[Congressional Record Volume 168, Number 158 (Thursday, September 29, 2022)]
[Senate]
[Page S5608]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

  SA 6083. Mr. MURPHY submitted an amendment intended to be proposed to 
amendment SA 5499 submitted by Mr. Reed (for himself and Mr. Inhofe) 
and intended to be proposed to the bill H.R. 7900, to authorize 
appropriations for fiscal year 2023 for military activities of the 
Department of Defense, for military construction, and for defense 
activities of the Department of Energy, to prescribe military personnel 
strengths for such fiscal year, and for other purposes; which was 
ordered to lie on the table; as follows:

        At the end of subtitle F of title XII, add the following:

     SEC. 1276. REVIEW OF LOAN SURCHARGE POLICY OF INTERNATIONAL 
                   MONETARY FUND.

       (a) Findings.--Congress finds as follows:
       (1) The International Monetary Fund (in this section 
     referred to as the ``IMF'') imposes a surcharge, in addition 
     to standard interest and service fees, of 200 basis points on 
     outstanding credit provided through its General Resources 
     Account that exceeds 187.5 percent of the IMF country quota, 
     and an additional 100 basis points if that credit has been 
     outstanding for over 36 or 51 months, depending on the 
     facility.
       (2) According to the IMF, ``These level and time-based 
     surcharges are intended to help mitigate credit risk by 
     providing members with incentives to limit their demand for 
     Fund assistance and encourage timely repurchases while at the 
     same time generating income for the Fund to accumulate 
     precautionary balances.''.
       (3) According to a 2021 report by the European Network on 
     Debt and Development, surcharges increase the average cost of 
     borrowing from the IMF by over 64 percent for surcharged 
     countries. Surcharges increased Ukraine's borrowing costs on 
     its IMF lending program by nearly 27 percent, Jordan's by 72 
     percent, and Egypt's by over 104 percent.
       (4) As a result of the invasion by the Russian Federation, 
     the World Bank predicts that Ukraine will experience an 
     economic contraction of 45 percent in 2022. Yet Ukraine is 
     expected to pay the IMF an estimated $483,000,000 in 
     surcharges from 2021 through 2027.
       (5) The Ukraine Comprehensive Debt Payment Relief Act of 
     2022 (H.R. 7081), which requires the Department of Treasury 
     to make efforts to secure debt relief for Ukraine, was passed 
     by the House of Representatives on May 11, 2022, with 
     overwhelming bipartisan support, by a vote of 362 Yeas to 56 
     Nays.
       (6) As a result of the war in Ukraine and other factors, 
     the World Bank predicted that global growth rates will slow 
     to 2.9 percent in 2022, down nearly half from 2021. External 
     public debt of developing economies is at record levels, and 
     the World Bank, the IMF, and the United Nations have all 
     warned of coming defaults and a potential global debt crisis. 
     As food and energy prices rise, the World Food Program has 
     estimated that 750,000 people are at immediate risk of 
     starvation or death, and 323,000,000 people may experience 
     acute food insecurity before the end of the year.
       (7) Since 2020, the number of countries paying surcharges 
     to the IMF has increased from 9 to 16. A December 2021 IMF 
     policy paper notes that under the IMF's model-based World 
     Economic Outlook scenario ``the number of surcharge-paying 
     members would increase to 38 in FY 2024 and FY 2025'' and 
     that under the Fund's ``adverse scenario, the number of 
     surcharge-paying members and the amount of surcharge income 
     would increase even more sharply''.
       (8) An April 2022 brief from the United Nations Global 
     Crisis Response Group on Food, Energy and Finance on the 
     impacts of the war in Ukraine on developing countries called 
     for the immediate suspension of surcharge payments for a 
     minimum of 2 years, because ``[s]urcharges do not make sense 
     during a global crisis since the need for more financing does 
     not stem from national conditions but from the global economy 
     shock''.
       (b) Review of Surcharge Policy at the International 
     Monetary Fund.--The Secretary of the Treasury shall instruct 
     the United States Executive Director at the International 
     Monetary Fund to use the voice and vote of the United States 
     to--
       (1) initiate an immediate review by the IMF of the 
     surcharge policy of the IMF to be completed, and its results 
     and underlying data published, within 365 days; and
       (2) suspend and waive surcharge payments during the 
     pendency of the review.
       (c) Components of the Review of Surcharge Policy.--The 
     review referred to in subsection (b) should include the 
     following:
       (1) A borrower-by-borrower analysis of surcharges in terms 
     of cost and as a percentage of national spending on debt 
     service on IMF loans, food security, and health for the 5-
     year period beginning at the start of the COVID-19 pandemic.
       (2) Evaluation of the policy's direct impact on--
       (A) disincentivizing large and prolonged reliance on IMF 
     credit;
       (B) mitigating the credit risks taken by the IMF;
       (C) improving borrower balance of payments and debt 
     sustainability, particularly during periods of contraction, 
     unrest, and pandemic;
       (D) promoting fiscally responsible policy reforms;
       (E) disincentivizing borrowers from seeking opaque and 
     potentially predatory bilateral loans; and
       (F) improving the ability of borrowers to repay private 
     creditors and access the private credit market.
       (3) Recommendations for--
       (A) identifying alternative sources of funding for the 
     IMF's precautionary balances that prioritize stable funding 
     sources and equitable burden-sharing among IMF members; and
       (B) determining whether the IMF should maintain, reform, 
     temporarily suspend, or eliminate the use of surcharges.
       (d) Consultations.--The review referred to in subsection 
     (b) must incorporate extensive consultation with relevant 
     experts, particularly those from countries that are currently 
     paying or have recently paid surcharges. Those experts should 
     include government officials responsible for overseeing 
     economic development, social services, and defense, United 
     Nations officials, economic research institutes, academics, 
     and civil society organizations.
                                 ______