International Monetary Fund and World Bank Act


Published: 1973-07-06

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International Monetary Fund and World Bank Act
INTERNATIONAL MONETARY FUND AND WORLD
BANK

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LRO 1/2002 STATUTE LAW OF THE BAHAMAS

INTERNATIONAL MONETARY FUND AND WORLD BANK
CHAPTER 352

INTERNATIONAL MONETARY FUND AND WORLD BANK

LIST OF AUTHORISED PAGES

1 LRO 1/2002
2 Blank
3 – 4 LRO 1/2002
5 – 6 Original
7 – 8 LRO 1/2002
9 –58 Original
59 – 60 LRO 1/2002
61 – 94 Original
95 – 97 LRO 1/2002

ARRANGEMENT OF SECTIONS
SECTION

1. Short title.
2. Interpretation.
3. Approval of acceptance of Bank Agreement, Fund Agreement, etc.
4. Financial provisions.
5. Status, immunities and privileges of the Bank and the Fund.
6. Minister may amend Schedule.

SCHEDULE

PART I — The Bank Agreement.
PART II — The Fund Agreement.



INTERNATIONAL MONETARY FUND AND WORLD
BANK

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LRO 1/2002 STATUTE LAW OF THE BAHAMAS

CHAPTER 352

INTERNATIONAL MONETARY FUND AND
WORLD BANK

An Act to provide for the acceptance by the
Government of the Agreements for the International
Monetary Fund and the International Bank for
Reconstruction and Development, and for matters connected
therewith.

[Commencement 6th July, 1973]
1. This Act may be cited as the International

Monetary Fund and World Bank Act.
2. (1) In this Act —
“the Bank” means the International Bank for

Reconstruction and Development provided for
by 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
Reconstruction and Development 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
as amended is set out in Part I of the Schedule to
this Act;

“the Fund” means the International Monetary Fund
provided for by 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 aforesaid
Conference and of which the text of the Articles
as amended is set out in Part II of the Schedule
to this Act;

“the Government” means —
(a) before the 10th day of July 1973, the

Government of the Bahama Islands;

23 of 1973
10 of 1977
13 of 2000
S.I. 120/2001

Short title.

Interpretation.

Schedule.

13 of 2000, s. 3.
Schedule.

CH.352 – 4] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS LRO 1/2002

(b) on or after that day, the Government of The
Bahamas;

“the Membership Resolution” means the resolutions
adopted by the Boards of Governors of the
Bank and the Fund, respectively, specifying the
terms and conditions upon which The Bahamas
shall be admitted to membership in the Bank
and the Fund;

“the Minister” means the Minister of Finance.
(2) Unless the context otherwise requires, references

in a section of this Act to a subsection are references to a
subsection of that section.

3. (1) Approval is hereby given for —
(a) acceptance by the Government of the Bank

Agreement, the Fund Agreement (including the
power to participate in the Special Drawing
Rights Department of the Fund) and the
Membership Resolutions; and

(b) the deposit on behalf of the Government of the
necessary instruments of acceptance and (if the
Government should decide to exercise the afore-
said power) participation.

(2) The Minister (or any person designated by him)
shall have power on behalf of the Government to sign the
Articles of Agreement of the Fund and the Bank and to
execute or deposit any instrument required to be executed
or deposited for the purpose of giving effect to paragraph
(a) of subsection (1).

4. (1) The Minister may pay for the account of The
Bahamas any amounts payable from time to time to the
Bank and the Fund under the Membership Resolutions, the
Bank Agreement and the Fund Agreement and also any
amounts payable from time to time by The Bahamas as a
participant in the Special Drawing Rights Department
aforesaid:

Provided that the Central Bank of The Bahamas 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 any such of the said amounts or
any such part thereof as may be specified in the agreement.

Approval of
acceptance of
Bank Agreement,
Fund Agreement,
etc.
10 of 1977, s. 3.

Financial
provisions.

10 of 1977, s. 4.

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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

(2) The Minister may create and issue to the Bank or
the Fund any such non-interest bearing and non-negotiable
notes or other obligations as are provided for by section 12
of Article 5 of the Bank Agreement and section 4 of Article
3 of the Fund Agreement, and any payments in respect of
any such notes or obligations so created and issued shall be
charged on the Consolidated Fund.

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

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

(5) Any moneys to be paid to The Bahamas from the
Bank or the Fund under this Act or raised by securities
under subsection (3) of this section and any gold, currency
or special drawing rights to be paid or allocated to The
Bahamas by the fund or which may otherwise be acquired
by The Bahamas in consequence of the participation of The
Bahamas in the Special Drawing Rights Department
aforesaid may be received by the Central Bank of The
Bahamas.

(6) The Central Bank of The Bahamas shall act as the
fiscal agency for The Bahamas under section 2 of Article 3
of the Bank Agreement and under section 1 of Article 5 of
the Fund Agreement, and as the depository required to be
designated under section 1 of Article 5 of the Bank
Agreement and under section 2 of Article 8 of the Fund
Agreement for holdings of currency of The Bahamas by
the Bank and the Fund.

5. The provisions of —
(a) sections 2, 3, 4, 5, 6, 7, 8 and 9 of Article 7 of

the Bank Agreement;
(b) sections 2, 3, 4, 5, 6, 7, 8 and 9 of Article 9 of

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

Article 8 of the Fund Agreement; and

13 of 2000, s. 4.

10 of 1977, s. 4.

10 of 1977, s. 4.

Status,
immunities and
privileges of the
Bank and the
Fund.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(d) paragraph (b) of Article 21 of the Fund
Agreement,

shall have the force of law in The Bahamas:
Provided that nothing in section 9 of Article 7 of the

Bank Agreement or in section 9 of Article 9 of the Fund
Agreement shall be construed —
(i) as entitling the Bank or the Fund to import

goods free of customs duty without any restric-
tion on their subsequent sale in The Bahamas; or

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

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

6. (1) Where any amendment of the Agreement is
accepted by the Government, the Minister may by Order
amend the Schedule to this Act for the purpose of
including therein the amendment so accepted.

(2) Any Order made under this section may contain
such consequential, supplemental or ancillary provisions as
appear to the Minister to be necessary or expedient for the
purpose of giving effect to the said amendment and,
without prejudice to the generality of the foregoing, may
contain provisions amending references in this Act to
specific provisions of the Agreement.

(3) Where the Schedule to this Act is amended
pursuant to this section, any reference in this Act or in any
other enactment or any instrument having effect under any
such enactment to the Agreement shall, unless the context
otherwise requires, be construed as a reference to the
Agreement as so amended.



Minister may
amend Schedule.
13 of 2000, s. 5.

INTERNATIONAL MONETARY FUND AND WORLD
BANK

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LRO 1/2002 STATUTE LAW OF THE BAHAMAS

SCHEDULE (Section 2)
ARTICLES OF AGREEMENT OF THE INTERNATIONAL
BANK FOR RECONSTRUCTION AND DEVELOPMENT

PART I
THE BANK AGREEMENT

Text of Articles of Agreement of the International Bank for
Reconstruction and Development

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

Introductory Article
The International Bank for Reconstruction and Development is
established and shall operate in accordance with the following
provisions:

ARTICLE 1
Purposes

The purposes of the Bank are:
(i) To assist in the reconstruction and development of

territories of members by facilitating the investment of
capital for productive purposes, including the restoration of
economies destroyed or disrupted by war, the reconversion
of productive facilities to peacetime needs and the encour-
agement of the development of productive facilities and
resources in less developed countries.

(ii) To promote private foreign investment by means of
guarantees or participations in loans and other investments
made by private investors; and when private capital is not
available on reasonable terms, to supplement private
investment by providing, on suitable conditions, finance for
productive purposes out of its own capital, funds raised by
it and its other resources.

(iii) To promote the long-range balanced growth of international
trade and the maintenance of equilibrium in balances of
payments by encouraging international investment for the
development of the productive resources of members, thereby
assisting in raising productivity, the standard of living and
conditions of labour in their territories.

(iv) To arrange the loans made or guaranteed by it in relation to
international loans through other channels so that the more
useful and urgent projects, large and small alike, will be
dealt with first.

(v) To conduct its operations with due regard to the effect of
international investment on business conditions in the


S.I. 120/2001

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STATUTE LAW OF THE BAHAMAS LRO 1/2002

territories of members and, in the immediate post-war
years, to assist in bringing about a smooth transition
from a wartime to a peacetime economy.

The Bank shall be guided in all its decisions by the purposes
set forth above.

ARTICLE 2
Membership in and Capital of the Bank

Section 1. (a) The original members of the Bank shall be
those members of the International Monetary Fund which accept
memberships in the Bank before the date specified in Article 11,
section 2(e).

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

Section 2. (a) The authorised capital stock of the Bank
shall be $10,000,000,000, in terms of United States dollars of the
weight and fineness in effect on 1st July 1944. The capital stock
shall be divided in 100,000 shares having a par value of $100,000
each, which shall be available for subscription only by members.

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

Section 3. (a) Each member shall subscribe shares of the
capital stock of the Bank. The minimum number of shares to be
subscribed by the original members shall be those set forth in
Schedule A. The minimum number of shares to be 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 shall prescribe rules laying down the
conditions under which members may subscribe shares of the
authorised capital stock of the Bank in addition to their minimum
subscriptions.

(c) If the authorised capital stock of the Bank is increased,
each member shall have a reasonable opportunity to subscribe,
under such conditions as the Bank shall decide, a proportion of the
increase of stock equivalent to the proportion which its stock
theretofore subscribed bears to the total capital stock of the Bank,
but no member shall be obligated to subscribe any part of the
increased capital.

Section 4. Shares included in the minimum subscriptions of
original members shall be issued at par. Other shares shall be issued
at par unless the Bank by a majority of the total voting power
decides in special circumstances to issue them on other terms.

Membership.

Authorised
capital.

Subscription of
shares.

Issue price of
shares.

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Section 5. The subscription of each member shall be
divided into two parts as follows:
(i) twenty percent shall be paid or subject to call under section

7(i) of this Article as needed by the Bank for its operations;
(ii) the remaining eighty percent shall be subject to call by

the Bank only when required to meet obligations of the
Bank created under Article 4, section 1(a)(ii) and (iii).

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

portion of the issue price of the shares.
Section 7. Payment of subscriptions for shares shall be

made in gold or United States dollars and in the currencies of the
members as follows:
(i) under section 5(i) of this Article, two percent of the

price of each share shall be payable in gold or United
States dollars, and, when calls are made, the remaining
eighteen percent shall be paid in the currency of the
member;

(ii) when a call is made under section 5(ii) of this Article,
payment may be made at the option of the member
either in gold, in United States dollars or in the
currency required to discharge the obligations of the
Bank for the purpose for which the call is made;

(iii) when a member makes payments in any currency under
(i) and (ii) above, such payments shall be made in
amounts equal in value to the member’s liability under
the call. This liability shall be a proportionate part of
the subscribed capital stock of the Bank as authorised
and defined in section 2 of this Article.

Section 8. (a) The two percent payable on each share in
gold or United States dollars under section 7(i) of this Article,
shall be paid within sixty days of the date on which the Bank
begins operations, provided that —
(i) any original member of the Bank whose metropolitan

territory has suffered from enemy occupation or
hostilities during the present war shall be granted the
right to postpone payment of one-half percent until five
years after that date;

(ii) an original member who cannot make such a payment
because it has not recovered possession of its gold
reserves which are still seized or immobilized as a
result of the war may postpone all payment until such
date as the Bank shall decide.

(b) The remainder of the price of each share payable
under Section 7(i) of this Article shall be paid as and when
called by the Bank, provided that —

Division and
calls of
subscribed
capital.

Limitation on
liability.

Method of
payment of
subscriptions for
shares.

Time of payment
of subscriptions.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(i) the Bank shall, within one year of its beginning
operations, call not less than eight percent of the price
of the share in addition to the payment of two percent
referred to in (a) above;

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

Section 9. (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 2, section 7(i), from currency referred to in Article
4, 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 Monetary Fund.

Section 10. Shares shall not be pledged or encumbered in any
manner whatever and they shall be transferable only to the Bank.

ARTICLE 3
General Provisions relating to Loans and Guarantees
Section 1. (a) The resources and the facilities of the Bank

shall be used exclusively for the benefit of members with
equitable consideration to projects for development and projects
for reconstruction alike.

(b) For the purpose of facilitating the restoration and
reconstruction of 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. Each member shall deal with the Bank only
through its Treasury, central bank, stabilisation fund or other
similar fiscal agency, and the Bank shall deal with members
only by or through the same agencies.

Maintenance of
value of certain
currency holdings
of the Bank.

Restriction on
disposal of shares.

Use of resources.

Dealings between
members and the
Bank.

INTERNATIONAL MONETARY FUND AND WORLD
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Section 3. The total amount outstanding of guarantees,
participations in loans and direct loans made by the Bank shall
not be increased at any time, if by such increase the total would
exceed on hundred percent of the unimpaired subscribed capital,
reserves and surplus of the Bank.

Section 4. The Bank may guarantee, participate in, or
make loans to any member or any political sub-division thereof
and any business, industrial and agricultural enterprise in the
territories of a member, subject to the following conditions:
(i) When the member in whose territories the project is

located is not itself the borrower, the member or the
central bank or some comparable agency of the
member which is acceptable to the Bank, fully
guarantees the repayment of the principal and the
payment of interest and other charges on the loan.

(ii) The Bank is satisfied that in the prevailing market
conditions the borrower would be unable otherwise to
obtain the loan under conditions which in the opinion
of the Bank are reasonable for the borrower.

(iii) A competent committee, as provided for in Article 5,
section 7, has submitted a written report recommending
the project after a careful study of the merits of the
proposal.

(iv) In the opinion of the Bank the rate of interest and other
charges are reasonable and such rate, charges and the
schedule for repayment of principal are appropriate to
the project.

(v) In making or guaranteeing a loan, the Bank shall pay
due regard to the prospects that the borrower, and, if
the borrower is not a member, that the guarantor, will
be in a position to meet its obligations under the loan;
and the Bank shall act prudently in the interests both of
the particular member in whose territories the project is
located and of the members as a whole.

(vi) In guaranteeing a loan made by other investors, the
Bank receives suitable compensation for its risk.

(vii) Loans made or guaranteed by the Bank shall, except in
special circumstances, be for the purpose of specific
projects of reconstruction or development.

Section 5. (a) The Bank shall impose no conditions that
the proceeds of a loan shall be spent in the territories of any
particular member or members.

(b) The Bank shall make arrangements to ensure that the
proceeds of any loan are used only for the purposes for which
the loan was granted, with due attention to considerations of
economy and efficiency and without regard to political or other
non-economic influences or considerations.

Limitations on
guarantees and
borrowings of the
Bank.

Conditions on
which the Bank
may guarantee or
make loans.

Use of loans
guaranteed,
participated in or
made by the
Bank.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(c) In the case of loans made by the Bank, it shall open an
account in the name of the borrower and the amount of the loan
shall be credited to this account in the currency or currencies in
which the loan is made. The borrower shall be permitted by the
Bank to draw on this account only to meet expenses in
connection with the project as they are actually incurred.

Section 6. (a) The Bank may make, participate in, or
guarantee loans to the International Finance Corporation, an
affiliate of the Bank, for use in its lending operations. The total
amount outstanding of such loans, participations and guarantees
shall not be increased if, at the time or as a result thereof, the
aggregate amount of debt (including the guarantee of any debt)
incurred by the said Corporation from any source and then
outstanding shall exceed an amount equal to four times its
unimpaired subscribed capital and surplus.

(b) The provisions of Article 3, sections 4 and 5(c) and of
Article 4, section 3 shall not apply to loans, participations and
guarantees authorised by this section.

ARTICLE 4
Operations

Section 1. (a) The Bank may make or facilitate loans
which satisfy the general conditions of Article 3 in any of the
following ways:
(i) By making or participating in direct loans out of its own

funds corresponding to its unimpaired paid-up capital and
surplus and, subject to section 6 of this Article, to its
reserves.

(ii) By making or participating in direct loans out of funds
raised in the market of a member, or otherwise borrowed
by the Bank.

(iii) By guaranteeing in whole or in part loans made by private
investors through the usual investment channels.

(b) The Bank may borrow funds under (a)(ii) above or
guarantee loans under (a)(iii) above only with the approval of
the member in whose markets the funds are raised and the
member in whose currency the loan is denominated, and only if
those members agree that the proceeds may be exchanged for
the currency of any other member without restriction.

Section 2. (a) Currencies paid into the Bank under Article 2,
section 7(i), shall be loaned only with the approval in each case of
the member whose currency is involved; provided, however, that if
necessary, after the Bank’s subscribed capital has been entirely
called, such currencies shall, without restriction by the members
whose currencies are offered, be used or exchanged for the
currencies required to meet contractual payments of interest, other


Loans to the
International
Finance
Corporation.

Methods of
making or
facilitating loans.

Availability and
transferability of
currencies.

INTERNATIONAL MONETARY FUND AND WORLD
BANK

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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

charges or amortisation on the Bank’s own borrowings, or to
meet the Bank’s liabilities with respect to such contractual
payments on loans guaranteed by the Bank.

(b) Currencies received by the Bank from borrowers or
guarantors in payment on account of principal of direct loans
made with currencies referred to in (a) 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 offered,
be used or exchanged for the currencies required to meet
contractual payments of interest, other charges or amortisation
on the Bank’s own borrowings, or to meet the Bank’s liabilities
with respect to such contractual payments on loans guaranteed
by the Bank.

(c) Currencies received by the Bank from borrowers or
guarantors in payment on account of principal of direct loans
made by the Bank under section 1(a)(ii) or of this Article, shall
be held and used, without restriction by the members, to make
amortisation 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
received as payments of interest and other charges for direct
loans made under section 1(a)(i) and (ii), and those received as
payments of commissions and other charges under section
1(a)(iii), shall be used or exchanged for other currencies or gold
required in the operations of the Bank without restriction by the
members whose currencies are offered.

(e) Currencies raised in the markets of members by
borrowers on loans guaranteed by the Bank under section
1(a)(iii) of this Article, shall also be used or exchanged for other
currencies without restriction by such members.

Section 3. The following provisions shall apply to direct
loans under section 1(a)(i) and (ii) of this Article:
(a) The Bank shall furnish the borrower with such currencies

of members, other than the member in whose territories the
project is located, as are needed by the borrower for
expenditures to be made in the territories of such other
members to carry out the purposes of the loan.

(b) The Bank may, in exceptional circumstances when local
currency required for the purposes of the loan cannot be raised
by the borrower on reasonable terms, provide the borrower as
part of the loan with an appropriate amount of that currency.

Provision of
currencies for
direct loans.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(c) The Bank, if the project gives rise indirectly to an increased
need for foreign exchange by the member in whose territories
the project is located, may in exceptional circumstances provide
the borrower as part of the loan with an appropriate amount of
gold or foreign exchange not in excess of the borrower’s local
expenditure in connection with the purposes of the loan.

(d) The Bank may, in exceptional circumstances, at the request
of a member in whose territories a portion of the loan is
spent, repurchase with gold or foreign exchange a part of
that member’s currency thus spent but in no case shall the
part so repurchased exceed the amount by which the
expenditure of the loan in those territories gives rise to an
increased need for foreign exchange.
Section 4. Loan contracts under section 1(a)(i) or (ii) of

this Article shall be made in accordance with the following
payment provisions:
(a) The terms and conditions of interest and amortisation

payments, maturity and dates of payment of each loan shall be
determined by the Bank. The Bank shall also determine the
rate and any other terms and conditions of commission to be
charged in connection with such loan.

In the case of loans made under section 1(a)(ii) of this
Article during the first ten years of the Bank’s operations,
this rate of commission shall be not less than one percent
per annum and not greater than one and one-half percent
per annum, and shall be charged on the outstanding portion
of any such loan. At the end of this period of ten years, the
rate of commission may be reduced by the Bank with
respect both to the outstanding portions of loans already
made and to future loans, if the reserves accumulated by
the Bank under section 6 of this Article and out of other
earnings are considered by it sufficient to justify a
reduction. In the case of future loans the Bank shall also
have discretion to increase the rate of commission beyond
the above limit, if experience indicates that an increase is
advisable.

(b) All loan contracts shall stipulate the currency or currencies
in which payments under the contract shall be made to the
Bank. At the option of the borrower, however, such
payments may be made in gold, or subject to the agreement
of the Bank, in the currency of a member other than that
prescribed in the contract:

(i) In the case of loans under section 1(a)(i) of this Article
the loan contracts shall provide that payments to the
Bank of interest, other charges and amortisation 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 of the provisions
of Article 2, section 9(c), shall be equivalent to the
value of such contractual payments at the


Payment
provisions for
direct loans.

INTERNATIONAL MONETARY FUND AND WORLD
BANK

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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

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(a)(ii)
and payable in the same currency.

(c) If a member suffers from an acute exchange stringency, so
that the service of any loan contracted by that member or
guaranteed by it or by one of its agencies cannot be provided
in the stipulated manner, the member concerned may apply to
the Bank for a relaxation of the conditions of payment. If the
Bank is satisfied that some relaxation is in the interests of the
particular member and of the operations of the Bank and of its
members as a whole, it may take action under either, or both,
of the following paragraphs with respect to the whole, or part,
of the annual service:

(i) The Bank may, in its discretion, make arrangements
with the member concerned to accept service
payments on the loan in the member’s currency for
periods not to exceed three years upon appropriate
terms 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 amortisation or
extend the life of the loan, or both.

Section 5. (a) In guaranteeing a loan placed through the usual
investment channels, the Bank shall charge a guarantee commission
payable periodically on the amount of the loan outstanding at a rate
determined by the Bank. During the first ten years of the Bank’s
operations, this rate shall be not less than one percent per annum and not
greater than one and one-half percent per annum. At the end of this
period of ten years, the rate of commission may be reduced by the Bank
with respect both to the outstanding portions of loans already guaranteed
and to future loans if the reserves accumulated by the Bank under section
6 of this Article and out of other earnings are considered by it sufficient
to justify a reduction. In the case of future loans the Bank shall also have
discretion to increase the rate of commission beyond the above limit, if
experience indicates that an increase is advisable.

(b) Guarantee commissions shall be paid directly to the
Bank by the borrower.

(c) Guarantees by the Bank shall provide that the Bank may
terminate its liability with respect to interest if, upon default by the
borrower and by the guarantor, if any, the Bank offers to purchase,
at par and interest accrued to a date designated in the offer, the
bonds or other obligations guaranteed.

Guarantees.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(d) The Bank shall have power to determine any other terms
and conditions of the guarantee.

Section 6. The amount of commissions received by the Bank
under sections 4 and 5 of this Article shall be set aside as a special
reserve, which shall be kept available for meeting liabilities of the
Bank in accordance with section 7 of this Article. The special
reserve shall be held in such liquid form, permitted under this
Agreement, as the Executive Directors may decide.

Section 7. In cases of default on loans made, participated
in, or guaranteed by the Bank:
(a) The Bank shall make such arrangements as may be feasible

to adjust the obligations under the loans, including
arrangements under or analogous to those provided in
section 4(c) of this Article.

(b) The payments in discharge of the Bank’s liabilities on
borrowings or guarantees under section 1(a)(ii) and (iii) of
this Article shall be charged:

(i) First, against the special reserve provided in section
6 of this Article.

(ii) Then, to the extent necessary and at the discretion of
the Bank, against the other reserves, surplus and
capital available to the Bank.

(c) Whenever necessary to meet contractual payments of
interest, other charges or amortisation on the Bank’s own
borrowings, or to meet the Bank’s liabilities with respect to
similar payments on loans guaranteed by it, the Bank may
call an appropriate amount of the unpaid subscriptions of
members in accordance with Article 2, 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
percent of the total subscriptions of the members for the
following purposes:

(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. In addition to the operations specified elsewhere
in this Agreement, the Bank shall have the power:
(i) To buy and sell securities it has issued and to buy and

sell securities which it has guaranteed or in which it has
invested, provided that the Bank shall obtain the
approval of the member in whose territories the
securities are to be bought or sold.

(ii) To guarantee securities in which it has invested for the
purpose of facilitating their sale.

Special reserve.

Methods of
meeting liabilities
of the Bank I
case of defaults.

Miscellaneous
operations.

INTERNATIONAL MONETARY FUND AND WORLD
BANK

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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

(iii) To borrow the currency of any member with the
approval of that member.

(vi) 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.

Section 9. Every security guaranteed or issued by the Bank
shall bear on its face a conspicuous statement to the effect that it is
not an obligation of any government unless expressly stated on the
security.

Section 10. The Bank and its officers shall not interfere in the
political affairs of any member; nor shall they be influenced in their
decisions by the political character of the member or members
concerned. Only economic considerations shall be relevant to their
decisions, and these considerations shall be weighed impartially in
order to achieve the purposes stated in Article 1.

ARTICLE 5
Organisation 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.

Section 2. (a) All the powers of the Bank shall be vested in the
Board of Governors consisting of one governor and one alternate
appointed by each member in such manner as it may determine.
Each governor and each alternate shall serve for five years, subject
to the pleasure of the member appointing him, and may be
reappointed. No alternate may vote except in the absence of his
principal. The Board shall select one of the governors as Chairman.

(b) The Board of Governors may delegate to the Executive
Directors authority to exercise any powers of the Board, except the
power to:
(i) Admit new members and determine the conditions of

their admission;
(ii) Increase or decrease the capital stock;
(iii) Suspend a member;
(iv) Decide appeals from interpretations of this Agreement

given by the Executive Directors;
(v) Make arrangements to co-operate with other international

organisations (other than informal arrangements of a
temporary and administrative character);

Warning to be
placed on
securities.

Political activity
prohibited.

Structure of the
Bank.

Board of
Governors.

CH.352 – 18] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(vi) Decide to suspend permanently the operations of the
Bank and to distribute its assets;

(vii) Determine the distribution of the net income of the Bank.
(c) The Board of Governors shall hold an annual meeting

and such other meetings as may be provided for by the Board or
called by the Executive Directors. Meetings of the Board shall
be called by the Directors whenever requested by five members
or by members having one-quarter of the total voting power.

(d) A quorum of any meeting of the Board of Governors
shall be a majority of the Governors, exercising not less than
two-thirds of the total voting power.

(e) The Board of Governors may by regulation establish a
procedure whereby the Executive Directors, when they deem
such action to be in the best interests of the Bank, may obtain a
vote of the Governors on a specific question without calling a
meeting of the Board.

(f) The Board of Governors, and the Executive Directors
to the extent authorised, may adopt such rules and regulations as
may be necessary or appropriate to conduct the business of the
Bank.

(g) Governors and alternates shall serve as such without
compensation from the Bank, but the Bank shall pay them
reasonable expenses incurred in attending meetings.

(h) The Board of Governors shall determine the
remuneration to be paid to the Executive Directors and the
salary and terms of the contract of service of the President.

Section 3. (a) Each member shall have two hundred and
fifty votes plus one additional vote for each share of stock held.

(b) Except as otherwise specifically provided, all matters
before the Bank shall be decided by a majority of the votes cast.

Section 4. (a) The Executive Directors shall be
responsible for the conduct of the general operations of the
Bank, and for this purpose, shall exercise all the powers
delegated to them by the Board of Governors.

(b) There shall be twelve Executive Directors, who need
not be governors, and of whom:
(i) five shall be appointed, one by each of the five

members having the largest number of shares;
(ii) seven shall be elected according to Schedule B by all

the Governors other than those appointed by the five
members referred to in (i) above.

for the purpose of this paragraph, “members” means governments
of countries whose names are set forth in Schedule A, whether they
are original members or become members in accordance with
Article 2, section 1(b). When governments of other countries
become members, the Board of Governors may, by a four-fifths


Voting.

Executive
Directors.

INTERNATIONAL MONETARY FUND AND WORLD
BANK

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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

majority of the total voting power, increase the total number of
directors by increasing the number of directors to be elected.

(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
becomes vacant more than ninety days before the end of his
term, another director shall be elected for the remainder of the
term by the governors who elected the former director. A
majority of the votes cast shall be required for election. While
the office remains vacant, the alternate of the former director
shall exercise his powers, except that of appointing an alternate.

(e) The Executive Directors shall function in continuous
session at the principal office of the Bank and shall meet as
often as the business of the Bank may require.

(f) A quorum for any meeting of the Executive Directors
shall be a majority of the Directors, exercising not less than one-
half of the total voting power.

(g) Each appointed director shall be entitled to cast the
number of votes allotted under section 3 of this Article to the
member appointing him. Each elected director shall be entitled
to cast the number of votes which counted towards his election.
All the votes which a director is entitled to cast shall be cast as a
unit.

(h) The Board of Governors shall adopt regulations under
which a member not entitled to appoint a director under (b)
above may send a 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. (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 Directors, but shall not vote at such meetings.
The President shall cease to hold office when the Executive
Directors so decide.

(b) The President shall be chief of the operating staff of the
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
organisation, appointment and dismissal of the officers and staff.

Executive
directors shall be
appointed or
elected every two
years.

President and
staff.

CH.352 – 20] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

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

(d) In appointing the officers and staff the President shall,
subject to the paramount importance of securing the highest
standards of efficiency and of technical competence, pay due
regard to the importance of recruiting personnel on as wide a
geographical basis as possible.

Section 6. (a) There shall be an Advisory Council of not
less than seven persons selected by the Board of Governors
including representatives of banking, commercial, industrial,
labour, and agricultural interests, and with as wide a national
representation as possible. In those fields where specialised
international organisations exist, the members of the Council
representative of those fields shall be selected in agreement with
such organisations. The Council shall advise the Bank on
matters of general policy. The Council shall meet annually and
on such other occasions as the Bank may request.

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

Section 7. The committees required to report on loans
under Article 3, 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. (a) The Bank, within the terms of this
Agreement, shall co-operate with any general international
organisation and with public international organisations having
specialised 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 after
amendment to this Agreement under Article 8.

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

Section 9. (a) The principal office of the Bank shall be
located in the territory of the member holding the greatest
number of shares.

(b) The Bank may establish agencies or branch offices in
the territories of any member of the Bank.

Advisory Council.

Loan committees.

Relationship to
other
international
organisations.

Location of
offices.

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Section 10. (a) The Bank may establish regional
offices and determine the location of, and the areas to be
covered by, each regional office.

(b) Each regional office shall be advised by a regional
council representative of the entire area and selected in such
manner as the Bank may decide.

Section 11. (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 say select. Initially, at least one-half of the gold
holdings of the Bank shall be held in the depository designated
by the member in whose territory the Bank has its principal
office, and at least forty percent shall be held in the depositories
designated by the remaining four members referred to above,
each of such depositories to hold, initially, not less than the
amount of gold paid on the shares of the member designating it.
However, all transfers of gold by the Bank shall be made with
due regard to the costs of transport and anticipated requirements
of the Bank. In an emergency the Executive Directors may
transfer all or any part of the Bank’s gold holdings to any place
where they can be adequately protected.

Section 12. The Bank shall accept from any member, in
place of any part of the member’s currency, paid in to the Bank
under Article 2, section 7(i), or to meet amortisation payments
on loans made with such currency, and not needed by the Bank
in its operations, notes 1 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 depository.

Section 13. (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.


1 Section 2 of Act 13 of 2000 reads as follows —
"Any non-negotiable notes issued to the Fund by the Government of the

Commonwealth of The Bahamas pursuant to section 12 of Article 5 of the Bank
Agreement ..... from the 16th day of June, 1977 to the 31st day of December, 1992
are hereby made effective for all purposes and are deemed to have been made in
accordance with the laws of the Commonwealth of The Bahamas."

Regional offices
and councils.

Depositories.

Form of holdings
of currency.

Publication of
reports and
provision of
information.

CH.352 – 22] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

Section 14. (a) The Board of Governors shall
determine annually what part of the Bank’s net income, after
making provision for reserves, shall be allocated to surplus and
what part, if any, shall be distributed.

(b) If any part is distributed, up to two percent non-
cumulative shall be paid, as a first charge against the distribution
for any year, to each member on the basis of the average amount
of the loans outstanding during the year made under Article 4,
section 1(a)(i), out of currency corresponding to its subscription.
If two percent is paid as a first charge, any balance remaining to
be distributed shall be paid to all members in proportion to their
shares. Payments to each member shall be made in its own
currency, or if that currency is not available in other currency
acceptable to the member. If such payments are made in
currencies other than the member’s own currency, the transfer of
the currency and its use by the receiving member after payment
shall be without restriction by the members.

ARTICLE 6
Withdrawal and Suspension of Membership: Suspension of

Operations
Section 1. Any member may withdraw from the Bank at

any time by transmitting a notice in writing to the Bank at its
principal office. Withdrawal shall become effective on the date
such notice is received.

Section 2. 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.

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

Section 3. Any member which ceases to be a member of
the International Monetary Fund shall automatically cease after
three months to be a member of the Bank unless the Bank by
three-fourths of the total voting power has agreed to allow it to
remain a member.

Section 4. (a) When a government ceases to be a member,
it shall remain liable for its direct obligations to the Bank and for
its contingent liabilities to the Bank so long as any part of the
loans or guarantees contracted before it ceased to be a member
are outstanding; but it shall cease to incur liabilities with respect
to loans and guarantees entered into thereafter by the Bank and
to share either in the income or the expenses of the Bank.

Allocation of net
income.

Right of members
to withdraw.

Suspension of
membership.

Cessation of
membership in
International
Monetary Fund.

Settlement of
accounts with
governments
ceasing to be
members.

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(b) 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 settlement of accounts with such government in accordance
with the provisions of (c) and (d) below. For this purpose the
repurchase price of the shares shall be the value shown by the
books of the Bank on the day the government ceases to be a
member.

(c) The 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 shares 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 2, 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 the aggregate of liabilities on loans and
guarantees in (c)(i) above until the former member has
received the full repurchase price.

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

(vi) If losses are sustained by the Bank on any guarantees,
participations in loans, or loans which were outstanding
on the date when the government ceased to be a
member, and the amount of such losses exceeds the
amount of the reserve provided against losses on the
date when the government ceased to be a member, such
government shall be obligated to repay upon demand
the amount by which the repurchase price of its shares
would have been reduced, if the losses had been taken
into account when the repurchase price was
determined. In addition, the former member
government shall remain liable on any call for unpaid
subscriptions under Article 2, section 6(ii), to the extent
that it would have been required to respond if the
impairment of capital had occurred and the call had
been made at the time the repurchase price of its shares
was determined.

(d) If the Bank suspends permanently its operations under
section 5(b) of this Article, within six months of the date upon
which any government ceases to be a member, all rights of such
government shall be determined by the provisions of section 5 of
this Article.

CH.352 – 24] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

Section 5. (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 realisation, conserva-
tion, and preservation of its assets and settlement of its obligations.

(c) The liability of all members for uncalled subscriptions to
the capital stock of the Bank and in respect of the depreciation of
their own currencies shall continue until all claims of creditors,
including all contingent claims, shall have been discharged.

(d) All creditors holding direct claims shall be paid out of the
assets of the Bank, and then out of payments to the Bank on calls on
unpaid subscriptions. Before making any payments to creditors
holding direct claims, the Executive Directors shall make such
arrangements as are necessary, in their judgment, to insure a
distribution to holders of contingent claims ratably with creditors
holding direct claims.

(e) No distribution shall be made to members on account
of their subscriptions to the capital stock of the Bank until —
(i) all liabilities to creditors have been discharged or

provided for, and
(ii) a majority of the Governors, exercising a majority of

the total voting power, have decided to make a
distribution.

(f) After a decision to make a distribution has been taken
under (e) above, the Executive Directors may by a two-thirds
majority vote make successive distributions of the assets of the
Bank to members until all of the assets have been distributed. This
distribution shall be subject to the prior settlement of all
outstanding claims of the Bank against each member.

(g) Before any distribution of assets is made, the Executive
Directors shall fix the proportionate share of each member
according to the ratio of its shareholding to the total outstanding
shares of the Bank.

(h) The Executive Directors shall value the assets to be
distributed as at the date of distribution and then proceed to
distribute in the following manner:
(i) There shall be paid to each member in its own obligations or

those of its official agencies or legal entities within its
territories, insofar as they are available for distribution, an
amount equivalent in value to its proportionate share of the
total amount to be distributed.

Suspension of
operations and
settlement of
obligations.

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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

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

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

(iv) Any remaining assets held by the Bank after payments
have been made to members under (i), (ii), and (iii)
above shall be distributed pro rata among the members.

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

ARTICLE 7
Status, Immunities and Privileges

Section 1. 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 territories of
each member.

Section 2. 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. 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 final judgment against the Bank.

Section 4. Property and assets of the Bank, wherever
located and by whomsoever held, shall be immune from search,
requisition, confiscation, expropriation or any other form of
seizure by executive or legislative action.

Section 5. The archives of the Bank shall be inviolable.
Section 6. To the extent necessary to carry out the

operations provided for in this Agreement and subject to the
provisions of this Agreement, all property and assets of the Bank
shall be free from restrictions, regulations, controls and
moratoria of any nature.

Purposes of
Article.

Status of the
Bank.

Position of the
Bank with regard
to judicial
process.

Immunity of
assets from
seizure.

Immunity of
archives.
Freedom of
assets from
restrictions.

CH.352 – 26] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

Section 7. The official communications of the Bank shall
be accorded by each member the same treatment that it accords
to the official communications of other members.

Section 8. 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, officials and employees of comparable
rank of other members.

Section 9. (a) The Bank, its assets, property, income and
its operations and transactions authorised by this Agreement,
shall be immune from all taxation and from all customs duties.
The Bank shall also be immune from liability for the collection
or payment of any tax or duty.

(b) No tax shall be levied on or in respect of salaries and
emoluments paid by the Bank to executive directors, alternates,
officials or employees of the Bank who are not local citizens,
local subjects, or other local nationals.

(c) No taxation of any kind shall be levied on any
obligation or security issued by the Bank (including any
dividend or interest thereon) by whomsoever held —
(i) which discriminates against such obligation or security

solely because it is issued by the Bank; or
(ii) if the sole jurisdictional basis for such taxation is the

place or currency in which it is issued, made payable or
paid, or the location of any office or place of business
maintained by the Bank.

(d) No taxation of any kind shall be levied on any
obligation or security guaranteed by the Bank (including any
dividend or interest thereon) by whomsoever held —
(i) which discriminates against such obligation or security

solely because it is guaranteed by the Bank; or
(ii) if the sole jurisdictional basis for such taxation is the

location of any office or place of business maintained by
the Bank.

Privilege for
communications.

Immunities and
privileges of
officers and
employees.

Immunities from
taxation.

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Section 10. 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.

ARTICLE 8
Amendments

(a) Any proposal to introduce modifications in this Agreement,
whether emanating from a member, a governor or the Executive
Directors, shall be communicated to the Chairman of the Board of
Governors who shall bring the proposal before the Board. If the
proposed amendment is approved by the Board the Bank shall, by
circular letter or telegram, ask all members whether they accept the
proposed amendment. When three-fifths of the members, having
four-fifths of the total voting power, have accepted the proposed
amendments, the Bank shall certify the fact by formal communica-
tion addressed to all members.

(b) Notwithstanding (a) above, acceptance by all members is
required in the case of any amendment modifying —
(i) the right to withdraw from the Bank provided in Article

6, section l;
(ii) the right secured by Article 2, section 3(c);
(iii) the limitation on liability provided in Article 2, section 6.

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

ARTICLE 9
Interpretation

(a) Any question of interpretation of the provisions of this
Agreement arising between any member and the Bank or between
any members of the Bank shall be submitted to the Executive
Directors for their decision. If the question particularly affects any
member not entitled to appoint an executive director, it shall be
entitled to representation in accordance with Article 5, section 4(h).

(b) In any case where the Executive Directors have given
a decision under (a) above, any member may require that the
question be referred to the Board of Governors, whose decision
shall be final. Pending the result of the reference to the Board,
the Bank may, so far as it deems necessary, act on the basis of
the decision of the Executive Directors.

(c) Whenever a disagreement arises between the Bank and a
country which has ceased to be a member, or between the Bank and
any member during the permanent suspension of the Bank, such
disagreement shall be submitted to arbitration by a tribunal of three


Application of
Article.

CH.352 – 28] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

arbitrators, one appointed by the Bank, another by the country
involved and an umpire who, unless the parties otherwise agree,
shall be appointed by the President of the Permanent Court of
International Justice or such other authority as may have been
prescribed by regulation adopted by the Bank. The umpire shall
have full power to settle all questions of procedure in any case
where the parties are in disagreement with respect thereto.

ARTICLE 10
Approval Deemed Given

Whenever the approval of any member is required before
any act may be done by the Bank, except in Article 8, approval
shall be deemed to have been given unless the member presents
an objection within such reasonable period as the Bank may fix
in notifying the member of the proposed act.

ARTICLE 11
Final Provisions

Section 1. This Agreement shall enter into force when it has
been signed on behalf of governments whose minimum subscrip-
tions comprise not less than sixty-five percent of the total
subscriptions set forth in Schedule A and when the instruments
referred to in section 2(a) of this Article have been deposited on
their behalf, but in no event shall this Agreement enter into force
before 1st May 1945.

Section 2. (a) Each government on whose behalf this Agree-
ment 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 (a) 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 shall
inform the governments of all countries whose names are set
forth in Schedule A, and all governments whose membership is
approved in accordance with Article 2, section 1(b), of all
signatures of this Agreement and of the deposit of all
instruments referred to in (a) above.

(d) At the time this Agreement is signed on its behalf, each
government shall transmit to the Government of the United States
of America one one-hundredth of one percent of the price of each
share in gold or United States dollars for the purpose of meeting


Entry into force.

Signature.

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administrative expenses of the Bank. This payment shall be
credited on account of the payment to be made in accordance
with Article 2, section 8(a). The Government of the United
States of America shall hold such funds in a special deposit
account and shall transmit them to the Board of Governors of the
Bank when the initial meeting has been called under section 3 of
this Article. If this Agreement has not come into force by 31st
December 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 31st December 1945.

(f) After 31st December 1945, this Agreement shall be
open for signature on behalf of the government of any country
whose membership has been approved in accordance with
Article 2, 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, overseas territories, all territories under their
protection, suzerainty, or authority and all territories in respect
of which they exercise a mandate.

(h) In the case of governments whose metropolitan territories
have been under enemy occupation, the deposit of the instrument
referred to in (a) above may be delayed until one hundred and
eighty days after the date on which these territories have been
liberated. If, however, it is not deposited by any such government
before the expiration of this period, the signature affixed on behalf
of that government shall become void and the portion of its
subscription paid under (d) above shall be returned to it.

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

Section 3. (a) As soon as this Agreement enters into force
under Section 1 of this Article, each member shall appoint a
governor and the member to whom the largest number of shares
is allocated in Schedule A shall call the first meeting of the
Board of Governors.

(b) At the first meeting of the Board of Governors,
arrangements shall be made for the selection of provisional
executive directors. The governments of the five countries, to
which the largest number of shares are allocated in Schedule A,
shall appoint provisional executive directors. If one or more of
such governments have not become members, the executive
directorships which they would be entitled to fill shall remain
vacant until they become members, or until 1st January 1946,
whichever is the earlier. Seven provisional executive directors
shall be elected in accordance with the provisions of Schedule B
and shall remain in office until the date of the first regular
election of executive directors which shall be held as soon as
practicable after 1st January 1946.

Inauguration of
the Bank.

CH.352 – 30] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(c) The Board of Governors may delegate to the
provisional executive directors any powers except those which
may not be delegated to the Executive Directors.

(d) The Bank shall notify members when it is ready to
commence operations.

DONE at Washington, in a single copy which shall remain
deposited in the archives of the Government of the United States of
America, which shall transmit certified copies to all governments
whose names are set forth in Schedule A and to all governments
whose membership is approved in accordance with Article 2,
section 1(b).

SCHEDULE A

SUBSCRIPTIONS

(millions of dollars) (millions of dollars)

Australia 200 Iran 24

Belgium 225 Iraq 6

Bolivia 7 Liberia .5

Brazil 105 Luxembourg 10

Canada 325 Mexico 65

Chile 35 Netherlands 275

China 600 New Zealand 50

Colombia 35 Nicaragua .8

Costa Rica 2 Norway 50

Cuba 35 Panama .2

Czechoslovakia 125 Paraguay .8

Denmark 2 Peru 17.5

Dominican Republic 2 Philippine Commonwealth 15

Ecuador 3.2 Poland 125

Egypt 40 Union of South Africa 100

El Salvador 1 Union of Soviet Socialist

Ethiopia 3 Republics 1200

France 450 United Kingdom 1300


2 The quota of Denmark shall be determined by the Bank after Denmark accepts

membership in accordance with these Articles of Agreement.

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Greece 25 United States 3175

Guatemala 2 Uruguay 10.5

Haiti 2 Venezuela 10.5

Honduras 1 Yugoslavia 40

Iceland 1

India 400 Total 9100


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 5, 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 5. The seven persons receiving the greatest number of
votes shall be executive directors, except that no person who
receives less than fourteen percent of the total of the votes which
can be cast (eligible votes) shall be considered elected.

3. When seven persons are not elected on the first ballot, a
second ballot shall be held in which the person who received the
lowest number of votes shall be ineligible for election and in which
there shall vote only (a) those governors who voted in the first
ballot for a person not elected and (b) those governors whose votes
for a person elected are deemed under 4 below to have raised the
votes cast for that person above fifteen percent of the eligible votes.

4. In determining whether the votes cast by a governor are
to be deemed to have raised the total of any person above fifteen
percent of the eligible votes, the fifteen 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 fifteen percent is reached.

5. Any governor, part of whose votes must be counted in
order to raise the total of any person above fourteen percent, shall
be considered as casting all of his votes for such person even if
the total votes for such person thereby exceed fifteen percent.

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

CH.352 – 32] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

PART II
THE FUND AGREEMENT

Text of Articles of Agreement of the International Monetary
Fund

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

Introductory Article
(i) The International Monetary Fund is established and shall

operate in accordance with the provisions of this
Agreement as originally adopted and subsequently
amended.

(ii) To enable the Fund to conduct its operations and
transactions, the Fund shall maintain a General
Department and a Special Drawing Rights Department.
Membership in the Fund shall give the right to
participation in the Special Drawing Rights Department.

(iii) Operations and transactions authorized by this Agreement
shall be conducted through the General Department,
consisting in accordance with the provisions of this
Agreement of the General Resources Account, the Special
Disbursement Account, and the Investment Account;
except that operations and transactions involving special
drawing rights shall be conducted through the Special
Drawing Rights Department.

ARTICLE I
Purposes

The purposes of the International Monetary Fund are:
(i) To promote international monetary co-operation through a

permanent institution which provides the machinery for
consultation and collaboration on international monetary
problems.

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

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

(iv) To assist in the establishment of a multilateral system of
payments in respect of current transactions between


13 of 2000, s. 6.

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members and in the elimination of foreign exchange
restrictions which hamper the growth of world trade.

(v) To give confidence to members by making the general
resources of the Fund temporarily available to them under
adequate safeguards, thus providing them with
opportunity to correct maladjustments in their balance of
payments without 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.

ARTICLE II
Membership

Section 1. 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. 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.

ARTICLE III
Quotas and Subscriptions

Section 1. Each member shall be assigned a quota
expressed in special drawing rights. The quotas of the members
represented at the United Nations Monetary and Financial
Conference which accept membership before December 31,
1945 shall be those set forth in Schedule A. The quotas of other
members shall be determined by the Board of Governors. The
subscription of each member shall be equal to its quota and shall
be paid in full to the Fund at the appropriate depository.

Section 2. (a) The Board of Governors shall at intervals of
not more than five years conduct a general review, and if it
deems it appropriate propose an adjustment, of the quotas of the
members. It may also, if it thinks fit, consider at any other time
the adjustment of any particular quota at the request of the
member concerned.

Original
members.

Other members.

Quotas and
payment of
subscriptions.

Adjustment of
quotas.

CH.352 – 34] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(b) The Fund may at any time propose an increase in the
quotas of those members of the Fund that were members on
August 31, 1975 in proportion to their quotas on that date in a
cumulative amount not in excess of amounts transferred under
Article V, Section 12(f)(i) and (j) from the Special Disbursement
Account to the General Resources Account.

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

(d) The quota of a member shall not be changed until the
member has consented and until payment has been made unless
payment is deemed to have been made in accordance with
Section 3(b) of this Article.

Section 3. (a) Each member which consents to an increase
in its quota under Section 2(a) of this Article shall, within a period
determined by the Fund, pay to the Fund twenty-five percent of the
increase in special drawing rights, but the Board of Governors may
prescribe that this payment may be made, on the same basis for all
members, in whole or in part in the currencies of other members
specified, with their concurrence, by the Fund, or in the member’s
own currency. A non-participant shall pay in the currencies of other
members specified by the Fund, with their concurrence, a
proportion of the increase corresponding to the proportion to be
paid in special drawing rights by participants. The balance of the
increase shall be paid by the member in its own currency. The
Fund’s holdings of a member’s currency shall not be increased
above the level at which they would be subject to charges under
Article V, Section 8(b)(ii), as a result of payments by other
members under this provision.

(b) Each member which consents to an increase in its quota
under Section 2(b) of this Article shall be deemed to have paid to
the Fund an amount of subscription equal to such increase.

(c) If a member consents to a reduction in its quota, the
Fund shall, within sixty days, pay to the member an amount
equal to the reduction. The payment shall be made in the
member’s currency and in such amount of special drawing rights
or the currencies of other members specified, with their
concurrence, by the Fund as is necessary to prevent the
reduction of the Fund’s holdings of the currency below the new
quota, provided that in exceptional circumstances the Fund may
reduce its holdings of the currency below the new quota by
payment to the member in its own currency.

(d) A seventy percent majority of the total voting power
shall he required for any decision under (a) above, except for the
determination of a period and the specification of currencies under
that provision.

Payments when
quotas are
changed.

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Section 4. 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 operations and transactions, notes3 or similar
obligations issued by the member or the depository designated
by the member under Article XIII, Section 2, which shall be
non-negotiable, non-interest bearing and payable at their face
value on demand by crediting the account of the Fund in the
designated depository. This Section shall apply not only to
currency subscribed by members but also to any currency
otherwise due to, or acquired by, the Fund and to be placed in
the General Resources Account.

ARTICLE IV
Obligations Regarding Exchange Arrangements

Section 1. Recognizing that the essential purpose of the
international monetary system is to provide a framework that
facilitates the exchange of goods, services, and capital among
countries, and that sustains sound economic growth, and that a
principal objective is the continuing development of the orderly
underlying conditions that are necessary for financial and economic
stability, each member undertakes to collaborate with the Fund and
other members to assure orderly exchange arrangements and to
promote a stable system of exchange rates. In particular, each
member shall:

Introductory Article
(i) endeavour to direct its economic and financial policies

toward the objective of fostering orderly economic growth
with reasonable price stability, with due regard to its
circumstances;

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

(iii) avoid manipulating exchange rates or the international
monetary system in order to prevent effective balance of
payments adjustment or to gain an unfair competitive
advantage over other members; and

(iv) follow exchange policies compatible with the undertakings
under this Section.


3 Section 2 of Act 13 of 2000 reads as follows-

"Any non-negotiable notes issued to the Fund by the Government of the Commonwealth
of The Bahamas pursuant to ...... section 4 of Article III of the Fund Agreement from the
16th day of June, 1977 to the 31st day of December, 1992 are hereby made effective for
all purposes and are deemed to have been made in accordance with the laws of the
Commonwealth of The Bahamas."

Substitution of
securities for
currency.

General
obligations of
members.

CH.352 – 36] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

Section 2. (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 fulfilment 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 maintenance by a member of a value for its currency in terms
of the special drawing right or another denominator, other than gold,
selected by the member, or (ii) co-operative arrangements by which
members maintain the value of their currencies in relation to the
value of the currency or currencies of other members, or (iii) other
exchange arrangements of a member’s choice.

(c) To accord with the development of the international
monetary system, the Fund, by an eighty-five percent majority of the
total voting power, may make provision for general exchange
arrangements without limiting the right of members to have
exchange arrangements of their choice consistent with the purposes
of the Fund and the obligations under Section 1 of this Article.

Section 3. (a) The Fund shall oversee the international mone-
tary system in order to ensure its effective operation, and shall
oversee the compliance of each member with its obligations under
Section 1 of this Article.

(b) In order to fulfil its functions under (a) above, the Fund
shall exercise firm surveillance over the exchange rate policies of
members, and shall adopt specific principles for the guidance of all
members with respect to those policies. Each member shall provide
the Fund with the information necessary for such surveillance, and,
when requested by the Fund, shall consult with it on the member’s
exchange rate policies. The principles adopted by the Fund shall be
consistent with co-operative arrangements by which members
maintain the value of their currencies in relation to the value of the
currency or currencies of other members, as well as with other
exchange arrangements of a member’s choice consistent with the
purposes of the Fund and Section 1 of this Article. These principles
shall respect the domestic social and political policies of members,
and in applying these principles the Fund shall pay due regard to the
circumstances of members.

Section 4. The Fund may determine, by an eighty-five
percent majority of the total voting power, that international
economic conditions permit the introduction of a widespread
system of exchange arrangements based on stable but adjustable
par values. The Fund shall make the determination on the basis of
the underlying stability of the world economy, and for this purpose
shall take into account price movements and rates of expansion in
the economies of members. The determination shall be made in
light of the evolution of the international monetary system, with
particular reference to sources of liquidity, and, in order to ensure


General
exchange
arrangements.

Surveillance over
exchange
arrangements.

Par values.

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the effective operation of a system of par values, to arrangements
under which both members in surplus and members in deficit in
their balances of payments take prompt, effective, and symmetrical
action to achieve adjustment, as well as to arrangements for
intervention and the treatment of imbalances. Upon making such
determination, the Fund shall notify members that the provisions of
Schedule C apply.

Section 5. (a) Action by a member with respect to its
currency under this Article shall be deemed to apply to the separate
currencies of all territories in respect of which the member has
accepted this Agreement under Article XXXI, Section 2(g) unless
the member declares that its action relates either to the metropolitan
currency alone, or only to one or more specified separate
currencies, or to the metropolitan currency and one or more
specified separate currencies.

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

ARTICLE V
Operations and Transactions of the Fund

Section 1. Each member shall deal with the Fund only
through its Treasury, central bank, stabilisation fund, or other
similar fiscal agency, and the Fund shall deal only with or
through the same agencies.

Section 2. (a) Except as otherwise provided in this
Agreement, transactions on the account of the Fund shall be
limited to transactions for the purpose of supplying a member,
on the initiative of such member, with special drawing rights or
the currencies of other members from the general resources of
the Fund, which shall be held in the General Resources Account,
in exchange for the currency of the member desiring to make the
purchase.

(b) If requested, the Fund may decide to perform financial
and technical services, including the administration of resources
contributed by members, that are consistent with the purposes of
the Fund. Operations involved in the performance of such
financial services shall not be on the account of the Fund.
Services under this subsection shall not impose any obligation
on a member without its consent.

Section 3. (a) The Fund shall adopt policies on the use of
its general resources, including policies on stand-by or similar
arrangements, and may adopt special policies for special balance
of payments problems, that will assist members to solve their
balance of payments problems in a manner consistent with the
provisions of this Agreement and that will establish adequate
safeguards for the temporary use of the general resources of the
Fund.

Separate
currencies within
a member’s
territories.

Agencies dealing
with the Fund.

Limitation on the
Fund’s operations
and transactions.

Conditions
governing use of
the Fund’s
general
resources.

CH.352 – 38] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(b) A member shall be entitled to purchase the currencies of
other members from the Fund in exchange for an equivalent
amount of its own currency subject to the following conditions:
(i) the member’s use of the general resources of the Fund

would be in accordance with the provisions of this
Agreement and the policies adopted under them;

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

(iii) the proposed purchase would be a reserve tranche
purchase, or would not cause the Fund’s holdings of the
purchasing member’s currency to exceed two hundred
percent of its quota;

(iv) the Fund has not previously declared under Section 5 of
this Article, Article VI, Section 1, or Article XXVI,
Section 2(a) that the member desiring to purchase is
ineligible to use the general resources of the Fund.

(c) The Fund shall examine a request for a purchase to
determine whether the proposed purchase would be consistent
with the provisions of this Agreement and the policies adopted
under them, provided that requests for reserve tranche purchases
shall not be subject to challenge.

(d) The Fund shall adopt policies and procedures on the
selection of currencies to be sold that take into account, in
consultation with members, the balance of payments and reserve
position of members and developments in the exchange markets,
as well as the desirability of promoting over time balanced
positions in the Fund, provided that if a member represents that
it is proposing to purchase the currency of another member
because the purchasing member wishes to obtain an equivalent
amount of its own currency offered by the other member, it shall
be entitled to purchase the currency of the other member unless
the Fund has given notice under Article VII, Section 3 that its
holdings of the currency have become scarce.

(e) (i) Each member shall ensure that balances of its
currency purchased from the Fund are balances of a freely
usable currency or can be exchanged at the time of purchase for
a freely usable currency of its choice at an exchange rate
between the two currencies equivalent to the exchange rate
between them on the basis of Article XIX, Section 7(a).

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

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(iii) An exchange under (i) above of a currency that is not
freely usable shall be made by the member whose currency is
purchased unless that member and the purchasing member agree
on another procedure.

(iv) A member purchasing from the Fund the freely usable
currency of another member and wishing to exchange it at the time of
purchase for another freely usable currency shall make the exchange
with the other member if requested by that member. The exchange
shall be made for a freely usable currency selected by the other
member at the rate of exchange referred to in (i) above.

(f) Under policies and procedures which it shall adopt,
the Fund may agree to provide a participant making a purchase
in accordance with this Section with special drawing rights
instead of the currencies of other members.

Section 4. The Fund may in its discretion, and on terms which
safeguard its interests, waive any of the conditions prescribed in
Section 3(b)(iii) and (iv) of this Article, especially in the case of
members with a record of avoiding large or continuous use of the
Fund’s general resources. In making a waiver it shall take into
consideration periodic or exceptional requirements of the member
requesting the waiver. The Fund shall also take into consideration a
member’s willingness to pledge as collateral security acceptable
assets having a value sufficient in the opinion of the Fund to protect
its interests and may require as a condition of waiver the pledge of
such collateral security.

Section 5. Whenever the Fund is of the opinion that any
member is using the general resources of the Fund in a manner
contrary to the purposes of the Fund, it shall present to the
member a report setting forth the views of the Fund and
prescribing a suitable time for reply. After presenting such a
report to a member, the Fund may limit the use of its general
resources by the member. If no reply to the report is received
from the member within the prescribed time, or if the reply
received is unsatisfactory, the Fund may continue to limit the
member’s use of the general resources of the Fund or may, after
giving reasonable notice to the member, declare it ineligible to
use the general resources of the Fund.

Section 6. (a) The Fund may accept special drawing rights
offered by a participant in exchange for an equivalent amount of
the currencies of other members.

(b) The Fund may provide a participant, at its request, with
special drawing rights for an equivalent amount of the currencies of
other members. The Fund’s holdings of a member’s currency shall
not be increased as a result of these transactions above the level at
which the holdings would be subject to charges under Section
8(b)(ii) of this Article.

(c) The currencies provided or accepted by the Fund under
this Section shall be selected in accordance with policies that take
into account the principles of Section 3(d) or 7(i) of this Article. The


Waiver of
conditions.

Ineligibility to use
the Fund’s
general resources.

Other purchases
and sales of
special drawing
rights by the
Fund.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

Fund may enter into transactions under this Section only if a
member whose currency is provided or accepted by the Fund
concurs in that use of its currency.

Section 7. (a) A member shall be entitled to repurchase at
any time the Fund’s holdings of its currency that are subject to
charges under Section 8(b) of this Article.

(b) A member that has made a purchase under Section 3
of this Article will be expected normally, as its balance of
payments and reserve position improves, to repurchase the
Fund’s holdings of its currency that result from the purchase and
are subject to charges under Section 8(b) of this Article. A
member shall repurchase these holdings if, in accordance with
policies on repurchase that the Fund shall adopt and after
consultation with the member, the Fund represents to the
member that it should repurchase because of an improvement in
its balance of payments and reserve position.

(c) A member that has made a purchase under Section 3
of this Article shall repurchase the Fund’s holdings of its
currency that result from the purchase and are subject to charges
under Section 8(b) of this Article not later than five years after
the date on which the purchase was made. The Fund may
prescribe that repurchase shall be made by a member in
instalments during the period beginning three years and ending
five years after the date of a purchase. The Fund, by an eighty-
five percent majority of the total voting power, may change the
periods for repurchase under this subsection, and any period so
adopted shall apply to all members.

(d) The Fund, by an eighty-five percent majority of the
total voting power, may adopt periods other than those that
apply in accordance with (c) above, which shall be the same for
all members, for the repurchase of holdings of currency acquired
by the Fund pursuant to a special policy on the use of its general
resources.

(e) A member shall repurchase, in accordance with
policies that the Fund shall adopt by a seventy percent majority
of the total voting power, the Fund’s holdings of its currency
that are not acquired as a result of purchases and are subject to
charges under Section 8(b)(ii) of this Article.

(f) A decision prescribing that under a policy on the use
of the general resources of the Fund the period for repurchase
under (c) or (d) above shall be shorter than the one in effect
under the policy shall apply only to holdings acquired by the
Fund subsequent to the effective date of the decision.

(g) The Fund, on 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, unless the Fund
determines, by a seventy percent majority of the total voting
power, that a longer period for repurchase which is consistent
with the temporary use of the general resources of the Fund is
justified because discharge on the due date would result in
exceptional hardship for the member.

Repurchase by a
member of its
currency held by
the Fund.

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(h) The Fund’s policies under Section 3(d) of this Article
may be supplemented by policies under which the Fund may
decide after consultation with a member to sell under Section
3(b) of this Article its holdings of the member’s currency that
have not been repurchased in accordance with this Section 7,
without prejudice to any action that the Fund may be authorized
to take under any other provision of this Agreement.

(i) All repurchases under this Section shall be made
with special drawing rights or with the currencies of other
members specified by the Fund. The Fund shall adopt policies
and procedures with regard to the currencies to be used by
members in making repurchases that take into account the
principles in Section 3(d) of this Article. The Fund’s holdings of
a member’s currency that is used in repurchase shall not be
increased by the repurchase above the level at which they would
be subject to charges under Section 8(b)(ii) of this Article.

(j) (i) If a member’s currency specified by the Fund
under (i) above is not a freely usable currency, the 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 Article XIX, Section 7(a).

(ii) Each member whose currency is specified by the Fund
for repurchase shall collaborate with the Fund and other
members to enable repurchasing members, at the time of the
repurchase, to obtain the specified currency in exchange for the
freely usable currencies of other members.

(iii) An exchange under (j)(i) above shall be made with the
member whose currency is specified unless that member and the
repurchasing member agree on another procedure.

(iv) If a repurchasing member wishes to obtain, at the time
of the repurchase, the freely usable currency of another member
specified by the Fund under (i ) above, it shall, if requested by
the other member, obtain the currency from the other member in
exchange for a freely usable currency at the rate of exchange
referred to in (j)(i) above. The Fund may adopt regulations on
the freely usable currency to be provided in an exchange.

Section 8. (a) (i) The Fund shall levy a service charge on
the purchase by a member of special drawing rights or the currency
of another member held in the General Resources Account in
exchange for its own currency, provided that the Fund may levy a
lower service charge on reserve tranche purchases than on other
purchases. The service charge on reserve tranche purchases shall
not exceed one-half of one percent.

Charges.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(ii) The Fund may levy a charge for stand-by or similar
arrangements. The Fund may decide that the charge for an
arrangement shall be offset against the service charge levied
under (i) above on purchases under the arrangement.

(b) The Fund shall levy charges on its average daily
balances of a member’s currency held in the General Resources
Account to the extent that they:
(i) have been acquired under a policy that has been the

subject of an exclusion under Article XXX(c), or.
(ii) exceed the amount of the member’s quota after

excluding any balances referred to in (i) above.
The rates of charge normally shall rise at intervals during

the period in which the 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 majority of the total voting power
shall be required for the determination of the rates of charge
under (a) and (b) above, which shall be uniform for all members,
and under (c) above.

(e) A member shall pay all charges in special drawing
rights, provided that in exceptional circumstances the Fund may
permit a member to pay charges in the currencies of other
members specified by the Fund, after consultation with them, or
in its own currency. The Fund’s holdings of a member’s
currency shall not be increased as a result of payments by other
members under this provision above the level at which they
would be subject to charges under (b)(ii) above.

Section 9. (a) The Fund shall pay remuneration on the
amount by which the percentage of quota prescribed under (b) or
(c) below exceeds the Fund’s average daily balances of a
member’s currency held in the General Resources Account other
than balances acquired under a policy that has been the subject
of an exclusion under Article XXX(c). The rate of remuneration,
which shall be determined by the Fund by a seventy percent
majority of the total voting power, shall be the same for all
members and shall be not more than, nor less than four-fifths of,
the rate of interest under Article XX, Section 3. In establishing
the rate of remuneration, the Fund shall take into account the
rates of charge under Article V, Section 8(b).

(b) The percentage of quota applying for the purposes of
(a) above shall be:

Remuneration.

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(i) for each member that became a member before the
second amendment of this Agreement, a percentage of
quota corresponding to seventy-five percent of its quota
on the date of the second amendment of this
Agreement, and for each member that became a
member after the date of the second amendment of this
Agreement a percentage of quota calculated by dividing
the total of the amounts corresponding to the
percentages of quota that apply to the other members
on the date on which the member became a member by
the total of the quotas of the other members on the
same date; plus

(ii) the amounts it has paid to the Fund in currency or
special drawing rights under Article III, Section 3(a)
since the date applicable under (b)(i) above; and minus

(iii) the amounts it has received from the Fund in currency
or special drawing rights under Article III, Section 3(c)
since the date applicable under (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 (a) above to each member to:
(i) a percentage, not in excess of one hundred percent, that

shall be determined for each member on the basis of the
same criteria for all members, or

(ii) one hundred percent for all members.
(d) Remuneration shall be paid in special drawing rights,

provided that either the Fund or the member may decide that the
payment to the member shall be made in its own currency.

Section 10. (a) The value of the Fund’s assets held in
the accounts of the General Department shall be expressed in
terms of the special drawing right.

(b) All computations relating to currencies of members
for the purpose of applying the provisions of this Agreement,
except Article IV and Schedule C, shall be at the rates at which
the Fund accounts for these currencies in accordance with
Section 11 of this Article.

(c) Computations for the determination of amounts of
currency in relation to quota for the purpose of applying the
provisions of this Agreement shall not include currency held in
the Special Disbursement Account or in the Investment Account.

Section 11. (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(a).

Computations.

Maintenance of
value.

CH.352 – 44] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(b) 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 adjustment shall be made within a
reasonable time, as determined by the Fund, after the date of
adjustment, and at any other time requested by the member.

Section 12. (a) The Fund shall be guided in all its policies and
decisions under this Section by the objectives set forth in Article VIII,
Section 7 and by the objective of avoiding the management of the price,
or the establishment of a fixed price, in the gold market.

(b) Decisions of the Fund to engage in operations or
transactions under (c), (d), and (e) below shall be made by an
eighty-five percent majority of the total voting power.

(c) The Fund may sell gold for the currency of any member
after consulting the member for whose currency the gold is sold,
provided that the Fund’s holdings of a member’s currency held in
the General Resources Account shall not be increased by the sale
above the level at which they would be subject to charges under
Section 8(b)(ii) of this Article without the concurrence of the
member, and provided that, at the request of the member, the Fund
at the time of sale shall exchange for the currency of another
member such part of the currency received as would prevent such
an increase. The exchange of a currency for the currency of another
member shall be made after consultation with that member, and
shall not increase the Fund’s holdings of that member’s currency
above the level at which they would be subject to charges under
Section 8(b)(ii) of this Article. The Fund shall adopt policies and
procedures with regard to exchanges that take into account the
principles applied under Section 7(i) of this Article. Sales under this
provision to a member shall be at a price agreed for each
transaction on the basis of prices in the market.

(d) The Fund may accept payments from a member in
gold instead of special drawing rights or currency in any
operations or transactions under this Agreement. Payments to
the Fund under this provision shall be at a price agreed for each
operation or transaction on the basis of prices in the market.

(e) The Fund may sell gold held by it on the date of the
second amendment of this Agreement to those members that were
members on August 31, 1975 and that agree to buy it, in proportion
to their quotas on that date. If the Fund intends to sell gold under (c)
above for the purpose of (f)(ii) below, it may sell to each developing
member that agrees to buy 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 (f)(iii) below. The gold that would be sold
under this provision to a member that has been declared ineligible to
use the general resources of the Fund under Section 5


Other operations
and transactions.

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–––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––––
[Original Service 2001] STATUTE LAW OF THE BAHAMAS

of this Article shall be sold to it when the ineligibility ceases, unless
the Fund decides to make the sale sooner. The sale of gold to a
member under this subsection (e) shall be made in exchange for its
currency and at a price equivalent at the time of sale to one special
drawing right per 0.888 671 gram of fine gold.

(f) Whenever under (c) above the Fund sells gold held by it
on the date of the second amendment of this Agreement, an amount
of the proceeds equivalent at the time of sale to one special drawing
right per 0.888 671 gram of fine gold shall be placed in the General
Resources Account and, except as the Fund may decide otherwise
under (g) below, any excess shall be held in the Special
Disbursement Account. The assets held in the Special Disbursement
Account shall be held separately from the other accounts of the
General Department, and may be used at any time:
(i) to make transfers to the General Resources Account for

immediate use in operations and transactions authorized
by provisions of this Agreement other than this Section;

(ii) for operations and transactions that are not authorized by
other provisions of this Agreement but are consistent with
the purposes of the Fund. Under this subsection (f)(ii)
balance of payments assistance may be made available on
special terms to developing members in difficult circum-
stances, and for this purpose the Fund shall take into
account the level of per capital income;

(iii) for distribution to those developing members that were
members on August 31, 1975, in proportion to their
quotas on that date, of such part of the assets that the
Fund decides to use for the purposes of (ii) above as
corresponds to the proportion of the quotas of these
members on the date of distribution to the total of the
quotas of all members on the same date, provided that
the distribution under this provision to a member that
has been declared ineligible to use the general
resources of the Fund under Section 5 of this Article
shall be made when the ineligibility ceases, unless the
Fund decides to make the distribution sooner.

Decisions to use assets pursuant to (i) above shall be taken
by a seventy percent majority of the total voting power, and
decisions pursuant to (ii) and (iii) above shall be taken by an
eighty-five percent majority of the total voting power.

(g) The Fund may decide, by an eighty-five percent
majority of the total voting power, to transfer a part of the excess
referred to in (f) above to the Investment Account for use
pursuant to the provisions of Article XII, Section 6(f).

(h) Pending uses specified under (f) above, the Fund may
invest a member’s currency held in the Special Disbursement
Account in marketable obligations of that member or in marketable
obligations of international financial organizations. The income of
investment and interest received under (f)(ii) above shall be placed


CH.352 – 46] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

in the Special Disbursement Account. No investment shall he
made without the concurrence of the member whose currency is
used to make the investment. The Fund shall invest only in
obligations denominated in special drawing rights or in the
currency used for investment.

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

(j) The Special Disbursement Account shall be terminated
in the event of the liquidation of the Fund and may be
terminated prior to liquidation of the Fund by a seventy percent
majority of the total voting power. Upon termination of the
account because of the liquidation of the Fund, any assets in this
account shall be distributed in accordance with the provisions of
Schedule K. Upon termination prior to liquidation of the Fund,
any assets in this account shall be transferred to the General
Resources Account for immediate use in operations and
transactions. The Fund by a seventy percent majority of the total
voting power, shall adopt rules and regulations for the
administration of the Special Disbursement Account.

ARTICLE VI
Capital Transfers

Section 1. (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.

Section 2. A member shall be entitled to make reserve
tranche purchases to meet capital transfers.

Use of the Fund’s
general resources
for capital
transfers.

Special provisions
for capital
transfers.

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Section 3. 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 VII, Section
3(b) and in Article XIV, Section 2.

ARTICLE VII
Replenishment and Scarce Currencies

Section 1. 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
concurrence of the member, the Fund borrow such
currency from some other source either within or
outside the territories of the member, but no member
shall be under any obligation to make such loans to the
Fund or to concur in the borrowing of its currency by
the Fund from any other source:

(ii) require the member, if it is a participant, to sell its
currency to the Fund for special drawing rights held in
the General Resources Account, subject to Article XIX,
Section 4. In replenishing with special drawing rights,
the Fund shall pay due regard to the principles of
designation under Article XIX, Section 5.

Section 2. If the Fund finds that a general scarcity of a
particular currency is developing, the Fund may so inform
members and may issue a report setting forth the causes of the
scarcity and containing recommendations designed to bring it to
an end. A representative of the member whose currency is
involved shall participate in the preparation of the report.

Section 3. (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.

(b) A formal declaration under (a) above shall operate as an
authorization to any member, after consultation with the Fund,
temporarily to impose limitations on the freedom of exchange
operations in the scarce currency. Subject to the provisions of


Controls of
capital transfers.

Measures to
replenish the
Fund’s holdings
of currencies.

General scarcity
of currency.

Scarcity of the
Fund’s holdings.

CH.352 – 48] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

Article IV and Schedule C, the member shall have complete
jurisdiction in determining the nature of such limitations, but
they shall be no more restrictive than is necessary to limit the
demand for the scarce currency to the supply held by, or
accruing to, the member in question, and they shall be relaxed
and removed as rapidly as conditions permit.

(c) The authorization under (b) above shall expire
whenever the Fund formally declares the currency in question to
be no longer scarce.

Section 4. Any member imposing restrictions in respect of
the currency of any other member pursuant to the provisions of
Section 3(b) of this Article shall give sympathetic consideration
to any representations by the other member regarding the
administration of such restrictions.

Section 5. Members agree not to invoke the obligations of
any engagements entered into with other members prior to this
Agreement in such manner as will prevent the operation of the
provisions of this Article.

ARTICLE VIII
General Obligations of Members

Section 1. In addition to the obligations assumed under other
articles of this Agreement, each member undertakes the obligations
set out in this Article.

Section 2. (a) Subject to the provisions of Article VII.
Section 3(b) and Article XIV, Section 2, no member shall, without
the approval of the Fund, impose restrictions on the making of
payments and transfers for current international transactions.

(b) Exchange contracts which involve the currency of any
member and which are contrary to the exchange control regulations
of that member 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.

Section 3. 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 prac-
tices, whether within or outside margins under Article IV or
prescribed by or under Schedule C, except as authorized under this
Agreement or approved by the Fund. If such arrangements and
practices are engaged in at the date when this Agreement enters into
force, the member concerned shall consult with the Fund as to their
progressive removal unless they are maintained or imposed under
Article XIV, Section 2, in which case the provisions of Section 3 of
that Article shall apply.

Administration of
restrictions.

Effect of other
international
agreements on
restrictions.

Introduction.

Avoidance of
restrictions on
currency
payments.

Avoidance of
discriminatory
currency
practices.

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Section 4. (a) Each member shall buy balances of its
currency held by another member if the latter, in requesting the
purchase, represents:
(i) that the balances to be bought have been recently

acquired as a result of current transactions; or
(ii) that their conversion is needed for making payments for

current transactions.
The buying member shall have the option to pay either in special
drawing rights, subject to Article XIX, Section 4, or in the
currency of the member making the request.

(b) The obligation in (a) above shall not apply when:
(i) the convertibility of the balances has been restricted

consistently with Section 2 of this Article or Article VI,
Section 3;

(ii) the balances have accumulated as a result of
transactions effected before the removal by a member
of restrictions maintained or imposed under Article
XIV, Section 2;

(iii) the balances have been acquired contrary to the
exchange regulations of the member which is asked to
buy them;

(iv) the currency of the member requesting the purchase has
been declared scarce under Article VII, Section 3(a); or

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

Section 5. (a) The Fund may require members to furnish it
with such information as it deems necessary for its activities,
including, as the minimum necessary for the effective discharge
of the Fund’s duties, national data on the following matters:
(i) official holdings at home and abroad of (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 according to countries of

destination and origin;
(v) total exports and imports of merchandise, in terms of

local currency values, according to countries of
destination and origin;

(vi) international balance of payments, including (1) trade
in goods and services, (2) gold transactions, (3) known
capital transactions, and (4) other items;

Convertibility of
foreign-held
balances.

Furnishing of
information.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(vii) international investment position, i.e., investments
within the territories of the member owned abroad and
investments abroad owned by persons in its territories
so far as it is possible to furnish this information;

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

wholesale and retail markets and of export and import
prices;

(x) buying and selling rates for foreign currencies;
(xi) exchange controls. i.e., a comprehensive statement of

exchange controls in effect at the time of assuming
membership in the Fund and details of subsequent
changes as they occur; and

(xii) where official clearing arrangements exist, details of
amounts awaiting clearance in respect of commercial
and financial transactions, and of the length of time
during which such arrears have been outstanding.

(b) In requesting information the Fund shall take into
consideration the varying ability of members to furnish the data
requested. Members shall be under no obligation to furnish
information in such detail that the affairs of individuals or
corporations are disclosed. Members undertake, however, to
furnish the desired information in as detailed and accurate a
manner as is practicable and, so far as possible, to avoid mere
estimates.

(c) The Fund may arrange to obtain further information
by agreement with members. It shall act as a centre for the
collection and exchange of information on monetary and
financial problems, thus facilitating the preparation of studies
designed to assist members in developing policies which further
the purposes of the Fund.

Section 6. Where under this Agreement a member is
authorized in the special or temporary circumstances specified in
the Agreement to maintain or establish restrictions on exchange
transactions, and there are other engagements between members
entered into prior to this Agreement which conflict with the
application of such restrictions, the parties to such engagements
shall consult with one another with a view to making such
mutually acceptable adjustments as may be necessary. The
provisions of this Article shall be without prejudice to the
operation of Article VII, Section 5.

Section 7. Each member undertakes to collaborate with the
Fund and with other member in order to ensure that the policies
of the member with respect to reserve assets shall be consistent
with the objectives of promoting better international surveillance
of international liquidity and making the special drawing right
the principal reserve asset in the international monetary system

Consultation
between members
regarding existing
international
agreements.

Obligation to
collaborate
regarding policies
on reserve assets.

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ARTICLE IX
Status, Immunities, and Privileges

Section 1. To enable the Fund to fulfil 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. The Fund shall possess full juridical personality,
and in particular, the capacity:
(i) to contact;
(ii) to acquire and dispose of immovable and movable

property; and
(iii) to institute legal proceedings.

Section 3. 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. 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. The archives of the Fund shall be inviolable.
Section 6. 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. The official communications of the Fund shall
be accorded by members the same treatment as the official
communications of other members.

Section 8. All Governors, Executive Directors, Alternates,
members of committees, representatives appointed under Article
XII, Section 3(j), advisors of any of the foregoing persons,
officers, and employees of the Fund:
(i) shall be immune from legal process with respect to acts

performed by them in their official capacity except
when the Fund waives this immunity;

(ii) not being local nationals, shall be granted the same
immunities from immigration restrictions, alien
registration requirements, and national service
obligations and the same facilities as regards exchange
restrictions as are accorded by members to the
representatives, officials, and employees of comparable
rank of other members; and

Purposes of
Article.

Status of the
Fund.

Immunity from
judicial process.

Immunity from
other action.

Immunity of
archives.
Freedom of
assets from
restrictions.

Privilege for
communications.

Immunities and
privileges of
officers and
employees.

CH.352 – 52] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

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

Section 9. (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
maintained by the Fund.

Section 10. Each member shall take such action as is
necessary in its own territories for the purpose of making effective in
terms of its own law the principles set forth in this Article and shall
inform the Fund of the detailed action which it has taken.

ARTICLE X
Relations with other International Organizations

The Fund shall co-operate within the terms of this Agreement
with any general international organization and with public
international organizations having specialized responsibilities in
related fields.

Any arrangements for such co-operation which would involve a
modification of any provision of this Agreement may be effected
only after amendment to this Agreement under Article XXVIII.

ARTICLE XI
Relations with Non-Member Countries

Section 1. Each member undertakes:
(i) not to engage in, nor to permit any of its fiscal agencies

referred to in Article V, Section 1 to engage in, any
transactions with a non-member or with persons in a non-
member’s territories which would be contrary to the
provisions of this Agreement or the purposes of the Fund;

Immunities from
taxation.

Application of
Article.

Undertakings
regarding
relations with
non-member
countries.

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(ii) not to co-operate with a non-member or with persons in
a non-member’s territories in practices which would be
contrary to the provisions of this Agreement or the
purposes of the Fund; and

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

Section 2. Nothing in this Agreement shall affect the right
of any member to impose restrictions on exchange transactions
with non-members or with persons in their territories unless the
Fund finds that such restrictions prejudice the interests of
members and are contrary to the purposes of the Fund.

ARTICLE XII
Organization and Management

Section 1. 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. (a) All powers under this Agreement not
conferred directly on the Board of Governors, the Executive
Board, or the Managing Director shall be vested in the Board of
Governors. The Board of Governors shall consist of one
Governor and one Alternate appointed by each member in such
manner as it may determine. Each Governor and each Alternate
shall serve until a new appointment is made. No Alternate may
vote except in the absence of his principal. The Board of
Governors shall select one of the Governors as Chairman.

(b) The Board of Governors may delegate to the
Executive Board authority to exercise any powers of the Board
of Governors, except the powers conferred directly by this
Agreement on the Board of Governors.

(c) The Board of Governors shall hold such meetings as
may be provided for by the Board of Governors or called by the
Executive Board. Meetings of the Board of Governors shall be
called whenever requested by fifteen members or by members
having one-quarter of the total voting power.

(d) A quorum for any meeting of the Board of Governors
shall be a majority of the Governors having not less than two-
thirds of the total voting power.

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

Restrictions on
transactions with
non-member
countries.

Structure of the
Fund.

Board of
Governors.

CH.352 – 54] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(f) The Board of Governors may by regulation establish a
procedure whereby the Executive Board, when it deems such
action to be in the best interests of the Fund, may obtain a vote
of the Governors on a specific question without calling a
meeting of the Board of Governors.

(g) The Board of Governors, and the Executive Board to the
extent authorized, may adopt such rules and regulations as may be
necessary or appropriate to conduct the business of the Fund.

(h) Governors and Alternates shall serve as such without
compensation from the Fund, but the Fund may pay them
reasonable expenses incurred in attending meetings.

(i) The Board of Governors shall determine the
remuneration to be paid to the Executive Directors and their
Alternates and the salary and terms of the contract of service of the
Managing Director.

(j) The Board of Governors and the Executive Board may
appoint such committees as they deem advisable. Membership
of committees need not be limited to Governors or Executive
Directors or their Alternates.

Section 3. (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) The Executive Board shall consist of Executive
Directors with the Managing Director as chairman. Of the
Executive Directors:
(i) five shall be appointed by the five members having the

largest quotas; and
(ii) fifteen shall be elected by the other members.

For the purpose of each regular election of Executive Directors,
the Board of Governors, by an eighty-five percent majority of the
total voting power, may increase or decrease the number of
Executive Directors in (ii) above. The number of Executive Directors
in (ii) above shall be reduced by one or two, as the case may be, if
Executive Directors are appointed under (c) below, unless the Board
of Governors decides, by an eighty-five percent majority of the total
voting power, that this reduction would hinder the effective discharge
of the functions of the Executive Board or of Executive Directors or
would threaten to upset a desirable balance in the Executive Board.

(c) If, at the second regular election of Executive Directors
and thereafter, the members entitled to appoint Executive Directors
under (b)(i) above do not include the two members, the holdings of
whose currencies by the Fund in the General Resources Account
have been, on the average over the preceding two years, reduced
below their quotas by the largest absolute amounts in terms of the
special drawing right, either one or both of such members, as the case
may be, may appoint an Executive Director.

Executive Board.

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(d) Elections of elective Executive Directors shall be
conducted at intervals of two years in accordance with the provisions
of Schedule E, supplemented by such regulations as the Fund deems
appropriate. For each regular election of Executive Directors, the
Board of Governors may issue regulations making changes in the
proportion of votes required to elect Executive Directors under the
provisions of Schedule E.

(e) Each Executive Director shall appoint an Alternate
with full power to act for him when he is not present. When the
Executive Directors appointing them are present, Alternates may
participate in meetings but may not vote.

(f) Executive Directors shall continue in office until their
successors are appointed or elected. If the office of an elected
Executive Director becomes vacant more than ninety days
before the end of his term, another Executive Director shall be
elected for the remainder of the term by the members that
elected the former Executive Director. A majority of the votes
cast shall be required for election. While the office remains
vacant, the Alternate of the former Executive Director shall
exercise his powers, except that of appointing an Alternate.

(g) The Executive Board shall function in continuous
session at the principal office of the Fund and shall meet as often
as the business of the Fund may require.

(h) A quorum for any meeting of the Executive Board
shall be a majority of the Executive Directors having not less
than one-half of the total voting power.

(i) (i) Each appointed Executive Director shall be
entitled to cast the number of votes allotted under Section 5 of
this Article to the member appointing him.

(ii) If the votes allotted to a member that appoints an
Executive Director under (c) above were cast by an Executive
Director together with the votes allotted to other members as a
result of the last regular election of Executive Directors, the
member may agree with each of the other members that the
number of votes allotted to it shall be cast by the appointed
Executive Director. A member making such an agreement shall
not participate in the election of Executive Directors.

(iii) Each elected Executive Director shall be entitled to
cast the number of votes which counted towards his election.

(iv) When the provisions of Section 5(b) of this Article are
applicable, the votes which an Executive Director would
otherwise be entitled to cast shall be increased or decreased
correspondingly. All the votes which an Executive Director is
entitled to cast shall be cast as a unit.

CH.352 – 56] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(v) When the suspension of the voting rights of a member
is terminated under Article XXVI, Section 2(b), and the member
is not entitled to appoint an Executive Director, the member may
agree with all the members that have elected an Executive
Director that the number of votes allotted to that member shall
be cast by such Executive Director, provided that, if no regular
election of Executive Directors has been conducted during the
period of 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 (f) 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.

(j) The Board of Governors shall adopt regulations under
which a member not entitled to appoint an Executive Director
under (b) above may send a representative to attend any meeting
of the Executive Board when a request made by, or a matter
particularly affecting, that member is under consideration.

Section 4. (a) The Executive Board shall select a
Managing Director who shall not be a Governor or an Executive
Director. The Managing Director shall be chairman of the
Executive Board, but shall have no vote except a deciding vote
in case of an equal division. He may participate in meetings of
the Board of Governors, but shall not vote at such meetings. The
Managing Director shall cease to hold office when the Executive
Board so decides.

(b) The Managing Director shall be chief of the operating
staff of the Fund and shall conduct, under the direction of the
Executive Board, the ordinary business of the Fund. Subject to
the general control of the Executive Board, he shall be
responsible for the organization, appointment, and dismissal of
the staff of the Fund.

(c) The Managing Director and the staff of the Fund, in
the discharge of their functions, shall owe their duty entirely to
the Fund and to no other authority. Each member of the Fund
shall respect the international character of this duty and shall
refrain from all attempts to influence any of the staff in the
discharge of these functions.

(d) In appointing the staff the Managing Director shall,
subject to the paramount importance of securing the highest
standards of efficiency and of technical competence, pay due
regard to the importance of recruiting personnel on as wide a
geographical basis as possible.

Section 5. (a) Each member shall have two hundred and
fifty votes plus one additional vote for each part of its quota
equivalent to one hundred thousand special drawing rights.

Managing
Director and
staff.

Voting.

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(b) Whenever voting is required under Article V, Section
4 or 5, each member shall have the number of votes to which it
is entitled under (a) above adjusted:
(i) by the addition of one vote for 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 (f) up to
the date when the vote is taken,

provided that neither net purchases nor net sales shall be deemed
at any time to exceed an amount equal to the quota of the
member involved.

(c) Except as otherwise specifically provided, all decisions
of the Fund shall be made by a majority of the votes cast.

Section 6. (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.

(d) The Fund, by a seventy percent majority of the total
voting power, may decide at any time to distribute any part of
the general reserve. Any such distribution shall be made to all
members in proportion to their quotas.

(e) Payments under (c) and (d) above shall be made in
special drawing rights, provided that either the Fund or the
member may decide that the payment to the member shall be
made in its own currency.

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

(ii) The Fund may decide to transfer to the Investment
Account a part of the proceeds of the sale of gold in accordance
with Article V, Section 12(g) and, by a seventy percent majority
of the total voting power, may decide to transfer to the
Investment Account, for immediate investment, currencies held
in the General Resources Account. The amount of these
transfers shall not exceed the total amount of the general reserve
and the special reserve at the time of the decision.

(iii) The Fund may invest a member’s currency held in the
Investment Account in marketable obligations of that member or in
marketable obligations of international financial organizations. No


Reserves,
distribution of net
income, and
investment.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

investment shall be made without the concurrence of the
member whose currency is used to make the investment. The
Fund shall invest only in obligations denominated in special
drawing rights or in the currency used for investment.

(iv) The income of investment may be invested in
accordance with the provisions of this subsection (f). Income not
invested shall be held in the Investment Account or may be used
for meeting the expenses of conducting the business of the Fund.

(v) The Fund may use a member’s currency held in the
Investment Account to obtain the currencies needed to meet the
expenses of conducting the business of the Fund.

(vi) The Investment Account shall be terminated in the
event of liquidation of the Fund and may be terminated, or the
amount of the investment may be reduced, prior to liquidation of
the Fund by a seventy percent majority of the total voting power.
The Fund, by a seventy percent majority of the total voting power,
shall adopt rules and regulations regarding administration of the
Investment Account, which shall be consistent with (vii), (viii),
and (ix) below.

(vii) Upon termination of the Investment Account because
of liquidation of the Fund, any assets in this account shall be
distributed in accordance with the provisions of Schedule K,
provided that a portion of these assets corresponding to the
proportion of the assets transferred to this account under Article V,
Section 12(g) to the total of the assets transferred to this account
shall be deemed to be assets held in the Special Disbursement
Account and shall be distributed in accordance with Schedule K,
paragraph 2(a)(ii).

(viii) Upon termination of the Investment Account prior to
liquidation of the Fund, a portion of the assets held in this
account corresponding to the proportion of the assets transferred
to this account under Article V, Section 12(g) to the total of the
assets transferred to the account shall be transferred to the
Special Disbursement Account if it has not been terminated, and
the balance of the assets held in the Investment Account shall be
transferred to the General Resources Account for immediate use
in operations and transactions.

(ix) On a reduction of the amount of the investment by the
Fund, a portion of the reduction corresponding to the proportion
of the assets transferred to the Investment Account under Article
V, Section 12(g) to the total of the assets transferred to this
account shall he transferred to the Special Disbursement
Account if it has not been terminated, and the balance of the
reduction shall be transferred to the General Resources Account
for immediate use in operations and transactions.

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LRO 1/2002 STATUTE LAW OF THE BAHAMAS

Section 7. (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. The Fund shall at all times have the right to
communicate its views informally to any member on any matter
arising under this Agreement. The Fund may, by a seventy
percent majority of the total voting power, decide to publish a
report made to a member regarding its monetary or economic
conditions and developments which directly tend to produce a
serious disequilibrium in the international balance of payments
of members. If the member is not entitled to appoint an
Executive Director, it shall be entitled to representation in
accordance with Section 3(j) of this Article. The Fund shall not
publish a report involving changes in the fundamental structure
of the economic organization of members.

ARTICLE XIII
Offices and Depositories

Section 1. 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. (a) Each member shall designate its central
bank as a depository for all the Fund’s holdings of its currency,
or if it has no central bank it shall designate such other
institution as may be acceptable to the Fund.

(b) The Fund may hold other assets, including gold, in the
depositories designated by the five members having the largest
quotas and in such other designated depositories as the Fund
may select. Initially, at least one-half of the holdings of the Fund
shall be held in the depository designated by the member in
whose territories the Fund has its principal office and at least
forty percent shall be held in the depositories designated by the
remaining four members referred to above. However, all
transfers of gold by the Fund shall be made with due regard to
the costs of transport and anticipated requirements of the Fund.
In an emergency the Executive Board may transfer all or any
part of the Fund’s gold holdings to any place where they can be
adequately protected.

Section 3. Each member guarantees all assets of the Fund
against loss resulting from failure or default on the part of the
depository designated by it.

Publication of
reports.

Communication
of views to
members.

Location of
offices.

Depositories.

Guarantee of the
Fund’s assets.

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STATUTE LAW OF THE BAHAMAS LRO 1/2002

ARTICLE XIV
Transitional Arrangements

Section 1. Each member shall notify the Fund whether it
intends to avail itself of the transitional arrangements in Section 2 of
this Article, or whether it is prepared to accept the obligations of
Article VIII, Sections 2, 3, and 4. A member availing itself of the
transitional arrangements shall notify the Fund as soon thereafter as it
is prepared to accept these obligations.

Section 2. A member that has notified the Fund that it intends to
avail itself of transitional arrangements under this provision may,
notwithstanding the provisions of any other articles of this
Agreement, maintain and adapt to changing circumstances the
restrictions on payments and transfers for current international
transactions that were in effect on the date on which it became a
member. Members shall, however, have continuous regard in their
foreign exchange policies to the purposes of the Fund, and, as soon
as conditions permit, they shall take all possible measures to develop
such commercial and financial arrangements with other members as
will facilitate international payments and the promotion of a stable
system of exchange rates. In particular, members shall withdraw
restrictions maintained under this Section as soon as they are
satisfied that they will be able, in the absence of such restrictions,
to settle their balance of payments in a manner which will not
unduly encumber their access to the general resources of the
Fund.

Section 3. The Fund shall make annual reports on the
restrictions in force under Section 2 of this Article. Any member
retaining any restrictions inconsistent with Article VIII, Sections 2,
3, or 4 shall consult the Fund annually as to their further retention.
The Fund may, if it deems such action necessary in exceptional
circumstances, make representations to any member that conditions
are favourable for the withdrawal of any particular restriction, or for
the general abandonment of restrictions, inconsistent with the
provisions of any other articles of this Agreement. The member
shall be given a suitable time to reply to such representations. If the
Fund finds that the member persists in maintaining restrictions
which are inconsistent with the purposes of the Fund, the member
shall be subject to Article XXVI, Section 2(a).

ARTICLE XV
Special Drawing Rights

Section 1. (a) 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 in accordance with the provisions
of Article XVIII to members that are participants in the Special
Drawing Rights Department.

(b) In addition, the Fund shall allocate special drawing rights
to members that are participants in the Special Drawing Rights
Department in accordance with the provisions of Schedule M.

Notification to
the Fund.

Exchange
restrictions.

Action of the
Fund relating to
restrictions.

Authority to
allocate special
drawing rights.
S.I. 120/2001.

S.I. 120/2001.

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Section 2. 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.

ARTICLE XVI
General Department and Special Drawing Rights Department

Section 1. All operations and transactions involving special
drawing rights shall be conducted through the Special Drawing
Rights Department. All other operations and transactions on the
account of the Fund authorized by or under this Agreement shall be
conducted through the General Department. Operations and
transactions pursuant to Article XVII, Section 2 shall be conducted
through the General Department as well as the Special Drawing
Rights Department.

Section 2. All assets and property of the Fund, except
resources administered under Article V, Section 2(b), shall be held in
the General Department, provided that assets and property acquired
under Article XX, Section 2 and Articles 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
be available to discharge or meet the liabilities, obligations, or losses
of the Fund incurred in the conduct of the operations and transactions
of the other Department, except that the expenses of conducting the
business of the Special Drawing Rights Department shall be paid by
the Fund from the General Department which shall be reimbursed in
special drawing rights from time to time by assessments under
Article XX, Section 4 made on the basis of a reasonable estimate of
such expenses.

Section 3. All changes in holdings of special drawing rights
shall take effect only when recorded by the Fund in the Special
Drawing Rights Department. Participants shall notify the Fund of the
provisions of this Agreement under which special drawing rights are
used. The Fund may require participants to furnish it with such other
information as it deems necessary for its functions.

ARTICLE XVII
Participants and Other Holders of Special Drawing Rights

Section 1. Each member of the Fund that deposits with the
Fund an instrument setting forth that it undertakes all the
obligations of a participant in the Special Drawing Rights
Department in accordance with its law and that it has taken all steps
necessary to enable it to carry out all of these obligations shall
become a participant in the Special Drawing Rights Department as


Valuation of the
special drawing
right.

Separation of
operations and
transactions.

Separation of
assets and
property.

Recording and
information.

Participant.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

of the date the instrument is deposited, except that no member
shall become a participant before the provisions of this
Agreement pertaining exclusively to the Special Drawing Rights
Department have entered into force and instruments have been
deposited under this Section by members that have at least
seventy-five percent of the total of quotas.

Section 2. 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. The Fund may prescribe:
(i) as holders, non-members, members that are non-

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

(ii) the terms and conditions on which prescribed holders
may be permitted to hold special drawing rights and
may accept and use them in operations and transactions
with participants and other prescribed holders; and

(iii) the terms and conditions on which participants and the
Fund through the General Resources Account may
enter into operations and transactions in special
drawing rights with prescribed holders.

An eighty-five percent majority of the total voting power
shall be required for prescriptions under (i) above. The terms
and conditions prescribed by the Fund shall be consistent with
the provisions of this Agreement and the effective functioning of
the Special Drawing Rights Department.

ARTICLE XVIII
Allocaion and Cancellation of Special Drawing Rights
Section 1. (a) In all its decisions with respect to the

allocation and cancellation of special drawing rights the Fund
shall seek to meet the long-term global need, as and when it
arises, to supplement existing reserve assets in such manner as
will promote the attainment of its purposes and will avoid
economic stagnation and deflation as well as excess demand and
inflation in the world.

(b) The first decision to allocate special drawing rights
shall take into account, as special considerations, a collective
judgment that there is a global need to supplement reserves, and
the attainment of a better balance of payments equilibrium, as
well as the likelihood of a better working of the adjustment
process in the future.

Fund as a holder.

Other holders

Principles and
considerations
governing
allocation and
cancellation.

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Section 2. (a) Decisions of the Fund to allocate or cancel
special drawing rights shall be made for basic periods which
shall run consecutively and shall be five years in duration. The
first basic period shall begin on the date of the first decision to
allocate special drawing rights or such later date as may be
specified in that decision. Any allocations or cancellations shall
take place at yearly intervals.

(b) The rates at which allocations are to he 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 basis for allocations or cancellations shall be the

quotas or net cumulative allocations on dates other than
the dates of decisions to allocate or cancel.

(d) A member that becomes a participant after a basic
period starts shall receive allocations beginning with the next
basic period in which allocations are made after it becomes a
participant unless the Fund decides that the new participant shall
start to receive allocations beginning with the next allocation
after it becomes a participant. If the Fund decides that a member
that becomes a participant during a basic period shall receive
allocations during the remainder of that basic period and the
participant was not a member on the dates established under (b)
or (c) above, the Fund shall determine the basis on which these
allocations to the participant shall be made.

(e) A participant shall receive allocations of special
drawing rights made pursuant to any decision to allocate unless:
(i) the Governor for the participant did not vote in favour

of the decision; and
(ii) the participant has notified the Fund in writing prior to

the first allocation of special drawing rights under that
decision that it does not wish special drawing rights to
be allocated to it under the decision. On the request of a
participant, the Fund may decide to terminate the effect
of the notice with respect to allocations of special
drawing rights subsequent to the termination.

Allocation and
cancellation.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(f) If on the effective date of any cancellation the amount
of special drawing rights held by a participant is less than its
share of the special drawing rights that are to be cancelled, the
participant shall eliminate its negative balance as promptly as its
gross reserve position permits and shall remain in consultation
with the Fund for this purpose. Special drawing rights acquired
by the participant after the effective date of the cancellation shall
be applied against its negative balance and cancelled.

Section 3. 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. (a) Decisions under Section 2(a), (b), and (c) or
Section 3 of this Article shall be made by the Board of
Governors on the basis of proposals of the Managing Director
concurred in by the Executive Board.

(b) Before making any proposal, the Managing Director,
after having satisfied himself that it will be consistent with the
provisions of Section 1(a) of this Article, shall conduct such
consultations as will enable him to ascertain that there is broad
support among participants for the proposal. In addition, before
making a proposal for the first allocation, the Managing Director
shall satisfy himself that the provisions of Section 1(b) of this
Article have been met and that there is broad support among
participants to begin allocations; he shall make a proposal for
the first allocation as soon after the establishment of the Special
Drawing Rights Department as he is so satisfied.

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

period;
(ii) if no decision has been taken with respect to allocation

or cancellation for a basic period, whenever he is
satisfied that the provisions of (b) above have been met;

(iii) when, in accordance with Section 3 of this Article, he
considers that it would be desirable to change the rate
or intervals of allocation or cancellation or change the
length of a basic period or start a new basic period; or

(iv) within six months of a request by the Board of
Governors or the Executive Board;

provided that, if under (i), (iii), or (iv) above the Managing Director
ascertains that there is no proposal which he considers to be
consistent with the provisions of Section 1 of this Article that has
broad support among participants in accordance with (b) above, he
shall report to the Board of Governors and to the Executive Board.

Unexpected
major
developments.

Decisions on
allocations and
cancellations.

INTERNATIONAL MONETARY FUND AND WORLD
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(d) An eighty-five percent majority of the total voting
power shall be required for decisions under Section 2(a), (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.

ARTICLE XIX
Operations and Transactions in Special Drawing Rights
Section 1. Special drawing rights may be used in the

operations and transactions authorized by or under this
Agreement.

Section 2. (a) A participant shall be entitled to use its special
drawing rights to obtain an equivalent amount of currency from a
participant designated under Section 5 of this Article.

(b) A participant, in agreement with another participant,
may use its special drawing rights to obtain an equivalent
amount of currency from the other participant.

(c) The Fund, by a seventy 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 conditions as the Fund deems appropriate. The
terms and conditions shall be consistent with the effective
functioning of the Special Drawing Rights Department and the
proper use of special drawing rights in accordance with this
Agreement.

(d) The Fund may make representations to a participant
that enters into any operation or transaction under (b) or (c)
above that in the 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 be subject to Article XXIII, Section 2(b).

Section 3. (a) In transactions under Section 2(a) of this
Article, except as otherwise provided in (c) below, a participant
will be expected to use its special drawing rights only if it has a
need because of its balance of payments or its reserve position or
developments in its reserves, and not for the sole purpose of
changing the composition of its reserves.

(b) The use of special drawing rights shall not be subject to
challenge on the basis of the expectation in (a) above, but the Fund
may, make representations to a participant that fails to fulfil this
expectation. A participant that persists in failing to fulfil this
expectation shall be subject to Article XXIII, Section 2(b).

(c) The Fund may waive the expectation in (a) above in
any transactions in which a participant uses special drawing rights
to obtain an equivalent amount of currency from a participant
designated under Section 5 of this Article that would promote


Use of special
drawing rights.

Operations and
transactions
between
participants.

Requirement of
need.

CH.352 – 66] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

reconstitution by the other participant under Section 6(a) of this
Article; prevent or reduce a negative balance of the other
participant; or offset the effect of a failure by the other
participant to fulfil the expectation in (a) above.

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

(b) A participant may provide currency in excess of the
obligatory limit or any agreed higher limit.

Section 5. (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(a) and 4 of this
Article. Designations shall be made in accordance with the
following general principles supplemented by such other
principles as the Fund may adopt from time to time:
(i) A participant shall be subject to designation if its balance of

payments and gross reserve position is sufficiently strong,
but this will not preclude the possibility that a participant
with a strong reserve position will be designated even
though it has a moderate balance of payments deficit.
Participants shall be designated in such manner as will
promote over time a 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 balances in holdings of
special drawing rights, or to offset the effect of failures
to fulfil the expectation in Section 3(a) of this Article.

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

(b) In order to promote over time a balanced distribution
of holdings of special drawing rights under (a)(i) above, the
Fund shall apply the rules for designation in Schedule F or such
rules as may be adopted under (c) below.

(c) The rules for designation may be reviewed at any time
and new rules shall be adopted if necessary. Unless new rules are
adopted, the rules in force at the time of the review shall continue to
apply.

Obligation to
provide currency.

Designation of
participants to
provide currency.

INTERNATIONAL MONETARY FUND AND WORLD
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Section 6. (a) Participants that use their special drawing
rights shall reconstitute their holdings of them in accordance
with the rules for reconstitution in Schedule G or such rules as
may be adopted under (b) below.

(b) The rules for reconstitution may be reviewed at any
time and new rules shall be adopted if necessary. Unless new
rules are adopted or a decision is made to abrogate rules for
reconstitution, the rules in force at the time of review shall
continue to apply. A seventy percent majority of the total voting
power shall be required for decisions to adopt, modify, or
abrogate the rules for reconstitution.

Section 7. (a) Except as otherwise provided in (b) below,
the exchange rates for transactions between participants under
Section 2(a) and (b) of this Article shall be such that participants
using special drawing rights shall receive the same value
whatever currencies might be provided and whichever
participants provide those currencies, and the Fund shall adopt
regulations to give effect to this principle.

(b) The Fund, by an eighty-five percent majority of the
total voting power, may adopt policies under which in
exceptional circumstances the Fund, by a seventy percent
majority of the total voting power, may authorize participants
entering into transactions under Section 2(b) of this Article to
agree on exchange rates other than those applicable under (a)
above.

(c) The Fund shall consult a participant on the procedure
for determining rates of exchange for its currency.

(d) For the purpose of this provision the term participant
includes a terminating participant.

ARTICLE XX
Special Drawing Rights Department Interest and Charges

Section 1. Interest at the same rate for all holders shall be
paid by the Fund to each holder on the amount of its holdings of
special drawing rights. The Fund shall pay the amount due to
each holder whether or not sufficient charges are received to
meet the payment of interest.

Section 2. Charges 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. The Fund shall determine the rate of interest by
a seventy percent majority of the total voting power. The rate of
charges shall be equal to the rate of interest.

Section 4. 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.

Reconstitution.

Exchange rates.

Interest.

Charges.

Rate of interest
and charges.

Assessments.

CH.352 – 68] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

Section 5. Interest, charges, and assessments shall be paid in
special drawing rights. A participant that needs special drawing
rights to pay any charge or assessment shall be obligated and
entitled to obtain them, for currency acceptable to the Fund, in a
transaction with the Fund conducted through the General Resources
Account. If sufficient special drawing rights cannot he obtained in
this way. the participant shall be obligated and entitled to obtain
them with a freely usable currency from a participant which the
Fund shall specify. Special drawing rights acquired by a participant
after the date for payment shall be applied against its unpaid
charges and cancelled.

ARTICLE XXI
Administration of the General Department and the Special

Drawing Rights Department
(a) The General Department and the Special Drawing

Rights Department shall be administered in accordance with the
provisions of Article XII, subject to the following provisions:
(i) For meetings of or decisions by the Board of Governors on

matters pertaining exclusively to the Special Drawing Rights
Department only requests by, or the presence and the votes
of, Governors appointed by members that are participants
shall be counted for the purpose of calling meetings and
determining whether a quorum exists or whether a decision
is made by the required majority.

(ii) For decisions by the Executive Board on matters pertaining
exclusively to the Special Drawing Rights Department only
Executive Directors appointed or elected by at least one
member that is a participant shall be entitled to vote. Each
of these Executive Directors shall be entitled to cast the
number of votes allotted to the member which is a
participant that appointed him or to the members that are
participants whose votes counted towards his election. Only
the presence of Executive Directors appointed or elected by
members that are participants and the votes allotted to
members that are participants shall be counted for the
purpose of determining whether a quorum exists or whether
a decision is made by the required majority. For the
purposes of this provision, an agreement under Article XII,
Section 3(i)(ii) by a member that is a participant shall entitle
an appointed Executive Director to vote and cast the
number of votes allotted to the member.

(iii) Questions of the general administration of the Fund,
including reimbursement under Article XVI, Section 2. and
any question whether a matter pertains to both Departments
or exclusively to the Special Drawing Rights Department
shall be decided as if they pertained exclusively to the


Payment of
interest, charges,
and assessments.

INTERNATIONAL MONETARY FUND AND WORLD
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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

General Department. Decisions with respect to the
method of valuation 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 decisions affecting the
operations and transactions conducted through both the
General Resources Account of the General Department
and the Special Drawing Rights Department shall be
made by the majorities required for decisions on
matters pertaining exclusively to each Department. A
decision on a matter pertaining to the Special Drawing
Rights Department shall so indicate.

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

(c) A question of interpretation of the provisions of this
Agreement on matters pertaining exclusively to the Special
Drawing Rights Department shall be submitted to the Executive
Board pursuant to Article XXIX(a) only on the request of a
participant. In any case where the Executive Board has given a
decision on a question of interpretation pertaining exclusively to the
Special Drawing Rights Department only a participant may require
that the question be referred to the Board of Governors under
Article XXIX(b). The Board of Governors shall decide whether a
Governor appointed by a member that is not a participant shall be
entitled to vote in the Committee on Interpretation on questions
pertaining exclusively to the Special Drawing Rights Department.

(d) Whenever a disagreement arises between the Fund
and a participant that has terminated its participation in the
Special Drawing Rights Department or between the Fund and
any participant during the liquidation of the Special Drawing
Rights Department with respect to any matter arising exclusively
from participation in the Special Drawing Rights Department,
the disagreement shall be submitted to arbitration in accordance
with the procedures in Article XXIX(c).

ARTICLE XXII
General Obligations of Participants

In addition to the obligations assumed with respect to special
drawing rights under other articles of this Agreement, each
participant undertakes to collaborate with the Fund and with other
participants in order to facilitate the effective functioning of the
Special Drawing Rights Department and the proper use of special
drawing rights in accordance with this Agreement and with the
objective of making the special drawing right the principal reserve
asset in the international monetary system.

CH.352 – 70] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

ARTICLE XXIII
Suspension of Operations and Transactions in Special Drawings

Rights
Section 1. In the event of an emergency or the development

of unforeseen circumstances threatening the activities of the Fund
with respect to the Special Drawing Rights Department, the
Executive Board, by an eighty-five percent majority of the total
voting power, may suspend for a period of not more than one year
the operation of any of the provisions relating to operations and
transactions in special drawing rights, and the provisions of Article
XXVII, Section 1(b), (c), and (d) shall then apply.

Section 2. (a) If the Fund finds that a participant has failed
to fulfil its obligations under Article XIX, Section 4, the right of
the participant to use its special drawing rights shall be suspended
unless the Fund otherwise decides.

(b) If the Fund finds that a participant has failed to fulfil any
other obligation with respect to special drawing rights, the Fund
may suspend the right of the participant to use special drawing
rights it acquires after the suspension.

(c) Regulations shall be adopted to ensure that before
action is taken against any participant under (a) or (b) above, the
participant shall be informed immediately of the complaint
against it and given an adequate opportunity for stating its case,
both orally and in writing. Whenever the participant is thus
informed of a complaint relating to (a) above, it shall not use
special drawing rights pending the disposition of the complaint.

(d) Suspension under (a) or (b) above or limitation under
(c) above shall not affect a participant’s obligation to provide
currency in accordance with Article XIX, Section 4.

(e) The Fund may at any time terminate a suspension under
(a) or (b) above, provided that a suspension imposed on a
participant under (b) above for failure to fulfil the obligations under
Article XIX, Section 6(a) shall not be terminated until one hundred
eighty days after the end of the first calendar quarter during which
the participant complies with the rules for reconstitution.

(f) The right of a participant to use its special drawing
rights shall not be suspended because it has become ineligible to
use the Fund’s general resources under Article V, Section 5, Article
VI, Section I, or Article XXVI, Section 2(a). Article XXVI, Section
2 shall not apply because a participant has failed to fulfil any
obligations with respect to special drawing rights.

Emergency
provisions.

Failure to fulfil
obligations.

INTERNATIONAL MONETARY FUND AND WORLD
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ARTICLE XXIV
Termination of Participation

Section 1. (a) Any participant may terminate its participation
in the Special Drawing Rights Department at any time by transmitting
a notice in writing to the Fund at its principal office. Termination shall
become effective on the date the notice is received.

(b) A participant that withdraws from membership in the
Fund shall be deemed to have simultaneously terminated its
participation in the Special Drawing Rights Department.

Section 2. (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 terminating 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
extinguish its obligation to the fund shall be cancelled.

(c) A settlement shall be made with reasonable despatch by
agreement between the terminating participant and the Fund with
respect to any obligation of the terminating participant or the Fund
after the setoff in (b) above. If agreement on a settlement is not
reached promptly the provisions of Schedule H shall apply.

Section 3. After the date of termination the Fund shall pay
interest on any outstanding balance of special drawing rights held
by a terminating participant and the terminating participant shall
pay charges on any outstanding obligation owed to the Fund at the
times and rates prescribed under Article XX. Payment shall be
made in special drawing rights. A terminating participant shall be
entitled to obtain special drawing rights with a freely usable
currency to pay charges or assessments in a transaction with a
participant specified by the Fund or by agreement from any other
holder, or to dispose of special drawing rights received as interest in
a transaction with any participant designated under Article XIX,
Section 5 or by agreement with any other holder.

Right to
terminate
participation.

Settlement on
termination.

Interest and
charges.

CH.352 – 72] INTERNATIONAL MONETARY FUND AND WORLD
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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

Section 4. Currency received by the Fund from a terminating
participant shall be used by the Fund to redeem special drawing
rights held by participants in proportion to the amount by which
each participant’s holdings of special drawing rights exceed its net
cumulative allocation at the time the currency is received by the
Fund. Special drawing rights so redeemed and special drawing
rights obtained by a terminating participant under the provisions of
this Agreement to meet any instalment due under an agreement on
settlement or under Schedule H and set off against that instalment
shall be cancelled.

Section 5. Whenever the Fund is required to redeem
special drawing rights held by a terminating participant,
redemption shall be made with currency provided by
participants specified by the Fund. These participants shall be
specified in accordance with the principles in Article XIX,
Section 5. Each specified participant shall provide at its option
the currency of the terminating participant or a freely usable
currency to the Fund and shall receive an equivalent amount of
special drawing rights. However, a terminating participant may
use its special drawing rights to obtain its own currency, a freely
usable currency, or any other asset from any holder, if the Fund
so permits.

Section 6. In order to facilitate settlement with a terminating
participant, the Fund may decide that a terminating participant
shall:
(i) use any special drawing rights held by it after the setoff in

Section 2(b) of this Article, when they are to be redeemed,
in a transaction with the Fund conducted through the
General Resources Account to obtain its own currency or a
freely usable currency at the option of the Fund; or

(ii) obtain special drawing rights in a transaction with the
Fund conducted through the General Resources Account
for a currency acceptable to the Fund to meet any charges
or instalment due under an agreement or the provisions of
Schedule H.

ARTICLE XXV
Liquidation of the Special Drawing 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 allocations or cancellations and all operations
and transactions in special drawing rights pending decision by the
Board of Governors. A decision by the Board of Governors to
liquidate the Fund shall be a decision to liquidate both the General
Department and the Special Drawing Rights Department.

(b) If the Board of Governors decides to liquidate the Special
Drawing Rights Department, all allocations or cancellations and all


Settlement of
obligation to the
Fund.

Settlement of
obligation to a
terminating
participant.

General
Resources
Account
transactions.

INTERNATIONAL MONETARY FUND AND WORLD
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[Original Service 2001] STATUTE LAW OF THE BAHAMAS

operations and transactions in special drawing rights and the
activities of the Fund with respect to the Special Drawing Rights
Department shall cease except those incidental to the orderly
discharge of the obligations of participants and of the Fund with
respect to special drawing rights and all obligations of the Fund
and of participants under this Agreement with respect to special
drawing rights shall cease except those set out in this Article,
Article XX, Article XXI(d), Article XXIV, Article XXIX(c),
and Schedule H, or any agreement reached under Article XXIV
subject to paragraph 4 of Schedule H, and Schedule I.

(c) Upon liquidation of the Special Drawing Rights
Department, interest and charges that accrued to the date of
liquidation and assessments levied before that date but not paid
shall be paid in special drawing rights. The Fund shall be
obligated to redeem all special drawing rights held by holders,
and each participant shall be obligated to pay the Fund an
amount equal to its net cumulative allocation of special drawing
rights and such other amounts as may be due and payable
because of its participation in the Special Drawing Rights
Department.

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

ARTICLE XXVI
Withdrawal from Membership

Section 1. Any member may withdraw from the Fund at
any time by transmitting a notice in writing to the Fund at its
principal office. Withdrawal shall become effective on the date
such notice is received.

Section 2. (a) If a member fails to fulfil any of its
obligations under this Agreement, the Fund may declare the
member ineligible to use the general resources of the Fund.
Nothing in this Section shall be deemed to limit the provisions
of Article V, Section 5 or Article VI, Section 1.

(b) If, after the expiration of a reasonable period
following a declaration of ineligibility under (a) above, the
member persists in its failure to fulfil any of its obligations
under this Agreement, the Fund may, by a 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 of suspension under (b) above, the member
persists in its failure to fulfil any of its obligations under this
Agreement, that member may be required to withdraw from
membership in the Fund by a decision of the Board of
Governors carried by a majority of the Governors having eighty-
five percent of the total voting power.

Right of members
to withdraw.

Compulsory
withdrawal.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

(d) Regulations shall be adopted to ensure that before action is
taken against any member under (a), (b), or (c) above, the member
shall be informed in reasonable time of the complaint against it and
given an adequate opportunity for stating its case, both orally and in
writing.

Section 3. 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 settlement of accounts.

ARTICLE XXVII
Emergency Provisions

Section 1. (a) In the event of an emergency or the
development of unforeseen circumstances threatening the activities of
the Fund, the Executive Board, by an eighty-five percent majority of
the total voting power, may suspend for a period of not more than one
year the operation of any of the following provisions:
(i) Article V, Sections 2, 3, 7, 8(a)(i) and (e);
(ii) Article VI, Section 2;
(iii) Article XI, Section l;
(iv) Schedule C, paragraph 5.

(b) A suspension of the operation of a provision under (a)
above may not be extended beyond one year except by the Board of
Governors which, by an eighty-five percent majority of the total
voting power, may extend a suspension for an additional period of
not more than two years if it finds that the emergency or unforeseen
circumstances referred to in (a) above continue to exist.

(c) The Executive Board may, by a majority of the total
voting power, terminate such suspension at any time.

(d) The Fund may adopt rules with respect to the subject matter
of a provision during the period in which its operation is suspended.

Section 2. (a) The Fund may not be liquidated except by
decision of the Board of Governors. In an emergency, if the
Executive Board decides that liquidation of the Fund may be
necessary, it may temporarily suspend all operations and
transactions, pending decision by the Board of Governors.

(b) If the Board of Governors decides to liquidate the Fund,
the Fund shall forthwith cease to engage in any activities except those
incidental to the orderly collection and liquidation of its assets and
the settlement of its liabilities, and all obligations of members under
this Agreement shall cease except those set out in this Article, in
Article XXIX(c), in Schedule J, paragraph 7, and in Schedule K.

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

Settlement of
accounts with
members
withdrawing.

Temporary
suspension.

Liquidation of the
Fund.

INTERNATIONAL MONETARY FUND AND WORLD
BANK

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ARTICLE XXVIII
Amendments

(a) Any proposal to introduce modifications in this Agreement,
whether emanating from a member, a Governor, or the Executive Board,
shall be communicated to the chairman of the Board of Governors who
shall bring the proposal before the Board of Governors. If the proposed
amendment is approved by the Board of Governors, the Fund shall, by
circular letter or telegram, ask all members whether they accept the
proposed amendment. When three-fifths of the members, having eighty-
five percent of the total voting power, have accepted the proposed
amendment, the Fund shall certify the fact by a formal communication
addressed to all members.

(b) Notwithstanding (a) above, acceptance by all members is
required in the case of any amendment modifying:
(i) the right to withdraw from the Fund (Article XXVI,

Section 1);
(ii) the provision that no change in a member’s quota shall be

made without its consent (Article III, Section 2(d)): and
(iii) the provision that no change may be made in the par

value of a member’s currency except on the proposal of
that member (Schedule C, paragraph 6).

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

ARTICLE XXIX
Interpretation

(a) Any question of interpretation of the provisions of this
Agreement arising between any member and the Fund or
between any members of the Fund shall be submitted to the
Executive Board for its decision. If the question particularly
affects any member not entitled to appoint an Executive
Director, it shall be entitled to representation in accordance with
Article XII, Section 3(j).

(b) In any case where the Executive Board has given a
decision under (a) above, any member may require, within three
months from the date of the decision, that the question be referred to
the Board of Governors, whose decision shall be final. Any question
referred to the Board of Governors shall be considered by a
Committee on Interpretation 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


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otherwise. Pending the result of the reference to the Board of
Governors the Fund may, so far as it deems necessary, act on the
basis of the decision of the Executive Board.

(c) Whenever a disagreement arises between the Fund and a
member which has withdrawn, or between the Fund and any
member during liquidation of the Fund, such disagreement shall be
submitted to arbitration by a tribunal of three arbitrators, one
appointed by the Fund, another by the member or withdrawing
member, and an umpire who, unless the parties otherwise agree,
shall he appointed by the President of the International Court of
Justice or such other authority as may have been prescribed by
regulation adopted by the Fund. The umpire shall have full power
to settle all questions of procedure in any case where the parties are
in disagreement with respect thereto.

ARTICLE XXX
Explanation of Terms

In interpreting the provisions of this Agreement the Fund
and its members shall be guided by the following provisions:

(a) The Fund’s holdings of a member’s currency in the
General Resources Account shall include any securities accepted
by the Fund under Article III, Section 4.

(b) Stand-by arrangement means a decision of the Fund
by which a member is assured that it will be able to make
purchases from the General Resources Account in accordance
with the terms of the decision during a specified period and up
to a specified amount.

(c) Reserve tranche purchase means a purchase by a
member of special drawing rights 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 export fluctuations;
(ii) policies-on the use of its general resources in connection

with the financing of contributions to international buffer
stocks of primary products; and

(iii) other policies on the use of its general resources in respect of
which the Fund decides, by an eighty-five percent majority of
the total voting power, that an exclusion shall be made.

(d) Payments for current transactions means payments
which are not for the purpose of transferring capital, and
includes, without limitation:

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(1) all payments due in connection with foreign trade, other
current business, including services, and normal short-term
banking and credit facilities;

(2) payments due as interest on loans and as net income from
other investments;

(3) payments of moderate amounts for amortization of loans or
for depreciation of direct investments; and

(4) moderate remittances for family living expenses.
The Fund may, after consultation with the members concerned,
determine whether certain specific transactions are to be
considered current transactions or capital transactions.

(e) Net cumulative allocation of special drawing rights
means the total amount of special drawing rights allocated to a
participant less its share of special drawing rights that have been
cancelled under Article XVIII, Section 2(a).

(f) A freely usable currency means a member’s
currency that the Fund determines (i) is, in fact, widely used to
make payments for international transactions, and (ii) is widely
traded in the principal exchange markets.

(g) Members that were members on August 31, 1975
shall be deemed to include a member that accepted membership
after that date pursuant to a resolution of the Board of Governors
adopted before that date.

(h) Transactions of the Fund means exchanges of monetary
assets by the Fund for other monetary assets. Operations of the Fund
means other uses or receipts of monetary assets by the Fund.

(i) Transactions in special drawing rights means exchanges
of special drawing rights for other monetary assets. Operations in
special drawing rights means other uses of special drawing rights.

ARTICLE XXXI
Final Provisions

Section 1. 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(a) of this Article have been
deposited on their behalf, but in no event shall this Agreement enter
into force before May 1, 1945.

Section 2. (a) 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.

Entry into force.

Signature.

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(b) Each country shall become a member of the Fund as
from the date of the deposit on its behalf of the instrument
referred to in (a) above, except that no country shall become a
member before this Agreement enters into force under Section 1
of this Article.

(c) The Government of the United States of America shall
inform the governments of all countries whose names are set
forth in Schedule A, and the governments of all countries whose
membership is approved in accordance with Article II, Section
2, of all signatures of this Agreement and of the deposit of all
instruments referred to in (a) above.

(d) At the time this Agreement is signed on its behalf,
each government shall transmit to the Government of the United
States of America one one-hundredth of one percent of its total
subscription in gold or United States dollars for the purpose of
meeting administrative expenses of the Fund. The Government
of the United States of America shall hold such funds in a
special deposit account and shall transmit them to the Board of
Governors of the Fund when the initial meeting has been called.
If this Agreement has not come into force by December 31,
1945, the Government of the United States of America shall
return such funds to the governments that transmitted them.

(e) This Agreement shall remain open for signature at
Washington on behalf of the governments of the countries
whose names are set forth in Schedule A until December 31,
1945.

(f) After December 31, 1945, this Agreement shall be
open for signature on behalf of the government of any country
whose membership has been approved in accordance with
Article II, Section 2.

(g) By their signature of this Agreement, all governments
accept it both on their own behalf and in respect of all their
colonies, overseas territories, all territories under their
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
signature.
[The signature and depositary clause reproduced below followed
the text of Article XX in the original Articles of Agreement]

Done at Washington, in a single copy which shall remain
deposited in the archives of the Government of the United States
of America, which shall transmit certified copies to all
governments whose names are set forth in Schedule A and to all
governments whose membership is approved in accordance with
Article II, Section 2.

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SCHEDULE A

QUOTAS

(In millions of United States dollars)

Australia 200 India 400

Belgium 225 Iran 25

Bolivia 10 Iraq 8

Brazil 150 Liberia 5

Canada 300 Luxembourg 10

Chile 50 Mexico 90

China 550 Netherlands 275

Colombia 50 New Zealand 50

Costa Rica 5 Nicaragua 2

Cuba 50 Norway 50

Czechoslovakia 125 Panama 5

Denmark 4 Paraguay 2

Dominican Republic 5 Peru 25

Ecuador 5 Philippine Commonwealth 15

Egypt 45 Poland 125

EI Salvador 2,5 Union of South Africa 100

Ethiopia 6 Union of Soviet Socialist

France 450 Republics 1200

Greece 40 United Kingdom 1300

Guatemala 5 United State 2750

Haiti 5 Uruguay 15

Honduras 2,5 Venezuela 15

Iceland 1 Yugoslavia 60



4 The quota of Denmark shall be determined by the Fund after the Danish

Government has declared its readiness to sign this Agreement but before signature takes
place.

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SCHEDULE B
TRANSITIONAL PROVISIONS WITH RESPECT TO

REPURCHASE, PAYMENT OF ADDITIONAL
SUBSCRIPTIONS, GOLD, AND CERTAIN OPERATIONAL

MATTERS
1. Repurchase obligations that have accrued pursuant to

Article V, Section 7(b) before the date of the second amendment
of this Agreement and that remain undischarged at that date
shall be discharged not later than the date or dates at which the
obligations had to be discharged in accordance with the
provisions of this Agreement before the second amendment.

2. A member shall discharge with special drawing rights
any obligation to pay gold to the Fund in repurchase or as a
subscription that is outstanding at the date of the second
amendment of this Agreement, but the Fund may prescribe that
these payments may be made in whole or in part in the
currencies of other members specified by the Fund. A non-
participant shall discharge an obligation that must be paid in
special drawing rights pursuant to this provision with the
currencies of other members specified by the Fund.

3. For the purposes of 2 above 0.888 671 gram of fine gold
shall be equivalent to one special drawing right, and the amount
of currency payable under 2 above shall be determined on that
basis and on the basis of the value of the currency in terms of the
special drawing right at the date of discharge.

4. A member’s currency held by the Fund in excess of
seventy-five percent of the member’s quota at the date of the
second amendment of this Agreement and not subject to
repurchase under 1 above shall be repurchased in accordance
with the following rules:
(i) Holdings that resulted from a purchase shall be

repurchased in accordance with the policy on the use of
the Fund’s general resources under which the purchase
was made.

(ii) Other holdings shall be repurchased not later than four
years after the date of the second amendment of this
Agreement.

5. Repurchases under 1 above that are not subject to 2
above, repurchases under 4 above, and any specification of
currencies under 2 above shall be in accordance with Article V,
Section 7(i).

6. All rules and regulations, rates, procedures, and
decisions in effect at the date of the second amendment of this
Agreement shall remain in effect until they are changed in
accordance with the provisions of this Agreement.

7. To the extent that arrangements equivalent in effect to
(a) and (b) below have not been completed before the date of the
second amendment of this Agreement, the Fund shall —

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(a) sell up to 25 million ounces of fine gold held by it on
August 31, 1975 to those members that were members on that
date and that agree to buy it, in proportion to their quotas on that
date. The sale to a member under this subparagraph (a) shall be
made in exchange for its currency and at a price equivalent at
the time of sale to one special drawing right per 0.888 671 gram
of fine gold; and

(b) sell up to 25 million ounces of fine gold held by it on
August 31, 1975 for the benefit of developing members that
were members on that date, provided, however, that the part, of
any profits or surplus value of the gold that corresponds to the
proportion of such a member’s quota on August 31, 1975 to the
total of the quotas of all members on that date shall be
transferred directly to each such member. The requirements
under Article V, Section 12(c) that the Fund consult a member,
obtain a member’s concurrence, or exchange a member’s
currency for the currencies of other members in certain
circumstances shall apply with respect to currency received by
the Fund as a result of sales of gold under this provision, other
than sales to a member in return for its own currency, and placed
in the General Resources Account.

Upon the sale of gold under this paragraph 7, 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 fine gold
shall be placed in the General Resources Account and other
assets held by the Fund under arrangements pursuant to (b)
above shall he held separately from the general resources of the
Fund. Assets that remain subject to disposition by the Fund upon
termination of arrangements pursuant to (b) above shall he
transferred to the Special Disbursement Account.

SCHEDULE C
PAR VALUES

1. The Fund shall notify members that par values may be
established for the purposes of this Agreement, in accordance
with Article IV, Sections 1, 3, 4, and 5 and this Schedule, in
terms of the special drawing right, or in terms of such other
common denominator as is prescribed by the Fund. The
common denominator shall not be gold or a currency.

2. A member that intends to establish a par value for its
currency shall propose a par value to the Fund within a
reasonable time after notice is given under 1 above.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

3. Any member that does not intend to establish a par
value for its currency under 1 above shall consult with the Fund
and ensure that its exchange arrangements are consistent with
the purposes of the Fund and are adequate to fulfil its obligations
under Article IV, Section I.

4. The Fund shall concur in or object to a proposed par value
within a reasonable period after receipt of the proposal. A proposed
par value shall not take effect for the purposes of this Agreement if
the Fund objects to it, and the member shall be subject to 3 above.
The Fund shall not object because of the domestic social or political
policies of the member proposing the par value.

5. Each member that has a par value for its currency
undertakes to apply appropriate measures consistent with this
Agreement in order to ensure that the maximum and the minimum
rates for spot exchange transactions taking place within its territories
between its currency and the currencies of other members
maintaining par values shall not differ from parity by more than four
and one-half percent or by such other margin or margins as the Fund
may adopt by an eighty-five percent majority of the total voting
power.

6. A member shall not propose a change in the par value
of its currency except to correct, or prevent the emergence of, a
fundamental disequilibrium. A change may be made only on the
proposal of the member and only after consultation with the Fund.

7. When a change is proposed, the Fund shall concur in or
object to the proposed par value within a reasonable period after
receipt of the proposal. The Fund shall concur if it is satisfied that
the change is necessary to correct, or prevent the emergence of, a
fundamental disequilibrium. The Fund shall not object because of
the domestic social or political policies of the member proposing
the change. A proposed change in par value shall not take effect for
the purposes of this Agreement if the Fund objects to it. If a
member changes the par value of its currency despite the objection
of the Fund, the member shall be subject to Article XXVI, Section
2. Maintenance of an unrealistic par value by a member shall be
discouraged by the Fund.

8. The par value of a member’s currency established under this
Agreement shall cease to exist for the purposes of this Agreement if
the member informs the Fund that it intends to terminate the par
value. The Fund may object to the termination of a par value by a
decision taken by an eighty-five percent majority of the total voting
power. If a member terminates a par value for its currency despite
the objection of the Fund, the member shall be subject to Article
XXVI, Section 2. A par value established under this Agreement
shall cease to exist for the purposes of this Agreement if the
member terminates the par value despite the objection of the Fund,
or if the Fund finds that the member does not maintain rates for a
substantial volume of exchange transactions in accordance with 5
above, provided that the Fund may not make such finding unless it


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has consulted the member and given it sixty days notice of the
Fund’s intention to consider whether to make a finding.

9. If the par value of the currency of a member has
ceased to exist under 8 above, the member shall consult with the
Fund and ensure that its exchange arrangements are consistent
with the purposes of the Fund and are adequate to fulfil its
obligations under Article IV, Section 1.

10. A member for whose currency the par value has
ceased to exist under 8 above may, at any time, propose a new
par value for its currency.

11. Notwithstanding 6 above, the Fund, by a seventy
percent majority of the total voting power, may make uniform
proportionate changes in all par values if the special drawing
right is the common denominator and the changes will not affect
the value of the special drawing right. The par value of a
member’s currency shall, however, not be changed under this
provision if, within seven days after the Fund’s action, the
member informs the Fund that it does not wish the par value of
its currency to be changed by such action.

SCHEDULE D

COUNCIL
1. (a) Each member that appoints an Executive

Director and each group of members that has the number of
votes allotted to them cast by an elected Executive Director shall
appoint to the Council one Councillor, who shall be a Governor,
Minister in the government of a member, or person of
comparable rank, and may appoint not more than seven
Associates. The Board of Governors may change, by an eighty-
five percent majority of the total voting power, the number of
Associates who may be appointed. A Councillor or Associate
shall serve until a new appointment is made or until the next
regular election of Executive Directors, whichever shall occur
sooner.

(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


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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

in global liquidity, and in this connection shall review developments
in the transfer of real resources to developing countries.

(b) The Council shall consider proposals pursuant to
Article XXVIII(a) to amend the Articles of Agreement.

3. (a) The Board of Governors may delegate to the
Council authority to exercise any powers of the Board of
Governors except the powers conferred directly by this
Agreement on the Board of Governors.

(b) Each Councillor shall be entitled to cast the number of
votes allotted under Article XII, Section 5 to the member or group
of members appointing him. A Councillor appointed by a group of
members may cast separately the votes allotted to each member in
the group. If the number of votes allotted to a member cannot be
cast by an Executive Director, the member may make arrangements
with a Councillor for casting the number of votes allotted to the
member.

(c) The Council shall not take any action pursuant to powers
delegated by the Board of Governors that is inconsistent with any
action taken by the Board of Governors and the Executive Board
shall not take any action pursuant to powers delegated by the Board
of Governors that is inconsistent with any action taken by either the
Board of Governors or the Council.

4. The Council shall select a Councillor as chairman,
shall adopt regulations as may be necessary or appropriate to
perform its functions, and shall determine any aspect of its
procedure. The Council shall hold such meetings as may be
provided for by the Council or called by the Executive Board.

5. (a) The Council shall have powers corresponding to
those of the Executive Board under the following provisions: Article
XII, Section 2(c), (f), (g), and (j); Article XVIII, Section 4(a) and
Section 4(c)(iv); Article XXIII, Section 1; and Article XXVII,
Section 1(a).

(b) For decisions by the Council on matters pertaining
exclusively to the Special Drawing Rights Department only
Councillors appointed by a member that is a participant or a
group of members at least one member of which is a participant
shall be entitled to vote. Each of these Councillors shall be
entitled to cast the number of votes allotted to the member which
is a participant that appointed him or to the members that are
participants in the group of members that appointed him, and
may cast the votes allotted to a participant with which
arrangements have been made pursuant to the last sentence of
3(b) above.

(c) The Council may by regulation establish a procedure
whereby the Executive Board may obtain a vote of the Councillors
on a specific question without a meeting of the Council when in the
judgment of the Executive Board an action must he 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.

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(d) 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) For the purposes of (b) and 3(b) above, an agreement
under Article XII, Section 3(i)(ii) by a member, or by a member
that is a participant, shall entitle a Councillor to vote and cast the
number of votes allotted to the member.

(f) When an Executive Director is entitled to cast the
number of votes allotted to a member pursuant to Article XII,
Section 3(i)(v), the Councillor appointed by the group whose
members elected such Executive Director shall be entitled to
vote and cast the number of votes allotted to such member. The
member shall be deemed to have participated in the appointment
of the Councillor entitled to vote and cast the number of votes
allotted to the member.

6. The first sentence of Article XII, Section 2(a) shall be
deemed to include a reference to the Council.

SCHEDULE E

ELECTION OF EXECUTIVE DIRECTORS
1. The election of the elective Executive Directors shall

be by ballot of the Governors eligible to vote.
2. In balloting for the Executive Directors to be elected,

each of the Governors eligible to vote shall cast for one person
all of the votes to which he is entitled under Article XII, Section
5(a). The fifteen persons receiving the greatest number of votes
shall be Executive Directors, provided that no person who
received less than four percent of the total number of votes that
can be cast (eligible votes) shall be considered elected.

3. When fifteen persons are not elected in the first ballot,
a second ballot shall be held in which there shall vote only (a)
those Governors who voted in the first ballot for a person not
elected, and (b) those Governors whose votes for a 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 determining whether the votes cast by a Governor
are to be deemed to have raised the total of any person above
nine percent of the eligible votes the nine percent shall be
deemed to include, first, the votes of the Governor casting the
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.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

5. Any Governor part of whose votes must be counted in
order to raise the total of any person above four percent shall be
considered as casting all of his votes for such person even if the
total votes for such person thereby exceed nine percent.

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

SCHEDULE F

DESIGNATION
During the first basic period the rules for designation shall

be as follows:
(a) Participants subject to designation under Article XIX,

Section 5(a)(i) shall be designated for such amounts as will
promote over time equality in the ratios of the participants’
holdings of special drawing rights in excess of their net
cumulative allocations to their official holdings of gold and
foreign exchange.

(b) The formula to give effect to (a) above shall be such that
participants subject to designation shall be designated:

(i) in proportion to their official holdings of gold and
foreign exchange when the ratios described in (a)
above are equal; and

(ii) in such manner as gradually to reduce the difference
between the ratios described in (a) above that are low
and the ratios that are high.

SCHEDULE G

RECONSTITUTION
1. During the first basic period the rules for reconstitution

shall be as follows:
(a) (i) A participant shall so use and reconstitute its holdings of

special drawing rights that, five years after the first
allocation and at the end of each calendar quarter
thereafter, the average of its total daily holdings of
special drawing rights over the 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.

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(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 comply with the requirement in
(a)(i) above. The Fund shall adopt regulations with respect
to the bases on which these calculations shall be made and
with respect to the timing of the designation of participants
under Article XIX, Section 5(a)(ii), in order to assist them to
comply with the requirement in (a)(i) above.

(iii) The Fund shall give special notice to a participant when
the calculations under (a)(ii) above indicate that it is
unlikely that the participant will be able to comply with
the requirement in (a)(i) above unless it ceases to use
special drawing rights for the rest of the period for
which the calculation was made under (a)(ii) above.

(iv) A participant that needs to acquire special drawing rights to
fulfil 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 entitled to obtain them with a freely
usable currency from a participant which the Fund shall
specify.

(b) Participants shall also pay due regard to the desirability
of pursuing over time a balanced relationship between their
holdings of special drawing rights and their other reserves.

2. If a participant fails to comply with the rules for
reconstitution, the Fund shall determine whether or not the
circumstances justify suspension under Article XXIII, Section 2(b).

SCHEDULE H

TERMINATION OF PARTICIPATION
1. If the obligation remaining after the setoff under Article

XXIV, Section 2(b) is to the terminating participant and agreement
on settlement between the Fund and the terminating participant is not
reached within six months of the date of termination, the Fund shall
redeem this balance of special drawing rights in equal half-yearly
instalments within a maximum of five years of the date of
termination. The Fund shall redeem this balance as it may determine,
either (a) by the payment to the terminating participant of the
amounts provided by the remaining participants to the Fund


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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 specified by the Fund, the General Resources
Account, or any other holder.

2. If the obligation remaining after the setoff under Article
XXIV, Section 2(b) is to the Fund and agreement on settlement
is not reached within six months of the date of termination, the
terminating participant shall discharge this obligation in equal
half-yearly instalments within three years of the date of
termination or within such longer period as may be fixed by the
Fund. The terminating participant shall discharge this obligation,
as the Fund may determine, either (a) by the payment to the
Fund of a freely usable currency, or (b) by obtaining special
drawing rights, in accordance with Article XXIV, Section 6,
from the General Resources Account or in agreement with a
participant specified by the Fund or from any other holder, and
the setoff of these special drawing rights against the instalment
due.

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

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

SCHEDULE I

ADMINISTRATION OF LIQUIDATION OF THE
SPECIAL DRAWING RIGHTS DEPARTMENT

1. In the event of liquidation of the Special Drawing
Rights Department, participants shall discharge their obligations
to the Fund in ten half-yearly instalments, or in such longer
period as the Fund may decide is needed, in a freely usable
currency and the currencies of participants holding special
drawing rights to be redeemed in any 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 proceed until special drawing rights
held in the General Resources Account have been distributed in
accordance with the following rule:

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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
participants in proportion to the amounts due to each participant
after the distribution under 2(b). To determine the amount due to
each member for the purpose of apportioning the remainder of
its holdings of each currency under 2(d) of Schedule K, the Fund
shall deduct the distribution of special drawing rights made
under this rule.

3. With the amounts received under 1 above, the Fund
shall redeem special drawing rights held by holders in the
following manner and order:
(a) Special drawing rights held by governments that have

terminated their participation more than six months before
the date the Board of Governors decides to liquidate the
Special Drawing Rights Department shall be redeemed in
accordance with the terms of any agreement under Article
XXIV or Schedule H.

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

(c) The Fund shall determine the proportion of special drawing
rights held by each participant in relation to its net
cumulative allocation. The Fund shall first redeem special
drawing rights from the participants with the highest
proportion until this proportion is reduced to that of the
second highest proportion; the Fund shall then redeem the
special drawing rights held by these participants in
accordance with their net cumulative allocations until the
proportions are reduced to that of the third highest
proportion; and this process shall be continued until the
amount available for redemption is exhausted.
4. Any amount that a participant will be entitled to receive

in redemption under 3 above shall be set off against any amount
to be paid under 1 above.

5. During liquidation the Fund shall pay interest on the
amount of special drawing rights held by holders, and each
participant shall pay charges on the net cumulative allocation of
special drawing rights to it less the amount of any payments
made in accordance with 1 above. The rates of interest and
charges and the time of payment shall be determined by the
Fund. Payments of interest and charges shall be made in special
drawing rights to the extent possible. A participant that does not
hold sufficient special drawing rights to meet any charges shall
make the payment with a currency specified by the Fund.
Special drawing rights received as charges in amounts needed
for administrative expenses shall not be used for the payment of
interest, but shall be transferred to the Fund and shall be
redeemed first and with the currencies used by the Fund to meet
its expenses.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

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

7. If after the final payments have been made to
participants each participant not in default does not hold special
drawing rights in the same proportion to its net cumulative
allocation, those participants holding a lower proportion shall
purchase from those holding a higher proportion such amounts
in accordance with arrangements made by the Fund as will make
the proportion of their holdings of special drawing rights the
same. Each participant in default shall pay to the Fund its own
currency in an amount equal to its default. The Fund shall
apportion this currency and residual claims among participants
in proportion to the amount of special drawing rights held by
each and these special drawing rights shall be cancelled. The
Fund shall then close the books of the Special Drawing Rights
Department and all of the 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 is distributed to other
participants under this Schedule guarantees the unrestricted use
of such currency at all times for the purchase of goods or for
payments of sums due to it or to persons in its territories. Each
participant so obligated agrees to compensate other participants
for any loss resulting from the difference between the value at
which the Fund distributed its currency under this Schedule and
the value realized by such participants on disposal of its
currency.

SCHEDULE J

SETTLEMENT OF ACCOUNTS WITH MEMBERS
WITHDRAWING

1. The settlement of accounts with respect to the General
Resources Account shall be made according to 1 to 6 of this
Schedule. The Fund shall be obligated to pay to a member
withdrawing an amount equal to its quota, plus any other
amounts due to it from the Fund, less any amounts due to the
Fund, including charges accruing after the date of its
withdrawal; but no payment shall be made until six months after
the date of withdrawal. Payments shall be made in the currency
of the withdrawing member, and for this purpose the Fund may
transfer to the General Resources Account holdings of the
member’s currency in the Special Disbursement Account or in
the Investment Account in exchange for an equivalent amount of
the currencies of other members in the General Resources
Account selected by the Fund with their concurrence.

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2. If the Fund’s holdings of the currency of the
withdrawing member are not sufficient to pay the net amount
due from the Fund, the balance shall be paid in a freely usable
currency, or in such other manner as may be agreed. If the Fund
and the withdrawing member do not reach agreement within six
months of the date of withdrawal, the currency in question held
by the Fund shall be paid forthwith to the withdrawing member.
Any balance due shall be paid in ten half-yearly instalments
during the ensuing five years. Each such instalment shall be
paid, at the option of the Fund, either in the currency of the
withdrawing member acquired after its withdrawal or in a freely
usable currency.

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

4. If the Fund’s holdings of the currency of a withdrawing
member exceed the amount due to it, and if agreement on the
method of settling accounts is not reached within six months of
the date of withdrawal, the former member shall be obligated to
redeem such excess currency in a freely usable currency.
Redemption shall be made at the rates at which the Fund would
sell such currencies at the time of withdrawal from the Fund.
The withdrawing member shall complete redemption within five
years of the date of withdrawal, or within such longer period as
may be fixed by the Fund, but shall not be required to redeem in
any half-yearly period more than one-tenth of the Fund’s excess
holdings of its currency at the date of withdrawal plus further
acquisitions of the currency during such half-yearly period. If
the withdrawing member does not fulfil this obligation, the Fund
may in an orderly manner liquidate in any market the amount of
currency which should have been redeemed.

5. Any member desiring to obtain the currency of a
member which has withdrawn shall acquire it by purchase from
the Fund, to the extent that such member has access to the
general resources of the Fund and that such currency is available
under 4 above.

6. The withdrawing member guarantees the unrestricted
use at all times of the currency disposed of under 4 and 5 above
for the purchase of goods or for payment of sums due to it or to
persons within its territories. It shall compensate the Fund for
any loss resulting from the difference between the value of its
currency in terms of the special drawing right on the date of
withdrawal and the value realized in terms of the special
drawing right by the Fund on disposal under 4 and 5 above.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

7. If the withdrawing member is indebted to the Fund as
the result of transactions conducted through the Special
Disbursement Account under Article V, Section 12(f)(ii), the
indebtedness shall be discharged in accordance with the terms of
the indebtedness.

8. If the Fund holds the withdrawing member’s currency
in the Special Disbursement Account or in the Investment
Account, the Fund may in an orderly manner exchange in any
market for the currencies of members the amount of the
currency of the withdrawing member remaining in each account
after use under 1 above, and the proceeds of the exchange of the
amount in each account shall be kept in that account. Paragraph
5 above and the first sentence of 6 above shall apply to the
withdrawing member’s currency.

9. If the Fund holds obligations of the withdrawing
member in the Special Disbursement Account pursuant to
Article V, Section 12(h), or in the Investment Account, the Fund
may hold them until the date of maturity or dispose of them
sooner. Paragraph 8 above shall apply to the proceeds of such
disinvestment.

10. In the event of the Fund going into liquidation under
Article XXVII, Section 2 within six months of the date on which
the member withdraws, the accounts between the Fund and that
government shall be settled in accordance with Article XXVII,
Section 2 and Schedule K.

SCHEDULE K

ADMINISTRATION OF LIQUIDATION
1. In the event of liquidation the liabilities of the Fund

other than the repayment of subscriptions shall have priority in
the distribution of the assets of the Fund. In meeting each such
liability the Fund shall use its assets in the following order:
(a) the currency in which the liability is payable;
(b) gold;
(c) all other currencies in proportion, so far as may be

practicable, to the quotas of the members.
2. After the discharge of the Fund’s liabilities in

accordance with 1 above, the balance of the Fund’s assets shall
be distributed and apportioned as follows:
(a)(i) The Fund shall calculate the value of gold held on August

31, 1975 that it continues to hold on the date of the decision
to liquidate. The calculation shall be made in accordance
with 9 below and also on the basis of one special drawing
right per 0.888 671 gram of fine gold on the date of
liquidation. Gold equivalent to the excess of the former value
over the latter shall be distributed to those members


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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 those members that were members on
August 31, 1975 in proportion to their quotas on that
date. Each type of asset shall be distributed
proportionately to members.

(b) The Fund shall distribute its remaining holdings of gold
among the members whose currencies are held by the Fund
in amounts less than their quotas in the proportions, but not
in excess of, the amounts by which their quotas exceed the
Fund’s holdings of their currencies.

(c) The Fund shall distribute to each member one-half the
Fund’s holdings of its currency but such distribution shall
not exceed fifty percent of its quota.

(d) The Fund shall apportion the remainder of its holdings of
gold and each currency:

(i) among all 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 amounts due, and

(ii) any excess holdings of gold and currency among all
the members in proportion to their quotas.

3. Each member shall redeem the holdings of its currency
apportioned to other members under 2(d) above, and shall agree
with the Fund within three months after a decision to liquidate
upon an orderly procedure for such redemption.

4. If a member has not reached agreement with the Fund
within the three-month period referred to in 3 above, the Fund
shall use the currencies of other members apportioned to that
member under 2(d) above to redeem the currency of that
member apportioned to other members. Each currency
apportioned to a member which has not reached agreement shall
be used, so far as possible, to redeem its currency apportioned to
the members which have made agreements with the Fund under
3 above.

5. If a member has reached agreement with the Fund in
accordance with 3 above, the Fund shall use the currencies of
other members apportioned to that member under 2(d) above to
redeem the currency of that member apportioned to other
members which have made agreements with the Fund under 3
above. Each amount so redeemed shall be redeemed in the
currency of the member to which it was apportioned.

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STATUTE LAW OF THE BAHAMAS [Original Service 2001]

6. After carrying out the steps in the preceding
paragraphs, the Fund shall pay to each member the remaining
currencies held for its account.

7. Each member whose currency has been distributed to
other members under 6 above shall redeem such currency in the
currency of the member requesting redemption, or in such other
manner as may be agreed between them. If the members
involved do not otherwise agree, the member obligated to
redeem shall complete redemption within five years of the date
of distribution, but shall not be required to redeem in any half-
yearly period more than one-tenth of the amount distributed to
each other member. If the member does not fulfil this obligation,
the amount of currency which should have been redeemed may
be liquidated in an orderly manner in any market.

8. Each member whose currency has been distributed to
other members under 6 above guarantees the unrestricted use of
such currency at all times for the purchase of goods or for
payment of 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.

9. The Fund shall determine the value of gold under this
Schedule on the basis of prices in the market.

10. For the purposes of this Schedule, quotas shall be
deemed to have been increased to the full extent to which they
could have been increased in accordance with Article III,
Section 2(b) of this Agreement.

SCHEDULE L

SUSPENSION OF VOTING RIGHTS
In the case of a suspension of voting rights of a member

under Article XXVI, Section 2(b), the following provisions shall
apply:

1. The member shall not:
(a) participate in the adoption of a proposed amendment of this

Agreement, or be counted in the total number of members
for that purpose, except in the case of an amendment
requiring acceptance by all members under Article
XXVIII(b) or pertaining exclusively to the Special Drawing
Rights Department;

(b) appoint a Governor or Alternate Governor, appoint or
participate in the appointment of a Councillor or Alternate
Councillor, or appoint, elect, or participate in the election
of an Executive Director.

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2. The number of votes allotted to the member shall not be
cast in any organ of the Fund. They shall not be included in
the calculation of the total voting power, except for
purposes of the acceptance of a proposed amendment
pertaining exclusively to the Special Drawing Rights
Department.
3. (a) The Governor and Alternate Governor appointed

by the member shall cease to hold office.
(b) The Councillor and Alternate Councillor appointed by

the member, or in whose appointment the member has
participated, shall cease to hold office, provided that, if such
Councillor was entitled to cast the number of votes allotted to
other members whose voting rights have not been suspended,
another Councillor and Alternate Councillor shall be appointed
by such other members under Schedule D, and, pending such
appointment, the Councillor and Alternate Councillor shall
continue to hold office, but for a maximum of thirty days from
the date of suspension.

(c) The Executive Director appointed or elected by the
member, or in whose election the member has participated, shall
cease to hold office, unless such Executive Director was entitled
to cast the number of votes allotted to other members whose
voting rights have not been suspended. In the latter case:

(i) if more than ninety days remain before the next regular
election of Executive Directors, another Executive Director
shall be elected for the remainder of the term by such other
members by a majority of the votes cast; pending such
election, the Executive Director shall continue to hold office,
but for a maximum of thirty days from the date of suspension;

(ii) if not more than ninety days remain before the next regular
election of Executive Directors, the Executive Director
shall continue to hold office for the remainder of the term.

SCHEDULE M

S.I. 120/2001. SPECIAL ONE-TIME ALLOCATION OF
SPECIAL DRAWING RIGHTS

1. 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
29.315788813 percent of its quota as of September 19, 1997,
provided that, for participants whose quotas have not been
adjusted as proposed in Resolution No. 45-2 of the Board of
Governors, calculations shall be made on the basis of the quotas
proposed in that resolution.

S.I. 120/2001

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STATUTE LAW OF THE BAHAMAS LRO 1/2002

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 calculated in accordance with (b) and
(c) below on the 30th day following the later of: (i) the date on
which the new member becomes a participant in the Special
Drawing Rights Department, or (ii) the effective date of the fourth
amendment of this Agreement.

(b) For the purposes of (a) above, each participant shall
receive an amount of special drawing rights that will result in such
participant’s net cumulative allocation being equal to 29.315788813
percent of its quota as of the date on which the member becomes a
participant in the Special Drawing Rights Department, as adjusted:

(i) first, by multiplying 29.315788813 percent by the ratio 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

(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 XVIII of the participants described in (c) below as
of the date on which the member became a participant in
the Special Drawing Rights Depart-ment 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 XVIII 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 Department, and (ii) have
received all allocations made by the Fund after September 19,
1997.

3. (a) Subject to 4 below, if the Federal Republic of
Yugoslavia (Serbia/Montenegro) succeeds to 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-
(92/150), 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: (i) the date on
which the Federal Republic of Yugoslavia (Serbia/Montenegro)
succeeds to membership in the Fund and participation in the
Special Drawing Rights Department in accordance with the terms


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and conditions of Executive Board Decision No. 10237-(92/150), or
(ii) the effective date of the fourth amendment of this Agreement.

(b) For the purposes of (a) above, the Federal Republic of
Yugoslavia (Serbia/Montenegro) shall receive an amount of
special drawing rights that will result in its net cumulative
allocation being equal to 29.315788813 percent of the quota
proposed to it under paragraph 3(c) of Executive Board Decision
No. 10237-(92/150), as adjusted in accordance with 2(b)(ii) and
(c) above as of the date on which the Federal Republic of
Yugoslavia (Serbia/Montenegro) qualifies for an allocation under
(a) above.

4. The Fund shall not allocate special drawing rights
under this Schedule to those participants that have notified 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 so allocated shall be deposited and
held in an escrow account within the Special Drawing Rights
Department and shall be released to the participant upon discharge
of all its overdue obligations to the Fund.

(b) Special drawing rights being held in an escrow account
shall not be available for any use and shall not be included in any
calculations of allocations or holdings of special drawing rights for
the purposes of the Articles, except for calculations under this
Schedule. If special drawing rights allocated to a participant are
held in an escrow account when the participant terminates its
participation in the Special Drawing Rights Department or when it
is decided to liquidate the Special Drawing Rights Department,
such special drawing rights shall be cancelled.

(c) For 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 Special Drawing Rights Department, and
overdue liabilities to the Fund as trustee.

(d) Except for the provisions of this 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 assets shall be maintained.

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