Bretton Woods Agreement Act, 2018 (1961)


Published: 1961

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Bretton woods Act, 2018 E
1


Bretton Woods Agreement Act, 2018 (1961)
Date of Authentication and Publication
2018.4.5(20 July 1961)
Amendments:
1. Some Nepal Acts Amendment, Repeal and
Continuance Through Re-arrangement
Act, 2019 (1963)
2019.12.30 (12 April 1963)
2. Bretton Woods Agreement (First
Amendment) Act, 2027 (1971)
2027.12.30 (12 April 1971)
3. Bretton Woods Agreement (Second
Amendment) Act, 2034 (1978)
2034.9.18(2 Jan. 1978)
4. Republic Strengthening and Some Nepal
Laws Amendment Act, 2066 (2010)1
2066.10.7(21 Jan. 2010)

Act Number 10 of the Year 2018 (1961)
An Act Made to Enable Nepal to Become a Member of the International
Monetary Fund and of the International Bank for Reconstruction and

1 This Act came into force on 15 Jestha 2065, "Prasati" and the word "Kingdom" has been deleted.

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Development by Acceptance of the International Agreements for the
Establishment and Operation of the Fund and the Bank
Preamble: Whereas, the International Monetary Fund and the Int rnational Bank
for Reconstruction and Development were established in pursuance of agreements
drawn up at the United Nations Monetary and Financil Conference held at
Bretton Woods in New Hampshire in the United States of America in July 1944;
and
Whereas, the International Monetary Fund and the Int rnational Bank for
Reconstruction and Development have prescribed the terms and conditions set out
in Schedules 1 and 2 of this Act as the terms and conditions upon which Nepal
may be admitted to membership of the International Monetary Fund and the
International Bank for Reconstruction and Development, respectively; and
Whereas, for the purpose of complying with the terms and conditions
aforesaid, it is necessary to make provision as hereinafter set out;
Now, therefore, be it enacted by His Majesty King Mahendra Bir Bikram
Shah Dev in accordance with Article 93 of the Constitution of Nepal2.
1. Short title and commencement: (1) This Act may be called as the
"Bretton Woods Agreement Act, 2018 (1961).”
(2) This Act shall come into force immediately.
2. Definitions: Unless the subject or the context otherwise requirs, in this
Act:
(a) "Fund" means the International Monetary Fund.

2 Amended by Some Nepal Acts Amendment, Repeal and Continuance Through Re-arrangement Act, 2019.

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(b) "Bank" means the International Bank for Reconstruction and
Development.
(c) "Fund Agreement" means the Articles of Agreement of the Fund,
and this term also includes amendments to the Agreement of the
Fund3.
(d) "Bank Agreement" means the Articles of Agreement of the Bank.
(e)4 "Special Drawing Rights" means the rights of the Fund to draw
moneys from the special account with the Fund to be distributed
between among the member states (Bhagidar) in order to meet the
requirements of international liquidity.
3. Authorization to conclude Agreements and deposit instruments of
acceptance: The Minister for Finance is, hereby, authorized by
instruments under his or her hand to empower such person as may be
named in such instruments, on behalf of the Governmnt of Nepal:
(a) To sign the Articles of Agreement of the International Monetary
Fund and the Articles of Agreement of the International Bank for
Reconstruction and Development, respectively.
(b) To deposit with the Government of the United States of America
instruments of acceptance of the Fund Agreement and Bank
Agreement setting out that the Government of Nepal has accepted in
accordance with the Nepal laws the respective Articles and the terms

3 Inserted by First Amendment. 4 Inserted by Second Amendment.

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and conditions prescribed thereunder as the terms upon which Nepal
shall be admitted to membership of the Fund and of the Bank.
(c)5 To accept the First Amendment to the Fund Agreement6, a d deposit
an instrument of acceptance to enable Nepal to participa e in the
Special Drawing Rights as provided by that Amendment.
(d)7 To accept the Second Amendment to the Fund Agreement, and
deposit an instrument of acceptance, accepting the liabilities set forth
in that Amendment and to accept increases in quota and share of
Nepal with the Bank.
4. Powers to pay moneys to the Fund and the Bank: The Minister for
Finance shall have authority to pay to the Fund andthe Bank from the
Consolidated Fund of the Government of Nepal such moneys/subscription
as may be payable from time to time to the Fund and the Bank on account
of the Government of Nepal, as specified in the terms and conditions set out
in Schedule……8
4A.9 Obligation to provide currency: In the event of the need of a member
using the special drawing rights in such a circumstance as may be specified
by the Fund pursuant to Section 4 of Article 1910 of the Fund Agreement,
and as set out in Schedule 13, the Minister for Finance shall provide freely
convertible currency11 on behalf of the Government of Nepal.

5 Inserted by First Amendment. 6 Amended by Second Amendment. 7 Inserted by Second Amendment. 8 Deleted by Second Amendment. 9 Inserted by First Amendment. 10 Amended by Second Amendment. 11 Amended by Second Amendment.

5


4B. 12 Obligation to reconstitute the holdings of used special drawing
rights: If the special drawing rights are used on behalf of the Government
of Nepal as provided in Section 6 (a) of Article 1913 of the Fund
Agreement, and as set out in Schedule 13, the Minister for Finance shall
reconstitute the special drawing rights to the extent so used, and all
payments required to be made in effecting such reconstitution shall be
made out of the Consolidated Fund of the Government of Nepal.
4C. 14 Obligation to provide freely convertible currencies: If freely
convertible currencies are demanded in consonance with the Fund
Agreement, the Minister for Finance may, on behalf of the Government of
Nepal, provide such currencies.
5. Power to issue promissory notes: The Minister for Finance may, on
behalf of the Government of Nepal, create non-interest bearing and non-
negotiable notes or bonds/conditions as set forth in Section 4 of Article 315
of the Fund Agreement, as set out in Schedule-3 and as set forth in
Section12 of Article 5 of the Bank Agreement, as set out in Schedule-4, in
such forms as he or she thinks fit and issue them in the name of the Fund or
the Bank, and the payments of the notes or bonds so created shall be paid
out of the Consolidated Fund of the Government of Nepal.
6. Power to raise loans: (1) For the purpose of providing any sums required
for making any payments out of the Consolidated Fund of the Government
of Nepal pursuant to this Act, the Minister for Finance may, on behalf of

12 Inserted by First Amendment. 13 Amended by Second Amendment. 14 Inserted by Second Amendment. 15 Amended by Second Amendment.

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the Government of Nepal, raise loans by the creation and issue of non-
interest-bearing and non-negotiable notes or bonds in the name of the Nepal
Rastra Bank, in such forms as he or she may think fit.
(2) Notwithstanding anything contained in 16Clause (11) of Section
2517 of the Nepal Rastra Bank Act, 2058, the Nepal Rastra Bank may, on
the basis of the notes or bonds created and issued in accordance with the
provision set forth in Sub-section (1), disburse loans to the Minister for
Finance, the amount of loans so borrowed shall be repaid/returned within
Five years after the date of such borrowing.
(3) Such moneys as required for the repayment of notes r bonds
created and issued in the name of the Nepal Rastra Bank under Sub-section
(1) shall paid out of the Consolidated Fund of the Government of Nepal.
7. Nepal Rastra Bank to be nominated as fiscal agency and
depository: (1) The Nepal Rastra Bank is, hereby, nominated as the fiscal
agency for the purposes of Section 1 of Article 5 of Schedule 5 of the Fund
Agreement and as the depository for the purposes of Section 2 of Article 13
of Schedule 6 of the Fund Agreement.
(2) The Nepal Rastra Bank is, hereby, nominated as the depository
for the purposes of Section 11 of Article 5 of Schedul 7 of the Bank
Agreement.

16 The serial order of Section is not in order as upon Amendment. 17 Amended by the Second Amendment.

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(3)18 The Nepal Rastra Bank shall have power to acquire, exercise
and deal with special drawing rights of the Governme t of Nepal and to
perform all other negotiable transactions supplemental or incidental thereto
8.19 Status, immunities and privileges of the Fund and the Bank: (1)
Notwithstanding anything contained in the Nepal laws in force, the status,
immunities and privileges set forth in Article 9 of the Fund Agreement, and
as set out in Schedule-8, and set forth in Article 7 of the Bank Agreement,
and as set out in Schedule-9, shall be accorded to the Fund and the Bank,
respectively.
(2) Notwithstanding anything contained in the Nepal laws in force,
the status, immunities and privileges set forth in Article 9 of the Fund
Agreement and immunities from all kinds of taxes shall be accorded on the
special drawing rights or dealing and transactions thereof, as provided in
Article 21(b)20 of the Fund Agreement, and as set out in Schedule-12.
9. Non-application of exchange contracts: Notwithstanding anything
contained in the Nepal laws in force, the matters on the non-application of
exchange contracts, as contained in Section 2(b) of Article 8 of the Fund
Agreement, and as set out in Schedule-10, shall have full force of law and
apply as such throughout Nepal.
10. Power to amend Schedules: If any amendment is made to any matter
contained in any Schedule of this Act of the Fund Agreement and the Bank
Agreement, the Government of Nepal may accordingly amend the Schedule

18 Inserted by Third Amendment. 19 Amended by First Amendment. 20 Amended by Second Amendment.

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of this Act, by publishing a notification in the Nepal Gazette, from time to
time.
11. Power to frame Rules: The Government of Nepal may frame Rules in
order to implement the objectives of this Act.
12. …………….21



21 Deleted by Some Nepal Acts Amendment, Repeal and Cotinuance Through Re-arrangement Act, 2019.


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Schedule-1
International Bank for Reconstruction and Development
1818 H. Street, N.W.
Washington 25, D.C.
Resolution No. 144
Admission of Nepal to Membership of the Bank
Whereas, the Government of Nepal has applied for admission to
membership in the International Bank for Reconstruction and Development in
accordance with Section 1 (b) of Article 222 of the Articles of Agreement of the
Bank; and
Whereas, pursuant to section 20 of the By-laws of the Bank, the Executive
Directors, after consultation with representatives of the Government of Nepal,
have made recommendations to the Board of Governors egarding this application;
Now, therefore, the Board of Governors hereby resolves that the terms and
conditions upon which Nepal shall be admitted to memb rship in the Bank shall
be as follows:
1. Definitions: As used in this Resolution:
(a) “Bank” means the International Bank for Reconstruction and
Development;
(b) “Articles” means the Articles of Agreement of the Bank;

22 Membership on the Bank shall open for other members of the Fund at such times and on such terms and conditions as the Bank may specify.

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(c) “Dollars” means United States dollars of the weight and fineness in
effect on 1 July 1944;
(d) “Subscription” means the capital stock of the Bank subscribed to by
a member;
(e) “Member” means member of the Bank.
2. Subscription: By accepting membership in the Bank, Nepal shall
subscribe to 100 shares of the capital stock of the Bank at the par value of
$100,000 per share.
3. Membership in the Fund: Before accepting membership in the Bank,
Nepal shall accept membership in and become a member of the
International Monetary Fund.
4. Payment of Subscription:
(a) Before accepting membership in the Bank, Nepal sh ll pay to the
Bank on account of the subscription price of one-half of such shares:
(i) gold or United States dollars equal to 2% thereof; and
(ii) an amount in its own currency which at the appropriate
prevailing exchange rate, shall be equal to 18% thereof.
(b) With respect to the subscription price of the other one-half of such
shares, the 2% portion payable in gold or United States dollars and
the 18% portion payable in the currency of the membr shall be left
uncalled, as set out in Resolution No. 129, on the same basis as the
2% and 18% portions of subscriptions made pursuant to Resolution
No. 128 of the Board of Governors.

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5. Representation and Information: Before accepting membership in the
Bank, Nepal shall represent to the Bank that it hastaken all action
necessary to sign and deposit the instrument of acceptance and sign the
Article as contemplated by paragraph 6 (d) and (e) of this Resolution, and
Nepal shall furnish to the Bank such information in respect of such action
as the Bank may request.
6. Acceptance of Membership: Nepal shall become a member of the Bank
with a subscription as set out in paragraph 2 of this Resolution as of the
date when Nepal shall have complied with the following requirements:
(a) become a member of the International Monetary Fund;
(b) made the payments called for by paragraph 4 of this Resolution;
(c) furnished the representation, and such information as may have been
requested, pursuant to paragraph 5 of this Resolution:
(d) deposited with the Government of the United States of America an
instrument stating that it has accepted in accordance with its law the
Articles and all the terms and conditions prescribed in this
Resolution, and that it has taken all steps necessary to enable it to
carry out all its obligations under the Articles and this Resolution;
(e) signed the original copy of the Articles held in the Archives of the
Government of the United States of America.
7. Limitation on Period for Acceptance of Membership: Nepal may
accept membership in the Bank pursuant to this Resolution until 31 March
1961, and if the Executive Directors deems necessary for an extraordinary
circumstance that this limitation on period for acceptance of membership

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by Nepal pursuant to this Resolution should be extended, they may extend
this limitation on period.

13


Schedule-2
Resolution on Membership of Nepal
Whereas, the Government of Nepal, Nepal on 13 April 1960, applied for
membership in the International Monetary Fund in accordance with section 2 of
Article II of the Articles of Agreement of the Fund; and
Whereas, pursuant to section 21 of the By-laws of the Fund, the Executive
Directors have consulted with the representative of that Government and have
agreed upon the terms and conditions which, in the opinion of the Executive
Directors, the Board of Governors may wish to prescribe for admitting Nepal to
membership in the Fund;
Now, therefore, the Board of Governors, having considered the
recommendations of the Executive Directors, hereby resolves that the terms and
conditions upon which Nepal shall be admitted to memb rship in the Fund shall be
as follows:
1. Definitions: As used in this Resolution;
(a) the term “Fund” means the International Monetary Fund;
(b) the term “Articles” means the Articles of Agreem nt of the
International Monetary Fund;
(c) the term “dollars” means United States dollars of the weight and
fineness in effect on 1 July 1944.
2. Quota: The quota of Nepal shall be 7,500,000 (Seven Million Five
Hundred Thousand dollars.

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3. Subscription: The subscription of Nepal shall be equal to its quota. Nepal
shall pay in gold, as a minimum, Three and half percent of its quota. The
balance of the subscription shall be paid in the currency of Nepal.
4. Payment of Subscription: The portion of the subscription to be paid in
gold shall be paid not later than the day the Articles are signed on behalf of
Nepal. In case Nepal does not acquire membership in the Fund, the gold so
paid shall be returned to it by the Fund. The remaining part of the
subscription which has not been paid in gold shall be paid before the
Thirtieth day after the initial par value of the currency of Nepal has been
agreed in accordance with Paragraph 5 below.
5. Determination of Par Value: Within 30 days after the Fund so requests,
Nepal shall communicate to the Fund a proposed par value for its currency,
and within 60 days following the Fund’s receipt of the proposed par value,
Nepal and the Fund shall agree on an initial par value for the currency:
provided that the Fund may extend the period of 60 days and that Nepal
shall be deemed to have withdrawn from the Fund if agreement on a par
value has not been reached when the extended period expires. In the period
between accepting membership and the establishment of a initial par value
pursuant to this paragraph, Nepal shall not change its exchange rates
prevailing at the time of accepting membership without agreement with the
Fund after prior consultation.
6. Exchange Transactions with the Fund: Nepal may not engage in
exchange transactions with the Fund until:
(a) the Thirtieth day of the par value of its currency having been
agreed in accordance with paragraph 5 above; and

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(b) its subscription has been paid in full.
7. Representation and Information: Before accepting membership in the
Fund, Nepal shall represent to the Fund that it has taken all action necessary
to sign and deposit the Instrument of Acceptance and sign the Articles, as
contemplated by paragraph 8 (a) and (b) of this Resolution, and Nepal shall
furnish to the Fund such information in respect of such action as the Fund
may request.
8. Acceptance of Membership: After the Fund shall have informed the
Government of the United States of America that Nepal has complied with
the conditions set out in paragraph 7 of this Resolution, Nepal shall become
a member of the Fund as of the date when Nepal shall have complied with
the following requirements:
(a) Nepal shall deposit with the Government of the United States of
America an instrument stating that it has accepted in accordance
with its law the Articles and all the terms and conditions prescribed
in this Resolution, and that it has taken all steps necessary to enable
it to carry out all its obligations under the Articles and this
Resolution; and
(b) Nepal shall sign the original copy of the Articles held in the
Archives of the Government of the United States of America.
9. Limitation on Period of Acceptance of Membership: Nepal may
accept membership in the Fund pursuant to this Resolution within 6 months
of the effective date of this Resolution, which date shall be the date of its
adoption by the Board of Governors; provided, however, that, if
extraordinary circumstances are deemed by the Executiv Directors to

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warrant an extension of the period during which the applicant may accept
membership pursuant to this Resolution, the Executive Directors may
extend such period until such later date as they may determine.

17


Schedule-323
Section 4 of Article 3 of the Articles of Agreement of the International
Monetary Fund
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 account of the Fund which in the judgment of he Fund is not
needed for its operations, notes or similar obligations issued by the member
or the depository designated by the member under Section 2 of Article 13,
which shall be non-negotiable, non-interest-bearing a d payable at their par
value on demand by crediting the account of the Fund in the designated
depository. This Section shall apply not only to currency subscribed by
members but also to any currency otherwise due to, or acquired by, the
Fund.

23 Amended by the Second Amendment.

18



Schedule-4
Section 12 of Article 5 of the Articles of Agreement of the International
Bank for Reconstruction and Development

Section 12. Form of Holdings of Currency: The Bank shall accept from any
member, in place of any part of the member's currency, paid in to the Bank
under Article 11, Section 7 (1), 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 Governmet 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 depository.

19



Schedule-5
Section 1 of Article 5 of the Articles of Agreement of the International
Monetary Fund
Section-1 of Article 5. Agencies dealing with the Fund: Each member
shall deal with the Fund only through its Treasury, central bank,
stabilization fund, or other similar fiscal agency and the Fund shall deal
only with or through the same agencies.

20


Schedule-6
Section 2 of Article 13 of the Articles of Agreement of the International
Monetary Fund
Section-2 of Article 13. Depositories: (a) Each member country shall
designate its central bank as a depository for all the Fund's holdings of its
currency, or if it has no central bank it shall designate such other institution
as may be acceptable to the Fund.
(b) The Fund may hold other assets, including gold, in the
depositories designated by the five members having the largest quotas and
in such other designated depositories as the Fund may select. Initially, at
least one-half of the holdings of the Fund shall be held in the depository
designated by the member in whose territories the Fund has its principal
office and at least Forty per cent shall be held in the depositories designated
by the remaining Four members referred to above. However, all transfers of
gold by the Fund shall be made with due regard to the costs of transport and
anticipated requirements of the Fund. In an emergency the Executive
Directors may transfer all or any part of the Fund's gold holdings to any
place where they can be adequately protected.

21


Schedule-7
Section 11 of Article 5 of the Articles of Agreement
of the International Bank for Reconstruction and Development
Section 11. Depositories: (a) Each member shall designate its central bank as a
depository for all the Banks 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 holdings of the Bank shall be held in
the depository designated by the member in whose territory the Bank has its
principal office, and at least 40 per cent shall be held in the depositories
designated by the remaining four members referred to above, each of such
depositories to hold, initially, not less than the amount of gold paid on the
shares of the member designating it. However, all tr nsfers of gold by the
Bank shall be made with due regard to the costs of ransport and anticipated
requirements of the Bank. In an emergency the Executive Directors may
transfer all or any part of the Banks gold holdings to any place where they
can be adequately protected.

22


Schedule-8
Article 9 of the Articles of Agreement of the International Monetary
Fund: Status, Immunities and Privileges
Section 1 of Article 9 Purposes of Article: To enable the Fund to fulfill the
functions with which it is entrusted, the status, immunities and privileges
set forth in this Article shall be accorded to the Fund in the territories of
each member.
Section 2. Status of the Fund: The Fund shall possess full juridical
personality, and in particular, the capacity:
(i) to contract;
(ii) to acquire and dispose of immovable and movable property;
(iii) to institute legal proceedings.
Section 3. Immunity from judicial process: The Fund, its property and its
assets, wherever located and by whomsoever held, shall enjoy immunity
from every form of judicial process except to the extent that it expressly
waives its immunity for the purpose of any proceedings or by the terms of
any contract.
Section 4. Immunity from judicial process: Property and assets of the
Fund, wherever located and by whomsoever held, shall be immune from
search, requisition, confiscation, expropriation or any other form of seizure
by executive or legislative action.
Section 5. Immunity of archives: The archives of the Fund shall be
inviolable.

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Section 6. Freedom of assets from restrictions: To the extent necessary to
carry out the operations provided for in this Agreem nt, all property and
assets of the Fund shall be free from restrictions, regulations, controls and
moratoria of any nature.
Section 7. Privilege for communications: The official communications of
the Fund shall be accorded by members the same treatment as the official
communications of other members.
Section 8. Immunities and privileges of officers and employees: All
governors, executive directors, alternates, members of the Board, agents
appointed pursuant to Section 3(j) of Article 12 of the Agreement and
advisors of any person mentioned above,24 and officers and employees of
the Fund:
(i) shall be immune from legal process with respect to acts
performed by them in their official capacity except when the
Fund waives this immunity;
(ii) not being local nationals, shall be granted the same
immunities from immigration restrictions, alien registration
requirements and national service obligations and the same
facilities as regards exchange restrictions as are accorded by
members to the representatives, officials, and employees of
comparable rank of other members;
(iii) shall be granted the same treatment in respect of travelling
facilities as is accorded by members to representatives,

24 Inserted by Second Amendment.

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officials and employees of comparable rank of other
members.
Section 9. Immunities 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
shall also be immune from liability for the collection or payment of any tax
or duty.
(b) No tax shall be levied on or in respect of salaries and
emoluments paid by the Fund to executive directors, alternates, officers or
employees of the Fund who are not local citizens, local subjects, or other
local nationals.
(c) No taxation of any kind shall be levied on any obligation or
security issued by the Fund, including any dividend or interest thereon, by
whomsoever held
(i) which discriminates against such obligation or security solely
because of its origin; or
(ii) if the sole jurisdictional basis for such taxation is the place or
currency in which it is issued, made payable or paid, or the
location of any office or place of business maintaied by the
Fund.
Section 10. Application of Article: Each member shall take such action as is
necessary in its own territories for the purpose of making effective in terms
of its own law the principles set forth in this Article and shall inform the
Fund of the detailed action which it has taken.

25


Schedule-9
Article 7 of the Articles of Agreement of the International Bank for
Reconstruction and Development: Status, Immunities and Privileges
Section 1 of Article 7. Purposes of Article: To enable the Bank to fulfill
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
territories of each member.
Section 2. Status of the Bank: The Bank shall possess full juridical
personality, and, in particular, the capacity:
(i) to contract;
(ii) to acquire and dispose of immovable and movable property;
(iii) to institute legal proceedings.
Section 3. Position of the Bank with regard to judicial process: Actions
may be brought against the Bank only in a court of competent jurisdiction
in the territories of a member in which the bank has an office, has
appointed an agent for the purpose of accepting service or notice of process,
or has issued or guaranteed securities. No actions shall, however, be
brought by members or persons acting for or deriving claims from
members. The property and assets of the Bank shall, wheresoever located
and by whomsoever held, be immune from all forms of eizure, attachment
or execution before the delivery of final judgment against the Bank.
Section 4. Immunity of assets from seizure: Property and assets of the
Bank, where ever located and by whom so ever held, shall be immune from

26


search, requisition, confiscation, expropriation or any other form of seizure
by executive or legislative action
Section 5. Immunity of archives: The archives of the Bank shall be
inviolable.
Section 6. Freedom of assets from restrictions: To the extent necessary to
carry out the operations provided for in this Agreem nt and subject to the
provisions of this Agreement, all property and assets of the Bank shall be
free from restrictions, regulations, controls and moratoria of any nature.
Section 7. Privilege for communications: The official communications of
the Bank shall be accorded by each member the same treatment that it
accords to the official communications of other memb rs.
Section 8. Immunities and privileges of officers and employees: All
governors, executive directors, alternates, officers and employees of the
Bank:
(i) shall be immune from legal process with respect to acts
performed by them in their official capacity except when the
Bank waives this immunity;
(ii) not being local nationals, shall be accorded the same
immunities from immigration restrictions, alien registration
requirements and national service obligations and the same
facilities as regards exchange restrictions as are accorded by
members to the representatives, officials, and employees of
comparable rank of other members;
(iii) shall be granted the same treatment in respect of travelling
facilities as is accorded by members to representatives,

27


officials and employees of comparable rank of other
members.
Section 9. Immunities from taxation: (a) The Bank, its assets, property,
income and its operations and transactions authorized by this Agreement,
shall be immune from all taxation and from all customs duties. The Bank
shall also be immune from liability for the collection or payment of any tax
or duty.
(b) No tax shall be levied on or in respect of salaries and
emoluments paid by the Bank to executive directors, alternates, officials or
employees of the Bank who are not local citizens, local subjects, or other
local nationals.
(c) No taxation of any kind shall be levied on any obligation or
security issued by the Bank (including any dividend or interest thereon) by
whomsoever held:
(i) which discriminates against such obligation or security solely
because it is issued by the Bank; or
(ii) if the sole jurisdictional basis for such taxation is the place or
currency in which it is issued, made payable or paid, or the
location of any office or place of business maintaied by the
Bank
(d) No taxation of any kind shall be levied on any obligation or
security guaranteed by the Bank (including any dividend or interest
thereon) by whomsoever held:
(i) which discriminates against such obligation or security solely
because it is guaranteed by the Bank; or

28


(ii) if the sole jurisdictional basis for such taxation is the location
of any office or place of business maintained by the Bank
Section 10. Application of Article: Each member shall take such action as is
necessary in its own territories for the purpose of making effective in terms
of its own law the principles set forth in this Article and shall inform the
Bank of the detailed action which it has taken.


29


Schedule-10
Section 2(b) of Article 8 of the Articles of Agreement of the
International Monetary Fund
Section 2(b) of Article. 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 Agreement shall be
unenforceable in the territories of any member. In addition, members may, by
mutual accord, co-operate in measures for the purpose of making the exchange
control regulations of either member more effective, provided that such measures
and regulations are consistent with this Agreement.

30


Schedule-1125
Article 15 of the Fund Agreement
Article 15 Section 1. Authority to allocate special drawing rights: To
meet the need, as and when it arises, for a supplement to existing reserve
assets, the Fund is authorized to allocate special drawing rights to members
that are participants in the Special Drawing Rights Department.
Article 15 Section 2. Valuation of the special drawing right: The method
of valuation of the special drawing right shall be determined by the Fund by
a seventy percent majority of the total voting power, provided, however,
that an eighty-five percent majority of the total voting power shall be
required for a change in the principle of valuation or a fundamental change
in the application of the principle in effect.
Section 3 of Article 16 of the Fund Agreement
Article 16 Section 3. Recording and information: All changes in holdings of
special drawing rights shall take effect only when r corded by the Fund in
the Special Drawing Rights Department. Participants shall notify the Fund
of the provisions of this Agreement under which special drawing rights are
used. The Fund may require participants to furnish it with such other
information as it deems necessary for its functions.
Section 1 of Article 17 of the Fund Agreement
Article 17 Section 1. Participants: Each member of the Fund that deposits
with the Fund an instrument setting forth that it undertakes all the

25 Inserted by First Amendment and Amended by Second Amendment.

31


obligations of a participant in the Special Drawing Rights Department in
accordance with its law and that it has taken all steps necessary to enable it
to carry out all of these obligations shall become a participant in the Special
Drawing Rights Department as of the date the instrument is deposited,
except that no member shall become a participant before the provisions of
this Agreement pertaining exclusively to the Special Drawing Rights
Department have entered into force and instruments have been deposited
under this Section by members that have at least Seventy-Five percent of
the total of quotas.
Article 22 of the Fund Agreement
Article 22. General Obligations of Participants: In addition to the
obligations assumed with respect to special drawing r ghts under other
articles of this Agreement, each participant undertakes to collaborate with
the Fund and with other participants in order to facilit te the effective
functioning of the Special Drawing Rights Department a d 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.

32


Schedule-1226
Article 21 (b) of the Fund Agreement
Article 21 (b): In addition to the privileges and immunities that are accorded
under Article IX of this Agreement, no tax of any kind shall be levied on
special drawing rights or on operations or transactions in special drawing
rights.

26 Amended by Second Amendment.

33


Schedule-1327
Section 4 of Article 19 of the Fund Amendment
Article 19, Section 428 Obligation to provide currency: A participant
designated by the Fund under Section 5 of this Article shall provide on
demand a freely usable currency29 to a participant using special drawing
rights under Section 2 (a) of this Article. A participant's obligation to
provide currency shall not extend beyond the point at which its holdings of
special drawing rights in excess of its net cumulative allocation are equal
to twice its net cumulative allocation or such higher limit as may be agreed
between a participant and the Fund. A participant may provide currency in
excess of the obligatory limit or any agreed higher limit.

Article 19, Section 530 Designation of participants to provide currency:
(a) The Fund shall ensure that a participant will be a le to use its special
drawing rights by designating participants to provide currency for
specified amounts of special drawing rights for thepurposes of
Sections 2(a) and 4 of this Article. Designations shall be made in
accordance with the following general principles supplemented by
such other principles as the Fund may adopt from time o time:

27 Inserted by First Amendment. 28 Amended by Second Amendment. 29 Amended by Second Amendment.
30 Amended by Second Amendment.


34


(1) A participant shall be subject to designation if its balance of
payments and gross reserve position is sufficiently strong, but
this will not preclude the possibility that a participant with a
strong reserve position will be designated even thoug 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.
(2) Participants shall be subject to designation in order to
promote reconstitution under Section 6(a) of this Article, to
reduce negative balances in holdings of special drawing
rights, or to offset the effect of failures to fulfill the
expectation in Section 3(a) of this Article.
(3) In designating participants, the Fund normally shall give
priority to those that need to acquire special drawing rights to
meet the objectives of designation under (2) above.
(b) In order to promote over time a balanced distribu ion of holdings of
special drawing rights under (a)(1) above, the Fund shall apply the
rules for designation in Schedule F or such rules as m y be adopted
under (c) below.
(c) The rules for designation may be reviewed at any time and new rules
shall be adopted if necessary. Unless new rules are adopted, the rules
in force at the time of the review shall continue to apply.


35


Article 19, Section 2(a)31 Operations and transactions between member
states: A member state shall be entitled to use its special drawing rights to
obtain an equivalent amount of currency from a participant designated
under Section 5 of this Article.

Schedule-1432
Section 6 (a) of Article 1933 of the Fund Agreement
Article 19, Section 6 (a)34 Reconstitution: Participants that use their special
drawing rights shall reconstitute their holdings of them in accordance with the
rules for reconstitution in Schedule G or such rules as may be adopted under (b)
below.

31 Amended by Second Amendment. 32 Inserted by Amendment. 33 Amended by Second Amendment 34 Amended by Second Amendment