I 

118TH CONGRESS 

2D SESSION H. R. 7902 

To support a review of surcharge policy at the International Monetary Fund. 

IN THE HOUSE OF REPRESENTATIVES 

APRIL 9, 2024 

Mr. GARCI ́A of Illinois (for himself, Mrs. BEATTY, Ms. PETTERSEN, Mr. 

CLEAVER, Mr. VARGAS, Ms. WILLIAMS of Georgia, Ms. TLAIB, Ms. 

PRESSLEY, and Ms. JAYAPAL) introduced the following bill; which was referred to the Committee on Financial Services 

A BILL 

To support a review of surcharge policy at the International 

Monetary Fund. 

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled, 

3 SECTION 1. SHORT TITLE. 

4 This Act may be cited as the ‘‘Stop Onerous Sur5 charges Act’’. 

6 SEC. 2. UNITED STATES SUPPORT FOR A REVIEW OF SUR7 CHARGE POLICY AT THE INTERNATIONAL 

8 MONETARY FUND. 

9 (a) FINDINGS.—The Congress finds the following: 


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1 (1) The International Monetary Fund (IMF) 

2 imposes a surcharge, in addition to standard interest 

3 and service fees, of 200 basis points on outstanding 

4 credit provided through its General Resources Ac5 count that exceeds 187.5 percent of the IMF coun6 try quota, and an additional 100 basis points if that 

7 credit has been outstanding for over 36 or 51 

8 months, depending on the facility. 

9 (2) According to the IMF, ‘‘These level and 

10 time-based surcharges are intended to help mitigate 

11 credit risk by providing members with incentives to 

12 limit their demand for Fund assistance and encour13 age timely repurchases while at the same time gen14 erating income for the Fund to accumulate pre15 cautionary balances.’’. 

16 (3) Surcharges substantially increase the cost of 

17 borrowing from the IMF, constituting, on average, 

18 an estimated 39 percent of conventional charges 

19 paid by affected countries in the past 5 years. Over 

20 the next 5 years, surcharges will make up an esti21 mated 39 percent of Ecuador’s nonprincipal pay22 ments on its IMF lending program, and 24 percent 

23 of Egypt’s. 

24 (4) Despite Russia’s illegal invasion, Ukraine 

25 remains one of the countries most heavily burdened 


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1 by surcharges. From 2024 to 2028, Ukraine is ex2 pected to pay the IMF approximately 

3 $1,500,000,000 in surcharges alone. 

4 (5) The James M. Inhofe National Defense Au5 thorization Act for Fiscal Year 2023 (Public Law 

6 117–263), which became law on December 23, 2022, 

7 included language derived from the Ukraine Com8 prehensive Debt Payment Relief Act of 2022. The 

9 Ukraine Comprehensive Debt Payment Relief Act of 

10 2022 requires the Department of Treasury to make 

11 efforts to secure debt relief for Ukraine, and was 

12 passed by the House of Representatives on May 11, 

13 2022, with overwhelming bipartisan support. 

14 (6) As a result of the war in Ukraine and other 

15 factors, in January 2024, the World Bank forecast 

16 that the world would experience the worst 5-year pe17 riod of growth in 30 years. The external public debt 

18 of developing economies is at record levels, and the 

19 World Bank, IMF, and United Nations have all 

20 warned of coming defaults and a potential global 

21 debt crisis. Due to conflict, economic conditions, and 

22 environmental factors, the World Food Program es23 timates that 783,000,000 people are facing extreme 

24 hunger, and more than 333,000,000 people are fac25 ing acute levels of food insecurity. 


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1 (7) Official data shows that the number of 

2 countries paying surcharges to the IMF has nearly 

3 tripled since 2019, and many more countries are es4 timated to have debt burdens near the threshold. 

5 (8) In a 2022 statement, dozens of former 

6 heads of state and government from across the polit7 ical spectrum, including United States allies such as 

8 the United Kingdom and Ukraine, have called for 

9 the immediate suspension of IMF surcharges. 

10 (9) An April 2022 brief from the United Na11 tions Global Crisis Response Group on Food, En12 ergy, and Finance on the impacts of the war in 

13 Ukraine on developing countries called for the imme14 diate suspension of surcharge payments for a min15 imum of 2 years, because ‘‘[s]urcharges do not make 

16 sense during a global crisis since the need for more 

17 financing does not stem from national conditions but 

18 from the global economy shock’’. 

19 (10) In October 2023, International Monetary 

20 and Financial Committee Chair Nadia Calvin ̃o stat21 ed that the Fund ‘‘will consider a review of sur22 charge policies’’. 

23 (11) According to Deputy Under Secretary for 

24 International Finance Brent Neiman, ‘‘China be25 came the world’s largest official creditor in 2017, 


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1 surpassing the claims of the World Bank, IMF, and 

2 all Paris Club official creditors combined.’’. By dra3 matically increasing the cost of borrowing from the 

4 IMF, surcharges may incentivize developing nations 

5 to seek financing from alternative sources like 

6 China. 

7 (b) REVIEW OF SURCHARGE POLICY AT THE INTER8 NATIONAL MONETARY FUND.—The Secretary of the 

9 Treasury shall instruct the United States Executive Direc10 tor at the International Monetary Fund (IMF) to use the 

11 voice and vote of the United States to— 

12 (1) initiate an immediate review by the IMF of 

13 its surcharge policy, to be completed, and its results 

14 and underlying data published, within 365 days; and 

15 (2) suspend and waive surcharge payments dur16 ing the pendency of the review. 

17 (c) COMPONENTS OF THE REVIEW OF SURCHARGE

18 POLICY.—The review referred to in subsection (b) shall 

19 include the following: 

20 (1) A borrower-by-borrower analysis of sur21 charges in terms of cost and as a percentage of na22 tional spending on debt service on IMF loans, food 

23 security, health, and education for the 5-year period 

24 beginning January 1, 2018. 


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1 (2) Evaluation of the policy’s effectiveness at 

2 achieving its goals of— 

3 (A) disincentivizing large and prolonged re4 liance on IMF credit; 

5 (B) mitigating the credit risks taken by 

6 the IMF; 

7 (C) improving borrower balance of pay8 ments and debt sustainability, particularly dur9 ing periods of contraction, unrest, public health 

10 emergency, high interest rates, and high global 

11 prices of commodities; and 

12 (D) promoting fiscally responsible policy 

13 reforms. 

14 (3) Evaluation of the policy’s potential unin15 tended consequences of— 

16 (A) incentivizing borrowers to seek opaque 

17 and potentially predatory bilateral loans; and 

18 (B) hindering the ability of borrowers to 

19 repay private creditors and access the private 

20 credit market. 

21 (4) Recommendations for— 

22 (A) identifying alternative sources of fund23 ing for the IMF’s precautionary balances that 

24 prioritize stable funding sources and equitable 

25 burden-sharing among IMF members; and 


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1 (B) determining whether the Fund should 

2 maintain, reform, temporarily suspend, or elimi3 nate the use of surcharges. 

4 (5) Extensive consultation with relevant ex5 perts, particularly those from countries that are cur6 rently paying or have recently paid surcharges. 

7 These experts should include government officials re8 sponsible for overseeing economic development, fiscal 

9 policy, health care and other social services, and de10 fense, as well as experts in global financial policy, 

11 global risk analysts, academics, and civil society rep12 resentatives. 

Æ 


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