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AMENDMENT TO RULES COMMITTEE PRINT 117–54
OFFERED BY MR. GARCÍA OF ILLINOISPage 1262, after line 23, insert the following:
1SEC. lll. REVIEW OF IMF LOAN SURCHARGE POLICY.

2(a) FINDINGS.—The Congress finds as follows:

3(1) The International Monetary Fund (in this4section referred to as the ‘‘IMF’’) imposes a sur-5charge, in addition to standard interest and service

6fees, of 200 basis points on outstanding credit pro-7vided through its General Resources Account that

8exceeds 187.5 percent of the IMF country quota,

9and an additional 100 basis points if that credit has

10been outstanding for over 36 or 51 months, depend-11

ing on the facility.

12(2) According to the IMF, ‘‘These level and13time-based surcharges are intended to help mitigate

14

credit risk by providing members with incentives to15

limit their demand for Fund assistance and encour-16

age timely repurchases while at the same time gen-17

erating income for the Fund to accumulate pre-18

cautionary balances.’’.

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1(3) According to a 2021 report by the Euro-2pean Network on Debt and Development, surcharges

3

increase the average cost of borrowing from the IMF

4by over 64 percent for surcharged countries. Sur-

5charges increased Ukraine’s borrowing costs on its

6

IMF lending program by nearly 27 percent, Jor-

7

dan’s by 72 percent, and Egypt’s by over 104 per-8cent.

9(4) As a result of Russia’s invasion, the World

10

Bank predicts that Ukraine will experience an eco-11

nomic contraction of 45 percent in 2022. Yet

12

Ukraine is expected to pay the IMF an estimated13$483,000,000 in surcharges from 2021 through142027.

15(5) The Ukraine Comprehensive Debt Payment

16

Relief Act of 2022 (H.R.7081), which requires the17

Department of Treasury to make efforts to secure

18

debt relief for Ukraine, was passed by the House of19

Representatives on May 11, 2022, with over-20

whelming bipartisan support, by a vote of 362 Yeas

21to 56 Nays.

22(6) As a result of the war in Ukraine and other23

factors, the World Bank predicted that global

24

growth rates will slow to 2.9 percent in 2022, down25

nearly half from 2021. External public debt of devel-

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1

oping economies is at record levels, and the World

2

Bank, IMF, and United Nations have all warned of3

coming defaults and a potential global debt crisis. As

4food and energy prices rise, the World Food Pro-

5gram has estimated that 750,000 people are at im-

6

mediate7

323,000,000 people may experience acute food inse-

8curity before the end of the year.

ofstarvation

ordeath,and9(7) Since 2020, the number of countries paying

10surcharges to the IMF has increased from 9 to 16.

11

A December 2021 IMF policy paper, notes that

12

under the IMF’s model-based World Economic Out-

13

look scenario ‘‘the number of surcharge-paying

14

members would increase to 38 in FY 2024 and FY

152025’’ and that under the Fund’s ‘‘adverse scenario,

16

the number of surcharge-paying members and the17amount of surcharge income would increase even18

more sharply’’.

19(8) An April 2022 brief from the United Na-

20tions Global Crisis Response Group on Food, Energy

21

and Finance on the impacts of the war in Ukraine22

on developing countries called for the immediate sus-

23

pension of surcharge payments for a minimum of 2

24years, because ‘‘[s]urcharges do not make sense dur-

25

ing a global crisis since the need for more financing

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does not stem from national conditions but from the2

global economy shock’’.

3(b) REVIEW OF SURCHARGE POLICY AT THE INTER-

4NATIONALMONETARY FUND.—The Secretary of the

5 Treasury shall instruct the United States Executive Direc6 tor at the International Monetary Fund to use the voice
7 and vote of the United States to—8(1) initiate an immediate review by the IMF of9the surcharge policy of the IMF to be completed,

10and its results and underlying data published, within

11365 days; and12(2) suspend and waive surcharge payments dur-13ing the pendency of the review.

14(c) COMPONENTS OF THE REVIEW OF SURCHARGE

15 POLICY.—The review referred to in subsection (b) shall16 include the following:
17(1) A borrower-by-borrower analysis of sur-

18charges in terms of cost and as a percentage of na-

19

tional spending on debt service on IMF loans, food

20security, and health for the 5-year period beginning21

at the start of the COVID-19 pandemic.

2223(2) Evaluation of the policy’s direct impact
on—24(A) disincentivizing large and prolonged re-25

liance on Fund credit;

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51(B) mitigating the credit risks taken by2

the IMF;

3(C) improving borrower balance of pay-4

ments and debt sustainability, particularly dur-5

ing periods of contraction, unrest, and pan-6demic;7(D) promoting fiscally responsible policy

8reforms;

9(E) disincentivizing borrowers from seek-

10ing opaque and potentially predatory bilateral

11loans; and12(F) improving the ability of borrowers to13

repay private creditors and access the private

14

credit market.

15(3) Recommendations for—16(A) Identifying alternative sources of fund-17ing for the IMF’s precautionary balances that18prioritize stable funding sources and equitable19

burden-sharing among IMF members;

20(B) Determining whether the Fund should

21

maintain, reform, temporarily suspend or elimi-

22

nate the use of surcharges.

23(4) The review process must incorporate exten-

24

sive consultation with relevant experts, particularly

25

those from countries that are currently paying or

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have recently paid surcharges. These experts should

2

include government officials responsible for over-3

seeing economic development, social services, and de-4fense, United Nations officials, economic research

5

institutes, academics, and civil society organizations.

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