The U.S. Treasury Department is expected to again decline to name China a currency manipulator in a long-delayed report that will likely anger congressional critics of Beijing's policies.

The report was due April 15 but was delayed until after last month's G20 leaders' summit in Canada. China said just before the G20 met that it will make the yuan's exchange rate more flexible gradually and end a two-year peg to the dollar.

The move seemed calculated to deflect growing criticism of Beijing's currency policies globally, but did not placate key members of Congress who threaten to push ahead with legislation to impose punitive duties on China if the yuan fails to rise.

Senator Charles Schumer called the People's Bank of China's announcement a vague and limited statement of intentions and said Congress would have no choice but to proceed with the legislation without more specific details and action from Beijing. He hopes for a vote within weeks.

The bill proposed by Schumer, fellow Democratic Senator Debbie Stabenow and Republican Senator Lindsey Graham, would repeal a 1988 law to curb currency manipulation and lower the threshold for punitive action on currencies found to be fundamentally misaligned.

Following are details of the existing law and the proposed Schumer-Stabenow-Graham Currency Exchange Rate Oversight Act of 2010:

CURRENT LAW

-- The U.S. Treasury Department, in consultation with the International Monetary Fund, shall analyze the exchange rate policies of foreign countries on an annual basis.

-- Semiannual reports are due April 15 and Oct. 15.

-- The reports examine whether countries are manipulating their currency's exchange rate with the U.S. dollar for purposes of preventing effective balance of payments adjustments or gaining unfair competitive advantage in international trade.

-- If manipulation is found, the Treasury secretary shall initiate negotiations with such foreign countries on an expedited basis, in the International Monetary Fund or bilaterally, for the purpose of ensuring that such countries regularly and promptly adjust the rate of exchange between their currencies and the United States dollar.

-- The secretary shall not be required to initiate negotiations in cases where such negotiations would have a serious detrimental impact on vital national economic and security interests.

-- In such cases, the secretary must notify leaders of the Senate Banking Committee and the House of Representatives' Financial Services Committee of his decision. The authorizing statute: here LATEST PROPOSAL

-- Treasury under the Schumer-Stabenow-Graham bill would be required to drop its manipulation criteria in favor of determining whether a currency is fundamentally misaligned based on objective criteria or clear policy action from the relevant government.

-- The latter designation would trigger a priority investigation from the U.S. Commerce Department as to whether the undervaluation is an unfair subsidy for that country's exports at the expense of U.S. industry. It must then impose import duties to counteract the subsidy.

-- Treasury would be required to immediately consult with all countries with misaligned currencies and engage the International Monetary Fund in priority cases. In the case of China, the IMF said on March 1 that the yuan was substantially undervalued from a medium-term perspective.

-- After 90 days of the designated country's failure to make appropriate policies, the U.S. must incorporate the currency undervaluation into its dumping calculations for products from that country. Federal purchases of goods and services from the country would be prohibited unless the country is a member of the World Trade Organization's Government Procurement Agreement -- a provision aimed squarely at China.

-- After 360 days of failure to adopt appropriate policies, the U.S. Trade Representative must request WTO dispute settlement consultations with the designated country. The U.S. Treasury would be required to consult with the Federal Reserve and other central banks to consider remedial intervention in currency markets.

-- The U.S. president could put the process on hold after the initial 90 days of inaction if he determined that it would harm national security or the economic interests of the United States, but this must be explained and could be overridden by a congressional disapproval resolution.

-- The bill would create a new body that the Treasury must consult while developing its report. Eight of the nine members would be chosen by Congress. (Reporting by David Lawder, Glenn Somerville and Doug Palmer; Editing by Kenneth Barry)

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