Two Republican congressmen claim a local policy targeting international oil companies threatens American investments in the region

US lawmakers have introduced legislation to block International Monetary Fund (IMF) support for certain Central African countries in protest of a controversial regulation imposed by local fiscal regulators on foreign oil companies.

The Bank of Central African States (BEAC) requires international oil companies (IOCs) to deposit environmental restoration funds - estimated between $5 billion to $10 billion - into accounts controlled by the regional bank. The funds, intended for post-production environmental cleanup, are currently held in foreign banks.

The BEAC's directive seeks to bolster the foreign reserves of the six Central African Economic and Monetary Community (CEMAC) members - Cameroon, Gabon, Chad, Equatorial Guinea, Central African Republic, and the Republic of Congo - whose economies have struggled to recover following the Covid-19 pandemic. The IMF-backed regulation was approved during an emergency summit in December and will be enforced starting on May 1, with penalties of up to 150% of the restoration funds for non-compliance.

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However, critics, including Republican Representatives Bill Huizenga and Dan Meuser, who sponsored the legislation (the Central African Exploitation and Manipulation of American Companies Act, or CEMAC Act), claim that the BEAC policy threatens billions of dollars in American oil and gas investments in the region.

The proposed bill, introduced late last month, would prevent the US Treasury from endorsing IMF proposals involving CEMAC member states until the global monetary agency has "publicly clarified that any funds provided to BEAC ... for site rehabilitation are ineligible to count towards gross foreign exchange reserves." 

"By refusing to clarify that these restoration funds will not count towards gross foreign exchange reserves, the IMF has misled the CEMAC member states and directly put tens of billions of dollars of IOCs investment in the region at risk," the lawmakers said.

"The IMF would be responsible for the loss of investment that the CEMAC region would face if a foreign exchange regulation that mandates extractive industry companies repatriate restoration funds for site rehabilitation to the BEAC is enacted," Huizenga and Meuser stated.

An IMF spokesperson confirmed to Reuters on Wednesday that the organization is aware of the draft US legislation.

"Staff stands ready to assess the nature of restoration funds for oil sites once the authorities and extractive companies share their final agreement," the spokesperson reportedly said. Privately owned French oil company Perenco has also told the outlet that it is in talks with the regional authorities to reach an agreement ahead of the April 30 deadline.