Caribbean Development Bank

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Caribbean Development Bank
CARIBBEAN DEVELOPMENT BANK ACT

CHAPTER 79:05

LAWS OF TRINIDAD AND TOBAGO

Current Authorised Pages
Pages Authorised

(inclusive) by L.R.O.
1–47 ..

L.R.O.

Act
39 of 1969

Amended by
45 of 1979

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Note on Subsidiary Legislation

This Chapter contains no subsidiary legislation.

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CHAPTER 79:05

CARIBBEAN DEVELOPMENT BANK ACT

ARRANGEMENT OF SECTIONS

SECTION

1. Short title.
2. Interpretation.
3. Acceptance of the Bank Agreement.
4. Financial provisions for giving effect to the Bank Agreement.
5. Minister empowered to raise loans for purposes of Bank Agreement.
6. Designation of depository for holdings of currency.
7. Certain provisions of Bank Agreement given force of law in Trinidad

and Tobago.
8. Amendment of Schedule.

SCHEDULE.

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CHAPTER 79:05

CARIBBEAN DEVELOPMENT BANK ACT

An Act to provide for the implementation by the Government
of an Agreement for the establishment and operation of
the Caribbean Development Bank, and for purposes
connected therewith.

[6TH DECEMBER 1969]

1. This Act may be cited as the Caribbean Development
Bank Act.

2. In this Act—
“Bank” means the Caribbean Development Bank established by

the Bank Agreement;
“Bank Agreement” means the Agreement establishing the

Caribbean Development Bank the text of which is set out in
the Schedule;

“Minister” means the member of the Cabinet to whom
responsibility for finance is assigned.

3. The Minister is hereby authorised on behalf of the
Government of Trinidad and Tobago to communicate its acceptance
of the Bank Agreement and to deposit with the Bank an instrument
of acceptance pursuant to paragraph 1(a) of Article 63 of the
Bank Agreement.

4. (1) All sums required to be paid by the Government
for the purpose of meeting the obligations of Trinidad and
Tobago under the Bank Agreement shall be a charge on the
Consolidated Fund.

(2) The Minister may, if he thinks fit, create and issue to
the Bank any such non-negotiable and interest-bearing notes
and other obligations as are provided for by paragraph 5 of
Article 7 of the Bank Agreement, and sums payable under such

39 of 1969.

Commencement.

Short title.

Interpretation.

Schedule.

Acceptance of
the Bank
Agreement.

Financial
provisions for
giving effect to
the Bank
Agreement.

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Minister
empowered to
raise loans
for purposes
of Bank
Agreement.

Designation of
depository for
holdings of
currency.

Certain
provisions of
Bank Agreement
given force of
law in Trinidad
and Tobago.

Amendment of
Schedule.
[45 of 1979].

notes or obligations so created and issued shall be a charge on
the Consolidated Fund.

(3) Any sums received by the Government from the
Bank pursuant to the Bank Agreement shall be paid into the
Consolidated Fund.

5. (1) The Minister may borrow from any person any sum
or sums required for payments under section 4 for replacing any
sum or sums paid out of the Consolidated Fund pursuant to that
section and, for the purpose of such borrowing, 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.

(2) The principal and interest of any securities issued
under subsection (1) and any expenses incurred in connection with
their issue shall be a charge on the Consolidated Fund.

(3) Any moneys raised by securities issued under
subsection (1) shall be paid into the Consolidated Fund.

6. The Central Bank of Trinidad and Tobago, or such other
institution as may be agreed upon with the Bank, shall act as a
depository with which the Bank may keep any of its holdings of
the currency of Trinidad and Tobago and other assets of the Bank.

7. Notwithstanding any other written law to the contrary, the
provisions of Articles 48, 49, 50, 51, 52, 53, 54 and 55 of the Bank
Agreement shall have the force of law in Trinidad and Tobago.

8. The Minister may from time to time by Order, amend the
Schedule for the purpose of bringing the text of the Bank Agreement
set out therein into accord with any amendments made to the
Agreement under Article 58 thereof.

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SCHEDULE

ARTICLES OF AGREEMENT OF THE CARIBBEAN
DEVELOPMENT BANK

The Contracting Parties;

CONSCIOUS of the need to accelerate the economic development of
States and Territories of the Caribbean and to improve the standards of living of
their peoples;

RECOGNISING the resolve of these States and Territories to intensify
economic co-operation and promote economic integration in the Caribbean;

AWARE of the desire of other countries outside the region to contribute to
the economic development of the region;

CONSIDERING that such regional economic development urgently
requires the mobilisation of additional financial and other resources; and

CONVINCED that the establishment of a regional financial institution with
the broadest possible participation will facilitate the achievement of these ends;

HEREBY AGREE AS FOLLOWS:

INTRODUCTORY ARTICLE

The Caribbean Development Bank (hereinafter called the “Bank”) is hereby
established and shall be governed by the following:

ARTICLES OF AGREEMENT
CHAPTER I

PURPOSE, FUNCTIONS AND PARTICIPATION
Article 1

PURPOSE

The purpose of the Bank shall be to contribute to the harmonious economic
growth and development of the member countries in the Caribbean (hereinafter
called the “region”) and to promote economic co-operation and integration
among them, having special and urgent regard to the needs of the less developed
members of the region.

Section 2.

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Article 2

FUNCTIONS
1. To carry out its purpose, the Bank shall have the following functions:

(a) to assist regional members in the co-ordination of their
development programmes with a view to achieving better
utilisation of their resources, making their economies more
complementary, and promoting the orderly expansion of their
international trade, in particular intra-regional trade;

(b) to mobilise within and outside the region additional financial
resources for the development of the region;

(c) to finance projects and programmes contributing to the
development of the region or any of the regional members;

(d) to provide appropriate technical assistance to its regional
members, particularly by undertaking or commissioning pre-
investment surveys and by assisting in the identification and
preparation of project proposals;

(e) to promote public and private investment in development
projects by, among other means, aiding financial institutions
in the region and supporting the establishment of consortia;

(f) to co-operate and assist in other regional efforts designed to
promote regional and locally controlled financial institutions
and a regional market for credit and savings;

(g) to stimulate and encourage the development of capital markets
within the region; and

(h) to undertake or promote such other activities as may advance
its purpose.

2. The Bank shall, where appropriate, co-operate with national, regional
or international organisations or other entities concerned with the development
of the region.

Article 3

MEMBERSHIP
1. Membership in the Bank shall be open to—

(a) States and Territories of the region; and
(b) non-regional States which are members of the United Nations

or of any of its specialised agencies or of the International
Atomic Energy Agency.

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2. The States and Territories listed in Annex A to this Agreement the
Governments of which sign this Agreement in accordance with paragraph 1 of
Article 62 and ratify or accept it in accordance with paragraph 1 of Article 63
shall become members of the Bank.

3. States and Territories eligible for membership under paragraph 1 of
this Article which do not become members in accordance with paragraph 2 of
this Article may be admitted to membership on such terms and conditions as
the Bank may determine by a vote of not less than two-thirds of the total number
of the governors representing not less than three-fourths of the total voting
power of the members, and on acceding to this Agreement in accordance with
paragraph 2 of Article 63.

4. For the purposes of Articles 26, 32 and 65 the last four Territories
listed in Category A of Annex A to this Agreement shall be considered as a
single member of the Bank.

Article 4

PARTICIPATION OF NON-MEMBERS
The Bank shall encourage and facilitate the fullest co-operation and

participation in its activities of other regional or non-regional States which are
members of the United Nations or any of its specialised agencies or of the
International Atomic Energy Agency and which may further its purpose, and
shall take such measures as it may deem appropriate under the provisions of
this Agreement to promote such co-operation and participation.

CHAPTER II

CAPITAL AND OTHER RESOURCES

Article 5

AUTHORISED CAPITAL
1. The authorised capital stock of the Bank shall be the equivalent of

fifty million dollars ($50,000,000) in terms of United States dollars of the weight
and fineness in effect on 1st September 1969. The authorised capital stock shall
be divided into ten thousand (10,000) shares with a par value of five thousand
dollars ($5,000) each, which shall be available for subscription only by members
in accordance with the provisions of Article 6.

2. The original authorised capital stock shall be divided into paid-up shares
and callable shares. Shares having an aggregate par value equivalent to twenty-
five million dollars ($25,000,000) shall be paid-up shares, and shares having an

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aggregate par value equivalent to twenty-five million dollars ($25,000,000) shall
be callable shares.

3. The authorised capital stock may be increased by the Board of
Governors at such time and on such terms and conditions as it may determine
by a vote of not less than two-thirds of the total number of the governors
representing not less than three-fourths of the total voting power of the members.

4. In this Agreement the expression “dollar” means a United States dollar
of the value specified in paragraph 1 of this Article.

Article 6

SUBSCRIPTION OF SHARES
1. Each member shall subscribe to shares of the capital stock of the Bank.

Each subscription to the original authorised capital stock shall be for paid-up
and callable shares in equal parts. The initial number of shares to be subscribed
by those States and Territories which become members in accordance with
paragraph 2 of Article 3 shall be as set forth in Annex A to this Agreement
which shall form an integral part thereof. The initial number of shares to be
subscribed by those States and Territories which are admitted to membership in
accordance with paragraph 3 of Article 3 shall be determined by the Board of
Governors in accordance with that paragraph.

2. The authorised capital stock of the Bank shall at all times be held or be
available for subscription in the following manner:

(a) not less than sixty (60) per cent by regional members; and
(b) not more than forty (40) per cent by other members.

3. In case of an increase in the authorised capital stock, each member
shall have a right to subscribe, on such terms and conditions as the Board of
Governors shall determine, to a proportion of the increase of stock equivalent
to the proportion which its stock previously subscribed bears to the total
subscribed capital stock immediately before such increase, provided, however,
that this provision shall not apply in respect of any increase or portion of an
increase in the authorised capital stock which is intended solely to give effect to
determinations of the Board of Governors under paragraphs 1 and 4 of this
Article. No member shall be obligated to subscribe to any part of an increase in
capital stock.

4. Subject to the provisions of paragraph 2 of this Article, the Board
of Governors may, at the request of a member, increase the subscription of
such member on such terms and conditions as the Board may determine.

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The Board of Governors shall pay special regard to the request of any regional
member having less than five (5) per cent of the subscribed capital stock to
increase its subscription.

5. Shares initially subscribed by those States and Territories which become
members in accordance with paragraph 2 of Article 3 shall be issued at par.
Other shares shall be issued at par unless the Board of Governors by a vote of
not less than two-thirds of the total number of the governors representing not
less than three-fourths of the total voting power of the members decides in
special circumstances to issue them on other terms.

6. Shares shall not be pledged or encumbered in any manner whatsoever.
They shall not be transferable except to the Bank.

7. Liability of the members on shares shall be limited to the unpaid
portion of their issue price.

8. Except as provided in paragraph 7 of this Article, no member shall
be liable, by reason of its membership, for obligations of the Bank.

Article 7

PAYMENT OF SUBSCRIPTIONS
1. Payment of the amount due in respect of paid-up shares initially

subscribed by a State or Territory which becomes a member in accordance with
paragraph 2 of Article 3 shall be made in six (6) instalments. The first instalment
shall equal 20 per cent of that amount and the remaining five instalments shall
each equal 16 per cent of that amount. The first instalment shall be paid by each
member not later than 90 days after entry into force of this Agreement or on or
before the date of deposit of its instrument of ratification or acceptance in
accordance with Article 63, whichever is the later. The second instalment shall
be paid not later than one (1) year from the entry into force of this Agreement.
The remaining four instalments shall each be paid successively not later than
one (1) year from the date on which the preceding instalment becomes payable.

2. Of each instalment of an initial subscription payable under
paragraph 1 of this Article by a State or Territory which becomes a member
pursuant to paragraph 2 of Article 3:

(a) fifty (50) per cent shall be paid in gold or in a convertible
currency which is freely and effectively useable in the
operations of the Bank or in a currency which is freely and
fully convertible into such a currency, provided that if the
currency of that member meets either of such requirements,

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such payment shall be made in the currency of that
member; and

(b) fifty (50) per cent shall be paid in the currency of that member,
subject to the provisions of paragraph 5 of this Article.

3. Each payment of a member in its own or another currency shall be in
such amount as the Bank, after such consultation with the International Monetary
Fund as it may consider necessary and utilising the par value, if any, established
with the International Monetary Fund, shall determine to be equivalent to the
full value in terms of dollars of the portion of the subscription being paid. The
first instalment payable pursuant to paragraph 1 of this Article shall be in such
amount as that member considers appropriate in accordance with this paragraph,
but shall be subject to such adjustment, to be effected within ninety (90) days of
the date on which such payment was due, as the Bank shall determine to be
necessary to constitute the full dollar equivalent of such payment.

4. Subject to the provisions of paragraphs 6 and 7 of this Article relating
to callable shares, payment of other subscriptions in respect of original authorised
shares and of increases in the capital stock of the Bank shall be made at such
times and in gold or in such currencies as the Board of Governors shall determine
and the Board may determine with the agreement of all members that different
proportions of such capital be paid up by different members.

5. The Bank shall accept from a member, in place of any part of the
member’s currency paid or to be paid by the member under paragraph 2(b) of
this Article or under paragraph 1 of Article 24 in respect of payments under
paragraph 2(b) of this Article, provided such currency is not required by the
Bank for the conduct of its operations, promissory notes or other obligations
issued by the Government of the member or by the depository designated by
the member pursuant to Article 37. Such notes or other obligations shall be
non-negotiable, non-interest bearing, and payable at their par value upon demand.
Subject to paragraph 5 of Article 23, demand for payment of such notes or other
obligations shall be made only as and when the funds are required by the Bank
for the conduct of its operations, provided, however, that a member which has
issued such promissory notes or other obligations may at the request of the
Bank convert any of them into interest-bearing notes or into cash to be invested
in government securities of that member. Demands upon such notes or
obligations shall, as far as practicable over reasonable periods of time, be uniform
in percentage of all such notes and obligations. Notwithstanding the issuance or
acceptance of a note or other obligation by the Bank, the obligation of the member
under paragraph 2(b) of this Article and under Article 24 shall subsist.

6. Callable shares shall be subject to call only as and when required by
the Bank to meet its obligations incurred pursuant to sub-paragraphs (b) and (d)
of Article 13 on borrowings of funds for inclusion in its ordinary capital resources

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or on guarantees chargeable to such resources. Such calls on unpaid subscriptions
shall be uniform in percentage on all callable shares.

7. Payment of calls referred to in paragraph 6 of this Article may be made
at the option of the member in gold, convertible currency or in the currency
required to discharge the obligations of the Bank for the purpose of which the
call is made.

8. The Bank shall determine the place for any payment under this Article,
provided that, until the inaugural meeting of the Board of Governors the payment
of the first instalment referred to in paragraph 1 of this Article shall be made to
the Government of Barbados as Trustee of the Bank.

Article 8

SPECIAL FUNDS
1. A special fund to be known as the Special Development Fund is hereby

established into which the Bank may receive contributions or loans. The Special
Development Fund may be used to make or guarantee loans of high
developmental priority, with longer maturities, longer deferred commencement
of repayment and lower interest rates than those determined by the Bank for its
ordinary operations. The Bank shall, as soon as practicable, adopt rules and
regulations for the administration and use of the Special Development Fund.

2. The Bank may establish, or be entrusted with the administration of,
other special funds which are designed to serve its purpose and fall within its
functions. It shall adopt such special rules and regulations as may be required
for the establishment, administration and use of the resources of each fund.

3. Subject to the provisions of paragraph 1 of this Article relating to the
Special Development Fund, the terms and conditions upon which the Bank
may receive contributions or loans for special funds, including the Special
Development Fund, shall be such as may be agreed upon between the Bank and
the contributor or lender, and special funds may be used in any manner and on
any terms and conditions not inconsistent with the purpose and functions of the
Bank or with any agreement relating to such funds.

4. No allocation may be made to the Special Development Fund provided
for in paragraph 1 of this Article or to any other special fund from the paid-up
capital or reserves of the Bank or from funds borrowed by the Bank for inclusion
in its ordinary capital resources.

5. The rules and regulations relating to any special fund shall be consistent
with the provisions of this agreement except those which expressly apply only

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to ordinary operations of the Bank. Where such rules and regulations do not
apply, special funds shall be governed by the provisions of this Agreement.

Article 9

ORDINARY CAPITAL RESOURCES AND

SPECIAL FUND RESOURCES

1. The resources of the Bank shall consist of ordinary capital resources
and special funds resources.

2. In this Agreement, the expression “ordinary capital resources” includes
the following:

(a) authorised capital stock of the Bank subscribed pursuant to
Article 6;

(b) funds borrowed by the Bank to which the commitment to calls
provided for in paragraph 6 of Article 7 is applicable;

(c) funds received in repayment of loans or guarantees made
with the resources referred to in subparagraphs (a) and (b) of
this paragraph;

(d) income derived from loans made from the aforementioned
funds or from guarantees to which the commitment to calls
provided for in paragraph 6 of Article 7 is applicable;

(e) any other funds or income received by the Bank which do not
form part of any special funds resources.

3. In this Agreement, the expression “special funds resources” refers to
the resources of any special fund and includes the following:

(a) resources initially contributed to any special fund;
(b) funds accepted by the Bank for inclusion in any special fund;
(c) funds repaid in respect of loans or guarantees financed from

the resources of any special fund which, under the rules, and
regulations of the Bank governing that special fund, are
received by such special fund;

(d) income derived from operations of the Bank in which any of
the aforementioned resources or funds are used or committed
if, under the rules and regulations of the Bank governing the
special fund concerned, that income accrues to such special
fund; and

(e) any other resources placed at the disposal of any special fund.

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CHAPTER III

OPERATIONS
Article 10

USE OF RESOURCES
The resources and facilities of the Bank shall be used exclusively to

further the purpose and carry out the functions set forth, respectively, in
Articles 1 and 2 of this Agreement.

Article 11

ORDINARY AND SPECIAL OPERATIONS
1. The operations of the Bank shall consist of ordinary operations and

special operations.

2. Ordinary operations shall be those financed from the ordinary capital
resources of the Bank.

3. Special operations shall be those financed from special funds resources.

Article 12

SEPARATION OF OPERATIONS
1. The ordinary capital resources of the Bank shall at all times and in all

respects be held, used, committed, invested or otherwise disposed of, entirely
separate from special funds resources. Each special fund, its resources and
accounts shall be kept entirely separate from other special funds, their resources
and accounts.

2. The ordinary capital resources of the Bank shall not be charged with,
or used to discharge, losses or liabilities arising out of operations or other
activities of any special fund. Special funds resources appertaining to any special
fund shall not be charged with, or used to discharge, losses or liabilities arising
out of operations or other activities of the Bank financed from its ordinary capital
resources or from resources appertaining to any other special fund.

3. In the operations and other activities of any special fund, the liability
of the Bank shall be limited to the resources appertaining to that special fund
which are at the disposal of the Bank.

4. The financial statements of the Bank shall show the ordinary operations
and the special operations of the Bank separately. Expenses appertaining to
ordinary operations shall be charged to the ordinary capital resources of the

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Bank. Expenses appertaining directly to special operations shall be charged to
the special funds resources. Any other expenses shall be charged as the Bank
shall determine.

5. The Bank shall adopt such other rules and regulations as may be
required to ensure the effective separation of the two types of its operations.

Article 13

RECIPIENTS AND METHODS OF
ORDINARY OPERATIONS

In its ordinary operations, the Bank may provide or facilitate financing
for any regional member or any political subdivision or any agency thereof, or
any other entity or enterprise in the public or private sector operating in the
territory of such member, as well as for international or regional agencies or
other entities concerned with the economic development of the region. The
Bank may carry out such operations in any of the following ways:

(a) by making or participating in direct loans with its unimpaired
paid-up capital and, except as provided in Article 18, with its
reserves and undistributed surplus;

(b) by making or participating in direct loans with funds raised
by the Bank in capital markets or borrowed or otherwise
acquired by the Bank for inclusion in its ordinary
capital resources;

(c) by investment of the funds referred to in paragraphs (a) and
(b) of this Article in the equity capital of an entity or enterprise,
provided, however, that no such investment shall be made until
after the Board of Governors, by a vote of not less than two-
thirds of the total number of governors representing not less
than three-fourths of the total voting power of the members,
shall have determined that the Bank is in a position to begin
such type of operations; or

(d) by guaranteeing, whether as primary or secondary obligor, in
whole or in part, loans for economic development.

Article 14

LIMITATIONS ON OPERATIONS
1. The total amount outstanding of loans, equity investments and

guarantees made by the Bank in its ordinary operations shall not at any time
exceed the total amount of its unimpaired subscribed capital, reserves and surplus

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and any other funds included in its ordinary capital resources, exclusive of the
special reserve provided for in Article 18 and other reserves not available for
ordinary operations.

2. The total amount outstanding in respect of the special operations of
the Bank relating to any special fund shall not at any time exceed the total
amount of the unimpaired resources appertaining to that special fund.

3. In the case of funds invested in equity capital out of the ordinary capital
resources of the Bank, the total amount invested shall not at any time exceed
ten (10) per cent of the aggregate amount of the unimpaired paid-up capital
stock of the Bank actually paid up at any given time together with the reserves
and surplus included in its ordinary capital resources, exclusive of the special
reserve provided for in Article 18.

4. The amount of any equity investment shall not exceed such percentage
of the equity capital of the entity or enterprise concerned as the Board of Directors
shall from time to time or in each specific case determine to be appropriate. The
Bank shall not seek to obtain by such an investment a controlling interest in the
entity or enterprise concerned, except where necessary to safeguard the
investment of the Bank.

Article 15

OPERATING PRINCIPLES
Subject to the provisions of this Agreement, the operations of the Bank

shall be conducted in accordance with the following principles:
(a) the operations of the Bank shall provide principally for the

financing of specific projects, including those forming part of
a national, sub-regional or regional development programme.
They may, however, include loans to, or guarantees of loans
made to, national development banks or other suitable financial
institutions, in order that the latter may finance development
projects on terms approved by the Bank where the individual
financing requirements of such projects are not, in the opinion
of the Bank, large enough to warrant the direct supervision of
the Bank;

(b) the Bank shall not finance any undertaking in the territory of a
member if that member objects to such financing;

(c) before a loan or guarantee is granted, the applicant shall have
submitted an adequate loan or guarantee proposal and the
President of the Bank shall have presented to the Board of

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Directors a written report regarding the proposal together with
his recommendations on the basis of a staff study;

(d) in considering an application for a loan or guarantee, the Bank
shall pay due regard to the ability of the borrower to obtain
financing elsewhere on terms and conditions that the Bank
considers reasonable for the recipient;

(e) in making or guaranteeing a loan, the Bank shall pay due
regard to the prospects that the borrower and its guarantor,
if any, will be in a position to meet their obligations under the
loan contract;

(f) in making or guaranteeing a loan, the rate of interest, other
charges and the schedule for repayment of principal shall be
such as are, in the opinion of the Bank, appropriate for the
loan concerned;

(g) in guaranteeing a loan made by other investors, or in
underwriting the sale of securities, the Bank shall receive
suitable compensation for its risk;

(h) the proceeds of financing in the ordinary operations of the
Bank shall normally be used only for procurement, in territories
of members, of goods and services produced in those territories.
In special cases the Board of Directors may, however,
determine the circumstances in which the procurement of
goods and services may be permitted elsewhere, giving
particular consideration wherever practicable to procurement
of goods and services produced in the territory of countries
which have contributed substantially to the resources of
the Bank;

(i) in procuring services, and in facilitating financing for entities
or enterprises in the private sector, the Bank shall pay due
regard to the need to develop and strengthen undertakings,
entities and skills of individuals belonging to the region;

(j) in the case of a direct loan made by the Bank, the borrower
shall be permitted by the Bank to draw its funds only to meet
expenditures in connection with the project as they are
actually incurred;

(k) the Bank shall take the necessary measures to ensure that the
proceeds of any loan made, guaranteed, or participated in by
the Bank are used only for the purposes for which the loan
was granted and with due regard to considerations of economy
and efficiency;

(l) the Bank shall pay due regard to the desirability of a reasonable
distribution of the benefits from its operations among the
members in the region;

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(m) the Bank shall seek to maintain reasonable diversification in
its investments in equity capital;

(n) the Bank may provide financing to meet either external or
local expenditures in respect of a project being assisted,
provided that in its ordinary operations the Bank shall provide
financing for local expenditures in the territory in which the
project is located only in exceptional circumstances and not
exceeding a reasonable proportion of the total of such
expenditures, or in circumstances where such financing may
be provided with local currency restricted under paragraph 2
of Article 23;

(o) the Bank shall be guided by sound development banking
principles in its operations.

Article 16

TERMS AND CONDITIONS FOR DIRECT
LOANS AND GUARANTEES

1. In the case of direct loans made or participated in or loans guaranteed
by the Bank, the contract shall establish the terms and conditions for the loan or
guarantee concerned, including those relating to payment of principal, interests
and other charges, maturities, and dates of payment in respect of the loan, or the
fees and other charges in respect of the guarantee, respectively.

2. Subject in the case of special operations to any rules and regulations
or other arrangements relating thereto, the contract relating to a loan made or
guaranteed by the Bank shall specify the currency or currencies to be used in
making repayments to the Bank, or stipulate that repayments shall be made in
the currency or currencies loaned, or make other appropriate provision for the
currency or currencies of repayment. At the option of the borrower, however,
such repayments may be made in gold or, subject to the agreement of the Bank,
in any convertible currency. The contract may also provide that the amount of
repayments to the Bank shall be equivalent, in terms of a currency specified for
that purpose by the Bank, to the value of those repayments on the date or dates
on which the loan was disbursed.

3. Where the recipient of a loan or guarantee of a loan is not itself a
member, the Bank may, when it deems it advisable, make it a condition of the
contract that the member in whose territory the project concerned is to be carried
out, or a public agency of that member acceptable to the Bank, guarantee the
repayment of the principal and the payment of interest and other charges on the
loan in accordance with the terms thereof.

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Article 17

COMMISSION AND FEES
1. The Bank shall determine the rate and any other terms and conditions

of the commission to be charged in connection with direct loans made or
participated in as part of its ordinary operations. This commission shall be
computed on the amount outstanding on each loan or participation and shall be
at the rate of not less than one (1) per cent per annum in the first five (5) years
of the operations of the Bank. At the end of this period, the rate of commission
may be set at such level as the Bank considers appropriate in the light of the
level of the reserves of the Bank.

2. In guaranteeing a loan as part of its ordinary operations, the Bank shall,
in addition to any other charges, require a guarantee fee, at a rate determined by
the Board of Directors, payable periodically on the amount of the loan
outstanding.

3. Other charges of the Bank in its ordinary operations, and any
commission, fees or other charges in its special operations, shall be determined
by the Board of Directors.

Article 18

SPECIAL RESERVE
The amount of commissions and guarantee fees received by the Bank

pursuant to Article 17 of this Agreement shall be set aside as a special reserve
which shall be kept for meeting liabilities of the Bank. The special reserve shall
be held in such liquid form as the Board of Directors may decide, provided that
whenever it is in the interest of the Bank the special reserve may be invested in
the securities of the region.

Article 19

METHODS OF MEETING LIABILITIES OF THE BANK
1. Whenever necessary to meet contractual payments of interest, other

charges or amortisation on borrowings of the Bank in its ordinary operations, or
to meet its liabilities with respect to similar payments in respect of loans
guaranteed by it, chargeable to its ordinary capital resources, the Bank may
call an appropriate amount of callable shares in accordance with paragraph 6
of Article 7.

2. If the subscribed callable capital stock of the Bank shall be entirely
called pursuant to paragraph 6 of Article 7, the Bank may, if necessary for the

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purpose specified in paragraph 1 of this Article, use or exchange the currency
of any member without restriction, including any restriction imposed pursuant
to paragraph 2 of Article 23.

CHAPTER IV

BORROWING AND OTHER MISCELLANEOUS POWERS
Article 20

GENERAL POWERS
In addition to the powers provided elsewhere in this Agreement, the Bank

shall have the power to:
(a) borrow funds in the territories of members or elsewhere, and

in this connection to furnish such collateral or other security
therefor as the Bank shall determine, provided always that—

(i) before making a sale of its obligations in a country, the
Bank shall seek the approval of the competent
authorities of that country;

(ii) where the obligations of the Bank are to be denominated
in the currency of a member, the Bank shall have
obtained the approval of the competent authorities of
that member;

(iii) the Bank shall obtain the approval of the competent
authorities referred to in subparagraphs (i) and (ii) of
this paragraph that the proceeds may be exchanged for
any other currency without restriction; and

(iv) before determining whether to sell its obligations in a
particular country, the Bank shall consider the amount
of previous borrowing, if any, in that country, the
amount of previous borrowings in other countries, and
the possible availability of funds in such other countries
and shall give due regard to the general principle that
its borrowings should, as far as possible, be diversified
as to the country of borrowing;

(b) buy and sell securities the Bank has issued or guaranteed or in
which it has invested, provided always that it shall have
obtained the approval of the competent authorities of the
country where the securities are to be bought or sold;

(c) guarantee securities in which it has invested, in order to
facilitate their sale;

(d) underwrite, or participate in the underwriting of, securities
issued by any enterprise or entity for purposes consistent with
the purpose and functions of the Bank;

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(e) invest or deposit funds, not needed in its operations, in the
territories of members or of substantial contributors to the
resources of the Bank, in such obligations or institutions of
members or substantial contributors, or nationals thereof, as it
may determine, except where the Board of Directors by a vote
of not less than three-fourths of the total voting powers of the
members determines otherwise;

(f) assist regional members in matters relating to the foreign
placement of official loans;

(g) borrow from Governments, their political subdivisions and
instrumentalities, and international organisations, on such
terms and conditions as may be agreed upon between the Bank
and the lender;

(h) provide technical assistance which serves its purpose and
comes within its functions, and where expenditures incurred
in furnishing such services are not reimbursable, charge the
income of the Bank therewith; and

(i) exercise such other powers and adopt such rules and regulations
as may be necessary or appropriate in furtherance of its purpose
and functions and consistent with the provisions of this
Agreement.

Article 21

NOTICE TO BE PLACED ON SECURITIES
Every security issued or guaranteed by the Bank shall include a statement

to the effect that it is not an obligation of any Government, unless it is in fact the
obligation of a particular Government, in which case it shall so state.

CHAPTER V

CURRENCIES

Article 22

VALUATION OF CURRENCIES AND DETERMINATION
OF CONVERTIBILITY

Whenever the Bank considers it necessary under this Agreement:
(a) to value any currency in terms of another currency or of

gold; or
(b) to determine whether any currency is convertible,

such valuation or determination, as the case may be, shall be reasonably made
by the Bank after consultation with the International Monetary Fund.

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Article 23

USE OF CURRENCIES

1. The currency of any member held by the Bank as part of its ordinary
capital resources, however acquired, may be used by the Bank or by any recipient
from the Bank, without restriction by that member, to make payments for
expenditures within, or for goods and services produced in, the territory of
that member.

2. Members may not maintain or impose any restrictions on the holding
or use by the Bank or by any recipient from the Bank, for payments in any
country, of gold or any currency received by the Bank and included in its ordinary
capital resources; except that a regional member may, after consultation with
and subject to periodic review by the Bank, restrict, in whole or in part, to
expenditure in the territory of that member the use of its currency paid in as, or
derived as repayments of principal from, currency of the member paid pursuant
to paragraph 2(b) of Article 7.

3. The use of any currency received and held by the Bank as part of its
special funds resources shall be governed by the rules, regulations and
agreements pertaining thereto and made by virtue of the provisions of Article 8.

4. Gold or currencies held by the Bank may not be used by the Bank to
purchase currencies of members or non-members except with the approval of
the member or members whose currencies are involved, but may be so used
without such approval—

(a) in order to meet the obligations of the Bank in the ordinary
course of its business; or

(b) if the currency to be used for such purchase is the currency of
a member received by the Bank as a payment on account of
the subscription of another member; or

(c) pursuant to a decision of the Board of Directors by a vote of
the Directors representing not less than two-thirds of the total
voting power of the members.

5. Nothing in this Agreement shall preclude the Bank from using the
currency of any member for administrative expenses incurred by the Bank in
the territory of that member.

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Article 24

MAINTENANCE OF VALUE OF THE CURRENCY
HOLDINGS OF THE BANK

1. Whenever the par value in the International Monetary Fund of the
currency of a member is reduced or the foreign exchange value of such currency
has, in the opinion of the Bank, depreciated to a significant extent within its
territories, that member shall pay to the Bank within a reasonable time an
additional amount of its currency sufficient to maintain the value as of the time
of subscription of the amount of such currency which is held or subsequently
received by the Bank (whether or not any such currency is held in the form of
notes or other obligations issued pursuant to paragraph 5 of Article 7) and
consisting of, or derived as repayments of principal from, currency originally
paid to the Bank by such member pursuant to paragraph 2(a) or paragraph 2(b)
of Article 7, or any additional currency paid pursuant to the provisions of the
present paragraph; provided, however, that, to the extent that the Bank shall, in
its opinion, have received from any borrower of such currency, or from any
guarantor, amounts paid solely as a result of such reduction in par value or of
such depreciation, the Bank shall pro tanto relieve that member of its obligations
under the present paragraph.

2. Whenever the par value of the currency of a member is increased, the
Bank shall pay to that member within a reasonable time an amount of such
currency equal to the increase in the value of that amount of the member’s
currency held or subsequently received by the Bank to which paragraph 1 of
this Article would be applicable; provided, however, that the Bank shall not be
obligated to make such payment to the extent that the benefit of any such increase
in par value shall have been passed on by the Bank to any borrower or guarantor
as a corollary of the obligation of either to make increased payments to the
Bank in case of a decrease in the par value of such currency.

3. The provisions of the preceding two paragraphs may be waived or
deemed inoperative by the Bank when a uniform change in the par values of the
currencies of all its members is made by the International Monetary Fund.

4. Amounts paid by a member pursuant to the provisions of paragraph 1
of this Article to maintain the value of any of its currency shall be useable and
convertible to the same extent as the original currency in respect of which such
amounts are paid.

5. In the case of a member whose currency does not have a par value
established with the International Monetary Fund, the initial value of such
currency in terms of dollars shall be as determined by the Bank pursuant to

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paragraph 3 of Article 7, or otherwise, for purposes of payments by such member
on account of its subscription. The Bank may, from time to time thereafter,
make a similar determination with respect to the value in terms of dollars of
such currency. For the purposes of the provisions of paragraphs 1 and 2 of this
Article, the value so determined from time to time shall be treated as if it were
the par value of such currency.

CHAPTER VI

ORGANISATION AND MANAGEMENT

Article 25

STRUCTURE
The Bank shall have a Board of Governors, a Board of Directors, a

President, a Vice-President, and such other officers and staff as may be
considered necessary.

Article 26

BOARD OF GOVERNORS: COMPOSITION
1. Each member shall be represented on the Board of Governors and

shall appoint one governor and one alternate. Each governor and alternate shall
serve at the pleasure of the appointing member. No alternate may vote except in
the absence of his principal. At each annual meeting, the Board of Governors
shall elect one of the governors as Chairman who shall hold office until the
election of the next Chairman.

2. Governors and alternates shall serve as such without remuneration
from the Bank, but the Bank may pay them reasonable expenses incurred in
attending meetings.

Article 27

BOARD OF GOVERNORS: POWERS
1. All the powers of the Bank shall be vested in the Board of Governors.

2. The Board of Governors may delegate to the Board of Directors any
or all its powers, except the power to—

(a) admit new members and determine the conditions of their
admission;

(b) increase or decrease the authorised capital stock of the Bank;

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(c) suspend a member;
(d) decide appeals from decisions regarding the interpretation or

application of this Agreement made by the Board of Directors;
(e) authorise the conclusion of general agreements for co-operation

with Governments and with other international organisations;
(f) elect the directors and the President of the Bank;
(g) determine the remuneration of the directors and their alternates;
(h) determine the reserves and the distribution of the net profits

of the Bank;
(i) amend this Agreement;
(j) decide to terminate the operations of the Bank and to distribute

its assets;
(k) select external auditors to certify the general balance sheet

and the statement of profit and loss of the Bank and to select
such other experts as may be necessary to examine and report
on the general management of the Bank;

(l) approve, after reviewing the report of the external auditors,
the general balance sheet and statements of profit and loss of
the Bank; and

(m) exercise such other powers as are expressly assigned to the
Board of Governors in this Agreement.

3. The Board of Governors shall retain full power to exercise authority
over any matter delegated to the Board of Directors in accordance with
paragraph 2 of this Article.

Article 28

BOARD OF GOVERNORS: PROCEDURE
1. The Board of Governors shall hold an annual meeting and such other

meetings as may be provided for by the Board of Governors or called by the
Board of Directors. Meetings of the Board of Governors other than the annual
meeting shall be called by the Board of Directors whenever requested by a
majority of the members of the Bank.

2. A majority of the total number of the governors shall constitute a
quorum for any meeting of the Board of Governors, provided such majority
represents not less than two-thirds of the total voting power of the members.

3. The Board of Governors may by regulation establish a procedure
whereby the Board of Directors, when the latter deems such action advisable,
may obtain a vote of the governors on a specific question without calling a
meeting of the Board of Governors.

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4. The Board of Governors may establish such subsidiary bodies as may
be necessary or appropriate for the conduct of the business of the Bank.

Article 29

BOARD OF DIRECTORS: COMPOSITION

*1. (1) The Board of Directors shall be composed of eleven (11) members
of whom—

(a) nine (9) shall be selected by the governors representing regional
members; and

(b) two (2) shall be selected by the governors representing non-
regional members.

(2) When other States or Territories become members, the Board of
Governors may, by a vote of not less than two-thirds of the total number of the
governors representing not less than three-fourths of the total voting power of
the members, increase the total number of directors.

(3) The directors shall be selected in accordance with rules of
procedure to be adopted by the Board of Governors by a vote of not less than
two-thirds of the total number of the governors representing not less than three-
fourths of the total voting power of the members. The said rules shall give
effect to the principles relating to regional directors set out in Part I of Annex B
to this Agreement. Until such rules have been adopted, the directors shall be
selected in accordance with Part II of the said Annex B.

2. Directors shall be persons of high competence in economic and
financial matters and shall be selected with due regard to the principle of equitable
geographical distribution.

3. Each director shall appoint an alternate with full power to act for him
when he is not present.

4. Directors shall hold office for a term of two (2) years and shall be
eligible for selection for a further term or terms of office. They shall continue in
office until their successors shall have been selected and assumed office. If the
office of a director becomes vacant before the expiration of his term of office
the vacancy shall be filled by a new director who shall be selected by the
governors representing the members who selected his predecessor and he shall
hold office for the remainder of the term of office of his predecessor.

*Paragraph 1(1)(a) of Article 29 was amended by Resolution No. 9/1976 of the Board of
Governors, and the amendment came into force on 2nd September 1976.

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Article 30

BOARD OF DIRECTORS—POWERS
The Board of Directors shall be responsible for the direction of the general

operations of the Bank and, for this purpose, shall, in addition to the powers
assigned to it expressly in this Agreement, exercise all the powers delegated to
it by the Board of Governors and in particular—

(a) prepare the work of the Board of Governors;
(b) in conformity with the general directions of the Board of

Governors, take decisions concerning loans, guarantees,
investments in equity capital, borrowing by the Bank,
furnishing of technical assistance, and other operations of
the Bank;

(c) submit the accounts for each financial year to the Board of
Governors at each annual meeting; and

(d) approve the budget of the Bank.

Article 31

BOARD OF DIRECTORS—PROCEDURE
1. The Board of Directors shall normally function at the principal office

of the Bank and shall meet as often as the business of the Bank may require.

2. A majority of the directors shall constitute a quorum for any meeting
of the Board of Directors, provided that such majority represents not less than
two-thirds of the total voting power of the members.

3. The Board of Governors shall adopt regulations under which a member
may send a representative to attend any meeting of the Board of Directors when
a matter particularly affecting that member is under consideration.

Article 32

VOTING
1. Each member shall have one hundred and fifty (150) votes plus one

additional vote for each share of capital stock held by it.

2. In voting in the Board of Governors, each governor shall be entitled to
cast the votes of the member he represents. Except as otherwise expressly
provided in this Agreement, all matters before the Board of Governors shall be
determined by a majority of the voting power of the members represented at
the meeting.

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3. In voting in the Board of Directors, each director shall be entitled to
cast the number of votes of the member or members whose votes counted towards
his selection, which votes must be cast as a unit. Except as otherwise expressly
provided in this Agreement, all matters before the Board of Directors shall be
determined by a majority of the voting power of the members represented at
the meeting.

Article 33

THE PRESIDENT
1. The Board of Governors, by a vote of not less than two-thirds of the

total number of the governors representing not less than three-fourths of the
total voting power of the members, shall elect a President of the Bank. The
President, while holding office, shall not be a governor or a director or an alternate
for either.

2. The term of office of the President shall be for such period not exceeding
five (5) years as the Board of Governors may determine. He may be re-elected.
He shall, however, cease to hold office when the Board of Governors so decides
by a vote of not less than two-thirds of the total number of the governors
representing not less than three-fourths of the total voting power of the members.

3. The President shall be Chairman of the Board of Directors but shall
have no right to vote, except to vote in case of an equal division. He may
participate in meetings of the Board of Governors but shall not vote.

4. The President shall be chief executive officer of the Bank and shall
conduct, under the direction of the Board of Directors, the current business of
the Bank. He shall be responsible for the organisation, appointment and dismissal
of the officers and staff, subject to the general control of the Board of Directors.

5. The President and the Vice-President shall be persons possessing
extensive experience in matters relating to finance and development in the public
or private sector.

6. In appointing the officers and staff, the President shall, subject to the
paramount importance of securing the highest standards of efficiency and
technical competence, pay due regard to the recruitment of personnel on as
equitable a geographical basis as possible.

Article 34

THE VICE-PRESIDENT
1. A Vice-President shall be appointed by the Board of Directors on the

recommendation of the President. The Vice-President shall hold office for such

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term, exercise such authority and perform such functions in the administration
of the Bank as may be determined by the Board of Directors. In the absence or
incapacity of the President, or while that office is vacant, the Vice-President
shall exercise the authority and perform the functions of the President.

2. The Vice-President may participate in meetings of the Board of
Directors but shall have no vote at such meetings, except that the Vice-President
shall cast the deciding vote when acting in place of the President.

Article 35

INTERNATIONAL CHARACTER OF THE BANK:
PROHIBITION OF POLITICAL ACTIVITY

1. The Bank shall not accept loans or assistance that may in any way
prejudice or otherwise alter its purpose or functions.

2. The Bank, its President, Vice-President, officers and staff 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 concerned. Only
economic considerations relevant to the purpose and functions of the Bank
shall be brought to bear upon their decisions. Such considerations shall be
weighed impartially in order to achieve and carry out the purpose and functions
of the Bank.

3. The President, Vice-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.

Article 36

OFFICES OF THE BANK
1. The principal office of the Bank shall be located in Barbados.

2. The Bank may establish agencies or branch offices elsewhere.

Article 37

CHANNEL OF COMMUNICATIONS, DEPOSITORIES
1. Each member shall designate an appropriate official entity with

which the Bank may communicate in connection with any matter arising under
this Agreement.

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2. Each member shall designate its central bank, or such other institution
as may be agreed upon with the Bank, as a depository with which the Bank may
keep any of its holdings of the currency of that member as well as other assets
of the Bank.

Article 38

OFFICIAL LANGUAGE AND REPORTS
1. The official language of the Bank shall be English.

2. The Bank shall transmit to members an Annual Report containing an
audited statement of its accounts and shall publish such Report. It shall also
transmit quarterly to its members a summary statement of its financial position
and a profit and loss statement showing the results of its operations.

3. The Bank may also publish such other reports as it deems desirable in
the carrying out of its purpose and functions. Such reports shall be transmitted
to the members of the Bank.

4. The accounts of the Bank shall be audited by external auditors of high
international standing selected by the Board of Governors.

Article 39

ALLOCATION OF NET INCOME
1. The Board of Governors shall determine at least annually the

disposition of the net income of the Bank arising from its ordinary operations
and what portion thereof, if any, shall be allocated, after making provision for
reserves or other purposes, to surplus, and what portion, if any, shall,
notwithstanding the provisions of Article 12, be allocated to any special fund,
including the Special Development Fund, or distributed to the members.

2. The Board of Governors shall determine at least annually the disposition
of the net income of the Bank arising from its special operations, subject to
any rules or regulations governing each special fund and any agreement
relating thereto.

3. Any distribution of net income under paragraph 1 of this Article shall
be made to each member in the proportion which the total payments made by
that member under paragraph 2(a) of Article 7 and the average amount of loans
outstanding during the year made out of currency corresponding to its
subscription under paragraph 2(b) of Article 7 bears to the total of such amounts
for all members.

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4. Payments shall be made in such manner and in such currency as the
Board of Governors shall determine.

CHAPTER VII

WITHDRAWAL AND SUSPENSION OF MEMBERS;
TEMPORARY SUSPENSION AND TERMINATION OF

OPERATIONS OF THE BANK

Article 40

WITHDRAWAL

1. Any member may withdraw from the Bank at any time by delivering
a notice in writing to the Bank at its principal office.

2. Withdrawal by a member shall become effective, and its membership
shall cease, on the date specified in its notice, but in no event less than six (6)
months after the date that notice has been received by the Bank. However, at
any time before the withdrawal becomes effective, the member may notify the
Bank in writing of the cancellation of its notice of intention to withdraw.

3. A member which has given notice of its withdrawal from the Bank
shall remain liable for all direct and contingent obligations to the Bank to which
it was subject at the date of delivery of the withdrawal notice. If the withdrawal
becomes effective, the member shall not incur any liability for obligations
resulting from operations of the Bank effected after the date on which the notice
of withdrawal was received by the Bank.

Article 41

SUSPENSION OF MEMBERSHIP

1. If a member fails to fulfil any of its obligations to the Bank, the Board
of Governors may suspend such member by a vote of not less than two-thirds of
the total number of the governors of other members representing not less than
three-fourths of the total voting power of the other members. The member
concerned shall have no vote.

2. The member so suspended shall automatically cease to be a member
of the Bank one (1) year from the date of its suspension unless the Board of
Governors, during that period, decides by the same majority necessary for
suspension to restore the member to good standing.

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3. 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 its obligations.

Article 42

SETTLEMENT OF ACCOUNTS
1. After the date on which a State or Territory ceases to be a member, that

former member 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 is outstanding; but it shall not incur
liabilities with respect to loans and guarantees entered into thereafter by the
Bank nor share either in the income or the expenses of the Bank.

2. At the time a State or Territory ceases to be a member, the Bank shall
arrange for the repurchase of such member’s shares by the Bank as a part of the
settlement of accounts with such member in accordance with the provisions of
paragraphs 3 and 4 of this Article. For this purpose, the repurchase price of the
shares shall be the value shown by the books of the Bank on the date of cessation
of membership.

3. The repayment for shares repurchased by the Bank under this Article
shall be governed by the following conditions:

(a) any amount due to the member concerned for its shares shall
be withheld so long as that member, its central bank or any of
its political sub-divisions or 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
contingent liability of the member for future calls on its
subscription for shares in accordance with paragraph 6 of
Article 7. In any event, no amount due to a member for its
shares shall be paid until six (6) months after the date on which
its membership ceases;

(b) payments for shares may be made from time to time, upon
their surrender by the former member concerned, to the extent
by which the amount due to the repurchase price in accordance
with paragraph 2 of this Article exceeds the aggregate amount
of liabilities on loans and guarantees referred to in
subparagraph (a) of this paragraph, until the former member
has received the full repurchase price;

(c) payments shall be made in such available currencies as the
Bank determines, taking into account its financial position;

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(d) if losses are sustained by the Bank on any guarantees or loans
which were outstanding on the date of cessation of membership
and the amount of such losses exceeds the amount of the
reserve provided against losses on that date, the former member
concerned shall 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 shall
remain liable on any call for unpaid subscriptions in accordance
with paragraph 6 of Article 7, 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.

4. If the Bank terminates its operations pursuant to Article 44 within
six (6) months of the date upon which the membership of any member ceases,
all rights of the member concerned shall be determined in accordance with the
provisions of Articles 44 to 46. That member shall be considered as still a member
for purposes of such Articles but shall have no voting rights.

Article 43

TEMPORARY SUSPENSION OF OPERATIONS
In an emergency, the Board of Directors may temporarily suspend operations

in respect of new loans and guarantees, pending an opportunity for further
consideration and action by the Board of Governors.

Article 44

TERMINATION OF OPERATIONS
1. The Bank may terminate its operations by resolution of the Board of

Governors approved by a vote of not less than two-thirds of the total number of
governors representing not less than three-fourths of the total voting power of
the members.

2. After such termination, the Bank shall forthwith cease all activities,
except those incident to the orderly realisation, conservation and preservation
of its assets and settlement of its obligations.

Article 45

LIABILITY OF MEMBERS AND PAYMENT OF CLAIMS
1. In the event of termination of the operations of the Bank, the liability

of all members for uncalled subscriptions to the capital stock of the Bank and in

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respect of the depreciation of their currencies shall continue until all claims
of creditors, including all contingent claims, shall have been discharged.

2. All creditors holding direct claims shall first be paid out of the assets
of the Bank and then out of payments to the Bank on unpaid or callable
subscriptions. Before making any payments to creditors holding direct
claims, the Board of Directors shall make such arrangements as are necessary,
in its judgment, to ensure a pro rata distribution among holders of direct and
contingent claims.

Article 46

DISTRIBUTION OF ASSETS
1. No distribution of assets shall be made to members on account of their

subscriptions to the capital stock of the Bank until all liabilities to creditors
shall have been discharged or provided for. Moreover, such distribution must
be approved by the Board of Governors by a vote of not less than two-thirds of
the total number of governors representing not less than three-quarters of the
total voting power of the members.

2. Any distribution of the assets of the Bank to the members shall be in
proportion to the capital stock held by each member and shall be effected at
such times and under such conditions as the Bank shall deem fair and equitable.
The shares of assets distributed need not be uniform as to type of assets. No
member shall be entitled to receive its share in such a distribution of assets until
it has settled all its obligations to the Bank.

3. Before any distribution of assets is made the Board of Directors shall
value the assets to be distributed as at the date of distribution and then proceed
to distribute in the following manner:

(a) 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;

(b) any balance due to a member after payment has been made
under (a) 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;

(c) any balance due to a member after payment has been made
under (a) and (b) 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;

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(d) any remaining balance due to a member after payment has
been made under (a), (b) and (c) shall be satisfied out of the
remaining assets held by the Bank.

4. Any member receiving assets distributed pursuant to this Article shall
enjoy the same rights with respect to such assets as the Bank enjoyed before
their distribution.

CHAPTER VIII

STATUS, IMMUNITIES, EXEMPTIONS AND PRIVILEGES

Article 47

PURPOSE OF CHAPTER
To enable the Bank effectively to fulfil its purpose and carry out the functions

entrusted to it, the status, immunities, exemptions and privileges set forth in
this Chapter shall be accorded to the Bank in the territory of each member.

Article 48

LEGAL STATUS
1. The Bank shall possess full juridical personality and, in particular,

full capacity—
(a) to contract;
(b) to acquire, and dispose of, immovable and movable

property; and
(c) to institute legal proceedings.

2. The Bank may enter into agreements with members, non-member
States and other international organisations.

Article 49

LEGAL PROCESS
1. The Bank shall enjoy immunity from every form of legal process, except

in cases arising out of or in connection with the exercise of its powers to borrow
money, to guarantee obligations, or to buy and sell or underwrite the sale of
securities, in which cases actions may be brought against the Bank in a Court of
competent jurisdiction in the territory of a member in which the Bank has its
principal or a branch office, or in the territory of a member or non-member
State where it has appointed an agent for the purpose of accepting service or
notice of process, or has issued or guaranteed securities.

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2. Notwithstanding the provisions of paragraph 1 of this Article, no action
shall be brought against the Bank by any member, or by any agency of a member,
or by any entity or person directly or indirectly acting for or deriving claims
from a member. Members shall have recourse to such special procedures for
the settlement of disputes between the Bank and its members as may be provided
for in this Agreement, in bye-laws and regulations of the Bank, or in contracts
entered into with the Bank.

3. The Bank shall also make provision for appropriate modes of settlement
of disputes in cases which do not come within the provisions of paragraph 2 of
this Article and which are subject to the immunity of the Bank by virtue of
paragraph 1 of that Article.

4. The Bank and its property and assets, wheresoever located and by
whomsoever held, shall be immune from all forms of seizure, attachment or
execution before the delivery of final judgment against the Bank.

Article 50

IMMUNITY OF ASSETS
Property and assets of the Bank, wheresoever located and by whomsoever

held, shall be immune from search, requisition, confiscation, expropriation or
any other form of taking or foreclosure by executive or legislative action.

Article 51

IMMUNITY OF ARCHIVES
The archives of the Bank and, in general, all documents, belonging to it, or

held by it, shall be inviolable, wherever located.

Article 52

FREEDOM OF ASSETS FROM RESTRICTIONS
To the extent necessary to carry out the purpose and functions of the Bank

effectively and subject to the provisions of this Agreement, the Bank—
(a) may hold assets of any kind and operate accounts in any

currency; and
(b) shall be free to transfer its assets from one country to another

or within any country and to convert any currency held by it
into any other currency,

without being restricted by financial controls, regulations or moratoria of
any kind.

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Article 53

PRIVILEGE FOR COMMUNICATIONS

Official communications of the Bank shall be accorded by each member
treatment not less favourable than that it accords to the official communications
of any other member.

Article 54

IMMUNITIES AND PRIVILEGES OF BANK PERSONNEL

All governors, directors, alternates, officials and employees of, and experts
performing missions for, the Bank—

(a) shall be immune from legal process with respect to acts
performed by them in their official capacity;

(b) where they are not local citizens or nationals, shall be accorded
such immunities from immigration restrictions, alien
registration requirements and national service obligations, and
such facilities as regards exchange regulations, as are not less
favourable than those accorded by the member concerned to
the representatives, official and employees of comparable rank
of any other member;

(c) shall be given such repatriation facilities in time of international
crisis as are not less favourable than those accorded by the
member concerned to the representatives, officials and
employees of comparable rank of any other member.

Article 55

EXEMPTION FROM TAXATION

1. The Bank, its assets, property, income and its operations and
transactions, shall be exempt from all direct taxation and from all Customs
duties on goods imported for its official use.

2. Notwithstanding the provisions of paragraph 1 of this Article, the Bank
will not claim exemption from taxes which are no more than charges for public
utility services.

3. The Bank will not normally claim exemption from Excise duties, and
from taxes on the sale of movable and immovable property, which form part of

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the price to be paid. Nevertheless, when the Bank is making important purchases
for official use of property on which such duties and taxes have been charged or
are chargeable, members will, whenever possible, make appropriate
administrative arrangements for the remission or return of the amount of
duty or tax.

4. Articles imported under an exemption from Customs duties as provided
by paragraph 1 of this Article, or in respect of which a remission or return of
duty or tax has been made under paragraph 3, shall not be sold in the territory of
the member which granted the exemption, remission or return except under
conditions agreed with that member.

5. No tax shall be levied on or in respect of salaries and emoluments
paid by the Bank to directors, alternates, officers or employees of the Bank,
including experts performing missions for the Bank, but members reserve the
right to tax their own citizens or nationals or persons permanently resident
in the territories of such members.

6. No tax of any kind shall be levied on any obligation or security issued
by the Bank, including any dividend or interest thereon, by whomsoever held—

(a) which discriminates against such obligation or security solely
because it is issued by the Bank; or

(b) if the sole jurisdictional basis for such taxation is the place or
the currency in which it is issued, made payable or paid, or
the location of any office or place of business maintained
by the Bank.

7. No tax of any kind shall be levied on any obligation or security
guaranteed by the Bank, including any dividend or interest thereon, by
whomsoever held—

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

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

Article 56

IMPLEMENTATION

Each member shall promptly inform the Bank of the action which it has
taken to make effective the provisions of this Chapter in its territory.

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Article 57

WAIVER OF IMMUNITIES, EXEMPTIONS
AND PRIVILEGES

The immunities, exemptions and privileges provided in this Chapter are
granted in the interests of the Bank. The Board of Directors may waive to such
extent and upon such conditions as it may determine, the immunities, exemptions
and privileges provided in this Chapter in cases where such action would, in its
opinion, be appropriate in the best interests of the Bank. The President shall
have the right and the duty to waive any immunity, exemption or privilege in
respect of any officer or employee of, or any expert performing a mission for,
the Bank where, in his opinion, the immunity, exemption or privilege would
impede the course of justice and can be waived without prejudice to the interests
of the Bank. In similar circumstances and under the same conditions, the Board
of Directors shall have the right and duty to waive any immunity, exemption or
privilege respecting the President and the Vice-President.

CHAPTER IX

AMENDMENTS, INTERPRETATION, ARBITRATION

Article 58

AMENDMENTS

1. This Agreement may be amended only by a resolution of the Board of
Governors adopted by a vote of not less than two-thirds of the total number of
governors representing not less than three-fourths of the total voting power of
the members.

2. Notwithstanding the provisions of paragraph 1 of this Article, the
unanimous agreement of the Board of Governors shall be required for the
adoption of any amendment modifying—

(a) the right to withdraw from the Bank;
(b) the limitations on liability provided in paragraphs 7 and 8 of

Article 6; and
(c) the rights pertaining to the subscriptions of capital stock

provided in paragraph 3 of Article 6.

3. Any proposal to amend this Agreement, whether emanating from a
member or from the Board of Directors, shall be communicated to the Chairman
of the Board of Governors, who shall communicate the proposal to each member
and then bring it before the Board of Governors. When an amendment has been

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adopted, the Bank shall certify it in a formal communication addressed to all
members. Amendments shall enter into force for all members three months
after the date of the formal communication unless the Board of Governors
specified therein a different period.

4. The foregoing provisions of this Article shall be subject to the terms of
the Protocol annexed hereto which shall have effect only for the purposes and
during the meeting specified therein.

Article 59

INTERPRETATION AND APPLICATION

1. Any question of interpretation or application of the provisions of this
Agreement not otherwise expressly provided for shall be submitted to the Board
of Directors for decision. A member particularly affected by the question under
consideration shall have the right to make direct representation to the Board of
Directors at the meeting of the Board at which the question is considered. Such
right shall be regulated by the Board of Governors.

2. In any case where the Board of Directors has given a decision under
paragraph 1 of this Article, any member may require that the question be referred
to the Board of Governors, whose decision shall be final. Pending the decision
of the Board of Governors, the Bank may, so far as it deems it necessary, act on
the basis of the decision of the Board of Directors.

Article 60

ARBITRATION

If a dispute should arise between the Bank and a State or Territory which
ceases to be a member, or between the Bank and any member after adoption of
a resolution to terminate the operations of the Bank, such dispute shall be
submitted to arbitration by a tribunal of three arbitrators. Each Party shall appoint
one arbitrator, and the two arbitrators so appointed shall appoint the third, who
shall be the Chairman. If within thirty days of the request for arbitration either
party has not appointed an arbitrator or if within fifteen days of the appointment
of two arbitrators the third arbitrator has not been appointed, either party may
request the President of the International Court of Justice, or such other authority
as may have been prescribed by regulations adopted by the Board of Governors,
to appoint an arbitrator. The procedure of the arbitration shall be fixed by the
arbitrators. However, the third arbitrator shall be empowered to settle all
questions of procedure in any case of disagreement with respect thereto. A
majority vote of the arbitrators shall be sufficient to reach a decision which
shall be final and binding upon the parties.

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Article 61

APPROVAL DEEMED GIVEN

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

CHAPTER X

FINAL PROVISIONS

Article 62

SIGNATURE AND DEPOSIT

1. This Agreement shall be deposited with the Secretary-General of the
United Nations (hereinafter called the “Depository”) and shall remain open until
14th November 1969 for signature by the Governments listed in Annex A to
this Agreement.

2. In the case of Territories in the region which are not fully responsible
for the conduct of their international relations and where the Government of the
State responsible for the conduct of the international relations of the Territory
does not sign, ratify, or accede to this Agreement on its behalf, such Territory
shall at the time of signing or acceding to this Agreement in pursuance of
Article 63 present an instrument issued by the Government of the State
responsible for the conduct of the international relations of that Territory
confirming that the latter has authority to conclude this Agreement and to assume
rights and obligations under it.

3. The Depository shall transmit certified copies of this Agreement to
all the signatories and other States and Territories which become members of
the Bank.

Article 63

RATIFICATION, ACCEPTANCE, ACCESSION AND
ACQUISITION OF MEMBERSHIP

1. (1) This Agreement shall be subject to ratification or acceptance by
the signatories. Instruments of ratification or acceptance shall be deposited by
the signatories with the Depository before 30th April, 1970. The Depository
shall notify the other signatories of each deposit and the date thereof.

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(2) A signatory whose instrument of ratification or acceptance is
deposited on or before the date on which this Agreement enters into force, shall
become a member of the Bank on that date, and a signatory whose instrument
of ratification or acceptance is deposited after that date, but before 30th
April 1970 shall become a member on the date of deposit of its instrument of
ratification or acceptance.

2. After 30th April 1970 a State or Territory may become a member of
the Bank by accession to this Agreement on such terms as the Board of Governors
shall determine in accordance with paragraph 3 of Article 3. Any such State or
Territory shall deposit, on or before a date appointed by the Board, an instrument
of accession with the Depository who shall notify such deposit and the date
thereof to the Bank and to the parties to this Agreement. Upon such deposit, the
State or Territory shall become a member of the Bank on the appointed date in
accordance with that paragraph.

3. A member may, when depositing its instrument of ratification or
acceptance, declare that in its territory the immunity conferred by paragraph 1
of Article 49 and subparagraph (a) of Article 54 shall not apply in relation to a
civil action arising out of an accident caused by a motor vehicle belonging to
the Bank or operated on its behalf or to a traffic offence committed by the
driver of such a vehicle.

The member may also declare that the privilege conferred by Article 53
shall be restricted in its territory to treatment not less favourable than the member
accords to international financial institutions of which it is a member, and that
the exemption referred to in paragraph 6(b) of Article 55 shall not extend to any
bearer instrument issued by the Bank in its territory or issued elsewhere by the
Bank and transferred in its territory.

Article 64

ENTRY INTO FORCE

This Agreement shall enter into force upon the deposit of instruments of
ratification or acceptance by eight signatories, including at least one non-regional
State, whose initial subscriptions, as set forth in Annex A to this Agreement, in
aggregate comprise not less than sixty per cent of the authorised capital stock
of the Bank, provided that 1st December 1969 shall be the earliest date on
which this Agreement may enter into force.

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Article 65

INAUGURAL MEETING

As soon as this Agreement enters into force, each member shall appoint a
governor, and the Secretary-General of the Commonwealth Caribbean Regional
Secretariat shall call the inaugural meeting of the Board of Governors.

IN WITNESS WHEREOF the undersigned plenipotentiaries, being
duly authorised thereto by their respective Governments, have signed the
present Agreement.

DONE AT Kingston, Jamaica, this Eighteenth day of October, One
Thousand Nine Hundred and Sixty-Nine.

FOR ANTIGUA
V. C. BIRD

FOR BAHAMAS
CARLTON E. FRANCIS

FOR BARBADOS
ERROL W. BARROW

FOR BRITISH HONDURAS
A. A. HUNTER

FOR BRITISH VIRGIN ISLANDS
IVAN DAWSON

FOR CANADA
PAUL MARTIN

FOR CAYMAN ISLANDS
D. V. WATLER

FOR DOMINICA
E. O. LEBLANC

FOR GRENADA
GEO. F. HOSTEN

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FOR GUYANA
P. A. REID

FOR JAMAICA
E. SEAGA

FOR MONTSERRAT
W. H. BRAMBLE

FOR ST. KITTS-NEVIS-ANGUILLA
ROBT. L. BRADSHAW

FOR ST. LUCIA
J. C. COMPTON

FOR ST. VINCENT
HUDSON K. TANNIS

FOR TRINIDAD AND TOBAGO
KAMALUDDIN MOHAMMED

FOR TURKS AND CAICOS ISLANDS
R. E. WAINWRIGHT

FOR UNITED KINGDOM
GEORGE THOMPSON

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ANNEX A

States and Territories which may become Members in accordance
with paragraph 2 of Article 3, and their initial subscriptions to the Authorised
Capital Stock.

(Article 6, Paragraph 1)

CATEGORY A

REGIONAL STATES
AND TERRITORIES

CATEGORY B

NON-REGIONAL STATES

No. of
Shares

$

1. Canada … 2,000
2. United Kingdom … 2,000

SUB-TOTAL … 4,000

GRAND -TOTAL 10,000

1. Jamaica … 2,240
2. Trinidad and

Tobago … 1,540
3. Bahamas … 660
4. Guyana … 480
5. Barbados … 280
6. Antigua … 100
7. British Honduras … 100
8. Dominica … 100
9. Grenada … 100
10. St. Kitts-Nevis-

Anguilla … 100
11. St. Lucia … 100
12. St. Vincent … 100
13. Montserrat … 25
14. British Virgin

Islands … 25
15. Cayman Islands … 25
16. Turks and Caicos

Islands … 25

SUB-TOTAL … 6,000

No. of
Shares

$

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ANNEX B

SELECTION OF DIRECTORS

Part I—Principles for the Selection of Directors Representing Regional Members

Of the five (5) directors to be selected pursuant to paragraph (1)(a) (i)
of Article 29:

(a) one (1) director shall be selected by each of the governors
representing the two (2) regional members having the largest
number of shares of the capital stock of the Bank;

(b) three (3) shall be selected by the Governors representing the
other regional members.

Part II—Selection of Directors Pending Adoption of the Rules of Procedure

1. Regional Members:
(a) one (1) director shall be selected by the governor

representing Jamaica;
(b) one (1) director shall be selected by the governor representing

Trinidad and Tobago;
(c) one (1) director shall be selected jointly by the governors

representing Guyana and Barbados;
(d) one (1) director shall be selected jointly by the governors

representing Bahamas and British Honduras; and
(e) one (1) director shall be selected jointly by the governors

representing Antigua, British Virgin Islands, Cayman Islands,
Dominica, Grenada, Montserrat, St. Kitts-Nevis-Anguilla,
St. Lucia, St. Vincent, Turks and Caicos Islands.

2. Non-Regional Members:
(a) one (1) director shall be selected by the governor representing

Canada; and
(b) one (1) director shall be selected by the governor representing

the United Kingdom.

PROTOCOL to Provide for Procedure for Amendment of Article 36 of the
Agreement Establishing the Caribbean Development Bank at the
Inaugural Meeting of the Board of Governors.

The States and Territories parties to the Agreement establishing the
Caribbean Development Bank (hereinafter referred to as “the Agreement”)
hereby agree that notwithstanding the provisions of Article 58 of the Agreement,

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paragraph 1 of Article 36 of the Agreement may be amended at the inaugural
Meeting of the Board of Governors of the Caribbean Development Bank by a
Resolution (on a motion which shall not be subject to amendment and moved
by the Governor for Jamaica) approved by the vote of a simple majority of the
Governors present and voting thereon representing more than one-half of the
voting powers of the Governors present and voting thereon.

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