International Development Association Agreement Act

Link to law: http://www.moj.gov.jm/laws/international-development-association-agreement-act
Published: 1964-03-05

INTERNATIONAL DEVELOPMENT ASSOCIATION
AGREEMENT

THE INTERNATIONAL DEVELOPMENT
ASSOCIATION AGREEMENT ACT

[5th March, 1964.1

1. This Act may be cited as the International Develop-
ment Association Agreement Act.

2. In this Act-
“the Association” means the International Develop-

ment Association established under the Associa-
tion Agreement;

“the Association Agreement” means the Agreement,
as amended, for the establishment and operation
of an international body to be called the Interna-
tional Development Association, and of which
the text of the Articles is set out in the Schedule;

“the Membership Resolution” means the Resolution
adopted by the Board of Governors of the
Association, specifying the terms and conditions
upon which Jamaica shall be admitted to member-
ship in the Association.

3. Acceptance by the Government of the Association
Agreement is hereby approved.

1

Ad
4of196A

Short title.

Interprela-
tion.

Schedule.

Approval
of accept-
ance of
Ansociation
Agreement.

4.-(1) The Minister responsible for finance is authorized Financial
to pay for the account of Jamaica the amounts payable from
time to time to the Association under the Membership
Resolution and the Association Agreement :

Provided that the Bank of Jamaica may from time to
time, subject to the terms of any agreement made by that
Bank with the Government and except where payments are

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2 INTERNATIONAL DEVELOPMENT ASSOCIATION
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required to be made pursuant to subsection (2), pay from
its own funds such of the amounts aforesaid as may be
specified in the Agreement.

(2) The Minister responsible for finance may create
and issue to the Association any such non-interest-bearing
and non-negotiable notes or other obligations as are
provided for by section 2 of Article I1 of the Association
Agreement, and any payments in respect of any such notes
or obligations so created and issued shall be charged on the
Consolidated Fund.

(3) The Minister responsible ior finance may borrow
from any person, any sum or sums required for payments
under this section and, for the purpose of such borrowing,
he may create and issue any securities bearing such rate of
interest and subject to such conditions as to repayment,
redemption or otherwise as he thinks fit.

(4) The principal and interest of any securities
issued under subsection (3) and the expenses incurred in
connection with their issue shall be charged on the
Consolidated Fund.

(5) Subject to the terms of any agreement to the
contrary made by the Bank of Jamaica with the Govem-
ment pursuant to the proviso to subsection (l), any moneys
received by the Government from the Association or raised
by securities under subsection (3) shall be paid into the
Consolidated Fund Account and shall form part of the
Consolidated Fund and be available in any manner in which
that Fund is available.

(6) The Bank of Jamaica shall act as a depository
for the holdings of currency of Jamaica and other assets of
the Association.

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1NTERNATIONAL DEVELOPMENT ASSOCIATION 3
AGREEMENT

5. The provisions of sections 2, 3, 4, 5, 6, 7, 8 and 9 of Status.
Article VIII of the Association Agreement shall have the andprivi.
force of law in Jamaica, subject to the proviso that nothing ~ ~ ~ ~ ~ ~ n ,
in section 9 of Article VIII of the Association Agreement
shall be construed-

(i) as entitling 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 Association any exemption
from duties or taxes which form part of the price
of goods sold; or

(iii) as conferring on the Association any exemption
from taxes or duties which are in fact no more
than charges for services rendered.

jmmuoitieE

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4 INTERNATIONAL DEVELOPMENT ASSOCIATION
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SCHEDULE (Section 2)
ARTICLES OF AGREEMENT OF THE INTERNATIONAL

DEVELOPMENT ASSOCIATION
The Governments on whose behalf this Agreement is signed,

Cansidering :
That mutual cooperation 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 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 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 agrec as follows:

INTRODULTORY ARTICLE
The International Development Association (hereinafter called “the

Association”) is established and shall operate in accordane with the
following provisions:

ARTICLE I
Purposes

The purposes of the Association are to promote economic develop-
ment, 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 Inter-
national 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 I1
Membership; Initial Subscriptions

SECTION 1. Membership
(a) The original members of the 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.

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INTERNATIONAL DEVELOPMENT ASSOCIATION
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(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 Subscription
(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 subscriptions 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 6neness in effect on
January 1. 1960.

(c) Ten per cent 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, OS on the date on
which the original member becomes a member. whichever shall be
later; twelve and one-half per cent one year after the beginning of
operations of the Association; and twelve and one-half per cent each
year thereafter at annual intervals until the ten per cent portion of the
initial subscription shall have been paid in full.
(4 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 Il of Schedule A. This ninety per cent portion of initial subscrip-
tions of original members shall be payable in 6ve equal annual instal-
ments 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 s u c a i n g
instalments each year thereafter at annual intervals until the ninety
per Cent 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 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 non-negotiable, non-interest-bearing
and payable at their par value on demand to the account of the
Association in the designated depository.
U) For the purposes of this Agreement the Association shall re-

gard as “freely convertible currency”:
(i) currency of a member wbich 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

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6 INTERNATIONAL DEVELOPMENT ASSOCIATlON
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(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 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 paymeut thereof, shall be determined by the Association
pursuant to section 1 (b) of this Article.

SECTION 3. Limitation on Liability
No member shall be liable, by reason of its membership, for

obligations of the Association.

ARTICLB 111
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
five years thereafter, review the adequacy of its resources and. if it
deems desirable, shall authorize a general increase in subscriptions
Notwithstanding the foregoing. general or individual increases in
subscriptions may be authorized at any time, provided that an individual
increase shall be considered only at the request of the member involved.
Subscriptions pursuant to this section are herein referred to as additional
subscriptions.

(6) Subject to the provisions of paragraph (c) below, when addi-
tional subscriptions are authorized, the amounts authorized for sub-
scription and the terms and conditions relating thereto shall be as
determined by the Association.

(c) When any additional subscription is authorized. 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

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INTERNATIONAL DEVELOPMENT ASSOCIATION
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amounts payable by such member on account of its initial or any
additional subscription, supplementary resources in the 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
arrangement relating to such resources. A Special Development
Certificate shall not carry any voting rights and shall he 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.

ARTICLE Iv
Currencies

SECTION 1. Use of Currencies
(a) Currency of any member listed in Part II of Schedule A, whether

or not freely convertible, received by the Association pursuant to
Article 11, section 2(4, in payment of the ninety per cent portion pay-
able 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 pay-
ment of 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 authorized.

(c) The usability of currencies received by the Association as
supplementary resources other than subscriptions, and currencies derived

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INTERNATIONAL DEVELOPMENT ASSOCIATION
AGREEMENT

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
uscd 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 counection 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 ArticIe U, section 2(d) by members listed in Pan I of
Schedule A shall be used by the Association on an approximately pro
rota basis; provided, however, that such portions of such subxri
tions as are paid in gold or in a currency other than that of the SUE
scribing member may be used more rapidly.

SECTION 2. Maintenance of Value of Currency Holdings
(U) 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 in to 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.

(6) Whenever the par value of a member’s currency is increased,
or the foreign exchange value of a 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 (U ) 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
Monetaly Fund.

(d) Amounts furnished under the provisions of paragraph (Q) of
this section to maintain the value of any currency shall be convertible
and usable to the same extent as such currency.
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INTERNATlONAL DEVELOPMENT ASSOCIATION
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ARTICLE V
Opem fions

SECTION 1. Use of Resources and conditions of Financing
(0) The Association shall provide financing to further development

in the less-developed areas of the world included within the
Association's membership.

(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 proposal. 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 organization.

(e) The Association shall not provide hancing for any project if
the member in whose territories the prolect 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 organization.

(f) The Association shall impose no conditions that the proceeds
of its hancing 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 accord-
ance 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 inEuences or considerations.

(h) Funds to be provided under any financing operation shall be
made available to the recipient only to meet expenses in connection
with the project as they are actually incurred.

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10 INTERNATIONAL DEVELOPMENT ASSOCIATION
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SECTION 2. Form and Terms of Financing
(a) Financing by the Association shall take the form of loans. The

(i) out of funds subscribed pursuant to Article III, section 1.
and funds derived therefrom as principal. interest or other
charges, if the authorization for such subscriptions expressly
provides for such financing; or

(ii) in special circumstances, out of supplementary resources
furnished to the Association, and funds derived therefrom
as principal, interest or other charges, if the arrangements
under which such resources are furnished expressly authorize
such financing.

(b) Subject to the foregoing paragraph, the Association may pro-
vide 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 financing to a member, the
govemen t of a territory included within the Association’s member-
ship, 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 organization.
(4 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.

S E ~ I O N 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 member 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. Cooperation with Other International Organizations and
Members Providing Development Assistance

The Association shall cooperate with those public international
organizations and members which provide financial and technical assist-
ance to the lessdeveloped areas of the world.

Association may, however, provide other financing, either-

SFCTION 5. Miscellaneous Operations
In addition to the operations specified elsewhere in this Agreement,

(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;

the Association may:

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INTERNATIONAL DEVELOPMENT ASSOCIATION
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(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 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 VI
Organization and Management

SECTION 1. Structure of the Association
The Association shall have a Board of Governors, Executive Direc-

tors, a President and such other officers and staff to perform such
duties as the Association may determine.

SECTION 2. Board of Governors
(a) All the 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 o m o 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 oficio he 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 he a member of the Association.

(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;

(U) authorize 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;

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12 INTERNATIONAL DEVELOPMENT ASSOCIATION
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(v) make arrangements pursuant to Section 7 of this Article to
cooperate with other international organizations (other than
informal arrangements of a temporary and administrative
character);

(vi) decide to suspend permanently the operations of the Asso-
ciation and to distribute its assets;

(vii) determine Ihc distribution of the Association’s net income
pursuant to section 12 of this Article; and

(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.

(6) The Association may by regulation establish a procedure whereby
the Executive Directors may obtain a vote of thc Governors on a
specific question without calling a meeting of the Board of Governors.

(A) The Board of Governors, and the Executive Directors to the
extent authorized, may adopt such rules and regulations as may be
necessaly or appropriate to conduct the business of the Association.

(i) Governors and Alternate Governors shall serve as such without
compcnsation from the Association.

SECTION 3. Votoling
(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 U, section l(b) or
Article 111. section l (b) and (c), as the case may be. Additions to
resources other than subscriptions under Article 11, section l(6) and
additional 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. Execufive Direclors
(U) 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.

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INTERNATIONAL DEVELOPMENT ASSOCIATION 13
AGREEMENT

(b) The Executive Directors of the Association shall be composed
ex u#icio of each Executive Director of the Bank who shall have been
(i) appointed by a member of the Bank which is also a member 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 o@cio 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 elccted Executive Director of the Bank shall be
cntitled 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 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 Stu#
(U) The President of the Bank shall be ex omio 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 Asso-
ciation. Under the direction of the Executive Directors he shall con-
duct the ordinary business of the Association and under their general
control shall be responsible for the organization, 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 oJ3icers
and staff of the Association.

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14 INTERNATlONAL DEVELOPMENT ASSOCIATION
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(c) The President, officers and staff of the Association, in the dis-
charge of their offices, owe their duty entirely to the Association and
to no other authority. Each member of the Association shall respecl
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, 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 re-
garding facilities, personnel and services and arrangements for
reimbursement. of administrative expenses paid in the first instance
by either organization 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 Organizations
The Association shall enter into formal arrangements with the Unit&

Nations and may enter into such arrangements with other public
international organizations having specialized responsibilities in related
fields.

SECTION 8. Location of Ofices
The principal office of the Association shall be the principal office

of the Bank. The Association may establish other offices in the tem-
tories of any member.

SECTION 9. Depositories
Each member shall designate its central hank 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, i t shall
designate for such purpose such other institution as may be acceptable
to the Association. In the absence of any d8erent designation, the
depository designated for the Bank shall he the depository for the
Association.

SECTION 10. Channel of Communicafion
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 differeut desiwa-
tion, the channel of communication designated for the Bank shall he
the channel for the Association.

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SECTION 11. Publication of Reports and Provision of Information
(a) The Association shall publish an annual report containins an

audited statement of its accounts and shall circulate to members a t
appropriate intervals a summary statement of its hancial 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 lime the

disposition of the Association’s net income, having due regard to
provision for reserves and wctingencies.

ARTICLE VII.

Withdrawal; Suspension of Membership: Suspension of Opemtions
SECTION 1 . Withdrawal by Members
Any member may withdraw from membership in the Association at

any time by transmitting B notice in writing to the Association at its
principal ofice. Withdrawal shall &come 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 Asso-

ciation, 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 he 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.

(6) While under suspension, a member shall not be entitled to
exercise any rights under this Agreement except the right of with-
drawal, 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
he a member of, the Bank shall automatically be suspended from
membership in. or cease to be a member of, the Association, as the
case may be.

SECTION 4. Rights and Duties of Governments Ceasing to be

(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 othenvisc
provided. remain liable for all financial obligations undertaken by it
to the Association. whether as a member, borrower, guarantor or other-
wise.

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Members

I5

16 INTERNATIONAL DEVELOPMENT ASSOCIATION
AGREEMENT

(b) When a government ceases to be a member, the Associatjon
and the government shall proceed to a settlement of accounts. As part
of such settlenient of accounts, h e Association and the government
may agree on the amounts to bc paid to the government on account of
its subscription and on the timc 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 govern-
ment.

(c) If no such agreement is reached within six months from the date
when the government ceased to be a member, or such other time as may
be agreed upon by the Association and the government, the following
urovisions shall apply :

F)

(ii)

(iii)

The g&e&nent shall he relieved of any further liability to
the Association on account of its subscription, except that the
government shall pay to the Association forthwith amonnts
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.
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 he 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.
The Association shall pay over to the government a pro ram
share of all principal repayments received by the Association
after the date on which the government ceases to he 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 he 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 k e n used or in the opinion of the Association will
be needed by it to meet its commitments under its financing
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 govern-
ment concerned.

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INTERNATIONAL DEVELOPMENT ASSOCIATION
AGREEMENT

(iv) Any amount due to the government on account of its sub-
scription may be withheld so long as that government, or
the government of an?; territory included within its member-
ship, or any political subdivision or any agency of any of lhc
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 habihty as it matures.

(v) In no event shall the government receive under this para-
graph (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 its subscriptions of all membcrs.

(vi) All calculations required hereunder shall be made on such
basis as shall be reasonably determined by the Association.

(d) ?n no event shall any amount due to a government under this
section be paid until six monLhs after the date upon which the govern-
ment 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 govem-
ment shall be considered a member of the Association for purposes
of such section 5, cxcept that it shall havc no voting rights.

SECTION 5 . Suspension of Operations and Settlement 0) Obligatiuns
(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 settlement
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
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 be 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.

fc) Subject to the foregoing, and to any special arrangements for
the disposition of supplementary resources agreed upon in connection
with the provision of such resources to the Association, the Associa-
tion shall distribute its assets to members pro rat= in proportion to

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17

18 INTERNATIONAL DEVELOPMENT ASSOCIATION
AGREEMENT

amounts paid in by them on account of their subscriptions. Any
distribution pursuant to the foregoing provision 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 type of assets distributed or of h e currencies in which they are
expressed.
(6) 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 VlU
Status, Immunities and PriviZeges

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 par-

ticular, the capacity:
(i) to contract;
(ii) to acquire and dispose of immovable and movable property;
(iii) to institute legal proceedings.

SECTION 3. Fosifion 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 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 whom-
soever held, be immune from all forms of seizure, attachment or
execution before the delivery of h a 1 judgment 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, oonfisca-
tion, expropriation or any other form of seizure by executive or legisla-
tive 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

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INTERNATIONAL DEVELOPMENT ASSOCIATION
AGREEMENT

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.

SEC~ION 7 . Privilege for Communications
The official communications of the Asscciation shall be accorded by

each member the same treatment that it accords to the o5cial com-
munications of other members.

SECTION 8 . Immunities and Priviivileges of Oficers and Employees
All Governors, Executive Directors, Alternates, officers and em-

(i) shall be immune from legal 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 immuni-
ties from immigration restrictions, alien registration require-
ments and national service obligativns 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.

ployees of the Association,

SECTION 9. Immunities from Taxution
(a) The Association, its assets, property, income and its operations

and transaction authorized 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 of salaries and emolu-
ments 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

(i) 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 therecn) by whomsoever held.

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19

20 INTERNATIONAL DEVELOPMENT ASSOCIATION
AGREEMENT

(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 loca-
tion of any office or place of business maintained by the
Association.

SECTION 10. Applicafion of Arlicie
Each member shall take such action as is necessary in its own terri-

tories 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.

A R T I ~ E IX
Amendmenis

(0) 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-6fths of the total voting power. have accepted the proposed
amendments. the Association shall certify the fact by formal 00mmu-
nication 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 Association provided in

(ii) the right secured by Article 111, 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 VII, Section 1 ;

ARTICLE X
Interprefation and Arbifration

(a) Any question of interpretation of the provisions of this Agree-
ment 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 accord-
ance with Article VI. Section 4 (g).

(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

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INTERNATIONAL DEVELOPMENT ASSOCIATION
AGREEMENT

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 disagree-
ment with respect thereto.

ARTICLE

Final Provisions
SECTTON 1. Entry into Force
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 hehalf 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 govenunent shall beoome a
member before this Agreement enters into force uader Section 1 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,
011 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 Dimtors of the Bank may extend
the p i o d during which this Agreement shall remain open for signature
by not more than six months

(6, 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 1 (b) .

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21

22 INTERNATIONAL DEVELOPMENT ASSOCIATION
AGREEMENT

Sccrrm 3. TerritoTial 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. Inaugurafion of fhe Association
(a) As soon as this Agreement enters into force under Section 1

of this Article the President shall call a meeting of the Executive
Directors.

(6) 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.

SECTION 5. Registrafion
The Bank is authorized 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 indicatd by its signature below its agree-
ment to act as depository of this agreement, to register this Agree-
ment 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
1 hereof.

SCHEDULE A-INITIAL SUBSCRIPTIONS
(US. 0 Millions)*

PART I
Australia ... 20.15 Japan ... 33.59
Austria ... 5.04 Luxembourg ... 1.01
Belgium ... 22.70 Netherlands ... 27.14
Canada ... 37.83 Norway ... 6.72
Denmark ... 8.74 Sweden 10.09
Finland ... 3.83 Union of South Gnca 10.09
France ... . . 52.96 United Kingdom 131.14
Germany ... 52.96 United States ... 320.29

163.07
Italy ... 18.16 ~

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INTERNATIONAL DEVELOPMENT ASSOCIATION
AGREEMENT

PART I, contd.
Afghanistan ...
Argentina ...
B o 1 iv i a
Brazil ...
Burma ...
Ceylon ...
Chile ...
China ...
Colombia ...
Costa Rica ...
Cuba ...
Dominican Republic
Ecuador ...
El Salvador _._
Ethiopia ...
Ghana ...
Grcece ...
Guatemala ...
Panama ...
Peru ...
Philippines ...
Saudi Arabia ...
Spain ...
Sudan ...
Thailand ...

...

Paraguay ...

1.01 Haiti
18.83 Honduras
1.06 Iceland

18.83 India
2.02 Indonesia
3.03 Iran
3.53 Iraq

30.26 Ireland
3.53 Israel
0.20 Jordan
4.71 Korea
0.40 Lebanon
0.65 Libya
0.30 Malaya
0.50 Mexico
2.36 Morocco
2.52 Nicaragua
0.40 Pakistan
0.02 Tunisia
0.30 Turkey
1.77 United Arab
5.04 uN,WY
3.70 Venezuela

10.09 Viet-Nam
1.01 Yugoslavia
3.03

... U. I 0

... 0.30

... 0.10

... 11.10

... 4.54

... 0.76

... 3.03

... 1.68

... 0.30

... 1.26

... 40.35

... 0.45

... 1.01

... 2.52

... 8.74

... 3.53

... 0.30

... 10.09

... 1.51

...

... 7.c

... 1.51

... 4.04 -
236.93

TOTAL 1000.00

23

*In terms of United States dollars of the weight and fineness in effect on
January 1, 1960.

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