LEGISLATIVE RESOLUTION urging the New York State Congressional deleg-
ation to support enactment of H.R. 2493, known as the Judgment Evading
Foreign Sovereigns Accountability Act of 2009

WHEREAS, Foreign states that do business, issue securities, or borrow
money in the United States - taking advantage of New York capital
markets and then refuse to satisfy judgments entered against them in
connection with disputes resulting from these or other commercial activ-
ities, directly or indirectly inflict billions of dollars of damage in
New York and in other states and undermine the credibility of New York's
federal and local courts; and
WHEREAS, The Republic of Argentina is a primary example of a foreign
state that has incurred large debts in the United States, defaulted on
those debts, and then refused to honor lawful judgments of the United
States and other courts ordering repayment; in 2001, Argentina defaulted
on more than $81,000,000,000 in sovereign debt, the largest such default
in history; in 2005, after refusing all efforts by creditors to negoti-
ate the terms of an exchange offer, Argentina unilaterally offered lend-
ers approximately 27 cents on the dollar in its restructuring deal, far
below the international norm for sovereign debt restructurings; Argenti-
na repudiated the debts owed to the unprecedented proportion of bond-
holders who rejected that offer; and
WHEREAS, Argentina still owes United States bondholders more than
$3,500,000,000; overall, the default and restructuring by Argentina have
cost United States bondholders, taxpayers, and shareholders more than
$10,000,000,000; and
WHEREAS, Argentina's intransigence has harmed New York State and its
citizens in particular; Argentina's avoidance of its debt obligations
directly affects its New York investors, particularly New York retirees
whose pension funds were invested in Argentina bonds before the default;
and
WHEREAS, Moreover, if Argentina paid its debts, New York State would
receive tens of millions of dollars in tax revenues; for example, if
Argentina paid its $1 billion debt to its largest single creditor --
which is managed by a New York-based fund manager -- well in excess of
$200 million will be taxable in New York State either through management
fees earned by the New York-based fund manager or as a result of part-
nership distributions to New York based investors; and
WHEREAS, Similarly, several of the actions against Argentina are class
actions, run on a contingency basis by New York law firms; the class
claims total several billion dollars; if those New York-based law firms
are awarded conventional fees for their efforts in collecting debts due
to the creditors they represent, hundreds of millions of dollars would
be taxable in New York (not counting the income of the New York-based
class members); and
WHEREAS, United States bondholders have won numerous court rulings
against Argentina relating to Argentina's default on debt owed to such
bondholders, and Argentina's decision to repeatedly ignore these judg-
ments undermines respect for the United States legal system generally,
and New York courts specifically; despite having agreed to submit to the
jurisdiction of the State of New York and to waive claims of sovereign
immunity, Argentina is now contesting at least 163 lawsuits and refusing
to honor 88 judgments against it; and
WHEREAS, Argentina has the capacity to pay its external creditors; the
nation now holds more than $45,000,000,000 in reserves; Argentina chose
to pay off its $9,800,000,000 debt to the International Monetary Fund in
full in 2005, years before it was due, and has similarly announced an

intention to pay sovereign creditors of the Paris Club of Official Cred-
itors in full and partially in advance; and
WHEREAS, Those who are injured as a result of this conduct often have
little or no recourse; judgment evading foreign states and their state-
owned corporations enjoy a safe haven within their national borders, and
this fact often presents an insurmountable obstacle to recovery for
those who are injured by the behavior of those states; and
WHEREAS, Action by the United States Government to combat this growing
problem must include measures that both protect against the irresponsi-
ble conduct of judgment evading foreign states and their state-owned
corporations, and motivate such states and corporations to raise their
standards of behavior; and
WHEREAS, An effective means of achieving this important objective is
to deprive judgment evading foreign states and their state-owned corpo-
rations of the privilege of issuing securities or borrowing in the
United States -- particularly in New York capital markets or from New
York financial institutions -- and requiring that warnings of their
irresponsible behavior be given to persons in the United States who are
contemplating investing in, lending to, or doing business with such
states and businesses, until those states demonstrate that such measures
are no longer necessary; and
WHEREAS, H.R. 2493, the Judgment Evading Foreign Sovereigns Account-
ability Act of 2009, would achieve these objectives; H.R. 2493 is
currently under consideration by the United States House of Represen-
tatives; now, therefore, be it
RESOLVED, That the New York State Congressional delegation be and
hereby is respectfully urged by this Legislative Body to support enact-
ment of H.R. 2493, known as the Judgment Evading Foreign Sovereigns
Accountability Act of 2009; and be it further
RESOLVED, That copies of this Resolution, suitably engrossed, be tran-
smitted to each member of the Congressional delegation from the State of
New York.