Chapter 76:01 - International Financial Organisations

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L.R.O. 1/ 2012
LAWS OF GUYANA
INTERNATIONAL FINANCIAL ORGANISATIONS ACT
CHAPTER 76:01
Act
2 of 1966B
Amended by
21 of 1969 10 of 1978







(inclusive) by L.R.O.
Pages Authorised
Current Authorised Pages
1 – 280 ... 1/2012
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Note
on
Subsidiary Legislation
This Chapter contains no subsidiary legislation.
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CHAPTER 76:01
INTERNATIONAL FINANCIAL ORGANISATIONS ACT
ARRANGEMENT OF SECTIONS

SECTION
1. Short title.
2. Interpretation.
3. Authorisation for signing of and accepting the Agreements.
4. Effect of signature.
5. Financial provisions relating to membership in the Fund.
6. Financial provisions relating to membership in the Inter-
national Bank, etc.
7. Certain provisions of Agreements given force of law in Guyana.
8. Power of Minister to make orders.
FIRST SCHEDULE—Articles of Agreement.
SECOND SCHEDULE—Text of Articles of Agreement of International Bank
for Reconstruction and Development.
THIRD SCHEDULE—Governments on whose behalf Agreement signed.
FOURTH SCHEDULE—Articles of Agreement of the International
Development Association.
___________________________
2 of 1966B
An Act to enable Guyana to become a member of the
International Monetary Fund, the International Bank for
Reconstruction and Development, the International
Finance Corporation and the International Development
Association.
WHEREAS pursuant to the Articles of Agreement
drawn up at the United Nations Monetary and Financial
Conference held in the year nineteen hundred and forty-four
at Bretton Woods in New Hampshire in the United States of
America, two international bodies known as the International
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Short title.
Interpretation.

Monetary Fund and the International Bank for
Reconstruction and Development were established;
AND WHEREAS pursuant to the Articles of Agreement
approved by the executive directors of the said
International Bank for Reconstruction and Development in
the year nineteen hundred and fifty-five an international
body known as the International Finance Corporation was
established;
AND WHEREAS pursuant to the Articles of Agreement
approved by the directors of the said International Bank for
Reconstruction and Development in the year nineteen
hundred and sixty an international body known as the
International Development Association was established;
AND WHEREAS the said several Articles of
agreement contain provisions by virtue whereof Guyana may
become a member of each such body, and by virtue whereof
the Articles of Agreement relating to each such body may
be signed and accepted on behalf of the Government of
Guyana, pursuant to the prescription of terms and
conditions in that behalf by the body in question;
AND WHEREAS it is expedient that Guyana should be
a member of the said International bodies:
Be it, therefore, enacted by the Parliament of Guyana:—
1. This Act may be cited as the International
Financial Organisations Act.
2. In this Act—
“Association” means the International Development
Association;

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Forth Schedule.

Second
Schedule.

Third Schedule.
First Schedule .


Authorisation
for signing and
accepting the
agreements.
“Association Agreement” means the Articles of Agreement
for the establishment and operation of the Association
set out in the Fourth Schedule;
“Bank” means the International Bank for
Reconstruction and Development;
“Bank Agreement” means the Articles of Agreement for
the establishment and operation of the Bank as
amended, set out in the Second Schedule;
“Corporation” means the International Finance Corporation;
“Corporation Agreement” means the Articles of Agreement
for the establishment and operation of the Corporation
as amended, set out in the Third Schedule;
“Fund” means the International Monetary Fund;
“Fund Agreement” means the Articles of Agreement for
the establishment and operation of the Fund, set out
in the First Schedule;
“Membership Resolutions” means resolutions adopted by the
Board of Governors of the Fund, the Bank, the
Corporation, and the Association, respectively,
specifying the terms and conditions upon which
Guyana shall be admitted to membership in these
organisations;
“Minister” means the Minister for the time being charged
with responsibility for finance.
3. The Minister is hereby authorised on behalf of the
Government of Guyana to sign any or all of the following
agreements, that is to say, the Fund Agreement, the Bank
Agreement, the Corporation Agreement and the Association
Agreement and to deposit, in the cases of the Fund Agreement
and the Bank Agreement, with the Government of the United
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Effect of
signature.

Financial
provisions
relating to
membership in
the fund.
[21 of 1969]


Financial
provisions
relating to
membership in
the
International
Bank, etc.
States, and, in the cases of the Corporation Agreement and
the Association Agreement, with the Bank, instruments
of acceptance of the said Agreements and of the terms and
conditions respectively prescribed thereunder relating to the
admission of Guyana to membership, or by instruments
under his hand, to empower such person as may be
named in such instruments to sign the said Agreements
and to deposit the said instruments of acceptance as
aforesaid.
4. If any such Agreement is signed as aforesaid, the
provisions of the following sections in connection therewith
shall have effect.
5. (1) It shall be the function of the Bank of Guyana
to pay the amounts (including any special drawing rights)
from time to time payable on account of Guyana under the
Membership Resolution and the Fund Agreement.
(2) The Bank of Guyana may, if it thinks fit, create
and issue to the Fund any such non-interest bearing and
non-negotiable notes or other obligations as are provided for
by section 5 of Article III of the Fund Agreement (which
section relates to the acceptance by the Fund of notes or
similar obligations in place of currency).
(3) The Bank of Guyana is hereby authorised to
receive from the Fund any sums relating to Guyana’s
subscription and any sums (including any special drawing
rights) to be received by reason of operations or transactions
under Article V or any other Article of the Fund Agreement.
6. (1) The Consolidated Fund is hereby charged with
all sums required for the purposes of making—
(a) all payments to be made from time to
time to the Bank under the provisions
of the Membership Resolution and the
Bank Agreement;
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Certain
provisions of
Agreements
given force of
law in Guyana.
(b) all payments to be made from time
to time to the Corporation under the
Membership Resolution and the
Corporation Agreement;
(c) all payments to be made from time to
time to the Association under the
Membership Resolution and the
Association Agreement.
(2) The Minister may, if he thinks fit, create and
issue to the Bank or the Association any such non-interest
bearing and non- negotiable notes or other obligations as are
provided for by section 12 of Article V of the Bank Agreement
and by section 2 (e) of Article II of the Association Agreement
(which sections relate to the acceptance by the Bank, or the
Association, as the case may be, of notes or similar obligations
in place of currency) and sums payable under such notes or
obligations so created and issued are hereby charged on
the Consolidated Fund.
(3) Any sums received by the Government of
Guyana from the Bank or the Corporation on account of
Guyana’s subscription to the capital stock thereof and any
sums received by the Government of Guyana from the
Association on account of Guyana’s subscription therein or
of supplementary resources provided by it shall be paid into
the Consolidated Fund.
7. The provisions of—
(a) sections 2 to 9 (inclusive) of Article IX
and paragraph (b) of Article XXVII of
the Fund Agreement;
(b) sections 2 to 9 (inclusive) of Article
VII of the Bank Agreement;

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(c) sections 2 to 9 (inclusive) of
Article VI of the Corporation
Agreement;
(d) sections 2 to 9 (inclusive) of Article
VIII of the Association Agreement;
and
(e) the first sentence of section 2(b) of
Article VIII of the Fund Agreement,
shall have the force of law in Guyana, so, however, that
nothing in section 9 of Article IX of the Fund Agreement or in
section 9 of Article VII of the Bank Agreement or in section
9 of Article VI of the Corporation Agreement or in
section 9 of Article VIII of the Association Agreement
shall be construed—
(i) as entitling the Fund, the Bank,
the Corporation or the
Association to import goods
free of customs duty without
any restriction on their
subsequent sale in the country
to which they were imported;
(ii) as conferring on the Fund,
the Bank, the Corporation or
the Association any exemption
from duties or taxes which form
part of the price of goods sold;
or
(iii) as conferring on the Fund,
the Bank, the Corporation or
the Association any exemption
from taxes or duties which are
in fact no more than charges
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Power of
Minister to
make orders.

[10 of 1978]

for services rendered.
8. (1) The Minister may by order make such
provisions as are necessary for carrying into effect any of the
provisions of the Fund Agreement, the Bank Agreement, the
Corporation Agreement and the Association Agreement.
(2) Without prejudice to the provisions of subsection
(1), where any amendment to an Agreement mentioned in
that subsection is accepted by the Government of Guyana,
the Minister may, by order, subject to negative resolution of
the National Assembly, amend the Schedule wherein such
Agreement is set out, by including therein the amendment so
accepted.
(3) An order made under subsection (2) may
contain such consequential, supplemental or ancillary
provisions (including provisions amending this Act) as
appear to the Minister to be necessary or expedient for the
purpose of giving due effect to the amendment accepted as
aforesaid.
(4) Where the provisions of an Agreement
mentioned in subsection (1) are amended pursuant to this
section, any references in this Act or any other instrument to
that Agreement shall, unless the context otherwise requires,
be construed as a reference to the Agreement as
amended.
_________________
FIRST SCHEDULE
ARTICLES OF AGREEMENT OF THE INTERNATIONAL
MONETARY FUND
The Governments on whose behalf the present
Agreement is signed agree as follows:

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INTRODUCTORY ARTICLE
(i) The International Monetary
Fund is established and shall
operate in accordance with
the provisions of this
Agreement as originally
adopted and subsequently
amended.
(ii) To enable the Fund to conduct
its operations and transactions,
the Fund shall maintain a
General Department and a
Special Drawing Rights
Department. Membership in
the Fund shall give the
right to participation in the
Special Drawing Rights
Department.
(iii) Operations and transactions
authorized by this Agreement
shall be conducted through
the General Department,
consisting in accordance with
the provisions of this
Agreement of the General
Resources Account, the Special
Disbursement Account, and
the Investment Account except
that operations and transactions
involving special drawing
rights shall be conducted
through the Special Drawing
Rights Department.

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ARTICLE I
PURPOSES
The purposes of the International Monetary Fund are:
(i) To promote international
monetary co-operation through
a permanent institution which
provides the machinery for
consultation and collaboration
on international monetary
problems.
(ii) To facilitate the expansion and
balanced growth of
international trade, and to
contribute thereby to the
promotion and maintenance of
high levels of employment and
real income and to the
development of productive
resources of all members as
primary objectives of
economic policy.
(iii) To promote exchange stability,
to maintain orderly exchange
arrangements among members,
and to avoid competitive
exchange depreciation.
(iv) To assist in the establishment of
a multilateral system of
payments in respect of current
transactions between members
and in the elimination of
foreign exchange restrictions
which hamper the growth of
world trade.
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(v) To give confidence to members
by making the general resources
of the Fund temporarily
available to them under
adequate safeguards, thus
providing them with
opportunity to correct
maladjustments in their balance
of payments without restoring
to measures destructive of
national or international
prosperity.
(vi) In accordance with the above, to
shorten the duration and lessen
the degree of disequilibrium in
the international balances of
payments of members.
The Fund shall be guided in all its policies and
decisions by the purposes set forth in this Article.
ARTICLE II.
MEMBERSHIP
Section 1.Original members
The original members of the Fund shall be those of
the countries represented at the United Nations Monetary and
Financial Conference whose governments accept membership
before December 31, 1945.
Section 2. Other Members
Membership shall be open to other countries at such
times and in accordance with such terms as may be
prescribed by the Board of Governors. These terms, including
the terms for subscriptions, shall be based on principles
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consistent with those applied to other countries that are already
members.
ARTICLE III
QUOTAS AND SUBSCRIPTIONS
Section 1. Quotas and payments of subscriptions
Each member shall be assigned a quota expressed
in special drawing rights. The quotas of the members
represented at the United Nations Monetary and Financial
Conference which accept membership before December 31,
1945 shall be those set forth in Schedule A. The quotas of
other members shall be determined by the Board of
Governors. The subscription of each member shall be equal to
its quota and shall be paid in full to the Fund at the
appropriate depository.
Section 2. Adjustment of quotas
(a) The Board of Governors shall at
intervals of not more than five years
conduct a general review, and if it
deems it appropriate propose an
adjustment, of the quotas of the
members. It may also, if it thinks fit,
consider at any other time the
adjustment of any particular quota at
the request of the member concerned.
(b) The Fund may at any time propose an
increase in the quotas of those
members of the Fund that were
members on August 31, 1975 in
proportion to their quotas on that
date in a cumulative amount not in
excess of amounts transferred under
Article V, Section 12f (I) (i) and (j) from
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the Special Disbursement Account to
the General Resources Account.
(c) An eighty-five percent majority of the
total voting power shall be required
for any change in quotas.
(d) The quota of a member shall not be
changed until the member has
consented and until payment has
been made unless payment is
deemed to have been made in
accordance with Section 3(b) of this
Article.
Section 3. Payments when quotas are changed
(a) Each member which consents to an
increase in its quote under Section
2(a) of this Article shall within a
period determined by the Fund, pay
to the Fund twenty-five percent of
the increase in special drawing
rights, but the Board of Governors
may prescribe that this payment may
be made, on the same basis for all
members in whole or in part in the
currencies of other members
specified, with their concurrence, by
the Fund, or in the member’s own
currency. A non- participant shall
pay in the currencies of other
members specified by the Fund,
with their concurrence, a
proportion of the increase
corresponding to the proportion to be
paid in special drawing rights by
participants. The balance of the
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increase shall be paid by the member
in its own currency. The Fund’s
holdings of a member’s currency shall
not he increased above the level at
which they would be subject to
charges under Article V, Section 8(b)
(ii), as a result of payments by other
members under this provision.
(b) Each member which consents to an
increase in its quota under Section
2(b) of this Article shall be deemed to
have paid to the Fund an amount of
subscription equal to such increase.
(c) If a member consents to a reduction in
its quota, the Fund shall, within sixty
days, pay to the member an amount
equal to the reduction. The payment
shall be made in the member’s
currency and in such amount of
special drawing rights or the
currencies of other members
specified, with their concurrence, by
the Fund as is necessary to prevent
the reduction of the Fund’s holdings of
the currency below the new quota,
provided that in exceptional
circumstances the Fund may reduce
its holdings of the currency below the
new quota by payment to the member
in its own currency.
(d) A seventy percent majority of the total
voting popover shall be required for
any decision under (a) above, except
for the determination of a period and
the Specification of currencies under
that provision.
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Section 4. Substitution of securities for currency
The Fund shall accept from any member, in place of any
part of the member’s currency in the General Resources
Account which in the judgement of the Fund is not needed for
its operations and transactions, notes or similar obligations
issued by the member or the depository designated by the
member under Article XIII, Section 2, which shall be non-
negotiable, non-interest bearing and payable at their face value
on demand by crediting the account of the Fund in the
designated depository. This Section shall apply not only to
currency subscribed by members but also to any currency
otherwise due to, or acquired by, the Fund and to be placed in
the General Resources Account.
ARTICLE IV
OBLIGATIONS REGARDING EXCHANGE
ARRANGEMENTS
Section 1. General obligations of members
Recognizing that the essential purpose of the
international monetary system is to provide a framework
that facilitates the exchange of goods, services, and capital
among countries, and that sustains sound economic growth,
and that a principal objective is the continuing development
of the orderly underlying conditions that are necessary for
financial and economic stability, each member
undertakes to collaborate with the Fund and other members
to assure orderly exchange arrangements and to promote a
stable system of exchange rates In particular each member
shall:
(i) endeavour to direct its
economic and financial
policies toward the objective
of fostering orderly economic
growth with reasonable price
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stability, with clue regard to its
circumstances;
(ii) seek to promote stability by
fostering orderly underlying
economic and financial
conditions and a monetary
system that does not tend to
produce erratic disruptions;
(iii) avoid manipulating exchange
rates or the international
monetary system in order to
prevent effective balance of
payments adjustment or to gain
an unfair competitive
advantage over other members;
and
(iv) follow exchange policies
compatible with the
undertakings under this
Section.
Section 2. General exchange arrangements
(a) Each member shall notify the Fund,
within thirty days after the date of the
second amendment of this
Agreement of the exchange
arrangements it intends to apply in
fulfillment of its obligations under
Section 1 of this Article, and shall
notify the Fund promptly of any
changes in its exchange
arrangements.
(b) Under an international monetary
system of the kind prevailing on
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January 1, 1976, exchange
arrangements may include—
(i) the maintenance by a member
of a value for its currency in
terms of the special drawing
right or another denominator
other than gold, selected by the
member, or
(ii) co-operative arrangements by
which members maintain the
value of their currencies in
relation to the value of the
currency or currencies of
other members, or
(iii) other exchange arrangements
of a member’s choice.
(c) To accord with the development of
the international monetary system,
the Fund, by an eighty-five percent
majority of the total voting power,
may make provision for general
exchange arrangements without
limiting the right of members to have
exchange arrangements of their
choice consistent with the purposes
of the Fund and the obligations
under Section 1 of this Article.
Section 3. Surveillance over exchange arrangements
(a) The Fund shall oversee the
international monetary system in
order to ensure its effective operation,
and shall oversee the compliance of
each member with its obligations
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under Section I of this Article.
(b) In order to fulfill its functions under
(a) above, the Fund shall exercise firm
surveillance over the exchange rate
policies of members, and shall adopt
specific principles for the guidance of
all members with respect to those
policies. Each member shall provide
the Fund with the information
necessary for such surveillance, and,
when requested by the Fund, shall
consult with it on the member’s
exchange rate policies. The principles
adopted by the Fund shall be
consistent with co- operative
arrangements by which members
maintain the value of their currencies
in relation to the value of the currency
or currencies of other members, as
well as with other exchange
arrangements of a member’s choice
consistent with the purposes of the
Fund and Section 1 of this Article.
These principles shall respect the
domestic social and political policies
of members, and in applying these
principles the Fund shall pay due
regard to the circumstances of
members.
Section 4. Par values
The Fund may determine by an eighty-five percent
majority of the total voting power, that international
economic conditions permit the introduction of a widespread
system of exchange arrangements based on stable but
adjustable par values. The Fund shall make the
determination on the basis of the underlying stability of the
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world economy, and for this purpose shall take into account
price movements and rates of expansion in the
economies of members. The determination shall be made
in light of the evolution of the international monetary
system, with particular reference to sources of liquidity, and
in order to ensure the effective operation of a system of par
values, to arrangements under which both members in surplus
and members in deficit in their balances of payments
take prompt, effective, and symmetrical action to achieve
adjustment, as well as to arrangements for intervention and
the treatment of imbalances. Upon making such
determination, the Fund shall notify members that the
provisions of Schedule C apply.
Section 5. Separate currencies within a member’s territories
(a) Action by a member with respect to
its currency under this Article shall
be deemed to apply to the separate
currencies of all territories in respect
of which the member has accepted this
Agreement under Article XXXI,
Section 2(g) unless the member
declares that its action relates either to
the metropolitan currency alone or
only to one or more specified separate
currencies or to the metropolitan
currency and one or more specified
separate currencies.
(b) Action by the Fund under this Article
shall be deemed to relate to all
currencies of a member referred to in
(a) above unless the Fund declares
otherwise.


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ARTICLE V
OPERATIONS AND TRANSACTIONS OF THE FUND
Section 1. Agencies dealing with the Fund
Each member shall deal with the Fund only through
its Treasury, central bank, stabilization fund, or other similar
fiscal agency, and the Fund shall deal only with or through
the same agencies.
Section 2. Limitation on the Fund’s operations and transactions
(a) Except as otherwise provided in this
Agreement, transactions on the
account of the Fund shall be limited
to transactions for the purpose of
supplying a member, on the
initiative of such member, with
special drawing rights or the
currencies of other members from the
general resources of the Fund, which
shall be held in the General Resources
Account, in exchange for the
currency of the member desiring to
make the purchase.
(b) If requested, the Fund may decide
to perform financial and technical
services, including the administration
of resources contributed by members,
that are consistent with the purposes
of the Fund. Operations involved in
the performance of such financial
services shall not be on the account of
the Fund. Services under this
subsection shall not impose any
obligation on a member without its
consent.
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Section 3. Conditions governing use of the Fund’s general resources
(a) The Fund shall adopt policies on the
use of its general resources, including
policies on standby or similar
arrangements, and may adopt special
policies for special balance of
payments problems, that will assist
members to solve their balance of
payments problems in a manner
consistent with the provisions of this
Agreement and that will establish
adequate safeguards for the
temporary use of the general
resources of the Fund.
(b) A member shall be entitled to
purchase the currencies of other
members from the Fund in exchange
for an equivalent amount of its own
currency subject to the following
conditions:
(i) the member’s use of the
general resources of the Fund
would be in accordance with
the provisions of this
Agreement and the policies
adopted under them;
(ii) the member represents that it
has a need to make the purchase
because of its balance of
payments or its reserve position
or developments in its reserves;
(iii) the proposed purchase would
be a reserve tranche purchase,
or would not cause the Funds
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holdings of the purchasing
member’s currency to exceed
two hundred percent of its
quota;
(iv) the Fund has not previously
declared under Section 5 of this
Article, Article VI, Section 1, or
Article XXVI, Section 2(a) that
the member desiring to
purchase is ineligible to use the
general resources of the Fund.
(c) The Fund shall examine a request for
a purchase to determine whether the
proposed purchase would be
consistent with the provisions of this
Agreement and the policies adopted
under them, provided that requests
for reserve tranche purchases shall
not be subject to challenge.
(d) The Fund shall adopt policies and
procedures on the selection of
currencies to be sold that take into
account, in consultation with
members, the balance of payments
and reserve position of members and
developments in the exchange
markets, as well as the desirability of
promoting over time balanced
positions in the Fund, provided that if
a member represents that it is
proposing to purchase the currency of
another member because the
purchasing member wishes to obtain
an equivalent amount of its own
currency offered by the other member,
it shall be entitled to purchase the
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currency of the other member unless
the Fund has given notice under
Article VII, Section 3 that its holdings
of the currency have become scarce
(e) (i) Each member shall ensure that
balances of its currency purchased
from the Fund are balances of a freely
usable currency or can be
exchanged at the time of purchase
for a freely usable currency of its
choice at an exchange rate between the
two currencies equivalent to the
exchange rate between them on the
basis of Article XIX, Section 7(a).
(ii) Each member whose currency
is purchased from the Fund or
is obtained in exchange for
currency purchased from the
Fund shall collaborate with the
Fund and other members to
enable such balances of its
currency to be exchanged, at
the time of purchase, for the
freely usable currencies of
other members.
(iii) An exchange antler (i) above of
a currency that is not freely
usable shall be made by the
member whose currency is
purchased unless that member
and the purchasing member
agree on another procedure.
(iv) A member purchasing from
the Fund the freely usable
currency of another member
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and wishing to exchange it at
the time of purchase for
another freely usable currency
shall make the exchange with
the other member if requested
by that member. The exchange
shall be made for a freely
usable currency selected by the
other member at the rate of
exchange referred to in (i)
above.
(f) Under policies and procedures which
it shall adopt, the Fund may agree to
provide a participant making a
purchase in accordance with this
Section with special drawing rights
instead of the currencies of other
members.
Section 4. Waiver of conditions
The Fund may, in its discretion, and on terms which
safeguard its interests, waive any of the conditions
prescribed in Section 3(b) (iii) and (iv) of this Article,
especially in the case of members with a record of avoiding
large or continuous use of the Fund’s general resources. In
making a waiver it shall take into consideration periodic or
exceptional requirements of the member requesting the
waiver. The Fund shall also take into consideration a
member’s willingness to pledge as collateral security
acceptable assets having a value sufficient in the opinion of
the Fund to protect its interests and may require as a
condition of waiver the pledge of such collateral security.
Section 5. Ineligibility to use the Fund’s general resources
Whenever the Fund is of the opinion that any member
is using the general resources of the Fund in a manner
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contrary to the purposes of the Fund, it shall present to the
member a report setting forth the views of the Fund and
prescribing a suitable time for reply. After presenting such a
report to a member, the fund may limit the use of its general
resources by the member. If no reply to the report is received
from the member within the prescribed time, or if the
reply received is unsatisfactory, the Fund may continue to
limit the member’s use of the general resources of the Fund or
may, after giving reasonable notice to the member, declare it
ineligible to use the general resources of the Fund.
Section 6. Other purchases and sales of special drawing rights by
the Fund
(a) The Fund may accept special
drawing rights offered by a
participant in exchange for an
equivalent amount of the currencies
of other members.
(b) The Fund may provide a participant,
at its request, with special drawing
rights for an equivalent amount of
the currencies of other members. The
Fund’s holdings of a member’s
currency shall not be increased as a
result of these transactions above the
level at which the holdings would be
subject to charges under Section 8(b)
(ii) of this Article.
(c) The currencies provided or accepted
by the Fund under this Section shall
he selected in accordance with
policies that take into account the
principles of Section 3(d) or 7(i) of this
Article. The Fund may enter into
transactions under this Section only if
a member whose currency is provided
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or accepted by the Fund concurs in
that use of its currency.
Section 7. Repurchase by a member of its currency held by the Fund
(a) A member shall be entitled to
repurchase at any time the Fund’s
holdings of its currency that are
subject to charges under Section 8(b)
of this Article.
(b) A member that has made a purchase
under Section 3 of this Article will
be expected normally, as its balance
of payments and reserve position
improves, to repurchase the Fund’s
holdings of its currency that result
from the purchase and are subject to
charges under Section 8(b) of this
Article. A member shall repurchase
these holdings if, in accordance with
policies on repurchase that the Fund
shall adopt and after consultation
with the member, the Fund
represents to the member that it
should repurchase because of an
improvement in its balance of
payments and reserve position.
(c) A member that has made a purchase
under Section 3 of this Article shall
repurchase the Fund’s holdings of its
currency that result from the purchase
and are subject to charges under
Section 8(b) of this Article not later
than five years after the date on
which the purchase was made. The
Fund may prescribe that repurchase
shall be made by a member in
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instalments during the period
beginning three years and ending
five years after the date of a purchase.
The Fund, by an eighty- five percent
majority of the total voting power, may
change the periods for repurchase
under this subsection, and any period
so adopted shall apply to all
members.
(d) The Fund, by an eighty-five percent
majority of the total voting power,
may adopt periods other than those
that apply in accordance with (c)
above, which shall be the same for
all members, for the repurchase of
holdings of currency acquired by the
Fund pursuant to a special policy on
the use of its general resources.
(e) A member shall repurchase, in
accordance with policies that the Fund
shall adopt by a seventy percent
majority of the total voting power,
the Fund’s holdings of its currency
that are not acquired as a result of
purchases and are subject to charges
under Section 8(b) (ii) of this Article.
(f) A decision prescribing that under a
policy on the use of the general
resources of the Fund the period for
repurchase under (c) or (d) above shall
be shorter than the one in effect under
the policy shall apply only to holdings
acquired by the Fund subsequent to
the effective date of the decision.
(g) The Fund, on request of a member,
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may postpone the date of discharge of
a repurchase obligation, but not
beyond the maximum period under
(c) or (d) above or under policies
adopted by the Fund under (e)
above, unless the Fund determines,
by a seventy percent majority of the
total voting power, that a longer
period for repurchase which is
consistent with the temporary use of
the general resources of the Fund is
justified because discharge on the due
date would result in exceptional
hardship for the member.
(h) The Fund’s policies under Section 3(d)
of this Article may be supplemented
by policies under which the Fund
may decide after consultation with a
member to sell under Section 3(b) of
this Article its holdings of the
member’s currency that have not been
repurchased in accordance with this
Section 7, without prejudice to any
action that the Fund may be
authorized to take under any other
provision of this Agreement.
(i) All repurchases under this Section
shall be made with special drawing
rights or with the currencies of other
members specified by the Fund. The
Fund shall adopt policies and
procedures with regard to the
currencies to be used by members in
making repurchases that take into
account the principles in Section
3(d) of this Article. The Fund’s
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holdings of a member’s currency that
is used in repurchase shall not be
increased by the repurchase above
the level at which they would be
subject to charges under Section 8(b)
(ii) of this Article.
(j) (i) If a member’s currency specified by
the Fund under (i) above is not a
freely usable currency, the number
shall ensure that the repurchasing
member can obtain it at the time of
the repurchase in exchange for a
freely usable currency selected by the
member whose currency has been
specified. An exchange of currency
under this provision shall take place
at an exchange rate between the
two currencies equivalent to the
exchange rate between them on the
basis of Article XIX, Section 7(a).
(ii) Each member whose currency
is specified by the Fund for
repurchase shall collaborate
with the Fund and other
members to enable
repurchasing members, at the
time of the repurchase, to
obtain the specified currency in
exchange for the freely usable
currencies of other members.
(iii) An exchange under (j) (i) above
shall be made with the member
whose currency is specified
unless that member and the
repurchasing member agree on
another procedure.
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(iv) If a repurchasing member
wishes to obtain. at the time of
the purchase the freely usable
currency of another member
specified by the Fund under (i)
above, it shall, if requested by
the other member, obtain the
currency from the other
member in exchange for a freely
usable currency at the rate of
exchange referred to in (j) (i)
above. The Fund may adopt
regulations on the freely usable
currency to be provided in an
exchange.
Section 8. Charges
(a) (i) The Fund shall levy a service charge
on the purchase by a member of
special drawing rights or the currency
of another member held in the General
Resources Account in exchange for its
own currency, provided that the Fund
may levy a lower service charge on
reserve tranche purchases than on
other purchases. The service charge
on reserve tranche purchases shall not
exceed one-half of one percent.
(ii) The Fund may levy a charge for
stand-by or similar
arrangements. The Fund may
decide that the charge for an
arrangement shall be offset
against the service charge
levied under (i) above on
purchases under the
arrangement.
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(b) The Fund shall levy charges on its
average daily balances of a member’s
currency held in the General
Resources Account to the extent that
they
(i) have been acquired under a
policy that has been the subject
of an exclusion under Article
XXX(c), or
(ii) exceed the amount of the
member’s quota after
excluding any balances referred
to in (i) above. The rates of
charge normally shall rise at
intervals during the period in
which balances are held.
(c) If a member fails to make a purchase
required under Section 7 of this
Article, the Fund, after consultation
with the member of the reduction of
the Fund’s holdings of its currency,
may impose such charges as the Fund
deems appropriate on its holdings of
the member’s currency that should
have been repurchased.
(d) A seventy percent majority of the
total voting power shall be required
for the determination of the rates of
charge under (a) and (b) above, which
shall be uniform for all members, and
under (c) above.
(e) A member shall pay all charges in
special drawing rights, provided that
in exceptional circumstances the
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Fund may permit a member to pay
charges in the currencies of other
members specified by the Fund, after
consultation with them, or in its own
currency. The Fund’s holdings of a
member’s currency shall not be
increased as a result of payments by
other members under this provision
above the level at which they would
be subject to charges under (b) (ii)
above.
Section 9. Remuneration
(a) The Fund shall pay remuneration on
the amount by which the percentage
of quota prescribed under (b) or (c)
below exceeds the Fund’s average
daily balances of a member’s
currency held in the General
Resources Account other than
balances acquired under a policy
that has been the subject of an
exclusion under Article XXX(c). The
rate or remuneration, which shall be
determined by the Fund by a seventy
percent majority of the total voting
power, shall be the same for all
members and shall be not more than,
nor less than four-fifths of, the rate of
interest under Article XX, Section 3. In
establishing the rate of remuneration,
the Fund shall take into account the
rates of charge under Article V,
Section 8(b).
(b) The percentage of quota applying for
the purposes of (a) above shall be:
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(i) for each member that became a
member before the second
amendment of this
Agreement, a percentage of
quota corresponding to seventy-
five percent of its quota on the
date of the second amendment
of this Agreement, and for each
member that became a member
after the date of the second
amendment of this Agreement,
a percentage of quota
calculated by dividing the
total of the amounts
corresponding to the
percentages of quota that apply
to the other members on the
date on which the member
became a member by the total of
the quotas of the other members
on the same date: plus
(ii) the amounts it has paid to the
Fund in currency or special
drawing rights under Article III,
Section 3(a) since the date
applicable under (b)(i) above;
and minus
(iii) the amounts it has received
from the Fund in currency or
special drawing rights under
Article III, Section 3(c) since
the date applicable under (b)(i)
above.
(c) The Fund, by a seventy percent
majority of the total voting power,
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may raise the latest percentage of
quota applying for the purposes of
(a) above to each member to:
(i) a percentage, not in excess of
one hundred percent, that shall
be determined for each
member on the basis of the
same criteria for all members,
or
(ii) one hundred percent for all
members.
(d) Remuneration shall be paid in special
drawing rights, provided that either
the Fund or the member may decide
that the payment to the member shall
be made in its own currency.
Section 10.Computations
(a) The value of the Fund’s assets held
in the accounts of the General
Department shall be expressed in
terms of the special drawing right.
(b) All computations relating to
currencies of members for the
purpose of applying the provisions of
this Agreement, except Article IV and
Schedule C, shall be at the rates at
which the Fund accounts for these
currencies in accordance with Section
11 of this Article,
(c) Computations for the determination
of amounts of currency in relation to
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quota for the purpose of applying the
provisions of this Agreement shall
not include currency held in the
Special Disbursement Account or in
the Investment Account.
Section 11. Maintenance of value
(a) The value of the currencies of
members held in the General
Resources Account shall be
maintained in terms of the special
drawing rights in accordance with
exchange rates under Article XIX,
Section 7(a).
(b) An adjustment in the Fund’s holding
of a member’s currency pursuant to
this Section shall be made on the
occasion of the use of that currency in
an operation or transaction between
the Fund and another member and at
such other times as the Fund may
decide or the member may request.
Payments to or by the Fund in respect
of an adjustment shall be made
within a reasonable time, as
determined by the Fund, after the
date of adjustment, and at any other
time requested by the member.
Section 12. Other operations and transactions
(a) The Fund shall be guided in all its
policies and decisions under this
Section by the objectives set forth in
Article VIII, Section 7 and by the
objective of avoiding the
management of the price, or the
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establishment of a fixed price in the
gold market.
(b) Decisions of the Fund to engage in
operations or transactions under (c),
(d), and (e) below shall be made by
an eighty-five percent majority of the
total voting power.
(c) The Fund may sell gold for the
currency of any member after
consulting the member for whose
currency the gold is sold, provided
that the Fund’s holdings of a
member’s currency held in the
General Resources Account shall not
be increased by the sale above the level
at which they would be subject to
charges under Section 8(b)(ii) of this
Article without the concurrence of the
member, and provided that, at the
request of the member, the Fund at the
time of sale shall exchange for the
currency of another member such part
of the currency received as would
prevent such an increase. The
exchange of a currency for the
currency of another member shall be
made after consultation with that
member, and shall not increase the
Fund’s holdings of that member’s
currency above the level at which
they would be subject to charges
under Section 8(b) (ii) of this Article.
The Fund shall adopt policies and
procedures with regard to exchanges
that take into account the principles
applied under Section 7(i) of this
Article. Sales under this provision to
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a member shall be at a price agreed for
each transaction on the basis of prices
in the market.
(d) The Fund may accept payments from
a member in gold instead of special
drawing rights or currency in any
operations or transactions under this
Agreement. Payments to the Fund
under this provision shall be at a price
agreed for each operation or
transaction on the basis of prices in
the market.
(e) The Fund may sell gold held by it on
the date of the second amendment of
this Agreement to those members
that were members on August 31,
1975 and that agree to buy it, in
proportion to their quotas on that
date. If the Fund intends to sell gold
under (c) above for the purpose of
(f)(ii) below, it may sell to each
developing member that agrees to buy
if that portion of the gold which, if
sold under (c) above, would have
produced the excess that could have
been distributed to it under (f)(iii)
below. The gold that would be sold
under this provision to a member
that has been declared ineligible to
use the general resources of the Fund
under Section 5 of this Article shall be
sold to it when the ineligibility ceases,
unless the Fund decides to make the
sale sooner. The sale of gold to a
member under this subsection (e) shall
be made in exchange for its currency
and at a price equivalent at the time of
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sale to one special drawing right per
0.888 671 gram of fine gold.
(f) Whenever under (c) above the Fund
sells gold held by it on the date of the
second amendment of this
Agreement, an amount of the
proceeds equivalent at the time of sale
to one special drawing right per 0.888
671 gram of fine gold shall be placed
in the General Resources Account
and, except as the Fund may decide
otherwise under (g) below, any
excess shall be held in the Special
disbursement Account. The assets
held in the Special Disbursement
Account shall be held separately
from the other accounts of the
General Department, and may be
used at any time:
(i) to make transfers to the General
Resources Account for
immediate use in
operations and transactions
authorized by provisions of this
Agreement other than this
Section;
(ii) for operations and
transactions that are not
authorized by other provisions
of this Agreement but are
consistent with the purposes
of the Fund. Under this
subsection (f) (ii) balance of
payments assistance may be
made available on special terms
to developing members in
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difficult circumstances, and for
this purpose the Fund shall take
into account the level of per
capita income:
(iii) for distribution to those
developing members that were
members on August 31, 1975,
in proportion to their quotas on
that date, of such part of the
assets that the Fund decides to
use for the purposes of (ii) above
as corresponds to the
proportion of the quotas of
these members on the date of
distribution to the total of the
quotas of all members on the
same date, provided that the
distribution under this
provision to a member that has
been declared ineligible to use
the general resources of the
Fund under section 5 of this
Article shall be made when
the ineligibility ceases, unless
the Fund decides to make the
distribution sooner.
Decisions to use assets pursuant to (i) above shall be taken by a
seventy percent majority of the total voting power, and
decisions pursuant to (ii) and (iii) above shall be taken by an
eighty-five percent majority of the total voting power.
(g) The Fund may decide, by an eighty-
five percent majority of the total
voting power, to transfer a part of
the excess referred to in (f) above to
the Investment Account for use
pursuant to the provisions of Article
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XII, Section 6(f).
(h) Pending uses specified under (f)
above, the Fund may invest a
member’s currency held in the
Special Disbursement Account in
marketable obligations of that
member or in marketable obligations
of international financial
organizations. The income of
investment and interest received
under (f)(ii) above shall be placed in
the Special Disbursement Account.
No investment shall be made without
the concurrence of the member whose
currency is used to make the
investment. The Fund shall invest
only in obligations denominated in
special drawing rights or in the
currency used for investment.
(i) The General Resources Account shall
be reimbursed from time to time in
respect of the expenses of
administration of the Special
Disbursement Account paid from the
General Resources Account by
transfers from the Special
Disbursement Account on the basis of
a reasonable estimate of such
expenses.
(j) The Special Disbursement Account
shall be terminated in the event of the
liquidation of the Fund and may be
terminated prior to liquidation of the
Fund by a seventy percent majority of
the total voting power. Upon
termination of the account because of
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the liquidation of the Fund, any assets in this account shall be
distributed in accordance with the
provisions of Schedule K. Upon
termination prior to liquidation of
the Fund, any assets in this account
shall be transferred to the General
Resources Account for immediate use
in operations and transactions. The
Fund, by a seventy percent majority
of the total voting power shall adopt
rules and regulations for the
administration of the Special
Disbursement Account.
ARTICLE VI
CAPITAL TRANSFERS
Section 1. Use of the Fund’s general resources for capital transfers
(a) A member may not use the Fund’s
general resources to meet a large or
sustained outflow of capital except as
provided in Section 2 of this Article
and the Fund may request a member
to exercise controls to prevent such
use of the general resources of the
Fund. If, after receiving such a
request, a member fails to exercise
appropriate controls, the Fund may
declare the member ineligible to use
the general resources of the Fund.
(b) Nothing in this Section shall be
deemed:
(i) to prevent the use of the
general resources of the fund
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for capital transactions of
reasonable amount required
for the expansion of exports or
in the ordinary course of trade,
banking, or other business; or
(ii) to affect capital movements
which are met out of a
member’s own resources, but
members undertake that such
capital movements will be in
accordance with the purposes
of the Fund.
Section 2. Special provisions for capital transfers
A member shall be entitled to make reserve tranche
purchases to meet capital transfers.
Section 3. Controls of capital transfers
Members may exercise such controls as are necessary
to regulate international capital movements, but no member
may exercise those controls in a manner which will
restrict payments for current transactions or which will
unduly delay transfers of funds in settlement of
commitments, except as provided in Article VII. Section 3(b)
and in Article XIV, Section 2.
ARTICLE VII
REPLENISHMENT AND SCARCE CURRENCIES
Section 1. Measures to replenish the Fund’s holdings of currencies
The Fund may, if it deems such action appropriate to
replenish its holdings of any member’s currency in the
General Resources Account needed in connection with its
transactions, take either or both of the following steps:
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(i) propose to the member that, on
terms and conditions agreed between
the Fund and the member, the latter
lend its currency to the Fund or
that, with the concurrence of the
member, the Fund borrow such
currency from some other source
either within or outside the
territories of the member, but no
member shall be under any
obligation to make such loans to the
Fund or to concur in the borrowing of
its currency by the Fund from any
other source:
(ii) require the member, if it is a
participant, to sell its currency to the
Fund for special drawing rights held
in the General Resources Account,
subject to Article XIX, Section 4. In
replenishing with special drawing
rights, the Fund shall pay due regard
to the principles of designation under
Article XIX, Section 5.
Section 2. General scarcity of currency
If the Fund finds that a general scarcity of a particular
currency is developing, the Fund may so inform members
and may issue a report setting forth the causes of the scarcity
and containing recommendations designed to bring it to an
end. A representative of the member whose currency is
involved shall participate in the preparation of the report.
Section 3. Scarcity of the Fund’s holdings
(a) If it becomes evident to the Fund
that the demand for a member’s
currency seriously threatens the
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Fund’s ability to supply that
currency, the Fund whether or not it
has issued a report under Section 2 of
this Article, shall formally declare
such currency scarce and shall
thenceforth apportion its existing and
accruing supply of the scarce
currency with due regard to the
relative needs of members, the
general international economic
situation, and any other pertinent
considerations. The Fund shall also
issue a report concerning its action.
(b) A formal declaration under (a)
above shall operate as an
authorization to any member, after
consultation with the Fund,
temporarily to impose limitations
on the freedom of exchange
operations in the scarce currency.
Subject to the provisions of Article IV
and Schedule C, the member shall
have complete jurisdiction in
determining the nature of such
limitations but they shall be no more
restrictive than is necessary to limit
the demand for the scarce currency to
the supply held by or accruing to, the
member in question, and they shall
be relaxed and removed as rapidly as
conditions permit.
(c) The authorization under (b) above
shall expire whenever the Fund
formally declares the currency in
question to be no longer scarce.

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Section 4. Administration of restrictions
Any member imposing restrictions in respect of the
currency of any other member pursuant to the provisions of
Section 3(b) of this Article shall give sympathetic
consideration to any representations by the other member
regarding the administration of such restrictions.
Section 5. Effect of other international agreements on restrictions
Members agree not to invoke the obligations of any
engagements entered into with other members prior to this
Agreement in such a manner as will prevent the operation of
the provisions of this Article.
ARTICLE VIII
GENERAL OBLIGATIONS OF MEMBERS
Section 1. Introduction
In addition to the obligations assigned under other
articles of this Agreement, each member undertakes the
obligations set out in this Article.
Section 2. Avoidance of restrictions on current payments
(a) Subject to the provisions of Article
VII, Section 3(b) and Article XIV,
Section 2, no member shall, without
the approval of the Fund, impose
restrictions on the making of
payments and transfers for current
international transactions.
(b) Exchange contracts which involve the
currency of any member and which
are contrary to the exchange control
regulations of that member
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maintained or imposed consistently
with this Agreement shall be
unenforceable in the territories of any
member. In addition, members may,
by mutual accord, cooperate in
measures for the purpose of making
the exchange control regulations of
either member more effective,
provided that such measures and
regulations are consistent with this
Agreement.
Section 3. Avoidance of discriminatory currency practices
No member shall engage in, or permit any of its fiscal
agencies referred to in Article V, Section I, to engage in, any
discriminatory currency arrangements or multiple currency
practices, whether within or outside margins under Article
IV or prescribed by or under Schedule C, except as authorized under this Agreement or approved by the Fund.
If such arrangements and practices are engaged in at the date
when this Agreement enters into force, the member
concerned shall consult with the Fund as to their progressive
removal unless they are maintained or imposed under
Article XIV, Section 2, in which case the provisions of Section
3 of that Article shall apply.
Section 4. Convertibility of foreign-held balances
(a) Each member shall buy balances of its
currency held by another member if
the latter, in requesting the purchase,
represents:
(i) that the balances to be bought
have been recently acquired as
a result of current transactions;
or

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(ii) that their conversion is
needed for making payments
for current transactions.
The buying member shall have the option to pay
either in special drawing rights, subject to Article XIX,
Section 4, or in the currency of the member making the
request.
(b) The obligation in (a) above shall not
apply when:
(i) the convertibility of the
balances has been restricted
consistently with Section 2 of
this Article or Article VI,
Section 3;
(ii) the balances have
accumulated as a result of
transactions effected before the
removal by a member of
restrictions maintained or
imposed under Article XIV,
Section 2;
(iii) the balances have been
acquired contrary to the
exchange regulations of the
member which is asked to buy
them;
(iv) the currency of the member
requesting the purchase has
been declared scarce under
Article VII, Section 3(a); or
(v) the member requested to make
the purchase is for any reason
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not entitled to buy currencies
of other members form the
Funds for its own currency.
Section 5. Furnishing of information
(a) The Fund may require members to
furnish it with such information as
it deems necessary for its activities,
including, as the minimum necessary
for the effective discharge of the
Fund’s duties, national data on the
following matters:
(i) official holdings at home and
abroad of (l) gold, (2) foreign
exchange;
(ii) holdings at home and abroad
by banking and financial
agencies, other than official
agencies, of (1) gold, (2) foreign
exchange;
(iii) production of gold;
(iv) gold exports and imports
according to countries of
destination and origin;
(v) total exports and imports of
merchandise, in terms of local
currency values, according to
countries of destination and
origin;
(vi) international balance of
payments, including (1) trade
in goods and services, (2) gold
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transactions, (3) known capital
transactions, and (4) other
items;
(vii) international investment
position, i.e., investments
within the territories of the
member owned abroad and
investments abroad owned by
persons in its territories so far
as it is possible to furnish this
information;
(viii) national income:
(ix) price indices, i.e., indices of
commodity prices in wholesale
and retail markets and of
export and import prices;
(x) buying and selling rates for
foreign currencies:
(xi) exchange controls, i.e., a
comprehensive statement of
exchange controls in effect at
the time of assuming
membership in the Fund and
details of subsequent changes
as they occur; and
(xii) where official clearing
arrangements exist, details of
amounts awaiting clearance in
respect of commercial and
financial transactions, and of
the length of time during
which such arrears have been
outstanding.
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(b) In requesting information the fund
shall take into consideration the
varying ability of members to furnish
the data requested. Members shall be
under no obligation to furnish
information in such detail that the
affairs of individuals or corporations
are disclosed. Members undertake,
however, to furnish the desired
information in as detailed and
accurate a manner as is practicable
and, so far as possible, to avoid mere
estimates.
(c) The Fund may arrange to obtain
further information by agreement
with members. It shall act as a centre
for the collection and exchange of
information on monetary and
financial problems, thus facilitating
the preparation of studies designed to
assist members in developing policies
which further the purposes of the
Fund.
Section 6. Consultation between members regarding existing
international agreements
Where under this Agreement a member is authorized
in the special or temporary circumstances specified in the
Agreement to maintain or establish restrictions on exchange
transactions, and there are other engagements between
members entered into prior to this Agreement which conflict
with the application of such restrictions, the parties to such
engagements shall consult with one another with a view to
making such mutually acceptable adjustments as may be
necessary. The provisions of this Article shall be without
prejudice to the operation of Article VII, Section 5.

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Section 7. Obligation to collaborate regarding policies on reserve
assets
Each member undertakes to collaborate with the
Fund and with other members in order to ensure that the
policies of the member with respect to reserve assets shall be
consistent with the objectives of promoting better
international surveillance of international liquidity and
making the special drawing right the principal reserve asset
in the international monetary system.
ARTICLE IX
STATUS, IMMUNITIES, AND PRIVILEGES
Section 1. Purposes of Article
To enable the Fund to fulfill the functions with which
it is entrusted, the status, immunities, and privileges set forth
in this Article shall be accorded to the Fund in the territories
of each member.
Section 2. Status of the Fund
The Fund shall possess full juridical personality, and
in particular, the capacity:
(i) to contract;
(ii) to acquire and, dispose of
immovable and movable
property; and
(iii) to institute legal proceedings.
Section 3. Immunity from. judicial process
The Fund, its property and its assets, wherever
located and by whomsoever held, shall enjoy immunity from
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every form of judicial process except to the extent that it
expressly waives its immunity for the purpose of any
proceedings or by the terms of any contract.
Section 4. Immunity from other action
Property and assets of the Fund wherever located
and by whomsoever held, shall be immune from search,
requisition, confiscation, expropriation, or any other form of
seizure by executive or legislative action.
Section 5. Immunity of archives
The archives of the Fund shall be inviolable.
Section 6. Freedom of assets from restrictions
To the extent necessary to carry out the activities
provided for in this Agreement, all property and assets of the
Fund shall be free from restrictions, regulations, controls,
and moratoria of any nature.
Section 7. Privilege for communications
The official communications of the Fund shall be
accorded by members the same treatment as the official
communications of other members.
Section 8. Immunities and privileges of officers and employees
All Governors, Executive Directors, Alternates,
members of committees, representatives appointed under
Article Xll, Section 3(j), advisors of any of the foregoing
persons, officers, and employees of the Fund:
(i) shall be immune from legal
process with respect to acts
performed by them in their
official capacity except when
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the Fund waives this
immunity;
(ii) not being local nationals, shall
be granted the same
immunities from immigration
restrictions, alien registration
requirements, and national
service obligations and the
same facilities as regards
exchange restrictions as are
accorded by members to the
representatives, officials, and
employees of comparable rank
of other members; and
(iii) shall be granted the same
treatment in respect of
travelling facilities as is
accorded by members to
representatives, officials and
employees of comparable rank
of other members.
Section 9. Immunities from taxations
(a) The Fund its assets, property, income,
and its operation and transactions
authorised by this Agreement shall be
immune from all taxation and from
all customs duties. The Fund shall
also be immune from liability for the
collection or payment of any tax or
duty.
(b) No tax shall be levied on or in
respect of salaries and emoluments
paid by the Fund to Executive
Directors, Alternates, officers, or
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employees of the fund who are not
local citizens, local subjects, or other
local nationals.
(c) No taxation of any kind shall be
levied on any obligation or security
issued by the Fund, including any
dividend or interest thereon, by
whomsoever held:
(i) which discriminates against
such obligation or security
solely because of its origin; or
(ii) if the sole jurisdictional basis
for such taxation is the place or
currency in which it is issued,
made payable or paid, or the
location of any office or place
of business maintained by the
Fund.
Section 10. Application of Article
Each member shall take such action as is necessary in
its own territories for the purpose of making effective in
terms of its own law the principles set forth in this Article
and shall inform the Fund of the detailed action which it has
taken.
ARTICLE X
RELATIONS WITH OTHER INTERNATIONAL
ORGANISATIONS
The Fund shall co-operate within the terms of this
Agreement with any general international organization and
with public international organizations having specialized
responsibilities in related fields. Any arrangements for
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such co-operation which would involve a modification
of all provision of this Agreement may be effected only after
amendment to this Agreement under Article XXVIII.
ARTICLE XI
RELATIONS WITH NON-MEMBER COUNTRIES
Section 1. Undertakings regarding relations with non-member
countries
Each member undertakes:
(i) not to engage in nor to permit
any of its fiscal agencies
referred to in Article V, Section
1 to engage in, any transactions
with a non-member or with
persons in a non-member’s
territories which would be
contrary to the provisions of
this Agreement or the purposes
of the Fund;
(ii) not to co-operate with a
non-member or with persons
in a non-member’s territories in
practices which would be
contrary to the provisions of
this Agreement or the purposes
of the Fund; and
(iii) to co-operate with the Fund
with a view to the application
in its territories of appropriate
measures to prevent
transactions with non-members
or with persons in their
territories which would be
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contrary to the provisions of
this Agreement or the purposes
of the Fund.
Section 2. Restrictions on transactions with non-member countries
Nothing in this Agreement shall affect the right of
any member to impose restrictions on exchange transactions
with non-members or with persons in their territories
unless the Fund finds that such restrictions prejudice the
interests of members and are contrary to the purposes of the
Fund.
ARTICLE XII
ORGANIZATION AND MANAGEMENT
Section 1. Structure of the Fund
The Fund shall have a Board of Governors, an
Executive Board, a Managing Director, and a staff, and a
Council if the Board of Governors decides, by an eighty-
five percent majority of the total voting power, that the
provisions of Schedule D shall be applied.
Section 2. Board of Governors
(a) All powers under this Agreement not
conferred directly on the Board of
Governors, the Executive Board, or
the Managing Director shall be vested
in the Board of Governors. The
Board of Governors shall consist of
one Governor and one Alternate
appointed by each member in such
manner as it may determine. Each
(Governor and each Alternate shall
serve until a new appointment is
made. No Alternate may vote except
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in the absence of his principal. The
Board of Governors shall select one of
the Governors as chairman.
(b) The Board of Governors may delegate
to the Executive Board authority to
exercise any powers of the Board of
Governors, except the powers
conferred directly by this
Agreement on the Board of
Governors.
(c) The Board of Governors shall hold
such meetings as may be provided
for by the Board of Governors or
called by the Executive Board.
Meetings of the Board of Governors
shall be called whenever requested
by fifteen members or by members
having one-quarter of the total voting
power.
(d) A quorum for any meeting of the
Board of Governors shall be a
majority of the Governors having not
less than two-thirds of the total
voting power.
(e) Each Governor shall be entitled to
cast the number of votes allotted
under Section 5 of this Article to the
member appointing him.
(f) The Board of Governors may by
regulation establish a procedure
whereby the Executive Board, when
it deems such action to be in the best
interests of the Fund, may obtain a
vote of the Governors on a specific
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question without calling a meeting of
the Board of Governors.
(g) The Board of Governors and the
Executive Board to the extent
authorised, may adopt such rules and
regulations as may be necessary or
appropriate to conduct the business
of the fund.
(h) Governors and Alternates shall
serve as such without
compensation from the Fund, but the
Fund may pay them reasonable
expenses incurred in attending
meetings.
(i) The Board of Governors shall
determine the remuneration to be
paid to the Executive Directors and
their Alternates and the salary and
terms of contract of service of the
Managing Director.
(j) The Board of Governors and the
Executive Board may appoint such
committees as they deem advisable.
Membership of committees need not
be limited to Governors or Executive
Directors or their Alternates.
Section 3. Executive Board
(a) The Executive Board shall be
responsible for conducting the
business of the Fund, and for this
purpose shall exercise all the powers
delegated to it by the Board of
Governors.
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(b) The Executive Board shall consist of
Executive Directors with the
Managing Director as chairman. Of
the Executive Directors:
(i) five shall be appointed by the
five members having the
largest quotas; and
(ii) fifteen shall be elected by the
other members.
For the purpose of each regular election of Executive
Directors, the Board of Governors, by an eighty-five percent
majority of the total voting power, may increase or decrease
the number of Executive Directors in (ii) above.
The number of Executive Directors in (ii) above shall
be reduced by one or two, as the case may be, if Executive
Directors are appointed under (c) below, unless the Board of
Governors decides, by an eighty- five percent majority of the
total voting power, that this reduction would hinder the
effective discharge of the functions of the Executive Board or
of Executive Directors or would threaten to upset a desirable
balance in the Executive Board.
(c) If, at the second regular election of
Executive Directors and thereafter,
the members entitled to appoint
Executive Directors under (b)(i)
above do not include the two
members, the holding of whose
currencies by the Fund in the General
Resources Account have been on the
average over the preceding two
years, reduced below their quotas by
the largest absolute amounts in terms
of the special drawing right, either
one or both of such members, as the
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case may be, may appoint an
Executive Director.
(d) Elections of elective Executive
Directors shall be conducted at
intervals of two years in accordance
with the provisions of Schedule E,
supplemented by such regulations as
the Fund deems appropriate. For
each regular election of Executive
Directors, the Board of Governors
may issue regulations making
charges in the proportion of votes
required to elect Executive Directors
under the provisions of Schedule E.
(e) Each Executive Director shall appoint
an Alternate with full power to act for
him when he is not present. When
the Executive Directors appointing
them are present. Alternates may
participate in meetings but may not
vote.
(f) Executive Directors shall continue
in office until their successors are
appointed or elected. If the office
of an elected Executive Director
becomes vacant more than ninety
days before the end of his term,
another Executive Director shall be
elected for the remainder of the term by the members that elected
the former Executive Director. A
majority of the votes cast shall be
required for election. While the office
remains vacant, the Alternate of the
former Executive Director shall
exercise his powers, except that of
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appointing an Alternate.
(g) The Executive Board shall function in
continuous session at the principal
office of the Fund and shall meet as
often as the business of the Fund may
require.
(h) A quorum for any meeting of the
Executive Board shall be a majority of
the Executive Directors having not
less than one-half of the total voting
power.
(i) (i) Each appointed Executive Director
shall be entitled to cast the number of
votes allotted under Section 5 of this
Article to the member appointing
him.
(ii) If the votes allotted to a
member that appoints an
Executive Director under (c)
above were cast by an
Executive Director together
with the votes allotted to other
members as a result of the
last regular election of
Executive Directors, the
member may agree with each
of the other members that the
number of votes allotted to it
shall be cast by the appointed
Executive Director. A member
making such an agreement
shall not participate in the
election of Executive Directors.
(iii) Each elected Executive Director
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shall be entitled to cast the
number of votes which
counted towards his election.
(iv) When the provisions of Section
5 (b) of this Article are
applicable, the votes which an
Executive Director would
otherwise be entitled to cast
shall be increased or decreased
correspondingly. All the votes
which an Executive Director is
entitled to cast shall be cast as a
unit.
(v) When the suspension of the
voting rights of a member is
terminated under Article XXVI,
Section 2(b), and the member is
not entitled to appoint an
Executive Director, the member
may agree with all the
members that have elected an
Executive Director that the
number of votes allotted to
that member shall be cast by
such Executive Director,
provided that, if no regular
election of Executive Directors
has been conducted during the
period of suspension, the
Executive Director in whose
election the member had
participated prior to the
suspension, or his successor
elected in accordance with
paragraph 3(c) (i) of Schedule L
or with (f) above, shall be
entitled to cast the number of
O. 32/1991
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votes allotted to the member.
The member shall be deemed
to have participated in the
election of the Executive
Director entitled to cast the
number of votes allotted to the
member.
(j) The Board of Governors shall adopt
regulations under which a member
not entitled to appoint an Executive
Director under (b) above may send a
representative to attend any meeting
of the Executive Board when a request
made by, or a matter particularly
affecting, that member is under
consideration.
Section 4. Managing Director and staff
(a) The Executive Board shall select a
Managing Director who shall not be
a Governor or an Executive Director.
The Managing Director shall be
chairman of the Executive Board, but
shall have no vote except a deciding
vote in case of an equal division. He
may participate in meetings of the
Board of Governors, but shall not vote
at such meetings. The Managing
Director shall cease to hold office
when the Executive Board so decides.
(b) The Managing Director shall be chief
of the operating staff of the Fund and
shall conduct, under the direction of
the Executive Board, the ordinary
business of the Fund. Subject to the
general control of the Executive
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Board, he shall be responsible for the
organization, appointment, and
dismissal of the staff of the Fund.
(c) The Managing Director and the
staff of the Fund, in the discharge
of their functions, shall owe their duty
entirely to the Fund and to no other
authority. Each member of the Fund
shall respect the international
character of this duty and shall refrain
from all attempts to influence any of
the staff in the discharge of these
functions.
(d) In appointing the staff the Managing
Director shall, subject to the
paramount importance of securing
the highest standards of efficiency
and of technical competence, pay
due regard to the importance of
recruiting personnel on as wide a
geographical basis as possible.
Section 5. Voting
(a) Each member shall have two hundred
and fifty votes plus one additional
vote for each part of its quota
equivalent to one hundred thousand
special drawing rights.
(b) Whenever voting is required under
Article V, Section 4 or 5, each member
shall have the number of votes to
which it is entitled under (a) above
adjusted.
(i) by the addition of one vote for
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the equivalent of each four
hundred thousand specie
drawing rights of net sales of its
currency from the general
resources of the Fund up to the
date when the vote is taken, or
(ii) by the subtraction of one vote
for the equivalent of each four
hundred thousand special
drawing rights of its net
purchases under Article V,
Section 3 (b) and (f) up to the
date when the vote is taken,
provided that neither net purchases nor net sales shall
be deemed at any time to exceed an amount equal to the
quota of the member involved.
(c) Except as otherwise specifically
provided, all decisions of the Fund
shall be made by a majority of the
votes cast.
Section 6. Reserves, distribution of net income, and investment
(a) The Fund shall determine annually
what part of its net income shall be
placed to general reserve or special
reserve, and what part, if any, shall be
distributed.
(b) The Fund may use the special reserve
for any purpose for which it may use
the general reserve, except
distribution.
(c) If any distribution is made of the net
intone of any year, it shall be made to
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all members in proportion to their
quotas.
(d) The Fund, by a seventy percent
majority of the total voting power,
may decide at any time to distribute
any part of the general reserve. Any
such distribution shall be made to all
members in proportion to their
quotas.
(e) Payments under (c) and (d) above
shall be made in special drawing
rights, provided that either the Fund
or the member may decide that the
payment to the member shall be made
in its own currency.
(f) (i) The Fund may establish an
Investment Account for the purposes
of this subsection (f). The assets of the
Investment Account shall be held
separately from the other accounts of
the General Department.
(ii) The Fund may decide to
transfer to the Investment
Account a part of the proceeds
of the sale of gold in accordance
with Article V Section 12(g)
and, by a seventy percent
majority of the total voting
power; may decide to transfer
to the Investment Account
for immediate investment,
currencies held in the General
Resources Account. The
amount of these transfers shall
not exceed the total amount of
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the general reserve and the
special reserve at the time of
the decision.
(iii) The Fund may invest a
member’s currency held in the
Investment Account in
obligations of that member or
in marketable obligations of
international financial
organizations. No investment
shall be made without the
concurrence of the member
whose currency is used to make
the investment. The Fuel
shall invest only in obligations
denominated in special
drawing rights or in the
currency used for investment.
(iv) The income of investment may
be invested in accordance with
the provisions of this
subsection (f). Income not
invested shall be held in the
Investment Account or may be
used for meeting the expenses
of conducting the business of
the Fund.
(v) The Fund may use a member’s
currency held in the Investment
Account to obtain the
currencies needed to meet the
expenses of conducting the
business of the Fund.
(vi) The Investment Account shall
be terminated in the event of
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liquidation of the Fund and
may be terminated, or the
amount of the investment may
be reduced, prior to liquidation
of the Fund by a seventy
percent majority of the total
voting power. The Fund, by a
seventy percent majority of the
total voting power, shall adopt
rules and regulations regarding
administration of the
Investment Account which
shall be consistent with (vii)
(viii) and (ix) below.
(vii) Upon termination of the
Investment Account because of
liquidation of the Fund, any
assets in this account shall be
distributed in accordance
with the provisions of
Schedule K, provided that a
portion of these assets
corresponding to the
proportion of the assets
transferred to this account
under Article, V Section 12(g)
to the total of the assets
transferred to this account shall
be deemed to be assets held in
the Special Disbursement
Account and shall be
distributed in accordance
with Schedule K paragraph 2(a)
(ii).
(viii) Upon termination of the
Investment Account prior to
liquidation of the Fund a
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portion of the assets held in this
account corresponding to the
proportion of the assets
transferred to this account
under Article V, Section 12(g)
to the total of the assets
transferred to the account shall
be transferred to the Special
Disbursement Account if it has
not been terminated and the
balance of the assets held in the
Investment Account shall be
transferred to the General
Resources Account for
immediate use in operations
and transactions.
(ix) On a reduction of the amount
of the investment by the Fund a
portion of the reduction
corresponding to the
proportion of the assets
transferred to the Investment
Account under Article V,
Section 12(g) to the total of the
assets transferred to this
account shall be transferred to
the Special Disbursement
Account if it has not been terminated, and the balance
of the reduction shall be
transferred to the General
Resources Account for
immediate use in operations
and transactions.
Section 7. Publication of reports
(a) The Fund shall publish an annual report
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containing an audited statement of its
accounts, and shall issue, at intervals
of three months or less a summary
statement of its operations and
transactions and its holdings of
special drawing rights, gold, and
currencies of members.
(b) The Fund may publish such other
reports as it deems desirable for
carrying out its purposes.
Section 8. Communication of views to members
The Fund shall at all times have the right to
communicate its views informally to any member on any
matter arising under this Agreement. The Fund may, by a
seventy percent majority of the total voting power decide to
publish a report made to a member regarding its monetary or
economic conditions and developments which directly tend
to produce a serious disequilibrium in the international
balance of payments of members. If the member is not
entitled to appoint an Executive Director it shall be entitled to
representation in accordance with Section 3(j) of this Article.
The Fund shall not publish a report involving changes in the
fundamental structure of the economic organization of
members.
ARTICLE XIII
OFFICES AND DEPOSITORIES
Section 1. Locations of offices
The principal office of the Fund shall be located in the
territory of the member having the largest quota, and
agencies or branch offices may be established in the territories
of other members.

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Section 2. Depositories
(a) Each member shall designate its
central bank as a depository for all the
Fund’s holdings of its currency, or if it
has no central bank it shall designate
such other institution as may be
acceptable to the Fund.
(b) The Fund may hold other assets,
including gold, in the depositories
designated by the five members
having the largest quotas and in such
other designated depositories as the
Fund may select. Initially, at least one-
half of the holdings of the Fund shall
be held in the depository designated
by the member in whose territories
the Fund has its principal office and at
least forty percent shall be held in the
depositories designated by the
remaining four members referred to
above. However, all transfers of gold
by the Fund shall be made with due
regard to the costs of transport and
anticipated requirements of the Fund.
In an emergency the Executive Board
may transfer all or any part of the
Fund’s gold holdings to any place
where they can be adequately
protected.
Section 3. Guarantee of the Fund’s assets
Each member guarantees all assets of the Fund
against loss resulting from failure or default on the part
of the depository designated by it.

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ARTICLE XIV
TRANSITIONAL ARRANGEMENTS
Section 1. Notification to the Fund
Each member shall notify the Fund whether it intends
to avail itself of the transitional arrangements in Section 2 of
this Article, or whether it is prepared to accept the obligations
of Article VIII, Sections 2, 3 and 4. A member availing itself of
the transitional arrangements shall notify the Fund as soon
thereafter as it is prepared to accept these obligations.
Section 2. Exchange restrictions
A member that has notified the Fund that it intends to
avail itself of transitional arrangements under this provision
may, notwithstanding the provisions of any other articles of
this Agreement, maintain and adapt to changing
circumstances the restrictions on payments and transfers for
current international transactions that were in effect on the
date on which it became a member. Members shall, however,
have continuous regard in their foreign exchange policies to
the purposes of the Fund, and, as soon as conditions permit,
they shall take all possible measures to develop such
commercial and financial arrangements with other members
as will facilitate international payments and the promotion of
a stable system of exchange rates. In particular, members shall
withdraw restrictions maintained under this Section as soon
as they are satisfied that they will be able, in the absence of
such restrictions, to settle their balance of payments in a
manner which will not unduly encumber their access to the
general resources of the Fund.
Section 3. Action of the Fund relating to restrictions
The fund shall make annual reports on the restrictions
in force under Section 2 of this Article. Any member retaining
any restrictions inconsistent with Article VIII, Section 2, 3 or 4,
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shall consult the fund annually as to their further retention.
The fund may, if it deems such action necessary in
exceptional circumstances, make representations to any
member that conditions are favourable for the withdrawal of
any particular restriction, or for the general abandonment of
restrictions, inconsistent with the provisions of any other
articles of this Agreement. The member shall be given a
suitable time to reply to such representations. If the Fund
finds that the member persists in maintaining restrictions
which are inconsistent with the purposes of the Fund, the
member shall be subject to Article XXVI, Section 2(a).
ARTICLE XV
SPECIAL DRAWING RIGHTS
Section 1. Authority to allocate special drawing rights
To meet the need, as and when it arises, for a
supplement to existing reserve assets, the Fund is authorised
to allocate special drawing rights to members that are
participants in the Special Drawing Rights Department.
Section 2. Valuation of the special drawing right
The method of valuation of the special drawing right
shall be determined by the Fund by a seventy per cent
majority of the total voting power, provided however, that an
eighty-five per cent majority of the total voting power shall be
required for a change in the principle of valuation or a
fundamental change in the application of the principle in
effect.
ARTICLE XVI
GENERAL DEPARTMENT AND SPECIAL DRAWING
RIGHTS DEPARTMENT
Section 1. Separation of operations and transactions

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All operations and transactions involving special
drawing rights shall be conducted through the Special
Drawing Rights Department. All other operations and
transactions on the account of the Fund authorised by or
under this Agreement shall be conducted through the General
Department. Operations and transactions pursuant to Article
XVII, Section 2 shall be conducted through the General
Department as well as the Special Drawing Rights
Department.
Section 2. Separation of assets and property
All assets and property of the Fund, except resources
administered under Article V, Section 2(b), shall be held in the
General Department, provided that assets and property
acquired under Article XX, Section2 and Articles XXIV and
XXV and Schedules H and I shall be held in the Special
Drawings Rights Department. Any assets or property held in
one Department shall not be available to discharge or meet
the liabilities, obligations or losses of the Fund incurred in the
conduct of the operations and transactions of the other
Department, except that the expenses of conducting the
business of the Special Drawing Rights Department shall be
paid by the Fund from the General Department which shall
be reimbursed in Special Drawing Rights from time to time by
assessments under Article XX, Section 4 made on the basis of
a reasonable estimate of such expenses.
Section 3. Recording and information
All changes in holdings of special drawing rights shall
take effect only when recorded by the Fund in the Special
Drawing Rights Department. Participants shall notify the
Fund of the provisions of this Agreement under which special
drawing rights are used. The Fund may require participants
to furnish it with such other information as it deems
necessary for its functions.

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ARTICLE XVII
PARTICIPANTS AND OTHER HOLDERS OF SPECIAL
DRAWING RIGHTS
Section 1. Participants
Each member of the Fund that deposits with the
fund an instrument setting forth that it undertakes all the
obligations of a participant in the Special Drawing Rights
Department in accordance with its law and that it has taken
all steps necessary to enable it to carry out all of these
obligations shall become a participant in the Special Drawing
Rights Department as of the date the instrument is deposited,
except that no member shall become a participant before
the provisions of this Agreement pertaining exclusively to
the Special Drawing Rights Department have entered into
force and instruments have been deposited under this Section
by members that have at least seventy-five percent of the total
of quotas.
Section 2. Fund as a holder
The fund may hold special drawing rights in the
General Resources Account and may accept and use them in
operations and transactions conducted through the General
Resources Account with participants in accordance with the
terms and conditions prescribed under Section 3 of this
Article.
Section 3. Other holders
The Fund may prescribe:
(i) as holders, non-members,
members that are non-
participants, institutions that
perform functions of a central
bank for more than one
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member, and other official
critics;
(ii) the terms and conditions on
which prescribed holders may
be permitted to hold special
drawing rights and may
accept and use them in
operations and transactions
with participants and other
prescribed holders; and
(iii) the terms and conditions on
which participants and the
Fund through the General
Resources Account may enter
into operations and
transactions in special drawing
rights with prescribed holders.
An eighty-five percent majority of the total voting
power shall be required for prescriptions under (i) above.
The terms and conditions prescribed by the Fund shall be
consistent with the provisions of this Agreement and the
effective functioning of the Special Drawing Rights
Department.
ARTICLE XVIII
ALLOCATION AND CANCELLATION OF SPECIAL
DRAWING RIGHTS
Section 1. Principles and considerations governing allocation and
cancellation
(a) In all its decisions with respect to the
allocation and cancellation of special
drawing rights the Fund shall seek to
meet the long-term global need, as
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and when it arises, to supplement
existing reserve assets in such manner
as will promote the attainment of its
purposes and will avoid economic
stagnation and deflation as well as
excess demand and inflation in the
world.
(b) The first decision to allocate special
drawing rights shall take into account,
as special considerations, a collective
judgment that there is a global need to
supplement reserves and the
attainment of a better balance of
payments equilibrium, as well as the
likelihood of a better working of the
adjustment process in the future.
Section 2. Allocation anal cancellation
(a) Decisions of the Fund to allocate or
cancel special drawing rights shall be
made for basic periods which shall
run consecutively and shall be five
years in duration. The first basic
period shall begin on the date of the
first decision to allocate special
drawing rights or such later date as
may be specified in that decision.
Any allocations or cancellations shall
take place at yearly intervals.
(b) The rates at which allocations are to
be made shall be expressed as
percentages of quotas on the date of
each decision to allocate. The rates at
which special drawing rights are to be
cancelled shall be expressed as
percentages of net cumulative
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allocations of special drawing rights
on the date of each decision to cancel.
The percentages shall be the same for
all participants.
(c) In its decision for any basic period the
fund may provide, notwithstanding
(a) and (b) above, that:
(i) the duration of the basic period
shall be other than five years; or
(ii) the allocations or cancellations
shall take place at other than
yearly intervals; or
(iii) the basis for allocations or
cancellations shall be the quotas
or net cumulative allocations
on dates other than the dates of
decisions to allocate or cancel.
(d) A member that becomes a participant
after a basic period starts shall receive
allocations beginning with the next
basic period in which allocations are
made after it becomes a participant
unless the Fund decides that the new
participant shall start to receive
allocations beginning with the next
allocation after it becomes a
participant. If the Fund decides that a
member that becomes a participant
during a basic period shall receive
allocations during the remainder of
that basic period and the participant
was not a member on the dates
establish under (b) or (c) above, the
Fund shall determine the basis on
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which these allocations to the
participant shall be made.
(e) A participant shall receive allocations
of special drawing rights made
pursuant to any decision to allocate
unless:
(i) the Governor for the
participant did not vote in
favour of the decision; and
(ii) the participant has notified the
Fund in writing prior to the
first allocation of special
drawing rights under that
decision that it does not wish
special drawing rights to be
allocated to it under the
decision. On the request of a
participant, the Fund may
decide to terminate the effect of
the notice with respect to
allocations of special drawing
rights subsequent to the
termination.
(f) If on the effective date of any
cancellation the amount of special
drawing rights held by a participant is
less than its share of special drawing
rights that are to be cancelled, the
participant shall eliminate its negative
balance as promptly as its gross
reserve position permits and shall
remain in consultation with the Fund
for this purpose. Special drawing
rights acquired by the participant
after the effective date of the
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cancellation shall be applied against
its negative balance and cancelled.
Section 3. Unexpected major developments
The Fund may change the rates or intervals of
allocation or cancellation during the rest of a basic period or
change the length of a basic period or start a new basic
period, if at any time the Fund finds it desirable to do so
because of unexpected major developments.
Section 4. Decisions on allocations and cancellations
(a) Decisions under Section 2(a), (b) and
(c) or Section 3 of this Article shall be
made by the Board of Governors on
the basis of proposals of the
Managing Director concurred in by
the Executive Board.
(b) Before making any proposal, the
Managing Director, after having
satisfied himself that it will be
consistent with the provisions of
Section 1(a) of this Article, shall
conduct such consultations as will
enable him to ascertain that there is
broad support among participants for
the proposal. In addition, before
making a proposal for the first
allocation, the Managing Director
shall satisfy himself that the
provisions of Section 1(b) of this
Article have been met and that there
is broad support among participants
to begin allocations: he shall make a
proposal for the first allocation as
soon after the establishment of the
Special Drawing Rights Department
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as he is so satisfied.
(c) The Managing Director shall make
proposals:
(i) not later than six months before
the end of each basic period;
(ii) if no decision has been taken
with respect to allocation or
cancellation for a basic period,
whenever he is satisfied that
the provisions of (b) above have
been met;
(iii) when in accordance Section 3 of
this Article, he considers that it
would be desirable to change
the rate or intervals of
allocation or cancellation or
change the length of a basic
period or start a new basic
period; or
(iv) within six months of a request
by the Board of Governors or
the Executive Board:
provided that, if under (i), (iii), or (iv) above the
Managing Director ascertains that there is no proposal which
he considers to be consistent with the provisions of Section 1
of this Article that has broad support among participants in
accordance with (b) above, he shall report to the Board of
Governors and to the Executive Board.
(d) An eighty-five percent majority of the
total voting power shall be required
for decisions under Section 2(a), (b),
and (c) of Section 3 of this Article
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except for decisions under Section 3
with respect to a decrease in the rates
of allocation.
ARTICLE XIX
OPERATIONS AND TRANSACTIONS IN SPECIAL
DRAWING RIGHTS
Section 1. Use of special drawing rights
Special drawing rights may be used in the operations
and transactions authorized by or under this Agreement.
Section 2. Operations and transactions between participants
(a) A participant shall be entitled to use
its special drawing rights to obtain an
equivalent amount of currency from a
participant designated under Section
5 of this Article.
(b) A participant, in agreement with
another participant, may use its
special drawing rights to obtain an
equivalent amount of currency from
the other participant.
(c) The Fund, by a seventy per cent
majority of the total voting power,
may prescribe operations in which a
participant is authorized to engage in
agreement with another participant
on such terms and conditions as the
Fund deems appropriate. The terms
and conditions shall be consistent
with the effective functioning of the
Special Drawing Rights Department
and the proper use of special drawing
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rights in accordance with this
Agreement.
(d) The Fund may make representations
to a participant that enters into any
operation or transaction under (b) or
(c) above that in the judgement of the
Fund may be prejudiced to the
process of designation according to
the principles of Section 5 of this
Article or is otherwise inconsistent
with Article XXII. A participant that
persists in entering into such
operations or transactions shall be
subject to Article XXIII, Section 2(b).
Section 3. Requirement of need
(a) In transactions under Section 2(a) of
this Article, except as otherwise
provided in (c) below, a participant
will be expected to use its special
drawing rights only is it has a need
because of its balance of payments or
its reserve position or developments
in its reserves, and not for the sole
purpose of changing the composition
of its reserves.
(b) The use of special drawing rights
shall not be subject to challenge on
the basis of the expectation in (a)
above, but the Fund may make
representations to a participant that
fails to fulfil this expectation. A
participant that persists in failing
to fulfill this expectation shall be
subject to Article XXIII, Section 2(b).

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(c) The Fund may waive the expectation
in (a) above in any transactions in
which a participant uses special
drawing rights to obtain an
equivalent amount of currency from a
participant designated under Section
5 of this Article that would promote
reconstitution by the other participant
under Section 6(a) of this Article;
prevent or reduce a negative balance
of the other participant; or offset the
effect of a failure by the other
participant to fulfill the expectation in
(a) above.
Section 4. Obligation to provide currency
(a) A participant designated by the Fund
under Section 5 of this Article shall
provide on demand a freely usable
currency to a participant using
special drawing rights under Section
2(a) of this Article. A participant’s
obligation to provide currency shall
not extend beyond the point at which
its holdings of special drawing rights
in excess of its net cumulative allocation are equal to twice its
cumulative allocation or such higher
limit as may be agreed between a
participant and the Fund.
(b) A participant may provide currency
in excess of the obligatory limit or any
agreed higher limit.
Section 5. Designation of participants to provide currency
(a) The Fund shall ensure that a
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participant will be able to use its
special drawing rights by designating
participants to provide currency for
specified amounts of special drawing
rights for the purposes of Sections 2(a)
and 4 of this Article. Designations
shall be made in accordance with the
following general principles
supplemented by such other
principles as the Fund may adopt
from time to time.
(i) A participant shall be subject to
designation if its balance of payments
and gross reserve position is
sufficiently strong, but this will
not preclude the possibility that a
participant with a strong reserve
position will be designated even
though it has a moderate balance of
payments deficit. Participants shall
be designated in such manner as will
promote over time a balance
distribution of holdings of special
drawing rights among them.
(ii) Participants shall be subject to
designation in order to promote
reconstitution under Section 6(a) of
this Article, to reduce negative
balances in holdings of special
drawing rights, or to offset the effect
of failures to fulfill the expectation in
Section 3(a) of this Article.
(iii) In designating participants, the Fund
normally shall give priority to those
that need to acquire special drawing
rights to meet the objectives of
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designation under (ii) above.
(b) In order to promote over time a
balanced distribution of holdings of
special drawing rights under (a) (i)
above, the Fund shall apply the rules
for designation in Schedule F or such
rules as may be adopted under (c)
below.
(c) The rules for designation may be
reviewed at any time and new rules
shall be adopted if necessary. Unless
new rules are adopted, the rules in
force at the time of the review shall
continue to apply.
Section 6. Reconstitution
(a) Participants that use their special
drawing rights shall reconstitute
their holdings of them in accordance
with the rules for reconstitution in
Schedule G or such rules as may be
adopted under (b) below.
(b) The rules for reconstitution may be
reviewed at any time and new rules
shall be adopted if necessary. Unless
new rules are adopted or a decision is
made to abrogate rules for
reconstitution, the rules in force at the
time of review shall continue to
apply. A seventy percent majority of
the total voting power shall be
required for decisions to adopt,
modify, or abrogate the rules for
reconstitution.

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Section 7. Exchange rates
(a) Except as otherwise provided in (b)
below, the exchange rates for
transactions between participants
under Section 2(a) and (b) of this
Article shall be such that participants
using special drawing rights shall
receive the same value whatever
currencies might be provided and
whichever participants provide those
currencies, and the Fund shall adopt
regulations to give effect to this
principle.
(b) The Fund, by an eighty-five percent
majority of the total voting power,
may adopt policies under which in
exceptional circumstances the Fund,
by a seventy percent majority of the
total voting power, may authorize
participants entering into transactions
under Section 2(b) of this Article to
agree on exchange rates other than
those applicable under (a) above.
(c) The fund shall consult a participant
on the procedure for determining
rates of exchange for its currency.
(d) For the purposes of this provision the
term participant includes a
terminating participant.
ARTICLE XX
SPECIAL DRAWING RIGHTS DEPARTMENT INTEREST
AND CHARGES

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Section 1. Interest
Interest at the same rate for all holders shall be paid
by the Fund to each holder on the amount of its holdings of
special drawing rights. The Fund shall pay the amount due to
each holder whether or not sufficient charges are received to
meet the payment of interest.
Section 2. Charges
Charges at the same rate for all participants shall be
paid to the Fund by each participant on the amount of its net
cumulative allocation of special drawing rights plus any
negative balance of the participant or unpaid charges.
Section 3. Rate of interest and charges
The Fund shall determine the rate of interest by a
seventy percent majority of the total voting power. The rate of
charges shall be equal to the rate of interest.
Section 4. Assessments
When it is decided under Article XVI, Section
2 that reimbursement shall be made, the Fund shall levy
assessments for this purpose at the same rate for all
participants on their net cumulative allocations.
Section 5. Payment of interest, charges, and assessments
Interest, charges, and assessments shall be paid in
special drawing rights. A participant that needs special
drawing rights to pay any charge or assessment shall be
obligated and entitled to obtain them, for currency acceptable
to the Fund, in a transaction with the Fund conducted
through the General Resources Account. If sufficient special
drawing rights cannot be obtained in this way, the participant shall be obligated and entitled to obtain them with a freely
usable currency from a participant which the Fund shall
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specify. Special drawing rights acquired by a participant
after the date for payment shall be applied against its unpaid
charges and cancelled.
ARTICLE XXI
ADMINISTRATION OF THE GENERAL DEPARTMENT
AND THE SPECIAL DRAWING RIGHTS DEPARTMENT
(a) The General Department and the
Special Drawing Rights Department
shall be administered in accordance
with the provisions of Article XII,
subject to the following provisions.
(i) For meetings of or decisions
by the Board of Governors on
matters pertaining exclusively
to the Special Drawing Rights
Department only requests by,
or the presence and the votes
of, Governors appointed by
members that are participants
shall be counted for the
purpose of calling meetings
and determining whether a
quorum exists or whether a
decision is made by the
required majority.
(ii) For decisions by the Executive
Board on matters pertaining
exclusively to the Special
Drawing Rights Department
only Executive Directors
appointed or elected by at least
one member that is a
participant shall be entitled to
vote. Each of these Executive
Directors shall be entitled to
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cast the number of votes
allotted to the member which is
a participant that appointed
him or to the members that are
participants whose votes
counted towards his election.
Only the presence of Executive
Directors appointed or elected
by members that are
participants and the votes
allotted to members that are
participants shall be counted
for the purpose of determining
whether a quorum exists or
whether a decision is made by
the required majority. For the
purposes of this provision, an
agreement under Article XII,
Section 3(i)(ii) by a member that
is a participant shall entitle an
appointed Executive Director to
vote and cast the number of
votes allotted to the member.
(iii) Questions of the general
administration of the Fund,
including reimbursement
under Article XVI, Section 2,
and any question whether a
matter pertains to both
Departments or exclusively to
the Special Drawing Rights
Department shall be
decided as if they
pertained exclusively to the
General Department. Decisions
with respect to the method of
valuation of the special
drawing right, the acceptance
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and holding of special drawing
rights in the General
Resources Account of the
General Department and the
use of them, and other
decisions affecting the
operations and transactions
conducted through both the
General Resources Account of
the General Department and
the Special Drawing Rights
Department shall be made by
the majorities required for
decisions on matters
pertaining exclusively to each
Department. A decision on a
matter pertaining to the Special
Drawing Rights Department
shall so indicate.
(b) In addition to the privileges and
immunities that are accorded under
Article IX of this Agreement no tax of
any kind shall be levied on special
drawing rights or on operations or
transactions in special drawing rights.
(c) A question of interpretation of the
provisions of this Agreement on
matters pertaining exclusively to the
Special Drawing Rights Department
shall be submitted to the Executive
Board pursuant to Article XXIX(a)
only on the request of a participant. In
any case where the Executive Board
has given a decision on a question
of interpretation pertaining
exclusively to the Special Drawing
Rights Department only a participant
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may require that the question be
referred to the Board of Governors
under Article XXIX(b). The Board of
Governors shall decide whether a
Governor appointed by a member
that is not a participant shall be
entitled to vote in the Committee on
Interpretation on questions
pertaining exclusively to the Special
Drawing Rights Department.
(d) Whenever a disagreement arises
between the Fund and a participant
that has terminated its participation in
the Special Drawing Rights
Department or between the Fund and
any participant during the liquidation
of the Special Drawing Rights
Department with respect to any
matter arising exclusively from
participation in the Special Drawing
Rights Department, the disagreement
shall be submitted to arbitration in
accordance with the procedures in
Article XXIX(c).
ARTICLE XXII
GENERAL OBLIGATIONS OF PARTICIPANTS
In addition to the obligations assumed with respect to
special drawing rights under other articles of this Agreement,
each participant undertakes to collaborate with the Fund and
with other participants in order to facilitate the effective
functioning of the Special Drawing Rights Department and
the proper use of special drawing rights in accordance with
this Agreement and with the objective of making the special
drawing right the principal reserve asset in the international
monetary system.
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ARTICLE XXIII
SUSPENSION OF OPERATIONS AND TRANSACTIONS
IN SPECIAL DRAWING RIGHTS
Section 1. Emergency provisions
In the event of an emergency or the development of
unforeseen circumstances threatening the activities of the
Fund with respect to the Special Drawing Rights Department,
the Executive Board, by an eighty-five percent majority of the
total voting power, may suspend for a period of not more
than one year the operation of any of the provisions relating
to operations and transactions in special drawing rights, and
the provisions of Article XXVII, Section 1(b), (c), and (d) shall
then apply.
Section 2. Failure to fulfill obligations
(a) If the Fund finds that a participant has
failed to fulfill its obligations under
Article XIX, Section 4, the right of the
participant to use its special drawing
rights shall be suspended unless the
fund otherwise decides.
(b) If the Fund finds that a participant has
failed to fulfill any other obligation
with respect to special drawing
rights, the Fund may suspend the
right of the participant to use special
drawing rights it acquires after the
suspension.
(c) Regulations shall be adopted to
ensure that before action is taken
against any participant under (a) or
(b) above, the participant shall be
informed immediately of the
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complaint against it and given an
adequate opportunity for stating its
case, both orally and in writing.
Whenever the participant is thus
informed of a complaint relating to (a)
above, it shall not use special drawing
rights pending the disposition of the
complaint.
(d) Suspension under (a) or (b) above or
limitation under (c) above shall not
affect a participant’s obligation to
provide currency in accordance with
Article XIX, Section 4.
(e) The Fund may at any time terminate a
suspension under (a) or (b) above,
provided that a suspension imposed
on a participant under (b) above for
failure to fulfill the obligations under
Article XIX, Section 6(a) shall not be
terminated until one hundred eighty
days after the end of the first
calendar quarter during which the
participant complies with the rules for
reconstitution.
(f) The right of a participant to use its
special drawing rights shall not be
suspended because it has become
ineligible to use the Fund’s general
resources under Article V, Section 5,
Article VI, Section 1, or Article XXVI,
Section 2(a), Article XXVI, Section 2,
shall not apply because a participant
has failed to fulfill any obligations
with respect to special drawing rights.

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ARTICLE XXIV
TERMINATION OF PARTICIPATION
Section 1. Right to terminate participation
(a) Any participant may terminate its
participation in the Special Drawing
Rights Department at any time by
transmitting a notice in writing to the
Fund at its principal office.
Termination shall become effective on
the date the notice is received.
(b) A participant that withdraws from
membership in the Fund shall be
deemed to have simultaneously
terminated its participation in the
Special Drawing Rights Department.
Section 2. Settlement on termination
(a) When a participant terminates its
participation in the Special Drawing
Rights Department, all operations and
transactions by the terminating
participant in special drawing rights
shall cease except as otherwise
permitted under an agreement made
pursuant to (c) below in order to
facilitate a settlement or as provided
in Sections 3, 5, and 6 of this Article or
in Schedule H. Interest and charges
that accrued to the date of termination
and assessments levied before that
date but not paid in special drawing
rights.
(b) The Fund shall be obligated to redeem
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all special drawing rights held by the
terminating participant shall be
obligated to pay to the Fund an
Rights Department. These obligations
shall be set off against each other and
the amount of the Special Drawing
Rights held by and the terminating
participant that is used in the setoff to
extinguish its obligation to the Fund
shall be cancelled.
(c) A settlement shall be made with
reasonable despatch by agreement
between the terminating participant
and the Fund with respect to any
obligation of the terminating
participant or the Fund after the setoff
in (b) above. If agreement on a
settlement is not reached promptly
the provisions of Schedule H shall
apply.
Section 3. Interest and charges
After the date of termination the Fund shall pay
interest on any outstanding balance of special drawing rights
held by a terminating participant, and the terminating
participant shall pay charges on any outstanding obligation
owed to the Fund at the times and rates prescribed under
Article XX. Payment shall be made in special drawing
rights. A terminating participant shall be entitled to obtain
special drawing rights with a freely usable currency to pay
charges or assessments in a transaction with a participant
specified by the Fund or by agreement from any other holder,
terminating participant, and the
amount equal to its net cumulative
allocation and any other amounts that
may be due and payable because of its
participation in the Special Drawing
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or to dispose of special drawing rights received as interest
in a transaction with any participant designated under
Article XIX. Section 5 or by agreement with any other holder.
Section 4. Settlement of obligation to the Fund
Currency received by the Fund from a terminating
participant shall be used by the Fund to redeem special
drawing rights held by participants in proportion to the
amount by which each participant’s holdings of special
drawing rights exceed its net cumulative allocation at the time
the currency is received by the Fund. Special drawing rights
so redeemed and special drawing rights obtained by a
terminating participant under the provisions of this
Agreement to meet any installment due under an
agreement on settlement or under Schedule II and set off
against that installment shall be cancelled.
Section 5. Settlement of obligation to a terminating participant
Whenever the Fund is required to redeem special
drawing rights held by a terminating participant, redemption
shall be made with currency provided by participants
specified by the Fund. These participants shall be specified
in accordance with the principles in Article XIX, Section 5.
Each specified participant shall provide at its option the
currency of the terminating participant or a freely usable
currency to the Fund and shall receive an equivalent amount
of special drawing rights. However, a terminating participant
may use its special drawing rights to obtain its own currency,
a freely usable currency, or any other asset from any holder, if
the Fund so permits.
Section 6. General Resources Account transaction
In order to facilitate settlement with a terminating
participant, the Fund may decide that a terminating
participant shall:

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(i) use any special drawing rights
held by it after the setoff in
Section 2(b) of this Article,
when they are to be redeemed,
in a transaction with the
Fund conducted through the
General Resources Account to
obtain its own currency or a
freely usable currency at the
option of the Fund, or
(ii) obtain special drawing rights in
a transaction with the Fund
conducted through the
General Resources Account for
a currency acceptable to the
Fund to meet any charges or
installment due under an
agreement or the provisions of
Schedule II.
ARTICLE XXV
LIQUIDATION OF THE SPECIAL DRAWING RIGHTS
DEPARTMENT
(a) The Special Drawing Rights
Department may not be liquidated
except by a decision of the Board of
Governors. In an emergency, if the
Executive Board decides that
liquidation of the Special Drawing
Rights Department may be necessary,
it may temporarily suspend
allocations or cancellations and all
operations and transactions in special
drawing rights pending decision by
the Board of Governors. A decision by
the Board of Governors to liquidate
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the Fund shall be a decision to
liquidate both the General
Department and the Special Drawing
Rights Department.
(b) If the Board of Governors decides to
liquidate the Special Drawing Rights
Department, all allocations or
cancellations and all operations and
transactions in Special Drawing
Rights and the activities of the Fund
with respect to the Special Drawing
Rights Department shall cease except
those incidental to the orderly
discharge of the obligations of
participants and of the Fund with
respect to special drawing rights, and
all obligations of the Fund and of
participants under this Agreement
with respect to Special Drawing
Rights shall cease except those set out in this Article. Article XX, Article XXI
(d), Article XXIV, Article XXIX(c), and
Schedule H, or any agreement
reached under Article XXIV subject to
paragraph 4 of Schedule H, and
Schedule I.
(c) Upon liquidation of the Special
Drawing Rights Department interest
and charges that accrued to the
date of liquidation and assessments
levied before that date but not paid
shall be paid in special drawing
rights. The Fund shall be obligated to
redeem all special drawing rights held
by holders, and each participant shall
be obligated to pay the Fund an
amount equal to its net cumulative
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allocation of special drawing rights
and such other amounts as may be
due and payable because of its
participation in the Special Drawing
Rights Department.
(d) Liquidation of the Special Drawing
Rights Department shall be
administered in accordance with the
provisions of Schedule I.
ARTICLE XXVI
WITHDRAWAL FROM MEMBERSHIP
Section 1. Right of members to withdraw
Any member may withdraw from the Fund at any
time by transmitting a notice in writing to the Fund at its
principal office. Withdrawal shall become effective on the
Section 2. Compulsory withdrawal
(a) If a member fails to fulfill any of its
obligations under this Agreement, the
Fund may declare the member
ineligible to use the general resources
of the Fund. Nothing in this Section
shall be deemed to limit the
provisions of Article V, Section 5 or
Article VI, Section 1.
(b) If, after the expiration of a reasonable
period following a declaration of
ineligibility under (a) above, the
member persists in its failure to fulfil
any of its obligations under this
Agreement, the Fund may, by a
date such notice is received.
O. 32/1991
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seventy per cent majority of the total
voting power, suspend the voting
rights of the member. During the
period of the suspension, the provisions of Schedule L shall apply.
The Fund may, by a seventy per cent
majority of the total voting power,
terminate the suspension at any time.
(c) If, after the expiration of a reasonable
period following a decision of
suspension under (b) above, the
member persists in its failure to fulfil
any of its obligations under this
Agreement, that member may be
required to withdraw from
membership in the Fund by a decision
of the Board of Governors carried by
a majority of the Governors having
eighty-five per cent of the total voting
power.
(d) Regulations shall be adopted to
ensure that before action is taken
against any member under (a), (b), or
(c) above, the member shall be
informed in reasonable time of the
complaint against it and given an
adequate opportunity for stating its
case, both orally and in writing.
Section 3. Settlement of accounts with members withdrawing
When a member withdraws from the Fund, normal
operations and transactions of the Fund in its currency shall
cease and settlement of all accounts between it and the fund
shall be made with reasonable despatch by agreement
between it and the Fund. If agreement is not reached
promptly, the provisions of Schedule J shall apply to the
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settlement of accounts.
ARTICLE XXVII
EMERGENCY PROVISIONS
Section 1. Emergency suspension
(a) In the event of an emergency or the
development of unforeseen
circumstances threatening the
activities of the fund, the Executive
Board, by an eighty-five percent
majority of the total voting power,
may suspend for a period of not more
than one year the operation of any of
the following provisions:
(i) Article V, Sections 2, 3, 7, 8(a)
(i) and (e);
(ii) Article VI, Section 2;
(iii) Article XI, Section 1;
(iv) Schedule C, paragraph 5.
(b) A suspension of the operation of a
provision under (a) above may not be
extended beyond one year except by
the Board of governors which, by an
eighty-five percent majority of the
total voting power, may extend a
suspension for an additional period of
not more than two years if it finds
that the emergency or unforeseen
circumstances referred to in (a) above
continue to exist.

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(c) The Executive Board may, by a
majority of the total voting power,
terminate such suspension at any
time.
(d) The Fund may adopt rules with
respect to the subject matter of a
provision during the period in which
its operation is suspended.
Section 2. Liquidation of the Fund
(a) The fund may not be liquidated
except by decision of the Board of
Governors. In an emergency, if the
Executive Board decides that
liquidation of the Fund may be
necessary, it may temporarily
suspend all operations and
transactions, pending decision by the
Board of Governors.
(b) If the Board of Governors decides to
liquidate the fund, the Fund shall
forthwith cease to engage in any
activities except those incidental to
the orderly collection and liquidation
of its assets and the settlement of its
liabilities, and all obligations of
members under this Agreement shall
cease except those set out in this
Article, in Article XXIX (c), in
Schedule J, paragraph 7, and in
Schedule K.
(c) Liquidation shall be administered
in accordance with the provisions of
Schedule K.

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ARTICLE XXVIII
AMENDMENTS
(a) Any proposal to introduce
modifications in this Agreement,
whether emanating from a member, a
Governor, or the Executive Board,
shall be communicated to the
chairman of the Board of Governors
who shall bring the proposal before
the Board of Governors. If the
proposed amendment is approved by
the Board of Governors, the Fund
shall, by circular letter or telegram,
ask all members whether they accept
the proposed amendment. When
three- fifths of the members, having
eighty-five percent of the total voting
power, have accepted the proposed
amendment, the Fund shall certify the
fact by a formal communication
addressed to all members.
(b) Notwithstanding (a) above,
acceptance by all members is
required in the case of any
amendment modifying:
(i) the right to withdraw from the
Fund (Article XXVI, Section 1);
(ii) the provisions that no change
in a member’s quota shall be
made without its consent
(Article III, Section 2(d); and
(iii) the provision that no change
may be made in the par value
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of a member’s currency except
on the proposal of that member
(Schedule C, paragraph 6).
(c) Amendments shall enter force for all
members three months after the date
of the formal communication unless a
shorter period is specified in the
circular letter or telegram.
ARTICLE XXIX
INTERPRETATION
(a) Any question of interpretation of the
provisions of this Agreement arising
between any member and the Fund or
between any members of the Fund
shall be submitted to the Executive
Board for its decision. If the question particularly affects any member not
entitled to appoint an Executive
Director, it shall be entitled to
representation in accordance with
Article XII, Section 3(j).
(b) In any case where the Executive
Board has given a decision under (a)
above, any member may require,
within three months from the date of
the decision, that the question be
referred to the Board of Governors,
whose decision shall be final. Any
question referred to the Board of
Governors shall be considered by
Committee on Interpretation of the
Board of Governors. Each Committee
member shall have one vote. The
Board of Governors shall establish the
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membership, procedures, and voting
majorities of the Committee. A
decision of the Committee shall be the
decision of the Board of Governors
unless the Board of Governors, by an
eighty-five percent majority of the
total voting power, decides otherwise.
Pending the result of the reference to
the Board of Governors the Fund
may, so far as it deems necessary, act
on the basis of the decision of the
Executive Board.
(c) Whenever a disagreement arises
between the Fund and a member
which has withdrawn, or between the
Fund and any member during
liquidation of the Fund, such
disagreement shall be submitted to
arbitration by a tribunal of three
arbitrators, one appointed by the
Fund, another by the member or
withdrawing member, and an umpire
who, unless the parties otherwise
agree, shall be appointed by the
President of the International Court of
Justice or such other authority as may
have been prescribed by regulation
adopted by the Fund. The umpire
shall have full power to settle all
questions of procedure in any case
where the parties are in disagreement
with respect thereto.
ARTICLE XXX
EXPLANATION OF TERMS
In interpreting the provisions of this Agreement, the
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Fund and its members shall be guided by the following
provisions:
(a) The Fund’s holdings of a member’s
currency in the General Resources
Account shall include any securities
accepted by the Fund under Article
III, Section 4.
(b) Stand-by arrangement means a
decision of the Fund by which a
member is assured that it will be able
to make purchases from the General
Resources Account in accordance
with the terms of the decision during
a specified period and up to a
specified amount.
(c) Reserve tranche purchase means a
purchase by a member of special
drawing rights of the currency of
another member in exchange for its
own currency which does not cause
the Fund’s holdings of the member’s
currency in the General Resources
Account to exceed its quota, provided
that for the purposes of this definition
the Fund may exclude purchases and
holdings under:
(i) policies on the use of its general
resources for compensatory
financing of export fluctuations;
(ii) policies on the use of its
general resources in connection
with the financing of
contributions to international
buffet stocks or primary
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products; and
(iii) other policies on the use of its
general resources in respect of
which the Fund decides, by an
eighty-five percent majority of
the total voting power, that
an exclusion shall be made.
(d) Payments for current transactions
means payments which are not for
the purpose of transferring capital
and includes, without limitation:
(1) all payments due in connection with foreign
trade, other current business, including
services and normal short-term banking and
credit facilities;
(2) payments due as interest on loans and or as
net income from other investments;
(3) payments of moderate amount for
amortization of loans or for depreciation of
direct investments; and
(4) moderate remittances for family living
expenses.
The Fund may, after consultation with the members
concerned, determine whether certain specific transactions
are to be considered current transactions or capital
transactions.
(e) Net cumulative allocation of special
drawing rights means the total
amount of special drawing rights
allocated to a participant less its share
of special drawing rights that have
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been cancelled under Article XVIII,
Section 2(a).
(f) A freely usable currency means a
member’s currency that the Fund
determines (i) is, in fact, widely used
to make payments for international
transactions, and (ii) is widely traded
in the principal exchange markets.
(g) Members that were members on
August 31, 1975 shall be deemed to
include a member that accepted
membership after that date pursuant
to a resolution of the Board of
Governors adopted before that date.
(h) Transactions of the Fund means
exchanges of monetary assets by the
Fund for other monetary assets.
Operations of the Fund means other
uses or receipts of monetary assets by
the Fund.
(i) Transactions in special drawing rights
means exchanges of special drawing
rights for other monetary assets.
Operations in special drawing rights
means other uses of special drawing
rights.
ARTICLE XXXI
FINAL PROVISIONS
Section 1. Entry into force
This Agreement shall enter into force when it has
been signed on behalf of governments having sixty-five
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percent of the total of the quotas set forth in Schedule A and
when the instruments referred to in Section 2(a) of this Article
have been deposited on their behalf, but in no event shall this
Agreement enter into force before May 1, 1945.
Section 2. Signature
(a) Each government on whose behalf
this Agreement is assigned shall
deposit with the Government of the
Untied States of America an
instrument setting forth that it has
accepted this Agreement in
accordance with its law and has taken
all steps necessary to enable it to carry
out all of its obligations under this
Agreement.
(b) Each country shall become a member
of the Fund as from the date of the
deposit on its behalf of the instrument
referred to in (a) above, except that
no country shall become a member
before this Agreement enters into
force under Section 1 of this Article.
(c) The Government of the United States
of America shall inform the
governments of all countries whose
names are set forth in Schedule A,
and the governments of all
countries whose membership is
approved in accordance with Article
II, Section 2, of all signatures of this
Agreement and of the deposit of all
instruments referred to in (a) above.
(d) At the time this Agreement is
signed on its behalf, each
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government shall transmit to the
Government of the United States of
America one one-hundredth of one
percent of its total subscription in
gold or United States dollars for the
purpose of meeting administrative
expenses of the Fund. The
government of the United States of
America shall hold such funds in a
special deposit account and shall
transmit them to the Board of
governors of the fund when the initial
meeting has been called. If this
Agreement has not come into force by
December 31, 1945, the Government
of the United States of America shall
return such funds to the governments
that transmitted them.
(e) This Agreement shall remain open for
signature at Washington on behalf of
the governments of the countries
whose names are set forth in Schedule
A until December 31, 1945.
(f) After December 31, 1945, this
Agreement shall be open for signature
on behalf of the government of
any country whose membership has
been approved in accordance with
Article II, Section 2.
(g) By their signature of this Agreement,
all governments accept it both on
their own behalf and in respect of all
their colonies, overseas territories, all
territories, under their production,
suzerainty, or authority, and all
territories in respect of which they
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exercise a mandate.
(h) Subsection (d) above shall come into
force with regard to each signatory
government as from the date of its
signature.
[The signature and depository clause reproduced below
followed the text of Article XX in the original Articles of
Agreement]
Done at Washington in a single copy which shall
remain deposited in the archives of the Government of the
United States of America, which shall transmit certified copies
to all governments whose names are set forth in Schedule A
and to all governments whose membership is approved in
accordance with Article II, Section 2.
SCHEDULE A
QUOTAS
(In millions of United States dollars)
Australia................................. 200 Iran.......................................... 25
Belgium.................................. 225 Iraq.......................................... 8
Bolivia..................................... 10 Liberia.................................... .5
Brazil....................................... 150 Luxembourg.......................... 10
Canada.................................... 300 Mexico.................................... 90
Chile........................................ 50 Netherlands........................... 275
China....................................... 550 New Zealand......................... 50
Columbia................................ 50 Nicaragua............................... 2
Costa Rica............................... 5 Norway.................................. 50
Cuba........................................ 50 Panama................................... .5
Czechoslovakia...................... 125 Paraguay................................ 2
Denmark*............................... Peru......................................... 25
Dominican Republic............. 5 Phillipine Commonwealth 15
Ecuador................................... 5 Poland..................................... 125
Egypt....................................... 45 Union of South Africa......... 100
El Salvador............................. 2.5 Union of Soviet Socialist
Republics................................
1200
Ethiopia.................................. 6 United Kingdom.................. 1300
France...................................... 450 United States......................... 2750
Greece..................................... 40 Uruguay................................. 15
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Guatemala.............................. 5 Venezuela.............................. 15
Haiti........................................ .5 Yugoslavia .......................... 60
Honduras.............................. 2.5
India....................................... 400


*The Quota of Denmark shall be determined by the Fund after the
Danish Government has declared its readiness to sign this Agreement but
before signature takes place.
SCHEDULE B
TRANSNATIONAL PROVISIONS WITH RESPECT TO
REPURCHASE,
PAYMENT OF ADDITIONAL SUBSCRIPTIONS, GOLD,
AND CERTAIN OPERATIONAL MATTERS
1. Repurchase obligations that have accrued pursuant
to Article V, Section 7(b) before the date of the second
amendment of the Agreement and that remain
undischarged at that date shall be discharged not later than
the date or dates at which the obligations had to be
discharged in accordance with the provisions of this
Agreement before the second amendment.
2. A member shall discharge with special drawing
rights any obligation to pay gold to the Fund in repurchase or
as a subscription that is outstanding at the date of the second
amendment of this Agreement, but the Fund may prescribe
that these payments may be made in whole or in part in the
currencies of other members specified by the Fund. A non-
participant shall discharge an obligation that must be paid in
special drawing rights pursuant to this provision with the
currencies of other members specified by the Fund.
3. For the purposes of 2 above 0.888 671 grams of fine
gold shall be equivalent to one special drawing right, and the
amount of currency payable under 2 above shall be
determined on that basis and on the basis of the value of the
currency in terms of the special drawing right at the date of
discharge.
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4. A member’s currency held by the Fund in excess of
seventy- five percent of the member’s quota at the date
of the second amendment of this Agreement and not subject
to repurchase under 1 above shall be repurchased in
accordance with the following rules:
(i) Holdings that resulted from a
purchase shall be repurchased
in accordance with the policy
on the use of the Fund’s general
resources under which the
purchase was made.
(ii) Other holdings shall be
repurchased not later than four
years after the date of the
second amendment of this
Agreement.
5. Repurchases under 1 above that are not subject to 2
above, repurchases under 4 above, and any specification of
currencies under 2 above shall be in accordance with Article
V, Section 7(i).
6. All rules and regulations, rates, procedures, and
decisions in effect at the date of the second amendment of this
Agreement shall remain in effect until they are changed in
accordance with the provisions of this Agreement.
7. To the extent that arrangements equivalent in effect
to (a) and (b) below have not been completed before the date
of the second amendment of this Agreement, the Fund shall—
(a) sell up to 25 million ounces of fine
gold held by it on August 31, 1975 to
those members that were members on
that date and that agree to buy it, in
proportion to their quotas on that
date. The sale to a member under this
subparagraph (a) shall be made in
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exchange for its currency and at a
price equivalent at the time of sale to
one special drawing right per o.888
671 gram of fine gold, and
(b) sell up to 25 million ounces of fine
gold held by it on August 31, 1975 for
the benefit of developing members
that were members on that date,
provided, however, that the part of
any profits or surplus value of the
gold that corresponds to the
proportion of such a member’s quota
on August 31, 1975 to the total of the
quotas of all members on that date
shall be transferred directly to each
such member. The requirements
under Article V, Section 12(c) that the
Fund consult a member, obtain a
member’s concurrence, or exchange a
member’s currency for the currencies
of other members in certain
circumstances shall apply with
respect to currency received by the
Fund as a result of sales of gold under
this provision, other than sales to a
member in return for its own
currency, and placed in the General
Resources Account.
Upon the sale of gold under paragraph 7, an amount
of the proceeds in the currencies received equivalent at the
time of sale to one special drawing right per o.888 671 gram of
fine gold shall be placed in the General Resources Account
and other assets held by the Fund under arrangements
pursuant to (b) above shall be held separately from the
general resources of the Fund. Assets that remain subject
to disposition by the Fund upon termination of arrangements
pursuant to (b) above shall be transferred to the Special
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Disbursement Account.
SCHEDULE C
PAR VALUES
1. The fund shall notify members that par values
may be established for the purposes of this Agreement, in
accordance with Article IV, Sections 1, 3, 4 and 5 and this
Schedule in terms of the special drawing right, or in terms of
such other common denominator as is prescribed by the
Fund. The common denominator shall not be gold or a
currency.
2. A member that intends to establish a par value for
its currency shall propose a par value to the Fund within a
reasonable time after notice is given under 1 above.
3. Any member that does not intend to establish a par
value for its currency under 1 above shall consult with the
Fund and ensure that its exchange arrangements are
consistent with the purposes of the fund and are adequate to
fulfil its obligations under Article IV, Section 1.
4. The Fund shall concur in or object to a proposed
par value within a reasonable period after receipt of the
proposal. A proposed par value shall not take effect for the
purposes of this Agreement if the Fund objects to it, and the
member shall be subject to 3 above. The Fund shall not object
because of the domestic social or political policies of the
member proposing the par value.
5. Each member that has a par value for its currency
undertakes to apply appropriate measures consistent with
this Agreement in order to ensure that the maximum and the
minimum rates for spot exchange transactions taking place
within its territories between its currency and the currencies
of other members maintaining par values shall not differ from
parity by more than four and one-half percent or by such
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other margin or margins as the Fund may adopt by an eighty-
five percent majority of the total voting power.
6. A member shall not propose a change in the par
value of its currency except to correct, or prevent the
emergence of, a fundamental disequilibrium. A change may
be made only on the proposal of the member and only after
consultation with the Fund.
7. When a change is proposed, the Fund shall concur
in or object to the proposed par value within a reasonable
period after receipt of the proposal. The Fund shall concur if
it is satisfied that the change is necessary to correct, or
prevent the emergence of, a fundamental disequilibrium. The
Fund shall not object because of the domestic social or
political policies of the member proposing the change. A
proposed change in par value shall not take effect for the
purposes of this Agreement if the Fund objects to it. If a
member changes the par value of its currency despite the
objection of the Fund, the member shall be subject to Article
XXVI, Section 2. Maintenance of an unrealistic par value by a
member shall be discouraged by the Fund.
8. The par value of a member’s currency established
under this Agreement shall cease to exist for the purposes of
this Agreement if the member informs the Fund that it
intends to terminate the par value. The Fund may object to
the termination of a par value by a decision taken by an
eighty-five percent majority of the total voting power. If a
member terminates a par value for its currency despite the
objection of the Fund, the member shall be subject to Article
XXVI, Section 2. A par value established under this
Agreement shall cease to exist for the purposes of this
Agreement if the member terminates the par value despite the
objection of the Fund, or if the Fund finds that the member
does not maintain rates for a substantial volume of
exchange transactions in accordance with 5 above, provided
that the Fund may not make such finding unless it has
consulted the member and given it sixty days notice of the
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Fund’s intention to consider whether to make a finding.
9. If the par value of the currency of a member has
ceased to exist under 8 above, the member shall consult with
the Fund and ensure that its exchange arrangements are
consistent with the purposes of the Fund and are adequate to
fulfil its obligations under Article IV, Section 1.
10. A member for whose currency the par value has
ceased to exist under 8 above may, at any time, propose a new
par value for its currency.
11. Notwithstanding 6 above, the Fund, by a seventy
percent majority of the total voting power, may make uniform
proportionate changes in all par values if the special drawing
right is the common denominator and the changes will not
affect the value of the special drawing right. The par value of
a member’s currency shall, however, not be changed under
this provision if, within seven days after the Fund’s action the
member informs the Fund that it does not wish the par value
of its currency to be changed by such action.
SCHEDULE D
COUNCIL
1. (a) Each member that appoints an Executive
Director and each group of members that has the number of
votes allotted to them cast by an elected Executive Director
shall appoint to the Council one Councillor, who shall be
a Governor. Minister in the government of a member, or
person of comparable rank, and may appoint not more than
seven Associates. The Board of Governors may exchange, by
an eighty-five percent majority of the total voting power, the
number of Associates who may be appointed. A Councillor
or Associate shall serve until a new appointment is made or
until the next regular election of Executive Directors,
whichever shall occur sooner.

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(b) Executive Directors, or in their
absence their Alternates, and
Associates shall be entitled to attend
meetings of the Council, unless the
Council decides to hold a restricted
session. Each member and each
group of members that appoints a
Councillor shall appoint an Alternate
who shall be entitled to attend a
meeting of the Council when the
Councillor is not present, and shall
have full power to act for the
Councillor.
2. (a) The Council shall supervise the management
and adaptation of the international monetary system,
including the continuing operation of the adjustment
process and developments in global liquidity, and in this
connection shall review developments in the transfer of real
resources to developing countries.
(b) The Council shall consider proposals
pursuant to Article XXVIII (a) to
amend the Articles of Agreement.
3. (a) The Board of Governors may delegate to the
Council authority to exercise any powers of the Board of
Governors except the powers conferred directly by this
Agreement on the Board of Governors.
(b) Each Councillor shall be entitled to
cast the number of votes allotted
under Article XII, Section 5 to the
member or group of members
appointing him. A Councillor
appointed by a group of members
may cast separately the votes allotted
to each member in the group. If the
number of votes allotted to a member
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cannot be cast by an Executive
Director, the member may make
arrangements with a Councillor for
casting the number of votes allotted to
the member.
(c) The Council shall not take any action
pursuant to powers delegated by the
Board of Governors that is
inconsistent with any action taken by
the Board of Governors and the
Executive Board shall not take any
action pursuant to powers delegated
by the Board of Governors that is
inconsistent with any action taken by
either the Board of Governors or the
Council.
4. The Council shall select a Councillor as chairman,
shall adopt regulations as may be necessary or appropriate to
perform its functions and shall determine any aspect of its
procedure. The Council shall hold such meetings as may be
provided for by the Council or called by the Executive Board.
5. (a) The Council shall have powers corresponding
to those of the Executive Board under the following
provisions:
Article XII, Section 2(c), (f), (g), and (j);
Article XVIII, Section 4(a), and Section 4(c) (iv);
Article XXIII, Section 1; and
Article XXVII, Section 1(a).
(b) For decisions by the Council on
matters pertaining exclusively to
the Special Drawing Rights
Department only Councillors
appointed by a member that is a
participant or a group of members at
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least one member of which is a
participant shall be entitled to vote.
Each of these Councillors shall be
entitled to cast the number of votes
allotted to the member which is a
participant that appointed him or to
the members that are participants in
the group of members that appointed
him, and may cast the votes allotted
to a participant with which
arrangements have been made
pursuant to the last sentence of 3(b)
above.
(c) The Council may by regulation
establish a procedure whereby the
Executive Board may obtain a vote of
the Councillors on a specific question
without a meeting of the Council
when in the judgment of the
Executive Board an action must be
taken by the Council which should
not be postponed until the next
meeting of the Council and which
does not warrant the calling of a
special meeting.
(d) Article IX, Section 3 shall apply to
Councillors, their Alternates, and
entitled to attend a meeting of the
Council.
(e) For the purposes of (b) and 3(b)
above, an agreement under Article
XII, Section 3(i)(ii) by a member or by
a member that is a participant, shall
entitle a Councillor to vote and cast
the number of votes allotted to the
Associates, and to any other person
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member.
(f) When an Executive Director is
entitled to cast the number of votes
allotted to a member pursuant to
Article XII, Section 3(i)(v), the
Councillor appointed by the group
whose members elected such
Executive Director shall be entitled to
vote and cast the number of votes
allotted to such member. The member
shall be deemed to have participated
in the appointment of the Councillor
entitled to vote and cast the number
of votes allotted to the member.
6. The first sentence of Article XII, Section 2(a) shall
be deemed to include a reference to the Council.
SCHEDULE E
ELECTION OF EXECUTIVE DIRECTORS
1. The election of the elective Executive Directors shall
be by ballot of the Governors eligible to vote.
2. In balloting for the Executive Directors to be
elected, each of the Governors eligible to vote shall cast for
one person all of the votes to which he is entitled under
Article XII, Section 5(a). The fifteen persons receiving the
greatest number of votes shall be Executive Directors
provided that no person who received less than four percent
of the total number of votes that can be cast (eligible votes)
shall be considered elected.
3. When fifteen persons are not elected in the first
ballot, a second ballot shall be held in which there shall vote
only (a) those Governors who voted in the first ballot for a
person not elected, and (b) those Governors whose votes for a
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person elected are deemed under 4 below to have raised the
votes cast for that person above the nine percent of the
eligible votes. If in the second ballot there are more
candidates than the number of Executive Directors to be
elected, the person who received the lowest number of votes
in the first ballot shall be ineligible for election.
4. In determining whether the votes cast by a
Governor are to be deemed to have raised the total of any
person above nine percent of the eligible votes the nine
percent shall be deemed to include, first the votes of the
Governor casting the next largest number, and so on until
nine percent is reached.
5. Any Governor part of whose votes must be counted
in order to raise the total of any person above four percent
shall be considered as casting all of his votes for such person
even if the total votes for such person thereby exceed nine
percent.
6. If, after the second ballot, fifteen persons have not
been elected, further ballots shall be held on the same
principles until fifteen persons have been elected, provided
that after fourteen persons are elected, the fifteenth may be
elected by a simple majority of the remaining votes and shall
be deemed to have been elected by all such votes.
SCHEDULE F
DESIGNATION
During the first basic period the rules for designation
shall be as follows:
(a) Participants subject to designation
under Article XIX, Section 5(a) (i) shall
be designated for such amounts as
will promote over time equality in the
ratios of the participants’ holdings of
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special drawing rights in excess of
their net cumulative allocations to
their official holdings of gold and
foreign exchange.
(b) The formula to give effect to (a) above
shall be such that participants subject
to designation shall be designated:
(i) in proportion to their official
holdings of gold and foreign
exchange when the ratios
described in (a) above are
equal; and
(ii) in such manner as gradually to
reduce the difference between
the ratios described in (a) above
that are low and the ratios that
are high.
SCHEDULE G
RECONSTITUTION
1. During the first basic period the rules for
reconstitution shall be as follows:
(a) (i) A participant shall so use and reconstitute
its holdings of special drawing rights that, five years after
the first allocation and at the end of each calendar
quarter thereafter, the average of its total daily holdings of
special drawing rights over the most recent five-year period
will be not less than thirty percent of the average of its daily
net cumulative allocation of special drawing rights over the
same period.
(ii) Two years after the first allocation
and at the end of each calendar month
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thereafter the Fund shall make
calculations for each participant so as
to ascertain whether and to what
extent the participant would need to
acquire special drawing rights
between the date of the calculation
and the end of any five-year period in
order to comply with the requirement
in (a) (i) above. The Fund shall adopt
regulations with respect to the
bases on which these calculations
shall be made and with respect to the
timing of the designation of
participants under Article XIX,
Section 5 (a) (ii), in order to assist
them to comply with the
requirements in (a) (i) above.
(iii) The Fund shall give special notice to a
participant when the calculations
under (a) (ii) above indicate that it is
unlikely that the participant will be
able to comply with the requirement
in (a) (i) above unless it ceases to use
special drawing rights for the rest of
the period for which the calculation
was made under (a) (ii) above.
(iv) A participant that needs to acquire
special drawing rights to fulfill this
obligation shall be obligated and
entitled to obtain them, for currency
acceptable to the fund, in a
transaction with the Fund conducted
through the General Resources
Account. If sufficient special drawing
rights to fulfill this obligation cannot
be obtained in this way, the
participant shall be obligated and
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entitled to obtain them with a
freely usable currency from a
participant which the Fund shall
specify.
(b) Participants shall also pay due regard
to the desirability of pursuing over
time a balanced relationship between
their holdings of special drawing
rights and their other reserves.
2. If a participant fails to comply with the rules for
reconstitution the Fund shall determine whether or not the
circumstances justify suspension under Article XXIII, Section
2(b).
SCHEDULE H
TERMINATION OF PARTICIPATION
1. If the obligation remaining after the setoff under
Article XXIV, Section 2 (b) is to the terminating participant
and agreement on settlement between the Fund and the
terminating participant is not reached within six months of
the date of termination, the Fund shall redeem this balance of
special drawing rights in equal half-yearly instalments within
a maximum of five years of the date of termination. The Fund
shall redeem this balance as it may determine either (a) by the
payment to the terminating participant of the amounts
provided by the remaining participants to the fund in
accordance with Article XXIV, Section 5, or (b) by permitting
the terminating participant to use its special drawing rights to
obtain its own currency or freely usable currency from a
participant specified by the Fund, the General Resources
Account, or any other holder.
2. If the obligation remaining after the setoff under
Article XXIV, Section 2(b) is to the Fund and agreement on
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settlement is not reached within six months of the date of
termination, the terminating participant shall discharge
this obligation in equal half-yearly instalments within three
years of the date of termination or within such longer period
as may be fixed by the Fund. The terminating participant
shall discharge this obligation, as the Fund may determine
either (a) by the payment to the fund of a freely usable
currency, or (b) by obtaining special drawing rights, in
accordance with Article XXIV, Section 6, from the General
Resources Account or in agreement with a participant
specified by the Fund or from any other holder, and the setoff
of these special drawing rights against the installment due.
3. Instalments under either 1 or 2 above shall fall due
six months after the date of termination and at intervals of six
months thereafter.
4. In the event of the Special Drawing rights
Department going into liquidation under Article XXV within
six months of the date a participant terminates its
participation, the settlement between the fund and that
government shall be made in accordance with Article XXV
and Schedule I.
SCHEDULE I
ADMINISTRATION OF LIQUIDATION OF THE SPECIAL
DRAWING RIGHTS DEPARTMENT
1. In the event of liquidation of the Special Drawing
Rights Department, participants shall discharge their
obligations to the fund in ten half-yearly instalments, or in
such longer period as the fund may decide is needed, in a
freely usable currency and the currencies of participants
holding special drawing rights to be redeemed in any
instalments to the extent of such redemption as determined
by the Fund. The first half-yearly payment shall be made six
months after the decision to liquidate the Special Drawing
Rights Department.
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2. If it is decided to liquidate the Fund within six
months of the date of the decision to liquidate the Special
Drawing Rights Department, the liquidation of the Special
Drawing Rights Department shall not proceed until special
drawing Rights held in the General Resources Account have
been distributed in accordance with the following rule:
After the distribution made under 2(a) and (b) of
Schedule K, the fund shall apportion its special drawing
rights held in the General Resources Account among all
members that are participants in proportion to the amounts
due to each participant after the distribution under 2(b). To
determine the amount due to each member for the purpose of
apportioning the remainder of its holdings of each currency
under 2(d) of Schedule K, the Fund shall deduct the
distribution of special drawing rights made under this rule.
3. With the amounts received under 1 above, the
Fund shall redeem special drawing rights held by holders in
the following manner and order:
(a) Special drawing rights held by
governments that have terminated
their participation more than six
months before the date the Board of
Governors decides to liquidate the
Special Drawing Rights Department
shall be redeemed in accordance with
the terms of any agreement under
Article XXIV or Schedule H.
(b) Special drawing rights held by
holders that are not participants
shall be redeemed before those held
by participants, and shall be
redeemed in proportion to the
amount held by each holder.
(c) The Fund shall determine the
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proportion of special drawing rights
held by each participant in relation
to its net cumulative allocation. The
Fund shall first redeem special
drawing rights from the participants
with the highest proportion until this
proportion is reduced to that of the
second highest proportion; the Fund
shall then redeem the special drawing
rights held by these participants in
accordance with their net cumulative
allocations until the proportions are
reduced to that of the third highest
proportion; and this process shall be
continued until the amount available
for redemption is exhausted.
4. Any amount that a participant will be entitled to
receive in redemption under 3 above shall be set off against
any amount to be paid under 1 above.
5. During liquidation the Fund shall pay interest on
the amount of special drawing rights held by holders, and
each participant shall pay charges on the net cumulative
allocation of special drawing rights to it less the amount of
any payments made in accordance with 1 above. The rates of
interest and charges and the time of payment shall be
determined by the Fund. Payments of interest and charges
shall be made in special drawing rights to the extent possible.
A participant that does not hold sufficient special drawing
rights to meet any charges shall make the payment with a
currency specified by the Fund. Special drawing rights
received as charges in amounts needed for
administrative expenses shall not be used for the payment of
interest, but shall be redeemed first and with the currencies
used by the Fund to meet its expenses.
6. While a participant is in default with respect to any
payment required by 1 or 5 above, no amounts shall be paid
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to it in accordance with 3 or 5 above.
7. If after the final payments have been made to
participants each participant not in default does not hold
special drawing rights in the same proportion to its net
cumulative allocation, those participants holding a lower
proportion shall purchase from those holding a higher
proportion such amounts in accordance with arrangements
made by the Fund as will make the proportion of their
holdings of special drawing rights the same. Each participant
in default shall pay to the Fund its own currency in an
amount equal to its default. The Fund shall apportion this
currency and any residual claims among participants in
proportion to the amount of special drawing rights held by
each and these special drawing rights shall be cancelled. The
Fund shall then close the books of the Special Drawing Rights
Department and all of the Funds liabilities from the
allocations of special drawing rights and the administration of
the Special Drawing Rights Department shall cease.
8. Each participant whose currency is distributed
to other participants under this Schedule guarantees the
unrestricted use of such currency at all times for the purchase
of goods or for payments of sums due to it or to persons in
its territories. Each participant so obligated agrees to
compensate other participants for any loss resulting from the
difference between the value at which the Fund distributed its
currency under this Schedule and the value realized by
such participants on disposal of its currency.
SCHEDULE J
SETTLEMENT OF ACCOUNTS WITH MEMBERS
WITHDRAWING
1. The settlement of accounts with respect to the
General Resources Account shall be made according to 1 to 6
of this Schedule. The fund shall be obligated to pay to a
member withdrawing an amount equal to its quota, plus any
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other amounts due to it from the fund, less any amounts due
to the fund, including charges accruing after the date of its
withdrawal: but no payment shall be made until six months
after the date of withdrawal. Payments shall be made in the
currency of the withdrawing member, and for this purpose
the Fund may transfer to the General Resources Account
holdings of the member’s currency in the Special
Disbursement Account or in the Investment Account in
exchange for an equivalent amount of the currencies of other
members in the General Resources Account selected by the
Fund with their concurrence.
2. If the Fund’s holdings of the currency of the
withdrawing member are not sufficient to pay the net amount
due from the fund, the balance shall be paid in a freely usable
currency, or in such other manner as may be agreed. If the
Fund and the withdrawing member do not reach agreement
within six months of the date of withdrawal, the currency in
question held by the Fund shall be paid forthwith to the
withdrawing member. Any balance due shall be paid in ten
half-yearly instalments during the ensuing five years. Each
such instalment shall be paid at the option of the fund, either in the currency of the withdrawing member
acquired after its withdrawal or in a freely usable currency.
3. If the Fund fails to meet any instalment which
is due in accordance with the preceding paragraphs the
withdrawing member shall be entitled to require the Fund to
pay the instalment in any currency held by the Fund with the
exception of any currency which has been declared scarce
under Article VII, Section 3.
4. If the Fund’s holdings of the currency of a
withdrawing member exceed the amount due to it, and if
agreement on the method of settling accounts is not reached
within six months of the date of withdrawal, the former
member shall be obligated to redeem such excess currency in
a freely usable currency. Redemption shall be made at the
rates at which the Fund would sell such currencies at the time
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of withdrawal from the Fund. The withdrawing member
shall complete redemption within five years of the date of
withdrawal, or within such longer period as may be fixed by
the Fund, but shall not be required to redeem in any half-
yearly period more than one-tenth of the Fund’s excess
holdings of its currency at the date of withdrawal plus further
acquisitions of the currency during such half-yearly period. If
the withdrawing member does not fulfill this obligation, the
Fund may in an orderly manner liquidate in any market the
amount of currency which should have been redeemed.
5. Any member desiring to obtain the currency of a
member which has withdrawn shall acquire it by purchase
from the Fund, to the extent that such member has access to
the general resources of the Fund and that such currency is
available under 4 above.
6. The withdrawing member guarantees the
unrestricted use at all times of the currency disposed of under
4 and 5 above for the purchase of goods or for payment of
sums due to it or to persons within the territories. It shall
compensate the Fund for any loss resulting from the
difference between the value of its currency in terms of the
special drawing right on the date of withdrawal and the value
realized in terms of the special drawing right by the Fund on
disposal under 4 and 5 above.
7. If the withdrawing member is indebted to the fund
as the result of transactions conducted through the Special
Disbursement Account under Article V, Section 12(f) (ii), the
indebtedness shall be discharged in accordance with the
terms of the indebtedness .
8. If the Fund holds the withdrawing member’s
currency in the Special Disbursement Account or in the
Investment Account, the Fund may in an orderly manner
exchange in any market for the currencies of members the
amount of the currency of the withdrawing member
remaining in each account after use under 1 above, and the
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proceeds of the exchange of the amount in each account shall
be kept in that account. Paragraph 5 above and the first
sentence of 6 above shall apply to the withdrawing member’s
currency.
9. If the Fund holds obligations of the withdrawing
member in the Special Disbursement Account pursuant to
Article V, Section 12(h), or in the Investment Account, the
Fund may hold them until the date of maturity or dispose of
them sooner. Paragraph 8 above shall apply to the proceeds of
such disinvestment.
10. In the event of the fund going into liquidation
under Article XXVII, Section 2 within six months of the date
on which the member withdraws, the accounts between the
Fund and that government shall be settled in accordance with
Article XXVII, Section 2 and Schedule K.
SCHEDULE K
ADMINISTRATION OF LIQUIDATION
1. In the event of liquidation the liabilities of the Fund
other than the repayment of subscriptions shall have priority
in the distribution of the assets of the Fund. In meeting each
such liability the Fund shall use its assets in the following
order:
(a) the currency in which the liability is
payable;
(b) gold;
(c) all other currencies in proportion, so
far as may be practicable, to the
quotas of the members.
2. After the discharge of the Fund’s liabilities in
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accordance with 1 above, the balance of the Fund’s assets
shall be distributed and apportioned as follows:
(a) (i)The Fund shall calculate the value of gold held
on August 31, 1975 that it continues to hold on the date of the
decision to liquidate. The calculation shall be made in
accordance with 9 below and also on the basis of one special
drawing right per 0.888 671 gram of fine gold on the date of
liquidation. Gold equivalent to the excess of the former value
over the latter shall be distributed to those members that
were members on August 1, 1975 in proportion to their
quotas on that date:
(ii) The fund shall distribute any
assets held in the Special
Disbursement Account on the
date of the decision to liquidate
to those members that were
members on August 31, 1975 in
proportion to their quotas on
that date. Each type of asset
shall be distributed
proportionately to members.
(b) The fund shall distribute its
remaining holdings of gold among
the members whose currencies are
held by the fund in amounts less than
their quotas in the proportions, but
not in excess of, the amounts by
which their quotas exceed the Fund’s
holdings of their currencies.
(c) The Fund shall distribute to each
member one-half the Fund’s holdings
of its currency but such distribution
shall not exceed fifty percent of its
quota.

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(d) The fund shall apportion the
remainder of its holdings of gold and
each currency:
(i) among all the members in
proportion to, but not in excess
of, the amount due to each
member after the distributions
under (b) and (c) above,
provided that distribution
under 2(a) above shall not be
taken into account for
determining the amounts due,
and
(ii) any excess holdings of gold and
currency among all the
members in proportion to their
quotas.
3. Each member shall redeem the holdings of its
currency apportioned to other members under 2(d) above,
and shall agree with the Fund within three months after a
decision to liquidate upon an orderly procedure for such
redemption.
4. If a member has not reached agreement with the
Fund within the three-month period referred to in 3 above,
the Fund shall use the currencies of other members
apportioned to that member under 2(d) above to redeem the
currency of that member apportioned to other members.
Each currency apportioned to a member which has not
reached agreement shall be used, so far as possible, to redeem
its currency apportioned to the members which have made
agreements with the Fund under 3 above.
5. If a member has reached agreement with the
Fund in accordance with 3 above, the Fund shall use the
currencies of other members apportioned to that member
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under 2(d) above to redeem the currency of that member
apportioned to other members which have made agreements
with the Fund under 3 above. Each amount so redeemed
shall be redeemed in the currency of the member to which it
was apportioned.
6. After carrying out the steps in the preceding
paragraphs, the Fund shall pay to each member the
remaining currencies held for its account.
7. Each member whose currency has been distributed
to other members under 6 above shall redeem such currency
in the currency of the member requesting redemption, or in
such other manner as may be agreed between them. If the
members involved do not otherwise agree, the member
obligated to redeem shall complete redemption within five
years of the date of distribution but shall not be required to
redeem in any half-yearly period more than one-tenth of the
amount distributed to each other member. If the member does
not fulfil this obligation, the amount of currency which
should have been redeemed may be liquidated in an
orderly manner in any market.
8. Each member whose currency has been distributed
to other members under 6 above guarantees the unrestricted
use of such currency at all times for the purchase of goods or
for payment of some due to it or to persons in its territories.
Each member so obligated agrees to compensate other
members for any loss resulting from the difference between
the value of its currency in terms of the special drawing right
on the date of the decision to liquidate the Fund and the value
in terms of the special drawing right realized by such
members on disposal of its currency.
9. The fund shall determine the value of gold under
this Schedule on the basis of prices in the market.
10. For the purposes of this Schedule, quotas shall be
deemed to have been increased to the full extent to which
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they would have been increased in accordance with Article
111, Section 2(b) of this Agreement.
SCHEDULE L
SUSPENSION OF VOTING RIGHTS
In the case of a suspension of voting rights of a
member under Article XXVI, Section 2(b), the following
provisions shall apply:
1. The member shall not:
(a) participate in the adoption of a
proposed amendment of this
Agreement, or be counted in the total
number of members for that purpose,
except in the case of an amendment
requiring acceptance by all members
under Article XXVIII (b) or pertaining
exclusively to the Special Drawing
Rights Department.;
(b) appoint a Governor or Alternate
Governor, appoint or participate in
the appointment of a Councillor, or
Alternate Councillor or appoint, elect
or participate in the election of an
Executive Director.
2. The number of votes allotted to the member shall
not be cast in any organ of the Fund. They shall not be
included in the calculation of the total voting power, except
for purposes of the acceptance of a proposed amendment
pertaining exclusively to the Special Drawing Rights
Department.
3. (a) The Governor and Alternate Governor
appointed by the member shall cease to hold office.
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(b) The Councillor and Alternate
Councillor appointed by the member,
or in whose appointment the member
has participated, shall cease to hold
office, provided that, if such
Councillor was entitled to cast the
number of votes allotted to other
members whose voting rights have
not been suspended, another
Councillor and Alternate Councillor
shall be appointed by such other
members under Schedule D, and,
pending such appointment, the
Councillor and Alternate Councillor
shall continue to hold office, but for a
maximum of thirty days from the date
of the suspension.
(c) The Executive Director appointed
or elected by the member, or in
whose election the member, has
participated, shall cease to hold office,
unless such Executive Director was
entitled to cast the number of votes
allotted to other members whose
voting rights have not been
suspended.
In the latter case:
(i) if more than ninety days
remain before the next regular
election of Executive Directors,
another Executive Director
shall be elected for the
remainder of the term by such
other members by a majority
of the votes cast; pending
such election, the Executive
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Director shall continue to hold
office, but for a maximum of
thirty days from the date of
suspension;
(ii) if not more than ninety days
remain before the next regular
election of Executive Directors,
the Executive Director shall
continue to hold office for the
remainder of the term.
4. The member shall be entitled to send a
representative to attend any meeting of the Board of
Governors, the Council, or the Executive Board, but not any
meeting of their committees, when a request made by, or a
matter particularly affecting, the member is under
consideration.
LIST OF ARTICLES AND SECTIONS
INTRODUCTORY
ARTICLE
I. PURPOSES
II. MEMBERSHIP
1. Original members
2. Other members
III. QUOTAS AND SUBSCRIPTIONS
1. Quotas and payment of subscriptions
2. Adjustment of quotas
3. Payments when quotas are changed
4. Substitution of securities for currency

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IV. OBLIGATIONS REGARDING EXCHANGE
ARRANGEMENTS
1. General obligations of members
2. General exchange arrangements
3. Surveillance over exchange arrangements
4. Par values
5. Separate currencies within a member’s territories
V. OPERATIONS AND TRANSACTIONS OF THE FUND
1. Agencies dealing with the Fund
2. Limitation on the Fund’s operations and
transactions
3. Conditions governing use of the Fund’s
general resources
4. Waiver of conditions
5. Ineligibility to use the Fund’s general
resources
6. Other purchases and sales of special drawing
rights by the Fund
7. Repurchase by a member of its currency held
by the Fund
8. Charges
9. Remuneration
10. Computations
11. Maintenance of value
12. Other operations and transactions
VI. CAPITAL TRANSFERS
1. Use of the Fund’s general resources for capital
transfers
2. Special provisions for capital transfers
3. Controls of capital transfers
VII. REPLENISHMENT AND SCARCE CURRENCIES
1. Measures to replenish the Fund’s holdings of
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currencies
2. General scarcity of the Fund’s holdings
3. Administration of restrictions.
4. Effect of other international agreements on
restrictions
VIII. GENERAL OBLIGATIONS OF MEMBERS
1. Introduction
2. Avoidance of restrictions on current
payments
3. Avoidance of discriminatory currency
practices
4. Convertibility of foreign-held balances
5. Furnishing of information
6. Consultation between members regarding
existing international agreements
7. Obligation to collaborate regarding policies
on reserve assets
IX. STATUS, IMMUNITIES AND PRIVILEGES
1. Purposes of Article
2. Status of the Fund
3. Immunity from judicial process
4. Immunity from other action
5. Immunity of archives
6. Freedom of assets from restrictions
7. Privilege for communications
8. Immunities and privileges of officers and
employees
9. Immunities from taxation
10. Application of Article
X. RELATIONS WITH OTHER INTERNATIONAL
ORGANISATIONS
XI. RELATIONS WITH NON-MEMBER COUNTRIES
1. Undertakings regarding relations with non-
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member countries
2. Restrictions on transactions with non-member
countries
XII. ORGANISATION AND MANAGEMENT
1. Structure of the Fund
2. Board of Governors
3. Executive Board
4. Managing Director and staff
5. Voting
6. Reserves, distribution of net income and
investment
7. Publication of reports
8. Communication of views to members
XIII. OFFICES AND DEPOSITORIES
1. Location of offices
2. Depositories
3. Guarantee of the Fund’s assets
XIV. TRANSITIONAL ARRANGEMENTS
1. Notification to the Fund
2. Exchange restrictions
3. Action of the Fund relating to restrictions
XV. SPECIAL DRAWING RIGHTS
1. Authority to allocate special drawing rights
2. Valuation of the special drawing right
XVI. GENERAL DEPARTMENT AND SPECIAL DRAWING
RIGHTS DEPARTMENT
1. Separation of operations and transactions
2. Separation of assets and property
3. Recording and information
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XVII. PARTICIPANTS AND OTHER HOLDERS OF SPECIAL
DRAWING RIGHTS
1. Participants
2. Fund as a holder
3. Other holders
XVIII. ALLOCATION AND CANCELLATION OF
SPECIAL DRAWING RIGHTS
1. Principles and considerations governing
allocation and cancellation
2. Allocation and cancellation
3. Unexpected major developments
4. Decisions on allocations and cancellations
XIX. OPERATIONS AND TRANSACTIONS IN SPECIAL
DRAWING RIGHTS
1. Use of special drawing rights
2. Operations and transactions between participants
3. Requirement of need
4. Obligation to provide currency
5. Designation of participants to provide currency
6. Reconstitution
7. Exchange rates
XX. SPECIAL DRAWING RIGHTS DEPARTMENT
INTEREST AND CHARGES
1. Interest
2. Charges
3. Rate of interest and charges
4. Assessments
5. Payment of interest, charges, and assessments

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XXI. ADMINISTRATION OF THE GENERAL
DEPARTMENT AND THE SPECIAL DRAWING RIGHTS
DEPARTMENT
XXII. GENERAL OBLIGATIONS OF PARTICIPANTS
XXIII. SUSPENSION OF OPERATIONS AND
TRANSACTIONS IN SPECIAL DRAWING RIGHTS
1. Emergency provisions
2. Failure to fulfil obligations
XXIV.TERMINATION OF PARTICIPATION
1. Right to terminate participation
2. Settlement on termination
3. Interest and charges
4. Settlement of obligation to the Fund
5. Settlement of obligation to a terminating
participant
6. General Resources Account transactions
XXV. LIQUIDATION OF THE SPECIAL DRAWING RIGHTS
DEPARTMENT
XXVI.WITHDRAWAL FROM MEMBERSHIP
1. Right of members to withdraw
2. Compulsory withdrawal
3. Settlement of accounts with members withdrawing
XXVII.EMERGENCY PROVISIONS
1. Temporary suspension
2. Liquidation of the Fund
XXVIII. AMENDMENTS

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XXIX. INTERPRETATION
XXX. EXPLANATION OF TERMS
XXXI. FINAL PROVISIONS
1. Entry into force
2. Signature
SCHEDULES
A. QUOTAS
B. TRANSITIONAL PROVISIONS WITH
RESPECT TO REPURCHASE, PAYMENT OF
ADDITIONAL SUBSCRIP TIONS, GOLD,
AND CERTAIN OPERATIONAL
MATTERS
C. PAR VALUES
D. COUNCIL
E. ELECTION OF EXECUTIVE DIRECTORS
F. DESIGNATION
G. RECONSTITUTION
H. TERMINATION OF PARTICIPATION
I. ADMINISTRATION OF LIQUIDATION OF THE
SPECIAL DRAWING RIGHTS DEPARTMENT
J. SETTLEMENT OF ACCOUNTS WITH MEMBERS
WITH DRAWING
K. ADMINISTRATION OF LIQUIDATION
_____________________
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SECOND SCHEDULE
Text of Articles of Agreement of the International
Bank for Reconstruction and Development
The Governments on whose behalf the present
Agreement is signed agree as follows:
INTRODUCTORY ARTICLE
The International Bank for Reconstruction and
Development is established and shall operate in
accordance with the following provisions:
ARTICLE I
PURPOSES
The purposes of the Bank are:
(i) To assist in the reconstruction
and development of territories
of members by facilitating the
Investment of capital for
productive purposes, including
the restoration of economies
destroyed or disrupted by
war, the reconversion of productive facilities to
peacetime needs and the
encouragement of the
development of productive
facilities and resources in less
developed countries.

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(ii) To promote private foreign
investment by means of
guarantees or participations in
loans and other investments
made by private investors; and
when private capital is not
available on reasonable terms,
to supplement private
investment by providing, on
suitable conditions, finance for
productive purposes out of its
own capital, funds raised by it
and its other resources.
(iii) To promote the long-range
balanced growth of
international trade and the
maintenance of equilibrium in
balances of payments by
encouraging international
investment for the
development of the
productive resources of
members, thereby assisting in
raising productivity, the
standard of living and
conditions of labour in their
territories.
(iv) To arrange the loans made or
guaranteed by it in relation to
international loans through
other channels so that the more
useful and urgent projects,
large and small alike, will be
dealt with first.
(v) To conduct its operations with
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due regard to the effect of
international investment on
business conditions in the
territories of members and, in
the immediate post-war years,
to assist in bringing about a
smooth transition from a
wartime to a peacetime
economy.
The Bank shall be guided in all its decisions by the
purposes set forth above.
ARTICLE II
MEMBERSHIP IN AND CAPITAL OF THE BANK
Section 1. Membership
(a) The original members of the Bank
shall be those members of the
International Monetary Fund which
accept membership in the Bank before
the date specified in Article XI,
Section 2(e).
(b) Membership shall be open to other
members of the Fund, at such time
and in accordance with such terms as
may be prescribe by the Bank.
Section 2. Authorised Capital.
(a) The Authorised Capital stock of the
bank shall be $10,000,000,000 in terms
of united States dollars of the weight
and fineness in effect on July 1, 1944.
The capital stock shall be divided into
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100,000 shares having a per value of
$100,000 each, which shall be
available for subscription only by
members.
(b) The capital stock may be increased
when the Bank deems it advisable by
a three-forth majority of the total
voting power.
Section 3. Subscription of Shares.
(a) Each member shall subscribe shares of
the capital stock of the Bank. The
minimum number of shares to be
subscribed by the original members
shall be those set forth in Schedule A.
The minimum number of shares to be
subscribe by other members shall be
determine by the Bank, which shall
reserve a sufficient portion of its
capital stock for subscription by such
members.
(b) The Bank shall prescribe rules laying
down the conditions under which
member may subscribe shares of the
authorised capital stock of the bank in
addition to their minimum
subscription.
(c) If the authorised capital stock of the
Bank is increased, each member shall
have a reasonable opportunity to
subscribe, under such conditions as
the Bank shall decide, a proportion of
the increase of stock equivalent to the
proportion which its stock theretofore
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subscribe bears to the total capital
stock of the bank, but no member
shall be obligated to subscribe any
part of the increased capital.
Section 4. Issue price of shares
Shares included in the minimum subscriptions of
original members shall be issued at par. Other shares shall be
issued at par unless the Bank by a majority of the total voting
power decides in special circumstances to issue them on other
terms.
Section 5. Division and calls of subscribed capital
The subscription of each member shall be divided into
two parts as follows:
(i) twenty percent shall be paid or
subject to call under Section 7
(i) of this article as needed by
the Bank for its operations;
(ii) the remaining eighty per cent
shall be subject to call by the
Bank only when required to
meet obligations of the Bank
created under Article IV,
Sections l(a) (ii) and (iii).
Calls on unpaid subscriptions shall be uniform on all
shares.
Section 6. Limitation on liability
Liability on shares shall be limited to the unpaid
portion of the issue price of the shares.
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Section 7. Method of payment of subscriptions for shares.
Payment of subscriptions for shares shall be made in
gold or United States dollars and in the currencies of the
members as follows:
(i) under section 5 (i) of this
Article, two per cent of the
price of each share shall be
payable in gold or United
States dollars, and, when calls
are made, the remaining
eighteen per cent shall be paid
in the currency of the member;
(ii) when a call is made under
section 5 (ii) of this Article,
payment may be made at the
option of the member either in
gold, in United States dollars or
in the currency required to
discharge the obligations of the
Bank for the purpose for which
the call is made;
(iii) when a member makes
payments in any currency
under (i) and (ii) above, such
payments shall be made in
amounts equal in value to the
member’s liability under the
call. This liability shall be a
proportionate part of the
subscribed capital stock of the
Bank as authorised and defined
in Section 2 of this Article.

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Section 8. Time of payments of subscriptions
(a) The two per cent payable on each
share in gold or United States dollars
under Section 7(i) of this Article shall
be paid within sixty days of the date
on which the Bank begins operations,
provided that:
(i) any original member of the
Bank whose metropolitan
territory has suffered from
enemy occupation or hostilities
during the present war shall
be granted the right to
postpone payment of one-half
per cent until five years after
that date;
(ii) an original member who cannot
make such a payment because
it has not recovered possession
of its gold reserves which are
still seized or immobilized as a
result of the war may postpone
all payment until such date as
the Bank shall decide.
(b) The remainder of the price of each
share payable under section 7 (i) of
this Article shall be paid as and when
called by the Bank, provided that
(i) the Bank shall, within one
year of its beginning
operations, call not less than
eight percent of the price of the
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share in addition to the
payment of two percent
referred to in (a) above;
(ii) not more than five percent of
the price of the share shall be
called in any period of three
months.
Section 9. Maintenance of value of certain currency holdings
of the Bank
(a) Whenever (i) the par value of a
member’s currency is reduced, or (ii)
the foreign exchange value of a
member’s currency has, in the opinion
of the Bank, depreciated to a
significant extent within that
member’s territories, the member
shall pay to the Bank within a
reasonable time an additional amount
of its own currency sufficient to
maintain the value, as of the time of
initial subscription, of the amount of
the currency of such member which is
held by the Bank and derived from
currency originally paid in to the
Bank by the Member under Article 11,
Section 7 (i) from currency referred to
in Article IV, Section 2 (b), or from
any additional currency furnished
under the provisions of the present
paragraph, and which has not been
repurchased by the member for gold
or for the currency of any member
which is acceptable to the Bank.
(b) Whenever the par value of a
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member’s currency is increased, the
Bank shall return to such member
within a reasonable time an amount
of that member’s currency equal to
the increase in the value of the
amount of such currency described in
(a) above.
(c) The provisions of the preceding
paragraphs may be waived by the
Bank when a uniform proportionate
change in the par values of the
currencies of all its members is made
by the International Monetary Fund.
Section 10. Restriction on disposal of shares.
Shares shall not be pledged or encumbered in any
manner whatever and they shall be transferable only to the
Bank.
ARTICLE III
GENERAL PROVISIONS RELATING TO LOANS AND
GUARANTEES
Section 1. Use of resources.
(a) The resources and the facilities of the
Bank shall be used exclusively for the
benefit of members with equitable
consideration to projects for
development and projects for
reconstruction alike.
(b) For the purpose of facilitating the
restoration and reconstruction. of
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the economy of members whose
metropolitan territories have
suffered great devastation from
enemy occupation or hostilities, the
Bank, in determining the conditions
and terms of loans made to such
members, shall pay special regard to
lightening the financial burden and
expediting the completion of such
restoration and reconstruction.
Section 2. Dealings between members and the Bank.
Each member shall deal with the Bank only through
its Treasury, central bank, stabilization fund or other similar
fiscal agency, and the Bank shall deal with members only by
or through the same agencies.
Section 3. Limitations on guarantees and borrowings of the
Bank.
The total amount outstanding of guarantees,
participations in loans and direct loans made by the Bank
shall not be increased at any time, if by such increase the total
would exceed one hundred percent of the unimpaired
subscribed capital reserves and surplus of the Bank.
Section 4. Conditions on which the Bank may guarantee or
make loans.
The Bank may guarantee, participate in, or make
loans to any member or any political sub-division thereof
and any business, industrial and agricultural enterprise in
the territories of a member, subject to the following
conditions:
(i) When the member in whose
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territories the project is located
is not itself the borrower, the
member or the central bank or
some comparable agency of the
member which is acceptable to
the Bank, fully guarantees the
repayment of the principal and
the payment of interest and
other charges on the loan.
(ii) The Bank is satisfied that in the
prevailing market conditions
the borrower would be unable
otherwise to obtain the loan
under conditions which in the
opinion of the Bank are
reasonable for the borrower.
(iii) A competent committee, as
provided for in Article V,
Section 7, has submitted a
written report recommending
the project after a careful
study of the merits of the
proposal.
(iv) In the opinion of the Bank the
rate of interest and other
charges are reasonable and
such rate, charges and the
schedule for repayment of
principal are appropriate to the
project.
(v) In making or guaranteeing a
loan, the Bank shall pay due
regard to the prospects that the
borrower, and, if the borrower
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is not a member, that the
guarantor, will be in position to
meet its obligations under the
loan; and the Bank shall act
prudently in the interests
both of the particular member
in whose territories the
project is located and of the
members as a whole.
(vi) In guaranteeing a loan made by
other investors, the Bank
receives suitable compensation
for its risk.
(vii) Loans made or guaranteed by
the Bank shall, except in special
circumstances, be for the
purpose of specific projects of
reconstruction or development.
Section 5. Use of loans guaranteed, participated in or made by
the Bank
(a) The Bank shall impose no conditions
that the proceeds of a loan shall be
spent in the territories of any
particular member or members.
(b) The Bank shall make arrangements to
ensure that the proceeds of any loan
are used only for the purposes for which the loan was granted, with
due attention to considerations of
economy and efficiency and
without regard to political or other
non-economic influences or
considerations.
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(c) In the case of loans made by the Bank,
it shall open an account in the name
of the borrower and the amount of the
loan shall be credited to this account
in the currency or currencies in which
the loan is made. The borrower shall
be permitted by the Bank to draw on
this account only to meet expenses in
connection with the project as they are
actually incurred.
Section 6. Loans to the International Finance Corporation.
(a) The Bank may make, participate in, or
guarantee loans to the International
Finance Corporation, an affiliate of
the Bank, for use in its lending
operations. The total amount
outstanding of such loans,
participations and guarantees shall
not be increased if, at the time or as a
result thereof, the aggregate amount
of debt (including the guarantee of
any debt) incurred by the said
Corporation from any source and
then outstanding shall exceed an
amount equal to four times its
unimpaired subscribed capital and
surplus.
(b) The provisions of Article III, Sections
4 and 5 (c) and of Article IV, Section 3
shall not apply to loans, participations
and guarantees authorised by this
Section.

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ARTICLE IV
OPERATIONS
Section 1. Methods of making or facilitating loans
(a) The Bank may make or facilitate loans
which satisfy the general conditions
of Article III in any of the following
ways:
(i) By making or participating in
direct loans out of its own
funds corresponding to its
unimpaired paid-up capital and
surplus and, subject to Section 6
of this Article, to its reserves.
(ii) By making or participating in
direct loans out of funds raised
in the market of a member, or
otherwise borrowed by the
Bank.
(iii) By guaranteeing in whole or in
part loans made by private
investors through the usual
investment channels.
(b) The Bank may borrow funds under
(a) (ii) above or guarantee loans under
(a) (iii) above only with the approval
of the member in whose markets the
funds are raised and the member in
whose currency the loan is
denominated, and only if those
members agree that the proceeds may
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be exchanged for the currency of any
other member without restriction.
Section 2. Availability and transferability of currencies
(a) Currencies paid into the Bank under
Article 11, Section 7(i), shall be loaned
only with the approval in each case of
the member whose currency is
involved; provided, however, that if
necessary, after the Bank’s subscribed
capital has been entirely called,
such currencies shall, without
restriction by the members whose
currencies are offered, be used or
exchanged for the currencies required
to meet contractual payments of
interest, other charges or amortization
on the Bank’s own borrowings, or to
meet the Bank’s liabilities with respect
to such contractual payments on loans
guaranteed by the Bank.
(b) Currencies received by the Bank from
borrowers or guarantors in payment
on account of principal of direct loans
made with currencies referred to iii
(a) above shall be exchanged for the
currencies of other members or
related only with the approval in each
case of the members whose currencies
are involved; provided, however,
that if necessary, after the Bank’s
subscribed capital has been entirely
called, such currencies shall, without
restriction by the members whose
currencies are offered, be used or
exchanged for the currencies required
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to meet contractual payments of
interest, other charges or amortization
on the Bank’s own borrowings, or to
meet the Bank’s liabilities with
respect to such contractual
payments on loans guaranteed by
the Bank.
(c) Currencies received by the Bank from
borrowers or guarantors in payment
on account of principal of direct loans
made by the Bank under Section 1(a)
(ii) of this Article, shall be held and
used, without restriction by the
members, to make amortization
payments, or to anticipate payment of
or repurchase part or all of the Bank’s
own obligations.
(d) All other currencies available to the
Bank, including those raised in the
market or otherwise borrowed under
Section l (a) (ii) of this Article, those
obtained by the sale of gold, those
received as payments of interest
and other charges for direct loans
made under Section. I (a) (i) and (ii),
and those received as payments of
commissions and other charges under
Section 1 (a) (iii), shall be used or
exchanged for other currencies or
gold required in the operations of the
Bank without restriction by the
members whose currencies are
offered.
(e) Currencies raised in the markets of
members by borrowers on loans
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guaranteed by the Bank under Section
1 (a) (iii) of this Article, shall also be
used or exchanged for other
currencies without restriction by such
members.
Section 3. Provisions or currencies for direct loans
The following provisions shall apply to direct
loans under Sections 1 (a) (i) and (ii) of this Article:
(a) The Bank shall furnish the
borrower with such currencies of
members, other than the member in
whose territories the project is
located, or as needed by the
borrower for expenditures to be made
in the territories of such other
members to carry out the purposes of
the loan.
(b) The Bank may, in exceptional
circumstances when local currency
required for the purposes of the loan
cannot be raised by the borrower on
reasonable terms, provide the
borrower as part of the loan with an
appropriate amount of that currency.
(c) The Bank, if the project gives rise
indirectly to an increased need for
foreign exchange by the member in
whose territories the project is
located, may in exceptional
circumstances provide the borrower
as part of the loan with an
appropriate amount of gold or foreign
exchange not in excess of the
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borrower’s local expenditure in
connection with the purposes of the
loan.
(d) The Bank may, in exceptional
circumstances, at the request of a
member in whose territories a portion
of the loan is spent, repurchase with
gold or foreign exchange a part of that
member’s currency thus spent but in
no case shall the part so repurchased
exceed the amount by which the
expenditure of the loan in those
territories gives rise to an increased
need for foreign exchange.
Section 4. Payment provisions for direct loans
Loan contracts under Section l (a) (i) or (ii) of this
Article shall be made in accordance with the following
payment provisions:
(a) The terms and conditions of interest
and amortization payments, maturity
and dates of payment of each loan
shall be determined by the Bank. The
Bank shall also determine the rate and
any other terms and conditions of
commission to be charged in
connection with such loan.
In the case of loans made under Section 1(a) (ii) of this
Article during the first ten years of the Bank’s operations,
this rate of commission shall be not less than one per cent
per annum and not greater than one and one half per cent per
annum, and shall be charged on the outstanding portion of
any such loan. At the end of this period of ten years, the rate
of commission may be reduced by the Bank with respect both
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to the outstanding portions of loans already made and to
future loans, if the reserves accumulated by the Bank under
Section 6 of this Article and out of other earnings are considered by it sufficient to justify a reduction. In the case of
future loans the Bank shall also have discretion to increase the
rate of commission beyond the above limit, if experience
indicates that an increase is advisable.
(b) All loan contracts shall stipulate the
currency or currencies in which
payments under the contract shall be
made to the Bank. At the option of the
borrower, however, such payments
may be made in gold, or subject to the
agreement of the Bank, in the
currency of a member other than that
prescribed in the contract.
(i) In the case of loans made under
Section l (a) (i) of this Article
the loan contracts shall provide
that payments to the Bank of
interest, other charges and
amortization shall be made in
the currency loaned, unless the
member whose currency is
loaned agrees that such
payments shall be made in
some other specified currency
or currencies. These payments,
subject to the provisions of
Article II, Section 9 (c), shall be
equivalent to the value of such
contractual payments at the
time the loans were made, in
terms of a currency specified
for the purpose by the Bank by
a three-fourths majority of the
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total voting power.
(ii) In the case of loans made under
Section I (a) (ii) of this Article,
the total amount outstanding
and payable to the Bank in any
one currency shall at no time
exceed the total amount of the
outstanding borrowings made
by the Bank under Section l (a)
(ii) and payable in the same
currency.

(c) If a member suffers from an acute
exchange stringency, so that the
service of any loan, contracted by that
member or guaranteed by it or by one
of its agencies cannot be provided in
the stipulated manner, the member
concerned may apply to the Bank for
a relaxation of the conditions of
payment. If the Bank is satisfied that
some relaxation is in the interests of
the particular member and of the
operations of the Bank and of its
members as a whole, it may take
action under either, or both, of the
following paragraphs with respect to
the whole, or part, of the annual
service:
(i) The Bank may, in its discretion,
make arrangements with the
member concerned, to accept
service payments on the loan
in the member’s currency for
periods not to exceed three
years upon appropriate terms
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regarding the use of such
currency and the maintenance
of its foreign exchange value;
and for the repurchase of such
currency on appropriate terms.
(ii) The Bank may modify the
terms of amortization or extend
the life of the loan, or both.
Section 5. Guarantees
(a) In guaranteeing a loan placed through
the usual investment channels, the
Bank shall charge a guarantee
commission payable periodically on
the amount of the loan outstanding at
a rate determined by the Bank.
During the first ten years of the
Bank’s operations, this rate shall be
not less than one per cent per annum
and not greater than one- half per cent
per annum. At the end of this period
of ten years, the rate of commission
may be reduced by the Bank with
respect both to the outstanding
portions of loans already
guaranteed and to future loans if
the reserves accumulated by the Bank
under Section 6 of this Article and out
of other earnings are considered by it
sufficient to justify a reduction. In the
case of future loans the Bank shall
also have discretion to increase the
rate of commission beyond the above
limit, if experience indicates that an
increase is advisable.

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(b) Guarantee commissions shall be paid
directly to the Bank by the borrower.
(c) Guarantees by the Bank shall provide
that the Bank may terminate its
liability with respect to interest if,
upon default by the borrower and by
the guarantor, if any, the Bank offers
to purchase, at par and interest
accrued to a date designated in the
offer, the bonds or other
obligations guaranteed.
(d) The Bank shall have power to
determine any other terms and
conditions of the guarantee.
Section 6. Special reserve
The amount of commissions received by the Bank
under Sections 4 and 5 of this article shall be set aside as a
special reserve, which shall be kept available for meeting
liabilities of the Bank in accordance with Section 7 of this
Article. The special reserve shall be held in such liquid form,
permitted under this Agreement, as the Executive Directors
may decide.
Section 7. Methods of meeting liabilities of the Bank in case of
defaults
In cases of default on loans made, participated in, or
guaranteed by the Bank:
(a) The Bank shall make such
arrangements as may be feasible to
adjust the obligations under the loans,
including arrangements under or
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analogous to those provided in
Section 4(c) of this Article.
(b) The payments in discharge of the
Bank’s liabilities on borrowings or
guarantees under Section I (a) (ii) and
(iii) of this Article shall be charged:
(i) first, against the special reserve
provided in Section 6 of this
Article.
(ii) then, to the extent necessary
and at the discretion of the
Bank, against the other
reserves, surplus and capital
available to the Bank.
(c) Whenever necessary to meet
contractual payments of interest,
other charges or amortization on the
Bank’s own borrowings, or to meet
the Bank’s liabilities with respect to
similar payments on loans guaranteed
by it, the Bank may call an
appropriate amount of the unpaid
subscriptions of members in
accordance with Article 11, Sections 5
and 7. Moreover, if it believes that a
default may be of long duration, the
Bank may call an additional amount
of such unpaid subscriptions not to
exceed in any one year one per cent of
the total subscriptions of the
members for the following purposes:
(i) To redeem prior to maturity, or
otherwise discharge its liability
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on, all or part of the
outstanding principal of any
loan guaranteed by it in respect
of which the debtor is in
default.
(ii) To repurchase, or otherwise
discharge, its liability on, all or
part of its own outstanding
borrowings.
Section 8. Miscellaneous operations
In addition to the operations specified elsewhere
in this Agreement, the Bank shall have the power:
(i) To buy and sell securities it has
issued and to buy and sell
securities which it has
guaranteed or in which it has
invested, provided that the
Bank shall obtain the approval
of the member in whose
territories the securities are to
be bought or sold.
(ii) To guarantee securities in
which it has invested for the
purpose of facilitating their
sale.
(iii) To borrow the currency of any
member with the approval of
that member.
(iv) To buy and sell such other
securities as the Directors by a
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three-fourths majority of the
total voting power may deem
proper for the investment of all
or part of the special reserve
under Section 6 of this Article.
In exercising the powers conferred by this Section, the
Bank may deal with any person, partnership, association,
corporation or other legal entity in the territories of any
member.
Section 9. Warning to be placed on securities
Every security guaranteed or issued by the Bank shall
bear on its face a conspicuous statement to the effect that it is
not an obligation of any government unless expressly stated
on the security.
Section 10. Political activity prohibited
The Bank and its officers 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 or
members concerned. Only economic considerations shall be
relevant to their decisions, and these considerations shall be
weighed impartially in order to achieve the purposes stated in
Article I.
ARTICLE V
ORGANISATION AND MANAGEMENT
Section 1. Structure of the Bank
The Bank shall have a Board of Governors, Executive
Directors, a President and such other officers and staff to
perform such duties as the Bank may determine.
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Section 2. Board of Governors
(a) All the powers of the Bank shall be
vested in the Board of Governors
consisting of one governor and one
alternate appointed by each member
in such manner as it may
determine. Each governor and each
alternate shall serve for five years,
subject to the pleasure of the member
appointing him, and may be
reappointed. No alternate may vote
except in the absence of his principal.
The Board shall select one of the
governors as Chairman.
(b) The Board of Governors may delegate
to the Executive Directors authority to
exercise any powers of the Board,
except the power to:
(i) Admit new members and
determine the conditions of
their admission;
(ii) Increase or decrease the capital
stock;
(iii) Suspend a member;
(iv) Decide appeals from
interpretations of this
Agreement given by the
Executive Directors;
(v) Make arrangements to
cooperate with other
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international organisations
(other than informal
arrangements of a temporary
and administrative character);
(vi) Decide to suspend permanently
the operations of the Bank and
to distribute its assets;
(vii) Determine the distribution of
the net income of the Bank.
(c) The Board of Governors shall hold an
annual meeting and such other
meetings as may be provided for by
the Board or called by the Executive
Directors. Meetings of the Board shall
be called by the Directors whenever
requested by five members or by
members having one-quarter of the
total voting power.
(d) A quorum for any meeting of the
Board of Governors shall be a
majority of the Governors, exercising
not less than two-thirds of the total
voting power.
(e) The Board of Governors may by
regulation establish a procedure
whereby the Executive Directors,
when they deem such action to be in
the best interests of the Bank, may
obtain a vote of the Governors on a
specific question without calling a
meeting of the Board.
(f) The Board of Governors, and the
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Executive Directors to the extent
authorised, may adopt such rules
and regulations as may be necessary
or appropriate to conduct the
business of the Bank.
(g) Governors and alternates shall serve
as such without compensation from
the Bank, but the Bank shall pay them
reasonable expenses incurred in
attending meetings.
(h) The Board of Governors shall
determine the remuneration to be
paid to the Executive Directors and
the salary and terms of the contract of
service of the President.
Section 3. Voting.—
(a) Each member shall have two hundred
fifty votes plus one additional vote for
each share of stock held.
(b) Except as otherwise specifically
provided, all matters before the Bank
shall be decided by a majority of the
votes cast.
Section 4. Executive Directors.—
(a) The Executive Directors shall be
responsible for the conduct of the
general operations of the Bank, and
for this purpose, shall exercise all the
powers delegated to them by the
Board of Governors.
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(b) There shall be twelve Executive
Directors, who need not be governors,
and of whom:
(i) five shall be appointed, one
by each of the five members
having the largest number of
shares;
(ii) seven shall be elected according
to Schedule B by all the
Governors other than those
appointed by the five members
referred to in (i) above.
For the purpose of this paragraph, “members” means
governments of countries whose names are set forth in
Schedule A, whether they are original members or become
members in accordance with Article 11, Section I (b). When
governments of other countries become members, the Board
of Governors may, by a four-fifths majority of the total voting
power, increase the total number of directors by increasing
the number of directors to be elected.
Executive directors shall be appointed or elected every two
years.
(c) Each executive director shall appoint
an alternate with full power to act for
him when he is not present. When the
executive directors appointing them
are present, alternates may participate
in meetings but shall not vote.
(d) Directors shall continue in office until
their successors are appointed or
elected. If the office of an elected
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director becomes vacant more than
ninety days before the end of his
term, another director shall be elected
for the remainder of the term by the
governors who elected the former
director. A majority of the votes cast
shall be required for election.
While the office remains vacant the alternate of the former
director shall exercise his powers, except that of appointing
an alternate.
(e) The Executive Directors shall function
in continuous session at the principal
office of the Bank and shall meet as
often as the business of the Bank may
require.
(f) A quorum for any meeting of the
Executive Directors shall be a majority
of the Directors, exercising not less
than one-half of the total voting
power.
(g) Each appointed director shall be
entitled to cast the number of votes
allotted under Section 3 of this Article
to the member appointing him. Each
elected director shall be entitled to
cast the number of votes which
counted toward his election. All the
votes which a director is entitled to
cast shall be cast as a unit.
(h) The Board of Governors shall adopt
regulations under which a member
not entitled to appoint a director
under (b) above may send a
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representative to attend any meeting
of the Executive Directors when a
request made by or a matter
particularly affecting that member is
under consideration.
(i) The Executive Directors may appoint
such committees as they deem
advisable. Membership of such
committees need not be limited to
governors or directors or their
alternates.
Section 5. President and staff.—
(a) The Executive Directors shall select a
President who shall not be a
governor or an executive director or
an alternate for either. The President
shall be Chairman of the Executive
Directors, but shall have no vote
except a deciding vote in case of
an equal division. He may
participate in meetings of the Board of
Governors, but shall not vote at such
meetings. The President shall cease to
hold office when the Executive
Directors so decide.
(b) The President shall be chief of the
operating staff of the and shall
conduct, under the direction of the
Executive Directors, the ordinary
business of the Bank. Subject to the
general control of the Executive
Directors, he shall be responsible for
the organisation, appointment, and
dismissal of the officers and staff.
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(c) The 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.
(d) In appointing the officers and staff the
President shall, subject to the
paramount importance of securing
the highest standards of efficiency
and of technical competence, pay due
regard to the importance of recruiting
personnel on as wide a geographical
basis as possible.
Section 6. Advisory Council.—
(a) There shall be an Advisory Council of
not less than seven persons selected
by the Board of Governors including
representatives of banking,
commercial, industrial, labour, and
agricultural interests, and with as
wide a national representation as
possible. In those fields where
specialized international
organisations exist, the members of
the Council representative of those
fields shall be selected in agreement
with such organisations. The
Council shall advise the Bank on
matters of general policy. The Council
shall meet annually and on such other
occasions as the Bank may request.
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(b) Councillors shall serve for two
years and may be reappointed. They
shall be paid their reasonable
expenses incurred on behalf of the
Bank.
Section 7. Loan Committees.—
The committees required to report on loans under
Article III, Section 4, shall be appointed by the Bank. Each
such committee shall include an expert selected by the
governor representing the member in whose territories the
project is located and one or more members of the technical
staff of the Bank.
Section 8. Relationship to other international organisations.—
(a) The Bank, within the terms of this
Agreement, shall cooperate with any
general international organisation and
with public international
organisations having specialized
responsibilities in related fields. Any
arrangements for such cooperation
which would involve a modification
of any provision of this Agreement
may be effected only after
amendment to this Agreement under
Article VIII.
(b) In making decisions on. applications
for loans or guarantees relating to
matters directly within the
competence of any international
organisation to the types specified in
the preceding paragraph and
participated in primarily by members
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of the Bank, the Bank shall give
consideration to the views and
recommendations of such
organisation.
Section 9. Location of offices.—
(a) The principal office of the Bank shall
be located in the territory of the
member holding the greatest number
of shares.
(b) The Bank may establish agencies or
branch offices in the territories of any
member of the Bank.
Section 10. Regional offices and councils.—
(a) The Bank may establish regional
offices and determine the location of,
and the areas to be covered by, each
regional office.
(b) Each regional office shall be advised
by a regional council representative of
the entire area and selected in such
manner as the Bank may decide.
Section 11. Depositories.—
(a) Each member shall designate its
central bank as a depository for all the
Bank’s holdings of its currency or, if it
has no central bank, it shall designate
such other institution as may be
acceptable to the Bank.

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(b) The Bank may hold other assets,
including gold, in depositories
designated by the five members
having the largest number of shares
and in such other designated
depositories as the Bank may select.
Initially, at least one- half of the gold
holdings of the Bank shall be held in
the depository designated by the
member in whose territory the Bank
has its principal office, and at least
forty per cent shall be held in the
depositories designated by the
remaining four members referred to
above, each of such depositories to
hold, initially, not less than the
amount of gold paid on the shares of
the member designating it. However,
all transfers of gold by the Bank shall
be made with due regard to the costs
of transport and anticipated
requirements of the Bank. In an
emergency the Executive Directors
may transfer all or any part of the
Bank’s gold holdings to any place
where they can be adequately
protected.
Section 12. Form of holdings of currency.—
The Bank shall accept from any member, in place of
any part of the member’s currency, paid in to the Bank under
Article 11, Section 7 (i), or to meet amortization payments on
loans made with such currency, and not needed by the
Bank in its operations, notes or similar obligations issued
by the Government of the member or the depository
designated by such member, which shall be non-negotiable,
non- interest-bearing and payable at their par value on
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demand by credit to the account of the Bank in the designated
depository.
Section 13. Publications of reports and provision of
information.—
(a) The Bank shall publish an annual
report containing an audited
statement of its accounts and shall
circulate to members at intervals of
three months or less a summary
statement of its financial position and
a profit and loss statement showing
the results of its operations.
(b) The Bank may publish such other
reports as it deems desirable to carry
out its purposes.
(c) Copies of all reports, statements and
publications made under this section
shall be distributed to members.
Section 14. Allocation of net income.—
(a) The Board of Governors shall
determine annually what part of the
Bank’s net income, after making
provision for reserves, shall be
allocated to surplus and what part, if
any, shall be distributed.
(b) If any part is distributed, up to
two percent non- cumulative shall
be paid, as a first charge against
the distribution for any year, to each
member on the basis of the average
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amount of the loans outstanding
during the year made under Article
IV, Section l(a) (i), out of currency
corresponding to its subscription. If
two percent is paid as a first charge,
any balance remaining to be
distributed shall be paid to all
members in proportion to their
shares. Payments to each member
shall be made in its own currency, or
if that currency is not available in
other currency acceptable to the
member. If such payments are made
in currencies other than the member’s
own currency, the transfer of the
currency and its use by the receiving
member after payment shall be
without restriction by the members.
ARTICLE VI
WITHDRAWAL AND SUSPENSION OF MEMBERSHIP:
SUSPENSION OF OPERATIONS
Section 1. Right of members to withdraw.
Any member may withdraw from the Bank at any
time by transmitting a notice in writing to the Bank at its
principal office. Withdrawal shall become effective on the
date such notice is received.
Section 2. Suspension of membership.
If a member fails to fulfill any of its obligations to the
Bank, the Bank may suspend its membership by decision of a
majority of the Governors, exercising a majority of the
total voting power. The member so suspended shall
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automatically cease to be a member one year from the date of
its suspension unless a, decision is taken by the same majority
to restore the member to good standing.
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
obligations.
Section 3. Cessation of membership in International Monetary
Fund.
Any member which ceases to be a member of the
International Monetary Fund shall automatically cease after
three months to be a member of the Bank unless the Bank by
three-fourths of the total voting power has agreed to allow it
to remain a member.
Section 4. Settlement of accounts with governments ceasing to
be members.
(a) When a government ceases to be a
member, it 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 are outstanding; but it
shall cease to incur liabilities with
respect to loans and guarantees
entered into thereafter by the Bank
and to share either in the income or
the expenses of the Bank.
(b) At the time a government ceases to be
a member, the Bank shall arrange for
the repurchase of its shares as a part
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of the settlement of accounts with
such government in accordance with
the provisions of (c) and (d) below.
For this purpose the repurchase price
of the shares shall be the value shown
by the books of the Bank on the day
the government ceases to be a
member.
(c) The repayment for shares
repurchased by the Bank under this
section shall be governed by the
following conditions:
(i) Any amount due to the
government for its shares shall
be withheld so long as the
government, its central bank or
any of its agencies remain
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 liability of the
government resulting from its
subscription for shares under
Article II, Section 5(ii). In any
event, no amount due to a
member for its shares shall be
paid until six months after the
date upon which the
government ceases to be a
member.
(ii) Payments for shares may be
made from time to time, upon
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their surrender by the
government, to the extent by
which the amount due as the
repurchase price in (b) above
exceeds the aggregate of
liabilities on loans and
guarantees in (c) (i) above until
the former member has
received the full repurchase
price.
(iii) Payments shall be made in the
currency of the country
receiving payment or at the
option of the Bank in gold.
(iv) If losses are sustained by the
Bank on any guarantees,
participations in loans, or loans
which were outstanding on the
date when the government
ceased to be a member, and the
amount of such losses exceeds
the amount of the reserve
provided against losses on
the date when the
government ceased to be a
member, such government
shall be obligated to 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
determined. In addition, the
former member government
shall remain liable on any call
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for unpaid subscriptions under
Article 11, Section 5 (ii), to the
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
was determined.
(d) If the Bank suspends permanently its
operations under Section 5 (b) of this
Article, within six months of the date
upon which any government ceases
to be a member, all rights of such
government shall be determined by
the provisions of Section 5 of this
Article.
Section 5. Suspension of operations and settlement of
obligations.—
(a) In an emergency the Executive
Directors may suspend temporarily
operations in respect of new loans
and guarantees pending an
opportunity for further considerations
and action by the Board of Governors.
(b) The Bank may suspend permanently
its operations in respect of new loans
and guarantees by vote of a majority
of the Governors, exercising a
majority of the total voting power.
After such suspension of operations
the Bank shall forthwith cease all
activities, except those incident to the
orderly realization, conservation, and
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preservation of its assets and
settlement of its obligations.
(c) The liability of all members for
uncalled subscriptions to the capital
stock of the Bank and in respect of
the depreciation of their own
currencies shall continue until all
claims of creditors, including all
contingent claims, shall have been
discharged.
(d) All creditors holding direct claims
shall be paid out of the assets of the
Bank, and then out of payments to the
Bank on calls on unpaid
subscriptions. Before making any
payments to creditors holding direct
claims, the Executive Directors shall
make such arrangements as are
necessary, in their judgement, to
insure a distribution to holders of
contingent claims rateably with
creditors holding direct claims.
(e) No distribution shall be made to
members on account of their
subscriptions to the capital stock of
the Bank until—
(i) all liabilities to creditors have
been discharged or provided
for, and
(ii) a majority of the Governors,
exercising a majority of the
total voting power, have
decided to make a
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distribution.
(f) After a decision to make a distribution
has been taken under (e) above, the
Executive Directors may by a two-
thirds majority vote make successive
distributions of the assets of the Bank
to members until all of the assets have
been distributed. This distribution
shall be subject to the prior settlement
of all outstanding claims of the
Bank against each member.
(g) Before any distribution of assets is
made, the Executive Directors shall fix
the proportionate share of each
member according to the ratio of
its shareholding to the total
outstanding shares. of the Bank.
(h) The Executive 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 its
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
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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 assets held by
the Bank after payments have
been made to members under
(i), (ii) and (iii) above shall be
distributed pro rata among
the members.
(i) Any member receiving assets
distributed by the Bank in accordance
with (h) above, shall enjoy the same
rights with respect to such assets as
the Bank enjoyed prior to their
distribution.
ARTICLE VII
STATUS, IMMUNITIES AND PRIVILEGES
Section 1. Purposes of Article.—
To enable the Bank to fulfill the functions with which
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it is entrusted, the status, immunities and privileges set forth
in this Article shall be accorded to the Bank in the territories
of each member.
Section 2. Status of the Bank.—
The Bank shall possess full juridical personality, and,
in particular the capacity:
(i) to contract;
(ii) to acquire and dispose of
immovable and movable
property;
(iii) to institute legal proceedings.
Section 3. Position of the Bank with regard to judicial
process.—
Actions may be brought against the Bank only in a
court of competent jurisdiction in the territories of a member
in which the Bank has an office, has appointed an agent for
the purpose of accepting service or notice of process, or has
issued or guaranteed securities. No actions shall, however, be
brought by members or persons acting for or deriving claims
from members. The property and assets of the Bank shall,
wheresoevers located and by whomsoever held, be immune
from all forms of seizure, attachment , or execution before the
delivery of final judgment against the Bank.
Section 4. Immunity of assets from seizure.—
Property and assets of the Bank wherever located
and by whomsoever held, shall be immune from search,
requisition, confiscation, expropriation or any other form of
seizure by executive or legislative action.
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Section 5. immunity of Archives.—
The archives of the Bank shall be inviolable.
Section 6. Freedom of assets from restrictions.—
To the extent necessary to carry out the operations
provided for in this Agreement and subject to the provisions
of this Agreement, all property and assets of the Bank
shall be free from restrictions, regulations, controls and
moratoria of any nature.
Section 7. Privileges for communications.—
The official communications of the Bank shall be
accorded by each member the same treatment that it
accords to the official communications of other members,
Section 8. Immunities and privileges of officers and
employees—
All governors, executive directors, alternates,
officers and employees of the Bank
(i) shall be immune from legal
process with respect to acts
performed by them in their
official capacity except when
the Bank waives this immunity;
(ii) not being local nationals, shall
be accorded the same
Immunities from immigration
restrictions, alien registration
requirements and national
service obligations and the
same facilities as regards
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exchange restrictions as are
accorded by members to the
representatives, officials, and
employees of comparable rank
of other members;
(iii) shall be granted the same
treatment in respect of
travelling facilities as is
accorded by members to
representatives, officials and
employees of comparable rank
of other members.
Section 9. Immunities from Taxation.—
(a) The Bank, its assets, property,
income and its operations and
transactions authorised by this
Agreement, shall be immune from all
taxation and from all customs duties.
The Bank shall also be immune from
liability for the collection or payment
of any tax or duty.
(b) No tax shall be levied on or in respect
of salaries and emoluments paid by
the Bank to executive directors,
alternates, officials or employees of
the Bank who are not local citizens,
local subjects, or other local nationals.
(c) No taxation of any kind shall be
levied on any obligation or security
issued by the Bank (including any
dividend or interest thereon) by
whomsoever held—
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(i) which discriminates against
such obligation or security
solely because it is issued by
the Bank; or
(ii) if the sole jurisdictional basis
for such taxation is the place or
currency in which it is issued,
made payable or paid, or the
location of any office or place of
business maintained by the
Bank.
(d) No taxation of any kind shall be
levied on any obligation or security
guaranteed by the Bank (including
any dividend or interest thereon) by
whomsoever held—
(i) which discriminates against
such obligation or security
solely because it is guaranteed
by the Bank; or
(ii) if the sole jurisdictional basis
for such taxation is the location
of any office or place of
business maintained by the
Bank.
Section 10. Application of Article.—
Each member shall take such action as is necessary in
its own territories for the purpose of making effective in terms
of its own law the principles set forth in this Article and shall
inform the Bank of the detailed action which it has taken.

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ARTICLE VIII
AMENDMENTS
(a) Any proposal to introduce
modifications in this Agreement,
whether emanating from a member, a
governor or the Executive Directors,
shall be communicated to the
Chairman of the Board of Governors
who shall bring the proposal before
the Board. If the proposed
amendment is approved by the Board
the Bank shall, by circular letter or
telegram, ask all members whether
they accept the proposed amendment.
When three-fifths of the members
having four- fifths of the total voting
power, have accepted the proposed
amendments, the Bank shall certify
the fact by formal communication
addressed to all members.
(b) Notwithstanding (a) above,
acceptance by all members is required
in the case of any amendment
modifying—
(i) the right to withdraw from the
Bank provided in Article VI,
Section 1;
(ii) the right secured by Article II,
Section 3(c);
(iii) the limitation on liability
provided in Article II, Section 6.
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(c) Amendments shall enter into force for
all members three months after the
date of the formal communication
unless a shorter period is specified in
the circular letter or telegram.
ARTICLE IX
INTERPRETATION
(a) Any question of interpretation of the
provisions of this Agreement arising
between any member and the Bank or
between any members of the Bank
shall be submitted to the Executive
Directors for their decision. If the
question particularly affects any
member not entitled to appoint an
executive director, it shall be entitled
to representation in accordance with
Article V, Section 4(h).
(b) In any case where the Executive
Directors have given a decision under
(a) above, any member may require
that the question be referred to the
Board of Governors, whose decision
shall be final. Pending the result of the
reference to the Board, the Bank may,
so far as it deems necessary, act on the
basis of the decision of the Executive
Directors.
(c) Whenever a disagreement arises
between the Bank and a country
which has ceased to be a member, or
between the Bank and any member
during the permanent suspension of
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the Bank, such disagreement
shall be submitted to arbitration
by a tribunal of three arbitrators, one
appointed by the Bank, another by the
country involved and an umpire who,
unless the parties otherwise agree,
shall be appointed by the President of
the Permanent Court of International
Justice or such other authority as may
have been prescribed by regulation
adopted by the Bank. The umpire
shall have full power to settle all
questions of procedure in any case
where the parties are in disagreement
with respect thereto.
ARTICLE X
APPROVAL DEEMED GIVEN
Whenever the approval of any member is required
before any act may be done by the Bank, except in Article
VIII, approval shall be deemed to have been given unless the
member presents an objection within such reasonable period
as the Bank may fix in notifying the member of the proposed
act.
ARTICLE XI
FINAL PROVISIONS
Section 1. Entry into force.—
This Agreement shall enter into force when it has
been signed on behalf of governments whose minimum
subscriptions comprise not less than sixty-five percent of the
total subscriptions set forth in Schedule A and when the
instruments referred to in Section 2(a) of this Article have
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been deposited on their behalf, but in no event shall this
Agreement enter into force before May 1, 1945.
Section 2. Signature.—
(a) Each government on whose behalf
this Agreement is signed shall deposit
with the Government or the United
States of America an instrument
setting forth that it has accepted this
Agreement in accordance with its law
and has taken all steps necessary to
enable it to carry out all of its
obligations under this Agreement.
(b) Each government shall become a
member of the Bank as from the date
of the deposit on its behalf of the
instrument referred to in (a) above,
except that no government shall
become a member before this
Agreement enters into force under
Section I of this Article.
(c) The Government of the United States
of America shall inform the
governments of all countries whose
names are set forth in Schedule A,
and all governments whose
membership is approved, in
accordance with Article II, Section
1(b), of all signatures of this
Agreement and of the deposit of all
instruments referred to in (a), above.
(d) At the time this Agreement is signed
on its behalf, each, government shall
transmit to the Government of the
United States of America one-
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hundredth of one percent of the price
of each share in gold or United States
dollars for the purpose of meeting
administrative expenses of the
Bank. This payment shall be credited
on account of the payment to be made
in accordance with Article II, Section
8(a). The Government of the United States of America shall hold such
funds in a special deposit account and
shall transmit them to the Board of
Governors of the Bank when the
initial meeting has been called under
Section 3 of this Article. If this
Agreement has not come into force by
December 31, 1945, the Government
of the United States of America shall
return such funds to the governments
that transmitted them.
(e) This Agreement shall remain open for
signature at Washington on behalf of
the governments of the countries
whose names, are set forth in
Schedule A until December 31, 1945.
(f) After December 31, 1945, this
Agreement shall be open for
signature on behalf of the government
of any country whose membership
has been approved in accordance
with Article 11, Section l(b).
(g) By their signature of this Agreement,
all governments accept it both on
their own behalf and in respect of all
their colonies, overseas territories,
all territories under their protection,
suzerainty, or authority and all
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territories in respect of which they
exercise a mandate.
(h) In the case of governments whose
metropolitan territories have been
under enemy occupation, the deposit
of the instrument referred to in (a)
above may be delayed until one
hundred and eighty days after the
date on which these territories have
been liberated. If, however, it is
not deposited by any such
government before the expiration of
this period, the signature affixed
on behalf of that government shall
become void and the portion of its
subscription paid under (d) above
shall be returned to it.
(i) Paragraphs (d) and (h) shall come
into force with regard to each
signatory government as from the
date of its signature.
Section 3. Inauguration of the Bank.
(a) As soon as this Agreement enters into
force under Section 1 of this Article,
each member shall appoint a
governor and the member to whom
the largest number of shares is
allocated in Schedule A shall call the
first meeting of the Board of
Governors.
(b) At the first meeting of the Board
of Governors, arrangements shall be
made for the selection of provisional
executive directors. The governments
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of the five countries, to which the
largest number of shares are
allocated in Schedule A, shall appoint
provisional executive directors. If one
or more of such governments have
not become members, the executive
directorships which they would be
entitled to fill shall remain vacant
until they become members, or until
January 1, 1946, whichever is the
earlier. Seven provisional executive
directors shall be elected in
accordance with the provisions of
Schedule B and shall remain in office
until the date of the first regular
election of executive directors which
shall be held as soon as practicable
after January 1, 1946.
(c) The Board of Governors may
delegate to the provisional
executive directors any powers except
those which may not be delegated to
the Executive Directors.
(d) The Bank shall notify members when
it is ready to commence operations.
Done at Washington, in a single copy which shall
remain deposited in the archives of the Government of the
United States of America, which ,shall transmit certified
copies to all governments whose names are set forth in
Schedule A and to all governments whose membership is
approved in accordance with Article II, Section 1(b).

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SCHEDULE A
SUBSCRIPTIONS
(millions of dollars) (millions of dollars)
Australia 200 Iran 24
Belgium 225 Iraq 6
Bolivia 7 Liberia .5
Brazil 105 Luxembourg 10
Canada 325 Mexico 65
Chile 35 Netherlands 275
China 600 New Zealand 50
Colombia 35 Nicaragua .8
Costa Rica 2 Norway 50
Cuba 35 Panama .2
Czechoslovakia 125 Paraguay .8
Denmark * Peru 17.5
Dominican Republic 2 Philippine Common-
wealth
15
Ecuador 3.2 Poland 125
El Salvador 1 Union of South Africa 100
Ethiopia 3 Union of Soviet
Socialist Republics
1,200
France 450 United Arab Republic 40
Greece 25 United Kingdom 1,300
Guatemala 2 United States 3,175
Haiti 2 Uruguay 10.5
Honduras 1 Venezuela 10.5
Iceland 1 Yugoslavia 40
India 400 Total 9,100
* The quota of Denmark shall be determined by the Bank after Denmark accepts membership in accordancewith these Articles of Agreement.
SCHEDULE B
ELECTION OF EXECUTIVE DIRECTORS
1. The election of the elective executive directors shall
be by ballot of the Governors eligible to vote under Article V,
Section 4(b).
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2. In balloting for the elective executive directors, each
governor eligible to vote shall cast for one person all of the
votes to which the member appointing him is entitled under
Section 3 of Article V. The seven persons receiving the
greatest number of votes shall be executive directors, except
that no person who receives less than fourteen per cent of the
total of the votes which can be cast (eligible votes) shall be
considered elected.
3. When seven persons are not elected on the first
ballot, a second ballot shall be held in which the person who
received the lowest number of votes shall be ineligible for
election and in which there shall vote only (a) those governors who voted in the first ballot for a person not
elected and (b) those governors whose votes for a person
elected are deemed under 4 below to have raised the votes
cast for that person above fifteen per cent of the eligible votes.
4. In determining whether the votes cast by a
governor are to be cle to have raised the total of any person
above fifteen percent of the eligible votes, the fifteen per cent
shall be deemed to include, first, the votes of the governor
casting the largest number of votes for such person, then the
votes of the governor casting the next largest number, and so
on until fifteen per cent is reached.
5. Any governor, part of whose votes must be counted
in order to raise the total of any person above fourteen
percent shall be considered as casting all of his votes for such
person even if the total votes for such person thereby exceed
fifteen percent.
6. If after the second ballot, seven persons have not
been elected, further ballots shall be held on the same
principles until seven persons have been elected, provided
that after six persons are elected by a simple majority the
remaining votes and shall be deemed to have been elected by
all such votes.

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THIRD SCHEDULE
The Governments on whose behalf this Agreement is
signed agree as follows:
INTRODUCTORY ARTICLE
THE INTERNATIONAL FINANCE CORPORATION
(hereinafter called the Corporation) is established and
shall operate in accordance with the following provisions:
ARTICLE I
PURPOSE
The purpose of the Corporation is to further
economic development by encouraging the growth of
productive private enterprise in member countries,
particularly in the less developed areas, thus supplementing
the activities of the International Bank for Reconstruction and
Development (hereinafter called the Bank). In carrying out
this purpose, the Corporation shall:
(i) in association with private
investors, assist in financing
the establishment,
improvement and expansion of
productive private enterprises
which would contribute to the
development of its member
countries by making
investments, without
guarantee of repayment by
the member government
concerned, in cases where
sufficient private capital is not
available on reasonable terms;
(ii) seek to bring together
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investment opportunities,
domestic and foreign private
capital, and experienced
management; and
(iii) seek to stimulate, and to help
create conditions conducive to,
the flow of private capital,
domestic and foreign, into
productive investment in
member countries.
The Corporation shall be guided in all its decisions
by the provisions of this Article.
ARTICLE II
MEMBERSHIP AND CAPITAL
Section 1. Membership.—
(a) The original members of the
Corporation shall be those members
of the Bank listed in Schedule A
hereto which shall, on or before the
date specified in Article IX, Section
2(c), accept membership in the
Corporation.
(b) Membership shall be open to other
members of the Bank at such times
and in accordance with such terms as
may be prescribed by the
Corporation.
Section 2. Capital Stock.—
(a) The authorised capital stock of the
Corporation shall be $100,000,000, in
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terms of United States dollars.
(b) The authorised capital stock shall
be divided into 100,000 shares
having a par value of one thousand
United States dollars each. Any such
shares not initially subscribed by
original members shall be available
for subsequent subscription in
accordance with Section 3(d) of this
Article.
(c) The amount of capital stock at any
time authorised may be increased by
the Board of Governors as follows:
(i) by a majority of the votes cast,
in case such increase is
necessary for the purpose of
issuing shares of capital stock
on initial subscription. by
members other than original
members, provided that the
aggregate of any increases
authorised pursuant to this
subparagraph shall not exceed
10,000 shares;
(ii) in any other case, by a three-
fourths majority of the total
voting power.
(d) In case of an increase authorised
pursuant to paragraph (c) (ii) above,
each member shall have a reasonable
opportunity to subscribe, under such
conditions as the Corporation shall
decide, to a proportion of the increase
of stock equivalent to the
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proportion which its stock
theretofore subscribed bears to the
total capital stock of the Corporation,
but no member shall be obligated to
subscribe to any part of the increased
capital.
(e) Issuance of shares of stock, other than
those subscribed either on initial
subscription or pursuant to paragraph
(d) above, shall require a three-
fourths majority of the total voting
power.
(f) Shares of stock of the Corporation
shall be available for subscription
only by, and shall be issued only to,
members.
Section 3. Subscriptions.—
(a) Each original member shall subscribe
to the number of shares of stock set
forth opposite its name in Schedule A.
The number of shares of stock to be
subscribed by other members shall be
determined by the Corporation.
(b) Shares of stock initially subscribed
by original members shall be issued
at par.
(c) The initial subscription of each
original member shall be payable in
full within 30 days after either the
date on which the Corporation shall
begin operations pursuant to Article
IX, Section 3(b), or the date on which
such original member becomes a
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member, whichever shall be later, or
at such date thereafter as the
Corporation shall determine. Payment
shall be made in gold or United States
dollars in response to a call by the
Corporation which shall specify the
place or places of payment.
(d) The price and other terms of
subscription of shares of stock to be
subscribed, otherwise than on initial
subscription by original members,
shall be determined by the
Corporation.
Section 4. Limitation on liability.—
No member shall be liable, by reason of its
membership, for obligations of the Corporation.
Section 5. Restriction on Transfers and Pledges of
Shares.—
Shares of stock shall not be pledged or encumbered in
any manner whatever, and shall be transferable only to the
Corporation.
ARTICLE III
OPERATIONS
Section 1. Financing Operations.—
The Corporation may make investments of its funds
in productive private enterprises in the territories of its
members. The existence of a government or other public
interest in such an enterprise shall not necessarily preclude
the Corporation from making an investment therein.

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Section 2. Forms of Financing.—
The Corporation may make investments of its funds
in such form or forms as it may deem appropriate in the
circumstances.
Section 3. Operational Principles.—
The operations of the Corporation shall be
conducted in accordance with the following principles:
(i) the Corporation shall not
undertake any financing for
which in its opinion sufficient
private capital could be
obtained on reasonable terms;
(ii) the Corporation shall not
finance an enterprise in the
territories of any member if the
member objects to such
financing;
(iii) the Corporation shall impose
no conditions that the proceeds
of any financing by it shall be
spent in the territories of any
particular country;
(iv) the Corporation shall not
assume responsibility for
managing any enterprise in
which it has invested and shall
not exercise voting rights for
such purpose or for any other
purpose which, in its opinion,
properly is within the scope of
managerial control;

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(v) the Corporation shall
undertake its financing on
terms and conditions which it
considers appropriate, taking
into account the requirements
of the enterprise, the risks being
undertaken by the
Corporation and the terms
and conditions normally
obtained by private investors
for similar financing;
(vi) the Corporation shall seek to
revolve its funds by selling its
investments to private investors
whenever it can appropriately
do so on satisfactory terms;
(vii) the Corporation shall seek to
maintain a reasonable
diversification in its
investments.
Section 4. Protection of Interests.—
Nothing in this Agreement shall prevent the
Corporation, in the event of actual or threatened default on
any of its investments, actual or threatened insolvency of the
enterprise in which such investment shall have been made, or
other situations which, in the opinion of the Corporation, threaten to jeopardize such investment, from taking such
action and exercising such rights as it may deem necessary for
the protection of its interests.
Section 5. Applicability of Certain Foreign Exchange
Restrictions.—
Funds received by or payable to the Corporation in
respect of an investment of the Corporation made in any
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member’s territories pursuant to Section I of this Article shall
not be free, solely by reason of any provision of this
Agreement, from generally applicable foreign exchange
restriction, regulations and controls in force in the territories
of that member.
Section 6. Miscellaneous Operations.—
In addition to the operations specified elsewhere
in this Agreement, the Corporation shall have the power to:
(i) borrow funds, and in that
connection to furnish such
collateral or other security
therefor as it shall determine;
provided, however, that before
making a public sale of its
obligations in the markets of a
member, the Corporation shall
have obtained the approval of
that member and of the
member in whose currency
the obligations are to be
denominated; if and so long as
the Corporation shall be
indebted on loans from or
guaranteed by the Bank, the
total amount outstanding of
borrowings incurred or
guarantees given by the
Corporation shall not be
increased if, at the time or as a
result thereof, the aggregate
amount of debt (including the
guarantee of any debt)
incurred by the Corporation
from any source and then
outstanding shall exceed an
amount equal to four times its
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unimpaired subscribed capital
and surplus;
(ii) invest funds not needed in its
financing operations in such
obligations as it may determine
and invest funds held by it for
pension or similar purposes in
any marketable securities, all
without being subject to the
restrictions imposed by other
sections of this Article;
(iii) guarantee securities in which it
has invested in order to
facilitate their sale;
(iv) buy and sell securities it has
issued or guaranteed or in
which it has invested;
(v) exercise such other powers
incidental to its business as
shall be necessary or desirable
in furtherance of its purposes.
Section 7. Valuation of Currencies.—
Whenever it shall become necessary under this
Agreement to value any currency in terms of the value of
another currency, such valuation shall be as reasonably
determined by the Corporation after consultation with the
International Monetary Fund.
Section 8. Warning to be Placed on Securities.—
Every security issued or guaranteed by the
Corporation shall bear on its face a conspicuous statement to
the effect that it is not an obligation of the Bank or, unless
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expressly stated on the security, of any government.
Section 9. Political Activity Prohibited.—
The Corporation and its officers 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 or members concerned. Only economic
considerations shall be relevant to their decisions, and these
considerations shall be weighed impartially in order to
achieve the purposes stated in this Agreement.
ARTICLE IV
ORGANISATION AND MANAGEMENT
Section 1. Structure of the Corporation
The Corporation shall have a Board of Governors, a
Board of Directors, a Chairman of the Board of Directors, a
President and such other officers and staff to perform such
duties as the Corporation may determine.
Section 2. Board of Governors.—
(a) All the powers of the Corporation
shall be vested in the Board of
Governors.
(b) Each Governor and Alternate
Governor of the Bank appointed by a
member of the Bank which is also a
member of the Corporation shall ex
officio be a Governor or Alternate
Governor, respectively, of the
Corporation. No Alternate Governor
may vote except in the absence of his
principal. The Board of Governors
shall select one of the Governors as
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Chairman of the Board of Governors.
Any Governor or Alternate Governor
shall cease to hold office if the
member by which he was appointed
shall cease to be a member of the
Corporation.
(c) The Board of Governors may delegate
to the Board of Directors authority to
exercise any of its powers, except the
power to:
(i) admit new members and
determine the conditions of
their admission;
(ii) increase or decrease the capital
stock;
(iii) suspend a member;
(iv) decide appeals from
interpretations of this
Agreement given by the Board
of Directors;
(v) make arrangements to co-
operate with other
international organisations
(other than informal
arrangements of a temporary
and administrative character);
(vi) decide to suspend permanently
the operations of the
Corporation and to distribute
its assets;
(vii) declare dividends;
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(viii) amend this Agreement.
(d) 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.
(e) The annual meeting of the Board of
Governors shall be held in
conjunction with the annual meeting
of the Board of Governor, of the Bank.
(f) A quorum for any meeting of the
Board of Governors shall be a
majority of the Governors, exercising
not less than two-thirds of the total
voting power.
(g) The Corporation may by regulation
establish a procedure whereby the
Board of Directors may obtain a vote
of the Governors on a specific
question without calling a meeting of
the Board of Governors.
(h) The Board of Governors, and the
Board of Directors to the extent
authorised, may adopt such rules and
regulations as may be necessary or
appropriate to conduct the business of
the Corporation.
(i) Governors and Alternate Governors
shall serve as such without
compensation from the Corporation.
Section 3. Voting.—

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(a) Each member shall have two hundred
and fifty votes plus one additional
vote for each share of stock held.
(b) Except as otherwise expressly
provided, all matters before the
Corporation, shall be decided by a
majority of the votes cast.
Section 4. Board of Directors
(a) The Board of Directors shall be
responsible for the conduct of the
general operations of the Corporation,
and for this purpose shall exercise all
the powers given to it by this
Agreement or delegated to it by the
Board of Governors.
(b) The Board of Directors of the
Corporation. shall be composed ex
officio of each Executive Director of
the Bank who shall have been either
(i) appointed by a member of the
Bank which is also a member of the
Corporation, or (ii) elected in an
election in which the votes of at least
one member of the Bank which is
also a member of the Corporation
shall have counted toward his
election. The Alternate to each such
Executive Director of the Bank shall
ex officio be an Alternate Director of
the Corporation. Any Director shall
cease to hold office if the member by
which he was appointed, or if all the
members whose votes counted
toward his election, shall cease to
be members of the Corporation.
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(c) Each Director who is an appointed
Executive Director of the Bank shall
be entitled to cast the number of votes
which the member by which he was
so appointed is entitled to cast in the
Corporation. Each Director who is an
elected Executive Director of the Bank
shall be entitled to cast the number of
votes which the member or members
of the Corporation whose votes
counted toward his election in the
Bank are entitled to cast in the
Corporation. All the votes which a
Director is entitled to cast shall be cast
as a unit.
(d) An Alternate Director shall have full
power to act in the absence of the
Director who shall have appointed
him. When a Director is present, his
Alternate may participate in meetings
but shall not vote.
(e) A quorum for any meeting of the
Board of Directors shall be a majority
of the Directors exercising not less
than one-half of the total voting
power.
(f) The Board of Directors shall meet as
often as the business of the
Corporation may require.
(g) The Board of Governors shall adopt
regulations under which a member of
the Corporation not entitled to
appoint an Executive Director of the
Bank may send a representative to
attend any meeting of the Board of
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Directors of the Corporation when a
request made by or a matter
particularly affecting, that member is
under consideration.
Section 5. Chairman, President and Staff.—
(a) The President of the Bank shall be ex
officio Chairman of the Board of
Directors of the Corporation, but shall
have no vote except a deciding vote in
case of an equal division. He may
participate in meetings of the Board of
Governors but shall not vote at such
meetings.
(b) The President of the Corporation shall
be appointed by the Board of
Directors on the recommendation
of the Chairman. The President shall
be chief of the operating staff of the
Corporation. Under the direction of
the Board of Directors and the general
supervision of the Chairman, he shall
conduct the ordinary business of the
Corporation and under their general
control shall be responsible for the
organisation, appointment and
dismissal of the officers and staff. The
President may participate in meetings
of the Board of Directors but shall not
vote at such meetings. The President
shall cease to hold office by decision
of the Board of Directors in which the
Chairman concurs.
(c) The President, officers and staff of the
Corporation, in the discharge of their
offices, owe their duty entirely to the
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Corporation and to no other
authority. Each member of the
Corporation 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.
(d) Subject to the paramount importance
of securing the highest standards of
efficiency and of technical
competence, due regard shall be paid,
in appointing the officers and staff of
the Corporation, to the importance of
recruiting personnel on as wide a
geographical basis as possible.
Section 6. Relationship to the Bank.—
(a) The Corporation shall be an entity
separate and distinct from the Bank
and the funds of the Corporation shall
be kept separate and apart from those
of the Bank. The provisions of this
Section shall not prevent the
Corporation from making
arrangements with the Bank
regarding facilities, personnel and
services and arrangements for
reimbursement of administrative
expenses paid in the first instance by
either organisation on behalf of the
other.
(b) Nothing in this Agreement shall make
the Corporation liable for the acts or
obligations of the Bank, or the Bank
liable for the acts or obligations of the
Corporation.
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Section 7. Relations With Other International Organisations.—
The Corporation, acting through the Bank, shall enter
into formal arrangements with the United Nations and
may enter into such arrangements with other public
international organisations having specialized responsibilities
in related fields.
Section 8. Location of Offices.—
The principal office of the Corporation shall be in the
same locality as the principal office of the Bank. The
Corporation may establish other offices in the territories of
any member.
Section 9. Depositories.—
Each member shall designate its central bank as a
depository in which the Corporation may keep holdings of
such member’s currency or other assets of the Corporation or,
if it has no central bank, it shall designate for such purpose
such other institution as may be acceptable to the
Corporation.
Section 10. Channel of Communication.—
Each member shall designate an appropriate authority
with which the Corporation may communicate in connection
with any matter arising under this Agreement.
Section 11. Publication of Reports and Provision of
Information.—
(a) The Corporation shall publish an
annual report containing an audited
statement of its account and shall
circulate to members at appropriate
intervals a summary statement of its
financial position and a profit and loss
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statement showing the results of its
operations.
(b) The Corporation may publish such
other reports as it deems desirable to
carry out its purposes.
(c) Copies of all reports, statements and
publications made under this Section
shall be distributed to members.
Section 12. Dividends.—
(a) The Board of Governors may
determine from time to time what
part of the Corporation’s net income
and surplus, after making appropriate
provision for reserves, shall be
distributed as dividends.
(b) Dividends shall be distributed pro
rata in proportion to capital stock held
by members.
(c) Dividends shall be paid in such
manner and in such currency or
currencies as the Corporation shall
determine.
ARTICLE V
WITHDRAWAL; SUSPENSION OF MEMBERSHIP;
SUSPENSION OF OPERATIONS
Section 1. Withdrawal by Members.—
Any member may withdraw from membership in the
Corporation at any time by transmitting a notice in writing to
the Corporation at its principal office. Withdrawal shall
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become effective upon the date such notice is received.
Section 2. Suspension of Membership.
(a) If a member fails to fulfil any of its
obligations to the Corporation, the
Corporation may suspend its
membership by decision of a majority
of the Governors, exercising a
majority of the total voting power.
The member so suspended shall
automatically cease to be a member
one year from the date of its
suspension unless a decision is taken
by the same majority to restore the
member to good standing.
(b) 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 obligations.
Section 3. Suspension or Cessation of Membership in the
Bank.—
Any member which is suspended from membership
in, or ceases to be a member of, the Bank shall automatically
be suspended from membership in, or cease to be a member
of, the Corporation, as the case may be.
Section 4. Rights and Duties of Governments Ceasing to be
Members.—
(a) When a government ceases to be a
member it shall remain liable for all
amounts due from it to the
Corporation. The Corporation shall
arrange for the repurchase of such
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government’s capital stock as a part of
the settlement of accounts with it in
accordance with the provisions of this
Section, but the government shall
have no other rights under this
Agreement except as provided in this
Section and in Article VIII(c).
(b) The Corporation and the government
may agree on the repurchase of the
capital stock of the government on
such terms as may be appropriate
under the circumstances, without
regard to the provisions of paragraph
(c) below. Such agreement may
provide, among other things, for a
final settlement of all obligations of
the government to the Corporation.
(c) If such agreement shall not have been
made within six months after the
government ceases to be a member or
such other time as the Corporation
and such government may agree, the
repurchase price of the government’s
capital stock shall be the value thereof
shown by the books of the
Corporation on the day when the
government ceases to be a member.
The repurchase of the capital stock
shall be subject to the following
conditions:
(i) payments for shares of stock
may be made from time to
time, upon their surrender by
the government, in such
instalments, at such times and
in such available currency or
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currencies as the Corporation
reasonably determines, taking
into account the financial
position of the Corporation;
(ii) any amount due to the
government for its capital stock
shall be withheld so long as the
government or any of its
agencies remains liable to the
Corporation for payment of any
amount and such amount may,
at the option of the
Corporation, be set off, as it
becomes payable, against the
amount due from the
Corporation;
(iii) if the Corporation sustains a
net loss on the investments
made pursuant to Article III,
Section 1, and held by it on the
date when the government
ceases to be a member, and the
amount of such loss exceeds the
amount of the reserves
provided therefor on such
date, such government shall
repay on demand the amount
by which the repurchase price
of its shares of stock would
have been reduced if such loss
had been taken into account
when the repurchase price was
determined.
(d) In no event shall any amount due to a
government for its capital stock under
this Section be paid until six months
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after the date upon which the
government ceases to be a member. If
within six months of the date upon
which any government ceases to be
a member the Corporation suspends
operations under Section 5 of this
Article, all rights of such
government shall be determined by
the provisions of such Section 5 and
such government shall be considered
still a member of the Corporation for
purposes of such Section 5, except
that it shall have no voting rights.
Section 5. Suspension of Operations and Settlement of
Obligations.—
(a) The Corporation may permanently
suspend its operations by vote of a
majority of the Governors exercising a
majority of the total voting power.
After such suspension of operations the Corporation shall forthwith
cease all activities, except those
incident to the orderly realization,
conservation and preservation of its
assets and settlement of its
obligations. Until final settlement of
such obligations and distribution of
such assets, the Corporation shall
remain in existence and all mutual
rights and obligations of the
Corporation and its members under
this Agreement shall continue
unimpaired, except that no member
shall be suspended or withdrawn
and that no distribution shall be made
to members except as in this Section
provided.
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(b) No distribution shall be made to
members on account of their
subscriptions to the capital stock of
the Corporation until all liabilities to
creditors shall have been discharged
or provided for and until the Board of
Governors, by vote of a majority of
the Governors exercising a majority of
the total voting power, shall have
decided to make such distribution.
(c) Subject to the foregoing, the
Corporation shall distribute the
assets of the Corporation to members
pro rata in proportion to capital stock
held by them, subject, in the case of
any member, to prior settlement of all
outstanding claims by the
Corporation against such member.
Such distribution shall be made at
such times, in such currencies, and in
cash or other assets as the
Corporation shall deem fair and
equitable. The shares distributed to
the several members need not
necessarily be uniform in respect of
the type of assets distributed or of the
currencies in which they are
expressed.
(d) Any member receiving assets
distributed by the Corporation
pursuant to this Section shall enjoy
the same rights with respect to such
assets as the Corporation enjoyed
prior to their distribution.

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ARTICLE VI
STATUS, IMMUNITIES AND PRIVILEGES
Section 1. Purposes of Article.—
To enable the Corporation to fulfil the functions with
which it is entrusted the status, immunities and privileges set
forth in this Article shall be accorded to the Corporation in
the territories of each member.
Section 2. Status of the Corporation.—
The Corporation shall possess full juridical
personality and, in particular, the capacity:
(i) to contract;
(ii) to acquire and dispose of
immovable and movable
property;
(iii) to institute legal proceedings.
Section 3. Position of the Corporation with regard to Judicial
Process.—
Actions may be brought against the Corporation only
in a court of competent jurisdiction in the territories of a
member in which the Corporation has an office, has
appointed an agent for the purpose of accepting service or
notice of process, or has issued or guaranteed securities. No
actions shall, however, be brought by members or persons
acting for or deriving claims from members. The property
and assets of the Corporation shall, wheresoever located
and by whomsoever held, be immune from all forms of
seizure, attachment or execution before the delivery of
final judgement against the Corporation.

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Section 4. Immunity of Assets from Seizure.—
Property and assets of the Corporation, wherever
located and by whomsoever held, shall be immune from
search, requisition, confiscation, expropriation or any other
form of seizure by executive or legislative action.
Section 5. Immunity of Archives.—
The archives of the Corporation shall be inviolable.
Section 6. Freedom of assets from Restrictions.—
To the extent necessary to carry out the operations
provided for in this Agreement and subject to the provisions
of Article III, Section 5, and the other provisions of this
Agreement, all property and assets of the Corporation shall
be free from restrictions, regulations, controls and moratoria
of any nature.
Section 7. Privilege for Communications.—
The official communications of the Corporation shall
be accorded by each member the same treatment that it
accords to the official communications of other members.
Section 8. Immunities and Privileges of Officers and
employees.—
All Governors, Directors, Alternates, officers and
employees of the Corporation:
(i) shall be immune from legal
process with respect to acts
performed by them in their
official capacity;
(ii) not being local nationals, shall
be accorded the same
immunities from immigration
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restrictions, alien registration
requirements and national
service obligations and the
same facilities as regards
exchange restrictions as are
accorded by members to the
representatives, officials, and
employees of comparable rank
of other members;
(iii) shall be granted the same
treatment in respect of
travelling facilities as is
accorded by members to
representatives, officials and
employees of comparable rank
of other members.
Section 9. Immunities from Taxation.—
(a) The Corporation, its assets, property,
income and its operations and
transactions authorised by this
Agreement, shall be immune from all
taxation and from all customs duties.
The Corporation shall also be immune
from liability for the collection or
payment of any tax or duty.
(b) No tax shall be levied on or in respect
of salaries and emoluments paid by
the Corporation to Directors,
Alternates, officials or employees of
the Corporation who are not local
citizens, local subjects, or other local
nationals.
(c) No taxation of any kind shall be
levied on any obligation or security
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issued by the Corporation (including
any dividend or interest thereon) by
whomsoever held:
(i) which discriminates against
such obligation or security
solely because it is issued by
the Corporation; or
(ii) if the sole jurisdictional basis
for such taxation is the place or
currency in which it is issued,
made payable or paid, or the
location of any office or place of
business maintained by the
Corporation.
(d) No taxation of any kind shall be
levied on any obligation or security
guaranteed by the Corporation
(including any dividend or interest
thereon) by whomsoever held:
(i) which discriminates against
such obligation or security
solely because it is guaranteed
by the Corporation, or
(ii) if the sole jurisdictional basis
for such taxation is the location
of any office or place of
business maintained by the
Corporation.
Section 10. Application of Article.—
Each member shall take such action as is necessary in
its own territories for the purpose of making effective in terms
of its own law the principles set forth in this Article and shall
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inform the Corporation of the detailed action which it has
taken.
Section 11. Waiver.—
The Corporation in its discretion may waive any of
the privileges and immunities conferred under this Article to
such extent and upon such conditions as it may determine.
ARTICLE VII
AMENDMENTS
(a) This Agreement may be amended by
vote of three- fifths of the Governors
exercising four-fifths of the total
voting power.
(b) Notwithstanding paragraph (a)
above, the affirmative vote of all
Governors is required in the case
of any amendment modifying:
(i) the right to withdraw from the
Corporation provided in Article
V, Section 1;
(ii) the pre-emptive right secured
by Article 11, Section 2(d);
(iii) the limitation on liability
provided in Article 11, Section
4.
(c) Any proposal to amend this
Agreement, whether emanating from
a member, a Governor or the Board of
Directors, shall be communicated to
the Chairman of the Board of
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Governors who shall bring the
proposal before the Board of
Governors. When an amendment has
been duly adopted, the Corporation
shall so certify by formal
communication addressed to all
members. Amendments shall enter
into force for all members three
months after the date of the formal
communication unless the Board of
Governors shall specify a shorter
period.
ARTICLE VIII
INTERPRETATION AND ARBITRATION
(a) Any question of interpretation of the
provisions of this Agreement
arising between any member and the
Corporation or between any members
of the Corporation shall be submitted
to the Board of Directors for its
decision. If the question particularly
affects any member of the
Corporation not entitled to appoint an
Executive Director of the Bank, it shall
be entitled to representation in
accordance with Article IV, Section
4(g).
(b) In any case where the Board of
Directors has given a decision under
(a) above, any member may require
that the question be referred to the
Board of Governors, whose decision
shall be final. Pending the result of the
reference to the Board of Governors,
the Corporation may, so far as it
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deems necessary, act on the basis of
the decision of the Board of Directors.
(c) Whenever a disagreement arises
between the Corporation and a
country which has ceased to be a
member, or between the Corporation
and any member during the
permanent suspension of the
Corporation, such disagree- ment
shall be submitted to arbitration by a
tribunal of three arbitrators, one
appointed by the Corporation,
another by the country involved and
an umpire who, unless the parties
otherwise agree, shall be appointed
by the President of the International
Court of Justice or such other
authority as may have been
prescribed by regulation adopted
by the Corporation. The umpire shall
have full power to settle all questions
of procedure in any case where the
parties are in disagreement with
respect thereto.
ARTICLE IX
FINAL PROVISIONS
Section 1. Entry into force.—
This Agreement shall enter into force when it has
been signed on behalf of not less than 30 governments whose
subscriptions comprise not less than 75 per cent of the total
subscriptions set forth in Schedule A and when the
instruments referred to in Section 2(a) of this Article have
been deposited on their behalf, but in no event shall this
Agreement enter into force before October 1, 1955.
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Section 2. Signature.—
(a) Each government on whose behalf
this Agreement is signed shall deposit
with the Bank an instrument setting
forth that it has accepted this
Agreement without reservation in
accordance with its law and has taken
all steps necessary to enable it to carry
out all of its obligations under this
Agreement.
(b) Each government shall become a
member of the Corporation as from
the date of the deposit on its behalf of
the instrument referred to in
paragraph (a) above except that no
government shall become a
member before this Agreement
enters into force under Section I of
this Article.
(c) This Agreement shall remain open for
signature until the close of business
on December 31, 1956, at the principal
office of the Bank on behalf of the
governments of the countries whose
names are set forth in Schedule A.
(d) After this Agreement shall have
entered into force, it shall be open for
signature on behalf of the government
of any country whose membership
has been approved pursuant to
Article II, Section l (b).
Section 3. Inauguration of the Corporation.—
(a) As soon as this Agreement enters into
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force under Section I of this Article
the Chairman of the Board of
Directors shall call a meeting of the
Board of Directors.
(b) The Corporation shall begin
operations on the date when such
meeting is held.
(c) Pending the first meeting of the Board
of Governors, the Board of Directors
may exercise all powers of the Board
of Governors except those reserved
to the Board of Governors under
this Agreement.
DONE at Washington, in a single copy which shall
remain deposited in the archives of the International Bank
for Reconstruction and Development, which has indicated
by its signature below its agreement to act as depository of
this Agreement and to notify all governments whose names
are set forth in Schedule A of the date when this Agreement
shall enter into force under Article IX, Section I hereof.
SCHEDULE A
SUBSCRIPTIONS TO CAPITAL STOCK OF THE
INTERNATIONAL FINANCE CORPORATION
Country
Number of
shares
Amount (in United
States dollars)
Australia 2,215 2,215,000
Austria 554 554,000
Belgium 2,492 2,492,000
Bolivia 78 78,000
Brazil 1,163 1,163,000
Burma 166 166,000
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Country
Number of
shares
Amount (in United
States dollars)
Canada 3,600 3,600,000
Ceylon 166 166,000
Chile 388 388,000
China 6,646 6,646,000
Colombia 388 388,000
Costa Rica 22 22,000
Cuba 388 388,000
Denmark 753 753,000
Dominican Republic 22 22,000
Ecuador 35 35,000
El Salvador 11 11,000
Ethiopia 33 33,000
Finland 421 421,000
France 5,815 815,000
Germany 3,655 3,655,000
Greece 277 277,000
Guatemala 22 22.000
Haiti 22 22,000
Honduras 11 11,000
Iceland 11 11,000
India 4,431 4,431,000
Indonesia 1,218 1,218,000
Iran 372 372,000
Iraq 67 67,000
Israel 50 50,000
Italy 1,994 1,994,000
Japan 2,769 2,769,000
Jordan 33 33,000
Lebanon 50 50,000
Luxembourg 111 111,000
Mexico 720 720,000
Netherlands 3,046 3,046,000
Nicaragua 9 9,000
Norway 554 54,000
Pakistan 1,108 1,108,000
Panama 2 2,000
Paraguay 16 16,000
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Country
Number of
shares
Amount (in United
States dollars)
Peru 194 194,000
Phillippines 166 166,000
Sweden 1,108 1,108,000
Syria 72 72,000
Thailand 139 139,000
Turkey 476 476,000
Union of South Africa 1,108 1,108,000
United Arab Republic 590 590,000
United Kingdom 14,400 14,400,000
United States 35,168 35,168,000
Uruguay 116 116,000
Venezuela 116 116,000
Yugoslavia 443 443,000
Total 100,000 $100,000,000
FOURTH SCHEDULE
ARTICLES OF AGREEMENT OF THE INTERNATIONAL
DEVELOPMENT ASSOCIATION
The Governments on whose behalf this Agreement is
signed, Considering:
That mutual co-operation for constructive economic
purposes, healthy development of the world economy and
balanced growth of international trade foster international
relationships conducive to the maintenance of peace and
world prosperity;
That in an acceleration of economic development
which will promote higher standards of living and economic
and social progress in the less developed countries is
desirable not only in the interests of those countries but also
in the interests of the international community as a whole;
That achievement of these objectives would be
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facilitated by an increase in the international flow of capital,
public and private to assist in the development of the
resources of the less-developed countries,
do hereby agree as follows:
INTRODUCTORY ARTICLE
THE INTERNATIONAL DEVELOPMENT ASSOCIATION
(hereinafter called “the Association”) is established and shall
operate in accordance with- the following provisions:
ARTICLE I
PURPOSES
The purposes of the Association are to promote
economic development, increase productivity and thus raise
standards of living in the less-developed areas of the
world included within the Association’s membership, in
particular by providing finance to meet their important
developmental requirements on terms which are more
flexible and bear less heavily on the balance of payments than
those of conventional loans, thereby furthering the
developmental objectives of the International Bank for
Reconstruction and Development (hereinafter called “the
Bank”) and supplementing its activities.
The Association shall be guided in all its decisions
by the provisions of this Article.
ARTICLE II
MEMBERSHIP; INITIAL SUBSCRIPTIONS
Section 1. Membership.—
(a) The original members of the
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Association shall be those members of
the Bank listed in Schedule A hereto
which, on or before the date specified
in Article XI, Section 2(c), accept
membership in the Association.
(b) Membership shall be open to other
members of the Bank at such times
and in accordance with such terms as
the Association may determine.
Section 2. Initial Subscriptions.—
(a) Upon accepting membership, each
member shall subscribe funds in the
amount assigned to it. Such
subscriptions are herein referred to as
initial subscriptions.
(b) The initial subscription assigned to
each original member shall be in the
amount set forth opposite its name in
Schedule A, expressed in terms of
United States dollars of the weight
and fineness in effect on January 1,
1960.
(c) Ten percent of the initial subscription
of each original member shall be
payable in gold or freely
convertible currency as follows: fifty
per cent within thirty days after the
date on which the Association shall
begin operations pursuant to Article
XI, Section 4, or on the date on which
the original member becomes a
member, whichever shall be later;
twelve and one-half percent one
year after the beginning of
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operations of the Association; and
twelve and one-half percent each year
thereafter at annual intervals until the
ten percent portion of the initial
subscription shall have been paid in
full.
(d) The remaining ninety per cent of
the initial subscription of each
original member shall be payable in
gold or freely convertible currency in
the case of members listed in Part I of
Schedule A, and in the currency of the
subscribing member in the case of
members listed in Part 11 of Schedule
A. This ninety percent portion of
initial subscriptions of original
members shall be payable in five
equal annual instalments as
follows: the first such instalment
within thirty days after the date on
which the Association shall begin
operations pursuant to Article XI,
Section 4, or on the date on which the
original member becomes a member,
whichever shall be later; the second
instalment one year after the
beginning of operations of the
Association, and succeeding
instalments each year thereafter at
annual intervals until the ninety
percent portion of the initial
subscription shall have been paid in
full.
(e) The Association shall accept from any
member, in place of any part of the
member’s currency paid in or payable
by the member under the preceding
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subsection (d) or under Section 2 of Article IV and not needed by the
Association in its operations, notes or
similar obligations issued by the
government of the member or the
depository designated by such
member, which shall be
nonnegotiable, non-interest-bearing
and payable at their par value on
demand to the account of the
Association in the designated
depository.
(f) For the purposes of this Agreement
the Association shall regard as “freely
convertible currency”:
(i) currency of a member which
the Association determines,
after consultation with the
International Monetary Fund,
is adequately convertible into
the currencies of other
members for the purposes of
the Association’s operations; or
(ii) currency of a member which
such member agrees, on terms
satisfactory to the Association,
to exchange for the currencies
of other members for the
purposes of the Association’s
operations.
(g) Except as the Association may
otherwise agree, each member listed
in Part I of Schedule A shall maintain,
in respect of its currency paid in by it
as freely convertible currency
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pursuant to subsection (d) of this
Section, the same convertibility as
existed at the time of payment.
(h) The conditions on which the initial
subscriptions of members other than
original members may be made, and
the amounts and the terms of
payment thereof, shall be determined
by the Association pursuant to Section
l (b) of this Article.
Section 3. Limitation on Liability.—
No member shall be liable, by reason of its
membership, for obligations of the Association.
ARTICLE III
ADDITIONS TO RESOURCES
Section 1. Additional Subscriptions.—
(a) The Association shall at such time
as it deems appropriate in the light
of the schedule for completion of
payments on initial subscriptions of
original members, and at intervals of
approximately live years thereafter,
review the adequacy of its resources
and, if it deems desirable, shall
authorise a general increase in
subscriptions. Notwithstanding the
foregoing, general or individual
increases in subscriptions may be
authorised at any time, provided that
an individual increase shall be
considered only at the request of the
member involved. Subscriptions
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pursuant to this Section are herein
referred to as additional
subscriptions.
(b) Subject to the provisions of paragraph
(c) below, when additional
subscriptions are authorised, the
amounts authorised for subscription
and the terms and conditions relating
thereto shall be as determined by the
Association.
(c) When any additional subscription is
authorised, each member shall be
given an opportunity to subscribe,
under such conditions as shall be
reasonably determined by the
Association, an amount which will
enable it to maintain its relative
voting power, but no member shall be
obligated to subscribe.
(d) All decisions under this Section shall
be made by a two- thirds majority of
the total voting power.
Section 2. Supplementary Resources provided by a Member
in the Currency of Another Member.—
(a) The Association may enter into
arrangements, on such terms and
conditions consistent with the
provisions of this Agreement as may
be agreed upon, to receive from any
member, in addition to the
amounts payable by such member
on account of its initial or any
additional subscription,
supplementary resources in the
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currency of another member,
provided that the Association shall
not enter into any such arrangement
unless the Association is satisfied that
the member whose currency is
involved agrees to the use of such
currency as supplementary resources
and to the terms and conditions
governing such use. The
arrangements under which any such
resources are received may include
provisions regarding the
disposition of earnings on the
resources and regarding the
disposition of the resources in the
event that the member providing
them ceases to be a member or the
Association permanently suspends its
operations.
(b) The Association shall deliver to the
contributing member a Special
Development Certificate setting forth
the amount and currency of the
resources so contributed and the
terms and conditions of the
arrangements relating to such
resources. A Special Development
Certificate shall not carry any voting
rights and shall be transferable only to
the Association.
(c) Nothing in this Section shall preclude
the Association from accepting
resources from a member in its
own currency on such terms as may
be agreed upon.

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ARTICLE IV
CURRENCIES
Section 1. Use of Currencies.—
(a) Currency of any member listed in Part
11 of Schedule A, whether or not
freely convertible, received by the
Association pursuant to Article 11,
Section 2(d), in payment of the
ninety percent portion payable
thereunder in the currency of such
member, and currency of such
member derived therefrom as
principal interest or other charges,
may be used by the Association for
administrative expenses incurred by
the association in the territories of
such member and, insofar as
consistent with sound monetary
policies, in payment for goods and
services produced in the territories of
such member and required for
projects financed by the Association
and located in such territories; and in
addition when and to the extent
justified by the economic and
financial situation of the member
concerned as determined by
agreement between the member and
the Association, such currency shall
be freely convertible or otherwise
usable for projects financed by the
Association and located outside the
territories of the member.
(b) The usability of currencies received
by the Association in payment of
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subscriptions other than initial
subscriptions of original members,
and currencies derived therefrom as
principal, interest or other charges,
shall be governed by the terms and
conditions on which such
subscriptions are authorised.
(c) The usability of currencies received
by the Association as supplementary
resources other than subscriptions,
and currencies derived therefrom as
principal, interest or other charges,
shall be governed by the terms of the
arrangements pursuant to which such
currencies are received.
(d) All other currencies received by the
Association may be freely used and
exchanged by the Association and
shall not be subject to any restriction
by the member whose currency is
used or exchanged; provided that the
foregoing shall not preclude the
association from entering into any
arrangements with the member in
whose territories any project financed
by the Association is located
restricting the use by the Association
of such member’s currency received
as principal, interest or other charges
in connection with such financing.
(e) The Association shall take appropriate
steps to ensure that, over reasonable
intervals of time, the portions of the
subscriptions paid under Article 11,
Section 2(d) by members listed in
Part I of Schedule A shall be used by
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the Association on an approximately
pro rata basis, provided, however,
that such portions of such
subscriptions as are paid in gold or in
a currency other than that of the
subscribing member may be used
more rapidly.
Section 2. Maintenance of Value of Currency Holdings.—
(a) Whenever the par value of a
member’s currency is reduced or the
foreign exchange value of a
member’s currency has, in the opinion
of the Association, depreciated to a
significant extent within that
member’s territories, the member
shall pay to the Association within a
reasonable time an additional amount
of its own currency sufficient to
maintain the value, as of the time of
subscription, of the amount of the
currency of such member paid into
the Association by the member under
Article 11, Section 2(d), and currency
furnished under the provisions of the
present paragraph, whether or not
such currency is held in the form of
notes accepted pursuant to Article
11, Section 2(e), provided, however,
that the foregoing shall apply only so
long as and to the extent that such
currency shall not have been initially
disbursed or exchanged for the
currency of another member.
(b) Whenever the par value of a
member’s currency is increased, or
the foreign exchange value of a
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member’s currency has, in the opinion
of the Association, appreciated to a
significant extent within that
member’s territories, the Association
shall return to such member within a
reasonable time an amount of that
member’s currency equal to the
increase in the value of the amount of
such currency to which the provisions
of paragraph (a) of this Section are
applicable.
(c) The provisions of the preceding
paragraphs may be waived by the
Association when a uniform
proportionate change in the par value
of the currencies of all its members is
made by the International Monetary
Fund.
(d) Amounts furnished under the
provisions of paragraph (a) of this
Section to maintain the value of any
currency shall be convertible and
usable to the same extent as such
currency.
ARTICLE V
OPERATIONS
Section 1. Use of Resources and Conditions of Financing
(a) The Association shall provide
financing to further development in
the less-developed areas of the
world included within the
Association’s membership.—

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(b) Financing provided by the
Association shall be for purposes
which in the opinion of the
Association are of high
developmental priority in the light of
the needs of the area or areas
concerned and, except in special
circumstances, shall be for specific
projects.
(c) The Association shall not provide
financing if in its opinion such
financing is available from private
sources on terms which are
reasonable for the recipient or could
be provided by a loan of the type
made by the Bank.
(d) The Association shall not provide
financing except upon the
recommendation of a competent
committee, made after a careful study
of the merits of the proposals. Each
such committee shall be appointed by
the Association and shall include a
nominee of the Governor or
Governors representing the member
or members in whose territories the
project under consideration is located
and one or more members of the
technical staff of the Association. The
requirement that the committee
include the nominee of a Governor or
Governors shall not apply in the
case of financing provided to a
public international or regional
organisation.
(e) The Association shall not provide
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financing for any project if the
member in whose territories the
project is located objects to such
financing, except that it shall not be
necessary for the Association to
assure itself that individual members
do not object in the case of financing
provided to a public international or
regional organisation.
(f) The Association shall impose no
conditions that the proceeds of its
financing shall be spent in the
territories of any particular member
or members. The foregoing shall not
preclude the Association from
complying with any restrictions on
the use of funds imposed in
accordance with the provisions of
these Articles, including restrictions
attached to supplementary resources
pursuant to agreement between the
Association and the contributor.
(g) The Association shall make
arrangements to ensure that the
proceeds of any financing are used
only for the purposes for which the
financing was provided, with due
attention to considerations of
economy, efficiency and competitive
international trade and without
regard to political or other non-
economic influences or
considerations.
(h) Funds to be provided under any
financing operation shall be made
available to the recipient only to
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meet expenses in connection with the
project as they are actually incurred.
Section 2. Form and Terms of Financing.—
(a) Financing by the Association shall
take the form of loans. The
Association may, however, provide
other financing, either—
(i) out of funds subscribed
pursuant to Article III, Section
1, and, funds derived
therefrom as principal interest
or other charges, if the
authorisation for such
subscriptions expressly
provides for such financing; or
(ii) in special circumstances, out
of supplementary resources
furnish to the Association, and
funds derived therefrom as
principal, interest or other
charges, if the arrangements
under which such resources are
furnished expressly authorise
such financing.
(b) Subject to the foregoing paragraph,
the Association may provide
financing in such forms and on such
terms as it may deem appropriate,
having regard to the economic
position and prospects of the area or
areas concerned and to the nature and
requirements of the project.
(c) The Association may provide
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financing to a member, the
government of a territory
included within the Association’s
membership, a political subdivision of
any of the foregoing, a public or
private entity in the territories of a
member or members, or to a public
international or regional organisation.
(d) In the case of a loan to an entity other
than a member, the Association may,
in its discretion, require a suitable
governmental or other guarantee or
guarantees.
(e) The Association, in special cases, may
make foreign exchange available for
local expenditures.
Section 3. Modifications of Terms of Financing.—
The Association may, when and to the extent it deems
appropriate in the light of all relevant circumstances,
including the financial and economic situation and prospects
of the members concerned, and on such conditions as it may
determine, agree to a relaxation or other modification of the
terms on which any of its financing shall have been provided.
Section 4. Co-operation with Other International
Organisations and Members Providing Development
Assistance.—
The Association shall co-operate with those public
international organisations and members which provide
financial and technical assistance to the less developed areas
of the world.
Section 5. Miscellaneous Operations.—

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In addition to the operations specified elsewhere
in this Agreement, the Association may:
(i) borrow funds with the
approval of the member in
whose currency the loan is
denominated;
(ii) guarantee securities in which it
has invested in order to
facilitate their sale;
(iii) buy and sell securities it has
issued or guaranteed or in
which it has invested;
(iv) in special cases, guarantee
loans from other sources for
purposes not inconsistent with
the provisions of these Articles;
(v) provide technical assistance
and advisory services at the
request of a member; and
(vi) exercise such other powers
incidental to its operations as
shall be necessary or desirable
in furtherance of its purposes.
Section 6. Political Activity Prohibited.—
The Association and its officers shall not interfere in
influenced in their decisions by the political character of the
member or members concerned. Only economic
considerations shall be relevant to their decisions, and these
considerations shall be weighed impartially in order to
achieve the purposes stated in this Agreement.
the political affairs of any member; nor shall they be
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ARTICLE VI
ORGANISATION AND MANAGEMENT
Section 1. Structure of the Association.—
The Association shall have a Board of Governors,
Executive Directors, a President and such other officers and
staff to perform such duties as the Association may
determine.
Section 2. Board of Governors.—
(a) All powers of the Association shall be
vested in the Board of Governors.
(b) Each Governor and Alternate
Governor of the Bank appointed by a
member of the Bank which is also a
member of the Association shall ex-
officio be a Governor and Alternate
Governor, respectively, of the
Association. No Alternate Governor
may vote except in the absence of his
principal. The Chairman of the Board
of Governors of the Bank shall ex-
officio be Chairman of the Board
of Governors of the Association
except that if the Chairman of the
Board of Governors of the Bank shall
represent a state which is not a
member of the Association, then the
Board of Governors shall select one of
the Governors as Chairman of the
Board of Governors. Any Governor
or Alternate Governor shall cease to
hold office if the member by which he
was appointed shall cease to be a
member of the Association.
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(c) The Board of Governors may delegate
to the Executive Directors authority to
exercise any of its powers, except the
power to:
(i) admit new members and
determine the conditions of
their admission;
(ii) authorise additional
subscriptions and determine
the terms and conditions
relating thereto;
(iii) suspend a member;
(iv) decide appeals from
interpretations of this
Agreement given by the
Executive Directors;
(v) make arrangements pursuant
to Section 7 of this Article to co-
operate with other international
organisations (other than
informal arrangements of a
temporary and administrative
character);
(vi) decide to suspend permanently
the operations of the
Association and to distribute its
assets;
(vii) determine the distribution of
the Association’s net income
pursuant to Section 12 of this
Article; and

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(viii) approve proposed amendments
to this Agreement.
(d) 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 Executive Directors.
(e) The annual meeting of the Board of
Governors shall be held in
conjunction with the annual meeting
of the Board of Governors of the
Bank.
(f) A quorum for any meeting of the
Board of Governors shall be a
majority of the Governors, exercising
not less than two-thirds of the total
voting power.
(g) The Association may by
regulation establish a procedure
whereby the Executive Directors may
obtain a vote of the Governors on a
specific question without calling a
meeting of the Board of Governors.
(h) The Board of Governors, and the
Executive Directors to the extent
authorised, may adopt such rules
and regulations as may be necessary
or appropriate to conduct the
business of the Association.
(i) Governors and Alternate Governors
shall serve as such without
compensation from the Association.

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Section 3. Voting.—
(a) Each original member shall, in respect
of its initial subscription, have 500
votes plus one additional vote for
each $5,000 of its initial subscription.
Subscriptions other than initial
subscriptions of original members
shall carry such voting rights as the
Board of Governors shall determine
pursuant to the provisions of Article
III, Section l(b) or Article III, Section
l(b) and (c), as the case may be.
Additions to resources other than
subscriptions under Article 111,
Section 1, shall not carry voting rights.
(b) Except as otherwise specifically
provided, all matters before the
Association shall be decided by a
majority of the votes cast.
Section 4. Executive Directors.—
(a) The Executive Directors shall be
responsible for the conduct of the
general operations of the Association,
and for this purpose shall exercise all
the powers given to them by this
Agreement or delegated to them by
the Board of Governors.
(b) The Executive Directors of the
Association shall be composed ex-
officio of each Executive Director of
the Bank who shall have been—
(i) appointed by a member of the
Bank which is also a member
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of the Association, or
(ii) elected in an election in which
the votes of at least one
member of the Bank which is
also a member of the
Association shall have counted
toward his election. The
Alternate to each such
Executive Director of the
Bank shall ex-officio be an
Alternate Director of the
Association. Any Director shall
cease to hold office if the
member by which he was
appointed, or if all the members
whose votes counted toward
his election, shall cease to be
members of the Association.
(c) Each Director who is an appointed
Executive Director of the Bank shall
be entitled to cast the number of
votes which the member by which he
was appointed is entitled to cast in the
Association. Each Director who is an
elected Executive Director of the Bank
shall be entitled to cast the number of
votes which the member or members
of the Association whose votes
counted toward his election in the
Bank are entitled to cast in the
Association. All the votes which a
Director is entitled to cast shall be cast
as a unit.
(d) An Alternate Director shall have full
power to act in the absence of the
Director who shall have appointed
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him. When a Director is present, his
Alternate may participate in meetings
but shall not vote.
(e) A quorum for any meeting of the
Executive Directors shall be a majority
of the Directors exercising not less
than one-half of the total voting
power.
(f) The Executive Directors shall meet as
often as the business of the
Association may require.
(g) The Board of Governors shall adopt
regulations under which a member of
the Association not entitled to appoint
an Executive Director of the Bank may
send a representative to attend any
meeting of the Executive Directors
of the Association when a request
made by, or a matter particularly
affecting, that member is under
consideration.
Section 5. President and Staff.—
(a) The President of the Bank shall be ex-
officio President of the Association.
The President shall be Chairman of
the Executive Directors of the
Association but shall have no vote
except a deciding vote in case of an
equal division. He may participate in
meetings of the Board of Governors
but shall not vote at such meetings.
(b) The President shall be chief of the
operating staff of the Association.
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Under the direction of the Executive
Directors he shall conduct the
ordinary business of the Association
and under their general control shall
be responsible for the organisation,
appointment and dismissal of the
officers and staff. To the extent
practicable, officers and staff of the
Bank shall be appointed to serve
concurrently as officers and staff of
the Association.
(c) The President, officers and staff of the
Association, in the discharge of their
offices, owe their duty entirely to the
Association and to no other authority.
Each member of the Association 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.
(d) In appointing officers and staff the
President shall, subject to the
paramount importance of securing
the highest standards of efficiency
and of technical competence, pay due
regard to the importance of recruiting
personnel on as wide a geographical
basis as possible.
Section 6. Relationship to the Bank.—
(a) The Association shall be an entity
separate and distinct from the Bank
and the funds of the Association shall
be kept separate and apart from those
of the Bank. The Association shall not
borrow from or lend to the Bank,
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except that this shall not preclude the
Association from investing funds not
needed in its financing operations in
obligations of the Bank.
(b) The Association may make
arrangements with the Bank
regarding facilities, personnel and
services and arrangements for
reimbursement of administrative
expenses paid in the first instance by
either organisation on behalf of the
other.
(c) Nothing in this Agreement shall make
the Association liable for the acts or
obligations of the Bank, or the Bank
liable for the acts or obligations of the
Association.
Section 7. Relations with Other International Organisations.—
The Association shall enter into formal arrangements
with the United Nations and may enter into such
arrangements with other public international organisations
having specialized responsibilities in related fields.
Section 8. Location of Offices.—
The principal office of the Association shall be the
principal office of the Bank. The Association may establish
other offices in the territories of any member.
Section 9. Depositories.—
Each member shall designate its central bank as a
depository in which the Association may keep holdings of
such member’s currency or other assets of the Association, or,
if it has no central bank, it shall designate for such purpose
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such other institution as may be acceptable to the Association.
In the absence of any different designation, the depository
designated for the Bank shall be the depository for the
Association.
Section 10. Channel of Communication.—
Each member shall designate an appropriate authority
with which the Association may communicate in connection
with any matter arising under this Agreement. In the
absence of any different designation, the channel of
communication designated for the Bank shall be the channel
for the Association.
Section 11. Publication of Reports and Provisions
of Information.—
(a) The Association shall publish an
annual report containing an audited
statement of its accounts and shall
circulate to members at appropriate
intervals a summary statement of its
financial position and of the results of
its operations.
(b) The Association may publish such
other reports as it deems desirable to
carry out its purposes.
(c) Copies of all reports, statements and
publications made under this Section
shall be distributed to members.
Section 12. Disposition of Net Income.—
The Board of Governors shall determine from time to
time the disposition of the Association’s net income, having
due regard to provision for reserves and contingencies.

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ARTICLE VII
WITHDRAWAL; SUSPENSION OF MEMBERSHIP;
SUSPENSION OF OPERATIONS
Section 1. Withdrawals by Members.—
Any member may withdraw from membership in the
Association at any time by transmitting a notice in writing to
the Association at its principal office. Withdrawal shall
become effective upon the date such notice is received.
Section 2. Suspension of Membership.—
(a) If a member fails to fulfil any of its
obligations to the Association, the
Association may suspend its
membership by decision of a majority
of the Governors, exercising a
majority of the total voting power.
The member so suspended shall
automatically cease to be a member
one year from the date of its
suspension unless a decision is taken
by the same majority to restore good
standing.
(b) 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 obligations.
Section 3. Suspension or Cessation of Membership in the
Bank.—
Any member which is suspended from membership
in, or ceases to be a member of, the Bank shall automatically
be suspended from membership in, or cease to be a member
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of, the Association, as the case may be.
Section 4. Rights and Duties of Governments Ceasing to be
Members.—
(a) When a government ceases to be a
member, it shall have no rights under
this Agreement except as provided in
this Section and in Article X(c), but it
shall, except as in this Section
otherwise provided, remain liable for
all financial obligations undertaken
by it to the Association, whether as a
member, borrower, guarantor or
otherwise.
(b) When a government ceases to be a
member, the Association and the
government shall proceed to a
settlement of accounts. As part of
such settlement of accounts, the
Association and the government may
agree on the amounts to be paid to the
government on account of its
subscription and on the time and
currencies of payment. The term
“subscription” when used in relation
to any member government shall for
the purposes of this Article be
deemed to include both the initial
subscription and any additional
subscription of such member
government.
(c) If no such agreement is reached
within six months from date when the
government ceased to be a member,
or such other time as may be agreed
upon by the Association and the
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government, the following provisions
shall apply:
(i) The government shall be
relieved of any further
liability to the Association on
account of its subscription,
except that the government
shall pay to the Association
forthwith amounts due and
unpaid on the date when the
government ceased to be a
member and which in the
opinion of the Association are
needed by it to meet its
commitments as of that
date under its financing
operations.
(ii) The Association shall return to
the government funds paid in
by the government on account
of its subscription or derived
therefrom as principal
repayments and held by the
Association on the date when
the government ceased to be a
member, except to the extent
that in the opinion of the
Association such funds will be
needed by it to meet its
commitments as of that
date under its financing
operations.
(iii) The Association shall pay over
to the government a pro rata
share of all principal
repayments received by the
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Association after the date on
which the government ceases to
be a member on loans
contracted prior thereto, except
those made out of
supplementary resources
provided to the Association
under arrangements
specifying special liquidation
rights. Such share shall be such
proportion of the total principal
amount of such loans as the
total amount paid by the
government on account of its
subscription and not returned
to it pursuant to clause (ii)
above shall bear to the total
amount paid by all members on
account of their subscriptions
which shall have been used or
in the opinion of the
Association will be needed
by it to meet its commitments
under its financial operations as
of the date on which the
government ceases to be a
member. Such payment by the
Association shall be made in
instalments when and as such
principal repayments are
received by the Association, but
not more frequently than
annually. Such instalments
shall be paid in the currencies
received by the Association
except that the Association
may in its discretion make
payment in the currency of
the government concerned.
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(iv) Any amount due to the
government on account of its
subscription may be withheld
so long as that government, or
the government of any
territory included within its
membership, or any political
sub-division or any agency of
any of the foregoing remains
liable, as borrower or
guarantor, to the Association,
and such amount may, at the
option of the Association, be
applied against any such
liability as it matures.
(v) In no event shall the
government receive under this
paragraph (c) an amount
exceeding, in the aggregate, the
lesser of the two following: (a)
the amount paid by the
government on account of its
subscription, or (b) such
proportion of the net assets of
the Association, as shown on
the books of the Association as
of the date on which the
government ceased to be a
member, as the amount of its
subscription shall bear to the
aggregate amount of the
subscriptions of all members.
(vi) All calculations required
hereunder shall be made on
such basis as shall be
reasonably determined by the
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Association.
(d) In no event shall any amount due to a
government under this Section be
paid until six months after the date
upon which the government ceases to
be a member. If within six months of
the date upon which any government
ceases to be a member the Association
suspends operations under Section 5
of this Article, all rights of such
government shall be determined by
the provisions of such Section 5 and
such government shall be considered
a member of the Association for
purposes of such Section 5, except
that it shall have no voting rights.
Section 5. Suspension of Operations and Settlement of
Obligations.—
(a) The Association may permanently
suspend its operations by vote of a
majority of the Governors exercising a
majority of the total voting power.
After such suspension of operations
the Association shall forthwith
cease all activities except those
incident to the orderly realization,
conservation and preservation of its
assets and settlements of its
obligations. Until final settlement of
such obligations and distribution of
such assets, the Association shall
remain in existence and all mutual
rights and obligations of the
Association and its members under
this Agreement shall continue
unimpaired, except that no
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member shall be suspended or shall
withdraw and that no distribution
shall be made to members except as in
this Section provided.
(b) No distribution shall he made to
members on account of their
subscriptions until all liabilities to
creditors shall have been discharged
or provided for and until the Board of
Governors, by vote of a majority of
the Governors exercising a majority of
the total voting power, shall have
decided to make such distribution.
(c) Subject to the foregoing, and to
any special arrangement for the
disposition of supplementary
resources agreed upon in connection
with the provision of such resources
to the Association, the Association
shall distribute its assets to members
pro rata in proportion to amounts
paid in by them on account of their
subscriptions. Any distribution
pursuant to the foregoing provisions
of this paragraph (c) shall be subject,
in the case of any member, to prior
settlement of all outstanding claims
by the Association against such
member. Such distribution shall be
made at such times, in such
currencies, and in cash or other assets
as the Association shall deem fair and
equitable. Distribution to the several
members need not be uniform in
respect of the types of assets
distributed or of the currencies in
which they are expressed.
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(d) Any member receiving assets
distributed by the Association
pursuant to this Section or Section 4
shall enjoy the same rights with
respect to such assets as the
Association enjoyed prior to their
distribution.
ARTICLE VIII
STATUS, IMMUNITIES AND PRIVILEGES
Section 1. Purposes of Article.—
To enable the Association to fulfil the functions with
which it is entrusted, the status, immunities and privileges
provided in this Article shall be accorded to the Association
in the territories of each member.
Section 2. Status of the Association.—
The Association shall possess full juridical
personality, and in particular, the capacity:
(i) to contract;
(ii) to acquire and dispose of
immovable and movable
property;
(iii) to institute legal proceedings.
Section 3. Position of the Association with Regard to Judicial
Process.—
Actions may be brought against the Association only
in a court of competent jurisdiction in the territories of a
member in which the Association has an office, has appointed
an agent for the purpose of accepting service or notice of
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process or has issued or guaranteed securities. No actions
shall, however, be brought by members or persons acting for
or deriving claims from members. The property and assets of
the Association shall, wheresoever located and by
whomsoever held, be immune from all forms of seizure,
attachment or execution before the delivery of final
judgement against the Association.
Section 4. Immunity of Assets from Seizure.—
Property and assets of the Association, wherever
located and by whomsoever held, shall be immune from
search, requisition, confiscation, expropriation or any other
form of seizure by executive or legislative action.
Section 5. Immunity of Archives.—
The archives of the Association shall be inviolable.
Section 6. Freedom of Assets from Restrictions.—
To the extent necessary to carry out the operations
provided for in this Agreement and subject to the provisions
of this Agreement, all property and assets of the Association
shall be free from restrictions, regulations, controls and
moratoria of any nature
Section 7. Privilege for Communications.—
The official communications of the Association shall
be accorded by each member the same treatment that it
accords to the official communications of other members.
Section 8. Immunities and Privileges of Officers and
Employees.—
All Governors, Executive Directors, Alternate,
officers and employees of the Association
(i) shall be immune from legal
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process with respect to acts
performed by them in their
official capacity except when
the Association waives this
immunity;
(ii) not being local nationals, shall
be accorded the same
immunities from immigration
restrictions, alien registration
requirements and national
service obligations and the
same facilities as regards
exchange restrictions as are
accorded by members to the
representatives, officials, and
employees of comparable rank
of other members;
(iii) shall be granted the same
treatment in respect of
travelling facilities as is
accorded by members to
representatives, officials and
employees of comparable rank
of other members.
Section 9. Immunities from Taxation.—
(a) The Association, its assets, property,
income and its operations and
transactions authorised by this
Agreement, shall be immune from all
taxation and from all customs duties. The Association shall also be immune
from liability for the collection or
payment of any tax or duty.
(b) No tax shall be levied on or in respect
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of salaries and emoluments paid by
the Association to Executive
Directors, Alternates, officials or
employees of the Association who are
not local citizens, local subjects, or
other local nationals.
(c) No taxation of any kind shall be
levied on any obligation or security
issued by the Association (including
any dividend or interest thereon) by
whomsoever held—
(i) which discriminates against
such obligation or security
solely because it is issued by
the Association; or
(ii) if the sole jurisdictional basis
for such taxation is the place or
currency in which it is issued,
made payable or paid, or the
location of any office or place of
business maintained by the
Association.
(d) No taxation of any kind shall be
levied on any obligation or security
guaranteed by the Association
(including any dividend or interest
thereon) by whomsoever held—
(i) which discriminates against
such obligation or security
solely because it is guaranteed
by the Association; or
(ii) if the sole jurisdictional basis
for such taxation is the location
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of any office or place of
business maintained by the
Association.
Section 10. Application of Article.—
Each member shall take such action as is necessary in
its own territories for the purpose of making effective in terms
of its own law the principles set forth in this Article and shall
inform the Association of the detailed action which it has
taken.
ARTICLE IX
AMENDMENTS
(a) Any proposal to introduce
modifications in this Agreement,
whether emanating from a member, a
Governor or the Executive Directors,
shall be communicated to the
Chairman of the Board of Governors
who shall bring the proposal before
the Board. If the proposed
amendment is approved by the Board,
the Association shall, by circular letter
or telegram, ask all members whether
they accept the proposed
amendment. When three-fifths of the
members having four-fifths of the
total voting power, have accepted the
proposed amendments, the
Association shall certify the fact by
formal communication addressed to
all members.
(b) Notwithstanding (a) above,
acceptance by all members is required
in the case of any amendments
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modifying—
(i) the right to withdraw from the
Association provided in Article
VII, Section 1;
(ii) the right secured by Article III,
Section 1(c);
(iii) the limitation on liability
provided in Article II, Section
3.—
(c) Amendments shall enter into force for
all members three months, after the
date of the formal communication
unless a shorter period is specified in
the circular letter or telegram.
ARTICLE X
INTERPRETATION & ARBITRATION
(a) Any question of interpretation of the
provisions of this Agreement
arising between any member and the
Association or between any members
of the Association shall be submitted
to the Executive Directors for their
decision. If the question particularly
affects any member of the Association
not entitled to appoint an Executive
Director of the Bank, it shall be entitled to representation in
accordance with Article VI, Section
4(g).
(b) In any case where the Executive
Directors have given a decision under
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(a) above, any member may require
that the question be referred to the
Board of Governors, whose decision
shall be final. Pending the result of the
reference to the Board of Governors,
the Association may, so far as it
deems necessary, act on the basis of
the decision of the Executive
Directors.
(c) Whenever a disagreement arises
between the Association and a
country which has ceased to be a
member, or between the Association
and any member during the
permanent suspension of the
Association, such disagreement shall
be submitted to arbitration by a
tribunal of three arbitrators, one
appointed by the Association, another
by the country involved and an
umpire who, unless the parties
otherwise agree, shall be appointed
by the President of the International
Court of Justice or such other
authority as may have been
prescribed by regulation adopted
by the Association. The umpire shall
have full power to settle all questions
of procedure in any case where the
parties are in disagreement with
respect thereto.
ARTICLE XI
FINAL PROVISIONS
Section 1. Entry into Force.—

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This Agreement shall enter into force when it has
been signed on behalf of governments whose subscriptions
comprise not less than sixty-five per cent of the total
subscriptions set forth in Schedule A and when the
instruments referred to in Section 2(a) of this Article have
been deposited on their behalf, but in no event shall this
Agreement enter into force before September 15, 1960.
Section 2. Signature.—
(a) Each government on whose behalf
this Agreement is signed shall deposit
with the Bank an instrument setting
forth that it has accepted this
Agreement in accordance with its law
and has taken all steps necessary to
enable it to carry out all of its
obligations under this Agreement.
(b) Each government shall become a
member of the Association as from
the date of the deposit on its behalf of
the instrument referred to in
paragraph (a) above except that no
government shall become a
member before this Agreement
enters into force under Section I of
this Article.
(c) This Agreement shall remain open for
signature until the close of business
on December 31, 1960, at the principal
office of the Bank, on behalf of the
governments of the states whose
names are set forth in Schedule A,
provided that, if this Agreement shall
not have entered into force by that
date, the Executive Directors of the
Bank may extend the period during
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which this Agreement shall remain
open for signature by not more than
six months.
(d) After this Agreement shall have
entered into force, it shall be open for
signature on behalf of the government
of any state whose membership shall
have been approved pursuant to
Article 11, Section l(b).
Section 3. Territorial Application.—
By its signature of this Agreement, each government
accepts it both on its own behalf and in respect of all
territories for whose international relations such government
is responsible except those which are excluded by such
government by written notice to the Association.
Section 4. Inauguration of the Association.-
(a) As soon as this Agreement enters into
force under Section I of this Article
the President shall call a meeting of
the Executive Directors.
(b) The Association shall begin
operations on the date when such
meeting is held.
(c) Pending the first meeting of the Board
of Governors, the Executive Directors
may exercise all the powers of the
Board of Governors except those
reserved to the Board of Governors
under this Agreement.

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Section 5. Registration.—
The Bank is authorised to register this Agreement
with the Secretariat of the United Nations in accordance with
Article 102 of the Charter of the United Nations and the
Regulations thereunder adopted by the General Assembly.
Done at Washington, in a single copy which shall remain
deposited in the archives of the International Bank for
Reconstruction and Development, which has indicated by its
signature below its agreement to act as depository of this
Agreement, to register this Agreement with the Secretariat of
the United Nations and to notify all governments whose
names are set forth in Schedule A of the date when this
Agreement shall have entered into force under Article XI,
Section I hereof.
SCHEDULE A
INITIAL SUBSCRIPTIONS
(US $MILLIONS)*
PART I
20.18 33.59
Austria 5.04 Luxembourg 1.01
Belgluin 22.70 Netherlands 27.74
Canada 37.83 Norway 6.72
Denmark 8.74 Sweden 10.09
Finland 3.83 Union of South Africa
10.09
France 52.96 United Kingdom 131.14
Germany 52.96 United States 320.29
Italy 18.16
* In terms of United States dollars of the weight and fineness in effect on January 1, 1960.
Australia Japan
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PART II
Afganistan 1.01 Ecuador 0.65
Argentina 18.83 El Salvador 0.30
Bolivia 1.06 Ethiopia 0.50
Brazil 18.83 Ghana 2.36
Burma 2.02 Greece 2.52
Chile 3.53 Guatemala 0.40
China 30.26 Haiti 0.76
Colombia 3.53 Honduras 0.30
Costa Rica 0.20 Iceland 0.10
Cuba 4.71 India 40.35
Dominican Republic
0.40 Indonesia 11.10
Iran 4.54 Peru 1.77
Iraq 0.76 Philippines 5.04
Ireland 3.03 Saudi-Arabia 3.70
Israel 1.68 Spain 10.09
Jordan 0.30 Sri Lanka 3.03
Korea 1.26 Sudan 1.01
Lebanon 0.45 Thailand 3.03
Libya 1.01 Tunisia 1.51
Malaya 2.52 Turkey 5.80
Mexico 8.74 United Arab Republic
6.03
Morocco 3.53 Uruguay 1.06
Nicaragua 0.30 Venezuela 7.06
Pakistan 10.09 Viet-Nam 1.51
Panama 0.02 Yugoslavia 4.04
Paraguay 0.30
236.93
Total 1000.00

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