Caribbean Development Bank (CAP. 69 1

CHAPTER 69

T H E CARIBBEAN DEVELOPMENT BANK ACT

Arrangement of Sections
Section

1. Short title.
2. Interpretation.
3. Acceptance of the Bank Agreement by the Government.
4. Financial Provisions for giving effect to the Bank

Agreement.
5. Minister empowered to raise loans for purposes of Bank

Agreement.
6. Certain provisions of Bank Agreement given force of law.

FIRST SCHEDULE.
SECOND SCHEDULE.

CARIBBEAN DEVELOPMENT BANK

1. This Act may be cited as the Caribbean Develop- Short title.
ment Bank Act.

2. In this Act- Interpretation.

"Bank" means the Caribbean Development Bank
established by the Bank Agreement;

"Bank Agreement" means the Agreement establishing
the Caribbean Development Bank the text of which
is set out in the First Schedule;

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2 CAP. 69) Caribbean Development Bank

''Minister" means the Minister responsible for Finance;

"Schedule" means a Schedule to this Act.

Acceptance of the
Bank Agreement

3. Acceptance by the Government of the Bank Agree-
by the ment is hereby approved.
Government.

Financial
Provisions for

4. (1) All sums required to be paid by the Govern-
giving effect to ment for the purpose of meeting the obligations of Antigua
the Bank
Agreement.

and Barbuda under the Bank Agreement are hereby charg-
ed on and shall be paid out of the Consolidated Fund.

(2) The Minister may, if he thinks fit, create and issue
to the Bank any such non-negotiable and non-interest bear-
ing notes and other obligations as are provided for by
paragraph 5 of Article 7 of the Bank Agreement and sums
payable under such notes or obligations so created and issued
shall be charged on and paid out of the Consolidated Fund.

(3) Any sums received by the Government from the
Bank pursuant to the Bank Agreement shall be paid into
the Consolidated Fund.

Minister 5 . (1) The Minister may borrow hom any person any
empowered to
raise loans for sum 01. sums required for payments under section 4 or for
purposes of Bank replacing any sum or sums paid out of the Consolidated Fund
Agreement.

pursuant to that section and, for the purpose of such bor-
rowing, may create and issue any securities bearing such
rate of interest and subject to such conditions as to repay-
ment, redemption or otherwise, as he thinks fit.

(2) The principal and interest of any securities issued
under subsection (1) and any expenses incurred in connec-
tion with their issue shall be charged on and paid out of
the Consolidated Fund.

(3) Any monies raised by securities issued under subsec-
tion (1) shall be paid into the Consolidated Fund.

Certain
provisions of

6. (1) The provisions of Articles 48, 50, 51 and 52
Bank Agreement of the Bank Agreement shall have the force of law in Antigua
give" force of and Barbuda.
law.

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Caribbean Development Bank (CAP. 69 3

(2) T h e provisions of the Articles of the Bank Agree-
ment mentioned i n the first column of the Second Schedule
shall have the force of law in Antigua and Barbuda to the
extent modified i n the second column thereof.

FIRST SCHEDULE

AGREEMENT ESTABLISHING THE CARIBBEAN DEVELOPMENT BANK

The Contracting Parties i

CONSCIOUS of the need to accelerate t i e economic development of States and
Territories of the Caribbean and to improve the standards of living of their peoples;

RECOGNIZING the resolve of these States and Territories to intensify economic
co-operation and promote economic integration in the Caribbean;

AWARE of the desire of other countries outside the region to contribute to
the economic development of the region;

CONSIDERING that such regional economic development urgently requires the
mobilization of additional financial and other resources; and

CONVINCED that the establishment of a regional financial institution with the
broadest possible participation will facilitate the achievement of these ends;

INTRODUCTORY ARTICLE

The Caribbean Development Bank (hereinafter called the "Bank") is hereby
established and shall be governed by the following

ARTICLES O F AGREEMENT:

CHAPTER I

PURPOSE, FUNCTIONS AND PARTICIPATION

ARTICLE 1

PURPOSE

The purpose of the Bank shall be to contribute to the harmonious economic
growth and development of the member countries in the Caribbean (hereinafter

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4 CAP. 69) Caribbean Development Bank

called the "region") and to promote economic co-operation and integration among
them, having special and urgent regard to the needs of the less developed members
of the region.

ARTICLE 2

FUNCTIONS

1. To carry out its purpose, the Bank shall have the following functions:
(a ) to assist regional members in the co-ordination of their development

programmes with a view to achieving better utilization of their resources,
making their economies more complementary, and promoting the orderly
expansion of their international trade, in particular intra-regional trade;

(6) to mobilize within and outside the region additional financial resources
for the development of the region;

(c ) to finance projects and programnles contributing to the development
of the region or any of the regional members;

(4 to provide appropriate technical assistance to its regional members,
particularly by undertaking or commissioning pre-investment surveys and
by assisting in the identification and preparation of project proposals;

( e ) to promote public and private investment in development projects
by, among other means, aiding financial institutions in the region and sup-
porting the establishment of consortia;

Ct) to co-operate and assist in other regional efforts designed to promote
regional and locally controlled financial institutions and a regional market
for credit and savings;

(g) to stimulate and encourage the development of capital markets within
the region, and

( h ) to undertake or promote such other activities as may advance its
purpose.

2. The Bank shall, where appropriate, co-operate with national, regional
or international organizations or other entities concerned with the development
of the region.

ARTICLE 3

MEMBERSHIP

1. Membership in the Bank shall be open to:
(a) States and Territories of the region; and

(6) non-regional States which are members of the United Nations or
of any of its specialized agencies or of the International Atomic Energy Agency.

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Caribbean Development Bank (CAP. 69 5

2. The States and Territories listed in Annex A to this Agreement the
Governments of which sign this Agreement in accordance with paragraph 1 of
Article 62 and ratify or accept it in accordance with paragraph 1 of Article 63
shall become members of the Bank.

3. States and Territories eligible for membership under paragraph 1 of this
Article which do not become members in accordance with paragraph 2 of this
Article may be admitted to membership on such terms and conditions as the Bank
may determine by a vote of not less than two-thirds of the total number of the
governors representing not less than three-fourths of the total voting power of
the members, and on acceding to this Agreement in accordance with paragraph 2
of Article 63.

4. For the purposes of Articles 26, 32 and 65 the last four Territories listed
in Category A of Annex A to this Agreement shall be considered as a single member
of the Bank.

ARTICLE 4

PARTICIPATION OF NON-MEMBERS

The Bank shall encourage and facilitate the fullest co-operation and participa-
tion in its activities of other regional or non-regional States which are members
of the United Nations or any of its specialized agencies or of the International
Atomic Energy Agency and which may further its purpose, and shall take such
measures as it may deem appropriate under the provisions of this Agreement to
promote such co-operation and participation.

CHAPTER I1

CAPITAL AND OTHER RESOURCES

ARTICLE 5

AUTHORIZED CAPITAL

1. The authorized capital stock of the Bank shall be the equivalent of fifty
million dollars ($50,000,000) in terms of United States dollars of the weight and
fineness in effect on IstlSeptember, 1969. The authorized capital stock shall be
divided into ten thousand (10,000) shares with a par value of five thousand dollars
($5,000) each, which shall be available for subscription only by members in
accordance with the provisions of Article 6.

2. he origin&authorized capital stock shall be divided into paid-up shares
and callable shares. Shares having & aggregate par value equivalent to twenty-
five million dollars ($25,000,000) shall be paid-up shares, and shares having an
aggregate par value equivalent to twenty-five million dollars ($25,000,000) shall
be callable shares.

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6 CAP. 69) Caribbean Development Bank

3. The authorized capital stock may be increased by the Board of Gover-
nors at such time and on such terms and conditions as it may determine by a
vote of not less than two-thirds of the total number of the governors representing
not less than three-fourths of the total voting power of the members.

4. In this Agreement the expression "dollar" means a United States dollar
of the value specified in paragraph 1 of this Article.

ARTICLE 6

SUBSCRIPTION OF SHARES

1. Each member shall subscribe to shares of the capital stock of the Bank.
Each subscription to the original authorized capital stock shall be for paid-up and
callable shares in equal parts. The initial number of shares to be subscribed by
those States and Territories which become members in accordance with paragraph 2
of Article 3 shall be as set forth in Annex A to this Agreement which shall form
an integral part thereof. The initial number of shares to be subscribed by those
States and Territories which are admitted to membership in accordance with
paragraph 3 of Article 3 shall be determined by the Board of Governors in accord-
ance with that paragraph.

2. The authorized capital stock of the Bank shall at all times be held or
be available for subscription in the following manner:

(a) not less than sixty (60) per cent by regional members; and

(b) not more than forty (40) per cent by other members.

3. In case of an increase in the authorized capital stock, each member shall
have a right to subscribe, on such terms and conditions as the Board of Governors
shall determine, to a proportion of the increase of stock equivalent to the propor-
tion which its stock previously subscribed bears to the total subscribed capital
stock immediately before such increase, provided, however, that this provision
shall not apply in respect of any increase or portion of an increase in the authoriz-
ed capital stock which is intended solely to give effect to determinations of the
Board of Governors under paragraphs 1 and 4 of this Article. No member shall
be obligated to subscribe to any part of an increase in capital stock.

4. Subject to the provisions of paragraph 2 of this Article, the Board of
Governors may, at the request of a member, increase the subscription of such
member on such terms and conditions as the Board may determine. The Board
of Governors shall pay special regard to the request of any regional member hav-
ing less than five (5) per cent of the subscribed capital stock to increase its
subscription.

5 . Shares initially subscribed by those States and Territories which become
members in accordance with paragraph 2 of Article 3 shall be issued at par. Other
shares shall be issued at par unless the Board of Governors by a vote of not less

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Caribbean Development Bank (CAP. 69

than two-thirds of the total number of the governors representing not less than
three-fourths of the total voting power of the members decides in special cir-
cumstances to issue them on other terms.

6. Shares shall not be pledged or encumbered in any manner whatsoever.
They shall not be transferable except to the Bank.

7. Liability of the members on shares shall be limited to the unpaid portion
of their issue price.

8. Except as provided in paragraph 7 of this Article, no member shall be
liable, by reason of its membership, for obligations of the Bank.

ARTICLE 7

PAYMENT OF SUBSCRIPTIONS

1. Payment of the amount due in respect of paid-up shares initially subscribed
by a State or Territory which becomes a member in accordance with paragraph 2
of Article 3 shall be made in six (6) instalments. The first instalment shall equal
twenty per cent of that amount and the remaining five instalments shall each equal
sixteen per cent of that amount. The first instalment shall be paid by each member
not later than ninety days after entry into force of this Agreement or on or before
the date of deposit of its instrument of ratification or acceptance in accordance
with Article 63, whichever is the later. The second instalment shall be paid not
later than one (1) year from the entry into force of this Agreement. The remain-
ing four instalments shall each be paid successively not later than one (1) year
from the date on which the preceding instalment becomes payable.

2. Of each instalment of an initial subscription payable under paragraph 1
of this Article by a State or Territory which becomes a member pursuant to
paragraph 2 of Article 3:

(a) fifty (50) per cent shall be paid in gold or in a convertible currency
which is freely and effectively useable in the operations of the Bank or in
a currency which is freely and fully convertible into such a currency, provid-
ed that if the currency of that member meets either of such requirements,
such payment shall be made in the currency of that member; and

(b) fifty (50) per cent shall be paid in the currency of that member, sub-
ject to the provisions of paragraph 5 of this Article.

3. Each payment of a member in its own or another currency shall be in
such amount as the Bank, after such consultation with the International Monetary
Fund as it may consider necessary and utilizing the par value, if any, established
with the International Monetary Fund, shall determine to be equivalent to the
full value in terms of dollars of the portion of the subscription being paid. The
first instalment payable pursuant to paragraph 1 of this Article shall be in such
amount as that member considers appropriate in accordance with this paragraph,

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8 CAP. 69) Caribbean Development Bank

but shall be subject to such adjustment, to be effected within ninety (90) days
of the date on which such payment was due, as the Bank shall determine to be
necessary to constitute the full dollar equivalent of such payment.

4. Subject to the provisions of paragraphs 6 and 7 of this Article relating
to callable shares, payment of other subscriptions in respect of original authorized
shares and of increases in the capital stock of the Bank shall be made at such
times and in gold or in such currencies as the Board of Governors shall determine
and the Board may determine with the agreement of all members that different
proportions of such capital be paid up by different members.

5 . The Bank shall accept from a member, in place of any part of the
member's currency paid or to be paid by the member under paragraph 2(b) of
this Article or under paragraph 1 of Article 24 in respect of payments under
paragraph 2(b) of this Article, provided such currency is not required by the Bank
for the conduct of its operations, promissory notes or other obligations issued by
the Government of the member or by the depository designated by the member
pursuant to Article 37. Such notes or other obligations shall be non-negotiable,
non-interest bearing, and payable at their par value upon demand. Subject to
paragraph 5 of Article 23, demand for payment of such notes or other obligations
shall be made only as and when the funds are required by the Bank for the con-
duct of its operations, provided, however, that a member which has issued such
promissory notes or other obligations may at the request of the Bank convert any
of them into interest-bearing notes or into cash to be invested in government
securities of that member. Demands upon such notes or obligations shall, as far
as practicable over reasonable periods of time, be uniform in percentage of all
such notes and obligations. Notwithstanding the issuance or acceptance of a note
or other obligation by the Bank, the obligation of the member under paragraph 2(b)
of this Article and under Article 24 shall subsist.

6. Callable shares shall be subject to call only as and when required by
the Bank to meet its obligations incurred pursuant to sub-paragraphs (b) and (d)
of Article 13 on borrowings of funds for inclusion in its ordinary capital resources
or on guarantees chargeable to such resources. Such calls on unpaid subscriptions
shall be uniform in percentage on all callable shares.

7. Payment of calls referred to in paragraph 6 of this Article may be made
at the option of the member in gold, convertible currency or in the currency re-
quired to discharge the obligations of the Bank for the purpose of which the call
is made.

8. The Bank shall determine the place for any payment under this Article,
provided that, until the inaugural meeting of the Board of Governors the pay-
ment of the first instalment referred to in paragraph 1 of this Article shall be made
to the Government of Barbados as Trustee of the Bank.

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Caribbean Development Bank (CAP. 69 9

ARTICLE 8

SPECIAL FUNDS

1. A special fund to be known as the Special Development Fund is hereby
established into which the Bank may receive contributions or loans. The Special
Development Fund may be used to make or guarantee loans of high develop-
mental priority, with longer maturities, longer deferred commencement of repay-
ment and lower interest rates than those determined by the Bank for its ordinary
operations. The Bank shall, as soon as practicable, adopt rules and regulations
for the administration and use of the Special Development Fund.

2. The Bank may establish, or be entrusted with the administration of,
other special funds which are designed to serve its purpose and fall within its func-
tions. It shall adopt such special rules and regulations as may be required for
the establishment, administration and use of the resources of each special fund.

3. Subject to the provisions of paragraph 1 of this Article relating to the
Special Development Fund, the terms and conditions upon which the Bank may
receive contributions or loans for special funds, including the Special Develop-
ment Fund, shall be such as may be agreed upon between the Bank and the con-
tributor or lender, and special funds may be used in any manner and on any
terms and conditions not inconsistent with the purpose and functions of the Bank
or with any agreement relating to such funds.

4. No allocation may be made to the Special Development Fund provided
for in paragraph 1 of this Article or to any other special fund from the paid-up
capital or reserve of the Bank or from funds borrowed by the Bank for inclusion
in its ordinary capital resources.

5 . The rules and regulations relating to any special fund shall be consistent
with the provisions of this Agreement except those which expressly apply only
to ordinary operations of the Bank. Where such rules and regulations do not apply,
special funds shall be governed by the provisions of this Agreement.

ARTICLE 9

ORDINARY CAPITAL RESOURCES AND SPECIAL FUNDS RESOURCES

1. The resources of the Bank shall consist of ordinary capital resources and
special funds resources.

2. In this Agreement, the expression "ordinary capital resources" includes
the following:

(a) authorized capital stock of the Bank subscribed pursuant to Article 6;

(b) funds borrowed by the Bank to which the commitment to calls pro-
vided for in paragraph 6 of Article 7 is applicable;

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CAP. 69) Caribbean Development Bank

(6) funds received in repayment of loans or guarantees made with the
resources referred to in sub-paragraphs (a) and (b) of this paragraph;

(d) Income derived from loans made from the aforementioned funds or
from guarantees to which the commitment to calls provided for in paragraph 6
of Article 7 is applicable; and

(e) any other funds or income received by the Bank which do not form
part of any special funds resources.

3. In this Agreement, the expression "special funds resources" refers to
the resources of any special fund and includes the following:

(a) resources initially contributed to any special fund;

( b ) funds accepted by the Bank for inclusion in any special fund;

(c) funds repaid in respect of loans or guarantees financed from the
resources of any special fund which, under the rules and regulations of the
Bank governing that special fund, are received by such special fund;

(6) income derived from operations of the Bank in which any of the
aforementioned resources or funds are used or committed if, under the rules
and regulations of the Bank governing the special fund concerned, that in-
come accrues to such special fund; and

(e) any other resources placed at the disposal of any special fund

CHAPTER I11

OPERATIONS

ARTICLE 10

USE OF RESOURCES

The resources and facilities of the Bank shall be used exclusively to further
the purpose and carry out the functions set forth, respectively, in Articles 1 and
2 of this Agreement.

ARTICLE 11

ORDINARY AND SPECIAL OPERATIONS

1 The operations of the Bank shall consist of ordinary operations and special
operations.

2. Ordinary operations shall be those financed from the ordinary capital
resources of the Bank.

3. Special operations shall be those financed from special funds resources.

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Caribbean Deuelopment Bank (CAP. 69 1 1

ARTICLE 12

SEPARATION OF OPERATIONS

1. The ordinary capital resources of the Bank shall at all times and in all
respects be held, used, committed, invested or otherwise disposed of, entirely
separate from special funds resources. Each special fund, its resources and accounts
shall be kept entirely separate from other special funds, their resources and accounts.

2. The ordinary capital resources of the Bank shall not be charged with,
or used to discharge, losses or liabilities arising out of operations or other activities
of any special fund. Special funds resources appertaining to any special fund shall
not be charged with, or used to discharge, losses or liabilities arising out of opera-
tions or other activities of the Bank financed from its ordinary capital resources
or from resources appertaining to any other special fund.

3. In the operations and other activities of any special fund, the liability
of the Bank shall be limited to the resources appertaining to that special fund
which are at the disposal of the Bank.

4. The financial statements of the Bank shall show the ordinary operations
and the special operations of the Bank separately. Expenses appertaining to or-
dinary operations shall be charged to the ordinary capital resources of the Bank.
Expenses appertaining directly to special operations shall be charged to the special
funds resources. Any other expenses shall be charged as the Bank shall determine.

5 . The Bank shall adopt such other rules and regulations as may be re-
quired to ensure the effective separation of the two types of its operations.

ARTICLE 13

RECIPIENTS AND METHODS OF ORDINARY OPERATIONS

In its ordinary operations, the Bank may provide or facilitate financing for
any regional member or any political subdivision or any agency thereof, or any
other entity or enterprise in the public or private sector operating in the territory
of such member, as well as for international or regional agencies or other entities
concerned with the economic development of the region. The Bank may carry
out such operations in any of the following ways:

(a ) by making or participating in direct loans with its unimpaired paid-
up capital and, except as provided in Article 18, with its reserves and un-
distributed surplus;

( b ) by making or participating in direct loans with funds raised by the
Bank in capital markets or borrowed or otherwise acquired by the Bank for
inclusion in its ordinary capital resources;

(6) by investment of the funds referred to in paragraphs (a ) and (b ) of
this Article in the equity capital of an entity or enterprise, provided, however,
that no such investment shall be made until after the Board of Governors,

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12 CAP. 69) Caribbean Development Bank

by a vote of not less than two-thirds of the total number of governors represen-
ting not less than three-fourths of the total voting power of the members,
shall have determined that the Bank is in a position to begin such type of
operations; or

(4 by guaranteeing, whether as primary or secondary obligor, in whole
or in part, loans for economic development.

ARTICLE 14

LIMITATIONS ON OPERATIONS

1. The total amount outstanding of loans, equity investments and guarantees
made by the Bank in its ordinary operations shall not at any time exceed the
total amount of its unimpaired subscribed capital, reserves and surplus and any
other funds included in its ordinary capital resources, exclusive of the special reserve
provided for in Article 18 and other reserves not available for ordinary operations.

2. The total amount outstanding in respect of the special operations of the
Bank relating to any special fund shall not at any time exceed the total amount
of the unimparted resources appertaining to that special fund.

3. In the case of funds invested in equity capital out of the ordinary capital
resources of the Bank, the total amount invested shall not at any time exceed
ten (10) per cent of the aggregate amount of the unimpaired paid-up capital stock
of the Bank actually paid up at any given time together with the reserves and
surplus included in its ordinary capital resources, exclusive of the special reserve
provided for in Article 18.

4. The amount of any equity investment shall not exceed such percentage
of the equity capital of the entity or enterprise concerned as the Board of Direc-
tors shall from time to time or in each specific case determine to be appropriate.
The Bank shall not seek to obtain by such an investment a controlling interest
in the entity or enterprise concerned, except where necessary to safeguard the
investment of the Bank.

ARTICLE 15

OPERATING PRINCIPLES

Subject to the provisions of this Agreement, the operations of the Bank shall
be conducted in accordance with the following principles:

(a) The operations of the Bank shall provide principally for the financ-
ing of specific projects, including those forming part of a national, sub-regional
or regional development programme. They may, however, include loans to,
or guarantees of loans made to, national development banks or other suitable
financial institutions, in order that the latter may finance development pro-
jects on terms approved by the Bank where the individual financing

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Caribbean Development Bank (CAP. 69 13

requirements of such projects are not, in the opinion of the Bank, large enough
to warrant the direct supervision of the Bank.

(6) The Bank shall not finance any undertaking in the territory of a
member if that member objects to such financing.

(c) Before a loan or guarantee is granted, the applicant shall have sub-
mitted an adequate loan or guarantee proposal and the President of the Bank
shall have presented to the Board of Directors a written report regarding
the proposal together with his recommendations on the basis of a staff study.

(d) In considering an application for a loan or guarantee, the Bank shall
pay due regard to the ability of the borrower to obtain financing elsewhere
on terms and conditions that the Bank considers reasonable for the recipient.

( e ) In making or guaranteeing a loan, the Bank shall pay due regard
to the prospects that the borrower and its guarantor, if any, will be in a
position to meet their obligations under the loan contract.

Cf) In making or guaranteeing a loan, the rate of interest, other charges
and the schedule for repayment of principal shall be such as are, in the opinion
of the Bank, appropriate for the loan concerned.

(g) In guaranteeing a loan made by other investors, or in under-writing
the sale of securities, the Bank shall receive suitable compensation for its risk.

(h ) The proceeds of financing in the ordinary operations of the Bank
shall normally be used only for procurement, in territories of members, of
goods and services produced in those territories. In special cases the Board
of Directors may, however, determine the circumstances in which the pro-
curement of goods and services may be permitted elsewhere, giving particular
consideration wherever practicable to procurement of goods and services pro-
duced in the territory of countries which have contributed substantially to
the resources of the Bank.

(z] In procuring services, and in facilitating financing for entities or enter-
prises in the private sector, the Bank shall pay due regard to the need to
develop and strengthen undertakings, entities and skills of individuals belonging
to the region.

@ In the case of a direct loan made by the Bank, the borrower shall
be permitted by the Bank to draw its funds only to meet expenditures in
connection with the project as they are actually incurred.

(k) The Bank shall take the necessary measures to ensure that the pro-
ceeds of any loan made, guaranteed, or participated in by the Bank are used
only for the purposes for which the loan was granted and with due regard
to considerations of economy and efficiency.

(I) The Bank shall pay due regard to the desirability of a reasonable
distribution of the benefits from its operations among the members in the
region.

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14 CAP. 69) Caribbean Development Bank

(m) The Bank shall seek to maintain reasonable diversification in its
investments in equity capital.

(n) The Bank may provide financing to meet either external or local
expenditures in respect of a project being assisted, provided that in its ordinary .
operations the Bank shall provide financing for local expenditures in the ter-
ritory in which the project is located only in exceptional circumstances and
not exceeding a reasonable proportion of the total of such expenditures, or
in circumstances where such financing may be provided with local currency ,
restricted under paragraph 2 of Article 23.

( 0 ) The Bank shall be guided by sound development banking principles
in its operations.

ARTICLE 16

TERMS AND CONDITIONS FOR DIRECT LOANS AND GUARANTEES

1. In the case of direct loans made or participated in or loans guaranteed
by the Bank, the contract shall establish the terms and conditions for the loan
or guarantee concerned, including those relating to payment of principal, interest
and other charges, maturities, and dates of payment in respect of the loan, or
the fees and other charges in respect of the guarantee, respectively.

2. Subject in the case of special operations to any rules and regulations '
or other arrangements relating thereto, the contract relating to a loan made or
guaranteed by the Bank shall specify the currency or currencies to be used in
making repayments to the Bank, or stipulate that repayments shall be made in
the currency or currencies loaned, or make other appropriate provision for the
currency or currencies of repayment. At the option of the borrower, however,
such repayments may be made in gold or, subject to the agreement of the Bank,
in any convertible currency. The contract may also provide that the amount of
repayments to the Bank shall be equivalent, in terms of a currency specified for
that purpose by the Bank, to the value of those repayments on the date or dates
on which the loan was disbursed.

3. Where the recipient of a loan or guarantee of a loan is not itself a member,
the Bank may, when it deems it advisable, make it a condition of the contract
that the member in whose territory the project concerned is to be carried out, '

or a public agency of that member acceptable to the Bank, guarantee the repay-
ment of the principal and the payment of interest and other charges on the loan
in accordance with the terms thereof.

ARTICLE 17

COMMISSION AND FEES

1. The Bank shall determine the rate and any other terms and conditions
of the commission to be charged in connection with direct loans made or par-
ticipated in as part of its ordinary operations. This commission shall be computed

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Caribbean Development Bank (CAP. 69 15

on the amount outstanding on each loan or participation and shall be at the rate
of not less than one (1) per cent per annum in the first five (5) years of the opera-
tions of the Bank. At the end of this period, the rate of commission may be set
at such level as the Bank considers appropriate in the light of the level of the
reserves of the Bank.

2. In guaranteeing a loan as part of its ordinary operations, the Bank shall,
in addition to any other charges, require a guarantee fee, at a rate determined
by the Board of Directors, payable periodically on the amount of the loan
outstanding.

3. Other charges of the Bank in its ordinary operations, and any commis-
sion, fees or other charges in its special operations, shall be determined by the
Board of Directors.

ARTICLE 18

SPECIAL RESERVE

The amount of commissions and guarantee fees received by the Bank pur-
suant to Article 17 of this Agreement shall be set aside as a special reserve which
shall be kept for meeting liabilities of the Bank. The special reserve shall be held
in such liquid form as the Board of Directors may decide, provided that whenever
it is in the interest of the Bank the special reserve may be invested in the securities
of the region.

ARTICLE 19

METHODS OF MEETING LIABILITIES OF THE BANK

1. Whenever necessary to meet contractual payments of interest, other
charges or amortization on borrowings of the Bank in its ordinary operations,
or to meet its liabilities with respect to similar payments in respect of loans
guaranteed by it, chargeable to its ordinary capital resources, the Bank may call
an appropriate amount of callable shares in accordance with paragraph 6 of
Article 7.

2. If the subscribed callable capital stock of the Bank shall be entirely called
pursuant to paragraph 6 of Article 7, the Bank may, if necessary for the purpose
specified in paragraph 1 of this Article, use or exchange the currency of any member
without restriction, including any restriction imposed pursuant to paragraph 2
of Article 23.

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CAP. 69) Caribbean Development Bank

CHAPTER IV

BORROWING AND OTHER MISCELLANEOUS POWERS

ARTICLE 20

GENERAL POWERS

In addition to the powers provided elsewhere in this Agreement, the Bank shall
have the power to:

(a) borrow funds in the territories of members or elsewhere, and in this
connection to furnish such collateral or other security therefor as the Bank
shall determine, provided always that:

(i) before making a sale of its obligations in a country, the Bank shall
seek the approval of the competent authorities of that country;

(ii) where the obligations of the Bank are to be denominated in the
currency of a member, the Bank shall have obtained the approval
of the competent authorities of that member;

(iii) the Bank shall obtain the approval of the competent auhorities refer-
red to in sub-paragraphs (i) and (ii) of this paragraph that the pro-
ceeds may be exchanged for any other currency without restric-
tion; and

(iv) before determining whether to sell its obligations in a particular
country, the Bank shall consider the amount of previous borrow-
ing, if any, in that country, the amount of previous borrowings
in other countries, and the possible availability of funds in such
other countries and shall give due regard to the general principle
that its borrowings should, as far as possible, be diversified as to
the country of borrowing;

(b) buy and sell securities the Bank has issued or guaranteed or in which
it has invested, provided always that it shall have obtained the approval of
the competent authorities of the country where the securities are to be bought
or sold;

(G) guarantee securities in which it has invested, in order to facilitate
their sale;

(d) underwrite, or participate in the underwriting of, securities issued
by any enterprise or entity for purposes consistent with the purpose and func-
tions of the Bank;

( e ) invest or deposit funds, not needed in its operations, in the territories
of members or of substantial contributors to the resources of the Bank, in
such obligations or institutions of members or substantial contributors, or
nationals thereof, as it may determine, except where the Board of Directors
by a vote of not less than three-fourths of the total voting power of the members
determines otherwise;

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Caribbean Development Bank (CAP. 69 17

(f) assist regional members in matters relating to the foreign placement
of official loans;

(q) borrow from Governments, their political sub-divisions and instrumen-
talities, and international organizations, on such terms and conditions as
may be agreed upon between the Bank and the lender;

(h) provide technical assistance which serves its purpose and comes within
its functions, and where expenditures incurred in furnishing such services
are not reimbursable, charge the income of the Bank therewith; and

(9 exercise such other powers and adopt such rules and regulations as
may be necessary or appropriate in furtherance of its purpose and functions
and consistent with the provisions of this Agreement.

ARTICLE 21

NOTICE TO BE PLACED ON SECURITIES

Every security issued or guaranteed by the Bank shall include a statement
to the effect that it is not an obligation of any Government, unless it is in fact
the obligation of a particular Government, in which case it shall so state.

CHAPTER V

CURRENCIES

ARTICLE 22

VALUATION OF CURRENCIES AND DETERMINATION OF
CONVERTIBILITY

Whenever the Bank considers it necessary under this Agreement:

(a) to value any currency in terms of another currency or of gold; or

( 6 ) to determine whether any currency is convertible;
such valuation or determination, as the case may be, shall be reasonably made
by the Bank after consultation with the International Monetary Fund.

ARTICLE 23

USE OF CURRENCIES

1. The currency of any member held by the Bank as part of its ordinary
capital resources, however acquired, may be used by the Bank or by any recipient
from the Bank, without restriction by that member, to make payments for expen-
ditures within, or for goods and services produced in, the territory of that member.

2. Members may not maintain or impose any restrictions on the holding
or use by the Bank or by any recipient from the Bank, for payments in any coun-
try, of gold or any currency received by the Bank and included in its ordinary

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CAP. 69) Caribbean Development Bank

capital resources; except that a regional member may, after consultation with and
subject to periodic review by the Bank, restrict, in whole or in part, to expen-
diture in the territory of that member the use of its currency paid in as, or derived
as repayments of principal from, currency of the member paid pursuant to
paragraph 2(b) of Article 7 .

3. The use of any currency received and held by the Bank as part of its
special funds resources shall be governed by the rules, regulations and agreements
pertaining thereto and made by virtue of the provisions of Article 8.

4. Gold or currencies held by the Bank may not be used by the Bank to
purchase currencies of members or non-members except with the approval of the
member or members whose currencies are involved, but may be so used without
such approval:

(i) in order to meet the obligations of the Bank in the ordinary course
of its business; or

(ii) if the currency to be used for such purchase is the currency of a
member received by the Bank as a payment on account of the
subscription of another member; or

(iii) pursuant to a decision of the Board of Directors by a vote of the
Directors representing not less than two-thirds of the total voting
power of the members.

5 . Nothing in this Agreement shall preclude the Bank from using the cur-
rency of any member for administrative expenses incurred by the Bank in the
territory of that member.

ARTICLE 24

MAINTENANCE OF VALUE OF THE CURRENCY HOLDINGS OF THE
BANK

1. Whenever the par value in the International Monetary Fund of the cur-
rency of a member is reduced or the foreign exchange value of such currency
has, in the opinion of the Bank, depreciated to a significant extent within its ter-
ritories, that member shall pay to the Bank within a reasonable time an additional
amount of its currency sufficient to maintain the value as of the time of subscrip-
tion of the amount of such currency which is held or subsequently received by
the Bank (whether or not any such currency is held in the form of notes or other
obligations issued pursuant to paragraph 5 of Article 7) and consisting of, or derived
as repayments of principal from, currency originally paid to the Bank by such
member pursuant to paragraph 2(a) or paragraph 2(b) of Article 7, or any addi-
tional currency paid pursuant to the provisions of the present paragraph; provided,
however, that, to the extent that the Bank shall, in its opinion, have received
from any borrower of such currency, or from any guarantor, amounts paid solely
as a result of such reduction in par value or of such depreciation, the Bank shall
pro tanto relieve that member of its obligations under the present paragraph.

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Caribbean Development Bank (CAP. 69 19

2. Whenever the par value of the currency of a member is increased, the
Bank shall pay to that member within a reasonable time an amount of such currency
equal to the increase in the value of that amount of the member's currency held
or subsequently received by the Bank to which paragraph 1 of this Article would
be applicable; provided, however, that the Bank shall not be obligated to make
such payment to the extent that the benefit of any such increase in par value
shall have been passed on by the Bank to any borrower or guarantor as a cor-
ollary of the obligation of either to make increased payments to the Bank in case
of a decrease in the par value of such currency.

3. The provisions of the preceding two paragraphs may be waived or deemed
inoperative by the Bank when a uniform change in the par values of the curren-
cies of all its members is made by the International Monetary Fund.

4. Amounts paid by a member pursuant to the provisions of paragraph 1
of this Article to maintain the value of any of its currency shall be useable and
convertible to the same extent as the original currency in respect of which such
amounts are paid.

5 . In the case of a member whose currency does not have a par value
established with the International Monetary Fund, the initial value of such currency
in terms of dollars shall be as determined by the Bank pursuant to paragraph 3
of Article 7 , or otherwise, for purposes of payments by such member on account
of its subscription. The Bank may, from time to time thereafter, make a similar
determination with respect to the value in terms of dollars of such currency. For
the purposes of the provisions of paragraphs 1 and 2 of this Article, the value
so determined from time to time shall be treated as if it were the par value of
such currency.

CHAPTER VI

ORGANIZATION AND MANAGEMENT

ARTICLE 25

STRUCTURE

The Bank shall have a Board of Governors, a Board of Directors, A Presi-
dent, a Vice-President, and such other officers and staff as may be considered
necessary.

ARTICLE 26

BOARD OF GOVERNORS: COMPOSITION

1 Each member shall be represented on the Board of Governors and shall
appoint one governor and one alternate. Each governor and alternate shall serve
at the pleasure of the appointing member. No alternate may vote except in the
absence of his principal. At each annual meeting, the Board of Governors shall

LAWS OF ANTIGUA AND BARBUDA

20 CAP. 69) Caribbean Development Bank

elect one of the governors as Chairman who shall hold office until the election
of the next Chairman.

2. Governors and alternates shall serve as such without remuneration from
the Bank, but the Bank may pay them reasonable expenses incurred in attending
meetings.

ARTICLE 27

BOARD OF GOVERNORS: POWERS

1. All the powers of the Bank shall be vested in the Board of Governors.

2. The Board of Governors may delegate to the Board of Directors any
or all its powers, except the power to:

(a) admit new members and determine the conditions of their admission;

(b) increase or decrease the authorized capital stock of the Bank;

(c) suspend a member;

(4 decide appeals from decisions regarding the interpretation or applica-
tion of this Agreement made by the Board of Directors;

( e ) authorize the conclusion of general agreements for co-operation with
Governments and with other international organizations;

V) elect the directors and the President of the Bank;

(g) determine the remuneration of the directors and their alternates;

(h ) determine the reserves and the distribution of the net profits of the
Bank;

(i) amend this Agreement;

@ decide to terminate the operations of the Bank and to distribute its
assets;

(k) select external auditors to certify the general balance sheet and the
statement of profit and loss of the Bank and to select such other experts as
may be necessary to examine and report on the general management of the
Bank;

(I) approve, after reviewing the report of the external auditors, the general
balance sheet and statements of profit and loss of the Bank; and

(m) exercise such other powers as are expressly assigned to the Board
of Governors in this Agreement.

3. The Board of Governors shall retain full power to exercise authority
over any matter delegated to the Board of Directors in accordance with paragraph 2
of this Article.

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Caribbean Development Bank (CAP. 69 2 1

ARTICLE 28

BOARD OF GOVERNORS: PROCEDURE

1. The Board of Governors shall hold an annual meeting and such other
meetings as may be provided for by the Board of Governors or called by the Board
of Directors. Meetings of the Board of Governors other than the annual meeting
shall be called by the Board of Directors whenever requested by a majority of
the members of the Bank.

2. A majority of the total number of the governors shall constitute a quorum
for any meeting of the Board of Governors, provided such majority represents
not less than two-thirds of the total voting power of the members.

3. The Board of Governors may by regulation establish a procedure whereby
the Board of Directors, when the latter deems such action advisable, may obtain
a vote of the governors on a specific question without calling a meeting of the
Board of Governors.

4. The Board of Governors may establish such subsidiary bodies as may
be necessary or appropriate for the conduct of the business of the Bank.

ARTICLE 29

BOARD OF DIRECTORS: COMPOSITION

1. (a ) The Board of Directors shall be composed of seven (7) members of
whom.

(i) five (5) shall be selected by the governors representing regional
members; and

(ii) two (2) shall be selected by the governors representing non-regional
members.

( 6 ) When other States or Territories become members, the Board of
Governors may, by a vote of not less than two-thirds of the total number
of the governors representing not less than three-fourths of the total voting
power of the members, increase the total number of directors.

(c) The directors shall be selected in accordance with rules of procedure
to be adopted by the Board of Governors by a vote of not less than two-
thirds of the total number of the governors representing not less than three-
fourths of the total voting power of the members. The said rules shall give
effect to the principles relating to regional directors set out in Part I of Annex B
to this Agreement. Until such rules have been adopted, the directors shall
be selected in accordance with Part I1 of the said Annex B.

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2 2 CAP. 69) Caribbean Development Bank

2. Directors shall be persons of high competence in economic and financial
matters and shall be selected with due regard to the principle of equitable
geographical distribution.

3. Each director shall appoint an alternate with full power to act for him
when he is not present.

4. Directors shall hold office for a term of two (2) years and shall be eligible
for selection for a further term or terms of office. They shall continue in office
until their successors shall have been selected and assumed office. If the office
of a director becomes vacant before the expiration of his term of office the vacancy
shall be filled by a new director who shall be selected by the governors represen-
ting the members who selected his predecessor and he shall hold office for the
remainder of the term of office of his predecessor.

ARTICLE 30

BOARD OF DIRECTORS: POWERS

The Board of Directors shall be responsible for the direction of the general
operations of the Bank and, for this purpose, shall, in addition to the powers
assigned to it expressly in this Agreement, exercise all the powers delegated to
it by the Board of Governors, and in particular:

(a) prepare the work of the Board of Governors;

( b ) in conformity with the general directions of the Board of Governors,
take decisions concerning loans, guarantees, investments in equity capital,
borrowing by the Bank, furnishing of technical assistance, and other opera-
tions of the Bank;

(c) submit the accounts for each financial year to the Board of Gover-
nors at each annual meeting; and

(d) approve the budget of the Bank.

ARTICLE 3 1

BOARD OF DIRECTORS: PROCEDURE

1. The Board of Directors shall normally function at the principal office
of the Bank and shall meet as often as the business of the Bank may require.

2. A majority of the directors shall constitute a quorum for any meeting
of the Board of Directors, provided that such majority represents not less than
two-thirds of the total voting power of the members.

3. The Board of Governors shall adopt regulations under which a member
may send a representative to attend any meeting of the Board of Directors when
a matter particularly affecting that member is under consideration.

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Caribbean Development Bank (CAP. 69 2 3

ARTICLE 32

VOTING

1. Each member shall have one hundred and fifty votes plus one addi-
tional vote for each share of capital stock held by it.

2. In voting in the Board of Governors, each governor shall be entitled
to cast the votes of the members he represents. Except as otherwise expressly pro-
vided in this Agreement, all matters before the Board of Governors shall be deter-
mined by a majority of the voting power of the members represented at the meeting.

3. In voting in the Board of Directors, each director shall be entitled to
cast the number of votes of the member or members whose votes counted towards
his selection, which votes must be cast as a unit. Except as otherwise expressly
provided in this Agreement, all matters before the Board of Directors shall be
determined by a majority of the voting power of the members represented at the
meeting.

ARTICLE 33

THE PRESIDENT

1. The Board of Governors, by a vote of not less than two-thirds of the
total number of the governors representing not less than three-fourths of the total
voting power of the members, shall elect a President of the Bank. The President,
while holding office, shall not be a governor or a director or an alternate for either.

2. The term of office of the President shall be for such period not exceeding
five (5) years as the Board of Governors may determine. He may be re-elected.
He shall, however, cease to hold office when the Board of Govenors so decides
by a vote of not less than two-thirds of the total number of the governors representing
not less than three-fourths of the total voting power of the members.

3. The President shall be Chairman of the Board of Directors but shall
have no right to vote, except to vote in case of an equal division. He may par-
ticipate in meetings of the Board of Governors but shall not vote.

4. The President shall be chief executive officer of the Bank and shall con-
duct, under the direction of the Board of Directors, the current business of the
Bank. He shall be responsible for the organization, appointment and dismissal
of the officers and the staff, subject to the general control of the Board of Directors.

5 . The President and the Vice-President shall be persons possessing exten-
sive experience in matters relating to finance and development in the public or
private sector.

6. In appointing the officers and staff, the President shall, subject to the
paramount importance of securing the highest standards of efficiency and technical

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2 4 CAP. 69) Caribbean Development Bank

competence, pay due regard to the recruitment of personnel on as equitable a
geographical basis as possible,.

ARTICLE 34

THE VICE-PRESIDENT

1. A Vice-President shall be appointed by the Board of Directors on the
recommendation of the President. The Vice-President shall hold office for such
term, exercise such authority and perform such functions in the administration
of the Bank as may be determined by the Board of Directors. In the absence
or incapacity of the President, or while that office is vacant, the Vice-President
shall exercise the authority and perform the functions of the President.

2. The Vice-President may participate in meetings of the Board of Direc-
tors but shall have no vote at such meetings, except that the Vice-President shall
cast the deciding vote when acting in place of the President.

ARTICLE 35

INTERNATIONAL CHARACTER OF THE BANK:

PROHIBITION OF POLITICAL ACTIVITY

1. The Bank shall not accept loans or assistance that may in any way
prejudice or otherwise alter its purpose or functions.

2. The Bank, its President, Vice-President, officers and staff shall not
interfere in the political affairs of any member, nor shall they be influenced in
their decisions by the political character of the member concerned. Only economic
considerations relevant to the purpose and functions of the Bank shall be brought
to bear upon their decisions. Such considerations shall be weighed impartially
in order to achieve and carry out the purpose and functions of the Bank.

3. The President, Vice-President, officers and staff of the Bank, in the
discharge of their offices, owe their duty entirely to the Bank and to no other
authority. Each member of the Bank shall respect the international character of
this duty and shall refrain from all attempts to influence any of them in the discharge
of their duties.

ARTICLE 36

OFFICE OF THE BANK

1. The principal office of the Bank shall be located in Barbados.

2. The Bank may establish agencies or branch offices elsewhere.

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Caribbean Development Bank (CAP. 69 25

ARTICLE 37

CHANNEL OF COMMUNICATIONS, DEPOSITORIES

1. Each member shall designate an appropriate official entity with which
the Bank may communicate in connection with any matter arising under this
Agreement.

2. Each member shall designate its central bank, or such other institution
as may be agreed upon with the Bank, as a depository with which the Bank may
keep any of its holdings of the currency of that member as well as other assets
of the Bank.

ARTICLE 38

OFFICIAL LANGUAGE AND REPORTS

1. The official language of the Bank shall be English.

2. The Bank shall transmit to members an Annual Report containing an
audited statement of its accounts and shall publish such Report. It shall also transmit
quarterly to its members a summary statement of its financial position and a profit
and loss statement showing the results of its operations.

3. The Bank may also publish such other reports as it deems desirable in
the carrying out of its purpose and functions. Such reports shall be transmitted
to the members of the Bank.

4. The accounts of the Bank shall be audited by external auditors of high
international standing selected by the Board of Governors.

ARTICLE 39

ALLOCATION OF NET INCOME

1. The Board of Governors shall determine at least a~nual ly the disposi-
tion of the net income of the Bank arising from its ordinary operations and what
portion thereof, if any, shall be allocated, after making provision for reserves or
other purposes, to surplus, and what portion, if any, shall, notwithstanding the
provisions of Article 12, be allocated to any special fund, including the Special
Development Fund, or distributed to the members.

2. The Board of Governors shall determine at least annually the disposi-
tion of the net income of the Bank arising from its special operations, subject
to any rules or regulations governing each special fund and any agreement relating
thereto.

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CAP. 69) Caribbean Development Bank

3. Any distribution of net income under paragraph 1 of this Article shall
be made to each member in the proportion which the total payments made by
that member under paragraph 2 (a) of Article 7 and the average amount of loans
outstanding during the year made out of currency corresponding to its subscrip-
tion under paragraph 2 (b) of Article 7 bears to the total of such amounts for
all members.

4. Payments shall be made in such manner and in such currency as the
Board of Governors shall determine.

CHAPTER VII

WITHDRAWAL AND SUSPENSION OF MEMBERS;

TEMPORARY SUSPENSION AND TERMINATION
OF OPERATIONS OF THE BANK

ARTICLE 40

WITHDRAWAL

1. Any member may withdraw from the Bank at any time by delivering
a notice in writing to the Bank at its principal office.

2. Withdrawal by a member shall become effective, and its membership
shall cease, on the date specified in its notice, but in no event less than six (6)
months after the date that notice has been received by the Bank. However, at
any time before the withdrawal becomes effective, the member may notify the
Bank in writing of the cancellation of its notice of intention to withdraw.

3. A member which has given notice of its withdrawal from the Bank shall
remain liable for all direct and contingent obligations to the Bank to which it
was subject at the date of delivery of the withdrawal notice. If the withdrawal
becomes effective, the member shall not incur any liability for obligations resulting
from operations of the Bank effected after the date on which the notice of withdrawal
was received by the Bank.

ARTICLE 41

SUSPENSION OF MEMBERSHIP

1. If a member fails to fulfil any of its obligations to the Bank, the Board
of Governors may suspend such member by a vote of not less than two-thirds
of the total number of the governors of other members representing not less than
three-fourths of the total voting power of the other members. The member con-
cerned shall have no vote.

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Caribbean Development Bank (CAP. 69 2 7

2. The member so suspended shall automatically cease to be a member
of the Bank one (1) year from the date of its suspension unless the Board of Gover-
nors, during that period, decides by the same majority necessary for suspension
to restore the member to good standing.

3. While under suspension, a member shall not be entitled to exercise any
rights under this Agreement, except the right of withdrawal, but shall remain
subject to all its obligations.

ARTICLE 42

SETTLEMENT OF ACCOUNTS

1. After the date on which a State or Territory ceases to be a member,
that former member shall remain liable for its direct obligations to the Bank and
for its contingent liabilities to the Bank so long as any part of the loans or guarantees
contracted before it ceased to be a member is outstanding; but it shall not incur
liabilities with respect to loans and guarantees entered into thereafter by the Bank
nor share either in the income or the expenses of the Bank.

2. At the time a State or Territory ceases to be a member, the Bank shall
arrange for the repurchase of such member's shares by the Bank as a part of
the settlement of accounts with such member in accordance with the provisions
of paragraphs 3 and 4 of this Article. For this purpose, the repurchase price of
the shares shall be the value shown by the books of the Bank on the date of cessa-
tion of membership.

3. The repayment for shares repurchased by the Bank under this Article
shall be governed by the following conditions:

(a ) Any amount due to the member concerned for its shares shall be
withheld so long as that member, its central bank or any of its political sub-
divisions or agencies remains liable, as borrower or guarantor, to the Bank
and such amount may, at the option of the Bank, be applied on any such
liability as it matures. No amount shall be withheld on account of the con-
tingent liability of the member for future calls on its subscription for shares
in accordance with paragraph 6 of Article 7 . In any event, no amount due
to a member for its shares shall be paid until six ( 6 ) months after the date
on which its membership ceases.

( b ) Payments for shares may be made from time to time, upon their
surrender by the former member concerned, to the extent by which the amount
due to the repurchase price in accordance with paragraph 2 of this Article
exceeds the aggregate amount of liabilities on loans and guarantees referred
to in sub-paragraph (a) of this paragraph, until the former member has received
the full repurchase price.

(6) Payments shall be made in such available currencies as the Bank
determines, taking into account its financial position.

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CAP. 69) Caribbean Development Bank

(6) If losses are sustained by the Bank on any guarantees or loans which
were outstanding on the date of cessation of membership and the amount
of such losses exceeds the amount of the reserve provided against losses on
that date, the former member concerned shall repay, upon demand, the
amount by which the repurchase price of its shares would have been reduced
if the losses had been taken into account when the repurchase price was deter-
mined. In addition, the former member shall remain liable on any call for
unpaid subscriptions in accordance with paragraph 6 of Article 7, to the same
extent that it would have been required to respond if the impairment of capital
had occurred and the call had been made at the time the repurchase price
of its shares were determined.

4. If the Bank terminates its operations pursuant to Article 44 within six
(6) months of the date upon which the membership of any member ceases, all
rights of the member concerned shall be determined in accordance with the provi-
sions of Articles 44 to 46. That member shall be considered as still a member
for purposes of such Articles but shall have no voting rights.

ARTICLE 43

TEMPORARY SUSPENSION OF OPERATIONS

In an emergency, the Board of Directors may temporarily suspend opera-
tions in respect of new loans and guarantees, pending an opportunity for further
consideration and action by the Board of Governors.

ARTICLE 44

TERMINATION OF OPERATIONS

1. The Bank may terminate its operations by resolution of the Board of
Governors approved by a vote of not less than two-thirds of the total number
of governors representing not less than three-fourths of the total voting power
of the members.

2. After such termination, the Bank shall forthwith cease all activities, except
those incident to the orderly realization, conservation and preservation of its assets
and settlement of its obligations.

ARTICLE 45

LIABILITY OF MEMBERS AND PAYMENT OF CLAIMS

1. In the event of termination of the operations of the Bank, the liability
of all members for uncalled subscriptions to the capital stock of the Bank and
in respect of the depreciation of their currencies shall continue until all claims
of creditors, including all contingent claims, shall have been discharged.

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Caribbean Deuelopment Bank (CAP. 69 2 9

2. All creditors holding direct claims shall first be paid out of the assets
of the Bank and then out of payments to the Bank on unpaid or callable subscrip-
tions. Before making any payments to creditors holding direct claims, the Board
of Directors shall make such arrangements as are necessary, in its judgement,
to ensure a pro rata distribution among holders of direct and contingent claims.

ARTICLE 46

DISTRIBUTION OF ASSETS

1. No distribution of assets shall be made to members on account of their
subscriptions to the capital stock of the Bank until all liabilities to creditors shall
have been discharged or provided for. Moreover, such distribution must be approved
by the Board of Governors by a vote of not less than two-thirds of the total number
of governors representing not less than three-quarters of the total voting power
of the members.

2. Any distribution of the assets of the Bank to the members shall be in
proportion to the capital stock held by each member and shall be effected at such
times and under such conditions as the Bank shall deem fair and equitable. The
shares of assets distributed need not be uniform as to type of assets. No member
shall be entitled to receive its share in such a distribution of assets until it has
settled all its obligations to the Bank.

3. Before any distribution of assets is made the Board of Directors shall
value the assets to be distributed as at the date of distribution and then proceed
to distribute in the following manner-

(i) There shall be paid to each member in its own obligations or those
of ~ t s official agencies or legal entities within its territories, insofar
as they are available for distribution, an amount equivalent in value
to its proportionate share of the total amount to be distributed.

(ii) Any balance due to a member after payment has been made under
(i) above shall be paid, in its own currency, insofar as it is held
by the Bank, up to an amount equivalent in value to such balance.

(iii) Any balance due to a member after payment has been made under
(i) and (ii) above shall be paid in gold or currency acceptable to
the member, insofar as they are held by the Bank, up to an amount
equivalent in value to such balance.

(iv) Any remaining balance due to a member after payment has been
made under (i), (ii), and (iii) shall be satisfied out of the remaining
assets held by the Bank.

4. Any member receiving assets distributed pursuant to this Article shall
enjoy the same rights with respect to such assets as the Bank enjoyed before their
distribution.

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30 CAP. 69) Caribbean Development Bank

CHAPTER VIII

STATUS, IMMUNITIES, EXEMPTIONS AND PRIVILEGES

ARTICLE 47

PURPOSE OF CHAPTER

To enable the Bank effectively to fulfil its purpose and carry out the func-
tions entrusted to it, the status, immunities, exemptions and privileges set forth
in this Chapter shall be accorded to the Bank in the territory of each member.

ARTICLE 48

LEGAL STATUS

1. The Bank shall possess full juridical personality and, in particular, full
capacity:

(a) to contract;

(b) to acquire, and dispose of, immovable and movable property; and

( 6 ) to institute legal proceedings.

2. The Bank may enter into agreements with members, non-member States
and other international organizations.

ARTICLE 49

LEGAL PROCESS

1. The Bank shall enjoy immunity from every form of legal process, except
in cases arising out of or in connection with the exercise of its powers to borrow
money, to guarantee obligations, or to buy and sell or underwrite the sale of
securities, in which cases actions may be brought against the Bank in a court
of competent jurisdiction in the territory of a member in which the Bank has
its principal or a branch office, or in the territory of a member or non-member
State where it has appointed an agent for the purpose of accepting service or notice
of process, or has issued or guaranteed securities.

2. Notwithstanding the provisions of paragraph 1 of this Article, no action
shall be brought against the Bank by any member, or by any agency of a member,
or by any entity or person directly or indirectly acting for or deriving claims from
a member. Members shall have recourse to such special procedures for the settle-
ment of disputes between the Bank and its members as may be provided for in
this Agreement, in by-laws and regulations of the Bank, or in contracts entered
into with the Bank.

LAWS OF ANTIGUA AND BARBUDA

Caribbean Development Bank (CAP. 69 3 1

3. The Bank shall also make provision for appropriate modes of settlement
of disputes in cases which do not come within the provisions of paragraph 2 of
this Article and which are subject to the immunity of the Bank by virtue of paragraph
1 of that Article.

4. The Bank and its property and assets, wheresoever located and by whom-
soever held, shall be immune from all forms of seizure, attachment or execution
before the delivery of final judgement against the Bank.

ARTICLE 50

IMMUNITY OF ASSETS

Property and assets of the Bank, wheresoever located and by whomsoever
held, shall be immune from search, requisition, confiscation, expropriation or
any other form of taking or foreclosure by executive or legislative action.

ARTICLE 51

IMMUNITY OF ARCHIVES

The archives of the Bank and, in general, all documents, belonging to it,
or held by it, shall be inviolable, wherever located.

ARTICLE 52

FREEDOM OF ASSETS FROM RESTRICTIONS

T o the extent necessary to carry out the purpose and functions of the Bank
effectively and subject to the provisions of this Agreement, the Bank

(a) may hold assets of any kind and operate accounts in any currency; and

(b) shall be free to transfer its assets from one country to another or
within any country and to convert any currency held by it into any other
currency, without being restricted by financial controh, regulations or
moratoria of any kind.

ARTICLE 53

PRIVILEGE FOR COMMUNICATIONS

Official communications of the Bank shall be accorded by each member treat-
ment not less favourable than that it accords to the official communications of
any other member.

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32 CAP. 69) Caribbean Deuelopment Bank

ARTICLE 54

IMMUNITIES AND PRIVILEGES OF BANK PERSONNEL

All governors, directors, alternates, officials and employees of, and experts
performing missions for, the Bank:

(a) shall be immune from legal process with respect to acts performed
by them in their official capacity;

( b ) where they are not local citizens or nationals, shall be accorded such
immunities from immigration restrictions, alien registration requirements
and national service obligations, and such facilities as regards exchange regula-
tions, as are not less favourable than those accorded by the member con-
cerned to the representatives, officials and employees of comparable rank
of any other member;

(c) shall be given such repatriation facilities in time of international crisis
as are not less favourable than those accorded by the member concerned
to the representatives, officials and employees of comparable rank of any
other member.

ARTICLE 55

EXEMPTION FROM TAXATION

1. The Bank, its assets, property, income and its operations and transac-
tions, shall be exempt from all direct taxation and from all customs duties on
goods imported for its official use.

2. Notwithstanding the provisions of paragraph 1 of this Article, the Bank
will not claim exemption from taxes which are no more than charges for public
utility services.

3. The Bank will not normally claim exemption from excise duties, and
from taxes on the sale of movable and immovable property, which form part of
the price to be paid. Nevertheless, when the Bank is making important purchases
for official use of property on which such duties and taxes have been charged
or are chargeable, members will, whenever possible, make appropriate
administrative arrangements for the remission or return of the amount of duty or tax.

4 Articles imported under an exemption from customs duties as provided
by paragraph 1 of this Article, or in respect of which a remission or return of
duty or tax has been made under paragraph 3 , shall not be sold in the territory
of the member which granted the exemption, remission or return except under
conditions agreed with that member.

5 No tax shall be levied on or in respect of salaries and emoluments paid
by the Bank to directors, alternates, officers or employees of the Bank, including

LAWS OF ANTIGUA AND BARBUDA

Caribbean Development Bank (CAP. 69 3 3

experts performing missions for the Bank, but members reserve the right to tax
their own citizens or nationals or persons permanently resident in the territories
of such members.

6 No tax of any kind shall be levied on any obligation or security issued
by the Bank, including any dividend or interest thereon, by whomsoever held-

(a) which discriminates against such obligation or security solely because
it is issued by the Bank; or

(b) if the sole jurisdictional basis for such taxation is the place or the
currency in which it is issued, made payable or paid, or the location of any
office or place of business maintained by the Bank.

7 No tax of any kind shall be levied on any obligation or security guaranteed
by the Bank, including any dividend or interest thereon, by whomsoever held-

(a) which discriminates against such obligation or security solely because
it is guaranteed by the Bank; or

(6) if the sole jurisdictional basis for such taxation is the location of any
office or place of business maintained by the Bank.

ARTICLE 56

IMPLEMENTATION

Each member shall promptly inform the Bank of the action which it has taken
to make effective the provisions of this Chapter in its territory.

ARTICLE 57

WAIVER OF IMMUNITIES, EXEMPTIONS AND PRIVILEGES

The immunities, exemptions and privileges provided in this Chapter are
granted in the interests of the Bank. The Board of Directors may waive to such
extent and upon such conditions as it may determine, the immunities, exemp-
tions and privileges provided in this Chapter in cases where such action would,
in its opinion, be appropriate in the best interests of the Bank. The President
shall have the right and the duty to waive any immunity, exemption or privilege
in respect of any officer or employee of, or any expert performing a mission for,
the Bank where, in his opinion, the immunity, exemption or privilege would impede
the course of justice and can be waived without prejudice to the interests of the
Bank. In similar circumstances and under the same conditions, the Board of Direc-
tors shall have the right and duty to waive any immunity, exemption or privilege
respecting the President and the Vice-President.

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CAP. 69) Caribbean Development Bank

CHAPTER IX

AMENDMENTS, INTERPRETATION, ARBITRATION

ARTICLE 58

AMENDMENTS

1. This Agreement may be amended only by a resolution of the Board
of Governors adopted by a vote of not less than two-thirds of the total number
of governors representing not less than three-fourths of the total voting power
of the members.

2. Notwithstanding the provisions of paragraph 1 of this Article, the
unanimous agreement of the Board of Governors shall be required for the adop-
tion of any amendment modifying:

(a) the right to withdraw from the Bank;

(b) the limitations on liability provided in paragraphs 7 and 8 of Arti-
cle 6; and

(G) the rights pertaining to the subscriptions of capital stock provided
in paragraph 3 of Article 6.

3. Any proposal to amend this Agreement, whether emanating from a
member or from the Board of Directors, shall be communicated to the Chairman
of the Board of Governors, who shall communicate the proposal to each member
and then bring it before the Board of Governors. When an amendment has been
adopted, the Bank shall certify it in a formal communication addressed to all
members. Amendments shall enter into force for all members three (3) months
after the date of the formal communication unless the Board of Governors specifies
therein a different period.

4. The foregoing provisions of this Article shall be subject to the terms
of the Protocol annexed hereto which shall have effect only for the purposes and
during the meeting specified therein.

ARTICLE 59

INTERPRETATION AND APPLICATION

1. Any question of interpretation or application of the provisions of this
Agreement not otherwise expressly provided for shall be submitted to the Board
of Directors for decision. A member particularly affected by the question under
consideration shall have the right to make direct representation to the Board of
Directors at the meeting of the Board at which the question is considered. Such
right shall be regulated by the Board of Governors.

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Caribbean Development Bank (CAP. 69 3 5

2. In any case where the Board of Directors has given a decision under
paragraph 1 of this Article, any member may require that the question be refer-
red to the Board of Governors, whose decision shall be final. Pending the decision
of the Board of Governors, the Bank may, so far as it deems it necessary, act
on the basis of the decision of the Board of Directors.

ARTICLE 60

ARBITRATION

If a dispute should arise between the Bank and a State or Territory which
ceases to be a member, or between the Bank and any member after adoption
of a resolution to terminate the operations of the Bank, such dispute shall be sub-
mitted to arbitration by a tribunal of three arbitrators. Each Party shall appoint
one arbitrator, and the two arbitrators so appointed shall appoint the third, who
shall be the Chairman. If within thirty days of the request for arbitration either
party has not appointed an arbitrator or if within fifteen days of the appointment
of two arbitrators the third arbitrator has not been appointed, either party may
request the President of the International Court of Justice, or such other authori-
ty as may have been prescribed by regulations adopted by the Board of Gover-
nors, to appoint an arbitrator. The procedure of the arbitration shall be fixed
by the arbitrators. However, the third arbitrator shall be empowered to settle
all questions of procedure in any case of disagreement with respect thereto. A
majority vote of the arbitrators shall be sufficient to reach a decision which shall
be final and binding upon the parties.

ARTICLE 61

APPROVAL DEEMED GIVEN

Whenever the approval of any member is required before any act may be
done by the Bank, approval shall be deemed to have been given unless the member
presents an objection within such reasonable period as the Bank may fix when
notifying the member of the proposed act.

CHAPTER X

FINAL PROVISIONS

ARTICLE 62

SIGNATURE AND DEPOSIT

1. This Agreement shall be deposited with the Secretary-General of the
United Nations (hereinafter called the "Depository") and shall remain open until
14 November, 1969 for signature by the Governments listed in Annex A to this
Agreement.

LAWS OF ANTIGUA AND BARBUDA

36 CAP. 69) Caribbean Development Bank

2. In the case of Territories in the region which are not fully responsible
for the conduct of their international relations and where the Government of the
State responsible for the conduct of the international relations of the Territory
does not sign, ratify, or accede to this Agreement on its behalf, such Territory
shall at the time of signing or acceding to this Agreement in pursuance of Article 63
present an instrument issued by the Government of the State responsible for the
conduct of the international relations of that Territory confirming that the latter
has authority to conclude this Agreement and to assume rights and obligations
under it.

3. The Depository shall transmit certified copies of this Agreement to all
the signatories and other States and Territories which become members of the Bank.

ARTICLE 63

RATIFICATION, ACCEPTANCE, ACCESSION AND ACQUISITION
OF MEMBERSHIP

1. (a) This Agreement shall be subject to ratification or acceptance by the
signatories. Instruments of ratification or acceptance shall be deposited by
the signatories with the Depository before 30 April, 1970. The Depository
shall notify the other signatories of each deposit and the date thereof.

( b ) A signatory whose instrument of ratification or acceptance is deposited
on or before the date on which this Agreement enters into force, shall become
a member of the Bank on that date, and a signatory whose instrument of
ratification or acceptance is deposited after that date, but before 30 April
1970, shall become a member on the date of deposit of its instrument of
ratification or acceptance.

2. After 30 April 1970 a State or Territory may become a member of the
Bank by accession to this Agreement on such terms as the Board of Governors
shall determine in accordance with paragraph 3 of Article 3. Any such State or
Territory shall deposit, on or before a date appointed by the Board, an instru-
ment of accession with the Depository who shall notify such deposit and the date
thereof to the Bank and to the parties to this Agreement. Upon such deposit,
the State or Territory shall become a member of the Bank on the appointed date
in accordance with that paragraph.

3. A member may, when depositing its instrument of ratification or accep-
tance, declare that in its territory the immunity conferred by paragraph 1 of
Article 49 and sub-paragraph (a) of Article 54 shall not apply in relation to a civil
action arising out of an accident caused by a motor vehicle belonging to the Bank
or operated on its behalf or to a traffic offence committed by the driver of such
a vehicle.

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Caribbean Development Bank (CAP. 69 37

The member may also declare that the privilege conferred by Article 53 shall
be restricted in its territory to treatment not less favourable than the member
accords to international financial institutions of which it is a member, and that
the exemption referred to in paragraph 6(b) of Article 55 shall not extend to any
bearer instrument issued by the Bank in its territory or issued elsewhere by the
Bank and transferred in its territory.

ARTICLE 64

ENTRY INTO FORCE

This Agreement shall enter into force upon the deposit of instruments of ratifica-
tion or acceptance by eight (8) signatories, including at least one non-regional
State. whose initial subscri~tions. as set forth in Annex A to this A~reement. in

c 2

aggregate comprise not less than sixty (60) per cent of the authorized capital stock
of the Bank, provided that 1st December 1969 shall be the earliest date on which
this Agreement may enter into force.

ARTICLE 65

INAUGURAL MEETING

As soon as this Agreement enters into force, each member shall appoint a
governor, and the Secretary-General of the Commonwealth Caribbean Regional
Secretariat shall call the inaugural meeting of the Board of Governors.

LAWS OF ANTIGUA AND BARBUDA

38 CAP. 69) Caribbean Development Bank

IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly authorized
thereto by their respective Governments, have signed the present Agreement.

DONE AT Kingston, Jamaica, this eighteenth day of October, one thousand
nine hundred and sixty-nine.

For ANTIGUA

V C BIRD

For BAHAMAS

CARLTON E FRANCIS

For BARBADOS

ERROL W BARROW

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Caribbean Development Bank (CAP. 69 39

For BRITISH HONDURAS

A A HUNTER

For BRITISH VIRGIN ISLANDS

IVAN DAWSON

For CANADA

PAUL MARTIN

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40 CAP. 69) Caribbean Development Bank

For CAYMAN ISLANDS

D V WATLER

For DOMINICA

E 0 LEBLANC

For GRENADA

GEO F HOSTEN

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Caribbean Development Bank (CAP. 69 41

For GUYANA

P A REID

For JAMAICA

E SEAGA

For MONTSERRAT

W H BRAMBLE

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42 CAP. 69) Caribbean Development Bank

For ST. KITTS-NEVIS-ANGUILLA

ROBT L BRADSHAW

For ST. LUCIA

J C COMPTON

For ST. VINCENT

HUDSON K TANNIS

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Caribbean Development Bank (CAP. 69 43

For TRINIDAD AND TOBAGO

KAMALUDDIN MOHAMMED

For TURKS AND CAICOS ISLANDS

R E WAINWRIGHT

For UNITED KINGDOM

GEORGE THOMPSON

LAWS OF ANTIGUA AND BARBUDA

44 CAP. 69) Caribbean Development Bank

ANNEX A

States and Territories which may become Members in accordance with
paragraph 2 of Article 3, and their initial subscriptions to the Authorized Capital
Stock.

(Article 6, Paragraph 1)

CATEGORY A CATEGORY B
Regional States and Territories Non-Regional States

No. of Shares No. of Shares

Jamaica 2,240 1. Canada 2,000
Trinidad and Tobago 1,540 2. United Kingdom 2,000
Bahamas 660
Guyana 480

Sub-Total 4,000

Barbados 280 Grand Tota110,OOO
Antigua 100
British Honduras 100
Dominica 100
Grenada 100
St Kitts-Nevis-Anguilla 100
St Lucia 100
St Vincent 100
Montserrat 25
British Virgin Islands 2 5
Cayman Islands 2 5
Turks and Caicos Islands 25

Sub-Total 6,000

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Caribbean Deuelopment Bank (CAP. 69 45

ANNEX B

SELECTION OF DIRECTORS

PART I-Principles for the Selection of Directors Representing Regional Members

Of the five (5) directors to be selected pursuant to paragraph l ( a ) (i) of
Article 29:

(a ) one ( 1 ) director shall be selected by each of the governors represen-
ting the two (2) regional members having the largest number of shares of
the capital stock of the Bank;

(6) three ( 3 ) shall be selected by the Governors representing the other
regional members.

PART 11-Selection of Directors Pending Adoption of the Rules of Procedure

1. Regional Members:
(a) one ( 1 ) director shall be selected by the governor representing Jamaica;

(b) one ( 1 ) director shall be selected by the governor representing Trinidad
and Tobago;

( 6 ) one ( 1 ) director shall be selected jointly by the governors represen-
ting Guyana and Barbados;

(d) one (1) director shall be selected jointly by the governors represen-
ting Bahamas and British Honduras; and

(e) one ( 1 ) director shall be selected jointly by the governors representing

Antigua
British Virgin Islands
Cayman Islands
Dominica
Grenada
Montserrat
St. Kitts-Nevis-Anguilla
St. Lucia
St. Vincent
Turks and Caicos Islands

2 . Nan-Regional Members:
(a) one ( 1 ) director shall be selected by the governor representing Canada;

and

(b ) one ( 1 ) director shall be selected by the governor representing the
United Kingdom.

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46 CAP. 69) Caribbean Development Bank

PROTOCOL to Provide for Procedure for Amendment of Article 36 of the
Agreement Establishing the Caribbean Development Bank at the Inaugural
Meeting of the Board of Governors.

The States and Territories parties to the Agreement establishing the Carib-
bean Development Bank (hereinafter referred to as "the Agreement") hereby agree
that notwithstanding the provisions of Article 58 of the Agreement, paragraph 1
of Article 36 of the Agreement may be amended at the inaugural Meeting of the
Board of Governors of the Caribbean Development Bank by a Resolution (on
a motion which shall not be subject to amendment and moved by the Governor
for Jamaica) approved by the vote of a simple majority of the Governors present
and voting thereon representing more than one-half of the voting powers of the
Governors present and voting thereon.

SECOND SCHEDULE

Article EXTENT OF MODIFICATION

49 - (i) The second sentence of paragraph 2 shall be excluded;

(ii) paragraph 3 shall be excluded.

5 4 - (i) the expression "local citizens or nationals" in sub-paragraph
( 6 ) shall apply only to persons who are regarded as belonging
to Antigua by subsection (8) of section 16 of the Constitution
of Antigua;

(ii) sub-paragraph (c ) shall be excluded.
55 - (i) paragraphs 2 and 3 shall be excluded;

(ii) for the words "under paragraph 3" in paragraph 4 shall be
substituted the words "in any other respect".