Source document: https://docs-lawep.s3.us-east-2.amazonaws.com/1698834252407.pdf (New Zealand)
International Finance Agreements Act 1961 Public Act Date of assent 1961 No 3 16 August 1961 Contents Title Preamble Short Title Interpretation Membership of the Fund, the Bank, and the Corporation Reserve Bank of New Zealand to be depository Payments under Agreements Power to borrow Issue of securities Application of certain Articles Schedule 1 Schedule A QUOTAS Schedule B TRANSITIONAL PROVISIONS WITH RESPECT TO REPURCHASE, PAYMENT OF ADDITIONAL Note This Act is administered in the Treasury Page 3 3 4 4 4 5 5 6 6 7 7 79 80 1 International Finance Agreements Act 1961 Reprinted as at 3 September 2007 SUBSCRIPTIONS, GOLD, AND CERTAIN OPERATIONAL MATTERS Schedule C PAR VALUES Schedule D COUNCIL Schedule E ELECTION OF EXECUTIVE DIRECTORS Schedule F DESIGNATION Schedule G RECONSTITUTION Schedule H TERMINATION OF PARTICIPATION Schedule I ADMINISTRATION OF LIQUIDATION OF THE SPECIAL DRAWING RIGHTS DEPARTMENT Schedule J SETTLEMENT OF ACCOUNTS WITH MEMBERS WITHDRAWING Schedule K ADMINISTRATION OF LIQUIDATION Schedule L SUSPENSION OF VOTING RIGHTS Schedule 2 Schedule A SUBSCRIPTIONS Schedule B ELECTION OF EXECUTIVE DIRECTORS Schedule 3 83 86 89 90 91 92 94 97 100 103 112 149 151 153 2 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble Schedule A Subscriptions to Capital Stock of the International Finance Corporation Schedule 4 Resolution of Board of Governors setting forth the terms and conditions governing admission to membership in the International Monetary Fund
 Schedule 5 Resolution of Board of Governors setting forth the terms and conditions governing admission to membership in the International Bank for Reconstruction and Development Schedule 6 Resolution of Board of Governors setting forth the terms and conditions governing admission to membership in the International Finance Corporation 175 178 180 182 An Act to make provision for the Government of New Zealand to become a member of the International Monetary Fund, the International Bank for Reconstruction and Development, and the International Finance Corporation, and to make further provision in respect thereof Preamble WHEREAS the International Monetary Fund and the International Bank for Reconstruction and Development were established pursuant to agreements drawn up at the United Nations Monetary and Financial Conference held in the month of July 1944: And whereas the International Finance Corporation was established pursuant to the Articles of Agreement approved by the Executive Directors of the International Bank for Reconstruction and Development on the 11th day of April 1955: And whereas the Fund and the Bank and the Corporation have prescribed terms and conditions (as set out in Schedules 4, 5, and 6 to this Act) upon which the Government of New Zealand may be admitted to membership of the Fund and the Bank and the Corporation: And whereas it is desirable to make provision accordingly.
3 s 1 International Finance Agreements Act 1961 Reprinted as at 3 September 2007 BE IT THEREFORE ENACTED by the General Assembly of New Zealand in Parliament assembled, and by the authority of the same, as follows: Short Title This Act may be cited as the International Finance Agreements Act 1961.
Interpretation In this Act, unless the context otherwise requires,— Bank means the International Bank for Reconstruction and Development Bank Agreement means the Articles of Agreement set out in Schedule 2 to this Act, providing for the establishment and operation of the Bank Corporation means the International Finance Corporation Corporation Agreement means the Articles of Agreement set out in Schedule 3 to this Act, providing for the establishment and operation of the Corporation Fund means the International Monetary Fund Fund Agreement means the Articles of Agreement of the International Monetary Fund set out in Schedule 1 to this Act, as that Schedule appears in the Schedule to the International Finance Agreements Amendment Act 1976.
Fund Agreement: this deﬁnition was substituted for the original deﬁnition by section 2 of the International Finance Agreements Amendment Act 1976.

Minister means the Treasurer, or other Minister of the Crown who, under the authority of any warrant or with the authority of the Prime Minister, is for the time being responsible for the administration of this Act or particular provisions of this Act.
Minister: this deﬁnition was inserted, as from 25 June 1997, by section 2 Treasurer (Statutory References) Act 1997 (1997 No 20).
Membership of the Fund, the Bank, and the Corporation Approval is hereby given to the New Zealand Government’s becoming a member of the Fund and of the Bank and of the Corporation in accordance with the Fund Agreement, the Bank Agreement, and the Corporation Agreement, and in 1 2 3 4 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 s 5 4 (1) (2) 5 accordance with the terms and conditions set out in Schedules 4, 5, and 6 to this Act.
Reserve Bank of New Zealand to be depository The Reserve Bank of New Zealand is hereby designated as the depository in New Zealand for all the holdings of New Zealand currency and of other assets of the Fund, the Bank, and the Corporation.
The Reserve Bank of New Zealand shall have power from time to time to acquire, hold, and deal with special drawing rights in accordance with the Fund Agreement; and, without limiting the generality of the expression foreign exchange in the Reserve Bank of New Zealand Act 1989, special drawing rights shall be deemed to be foreign exchange for the purposes of that Act.

Subsection (2) was inserted, as from 21 April 1978, by section 4 International Finance Agreements Amendment Act 1976 (1976 No 25).
Subsection (2) was substituted, as from 1 February 1990, by section 185 Reserve Bank of New Zealand Act 1989 (1989 No 157).
Payments under Agreements There shall be paid out of public money, without further appropriation than this section,— (a) All payments required to be made from time to time to the Fund under the terms set out in Schedule 4 to this Act and the provisions of the Fund Agreement: (b) All payments required to be made from time to time to the Bank under the terms set out in Schedule 5 to this Act and the provisions of the Bank Agreement: All payments required to be made from time to time to the Corporation under the terms set out in Schedule 6 to this Act and the provisions of the Corporation Agree­ ment.
(c) Section 5 was amended by section 160(1) of the Public Finance Act 1977 by omitting the words “National Development”.

Section 5 was further amended by section 86(1) Public Finance Act 1989 (1989 No 44) by substituting the words “public money” for the words “the Loans Account or any other account of the Public Account”.
5 s 6 6 (1) International Finance Agreements Act 1961 Reprinted as at 3 September 2007 Power to borrow The Minister may from time to time borrow on the security of and charged upon the public revenues of New Zealand such sums of money as are required to be paid by the Government of New Zealand under section 5 of this Act.

(2) All money borrowed under the authority of this section shall, as and when borrowed, be paid to the Crown Bank Account.
(3) All money borrowed under the authority of this section shall be borrowed under and subject to the provisions of Part 6 of the Public Finance Act 1989.

Subsection (1) was amended, as from 25 June 1997, by section 2 Treasurer (Statutory References) Act 1997 (1997 No 20) by substituting the word “Minister” for the words “Minister of Finance”.

In subsection (2) the words “National Development” were omitted by section 160(1) of the Public Finance Act 1977.
This subsection was amended, as from 1 July 1989, by section 86(1) Public Finance Act 1989 (1989 No 44) by substituting the words “the Crown Bank Account” for the words “the Public Account for the credit of the Loans Account or of any other account”.
Subsection (3) (as amended by section 160(1) Public Finance Act 1977) was further amended, as from 1 July 1989, by section 86(1) Public Finance Act 1989 (1989 No 44) by substituting the words “Part 6 of the Public Finance Act 1989” for the words “Part 5 of the Public Finance Act 1977”.
The provisions of subsection (2) and (3) apply to money borrowed under sections 3(3) and 4(4) of the International Finance Agreements Amendment Act 1966 and under sections 3(2) and 4(2) of the International Finance Agreements Amendment Act 1975. to create hereby authorised Issue of securities and is The Minister issue securities, notes, or obligations, which shall be non­negotiable, non­interest bearing, and payable on demand, to the Fund in conformity with section 4 of Article III of the Fund Agreement, and to the Bank in conformity with section 12 of Article V of the Bank Agreement.
Section 7 was amended, as from 21 April 1978, by section 5 International Finance Agreements Amendment Act 1976 (1976 No 25) by substituting the expression “section 4” for the expression “section 5”.

Section 7 was further amended, as from 25 June 1997, by section 2 Treasurer (Statutory References) Act 1997 (1997 No 20) by substituting the word “Minister” for the words “Minister of Finance”.
7 6 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 s 8 8 (1) (2) Application of certain Articles The ﬁrst sentence of section 2(b) of Article VIII of the Fund Agreement (which relates to contracts that involve the currency of any member and are contrary to the exchange control regulations of that member) shall have the force of law in New Zealand.
Sections 2 to 9 of Article IX of the Fund Agreement, sections 2 to 9 of Article VII of the Bank Agreement, and sections 2 to 9 and 11 of Article VI of the Corporation Agreement (which relate to status, immunities, and privileges) shall have the force of law in New Zealand.

(2A) Paragraph (b) of Article XXI of the Fund Agreement (which relates to the exemption from taxation of special drawing rights and of operations and transactions in special drawing rights) shall have the force of law in New Zealand.
In this section, New Zealand includes the Cook Islands, and Tokelau.

(3) (4) (5) Subs (2A) was inserted by section 6 of the International Finance Agreements Amendment Act 1976.

In subsection (3), section 9 of the Western Samoa Act 1961 substituted for the words “the Tokelau Islands and Western Samoa” the words “and the Tokelau Islands”, and the reference to Tokelau was substituted for the reference to the Tokelau Islands by section 3(8) Tokelau Amendment Act 1976.
Subsection (5) was repealed by section 10(1) of the Western Samoa Act 1961.

Subsection (4) was repealed by section 58 of the Cook Islands Amendment Act 1964.

Schedule 1 Sections 2, 7, 8 7 Schedule 1 International Finance Agreements Act 1961 Reprinted as at 3 September 2007 This Schedule was substituted for the original Schedule 1 by section 7 of the International Finance Agreements Amendment Act 1976.
ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND Preamble The Governments on whose behalf the present Agreement is signed agree as follows: INTRODUCTORY ARTICLE (i) (ii) The International Monetary Fund is established and shall operate in accordance with the provisions of this Agreement as originally adopted and subsequently amended.

To enable the Fund to conduct its operations and trans­ actions, the Fund shall maintain a General Department and a Special Drawing Rights Department.
Member­ ship in the Fund shall give the right to participation in the Special Drawing Rights Department.
(iii) Operations and transactions authorised by this Agree­ ment shall be conducted through the General Depart­ ment, consisting in accordance with the provisions of this Agreement of the General Resources Account, the Special Disbursement Account, and the Investment Ac­ count; except that operations and transactions involving special drawing rights shall be conducted through the Special Drawing Rights Department.
ARTICLE I PURPOSES The purposes of the International Monetary Fund are: (i) To promote international monetary co­operation through a permanent institution which provides the machinery for consultation and collaboration on inter­ national monetary problems.
To facilitate the expansion and balanced growth of inter­ national trade, and to contribute thereby to the promo­ tion and maintenance of high levels of employment and (ii) 8 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued real income and to the development of the productive resources of all members as primary objectives of eco­ nomic policy.
(iii) To promote exchange stability, to maintain orderly ex­ change arrangements among members, and to avoid competitive exchange depreciation.

(v) (iv) To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade.
To give conﬁdence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.

In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the inter­ national balances of payments of members.
(vi) 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 coun­ tries represented at the United Nations Monetary and Finan­ cial Conference whose governments accept membership be­ fore December 31, 1945.
SECTION 2 OTHER MEMBERS Membership shall be open to other countries at such times and in accordance with such terms as may be prescribed by the Board of Governors.

These terms, including the terms for sub­ scriptions, shall be based on principles consistent with those applied to other countries that are already members.
9 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued ARTICLE III QUOTAS AND SUBSCRIPTIONS SECTION 1 QUOTAS AND PAYMENT OF SUBSCRIPTIONS Each member shall be assigned a quota expressed in special drawing rights.

The quotas of the members represented at the United Nations Monetary and Financial Conference which ac­ cept membership before December 31, 1945 shall be those set forth in Schedule A.
The quotas of other members shall be de­ termined by the Board of Governors.

The subscription of each member shall be equal to its quota and shall be paid in full to the Fund at the appropriate depository.

SECTION 2 ADJUSTMENT OF QUOTAS (a) (b) (c) (d) The Board of Governors shall at intervals of not more than 5 years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of the members.
It may also, if it thinks ﬁt, consider at any other time the adjustment of any particular quota at the request of the member concerned.

The Fund may at any time propose an increase in the quotas of those members of the Fund that were members on August 31, 1975 in proportion to their quotas on that date in a cumulative amount not in excess of amounts transferred under Article V, Section 12(f)(i) and (j) from the Special Disbursement Account to the General Re­ sources Account.
An 85 percent majority of the total voting power shall be required for any change in quotas.

The quota of a member shall not be changed until the member has consented and until payment has been made unless payment is deemed to have been made in accordance with Section 3(b) of this Article.
SECTION 3 PAYMENTS WHEN QUOTAS ARE CHANGED (a) Each member which consents to an increase in its quota under Section 2(a) of this Article shall, within a period 10 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued determined by the Fund, pay to the Fund 25 percent of the increase in special drawing rights, but the Board of Governors may prescribe that this payment may be made, on the same basis for all members, in whole or in part in the currencies of other members speciﬁed, with their concurrence, by the Fund, or in the member’s own currency.
A non­participant shall pay in the currencies of other members speciﬁed by the Fund, with their con­ currence, a proportion of the increase corresponding to the proportion to be paid in special drawing rights by participants.

The balance of the increase shall be paid by the member in its own currency.
The Fund’s holdings of a member’s currency shall not be increased above the level at which they would be subject to charges under Article V, Section 8(b)(ii), as a result of payments by other members under this provision.

Each member which consents to an increase in its quota under Section 2(b) of this Article shall be deemed to have paid to the Fund an amount of subscription equal to such increase.
If a member consents to a reduction in its quota, the Fund shall, within 60 days, pay to the member an amount equal to the reduction.
The payment shall be made in the member’s currency and in such amount of special drawing rights or the currencies of other members speciﬁed, with their concurrence, by the Fund as is necessary to prevent the reduction of the Fund’s holdings of the currency below the new quota, provided that in exceptional circumstances the Fund may reduce its holdings of the currency below the new quota by payment to the member in its own currency.
(b) (c) (d) A 70 percent majority of the total voting power shall be required for any decision under (a) above, except for the determination of a period and the speciﬁcation of currencies under that provision.
11 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued SECTION 4 SUBSTITUTION OF SECURITIES FOR CURRENCY The Fund shall accept from any member, in place of any part of the member’s currency in the General Resources Account which in the judgment of the Fund is not needed for its op­ erations and transactions, notes or similar obligations issued by the member or the depository designated by the member under Article XIII, Section 2, which shall be non­negotiable, non­interest bearing and payable at their face value on demand by crediting the account of the Fund in the designated deposi­ tory.
This Section shall apply not only to currency subscribed by members but also to any currency otherwise due to, or ac­ quired by, the Fund and to be placed in the General Resources Account.
ARTICLE IV OBLIGATIONS REGARDING EXCHANGE ARRANGEMENTS SECTION 1 GENERAL OBLIGATIONS OF MEMBERS Recognising that the essential purpose of the international monetary system is to provide a framework that facilitates the exchange of goods, services, and capital among countries, and that sustains sound economic growth, and that a princi­ pal objective is the continuing development of the orderly underlying conditions that are necessary for ﬁnancial and economic stability, each member undertakes to collaborate with the Fund and other members to assure orderly exchange arrangements and to promote a stable system of exchange rates.
In particular, each member shall: (i) endeavour to direct its economic and ﬁnancial policies toward the objective of fostering orderly economic growth with reasonable price stability, with due regard to its circumstances; seek to promote stability by fostering orderly under­ lying economic and ﬁnancial conditions and a monetary system that does not tend to produce erratic disruptions; (ii) 12 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (iii) (iv) avoid manipulating exchange rates or the international monetary system in order to prevent effective balance of payments adjustment or to gain an unfair competitive advantage over other members; and follow exchange policies compatible with the undertak­ ings under this Section.
SECTION 2 GENERAL EXCHANGE ARRANGEMENTS (a) Each member shall notify the Fund, within 30 days after the date of the second amendment of this Agreement, of the exchange arrangements it intends to apply in fulﬁl­ ment of its obligations under Section 1 of this Article, and shall notify the Fund promptly of any changes in its exchange arrangements.
(b) Under an international monetary system of the kind prevailing on January 1, 1976, exchange arrangements may include (i) the maintenance by a member of a value for its currency in terms of the special drawing right or another denominator, other than gold, selected by the member, or (ii) co­operative arrangements by which members maintain the value of their currencies in relation to the value of the currency or currencies of other members, or (iii) other exchange arrangements of a member’s choice.
To accord with the development of the international monetary system, the Fund, by an 85 percent majority of the total voting power, may make provision for gen­ eral exchange arrangements without limiting the right of members to have exchange arrangements of their choice consistent with the purposes of the Fund and the obligations under Section 1 of this Article.
(c) SECTION 3 SURVEILLANCE OVER EXCHANGE ARRANGEMENTS (a) The Fund shall oversee the international monetary sys­ tem in order to ensure its effective operation, and shall 13 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (b) oversee the compliance of each member with its obli­ gations under Section 1 of this Article.
In order to fulﬁl its functions under (a) above, the Fund shall exercise ﬁrm surveillance over the exchange rate policies of members, and shall adopt speciﬁc principles for the guidance of all members with respect to those policies.

Each member shall provide the Fund with the information necessary for such surveillance, and, when requested by the Fund, shall consult with it on the mem­ ber’s exchange rate policies.
The principles adopted by the Fund shall be consistent with co­operative arrange­ ments by which members maintain the value of their currencies in relation to the value of the currency or currencies of other members, as well as with other ex­ change arrangements of a member’s choice consistent with the purposes of the Fund and Section 1 of this Art­ icle.
These principles shall respect the domestic social and political policies of members, and in applying these principles the Fund shall pay due regard to the circum­ stances of members.

SECTION 4 PAR VALUES The Fund may determine, by an 85 percent majority of the total voting power, that international economic conditions permit the introduction of a widespread system of exchange arrange­ ments based on stable but adjustable par values.
The Fund shall make the determination on the basis of the underlying stability of the world economy, and for this purpose shall take into account price movements and rates of expansion in the economies of members.
The determination shall be made in light of the evolution of the international monetary system, with particular reference to sources of liquidity, and, in order to ensure the effective operation of a system of par values, to arrangements under which both members in surplus and mem­ bers in deﬁcit in their balances of payments take prompt, ef­ fective, and symmetrical action to achieve adjustment, as well as to arrangements for intervention and the treatment of imbal­ 14 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued ances.
Upon making such determination, the Fund shall notify members that the provisions of Schedule C apply.
SECTION 5 SEPARATE CURRENCIES WITHIN A MEMBER’S TERRITORIES (a) Action by a member with respect to its currency under this Article shall be deemed to apply to the separate cur­ rencies of all territories in respect of which the member has accepted this Agreement under Article XXXI, Sec­ tion 2(g) unless the member declares that its action re­ lates either to the metropolitan currency alone, or only to one or more speciﬁed separate currencies, or to the metropolitan currency and one or more speciﬁed separ­ ate currencies.
(b) Action by the Fund under this Article shall be deemed to relate to all currencies of a member referred to in (a) above unless the Fund declares otherwise.

ARTICLE V OPERATIONS AND TRANSACTIONS OF THE FUND SECTION 1 AGENCIES DEALING WITH THE FUND Each member shall deal with the Fund only through its Treas­ ury, central bank, stabilisation fund, or other similar ﬁscal agency, and the Fund shall deal only with or through the same agencies.
SECTION 2 LIMITATION ON THE FUND’S OPERATIONS AND TRANSACTIONS (a) Except as otherwise provided in this Agreement, trans­ actions on the account of the Fund shall be limited to transactions for the purpose of supplying a member, on the initiative of such member, with special drawing rights or the currencies of other members from the gen­ eral resources of the Fund, which shall be held in the 15 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (b) General Resources Account, in exchange for the cur­ rency of the member desiring to make the purchase.
If requested, the Fund may decide to perform ﬁnancial and technical services, including the administration of resources contributed by members, that are consistent with the purposes of the Fund.

Operations involved in the performance of such ﬁnancial services shall not be on the account of the Fund.

Services under this sub­ section shall not impose any obligation on a member without its consent.
SECTION 3 CONDITIONS GOVERNING USE OF THE FUND’S GENERAL RESOURCES (a) The Fund shall adopt policies on the use of its general resources, including policies on stand­by or similar ar­ rangements, and may adopt special policies for special balance of payments problems, that will assist members to solve their balance of payments problems in a man­ ner consistent with the provisions of this Agreement and that will establish adequate safeguards for the tempo­ rary use of the general resources of the Fund.
(b) A member shall be entitled to purchase the currencies of other members from the Fund in exchange for an equivalent amount of its own currency subject to the following conditions: (i) the member’s use of the general resources of the Fund would be in accordance with the provisions of this Agreement and the Policies adopted under them: the member represents that it has a need to make the purchase because of its balance of payments or its reserve position or developments in its re­ serves: the proposed purchase would be a reserve tranche purchase, or would not cause the Fund’s holdings (ii) (iii) 16 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (c) (d) (iv) of the purchasing member’s currency to exceed 200 percent of its quota: the Fund has not previously declared under Sec­ tion 5 of this Article, Article VI, Section 1, or Article XXVI, Section 2(a) that the member de­ siring to purchase is ineligible to use the general resources of the Fund.
The Fund shall examine a request for a purchase to de­ termine whether the proposed purchase would be con­ sistent with the provisions of this Agreement and the policies adopted under them, provided that requests for reserve tranche purchases shall not be subject to chal­ lenge.
The Fund shall adopt policies and procedures on the se­ lection of currencies to be sold that take into account, in consultation with members, the balance of payments and reserve position of members and developments in the exchange markets, as well as the desirability of pro­ moting over time balanced positions in the Fund, pro­ vided that if a member represents that it is proposing to purchase the currency of another member because the purchasing member wishes to obtain an equivalent amount of its own currency offered by the other mem­ ber, it shall be entitled to purchase the currency of the other member unless the Fund has given notice under Article VII, Section 3, that its holdings of the currency have become scarce.
(e) (i) Each member shall ensure that balances of its currency purchased from the Fund are balances of a freely usable currency or can be exchanged at the time of purchase for a freely usable cur­ rency of its choice at an exchange rate between the 2 currencies equivalent to the exchange rate between them on the basis of Article XIX, Sec­ tion 7(a): 17 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (ii) Each member whose currency is purchased from the Fund or is obtained in exchange for currency purchased from the Fund shall collaborate with the Fund and other members to enable such bal­ ances of its currency to be exchanged, at the time of purchase, for the freely usable currencies of other members: (iii) An exchange under (i) above of a currency that is not freely usable shall be made by the member whose currency is purchased unless that member and the purchasing member agree on another pro­ cedure: (iv) A member purchasing from the Fund the freely usable currency of another member and wishing to exchange it at the time of purchase for another freely usable currency shall make the exchange with the other member if requested by that mem­ ber.
The exchange shall be made for a freely usable currency selected by the other member at the rate of exchange referred to in (i) above.

Under policies and procedures which it shall adopt, the Fund may agree to provide a participant making a pur­ chase in accordance with this Section with special draw­ ing rights instead of the currencies of other members.
(f) SECTION 4 WAIVER OF CONDITIONS The Fund may in its discretion, and on terms which safeguard its interests, waive any of the conditions prescribed in Sec­ tion 3(b)(iii) and (iv) of this Article, especially in the case of members with a record of avoiding large or continuous use of the Fund’s general resources.

In making a waiver it shall take into consideration periodic or exceptional requirements of the member requesting the waiver.
The Fund shall also take into consideration a member’s willingness to pledge as collat­ eral security acceptable assets having a value sufﬁcient in the opinion of the Fund to protect its interests and may require as a condition of waiver the pledge of such collateral security.
18 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued SECTION 5 INELIGIBILITY TO USE THE FUND’S GENERAL RESOURCES Whenever the Fund is of the opinion that any member is using the general resources of the Fund in a manner contrary to the purposes of the Fund, it shall present to the member a report setting forth the views of the Fund and prescribing a suitable time for reply.
After presenting such a report to a member, the Fund may limit the use of its general resources by the member.

If no reply to the report is received from the member within the prescribed time, or if the reply received is unsatisfactory, the Fund may continue to limit the member’s use of the general resources of the Fund or may, after giving reasonable notice to the member, declare it ineligible to use the general resources of the Fund.
SECTION 6 OTHER PURCHASES AND SALES OF SPECIAL DRAWING RIGHTS BY THE FUND (a) (b) (c) The Fund may accept special drawing rights offered by a participant in exchange for an equivalent amount of the currencies of other members.

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

The currencies provided or accepted by the Fund under this Section shall be selected in accordance with poli­ cies that take into account the principles of Section 3(d) or 7(i) of this Article.
The Fund may enter into transactions under this Section only if a member whose currency is provided or accepted by the Fund concurs in that use of its currency.
19 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued SECTION 7 REPURCHASE BY A MEMBER OF ITS CURRENCY HELD BY THE FUND (a) A member shall be entitled to repurchase at any time the Fund’s holdings of its currency that are subject to charges under Section 8(b) of this Article.
(c) (b) A member that has made a purchase under Section 3 of this Article will be expected normally, as its balance of payments and reserve position improves, to repur­ chase the Fund’s holdings of its currency that result from the purchase and are subject to charges under Sec­ tion 8(b) of this Article.
A member shall repurchase these holdings if, in accordance with policies on repur­ chase that the Fund shall adopt and after consultation with the member, the Fund represents to the member that it should repurchase because of an improvement in its balance of payments and reserve position.
A member that has made a purchase under Section 3 of this Article shall repurchase the Fund’s holdings of its currency that result from the purchase and are subject to charges under Section 8(b) of this Article not later than 5 years after the date on which the purchase was made.

The Fund may prescribe that repurchase shall be made by a member in instalments during the period beginning 3 years and ending 5 years after the date of a purchase.
The Fund, by an 85 percent majority of the total voting power, may change the periods for repurchase under this subsection, and any period so adopted shall apply to all members.

The Fund, by an 85 percent majority of the total voting power, may adopt periods other than those that apply in accordance with (c) above, which shall be the same for all members, for the repurchase of holdings of currency acquired by the Fund pursuant to a special policy on the use of its general resources.
A member shall repurchase, in accordance with policies that the Fund shall adopt by a 70 percent majority of the (d) (e) 20 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (f) (g) (h) (i) total voting power, the Fund’s holdings of its currency that are not acquired as a result of purchases and are subject to charges under Section 8(b)(ii) of this Article.
A decision prescribing that under a policy on the use of the general resources of the Fund the period for repur­ chase under (c) or (d) above shall be shorter than the one in effect under the policy shall apply only to hold­ ings acquired by the Fund subsequent to the effective date of the decision.
The Fund, on the request of a member, may postpone the date of discharge of a repurchase obligation, but not beyond the maximum period under (c) or (d) above or under policies adopted by the Fund under (e) above, un­ less the Fund determines, by a 70 percent majority of the total voting power, that a longer period for repurchase which is consistent with the temporary use of the gen­ eral resources of the Fund is justiﬁed because discharge on the due date would result in exceptional hardship for the member.
The Fund’s policies under Section 3(d) of this Article may be supplemented by policies under which the Fund may decide after consultation with a member to sell under Section 3(b) of this Article its holdings of the member’s currency that have not been repurchased in accordance with this Section 7, without prejudice to any action that the Fund may be authorised to take under any other provision of this Agreement.
All repurchases under this Section shall be made with special drawing rights or with the currencies of other members speciﬁed by the Fund.

The Fund shall adopt policies and procedures with regard to the currencies to be used by members in making repurchases that take into account the principles in Section 3(d) of this Art­ icle.
The Fund’s holdings of a member’s currency that is used in repurchase shall not be increased by the repur­ chase above the level at which they would be subject to charges under Section 8(b)(ii) of this Article.
21 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (j) (i) (ii) If a member’s currency speciﬁed by the Fund under (i) above is not a freely usable currency, the member shall ensure that the repurchasing mem­ ber can obtain it at the time of the repurchase in exchange for a freely usable currency selected by the member whose currency has been speci­ ﬁed.
An exchange of currency under this provi­ sion shall take place at an exchange rate between the 2 currencies equivalent to the exchange rate between them on the basis of Article XIX, Sec­ tion 7(a): Each member whose currency is speciﬁed by the Fund for repurchase shall collaborate with the Fund and other members to enable repurchasing members, at the time of the repurchase, to obtain the speciﬁed currency in exchange for the freely usable currencies of other members: (iv) (iii) An exchange under (j)(i) above shall be made with the member whose currency is speciﬁed un­ less that member and the repurchasing member agree on another procedure: If a repurchasing member wishes to obtain, at the time of the repurchase, the freely usable currency of another member speciﬁed by the Fund under (i) above, it shall, if requested by the other mem­ ber, obtain the currency from the other member in exchange for a freely usable currency at the rate of exchange referred to in (j)(i) above.
The Fund may adopt regulations on the freely usable currency to be provided in an exchange.
SECTION 8 CHARGES (a) (i) The Fund shall levy a service charge on the purchase by a member of special drawing rights 22 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued or the currency of another member held in the in exchange for General Resources Account its own currency, provided that the Fund may levy a lower service charge on reserve tranche purchases than on other purchases.
The service charge on reserve tranche purchases shall not exceed one­half of one percent.

The Fund may levy a charge for stand­by or sim­ ilar arrangements.

The Fund may decide that the charge for an arrangement shall be offset against the service charge levied under (i) above on pur­ chases under the arrangement.
(ii) (b) (c) (ii) The Fund shall levy charges on its average daily bal­ ances of a member’s currency held in the General Re­ sources Account to the extent that they: (i) have been acquired under a policy that has been the subject of an exclusion under Article XXX(c), or exceed the amount of the member’s quota after excluding any balances referred to in (i) above.

The rates of charge normally shall rise at intervals dur­ ing the period in which balances are held.
If a member fails to make a repurchase required under Section 7 of this Article, the Fund, after consultation with the member on the reduction of the Fund’s hold­ ings of its currency, may impose such charges as the Fund deems appropriate on its holdings of the member’s currency that should have been repurchased.
(e) (d) A 70 percent majority of the total voting power shall be required for the determination of the rates of charge under (a) and (b) above, which shall be uniform for all members, and under (c) above.

A member shall pay all charges in special drawing rights, provided that in exceptional circumstances the Fund may permit a member to pay charges in the cur­ rencies of other members speciﬁed by the Fund, after consultation with them, or in its own currency.
The 23 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued Fund’s holdings of a member’s currency shall not be increased as a result of payments by other members under this provision above the level at which they would be subject to charges under (b)(ii) above.
SECTION 9 REMUNERATION (a) (b) The Fund shall pay remuneration on the amount by which the percentage of quota prescribed under (b) or (c) below exceeds the Fund’s average daily balances of a member’s currency held in the General Resources Account other than balances acquired under a policy that has been the subject of an exclusion under Article XXX(c).
The rate of remuneration, which shall be de­ termined by the Fund by a 70 percent majority of the total voting power, shall be the same for all members and shall be not more than, nor less than four­ﬁfths of, the rate of interest under Article XX, Section 3.

In es­ tablishing the rate of remuneration, the Fund shall take into account the rates of charge under Article V, Section 8(b).
The percentage of quota applying for the purposes of (a) above shall be: (i) for each member that became a member before the second amendment of this Agreement, a per­ centage of quota corresponding to 75 percent of its quota on the date of the second amend­ ment of this Agreement, and for each member that became a member after the date of the sec­ ond amendment of this Agreement, a percent­ age of quota calculated by dividing the total of the amounts corresponding to the percentages of quota that apply to the other members on the date on which the member became a member by the total of the quotas of the other members on the same date; plus 24 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (ii) (iii) the amounts it has paid to the Fund in currency or special drawing rights under Article III, Section 3(a) since the date applicable under (b)(i) above; and minus the amounts it has received from the Fund in cur­ rency or special drawing rights under Article III, Section 3(c) since the date applicable under (b)(i) above.
(c) (d) The Fund, by a 70 percent majority of the total voting power, may raise the latest percentage of quota applying for the purposes of (a) above to each member to: (i) a percentage, not in excess of 100 percent, that shall be determined for each member on the basis of the same criteria for all members, or one hundred percent for all members.
(ii) Remuneration shall be paid in special drawing rights, provided that either the Fund or the member may decide that the payment to the member shall be made in its own currency.

SECTION 10 COMPUTATIONS (a) The value of the Fund’s assets held in the accounts of the General Department shall be expressed in terms of the special drawing right.
(b) All computations relating to currencies of members for the purpose of applying the provisions of this Agree­ ment, except Article IV and Schedule C, shall be at the rates at which the Fund accounts for these currencies in accordance with Section 11 of this Article.

Computations for the determination of amounts of cur­ rency in relation to quota for the purpose of applying the provisions of this Agreement shall not include cur­ rency held in the Special Disbursement Account or in the Investment Account.
(c) SECTION 11 MAINTENANCE OF VALUE 25 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (a) The value of the currencies of members held in the Gen­ eral Resources Account shall be maintained in terms of the special drawing right in accordance with exchange rates under Article XIX, Section 7(a).
(b) An adjustment in the Fund’s holdings of a member’s currency pursuant to this Section shall be made on the occasion of the use of that currency in an operation or transaction between the Fund and another member and at such other times as the Fund may decide or the mem­ ber may request.

Payments to or by the Fund in respect of an adjustment shall be made within a reasonable time, as determined by the Fund, after the date of adjustment, and at any other time requested by the member.
SECTION 12 OTHER OPERATIONS AND TRANSACTIONS (a) The Fund shall be guided in all its policies and decisions under this Section by the objectives set forth in Article VIII, Section 7 and by the objective of avoiding the management of the price, or the establishment of a ﬁxed price, in the gold market.

(c) (b) Decisions of the Fund to engage in operations or trans­ actions under (c), (d), and (e) below shall be made by an 85 percent majority of the total voting power.
The Fund may sell gold for the currency of any mem­ ber after consulting the member for whose currency the gold is sold, provided that the Fund’s holdings of a member’s currency held in the General Resources Ac­ count shall not be increased by the sale above the level at which they would be subject to charges under Section 8(b)(ii) of this Article without the concurrence of the member, and provided that, at the request of the mem­ ber, the Fund at the time of sale shall exchange for the currency of another member such part of the currency received as would prevent such an increase.
The ex­ change of a currency for the currency of another mem­ ber shall be made after consultation with that member, 26 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (e) (d) and shall not increase the Fund’s holdings of that mem­ ber’s currency above the level at which they would be subject to charges under Section 8(b)(ii) of this Article.
The Fund shall adopt policies and procedures with re­ gard to exchanges that take into account the principles applied under Section 7(i) of this Article.

Sales under this provision to a member shall be at a price agreed for each transaction on the basis of prices in the market.

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

The Fund may sell gold held by it on the date of the second amendment of this Agreement to those mem­ bers that were members on August 31, 1975 and that agree to buy it, in proportion to their quotas on that date.
If the Fund intends to sell gold under (c) above for the purpose of (f)(ii) below, it may sell to each de­ veloping member that agrees to buy it that portion of the gold which, if sold under (c) above, would have pro­ duced the excess that could have been distributed to it under (f)(iii) below.
The gold that would be sold under this provision to a member that has been declared in­ eligible to use the general resources of the Fund under Section 5 of this Article shall be sold to it when the ineli­ gibility ceases, unless the Fund decides to make the sale sooner.

The sale of gold to a member under this subsec­ tion (e) shall be made in exchange for its currency and at a price equivalent at the time of sale to one special drawing right per 0.888 671 gram of ﬁne gold.
(f) Whenever under (c) above the Fund sells gold held by it on the date of the second amendment of this Agree­ ment, an amount of the proceeds equivalent at the time of sale to one special drawing right per 0.888 671 gram of ﬁne gold shall be placed in the General Resources 27 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (ii) (iii) Account and, except as the Fund may decide otherwise under (g) below, any excess shall be held in the Special Disbursement Account.
The assets held in the Special Disbursement Account shall be held separately from the other accounts of the General Department, and may be used at any time: (i) to make transfers to the General Resources Ac­ count for immediate use in operations and trans­ actions authorised by provisions of this Agree­ ment other than this Section: for operations and transactions that are not au­ thorised by other provisions of this Agreement but are consistent with the purposes of the Fund.
Under this subsection (f)(ii) balance of payments assistance may be made available on special terms to developing members in difﬁcult cir­ cumstances, and for this purpose the Fund shall take into account the level of per capita income: for distribution to those developing members that were members on August 31, 1975, in proportion to their quotas on that date, of such part of the as­ sets that the Fund decides to use for the purposes of (ii) above as corresponds to the proportion of the quotas of these members on the date of dis­ tribution to the total of the quotas of all members on the same date, provided that the distribution under this provision to a member that has been declared ineligible to use the general resources of the Fund under Section 5 of this Article shall be made when the ineligibility ceases, unless the Fund decides to make the distribution sooner.
Decisions to use assets pursuant to (i) above shall be taken by a 70 percent majority of the total voting power, and decisions pursuant to (ii) and (iii) above shall be taken by an 85 percent majority of the total voting power.
28 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (g) (h) (i) (j) The Fund may decide, by an 85 percent majority of the total voting power, to transfer a part of the excess referred to in (f) above to the Investment Account for use pursuant to the provisions of Article XII, Section 6(f).
Pending uses speciﬁed under (f) above, the Fund may invest a member’s currency held in the Special Dis­ bursement Account in marketable obligations of that member or in marketable obligations of international ﬁnancial organisations.

The income of investment and interest received under (f)(ii) above shall be placed in the Special Disbursement Account.

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

The General Resources Account shall be reimbursed from time to time in respect of the expenses of adminis­ tration of the Special Disbursement Account paid from the General Resources Account by transfers from the Special Disbursement Account on the basis of a reason­ able estimate of such expenses.
The Special Disbursement Account shall be terminated in the event of the liquidation of the Fund and may be terminated prior to liquidation of the Fund by a 70 per­ cent majority of the total voting power.
Upon termin­ ation of the account because of the liquidation of the Fund, any assets in this account shall be distributed in accordance with the provisions of Schedule K. Upon termination prior to liquidation of the Fund, any assets in this account shall be transferred to the General Re­ sources Account for immediate use in operations and transactions.
The Fund, by a 70 percent majority of the total voting power, shall adopt rules and regulations for the administration of the Special Disbursement Ac­ count.
29 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued ARTICLE VI CAPITAL TRANSFERS SECTION 1 USE OF THE FUND’S GENERAL RESOURCES FOR CAPITAL TRANSFERS (a) A member may not use the Fund’s general resources to meet a large or sustained outﬂow of capital except as provided in Section 2 of this Article, and the Fund may request a member to exercise controls to prevent such use of the general resources of the Fund.
If, af­ ter receiving such a request, a member fails to exercise appropriate controls, the Fund may declare the member ineligible to use the general resources of the Fund.
(b) Nothing in this Section shall be deemed: (i) (ii) to prevent the use of the general resources of the Fund for capital transactions of reasonable amount required for the expansion of exports or in the ordinary course of trade, banking, or other business; or to affect capital movements which are met out of a member’s own resources, but members under­ take that such capital movements will be in ac­ cordance with the purposes of the Fund.
SECTION 2 SPECIAL PROVISIONS FOR CAPITAL TRANSFERS A member shall be entitled to make reserve tranche purchases to meet capital transfers.
SECTION 3 CONTROLS OF CAPITAL TRANSFERS Members may exercise such controls as are necessary to regu­ late international capital movements, but no member may ex­ ercise these controls in a manner which will restrict payments for current transactions or which will unduly delay transfers of funds in settlement of commitments, except as provided in Article VII, Section 3(b) and in Article XIV, Section 2.
30 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued ARTICLE VII REPLENISHMENT AND SCARCE CURRENCIES SECTION 1 MEASURES TO REPLENISH THE FUND’S HOLDINGS OF CURRENCIES The Fund may, if it deems such action appropriate to replen­ ish its holdings of any member’s currency in the General Re­ sources Account needed in connection with its transactions, take either or both of the following steps: (i) propose to the member that, on terms and conditions agreed between the Fund and the member, the latter lend its currency to the Fund or that, with the concurrence of the member, the Fund borrow such currency from some other source either within or outside the territories of the member, but no member shall be under any obliga­ tion to make such loans to the Fund or to concur in the borrowing of its currency by the Fund from any other source: require the member, if it is a participant, to sell its cur­ rency to the Fund for special drawing rights held in the General Resources Account, subject to Article XIX, Section 4.
In replenishing with special drawing rights, the Fund shall pay due regard to the principles of des­ ignation under Article XIX, Section 5.

(ii) SECTION 2 GENERAL SCARCITY OF CURRENCY If the Fund ﬁnds that a general scarcity of a particular cur­ rency is developing, the Fund may so inform members and may issue a report setting forth the causes of the scarcity and containing recommendations designed to bring it to an end.
A representative of the member whose currency is involved shall participate in the preparation of the report.
SECTION 3 SCARCITY OF THE FUND’S HOLDINGS (a) If it becomes evident to the Fund that the demand for a member’s currency seriously threatens the Fund’s abil­ ity to supply that currency, the Fund, whether or not it 31 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued has issued a report under Section 2 of this Article, shall formally declare such currency scarce and shall thence­ forth apportion its existing and accruing supply of the scarce currency with due regard to the relative needs of members, the general international economic situation, and any other pertinent considerations.
The Fund shall also issue a report concerning its action.

(b) A formal declaration under (a) above shall operate as an authorisation to any member, after consultation with the Fund, temporarily to impose limitations on the freedom of exchange operations in the scarce currency.
Sub­ ject to the provisions of Article IV and Schedule C, the member shall have complete jurisdiction in determining the nature of such limitations, but they shall be no more restrictive than is necessary to limit the demand for the scarce currency to the supply held by, or accruing to, the member in question, and they shall be relaxed and removed as rapidly as conditions permit.
The authorisation under (b) above shall expire when­ ever the Fund formally declares the currency in ques­ tion to be no longer scarce.

(c) SECTION 4 ADMINISTRATION OF RESTRICTIONS Any member imposing restrictions in respect of the currency of any other member pursuant to the provisions of Section 3(b) of this Article shall give sympathetic consideration to any representations by the other member regarding the administra­ tion of such restrictions.
SECTION 5 EFFECT OF OTHER INTERNATIONAL AGREEMENTS ON RESTRICTIONS Members agree not to invoke the obligations of any engage­ ments entered into with other members prior to this Agreement in such a manner as will prevent the operation of the provisions of this Article.
32 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued ARTICLE VIII GENERAL OBLIGATIONS OF MEMBERS SECTION 1 INTRODUCTION In addition to the obligations assumed under other articles of this Agreement, each member undertakes the obligations set out in this Article.
SECTION 2 AVOIDANCE OF RESTRICTIONS ON CURRENT PAYMENTS (a) (b) Subject to the provisions of Article VII, Section 3(b) and Article XIV, Section 2, no member shall, without the approval of the Fund, impose restrictions on the making of payments and transfers for current international transactions.
Exchange contracts which involve the currency of any member and which are contrary to the exchange con­ trol regulations of that member maintained or imposed consistently with this Agreement shall be unenforceable in the territories of any member.

In addition, members may, by mutual accord, co­operate in measures for the purpose of making the exchange control regulations of either member more effective, provided that such meas­ ures and regulations are consistent with this Agreement.
SECTION 3 AVOIDANCE OF DISCRIMINATORY 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 discrim­ inatory currency arrangements or multiple currency practices, whether within or outside margins under Article IV or pre­ scribed by or under Schedule C, except as authorised under this Agreement or approved by the Fund.
If such arrangements and practices are engaged in at the date when this Agreement enters into force, the member concerned shall consult with the Fund as to their progressive removal unless they are main­ tained or imposed under Article XIV, Section 2, in which case the provisions of Section 3 of that Article shall apply.
33 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued SECTION 4 CONVERTIBILITY OF FOREIGN­HELD BALANCES (a) (b) Each member shall buy balances of its currency held by another member if the latter, in requesting the purchase, represents: (i) that the balances to be bought have been recently acquired as a result of current transactions; or that their conversion is needed for making pay­ ments for current transactions.
(ii) The buying member shall have the option to pay either in special drawing rights, subject to Article XIX, Sec­ tion 4, or in the currency of the member making the re­ quest.
The obligation in (a) above shall not apply when: (i) the convertibility of the balances has been re­ stricted consistently with Section 2 of this Article or Article VI, Section 3; 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; the balances have been acquired contrary to the exchange regulations of the member which is asked to buy them; the currency of the member requesting the pur­ chase has been declared scarce under Article VII, Section 3(a); or the member requested to make the purchase is for any reason not entitled to buy currencies of other members from the Fund for its own currency.
(ii) (iii) (iv) (v) SECTION 5 FURNISHING OF INFORMATION (a) The fund may require members to furnish it with such information as it deems necessary for its activities, in­ cluding, as the minimum necessary for the effective dis­ 34 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued charge of the Fund’s duties, national data on the follow­ ing matters: (i) (ii) (iii) (iv) (v) (vi) (vii) ofﬁcial holdings at home and abroad of (1) gold, (2) foreign exchange; holdings at home and abroad by banking and ﬁ­ nancial agencies, other than ofﬁcial agencies, of (1) gold, (2) foreign exchange; production of gold; gold exports and imports according to countries of destination and origin; total exports and imports of merchandise, in terms of local currency values, according to countries of destination and origin; international balance of payments, including (1) trade in goods and services, (2) gold transac­ tions, (3) known capital transactions, and (4) other items; invest­ international ments within the territories of the member owned abroad and investments abroad owned by persons in its territories so far as it is possible to furnish this information; investment position, ie, (viii) national income; (ix) (x) (xi) price indices, ie, indices of commodity prices in wholesale and retail markets and of export and import prices; buying and selling rates for foreign currencies; exchange controls, ie, a comprehensive state­ ment of exchange controls in effect at the time of assuming membership in the Fund and details of subsequent changes as they occur; and (xii) where ofﬁcial clearing arrangements exist, de­ tails of amounts awaiting clearance in respect of commercial and ﬁnancial transactions, and of the length of time during which such arrears have been outstanding.
35 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (b) (c) In requesting information the Fund shall take into con­ sideration the varying ability of members to furnish the data requested.

Members shall be under no obligation to furnish information in such detail that the affairs of indi­ viduals or corporations are disclosed.
Members under­ take, 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.

The Fund may arrange to obtain further information by agreement with members.

It shall act as a centre for the collection and exchange of information on monet­ ary and ﬁnancial problems, thus facilitating the prepar­ ation of studies designed to assist members in develop­ ing policies which further the purposes of the Fund.
SECTION 6 CONSULTATION BETWEEN MEMBERS REGARDING EXISTING INTERNATIONAL AGREEMENTS Where under this Agreement a member is authorised in the special or temporary circumstances speciﬁed in the Agreement to maintain or establish restrictions on exchange transactions, and there are other engagements between members entered into prior to this Agreement which conﬂict with the applica­ tion of such restrictions, the parties to such engagements shall consult with one another with a view to making such mutually acceptable adjustments as may be necessary.
The provisions of this Article shall be without prejudice to the operation of Article VII, Section 5.
SECTION 7 OBLIGATION TO COLLABORATE REGARDING POLICIES ON RESERVE ASSETS Each member undertakes to collaborate with the Fund and with other members in order to ensure that the policies of the member with respect to reserve assets shall be consistent with the objectives of promoting better international surveillance of international liquidity and making the special drawing right the principal reserve asset in the international monetary sys­ tem.
36 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued ARTICLE IX STATUS, IMMUNITIES, AND PRIVILEGES SECTION 1 PURPOSES OF ARTICLE To enable the Fund to fulﬁl the functions with which it is en­ trusted, the status, immunities, and privileges set forth in this Article shall be accorded to the Fund in the territories of each member.
SECTION 2 STATUS OF THE FUND The Fund shall possess full juridical personality, and in par­ ticular, the capacity: (i) (ii) to contract; to acquire and dispose of immovable and movable prop­ erty; and to institute legal proceedings.
(iii) SECTION 3 IMMUNITY FROM JUDICIAL PROCESS The Fund, its property and its assets, wherever located and by whomsoever held, shall enjoy immunity from every form of judicial process except to the extent that it expressly waives its immunity for the purpose of any proceedings or by the terms of any contract.
SECTION 4 IMMUNITY FROM OTHER ACTION Property and assets of the Fund, wherever located and by whomsoever held, shall be immune from search, requisition, conﬁscation, expropriation, or any other form of seizure by executive or legislative action.

SECTION 5 IMMUNITY OF ARCHIVES The archives of the Fund shall be inviolable.
SECTION 6 FREEDOM OF ASSETS FROM RESTRICTIONS To the extent necessary to carry out the activities provided for in this Agreement, all property and assets of the Fund shall be free from restrictions, regulations, controls, and moratoria of any nature.
37 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued SECTION 7 PRIVILEGE FOR COMMUNICATIONS The ofﬁcial communications of the Fund shall be accorded by members the same treatment as the ofﬁcial communications of other members.
SECTION 8 IMMUNITIES AND PRIVILEGES OF OFFICERS AND EMPLOYEES All Governors, Executive Directors, Alternates, members of committees, representatives appointed under Article XII, Sec­ tion 3(j), advisors of any of the foregoing persons, ofﬁcers, and employees of the Fund: (i) shall be immune from legal process with respect to acts performed by them in their ofﬁcial capacity except when the Fund waives this immunity; not being local nationals, shall be granted the same im­ munities from immigration restrictions, alien registra­ tion requirements, and national service obligations and the same facilities as regards exchange restrictions as are accorded by members to the representatives, ofﬁ­ cials, and employees of comparable rank of other mem­ bers; and shall be granted the same treatment in respect of trav­ elling facilities as is accorded by members to represen­ tatives, ofﬁcials, and employees of comparable rank of other members.
(ii) (iii) SECTION 9 IMMUNITIES FROM TAXATION (a) The Fund, its assets, property, income, and its oper­ ations and transactions authorised by this Agreement shall be immune from all taxation and from all customs duties.

The Fund shall also be immune from liability for the collection or payment of any tax or duty.
(b) No tax shall be levied on or in respect of salaries and emoluments paid by the Fund to Executive Directors, Alternates, ofﬁcers, or employees of the Fund who are not local citizens, local subjects, or other local nation­ als.
38 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (c) No taxation of any kind shall be levied on any obligation or security issued by the Fund, including any dividend or interest thereon, by whomsoever held: (i) which discriminates against such obligation or security solely because of its origin; or if the sole jurisdictional basis for such taxation is the place or currency in which it is issued, made payable or paid, or the location of any ofﬁce or place of business maintained by the Fund.
(ii) SECTION 10 APPLICATION OF ARTICLE Each member shall take such action as is necessary in its own territories for the purpose of making effective in terms of its own law the principles set forth in this Article and shall inform the Fund of the detailed action which it has taken.
ARTICLE X RELATIONS WITH OTHER INTERNATIONAL ORGANISATIONS The Fund shall co­operate within the terms of this Agree­ ment with any general international organisation and with pub­ lic international organisations having specialised responsibil­ ities in related ﬁelds.

Any arrangements for such co­oper­ ation which would involve a modiﬁcation of any provision of this Agreement may be effected only after amendment to this Agreement under Article XXVIII.
ARTICLE XI RELATIONS WITH NON­MEMBER COUNTRIES SECTION 1 UNDERTAKINGS REGARDING RELATIONS WITH NON­MEMBER COUNTRIES Each member undertakes: (i) not to engage in, nor to permit any of its ﬁscal agencies referred to in Article V, Section 1 to engage in, any transactions with a non­member or with persons in a non­member’s territories which would be contrary to the provisions of this Agreement or the purposes of the Fund; 39 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (ii) (iii) not to co­operate with a non­member or with persons in a non­member’s territories in practices which would be contrary to the provisions of this Agreement or the purposes of the Fund; and to co­operate with the Fund with a view to the applica­ tion in its territories of appropriate measures to prevent transactions with non­members or with persons in their territories which would be contrary to the provisions of this Agreement or the purposes of the Fund.
SECTION 2 RESTRICTIONS ON TRANSACTIONS WITH NON­MEMBER COUNTRIES Nothing in this Agreement shall affect the right of any mem­ ber to impose restrictions on exchange transactions with non­ members or with persons in their territories unless the Fund ﬁnds that such restrictions prejudice the interests of members and are contrary to the purposes of the Fund.
ARTICLE XII ORGANISATION AND MANAGEMENT SECTION 1 STRUCTURE OF THE FUND The Fund shall have a Board of Governors, an Executive Board, a Managing Director, and a staff, and a Council if the Board of Governors decides, by an 85 percent majority of the total voting power, that the provisions of Schedule D shall be applied.
SECTION 2 BOARD OF GOVERNORS (a) All powers under this Agreement not conferred directly on the Board of Governors, the Executive Board, or the Managing Director shall be vested in the Board of Governors.

The Board of Governors shall consist of one Governor and one Alternate appointed by each member in such manner as it may determine.

Each Governor and each Alternate shall serve until a new appointment is made.
No Alternate may vote except in the absence 40 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (b) (c) of his principal.

The Board of Governors shall select one of the Governors as chairman.

The Board of Governors may delegate to the Executive Board authority to exercise any powers of the Board of Governors, except the powers conferred directly by this Agreement on the Board of Governors.
The Board of Governors shall hold such meetings as may be provided for by the Board of Governors or called by the Executive Board.

Meetings of the Board of Governors shall be called whenever requested by 15 members or by members having one­quarter of the total voting power.

(f) (e) (d) A quorum for any meeting of the Board of Governors shall be a majority of the Governors having not less than two­thirds of the total voting power.
Each Governor shall be entitled to cast the number of votes allotted under Section 5 of this Article to the mem­ ber appointing him.

The Board of Governors may by regulation establish a procedure whereby the Executive Board, when it deems such action to be in the best interests of the Fund, may obtain a vote of the Governors on a speciﬁc question without calling a meeting of the Board of Governors.
The Board of Governors, and the Executive Board to the extent authorised, may adopt such rules and regula­ tions as may be necessary or appropriate to conduct the business of the Fund.

(g) (h) Governors and Alternates shall serve as such without compensation from the Fund, but the Fund may pay them reasonable expenses incurred in attending meet­ ings.
The Board of Governors shall determine the remuner­ ation to be paid to the Executive Directors and their Al­ ternates and the salary and terms of the contract of ser­ vice of the Managing Director.

(i) 41 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (j) The Board of Governors and the Executive Board may appoint such committees as they deem advisable.
Mem­ bership of committees need not be limited to Governors or Executive Directors or their Alternates.

SECTION 3 EXECUTIVE BOARD The Executive Board shall be responsible for conduct­ ing the business of the Fund, and for this purpose shall exercise all the powers delegated to it by the Board of Governors.

The Executive Board shall consist of Executive Direct­ ors with the Managing Director as chairman.
Of the Executive Directors: (i) Five shall be appointed by the 5 members having the largest quotas; and Fifteen shall be elected by the other members.

(ii) For the purpose of each regular election of Executive Directors, the Board of Governors, by an 85 percent majority of the total voting power, may increase or de­ crease the number of Executive Directors in (ii) above.
The number of Executive Directors in (ii) above shall be reduced by one or 2, as the case may be, if Execu­ tive Directors are appointed under (c) below, unless the Board of Governors decides, by an 85 percent majority of the total voting power, that this reduction would hin­ der the effective discharge of the functions of the Execu­ tive Board or of Executive Directors or would threaten to upset a desirable balance in the Executive Board.
If, at the second regular election of Executive Directors and thereafter, the members entitled to appoint Execu­ tive Directors under (b)(i) above do not include the 2 members, the holdings of whose currencies by the Fund in the General Resources Account have been, on the average over the preceding 2 years, reduced below their quotas by the largest absolute amounts in terms of the special drawing right, either one or both of such mem­ (a) (b) (c) 42 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (f) (e) (d) bers, as the case may be, may appoint an Executive Dir­ ector.
Elections of elective Executive Directors shall be con­ ducted at intervals of 2 years in accordance with the provisions of Schedule E, supplemented by such regu­ lations as the Fund deems appropriate.
For each regular election of Executive Directors, the Board of Governors may issue regulations making changes in the proportion of votes required to elect Executive Directors under the provisions of Schedule E. Each Executive Director shall appoint an Alternate with full power to act for him when he is not present.

When the Executive Directors appointing them are present, Alternates may participate in meetings but may not vote.
Executive Directors shall continue in ofﬁce until their successors are appointed or elected.

If the ofﬁce of an elected Executive Director becomes vacant more than 90 days before the end of his term, another Executive Director shall be elected for the remainder of the term by the members that elected the former Executive Dir­ ector.

A majority of the votes cast shall be required for election.
While the ofﬁce remains vacant, the Al­ ternate of the former Executive Director shall exercise his powers, except that of appointing an Alternate.

The Executive Board shall function in continuous ses­ sion at the principal ofﬁce of the Fund and shall meet as often as the business of the Fund may require.

(h) A quorum for any meeting of the Executive Board shall be a majority of the Executive Directors having not less than one­half of the total voting power.
(i) (i) (g) Each appointed Executive Director shall be en­ titled to cast the number of votes allotted under Section 5 of this Article to the member appoint­ ing him: 43 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (ii) If the votes allotted to a member that appoints an Executive Director under (c) above were cast by an Executive Director together with the votes allotted to other members as a result of the last regular election of Executive Directors, the mem­ ber may agree with each of the other members that the number of votes allotted to it shall be cast by the appointed Executive Director.
A member making such an agreement shall not participate in the election of Executive Directors: (iii) Each elected Executive Director shall be entitled to cast the number of votes which counted to­ wards his election: (iv) When the provisions of Section 5(b) of this Art­ icle are applicable, the votes which an Executive Director would otherwise be entitled to cast shall be increased or decreased correspondingly.

All the votes which an Executive Director is entitled to cast shall be cast as a unit.
(v) When the suspension of the voting rights of a member is terminated under Article XXVI, Sec­ tion 2(b), and the member is not entitled to ap­ point an Executive Director, the member may agree with all the members that have elected an Executive Director that the number of votes allot­ ted to that member shall be cast by such Execu­ tive Director, provided that, if no regular election of Executive Directors has been conducted dur­ ing the period of the suspension, the Executive Director in whose election the member had par­ ticipated prior to the suspension, or his successor elected in accordance with paragraph 3(c)(i) of Schedule L or with (f) above, shall be entitled to cast the number of votes allotted to the member.
The member shall be deemed to have participated in the election of the Executive Director entitled 44 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (j) to cast the number of votes allotted to the mem­ ber.
The Board of Governors shall adopt regulations under which a member not entitled to appoint an Executive Director under (b) above may send a representative to attend any meeting of the Executive Board when a re­ quest made by, or a matter particularly affecting, that member is under consideration.

SECTION 4 MANAGING DIRECTOR AND STAFF (a) (b) (c) (d) The Executive Board shall select a Managing Director who shall not be a Governor or an Executive Director.
The Managing Director shall be chairman of the Ex­ ecutive Board, but shall have no vote except a deciding vote in case of an equal division.

He may participate in meetings of the Board of Governors, but shall not vote at such meetings.

The Managing Director shall cease to hold ofﬁce when the Executive Board so decides.

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

The Managing Director and the staff of the Fund, in the discharge of their functions, shall owe their duty en­ tirely to the Fund and to no other authority.

Each mem­ ber of the Fund shall respect the international character of this duty and shall refrain from all attempts to inﬂu­ ence any of the staff in the discharge of these functions.
In appointing the staff the Managing Director shall, sub­ ject to the paramount importance of securing the highest standard of efﬁciency and of technical competence, pay due regard to the importance of recruiting personnel on as wide a geographical basis as possible.
45 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued SECTION 5 VOTING (a) Each member shall have 250 votes plus one additional vote for each part of its quota equivalent to 100 000 special drawing rights.
(b) Whenever voting is required under Article V, Section 4 or 5, each member shall have the number of votes to which it is entitled under (a) above adjusted: (i) by the addition of one vote for the equivalent of each 400 000 special drawing rights of net sales of its currency from the general resources of the Fund up to the date when the vote is taken, or by the subtraction of one vote for the equivalent of each 400 000 special drawing rights of its net purchases under Article V, Section 3(b) and (f) up to the date when the vote is taken, (ii) provided that neither net purchases nor net sales shall be deemed at any time to exceed an amount equal to the quota of the member involved.
Except as otherwise speciﬁcally provided, all decisions of the Fund shall be made by a majority of the votes cast.

(c) SECTION 6 RESERVES, DISTRIBUTION OF NET INCOME AND INVESTMENT (a) (b) (c) (d) The Fund shall determine annually what part of its net income shall be placed to general reserve or special re­ serve, and what part, if any, shall be distributed.

The Fund may use the special reserve for any purpose for which it may use the general reserve, except distri­ bution.
If any distribution is made of the net income of any year, it shall be made to all members in proportion to their quotas.

The Fund, by a 70 percent majority of the total voting power, may decide at any time to distribute any part of 46 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (e) the general reserve.

Any such distribution shall be made to all members in proportion to their quotas.
Payments under (c) and (d) above shall be made in spe­ cial drawing rights, provided that either the Fund or the member may decide that the payment to the member shall be made in its own currency.

(f) (i) (ii) The Fund may establish an Investment Account for the purposes of this subsection (f).
The assets of the Investment Account shall be held separ­ ately from the other accounts of the General De­ partment: The Fund may decide to transfer to the Invest­ ment Account a part of the proceeds of the sale of gold in accordance with Article V, Section 12(g) and, by a 70 percent majority of the total voting power, may decide to transfer to the In­ vestment Account, for immediate investment, currencies held in the General Resources Ac­ count.
The amount of these transfers shall not exceed the total amount of the general reserve and the special reserve at the time of the deci­ sion: (iii) The Fund may invest a member’s currency held in the Investment Account in marketable obli­ gations of that member or in marketable obli­ gations of international ﬁnancial organisations.

No investment shall be made without the con­ currence of the member whose currency is used to make the investment.
The Fund shall invest only in obligations denominated in special draw­ ing rights or in the currency used for investment: (iv) The income of investment may be invested in ac­ cordance with the provisions of this subsection (f).
Income not invested shall be held in the In­ vestment Account or may be used for meeting the expenses of conducting the business of the Fund: 47 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (v) The Fund may use a member’s currency held in the Investment Account to obtain the currencies needed to meet the expenses of conducting the business of the Fund: (vi) The Investment Account shall be terminated in the event of liquidation of the Fund and may be terminated, or the amount of the investment may be reduced, prior to liquidation of the Fund by a 70 percent majority of the total voting power.
The Fund, by a 70 percent majority of the total voting power, shall adopt rules and regulations regarding administration of the Investment Ac­ count, which shall be consistent with (vii), (viii), and (ix) below: (vii) Upon termination of the Investment Account be­ cause of liquidation of the Fund, any assets in this account shall be distributed in accordance with the provisions of Schedule K, provided that a portion of these assets corresponding to the pro­ portion of the assets transferred to this account under Article V, Section 12(g) to the total of the assets transferred to this account shall be deemed to be assets held in the Special Disbursement Ac­ count and shall be distributed in accordance with Schedule K, paragraph 2(a)(ii): (viii) Upon termination of the Investment Account prior to liquidation of the Fund, a portion of the assets held in this account corresponding to the proportion of the assets transferred to this ac­ count under Article V, Section 12(g) to the total of the assets transferred to the account shall be transferred to the Special Disbursement Account if it has not been terminated, and the balance of the assets held in the Investment Account shall be transferred to the General Resources Account for immediate use in operations and transactions: 48 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (ix) On a reduction of the amount of the investment by the Fund, a portion of the reduction corres­ ponding to the proportion of the assets trans­ ferred to the Investment Account under Article V, Section 12(g) to the total of the assets trans­ ferred to this account shall be transferred to the Special Disbursement Account if it has not been terminated, and the balance of the reduction shall be transferred to the General Resources Account for immediate use in operations and transactions.
SECTION 7 PUBLICATION OF REPORTS (a) (b) The Fund shall publish an annual report containing an audited statement of its accounts, and shall issue, at intervals of 3 months or less, a summary statement of its operations and transactions and its holdings of spe­ cial drawing rights, gold, and currencies of members.

The Fund may publish such other reports as it deems desirable for carrying out its purposes.
SECTION 8 COMMUNICATION OF VIEWS TO MEMBERS The Fund shall at all times have the right to communicate its views informally to any member on any matter arising under this Agreement.

The Fund may, by a 70 percent majority of the total voting power, decide to publish a report made to a member regarding its monetary or economic conditions and developments which directly tend to produce a serious dise­ quilibrium in the international balance of payments of mem­ bers.
If the member is not entitled to appoint an Executive Director, it shall be entitled to representation in accordance with Section 3(j) of this Article.

The Fund shall not publish a report involving changes in the fundamental structure of the economic organization of members.

Note: Article XII, section 3(i)(v) was inserted by section 2(1) Reserve Bank of New Zealand Amendment Act 1992 (1992 No 32).
49 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued ARTICLE XIII OFFICES AND DEPOSITORIES SECTION 1 LOCATION OF OFFICES The principal ofﬁce of the Fund shall be located in the territory of the member having the largest quota, and agencies or branch ofﬁces may be established in the territories of other members.
SECTION 2 DEPOSITORIES (a) (b) Each member shall designate its central bank as a de­ pository for all the Fund’s holdings of its currency, or if it has no central bank it shall designate such other insti­ tution as may be acceptable to the Fund.

The Fund may hold other assets, including gold, in the depositories designated by the 5 members having the largest quotas and in such other designated depositories as the Fund may select.
Initially, at least one­half of the holdings of the Fund shall be held in the depository des­ ignated by the member in whose territories the Fund has its principal ofﬁce and at least 40 percent shall be held in the depositories designated by the remaining mem­ bers referred to above.

However, all transfers of gold by the Fund shall be made with due regard to the costs of transport and anticipated requirements of the Fund.
In an emergency the Executive Board may transfer all or any part of the Fund’s gold holdings to any place where they can be adequately protected.

SECTION 3 GUARANTEE OF THE FUND’S ASSETS Each member guarantees all assets of the Fund against loss resulting from failure or default on the part of the depository designated by it.
ARTICLE XIV TRANSITIONAL ARRANGEMENTS SECTION 1 NOTIFICATION TO THE FUND Each member shall notify the Fund whether it intends to avail itself of the transitional arrangements in Section 2 of this Art­ icle, or whether it is prepared to accept the obligations of Art­ 50 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued icle VIII, Sections 2, 3, and 4.
A member availing itself of the transitional arrangements shall notify the Fund as soon there­ after as it is prepared to accept these obligations.
SECTION 2 EXCHANGE RESTRICTIONS A member that has notiﬁed the Fund that it intends to avail itself of transitional arrangements under this provision may, notwithstanding the provisions of any other Articles of this Agreement, maintain and adapt to changing circumstances the restrictions on payments and transfers for current international transactions that were in effect on the date on which it became a member.
Members shall, however, have continuous regard in their foreign exchange policies to the purposes of the Fund, and, as soon as conditions permit, they shall take all possible measures to develop such commercial and ﬁnancial arrange­ ments with other members as will facilitate international pay­ ments and the promotion of a stable system of exchange rates.
In particular, members shall withdraw restrictions maintained under this Section as soon as they are satisﬁed that they will be able, in the absence of such restrictions, to settle their balance of payments in a manner which will not unduly encumber their access to the general resources of the Fund.

SECTION 3 ACTION OF THE FUND RELATING TO RESTRICTIONS The Fund shall make annual reports on the restrictions in force under Section 2 of this Article.
Any member retaining any restrictions inconsistent with Article VIII, Sections 2, 3, or 4 shall consult the Fund annually as to their further retention.

The Fund may, if it deems such action necessary in excep­ tional circumstances, make representations to any member that conditions are favourable for the withdrawal of any particu­ lar restriction, or for the general abandonment of restrictions, inconsistent with the provisions of any other Articles of this Agreement.
The member shall be given a suitable time to re­ ply to such representations.

If the Fund ﬁnds that the member persists in maintaining restrictions which are inconsistent with 51 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued the purposes of the Fund, the member shall be subject to Art­ icle XXVI, Section 2(a).
ARTICLE XV SPECIAL DRAWING RIGHTS SECTION 1 AUTHORITY TO ALLOCATE SPECIAL DRAWING RIGHTS To meet the need, as and when it arises, for a supplement to existing reserve assets, the Fund is authorised to allocate spe­ cial drawing rights to members that are participants in the Spe­ cial Drawing Rights Department.
SECTION 2 VALUATION OF THE SPECIAL DRAWING RIGHT The method of valuation of the special drawing right shall be determined by the Fund by a 70 percent majority of the total voting power, provided, however, that an 85 percent majority of the total voting power shall be required for a change in the principle of valuation or a fundamental change in the applica­ tion of the principle in effect.
ARTICLE XVI GENERAL DEPARTMENT AND SPECIAL DRAWING RIGHTS DEPARTMENT SECTION 1 SEPARATION OF OPERATIONS AND TRANSACTIONS All operations and transactions involving special drawing rights shall be conducted through the Special Drawing Rights Department.

All other operations and transactions on the ac­ count of the Fund authorised by or under this Agreement shall be conducted through the General Department.
Operations and transactions pursuant to Article XVII, Section 2 shall be conducted through the General Department as well as the Special Drawing Rights Department.
SECTION 2 SEPARATION OF ASSETS AND PROPERTY All assets and property of the Fund, except resources admin­ istered under Article V, Section 2(b), shall be held in the Gen­ eral Department, provided that assets and property acquired 52 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued under Article XX, Section 2 and Articles XXIV and XXV and Schedules H and I shall be held in the Special Drawing Rights Department.
Any assets or property held in one Department shall not be available to discharge or meet the liabilities, obli­ gations, or losses of the Fund incurred in the conduct of the operations and transactions of the other Department, except that the expenses of conducting the business of the special Drawing Rights Department shall be paid by the Fund from the General Department which shall be reimbursed in special drawing rights from time to time by assessments under Article XX, Section 4 made on the basis of a reasonable estimate of such expenses.
SECTION 3 RECORDING AND INFORMATION All changes in holdings of special drawing rights shall take effect only when recorded by the Fund in the Special Draw­ ing Rights Department.

Participants shall notify the Fund of the provisions of this Agreement under which special drawing rights are used.

The Fund may require participants to furnish it with such other information as it deems necessary for its func­ tions.
ARTICLE XVII PARTICIPANTS AND OTHER HOLDERS OF SPECIAL DRAWING RIGHTS SECTION 1 PARTICIPANTS Each member of the Fund that deposits with the Fund an in­ strument setting forth that it undertakes all the obligations of a participant in the Special Drawing Rights Department in ac­ cordance with its law and that it has taken all steps necessary to enable it to carry out all of these obligations shall become a participant in the Special Drawing Rights Department as of the date the instrument is deposited, except that no member shall become a participant before the provisions of this Agreement pertaining exclusively to the Special Drawing Rights Depart­ ment have entered into force and instruments have been de­ posited under this Section by members that have at least 75 percent of the total of quotas.
53 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued SECTION 2 FUND AS A HOLDER The Fund may hold special drawing rights in the General Re­ sources Account and may accept and use them in operations and transactions conducted through the General Resources Account with participants in accordance with the provisions of this Agreement or with prescribed holders in accordance with the terms and conditions prescribed under Section 3 of this Article.
SECTION 3 OTHER HOLDERS The Fund may prescribe: (i) as holders, non­members, members that are non­par­ ticipants, institutions that perform functions of a central bank for more than one member, and other ofﬁcial en­ tities; the terms and conditions on which prescribed holders may be permitted to hold special drawing rights and may accept and use them in operations and transactions with participants and other prescribed holders, and the terms and conditions on which participants and the Fund through the General Resources Account may en­ ter into operations and transactions in special drawing rights with prescribed holders.
(ii) (iii) An 85 percent majority of the total voting power shall be re­ quired for prescriptions under (i) above.

The terms and condi­ tions prescribed by the Fund shall be consistent with the pro­ visions of this Agreement and the effective functioning of the Special Drawing Rights Department.
ARTICLE XVIII ALLOCATION AND CANCELLATION OF SPECIAL DRAWING RIGHTS SECTION 1 PRINCIPLES AND CONSIDERATIONS GOVERNING ALLOCATION AND CANCELLATION (a) In all its decisions with respect to the allocation and can­ cellation of special drawing rights the Fund shall seek to meet the long­term global need, as and when it arises, 54 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (b) to supplement existing reserve assets in such manner as will promote the attainment of its purposes and will avoid economic stagnation and deﬂation as well as ex­ cess demand and inﬂation in the world.
The ﬁrst decision to allocate special drawing rights shall take into account, as special considerations, a collect­ ive judgment that there is a global need to supplement reserves, and the attainment of a better balance of pay­ ments equilibrium, as well as the likelihood of a better working of the adjustment process in the future.
SECTION 2 ALLOCATION AND CANCELLATION (a) (b) (c) Decisions of the Fund to allocate or cancel special draw­ ing rights shall be made for basic periods which shall run consecutively and shall be 5 years in duration.

The ﬁrst basic period shall begin on the date of the ﬁrst deci­ sion to allocate special drawing rights or such later date as may be speciﬁed in that decision.

Any allocations or cancellations shall take place at yearly intervals.
The rates at which allocations are to be made shall be expressed as percentages of quotas on the date of each decision to allocate.

The rates at which special drawing rights are to be cancelled shall be expressed as percent­ ages of net cumulative allocations of special drawing rights on the date of each decision to cancel.

The per­ centages shall be the same for all participants.
In its decision for any basic period the Fund may pro­ vide, notwithstanding (a) and (b) above, that: (i) the duration of the basic period shall be other than 5 years; or the allocations or cancellations shall take place at other than yearly intervals, or the basis for allocations or cancellations shall be the quotas or net cumulative allocations on dates other than the dates of decisions to allocate or cancel.
(ii) (iii) 55 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (d) A member that becomes a participant after a basic period starts shall receive allocations beginning with the next basic period in which allocations are made after it becomes a participant unless the Fund decides that the new participant shall start to receive allocations beginning with the next allocation after it becomes a participant.
If the Fund decides that a member that becomes a participant during a basic period shall re­ ceive allocations during the remainder of that basic period and the participant was not a member on the dates established under (b) or (c) above, the Fund shall determine the basis on which these allocations to the participant shall be made.
A participant shall receive allocations of special draw­ ing rights made pursuant to any decision to allocate un­ less: (i) (e) (ii) the Governor for the participant did not vote in favour of the decision; and the participant has notiﬁed the Fund in writing prior to the ﬁrst allocation of special drawing rights under that decision that it does not wish special drawing rights to be allocated to it under the decision.
On the request of a participant, the Fund may decide to terminate the effect of the no­ tice 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 its share of the special drawing rights that are to be cancelled, the participant shall eliminate its negative balance as promptly as its gross reserve position permits and shall remain in consultation with the Fund for this purpose.
Special drawing rights acquired by the partici­ pant after the effective date of the cancellation shall be applied against its negative balance and cancelled.
56 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued SECTION 3 UNEXPECTED MAJOR DEVELOPMENTS The Fund may change the rates or intervals of allocation or cancellation during the rest of a basic period or change the length of a basic period or start a new basic period, if at any time the Fund ﬁnds it desirable to do so because of unexpected major developments.
SECTION 4 DECISIONS ON ALLOCATIONS AND CANCELLATIONS (a) (b) (c) Decisions under Section 2(a), (b), and (c) or Section 3 of this Article shall be made by the Board of Governors on the basis of proposals of the Managing Director con­ curred in by the Executive Board.
Before making any proposal, the Managing Director, after having satisﬁed himself that it will be consistent with the provisions of Section 1(a) of this Article, shall conduct such consultations as will enable him to ascer­ tain that there is broad support among participants for the proposal.
In addition, before making a proposal for the ﬁrst allocation, the Managing Director shall satisfy himself that the provisions of Section 1(b) of this Article have been met and that there is broad support among participants to begin allocations; he shall make a pro­ posal for the ﬁrst allocation as soon after the establish­ ment of the Special Drawing Rights Department as he is so satisﬁed.
The Managing Director shall make proposals: (i) not later than 6 months before the end of each basic period; 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; (ii) (iii) when, in accordance with Section 3 of this Art­ icle, he considers that it would be desirable to change the rate or intervals of allocation or can­ 57 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued cellation or change the length of a basic period or start a new basic period; or (iv) within 6 months of a request by the Board of Governors or the Executive Board; provided that, if under (i), (iii), or (iv) above the Man­ aging Director ascertains that there is no proposal which he considers to be consistent with the provisions of Sec­ tion 1 of this Article that has broad support among par­ ticipants in accordance with (b) above, he shall report to the Board of Governors and to the Executive Board.
(d) An 85 percent majority of the total voting power shall be required for decisions under Section 2(a), (b), and (c) or Section 3 of this Article except for decisions under Section 3 with respect to a decrease in the rates of allo­ cation.

ARTICLE XIX OPERATIONS AND TRANSACTIONS IN SPECIAL DRAWING RIGHTS SECTION 1 USE OF SPECIAL DRAWING RIGHTS Special drawing rights may be used in the operations and trans­ actions authorised by or under this Agreement.
SECTION 2 OPERATIONS AND TRANSACTIONS BETWEEN PARTICIPANTS (a) A participant shall be entitled to use its special drawing rights to obtain an equivalent amount of currency from a participant designated under Section 5 of this Article.

(b) A participant, in agreement with another participant, may use its special drawing rights to obtain an equiva­ lent amount of currency from the other participant.
The Fund, by a 70 percent majority of the total vot­ ing power, may prescribe operations in which a partici­ pant is authorised to engage in agreement with another participant on such terms and conditions as the Fund deems appropriate.
The terms and conditions shall be consistent with the effective functioning of the Special (c) 58 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (d) Drawing Rights Department and the proper use of spe­ cial drawing rights in accordance with this Agreement.
The Fund may make representations to a participant that enters into any operation or transaction under (b) or (c) above that in the judgment of the Fund may be prejudi­ cial to the process of designation according to the prin­ ciples of Section 5 of this Article or is otherwise in­ consistent with Article XXII.

A participant that persists in entering into such operations or transactions shall be subject to Article XXIII, Section 2(b).
SECTION 3 REQUIREMENT OF NEED (a) (b) (c) In transactions under Section 2(a) of this Article, except as otherwise provided in (c) below, a participant will be expected to use its special drawing rights only if it has a need because of its balance of payments or its reserve position or developments in its reserves, and not for the sole purpose of changing the composition of its reserves.
The use of special drawing rights shall not be subject to challenge on the basis of the expectation in (a) above, but the Fund may make representations to a participant that fails to fulﬁll this expectation.

A participant that persists in failing to fulﬁll this expectation shall be sub­ ject to Article XXIII, Section 2(b).
The Fund may waive the expectation in (a) above in any transactions in which a participant uses special drawing rights to obtain an equivalent amount of currency from a participant designated under Section 5 of this Article that would promote reconstitution by the other partici­ pant under Section 6(a) of this Article; prevent or reduce a negative balance of the other participant; or offset the effect of a failure by the other participant to fulﬁl the expectation in (a) above.
SECTION 4 OBLIGATION TO PROVIDE CURRENCY 59 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (a) A participant designated by the Fund under Section 5 of this Article shall provide on demand a freely usable cur­ rency to a participant using special drawing rights under Section 2(a) of this Article.
A participant’s obligation to provide currency shall not extend beyond the point at which its holdings of special drawing rights in ex­ cess of its net cumulative allocation are equal to twice its net cumulative allocation or such higher limit as may be agreed between a participant and the Fund.

(b) A participant may provide currency in excess of the ob­ ligatory limit or any agreed higher limit.
SECTION 5 DESIGNATION OF PARTICIPANTS TO PROVIDE CURRENCY (a) The Fund shall ensure that a participant will be able to use its special drawing rights by designating partici­ pants to provide currency for speciﬁed amounts of spe­ cial drawing rights for the purposes of Sections 2(a) and 4 of this Article.
Designations shall be made in ac­ cordance with the following general principles supple­ mented by such other principles as the Fund may adopt from time to time: (i) A participant shall be subject to designation if its balance of payments and gross reserve position is sufﬁciently strong, but this will not preclude the possibility that a participant with a strong re­ serve position will be designated even though its has a moderate balance of payments deﬁcit.
Par­ ticipants shall be designated in such manner as will promote over time a balanced distribution of holdings of special drawing rights among them: 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 (ii) 60 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (iii) the effect of failures to fulﬁll the expectation in Section 3(a) of this Article: In designating participants, the Fund normally shall give priority to those that need to acquire special drawing rights to meet the objectives of designation under (ii) above.
In order to promote over time a balanced distribution of holdings of special drawing rights under (a)(i) above, the Fund shall apply the rules for designation in Sched­ ule F or such rules as may be adopted under (c) below.

The rules for designation may be reviewed at any time and new rules shall be adopted if necessary.

Unless new rules are adopted, the rules in force at the time of the review shall continue to apply.
(b) (c) SECTION 6 RECONSTITUTION (a) (b) Participants that use their special drawing rights shall reconstitute their holdings of them in accordance with the rules for reconstitution in Schedule G or such rules as may be adopted under (b) below.

The rules for reconstitution may be reviewed at any time and new rules shall be adopted if necessary.

Unless new rules are adopted or a decision is made to abrogate rules for reconstitution, the rules in force at the time of review shall continue to apply.
A 70 percent majority of the total voting power shall be required for decisions to adopt, modify, or abrogate the rules for reconstitution.
SECTION 7 EXCHANGE RATES (a) Except as otherwise provided in (b) below, the exchange rates for transactions between participants under Sec­ tion 2(a) and (b) of this Article shall be such that par­ ticipants using special drawing rights shall receive the same value whatever currencies might be provided and whichever participants provide those currencies, and 61 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued the Fund shall adopt regulations to give effect to this principle.
The Fund, by an 85 percent majority of the total vot­ ing power, may adopt policies under which in excep­ tional circumstances the Fund, by a 70 percent majority of the total voting power, may authorise participants en­ tering into transactions under Section 2(b) of this Art­ icle to agree on exchange rates other than those applic­ able under (a) above.

The Fund shall consult a participant on the procedure for determining rates of exchange for its currency.
For the purpose of this provision the term participant includes a terminating participant.

(b) (c) (d) ARTICLE XX SPECIAL DRAWING RIGHTS DEPARTMENT INTEREST AND CHARGES SECTION 1 INTEREST 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 participants shall be paid to the Fund by each participant on the amount of its net cumulative allocation of special drawing rights plus any negative balance of the participant or unpaid charges.

SECTION 3 RATE OF INTEREST AND CHARGES The Fund shall determine the rate of interest by a 70 percent majority of the total voting power.

The rate of charges shall be equal to the rote of interest.
SECTION 4 ASSESSMENTS When it is decided under Article XVI, Section 2 that reim­ bursement shall be made, the Fund shall levy assessments for 62 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued this purpose at the same rate for all participants on their net cumulative allocations.
SECTION 5 PAYMENT OF INTEREST, CHARGES AND ASSESSMENTS Interest, charges, and assessments shall be paid in special drawing rights.

A participant that needs special drawing rights to pay any charge or assessment shall be obligated and entitled to obtain them, for currency acceptable to the Fund, in a transaction with the Fund conducted through the General Resources Account.
If sufﬁcient special drawing rights cannot be obtained in this way, the participant shall be obligated and entitled to obtain them with a freely usable currency from a participant which the Fund shall specify.

Special drawing rights acquired by a participant after the date for payment shall be applied against its unpaid charges and cancelled.
ARTICLE XXI ADMINISTRATION OF THE GENERAL DEPARTMENT AND THE SPECIAL DRAWING RIGHTS DEPARTMENT (a) The General Department and the Special Drawing Rights Department shall be administered in accord­ ance with the provisions of Article XII, subject to the following provisions: (i) For meetings of or decisions by the Board of Governors on matters pertaining exclusively to the Special Drawing Rights Department only re­ quests by, or the presence and the votes of, Gov­ ernors appointed by members that are partici­ pants shall be counted for the purpose of call­ ing meetings and determining whether a quorum exists or whether a decision is made by the re­ quired majority: For decisions by the Executive Board on mat­ ters pertaining exclusively to the Special Draw­ ing Rights Department only Executive Directors (ii) 63 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued appointed or elected by at least one member that is a participant shall be entitled to vote.
Each of these Executive Directors shall be entitled to cast the number of votes allotted to the member which is a participant that appointed him or to the mem­ bers that are participants whose votes counted towards his election.
Only the presence of Ex­ ecutive Directors appointed or elected by mem­ bers that are participants and the votes allotted to members that are participants shall be counted for the purpose of determining whether a quo­ rum exists or whether a decision is made by the required majority.
For the purposes of this pro­ vision, an agreement under Article XII, Section 3(i)(ii) by a member that is a participant shall en­ title an appointed Executive Director to vote and cast the number of votes allotted to the member: (iii) Questions of the general administration of the Fund, including reimbursement under Article XVI, Section 2, and any question whether a mat­ ter pertains to both Departments or exclusively to the Special Drawing Rights Department shall be decided as if they pertained exclusively to the General Department.
Decisions with respect to the method of valuation of the special draw­ ing right, the acceptance and holding of special drawing rights in the General Resources Account of the General Department and the use of them, and other decisions affecting the operations and transactions conducted through both the General Resources Account of the General Department and the Special Drawing Rights Department shall be made by the majorities required for de­ cisions on matters pertaining exclusively to each Department.
A decision on a matter pertaining to the Special Drawing Rights Department shall so indicate.

64 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (b) (c) In addition to the privileges and immunities that are ac­ corded under Article IX of this Agreement, no tax of any kind shall be levied on special drawing rights or on operations or transactions in special drawing rights.
A question of interpretation of the provisions of this Agreement on matters pertaining exclusively to the Special Drawing Rights Department shall be sub­ mitted to the Executive Board pursuant to Article XXIX(a) only on the request of a participant.
In any case where the Executive Board has given a decision on a question of interpretation pertaining exclusively to the Special Drawing Rights Department only a participant may require that the question be referred to the Board of Governors under Article XXIX(b).

The Board of Governors shall decide whether a Governor appointed by a member that is not a participant shall be entitled to vote in the Committee on Interpretation on questions pertaining exclusively to the Special Drawing Rights Department.
(d) Whenever a disagreement arises between the Fund and a participant that has terminated its participation in the Special Drawing Rights Department or between the Fund and any participant during the liquidation of the Special Drawing Rights Department with respect to any matter arising exclusively from participation in the Special Drawing Rights Department, the disagreement shall be submitted to arbitration in accordance with the procedures in Article XXIX(c).
ARTICLE XXII GENERAL OBLIGATIONS OF PARTICIPANTS In addition to the obligations assumed with respect to special drawing rights under other Articles of this Agreement, each participant undertakes to collaborate with the Fund and with other participants in order to facilitate the effective functioning of the Special Drawing Rights Department and the proper use of special drawing rights in accordance with this Agreement 65 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued and with the objective of making the special drawing right the principal reserve asset in the international monetary system.
ARTICLE XXIII SUSPENSION OF OPERATIONS AND TRANSACTIONS IN SPECIAL DRAWING RIGHTS SECTION 1 EMERGENCY PROVISIONS In the event of an emergency or the development of unfore­ seen circumstances threatening the activities of the Fund with respect to the Special Drawing Rights Department, the Execu­ tive Board, by an 85 percent majority of the total voting power, may suspend for a period of not more than one year the oper­ ation of any of the provisions relating to operations and trans­ actions in special drawing rights, and the provisions of Article XXVII, Section 1(b), (c), and (d) shall then apply.
SECTION 2 FAILURE TO FULFIL OBLIGATIONS (a) (b) (c) (d) If the Fund ﬁnds that a participant has failed to fulﬁl its obligations under Article XIX, Section 4, the right of the participant to use its special drawing rights shall be suspended unless the Fund otherwise decides.

If the Fund ﬁnds that a participant has failed to fulﬁl any other obligation with respect to special drawing rights, the Fund may suspend the right of the participant to use special drawing rights it acquires after the suspension.
Regulations shall be adopted to ensure that before ac­ tion is taken against any participant under (a) or (b) above, the participant shall be informed immediately of the complaint against it and given an adequate oppor­ tunity for stating its case, both orally and in writing.

Whenever the participant is thus informed of a com­ plaint relating to (a) above, it shall not use special draw­ ing rights pending the disposition of the complaint.
Suspension under (a) or (b) above or limitation under (c) above shall not affect a participant’s obligation to provide currency in accordance with Article XIX, Sec­ tion 4.
66 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (e) (f) The Fund may at any time terminate a suspension under (a) or (b) above, provided that a suspension imposed on a participant under (b) above for failure to fulﬁl the obligations under Article XIX, Section (6)(a) shall not be terminated until 180 days after the end of the ﬁrst calendar quarter during which the participant complies with the rules for reconstitution.
The right of a participant to use its special drawing rights shall not be suspended because it has become in­ eligible to use the Fund’s general resources under Art­ icle V, Section 5, Article VI, Section 1, or Article XXVI, Section 2(a).

Article XXVI, Section 2 shall not apply because a participant has failed to fulﬁll any obligations with respect to special drawing rights.
ARTICLE XXIV TERMINATION OF PARTICIPATION SECTION 1 RIGHT TO TERMINATE PARTICIPATION (a) Any participant may terminate its participation in the Special Drawing Rights Department at any time by transmitting a notice in writing to the Fund at its prin­ cipal ofﬁce.

Termination shall become effective on the date the notice is received.

(b) A participant that withdraws from membership in the Fund shall be deemed to have simultaneously termin­ ated its participation in the Special Drawing Rights De­ partment.
SECTION 2 SETTLEMENT ON TERMINATION (a) When a participant terminates its participation in the Special Drawing Rights Department, all operations and transactions by the terminating participant in special drawing rights shall cease except as otherwise permit­ ted under an agreement made pursuant to (c) below in order to facilitate a settlement or as provided in Sections 3, 5, and 6 of this Article or in Schedule H. Interest and 67 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (b) (c) charges that accrued to the date of termination and as­ sessments levied before that date but not paid shall be paid in special drawing rights.
The Fund shall be obligated to redeem all special draw­ ing rights held by the terminating participant, and the terminating participant, shall be obligated to pay to the Fund an amount equal to its net cumulative allocation and any other amounts that may be due and payable be­ cause of its participation in the Special Drawing Rights Department.
These obligations shall be set off against each other and the amount of special drawing rights held by the terminating participant that is used in the setoff to extinguish its obligation to the Fund shall be cancelled.

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

SECTION 3 INTEREST AND CHARGES After the date of termination the Fund shall pay interest on any outstanding balance of special drawing rights held by a ter­ minating participant, and the terminating participant shall pay charges on any outstanding obligation owed to the Fund at the times and rates prescribed under Article XX.

Payment shall be made in special drawing rights.


A terminating participant shall be entitled to obtain special drawing rights with a freely usable currency to pay charges or assessments in a transaction with a participant speciﬁed by the Fund or by agreement from any other holder, or to dispose of special drawing rights received as interest in a transaction with any participant designated under Article XIX, Section 5 or by agreement with any other holder.
SECTION 4 SETTLEMENT OF OBLIGATION TO THE FUND Currency received by the Fund from a terminating participant shall be used by the Fund to redeem special drawing rights held 68 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued by participants in proportion to the amount by which each par­ ticipant’s holdings of special drawing rights exceed its net cu­ mulative allocation at the time the currency is received by the Fund.
Special drawing rights so redeemed and special draw­ ing rights obtained by a terminating participant under the pro­ visions of this Agreement to meet any instalment due under an agreement on settlement or under Schedule H and set off against that instalment shall be cancelled.
SECTION 5 SETTLEMENT OF OBLIGATION TO A TERMINATING PARTICIPANT Whenever the Fund is required to redeem special drawing rights held by a terminating participant, redemption shall be made with currency provided by participants speciﬁed by the Fund.

These participants shall be speciﬁed in accordance with the principles in Article XIX, Section 5.
Each speciﬁed participant shall provide at its option the currency of the terminating participant or a freely usable currency to the Fund and shall receive an equivalent amount of special drawing rights.

However, a terminating participant may use its special drawing rights to obtain its own currency, a freely usable currency, or any other asset from any holder, if the Fund so permits.
SECTION 6 GENERAL RESOURCES ACCOUNT TRANSACTIONS In order to facilitate settlement with a terminating participant, the Fund may decide that a terminating participant shall: (i) use any special drawing rights held by it after the setoff in Section 2(b) of this Article, when they are to be redeemed, in a transaction with the Fund conducted through the General Resources Account to obtain its own currency or a freely usable currency at the option of the Fund, or obtain special drawing rights in a transaction with the Fund conducted through the General Resources Account for a currency acceptable to the Fund to meet (ii) 69 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued any charges or instalment due under an agreement or the provisions of Schedule H. ARTICLE XXV LIQUIDATION OF THE SPECIAL DRAWING RIGHTS DEPARTMENT (a) (b) (c) The Special Drawing Rights Department may not be liquidated except by decision of the Board of Govern­ ors.
In an emergency, if the Executive Board decides that liquidation of the Special Drawing Rights Depart­ ment may be necessary, it may temporarily suspend al­ locations or cancellations and all operations and trans­ actions in special drawing rights pending decision by the Board of Governors.

A decision by the Board of Governors to liquidate the Fund shall be a decision to liquidate both the General Department and the Special Drawing Rights Department.
If the Board of Governors decides to liquidate the Spe­ cial Drawing Rights Department, all allocations or can­ cellations and all operations and transactions in special drawing rights and the activities of the Fund with re­ spect to the Special Drawing Rights Department shall cease except those incidental to the orderly discharge of the obligations of participants and of the Fund with re­ spect 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 XX, Article XXI (d), Art­ icle XXIV, Article XXIX (c), and Schedule H, or any agreement reached under Article XXIV subject to para­ graph 4 of Schedule H, and Schedule I.
Upon liquidation of the Special Drawing Rights Depart­ ment, 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 70 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued rights held by holders, and each participant shall be ob­ ligated to pay the Fund an amount equal to its net cu­ mulative allocation of special drawing rights and such other amounts as may be due and payable because of its participation in the Special Drawing Rights Depart­ ment.
Liquidation of the Special Drawing Rights Department shall be administered in accordance with the provisions of Schedule I.

(d) ARTICLE XXVI 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 of­ ﬁce.

Withdrawal shall become effective on the date such no­ tice is received.
SECTION 2 COMPULSORY WITHDRAWAL (a) (b) (c) If a member fails to fulﬁl any of its obligations under this Agreement, the Fund may declare the member ineli­ gible to use the general resources of the Fund.

Nothing in this Section shall be deemed to limit the provisions of Article V, Section 5 or Article VI, Section 1.
If, after the expiration of a reasonable period following a declaration of ineligibility under (a) above, the mem­ ber persists in its failure to fulﬁl any of its obligations under this Agreement, the Fund may, by a seventy per­ cent majority of the total voting power, suspend the vot­ ing rights of the member.

During the period of the sus­ pension, the provisions of Schedule L shall apply.

The Fund may, by a 70 percent majority of the total voting power, terminate the suspension at any time.
If, after the expiration of a reasonable period following a decision of suspension under (b) above, the member persists in its failure to fulﬁl any of its obligations under 71 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (d) this Agreement, that member may be required to with­ draw from membership in the Fund by a decision of the Board of Governors carried by a majority of the Gov­ ernors having 85 percent of the total voting power.
Regulations shall be adopted to ensure that before ac­ tion is taken against any member under (a), (b), or (c) above, the member shall be informed in reasonable time of the complaint against it and given an adequate oppor­ tunity for stating its case, both orally and in writing.
SECTION 3 SETTLEMENT OF ACCOUNTS WITH MEMBERS WITHDRAWING When a member withdraws from the Fund, normal operations and transactions of the Fund in its currency shall cease and settlement of all accounts between it and the Fund shall be made with reasonable despatch by agreement between it and the Fund.

If agreement is not reached promptly, the provisions of Schedule J shall apply to the settlement of accounts.
Article XXVI, section 2(b) and (c) substituted, as from 1 June 1993, by section 2(2) International Finance Agreements Amendment Act 1992 (1992 No 132).
ARTICLE XXVII EMERGENCY PROVISIONS SECTION 1 TEMPORARY SUSPENSION (a) In the event of an emergency or the development of un­ foreseen circumstances threatening the activities of the Fund, the Executive Board, by an 85 percent majority of the total voting power, may suspend for a period of not more than one year the operation of any of the fol­ lowing provisions: (i) (ii) Article VI, Section 2; (iii) Article XI, Section 1; (iv) Article V, Sections 2, 3, 7, 8(a)(i) and (e); Schedule C, paragraph 5.
(b) A suspension of the operation of a provision under (a) above may not be extended beyond one year except by 72 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued the Board of Governors which, by an 85 percent major­ ity of the total voting power, may extend a suspension for an additional period of not more than 2 years if it ﬁnds that the emergency or unforeseen circumstances referred to in (a) above continue to exist.
The Executive Board may, by a majority of the total voting power, terminate such suspension at any time.

The Fund may adopt rules with respect to the subject matter of a provision during the period in which its op­ eration is suspended.

(c) (d) SECTION 2 LIQUIDATION OF THE FUND (a) (b) (c) The Fund may not be liquidated except by decision of the Board of Governors.
In an emergency, if the Ex­ ecutive Board decides that liquidation of the Fund may be necessary, it may temporarily suspend all operations and transactions, pending decision by the Board of Gov­ ernors.
If the Board of Governors decides to liquidate the Fund, the Fund shall forthwith cease to engage in any activ­ ities except those incidental to the orderly collection and liquidation of its assets and the settlement of its liabil­ ities, and all obligations of members under this Agree­ ment shall cease except those set out in this Article, in Article XXIX(c), in Schedule J, paragraph 7, and in Schedule K. Liquidation shall be administered in accordance with the provisions of Schedule K. ARTICLE XXVIII AMENDMENTS (a) Any proposal to introduce modiﬁcations in this Agree­ ment, whether emanating from a member, a Governor, or the Executive Board, shall be communicated to the chairman of the Board of Governors who shall bring the proposal before the Board of Governors.
If the pro­ 73 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued posed amendment is approved by the Board of Govern­ ors, the Fund shall, by circular letter or telegram, ask all members whether they accept the proposed amendment.
When three­ﬁfths of the members, having 85 percent of the total voting power, have accepted the proposed amendment, the Fund shall certify the fact by a formal communication addressed to all members.
(b) Notwithstanding (a) above, acceptance by all members (ii) (iii) is required in the case of any amendment modifying: (i) the right to withdraw from the Fund (Article XXVI, Section 1); the provision that no change in a member’s quota shall be made without its consent (Article III, Section 2(d)); and the provision that no change may be made in the par value of a member’s currency except on the proposal of that member (Schedule C, paragraph 6).
(c) Amendments shall enter into force for all members 3 months after the date of the formal communication un­ less a shorter period is speciﬁed in the circular letter or telegram.

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

In any case where the Executive Board has given a deci­ sion under (a) above, any member may require, within 3 months from the date of the decision, that the question be referred to the Board of Governors, whose decision shall be ﬁnal.
Any question referred to the Board of 74 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued Governors shall be considered by a Committee on Inter­ pretation 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 Com­ mittee shall be the decision of the Board of Governors unless the Board of Governors, by an 85 percent major­ ity of the total voting power, decides otherwise.

Pend­ ing the result of the reference to the board of Governors the Fund may, so far as it deems necessary, act on the basis of the decision of the Executive Board.
(c) Whenever a disagreement arises between the Fund and a member which has withdrawn, or between the Fund and any member during liquidation of the Fund, such disagreement shall be submitted to arbitration by a tri­ bunal of 3 arbitrators, one appointed by the Fund, an­ other by the member or withdrawing member, and an umpire who, unless the parties otherwise agree, shall be appointed by the President of the International Court of Justice or such other authority as may have been pre­ scribed by regulation adopted by the Fund.
The umpire shall have full power to settle all questions of procedure in any case where the parties are in disagreement with respect thereto.

ARTICLE XXX EXPLANATION OF TERMS In interpreting the provisions of this Agreement the Fund and its members shall be guided by the following provisions: (a) The Fund’s holdings of a member’s currency in the Gen­ eral Resources Account shall include any securities ac­ cepted by the Fund under Article III, Section 4.
Stand­by arrangement means a decision of the Fund by which a member is assured that it will be able to make purchases from the General Resources Account in ac­ cordance with the terms of the decision during a speci­ ﬁed period and up to a speciﬁed amount.
(b) 75 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (c) (d) Reserve tranche purchase means a purchase by a mem­ ber of special drawing rights or the currency of another member in exchange for its own currency which does not cause the Fund’s holdings of the member’s currency in the General Resources Account to exceed its quota, provided that for the purposes of this deﬁnition the Fund may exclude purchases and holdings under: (i) policies on the use of its general resources for compensatory ﬁnancing of export ﬂuctuations; policies on the use of its general resources in connection with the ﬁnancing of contributions to international buffer stocks of primary products; and other policies on the use of its general resources in respect of which the Fund decides, by an 85 percent majority of the total voting power, that an exclusion shall be made.
(ii) (iii) Payments for current transactions means payments which are not for the purpose of transferring capital, and includes, without limitation: (1) all payments due in connection with foreign trade, other current business, including services, and normal short­term banking and credit facil­ ities; payments due as interest on loans and as net in­ come from other investments; payments of moderate amount for amortisation of loans or for depreciation of direct investments; and (2) (3) (4) moderate remittances for family living expenses.
The Fund may, after consultation with the members conceded, determine whether certain speciﬁc transac­ tions are to be considered current transactions or capital transactions.
Net cumulative allocation of special drawing rights means the total amount of special drawing rights allo­ cated to a participant less its share of special drawing (e) 76 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (f) rights that have been cancelled under Article XVIII, Section 2(a).
A freely usable currency means a member’s currency that the Fund determines (i) is, in fact widely used to make payments for international transactions, and (ii) is widely traded in the principal exchange markets.

(h) (g) Members that were members on August 31, 1975 shall be deemed to include a member that accepted member­ ship after that date pursuant to a resolution of the Board of Governors adopted before that date.
Transaction of the Fund means exchanges of monetary assets by the Fund for other monetary assets.

Oper­ ations of the Fund means other uses or receipts of mon­ etary assets by the Fund.

Transactions in special drawing rights means exchanges of special drawing rights for other monetary assets.

Op­ erations in special drawing rights means other uses of special drawing rights.
(i) ARTICLE XXXI FINAL PROVISIONS SECTION 1 ENTRY INTO FORCE This agreement shall enter into force when it has been signed on behalf of governments having 65 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 behalf this Agreement is signed shall deposit with the Government of the United States of America an instrument setting forth that it has accepted this Agreement in accordance with its law and has taken all steps necessary to enable it to carry out all of its obligations under this Agreement.
77 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (b) (c) Each country shall become a member of the Fund as from the date of the deposit on its behalf of the instru­ ment referred to in (a) above, except that no country shall become a member before this Agreement enters into force under Section 1 of this Article.
The Government of the United States of America shall inform the governments of all countries whose names are set forth in Schedule A, and the governments of all countries whose membership is approved in accordance with Article II, Section 2, of all signatures of this Agree­ ment and of the deposit of all instruments referred to in (a) above.
(d) At the time this Agreement is signed on its behalf, each government shall transmit to the Government of the United States of America one one­hundredth of 1 per­ cent of its total subscription in gold or United States dol­ lars 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 ac­ count and shall transmit them to the Board of Governors of the Fund when the initial meeting has been called.
If this Agreement has not come into force by December 31 1945, the Government of the United States of America shall return such funds to the governments that trans­ mitted them.

This Agreement shall remain open for signature at Washington on behalf of the governments of the coun­ tries whose names are set forth in Schedule A until December 31, 1945.
After December 31, 1945, this Agreement shall be open for signature on behalf of the government of any coun­ try whose membership has been approved in accordance with Article II, Section 2.
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 (g) (e) (f) 78 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule A ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (h) their protection, suzerainty, or authority, and all territor­ ies in respect of which they exercise a mandate.
Subsection (d) above shall come into force with regard to each signatory government as from the date of its signature.
[The signature and depository clause reproduced below fol­ lowed the text of Article XX in the original Articles of Agree­ ment] Done at Washington, in a single copy which shall remain de­ posited in the archives of the Government of the United States of America, which shall transmit certiﬁed copies to all govern­ ments whose names are set forth in Schedule A and to all gov­ ernments whose membership is approved in accordance with Article II, Section 2.
Schedule A QUOTAS (In millions of United States dollar) Australia Belgium Bolivia Brazil Canada Chile China Colombia Costa Rica Cuba 200 India 225 Iran 10 Iraq 150 Liberia 300 Luxembourg 50 Mexico 550 Netherlands 50 5 50 New Zealand Nicaragua Norway 400 25 8 .5 10 90 275 50 2 50 79 Schedule B International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued Australia 200 India Czechoslovakia 125 Panama * 5 5 45 2.5 6 Paraguay Peru Phillipine Commonwealth 15 Poland Union of South Africa Union of Soviet Socialist Republic 450 United Kingdom 40 United States 5 5 Uruguay Venezuela 2.5 Yugoslavia 1 Total 400 .5 2 25 125 100 1200 1300 2750 15 15 60 9100 *Denmark Dominican Republic Ecuador Egypt El Salvador Ethiopia France Greece Guatemala Haiti Honduras Iceland *The quota of Denmark shall be determined by the Fund after the Danish Government has declared its readiness to sign this Agreement but before signature takes place.
Schedule B TRANSITIONAL PROVISIONS WITH RESPECT TO REPURCHASE, PAYMENT OF ADDITIONAL 80 1 2 3 4 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule B ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued SUBSCRIPTIONS, GOLD, AND CERTAIN OPERATIONAL MATTERS Repurchase obligations that have accrued pursuant to Article V, Section 7(b) before the date of the second amendment of this Agreement and that remain undischarged at that date shall be discharged not later than the date or dates at which the obli­ gations had to be discharged in accordance with the provisions of this Agreement before the second amendment.
A member shall discharge with special drawing rights any obligation to pay gold to the Fund in repurchase or as a sub­ scription that is outstanding at the date of the second amend­ ment of this Agreement, but the Fund may prescribe that these payments may be made in whole or in part in the currencies of other members speciﬁed by the Fund.
A non­ participant shall discharge an obligation that must be paid in special drawing rights pursuant to this provision with the currencies of other members speciﬁed by the Fund.

For the purposes of 2 above 0.888 671 gram of ﬁne gold shall be equivalent to one special drawing right, and the amount of currency payable under 2 above shall be determined on that basis and on the basis of the value of the currency in terms of the special drawing right at the date of discharge.
A member’s currency held by the Fund in excess of 75 percent of the member’s quota at the date of the second amendment of this Agreement and not subject to repurchase under 1 above shall be repurchased in accordance with the following rules: (i) Holdings that resulted from a purchase shall be repur­ chased in accordance with the policy on the use of the Fund’s general resources under which the purchase was made.
81 Schedule B International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (ii) Other holdings shall be repurchased not later than 4 years after the date of the second amendment of this Agreement.

Repurchases under 1 above that are not subject to 2 above, repurchases under 4 above, and any speciﬁcation of currencies under 2 above shall be in accordance with Article V, Section 7(i).
All rules and regulations, rates, procedures, and decisions in effect at the date of the second amendment of this Agreement shall remain in effect until they are changed in accordance with the provisions of this Agreement.
5 6 7 To the extent that arrangements equivalent in effect to (a) and (b) below have not been completed before the date of the sec­ ond amendment of this Agreement, the Fund shall: (a) sell up to 25 million ounces of ﬁne gold held by it on August 31, 1975 to those members that were members on that date and that agree to buy it, in proportion to their quotas on that date.
The sale to a member under this subparagraph (a) shall be made in exchange for its currency and at a price equivalent at the time of sale to one special drawing right per 0.888 671 gram of ﬁne gold, and sell up to 25 million ounces of ﬁne gold held by it on August 31, 1975 for the beneﬁt of developing mem­ bers that were members on that date, provided, how­ ever, that the part of any proﬁts or surplus value of the gold that corresponds to the proportion of such a mem­ ber’s quota on August 31, 1975 to the total of the quotas of all members on that date shall be transferred directly to each such member.
The requirements under Article V, Section 12(c) that the Fund consult a member, ob­ tain a member’s concurrence, or exchange a member’s currency for the currencies of other members in certain (b) 82 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule C ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued circumstances shall apply with respect to currency re­ ceived by the Fund as a result of sales of gold under this provision, other than sales to a member in return for its own currency, and placed in the General Resources Ac­ count.
Upon the sale of gold under this paragraph 7, an amount of the proceeds in the currencies received equivalent at the time of sale to one special drawing right per 0.888 671 gram of ﬁne gold shall be placed in the General Resources Account and other assets held by the Fund under arrangements pursuant to (b) above shall be held separately from the general resources of the Fund.
Assets that remain subject to disposition by the Fund upon termination of arrangements pursuant to (b) above shall be transferred to the Special Disbursement Account.

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

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

Any member that does not intend to establish a par value for its currency under 1 above shall consult with the Fund and ensure that its exchange arrangements are consistent with the purposes of the Fund and are adequate to fulﬁl its obligations under Article IV, Section 1.
83 1 2 3 Schedule C International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued 4 5 6 7 84 The Fund shall concur in or object to a proposed par value within a reasonable period after receipt of the proposal.

A proposed par value shall not take effect for the purposes of this Agreement if the Fund objects to it, and the member shall be subject to 3 above.
The Fund shall not object because of the domestic social or political policies of the member proposing the par value.
Each member that has a par value for its currency undertakes to apply appropriate measures consistent with this Agreement in order to ensure that the maximum and the minimum rates for spot exchange transactions taking place within its territor­ ies between its currency and the currencies of other members maintaining par values shall not differ from parity by more than 4 1/2 percent or by such other margin or margins as the Fund may adopt by an 85 percent majority of the total voting power.
A member shall not propose a change in the par value of its currency except to correct, or prevent the emergence of, a fun­ damental disequilibrium.

A change may be made only on the proposal of the member and only after consultation with the Fund.

When a change is proposed, the Fund shall concur in or object to the proposed par value within a reasonable period after re­ ceipt of the proposal.
The Fund shall concur if it is satisﬁed that the change is necessary to correct, or prevent the emer­ gence of, a fundamental disequilibrium.

The Fund shall not object because of the domestic social or political policies of the member proposing the change.

A proposed change in par value shall not take effect for the purposes of this Agreement if the Fund objects to it.
If a member changes the par value of its currency despite the objection of the Fund, the member shall be subject to Article XXVI, Section 2.

Maintenance of Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule C ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued an unrealistic par value by a member shall be discouraged by the Fund.
The par value of a member’s currency established under this Agreement shall cease to exist for the purposes of this Agree­ ment if the member informs the Fund that it intends to termin­ ate the par value.

The Fund may object to the termination of a par value by a decision taken by an 85 percent majority of the total voting power.

If a member terminates a par value for its currency despite the objection of the Fund, the mem­ ber shall be subject to Article XXVI, Section 2.
A par value established under this Agreement shall cease to exist for the purposes of this Agreement if the member terminates the par value despite the objection of the Fund, or if the Fund ﬁnds that the member does not maintain rates for a substantial vol­ ume of exchange transactions in accordance with 5 above, pro­ vided that the Fund may not make such ﬁnding unless it has consulted the member and given it 60 days notice of the Fund’s intention to consider whether to make a ﬁnding.
If the par value of the currency of a member has ceased to exist under 8 above, the member shall consult with the Fund and ensure that its exchange arrangements are consistent with the purposes of the Fund and are adequate to fulﬁl its obligations under Article IV, Section 1.

A member for whose currency the par value has ceased to exist under 8 above may, at any time, propose a new par value for its currency.
Notwithstanding 6 above, the Fund, by a 70 percent majority of the total voting power, may make uniform proportionate changes in all par values if the special drawing right is the common denominator and the changes will not affect the value of the special drawing right.
The par value of a member’s 85 8 9 10 11 Schedule D International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued currency shall, however, not be changed under this provision if, within 7 days after the Fund’s action, the member informs the Fund that it does not wish the par value of its currency to be changed by such action.
1 2 Schedule D COUNCIL (a) (b) Each member that appoints an Executive Director and each group of members that has the number of votes allotted to them cast by an elected Executive Director shall appoint to the Council one Councillor, who shall be a Governor, Minister in the government of a mem­ ber, or person of comparable rank, and may appoint not more than 7 Associates.
The Board of Governors may change, by an 85 percent majority of the total vot­ ing power, the number of Associates who may be ap­ pointed.

A Councillor or Associate shall serve until a new appointment is made or until the next regular election of Executive Directors, whichever shall occur sooner.

Executive Directors, or in their absence their Alternates, and Associates shall be entitled to attend meetings of the Council, unless the Council decides to hold a restricted session.
Each member and each group of members that appoints a Councillor shall appoint an Alternate who shall be entitled to attend a meeting of the Council when the Councillor is not present, and shall have full power to act for the Councillor.
(a) The Council shall supervise the management and adap­ tation of the international monetary system, including the continuing operation of the adjustment process and 86 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule D ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (b) (a) (b) (c) developments in global liquidity, and in this connec­ tion shall review developments in the transfer of real resources to developing countries.
The Council shall consider proposals pursuant to Art­ icle XXVIII (a) to amend the Articles of Agreement.

The Board of Governors may delegate to the Coun­ cil authority to exercise any powers of the Board of Governors except the powers conferred directly by this Agreement on the Board of Governors.

Each Councillor shall be entitled to cast the number of votes allotted under Article XII, Section 5 to the mem­ ber or group of members appointing him.
A Councillor appointed by a group of members may cast separately the votes allotted to each member in the group.

If the number of votes allotted to a member cannot be cast by an Executive Director, the member may make arrange­ ments with a Councillor for casting the number of votes allotted to the member.
The Council shall not take any action pursuant to powers delegated by the Board of Governors that is inconsistent with any action taken by the Board of Governors and the Executive Board shall not take any action pursuant to powers delegated by the Board of Governors that is inconsistent with any action taken by either the Board of Governors or the Council.
The Council shall select a Councillor as chairman, shall adopt regulations as may be necessary or appropriate to perform its functions, and shall determine any aspect of its procedure.

The Council shall hold such meetings as may be provided for by the Council or called by the Executive Board.
87 3 4 5 Schedule D International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (a) (b) (c) The Council shall have powers corresponding to those of the Executive Board under the following provisions: Article XII, Section 2(c), (f), (g), and (j); Article XVIII, Section 4(a) and Section 4(c)(iv); Article XXIII, Sec­ tion 1; and Article XXVII, Section 1(a).
For decisions by the Council on matters pertaining ex­ clusively to the Special Drawing Rights Department only Councillors appointed by a member that is a par­ ticipant or a group of members at least one member of which is a participant shall be entitled to vote.
Each of these Councillors shall be entitled to cast the number of votes allotted to the member which is a participant that appointed him or to the members that are participants in the group of members that appointed him, and may cast the votes allotted to a participant with which arrange­ ments have been made pursuant to the last sentence of 3(b) above.
The Council may by regulation establish a procedure whereby the Executive Board may obtain a vote of the Councillors on a speciﬁc question without a meeting of the Council when in the judgment of the Executive Board an action must be taken by the Council which should not be postponed until the next meeting of the Council and which does not warrant the calling of a special meeting.
(e) (d) Article IX, Section 8 shall apply to Councillors, their Alternates, and Associates, and to any other person en­ titled to attend a meeting of the Council.

For the purposes of (b) and 3(b) above, an agreement under Article XII, Section 3(i)(ii) by a member, or by a member that is a participant, shall entitle a councillor to vote and cast the number of votes allotted to the mem­ ber.
(f) When an Executive Director is entitled to cast the num­ ber of votes allotted to a member pursuant to Article XII, Section 3(i)(v), the Councillor appointed by the group whose members elected such Executive Director 88 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule E ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued shall be entitled to vote and cast the number of votes al­ lotted to such member.
The member shall be deemed to have participated in the appointment of the Councillor entitled to vote and cast the number of votes allotted to the member.

New FIRST SCHEDULE Schedule D, paragraph 5(f) was inserted by section 2(3) of 1992 No 132.

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

Schedule E ELECTION OF EXECUTIVE DIRECTORS The election of the elective Executive Directors shall be by ballot of the Governors eligible to vote.
In balloting for the Executive Directors to be elected, each of the Governors eligible to vote shall cast for one person all of the votes to which he is entitled under Article XII, Section 5(a).

The 15 persons receiving the greatest number of votes shall be Executive Directors, provided that no person who received less than 4 percent of the total number of votes that can be cast (eligible votes) shall be considered elected.
When 15 persons are not elected in the ﬁrst ballot, a second ballot shall be held in which there shall vote only (a) those Governors who voted in the ﬁrst ballot for a person not elected, and (b) those Governors whose votes for a person elected are deemed under 4 below to have raised the votes cast for that person above 9 percent of the eligible votes.
If in the second ballot there are more candidates than the number of Executive Directors to be elected, the person who received the lowest 89 6 Schedule F International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued number of votes in the ﬁrst ballot shall be ineligible for elec­ tion.
In determining whether the votes cast by a Governor are to be deemed to have raised the total of any person above 9 percent of the eligible votes the 9 percent shall be deemed to include, ﬁrst, the votes of the Governor casting the largest number of votes for such person, then the votes of the Governor casting the next largest number, and so on until 9 percent is reached.
Any Governor part of whose votes must be counted in order to raise the total of any person above 4 percent shall be con­ sidered as casting all of his votes for such person even if the total votes for such person thereby exceed 9 percent.
If, after the second ballot, 15 persons have not been elected, further ballots shall be held on the same principles until 15 persons have been elected, provided that after 14 persons are elected, the 15th may be elected by a simple majority of the remaining votes and shall be deemed to have been elected by all such votes.
Schedule F DESIGNATION During the ﬁrst basic period the rules for designation shall be as fol­ lows: (a) Participants subject to designation under Article XIX, Section 5(a)(i) shall be designated for such amounts as will promote over time equality in the ratios of the participants’ holdings of special drawing rights in excess of their net cumulative allo­ cations to their ofﬁcial holdings of gold and foreign exchange.
The formula to give effect to (a) above shall be such that par­ ticipants subject to designation shall be designated: (b) 90 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule G ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (i) (ii) in proportion to their ofﬁcial holdings of gold and for­ eign exchange when the ratios described in (a) above are equal; and 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.
1 Schedule G RECONSTITUTION During the ﬁrst basic period the rules for reconstitution shall be as follows: (a) (i) (ii) A participant shall so use and reconstitute its holdings of special drawing rights that, 5 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 5­year period will be not less than 30 percent of the average of its daily net cumulative allocation of special drawing rights over the same period: 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 as­ certain whether and to what extent the participant would need to acquire special drawing rights be­ tween the date of the calculation and the end of any 5­year period in order to comply with the re­ quirement in (a)(i) above.
The Fund shall adopt regulations with respect to the bases on which these calculations shall be made and with respect to the timing of the designation of participants under Article XIX, Section 5(a)(ii), in order to as­ 91 Schedule H International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued sist them to comply with the requirement in (a)(i) above: (iii) The Fund shall give special notice to a participant when the calculations under (a)(ii) above indicate that it is unlikely that the participant will be able to comply with the requirement in (a)(i) above unless it ceases to use special drawing rights for the rest of the period for which the calculation was made under (a)(ii) above: (iv) A participant that needs to acquire special draw­ ing rights to fulﬁl this obligation shall be obli­ gated and entitled to obtain them, for currency acceptable to the Fund, in a transaction with the Fund conducted through the General Resources Account.
If sufﬁcient special drawing rights to fulﬁl this obligation cannot be obtained in this way, the participant shall be obligated and en­ titled to obtain them with a freely usable currency from a participant which the Fund shall specify: Participants shall also pay due regard to the desirability of pursuing over time a balanced relationship between their holdings of special drawing rights and their other reserves.
(b) If a participant fails to comply with the rules for reconstitution, the Fund shall determine whether or not the circumstances jus­ tify suspension under Article XXIII, Section 2(b).
Schedule H TERMINATION OF PARTICIPATION If the obligation remaining after the setoff under Article XXIV, Section 2(b) is to the terminating participant and agreement on settlement between the Fund and the terminating partici­ pant is not reached within 6 months of the date of termination, 2 1 92 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule H ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued the Fund shall redeem this balance of special drawing rights in equal half­yearly instalments within a maximum of 5 years of the date of termination.
The Fund shall redeem this balance as it may determine, either (a) by the payment to the terminating participant of the amounts provided by the remaining partici­ pants to the Fund in accordance with Article XXIV, Section 5, or (b) by permitting the terminating participant to use its special drawing rights to obtain its own currency or a freely usable currency from a participant speciﬁed by the Fund, the General Resources Account, or any other holder.
If the obligation remaining after the setoff under Article XXIV, Section 2(b) is to the Fund and agreement on settlement is not reached within 6 months of the date of termination, the ter­ minating participant shall discharge this obligation in equal half­yearly instalments within 3 years of the date of termin­ ation or within such longer period as may be ﬁxed by the Fund.
The terminating participant shall discharge this obligation, as the Fund may determine, either (a) by the payment to the Fund of a freely usable currency, or (b) by obtaining special drawing rights, in accordance with Article XXIV, Section 6, from the General Resources Account or in agreement with a participant speciﬁed by the Fund or from any other holder, and the setoff of these special drawing rights against the instalment due.
Instalments under either 1 or 2 above shall fall due 6 months after the date of termination and at intervals of 6 months there­ after.

In the event of the Special Drawing Rights Department go­ ing into liquidation under Article XXV within 6 months of the date a participant terminates its participation, the settlement between the Fund and that government shall be made in ac­ cordance with Article XXV and Schedule I.
93 2 3 4 Schedule I International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued Schedule I ADMINISTRATION OF LIQUIDATION OF THE SPECIAL DRAWING RIGHTS DEPARTMENT In the event of liquidation of the Special Drawing Rights De­ partment, participants shall discharge their obligations to the Fund in 10 half­ yearly instalments, or in such longer period as the Fund may decide is needed, in a freely usable currency and the currencies of participants holding special drawing rights to be redeemed in any instalment to the extent of such redemp­ tion, as determined by the Fund.
The ﬁrst half­yearly payment shall be made 6 months after the decision to liquidate the Spe­ cial Drawing Rights Department.
If it is decided to liquidate the Fund within 6 months of the date of the decision to liquidate the Special Drawing Rights Department, the liquidation of the Special Drawing Rights De­ partment shall not proceed until special drawing rights held in the General Resources Account have been distributed in ac­ cordance with the following rule: After the distributions made under 2(a) and (b) of Schedule K, the Fund shall apportion its special drawing rights held in the General Resources Account among all members that are par­ ticipants in proportion to the amounts due to each participant after the distribution under 2(b).
To determine the amount due to each member for the purpose of apportioning the remain­ der of its holdings of each currency under 2(d) of Schedule K, the Fund shall deduct the distribution of special drawing rights made under this rule.
With the amounts received under 1 above, the Fund shall re­ deem special drawing rights held by holders in the following manner and order: (a) Special drawing rights held by governments that have terminated their participation more than 6 months be­ 1 2 3 94 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule I ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (b) (c) fore the date the Board of Governors decides to liquid­ ate the Special Drawing Rights Department shall be re­ deemed in accordance with the terms of any agreement under Article XXIV or Schedule H: Special drawing rights held by holders that are not par­ ticipants shall be redeemed before those held by par­ ticipants, and shall be redeemed in proportion to the amount held by each holder: The Fund shall determine the proportion of special drawing rights held by each participant in relation to its net cumulative allocation.
The Fund shall ﬁrst redeem special drawing rights from the participants with the highest proportion until this proportion is reduced to that of the second highest proportion; the Fund shall then redeem the special drawing rights held by these participants in accordance with their net cumulative allocations until the proportions are reduced to that of the third highest proportion; and this process shall be continued until the amount available for redemption is exhausted.
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.

During liquidation the Fund shall pay interest on the amount of special drawing rights held by holders, and each participant shall pay charges on the net cumulative allocation of special drawing rights to it less the amount of any payments made in accordance with 1 above.
The rates of interest and charges and the time of payment shall be determined by the Fund.

Pay­ ments of interest and charges shall be made in special draw­ ing rights to the extent possible.

A participant that does not hold sufﬁcient special drawing rights to meet any charges shall make the payment with a currency speciﬁed by the Fund.
Spe­ cial drawing rights received as charges in amounts needed for 95 4 5 Schedule I International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued administrative expenses shall not be used for the payment of interest, but shall be transferred to the Fund and shall be re­ deemed ﬁrst and with the currencies used by the Fund to meet its expenses.
While a participant is in default with respect to any payment required by 1 or 5 above, no amounts shall be paid to it in accordance with 3 or 5 above.
If after the ﬁnal payments have been made to participants each participant not in default does not hold special drawing rights in the same proportion to its net cumulative allocation, those participants holding a lower proportion shall purchase from those holding a higher proportion such amounts in accordance with arrangements made by the Fund as will make the propor­ tion of their holdings of special drawing rights the same.
Each participant in default shall pay to the Fund its own currency in an amount equal to its default.

The Fund shall apportion this currency and any residual claims among participants in pro­ portion to the amount of special drawing rights held by each and these special drawing rights shall be cancelled.
The Fund shall then close the books of the Special Drawing Rights De­ partment and all of the Fund’s liabilities arising from the allo­ cations of special drawing rights and the administration of the Special Drawing Rights Department shall cease.

Each participant whose currency is distributed to other partici­ pants under this Schedule guarantees the unrestricted use of such currency at all times for the purchase of goods or for pay­ ments of sums due to it or to persons in its territories.
Each par­ ticipant so obligated agrees to compensate other participants for any loss resulting from the difference between the value at which the Fund distributed its currency under this Schedule 6 7 8 96 1 2 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule J ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued and the value realised by such participants on disposal of its currency.
Schedule J SETTLEMENT OF ACCOUNTS WITH MEMBERS WITHDRAWING The settlement of accounts with respect to the General Re­ sources Account shall be made according to 1 to 6 of this Schedule.

The Fund shall be obligated to pay to a member withdrawing an amount equal to its quota, plus any other amounts due to it from the Fund, less any amounts due to the Fund, including charges accruing after the date of its with­ drawal; but no payment shall be made until 6 months after the date of withdrawal.
Payments shall be made in the currency of the withdrawing member, and for this purpose the Fund may transfer to the General Resources Account holdings of the member’s currency in the Special Disbursement Account or in the Investment Account in exchange for an equivalent amount of the currencies of other members in the General Resources Account selected by the Fund with their concurrence.
If the Fund’s holdings of the currency of the withdrawing member are not sufﬁcient to pay the net amount due from the Fund, the balance shall be paid in a freely usable currency, or in such other manner as may be agreed.

If the Fund and the withdrawing member do not reach agreement within 6 months of the date of withdrawal, the currency in question held by the Fund shall be paid forthwith to the withdrawing member.

Any balance due shall be paid in 10 half­yearly instalments during the ensuing 5 years.
Each such instalment shall be paid, at the option of the Fund, either in the currency of the withdrawing member acquired after its withdrawal or in a freely usable currency.
97 Schedule J International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued 3 4 5 6 98 If the Fund fails to meet any instalment which is due in accord­ ance with the preceding paragraphs, the withdrawing member shall be entitled to require the Fund to pay the instalment in any currency held by the Fund with the exception of any currency which has been declared scarce under Article VII, Section 3.
If the Fund’s holdings of the currency of a withdrawing member exceed the amount due to it, and if agreement on the method of settling accounts is not reached within 6 months of the date of withdrawal, the former member shall be obligated to redeem such excess currency in a freely usable currency.

Redemption shall be made at the rates at which the Fund would sell such currencies at the time of withdrawal from the Fund.
The withdrawing member shall complete redemption within 5 years of the date of withdrawal, or within such longer period as may be ﬁxed by the Fund, but shall not be required to redeem in any half­yearly period more than one­tenth of the Fund’s excess holdings of its currency at the date of withdrawal plus further acquisitions of the currency during such half­yearly period.
If the withdrawing member does not fulﬁl this obligation, the Fund may in an orderly manner liquidate in any market the amount of currency which should have been redeemed.

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 gen­ eral resources of the Fund and that such currency is available under 4 above.
The withdrawing member guarantees the unrestricted use at all times of the currency disposed of under 4 and 5 above for the purchase of goods or for payment of sums due to it or to persons within its territories.
It shall compensate the Fund for any loss resulting from the difference between the value of 7 8 9 10 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule J ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued its currency in terms of the special drawing right on the date of withdrawal and the value realized in terms of the special drawing right by the Fund on disposal under 4 and 5 above.
If the withdrawing member is indebted to the Fund as the re­ sult of transactions conducted through the Special Disburse­ ment Account under Article V, Section 12(f)(ii), the indebted­ ness shall be discharged in accordance with the terms of the indebtedness.
If the Fund holds the withdrawing member’s currency in the Special Disbursement Account or in the Investment Account, the Fund may in an orderly manner exchange in any market for the currencies of members the amount of the currency of the withdrawing member remaining in each account after use under 1 above, and the proceeds of the exchange of the amount in each account shall be kept in that account.

Paragraph 5 above and the ﬁrst sentence of 6 above shall apply to the with­ drawing member’s currency.
If the Fund holds obligations of the withdrawing member in the Special Disbursement Account pursuant to Article V, Sec­ tion 12(h), or in the Investment Account, the Fund may hold them until the date of maturity or dispose of them sooner.

Para­ graph 8 above shall apply to the proceeds of such disinvest­ ment.
In the event of the Fund going into liquidation under Article XXVII, Section 2 within 6 months of the date on which the member withdraws, the accounts between the Fund and that government shall be settled in accordance with Article XXVII, Section 2 and Schedule K. 99 Schedule K International Finance Agreements Act 1961 Reprinted as at 3 September 2007 1 2 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued Schedule K ADMINISTRATION OF LIQUIDATION In the event of liquidation the liabilities of the Fund other than the repayment of subscriptions shall have priority in the distri­ bution of the assets of the Fund.
In meeting each such liability the Fund shall use its assets in the following order: the currency in which the liability is payable; (a) gold; (b) all other currencies in proportion, so far as may be prac­ (c) ticable, to the quotas of the members.
After the discharge of the Fund’s liabilities in accordance with 1 above, the balance of the Fund’s assets shall be distributed and apportioned as follows: (a) (i) The Fund shall calculate the value of gold held on August 31, 1975 that it continues to hold on the date of the decision to liquidate.

The calculation shall be made in accordance with 9 below and also on the basis of one special drawing right per 0.888 671 gram of ﬁne gold on the date of liquidation.
Gold equivalent to the excess of the former value over the latter shall be distributed to those members that were members on August 31, 1975 in proportion to their quotas on that date: The Fund shall distribute any assets held in the Special Disbursement Account on the date of the decision to liquidate to those members that were members on August 31, 1975 in proportion to their quotas on that date.
Each type of asset shall be distributed proportionately to members: The Fund shall distribute its remaining holdings of gold among the members whose currencies are held by the Fund in amounts less that their quotas in the propor­ tions, but not in excess of, the amounts by which their quotas exceed the Fund’s holdings of their currencies: (ii) (b) 100 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule K ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (c) (d) The Fund shall distribute to each member one­half the Fund’s holdings of its currency but such distribution shall not exceed 50 percent of its quota: The Fund shall apportion the remainder of its holdings of gold and each currency: (i) among all the members in proportion to, but not in excess of, the amounts due to each member after the distributions under (b) and (c) above, provided that distribution under 2(a) above shall not be taken into account for determining the amounts due, and any excess holdings of gold and currency among all the members in proportion to their quotas.
(ii) 3 4 5 Each member shall redeem the holdings of its currency appor­ tioned to other members under 2(d) above, and shall agree with the Fund within 3 months after a decision to liquidate upon an orderly procedure for such redemption.

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

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(d) above to redeem the currency of that member apportioned to other members which have made agreements with the Fund under 3 above.
Each amount so redeemed shall be redeemed in the currency of the member to which it was apportioned.

101 Schedule K International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued After carrying out the steps in the preceding paragraphs, the Fund shall pay to each member the remaining currencies held for its account.
Each member whose currency has been distributed to other members under 6 above shall redeem such currency in the currency of the member requesting redemption, or in such other manner as may be agreed between them.

If the mem­ bers involved do not otherwise agree, the member obligated to redeem shall complete redemption within 5 years of the date of distribution, but shall not be required to redeem in any half­yearly period more than one­tenth of the amount dis­ tributed to each other member.
If the member does not ful­ ﬁl this obligation, the amount of currency which should have been redeemed may be liquidated in an orderly manner in any market.

Each member whose currency has been distributed to other members under 6 above guarantees the unrestricted use of such currency at all times for the purchase of goods or for payment of sums due to it or to persons in its territories.
Each member so obligated agrees to compensate other members for any loss resulting from the difference between the value of its currency in terms of the special drawing right on the date of the deci­ sion to liquidate the Fund and the value in terms of the special drawing right realized# by such members on disposal of its currency.

The Fund shall determine the value of gold under this Schedule on the basis of prices in the market.
For the purposes of this Schedule, quotas shall be deemed to have been increased to the full extent to which they could have 102 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule L ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued been increased in accordance with Article III, Section 2(b) of this Agreement.
Schedule L SUSPENSION OF VOTING RIGHTS FIRST SCHEDULE: Schedule L was inserted by section 2(4) International Fi­ nance Agreements Amendment Act 1992 (1992 No 132).
In the case of a suspension of voting rights of a member under Article XXVI, Section 2(b), the following provisions shall apply: The member shall not: (a) participate in the adoption of a proposed amendment of this Agreement, or be counted in the total number of members for that purpose, except in the case of an amendment requiring acceptance by all members under Article XXVIII(b) or pertaining exclusively to the Spe­ cial Drawing Rights Department; appoint a Governor or Alternate Governor, appoint or participate in the appointment of a Councillor or Alter­ nate Councillor, or appoint, elect, or participate in the election of an Executive Director.
(b) The number of votes allotted to the member shall not be cast in any organ of the Fund.

They shall not be included in the calculation of the total voting power, except for purposes of the acceptance of a proposed amendment pertaining exclusively to the Special Drawing Rights Department.

(a) (b) The Governor and Alternate Governor appointed by the member shall cease to hold ofﬁce.
The Councillor and Alternate Councillor appointed by the member, or in whose appointment the member has participated, shall cease to hold ofﬁce, provided that, 103 1 2 3 Schedule L International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued (c) if such Councillor was entitled to cast the number of votes allotted to other members whose voting rights have not been suspended, another Councillor and Alter­ nate Councillor shall be appointed by such other mem­ bers under Schedule D, and, pending such appointment, the Councillor and Alternate Councillor shall continue to hold ofﬁce, but for a maximum of 30 days from the date of the suspension.
The Executive Director appointed or elected by the member, or in whose election the member has partici­ pated, shall cease to hold ofﬁce, unless such Executive Director was entitled to cast the number of votes al­ lotted to other members whose voting rights have not been suspended.
In the latter case: (i) if more than 90 days remain before the next regu­ lar election of Executive Directors, another Ex­ ecutive Director shall be elected for the remain­ der of the term by such other members by a ma­ jority of the votes cast; pending such election, the Executive Director shall continue to hold ofﬁce, but for a maximum of 30 days from the date of suspension; if not more than 90 days remain before the next regular election of Executive Directors, the Ex­ ecutive Director shall continue to hold ofﬁce for the remainder of the term.
(ii) The member shall be entitled to send a representative to attend any meeting of the Board of Governors, the Council, or the Executive Board, but not any meeting of their committees, when a request made by, or a matter particularly affecting, the member is under consideration.

LIST OF ARTICLES AND SECTIONS INTRODUCTORY ARTICLE 104 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule L ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued I.

PURPOSES II.
PURPOSES II.

MEMBERSHIP 1.

Original members 2.

Other members III.

QUOTAS AND SUBSCRIPTIONS 1.

Quotas and payment of subscriptions 2.

Adjustment of quotas 3.

4.

Payments when quotas are changed Substitution of securities for currency IV.

OBLIGATIONS REGARDING EXCHANGE ARRANGEMENTS 1.

General obligations of members 2.

General exchange arrangements 3.

4.

5.


Surveillance over exchange arrangements Par values Separate currencies within a member’s territories V. OPERATIONS AND TRANSACTIONS OF THE FUND 1.

Agencies dealing with the Fund 2.

3.

Limitation on the Fund’s operations and transactions Conditions governing use of the Fund’s general resources 4.

Waiver of conditions 5.


Ineligibility to use the Fund’s general resources 105 Schedule L International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued 6.

Other purchases and sales of special drawing rights by the Fund 7.

8.

9.

Repurchase by a member of its currency held by the Fund Charges Remuneration 10.

Computations 11.

Maintenance of value 12.

Other operations and transactions VI.

CAPITAL TRANSFERS 1.


Use of the Fund’s general resources for capital transfers 2.

3.

Special provisions for capital transfers Controls of capital transfers VII.

REPLENISHMENT AND SCARCE CURRENCIES 1.

Measures to replenish the Fund’s holdings of currencies 2.

General scarcity of currency 3.

Scarcity of the Fund’s holdings 4.

Administration of restrictions 5.

Effect of other international agreements on restrictions VIII.

GENERAL OBLIGATIONS OF MEMBERS 1.


Introduction 106 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule L ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued 2.

Avoidance of restrictions on current payments 3.

Avoidance of discriminatory currency practices 4.

5.

6.

Convertibility of foreign­held balances Furnishing of information Consultation between members regarding existing international agreements 7.
Obligation to collaborate regarding policies on reserve assets IX.

STATUS, IMMUNITIES, AND PRIVILEGES 1.

2.

3.

4.

5.

6.

7.

8.

9.

Purposes of Article Status of the Fund Immunity from judicial process Immunity from other action Immunity of archives Freedom of assets from restrictions Privilege for communications Immunities and privileges of ofﬁcers and employees Immunities from taxation 10.

Application of Article X.

RELATIONS WITH OTHER INTERNATIONAL ORGANISATIONS XI.
RELATIONS WITH NON­MEMBER COUNTRIES 107 Schedule L International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued 1.

Undertakings regarding relations with non­member countries 2.

Restrictions on transactions with non­member countries XII.

ORGANISATION AND MANAGEMENT 1.

2.

3.

Structure of the Fund Board of Governors Executive Board 4.

Managing Director and staff 5.

Voting 6.

7.

8.


Reserves, distribution of net income, and investment Publication of reports Communication of views to members XIII.

OFFICES AND DEPOSITORIES 1.

Location of ofﬁces 2.

Depositories 3.

Guarantee of the Fund’s assets XIV.

TRANSITIONAL ARRANGEMENTS 1.

Notiﬁcation to the Fund 2.

Exchange restrictions 3.

Action of the Fund relating to restrictions XV.

SPECIAL DRAWING RIGHTS 1.


Authority to allocate special drawing rights 108 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule L ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued 2.

Valuation of the special drawing right XVI.

GENERAL DEPARTMENT AND SPECIAL DRAWING RIGHTS DEPARTMENT 1.

2.

3.
2.

3.

Separation of operations and transactions Separation of assets and property Recording and information XVII.PARTICIPANTS AND OTHER HOLDERS OF SPECIAL DRAWING RIGHTS 1.

2.

Participants Fund as a holder 3.

Other holders XVIII.ALLOCATION AND CANCELLATION OF SPECIAL DRAWING RIGHTS 1.

Principles and considerations governing allocation and cancellation 2.

Allocation and cancellation 3.

Unexpected major developments 4.

Decisions on allocations and cancellations XIX.


OPERATIONS AND TRANSACTIONS IN SPECIAL DRAWING RIGHTS 1.

Use of special drawing rights 2.

Operations and transactions between participants 3.

Requirement of need 4.

Obligation to provide currency 109 Schedule L International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued 5.

Designation of participants to provide currency 6.

7.

Reconstitution Exchange rates XX.


SPECIAL DRAWING RIGHTS DEPARTMENT INTEREST AND CHARGES 1.

2.

3.

Interest Charges Rate of interest and charges 4.

Assessments 5.

Payment of interest, charges, and assessments XXI.

ADMINISTRATION OF THE GENERAL DEPARTMENT AND THE SPECIAL DRAWING RIGHTS DEPARTMENT XXII.GENERAL OBLIGATIONS OF PARTICIPANTS XXIII.SUSPENSION OF OPERATIONS AND TRANSACTIONS IN SPECIAL DRAWING RIGHTS 1.

2.
2.

Emergency provisions Failure to fulﬁl obligations XXIV.TERMINATION OF PARTICIPATION Right to terminate participation Settlement on termination Interest and charges Settlement of obligation to the Fund Settlement of obligation to a terminating participant 1.

2.

3.

4.

5.

110 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule L ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued 6.
General Resources Account transactions XXV.LIQUIDATION OF THE SPECIAL DRAWING RIGHTS DEPARTMENT XXVI.WITHDRAWAL FROM MEMBERSHIP 1.

2.

3.

Right of members to withdraw Compulsory withdrawal Settlement of accounts with members withdrawing XXVII.EMERGENCY PROVISIONS 1.

2.

Temporary suspension Liquidation of the Fund XXVIII.AMENDMENTS XXIX.INTERPRETATION XXX.EXPLANATION OF TERMS XXXI.FINAL PROVISIONS 1.

2.

Entry into force Signature SCHEDULES A.

QUOTAS B.


TRANSITIONAL PROVISIONS WITH RESPECT TO REPURCHASE, PAYMENT OF ADDITIONAL SUBSCRIPTIONS, GOLD, AND CERTAIN OPERATIONAL MATTERS C. PAR VALUES 111 Schedule 2 International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND—continued D. E. F. G. H. I. J.
COUNCIL ELECTION OF EXECUTIVE DIRECTORS DESIGNATION RECONSTITUTION TERMINATION OF PARTICIPATION ADMINISTRATION OF LIQUIDATION OF THE SPECIAL DRAWING RIGHTS DEPARTMENT SETTLEMENT OF ACCOUNTS WITH MEMBERS WITHDRAWING K. ADMINISTRATION OF LIQUIDATION L. SUSPENSION OF VOTING RIGHTS Schedule 2 Sections 2, 7, 8(2) ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT Preamble The Governments on whose behalf the present Agreement is signed agree as follows: INTRODUCTORY ARTICLE The International Bank for Reconstruction and Development is established and shall operate in accordance with the follow­ ing provisions: 112 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued ARTICLE I PURPOSES The purposes of the Bank are: (i) (ii) To assist in the reconstruction and development of terri­ tories of members by facilitating the investment of cap­ ital for productive purposes, including the restoration of economies destroyed or disrupted by war, the reconver­ sion of productive facilities to peacetime needs and the encouragement of the development of productive facil­ ities and resources in less developed countries: To promote private foreign investment by means of guarantees or participations in loans and other invest­ ments made by private investors; and when private capital is not available on reasonable terms, to sup­ plement private investment by providing, on suitable
 conditions, ﬁnance for productive purposes out of its own capital, funds raised by it and its other resources: (iii) To promote the long­range balanced growth of inter­ national trade and the maintenance of equilibrium in balances of payments by encouraging international investment for the development of the productive resources of members, thereby assisting in raising productivity, the standard of living and conditions of labour in their territories: (iv) To arrange the loans made or guaranteed by it in relation to international loans through other channels so that the more useful and urgent projects, large and small alike, will be dealt with ﬁrst: To conduct its operations with due regard to the effect of international investment on business conditions in the territories of members and, in the immediate post­war years, to assist in bringing about a smooth transition from a wartime to a peacetime economy.
(v) The Bank shall be guided in all its decisions by the purposes set forth above.
113 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued ARTICLE II MEMBERSHIP IN AND CAPITAL OF THE BANK SECTION 1 MEMBERSHIP (a) The original members of the Bank shall be those mem­ bers of the International Monetary Fund which accept membership in the Bank before the date speciﬁed in Article XI, Section 2(e).
(b) Membership shall be open to other members of the Fund, at such times and in accordance with such terms as may be prescribed by the Bank.

SECTION 2 AUTHORISED CAPITAL (a) (b) The authorised capital stock of the Bank shall be $10,000,000,000, in terms of United States dollars of the weight and ﬁneness in effect on 1 July 1944.

The capital stock shall be divided into 100,000 shares having a par value of $100,000 each, which shall be available for subscription only by members.
The capital stock may be increased when the Bank deems it advisable by a three­fourths majority of the total voting power.

SECTION 3 SUBSCRIPTION OF SHARES (a) (b) Each member shall subscribe shares of the capital stock of the Bank.

The minimum number of shares to be subscribed by the original members shall be those set forth in Schedule A.
The minimum number of shares to be subscribed by other members shall be determined by the Bank, which shall reserve a sufﬁcient portion of its capital stock for subscription by such members.
The Bank shall prescribe rules laying down the condi­ tions under which members may subscribe shares of the 114 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (c) authorised capital stock of the Bank in addition to their minimum subscriptions.
If the authorised capital stock of the Bank is increased, each member shall have a reasonable opportunity to subscribe, under such conditions as the Bank shall de­ cide, a proportion of the increase of stock equivalent to the proportion which its stock theretofore subscribed bears to the total capital stock of the Bank, but no mem­ ber shall be obligated to subscribe any part of the in­ creased capital.
SECTION 4 ISSUE PRICE OF SHARES Shares included in the minimum subscriptions of original members shall be issued at par.

Other shares shall be issued at par unless the Bank by a majority of the total voting power decides in special circumstances to issue them on other terms.
SECTION 5 DIVISION AND CALLS OF SUBSCRIBED CAPITAL The subscription of each member shall be divided into 2 parts as follows: (i) Twenty percent shall be paid or subject to call under section 7(i) of this Article as needed by the Bank for its operations: The remaining 80 percent shall be subject to call by the Bank only when required to meet obligations of the Bank created under Article IV, section 1(a)(ii) and (iii).

Calls on unpaid subscriptions shall be uniform on all shares.
(ii) SECTION 6 LIMITATION ON LIABILITY Liability on shares shall be limited to the unpaid portion of the issue price of the shares.
115 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued SECTION 7 METHOD OF PAYMENT OF SUBSCRIPTIONS FOR SHARES Payment of subscriptions for shares shall be made in gold or United States dollars and in the currencies of the members as follows: (i) Under Section 5(i) of this Article, 2 percent of the price of each share shall be payable in gold or United States dollars, and, when calls are made, the remaining 18 per­ cent shall be paid in the currency of the member: (ii) When a call is made under Section 5(ii) of this Article, payment may be made at the option of the member ei­ ther in gold, United States dollars or in the currency re­ quired to discharge the obligations of the Bank for the purpose for which the call is made: (iii) When a member makes payments in any currency under (i) and (ii) above, such payments shall be made in amounts equal in value to the member’s liability under the call.
This liability shall be a proportionate part of the subscribed capital stock of the Bank as authorised and deﬁned in Section 2 of this Article.
SECTION 8 TIME OF PAYMENT OF SUBSCRIPTIONS (a) The 2 percent payable on each share in gold or United States dollars under Section 7(i) of this Article shall be paid within 60 days of the date on which the Bank begins operations, provided that: (i) Any original member of the Bank whose metro­ politan territory has suffered from enemy occu­ pation or hostilities during the present war shall be granted the right to postpone payment of 1/2 percent until 5 years after that date: (ii) An original member who cannot make such a payment because it has not recovered possession of its gold reserves which are still seized or im­ 116 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (b) mobilised as a result of the war may postpone all payment until such date as the Bank shall decide.
The remainder of the price of each share payable under section 7(i) of this Article shall be paid as and when called by the Bank, provided that: (i) The Bank shall, within one year of its beginning operations, call not less than 8 percent of the price of the share in addition to the payment of 2 per­ cent referred to in (a) above: (ii) Not more than 5 percent of the price of the share shall be called in any period of 3 months.
SECTION 9 MAINTENANCE OF VALUE OF CERTAIN CURRENCY HOLDINGS OF THE BANK (a) Whenever (i) the par value of a member’s currency is re­ duced, or (ii) the foreign exchange value of a member’s currency has, in the opinion of the Bank, depreciated to a signiﬁcant extent within that member’s territories, the member shall pay to the Bank within a reasonable time an additional amount of its own currency sufﬁcient to maintain the value, as of the time of initial subscrip­ tion, of the amount of the currency of such member, which is held by the Bank and derived from currency originally paid in to the Bank by the member under Art­ icle II, Section 7(i), from currency referred to in Article IV, Section 2(b), or from any additional currency fur­ nished under the provisions of the present paragraph, and which has not been repurchased by the member for gold or for the currency of any member which is accept­ able to the Bank.
(b) Whenever the par value of a member’s currency is in­ creased, the Bank shall return to such member within a reasonable time an amount of that member’s currency equal to the increase in the value of the amount of such currency described in (a) above.
117 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (c) The provisions of the preceding paragraphs may be waived by the Bank when a uniform proportionate change in the par values of the currencies of all its members is made by the International Monetary Fund.
SECTION 10 RESTRICTION ON DISPOSAL OF SHARES Shares shall not be pledged or encumbered in any manner whatever and they shall be transferable only to the Bank.

ARTICLE III GENERAL PROVISIONS RELATING TO LOANS AND GUARANTEES SECTION 1 USE OF RESOURCES (a) (b) The resources and the facilities of the Bank shall be used exclusively for the beneﬁt of members with equitable consideration to projects for development and projects for reconstruction alike.
For the purpose of facilitating the restoration and recon­ struction of the economy of members whose metropol­ itan territories have suffered great devastation from en­ emy occupation or hostilities, the Bank, in determining the conditions and terms of loans made to such mem­ bers, shall pay special regard to lightening the ﬁnancial burden and expediting the completion of such restora­ tion and reconstruction.
SECTION 2 DEALINGS BETWEEN MEMBERS AND THE BANK Each member shall deal with the Bank only through its Treas­ ury, central bank, stabilisation fund or other similar ﬁscal agency, and the Bank shall deal with members only by or through the same agencies.
118 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued SECTION 3 LIMITATIONS ON GUARANTEES AND BORROWINGS OF THE BANK The total amount outstanding of guarantees, participations in loans and direct loans made by the Bank shall not be increased at any time, if by such increase the total would exceed 100 per­ cent of the unimpaired subscribed capital, reserves and surplus of the Bank.
SECTION 4 CONDITIONS ON WHICH THE BANK MAY GUARANTEE OR MAKE LOANS The Bank may guarantee, participate in, or make loans to any member or any political subdivision thereof and any business, industrial, and agricultural enterprise in the territories of a member, subject to the following conditions: (i) When the member in whose territories the project is located is not itself the borrower, the member or the central bank or some comparable agency of the member which is acceptable to the Bank, fully guarantees the repayment of the principal and the payment of interest and other charges on the loan: The Bank is satisﬁed that in the prevailing market con­ ditions the borrower would be unable otherwise to ob­ tain the loan under conditions which in the opinion of the Bank are reasonable for the borrower: (ii) (iv) (iii) A competent committee, as provided for in Article V, Section 7, has submitted a written report recommend­ ing the project after a careful study of the merits of the proposal: In the opinion of the Bank the rate of interest and other charges are reasonable and such rate, charges and the schedule for repayment of principal are appropriate to the project: In making or guaranteeing a loan, the Bank shall pay due regard to the prospects that the borrower, and, if the borrower is not a member, that the guarantor, will (v) 119 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued be in position to meet its obligations under the loan; and the Bank shall act prudently in the interests both of the particular member in whose territories the project is located and of the members as a whole: In guaranteeing a loan made by other investors, the Bank receives suitable compensation for its risk: (vii) Loans made or guaranteed by the Bank shall, except in special circumstances, be for the purpose of speciﬁc projects of reconstruction or development.
(vi) SECTION 5 USE OF LOANS GUARANTEED, PARTICIPATED IN, OR MADE BY THE BANK (a) (b) (c) The Bank shall impose no conditions that the proceeds of a loan shall be spent in the territories of any particular member or members.

The Bank shall make arrangements to ensure that the proceeds of any loan are used only for the purposes for which the loan was granted, with due attention to considerations of economy and efﬁciency and without regard to political or other non­economic inﬂuences or considerations.
In the case of loans made by the Bank, it shall open an account in the name of the borrower, and the amount of the loan shall be credited to this account in the currency or currencies in which the loan is made.

The borrower shall be permitted by the Bank to draw on this account only to meet expenses in connection with the project as they are actually incurred.
ARTICLE IV OPERATIONS SECTION 1 METHODS OF MAKING OR FACILITATING LOANS 120 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (a) (b) The Bank may make or facilitate loans which satisfy the general conditions of Article III in any of the following ways: (i) By making or participating in direct loans out of its own funds corresponding to its unimpaired paid­up capital and surplus and, subject to Sec­ tion 6 of this Article, to its reserves: By making or participating in direct loans out of funds raised in the market of a member, or otherwise borrowed by the Bank: (ii) (iii) By guaranteeing in whole or in part loans made by private investors through the usual investment channels.
The Bank may borrow funds under (a)(ii) above or guar­ antee loans under (a)(iii) above only with the approval of the member in whose markets the funds are raised and the member in whose currency the loan is denomin­ ated, and only if those members agree that the proceeds may be exchanged for the currency of any other mem­ ber without restriction.
SECTION 2 AVAILABILITY AND TRANSFERABILITY OF CURRENCIES (a) Currencies paid into the Bank under Article II, Section 7(i), shall be loaned only with the approval in each case of the member whose currency is involved; provided, however, that if necessary, after the Bank’s subscribed capital has been entirely called, such currencies shall, without restriction by the members whose currencies are offered, be used or exchanged for the currencies required to meet contractual payments of interest, other charges or amortisation on the Bank’s own borrowings, or to meet the Bank’s liabilities with respect to such contractual payments on loans guaranteed by the Bank.
121 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (b) (c) Currencies received by the Bank from borrowers or guarantors in payment on account of principal of di­ rect loans made with currencies referred to in (a) above shall be exchanged for the currencies of other mem­ bers or reloaned only with the approval in each case of the members whose currencies are involved; provided, however, that if necessary, after the Bank’s subscribed capital has been entirely called, such currencies shall without restriction by the members whose currencies are offered, be used or exchanged for the currencies re­ quired to meet contractual payments of interest, other charges or amortisation on the Bank’s own borrowings, or to meet the Bank’s liabilities with respect to such con­ tractual payments on loans guaranteed by the Bank.
Currencies received by the Bank from borrowers or guarantors in payment on account of principal of direct loans made by the Bank under section 1(a)(ii) of this article, shall be held and used without restriction by the members, to make amortisation payments, or to antici­ pate payment of or repurchase part or all of the Bank’s own obligations.
(d) All other currencies available to the Bank, including those raised in the market or otherwise borrowed under Section 1(a)(ii) of this Article, those obtained by the sale of gold, those received as payments of interest and other charges for direct loans made under section 1(a)(i) and (ii), and those received as payments of commissions and other charges under Section 1(a)(iii), shall be used or exchanged for other currencies or gold required in the operations of the Bank without restriction by the members whose currencies are offered.
Currencies raised in the markets of members by bor­ rowers on loans guaranteed by the Bank under Section 1(a)(iii) of this Article, shall also be used or exchanged (e) 122 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued for other currencies without restriction by such mem­ bers.
SECTION 3 PROVISION OF CURRENCIES FOR DIRECT LOANS The following provisions shall apply to direct loans under Sec­ tion 1(a)(i) and (ii) of this Article: (a) (b) (c) (d) The Bank shall furnish the borrower with such curren­ cies of members other than the member in whose ter­ ritories the project is located as are needed by the bor­ rower for expenditures to be made in the territories of such other members to carry out the purposes of the loan: The Bank may, in exceptional circumstances when local currency required for the purposes of the loan cannot be raised by the borrower on reasonable terms, provide the borrower as part of the loan with an appropriate amount of that currency: The Bank, if the project gives rise indirectly to an in­ creased need for foreign exchange by the member in whose territories the project is located, may in excep­ tional circumstances provide the borrower as part of the loan with an appropriate amount of gold or foreign ex­ change not in excess of the borrower’s local expenditure in connection with the purposes of the loan: The Bank may, in exceptional circumstances, at the re­ quest of a member in whose territories a portion of the loan is spent, repurchase with gold or foreign exchange a part of that member’s currency thus spent, but in no case shall the part so repurchased exceed the amount by which the expenditure of the loan in those territories gives rise to an increased need for foreign exchange.
SECTION 4 PAYMENT PROVISIONS FOR DIRECT LOANS Loan contracts under Section 1(a)(i) or (ii) of this Article shall be made in accordance with the following payment provisions: 123 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 (a) ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued The terms and conditions of interest and amortisation payments, maturity and dates of payment of each loan shall be determined by the Bank.
The Bank shall also determine the rate and any other terms and conditions of commission to be charged in connection with such loans.

In the case of loans made under Section 1(a)(ii) of this Article during the ﬁrst 10 years of the Bank’s oper­ ations, this rate of commission shall be not less than 1 percent per annum and not greater than 1 1/2 percent per annum, and shall be charged on the outstanding portion of any such loan.
At the end of this period of 10 years, the rate of commission may be reduced by the Bank with respect both to the outstanding portions of loans already made and to future loans, if the reserve accumu­ lated by the Bank under Section 6 of this Article and out of other earnings is considered by it sufﬁcient to justify a reduction.
In the case of future loans the Bank shall also have discretion to increase the rate of commission beyond the above limit, if experience indicates that an increase is advisable: (b) All loan contracts shall stipulate the currency or cur­ rencies in which payments under the contract shall be made to the Bank.
At the option of the borrower, how­ ever, such payments may be made in gold, or subject to the agreement of the Bank, in the currency of a member other than that prescribed in the contract: (i) In the case of loans made under Section 1(a)(i) of this Article, the loan contracts shall provide that payments to the Bank of interest, other charges and amortisation shall be made in the currency loaned, unless the member whose currency is loaned agrees that such payments shall be made in some other speciﬁed currency or currencies.
124 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (c) (ii) These payments subject to the provisions of Art­ icle II, Section 9(c), shall be equivalent to the value of such contractual payments at the time the loans were made, in terms of a currency spe­ ciﬁed for the purpose by the Bank by a three­ fourths majority of the total voting power: In the case of loans made under Section 1(a)(ii) of this Article, the total amount outstanding and payable to the Bank in any one currency shall at no time exceed the total amount of the outstand­ ing borrowings made by the Bank under Section 1(a)(ii) and payable in the same currency: If a member suffers from an acute exchange stringency, so that the service of any loan contracted by that mem­ ber or guaranteed by it or by one of its agencies can­ not be provided in the stipulated manner, the member concerned may apply to the Bank for a relaxation of the conditions of payment.
If the Bank is satisﬁed that some relaxation is in the interests of the particular member and of the operations of the Bank and of its members as a whole, it may take action under either, or both, of the following paragraphs with respect to the whole, or part, of the annual service: (i) The Bank may, in its discretion, make arrange­ ments with the member concerned to accept service payments on the loan in the member’s currency for periods not to exceed 3 years upon appropriate terms regarding the use of such currency and the maintenance of its foreign ex­ change value; and for the repurchase of such currency on appropriate terms: The Bank may modify the terms of amortisation or extend the life of the loan, or both.
(ii) SECTION 5 GUARANTEES 125 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (a) In guaranteeing a loan placed through the usual invest­ ment channels, the Bank shall charge a guarantee com­ mission payable periodically on the amount of the loan outstanding at a rate determined by the Bank.
During the ﬁrst 10 years of the Bank’s operations this rate shall be not less than 1 percent per annum and not greater than 1 1/2 percent per annum.

At the end of this period of 10 years the rate of commission may be reduced by the Bank with respect both to the outstanding portions of loans already guaranteed and to future loans if the reserves accumulated by the Bank under Section 6 of this Article and out of other earnings are considered by it sufﬁcient to justify a reduction.
In the case of future loans the Bank shall also have discretion to increase the rate of commission beyond the above limit if experience indicates that an increase is advisable.

(b) Guarantee commissions shall be paid directly to the (c) (d) Bank by the borrower.
Guarantees by the Bank shall provide that the Bank may terminate its liability with respect to interest if, upon de­ fault by the borrower and by the guarantor, if any, the Bank offers to purchase, at par and interest accrued to a date designated in the offer, the bonds or other obliga­ tions guaranteed.

The Bank shall have power to determine any other terms and conditions of the guarantee.
SECTION 6 SPECIAL RESERVE The amount of commissions received by the Bank under Sec­ tions 4 and 5 of this Article shall be set aside as a special re­ serve, which shall be used only for meeting liabilities of the Bank in accordance with Section 7 of this Article.

The special reserve shall be held in such liquid form, permitted under this Agreement, as the Executive Directors may decide.
126 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (b) SECTION 7 METHODS OF MEETING LIABILITIES OF THE BANK IN CASE OF DEFAULTS In cases of default on loans made, participated in, or guaran­ teed by the Bank: (a) The Bank shall make such arrangements as may be fea­ sible to adjust the obligations under the loans, including arrangements under or analogous to those provided in Section 4(c) of this Article: The payments in discharge of the Bank’s liabilities on borrowings or guarantees under Section 1(a)(ii) and (iii) of this Article shall be charged: (i) (ii) First, against the special reserve provided in Sec­ tion 6 of this Article: Then, to the extent necessary and at the discretion of the Bank, against the other reserves, surplus and capital available to the Bank.
(c) Whenever necessary to meet contractual payments of interest, other charges or amortisation on the Bank’s own borrowings, or to meet the Bank’s liabilities with respect to similar payments on loans guaranteed by it, the Bank may call an appropriate amount of the unpaid subscriptions of members in accordance with Article II, Sections 5 and 7.
Moreover, if it believes that a default may be of long duration, the Bank may call an additional amount of such unpaid subscriptions not to exceed in any one year 1 percent of the total subscriptions of the members for the following purposes: (i) To redeem prior to maturity or otherwise dis­ charge its liability on all or part of the outstanding principal of any loan guaranteed by it in respect of which the debtor is in default: To repurchase or otherwise discharge its liability on all or part of its own outstanding borrowings.
(ii) 127 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued SECTION 8 MISCELLANEOUS OPERATIONS In addition to the operations speciﬁed elsewhere in this Agree­ ment, the Bank shall have the power: (i) To buy and sell securities it has issued and to buy and sell securities which it has guaranteed or in which it has invested, provided that the Bank shall obtain the ap­ proval of the member in whose territories the securities are to be bought or sold: To guarantee securities in which it has invested for the purpose of facilitating their sale: (ii) (iii) To borrow the currency of any member with the ap­ proval of that member: (iv) To buy and sell such other securities as the Directors by a three­fourths majority of the total voting power may deem proper for the investment of all or part of the special reserve under Section 6 of this Article.
In exercising the powers conferred by this section, the Bank may deal with any person, partnership, association, corpor­ ation or other legal entity in the territories of any member.

SECTION 9 WARNING TO BE PLACED ON SECURITIES Every security guaranteed or issued by the Bank shall bear on its face a conspicuous statement to the effect that it is not an obligation of any government unless expressly stated on the security.
SECTION 10 POLITICAL ACTIVITY PROHIBITED The Bank and is ofﬁcers shall not interfere in the political af­ fairs of any member; nor shall they be inﬂuenced in their de­ cisions by the political character of the member or members concerned.

Only economic considerations shall be relevant to their decisions, and these considerations shall be weighed im­ partially in order to achieve the purposes stated in Article I.
128 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued ARTICLE V ORGANISATION AND MANAGEMENT SECTION 1 STRUCTURE OF THE BANK The Bank shall have a Board of Governors, Executive Direct­ ors, a President and such other ofﬁcers and staff to perform such duties as the Bank may determine.
SECTION 2 BOARD OF GOVERNORS (a) (b) All the powers of the Bank shall be vested in the Board of Governors consisting of one Governor and one Al­ ternate appointed by each member in such manner as it may determine.

Each Governor and each Alternate shall serve for 5 years, subject to the pleasure of the member appointing him, and may be reappointed.

No Alternate may vote except in the absence of his principal.

The Board shall select one of the Governors as Chairman.
The Board of Governors may delegate to the Executive Directors authority to exercise any powers of the Board, except the power to: (i) Admit new members and determine the condi­ tions of their admission: Increase or decrease the capital stock: (ii) (iii) Suspend a member: (iv) Decide appeals from interpretations of this Agreement given by the Executive Directors: (v) Make arrangements to co­operate with other international organisations (other than informal arrangements of a temporary and administrative character): (vi) Decide to suspend permanently the operations of the Bank and to distribute is assets: (vii) Determine the distribution of the net income of the Bank.
(c) The Board of Governors shall hold an annual meeting and such other meetings as may be provided for by the 129 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued Board or called by the Executive Directors.

Meetings of the Board shall be called by the Directors whenever requested by 5 members or by members having one­ quarter of the total voting power.
(e) (d) A quorum for any meeting of the Board of Governors shall be a majority of the Governors, exercising not less than two­thirds of the total voting power.

The Board of Governors may be regulation establish a procedure whereby the Executive Directors, when they deem such action to be in the best interests of the Bank, may obtain a vote of the Governors on a speciﬁc ques­ tion without calling a meeting of the Board.
The Board of Governors, and the Executive Directors to the extent authorised, may adopt such rules and regula­ tions as may be necessary or appropriate to conduct the business of the Bank.

(f) (g) Governors and Alternates shall serve as such without compensation from the Bank, but the Bank shall pay them reasonable expenses incurred in attending meet­ ings.
The Board of Governors shall determine the remuner­ ation to be paid to the Executive Directors and the salary and terms of the contract of service of the President.

(h) SECTION 3 VOTING (a) (b) Each member shall have 250 votes, plus one additional vote for each share of stock held.

Except as otherwise speciﬁcally provided, all matters before the Bank shall be decided by a majority of the votes cast.
SECTION 4 EXECUTIVE DIRECTORS (a) The Executive Directors shall be responsible for the conduct of the general operations of the Bank, and for 130 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (b) (c) (ii) this purpose, shall exercise all the powers delegated to them by the Board of Governors.
There shall be 12 Executive Directors, who need not be Governors and of whom: (i) Five shall be appointed, one by each of the 5 members having the largest number of shares; Seven shall be elected according to Schedule B by all the Governors other than those appointed by the 5 members referred to in (i) above.
For the purpose of this paragraph, “members” means governments of countries whose names are set forth in Schedule A, whether they are original members or be­ come members in accordance with Article II, Section 1(b).

When governments of other countries become members, the Board of Governors may, by a four­ﬁfths majority of the total voting power, increase the total number of Directors by increasing the number of Dir­ ectors to be elected.

Executive Directors shall be appointed or elected every 2 years.
Each Executive Director shall appoint an Alternate with full power to act for him when he is not present.

When the Executive Directors appointing them are present, Alternates may participate in meetings but shall not vote.

(d) Directors shall continue in ofﬁce until their successors are appointed or elected.
If the ofﬁce of an elected Dir­ ector becomes vacant more than 90 days before the end of his term, another Director shall be elected for the re­ mainder of the term by the Governors who elected the former Director.

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

While the ofﬁce remains vacant, the Alternate of the former Director, shall exercise his powers, except that of appointing an Alternate.
131 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (e) (f) (g) (h) (i) The Executive Directors shall function in continuous session at the principal ofﬁce of the Bank and shall meet as often as the business of the Bank may require.
A quorum for any meeting of the Executive Directors shall be a majority of the Directors, exercising not less than one­half of the total voting power.

Each appointed Director shall be entitled to cast the number of votes allotted under Section 3 of this Art­ icle to the member appointing him.

Each elected Dir­ ector shall be entitled to cast the number of votes which counted toward his election.

All the votes which a Dir­ ector is entitled to cast shall be cast as a unit.
The Board of Governors shall adopt regulations under which a member not entitled to appoint a Director under (b) above may send a representative to attend any meet­ ing of the Executive Directors when a request made by, or a matter particularly affecting, that member is under consideration.

The Executive Directors may appoint such Committees as they deem advisable.

Membership of such commit­ tees need not be limited to Governors or Directors or their Alternates.
SECTION 5 PRESIDENT AND STAFF (a) (b) The Executive Directors shall select a President who shall not be a Governor or an Executive Director or an Alternate for either.

The President shall be Chairman of the Executive Directors, but shall have no vote except a deciding vote in case of an equal division.

He may participate in meetings of the Board of Governors, but shall not vote at such meetings.

The President shall cease to hold ofﬁce when the Executive Directors so decide.
The President shall be chief of the operating staff of the Bank and shall conduct, under the direction of the 132 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (c) (d) Executive Directors, the ordinary business of the Bank.
Subject to the general control of the Executive Direct­ ors, he shall be responsible for the organisation, ap­ pointment and dismissal of the ofﬁcers and staff.

The President, ofﬁcers and staff of the Bank, in the dis­ charge of their ofﬁcers, owe their duty entirely to the Bank and to no other authority.

Each member of the Bank shall respect the international character of this duty and shall refrain from all attempts to inﬂuence any of them in the discharge of their duties.
In appointing the ofﬁcers and staff the President shall, subject to the paramount importance of securing the highest standards of efﬁciency and of technical compe­ tence, pay due regard to the importance of recruiting personnel on as wide a geographical basis as possible.
SECTION 6 ADVISORY COUNCIL (a) (b) There shall be an Advisory Council of not less than 7 persons selected by the Board of Governors includ­ ing representatives of banking, commercial, industrial, labour, and agricultural interests, and with as wide a na­ tional representation as possible.

In those ﬁelds where specialised international organisations exist, the mem­ bers of the Council representative of those ﬁelds shall be selected in agreement with such organisations.
The Council shall advise the Bank on matters of general pol­ icy.

The Council shall meet annually and on such other occasions as the Bank may request.

Councillors shall serve for 2 years, and may be reap­ pointed.

They shall be paid their reasonable expenses incurred in behalf of the Bank.

SECTION 7 LOAN COMMITTEES The committees required to report on loans under Article III, section 4, shall be appointed by the Bank.
Each such commit­ 133 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued tee shall include an expert selected by the Governor represent­ ing the member in whose territories the project is located and one or more members of the technical staff of the Bank.
SECTION 8 RELATIONSHIP TO OTHER INTERNATIONAL ORGANISATIONS (a) (b) The Bank, within the terms of this Agreement, shall co­operate with any general international organisation and with public international organisations having specialised responsibilities in related ﬁelds.

Any ar­ rangements for such co­operation which would involve a modiﬁcation of any provision of this Agreement may be effected only after amendment to this Agreement under Article VIII.
In making decisions on applications for loans or guaran­ tees relating to matters directly within the competence of any international organisation of the types speciﬁed in the preceding paragraph and participated in primarily by members of the Bank, the Bank shall give consider­ ation to the views and recommendations of such organ­ isation.

SECTION 9 LOCATION OF OFFICES (a) (b) The principal ofﬁce of the Bank shall be located in the territory of the member holding the greatest number of shares.
The Bank may establish agencies or branch ofﬁces in the territories of any member of the Bank.

SECTION 10 REGIONAL OFFICES AND COUNCILS (a) The Bank may establish regional ofﬁces and determine the location of, and the areas to be covered by, each regional ofﬁce.
134 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (b) Each regional ofﬁce shall be advised by a regional coun­ cil representative of the entire area and selected in such manner as the Bank may decide.
SECTION 11 DEPOSITORIES (a) (b) Each member shall designate its central bank as a de­ pository for all the Bank’s holdings of its currency or, if it has no central bank, it shall designate such other in­ stitution as may be acceptable to the Bank.

The Bank may hold other assets, including gold, in depositories designated by the 5 members having the largest number of shares and, in such other designated depositories as the Bank may select.
Initially, at least one­half of the gold holdings of the Bank shall be held in the depository designated by the member in whose terri­ tory the Bank has its principal ofﬁce, and at least 40 per­ cent shall be held in the depositories designated by the remaining 4 members referred to above, each of such depositories to hold, initially, not less than the amount of gold paid on the shares of the member designating it.
However, all transfers of gold by the Bank shall be made with due regard to the cost of transport and an­ ticipated requirements of the Bank.

In an emergency the Executive Directors may transfer all or any part of the Bank’s gold holdings to any place where they can be adequately protected.
SECTION 12 FORM OF HOLDINGS OF CURRENCY The Bank shall accept from any member, in place of any part of the member’s currency paid into the Bank under Article II, Section 7(i), or to meet amortisation payments on loans made with such currency, and not needed by the Bank in its oper­ ations, notes or similar obligations issued by the government of the member or the depository designated by such mem­ ber, which shall be non­negotiable, non­interest bearing and 135 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued payable at their par value on demand by credit to the account of the Bank in the designated depository.
SECTION 13 PUBLICATION OF REPORTS AND PROVISION OF INFORMATION (a) (b) (c) The Bank shall publish an annual report containing an audited statement of its accounts and shall circulate to members at intervals of 3 months or less a summary statement of its ﬁnancial position and a proﬁt and loss statement showing the results of its operations.

The Bank may publish such other reports as it deems desirable to carry out its purposes.
Copies of all reports, statements and publications made under this section shall be distributed to members.

SECTION 14 ALLOCATION OF NET INCOME (a) (b) The Board of Governors shall determine annually what part of the Bank’s net income, after making provision for reserves, shall be allocated to surplus, and what part, if any, shall be distributed.
If any part is distributed, up to 2 percent non­cumula­ tive shall be paid, as a ﬁrst charge against the distri­ bution for any year, to each member on the basis of the average amount of the loans outstanding during the year made under Article IV, Section 1(a)(i), out of cur­ rency corresponding to its subscription.

If 2 percent is paid as a ﬁrst charge, any balance remaining to be dis­ tributed shall be paid to all members in proportion to their shares.
Payments to each member shall be made in its own currency, or, if that currency is not available, in other currency acceptable to the member.
If such pay­ ments are made in currencies other than the member’s own currency, the transfer of the currency and its use 136 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued by the receiving member after payment shall be with­ out restriction by the members.
ARTICLE VI WITHDRAWAL AND SUSPENSION OF MEMBERSHIP: SUSPENSION OF OPERATIONS SECTION 1 RIGHT OF MEMBERS TO WITHDRAW Any member may withdraw from the Bank at any time by transmitting a notice in writing to the Bank at its principal ofﬁce.

Withdrawal shall become effective on the date such notice is received.
SECTION 2 SUSPENSION OF MEMBERSHIP If a member fails to fulﬁl any of its obligations to the Bank, the Bank may suspend its membership by decision of a major­ ity of the Governors, exercising a majority of the total voting power.

The member so suspended shall automatically cease to be a member one year from the date of its suspension unless a decision is taken by the same majority to restore the member to good standing.
While under suspension, a member shall not be entitled to ex­ ercise any rights under this Agreement, except the right of withdrawal, but shall remain subject to all obligations.

SECTION 3 CESSATION OF MEMBERSHIP IN INTERNATIONAL MONETARY FUND Any member which ceases to be a member of the International Monetary Fund shall automatically cease after 3 months to be a member of the Bank unless the Bank by three­fourths of the total voting power has agreed to allow it to remain a member.
SECTION 4 SETTLEMENT OF ACCOUNTS WITH GOVERNMENTS CEASING TO BE MEMBERS (a) When a government ceases to be a member, it shall re­ main liable for its direct obligations to the Bank and for its contingent liabilities to the Bank so long as any part 137 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued of the loans or guarantees contracted before it ceased to be a member are outstanding; but it shall cease to incur liabilities with respect to loans and guarantees entered into thereafter by the Bank and to share either in the in­ come or the expenses of the Bank.
(b) At the time a government ceases to be a member, the Bank shall arrange for the repurchase of its shares as a part of the settlement of accounts with such government in accordance with the provisions of (c) and (d) below.

For this purpose the repurchase price of the shares shall be the value shown by the books of the Bank on the day the government ceases to be a member.
The payment for shares repurchased by the Bank under this section shall be governed by the following condi­ tions: (i) (c) Any amount due to the government for its shares shall be withheld so long as the government, its central bank or any of its agencies remains liable, as borrower or guarantor, to the Bank, and such amount may at the option of the Bank, be applied on any such liability as it matures.
No amount shall be withheld on account of the liability of the government resulting from its subscription for shares under Article II, Section 5(ii).
In any event, no amount due to a member for its shares shall be paid until 6 months after the date upon which the government ceases to be a member: Payments for shares may be made from time to time, upon their surrender by the government, to the extent by which the amount due as the repur­ chase price in (b) above exceeds the aggregate of liabilities on loans and guarantees in (c)(i) above until the former member has received the full re­ purchase price: (ii) 138 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (iv) (iii) Payments shall be made in the currency of the country receiving payment or at the option of the Bank in gold: If losses are sustained by the Bank on any guar­ antees, participations in loans, or loans which were outstanding on the date when the govern­ ment ceases to be a member, and the amount of such losses exceeds the amount of the reserve provided against losses on the date when the gov­ ernment ceased to be a member, such govern­ ment shall be obligated to repay upon demand the amount by which the repurchase price of its shares would have been reduced, if the losses had been taken into account when the repurchase In addition, the former price was determined.
member government shall remain liable on any call for unpaid subscriptions under Article II, Section 5(ii), to the extent that it would have been required to respond if the impairment of capital had occurred and the call had been made at the time the repurchase price of its shares was deter­ mined.
If the Bank suspends permanently its operations under Section 5(b) of this Article, within 6 months of the date upon which any government ceases to be a member, all rights of such government shall be determined by the provisions of Section 5 of this Article.
(d) SECTION 5 SUSPENSION OF OPERATIONS AND SETTLEMENT OF OBLIGATIONS (a) In an emergency the Executive Directors may suspend temporarily operations in respect of new loans and guar­ antees pending an opportunity for further consideration and action by the Board of Governors.
139 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (b) (c) The Bank may suspend permanently its operations in respect of new loans and guarantees by vote of a major­ ity of the Governors, exercising a majority of the total voting power.
After such suspension of operations the Bank shall forthwith cease all activities, except those incident to the orderly realisation, conservation, and preservation of its assets and settlement of its obliga­ tions.

The liability of all members for uncalled subscriptions to the capital stock of the Bank and in respect of the depreciation of their own currencies shall continue until all claims of creditors, including all contingent claims, shall have been discharged.
(d) All creditors holding direct claims shall be paid out of the assets of the Bank, and then out of payments to the Bank on calls on unpaid subscriptions.

Before mak­ ing any payments to creditors holding direct claims, the Executive Directors shall make such arrangements as are necessary, in their judgment, to insure a distribution to holders of contingent claims rateably with creditors holding direct claims.
No distribution shall be made to members on account of their subscriptions to the capital stock of the Bank until: All liabilities to creditors have been discharged (i) or provided for; and (e) (f) (ii) A majority of the Governors, exercising a ma­ jority of the total voting power, have decided to make a distribution.
After a decision to make a distribution has been taken under (e) above, the Executive Directors may be a two­ thirds majority vote make successive distributions of the assets of the Bank to members until all of the assets have been distributed.

This distribution shall be subject to the prior settlement of all outstanding claims of the Bank against each member.
140 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (g) (h) (i) Before any distribution of assets is made, the Executive Directors shall ﬁx the proportionate share of each mem­ ber according to the ratio of its shareholding to the total outstanding shares of the Bank.
The Executive Directors shall value the assets to be dis­ tributed as at the date of distribution and then proceed to distribute in the following manner: (i) There shall be paid to each member in its own obligations or those of its ofﬁcial agencies or legal entities within its territories, in so far as they are available for distribution, an amount equiva­ lent in value to its proportionate share of the total amount to be distributed: (ii) Any balance due to a member after payment has been made under (i) above shall be paid, in its own currency, in so far as it is held by the Bank, up to an amount equivalent in value to such bal­ ance: (iii) Any balance due to a member after payment has been made under (i) and (ii) above shall be paid, in gold or currency acceptable to the member, in so far as they are held by the Bank, up to an amount equivalent in value to such balance: (iv) Any remaining assets held by the Bank after pay­ ments have been made to members under (i), (ii), and (iii) above shall be distributed pro rata among the members.
Any member receiving assets distributed by the Bank in accordance with (h) above shall enjoy the same rights with respect to such assets as the Bank enjoyed prior to their distribution.
141 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued ARTICLE VII STATUS, IMMUNITIES, AND PRIVILEGES SECTION 1 PURPOSE OF ARTICLE To enable the Bank to fulﬁl the functions with which it is en­ trusted, the status, immunities and privileges set forth in this Article shall be accorded to the Bank in the territories of each member.
SECTION 2 STATUS OF THE BANK The Bank shall possess full juridical personality, and, in par­ ticular, the capacity: (i) (ii) To contract: To acquire and dispose of immovable and movable property: (iii) To institute legal proceedings.
SECTION 3 POSITION OF THE BANK WITH REGARD TO JUDICIAL PROCESS Actions may be brought against the Bank only in a Court of competent jurisdication in the territories of a member in which the Bank has an ofﬁce, has appointed an agent for the purpose of accepting service or notice of process, or has issued or guar­ anteed securities.

No actions shall, however, be brought by members or persons acting for or deriving claims from mem­ bers.
The property and assets of the Bank shall, wheresoever located and by whomsoever held, by immune from all forms of seizure, attachment or execution before the delivery of ﬁnal judgment against the Bank.

SECTION 4 IMMUNITY OF ASSETS FROM SEIZURE Property and assets of the Bank, wherever located and by whomsoever held, shall be immune from search, requisition, conﬁscation, expropriation or any other form of seizure by executive or legislative action.
SECTION 5 IMMUNITY OF ARCHIVES The archives of the Bank shall be inviolable.
142 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued SECTION 6 FREEDOM OF ASSETS FROM RESTRICTIONS To the extent necessary to carry out the operations provided for in this Agreement and subject to the provisions of this Agree­ ment, all property and assets of the Bank shall be free from restrictions, regulations, controls and moratoria of any nature.
SECTION 7 PRIVILEGE FOR COMMUNICATIONS The ofﬁcial communications of the Bank shall be accorded by each member the same treatment that it accords to the ofﬁcial communications of other members.
SECTION 8 IMMUNITIES AND PRIVILEGES OF OFFICERS AND EMPLOYEES All Governors, Executive Directors, Alternates, ofﬁcers and employees of the Bank: (i) Shall be immune from legal process with respect to acts performed by them in their ofﬁcial capacity except when the Bank waives this immunity: (ii) Not being local nationals, shall be accorded the same immunities from immigration restrictions, alien regis­ tration requirements and national service obligations and the same facilities as regards exchange restrictions as are accorded by members to the representatives, ofﬁ­ cials, and employees of comparable rank of other mem­ bers: (iii) Shall be granted the same treatment in respect of trav­ elling facilities as is accorded by members to represen­ tatives, ofﬁcials and employees of comparable rank of other members.
SECTION 9 IMMUNITIES FROM TAXATION (a) The Bank, its assets, property, income and its operations and transactions authorised by this Agreement, shall be immune from all taxation and from all Customs duties.

The Bank shall also be immune from liability for the collection or payment of any tax or duty.
143 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (c) (b) No tax shall be levied on or in respect of salaries and emoluments paid by the Bank to Executive Directors, Alternates, ofﬁcials or employees of the Bank who are not local citizens, local subjects, or other local nation­ als.
No taxation of any kind shall be levied on any obligation or security issued by the Bank (including any dividend or interest thereon) by whomsoever held: (i) Which discriminates against such obligation or security solely because it is issued by the Bank; or If the sole jurisdictional basis for such taxation is the place or currency in which it is issued, made payable or paid, or the location of any ofﬁce or place of business maintained by the Bank.
(ii) (d) No taxation of any kind shall be levied on any obliga­ tion or security guaranteed by the Bank (including any dividend or interest thereon) by whomsoever held: (i) Which discriminates against such obligation or security solely because it is guaranteed by the Bank; or If the sole jurisdictional basis for such taxation is the location of any ofﬁce or place of business maintained by the Bank.
(ii) SECTION 10 APPLICATION OF ARTICLE Each member shall take such action as is necessary in its own territories for the purpose of making effective in terms of its own law the principles set forth in this Article, and shall inform the Bank of the detailed action which it has taken.
ARTICLE VIII AMENDMENTS (a) Any proposal to introduce modiﬁcations in this Agree­ ment, whether emanating from a member, a Governor or 144 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued the Executive Directors, shall be communicated to the Chairman of the Board of Governors, who shall bring the proposal before the Board.
If the proposed amend­ ment is approved by the Board, the Bank shall, by circu­ lar letter or telegram, ask all members whether they ac­ cept the proposed amendment.

When three­ﬁfths of the members, having four­ﬁfths of the total voting power, have accepted the proposed amendment, the Bank shall certify the fact by a formal communication addressed to all members.
(b) Notwithstanding (a) above, acceptance by all members is required in the case of any amendment modifying: (i) The right to withdraw from the Bank provided in Article VI, Section 1: The right secured by Article II, Section 3(c): (ii) (iii) The limitation on liability provided in Article II, Section 6.

(c) Amendments shall enter into force for all members 3 months after the date of the formal communication un­ less a shorter period is speciﬁed in the circular letter or telegram.
ARTICLE IX INTERPRETATION (a) (b) Any question of interpretation of the provisions of this Agreement arising between any member and the Bank or between any members of the Bank shall be submit­ ted to the Executive Directors for their decision.

If the question particularly affects any member not entitled to appoint an Executive Director, it shall be entitled to rep­ resentation in accordance with Article V, Section 4(h).
In any case where the Executive Directors have given a decision under (a) above, any member may require that the question be referred to the Board of Governors, whose decision shall be ﬁnal.
Pending the result of the 145 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued reference to the Board, the Bank may so far as it deems necessary, act on the basis of the decision of the Execu­ tive Directors.
(c) Whenever a disagreement arises between the Bank and a country which has ceased to be a member, or between the Bank and any member during the permanent sus­ pension of the Bank, such disagreement shall be sub­ mitted to arbitration by a tribunal of 3 arbitrators, one appointed by the Bank, another by the country involved and an umpire who, unless the parties otherwise agree, shall be appointed by the President of the Permanent Court of International Justice or such other authority as may have been prescribed by regulation adopted by the Bank.
The umpire shall have full power to settle all questions of procedure in any case where the parties are in disagreement with respect thereto.

ARTICLE X APPROVAL DEEMED GIVEN Whenever the approval of any member is required before any act may be done by the Bank, except in Article VIII, approval shall be deemed to have been given unless the member pre­ sents an objection within such reasonable period as the Bank may ﬁx in notifying the member of the proposed act.
ARTICLE XI FINAL PROVISIONS SECTION 1 ENTRY INTO FORCE This Agreement shall enter into force when it has been signed on behalf of governments whose minimum subscriptions com­ prise not less than 65 percent of the total subscriptions set forth in Schedule A and when the instruments referred to in Section 2(a) of this Article have been deposited on their behalf, but in no event shall this Agreement enter into force before 1 May 1945.
146 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued SECTION 2 SIGNATURE (a) (b) (c) Each government on whose behalf this Agreement is signed shall deposit with the Government of the United States of America an instrument seting forth that it has accepted this Agreement in accordance with its law and has taken all steps necessary to enable it to carry out all of its obligations under this Agreement.
Each government shall become a member of the Bank as from the date of the deposit on its behalf of the in­ strument referred to in (a) above, except that no gov­ ernment shall become a member before this Agreement enters into force under Section 1 of this Article.
The Government of the United States of America shall inform the governments of all countries whose names are set forth in Schedule A, and all governments whose membership is approved in accordance with Article II, Section 1(b), of all signatures of this Agreement and of the deposit of all instruments referred to in (a) above.
(d) At the time this Agreement is signed on its behalf, each government shall transmit to the Government of the United States of America one one­hundredth of 1 per­ cent of the price of each share in gold or United States dollars for the purpose of meeting administrative ex­ penses of the Bank.

This payment shall be credited on account of the payment to be made in accordance with Article II, Section 8(a).
The Government of the United States of America shall hold such funds in a special de­ posit account and shall transmit them to the Board of Governors of the Bank when the intial meeting has been called under Section 3 of this Article.

If this Agreement has not come into force by 31 December 1945, the Gov­ ernment of the United States of America shall return such funds to the governments that transmitted them.
147 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued (e) (f) (g) (h) (i) This Agreement shall remain open for signature at Washington on behalf of the governments of the coun­ tries whose names are set forth in Schedule A until 31 December 1945.
After 31 December 1945 this Agreement shall be open for signature on behalf of the government of any coun­ try, whose membership has been approved in accord­ ance with Article II, Section 1(b).

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 territor­ ies in respect of which they exercise a mandate.
In the case of governments whose metropolitan territor­ ies have been under enemy occupation, the deposit of the instrument referred to in (a) above may be delayed until 180 days after the date on which these territories have been liberated.

If, however, it is not deposited by any such government before the expiration of this period, the signature afﬁxed on behalf of that govern­ ment shall become void and the portion of its subscrip­ tion paid under (d) above shall be returned to it.
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 BANK (a) As soon as this Agreement enters into force under Sec­ tion 1 of this Article, each member shall appoint a Gov­ ernor and the member to whom the largest number of shares is allocated in Schedule A shall call the ﬁrst meeting of the Board of Governors.
(b) At the ﬁrst meeting of the Board of Governors arrange­ ments shall be made for the selection of provisional Ex­ ecutive Directors.

The governments of the 5 countries 148 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule A ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued to which the largest number of shares are allocated in Schedule A shall appoint provisional Executive Direct­ ors.
If one or more of such governments have not be­ come members the executive directorships which they would be entitled to ﬁll shall remain vacant until they become members, or until 1 January 1946, whichever is the earlier.

Seven provisional Executive Directors shall be elected in accordance with the provisions of Sched­ ule B and shall remain in ofﬁce until the date of the ﬁrst regular election of Executive Directors which shall be held as soon as practicable after 1 January 1946.
The Board of Governors may delegate to the provi­ sional Executive Directors any powers except those which may not be delegated to the Executive Directors.

The Bank shall notify members when it is ready to com­ mence operations.
(c) (d) Done at Washington, in a single copy which shall remain de­ posited in the archives of the Government of the United States of America which shall transmit certiﬁed copies to all govern­ ments whose names are set forth in Schedule A and to all gov­ ernments whose membership is approved in accordance with Article II, Section 1(b).

[Here follow the signatures.]
Schedule A SUBSCRIPTIONS $(mil­ lion) 200 225 10 India Iran Iraq Australia Belgium Bolivia $(mil­ lion) 400 25 8 149 Schedule A International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued Brazil Canada Chile China Colombia Costa Rica Cuba $(mil­ lion) 150 300 50 550 50 5 50 Liberia Luxembourg Mexico Netherlands New Zealand Nicaragua Norway Czechoslovakia 125 Panama *Denmark Dominican Republic Ecuador Egypt El Salvador Ethiopia France Greece Guatemala 150 * 5 5 45 2.5 6 Paraguay Peru Phillipine Commonwealth Poland Union of South Africa Union of Soviet Socialist Republic 450 United Kingdom 40 5 United States Uruguay $(mil­ lion) .5 10 90 275 50 2 50 .5 2 25 15 125 100 1200 1300 2750 15 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule B ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued Haiti Honduras Iceland $(mil­ lion) 5 2.5 1 Venezuela Yugoslavia Total $(mil­ lion) 15 60 9100 *The quota of Denmark shall be determined by the Fund after the Danish Government has declared its readiness to sign this Agreement but before signature takes place.
1 2 3 Schedule B ELECTION OF EXECUTIVE DIRECTORS The election of the elective executive Directors shall be by bal­ lot of the Governors eligible to vote under Article V, Section 4(b).
In balloting for the elective Executive Directors, each Gov­ ernor eligible to vote shall cast for one person all of the votes to which the member appointing him is entitled under Section 3 of Article V. The 7 persons receiving the greatest number of votes shall be Executive Directors, except that no person who receives less than 14 percent of the total of the votes which can be cast (eligible votes) shall be considered elected.
When 7 persons are not elected on the ﬁrst ballot, a second bal­ lot shall be held in which the person who received the lowest number of votes shall be ineligible for election and in which there shall vote only (a) those Governors who voted in the ﬁrst 151 Schedule B International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT—continued ballot for a person not elected and (b) those Governors whose votes for a person elected are deemed under 4 below to have raised the votes cast for that person above 15 percent of the eligible votes.
In determining whether the votes cast by a Governor are to be deemed to have raised the total of any person above 15 percent of the eligible votes, the 15 percent shall be deemed to include, ﬁrst, the votes of the Governor casting the largest number of votes for such person, then the votes of the Governor casting the next largest number, and so on until 15 percent is reached.
Any Governor, part of whose votes must be counted in order to raise the total of any person above 14 percent, shall be con­ sidered as casting all of his votes for such person even if the total votes for such person thereby exceed 15 percent.
If after the second ballot, 7 persons have not been elected, fur­ ther ballots shall be held on the same principles until 7 persons have been elected, provided that after 6 persons are elected, the seventh, may be elected by a simple majority of the remain­ ing votes and shall be deemed to have been elected by all such votes.
4 5 6 152 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble Schedule 3 Sections 2, 8(2) ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION Preamble The governments on whose behalf this Agreement is signed agree as follows: INTRODUCTORY ARTICLE The International Finance Corporation (hereinafter called the Corporation) is established and shall operate in accordance with the following provisions: ARTICLE I PURPOSE The purpose of the Corporation is to further economic devel­ opment by encouraging the growth of productive private enter­ prise in member countries, particularly in the less developed areas, thus supplementing the activities of the International Bank for Reconstruction and Development (hereinafter called the Bank).
In carrying out this purpose, the Corporation shall: In association with private investors, assist in ﬁnancing (i) the establishment, improvement and expansion of pro­ ductive private enterprises which would contribute to the development of its member countries by making in­ vestments, without guarantee of repayment by the mem­ ber government concerned, in cases where sufﬁcient private capital is not available on reasonable terms; Seek to bring together investment opportunities domes­ tic and foreign private capital and experienced manage­ ment; and (ii) (iii) Seek to stimulate and to help create conditions con­ ducive to, the ﬂow of private capital, domestic and for­ eign, into productive investment in member countries.
The Corporation shall be guided in all its decisions by the pro­ visions of this Article.
153 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued ARTICLE II MEMBERSHIP AND CAPITAL SECTION 1 MEMBERSHIP (a) The original members of the Corporation shall be those members of the Bank listed in Schedule A hereto which shall, on or before the date speciﬁed in Article IX, Sec­ tion 2(c), accept membership in the Corporation.
(b) Membership shall be open to other members of the Bank at such times and in accordance with such terms as may be prescribed by the Corporation.

SECTION 2 CAPITAL STOCK (a) (b) (c) The authorised capital stock of the Corporation shall be $100,000,000, in terms of United States dollars.

The authorised capital stock shall be divided into 100,000 shares having a par value of $(US)1,000 each.
Any such shares not initially subscribed by original members shall be available for subsequent subscription in accordance with Section 3(d) of this Article.
The amount of capital stock at any time authorised may be increased by the Board of Governors as follows: (i) By a majority of the votes cast, in case such in­ crease is necessary for the purpose of issuing shares of capital stock on initial subscription by members other than original members, provided that the aggregate of any increases authorised pursuant to this subparagraph shall not exceed 10,000 shares: In any other case, by a four­ﬁfths majority of the total voting power.
(ii) (d) In case of an increase authorised pursuant to paragraph (c)(ii) above, each member shall have a reasonable op­ portunity to subscribe, under such conditions as the Cor­ poration shall decide, to a proportion of the increase of stock equivalent to the proportion which its stock there­ 154 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued tofore subscribed bears to the total capital stock of the Corporation, but no member shall be obligated to sub­ scribe to any part of the increased capital.
Issuance of shares of stock, other than those subscribed either on initial subscription or pursuant to paragraph (d) above, shall require a three­fourths majority of the total voting power.

Shares of stock of the Corporation shall be available for subscription only by, and shall be issued only to, members.

(e) (f) SECTION 3 SUBSCRIPTIONS (a) (b) (c) (d) Each original member shall subscribe to the number of shares of stock set forth opposite its name in Schedule A.
The number of shares of stock to be subscribed by other members shall be determined by the Corporation.

Shares of stock initially subscribed by original members shall be issued at par.
The intial subscription of each original member shall be payable in full within 30 days after either the date on which the Corporation shall begin operations pur­ suant to Article IX, Section 3(b), or the date on which such original member becomes a member, whichever shall be later, or at such date thereafter as the Corpor­ ation shall determine.

Payment shall be made in gold or United States dollars in response to a call by the Corpor­ ation which shall specify the place or places of payment.
The price and other terms of subscription of shares of stock to be subscribed, otherwise than on initial sub­ scription by original members, shall be determined by the Corporation.

SECTION 4 LIMITATION ON LIABILITY No member shall be liable, by reason of its membership, for obligations of the Corporation.
155 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued SECTION 5 RESTRICTION ON TRANSFERS AND PLEDGES OF SHARES Shares of stock shall not be pledged or encumbered in any manner whatever, and shall be transferable only to the Cor­ poration.
ARTICLE III OPERATIONS SECTION 1 FINANCING OPERATIONS The Corporation may make investments of its funds in produc­ tive private enterprises in the territories of its members.

The existence of a government or other public interest in such an enterprise shall not necessarily preclude the Corporation from making an investment therein.

SECTION 2 FORMS OF FINANCING (a) (b) The Corporation’s ﬁnancing shall not take the form of investments in capital stock.
Subject to the foregoing, the Corporation may make investments of its funds in such form or forms as it may deem appropriate in the cir­ cumstances, including (but without limitation) invest­ ments according to the holder thereof the right to par­ ticipate in earnings and the right to subscribe to, or to convert the investment into, capital stock.

The Corporation shall not itself exercise any right to subscribe to, or to convert any investment into, capital stock.
SECTION 3 OPERATIONAL PRINCIPLES The operations of the Corporation shall be conducted in ac­ cordance with the following principles: (i) The Corporation shall not undertake any ﬁnancing for which in its opinion sufﬁcient private capital could be obtained on reasonable terms: 156 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (ii) The Corporation shall not ﬁnance an enterprise in the territories of any member if the member objects to such ﬁnancing: (iii) The Corporation shall impose no conditions that the proceeds of any ﬁnancing by it shall be spent in the ter­ ritories of any particular country: (v) (iv) The Corporation shall not assume responsibility for managing any enterprise in which it has invested: The Corporation shall undertake its ﬁnancing on terms and conditions which it considers appropriate, taking into account the requirements of the enterprise, the risks being undertaken by the Corporation and the terms and conditions normally obtained by private investors for similar ﬁnancing: (vi) The Corporation shall seek to revolve its funds by sell­ ing its investments to private investors whenever it can appropriately do so on satisfactory terms: (vii) The Corporation shall seek to maintain a reasonable di­ versiﬁcation in its investments.
SECTION 4 PROTECTION OF INTERESTS Nothing in this Agreement shall prevent the Corporation, in the event of actual or threatened default on any of its invest­ ments, actual or threatened insolvency of the enterprise in which such investment shall have been made, or other situ­ ations which, in the opinion of the Corporation, threaten to jeopardise such investment, from taking such action and exer­ cising such rights as it may deem necessary for the protection of its interests.
SECTION 5 APPLICABILITY OF CERTAIN FOREIGN EXCHANGE RESTRICTIONS Funds received or payable to the Corporation in respect of an investment of the Corporation made in any member’s territor­ ies pursuant to Section 1 of this Article shall not be free, solely by reason of any provision of this Agreement, from generally 157 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued applicable foreign exchange restrictions, regulations and con­ trols in force in the territories of that member.
SECTION 6 MISCELLANEOUS OPERATIONS In addition to the operations speciﬁed elsewhere in this Agree­ ment, the Corporation shall have the power to: (i) Borrow funds, and in that connection to furnish such collateral or other security therefor as it shall determine; provided, however, that before making a public sale of its obligations in the markets of a member, the Corpor­ ation shall have obtained the approval of that member and of the member in whose currency the obligations are to be denominated: Invest funds not needed in its ﬁnancing operations in such obligations as it may determine and invest funds held by it for pension or similar purposes in any mar­ ketable securities, all without being subject to the re­ strictions imposed by other Sections of this Article: (ii) (iii) Guarantee securities in which it has invested in order to facilitate their sale: (iv) Buy and sell securities it has issued or guaranteed or in (v) which it has invested: Exercise such other powers incidental to its business as shall be necessary or desirable in furtherance of its purposes.
SECTION 7 VALUATION OF CURRENCIES Whenever it shall become necessary under this Agreement to value any currency in terms of the value of another cur­ rency, such valuation shall be as reasonably determined by the Corporation after consultation with the International Monet­ ary Fund.
SECTION 8 WARNING TO BE PLACED ON SECURITIES Every security issued or guaranteed by the Corporation shall bear on its face a conspicuous statement to the effect that it is not an obligation of the Bank or, unless expressly stated on the security, of any government.
158 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued SECTION 9 POLITICAL ACTIVITY PROHIBITED The Corporation and its ofﬁcers shall not interfere in the polit­ ical affairs of any member; nor shall they be inﬂuenced in their decisions by the political character of the member or members concerned.
Only economic considerations shall be relevant to their decisions, and these considerations shall be weighed im­ partially in order to achieve the purposes stated in this Agree­ ment.

ARTICLE IV ORGANISATION AND MANAGEMENT SECTION 1 STRUCTURE OF THE CORPORATION The Corporation shall have a Board of Governors, a Board of Directors, a Chairman of the Board of Directors, a President and such other ofﬁcers and staff to perform such duties as the Corporation may determine.
SECTION 2 BOARD OF GOVERNORS (a) (b) (c) All the powers of the Corporation shall be vested in the Board of Governors.

Each Governor and Alternate Governor of the Bank appointed by a member of the Bank which is also a member of the Corporation shall ex ofﬁcio be a Gov­ ernor or Alternate Governor, respectively, of the Cor­ poration.

No Alternate Governor may vote except in the absence of his principal.

The Board of Governors shall select one of the Governors as Chairman of the Board of Governors.
Any Governor or Alternate Governor shall cease to hold ofﬁce if the member by which he was ap­ pointed shall cease to be a member of the Corporation.
The Board of Governors may delegate to the Board of Directors authority to exercise any of its powers, except the power to: (i) Admit new members and determine the condi­ tions of their admission: Increase or decrease the capital stock: (ii) 159 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (iii) Suspend a member: (iv) Decide appeals from interpretations of Agreement given by the Board of Directors: (v) Make arrangements to co­operate with other international organisations (other than informal arrangements of a temporary and administrative character): this (vi) Decide to suspend permanently the operations of the Corporation and to distribute its assets: (vii) Declare dividends: (viii) Amend this Agreement.
The Board of Governors shall hold an annual meeting and such other meetings as may be provided for by the Board of Governors or called by the Board of Directors.

The annual meeting of the Board of Governors shall be held in conjunction with the annual meeting of the Board of Governors of the Bank.

A quorum for any meeting of the Board of Governors shall be a majority of the Governors, exercising not less than two­thirds of the total voting power.
The Corporation may by regulation establish a proced­ ure whereby the Board of Directors may obtain a vote of the Governors on a speciﬁc question without calling a meeting of the Board of Governors.

The Board of Governors, and the Board of Directors to the extent authorised, may adopt such rules and regula­ tions as may be necessary or appropriate to conduct the business of the Corporation.

Governors and Alternate Governors shall serve as such without compensation from the Corporation.
(d) (e) (f) (g) (h) (i) SECTION 3 VOTING (a) Each member shall have 250 votes plus one additional vote for each share of stock held.

160 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (b) Except as otherwise expressly provided, all matters be­ fore the Corporation shall be decided by a majority of the votes cast.
SECTION 4 BOARD OF DIRECTORS (a) (b) (c) The Board of Directors shall be responsible for the con­ duct of the general operations of the Corporation, and for this purpose shall exercise all the powers given to it by this Agreement or delegated to it by the Board of Governors.
The Board of Directors of the Corporation shall be com­ posed ex ofﬁcio of each Executive Director of the Bank who shall have been either (i) appointed by a member of the Bank which is also a member of the Corporation, or (ii) elected in an election in which the votes of at least one member of the Bank which is also a member of the Corporation shall have counted towards his elec­ tion.

The Alternate to each such Executive Director of the Bank shall ex ofﬁcio be an Alternate Director of the Corporation.
Any director shall cease to hold ofﬁce if the member by which he was appointed, or if all the members whose votes counted toward his election, shall cease to be members of the Corporation.

Each Director who is an appointed Executive Director of the Bank shall be entitled to cast the number of votes which the member by which he was so appointed is entitled to cast in the Corporation.
Each Director who is an elected Executive Director of the Bank shall be entitled to cast the number of votes which the member or members of the Corporation whose votes counted toward his election in the Bank are entitled to cast in the Corporation.

All the votes which a Director is entitled to cast shall be cast as a unit.

(d) An Alternate Director shall have full power to act in the absence of the Director who shall have appointed him.
161 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (e) (f) (g) When a Director is present, his alternate may participate in meetings but shall not vote.

A quorum for any meeting of the Board of Directors shall be a majority of the Directors exercising not less than one­half of the total voting power.

The Board of Directors shall meet as often as the busi­ ness of the Corporation may require.
The Board of Governors shall adopt regulations under which a member of the Corporation not entitled to ap­ point an Executive Director of the Bank may send a rep­ resentative to attend any meeting of the Board of Dir­ ectors of the Corporation when a request made by, or a matter particularly affecting, that member is under con­ sideration.
SECTION 5 CHAIRMAN, PRESIDENT, AND STAFF (a) (b) The President of the Bank shall be ex ofﬁcio Chairman of the Board of Directors of the Corporation, but shall have no vote except a deciding vote in case of an equal division.

He may participate in meetings of the Board of Governors but shall not vote at such meetings.

The President of the Corporation shall be appointed by the Board of Directors on the recommendation of the Chairman.

The President shall be chief of the oper­ ating staff of the Corporation.
Under the direction of the Board of Directors and the general supervision of the Chiarman, he shall conduct the ordinary business of the Corporation and under their general control shall be responsible for the organisation, appointment and dis­ missal of the ofﬁcers and staff.

The President may par­ ticipate in meetings of the Board of Directors but shall not vote at such meetings.

The President shall cease to hold ofﬁce by decision of the Board of Directors in which the Chairman concurs.
162 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (c) (d) The President, ofﬁcers and staff of the Corporation, in the discharge of their ofﬁces, owe their duty entirely to the Corporation and to no other authority.

Each member of the Corporation shall respect the international char­ acter of this duty and shall refrain from all attempts to inﬂuence any of them in the discharge of their duties.
Subject to the paramount importance of securing the highest standards of efﬁciency and of technical compe­ tence, due regard shall be paid, in appointing the ofﬁ­ cers and staff of the Corporation, to the importance of recruiting personnel on as wide a geographic basis as possible.

SECTION 6 RELATIONSHIP TO THE BANK (a) The Corporation shall be an entity separate and dis­ tinct from the Bank and the funds of the Corporation shall be kept separate and apart from those of the Bank.
The Corporation shall not lend to or borrow from the Bank.

The provisions of this section shall not prevent the Corporation from making arrangements with the Bank regarding facilities, personnel and services and arrangements for reimbursement of administrative ex­ penses paid in the ﬁrst instance by either organisation on behalf of the other.
(b) Nothing in this Agreement shall make the Corporation liable for the acts or obligations of the Bank, or the Bank liable for the acts or obligations of the Corporation.

SECTION 7 RELATIONS WITH OTHER INTERNATIONAL ORGANISATIONS The Corporation, acting through the Bank, shall enter into for­ mal arrangements with the United Nations and may enter into such arrangements with other public international organisa­ tions having specialised responsibilities in related ﬁelds.
163 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued SECTION 8 LOCATION OF OFFICES The principal ofﬁce of the Corporation shall be in the same locality as the principal ofﬁce of the Bank.

The Corporation may establish other ofﬁces in the territories of any member.
SECTION 9 DEPOSITORIES Each member shall designate its central bank as a depository in which the Corporation may keep holdings of such mem­ ber’s currency or other assets of the Corporation or, if it has no central bank, it shall designate for such purpose such other institution as may be acceptable to the Corporation.
SECTION 10 CHANNEL OF COMMUNICATION Each member shall designate an appropriate authority with which the Corporation may communicate in connection with any matter arising under this Agreement.
SECTION 11 PUBLICATION OF REPORTS AND PROVISION OF INFORMATION (a) (b) (c) The Corporation shall publish an annual report contain­ ing an audited statement of its accounts and shall cir­ culate to members at appropriate intervals a summary statement of its ﬁnancial position and a proﬁt and loss statement showing the results of its operations.

The Corporation may publish such other reports as it deems desirable to carry out its purposes.
Copies of all reports, statements and publications made under this section shall be distributed to members.

SECTION 12 DIVIDENDS (a) The Board of Governors may determine from time to time what part of the Corporation’s net income and sur­ plus, after making appropriate provision for reserves, shall be distributed as dividends.

(b) Dividends shall be distributed pro rata in proportion to capital stock held by members.
164 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (c) Dividends shall be paid in such manner and in such cur­ rency or currencies as the Corporation shall determine.
ARTICLE V WITHDRAWAL, SUSPENSION OF MEMBERSHIP, SUSPENSION OF OPERATIONS SECTION 1 WITHDRAWAL BY MEMBERS Any member may withdraw from membership in the Corpor­ ation at any time by transmitting a notice in writing to the Cor­ poration at its principal ofﬁce.

Withdrawal shall become ef­ fective upon the date such notice is received.
SECTION 2 SUSPENSION OF MEMBERSHIP (a) If a member fails to fulﬁl any of its obligations to the Corporation, the Corporation may suspend its member­ ship by decision of a majority of the Governors, exer­ cising a majority of the total voting power.

The member so suspended shall automatically cease to be a member one year from the date of its suspension unless a deci­ sion is taken by the same majority to restore the member to good standing.
(b) While under suspension, a member shall not be entitled to exercise any rights under this Agreement except the right of withdrawal, but shall remain subject to all obli­ gations.

SECTION 3 SUSPENSION OR CESSATION OF MEMBERSHIP IN THE BANK Any member which is suspended from membership in, or ceases to be a member of, the Bank shall automatically be suspended from membership in, or cease to be a member of, the Corporation, as the case may be.
SECTION 4 RIGHTS AND DUTIES OF GOVERNMENTS CEASING TO BE MEMBERS 165 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (b) (a) When a government ceases to be a member it shall re­ main liable for all amounts due from it to the Corpor­ ation.
The Corporation shall arrange for the repurchase of such government’s capital stock as a part of the settle­ ment of accounts with it in accordance with the provi­ sions of this section, but the government shall have no other rights under this Agreement except as provided in this Section and in Article VIII(c).
The Corporation and the government may agree on the repurchase of the capital stock of the government on such terms as may be appropriate under the circum­ stances, without regard to the provisions of paragraph (c) below.

Such agreement may provide, among other things, for a ﬁnal settlement of all obligations of the government to the Corporation.
If such agreement shall not have been made within 6 months after the government ceases to be a member or such other time as the Corporation and such government may agree, the repurchase price of the government’s capital stock shall be the value thereof shown by the books of the Corporation on the day when the govern­ ment ceases to be a member.
The repurchase of the cap­ ital stock shall be subject to the following conditions: (i) (c) Payments for shares of stock may be made from time to time, upon their surrender by the govern­ ment, in such instalments, at such times and in such available currency or currencies as the Cor­ poration reasonably determines, taking into ac­ count the ﬁnancial position of the Corporation: (ii) Any amount due to the government for its cap­ ital stock shall be withheld so long as the govern­ ment or any of its agencies remains liable to the Corporation for payment of any amount and such amount may, at the option of the Corporation, be set off, as it becomes payable, against the amount due from the Corporation: 166 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (iii) If the Corporation sustains a net loss on the in­ vestments made pursuant to Article III, Section 1, and held by it on the date when the government ceases to be a member, and the amount of such loss exceeds the amount of the reserves provided therefor on such date, such government shall re­ pay on demand the amount by which the repur­ chase price of its shares of stock would have been reduced if such loss had been taken into account when the repurchase price was determined.
In no event shall any amount due to a government for its capital stock under this section be paid until 6 months after the date upon which the government ceases to be a member.
If within 6 months of the date upon which any government ceases to be a member the Corporation suspends operations under Section 5 of this Article, all rights of such government shall be determined by the provisions of such Section 5 and such government shall be considered still a member of the Corporation for pur­ poses of such Section 5, except that it shall have no vot­ ing rights.
(d) SECTION 5 SUSPENSION OF OPERATIONS AND SETTLEMENT OF OBLIGATIONS (a) The Corporation may permanently suspend its oper­ ations by vote of a majority of the Governors exercising a majority of the total voting power.

After such sus­ pension of operations the Corporation shall forthwith cease all activities, except those incident to the orderly realisation, conservation and preservation of its assets and settlement of its obligations.
Until ﬁnal settlement of such obligations and distribution of such assets, the Corporation shall remain in existence and all mutual rights and obligations of the Corporation and its mem­ bers under this Agreement shall continue unimpaired, 167 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued except that no member shall be suspended or withdraw and that no distribution shall be made to members ex­ cept as in this section provided.
(c) (b) No distribution shall be made to members on account of their subscriptions to the capital stock of the Corpor­ ation until all liabilities to creditors shall have been dis­ charged or provided for and until the Board of Govern­ ors, by vote of a majority of the Governors exercising a majority of the total voting power, shall have decided to make such distribtion.
Subject to the foregoing, the Corporation shall dis­ tribute the assets of the Corporation to members pro rata in proportion to capital stock held by them, sub­ ject, in the case of any member, to prior settlement of all outstanding claims by the Corporation against such member.

Such distribution shall be made at such times, in such currencies, and in cash or other assets as the Corporation shall deem fair and equitable.
The shares distributed to the several members need not necessarily be uniform in respect of the type of assets distributed or of the currencies in which they are expressed.

(d) Any member receiving assets distributed by the Corpor­ ation pursuant to this Section shall enjoy the same rights with respect to such assets as the Corporation enjoyed prior to their distribution.
ARTICLE VI STATUS, IMMUNITIES, AND PRIVILEGES SECTION 1 PURPOSES OF ARTICLE To enable the Corporation to fulﬁl the functions with which it is entrusted, the status, immunities and privileges set forth in this article shall be accorded to the Corporation in the territor­ ies of each member.
SECTION 2 STATUS OF THE CORPORATION The Corporation shall possess full juridical personality and, in particular, the capacity: 168 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (i) (ii) To contract: To acquire and dispose of immovable and movable property: (iii) To institute legal proceedings.
SECTION 3 POSITION OF THE CORPORATION WITH REGARD TO JUDICIAL PROCESS Actions may be brought against the Corporation only in a Court of competent jurisdiction in the territories of a mem­ ber in which the Corporation has an ofﬁce, has appointed an agent for the purpose of accepting service or notice of process, or has issued or guaranteed securities.

No actions shall, how­ ever, be brought by members or persons acting for or deriving claims from members.
The property and assets of the Corpor­ ation shall, wheresoever located and by whomsoever held, be immune from all forms of seizure, attachment or execution be­ fore the delivery of ﬁnal judgment against the Corporation.

SECTION 4 IMMUNITY OF ASSETS FROM SEIZURE Property and assets of the Corporation, wherever located and by whomsoever held, shall be immune from search, requisi­ tion, conﬁscation, expropriation or any other form of seizure by executive or legislative action.
SECTION 5 IMMUNITY OF ARCHIVES The archives of the Corporation shall be inviolable.

SECTION 6 FREEDOM OF ASSETS FROM RESTRICTIONS To the extent necessary to carry out the operations provided for in this Agreement and subject to the provisions of Article III, Section 5, and the other provisions of this Agreement, all property and assets of the Corporation shall be free from re­ strictions, regulations, controls and moratoria of any nature.
SECTION 7 PRIVILEGE FOR COMMUNICATIONS The ofﬁcial communications of the Corporation shall be ac­ corded by each member the same treatment that it accords to the ofﬁcial communications of other members.
169 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued SECTION 8 IMMUNITIES AND PRIVILEGES OF OFFICERS AND EMPLOYEES All Governors, Directors, Alternates, ofﬁcers and employees of the Corporation: (i) Shall be immune from legal process with respect to acts performed by them in their ofﬁcial capacity: (ii) Not being local nationals, shall be accorded the same immunities from immigration restrictions, alien regis­ tration requirements and national service obligations and the same facilities as regards exchange restrictions as are accorded by members to the representatives, ofﬁ­ cials, and employees of comparable rank of other mem­ bers: (iii) Shall be granted the same treatment in respect of trav­ elling facilities as is accorded by members to represen­ tatives, ofﬁcials and employees of comparable rank of other members.
SECTION 9 IMMUNITIES FROM TAXATION (a) The Corporation, its assets, property, income and its op­ erations and transactions authorised by this Agreement, shall be immune from all taxation and from all Customs duties.

The Corporation shall also be immune from li­ ability for the collection or payment of any tax or duty.
(b) No tax shall be levied on or in respect of salaries and emoluments paid by the Corporation to Directors, Al­ ternates, ofﬁcials or employees of the Corporation who are not local citizens, local subjects, or other local na­ tionals.
No taxation of any kind shall be levied on any obli­ gation or security issued by the Corporation (including any dividend or interest thereon) by whomsoever held: (i) Which discriminates against such obligation or security solely because it is issued by the Cor­ poration; or (c) 170 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (ii) If the sole jurisdictional basis for such taxation is the place or currency in which it is issued, made payable or paid, or the location of any ofﬁce or place of business maintained by the Corporation.
(d) No taxation of any kind shall be levied on any obliga­ tion or security guaranteed by the Corporation (includ­ ing any dividend or interest thereon) by whomsoever held: (i) Which discriminates against such obligation or security solely because it is guaranteed by the Corporation; or If the sole jurisdictional basis for such taxation is the location of any ofﬁce or place of business maintained by the Corporation.
(ii) SECTION 10 APPLICATION OF ARTICLE Each member shall take such action as is necessary in its own territories for the purpose of making effective in terms of its own law the principles set forth in this Article and shall inform the Corporation of the detailed action which it has taken.

SECTION 11 WAIVER The Corporation in its discretion may waive any of the privil­ eges and immunities conferred under this Article to such ex­ tent and upon such conditions as it may determine.
ARTICLE VII AMENDMENTS (a) This Agreement may be amended by vote of three­ﬁfths of the Governors exercising 85 percent of the total vot­ ing power.
(b) Notwithstanding paragraph (a) above, the afﬁrmative vote of all Governors is required in the case of any amendment modifying: (i) The right to withdraw from the Corporation pro­ vided in Article V, Section 1; 171 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (c) (ii) The pre­emptive right secured by Article II, Sec­ tion 2(d); (iii) The limitation on liability provided in Article II, Section 4.
Any proposal to amend this Agreement, whether em­ anating from a member, a Governor or the Board of Directors, shall be communicated to the Chairman of the Board of Governors, who shall bring the proposal before the Board of Governors.

When an amendment has been duly adopted, the Corporation shall so cer­ tify by formal communication addressed to all mem­ bers.
Amendments shall enter into force for all mem­ bers 3 months after the date of the formal communi­ cation unless the Board of Governors shall specify a shorter period.

ARTICLE VIII INTERPRETATION AND ARBITRATION (a) (b) Any question of interpretation of the provisions of this Agreement arising between any member and the Cor­ poration or between any members of the Corporation shall be submitted to the Board of Directors for its de­ cision.
If the question particularly affects any member of the Corporation not entitled to appoint an Executive Director of the Bank, it shall be entitled to representa­ tion in accordance with Article IV, Section 4(g).

In any case where the Board of Directors has given a de­ cision under (a) above, any member may require that the question be referred to the Board of Governors, whose decision shall be ﬁnal.
Pending the result of the refer­ ence to the Board of Governors, the Corporation may, so far as it deems necessary, act on the basis of the de­ cision of the Board of Directors.
(c) Whenever a disagreement arises between the Corpor­ ation and a country which has ceased to be a mem­ ber, or between the Corporation and any member dur­ 172 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Preamble ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued ing the permanent suspension of the Corporation, such disagreement shall be submitted to arbitration by a tri­ bunal of 3 arbitrators, one appointed by the Corporation, another by the country involved and an umpire who, unless the parties otherwise agree, shall be appointed by the President of the International Court of Justice or such other authority as may have been prescribed by regulation adopted by the Corporation.
The umpire shall have full power to settle all questions of procedure in any case where the parties are in disagreement with respect thereto.
ARTICLE IX FINAL PROVISIONS SECTION 1 ENTRY INTO FORCE This Agreement shall enter into force when it has been signed on behalf of not less than 30 governments whose subscriptions comprise not less than 75 percent of the total subscriptions set forth in Schedule A and when the instruments referred to in Section 2(a) of this Article have been deposited on their behalf, but in no event shall this Agreement enter into force before October 1955.
SECTION 2 SIGNATURE (a) (b) Each government on whose behalf this Agreement is signed shall deposit with the Bank an instrument set­ ting forth that it has accepted this Agreement without reservation in accordance with its law and has taken all steps necessary to enable it to carry out all of its obliga­ tions under this Agreement.
Each government shall become a member of the Cor­ poration as from the date of the deposit on its behalf of the instrument referred to in paragraph (a) above, ex­ cept that no government shall become a member before this Agreement enters into force under Section 1 of this Article.
173 Preamble International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued (c) This Agreement shall remain open for signature until the close of business on 31 December 1956 at the prin­ cipal ofﬁce of the Bank on behalf of the governments of the countries whose names are set forth in Schedule A.
(d) After this Agreement shall have entered into force, it shall be open for signature on behalf of the government of any country whose membership has been approved pursuant to Article II, Section 1(b).

SECTION 3 INAUGURATION OF THE CORPORATION (a) (b) (c) As soon as this Agreement enters into force under Sec­ tion 1 of this Article the Chairman of the Board of Dir­ ectors shall call a meeting of the Board of Directors.

The Corporation shall begin operations on the date when such meeting is held.
Pending the ﬁrst meeting of the Board of Governors, the Board of Directors may exercise all the powers of the Board of Governors except those reserved to the Board of Governors under this Agreement.
Done at Washington, in a single copy which shall remain de­ posited in the archives of the International Bank for Recon­ struction and Development, which has indicated by its signa­ ture below its agreement to act as depository of this Agree­ ment and to notify all governments whose names are set forth in Schedule A of the date when this Agreement shall enter into force under Article IX, Section 1, hereof.
International Bank for Reconstruction and Development: EUGENE R. BLACK President [Here follow the signatures.]
174 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule A ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued Schedule A Subscriptions to Capital Stock of the International Finance Corporation Country Australia Austria Belgium Bolivia Brazil Burma Canada Ceylon Chile China Colombia Costa Rica Cuba Denmark Dominican Republic Ecuador Egypt El Salvador Number of Shares Amount $(US) Schedule A International Finance Agreements Act 1961 Reprinted as at 3 September 2007 ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued Number of Shares Amount $(US) Country Ethiopia Finland France Germany Greece Guatemala Haiti Honduras Iceland India Indonesia Iran Iraq Israel Italy Japan Jordan Lebanon Luxembourg Mexico 176 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule A ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION—continued Country Netherlands Nicaragua Norway Pakistan Panama Paraguay Peru Philippines Sweden Syria Thailand Turkey Number
 of Shares Amount $(US) 3,046 3,046,000 9 554 9,000 554,000 1,108 1,108,000 2 16 194 166 2,000 16,000 194,000 166,000 1,108 1,108,000 72 139 476 72,000 139,000 476,000 Union of South Africa 1,108 1,108,000 United Kingdom United States Uruguay Venezuela Yugoslavia 14,400 14,400,000 35,168 35,168,000 116 116 443 116,000 116,000 443,000 TOTAL 100,000 $100,000,000 177 Schedule 4 International Finance Agreements Act 1961 Reprinted as at 3 September 2007 Schedule 4 Resolution of Board of Governors setting forth the terms and conditions governing admission to membership in the International Monetary Fund Sections 3, 5(a) WHEREAS, the Government of New Zealand on April 17, 1961, applied for admission to membership in the International Monetary Fund in accordance with Section 2 of Article II of the Articles of Agreement of the Fund; and WHEREAS, pursuant to Section 21 of the bylaws of the Fund, the Executive Directors have consulted with representatives of that Gov­ ernment and have agreed upon the terms and conditions which, in the opinion of the Executive Directors, the Board of Governors may wish to prescribe for admitting New Zealand to membership in the Fund; NOW, THEREFORE, the Board of Governors, having considered the recommendations of the Executive Directors, hereby resolves that the terms and conditions upon which New Zealand shall be admitted to membership in the Fund shall be as follows: 1.
(c) Deﬁnitions: As used in this Resolution: (a) (b) The term “Fund” means International Monetary Fund.

The term “Articles” means the Articles of Agreement of the International Monetary Fund.

The term “dollars” or “$” means United States dollars of the weight and ﬁneness in effect on July 1, 1944.

Quota: The quota of New Zealand shall be $125 million.
Subscription: The subscription of New Zealand shall be equal to its quota, and not less than $18 million of the subscription shall be paid in gold and the balance in the currency of New Zealand.

Payment and Subscription: The portion of the subscription to be paid in gold shall be paid not later than the day the Articles are signed on behalf of New Zealand.

In case New Zealand does not acquire membership in the Fund the gold so paid shall be returned to it by the Fund.
The remaining part of the sub­ scription which has not been paid in gold shall be paid before the thirtieth day after the initial par value of the currency of 2.

3.

4.

178 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule 4 5.

6.

7.

8.

New Zealand has been agreed in accordance with paragraph 5 below.
Determination of Par Value: Within 30 days after the Fund so requests, New Zealand shall communicate to the Fund a pro­ posed par value for its currency, and within 60 days following the Fund’s receipt of the proposed par value, New Zealand and the Fund shall agree on an initial par value for the currency; provided that the Fund may extend the period of 60 days and that New Zealand shall be deemed to have withdrawn from the Fund if agreement on a par value has not been reached when the extended period expires.
In the period between accept­ ing membership and the establishment of an initial par value pursuant to this paragraph, New Zealand shall not change its exchange rates prevailing at the time of accepting membership without agreement with the Fund after prior consultation.
Exchange Transactions with the Fund: New Zealand may not engage in exchange transactions with the Fund (a) before the thirtieth day after the par value of its currency has been agreed in accordance with paragraph 5 above and (b) before its sub­ scription has been fully paid.
Representation and Information: Before accepting member­ ship in the Fund, New Zealand shall represent to the Fund that it has taken all action necessary to sign and deposit the Instru­ ment of Acceptance and sign the Articles, as contemplated by paragraph 8(a) and (b) of this Resolution, and New Zealand shall furnish to the Fund such information in respect of such action as the Fund may request.
Acceptance of Membership: After the Fund shall have in­ formed the Government of the United States of America that New Zealand has complied with the conditions set forth in paragraph 7 of this Resolution, New Zealand shall become a member of the Fund as of the date when New Zealand shall have complied with the following requirements: (a) New Zealand shall deposit with the Government of the United States of America an instrument stating that it has accepted in accordance with its law the Articles and all the terms and conditions prescribed in this Reso­ lution, and that it has taken all steps necessary to enable 179 Schedule 5 International Finance Agreements Act 1961 Reprinted as at 3 September 2007 9. it to carry out all its obligations under the Articles and this Resolution; and (b) New Zealand shall sign the original copy of the Articles held in the Archives of the Government of the United States of America.
Limitation on Period for Acceptance of Membership: New Zealand may accept membership in the Fund pursuant to this Resolution within 6 months of the effective date of this Reso­ lution, which date shall be the date of its adoption by the Board of Governors; provided, however, that, if extraordinary cir­ cumstances are deemed by the Executive Directors to warrant an extension of the period during which the applicant may ac­ cept membership pursuant to this Resolution, the Executive Directors may extend such period until such later date as they may determine.
Sections 3, 5(b) Schedule 5 Resolution of Board of Governors setting forth the terms and conditions governing admission to membership in the International Bank for Reconstruction and Development WHEREAS, the Government of New Zealand has applied for admis­ sion to membership in the International Bank for Reconstruction and Development in accordance with Section 1(b) of Article II of the Art­ icles of Agreement of the Bank; and WHEREAS, pursuant to Section 20 of the bylaws of the Bank, the Executive Directors, after consultation with representatives of the Government of New Zealand, have made recommendations to the Board of Governors regarding this application; NOW, THEREFORE, the Board of Governors hereby RESOLVES: THAT the terms and conditions upon which New Zealand shall be admitted to membership in the Bank shall be as follows: 1.
Deﬁnitions: As used in this Resolution: 180 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule 5 2.

3.

4.

5.

(a) (b) (c) (d) “Bank” means International Bank for Reconstruction and Development.

“Articles” means the Articles of Agreement of the Bank.

“Dollars” or “$” means United States dollars of the weight and ﬁneness in effect on July 1, 1944.

“Subscription” means the capital stock of the Bank sub­ scribed to by a member.

“Member” means member of the Bank.


(e) Subscription: By accepting membership in the Bank, New Zealand shall subscribe to 1,667 shares of the capital stock of the Bank at the par value of $100,000 per share.

Membership in the Fund: Before accepting membership in the Bank, New Zealand shall accept membership in and become a member of the International Monetary Fund.
Payments on Subscription: (a) Before accepting membership in the Bank, New Zealand shall pay to the Bank on account of the sub­ scription price of one­half of such shares: (i) Gold or United States dollars equal thereof; and to 2% (ii) An amount in its own currency which, at the ap­ propriate prevailing exchange rate, shall be equal to 18% thereof: (b) With respect to the subscription price of the other one­ half of such shares, the 2% portion payable in gold or United States dollars and the 18% portion payable in the currency of the member shall be left uncalled, as set forth in Resolution No 129, on the same basis as the 2% and 18% portions of subscriptions made pursuant to Resolution No 128 of the Board of Governors.
Representation and Information: Before accepting member­ ship in the Bank, New Zealand shall represent to the Bank that it has taken all action necessary to sign and deposit the instru­ ment of acceptance and sign the Articles as contemplated by paragraph 6(d) and (e) of this Resolution and New Zealand shall furnish to the Bank such information in respect of such action as the Bank may request.

181 Schedule 6 International Finance Agreements Act 1961 Reprinted as at 3 September 2007 6.

7.
Acceptance of Membership: New Zealand shall become a member of the Bank, with a subscription as set forth in para­ graph 2 of this Resolution, as of the date when New Zealand shall have complied with the following requirements: Become a member of the International Monetary Fund: (a) (b) Made the payments called for by paragraph 4 of this (c) Resolution: Furnished the representation, and such information as may have been requested, pursuant to paragraph 5 of this Resolution: (d) Deposited with the Government of the United States of America an instrument stating that it has accepted in accordance with its law the Articles and all the terms and conditions prescribed in this Resolution, and that it has taken all steps necessary to enable it to carry out all its obligations under the Articles and this Resolution: Signed the original copy of the Articles held in the Archives of the Government of the United States of America.
(e) Limitation on Period for Acceptance of Membership.

New Zealand may accept membership in the Bank pursuant to this Resolution until January 19, 1962, provided, however, that, if extraordinary circumstances are deemed by the Executive Dir­ ectors to warrant an extension of the period during which New Zealand may accept membership pursuant to this Resolution, the Executive Directors may extend such period.
Schedule 6 Resolution of Board of Governors setting forth the terms and conditions governing admission to membership in the International Finance Corporation Sections 3, 5(c) WHEREAS, the Government of New Zealand has applied for ad­ mission to membership in the International Finance Corporation in accordance with Section 1(b) of Article II of the Articles of Agree­ ment of the Corporation; and 182 Reprinted as at 3 September 2007 International Finance Agreements Act 1961 Schedule 6 WHEREAS, pursuant to Section 17 of the bylaws of the Corporation, the Board of Directors, after consultation with representatives of the Government of New Zealand, have made recommendations to the Board of Governors regarding the application of said Government; NOW THEREFORE, the Board of Governors hereby RESOLVES: THAT the terms and conditions upon which New Zealand shall be admitted to membership in the Corporation shall be as follows: 1.
(b) (c) (d) Deﬁnitions: As used in this Resolution: (a) “Corporation” means International Finance Corpor­ ation: “Articles” means the Articles of Agreement of the Cor­ poration: “Dollars” or “$” means United States dollars: “Subscription” means the capital stock of the Corpor­ ation subscribed by a member: (e) “Member” means member of the Corporation.
Subscription: By accepting membership in the Corporation, New Zealand shall subscribe to 923 shares of the capital stock of the Corporation at the par value of $1,000 per share.

Membership in the Bank: Before accepting membership in the Corporation, New Zealand shall accept membership in and be­ come a member of the International Bank for Reconstruction and Development.
Payments on Subscription: Before accepting membership in the Corporation, New Zealand shall pay $923,000 to the Cor­ poration in full payment of the capital stock subscribed.

Information: Before accepting membership in the Corpor­ ation, New Zealand shall furnish to the Corporation such information relating to its application for membership as the Corporation may request.
Acceptance of Membership: New Zealand shall become a member of the Corporation, with a subscription as set forth in paragraph 2 of this Resolution, as of the date when New Zealand shall have complied with the following requirements: (a) Made the payment called for by paragraph 4 of this Resolution; 183 2.

3.

4.

5.

6.
Schedule 6 International Finance Agreements Act 1961 Reprinted as at 3 September 2007 (b) (c) (d) Furnished such information as may have been requested by the Corporation pursuant to paragraph 5 of this Reso­ lution; Deposited with the International Bank for Reconstruc­ tion and Development an instrument stating that it has accepted without reservation in accordance with its law the Articles and all the terms and conditions prescribed in this Resolution, and that it has taken all steps neces­ sary to enable it to carry out all its obligations under the Articles and this Resolution; and Signed the original copy of the Articles held by the International Bank for Reconstruction and Develop­ ment.
7.

Limitation on Period for Acceptance of Membership: New Zealand may accept membership in the Corporation pursuant to this Resolution until January 19, 1962, provided, however, that, if extraordinary circumstances are deemed by the Board of Directors to warrant an extension of the period during which New Zealand may accept membership pursuant to this Reso­ lution, the Board of Directors may extend such period.

184