Representatives García, Jayapal introduce Stop Onerous Surcharges (S.O.S.) Act to reform IMF Surcharges that cost Ukraine and Other Countries Billions

Statement

Today Representatives Jesús G. "Chuy" García (IL-04), a member of the House Financial Services Committee, and Pramila Jayapal (WA-07), Chair of the Congressional Progressive Caucus, introduced the Stop Onerous Surcharges (S.O.S.) Act to direct the U.S. Department of Treasury to support a review of the International Monetary Fund's (I.M.F.) surcharge policy and a pause on surcharges for the duration of the review.

The IMF imposes "surcharge fees" to countries that hold large loans or owe for a long time. These charges are above and beyond regular loan and interest payments.

Ukraine owes tens of millions of dollars to the IMF in these surcharge fees each month, and it will have paid half a billion dollars in surcharges by the end of next year.
Argentina will pay more than three billion dollars to the IMF in surcharge fees between 2018 and 2023-- enough to vaccinate every Argentine nine times against COVID-19.
Surcharge reform enjoys international support: Last year the IMF's G-24 group of countries recommended that the Fund suspend, reform, or eliminate surcharges.

"IMF surcharges hit poorer countries hardest and undermine the Fund's mission at a time when financial assistance is more crucial than ever. It just doesn't make sense for countries like Ukraine to send tens of millions of dollars every month to fund the IMF in Washington as they confront war, pandemic, and economic crisis," said Congressman Jesús "Chuy" García. "It's past time for the IMF to review and reform its surcharge policies, and the U.S. should lead that call."

"We must not punish countries seeking financial assistance with surcharge fees. They shouldn't be focused on paying back the IMF when they're trying to fight against and recover from a global pandemic, war, and economic injustice," said Congresswoman Pramila Jayapal. "We need the IMF to halt these surcharges immediately and reform this broken policy that overburdens countries in need of help."

In January Reps. García, Jayapal, and Ocasio-Cortez led a letter to Treasury Secretary Yellen urging her to support the elimination of IMF surcharges. Treasury was not willing to endorse a change at that time.

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