Bretton Woods Agreements Act


Published: 1962-11-29

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BRETTON WOODS AGREEMENTS



THE BRETTON WOODS AGREEMENTS ACT

ARRANGEMENT OF SECTIONS

1. Short title.

2. Interpretation.

3. Approval of acceptance of Fund Agreement and Bank Agreement.

4. Financial provisions.

5. Status, immunities and privileges of the Fund and the Bank.
6. Amendment of Schedule and matters consequential on

amendment.




SCHEDULE

PART I. The Fund Agreement

ARTICLE I—Purposes

ARTICLE II—Membership

ARTICLE III—Quotas and Subscriptions

ARTICLE IV—Obligations Regarding Exchange Arrangements

ARTICLE V—Operations and Transactions of the Fund

ARTICLE VI—Capital Transfer

ARTICLE VII—Replenishment and Scarce Currencies

ARTICLE VIII—General Obligations of Members

ARTICLE IX—Status, Immunities, and Privileges

ARTICLE X—Relations with Other International Organizations

ARTICLE XI—Relations with Non-Member Countries

ARTICLE XII—Organization and Management

ARTICLE XIII—Offices and Depositories

ARTICLE XIV—Transitional Arrangements

ARTICLE XV—Special Drawing Rights

ARTICLE XVI—General Department and Special Drawing Rights
Department



ARTICLE XVII—Participants and Other Holders of Special
Drawing Rights



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BRETTON WOODS AGREEMENTS



ARTICLE XVIII—Allocation and Cancellation of Special Drawing
Rights



ARTICLE XIX—Operations and Transaction in Special Drawing
Rights



ARTICLE XX—Special Drawing Rights Department Interest and
Charges



ARTICLE XXI—Administration of the General Department and
the Special Drawing Rights Department



ARTICLE XXII—General Obligations of Participants

ARTICLE XXIII—Suspension of Operations and Transactions in
Special Drawing Rights



ARTICLE XXIV—Termination of Participation

ARTICLE XXV—Liquidation of the Special Drawing Rights
Department



ARTICLE XXVI—Withdrawal from membership

ARTICLE XXVII—Emergency Provisions

ARTICLE XXVIII—Amendments

ARTICLE XXIX—Interpretation

ARTICLE XXX—Explanation of Terms

ARTICLE XXXI—Final Provisions

SCHEDULE A—Quotas

SCHEDULE B

SCHEDULE C—Par Values

SCHEDULE D—Council

SCHEDULE E—Election of Executive Directors

SCHEDULE F—Designation

SCHEDULE G—Reconstitution

SCHEDULE H—Termination of Participation

SCHEDULE I—Administration of Liquidation of the Special
Drawing Rights Department



SCHEDULE J—Settlement of Accounts with Members
Withdrawing



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BRETTON WOODS AGREEMENTS

SCHEDULE K—Administration of Liquidation

SCHEDULE L—Suspension of Voting Rights

SCHEDULE M—Special One-Time Allocation of Special Drawing
Rights



SCHEDULE K—Administration of Liquidation



PART II. The Bank Agreement

ARTICLE I—Purposes
ARTICLE II—Membership in and Capital of the Bank

ARTICLE III—General Provisions relating to Loans and
Guarantees



ARTICLE IV—Operations

ARTICLE V—Organization and Management

ARTICLE VI—Withdrawal and Suspension of Membership:
Suspension of Operations



ARTICLE VII—Status, Immunities and Privileges

ARTICLE VIII—Amendments

ARTICLE IX—Interpretation

ARTICLE X—Approval deemed given

ARTICLE XI—Final Provisions

ARTICLE III—Quotas and Subscriptions

ARTICLE IV—Obligations Regarding Exchange Arrangements

ARTICLE V—Operations and Transactions of the Fund

SCHEDULE A—Subscriptions

SCHEDULE B—Election of Executive Directors









[The inclusion of this page is authorized by L.N. 480/1973]



BRETTON WOODS AGREEMENTS

THE BRETTON WOODS AGREEMENTS ACT ,o~1962 Acta
s3 of 1968.

[29rh November, 1962.1

1. This Act may be cited as the Bretton Woods Agree- shorttitla
men& Act.

InIcrprr-
lation. 2. In this Act-

“the Bank” means the International Bank for
Reconstruction and Development established under
the Bank Agreement;

“the Bank Agreement” means the agreement, for the
establishment and operation of an international
body to be called the International Bank for Recon-
struction and Development, which was drawn up
at the United Nations Monetary and Financial
Conference held at Bretton Woods in New Hamp-
shire in the United States of America in July,
1944, and of which the text of the Articles is set
out in Part I1 of the Schedule;

“the Fund” means the International Monetary Fund
established under the Fund Agreement;

“the Fund Agreement” means the agreement, for the
establishment and operation of an international
body to be called the International Monetary Fund,
which was drawn up at the United Nations
Monetary and Financial Conference held at
Bretton Woods in New Hampshire in the United
States of America in July, 1944, and of which the
text of the Articles is set out in Part I of the
Schedule;

“the Membership Resolutions” means the resolutions
adopted by the Board of Governors of the Fund

SChcdUlC.

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2 BRETTON WOODS AGREEMENTS

and the Bank, respectively, specifying the terms
and conditions upon which Jamaica shall be
admitted to membership in the Fund and the Bank.

3. Acceptance by the Government of the Fund Agree- Approvalof
ofFund
acceptance

Agrcrmcnt
and Bank
Agreement.

ment and the Bank Agreement is hereby approved.

Fmanc'al 4 4 1 ) The Minister responsible for finance is authorized
to pay for the account of Jamaica the amounts payable from
time to time to the Fund and the Bank under the Member-
ship Resolutions, the Fund Agreement and the Bank Agree
ment :

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
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 Fund or the Bank any such non-interest
bearing and non-negotiable notes or other obligations as are
provided for by section 5 of Article I11 of the Fund Agree-
men4 and section 12 of Article V of the Bank Agreement,
and any payments in respect of any such notes or obligations
so created and issued shall be charged on the Consolidated
Fund.

pronaions.

(3) The Minister responsible for 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 t h i s fit.

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BRETTON WOODS AGREEMENTS 3

(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 con-
trary made by the Bank of Jamaica with the Government
pursuant to the proviso to subsection (1) any moneys
received by the Government from the Fund or the Bank
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 the Island and other assets of
the Fund and the Bank.

5. The provisions of- status.. .

privileges

immunitles

Fund Agreement; of the Fund
(a) sections 2, 3, 4, 5, 6, 7, 8 and 9 of Article Ix of the and
(b) sections 2, 3, 4, 5 , 6, 7, 8 and 9 of Article VII of E&!

the Bank Agreement; and
(c) the first sentence of paragraph (b) of section 2 of

Article VIII of the Fund Agreement,
shall have the force of law in the Island, subject to the pro-
viso that nothing in section 9 of Article IX of the Fund
Agreement or in section 9 of Article VII of the Bank Agree-
ment shall be construed-

(i) as entitling the Fund or the Bank to import
goods free of customs duty without any restric-
tion on their subsequent sale in the country to
which they were imported;

(ii) as conferring on the Fund or the Bank any
exemption from duties or taxes which form part
of the price of goods sold;
or

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4 BRETTON WOODS AGREEMENTS

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

6.-(1) Where any amendment to the Fund Agreement or
the Bank Agreement is accepted by the Government, the
Minister responsible for finance may by order amend the
Schedule to this Act by including therein the amendment so

Amend-

Schedule

terncon.

ment. accepted.

ment of

and mat-

on amsnd-

Schedule.
5311968 s. 2. (2) Any order made under this section may contain

such consequential, supplemental or ancillary provisions as
appear to the Minister responsible for finance to be necessary
or expedient for the purpose of giving due effect to the
amendment accepted as aforesaid and, without prejudice to
the generality of the foregoing, may contain provisions
amending references in this Act to specific provisions of the
Fund Agreement or the Bank Agreement.

(3) Every order made under this section shall be
subject to negative resolution of the House of Repre-
sentatives.

(4) Where the Schedule to this Act is amended
pursuant to this section any reference in this Act or any
other instrument to the Fund Agreement or the Bank Agree-
ment shall, unless the context otherwise requires, be
construed as a reference to the Fund Agreement or the Bank
Agreement, as the case may be, as so amended.

me inclusion of (his page is auth-nkd by L.N. 480/1973]

BRETTON WOODS AGREEMENTS

SCHEDULE

PART I. The Fund Agreement
TEXT OF

ARTICLES OF AGREEMENT
OF THE

hTERNATIONAL MONETARY FUND

The Governments on whose behalf the present Agreement is signed
agree as follows:

Introduclory Article L.N.
77/1991.

(i) The Internationd Monetary Fund is established and shall
operate in accordance with the provisions of this Agreement
as originally adopted and subsequently amended.

(U] 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 he conducted through the General Department, consisting
in accordance with the provisions of this Agrment of the.
General Resources Aaaunt, the Specid Disbursement
Account, and the Investment Account; except that operations
and transactions involving special drawing rights shall be wn-
ducted through the Special Drawing Rlghts Department.

ARncw I.-Piwposes LN.
niis91. The purposes of the International Monetary Fund are:

(i) To promote internatiqnal monetary cooperation through a per
manent institution wh!ch provides the machinery for con-
sultation and collaboration on international monetary problems.

(ii) To facilitate the expansion and balanced groMh of international
trade, and to contribute thereby to the promotion and main-
tenance of high levels of employment and real income and to
the development of the productive resources of all members
as primary objectives of economic pollcy.

(iii) To promote exchange stability, to maintain orderly exchange
arrangements among members, and to avoid competitive ex-
change depreciation.

(iv) To assist in the establishment of a multilateral system of pay-
ments in respect of current tfamactions between members and
in the elimination of foreign exchange restrictions which
hamper the growth of world trade.

p’k inolmion of this psge is authorjzcd by L.N. 90/19931

5

6 BRETTON WOODS AGREEMENTS

(V) TO Bive 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 resorting
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.

L.N.
77/1991. A m a B 11.-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. Oihm 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 consistent with those applied to other countries that
are already members.

L.N.
77/1991. ARTICLE 111.-Quom and Subscriptions

Section 1. Quotas and payment of subscriptions
Each member shaP 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 hy the Board of Governors. The
subscription of each member shall be equal .W its quota and shall be paid
in full to the Fund at the appropriate depository.
Section 2. Adjustment of quotw

(a) The Board of Governors shall at intervals of not more than five
years conduct a p x r a l review, and if it deems it appropriate propme
an adjustment, of the quotas of the members. It may alrro, if it thinks
fit, consider at any other time the adjustmeat of any particular quota
at the request of the member concerned.

(b) 7he Fund may at any t ime propose an increase in the quotas ob
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
excm of amomta transferred under Article V, secffm 12 Cf) 0 aad Cn
from the Special Disbursement Account to the General Resources
Account.

eighty-five percent majority of the total voting power shall
be required for any change in quotas.

@)

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BRETTON WOODS AGREEMENTS

(4 The quota of a member shdl not he 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 me changed
(a) Each member which consents to an increase in its quota under

section 2 (a) of th is 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 con-
curi-ence, 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 he paid in special drawing riphts
by participants. The balance of the increase shaM 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 whicb consents to an increase in its quota under
section 2 (b) of this Article sh.all 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 shdk

within sixty daya. pay to the member an amount equaI 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 nf the currency below the new
quota, providbd 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.
(4 A seventy percent ma.iority of the total voting power shall be

required for any decision under (a) above, except for the determination
of a period and the specification of currencies under that provision.

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
judgment of the Fund is not needed for its operation8 and transactions.
notes or similar obligations issued by the member or the depository
designated by the member under Arhcle XIII, sectlon 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 subs$bed by
members but dso to any currency otherwise due to. or acqu~red by.
the Fund and to be placed in the General Resources Aocount.

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8 BRETTON WOODS AGREEMENTS

L.N.
77’’991’

ARnm 1V.-Obligations Regarding Exchange Arrwements
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 gods,
services, and capital among countries, and that sustains sound economic
growth, and !hat 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 ordenly exchange arrangements
and to promote a stable system of exchange rates. In particular, each
member shall:

(i) endeavor to direct its economic and hancial pokier toward
the objective of fostering orderly economic growth with
reasonable price Stability, with due regard to its circumstances:

(U) seek to promote stability by fostering orderly underlying
economic and financial conditions and a monetary system that
does not tend to produce erratic disruptions:

(Gi) avoid manipulating exchange rates or the international
monetary system in order to prevent effective kalanct Of pay-
ments 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 January 1, 1976, exchange arrangements may include (i) the main-
tenanse 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) cooperative arrangements by which membcrs maintarn
the value of their currencies in relation to the value of the cumncy 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 v o a
power, may make provision for general exchange am.n@ments without
limiting the right of members to have exchange arrangements of their
choice consistent with the purposes of the Fund and &e obligations
under section 1 of this Article.

hdusion of thls pase is authorized by L.N. 90119931

BRETTON WOODS AGREEMENTS 9

Section 3. Surveillance over exchange mmgements
(a) The Fund shall oversee the international monetary system in

order to ensure its eEective operations, and shall oversee the complimce
of each member with its obligations under section 1 of this Article.

(b) In order to fulfill its functions under (U) above. the Fund shall
exercise firm surveillance over the exchange rate policies of members
and shall adopt specilic principles for the guidance of all members wth
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 policied. The
principles adopted by the Fund shall be consistent with cooperatiye
arrangements by which members maintain the value of theit currencies
in relation to the value of the currency or currencies of other membem
as well as with other exchange arrangements of a member'a choice
consistent with the purposes of the Fund and section 1 of this
These principles shall respect the domestic. social and political @UeS
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 d u e s . The Fund shall make the determination
on the basis of the underlying stability of the world economy. and for
this purpose shall take into a m u n t price movements and ratea of
expansion in the. economies of members. The determination aball be
made in light of the evolution of the international monetary system,
with particular reference to saurces of liquidity. and, in order to emure
the effective operation of a system of par values, to arrangements under
which both members in surplus and members in de6cit 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 cuwencies within a member's rerrirories
(U) 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 XXXL section 2 (g) unless the member declares that its
action relatcs either to the metropqlitan currency alone, m only to onc
or more specified separate cmenc1es, or to the metropolitan currency
and one or more specifid separate currencies.

( b ) Action by the Fund under this Article shall be deemed to rehto
to all currencies of a member referred to in (a) above unless the Fund
declares otherwise.

indlaion of this page is authorized by L.N. W / IWJ]

10 BRETTON WOODS AGREEMENTS

L.N.
77'1991'

ARTICLE V:--Opcmrions and Transactions of the Fund
Section 1. Agencies dealing with the Fund

Each member shall deal with the Fund only through its Treaa~ry.
central bank, stabilization fund, or other similar fiscal agency, and tbc
Fund shall deal only with or through the same agencies.

Section 2. LimiIation on the Fund's operationr and fronrQctioM
(a) Except as otherwise provided iu this Agreement, dransactiona 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 kom the general
resouroes of the Fund, which shall be held in the General Reso-
Account, in exchange for the currency of the member desiring to make
the purchase.

(b) U 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. Serv~cea under lhis subsection
shall m t impose any obligation on a member without its Consent.

Section 3. Conditions governing use of the Fund's general resource5
(a) The Fund shall adopt pdicies on the use of its general mm,

including policies on stand-by or similar arrangements. and may ado t

assist members to solve their balance of payments problems in a manner
consistent with the provisions of thls Agreement and that will establish
adequate safeguards for the temporary Use of the resonMu cd
the Fund.

( b ) A member shall be entitled to purchase the currencies of other
members from the Fund in exchange for an equivalent amount Oi its
own currency subject to the foUowlng conditions:

(i) the member's use of the general resources of the Fund would
be in accordance with the ovisions of ths Agreement and
the policies adopted under x",:

(ii) the member represents that it has a need to make the purchase
because of its balance of payments or itr merve position or
developments in its reserves;

(iii) the proposed purchase would be a reserve Wche purchase.
or would not cause the Fund's holdings of the purchasing
member's currency to exceed two hundred percent of ita
quota:

(iv) the Fund has not previously dcchred under section 5 of thia
Article, Article VI, section 1, or Article X M , saction 2 (0)
that the member desiring to purchase is ineligible to we the
general resources of the Fund.

s p e c s policies for special balance of payments problems. that wh

lThe inclusion of this m e is authorized by LN. 901 19931

12 BRETTON WOODS AGREEMENTS

avoiding large or continuous use of the Fund's general resou~cc~. 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 BS collateral
security acceptable assets having a value sac ien t 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 Funds general resources
Whenever the Fund is of the opinion that any member i8 using the

general resources of the Fund in a manner contrary to the purposes ol
the Fund. it shall present to the member a report sdting 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 i
received from the member within the prescribed time, or i! the rtply
received is unsatisfactory, the Fund may continue to limit the mmber's
use of the general resources of the Fund or may. after givlng reasonable
notice to the member, declare it ineligible to use the general r e s ~ u r ~ e i
of the Fund.

Section 6. Other purchases and sal@ of special drawing righfs by the

(U) The Fund may accept special drawing rights offered by a
participant in exchange for an aquivalent amount of the w r e n c h 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 r d t 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 be selected in accordance with policies that take into
account the principles of section 3 (4 or 7 (i) of th is Article.
Fund may enter into transactions under this section only if a member
whme currency is provided or accepted by the Fund concurs in that
usc of its cnrrency.

Section 7. Repurchase by a member of i fs currency held by !he 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 Artiole.

(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 subjwt to chargea
under section 8 (b) of this Article. A member shall repurchase these
holdings if, in accordance with policies on repurchase that the Fund

[The ioolrsion of this page is authorized by L.N. 90/1993!

Fund

BRETTON WOODS AGREEMENTS 13

shall adopt and after consuitation with the member, the Fund
represents to the member that it should repurchase because of ltIl
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 Wult
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 he made by
a member in installments 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 perlod so adopted shall
apply to all members.
(4 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, whicb shall be the same for all members, for the
repurchase of holdings of currency acquired by the-Fund pursuant to a
S P ~ ~ I policy on the use of its genera resources.

(e) A member s h d repurchase, in accordance with policies that the
Fund shall ado t by a seventy percent majority of the total voting

result of purchases and are subject to charges under section 8 (b) (ii) of
this Article.

Cn 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 hddhgs acquired by the Fund subsequent to the effective
date of the decision.
k) The Fund, on the request of a member. 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. un!ess the Fund determines, by a seventy percent
majority of the total voting power, that a longer period for repurchase
which is consistent with the temprary use of the general resources
of the Fund is justified because discharge on the due date would result
in exceptional hardship for the member.

( f i ) m e Fund's policies under section 3 (d) of this Article may he
supplemented by policies under whicb the Fund may decide after
consdtation with a member to sell under secbon 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 repmhases that
take into aqount the principles in section 3 (d) of this Article. The

[The inclusion of this ,page is authorized by L,N. 90/19931

power, the Fun a 's holdings of its currency that are not hcquired aa a

-

14 ERET’I‘ON WOODS AGREEMENTS

Fund’s holdings of a member’s cumncy that is used in repurcbase
shall not be increased by the repurchase above @e level at which they
would be subject to charges under section 8 (b) (ii) of this Article.

(i) If a member’s currency specified by the Fund under ( f i
above is not a freely usable currency, the member 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 Articye XIX section 7 (U).

(ii) Each member whose currency is specilied 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 01) (i) above shall be made with the
member whose currency is specified unless that member
and the repurchasing member agree on another procedure.

(iv) If a repurchasing member wishes to obtain, at the time of
the repurchase, the freely usable currency of another
member specif~ed by the Fund under (I) above, it shall.
if requested by the other member, obtain the cumncy
from the other member in exchange for a freely usable
currency at the rate of exchange referred to in 0) (0
above. The Fund may adopt regulr!tions on the freely
usable currency to be provided in an exchange.

01

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 exchans for its own C U K ~ C Y , provided that the Fund

a lower service charge on reserve hanche pur- %::3l an on other purchases. The service charge on
reserve tranche purchases shall not exceed one-half of one
percent.

(i) 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 chargc
levied under (i) above on purchases under the arrange-
ment.

(b) The Fund shall levy charges on its average daily balamxs of a
member’s currency held in the General Resources Acmunt to the extent
that they-

(i) have been acquired under a policy that has been the subject
of an exdnsion under Article XXX (c). or

[me inclusion of this page is authorized by LN. 90119931

BRETTON WOODS AGREEMENTS 15

(ii) exceed the amount of the member’s quota after excluding

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 repurchase required under section 7
of this Article, the Fund, after consultation with the member on 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 mlijority 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, pro-
vided that in exceptional circumstances the Fund may permit a membcr
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 (6) (ii) above.

Section 9. Remunmufion
(a) The Fund shall pay remuneration 011 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 of
remuneration which shall he determined by the Fund by a seventy
percent majority of the total voting power, shall be the m e 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:

(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 percmtages 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 111. section 3 (a) since the
date applicable under (b) (i) above; and minus

any balances referred to in (i) above.

[The inclusion of this page is authorized by L.N. 901 19931

16 BRETTON WOODS AGREEMENTS

(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 (6) (i) above.

(c) The Fund, by a seventy percent majority of the total voting power.
may raise the latest percentage of quota applying for the purposes of (U)
above to each member to :

(i) a percentage, not in excess of one hundred percent, that
shall be determined for each member on the &Sir 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 cu~'Imcy.

Section 10. Computations
(Q) 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, shald be at the rates at which the Fund accounts fot
these currencies in accordance with section 11 of this Article.

(c) Computations for the determination of amounb of currrncy in
relation to quota for the purpose of applyin the provisions of this

Account or in the Investment Account.

Section 11. Mainfenonce of vdue
(a) The value of the currencies of members held in the General

Resources Account shall be maintained in terms of the special drawing
right in accordance with exchange rates under Article XIX, section 7
(4.

(6) An adjustment in the Fund's holdings 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 adjnstment
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 operaions md tronsnctiom
(a) The Fund shall be guided in all its policies and decisions under

this section by the objectives set forth in Article VnI. section 7 and by
the objective of avoiding the management of the price. or the establish-
ment of a fixed price, in the gold market.

[The inclusion of this page is uuthon'zed by L.N. 90119931

Agreement shall not include currency held in t e Special Disbursement

BRETTON WOODS AGREEMENTS

(b) Decisions of the Fund to engage in operations or transactions
under (c), ( 4 , 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 a member shall be at a price agreed for each
transaction on the basis of prices in the market.

( 4 The Fund may accept payments from a member in gold instead
of special drawing rights or currency in any operations or trans-
actions 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 Gices 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, insproportion to their quotas
on that date. If the Fund intends to sell gold under (c) above for the
purpose of (n (ii) below, it may sell to each developing member that
agrees to buy it that portion of the gold which, if sold under (c) above,
would have produced the excess that could have been distributed to it
under (n (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

'[The inclusion of this page is authorized by L.N. 92c/2012]

BRETTON WOODS AGREEMENTS

to a member under this subsection (e) shall be made in exchange for its
currency and at a price equivalent at the time of sale to one special drawing
right per 0.88867 1 gram of fine gold.

u> 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
0.888671 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 bc used at any time:

(i) to make transfers to the General Resources Account for im-
mediate 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 pur-
poses of the Fund. Under this subsection (ii) balance of
payments assistance may be made available on special terms
to developing members ih 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 ~ u g u s t 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
segtion 5 of this Article shall be made when the ineligibility
ceases, unless', the Fund decides to make the distribution
sooner.

[The inclusion o f this page is authorized by L.N. 92c/2012]

BRETTON WOODS AGREEMENTS 18.0 1

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 (n
above to the Investment Account for use pursuant to the provisions of
Article X11, section 6 (n.

(h) Pending uses specified under fl above, the Fund may use a ,34A/2011
member's currency held in the Special Disbursement Account for Sch.
investment as it may determine, in accordance with rules and regulations
adopted by the Fund by a seventy percent majority of the total
voting power. The income of investment and interest received under
fl (ii) above shall be placed in the Special Disbursement Account.

( i ) The General Resources Account shall be reimbursed from time to
time in respect of the expenses of administration of the Special Disburse-
ment Account paid from the General Resources Account by transfers
from the Special Disbursement Account on the basis of a reasonable
estimate of such expenses.

(i) 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 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.

(k) 'Whenever under (c) above the Fund sells gold acquired by it after I 3 4 ~ 2 0 1 I
Sch.

[The inclusion of this page is authorized by L.N. 92c/2012]

BRETTON WOODS AGREEMENTS 11

(c) The Fund shall examine a request for a purchase to d ! t . d e
whether proposed purchase would be consistent with the provlslons d
this Agreement and the poiicies adopted under them, provided that
requests for reserve tranche purchases shall not be subject to challenge.
(4 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 d
developments in the exchange markets, as well as the desirability. of
promoting over time balanced positions in the Fund, provided that d 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 membcr. it
shall be entitled to purchase the currency of the other member unless the
Fund has given notice under Article VII, sEtion 3 that its holdings Of
the currency have become scarce.

(i) Each member shall ensure that balances of its ourrency
purchased from the Fund are balances of a freely usable
currency or can he 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 XM, section
7 (4.

(ii) Each member whose currency is purchased from the Fund
or is obtained in exchange for currency purchaaed from
the Fund shall collaborate with the Fund and o h r
members to enable such balances of its currency to be
exchanged, at the time of purchase, !or the freely usable
currencies of other members.

(iii) An exchange under (i) above of a currency that is not
freely usable shall be made by the member whose currency
is pu~hased 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 and wishing to exchange it at
the time of purchase for another freely yable cumacy
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 m m b n
at the rate of exchange referred to in (i) above.

U) Under policies and procedures which it shall adopt, the Fund
may agree to provide a participant making a purchase in acoor&e
with this section with special drawing rights instead of the currencies
of other members.

Section 4. Waiver of conditiom
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

(e)

-
indusion of this page is authorized by L.N. 901 19931

BRETTOhT WOODS AGREEMEtYTS

thc date of the second amendment of this Agreement, an amount of the
proceeds equivalent to the acquisition price of the gold shall be .placed
in t h e General Resources Account, and any excess shall be placed in
the lnvestment Account for use pursuant to the provisions of Article
XII, section 6 0 . If any gold acquired by the Fund after the date of
the second amendment of this Agreement is sold after April 7, 2008
but prior to the date of entry into force of this provision, then, upon
entry into force of this provision, and notwithstanding the limit set
forth in Article X11, section 6 0 (ii), the Fund shall transfer to the lnvestment
Account from the General Resources Account an amount equal to the
proceeds of such sale less (i) the acquisition price of the gold sold, and (ii)
any amount of such proceeds in excess of the acquisition price that may have
already been transferred to the Investment Account prior to the date of entry
into force of this provision.

ARTICLE VI--Capi/al Transfers

Section 1. Use of /he Fund's general resources for capital ~ransfers

(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
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.

[The -inclusion of this page is authorized by L.N. 92c/2012]

BRETTON WOODS AGREEMENTS

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 these 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 V11, section 3 (6) and in Article XlV, section
2.

ARTICLE VI 1-Replenishment and Scarce Currencies L.N.
7711991.

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:

(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 c'on-
currence 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 hcld 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 scarciry 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 t o , an end. A representative of the member
whose currency is involved shall. participate in the preparation of the
report.

[The inclusion of this page is authorized by L.N. 92c/2012]

BWTTON WOODS AGREEMENTS

Section 3. Scarcit). qf the Fzmd 's holdings

( a ) If it becomes evident to the Fund that the demand for a member's
currency seriously threatens the 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.

( 6 ) 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 (6 ) above shall expire whenever the
Fund formally declares the currency in question to be no longer
scarce.

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 (6 ) of this Article
shall give sympathetic consideration to any representations by the other
member regarding the administration of such restrictions.

[The inclusion of this page is authorized by L.N. 92c/2012]

BRETTON WOODS AGREEMENTS 21

Section 5. Egect 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.

A R ~ C L E VUI.-General Obfigotions of Members L.N.
npwi. Section 1. Introduction

In addition to the obligations assumed under other articlcs 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 (a) and Artide

X I V . sectiqn 2, no member shall, without the approval of the Fund
i m p e restrictions on the making of payments and transfers for m n t
international tmnsactions.

(b) Exchange contracts which involve the currency of any member
and which are contrary to the exchange control regulations of that
member maintained or imposed consistently with this Apeanwt shall
be unenforceable in the territories of any member. addition, members
may, by mutual accord, cooperate in measures for the purpose of makiig
the exchange control regulations of either member mqre effective,
provided that such measures and regulations are consistent with this
Agreement.

Section 3. Avoidmce of discrimimtory currency plactices
No member shall engage in, or permit any of its fiscal agencies

referred to in Article V. section 1 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 sh& apply.

Section 4. Convertibility of foreign-?dd balances

member if the latter, in requesting the purchase. represents :

acquired as a result of current transactions: or

current transactions.

(a) Each member shall buy balanm of its currency held by another

(i) that the balances to be bought have been -fly

(ii) that their conversion is needed for making payments for

[The inclusion of this page is authorized by L.N. W/ 1-31

BRETTON WOODS AGREEMENTS

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 (U) above shall not apply when:
(i) the convertibility of the balances has been restricted

consistently with section 2 of this Aaicle or Article VI.
sKtion 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 Arhcle VII, section 3 (a); or

(v) the member requested to make the purchase is for any
reason not entitled to buy currencies of other members
from the Fund for its own cuqncy.

Section 5. Furnishing of informofion
(U) The Fund may require members to furnish it with such

information as it deems necessary forpits activities. including, as the
minimum necessary for the effective discharge of the Fund's duties,
national data on the fdowing matters :

(i) official haldings at home and abroad of (1) 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 aowrdhg to oonntrh 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 tr,ansa&ons. (3) hewn
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 i t s territories 80
far as it is possible to furnish this mfomatm:

(viii) national income;
(ix) price indices, i.e., indices of commodity prices in whole-

sale and retail markets and of export and import prices;
(x) buying and selling rates for fore i s currencies;

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BRETTON WOODS AGREEMENTS

(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 urmmercial
and financial transactions, and of the length of time
during which such arrears have been outstanding.

(b) In requesting information the find 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 a p e -
ment with members. It shall act as a centre for the collection and
exchange of information on monetary and finanaal problems, thus
facilitating the preparation of studies designed to assist members in
developing policies which further the purposes of the Fund.

Section 6. Consultation benveen members regarding existing
internafionul ngreements

Where under this Agreement a member is authorized in the special
or temporary circumstances specified in the Agreement to maintain
or establish restrictions 011 exchange transactions, and there are other
engagements between members entered into prior to this Agreement
which conllict 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 Vn, section 5.

Section 7. Obligatim 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 objectivea of promoting
better international surveillance of international liquidity and making the
special drawing right the principal reserve asset in the international
monetary system.

ARTICLE M.-Status, Zmmunities, and Privikges L.N.
Section 1. Purpares of Article
To enabne 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.

IThe hdusion af this page is authorized by LN. 90/1993]

n/m.

24 BRETTON WOODS AGREEMENTS

Section 2. Starus of the Fund

the capacity :
The Fund shall possess full juridical personality, and in N c u I a r ,

(i) to contract:
(ii) to acquire and dispose of immovable and movable

(i) to institute legal proceadings.

Section 3. Immunity from judicial process
The Fund. its property and its assets. wherever located and by

whomsoever held, shall enjoy immunity from 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. lmmrrnify from orher action
Property and assets of the Fund, wherever located and by whomso-

ever held, shall be immune from search, requisition, wn5scation
expropriation, or any other form of seizure by executive or kgislative
action

Section 5. Immunity of archives

property: and

The arcbives of the Fund shall be inviolable.

Section 6. Freedom of assets from rmtricrions
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. PriviIege for communicutions
The official communications of the Fund shall be acoorded by

members the same eeatment as the official wmmunicatip of other
members.

Section 8. Immunities md privileges of oficers und empbyees
All Governors. Executive Directors, Alternates, members of cam-

mittees, represenhtives appointed under Article Xn, section 3 0).
advisors of any of the foregoing persons. offiws. and employees of the
Fund :

(i) shall be immme fr0.m leg$ process with reSpsct to BCtS
performed by them in theu official capacity except When
the Fund waives this immunity;

(ji) not being local nationals, shall be mkd the .same
immunities from immqation restsictions. alien reg.istration
requirements, and nauonal service obligations and the
same facilities as regards exchange restrictions as arc

inclusion of this .page is aulhorized by LN. 90119931

BRETTON WOODS AGREEMENTS 2s

accorded by members to the representatives, offie&, and
employees of comparable rank of other members: and

(iii) shall be granted the same treatment in respect of travelling
facilities as is m d e d by members to representatives.
officials. and employees of comparable rank of other
members.

Section 9. Zmmrim’ties from taxation
(a) The Fund. its assets, property, income. and its operations and

transactions authorized by this Agreement shall be immune from all
taxation and from all customs duties. The Fund sbal 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 Exextive Directors, Alternates, officers, or
employex of the Fund who are not docal citizens. local subjects. or other
local nationals.

(c) No taxation of any kind shall be levied on any obligation M
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

(2) 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 ofl6ce 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 p w p e of m-g e&ctive in terms .of its m law
the principles set orth m &IS Arhcle and shall inform the Fund of the
detailed action which it has taken.

A R ~ C L S X.-Relations with Other Internatiml 0rgMiutwn.v

any general international organivltion and with public international
organizations having specialized responsibilities in related fields. Any
arrangements for such co-operation which would involve a modification
of any provision of this Agreement may be effected only aftcr amend-
ment to this Ageement under Article XXVIU.

ARTICIB XI.-Relatioru with Non-Member C o u m k
Section 1. Undertakings regarding relationr wiih non-member coun!ries

L..J.
The Fund shall co-operate within the terms of this Agreement with n/191.

m.
77/1991.

Each member undertakes :
(i) not to engage in, nor to pehnit any of its fiscal agencies

referred to in Arhcle V. smtion 1 to engage in. any
transactions with a nonmember or with persons in a

me inclusion oE this page is authorized by LB. 931 19931

26 BRETTON WOODS AGREEMENTS

L.N.
7711991.

non-member’s territories which would be contrary to the
provisions of this Agreement or the purposw 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 pur-
poses of the Fund; and

(iii) to co-operate with the Fund with a view to the application
in its territories of appropriate measurw to prevent
transactions with non-members or with persona in their
temtona which would be contrary to the provisions of
this Agreement or the purposes of the Fund.

Section 2. Restricfiom on tramucfions wifh 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.

A R T I ~ XIL4rgMizahon and Manaremen1
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. Bomd of Governors
(a) All powers under this Agrbement not conferred diractly 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 in the absence of his principal. The Board of Governon
shall select one of the Governors as chairman.

(6) 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 Governora.

(c) The Board of Governors shall hold such meetings as m0y 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 onequwer of the
total voting power.
(4 A quorum for any meeting of the Board of Govmors shall be a

majonty of the Governors having not less than two-thirds of the total
voting power.

F e inclusion Of this page is authorized by L.N. W! 19931

BRER"ON WOODS AGREEMENTS 27

( e ) Each Governor shall be entitled to cast the number of votes
allotted under section 5 of this Article to the member appointing him.

u> 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
question without calling a meeting of the Board of Governors.

(g) The Board of Governors, and the Executive Board .to the extent autho-
rized, may adopt such rules and regulations as may be necessary or appro-
priate 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 the contract of service of the Managing Director.

0) 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. E-rectrtive 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.

(b) Subject to ( c ) below, the Executive Board shall consist of twenty L N
Executive Directors elected by the members, with the Managing Director as 13.1Al2Ol I .
chairman; sch.

( c ) For the purpose of each regular election of Executive Directors, the L N
Board of Governors, by an eighty-five percent majority of the total voting k::N2011
power, may increase or decrease the number of Executive Directors specified
in (b) above;

(4 Elections of Executive Directors shall be conducted at intervals of
two years in accordance with regulations which shall be adopted by the 1 3 4 ~ 2 0 1 1
Board of Governors. Such regulations shall include a limit on the total Sch
nimber of votes that more than one member may cast for the same can-
didate;

( e ) Each Executive Director shall appoint an Alternate with full power
to act for him when he is not present, provided that the Board of Governors 13-1,4,201 I
may adopt rules enabling an Executive Director elected by more than sch
a specified number of members to appoint two Alternates. Such rules. if
adopted, may only be modsed in the context of the regular election
of Executive Directors and shall require an Executive Director appointing
two Alternates to designate:

[The inclusion of this page is authorized by L.N. 92d2012]

BRETTON WOODS AGREEMENTS

(i) the Alternate who shall act for the Executive Director when he
is not present and both Alternates are present; and

(ii) the Alternate who shall exercise the powers of the Executive
Director under (n below. When the Executive Directors
appointing them are present, Alternates may participate in
meetings but may not vote.

L.N. (n Executive Directors shall continue in office until their successors are
134A'2011 elected. If the office of an Executive Director becomes vacant more than
Sch.

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 elec-
tion. While the office remains vacant, the Alternate of the former Executive
Director shall exercise his powers, except that of appointing an Alternate:

(g) The Executive Board shall function in continuous session at the
principal of ice 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 Executive Director shall be entitled to cast the number of
votes which counted towards his election.

(ii) 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.

(iii) when the suspension of the voting rights of a member is
terminated under Article XXVI, section 2(b), the member may
agree with all the members that have been 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 the 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 (n above, shall be
entitled to cast the number of 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.

[The inclusion of this page is authorized by L.N. 92c/2012]

BRETTON WOODS AGREEMENTS 29

(j) The Board of Governors shall adopt regulations under which a L.N.
member may send a representative to attend any meeting of the Executive 134N2011
Board when a request made by, or a matter particularly affecting, that SCh.
member is under consideration.

Section 4. Managing Direcfor and sluff

(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
Directors shall cease to hold ofice when the Executive Board so decides.

(h) 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 Bbard, 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.

(4 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 per-
sonnel on as wide a geographical basis as possible.

Section 5. Vofing

(a) The total votes of each member shall be equal to the sum of its basic L.N.
votes and its quota-based votes: 1 3 4 ~ 2 0 I I .

Sch.
(i) the basic votes of each member shall be the number of votes

that results from the equal distribution among all the members
of 5.502 percent of the aggregate sum of the total voting
power of all the members, provided that there shall be no
fractional basic votes.

(ii) The quota-based votes of each member shall be the number
of votes that results from the allocation of one 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:

[The inclusion of this page is authorized by L.N. 92c/2012]

BRETTON WOODS AGREEMENTS

(i) by the addition of one vote for the equivalent of each four
hundred thousand special 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 (1) 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 income of any year, it shall be
made to all members in proportion to their quotas.

( 4 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 ( 4 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.

(1) (i) The Fund may establish an Investment Account for the
purposes of this subsection (1). The assets of the lnvestment
Account shall be held separately from the oiher accounts of the
General Department.

(ii) The Fund may decide to transfei* to the lnvestment 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 lnvest-
ment Account, for immediate investment, currencies held in
the General Resources Account. The amount of these transfers
shall not exceed the total amount of the general reserve and the
special reserve at the time of the decision.

[The inclusion of this page is authorized by L.N. 92c12012]

BRETTON WOODS AGREEMENTS 3 1

(iii) The Fund may use a member's currency held in the Invest- L.N.
ment Account for investment as it may determine, in accord- 134N201 I
ance with rules and regulations adopted by the Fund by a Sch
seventy percent majority of the total voting power. The rules
and regulations adopted pursuant to this provision shall be
consistent with (vii), (viii), and (ix) below;

(iv) The income of investment may be invested in accordance
with the provisions of this subsection @. Income not invested
shall be held in the lnvestment 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 Invest-
ment 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 L,N,
liquidation of the Fund and may be terminated, or the amount 134N201 I .
of the investment may be reduced, prior to liquidation of the sch
Fund by a seventy percent majority of the total voting p o w r .

(vii) Upon termination of the lnvestment 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 lnvestment Account prior to
liquidation of the Fund, a 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
lnvestment 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 lnvestment
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

[The inclusion of this page is authorized by L.N. 92~120121

BRETTON WOODS AGREEMENTS

General Resources Account for immediate use in operations
and transactions.

Section 7. Pziblication of reports

( a ) The Fund shall publish an annual report 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

L.N. he Fund shall at all times 'have the right to communicate its views
134A12011. informally to any member on any matter arising under this Agreement. The
Sch.

Fund may, by 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 dis-
equilibrium in the international balance of payments of members. The rele-
vant member shall be entitled to representation in accordance with section
3 0 ) of this Article. The Fund shall not publish a report involving changes in
fundamental structure of the economic organization of members.

L.N.
7711991.

ARTICLE X111-Ofiices and Depositories

Section 1. Location ofofiices

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.

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.

( 6 ) 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 require-
ments 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.

[The inclusion of this page is authorized by L.N. 92~/2012]

BRETTON WOODS AGREEMENTS 33

,

Section 3. Guaranlee 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 i t

L.N.
7711991. ARTICLE XIV.-Tronn'tional 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 s h d notify
the Fund as soon thereafter as it is prepared to accept these ObligatiW.

Section 2. Exchange restrictions
A member that has notified the Fund that it intends to avail itself d

transitimal 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 transfera
for current international transactions ,that were in effmt on the &e of
which it became a member. Members shall, however, have continuour
regard in their foreign exchange policies to the purposes of the Fund,
and, as soon as conditions pennit, they shall take all possible measurea
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 rue satisfied
that they will be able, in the alxence of such restrictions, to settle their
balance of payments in a manner which will not unduly encumkc their
access to the general resources of the Fund.

Section 3. Acfion of the Fund relating to restrictions
The Fund shall make annual reports on fhe restrictions in force

under section 2 of this Article. Any member retaining any restrictions
inconsistent with Article Vm, sections 2.3. or 4 shall consult the Fund
annually as to their further retention. The Fund may, if it deem such
action necessary in exceptional circumstances, make representations to
any member that conditions are favourable for the withdrawal of m y
particular restriction, or for the general abandonment of r e s t r i ~ a s .
incons=tent with the provisions of any other articles of this Agreement
The member shall be given a suitable time to reply to such rcpresmta-
tions. If the Fund finds that the member persists in maiotainmg
restrictions which are inconsistent with the purposes of the Fund. the
member shall he subject to Article XXVI, &ion 2 (a).

Anncm X V S p e c i a l Drawing Rights L.N.
LN.
n/iwi. Section 1. Authority to allocate special drawing righls

reserve assets, the Fund is authorized to allocate special drawing rights

[The iwlusionof this page isauthori7xd by L.N. 146/19yy]

TO meet the need, as and when it arises, for a s q p l m e n t to existing 93c11998.

34 BRETTON WOODS AGREEMENTS

in accordance with the provisions of Article XVnI to members that
are participants in the Special Drawing Rights Department.
In addition, the Fund shall allocate special drawing rights to members

that are participgnts in the SpeciaI Drawing Rights Department in
accordance with the provisions of Schedule M.

Section 2. Valuaiion of rhe special drawing right
The method of valuation of the special drawing right shall be deter-

mined by the Fund by a seventy percent majority of the total voting
power, provided, however, that an eighty-five percent majority of the
totaU voting power shall be required for a change in the principle d
valuation or a fundamental change in the application of the principle in
&ect.

L.N.
77 I1991. Department

ARTICLE XVL-General Department and Specior Dmwing Righta

Section 1. Separution of operatiom and transactiom
AU operations and transactions involving spocial drawing rights shall

be conducted thrqugh the Special Drawing Rights Department. AI1 0th
operations and transactions on the m u n t of the Fund authorized by
or under this Agreement shaU he conducted through the General
Department. Operations and transzictions pursuant to Article XW,
section 2 shall be conducted through the General Department a w d
as the Special Drawing Rights Department.

Section 2. Separation of assets and property
of the Fund, except resources sdmidwtaed

under Article V. section ? (b). shall be held in the General Department,
provided that assets and property acquired under Article XX. ~ t i m 2
and Artides XXIV and XXV and Schedules H and I shall be held in
the Special Drawing Rights Department. Any assets or property held
in one Department shall not he available to dissharge M m e t tbc
liabilities, obligations, or losses of the Fund hawred 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 shaU he paid by the Fund from the General Department
which shaU be reimbursed in special drawing rights from time to time
by assessments under Article XX, seftion 4 made on the basis of a
reawnable 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 R~ghig
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 other information BS it deems
necessary for its functions.

1The inclusion of this page is authorized by L.N. 146/19991

All assets and proper

______

BRETTON WOODS AGREEMENTS 3?

A R ~ C L E XVIL-Participants and Orher Holders of specid L.N.
Drawing Rights n/1991.

Section 1. Parficipmts
Each member of the Fund that deposits with the Fund dn instrument

setting forth that it undertakes all the obligations of a participant in the
Special Drawing Rights Department in accodance 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 t h i s Agree-
ment 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

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 provisions of this Agreement or with prescribed
holders in accordance with the terms and conditions prescribed under
section 3 of this Article.
Section 3. Other holders

total of quotas.

The Fund may prescribe :
(i) as holders, non-members, members that are non-participants,

institutions that perform fnnctions of a central bank for more
that one member, and other official entities;

tii) the terms and conditions on which prescribed holders may
be permitted to hold special drawing riehts and may accent
and use them in operations and transactions with’@&
pants 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 speclal 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

ARTKLB XVIIL--A llofarion and Cancellation of Special

Section 1. Principles and considerations governing ailmation and
cancellation

L.N.
Drawing Rights 7711991.

(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

me inclusion r d this paze i s authorized by LN. 90119931

36 BRETTON WOODS AGREEMENTS

global need, as 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
infiation in the world.

(b) The first decision to allocate special drawing rights shall take
into account, as special consideration, 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. AIlocation and cancellafion
(a) Decisions of the Fund to allocate or cancel spxial drawing riEhts

shall be made for basic periods which shall TUD oonsecutively 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 cancallations
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 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 basic 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 dwides that a member that becomes a participant during a Wic
period shall receive allocations during the remainder of that basic period
and the participant was not a member on the dates established under
(b) or (c) above. the Fund shall determine Lhe basis on which these
allocations to the participants shall be made.

(e) A participant shall receive allocations of special drawing r i g h
made pursuant to any decision to allocate unless:

(i) the Governor for the participant did not vote in favor of
the decision: and

me inclusion of this page is suthorized by LN. So119931

BRETTON WOODS AGREEMENTS 37

(ii) the participant has notified the Fund in Writing prior to
the 6rst 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 fo terminate the e5:ct
of the notice with respect to docatlons of spefial drawmg
rights subsequent to the termination.

If on the e5ective date of any cancellation the amoupt of spacial
drawing rights held by a participant is less than its share. of the special
drawing rights that are to be cancelled, the participant shall eliminate its
neptive balanm 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
cancullation shall be apphd 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 cancellarions
(a) Decisions under section 2 (a), (a), 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 he consistent with the provisions of section
1 (a) of this Article. shall conduct such consultations a will enable him
to ascertain that there is broad support amon participants for the
proposal. In addition, before making a propod for the 6rst 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 as he is so satisfied.

(c) The Managing Director shall make proposds :
(i) not later than six months before the end of each basic

period;
Ci) 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 with section 3 of this Article, he
considers that it would be desirable to change the rate
or intervals of allocation or canmllation or change the
length of a basic period or start a new basic period; or

W e inclusion of this pase i E authoked by L.N. W/ 19931

38 BRETTON WOODS AGREEMENTS

(iv) wilhin six months of a request by the Board of Governors

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 f 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 fa), (b), and (c) or section 3 of this
Article except for decisions under section 3 with respect to a decrease
in the rates of allocation.

or the Executive Board,

L.N.
77/19El1.

ARTICLE XJX-Operatiom and Transactions in Special Drawing
Rights

Section 1. Use of special drawing rights

authorized hy or under this Agreement

Section 2. Operations and transactions between participants
(a) A participant shall he 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 percent 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 con-
ditions 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 rights in
accordance with this Agreement.
(d) The Fund may make representations to a participant that enten

into any operation or transaction under (b) or (c) above that in the
judgment of the Fund may be prejudicial 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 he subject to Article XXIII,
section 2 (b).

Section 3. Requiremew of need
(a) In transactions under section 2 (a) of this Article, except as

otherwise provided in Cc) below, a participant will be expected to use
its special drawing rights only if it has a need because o€ its balance Of
payments or its reserve position or developments in its rcsewes. and
not for the sole purpose of changing the composition of its reserves.

Special drawing rights may be used in the operations and transactionr

-. [a inclusion at this page is authorized by LM. 90/1993]

BRETTON WOODS AGREEMENTS 39

(6) The use of special drawing rights shall not be subject to
chal!enge on the basis of the expectation of (U) above, but the Fund may
make representations to a participant that fails to fulfill this expectation.
A participant that persists in failing to fulfiU this expectation shall be
subject to Article XXIII, section 2 (b) .

(c) The Fund may waive the expectation in (U) above in any trans-
actions in which a participant uses special drawing rishts to obtain an
equivalent amount of currency from a participanf designated under
section 5 of this Article that would promote rexmstitutlon by the other
participant under section 6 (U) of this Article; prevent or reduce a
neptive balance of the other participant; or ofset the effect of a failure
by the other participant to fulfil1 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 (U) of this Article. A
participant’s ob!igation 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 net cumuiative 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 :o provide currency
(a) The Fund shall ensure that a 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 (U) 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 sub:ect 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 balanced 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 Mances in holdinrs of special drawing
rights, or to offset the effect of failures to fulfil1 the
expectation in section 3 (a) of this Article.

(iii) In desigaating participants the Fund normally shall give
Priority to those that need to acquire special drawing
rights to meet the objectives of designation under (ii)
above.

Whe inclusion of this page is authorized by L.N. 90/1993]

40 BRETTON WOODS AGREEMENTS

(b) Jn order to promote over time a balanced distribution of holdings
of special drawing rights un&r (U) (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 he 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. Recomtiturion
(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 (6) below.

(b) The rules for reconstitution may be reviewed at any time and new
rules shall be adopted if necessary. Unless new d e s 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.

Section 7. Exchange rules
(U) Except as otherwise provided in (b) below. the exchange rates for

transactions between participants under section 2 (U) and (b) of this
Article s M l 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 purpose of this provision the term participant includea a

termination participant.

L.N.
7711991. ARncLE XX-Specia i Drawing Rights Departmen!

Interest and Charges
Section 1. Zntwest

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 sufZcient
charges are received to meet the payment of interest.

[ f i e inclusion of this page is authorized by L.N. PO1 19931

BRETTON WOODS AGREEMENTS 4 1

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 per cent
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. Payt~fent 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 assess-
ment 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
freeli usable currency from a participant which the Fund shall specify.
Special drawing rights acquired by a participant after the date for payment
shall be applied against its unpaid charges and cancelled.

[The signature and depositary clause reproduced below followed the text of
Article X X in the original Articles of Agreernenr]

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 11, Section 2.

AKTICLE XXI. Administiationof the General Department and the L.N.
Special Drawing Rights Department 7711991.

( a ) The General Department and the Special Drawing ~ i ~ h ; s 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 deter-
mining whether a quorum exists or whether a decision is
made by the required majority.

[The inclusion of this page is authorized by L.N. 92c/2012]

42

L N
134N2011.
Sch

BRETTON WOODS AGREEMENTS

(ii) For decisions by the Executive Board on matters pertaining
exclusively to the Special Drawing Rights Department only
Executive Directors elected by at least one member that
is a participant shall be entitled to vote. Each of these
Executive Directors shall be entitled to cast the number of
votes allotted to the members that are participants whose
votes counted towards his election. Only the presence of
Executive Directors 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.

(iii) Questions of the general administration of the Fund, including
reimbursement under Article XVI, Section 2, and any ques-
tion whether a matter pertains to both Departments or exclu-
sively 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 valua-
tion of the special drawing right, the acceptance and holding
of special drawing rights in the General Resources Account of
the General Department and the use of them, and other deci-
sions 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 1X 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 XXlX (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 may require
that the question be referred to the Board of Governors under
Article XXlX (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.

[The inclusion of this page is authorized by L.N. 92c/2012]

BRETTON WOODS AGREEMENTS 43

(4 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 he submitted to
arbitration in accordance with the procedures in Article SXIX (c).

ARTICLE XXII.--General Obligation of Participmfs
In addition to the obligations assumed with respect to special drawing

right8 under other articles of this Agreement. each participant under-
takes 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.

L.N. n/im

ARTICLE XXtILSuspension of Operalions and Transactions
in Special Drawing Rights

L.N.
771 1991.

Section 1. Emergency provisionr
In &e event of an emergency or the development of unforseen

circumstances threatening the activities of the Fund with r e s p t to the
Special Drawing Rights Department, lhe Executive Board. by an
eighty-five per cent majority of the total v o h g 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 fulfiil obligations

(a) If the Fund 6nds that a partiCipan6 has failed to fulfil1 its
obligations under Article XIX. section 4. the right of the puticipmt
to use its special drawing rights shall be suspended unless the Fund
otherwise decides.

( b ) If the Fund h d s that a participant has failed to fulfil1 any ogher
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 he adopted to e m r e that before action is
taken against any participant under (a) or (b) above. the participant
shall be informed immediately of the 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 (U)
above, it shall not use special drawing rights p e d i g the disposition
of the complaint.
(4 Suspension under (a) or (6) above or limitation under (c) above

shall not affect a participant’s obligation to provide currency in
accordance with Article XIX, Section 4.

IThe inclusion af th i r page is authorized by LN. 90/1993]

44 BRETTON WOODS AGREEMENTS

(e) The Fund may at any time terminate a suspension,vder (U) or
(b) above, provided that a suspension imposed on a p r a p a n t under
(b) above for failure to fulfil1 the obligations under Article X M .
section 6(a) shall not be terminated until one hundred eighv days ater
the end of the first calendar quarter during which the parUcipant com-
plies 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 Z(a). Article XXVI, Section 2 shall not apply
because a participant has failed to fultill any obligations with respect
to special drawing rights.

h n u n XXIV. Terminuttion of Participation
Section 1. Right 10 terminate parficipation

(U ) Any participant may terminate its participation,in the Special
Drawing Rights Department at any time by transmltbng a noficce 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 shall be paid in special drawing rights.

(b) The Fund shall be obligated to redeem all special drawing rights
held by the terminatiug participant, and the terminating participant
shall be obligated to pay to the Fund an 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 Rights
Department. These obligations shall be set off against each other and
the amount of special drawing rights held by the terminating participant
that is used in the setoff to extmguish its obligation to the Fund shall
be cancelled.

(c) A settlement shall be made with reasonable despatch by agree-
ment 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.

IThe inclusion OE this page is authorized by LN. 90/1993]

L.N.
7711991.

BRETTON WOODS AGREEMENTS 45

Scction 3. Interm 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 t imes 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 chargea or
assessments in a transaction with a participant specified by tbe Fund or
by agreement from any other holder, or to dispose of special drawing
rights received as interest in a transaction with m y 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 partici-
pants in proportion to the amount by which each participant's holdinss
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
installmeat due under an agreement on settlement 01 under Schedule
H and set off against that installment shall be cancelled

Section 5. Settlement of obligation to a termiMting panicipmt
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 specised in accordance with the principles in
Article XVC, 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 me its speial
drawing rights to obtain its own currency, a freely usable currmcy, or
any other asset from any holder, if the Fund 80 permits.

Section 6. General Resources Account transaction

Fund may decide that a terminating participant Shall :
order to facilitate settlement with a terminating participant. the

(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
me inclusion of tbk page i6 authorized by L.N. 90/ 15931

46 BRETTON WOODS AGREEMENTS

L.N.
7711991.

LN.
7711991.

currency acceptable to the Fund to meet any charges or
installment due under an agreement or the provisions of
Schedule H.

hncw XXV.-Liquidation of the Special Drawin8 Rights
Department

(a) The Special Drawing Rights Department may not be liquidated
except by 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 allocatim
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 the Fund shall he a decision to
liquidate both the General Department and the Special Drawing Rights
Department.

(6) 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 fights 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 tl?e Fund and of participants
under this Agreement with respect to p a l drawing rights shall cease
except those set out in this Article, Aricle Xy Article X X I (4,
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 assess-
ments levied before that date but not paid shall be paid in special
drawing rights. The Fund shall he 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 allocation of
special drawing rights and such other amounts as may be due and
payable because of its participation in the Special Drawing fight3
Department

(a) Liquidation of the Special Drawing Rights Department shall be
administered in accordance with the provisions of Schedule. I.

ARTICLE XXVI.-Wifhdrawal from Membership
Section 1. Right of members to wirhdraw

Any member may withdraw from the Fund at my time by trans-
mitting a notice in writing to the Fund at its principal office. Withdrawal
shall become effwtive on the date such notice is received.

Fhe inclusion af this page is authorized by LN. 90119931

BRETTON WOODS AGREEMENTS 47

Section 2. Compulsory wifhdrawal
(a) If a member fails to fullill 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.

declaration of ineligibility under (a) above, the member persists in its 77/1991.
failure to fulfiJ any of its obligations under this Agreement. the Fund
may, by a seventy percent 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
percent majority of the total voting power, terminate the suspension
at any time.

(c) If, after the expiration of a reasonable period following a decision L,N,
of suspension under ( b ) above, the member persists in its failure to fulfil1 n/1991.
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 percent of the total voting power.
(d) Regulations shall be adopted to ensure that before action is L.N.

taken against any member under (a), (bA or (c) above, the member shall 77/1991.
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. Seftlernent 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 settle-
ment of accounts.

(b) If. after the expiration of a reasonable period following a L.N.

AR~CLB XXVIL-Emergency F’rovisions L.N.
nii99i.

Section 1. Tempomy 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 my of
the following provisions:

(i) Article V. sectionS 2.3,7.8 (a) (i) and (e):
(ii) Article VI. section 2;

(iii) Article X I . 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

r h e indusion of this page is auhorized by LN. 9Q/1993]

48 BRETTON WOODS AGREEMENTS

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
(U) above continue to exist.

(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 pied in which its operation ia suspended

Section 2. Liquidation of the Fund
(U) 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 a l l obligations of membera under
this Agreement shall cease except those set out in this Article. in Article
XXlX (c), in Schedule I. paragraph 7. and in Schedule K.

(c) Liquidation shall be administered in accordance with the
provisions of Schedule K.

A m a E XXVIU-Amendments
(U) Any proposal to introduce modifications in thin Agreement,

whether emanating h m 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 Govmors.
If the proposed amendment is approved by the Board of Governors,
the Fund shall, by circular letter or telegram, ask al l members whether
they accept the proposed amendment.

When threefifths of the members. having eighty-five pcrcent of the
total voting pqwer, have accepted the proposed amendment. the Fund
shall certify the fact by a formal communication addressed to all
members.

(b) Notwithstanding (U) above, acceptancc by all members is
required in the case of any amendment mod8ying:

(i) the right to withdraw from the Fund (Article X X V L rection
1);

(U) the provision that no change in a member’a quota shall be
made without its consent (Article IlI, section 2 (d)

(iii) the provision that no change may be made in the par value
of a member’s currency except on the p r o p 4 of that
member (Schedule C, paragraph 6).

and

Vhe indusion of thia m e is authorized by LN. 901 19931

BRETTON WOODS AGREEMENTS 49

(c ) Amendments shall enter into force for all members three months
after the date of the formal communication unless a shorter period is speci-
fied in the circular letter or telegram.

ARTICLE XXIX. Interpretation L N
7711991 ( a ) Any question of interpretation of the provisions of this Agreement

arising between any member and the Fund or between any members of 134A/20I1
the Fund shall be submitted to the Executive Board for its decision. If the sch.
question particularly affects any member not entitled to appoint an Exe-
cutive Director, it shall be entitled to representation in accordance with
Article XII, section 30').

( 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 a Committee on lnterpretation of the Board of
Governors. Each Committee member shall have one vote. 'The Board of
Governors shall establish the 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 dyision 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 Inter-
national 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 I* N
7711991

In interpreting the provisions of this Agreement the 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 111, 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.

[The inclusion of this page is authorized by LN. 9242012]

BRETTON WOODS AGREEMENTS

(c) Reserve tranche purchase means a purchase by a member of special
drawing rights or 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 expert fluctuations;

(ii) policies on the use of its general resources in connection with the
financing of contributions to international buffer stocks of pri-
mary 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.

(4 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) p&ments due as interest on loans and as net income fiom 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 trans-
actions 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 been cancelled under Article XVIII,
section 2 (a).

fl A fieely 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 3 1, 1972 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.

[The inclusion of this page is authorized by L.N. 92d2012]

BRETTON WOODS AGREEMENTS 51

ARTICLE XXXI-Final Provisions L.N.
7 7 / 1 9 ]

Section 1. Entry into force
This Agreement shall enter into force when it has been signed on

behalf of governments having sixty-five percent of the total of the
quotas set forth in Schedule A and when the instruments referred to
in section 2 (U) of this Article have been deposited on ther behalf.
but in no event shall this Agreement enter d o force before May 1.
1945.

Section 2. Signatwe
(U) Each government on whose behalf this Agreement is dgnd

shall deposit with the Government of the United States of +erica an
instrument setting forth that it has accepted this Agreement III accord-
ance with its law and has taken all steps necessary to enable it to carry
out all of its obligations under this Agreement.

(6) Each country shall become a member of the Fund aa from the
date of the deposit on its behalf of the instrument referred to in fa)
above. except that no coun shall become a member before this

(c) The Government of the United States of America shall inform
the governments of all countries hose names are set forth in Schedule
A, and the governments of all countries whose membership is approved
in accordance with Article Il, Section 2, of all signatures of this Agree-
ment and of the deposit of all instruments refmed to in (U) 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-hundredth of one percent of its total subscription in gold
or United States dollars for the purpose of meeting administrative
expense3 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 hy December
31, 1945. the Government of the United States of America shall return
such funds to the governments that transmitted them.

(e) This Aaeement shall remain omn for signature at Washiwton

Agffement enters into force un 3 ' er sect1011 1 of this Article.

on behalf of -the governments of th; 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 member-
ship 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 protection, suzerainty. or authority,
and all territories in respect of which they exercise a mandate.

(h) Subsection (d) above shall come into force with regard to each
signatory government as from the date of its sigoature.

Phe inolusion of this page i h mvhor id by L.N. 901 19931

52 BRETTON WOODS AGREEMENTS

L.N. &€iEDULE k ~ u o i n s
?711991. (In millions of United States dollars)

Australia ........................ 200 Iran ............................... 25
Belgium ........................ 225 Iraq ................................. 8
Bolivia ........................... 10 Liberia ........................... .5
Brazil ........................... 150 Luxembourg ..................... 10
Canada .......................... 300 Mexica ........................... 90
Chile .............................. 50 Netherlands ..................... 275
China ........................... 550 New Zealand ..................... 50
Colombia ........................ 50 Nicaragua .......................... 2
C o s t a Rim ........................ 5
Cuba .............................. 50 Panama ........................... 5

Norway ........................... 50

Chchoslovakia ............... 125 Paraguay ........................... 2
Denmark' .................... Peru ............................... 25
Dominican Republic ........... .5 Philippine
Ecuador ........................... 5 Commonwealth ............. 15
Egypt .............................. 45 Poland ........................... 125
El Salvador ...................... 2.5 Union of South Africa ...... 1CU
Ethiopia ........................... 6 Union of Soviet Socialit
France .......................... 450 Republics 17-00
Greece ............................. 40 United Kingdom 1300
Guatemala ........................ 5 United States ................ 2750
Haiti ................................ 5 Uruguay ......................... 15
Honduras .......................... 2.5 Venezuela ..................... If

India ............................ 400

...................
............

Iceland ............................. 1 Yugoslavia ................... 60

*The quota of Denmark shall be determined by the Fund afta ths
Danish Govermnmt has declared iis teadinar, to sign this m m t
but MoIe signature lakes place.

L.N. SxlmJLE B
Trrmsitiod PmViFions with Respect to Repurchase. Pay?nenr of
Additional Subsdptions, Gold, and Certain Operaliond Matters

1. Repurchase obligations that have accrued pursuant to Article V,
section 7 (b) before the date of the second amendment of tbis Agree
ment 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 t h i Agreement before
the second amendment.

7711991.

inolusion of hie page is authorized by LN. 90( 19931

BRETTON WOODS AGREEMENTS 53

2. A member shall discharge with special drawing rights any obli-
gation to pay gold to the Fund in repurchase or as a subscription that
i s outstanding at the date of the second amendment of thii Agreement.
but the Fund may prescribe that these payments may be made in whole
or in part in the currencies of other members speci6ed 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 gram of fine gold shall be
equivalent to one special drawing right, and the amount of currency
payable nnder 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.

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, re-
purchases under 4 above, and any specification of currencies under 2
above shall be in a m r d a n e with Article V. section 7(3.

6. AU rules and regulations. rates, procedures. and decisions in effect
at the date of the s o n d amendment of this Agreemeot shd remain
in effect until they are changed in accordance with the provisions of this
Agreement.
7. To the extent that arrangement8 equivalent in effect to (U) 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 h e gold held by it on
August 31, 1975 to thme members that were membets 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 exchange for its currency and at a price
equivalent at the time of sale to one rpecial drawing right
per 0.888 671 gram of Rne gold, and

(6) sell up to 25 million ounces of fine gold held by it on August
31, 1975 for the benefit of developing members that were
membem 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 Aurmst 31, 1975
to the total of the quotas of all members on that date shall
be transferred directly to each such member. The requirements -

[Tbc indmion of this pge is authorized by L:N. 90/ 19931

54 BRETTON WOODS AGREEMENTS

under Article V, section 12 (c) that the Fund consult a
member. obtain a member’s concurrence, or exchange a mem-
ber’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 this paragraph I , an amount of the proceeds
in the currencies received equivalent at the time of sale to one special
drawing right per 0.888 671 gram of h e 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, Asets that remain subject to disposition
by the Fund upon termination of arraJgements pursuant to (6) above
shall be transferred to the Special Disbursement Account.

L.N. SCXEDULE C.-Pm Vdues ni 1591.
1. The Fund shall notify members that par values may bc estab-

lished for the purposes of this Agreement, in accordance with Article
N, sections 1, 3, 4, and 5 and this Schedule, in terns 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 withiin 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 fulm its obligations under Article N, 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 ifs currency undertakes to
apply appropriate measures consistent with thls Agreement in ordzr to
ensure that the maximum and the mipimum rates for spot exchans
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 sucb 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 fundmental

inclusion of this page is authorized by L.N. Wl19931

BRETTON WOODS AGREEMENTS

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 Agree-
ment 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 Agree-
ment 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 es-
change 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 Fund's intention to consider whether to make a finding.

[The inclusion of this page is authorized by L.N. 92c/2012]

BRETTON WOODS AGREEMENTS

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 fulfill its obligations under Article 1V; 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.

I I . 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.

I L N . I . ( a ) Each member or group of members that has the number
134Al20 1 1 of votes allotted to it or them cast by an Executive Director
Sch. 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 change, by an

[The inclusion of this page is authorized by L.N. 92~120121

BRETTON WOODS AGREEMENTS 56.0 1

eighty-tive 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; and

(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 develop-
ments in the transfer of real resources to developing countries.

(b ) The Council shall consider proposals pursuant to Article
XXVlll (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.

[The inclusion of this page is authorized by L.N. 92~120121

BRETTON WOODS AGREEMENTS

(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 cannot be cast by an Executive Director, the mem-
ber 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 regula-
tions 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 X11,
section 2 (c), 0, (g), and 0'); Article XVIII, section 4(a) and
section 4 (c) (iv); Article XXIII, section 1; and Article XXVlI,
section I (a). . .

[The inclusion of this page is authorized by L.N. 92c/2012]

BRETTON WOODS AGREEMENTS

(6) 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 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 thi 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 (6) 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.

(6) Article IX, section 8 shall apply to Councillors, their
Alternates, and Associates, and to any other person entitled to
attend a meeting of the Council.

(e) When an Executive Director is entitled to cast the number of L N
votes allotted to a member pursuant to Article XII, section 134N2011
3(i), (iii), the Councillor appointed by the group whose mem- Sch
bers 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 appoint-
ment 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. Transitional Provisions with Respect L N
to Executive Directors 134A120 1 1

Sch

I. Upon entry into force of this Schedule: - L.N.
134N20 1 1. (a) Each Executive Director who was appointed pursuant to Sch

former Article Xll, sections 3(b)(i) or 3(c), and was in office ' a immediately prior to the entry into force of this Schedule, shall be deemed to have been elected by the member who
appointed him; and

(6) Each Executive Director who casts the number of votes of a
I member pursuant to former Article XII, section 3(i)(ii) imme-

diately prior to the entry into force of this Schedule, shall be
deemed to have been elected by such member.

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

I [The inclusion of this page is authorized by L.N, 92~/2012]

58 BRETTON 1VOODS ,~GREEMEI\ITS

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 a;e 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 person elected are deemed under 4 below to have raised the votes cast
for that person above 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 detennining 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 largest number of votes for such person, then 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.

L N SCHEDULE F. Desigtiation
7711991

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 special
drawing rights in excess of their net cumulative allocations to their
official holdings of gold and foreign exchange.

(6 ) The formula to give effect to (a) above shall be such that partici-
pants 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.

[The inclusion o f this page is authorized by L.N. 92~/2012]

BRETTON WOODS AGREEMENTS 58.01

S ~ ~ I D ~ L B G.-Reconstitmion LN.
77/1941.

1. During the first basic period the rules for reconstitution shall be
as follows:

(Q) (i) A participant shall so use and reconstitute its holdings
of special drawing rights that, five years aftzr the fust
allocation and at the end of each calendar quarter there-
after, 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 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 wmply 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 respat to the timing of the designation of partici-
pants under Article XM, section 5(a) (ii), in order to
mist them to comply with the requirement in (Q) (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 wil l be able to comply
with the requirement in (a) (i) above unless it ceases to
use s ecial drawing rights for the rest of the period for

(iv) A participant that needs to acquire special drawing
rights to fullil 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 fulfil this obligation cannot be obtained
in this way. the participant shall be obligated and en-
titled 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 hold-
mgs of special drawing rights and their other reserves.

whic K the calculation was made under (Q) (ii) above.

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 XXlII. section 2 (b).

[The inclusion of th is ,p&e is muthorized by L.N. 90/1S93]

58.02 BRETTON WOODS AGREEMENTS

L.N. SCHEDULE It-Termination of Participation
7'111991. 1. If the obligation remaining after the setoff under Article XXw.

section 2 (6) is to the terminaung particlpant and agreement on setue-
mcnt between the Fund and the terminating participant is not reached
within six months ot the date 01 terminatmu u e L . U I . ~ d~iul r a k m
this balance of special drawing rights in equal half-yearly instalments
within a maximum of five years of the date of tcrnunahon. h e b u d
shall redeem this balance as it may determine. eitber (a) by the pay-
ment to the terminam 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 a freely usable
currency from a participant spedied by the Fund, the General Resources
Aocount, 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 settlement is not reached
within six months of the date of termination. the terminating participant
shall discharge this obligation in equal half-yearly instalments W I ~
three years of the date of termination or within such longer PnOd as
may be fixed by the Fund. The terminating participant shall W r g e
this obligation. as the Fund may determine, either (a) by the payment
to the Fund of a freely usable currency, or (b) by obta
drawing rights, in accordance with Article XXIV. WtiOn?%%%L
General Resources Aacount or in agreement with a participant specified
by the Fund or from any other holder, and the setoff of these S p h l
drawing rights against the instalment due.

3. Instalments under cither 1 or 2 above shall fall due six months
after the date of tennination and at intervals of six months thereafter.

4. In the event of the Special Drawing Rights Department going into
liquidation under Article XXV withm six months of the date a partici-
pant terminates its participation. the settlement between the Fund and
that government shall be made in awrdance with Article XXV and
Schedule I.

L.N.
7711991. Special Drawing Rights Department

SCHEDULE I.-Administrdion of Liquidation of the

1. In the event of liquidation of the Special Drawing R d t s Depart-
ment, participants shall dipcharge 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 pariicipants
holding special drawing rights to be redeemed in any instalment 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.

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

[The indusion of tbLr pagc is authorid by L:N. 901,19931

BRETTON WOODS AGREEMENTS 58.03

proceed until special drawing rights held in the General Resoutces
Account have been distributed in accordance with the following rule:

After the distributions 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 partici-
pants 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 hold-
ings of each currency under 2 (d) of Schedule K. the Fund shajl
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) Spceial drawing rights held by governments that have termi-
nated 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 terns of any agreement under Article XXIV or
Schedule €I.

(b) Special drawing rights held by holders that are not participants
shall be redeemed before those held by participants, and shall
he redeemed in proportion to the amount held by each holder.

(c) The Fund shall deternine the 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
thud highest proportion: and this p r m s shall be COtIthWd
until the amount available for redemption is exhausted.

4. Any amount that a artkipant will be. entitled to receive in re-
demption under 3 above & all 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 hold- and each d c i p a n t ShaU
pay charges on the net cumulative allocation of specid 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 he made
in speck.1 drawing rights to the extent possible. A participant that does
not hold suf6cient 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 transferred
to the Fund and shall be redeemed 6rst and with the currencies used
by the Fund to meet its expenses.

[The inclusion af this page is au.uthorized by LN. 90/ 19931

58.04 BRETTON WOODS AGREEMENTS

LN.
??I 1991

6. While a participant is in default with respect to any payment re-
quired by 1 or 5 above, no amounts shall be paid to it in accordance
with 3 or 5 above.

7. If after the h a 1 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

roportion such amounts in amrdance 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 appor-
tion this currency and any residual claims among participants in p m
portion 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 Fund's
liabilities arising from the allocations of special drawing rights and the
administration of the Special Drawing Rights Department shall cease.

8. Each participant whose currency M distributed to other partici-
pants 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 territorities. 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 cupncy.

SCHEDULE J.--Settlement of Accourtls 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 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 ayment shall be made until six months after

withdrawing member, and for this purpose the Fund may transfer to
the General Resources Account holdings of the member's c-cy in
the Special Disbursement Account or m the Investment Account in
exchange for an equivalent amount of the clirrencies of other members
in the General Resources Account selected by the Fund With their
concurence.

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
shaU 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 wtl?drawal, the currency
in question held by the Fund shall be paid forthwth to the WitMraWing
member. Any balance due shall be paid in ten half-yearly instalments
during the ensuing 6ve years. Each such instalment shall be paid, at
the option of the Fnnd, either in the currency of the withdrawing
member acquired after its withdrawal or in a freely usable currency.

F e inclusion or this page is authorized by LN. 90/1W31

the date of withdrawal. ! ayments shall be made in the currency of the

BRETTON WOODS AGREEMENTS

3. If the Fund fails to meet any instalment which is due in accord-
ance with the preceding paragraphs, the withdrawing member shall be
entitled to require the Fund to pay the instalment in my currency held
by the Fund with the exception of any currency which has been declared
scarce under Article VII. section 3.

4. If the Funds holding 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 e x w s currency
in a freely usable currency. Redemption shall be made at the rates at
which the Fund would sell such currencies at the time 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 he hed by the Fund, but shall not be required to redeem in
any half-ycarly period more than one-tenth of the Fund’s excess hold-
ings of its currency at the date of withdrawal plus further acquisitions
of the currency during such half-yearly period. If the withdrawing mem-
ber does not fulfil1 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 persoas within its
territories. It shall compensate the Fund for any loss resulting from
the dBerence 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 dispmal 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 12v) (i). the indebtedness shall be discharged in
accordance with the tern of the indebtedness.

8. If the Fund holds the withdrawing member’s currency in the Special
Disbursemeat Account or in the Investment Account, the Fund may in
an orderly manner exchange in any market for the currencies of mem-
bers the amount of the currency of the withdrawing member remaining
in each account after use under 1 above, and the proceeds of the ex-
change 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

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58.06 BRETTON WOODS AGREEMENTS

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 witbin six months of the date on which the member
withdraws, the accounts between the Fund and that Wvernment shall
be settled in accordance with Article XXVII, section 2 and Schedule
K.

SCHEDULE K.-Adminii~?ation of Liqui&ion
I. 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:

L.N.
771 1991

(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 accordance with 1
above, the balance of the Fund's assets shall be distributed and
apportioned as follows:

(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 dis-
tributed to those members that were members on
August 31. 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 thme members that were m e m h on
August 31. 1975 in propation to their quotas on that
date. Each type of asset shall be distributed propor-
tionately 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 pmportions. 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
fitty percent of its quota

(U)

rme indmion of this page is authorid by LN. W119931

BRETTON WOODS AGREEMENTS

( 4 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 amounts 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 amount 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 ( 4 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 ( 4 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 under 2 (4 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 distribu-
tion, 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 fulfill 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 sums 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.

[The inclusion of this page is authorized by L.N. 92~120121

, L.N.
7811991

L.N.
134N201 I .
Sch.

' L.N.
! 134N2011.
. Sch.

L.N.
: 134N2011.

Sch.

BRETTON WOODS AGREEMENTS

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 f i l l extent to which they could 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 inember under Article
XXVI, section 2(b), the following provisions shall apply:

1. The member shall not:

(a) Participants 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 XXVlll (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 elected
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 o f ' ( a ) the acceptance of a proposed
amendment pertaining exclusively to the Special Drawing Rights Department
and (h) the calculation of basic votes pursuant to Article XII, section
5 (a)(i).

3. (a) The Governor and ~ l t e rna te Governor appointed by the member
shall cease to hold office.

(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 maxi-mum of thirty days
from the date of suspension.

(c) The Executive Director 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

[The inclusion of this page is authorized by L.N. 92c12012J

BRETTON WOODS AGREEMENTS 58.09

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 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 Director, the Executive
Director shall continue to hold office for the remainder
of the temi.

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.

SCHEDULE M. Special One-Time Allocation of Special Drawing L.N.
~ i g h t s 98C11998. '

I. Subject to 4 below, each member that, as of September 19, 1997, is a
participant in the Special Drawing Rights Department shall, on the 30th day
following the effective date of the fourth amendment of this Agreement,
receive an allocation of special drawing rights in an amount that will result in
its net cumulative allocation of special drawing rights being equal to
29.3 157888 13 per cent of its quota as of September 19, 1997, provided that, .
for participants whose quotas have not been adjusted as proposed in Reso-
lution No. 45-2 of the Board of Governors, calculations shall be made on the
basis of quotas proposed in that resolution.

2. (a) Subject to 4 below, each country that becomes a participant in the
Special Drawing Rights Department after September 19, 1997 but
within three months of the date of its membership in the Fund shall
receive an allocation of special drawing rights in an amount calcu-
lated in accordance with (b) and (c) below on the 30th day follow-
ing the later of:

(i) the date on which the new member becomes a participant
in the Special Drawings Rights Department; or

(ii) the effective date of the fourth amendmentof this Agree-
ment.

(b) For the purposes of (a) above, each participant shall receive an
amount of special drawing rights that will result in such parti-
cipant's net cumulative allocation being equal to 29.3 157888 13 per
cent of its quota as of the date on which the member becomes a
participant in the Special Drawing Rights Department as adjusted:

b [The inclusion of this page is authorid by L.N. 92~12012)

BRETTON WOODS AGREEMENTS

(i) first, by multiplying 29.3 157888 13 per cent by the ratio
I of the total of quotas, as calculated under 1 above, of

the participants described in (c) below to the total of
quotas of such participants as of the date on which the
member became a participant in the Special Drawing
Rights Department; and

I

(ii) second, by multiplying the product of (i) above by the
ratio of the total of the sum of the net cumulative
allocations of special drawing rights received under
Article XVlll of the participants described in (c) below
as of the date on which the member became a partici-
pant in the Special Drawing Rights Department and the
allocations received by such participants under 1 above
to the total of the sum of the net cumulative allocations
of Special Drawing Rights received 'under Article
XVlII of such participants as of September 19, 1997
and the allocations received by such participants under
1 above.

(c) For the purposes of the adjustments to be made under (b) above,
the participants in the Special Drawing Rights Department shall be
members that are participants as of September 19, 1997 and:

(i) continue to be participants in the Special Drawing
Rights Department as of the date on which the member
became a participant in the Special .Drawing Rights
Departnient; and

(ii) have received all allocations made in the Fund after
September 19, 1997.

3.(a) Subject to 4 below, if the Federal Republic of Yugoslavia
(SerbidMontenegro) succeeds i, the membership in the Fund and
the participation in the Special Drawing Rights Department of the
former Socialist Federal Republic of Yugoslavia in accordance with
the terms and conditions of Executive Board Decision No. 10237-
(9211 50), adopted December 14, 1992, it shall receive an allocation
of Special Drawing Rights in an amount calculated in accordance
with (b) below on the 30th day following the later of:

[The inclusion of this page is authorized by L.W. 92c/2012]
I

I

BRMTON WOODS AGREEMENTS 58. I i

(i) the date on which the Federal Republic of Yugoslavia
(Serbia/Montenegro) succeeds to membership in the
Fund and partinpation in the Special Drawing Rights
Department in accordance with the terms and con-
ditions of Executive Board Decision No. 10237.(92/ 150):
or

Agrrunent.
(U) the effective date of the fourth amendment of thi8

(b) For the purposes of (U) above, the Federal Republic of
Yugoalavia (Serbia/Montenegro) shall receive an amount, of
Special Drawing Rights that wil l result in its net cumulatlve
allocation being equal to 29.315788813 percent of the quota
proposed to it under paragraph 3 (c) of Exfmtive Bpard
DeEision No. 1@237-(92/150), as adjusted in accordance with
2 (b) (ii) and (c) above as of the date on which the Federal
Republic of Yugoslavia (Scrbia/Montenegro) pualifics for an
allcation unda (a) abovc

4. The Fund shall not allocate Special Drawing Rights under this
Schqlule to thm panicipanu that have notif~ed the Fund in Writing
prior' to the date of the allocation of their desire not to receive the
allocation.

5. (a) If. at the time an allocation is made to a participant under
1. 2. or 3 above, the participant has overdue obligations to
the Fund, the Special Drawing Rights 80 allocated shall be
deposited and held in an escrow account within the Special
Drawing Rights Department and shall be releasod to the parti-
cipant upon discharge of all its overdue o b l i t i o u to the
FlUd.

(b) S p i i Drawing Rights being held in an esc10w account shall
not be availabk for any use and shall not be included in any
calculations of allmations or holdinga of Spwial Drawing
Rights for the punposes of the Articles. except for calculations
under this Schedule. If Spacial Drawing Rights allocated to a
participant arc held in an -w account when the participant
termmates its participation in the Special Drawing Rights
Deparbnmt 01 when it is dacidcd to liquidate the Special
~~indrulonoPthis~goisau~ooriecd$y L.N.146119991

58.12 BRETTON WOODS AGREEMENTS

Drawing Rights Deprtment. such Special Drawing Rights
shall be cancelld.

(c) For the purposes of this paragraph. overdue obligations to the
Fund consist of overdue repurchases and charges in the
General Resources Account, overdue principal and interest
on loans in the Special Disbursement Account. overdue charges
and, assessments in the Spscial Drawing Rights Department.
and overdue liabilities to the Fund as trustee.

(a) Except for the provision of tbis paragraph. the principle of
separation between the General Department and the Special
Drawing Rights Department and the unconditional character
of Special Drawing Rights as reserve assds shall be main-
taw.

PART n. The Bank Agreement
REWNSTRUCITON AND DEVELOPMENT

The Governments on whose behalf the present Agrecmen! is signed

TEXT OF ARTICLES OF AGREEMENT OF THE hERNATIONAL BANK FUR

agree as follows:

b$tRODUCTORY ARTICLE
The International Bank for Reconstruction and Development is

established and shall operate in scconhce with the follcwing p m
visions :

ARTICLE I. Purposu
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 pro-
ductive purposes including the restoration of economies
destroyed or disrupted by war, the reconversion of productive

(The inclusion of bhis page is authorized by L.N 1461 19991

BRETTON WOODS AGREEMENTS 58.13

facilities to peacetime needs and the encouragemznt of the
development of pmductive facilities and resources in less
developed countries

(ii) To promote private foreign invcstment 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 invcs!mcnt by
providing, on suitable conditions. finance for productive pur-
poses out of its own capital. funds raised by it and its other
resources.

(iii) To promote the long-range balanced gmwth of international
trade and the maintenance of equilibrium in balances of pay.
ments by encouraging international investment for the develop-
ment of the productive resources of members, thereby assist-
ing in raising productivity, xhe standard of living and con-
ditions of labour in tbeir 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 oonduot its operations with due regard to the effea of
international investment on business conditions in the terri-
tories 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 re1
forth above.

A m a n U. Membership in Md Capital of the Bunk
Section 1. Membership
(a) The original members of the Bank shall be those memkrs of

the International Monetaly Fund which accept membership in the Dank

[The inclusion of this page is authorized by L.N. 1461 19991

RL-9

58.14 BRETTON WOODS AGREEMENTS

before the date specified in Article XI, Section 2 k).

( b ) Membership shall b: open to other members of the Fund. at
such times and in accordance with such terms as may be prescribcd
by the Bank.

Section 2. Authorized capital
(a) The authorized capital stock of the Bank shall be $10,oM),OOO,OOO

in temis of United States dollars of the weigh1 and fineness in effect on
July 1. 1944. The capital stock shall be divided into 100,ooO shares
having a par value of S100,oOO each. which shall be available for
subscription only by members.

(h ) The capital stock may be increased when the Bank deems it
advisable by a three-fourths majority of the total voting power.

Section 3. Subscriplion of shares
( U ) 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. Thc mininium
number of shares to be subscribed by other members shall be determined
by the Bank, which shall reserve a sufficient portion of its capital stock
for subscription by such members.

( b ) The Bank shdl prescribe rules laying down the conditions under
which members may subscribe shares of the authorized capital stock of
the Bank in addition to their minimum subscriptions.

(c) I! the authorized capita1 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 sub-
scribed bears to the total capital stock of the Bank, but no member
shall bc obligated to subscribe any part of the increased capital.

[The inclusion of this page is authorized by L.N. 146/ 19991

BRETTON WOODS AGREEMENTS

Section 4. Zssue price of shures
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 powers decides in special
circumstances to issue them on other terms.

Section 5. Division und calls of subscribed capital
The subscription of each member shall be divided into two parts

(i) twenty per cent 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 he subject to call by the
Bank only when required to meet obligations of the Bank
created under Article lV, sections 1 (a) (ii) (ii).

as follows :

Calls on unpaid subscriptions shall be uniform on all shares
Section 6 . Limifation on liubility
Liability on shares shall be limited to the unpaid portion of the

Section I . Method of payment of subscripfions fop. shares
Payment of subscriptions for shares shall be made in gold or United

(i) under Section 5 (i) of this Article, two per cent of the prim
of each share shal l 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, pay-
ment 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 authorized and detined in Section 2 of this
Article.

issue prim of the shans.

States dollars and in the currencies of the members as follows:

Section 8. Time of payment of subscriptiom
(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 territov
has suffered from enemy occupation or hostilities during the
present war shall he granted the right to postpone payment
of one-half per cent until five years after that date:

me inclusion of this pagc ia authorized by L.N. 480/19731

BRETTON WOODS AGREEMENTS

(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 post-
pone 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 per cent of the price of the share in
addition to the payment of two per cent referred to in (a)
above;

(ii) not more than five per cent of the price of the share shall be
called in any period of three months.

Section 9. Mahfenance of value of certain currency holdinss of the

(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 II. 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 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 Mone-
tary Fund.

Bank

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 relaling to Lonnr and GumaMees
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.

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BRETTON WOODS AGREEMENTS 61

(b) For the purpose of facilitating the restoration and reconstruction
of 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 md !he Bank
Each member shall deal with the Bank only through its Treasury,

central bank. stabilization fund or other similar E:ml agency. and the
Bank shall deal with members only by or through the same agencies.

Section 3. Limitations on guarantees and borrowings of !he Bank
The total amount outstanding of gnarantees, 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 per cent of the
unimpaired subscribed capital, reserves and surplus of the Bank.

Section 4. Conditionr on which the Bank may guaranfee or make

The Bank may guarantee, participate in or make loans to a n y
member or any political subdivision thereof and any business, indus-
trial, and agricultural enterprise in the territories of a member, subject
to the following conditions:

(i) When the member in whose 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 h o m e r would be unable otherwise to obtain the loan
under conditions which in the opinion of the Bank are reasofl-
able 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 Cank 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 brrowcr
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.

loam

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62 BRETTON WOODS AGREEMENTS

(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 gunranteed, participated in or made by the

(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-ewnomlc
influences or considerations.

(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.

Bank

hncm IV. Operations
Section 1. Methods of mnking or facilitating loons
(U) The Bank may make or facilitate loans which satidy the general

(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.

(ii) 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 (0) (ii) 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 be exchanged for the currency of any other member with-
out restriction.

conditions of Article III in any of the following ways :

Section 2. Avnilabilify and trMsferubiIity 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

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BRETTON WOODS AGREEMENTS

whose currency is involved; provided, however, that if necessary. after
the Bank's subscribed ca ital has been entirely called, such currencies

be used or exchanged for the currencies required to meet contractual
ayments of interest, other charges or amortization on the Bank's own L ' rrowmgs, 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 in (U) above shall be exchanged for the currencies of other
members or reloaned 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 o f f e d . 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.

(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 (U) (ii) of this Article. shall be held and wed, 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 1 (a) (ii)
of this Article, those obtained by the sale of gold, those m i v e d as
payments of interest and other charges for direct loans made under
Section 1 (U) (i) and (ii), and those received as payments of commis-
sions and other charges under Section 1 (U) (%), 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 guaranteed by thc Bank under W o n 1 (U) (iii) of this Article.
shall also be used or exchanged for other currencies without restriction
by such members

shall, without restriction t y the members whose currencies are offered.

Scction 3. Provision of crrrrenaes for direct loans
The following provisions shall apply to direct l m s under Scction

(U) The Bank shall furnish the borrower with such curreocies
of members, other than the member in whose territories the
project is located, as are needed by the borrower for expendi-
tures 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

1 (a) (i) and (ii) of this Article:

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63

64 BRETTON WOODS AGREEMENTS

by the borrower on reasonable terms, provide the borrower
as part of the loan with an appropriate amount of that
currency.
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 pro-
vide the borrower as part of the loan with an appropriate
amount of gold or foreign exchange not in excess of the
borrower's local expcnditun in connection with the purpascs
of the loan.
The Bank may, in exceptional circumstances, at the request
of a member in whose territories a portion of the loan is spcnt.
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 loam
Loan contracts under Section 1 (a) (i) or (U) of this Article shall

(a) The terms and conditions of interest and amortization pay-
ments, maturity and dates of payment of each loan shall bc
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 annun and not greater than one and one-half per cent
per annum. and shall be charged on the outstanding portions
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 to the outstanding portions of loans already made and
to future loans, if the E S ~ N ~ S 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 sti ulate the currency or currencies

Bank At the option of the borrower, however, such py-
m a t s may be made in gold. or subject to the agreement of
the Eank, in the cu~~ency of a member other than that
prescribed in the contract.

(i) In the case of loans made under Section 1 (a) (i) of
this Article. the loan contracts shall provide that pay-

be made io accordance with the following payment provisions:

in which payments under tL contract shall be made to the

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BRETTON WOODS AGREEMENTS

ments 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 11. 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 total voting power.

(ii) In the case of loans made under Section 1 (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 1 (U) (ii) and pay-
able in the same currency.

(c) If a member suffers from an acute exchange stringency, M]
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 concern& may apply
to the Bank for a relaxation of the conditions of payment
If the Bank is satis6ed 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 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
(U) 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 mum and not p a t e r
than one and one-half per cent per annum. At the end of this period
of tcn years, the rate of commission may he. d d by the Bank with
res t both to the outstanding portions of loans already guaranteed
m8"o future loans if the reserves accumulated by the Bank under
Section 6 of this Article and out of other earnings are considered by
it sufftcient to justify a reduction. In the case of future loans the Bank

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66 BRETTON WOODS AGREEMENTS

shall also have discretion to increase the rate of commission beyond
the above limit, if experience indicates that an increase is advisable.

(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 "spect 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.
(4 The Bank shall have power to determine any other terms and

conditions of the guarantee.

Section 6. Specid 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 acaordance with
Section 7 of this Article. The special reserve shall bc held in such liquid
form. permitted under this Agretmcnt, as the Executive Directors
may decide.

Section 7 . Methods of meeting liabilities of the Bank in care of

In cascs of default on loans made, participated in, or guaranteed

(a) The Bank shall make such arrangements as may be feasible
to adjust the obligations under the loans, including arrange-
ments under or analogous to those provided in Section 4 (c)
of this Article.

(b) The payments in discharge of the Bank's liabilities on borrow-
ings or guarantees under Section 1 (a) (ji) and (E) of this
Article shall be charged :

(i) first, against the special rese~e 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 bornwings,
or to meet the Bank's liabilities with respect to similar pay.
ments on loans guaranteed by it, the Bank may call an
appropriate amount of the unpaid subscriptions of members
in accordance with Article II. 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 sub-
scriptions of the members for the following purposes:

defaults

by the Bank:

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BRETTON WOODS AGREEMENTS

(i) To redeem prior to maturity. or otherwise discharge its
liability 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. Mixellmeour operations
In addition to the operations specified elsewhere in this Agreement,

(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.

(i) 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
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.

the Bank shall have the power:

Section 9. Warning to be placed on securities
Every security guaranteed or issued by the Bank shall bear on its

facc a conspicuous statement to the e f f d 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
plitical character of the member (# members concerned. Only economic
considerations shall be relevant to their decisions, and these consider-
ations shall be weighed imparlially in order to achieve the purposes
stated in Article I.

ARTICLE V. Organization and Management
Section 1.
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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Structure of the Bank

61

68 BRETTON WOODS AGREEMENTS

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 re-appointed. 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 Emutive Directors
authority to exercise any powers of the Board, exoept 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 co-operate with other international
organizations (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 Eoard shall be called by the
Directors whenever requested by five members or by members having
onequarter 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 pm-
cedure whereby the Executive Directors, when they deem snch action
to he in the best interests of the Bank. may obtain a vote of the
Governors on a specific question Without calling a meeting of the Eoard.

(f) The Board of Governors. and the Executive Directors to the
extent authorized, 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 compensa-
tion 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 salaly and terms of the
contract of service of the President.

[The inclusion of ibis page is authorized by L.N. 480l19731

BRETTON WOODS AGREEMENTS 69

Section 3. Voting
(U) Each member shall have two hundred fifty votes plus one

(b) Except as otherwise specifically provided. all matters before the

Section 4. Executive Directors
( U ) 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.

(6) 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
II, Section 1 (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 increas-
ing 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 director becames vacant
more than ninety days before the end of his tern. 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 altemate 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.

v) .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

additional vote for each share of stock held.

Bank shall be decided by a majority of votes cast.

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70 BRETTON WOODS AGREEMENTS

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 (a) above may send
a 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. Presideni nnd Sfq7
(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 stall of the Bank
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 organization.
appointment and dismissal of the of6cers and staE

(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 inEuence
any of them in the discharge of their duties.

(a) 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 impor-
tance 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 bank-
ing, commercial, industrial, labour. and agricultural interests. and with
as wide a national representation as possible. In those fields where
specialized international organizations exist, the members of the Council
representative of those fields shall be selected in agreement with such
organizations. 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.

(b) Councillors shall serve for two years and may be reappointed.
They shall be paid their reasonable expenses incurred on behalf of
the Bank.

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BRETTON WOODS AGREEMENTS 71

Section I. 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 organizationr
(a) The Bank, within the terms of this Agreement, shall co-operate

with any general international organization and with public inter-
national organizations having specialized responsibilities in related
fields. Any arrangements for such co-operation which would involve
a modification of any provision of this Agreement may be affected only
after amendment to this Agreement under Article VIII.

(b) In making decisions on applicatiws for loans or guarantees
relating to matters directly within the competence of any international
organization of the types specified in the preceding paragraph and
participated in primariiy by members of the Bank, the Bank shall give
consideration to the views and recommendations of such organization.

Section 9. Location of ofices
(Q) The principal office of the Bank shall be located in the territory

(b) The Bank may establish agencies or branch oflks in the territo-

Section 10. Regional o@es 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.

of the member holding the greatest number of shares.

ries of any member of the Bank.

Section 11. Depositmies
(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.

(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 holdiw 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 depositoties designated by the remainiq 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

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12 BRETTON WOODS AGREEMENTS

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
I (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 demand by
credit to the account of the Bank in the designated depsitory.

Section 13. Publication 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 per cent non-cumulative
shall be paid, as a first charge against the distribution for any year.
to each member on the basis of the average amount of the loans out-
standing during the year made under Article N. Section 1 (a) (i). out
of currency corresponding to its subscription. If two per cent 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.

Anncu VL WifMmwal and Suspension of Membership:
Surperrpion of Operationr

Section 1. Right of members to withdraw
Any member may withdraw from the Bank at any time by trans-

mitting a notice in writing to the Bank at its principal office. With-
drawal shall become effective on the date such notice is received-

Khc inclusion of thia p ~ p c k authmid by L.N. 4W19731

, 1 1 t

BRETTON WOODS AGREEMENTS

Section 2. Suspension of membership
If a member fails to fulfil 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 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.

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

Section 3. Cessation of membership in International Monetary
Fund

Any member which ceases I to be a member of the International
Monetary Fund shaU 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. Setfkment of accounts with governments ceasing to be

(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 there-
after by the Bank and to share either in the income or the expenses
of the Bank.

(a) At the time a government ceases to be a member. the Bank
shall arrange for the repurchase of its shares as a part of the settle-
ment of accounts with such government in accordance with the provi-
sions of (c) and (d) below. For this purpose the repurchase
of the shares shall be the value show0 by the books of the Ba&?
the day the government ceases to be a member.

(c) The payment 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 sham shall be
withheld so long as the government. its central bank or any
of its agencies remains liable, as borrower or guarantor, to the
Bank and such amount may. at the option of the Bank, be
applied on any such liability as it matures No amount shall
be withheld on account of the 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
their surrender by the government, to the extent by which
the amount due as the repurchase price in (b) above exceeds

members

me inclusion of this paoe is authorized by LN. 480/19731

n

74 BRETTON WOODS AGREEMENTS

the aggregate of liabilities on loans and guarantees in (c) (i)
above until the former member has received the full repur-
chase price.

(iii) Payments shall be made in the currency of the country receiv-
ing payment or at the option of the Bank in gold.

(iv) If losses are sustained by the Bank on any guarantees, partic-
ipations 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 re urchase price was
determined. In addition, the former mem r government shaU
remain liable on any call for unpaid subscriptions under
Article IL 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 (6) of this Article, within six months of the date upon which any
government ceases to be a member, all ri&ts of such government shall
be determined by the provisions of Section 5 of this Article.

Section 5. Suspension of operatwm 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 consideration 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 preservation of
its assets and settlement of its obligations

(c) The liabilit of all members for uncalled subscriptions to the
capital stock of d e 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.
(4 AU creditors holding direct claims shall be p i d 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 judgment, to insure a distribution to holders of
contingent claims ratably with creditors holding direct claims

me inclusion of thh page is authorizsd by L.N. 480/19731

BRETTON WOODS AGREEMENTS

(e) No distribution shall be made to members on account of their

(i) all liabilities to creditors have been discharged or provided
for, and

(i) a majority of the Governors. exercising a majority of the total
voting power, have decided to make a distribution.

(j) 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 p r o d 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
under (i) above shall be p id , in its own currency, insofar
as it is held by the Bank, up to an amonnt equivalent in value
to such balance.

(iii) Any balance due. to a member after payment has been made
under (i) and (i) 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 (i) above shall
be distributed pro ratu among the members.

(i) Any member receiving assets distributed by the Bank in accord-
ance with (h) above, shall enjoy the same rights with respect to such
assets as the Bank enjoyed prior to their distribution.

subscriptions to the capital stock of the Bank nntil

ARncLs W. Status, lmmunifies and Privileges
Section 1. Purposes of Anicle
To enable the Bank to fulfil the functions with which it is entrusted

the status, immunities and privileges set forth in this Article shall be
accorded to the Bank in the qerritories of each member.

~

[The inclusion of this page is authoIkd by L.N. 480119731

76 BRETTON WOODS AGREEMENTS

Section 2. Status of the Bank
The Bank shall possess full juridid 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 he 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,
wheresoever located and by whomsoever held, be immune from all
forms of seizure, attachment or execution before the delivery of
judgment against the Bank.

Section 4. Immunity of assets from seizure
Propexty and assets of the Bank, wherever located and by whomso-

ever held, shall be immune from search, requisition, confiscation.
expropriation or any other lorm of seizure by executive or legislative
action.

Section 5 . Zmmunity of archives
The archives of the Bank shall be inviolable.
Section 6. Freedom of apsets 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 BanL shall be free from restrictions,
regulations, controls and moratoria of any nature.

Section 7 . Privilege for communications
The official communications of the Bank shall be accorded by each

member the same ueatment that it accords to the official wmmunica-
tion of other members.

Section 8. Immunities and privileges of oficers and employees
All governors. executive directors. alternates, officers and emplops

of the Bank

(i) shall be immune from legal process with respect to acts per-
formed by them in their official capacity except when the
Bank waives this immunity:

(ii) not being local nationals, shall be accorded the same immun-
ities from immigration restrictions, alien registration re-
quirements and national service obligations and the Same

l l l e irdusion of this page is authorid by L.N. 480/19731

BRETTON WOODS AGREEMENTS n

c

facilities as remrds exchange restrictions a3 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
facilitia as is accorded by members to representatives. oficials
and employees of comparable rank of other members.

section 9. Immuniiies from taxation
(a) The Bank. its assets, property, income and ifs operations and

transactions authorized by this Agreement. shall bc 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 emolu-
ments paid by the Bank to executive d k t o r s , 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-

(i) which discriminates against such obligation or sccurity 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 issucd. 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
szcurity guaranteed by the Bank (including any dividend or interest
thereon) by whomsoever beld-

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

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

Section 10. Application of Article
Each member shall take such action M is necessary in ia own

temtorics for the purpose of making effective in terms of its own
law the principks set forth in this Article and shall inform the Bank
of the detailed action which it has taken.

ARTICLE m. Amendmenir
(a) Any proposal to introduce modifications in this Agreement,

whether emanating from a member, a governor or the Executive
Directors. ghau 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 mrmbcra whether they ampt the

tT%e bmlusim of thia pap is an&&& by L.N. 17119891

7a BRETTON WOODS AGREEMENTS

L.N.
@4/198lk

proposed a m d e n t . When tbree-fifths of the rncmIxm, bvhg
eighty-five per cent of the total voting power, have accepted the pro.
posed amendments, the Bank shall certify the fact by formal m-
munication addressed to all members.

( b ) Notwithstanding (a) above, acceptance by all members is re-
quired in the case of any amendment modifying

(i) the right to withdraw from the Bank provided in Article W.
Section 1:

(ii) the right secured by Article II. Section 3 (c);
(iii) the limitation on liability provided in Article IL Section 6.

(c) Amendments shall enter into force for all members three months
after the date of the formal communicatian unless a shorter mod is
specified in the circular letter or telegram.

Anncm E. Interpretation
(a) Any question of interpretation of the provisions of this Agree-

ment 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 cntitlzd to
representation in accordance with Article V, Section 4 (h).

(6) In MY 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 6nal. Pending
the result of the reference to the Board. the Bank may, 90 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 the Bank, such disagree-
ment 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 otbenvise 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 casc where the parties are in disagreement with respect
thereto.

ARTICLE X. Approval deemed given
Whenever the a roval of any member is uired More any act

may be done by Bank, except in Article 3 1 . approval shall be
deemed to have been given unless the member presents an objaction
within such reasonable period as the Bank may 6x iu notifying the
member of the proposed act.

llhe i d w o n oi this pssc ia autbmked by LN. 11119S9l

BRETTON WOODS AGREEMENT5 79

ARncLB XI. Final Provisions
Section 1. Entry inio 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 per cent of lhe total subscriptions set forth in
Schedule A and when the instruments referred to in Section 2(4 of
this Article have been deposited on theis behalf, but in no event shall
this Agreement enter into before May 1. 1945.

Section 2. Signu!ure
(U) Each government on whose behalf this Agreement is signed

shall deposit with the Government of 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
(U) above, except that no government 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 shdl 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 al l instruments referred to in (U) above.
(d) At the time this Agreement is signed on its behalf each govern-

ment shall transmit to the Government of the United States of
America one one-hundredth of one per cent of the price of each share
in gold or United States dollars for the purpose of meeting admin-
istrative 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 th is 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.

v) After December 31, 1945, this Agreement shall be open for
signature on behalf of the government of any country whose member-
ship has been approved in accordance with Article II, Section 1 (b).

(g) By their signature of this Agreement, all governments accept
it both on their own behalf and in respect of all their colonies, over-
seas territories, all territories under their protection. suzerainty, or
authority and all territories in respect of which they exercise a man-
date.

[The inclusion of lhis page is authorired by L.N. 480/19731

80 BRETTON WOODS AGREEMENTS

(h) In the case of governments whose metropolitan territories have
been under enemy occupation, the deposit of the instrument referred
to in (U) 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 a&ed on behalf of that government shall become
void and the portion of its subscription paid under (d) above shall be
returned to it.

(1) Paragraphs (d) and (h) shall come into force with regard to each
signatory government as from the date of its signature.

Section 3. Inaiigurafion of the Bank
(a) As soon as this k e e m e n t 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 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 became
members, the executive directorship 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 6rst 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 delega-
ted 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 member-
ship is approved in accordance with Article El, Section 1 (b).

Australia
Belgium
Bolivia
Brazil

SUBSCRIPTTONS
(m'IKanr of dollars)

ZOO Canada 325
225 Chile 35

7 China 600
105 Colombia 35

mhe inclusion of this page i8 auihorived by L.N. 480119731

BRETTON WOODS AGREEMENTS 81

SCHEDULE A
SU~SCIUP~~ONS

(millions of dollars)
costa Rica 2 Luxembourg 10
Cuba 35 Mexico 65
Czechoslovakia 125 Netherlands 275
'Denmark New Zealand 50
Dominican Republic 2 Nicaragua .8
Ecuador 3.2 Norway 50
EDPt 40 Panama .2
El Salvador 1 Paraguay .8
Ethiopia 3 Peru 17.5
France 450 Philippine Commonwealth 15
Gl-EXX 25 Poland 125
Guatemala 2 Union of South Africa 100
Haiti 2 Union of Soviet Socialist
Honduras 1 Republics 1200
Iceland I United Kingdom 1300
India 400 United States 3175
Iran 24 Uruguay 10.5
Iraq 6 Venezuela 10.5
Liberia .5 Yugoslavia 40 -

Total 9100
The quota of Denmark shall bc determined by the Bank after Denmark

amepts membership in accordance with thw Articles of Agrosmsot.

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).

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
(U) tbose$vernors who voted in the first Mlot for a r sw not elected
and (b) ose governors whose votes for a person el%d are deemed
under 4 below to have raised the votes cast for that person above fifteen
per cent of the eligible votes.

yrhc inclusion of this page is authorized by LN. 480119731

82 BRETTON WOODS AGREEMENTS

4. In determining whether the votes cast by a governor are to be
deemed to have raised the total of any person above fifteen per Cent
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 Meen per cent is reached.

5. A n y governor, part of whose votes must be counted in order to
raise the total of any person above fourteen per cent shall be considered
as casting all of his votes for such person even if the total votes for
such person thereby exceed liftem per cent.

6. If, after the second ballot, seven persons have not been elected.
further ballots shall be held on the same principles until men persons
have been elected, provided that after six persons are elected. the
seventh may he elected by a simple majority of the remaining votes
and shall be deemed to have been elected by all such votes

[The inclusion of this page ia authorized by L.N. 480119731

Related Laws