Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698071753152.pdf (Guyana)
Published on the 23rd day of October, 1969 192 No.

42 of 1969.

GUYANA ORDER MADE UNDER THE INTERNATIONAL FINANCIAL ORGANISATION ACT, 1966 (No.

2 of 1966).

UNDER SECTION 8 OF THE INTERNATIONAL FINANCIL ORGANISATION ACT, 1966 AND BY VIRTUE AND IN EXERCISE OF ALL OTHER POWERS ENABLING HIM IN THAT BEHALF, IT IS HEREBY ORDERED BY THE MINIS TER RESPONSIBLE FOR FINANCE AS FOLLOWS:- :\,' .

· ... ' ·~ I.
· ... ' ·~ I.

This Order may be cited as the International Financial Organi- sations (lnternatoinal Monetary Fund) Order, 1969.

Act No.

2 of 1%6.

2.

Section 7 of the International Financial Orgahisations Act, 1966, is hereby amended by the insertion of the words and numbers "and paragraph (b) of .t\rticle XXVII'' immediately after the numerals "IX" appearing in paragraph (a) .

3.
The First Schedule to the abovementioned Act is hereby de leted and the following schedule substituted therefor - FIRST SCHEDULE Articles of Agreement Of The International Monetary Fund The Governments on whose behalf of 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 agree ment as originally adopted and as subsequently amended in order to institute a facility based on special drawing rights and to effect certain other changes.
(ii) To enable the Fund to conduct its operations and transac tions, the Food -shall maintain a General Account and a Special Drawing Account.

Membership in the Fund shall give the right to participation in the Special Drawing Ac count.

193 (iii) Operations and transactions authorised by this Agreement shall be conducted through the General Account except that operations and transactions involving special drawing rights shall be conducted through the Special Drawing Account.
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 or intemational monetary problems.
(ii) To facilitate the expansion and balanced growth of inter national 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 ) T o promote exchange stability, to maintain orderly ex change arrangements among members, and to avoid com petitive exchange depreciation.
(iv) To assist in the establishment of a multilateral system of payments transactions between members and in the elimination of foreign exchange re strictions which hamper the growth of world trade.
respect of current in (v) To give confidence to members by making the Fund's re sources temporarily available to them under adequate safe guards, thus providing them with opportunity to correct maladjustments in their balance of payments without re sorting to measures destructive of national or internation al prosperity.

(vi) In accordance with the above , to shorten the duration and lessen the degr.ee of disequilibrium in the i!llternational 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 Original members - The original members of the Fund shall be those of the countries represented at the United Na tions Monetary and Financial Conference whose governments accept membership before the date specified in Article XX, Section 2 ( e).

Section 2.

Other members.


- Membership shall be open to the Governments of other countries at such times and in accordance with such terms as may be prescribed by the Fund.

194 ARTICLE III Quotas and Subscriptions Section 1.

Quotas.

- Each member shall be assioned a quota.

The quotas of the members represented at the United N ations Monetary and Financial Conference which accept membership before the date specified in Article XX, Section 2 (e) shall be those set forth in Schedule A.
The quotas of other members shall he determined by the Fund.

Section 2.

Adjustment of quotas.

- The Fund shall at inter vals of not more than fiv.e years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of the mem bers.

It may also, if it thinks fit, consider at any other time the adjust ment of any particular qUJOta at the request of the member concer ned .
An eighty-five percent majority of the total voting power shall be required for any change in quotas proposed as the result of a gene ral review and a four-fifths majority of the total voting power shall be required for any other change in quotas.

No quota shall be changed without the consent of the member concerned.

Section 3.
Section 3.

Subscriptions: time, place, and form of payment - (a) The subscriptions of each member shall be equal to its quota and shall be paid in full to the Fund at the appropriate depository on or before the date when the member becomes eligible under Article XX, Section 4(c) or (d) , to buy currencies from the Fund.
(b) Each member shall pay in gold, as a minimum the smaller of (i) twenty-five percent of its quota ; or (ii) ten percent of its net official holdings of gold and United States dollars as at the date when the Fund notifies members under Article XX, Section 4(a) that it will shortly be in a position to begin exchange tran sactions.

Each member shall furnish to the Fund mine its net official holdings of gold and United States dollars.
the data necessary to deter (c) Eaeh member shall pay the balance of its quota in its own currency.

(d) If the net official holdings of gold and United States dollars of any member as at the date referred to in (b) (ii) above are not ascertainable because its territories have been occupied by the enemy, the Fund shall fix an appropriate alternative date for deter If such date is later than that on which the mining such holdings.
country becomes eligible under Article XX, Section 4(c) or (d), to buy currencies from the Fund, the Fund and the member shall agree on a provisional gold payment to be made under (b) above, and the balance of .the member's subscription shall be paid in the member's currency, subject to appropriate adjustment between the member and the Fund when the net offical holdings have been ascertained.

(a) Each member which consents to an increase ip its quota shall, within thirty Section 4.
Payments when quotas are changed - 195 days after the date of its consent, pay to the Fund twenty-five percent If, how of the increase in gold and the balance in its own currency.

ever, on the date when the member consents to an increase.

its mone tary reserves are less than its new quota, the Fund may · reduce the proportion of the increase to be paid in gold.
(b) If a member consents to a reduction in its qu.ota, the Fund shall within thirty days after the date of the consent, pay to the member an amount equal to the reduction.

The payment shall be made in the members currency and in such amount of gold as may be necessary to prevent reducing Fund's holdings of the currency below seventy-five percent of the new quota.
(c) A majority of eighty-five percent of the total voting power shall be required for any decisions dealing with the payment, or made with the sole purpose of mitigating the effects of the payment, of in creases in quotas proposed as the result of general review of quotas.

The Section 5.

Substitution of securities for currency.


- Fund shall accept from any member in place of any part of the mem ber's currency which in the judgement of the Fund is not needed for its operations, notes or similar obligations issued by the member or the depository designated by the member under Article XIII, Section 2, which shall be non-nego tiable, non-interest bearing and payable at their par value on demand by crediting the account of the Fund in the designated depository.
This Section shall apply not only to currency subscribed by members blllt also to any currency otherwise due to, or acquired by, the Fund.

ARTICLE IV Par Value of Currencies Section 1.

Expression of par values.

- (a) The par value of the currency of each member shall be expressed in terms of gold as a common denominator or in terms of the United States dollar of the weight and fineness in effect on July 1.

1944.
1944.

(b) All computations relating to currencies of members for the purpose of applying the provisions of this Agreement shall be on the basis of their par values.

Section 2.

Gold purchases based on par values.

- The Fund shall prescribe a margin above and below par value for transactions in gold by members, and no member shall buy gold at a price above par valu,e plus the prescribed margin , or sell gold at a price below par value minus the prescribed margin.

The Section 3.
The Section 3.

Foreign exchange dealings based on parity.

- maximum and the minimum rates for exchange transactions between the currencies of members taking place within their territories shall not dif fer from parity (i) in the case of spot exchange transactions, by more than one percent; and 196 (i1) in the case of other exchange transactions, by a margin which exceeds the margin for spot exchange transactions by more than the Fund considers reasonable.

Section 4.
Section 4.

Obligations r.egarding exchange stability.

- (a) Each member undertakes to collaborate with the Fund to promote exchange stability, to maintain orderly exchange arran.gements with other members, and to avoid competitive exchange alterations.
(b) Each member undertakes., through appiropriare measures consistent with this Agreeme111t, to permit within its territories ex change transactions betWeen its currency and the currencies of other membe1·s ouly within the limius prescribed under Section 3 of this Article .
A member whose monetary authorities, for the s&t'lement of internatiooal transacti0ns, in fact freely buy and sell gold within the limit1s prescrihed by the Fund under Section 2 of this Article shall be deemed to be fulfilling this undertaking.

Section 5.

Changes in par values.-(a) A member shall not propc:;e a chan g~ in the par value of its currency except to correct a fundamental diJsequilibriu,m .
(b) A change in the par value of a member's currency may be made only on the proposal of the memrer and only after coosu1tation wit1h the Fund.
( c) When a change is proposed, the Fund shall first take into account changes, if any, which haw already taken place in the initial par value of the member's currency, as determined under Article If the proposed chang'<;!, togeth er with all previous XX, Section 4. changes, whether increases or decreases, (i) does not excered ten percent of the initial par value, the Fund shall raise no objection ; (ii) does not exceed a further ten perc<ont of the initial par value, the Fund may either concur or object, but shall declare its attitude within seventy-two hours if the member so request ; (iii) is not "ithin (i) or (ii) abow, the Fund may dtiher concur or object, but shall be tmtirled to a longer period in which to declare its attitude .
(d) Uniform changes in par values made under Section 7 of this A11ticl.

:: 'Shall not be taken into accou nt in determining whether a pro posed change falls within (i), (ii) or (iii) of (c) above.

( e) A member may change the par value of its currency wit!hout the concurrence of the Fund if the change does not affect the: inter national transactions of membcn, of the Fund.
The fund shall concur in a proposed change which is within th~ terms of ( c) (ii) or ( c) (iii) above if it is satisfied that the change is necessary to correat a fundamental disequilibrium.

In particular, provided it is so satisfied, it shall not object to a proposed change because 0f the domestic social or political policies of the member proposing t:hre change.

197 Section 6.
197 Section 6.

Effect of unauthorised changes-If a member changes the par value of its curency despite the objection of the Fund, in cases where the Fund is entitled to object, the member shall be ineligible to use the resources of lthe Fund unJiess the Fuind otherwise determines: and if, after the expiration of a reasonable period, the difference between tthe member and the Fund continues, the· matter shall be subject to the provisions of Article XV, Section 2(b).

Section 7.
Section 7.

Uniform changes in par values-Notwithstanding the provisions of Section 5 (b) of this Article, the Fund by an eighty· five percent majority of the total voting power may make uniform prop011ionate changes in the par vaiiues of the currencies of all mem bers.
The par value of a members currency shall, however, not be changed under this provision if, within seventy-two hours of the Fund's action, the member informs the Fund 'that it does no~ wish the par va1ue of its currency to be changed by such action.

Section 8.

Maintenance of gold va1ue of the Fund's assets.
(a) The gold value of the Fm1'd's assets shall be maintained notwitlhstanding- changes in the par or foreign exchange value of the currency of any member (b) 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 FUDd, depreciated to a significant extent within that member's terrrtories, the member shall pay to the Fund within a reasonable time an amount of its own currency equal to the reduotion in the gold value of its currency held by the Fund.
( c) Whenever the par value of a member's currency is increased, tlbe Food shall return to such member within a reasonable time an amount i111 its currency equal to the increase in the gdld value of its currency held by the Fund .

(d) The provisions of this Section shall apply to a uniform proportionate change in the par values of the currencies of all members, unless at the time when such a change is ma.tie the Fund decides otherwise by ·an eighty-nve percent majority of the total voting power.
Scetion 9.

Separate currencies within a member's territories A member proposing a change in the par value of its currency sha11 be deemed, unless it declares otherwise.

to be proposing a correspond·· ing chrange in the par vaiue of the separate cmrencies of all territoriies in respect of which it has accepted this Agreement under Article XX, Section 2(g).
It shall, however, be open to a member to declare thait its proposal relates either to the metropolitan currency alone, or only to one or more specified separate currencies, or to t!he meit.ro politan currency and one or more specified separate currencies.

ARTICLE V Transactions with the Fund Section 1.


Agencies dealing with the Fund.-Each member shall deal with the Fund only through its Treasury, central bank, 198 stabilization fund, or other similar fiscal agency and the Fund shall deal only with or through the same agencies.

Section 2.
Section 2.

Limitation on the Fund·s operations-Excf'r~r ,as otherwise provided in this Agreement, operations on the account of the Fund shall be limited to transactions for the purposic of supply'ing a member, on the initiative of such member, with the currency of another member in exchange for gold or for thre currency of the mem ber desiring to make the purchase.

Section 3.

Conditions governing use of the Fund's resources.
Ca) A member shatl be entitled to buy the currency of another mem ber from the Fund in exchange for its own currency subject oo thle following conditions ; (i) The member ·desiring to purchase the currency represents that it is presently needed for making in that currency pay the provisions of this ments which Agreement; ::ire consistent with (ii) The Fund has not 2:iven notice under Article VII, Section 3, that ifis holdings- of the currency dresired have become scarce; (iii) The proposed purchase would be a gold tranche purchase, or would not cause the Fund's holdings of the purchasing members's cnrrency to increasl!
by more than twenty-five percent of its quota during the period of twelve mooths ending on the date of 11he purchase or to \exceed two hundred percent of its quota ; (iv) The Fund has not previously declared under Section 5 of this Article, Article JV, Section 6, Article VI, Seolion 1, or Articl e XV.

Section 2 (a) that th e member desiring to purchase is ineligible to use the resources of the Fund.
(b) A member shall not be entitled without the permission of the Fund to use the Fund's resources to acquire currency to hold against forward exchange transactions.

( c) A member's use of the resources of the Fund shall be in accordance with the purposes of nhe Fund .
The Fund shall adopt policies on the use of its resources that will assist members to solve their balancre of payments problems in a manner consistent with the purposes of the Fund nnd that will establish adequate sa fe -guards for the temporary use of its resources.
(d) A representation by a member under (a) above shall be examined bv the Fund to determine whether th e pro posed purchase would he consistent with th<:: provi ions of 11his Agree ment rnnd with the policies adopted under them, with the exception that proposed gold tranche purchases shall not be subject to chalknge .

Section 4 .
Section 4 .

\Vaiver of conditions.-The Fund may in its discre tion, and on terms whicr safegua rds its interests, waive any of the conditions prescribed in Section 3 ( a) of this Article, especially in the case of members with a record of avoiding large or co ntinuous 199 use of the Fund's resources.

Jn 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 memhcr's willingne~s to pledg,.!
as collateral security gold, silver, securities, or other 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.
Section 5.

Ineligibility to use the Fund's resources.-Wbenever tlhe Fund is of the opinion that any member is UISing ,the resources of the Fund in a manner conltrary to the purposes of the Fund, it sh~ll present to the member a report setting forth the views of the Fund and prescribing a suitable time for reply.

After presemmg such a report to a mem!Jer, the Fund may limit the use of its resources If no re.ply to 1.he report is received from the member by the memher.
within the prescribed time, or if tihe reply received is unsati,sfactory, the Fund may continue to limit th'c!

member's use of the Funds re sources or may, after giving reasonable notice to the member, declare it ineligihle to use the resources of the Fund.

Section 6.

P urchases cf currencies from the Fund for gold.


( a) Any member desiring to obtain, directly or indirectly, the currency of another me:mber for .gold shall, provided that it can do so with equal advantage, acqu.ire it by the sale of gold to tlhe Fund.

(b) Nothing in this Section !Shall be deemed to preclude any member from selling in any market gold newly produced from mines located within its territories.

Section 7.
Section 7.

Repurchase by a member of its currency held by the Fund.- (a) A member may repurchase from the Fund and the .Fund shall sell for gold any part of the Fund's holdings of its currency in excess of its quota.
(b) At the end of each financial year of the Fund, a member shall repurchase from the Fund with each type of monetary reserve, as determined in accordance with Schedule B, part of the Fund's holdings of its currency under the following conditions: (i ) Each member shall use in repurchases of its own currency from the Fund an amount of its monetary reserves equal in value to the following changes that have occurf'c!d duiring the year : one-half cf any increase in the Fund's holdings of the member"s currency, plus one-half of any increas-e, or minus one-half of any decrease, in the member's monetary rc.s<erves, or, if the Fund's holdings of the member's cur reocy have decreased, one-half .of any increase in the mem ber's monetary reserves minus one~half of ~he decrease in the Fund's holdings of the member's currency.
(ii) If after the repurchase described in (i) above (if required) has been made, a member's holdings of another member's currency ( or of gold acquired from that member) are found to have increased by reason of transactions in terms 200 of that currency with other members or persdns in their territories, the member whose holdings of such currency ( or gold) have thus increased shall use the increase to repurchase its own currency from the Fund.

(c) !
(c) !

'Jone of the adpustments described in (b) abcwe shall be carried to a paint at which (i) the memhe·r's monetary reserves are below one hundred fifty percent of its quota, or (ii) th1e Fund's holdin gs of its currency are below seve111ty-five percent of its quota , or (iii) the Fund's holdin!

!s of anv currencv required to be used are above seventy-five percent of th~ quota of the member concerned, or (iv) the amount renurchased exceedc; twe nty-five percent of the quota of th e memb~r concerned.
( d) The Fund by an eighty-five percoot majority of the total voting power may revise the pe•rcentages in ( c) (i) and (iv) above and revise.

and supplemen t the rules in paragraph 1 ( c) .

( d) , and ( e ) and paragraph 2(b) of Schedule B.

Section 8.
Section 8.

Charges .- ( a) Any member buying the currency of another memb1er from the Fund in exchange for its own currency shall pay, in addition to the parity price, a service charge u niform for all m embers of not less than one-half percent and not mo re than one percent, as determined by the Fund, provided that the Fund in its discretion may levy a service charge of less than one-half percent on gold tranche purchases.
(b) The Fund may levy a reasonable handling charge on any member buying gold from the Fund or seHing gold to the Fund.

( c) The Fund shall levy charges uniform for all member which shall be payable by anv memher on the average da ily balances of its currency held by the F11nd in excess of its quota.
These charges shall be at the folfowing rates : (i) On amounts not more than twenty-five percent in excess of the quota : no charge for the first three months; one-half percent per annum for the next nine months ; and tlhiereafter an increase in the charge of one-half percen t for each sub sequent year.
(ii) On amnunts more tha111 twenty-five percent and not more than fifty perce-nt in excess of the quota : an additional one half percent for the first year; and an additional one-half percent for each subsequent year.

(iii) On 1each additional bracket of twenty-five percent in exress of the quota: an additional one-half percent for the first year ; and an additional one-half perecnt, for each subsequent year.
201 (d) Whenever the Fund's holdings of a membeT's currency are such that the charge aprrlicable to any bracket for any period has reached the rate of four percent per annum , the Fund and thie member shall consider means by which the Fund's holdings of tihe currency can be reduced.

'f;hereafter, the charges shall rise in accordance with the provisions of ( c) above until they reach fiw percent and failing agreement, the Fund may then impose such charges as it deem s appropriate.
( e) The rates referred to iP.

( c) and ( d) above may be changed by a three-fourths majority of the total voting power.

(f) All charges shall be paid in gold.

If, however, the member's monetary reserves are less than one-half of its quota, it shall pay in gold only that proportion of the charges due which such reserves bear to orue-ha!f of its quota, and shall pay the bakmce in its own currency.

Section 9.
Section 9.

Remuneration.--- (a) The Fund shall µay remuner ation, art: a rate uniform for all members, on the amount by which seV'cnty-five percent of <1.

member's quota exceeded tlhe average of the Fund's holdings of the member"s currency, provided tihat no account shall be taken of holdings in excess of sieventy-five percent of quota.
The rate shall be one and one-half percent per annum, but the Fund in its dis,cretion may increase or reduce this rate, provided that a tihree-fourths majority of the total voting power shall be required for any increase above two percent per annum or reduction below on:!

percent per annum.

(b) Remuner~'tion shall be paid in gold or a member's own currency as determined by the Fund.

ARTICLE VI Capital Transfers Section 1.

Use of lhc Fund's resources for capital transfen<;.
(a) A member may not use the Fund's resources to meet a large or sustainied outflow of capital except as provided in Section 2 of this Article, and the Fund may request a member to exercise conltrols.

to If, after receiving isuch prevent such use of the resources of the Fund.

a requ<:"st, a member farls to exercise appropriaite controls, the Fund may declare tihe member ineligible to use ,the resources of the Fund.

(b) Nothing in thi~ Section shall be deemed.


(i) to prevent the use of the resources of the Fund for capital transactions of reasooable amount required for for the expansion of exports or in the ordinary course of trade, banking or other business, or (ii) to rdect capital movements which are met out of a member's own resources of gold and foreign exchange, but members undertake that such capital movemei!1ts wil: be in accordance with the purposies of ·the Fund.

202 Section 2.
202 Section 2.

Special prov1S1ons for capital transfers.-A mem?er shall be entitled to make gold tranche purchases to meet capital tra nsfers.

S<cction 3.
S<cction 3.

Controls of capital transfers.- Members may exercise such controls as are necessa ry to regulate international capital move ments, but no members may e:-:ercise these contirols in a manner which will res<trict payment for curreint transactioJlltions or which will unduly delay transfers of fund <; in settlement of commitments, except a1s pro vidt>d in Ar ticle Vll , Section 3 ( b ) , and in A rticl e XIV ,, Seeition 2.

ARTICLE Vll Scarce Currencie Section 1.


General scarci ty of currency.-If the Fund finds that a general scarcity of a particular curre ncy is developing, the Fund may so inform members an d may issue a report setting forth the causes of the scarc ity a nd containing recommendations designed to bring it to an end.

A representative of the member whose currency is in volved shall participa te in the preparation of the report.

Section 2.
Section 2.

Measures <to rep1enish the Fund's holdings of si;arce currencies.- The Fund may.
if it deems such action appropriate to repl enish its holdings of rmy r.tember"s currency, take either or both of vhe following ste ps: (i) Propose to the member that, on ~ rms and conditions agreed between the Fu nd and the member, the latter lend its cur .. rency to th( Fund or thait with the approval of th~ member, the Fund borrow such currency from some other source either within or outside the territories of the member, but no m1::1mber shall be under any obligation to make such loans to the F und or t o approve the borrowing of its cur·· rency by the F und from any other source.
(ii) Require the memher to sell its currency to the Fund for gold .

Section 3.
Section 3.

Scarcity of the Fund's holdings .-(a) H it recomes evident to the Fund thait the demand for a member's currency s-::riously ~hreate ns the Fund's abili ty to supply that currency, the Fund, wheth~ or not it has issued a report under Section 1 of fthis Article, shall formally declare such currency scarce and shall thenceforth apportion its existing an d accruing , upply of th e scarce currency with due regard to the rela ti ve need s of members .
the general intern ational economic situation, and any other pertinent conlsiderations.

Thie Fu nd ~all also issue a report concern ing its action .

(b) A formal declaration under (a) above shall operate as an authorization to any member, after consultation with the Fund, tempor arily to impose limitations of th<e freedom of exdhange Opt'rations in the scarce currency.
Suh;e:ct to the provisions of Artick IV, Section 3 and 4, the member shall have complete jurisdiction in dctermining 203 the nature of such limitations, but they shall be no more restrictive than is necesrnry 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 ais conditions permiit.
( c) The authorization under ( b) above shall expire whicnever the Fund formally declares the currency in question to be no longer scarce.

Section 4.

Administration of rostrictions.-Any member impos ing restrictions in respect of the currency of any other member pur suant to the provisions of Section 3 (b) of this Article shall give sympathetic comideration to any repr<"!sentations by the other member regarding the administration of such restrictions.

Sec~ion 5.
Sec~ion 5.

Eflect of other internaJt1onal agreements on re,stric ticns.-Memhers agree 111ot to invoke the obligations of any engage ments entered into with other members prior to this Agreement in such a manner as will rre\'ent the operatrion of the provisic-.n s of thi , Article.

ARTICLE VIII General Obligations of Members Section 1.

Introduation.-In addition to the obligations assumed under other articles of thi1s A!.

!r'cement, each member - undertakes tlhe obligations set out in this Article.
Section 2 .

Avoidance of restrictions on current paym~nts.

(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 1the making of payments and transfers for current international transactions.
{ b) Exchange contracts which involve the currency of any mem ber and which are contrary to th'c exchange contn:;1 regulations of that member maintained or imposed consistently with this Agreement shall be unenforceable in the ts::rritories of any member.

In addition , members may, by mwtual accord, co-operait.e in measures for the pur pose of making the exchange control regulations of either member more efkctive, provided that such measures and regulations are con sistent with this Agreement.

Section 3.
Section 3.

Avoidance of di£criminatory currency practices.

-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 .multipk currency practices except as authorised under If such arram!ements and this Agreement or approved hy the Fund.
practices are engaged in at the date whc,n this Agreement entens inio force the membier concerned shall consult with the Fund a5 to their progressive removal unless they are maintained or imposed under Article XIV, Section 2, in which case the provisions of Section 4 of that Article shall apply.

204 Section 4.

Convertibility of foreign held balances.


- (a) Eac~ member s~all buy balances of its currency held by another member 1f the latter, m requesting the purchase, represents (i) that the balances to be brought have been recentlv acquired as the result of current transactions ; or • (ii) that their conversion is needed for making payments for cwrrent transactions.

The buying member shall have the option to pay currency of the member making the request or in gold.
the either in ( b) The obligation in (a) above shall not apply (i) when the convertibility of the balances has been re stricted consistently with Section 2 of this Article, or Article VI, Section 3 ; or (ii ) when 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 ; or (iii) when the balances have been acquired contrary to the exchange regulations of the member which is asked to buy them ; or (iv) when the currency of the member requesting the pur chase has been declared scarce under Article VII, ection3 (a) ; or ( v) when the member requested to make the purchase is for a ny reason not entitled to buy currencies of other members from the Fund for its own currency.
Section 5.

Furnishing of information.

- (a) The Fund may require members to furnish it with such information as it deems neces sary for its operations, including, as the minimum necessary for the effective di scharge on 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 desti nation and origin .

(v ) Total exports and imports of merchandise, in terms of local currency values, according to countries of destina tion and origin.

( vi) International balance of payments, including ( 1) trade in goods and services, ( 2) gold transactions, ( 3) known capi tal transactions, and ( 4) other items.

205 (vii) International investment position, i.e.


investments within the territories of the member owned abroad and invest men ts abroad owned by persons in its territories so far as it is possible to furnish this information .

(viii) National income.

(ix) Prices indices, i.e., indices of commodity prices in whole sale and retail markets and of export and import prices.

(x) buying and selling rates for foreign currencies.

(xi) Exchange controls, i.e.


a comprehensive statement of ex change controls in effect at the time of assuming member ship in the Fund and details of subsequent changes as they occur.

(xii) Where official clearing arrang.ements 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 con sideration the varying ability of members to furnish the data reqU:ested.

Members shall be under no obliga tion to furnish information in such rletail 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 It shall act as a centre for the collection agreement with members.

and exchange of information on monetary and financial problems, thus facilitating the preparation of studies designed to assist members in de veloping policies which further the purposes of the Fund .

Section 6.
Consultation between members regarding existing intunatio;ial agreements - -Where unde r this Agreement a member is authorised in the special or temporary circumstances specified in the Agreement to maintain or establish restrictions on exchange transac tions, and there are other engagements between members entered into prior to the Agreement which conflict with the application of such restrictions, the parties to such engagements will consult with one an other wfrh a view to making s"Uch mutually acceptable adjustments as may be necessary.
The provisions of this Article shall be without pre judice to the operation of Article VII, Section 5.

ARTICLE IX Status, Immunities and Privileges Section 1.

Purposes of Article.

- To enable the Fund to fulfil the functions with which it is entrusted, the status, immmnities and privileges set forth in this Article shall be accorded to the Fund in the territories of each member.

Section 2.

Status of the Fund.


- full juridical personality, and particular, the capacity The Fund shall possess 206 (i) to contract ; (ii) to acquire and dispose of immovable and movable property ; (iii) to institute legal proceedings ; Section 3.

Immunity from judicial process.


- The Fund, its property and its assets, wherever located and by whom sover held , shall enjoy immunity from every form of judicial process except to the extent that it expressly waives its immll'!1ity for the purpose of any proceed ings or by terms of any contract.

Section 4.

Property and as Im mulni ty from other action .

- sets of the Fund , wherever located and by whomsoever held, shall be immune from search .
requisition , con fiscation , expropriation or any other for m of seizure by ex.et:utive or legislative action .

Section 5. shall be inviolable.

Immuni ty of archives: - The archives of the Fund Section 6.

Freedom of assets from restriction s - To the in tent necessary to carry ou t the operations provided for in this Agree ment, alJ property and assets of the F und shall be free from restric tion s. regulations, controls and mora toria of any nature.

Section 7.

Privilege for communications.


- The official com· munications of the Fund shall be accorded by members the same treat ment as the official communi cations of other members.

Section 8.

Immunities and privileges of officers and employ ees.
All governors, executive directors, alternates , officers and em ployees, of the Fund (i) shall be immune from legal process with respect to acts performed by them in their official capacity except when the F und waives this immunity ; (ii) not being local nationals, shall be granted the same im munities from immigration restrictions, aliens registration requirements and national service obligations and the same facilities as regards exchange restrictions as are accorded by members to the representatives, officials, and employ ees of comparable rank of other members; (iii) shall be granted the same treatment in respect of travel ling facilities as is accorded by members to representatives, officials and employees of comparable rank of other mem bers.
Section 9.

Immunities from taxation.

- (a) The Fund, its assets, property, income and its operations and transactions authorised by this Agreement, shall be immune from aU taxation and fro::n all customs duties.

The Fund shall also be immune from liability for the coilection 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 2(Y'/ 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 secll!
"ity solely because of its origin; or (ii) if the sole jurisdictional basis for such taxation is the place or curr.ency in which it is issued, made payable or paid, or the location of any office or place of business maintained by the Fund .

S.ectionlO.

Application of Article.


- Each member shall take in its o~n territories for the purpose of making action as is necessary 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 Organisations The Fund shall co-operate within the terms of this Agree ment with any general international organisation and with public inter national organisations having specialized 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 XVII.

responsibilities in ARTICLE XI Relations with Non-member Countries Section 1.
Undertakings regarding relations with non-mem ber countries.
- Each member undertakes: (i) Not to engage in, nor permit any of its fiscal agencies referred to in Article V, Section 1, to engage in any tran sactions with a non-member or with persons in a non member's territories which would be contrary to the pro visions of this Agreement or the purposes of the Fund; (ii ) Not to co-operate with a non-member or with persons in a non-member's territories in practices which would be con trary 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 appli cation in its territories of appropriate measures to prevent transaction s 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.
208 Section 2.

Restrictions on transactions with non-member countries - Nothing in this Agreement shall effect the right of any member transactions with non members or with persons in their territories unless the F und finds that such restrictions prejudice the interests of members and are contrary to the purpose of the F und.
impose restrictions on exchange to ARTICLE XII Organisation and Management Secti on l. Structure of the :rund.-The Fund shall have a Board of Governors, E xec utive D irectors, a M anaging Di rector, and a staff.

Sec tion 2.

Board of Governors.-(a) All powers of the F und shall be vested in the Boar d of G overnors consisting of o ne governor and one altt>rn atc.

ap pointed by each membe r in such manner ::is it may determine.
Each governo r a nd each alternate shall serve fo r five years, subject to the pleasu re of the m"cmber appoin bing Jiim, and may be re-appointed.

No c.lternate may vote except in the abse nce of his principal.

T b<c Boa rd shall select one of the Governors as chairman .

( b ) The Board of Governors may delegate to the E xecutive Dire~tors authority to exeu.

:ise an y powers of the Board, except the powe r to: (i) A dmit new members and de termine the conditions of their admi ssion .
( ii) A pprove a revision of quotas, or to decide on the pay men t, or on the mit igation of the elrects of payment, of inc reases in q uctas proposed as the result of a general re view of quotas.

( iii) A pprove a w1i form ch arge in the par val ues of thl!

cur rencies o f all members, or to decide whell1 such a change is made that the provision s relating to the mai ntenanc"c of gold value of th e Fund's assets shall not apply.
(iv) M ake arrangements to co-operate wibh other inter national organi sations ( other than informal arrangemoots of a temporary or admi nistrative character ) .

( v) D etermine the distribution of the net income of ithe F und .

(vi) R equire a m ember to withdraw.

(vii ) Di!cide to liquidate the Fund.

(viii ) D ecide appeal s from interpretations of this agreement given by the E xecutive D irectors.

(ix) R evise the provisioos on repurchasl!


or to revise and supplement the rules fo r the distribution of repurchaises among types of reserves.

(x ) Make transfers to general reserve from any special reserve .

209 (c) The Board of Governors shall hold an annual meeting and such other meetings as may he provided for by the Board or called by the Executive OircOLors.
Meetings of the Board shall be called by the Directors whenever requested by five members or by members having one-quarter of th~ total voting power.

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

( e) Each governor shall be entitled to cast the numbe·r of votes allotted under Section 5 of this Article to the member appointing him.
(0 The Board of Governors may by regulation establish a pro cedure whereby the Executive Directors, when they deem such action to be in the best interests of the Fund may obtain a vote ,f the govem.Jrs on a specific ques tion without calling a meeting of the Board, (g) 'Th~ 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 Fund.
(h) Governor·s an d alternates shall serve as such without com ~nsaticm from tihe Fund.

hut the Fund shall pay them reasonable expenses incurred in attending meetings.

(i) The Board of G0vernon~ shaJl determine the remunerntfon to be paid to the Execultive Directdrs and the salary aind terms of the contraot of a srervice of the Managing Director.

Secti0n 3.
Secti0n 3.

Executive Directors.-(a) The Executive Directors shaJl be responsihle for the conduct of t!he e:eneral ooernitions of the Fund, and for this purpose shail exercise all the powers rlelegated to them by the Board of Governors.

(b) T.here shaJJ be not fess than twelve directors who need not be governors, and of whom (i) five shall he appointed by the five members having the largest quotas: (ii) not more than two shaJl be appointed when the pro visions cf ( c) below apply; (iii) fiV'<!
shall he elected by the members not entitled to appoint directors .

other tlhan the American Republics; and (iv) two shall be elected by the American Republics not entitled to appoint directors.

For the purposes of this paragraph, members means gowrnments of countries wh0se !lames are siet .forth in Schedule A~ whether they become members m accordance with Articl~ XX or in accordance with Article II.

Section 2.

When governments of other countries become members, t~e Board of.
Gowrnors may, by a four-fifths majority of the total votmg powers, mcrease the number of directors to be elected.
210 ( c) If, at the second regular 1clection of directors and thereafter, the members 1cntitled to appoint directors under (b) (i) above do not include the two members, the holdings of whose curr.xicies by the Fund have been, on the average over the preceding two years, reduced below their quotas hy the largest absolute amounts in terms of gold as a common d1cnominatar, either one or both of such members, as the case may be, shall be entitled to appoint a director.
(d) Subject to Artide XX, Section 3(b) elections of elective directors shall be conducted at intervals of two years in accordance with the provisions of Schedule C, supplemented by such regulations as the Fund deems appropriate.
Whenever the Board of Gowrnors increases the number of directors to be elected und1cr (b) above, it shall issue regulations making appropriate changes in the proportion of votes required t.o 'elect directors under the provisiorus of Sched1lle C. ( e) Each director shall appoint an alternate with full power to act for him when he is not rresent.

When the directors appointing them are present, alternates may participate in meetings but may not vote.
(f) Directors shall continue in office until their successors are If the otnce of an elected director becomes appointed or elected.

vacant more th an ninety days btfore the end of his tem1, another director shall be elected for the remainder of the term by the members who elected the former director.

A majority of the votes cast shall be required for election.

While the office remains vacant, tlhe alternate of the former director slrn11 exercise his powers, exrept that of appointing an alternate.
(g) The Executive Directors shall function in continuous sessiou at the principal offire of the Fund and sha:11 meet as often as the business of the Fund may require.

(h) A quorum for any meeting of the Executive Directors shall be a majority of the directors reprels:enting not less than one-half of the voting power.

(i) Each appointed director shall be entitled to cast the number of votes allotted undl:!r Section 5 of this Article to the member appoint" ing him .
Each elected director shall be entitled to cast the number of vales which counted towards his election.

Wh1cn the provisions 01: Section 5 (b) of this Article are applioable , the votes which a director would otherwise be entitkd to cast shall be increased or decreased correspondingly.

All the votes which a director is entitled to cast ;hall be cast as a unit.
(j) The Board of Go\'erncrs shall adopt regulations under which a m1cmber not enJtitled to appoint a direotor under (b) above may send a representative to attend any meeting of the Executive Directors when a request made by, or a matter parJticul arly affecting, that member is under consideration.

(k) The Execrntive Directors may appoint such committees as they deem advisable.

Membership of committees need not be limited to governors or directors or their alternates.

211 Section 4.
211 Section 4.

Managing Director and staff.-(a) The Executive Dire.ctors shall sielect a Managing Director who shall not be a governor or an executive director.

The Man aging Director shall be chairman of the Executive Directors, but sha'll have no no·re exrept a cJleciding · vote in case of an equal division.

He m ay participate in meetin!

!s of the Board of Governors, but shall not vote at such meetings.

The Managing Director shall cease to ihold office when ,the Executive Directors so decide.
(b) The Managing Director shall be chief of thie operating staff of the Fund and shall conduct.

under the direction of the Executive Directors, the ordinary business of the Fund.

Subject to the general control of the Executive Directors, he shaU be respon/9ible for the organization, appointment and dismissal of the staff of the Fund.

( c) 'Phe Managing Director and th e sttaff of the Fund.

in the discharge of th':!ir function s. shall owe their dutv entirelv to the Fund and to -no other authority.
Each membier of the Fund shall respect the i111temational character of this dutv and shall refrain from all attempts to inflt1ence any of the staff in the discharge of his fnnctions.

(d) Tn appointing the staff the Managing Director shall.

subiect to the paramount imoortance of securin!!

the highe!\t standards of efficiencv and of technical compete111ce.

pay due regard to the imnort ance of recruiting personnel on as wid~ a geographical basis as possible.

Section 5.

Vctin!
Section 5.

Vctin!

!.-- ( a) E ach member shall have hvo hundred fiftv voteis plus one addition::,~ vo1e for each nart of its quota equivalent to one hundred thousand United States dollars.
(b) Whe111 ever voting ic; reauired und'er Article V. ~ction 4 or 5. el'lch member shall have the number of votes to which it is entitled under (a) above, adjusted (i) bv the additi0n of onie vote for the enuivalent for each four huncfred thnus·and TJi'nited States dollars of net sales of its curren cy u p to the date whe111 the vote is taken.
or (ii) bv the s11htrartion of on e vote for th~ t>011iv::ilent nf each fom hnndrt>d thou~and UnitPd State~ dollar~ of it<: net nnrchcise~ of the cmrencit>s of other mcmhers up to the dnt~ when the vote is taken: 11rrwidPcl .

tl1at neithrr net p11rcha~es nr,r net sales ~h::,11 he deemed ::,t """ ti"le t0 exceed an amo11nt 1::qvc11 t0 th e- quota 0f the' 'mt>'l'lht>r involved.
( c 'l Fr,r the n-11rn0se r,f all comn11t::itinm 1mner ti-.i< SPrtirm TTrit0rl St<1tr~ rlnllar~ <h.,11 he- <l"emecl t0 b e of th~ weicrht ::i111d finPne<:i<: 1 Od..1 .

::irlin~ten fnr ::,nv nniFnrm ri...,·'°'"" ,,~,.

:r,,_ Article TV, Section 7, if a waiver is made under Section 8(d) of that Article.

0 f+~ 0 + " " T,, J,, 1 ;..., (d) Except as otherwise snecificallv nrovided, the Fund shall be made by a majority of thie votes cast.

all decisions of Section 6.


Reserves and di~trib11tion of net income.-( a) The Board of Governors shall determine annually what part of the Fund's 212 net income shall be placed to reserve and what part, if any, shall be distributed.
(b) If any distribution is made of the net income of any year, there 9ha:ll fi rst be d stributed to members eligiblle to receive remuner tion under Article V , Section 9, for that year an amount by which two percent per annu m exceeded any remuneration that has been paid for thait year.

Any di~tribution of the net income of that yea r beyoml that amount shall be made to all members in proportion to their quotas.

P ayments to each member shall be made in its own currency.
( c) The Fund may make transfers to general reserve from any special reserve .

Section 7.

Publication of reportlS.-(a) T he Fund <;hall publish an annual report containing an aud5ted statement of its acounts, and shall issue, at mtervaJ,s of three months or less a summ ary sitatemeint of its transactions and its holdings of gold and currencie.s of.

memrers.

(b) The Fund may publish such other reports as it deems desirable for carrying out its purposes.

Section 8.

Communic:1tion of views to members.


-The Fund shall at all times have t'he right to communicate its views informally to any member on any matter arising under this Agreement.
The Fund may, by a two-thirds majority of the total voting power, decide to pub li sh a report made to a member regarding its monetary or ~conomic conditions and develC'pments which directly tend to produce a serious discquiiibrium in the international balance of payments of If the member is not entitled to appoint an executive members.

director, it shall be entitled to representation in accordanre wi'th Section 3 (j) of this Article.
The Fund shall not publish a report the fundamental structure of the economic in volving changes organization of members.

in ARTICLE XIII Offices and Depositories Section 1.

Location of Oliices.-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 terri.

tories of other memrers.

Section 2.


D epositories .--(a) Each member country shail designate its central bank as a depository for all the F und's holdings of its currency, or if it has no central bank it shall des ignate such other institution as may be acceptable 1:o the Fund.

(bj The Fu nd may hold other assets.

includin g gold, in tihe depositories designated by the five members having the largest quotas and in such other designated depositories as the Fund may select.
Initially, at lea/Sit one--half of the holdings of the Fund shall re held in the depository designated by the member in whose territories the 213 Fund has its principal office and at kast forty per cent shall be held in the depositories designated by the remaining fo ur members referred to above.

However, all transf1ers of gold by the F und shall be made with due regard to the cost of transport and anticipated r.cquirements of the Fund.
In an emergency the E xecutive Directors may transfer all or any part of the Fund's gold holdings to any place where they can be adequately protected.

Section 3.

Guarantee of the Fund's assets.

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

ARTICLE XIV Transitional Period Section 1.


Introduction.--The Fund is not intend'<!d to provide facilities for relief or reconstruction or to deal with international in debtedness arising out of the war.

Section 2.
Section 2.

Exchange restrictions-In thie post-war transitional period members may, notwithstanding the provisions of any other articles of this Agreement, maintain and adapt to changing circum stances (and, in the case of members whose territories have been occupied by the enemy, introduce where necessary) restrictions on pay ments and transfers for current international transactions.
Members shall , however, have continuous regard in their fo reign 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 inter In national payments and the maintenance of exchange stability.
particular, members shall withdraw res trictions maintained or imposed 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 re sources of the Fund.

Section 3.
Section 3.

-Notification to the F und.-Each member shall notify the Fund before it becomes eligible under Article XX , Section 4{c) or {d), to buy currency from the F und, whether it inrends to avail itself of the transitional arrangements in Section 2 of this Article, or whether it is prepared to accept ;the obligations of Articl~ VIII, Sections 2, 3 and 4.
A member availing itself of 1he transitional arrangements shall notify the Fund as soon thereafrer as it is prepared to accept the abovementioned obliga~ions.

Section 4.

Action of the Fund relatin!!

to restrictions.-Not later than three years after the date on which the Fund begins operations and in each year thereafter, the Fund shall report dn the restrictions still in force under Section 2 of ~his Article.

Five years afrer the da.tc on which the Fund begins operations, and in each year thereafter.
any member still retaining any restrictions inconsistent with Article 214 VIII, Sections 2, 3, or 4, shall consu1t the Fund as to their fuI1ther retention.

The Fund mav.

i£ it deems such action necessarv in cxcep tional circumstances, mak.

:: representations to any member -that condi tions are favourable fo r the withdrawal of any particular restriction or for the general abandonment of restrictions, inconsistent with the provisioI1& of any other article of this Agreeml!nt.
The member shall If the Fund be given a suitable time to reply to such repre~ntations.

~nds that the member persists in maintaining restrictions which are mco111sistent with the purposes of the Fund, the member shall be subject to Article XV, Section 2 (a) .

Sectfon 5.
Sectfon 5.

Nature of transitional period.-ln its relations with members, the Fund shall recognise that the post-war transitional period will be one of change and adjustment a111d in making decisions on requests occasioned thereby which are presented by any member it shall give tihe memlYer the benefit of any reasonable doubt.

ARTICLE XV Withdrawal from Membership Section 1.


Right of members to withdraw.- 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.

Compulsory withdrawal.-(a) If a member fails to fulfil any of its obligatiorns under this Agreement, the Food may declare the member ineligibk to use the resource of the F und.
Nothing in this Section shall !Je deemed to limit the provisions of Article IV, Section 6, Article V, S1ection 5, or Article VI, Section 1.
(b) If, after the expiration of a reasonable period the member persists in its failure to fulfill any of its obligations under this Agree ment, or a difference between a member and the Fund under Articl,e IV, Section 6, continues that member may be required to withdraw from membership in the Fund by a decision of the Board of Governor/s carried by a majority of the Governors representing a majority of the total voting power.
(c) R eguiations shall be adopted ,to ensure tihat before action is taken against any member under (a) or (b) above, t!he member shall be info1med in reasonable time of the complaint agaiinst it and oiven an adequate opportunity for stating its case, bot:h orally and in writing.

Section 3.

S~ttlem1ent of accounts with members withdrawing.

When a member withdraws from the Fund, normal transaation1s.
of the ~und in its currency shall cease and settlement of all accounts between 1t and th~ Fund shall be made with reasonable despatch by agreement betw~~n 1t and the ~und.

If agreemieJl/t is not reached promptly, the Prov1s1oos of Schedule D shal] apply to the settlement of accounts.

215 ARTICLE XVI Emergency Provisions Section 1.


Temporary sul",pension.-(a) In the eve·nt of an emergency or the development of unforese'cn circumstances threatening the opernt,ions of the Fund, the Executive Directors by unanimous vo~ may suspend for a period of not more than one hundred twenty days the operation of any of the following provisions: (i) Artick IV, Sections 3 and 4(b) .

(ii) Article V, Sections 2, 3, 7, 8(a) and (f).

(iii) Article VI, Section 2.

(iv) Article XI, Section 1.


(b) Simultaneous with any decision to suspend the operation of any of the foregoing provisions, the Executive Directors shall call a meeting of the Board of Governors for the earliest practicable date.

(c) The Executivie Dire.

::tors may not extend any suspension be yond one hundred twcD!ly days.
Such suspension may be extended, however, for an additional period of not more than two hundred forty days, if the Board of Governors by a four-fifths majority of the total voting power so decides, but it may not be fuirther extended excepV by amendment of this Agreement pursuant to Article XVII.

(d) The Executive Directors may, by a majority of the total voting poWl.

:!r, terminate such suspension at any time.

Section 2.

Liquidation of the Fund.


-(a) The Fund may not be liquidated exc'cpt by decision of the Board of Governors.

In an emergency, if the Executive Directors decide that liquidation of the Fund may be necessary, they may temporarily suspend all transactioos.

pending decision by the Board.
(b) If the Board of Governors decides to liquidate the Fund, the Fund shall fo rthwith ooase to engag'c in any activities except 1ihose incidental to the orderly collection and liquidation of its assets and the settlement of its liabilities, and all obligations of members und'cr this Agreement shall cease except those set out in this Article, i::i Article XVlll, paragraph (c), in Schedule D, paragraph 7, and in Schedule E. ( c) Liquidation shall be administered in accordance with the pro.
v1sions of Schedule E .

ARTICLE XVII Amendments (a) Any propo~al 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 If the Governors who shall bring the proposal before the Board.

216 proposed amendment is approved by the Board the Fund shall, by circular letter or telegram, ask all members wheither they ac::ept the proposed amendment.
When three-fifths of the members, having four fifths of the total voting power, have accepted ~he 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 requrired in the case of any amendment modifying (i) the right to withdraw from the Fund (Article XV, Section 1); (ii) the provision that no change in a member's quota shall be made without its consent (Article III, Section 2) ; (iii) the provision that no change may be made in the par value the proposal of that of a member's currency except on member (Article IV, Section 5 (b)).
(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 XVIII 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 Director for If the question particularly affects any member not their decision.
entitled to appoint an executive director it shall be entitled to repre sentation in accordance with Article XII, Section 3 (j).

(b) In any case where the Executive Directors have given a (a) above, any member may require, within three decision under months from the date of the deci sion, 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 Commit te 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 by an eighty-five percent majority of the total voting power decides otherwise.

Pending the results of the re ference to the Board the Fund 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 Fund and a member which has withdrawn, or between the Fund and any member during liqulidation 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 um pire 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 Fund.
The umpire shall have full power to settle all questions of pro- cedure in any case where the parties are in disagreement with respect thereto.

217 ARTICLE XIX Explanation of Terms In interpreting the provisions of this Agreement the Fund and its members shall be guided by the following: (a) A member's monetary reserves means its official holdings of gold, of convertible currencies of other members and of the cur rencies of such non-members as the Fund may spe~ify.
(b) The official holdings of a member means central holdings (that is, the holdings of its Treasury, central bank, stabilization fund, or similar fiscal agency).
(c) The holdings of other official institutions or other banks within its territories may, in any particular case, be deemed by the Fu!Ild, after consultation with the member, to be official holdings to the e~tent that they are substantially in excess of working balances; pro vided that for the purpose of determining whether, in a particular case holdings are in excess of working balances, there shall be deducted from such holdings amounts of currency due to official institutions and banks in the territories of members or non-members specified under (d) below.
(d) A member's holdings of convertible currencies means the holdings of the currencies of other members which are not availing themselves of the transitional arrangements under Article XIV, Section 2, together with its holdings of the currencies of such non-members as the Fund may from time to time specify.

The term currency for this purpose includes without limitations coins, paper money, bank bal ances, bank acceptances, and government obligations issued with a ma turity not exceeding twelve months.
(e) The sums deemed to be official holdings of other official institutions and other banks under (c) above shall be included in the member's monetary res·erves.

(f) The Fund's holdings of the currency of a member shall include any securities accepted by the Fund under Article III, Section 5.
(g) The Fund, after consultation with a member which is availing itself of the transitional arrangements under Article XIV, Sec tion 2, may deem holdings of the currency of that member which car ry specified rights of conv.ersion into another currency or into gold to be holdings of convertible currrency for the purpose of the calculation of monetary reserves.
(h) For the purpose of calculating gold subscriptions under Article III Section 3, a member's net official holdings of gold and United States dollars shall consist of its official holdings of gold and United States currency after deducting central holdings of its currency by other countries and holdings of its currency by other official insti tutions and other banks if these holdings carry specified rights of con version into gold or United States currency.
218 (i) Payments for current transactions means payments which are not for the purpose of t ransferring capital, and includes, without limitation: (i ) All payment due in connection with foreign trade, other current business, including services, and normal short-term ba nking and credit facilities; ( 2) Payments due as interest on loans a nd as net income from other investments ; ( 3) Payments of moderate amount for amortization of loans or for dep reciation of direct investments; ( 4) Moderate remittances for family living expenses.
The Fund may, after consultation with the members concerned, deter mine whether certain specific t ra nsaction s are to be con idered current tra nsactio ns or capital transactions.
(j ) Gold tranche purchase means a purchase by a member of the currency of another member in exchange for its own currency which does not cause the Fund 's holdings of the member's currency to exceed one hundred percent of its quota, provided that for the purposes of this definition the Fund may exclude purchases and holding- under policies on the use of its reso ures for compensatory fin ancing of export fluctuations.
ARTICLE XX Inaugural Provisions Section l. En try into force - This agreement shall enter into force when it has been signed on behalf of goverments 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.

Signature.


- (a ) Each government on whose be half this Agreement is signed shall deposit with the Government of the United 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 ob.Jigations under this Agreement.
tates of America an instrument setting forth that (b) Each government shall becoroe 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 n o 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 mform thegovernments of all countries whose names are set forth in Schedul~ A, and all governments whose membership is approved in accordance with Article 11, Section 2, of all signatures of this Agree ment and of the deposit of all instruments referred to in (a) a bove.
(d) At the time this Agreement is signed on its behalf, each government shall transmit to the Goverment of the United States of 219 America one one-hundredth of one percent of its total subscriptions 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 under Section 3 of this Article If this Agree ment has not come into force by December 31, 1945, the Government of the United States of America shall return such funds to the Govern ment that transmitted them.
(e) The agreement shall remain open for signature at Washing ton 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 mem bership 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 man: date.
(h) In the case of governments whose metropolitan territories have been under enemy occupation, the deposit of the instrument re ferred to in (a) above may be delayed until one hundred and eight days after the date on which these territories have been liberated.

If, however, it is not deposited by amy such government before the ex piration of this period the signature affixed on behalf of that govern ment shall become void and the portion of its subscription paid under ( d) above shall be returned to it.
(i) Paragraph (d) and (h) shall come into force with regard to each signatory government as from the date of its signature.

Section 3.

Inauguration of the Fund.

- (a) As soon as this Agreement enters into force under Section 1 0£ this Article, each mem ber shall appoint a governor and tbe member having the largest quota shall call the first meeting of the Board of Governors.
(b) At the first meeting of the Board of Governors, arrange ments shall be made for the selection .9f provisional executive directors, The governments of the five countries for which the largest quotas are set forth in Scihedule A shall appoint provisional executive direc tors.

If one or more of such governments have not become members, the executive directorships they would be en.titled oo fill shall remain vacant until they become members, or until January 1, 1946, which ever is the earlier.
Sevein provisional executive directors shall be elected in accordance with the provisions of Schedule C and shall remain in office until the date of the first regular election of executive directors which shall be held as SIOon as practicable after January 1, 1946.

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

220 Sect:ion 4.
220 Sect:ion 4.

Initial determination of par values.-(a) When the Fund is of the opinion, that it will shOlrtly be in a position to begin exchange transactions, it shall so Dotifv the members and .stlall request each member to communicate within ·thirty days the par value of its currency based on 'the rates of exchange prevailing on the sixtieth day before the entry into force of Jthis Agreement.
No member whose mertropolitan territory bas been occupied by the enemy shall be re quired to make sucih a communication while that territory is a theatre of major hcstilitie.s or for such period thereafter as the Fund may determine.

When such a member communicates the par value of its currency the provisions of ( d) below shall apply.
(b) The par value communicated by a member whose metro politan territory has n0t been occupied by the enemy shall be the par value of that member's currency for the purposes of this Agree ment unless, within ninety days after the request referred to in (a) above has been received, ( i) tihe member notifies the Fund that it regards th.
: par value as unsatisfactory, or (ii) the Fund notifies t!he member that in its opinion the par value cannot be maintained without causing recourse to the Fund on the part of that member or others on a scale prejudicial to the Fund and to members.

When notification is given under (i) or (ii) above, the Fund and the member shall, witihin a period determined by the Fund in the light of all relevant If circumstanC'cs, agree upon a suitahle par v,alue for thait currency.
the Fund and the member do not agree within the period so determined, the member shal be deemed to have withdrawn from the Fund on the date when the period expires.
(c) When the par value of a member's currency has been estab lished under (b) above, either by the expiration of ninety days without notification, or by agreement after notificart:io{), rhe member shall be eligible to buy from the Fund the currencies of other members to the full extent permitted in this Agreement provided thait the Fund has begun exchmge transactions.
(d) In the case of a member whose metropolitan territory has been occupied by the enemy, the provisioos of ( b) above sd.1all apply, subject to tlle following modifications:- {i) The period of ninety days shall be extended so as to end on a date to be fixed by agreement between the Fund and the member.
(ii) Witihin the extended period the membe r may, if the Fund has begun exchan~ tran~actions, buv from the Fund with its currency the currencies of other mem bers, but on'ly undeir such conditi.oos and !in such amounts as may be prescribed by the Fund.

(11i) At any time before the date fixed under (i) above, changes may be made by agreement with the Fund in the par value communicated under (a) above.
(e) If a member whose metropolitan territory has been occupied by the enemy adopts a new monetary unit before the darte to be fixed under (d) (i) above, the par value fixed by that member for 221 the new unit sha11 be communicated to the Fund and the provisions of (d) above, shall apply.

(f) Changes in par values agreed with the Fund under this Section shall not be taken into account in d~tennining whether a proposed change falls widiin (i ), {ii) or (iii) of Article IV, Section 5(c).
(g) A member communicating to the Fund a par value for tlh.e currency of its metropolitan territory shall simultaneo1IBly commum cat'e a value, in terms of that currency, for each seperate currency, where suoh existls in 1he territories in respect of which it has accepted this Agreement under Section 2 ( g) of this Article, but no mem"bl!r Slha11 be required to make a communication for the separate cmrencv of a territory which has been occupied by the enemy whifo that territory is a t'he,atre of major hos,tilities or for such period thereafter as the Fund may det".!rmine.
On the basis of the par value w com municated, the Fund shall compute the par value of each separate currency.

A communication or notification to the Fund under (a), (b) or (d) above regarding the par -.nalue of a currency, shall also be deemed, unless the contrary is stated to be a communication or notificatlicn regarding the par value of all the separate currencies referred to above.
Any member may, however, make a communi relating to the metropolitan or any of the cation or notification separate currencies alon".!.

If the member does so, the provisions of the preceding paragraphs ( including ( d) above, if a territo-ry where a separate currency e,.ists ha~ been occupil.

!d by the enemy) shall apply to each of these currencies separately.
(h) The Fund shall begin exchange transactions at such date as it may determine after members having sixty-five percent of the total of the quotas set forth in Schedule A have become eligible in accordance with the preceding paragraphs of this Section, to purchase the currencie,s of otheir members, but in no event unW after major hostilities in Europe have ceased.
(i) The Fund postpone exchange transactions with any member if its circumstances are such that, in the opinion of the Fund, they would lead to use of the resources of the Fund in a manner contrarv to the purposes of this Agreement or prejudicial to the Fund or the members.

(j) The par value of the currencies of governments which in dicate their desire to become members after December 31, 1945, shall be dete-:mined in accordance with the provisions of Artie~ II, Section 2.
Done at Washinton in a single copy which shall remain deposit'Cd in the archives of the Govennment of the United States of America, which sh all transmit certified copies to all governm".

!nts whose names are set forth in Schedule A and to all governments whose member~ ship is approved in accordimce with Article II, Section 2.

222 ARTICLE XXI Special D rawing Rights Section J .
Authority to a\loca(e special c:lraw ing ng:hts.-To mee:t the need, as and when it m ises, for a supplement to existing reserve assets, the Fund is authorized to allocate special drawing rights to memocrs that are participan:ts in the Special D rawi ng Account.

Section 2.

Unit of value .

-The unit of value of special drawing rights shall be equivalent to O.f;38 671 gram of fine gold .

ARTJCLEXXH General Account and Special Dra\ving Account Section 1.
Separation of operation s and transactions.-All operation s a nd trans11ctfo!1S invol vin g sTl'cci11l drawing ri!

!hts sha11 be conducted through the 'SVf'ci:tl D rawin!!

Account.

AH 0th~r oneratioo s and transaction s- of the Fnnd m1thorised bv or under this A!

!reem ent shall b e conducted throu qh the G c> nc ral Account.

O ncratfons and transactions pursuant to Article XXTIT.

Section 2 .

sh all be c0nductcd th rou_!

!h the G ener 11l Account as well as the Special Drawin g Acount.

Section 2 .
Section 2 .

Srnarntinn of ::i, sets ancl nrnnertv .-All assets an d pronerty 0f the Fund sh all he held in the Gen eral Acco11:n t. excent th ::it a,,pts and n ronertv ar m1ired nnder Article XXVT.

Si>cti0:11 2 .

::incl Article~ XXX an d XXXT and Schedules H ancl T ,1,.,11 h ~ held in the Snecial D rawin !

!

Acr mmt.

Anv '.l ,sets o r n roT1e rtv hPkl in one Ar.cmmt sh nll n0t be ;iv'-l il ahle to cli,cfoirpe or meet the li ah\,itir~ .

obli!
obli!

!atinns~ or lo~se s of the Fun d incurred in the condu ct 0f the o~rntions and trans::ict ion1~ of the oth er Accmmt excent that th e exnenses of concl11ctin !

!

th e bu, ines~ of th e Sneci a1 Dr'lwincr Account shall re oaid bv the F und from the Gen eral Acrount which , h 'lll be reimbursed from time to time by asse,ssments t11n<ler Article XXVT .

Section 4. made on the basis of · a re:1,onable estfimatc of such expenses.

Section 3.
Section 3.

R ecording- 11nd info nnation .-All ch nn ncs in holdinqs of sniecial drawin !

!

ri o-ht s shall tcike effect oolv when rec rded hv the F1md in the Snecial D rmvi:n !

!

Acco unt .

P articinant~ sh al1 notifv the Fnnd of the provi~ion" of thi<; A!

!reemc nt 1mder which sneci a1 drawin!!

ri!

!hts rtre used.


The Fund mav require oarticinan t<; to fnrnish it with such other jnformation as it de:cms necessary fo r i1s fu'l1ction s. ARTICLE XXTII P articipants and Other HoMers of Special Drawing Rights th e Fund Section 1.

Pn rticinants .

- - E 11ch mPmh:c, of th rtt deposits with the Fund an in<;tru ment settinq fort1, th at it 1mclert::ik-t>~ all th e obligations of a particioant in the Soecial Drawin!!

Account in accordance with its law and that it h as taken all sten<;.
nececc<1rv fo enable it to carrY out alt of these obli!

!ations sh all become :1 011rticinant in the Snecial D rawing Accoun t as of the elate the in,trn rn ent is rleoosi terl .

exceot that no member shall become a n<irtir in.,.nt before Articles XXI through XXXII and Schedules F through I have 223 entered into force and instmrnents have been deposited under this Section by members that have at least seventy-five percent of the total of quotas.

Section 2.

Gener&!
Section 2.

Gener&!

Account as a holder.-The Fund may accept and hold special drawing rights in the General Account and use them , in accordance with the provisions of this Agreement.

Section 3.
Other ho1ders.---The Fund by an eighty-five percent majority of the total voting power may prescribe: (i) as holders, non-members, members that are non-parti cipants, and institutions that perform functions of a central bank for more than one member; (ii) the terms a nd conditions on which these holders may be permitted to accept, hold, and use special drawing rights, in operations an·d transactions with participants; and (iii) the terms and conditions on which participants may enter into operations and transactions with these holders.
The terms and con ditions prescribed by the Fund for the use of special drawing righ ts by pre~cribed h0lders and by particioants in operations and transactions with them iShall be consistoot with the provisions of this Agreement.

ARTICLE XXIV Allocation And Cancellation of Special Drawing Rights Section l. Princiofos an d comiderntions 1zovernin!!

allocation and cancellation.-( a) Jn all its decisions with resoect to the 0llocation and cancellation of soecial drawin!!

ri!
ri!

!htls the Fund shall seek to meet the loog-term glohal nC'ed, as and \~hen it arises,, to s11.1pplement existing reserve assets in such m anner as will promote the attainm~nt of its purposes and will avoid economic sta!mation and deflation as wdl as excess demand and inflation in the world.

(b) The filiSt decisioo to allocate special drawing rh!hts shall take into account.
as special considerations, a collective judgement that there is a global need t0 suppkment reserves , and the attainml!nt of a better balance of payments equilibrium, as well as the likelihood of a better working of the adjustment process in the future.

Section 2.

Allocation and cancellation.-(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 sh all 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 aI1ocations or canc'c!llations shall take place at yearly intervals.

(b) The rates at which allocations are to be made shall be expressed as p~rcentages of quotas on the date of each decision to allocate.
The rates at which special drawing rights are to be cancelled 224 shall be expressed as percentageis 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) ;;ibove, that: (i) the duration of the basic period shall be other than five (ii) (iii) years; or the allocations or cancellations shall take olace at other than yearly in tervals; or the basis for allocatioru; or cancellatiions shall be the quotas or net cumulative allocations on dates other than the dates of decisions to allocate or cancel.
• (d) A members that becomes a participant after a basic period starts shall receive allocations begin ning with the next basic pe:riod in which allocations are made after it becomes a participant unless the Fund decides that the new pariticipant shall start to receive allocations begi nning with the next allocation after it becomes a participant, If t1he Fund decides that a member that becomes a particioant during a basic period shall receive allocations durim!
t!he remainder of that basic oeriod and the participant was not a-- member on the dates est::iblished under (b ) nr (c) above, the Fund shall determine the basis on which these cllocations 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 decisions; and (ii) thic participimt has notifi ed 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 t!he notice with respect to allocations of special drawing rights subsequent to the termination.

(f) If on the effective date of any cancellation the amount of special drawing rights held by a participant is less than iits share of the special drawing rights that are to be cance11ed.
the participant <;hall eliminate its negative balance as promptly as its gross reserve position permits and shall remain in consultation wit!h the Fund for this pur pose.

Special drawing rights acquired by the participant after the effective date of the cancdlation shall be appiied against its negative balance and cancel1ed.

Sectiion 3.
Sectiion 3.

Unexpected ma jor dewlopments.-The FHnd may change tihe rotes or interva1s of allocation or cancellation during the rest of a basic period or change the length of a basic period or start a new hasic period , if at any time the Fund finds it desirable to do so because of unexpected major developments.

Section 4.
Section 4.

Decisions on allocations and cancellations.-(a) De cisions under Section 2 (a ), (.b ), and ( c) or Section 3 of this Article 225 shall be made by the Board of Governors on the basis of propoisals of the Managing Director concurred in by the Executive Dii"ectors.

(b) Before making any proposal,, the Managing Director.
after having satisfied himself that it will be c01nsistent with the provhions of Section 1 (a) of this Article, ·shall conduct such consultaJtions as will enable him to asce~t11in that there is broad support among parti In addition before making a proposal for cipants for t·he proposal.
the fir9t allocation, the Managing Director shall satMy himself that me 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 pronosal for the first allocation as soon after the establishment of the Special Drawing Account 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 acc0rdance 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 GovP,mors or the Executive Directors; Provided that, if under (i) , (iii), or (iv) above the Managing Director ascertains that there is no proposal which he considers to be comistent with the provisions of Section 1 of this Article tthat has broad support among parti::ipants in accordance with (b) above.
he shall report to to the Board of Governors anc to the Executive Directors .

( d) A majority cf eighty-five percent of the total voting power shall be required for decisions under Section 2(a), (b) , a:nd (c) or Section 3 of this Article except for decisions under Section 3 with respect to a decrease in the rates of allocation.

ARTICLE XXV Operations And Transactions In Special Drawing Rights Section 1.
Use of special drawing rights.-Special drawing rights may be used in the operations and transactions authorised by or under tJ1is Agreement.

Section_2.

Transa~tions b~tween p_articipants.-(a) A participant shall be entitled to use its special drawmg nghts tlo obtain an equiva lent ~mou~t 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 righ~: 226 (i) to obtain an equivalent amount of its own currency held by the other participant; or (ii) to obtain an equivalent amount.
of currenc_y from the other participant in -any transactlon_s, i;,rescnbed by the Fund that would promote reconstitution by the other parti~ipant under Section 6( a) of this Article; pi:event or re duce a negative balance of the other part_1c_1pant ; offset the effci:t of a failure by the other part1c1pants to fulfill the exoect&tion in Section 3 (a) of this Article; or bring the h~ldings of special drawing .

rights by ?oth participants closer to their net cumul_at1~e allocat10nis .
The Fund by an eighty-five percent ma1onty of the tota1 voting power may prescribe addit!onal !r~nsactions or categories of transactions under this prov1s1on.

Any transactions or categories of transactions prescribed by the Fund under this subsection ( b ) (ii) 9hall be con sistent with the other provisions of this Agreement and with the proper use of special drawing rights in accord ance with this Agreement.
( c ) A participant that provides currency to a participant using special drawing rights shall receive an equivalent amount of special drawing rights.

Section 3.

R eq uirement of need .
- (a) In transactions un der Section 2 of this Article, except as otherwise provided in (c) be low, a participant will be expected to use its special drawing rights onl y to meet bala111ce of payments needs or in the light of development in its official holdings of gold foreign exchange, and specia1 drawing rights and its reserve position in the Fund, and not for the sole purpose of c~anging the composition of the foregoing as betweein special drawing rights and the total of gold , foreign exchange, and reserve position in the Fund.
(b) The use of special drawing rights shall not be subject to cha11enge on the basis of the expectation in (a) above, but the Fund may make representations to a participant that fails to fulfill this ex pectation .

A participant that persists in fa iling to fulfill this expecta tion shall be subject to Article XXIX , Section 2 (b).
(c) Participants may use special drawing rights without ful fi11ing the expectation in (a) above to obtain an equivalent amount of currency from another participant in any transactions .
prescribed by the Fund that would promote reconstitution by the other partici pant under Section 6 (a) of this Article ; prevent or reduce a negative balance of the other participant: offset the effect of a failure by the other participant to fulfill the expectation in (a) above; or bring the holdings of special drawing rights by both participants closer to their net cumulative allocations.

Section 4.

Obligation to provide currency.


- A participant designated by the Fund under Section 5 of this Article shall provide on demand currency convertible in fact to a participant using special drawin~ rights under Section 2 (a) of this Article.
A participant's obli gation to provide currency shall not extend beyond the point at whi<;h 227 its holdings of special drawing rights in excess of its net cumulative allocation are equal to twice its net cumulative allocation or such higher li_mit as may be agreed between a participant and the Fulnd.

A parti cipant may provide currency in excess of the obligatory limit or any agreed higher limit.

Section S. D esignation of participants to provide currency.
(a) The Fund shall ensure that a participant will be able to use - its special drawing rights by designating participants to provide currency for specifi ed amounts of special drawing rights for the purposes of Sec tions 2 (a) and 4 of this A_rticle.

D esignations shall be made in accord ance with the followi ng general principles supplemented by such other prniciples as the Fund may adopt from time to time.
(i) A participant shall be subject to designation if its balance of payments and gross reserves position is sufficienitly strong, but this will not preclude the possibility that a participant with a strong reserve por tion will be designated even though it has a moderate balance 'Jf 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 the expectation in Section 3 (a) of this Article.

fulfill (iii) In designating participants the Fund normally shall those that need to acquire special give priority to 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 shali apply the rules for designation in Schedule F or such rules as may be adopted under (c) below.

( c) The rules for designation shall be reviewed before the end of the first and each subsequent basic period and the Fund may adopt new rules as the result of a review.

Unless new rules are adopted, the rules in force at the time of the review shall continue to apply.

Section 6.
Section 6.

Reconstitution.

- (a) Participants that use their special drawing rights shall reconstitute their holdings of in accordance with the rules for reconstitution in Schedule G or such rules as may be adopted under (b) below.

them (b) The rules for reconstitution shall be reviewed before the end of the first a nd each su bsequr.nt basic period and new rules shall be adopted if necessary.
Unless new rules are adopted or a deci§ion is made to abrogate rules for rec,)Ilstitution , the rules in force at the time of the review shall continue to apply.

An eighty-five percent 228 majority of the total voting power shall be required for decisions to adopt, modify, or abrogate the rules for reconstitution.

Section 7.

Operations and transactions through the General (a) Special drawing rights shall be included in a member's Account.
- monetary reserves under Article XIX for the purposes of Article III, Section 4 (a), Article V, Section 7 ( b) and ( c), Article V, Section 8 (f) , and Schedule B, paragraph 1.

The Fund may decide that in calculating monetary reserves and the increase in monetary reserves during any year for the purpose of Article V, Section 7( b) and (c), no account shall be taken of any increase or decrease in those monetary reserves which is due to allocations or cancellations of special drawing rights during the year.
(b) The Fund shall accept special drawing rights (i) in repurchases accruing in special drawing rights under Article V, Section 7 (b) ; and (ii) in reimbursement pursuant to Article XXVI, Section 4.

The Fund may accept special drawing rights to the extent it may decide: (i) in payment of charges ; and (ii) repurchases other than these under Article V, Sectiou 7 (b), in proportions which, as far as feasible, shall be the same for all members.
( d) The Fund, if it deems such action appropriate to replenish its holdings of a participant's currency and after consultation with that participant on alternative ways of r.eplenishnient under Article VII, Section 2, may require that participant to provide its currency for special drawing rights held in the General Account subject to Section 4 In replenishing with special drawing rights the Fund of this Article.

shall pay due regard to the principles of designation under Section 5 of this Article.
(e) To the extent that a participant may receive special draw ing rights in a transaction prescribed by the Fund to promote reconsti tution by it under Section 6{a) of this Article, prevent or reduce a negative balance, or offset the effect of a failure by it to fulfill the expectation in Section 3 (a) of thi s Article, the Fund may provide the participant with special drawing rights held in the General Account for gold or currency acceptable to the Fund.
(f) In any of the other operations and transactions of the Fund with a participant conduicted through the General Account with the Fund may use special drawing rights by agreement with the parti cipant.

(g) The Fund may levy reasonable charges uniform for all participants in connection with operations and transactions under this Section.

Section 8, Exchange rates.


- (a) The exchange rates for operations or transactions between participants shall be such that a participant using special drawing rights shall receive the same value whatever currencies might be provided and whichever participants pl'Q- 229 vi~e those currencies and the Fund shall adopt regulations to give effect to this principle.

(b) The Fund shall consult a participant on the procedure for determining rates of exchange for its currency.
( c) For the purpose of this provision the term participant in cludes a terminating participant.

ARTICLE XXVI Special Drawing Account Interest And Charges Interesit.

- 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.


- Charges at the same rate for all parti cipants shall be paid to the Fund by each participant on the amount of its net cumulative alloca tion of special drawing rights plus any negative balance of the participant or unpaid charges.

Section 3.

Rate of interest and charges.

- The rate of in terest shall be equal to the rate of charge?

and shall be one and one half percent per annum.


The Fund in its discretion may increase or reduce this rate, but the rate shall not be greater than two percent or the rate of remuneration decided under Article V, Section 9, which ever is higher, or smaller than one percent or the rate of remuneration decided under Article V, Section 9, whichever is lower.

Section 4.

Assessments.


- When it is decided under Article XXII, 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.

Sect10n 5.

Payment of 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, at its option for gold or currency acceptable to the Fund, in a transaction with the Fund conducted through the If sufficient special drawing rights cannot be ob General Account.

tained in this way, the participant shall be obligated and entitled to obtain them with currency convertible in fact from a participant which the Fund shall specify.
Special drawing rights acquired by a partici pant after the date for payment shall be applied against its unpaid charges and cancelled.
ARTICLE XXVII Administration Of The General Account And The Special Drawing Account (a) The General Account and the Special Drawing Account Shall be administered in accordance with the provisions of Article XII, subject to the following: 230 (i) The Board of Governors may delegate to the E xecutive Director authority to exercise any powers of the Board with respect to special drawing rights except those under Article XXIIII, Section 3, Article XXIV, Section 2( a ), (b), and (c), '<ind Section 3, the penultimate sentence of Article XXV, Section 2( b) , Article XXV, Section 6( b ), and Article XXXI(a) .
(ii) For mee tings of or decisions by the Board of Governors on matters pertaiining exclusively to the Special Draw ing Account only reques.ts 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.
(iii) For decisions by the Executive Directors on matters pertaining exclusively to the SJ)'ccial Drawing Account only directors appointed or elected by at1 least one mem ber that i~ a participant shall be entitled to vote.

Each of these directors shall be entitled to cast th e number of votes allotted to -the member which is a participant that appointed him or to the members that are particip ants whose votes counted towards his election.
Only the presence of directors appointed or elected by mem bers .th at are participants and the votes allortted :o members that are participants shall be counted for the purpose of determi ning whether a quorum ex ists or whether a decision is made by tlle required majority.
(iv) Questions of the general administration of the Fund, including rcimbursemcnrt under Article XXII, Section 2, and any question wh ether a matter pertains to both Accounts or exclusively to the Special Drawing Account shall be decided as if they pertained exclusively to the the General Account.
Decisions with acceptance and holdings of special drawing rights in the General Account and the use of them, and other decisions affecting the operations and transactions con ducted through both the General Account and the Special Drawing Account shall be made by the majorities required for decisions on matters pertaining excl usivdy to each Account.

A decision on a matter pertaining: to the Special Drawing Account shall so indicate.
respect to ( b) In addition to the privileges and immun~ties that are accorded under Article IX of this Agreement, no tax 9f any kind shall be levied oo special drawing rights or on operation,s or traru;actlions in special drawing rights.

(c) A question of interpretation of the provisions of this Agree ment on matters pertaining exclusively to the Special Drawing Account shall be submitted to the Executive Directors pursuant to Article 231 In any case where XVIII(a) only on the request of a participant.
the ExecuJtive Directors have given a decision on a question of inter pretation pertaining exclusively to the Special Drawing Account only a participant may require that the question be referred to the Board of Governors under Article XVIII(b).

The Board of Governors shall decide whether a governor appointed by a member that is not a parti cipant shall be entitled to vote in the Committee on Interpretation on questions pertaining exclusively to the Special Drawing Account.
(d) Whenever a disagreement arises between the Fund and a participant that has terminated its participation in the Special Drawing Account or between the Fund and any participant during the liquidaJion of tihe Special Drawing Account with respect to any matter arising exclusively from participation in the Special Drawing Accoulnt, the disagreement shall be submitted to arbitration in accordance with the procedures in Article XVIII ( c) .
ARTICLE XXVIII General Obligations of Participants In addition Ito the obligations assumed with respect to special drawing rights under other Artic1es of this Agreement, each participant undertiakes to collaborate with the Fund and with other participants in order to facilitate the effective functioning of the Special Drawing Account and the proper use of special drawing rights ill1 accordance with this Agreement.

ARTICLE XXIX Suspension of Transactions In Special Drawing Rights Section 1.
Emergency provisions.-In the event of an emergency or the development of uruorseen circumstances threatening the opera tions of the Fund with respect to the Special Drawing Account, the Executive Directors by unanimous vote may suspend for a period of not more than one hundred and twenty days the operation of any of the provisions relating to special drawing rights, and the provisions of Article XVI, Section 1 (b), ( c) and ( d), shall then apply.

Section 2.

Failure to fulfill obligations.


- (a) If the Fund finds that a participant has failed to fulfill its obligations under Article XXV, Section 4, uhe right of the participant to use its :sipecial drawing rights shall be suspended unless rt:he Fund otherwise determmes.
(b) If the Fund finds that a participant has failed to fulfill any other obligation with respect to special drawing rights, the Fund may suspend the right of t·he participant to use ~pecial drawing rights it acquires after t1he suspen,,ion.
(c) Regulations ~hall be adopted to ensure that bdore action 1s taken against any participant under (a) or (b) above, the partici pant shall be informl'd immediately of tihe complaint against it and given an adequate oppo1tunity 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.
232 (d) Suspension umder (a) or (b) above or limitation under ( c) above shall not affect a participant 's obligation to provide currency in accordance wi th A rticle XXV, 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 fo r fai lure to fulfill the obligation under Article XXV, Section 6 (a), shall not be terminated until ont 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 becaase it has become ineligible to use the Fund's resources under Article IV, Section 6.

Article V, Section 5, Article VI, Section 1, or Article XV, Section 2(a), Article XV, Section 2, shall not apply because a participant has failed to fulfill any obligations with respect to special drawing rights.

ARTICLE XXX Termination Of Participation Section 1.
Right ( a ) Any participant may terminate its participation in the Special Drawing Account at any time b y transmitting a notice in writing to the Fund at its principal office.

T ermination shall become effective on the date the notice is received.

terminate participation .

- to (b) A participant that withdraws from membership in the Fund shall be deemed to have simultaneously terminated its participa tion in the Special D rawing Account.

Section 2.

Settlement on termination.


- (a ) When a partici pant terminates its participation in tht Special Drawing Account, all operations a nd transactions by the terminating participant in special drawing rights shall cease except as otherwise permitted und er an agree ment 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 assess ments tevied before that date but not paid shall be paid in special drawing rights.

(b) T he F und shall be obligated to redeem all special drawing rights held by the terminating participant, and the terminating partici pant 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 pay able because of its particiption in the Sp.ecial Drawing Account.
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 set off to extinguish its obligation to the Fund shall be cancelled.

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

233 Section 3.

Interest and charges.

- After the date of termi nation the Fund shall pay interest on any outstanding balance of special drawing rights held by a terminating participant and the ter minating participant shall pay charges on any outstanding obligation owed to the Fund at the times and rates prescribed under Article XXVI.

Payment shall be made in special drawing rights.


A terminating parti cipant shall be entitled to obtain special drawing rights with currency convertible in fact 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 XXV.

Sec tion 5, or by agreement with any other holder.

Section 4.
Section 4.

Settlement of obligation to the Fund.

- Gold or currency received by the Fund from a terminating participant shall be used by the Fund to redeem special drawing rights held by partici pants in proportion to the amonut by which each participant's hold ings of special drawing rights exceed its net cumulative allocation at the time the gold or 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 install ment due under an agreement on settlement or under Schedule H and set off against that installments shall be cancelled.

Section 5.

Settlement of obligation to a terminating partici pant.
- Whenever the Fund is required to redeem special drawing righst held by a terminating participant, redemption shall be made with currency or gold provided by participants specified by the Fund.

These participants shall be specified in accordance with the principles in Article XXV, Section 5.
Each specified particip.µit shall provide at its option the currency of the terminating participant or currency convertible in fact or gold 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, currency in fact, or gold from any holder, if the Fund so permits.

convertible Section 6.

General Account transactions.
- In order to fa cilitate 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 re deemed, in a transaction with the Fund conducted through the General Account to obtain its own currency or currency convertible in fact at the option of the Fund; or (ii) obtain special drawing rights in a transaction with the Fund conducted through the General Account for a currency ac ceptable to the Fund or gold to meet any charges or in stallment due under an agreement or the provisions of Schedule H .
234 ARTICLE XXXI Liquidation Of The Special Drawing Account (a) The Special Drawing Ac-count may not be liquidated ex In any emergency, of cept by decision of the Board of Governors.

the Executive Directors decide that liquidation of the Special Drawing Account may be necessary, they may temporarily suspend allocations or cancellations and all transactions in special drawing rights pending the Board.
A decision by the Board of Governors to decision by liquidate the Fund shall be a decision to liquidate both the General Account and the Special Drawing Account.
(b) If the Board of Governors decides to liquidate the Special Drawing Account, all allocations or cancellations and all operations and transactions in special drawing rights and the activities of the Fund with respect to the Special Drawing Account 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 re spect to special drawing rights shall cease except those set out in this Article, Article XVIII(c) , Article XXVI, Article XXVII(d), Article XXX and Schedule H , or any agreement reached under Article XXX subject to paragraph 4 of Schedule H , Article XXXII , and Schedule I .
(c) Upon liquidation of the Special Drawing Accqunt, 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 Account.

(d) Liquidation of the Special Drawing Account shall be ad ministered in accordance with the provisions of Schedule I.
ARTICLE XXXII Explanation Of Terms With Respect To Special Drawing Rights In interpreting the provisions of this Agreement with respect to special drawing rights the Fund and its members shall be guided by the following: (a) 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 XXIV.

Section 2 (a).
(b) Curr.ency convertible in fact means: (i) a participant's currency for which a procedure exists for the conversion of balances of the currency obtained in transactions involving special drawing rights into each other currency for which such procedure exists, at rates of exchange prescribed under Article XXV, Section 8, and which is the Curr.ency of a participant that 235 (i) has accepted the obligations of Article VIII, Sec tions 2, 3, and 4, or (ii) for the settlement of international transactions in fact freely buys and sells gold within the limits prescribed by the Fund under Section 2 of Article IV; or ( 2) currency convertible into a currency described in para graph ( 1) above at rates of exchange prescribed under Article XXV, Section 8.
( c) A participant's reserve position in the Fund means the sum of the gold tranche purchases it could make and the amount of any indebtedness of the Fund which is readily repayable to the participant under a loan agreement.
SCHEDULE A Quotas In millions of United States dollars Australia Belgium Bolivia China Columbia Costa Rica Cuba Czechoslovakia Denmark Dominica Republic Ecuador Egypt El Salvador Ethiopia France Greece Guatemala Haiti Honduras Iceland India Iran Iraq Liberia Luxembourg Mexico 150 300 50 275 50 2 50 .5 2 25 15 125 100 1,200 1,300 2,750 15 15 60 200 225 10 550 50 5 50 125 (1) 5 5 45 2.5 6 450 4 Brazil Canada Chile Netherlands New Zealand Nicaragua Norway Panama Paraguay Peru Philippine Commonwealth Poland Union of South Africa Union of Soviet Socialist Republics United Kingdom United States 5 5 2.5 Uruguay Venezuela 1 400 Yugoslavia 25 8 .s 10 90 Total 8,800 236 The quota of Denmark shall be determined by the Fund after 1. the Danish Government has declared its readiness to sign this Agree ment but before signature takes place.
SCHEDULE B Provisions with Respect to Repurchase by a Member of Its Currency Held by the Fund 1.
In determining the extent to which repurchase of a member's currency from the Fund under Article V, Section 7 ( b) , shall be made with each convertible currency and each of the other types of mone tary reserve, the following rule, subject to 2 below, shall apply: (a) If the members 's monetary reserves have not increased during the year, the amount payable lto the Fu~d shall be distributed among all types of reserves m proportion to the member's holdings thereof at the end of the year.
(b) If the member's monetary reserves have increased during the year, a part of tlhe amount payable to the Fund equal to c,ne-half of the increaise, minus one-half of any decrease in the Fund's holdings of the mem ber's currency that h as occurred during the year, shall re distributed among those types of reserves which have increased in proporJtion to the amount by which each of the;m bas increasiecl.
The remainder of the sum payable to the Fund shall be distributed among all types of r~serves in proportion to the member's remaining holdings thereof.
(c) If after the repurchases required under Article V, Section 7(b), had been made, the result would exceed either of the limits specified in Article V, Section 7 ( c) (i) or (ii), the Fund shall require such re purchases to be made by the member proportionately in such manner that these limits will not be exce'eded (d) lf after all the repurchases required under Artide V, Section 7 t b), had been made, the result would exceed the limit specified in Article V, Section 7 ( c) (iii) the amount by which the limit would be exceeded shall be discharged in com'\'!rtible currencies as determined by the Fund without exceeding that limit.
(e) If a repurchase required under Article V, Section 7(b), would exceed the limit specified in Article V, Section 7 ( c) (iv), the amount by which the limit would be exceeded shall be repurchased at the end of the subsequent financial year or years in such a way that total repurchases under Article V, Section 7(b), in any year would not exceed the limit specified in Article V, Section 7 ( c) (iw).

2.

(a) The Fund shall not acquire the currency of any non member under Article V, Section 7(b) and (c).
237 (b) Any amount payablt' in the currency of a ~on-~ember under 1 (a) or 1 (b) above shall be paid m the convertible currencies of members as determined by the Fund.

3.
In calculating monetary reserves and the increase in monetary reserves during any vcar for the purpose of Article V, Section 7(b) and ( c), no account· shall be taken, unless deductions have otherwise been made by the member for such holdings, of any increase in those monetary reserves v.hich is due to currency previously iinconwrtible having become convertible <luring the Y'l!ar; or to holdings which are the proceeds of a fong-term or medium-term loan contracted during rhe year; or to holdings which have been transferred or set aside for repayment of a loan during the subtsequellll: year.
4.

In the c::ise of members whose metropolitan territories have been occupied by the enemy, gold newly produced during the five years after the entry into force of this Agreement from mines located within their metropolitan territories shall not be included in computations of their monetary reserves or of increases in their m0111etary reserves.

5 .
In calculating monetary reserves and the increase in monetary rnse-rves during any year for the purpose of Article V, Section 7(b) and ( c), the Fund may decide in its dii.scretion, on the request of a member, that deductions shall be made for obligations outstanding as the result of transactions between m~bers under a reciprocal facility by which a member agrees to exchange on demand its currency for the currency of the othc:r member up to a maximum amount and on terms roguiring that each such transaction be reserved within a specified period not in excess of nine months.
6.

In calculating monetary reserves and the increase in monetary reserves for th't:!
purpose of Article V, Section 7(b) and (c), ArticJe XIX(e) shall apply except that the following provisions sh?Jl apply at the end of a financial year if it was in effect at the beginning of that year: 'A member·s monetary reserves shall be calculated by deducting from its central holdings the currency liabilities to the Treasuries, central hanks, stabilization funds, or similar fiscal agencies of other members or non-members specified under ( d) above, ltoirether with similar liabilities to other official inEtitutions ancf other banks in -the territories of mem bers, or non-members specified under (d) above.
To these net holdings s,h01J be added the sums deemed to be official holdings cf other official institrutions and other banks under ( c) above.'

SCHEDULE C Election of Fxecutire Directors 1.

The election of <the elective executive directors shall be by ballot of the governors eligible to vote under Article XII, Sectioin 3 (b) (iii) :md (iv).

238 2 .

In ba110ting for the five directors to be elected under Article XII, Section 3 (b 1 (iii), each of the govemol!
's eligible to vote shall cast for one person all of the votes to which he ~:i entitled under Article XII , Section 5 (a).

The five persons receiving the greatest number of vote shall be 'directors, provided t1hat no perscm who received less than nineteen percent of the total number of votes that can be ca~t ( eligible votes) shall be considered elected .

3.
3.

When five persons are not elected on the first ballot, a second b;1llot shall be held in which the person who received the low~st number of votes shall "tie ineligible for election and in which there shall vote : n!y (a) those governors who voted in the first ballot for a person not elected, and ( b) those go\l'crnors whose votes for a person elected are deemed under 4 helow, to have rafaed the votes cast for that per$on above twenty percent of the eligible votes.

4.
4.

In determining whether the votes cast by a governor are to be deemed to have raised 1!he total of any person above twenty percent of the eligible votes the twenty percent shall be deemed to include, first the votes of the gO'Vernor casting the largest number of votes for such person, then the votes of the governor casting the next largest number , and so on, until twenty percent is reached .

5.
5.

Any gowrnor part of \vhose votes must be counted in order to raise the total of any person above nineteen percent shall be con sidered as c:isti ng all of his \'Otes for such person even if the total voties for such persor:.

thereby exceed twenty percent.

6.


If, after the second hallot, five persons have not been elected, further b aJlots shall :ie held on the same principles until five persons have been elected , provided that after four persons are elected, the fifth may be elecood by a ~imple majority of the remaining votes and shall be deemed to have been elected by all such votes .

7.
7.

Th<c directors to be elected by the American R epublics under Article XII, Section 3(b) (iv) shall be elected as follows: (a) Each of the directors shall be elected separately.

(b) In the election of th-e fi rst1 director, each governor repre senting an American Republic eligible to participate in the elt-ction shall cas>t for one person all the votes to \Vhich he is entitled.
The person receiving the largest number of votes shall be elected providied that he has received not less than forty-five percent of the total votes .

( c) If no person is elected on the first ballot, further ballots shall be held , in each of which the person receiving the lowest number of votes shall be eliminated, until one pcffon receives a number of votes sufficient for election under ( b) ~bove.
{d) Governors whose votes contributed to the election of the first director shall take no part in the election of the second di.rector.

239 ( e) Persons who did not succeed in the first ~lection shall not be ineligible for election as the second director.

(f) A majority of the vote,s which can be cast shall be If at the required for election of the second director.
first baUot no person receives a majority, further ballots shall be h!tld in each of which the person receiving the lowest number of votes shall be eliminated, until some person obtains u majority.

(g) The second director i;hall be deemed to haV'c be<.

!n eleoted by all the vote~.

which could have been cast in the ballot securing his i!lection.

SCHEDULED Settlement of Accounts with Members Withdrawing 1.
The Fund shall be obligated to pay to a member withdrawing an amount equal to it;; quota, plus any other amounts due to it from the Fund, less any nmooots dul!

to the Fund, including charges accruing after the date of its withdrawal: bUJt no payment shaaI be made until six months after the date of withdrawal.

Pavments shall be made in the currency of thie withdrawing member.

· 2.
· 2.

If the Fund's holdings of the currency of the wittlldrawing memher are not sufficien;t to pay the net amount due from the Fund.

the balance shall hie paid in gold, or in such other manner as may be agreed.

If the Fund and the whhdrawing member do not reach agree ment within six months of the date of withdrawal, the currency in question held by ithe Fund shall be paid forthwith to tlhe withdrawimg member.

Any balance due shall be paid in ten half-yearly instalmients during the ensuing five years.
Each such instalment shall be paid.

at the option of thl:!

Fund, either in the currency of the withdrawiing member acquired afaer its withdrawal or by the delivery of gold.

'.,.

Jf the Fund fails to meet any instalment which is due in ac cordance with the pr'el:eding paragraphs, the withdrawing member shall be entitled tc require the Fund t0 pay the insitalment in ainy currency held by the Fund with the exception of any currency which has been declared scarce under Article VII, Section 3.

4.
4.

If the Fund's holdings of the currency of a withdrawing mem ber exceed the amount due to it, and if agreement on the method of settling accounts is 111ot reached within ,s1ix months of the date of with.

drawal, the forr.

·er me, bcr shall be obligated to redeem such exoess currency in gold ,r, at .

s option.

in ;the currencies of membtrs which at the time of red mrtio11 are convertible.

Redemption shall be made at the parity existit1g ·t the time of withdrawal from the Fnnd.
The withdrawing member hall complete redemptiOlll within five years of tire date of withdrawal, or within such longer period as may be fixed by the Fund, buit: shaJI not be requfreid to redeem in any half-yearly period mnre than one-tenth of the Fund's exooss holding~ of its cur.

rency at thie date of withdrawal plu.o.

further acquisitions of the currency 240 during such half-yearly period.
Tf the withdrawing member does not fulfill this obligation, the Fund may in an orderly manner liquidate in any market the amount of currency which should have reen 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 resource1s of the Fund and that such currency is available under 4 above.

6.
6.

The withdrawing memb'l!r guarantees the unrestricted use at aU times of the currency disposed of under 4 and 5 above for tilie purchase of goods or for payment of sums due to it or to persons1 within its territories.

It shall compensate the Fund for any loss result ing from the difference between the par value of its currency on the date ofwithdrawal and the value realized by :the Fund on disposal under 4 and 5 above.

7.
7.

In the event of the Fund going into liquidation under Article XVI, Section 2, w.ithin six months of the date on which the membior withdraws, the account be:twecn the Fund and that govern ment shall be settled in accordance with Article XVI, Section 2, and Schedule E .

SCHEDULE E 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 drstribu tion 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; (cl all other currerncics in proportion, so far as may be practi cable, to the quotas of the members.

2.
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) The Fund shall distribute its holdings of gold among the members whose currencies are held by the Fund in amounts less than their quotas.

These members 8ihall share the gold so distributed in the proportions of tihe amcunts by which their quotas exceed the Fund's hold ings of their currencies.
(b) 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.

(c) The Fund shall apportion the remainder of its holdings of each currency among all the members in proportion 241 to the amounts due to each member after the distribution under (a) and (b) above.

3.
3.

Each member shall redeem the holdings of its currency appor tioned to other members under 2 ( c) 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 bais not reached agreement with the Ftind withi!J the ~ree-month period referred to in 3 above , die Fund shall use the currencies of other members apportioned to thait member under 2(cl above to redeem the currency of that member apportioned to other members.
Each currency apportioned to a member which has not reached agr~ment shall be used, so far as possible, to redeem its cur rency 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 accord ance with 3 above, the Fund shall use the currencies of other members apportioned to that member under 2(c) above to redeem the currency of that member apportioned to other members which have made agree ments with the Fund under 3 above.
Each amount so redeemed · shall be redeemed in the currency of the member to which it was apportioned.

6.

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

7.

Each member whos,.

currency has been distribu1ted to other members under 6 above shal1 redeem such currency in gold or, at its option, 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 fuliill this obliRation, the amount of currency which should have been redeemed may be liquidated in an orderly manner in any market.

8.
8.

Each member whose currency has been distributed to other members under 6 above guarantees the unrestricted use of such cur rency 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 io compensate other members for any loss resulting from the difference between the par value of its currency on the date of the decision to liquidate the Fund and the value realised by such members on disposal of its currency.
SCHEDULE F Designation f 11 as o ows: During the first basic period the rules for designation shall be .

.... , r:w ra ·~ _ ··-·- ·- · .. _ .

, 242 (a) Participants subject to designation under Article XXV, Section 5 (a ) (i) , shall be designated for such amounts as will promote over time equality in the ratios of the participant's holdings of special drawing rights in excess of their net cumulative allocatins 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 designat~d : (i) in proportion to their official holdings of _gold and for eign 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 period the rules fo r reconstruction shall be .
as follows: (a ) (i) A participant shall so UJse 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 most recent five-year period will be not Jess than thirty percent of the average of its daily net cumulative allocation of special drawing rights over the same period .
( ii) Two years after the first allocation and at the end of each calendar month thereafter the Fund shall make calculations for each participant so as to ascertain whether and to what extent the participant would need to acquire special drawing rights between the date of the calculation and the .end of any five-year period in ohler 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 Articl~ XXV, Se_ction 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 requfrement 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.
243 (iv) A participant that needs to acquire special drawing rights to fulfill this obligation shall be obligated and entitled to obtain them , at its option for gold or cur rency acceptable to the Fund, in a transaction with the Fund conducted through the General Account.
If sufficient special drawing rights to fulfill this obligation cannot be obtained in this way, the participant shall be obligated and entitled to obtain them with currency convertible in fact 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 of special holdings drawing rights and their holdings of gold and foreign exchange and their reserve positions in the Fulild.

2.
2.

· If a participant fails to comply with the rules for reconstitution, the Fund shall determine whether or not the circumstances justify sus pension under Article XXIX, Section 2 (b) .
SCHEDULE H Termination of Participation 1 If the obligation remaining after the setoff under Article XXX, Section 2 (b), is to the terminating partic:pant and agreement on settle ment between the Fund and the terminating participant is not reached within six months of the date of ttrmination, the Fund sha11 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 re deem 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 in accordance with Article XXX, Section S. or (b) by permitting the terminating participant to use its soecial drawing rights to obtain its own currency or currency convertible, in fact from a participant specifitd by the Fund, the General Account, or any other holder.

2.
2.

If the obligation remaining after the setoff under Article XXX, Section 2 (b) , is to the Fund and agreement on settlement is not reach ed within six months of the date of termination.

the terminating parti cipant 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 currency convertible in fact or gold at the option of the terminating participant, or (b) by obtaining special drawing rights, in accordance with Article XXX, Section 6 from the General Account or in aareement with a participant specified by the Fund or from any other holder.

and the setoff of these special dra:wing rights against the instalment due.

3.
3.

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

244 4.

In the event of the Speci al D rawi ng Account going into liquida tion under Article XXXI within six months of the date a participant terminates its participation, the settlement between the Fund and that government shall be made in accordance wi th Article XXXI and Schedule I.

SCHEDULE I Administration of Liquidation of The Special Drawing Account 1.
In the event of liquidation of the Special Drawing Accoumt, 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 currency convertible in fact and the currencies of partici pants 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 Account.

2.
If it is decided to liquidate the Fund within six months of the date of the decision to liqudate the Special Drawing Account, the liquidation of the Special Drawing Account shall not proceed until special drawing rights held in the General Account have been distributed in accordance with the following rule : After the distribution made under 2 (a) of Schedule E, the Fund shall apportion its special drawing rights held in the General Account among all members that are parti cipants in proportion to the amounts due to each parti cipant after the distribution under 2 (a).
To determine the amount due to each member for the purpose of ap portioning the remainder of its holdings of each currency under 2 ( c) of Schedule E , the Fund shall deduct the dis tribution of special drawing rights made under this rule.

3.
With the amounts received under 1 above, the Fund shail redeem special drawing rights held by holders in the following manner: and order: (a) Special drawing rights held by governments that have ter minated their participation more than six months before the date the Board of Governors decides to liquidate the Special Drawing Account shall be redeemed in accordance with the terms of any agreement under Article XXX or Schedule H. (b) Special drawing rights held by holders that are not parti cipants 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 ~peciai draw ing rights held by each participant fa1 relation to its net cumulative alloca1ion.
The Fund shall first redeem special drawing rights from the participants with the 245 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_ u;:itil 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.
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 leS1s the amount of any payments made in accordance with 1 above.
The rates of interest and charges and the time of payment shall be detennined by the Fund.

Payments of interest and charges shall be made in special drawing rights to the extel]t possible.

A participant that does not hold sufficient special drawing rights to meet any charges ,sha11 make the payment with gold or a currency specified by the Food.
Special drawing rights received as charges in amounts needed for administrative expenses shaU not be used for tlte payment of interest, but shall be transferred tJo the Fund and shall be redeemed first and with the currencies u~ed by the Fund to meet its ex~nses.

6.

While a pa11ticipant is in default with respect to any payment required by 1 or 5 above, no amounts shall be paid to it in accordanre with 2 or 5 above.

7.
7.

If after the final payments have been made to participants each ·participant not in defaul~ does not ho'ld special drawing rights in the same proportion 11:o its net cumulative aHocation, those participants holding a lower proportion shall purchase from those holding a higher proportion such amounts in accordance with arangementis 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 rt.he Fund hs own currency in an amount equal to its default.

The Fund shall apportiion this currency and any residual claims among participants in proportion to the amoun1t of special drawing rights held by each aind thc-se special drawing rights ISihaH be canrelled.
The Fund shall then dose the "Jooks of the Special_ Drawing Account and all of the Fund's li~-tbilities ari!tlng from the allocations of s,pecial drawing rights aind the aqministratiion of the Special Iirawing Accouolt shall ceasie.

8.

Each participant whose currency is distributed to other par ticipants .

under this.

Schedule guarantees the unrestricted U1S,e of such currency at a11 .

itime~.

for the purchase of goods or for p~yments of sums due to it or to persons in its territories.
Each participant so obligated agrees to compensate other participants for any loss resulting 246 from the difference between the value at which the Fund distributed 'i'!s.

currency under this Schedule au1d the value realised by such par ticipants on disposal of its currency .

LIST OF ARTICLES AND SECTIONS Introductory Article I.

Purposes II.

Membership 1.

Original Members 2.

Other members HI.

QuotaJS and Subscriptions 1.

Quotas 2.

Adjustment of quotas 3.


Suhscripitions: time, place and form of payment 4.

Payments when quotas are changed 5.

Substitution of securities for currency IV.

Par Values of Currenci~s 1.

Expression of par values 2.

Gold purchases based on par values 3.

Foreign exchange dealings based on parity 4.

Obligations regarding exchange stability 5.

Changes in par vafoies 6.

Effect of unauthorised changes 7.

Uniform changes in par values 8.

Maintenance of gold value of the Fund's assets 9.


Separate cunencies witlhin a member's territories V .

Transactions with the Fund 1.

Agencies dealing with the Fund 2.

Limitation on the Fund's operatioos 3.

Conditions governing use of the Fund's resourcies 4, 5.

6.

Purchases of currencies from the Fund for gold 7.

Repurchase by a member of its currency held by \Vaiver of conditions Ineligibility to use the Fund's resources the Fund 8.

Charges 9.

Remuneration VI .

Capital Transfers 1.


Use of the Fund's resources for capital transfer~ 2.

Special provisions for capital transfers 3.

Controls of capital transfers 241 VII.

Scarce Currencies .

VIII.

1.

General scarcity of currency 2.

Measures to replenish the Fund's holdings of scar~ currencies 3.

Scarcity of the Fund's holdings 4.

AdministraJtion of restrictions 5.

Effect of other international.

agreements on restric tions Introduction ,General Obiigations of Members l. 2.
Avoidance of restrictions on current payments 3.

Avoidance of discriminatory currency practices 4.

Convertibility of foreign-held balances 5.

Furnishing of information 6.

Consultation between members regarding existing in tern a tional agreements.

IX.

Status, Immunities and Privileges Immunity from judicial process Immunity from other action Immunity of archives 1.

Purposes of Article 2.

Status of the Fund 3.

4.

5.

6.

Freedom of assets from restrictions 7.

Privilege for communications 8.


Immunities and privileges of officers and employees Immunities from taxation 9.

10.

Application of Af!icle · X.

Relations with O~her · International Organisations XI.

Relations with Non-member Countries 1.

Undertakings regarding relations with non-member countries 2.

Restrictions on countries transactions with non-member XII.

Organisation and Management 1.

Structure of the Fund 2.

Board of Governors 3.

Executive Directors 4.

Managing Director and staff 5.


Voting 6.

Distribution of net income 7.

Publication of reports 8.

Communication of views to members XII I.

Offices and Depcsitories 1.

Location of offices 2.

Depositories 3.

Guarantee of the Fund's assets XIV.

Transitional Period Introduction 1.

2.

Exchange restrictions 3.

Notification to the Fund 4.

Action of the Fund relating to restrictions 5.

Nature of transitional period XV.

Withdrawal from Membership 1.

Right of members to withdraw 2.


Compulsory withdrawal 3.

Settlement of accounts with members withdrawing XV I.

Emergency Provisions 1.

Temporary suspension 2.

Li4uidation of the Fund XVII.

Amcndmrents XVIII.

Interpretation XIX.

Explanation of Terms XX.

Inaugural Provisions 1.

Entry into force 2.

Signature 3.

4.

Inauguration of the Fund Initial de.termination of par values XXI.

Special Drawing Rights 1.

Authority to allocate special drawing rights 2.

Unit of value XXII .


General Account and Special Drawing Account 1.

Separation of operations and transactions 2.

Separation of assets and property 3.

Recording i:tnd information XXIIJ .

Participants and other Holders of Special Drawing Rights l .

Participants 2.

General Account as a holder 3.

Other holders 249 XXIV .

Allocation and Cancdlation of Special Drawing Rights 1.

Principl~s and considerntions governing allocation and cancellation 2.

Allocation and cance'llation 3.


Unexpected major developments 4.

Decisions on allocations and cancellations XXV.

Operati~ns and 'fransactions in Special Drawing Rights 1.

Use of special drawing rights 2.

Transactions betweei;i participants 3.

Requirement of need 4.

Obligation to provide currency 5.

Designa!tion of participants to provide currency 6.

Reconstitution 7.

Operations and transactions through the General Account 8.

Exchange t ates XXVI.


Special f?rawing Account Interest and Charges Interest 1.

2. ,.

Cb,arges 3.

Rate oI interest and charges 4.

Assessments Payment of interest, charges, and assessments XXVII.

Adminir.tration of the General Account and the Special Drawing Account XXVIII.

General Obligations of Participants XX.IX.

Suspension of Transactions in Special Drawing Rights 1.

Emergency provisions , 2.

Failure to fulfill obligations XXX.

Terminatioo of Participation 1.


Right to terminate participation 2.

Settlement on termination 3.

Interest and charges 4.

Settlement of obligation to the Fund 5.

Settlement of obligation to a terminating participant 6.

General Account transaction~ XXXI.

Liquidation of the Special Drawing Account XXXII.

Explanation of Terms with Respect to Special Drawing Rights.

250 SCHEDULES .SCHEDULE A.

Quotas SCHEDULE B.


Provisions with Respect to Repurchase by a Member of its Currency held by the Fund SCHEDULE C. Eleotion of Executive Directors SCHEDULE D. Settlement of Accounts with Members Withdrawing SCHEDULE E .

Administration of Liquidation SCHEDULE F. Designation SCHEDULE G. R'l"!constitution SCHFDULE H. Termination of Participation SCHEDULE I.

Administration of Liquidation of the Special Drawing Account."

Order this 23rd day of September, 1969.

P.A.


REID, Minister of Finance.