- 34 -
Congress had recognized that the repatriation provisions had
discouraged investments that would be favorable to the U.S.
balance of payments. Congress addressed that problem by adding
two additional exceptions to the definition of U.S. property:
subparagraphs (F) (certain stock or debt investments) and
(G) (certain oil drilling rigs). The subparagraph (F) exception
is limited to stock or debt of unrelated domestic corporations.
The Committee on Finance cautioned that it did not wish the law
to be changed to permit the U.S. shareholders of a controlled
foreign corporation to use the earnings of the corporation
without payment of tax. H. Rept. 94-658, supra. S. Rept. 94-
938, supra. Congress did not amend the section 956 deposit
exception to except only deposits with unrelated persons. That
is understandable, however, since BHCA prohibited nonbank holding
companies from owning banks.12 Petitioner has offered no policy
reason why Congress would permit deposits (particularly deposits
for an indefinite period) with a related bank but prohibit
investments in a related corporation. In response to
11(...continued)
Federal banking laws going back to the 1930's and the Bank
Holding Company Act of 1956.”)
12 Undoubtedly, Congress believed that it had foreclosed that
possibility in 1970 when it enacted BHCA 1970 Amendments. See
supra note 11. By 1987, nonbank companies had found a loophole
(the nonbank loophole) in BHCA, which Congress enacted CEBA to
close. See supra note 3. Commercial firms, however, did not
begin to exploit the nonbank loophole until the early 1980s.
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