26. 9. 90 Official Journal of the European Communities No C 241/1 
II 
(Preparatory Acts) 
COMMISSION 
Proposal for Council Decision on the conclusion of the Articles of Agreement establishing the 
European Bank for Reconstruction and Development 
COM(90) 190 final/2 
(Submitted by the Commission on 8 May 1990) 
(90/C 241/01) 
THE COUNCIL OF THE EUROPEAN COMMUNITIES, 
Having regard to the Treaty instituting the European 
Economic Community, and in particular Article 235 
thereof, 
Having regard to the proposal by the Commission, 
Having regard to the opinion of Parliament, 
Whereas the people of Central and Eastern Europe have close 
historical ties with the people of the Community and whereas 
these ties are being strengthened by agreements for 
cooperation and trade; 
Whereas the countries of Central and Eastern Europe are 
committed to the fundamental principles of multiparty 
democracy, the rule of law, and respect for human rights and 
whereas these countries are willing to implement reforms in 
order to evolve towards market-oriented economies; 
Whereas the economic reforms will contribute in a significant 
way to the vigorous development of economic relations 
between those countries and the Community and whereas 
this will help promote throughout the Community a 
harmonious development of economic activities; 
Whereas the transition to market-oriented economies will 
require considerable investment principally in the private 
sector but also in the public sector; whereas the establishment 
of a special bank could help supply the finance necessary for 
such investment; 
Whereas 40 countries together with the European Economic 
Community and the European Investment Bank have 
signified their intention of becoming members of a European 
Bank for Reconstruction and Development which is 
European in its basic character and broadly international in its membership and have established Articles of Agreement to 
that end; 
Whereas conclusion of the Articles of Agreement by the 
European Economic Community is necessary to achieve the 
Community's objectives in the field of economic external 
relations and whereas the Treaty has not provided other 
powers therefor than those in Article 235, 
HAS DECIDED AS FOLLOWS: 
Article 1 
The Articles of Agreement establishing a European Bank for 
Reconstruction and Development, hereinafter referred to 
respectively as the 'Articles of Agreement' and the 'EBRD' are 
hereby approved on behalf of the European Economic 
Community. The text of the Articles of Agreement is 
annexed to this Decision. 
Article 2 
The Governor and Alternate Governor of the EBRD 
representing the Community under Article 23 (1) of the 
Articles of Agreement shall be appointed by the 
Commission. 
Article 3 
1. The Commission shall designate the institution to act 
as depository under Article 34 (1) of the Articles of 
Agreement. 
2. The Commission shall be the official entity with which 
the EBRD may communicate as laid down in Article 34 (2) of 
the Articles of Agreement. 
No C 241/2 Official Journal of the European Communities 26. 9. 90 
AGREEMENT ESTABLISHING THE EUROPEAN BANK FOR RECONSTRUCTION AND 
DEVELOPMENT 
The Contracting Parties, 
Committed to the fundamental principles of multiparty democracy, the rule of law, respect for human rights and 
market economics; 
Recalling the Final Act of the Helsinki Conference on Security and Cooperation in Europe, and in particular its 
Declaration on Principles; 
Welcoming the intent of Central and Eastern European countries to further the practical implementation of 
multiparty democracy, strengthening democratic institutions, the rule of law and respect for human rights and 
their willingness to implement reforms in order to evolve towards market-oriented economies; 
Considering the importance of close and coordinated cooperation in order to promote the economic progress of 
Central and Eastern European countries to help their economies become more internationally competitive and 
assist them in their reconstruction and development and thus to reduce, where appropriate, any risks related to the 
financing of their economies; 
Convinced that the establishment of a multilateral financial institution which is European in its basic character and 
broadly international in its membership would help serve these ends and would constitute a new and unique 
structure of cooperation in Europe; 
Have agreed to establish hereby the European Bank for Reconstruction and Development (hereinafter called 'the 
Bank') which shall operate in accordance with the following: 
CHAPTER I 
PURPOSE, FUNCTIONS AND MEMBERSHIP 
Article 1 
Purpose 
In contributing to economic progress and reconstruction, the 
purpose of the Bank shall to be foster the transition towards 
open market-oriented economies and to promote private and 
entrepreneurial initiative in the Central and Eastern 
European countries committed to and applying the principles 
of multiparty democracy, pluralism and market 
economics. 
Article 2 
Functions 
1. To fulfil on a long-term basis its purpose of fostering 
the transition of Central and Eastern European countries 
towards open market-oriented economies and the promotion 
of private and entrepreneurial initiative, the Bank shall assist 
the recipient member countries to implement structural and 
sectoral economic reforms, including demonopolization, 
decentralization and privatization, to help their economies 
become fully integrated into the international economy by 
measures: 
(i) to promote, through private and other interested 
investors, the establishment, improvement and expansion of productive, competitive and 
private-sector activity, in particular small and 
medium-sized enterprises; 
(ii) to mobilize domestic and foreign capital and 
experienced management to the end described in 
(i); 
(iii) to foster productive investment, including in the 
service and financial sectors, and in related 
infrastructure where that is necessary to support 
private and entrepreneurial initiative, thereby 
assisting in making a competitive environment and " 
raising productivity, the standard of living and 
conditions of labour; 
(iv) to provide technical assistance for the preparation, 
financing and implementation of relevant projects, 
whether individual or in the context of specific 
investment programmes; 
(v) to stimulate and encourage the development of capital 
markets; 
(vi) to give support to sound and economically viable 
projects involving more than one recipient member 
country; 
(vii) to promote in the full range of its activities 
environmentally sound and sustainable development; 
and 
(viii) to undertake such other activities and provide such 
other services as may further these functions. 
26. 9. 90 Official Journal of the European Communities No C 241/3 
2. In carrying out the functions referred to in paragraph 1 
of this Article, the Bank shall work in close cooperation with 
all its members and, in such manner as it may deem 
appropriate within the terms of this Agreement, with the 
International Monetary Fund, the International Bank for 
Reconstruction and Development, the International Finance 
Corporation, the Multilateral Investment Guarantee 
Agency, and the Organization for Economic Cooperation 
and Development, and shall cooperate with the United 
Nations and its Specialized Agencies and other related 
bodies, and any entity, whether public or private, concerned 
with the economic development of, and investment in, 
Central and Eastern European countries. 
Article 3 
Membership 
1. Membership in the Bank shall be open: 
(i) to (1) European countries and (2) non-European 
countries which are members of the International 
Monetary Fund; and 
(ii) to the European Economic Community and the 
European Investment Bank. 
2. Countries eligible for membership under paragraph 1 
of this Article, which do not become members in accordance 
with Article 61 of this Agreement, may be admitted, under 
such terms and conditions as the Bank may determine, to 
membership in the Bank upon the affirmative vote of not less 
than two-thirds of the Governors, representing not less than 
three-fourths of the total voting power of the members. 
CHAPTER II 
CAPITAL 
Article 4 
Authorized capital stock 
1. The original authorized capital stock shall be ECU 
10 000 million. It shall be divided into one million shares, 
having a par value of ECU 10 000 each, which shall be 
available for subscription only by members in accordance 
with the provisions of Article 5 of this Agreement. 
2. The original capital stock shall be divided into paid-in 
shares and callable shares. The initial total aggregate par 
value of paid-in shares shall be ECU 3 000 million. 
3. The authorized capital stock may be increased at such 
time and under such terms as may seem advisable, by a vote 
of not less than two-thirds of the Governors, representing not 
less than three-fourths of the total voting power of the 
members. Article 5 
Subscription of shares 
1. Each member shall subscribe to shares of the capital 
stock of the Bank, subject to fulfilment of the member's legal 
requirements. Each subscription to the original authorized 
capital stock shall be for paid-in shares and callable shares in 
the proportion of three to seven. The initial number of shares 
available to be subscribed to by Signatories to this Agreement 
which become members in accordance with Article 61 of this 
Agreement shall be that set forth in Annex A. No member 
shall have an initial subscription of less than 100 shares. 
2. The initial number of shares to be subscribed to by 
countries which are admitted to membership in accordance 
with paragraph 2 of Article 3 of this Agreement shall be 
determined by the Board of Governors; provided, however, 
that no such subscription shall be authorized which would 
have the effect of reducing the percentage of capital stock 
held by countries which are members of the European 
Economic Community, together with the European 
Economic Community and the European Investment Bank, 
below the majority of the total subscribed capital stock. 
3. The Board of Governors shall at intervals of not more 
than five years review the capital stock of the Bank. In case of 
an increase in the authorized capital Steele, each member 
shall have a reasonable opportunity to subscribe, under such 
uniform terms and conditions as the Board of Governors 
shall determine, to a proportion of the increase in stock 
equivalent to the proportion which its stock subscribed bears 
to the total subscribed capital stock immediately prior to 
such increase. No member shall be obliged to subscribe to 
any part of an increase of capital stock. 
4. Subject to the provisions of paragraph 3 of this Article, 
the Board of Governors may, at the request of a member, 
increase the subscription of that member, or allocate shares 
to that member within the authorized capital stock which are 
not taken up by other members; provided, however, that 
such increase shall not have the effect of reducing the 
percentage of capital stock held by countries which are 
members of the European Economic Community, together 
with the European Economic Community and the European 
Investment Bank, below the majority of the total subscribed 
capital stock. 
5. Shares of stock initially subscribed to by members shall 
be issued at par. Other shares shall be issued at par unless the 
Board of Governors, by a vote of not less than two-thirds of 
the Governors, representing not less than two-thirds of the 
total voting power of the members, decides to issue them in 
special circumstances on other terms. 
6. Shares of stock shall not be pledged or encumbered in 
any manner whatsoever, and they shall not be transferable 
except to the Bank in accordance with Chapter VII of this 
Agreement. 
7. The liability of the members on shares shall be limited 
to the unpaid portion of their issue price. No member shall be 
liable, by reason of its membership, for obligations of the 
Bank. 
No C 241/4 Official Journal of the European Communities 26. 9. 90 
Article 6 
Payment of subscriptions 
1. Payment of the paid-in shares of the amount initially 
subscribed to by each Signatory to this Agreement, which 
becomes a member in accordance with Article 61 of this 
Agreement, shall be made in five instalments of 20 % each of 
such amount. The first instalment shall be paid by each 
member within 60 days after the date of the entry into force 
of this Agreement, or after the date of deposit of its 
instrument of ratification, acceptance or approval in 
accordance with Article 61, if this latter is later than the date 
of the entry into force. The remaining four instalments shall 
each become due successively one year from the date on 
which the preceding instalment became due and shall each, 
subject to the legislative requirements of each member, be 
paid. 
2. 50% of payment of each instalment pursuant to 
paragraph 1 of this Article, or by a member admitted in 
accordance with paragraph 2 of Article 3 of this Agreement, 
may be made in promissory notes or other obligations issued 
by such member and denominated in ecus, in United States 
dollars or in Japanese yen, to be drawn down as the Bank 
needs funds for disbursement as a result of its operations. 
Such notes or obligations shall be non-negotiable, 
non-interest-bearing and payable to the Bank at par value 
upon demand. Demands upon such notes or obligations 
shall, over reasonable periods of time, be made so that the 
value of such demands in ecus at the time of demand from 
each member is proportional to the number of paid-in shares 
subscribed to and held by each such member depositing such 
notes or obligations. 
3. All payment obligations of a member in respect of 
subscription to shares in the initial capital stock shall be 
settled either in ecus, in United States dollars or in Japanese 
yen on the basis of the average exchange rate of the relevant 
currency in terms of the ecu for the period from 30 September 
1989 to 31 March 1990 inclusive. 
4. Payment of the amount subscribed to the callable 
capital stock of the Bank shall be subject to call, taking 
account of Articles 17 and 42 of this Agreement, only as and 
when required by the Bank to meet its liabilities. 
5. In the event of a call referred to in paragraph 4 of this 
Article, payment shall be made by the member in ecus, in 
United States dollars or in Japanese yen. Such calls shall be 
uniform in ecu value upon each callable share calculated at 
the time of the call. 
6. The Bank shall determine the place for any payment 
under this Article not later than one month after the 
inaugural meeting of its Board of Governors, provided that, 
before such determination, the payment of the first 
instalment referred to in paragraph 1 of this Article shall be 
made to the European Investment Bank, as trustee for the 
Bank. 7. For subscriptions other than those described in 
paragraphs 1, 2 and 3 of this Article, payments by a member 
in respect of subscription to paid-in shares in the authorized 
capital stock shall be made in ecus, in United States dollars or 
in Japanese yen whether in cash or in promissory notes or in 
other obligations. 
8. For the purposes of this Article, payment or 
denomination in ecus shall include payment or denomination 
in any fully convertible currency which is equivalent on the 
date of payment or encashment to the value of the relevant 
obligation in ecus. 
Article 7 
Ordinary capital resources 
As used in this Agreement, the term 'ordinary capital 
resources' of the Bank shall include the following: 
(i) authorized capital stock of the Bank, including both 
paid-in and callable shares, subscribed to pursuant to 
Article 5 of this Agreement; 
(ii) funds raised by borrowings of the Bank by virtue of 
powers conferred by subparagraph (i) of Article 20 of 
this Agreement, to which the commitment to calls 
provided for in paragraph 4 of Article 6 of this 
Agreement is applicable; 
(iii) funds received in repayment of loans or guarantees and 
proceeds from the disposal of equity investment made 
with the resources indicated in subparagraphs (i) and 
(ii) of this Article; 
(iv) income derived from loans and equity investment, 
made from the resources indicated in subparagraphs (i) 
and (ii) of this Article, and income derived from 
guarantees and underwriting not forming part of the 
special operations of the Bank; and 
(v) any other funds or income received by the Bank which 
do not form part of its Special Funds resources referred 
to in Article 19 of this Agreement. 
CHAPTER III 
OPERATIONS 
Article 8 
Recipient countries and use of resources 
1. The resources and facilities of the Bank shall be used 
exclusively to implement the purpose and carry out the 
functions set forth, respectively, in Articles 1 and 2 of this 
Agreement. 
2. The Bank may conduct its operations in countries from 
Central and Eastern Europe which are proceeding steadily in 
the transition towards market-oriented economies and the 
promotion of private and entrepreneurial initiative, and 
which apply, by concrete steps and otherwise, the principles 
as set forth in Article 1 of this Agreement. 
^,^0 Official journal of the European Communities c^oC^tB^ 
^. In cases where a member mi^ht he implementing 
policies which are inconsistent with Article! of this 
Agreement, or in exceptional circumstances, the ^oard of 
directors shall considerwhether access byamemberto^anl^ 
resources shouldhesuspendedor otherwise modified and 
maymal^erecommendationsaccordm^ly tothe^oardof 
C^o^ernors.Any decision on these matters shall betaken by 
the ^oard of governors hy a majority of not less than 
twoDthirds of the C^o^ernors, representing not less than 
threefourths of the total ^otin^ power of the members. 
^. ^ Any potential recipient country may request that 
the ^anl^ provide access to its resources for limited 
purposeso^erapenodof three yearsbe^mnm^ 
after the entry into force of this Agreement, Any 
such request shall he attached as an integral part of 
this Agreement as soon as it is made. 
^ tOunn^suchapenod^ 
^ the ^anl^ shall provide to suchacountry,and 
to enterprises in its territory, upon their 
request,technical assistance and othertypesof 
assistancedirectedtofmanceitspn^atesector, 
to facilitate the transition of ^tateDowned 
enterprises to private ownership and control, 
and to help enterprises operating 
competitively and mo^m^ to participation in 
themarleetonentedeconomy,suh^ecttothe 
proportion set forth m para^raph^ of 
ArticleMofthisA^reement^ 
d^ the total amount of any assistance thus 
provided shall not exceed the total amount of 
cash disbursed and promissorynotes issued hy 
that country for its shares. 
^nd Atthe end ofthis period,the decision to allow such 
a country access beyond the limits specified in 
subpa^a^raphs^ and d^ shallbetaleenby the 
^oard of (Governors byama^onty of not less than 
threefourthsoftheC^o^ernorsrepresentm^notless 
than ^^ of the total ^otm^ power of the 
members. 
Ar^^ 
Ordinary and special operations 
The operations of the ^anl^ shall consist of ordinary 
operations financed from the ordinary capital resources of 
the^anl^referredtoinArticle^ofthisA^reementandspecial 
operations financed from the special rounds resources 
referred to in Article l^ofthis Agreement.The two types of 
operations may be combined. 
Ar^^^ 
reparation of operations 
P The ordinary capital resources and the special ^unds 
resources of the ^anl^ shall at all times and in all respects be held, used, committed, m^estedorotherwisedisposedof 
entirely separately from each other. The financial statements 
ofthe^an^shallshowthereser^esoftheBanl^go^etherwith 
its ordinary operations, and, separately, its special 
operations. 
2. The ordinary capital resources of the ^anle shall under 
nocircumstances bechar^ed with, or used todischar^e, 
losses or liabilities arising out of special operations or other 
activities for which special rounds resources were originally 
used or committed. 
^. L^penses appertaining directly to ordinary operations 
shall bechar^ed to theordmarycapitalresourcesofthe^anm 
L^penses appertaining directly to special operations shall be 
charged to special l^unds resources. Any other expenses 
shall,sub^ecttopara^raphlof Article l^ofthis Agreement, 
be charged as the ^anl^ shall determine. 
Ar^^ 
methods of operation 
1. The ^anl^ shall carry out its operations in furtherance 
of its purpose and functions as set out in Articlesland^of 
this A^reementmany or all of the following ways. 
^d by mal^in^, or cofinancin^ together with multilateral 
institutions, commercial banl^s or other interested 
sources, or participating in, loans to pn^ateDsector 
enterprises, loans to any ^tate^owned enterprise 
operating competitively and mo^in^ to participationm 
the marl^et^oriented economy, and loans to any 
^tateDowned enterprise to facilitate its transition to 
private ownership and controls in particular to 
facihtateorenhancetheparticipationofpn^ateand^or 
foreign capital in such enterprises^ 
^id ^ by investment in the equity capital of 
pn^ateDsector enterprises^ 
^d by investment in the equity capital of any 
^tateDowned enterprise operating competitively 
and mo^in^ to participation in the 
marleetonented economy,and investment in the 
equity capital of any ^tateDowned enterprise to 
facilitate its t^ansitiontopn^ateownershipand 
cont^ol^ in particular to facilitate or enhance the 
participation of private and^or foreign capital in 
such enterprises^ and 
^ by underwntm^,where other means of financing 
are not appropriate, the equity issue of securities 
by both pri^ate^sector enterprises and such 
^tate^owned enterprises referred tom^abo^efor 
the ends mentioned in that subparagraphs 
^nd by facilitating access to domestic and international 
capitalmarl^etsbypri^ateDsectorenterprisesor by other 
enterprises referred to in subparagraphs of this 
No C 241/6 Official Journal of the European Communities 26. 9. 90 
paragraph for the ends mentioned in that 
subparagraph, through the provision of guarantees, 
where other means of financing are not appropriate, 
and through financial advice and other forms of 
assistance; 
(iv) by deploying Special Funds resources in accordance 
with the agreements determining their use; and 
(v) by making or participating in loans and providing 
technical assistance for the reconstruction or 
development of infrastructure, including 
environmental programmes, necessary for 
private-sector development and the transition to a 
market-oriented economy. 
For the purposes of this paragraph, a State-owned enterprise 
shall not be regarded as operating competitively unless it 
operates autonomously in a competitive market environment 
and unless it is subject to bankruptcy laws. 
2. (i) The Board of Directors shall review at least 
annually the Bank's operations and lending strategy 
in each recipient country to ensure that the purpose 
and the functions of the Bank, as set out in 
Articles 1 and 2 of this Agreement, are fully served. 
Any decision pursuant to such a review shall be 
taken by a majority of not less than two-thirds of 
the Directors, representing not less than 
three-fourths of the total voting power of the 
members. 
(ii) The said review shall involve the consideration of, 
inter alia, each recipient country's progress made 
on decentralization, demonopolization and 
privatization and the relative shares of the Bank's 
lending to private enterprises, to State-owned 
enterprises in the process of transition to 
participation in the market-oriented economy or 
privatization, for infrastructure, for technical 
assistance, and for other purposes. 
3. (i) Not more than 40% of the amount of the Bank's 
total committed loans, guarantees and equity 
investments, without prejudice to its other 
operations referred to in this Article, shall be 
provided to the State sector. Such percentage limit 
shall apply initially over a two-year period, from 
the date of commencement of the Bank's 
operations, taking one year with another, and 
thereafter in respect of each subsequent financial 
year. 
(ii) For any country, not more than 40% of the 
amount of the Bank's total committed loans, 
guarantees and equity investments over a period of 
five years, taking one year with another, and 
without prejudice to the Bank's other operations 
referred to in this Article, shall be provided to the 
State sector. 
(iii) For the purposes of this paragraph: 
(a) the State sector includes national and local 
governments, their agencies, and enterprises 
owned or controlled by any of them; (b) a loan or guarantee to, or equity investment in, 
a State-owned enterprise which is 
implementing a programme to achieve private 
ownership and control shall not be considered 
as made to the State sector; 
(c) loans to a financial intermediary for onlending 
to the private sector shall not be considered as 
made to the State sector. 
Article 12 
Limitations on ordinary operations 
1. The total amount of outstanding loans, equity 
investments and guarantees made by the Bank in its ordinary 
operations shall not be increased at any time, if by such 
increase the total amount of its unimpaired subscribed 
capital, reserves and surpluses included in its ordinary capital 
resources would be exceeded. 
2. The amount of any equity investment shall not 
normally exceed such percentage of the equity capital of the 
enterprise concerned as shall be determined, by a general 
rule, to be appropriate by the Board of Directors. The Bank 
shall not seek to obtain by such an investment a controlling 
interest in the enterprise concerned and shall not exercise 
such control or assume direct responsibility for managing 
any enterprise in which it has an investment, except in the 
event of actual or threatened default on any of its 
investments, actual or threatened insolvency of the enterprise 
in which such investment shall have been made, or other 
situations which, in the opinion of the Bank, threaten to 
jeopardize such investment, in which case the Bank may take 
such action and exercise such rights as it may deem necessary 
for the protection of its interests. 
3. The amount of the Bank's disbursed equity investments 
shall not at any time exceed an amount corresponding to its 
total unimpaired paid-in subscribed capital, surpluses and 
general reserve. 
4. The Bank shall not issue guarantees for export credits 
nor undertake insurance activities. 
Article 13 
Operating principles 
The Bank shall operate in accordance with the following 
principles: 
(i) the Bank shall apply sound banking principles to all its 
operations; 
(ii) the operations of the Bank shall provide for the 
financing of specific projects, whether individual or in 
26. 9. 90 Official Journal of the European Communities No C 241/7 
the context of specific investment programmes, and 
for technical assistance, designed to fulfil its purpose 
and functions as set out in Articles 1 and 2 of this 
Agreement; are used only for the purposes for which the loan or the 
equity investment was granted and with due attention 
to considerations of economy and efficiency. 
(iii) the Bank shall not finance any undertaking in the 
territory of a member if that member objects to such 
financing; 
(iv) the Bank shall not allow a disproportionate amount of 
its resources to be used for the benefit of any 
member; 
(v) the Bank shall seek to maintain reasonable 
diversification in all its investments; 
(vi) before a loan, guarantee or equity investment is 
granted, the applicant shall have submitted an 
adequate proposal and the President of the Bank shall 
have presented to the Board of Directors a written 
report regarding the proposal, together with 
recommendations, on the basis of a staff study; 
(vii) the Bank shall not undertake any financing, or provide 
any facilities, when the applicant is able to obtain 
sufficient financing or facilities elsewhere on terms 
and conditions that the Bank considers reasonable; 
(viii) in providing or guaranteeing financing, the Bank shall 
pay due regard to the prospect that the borrower and 
its guarantor, if any, will be in a position to meet their 
obligations under the financing contract; 
(ix) in case of a direct loan made by the Bank, the borrower 
shall be permitted by the Bank to draw its funds only 
to meet expenditure as it is actually incurred; 
(x) the Bank shall seek to revolve its funds by selling its 
investments to private investors whenever it can 
apropriately do so on satisfactory terms; 
(xi) . in its investments in individual enterprises, the Bank 
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 Bank, and the terms and conditions 
normally obtained by private investors for similar 
financing; 
(xii) the Bank shall place no restriction upon the 
procurement of goods and services from any country 
from the proceeds of any loan, investment or other 
financing undertaken in the ordinary or special 
operations of the Bank, and shall, in all appropriate 
cases, make its loans and other operations conditional 
on international invitations to tender being arranged; 
and 
(xiii) the Bank shall take the necessary measures to ensure 
that the proceeds of any loan made, guaranteed or 
participated in by the Bank, or any equity investment, Article 14 
Terms and conditions for loans and guarantees 
1. In the case of loans made, participated in, or 
guaranteed by the Bank, the contract shall establish the terms 
and conditions for the loan or the guarantee concerned, 
including those relating to payment of principal, interest and 
other fees, charges, maturities and dates of payment in 
respect of the loan or the guarantee, respectively. In setting 
such terms and conditions, the Bank shall take fully into 
account the need to safeguard its income. 
2. Where the recipient of loans or guarantees of loans is 
not itself a member, but is a State-owned enterprise, the Bank 
may, when it appears desirable, bearing in mind the different 
approaches appropriate to public and State-owned 
enterprises in transition to private ownership and control, 
require the member or members in whose territory the 
project concerned is to be carried out, or a public agency or 
any instrumentality of such member or members acceptable 
to the Bank, to guarantee the repayment of the principal and 
the payment of interest and other fees and charges of the loan 
in accordance with the terms thereof. The Board of Directors 
shall review annually the Bank's practice in this matter, 
paying due attention to the Bank's creditworthiness. 
3. ' The loan or guarantee contract shall expressly state the 
currency or currencies, or ecus, in which all payments to the 
Bank thereunder shall be made. 
Article 15 
Commission and fees 
1. The Bank shall charge, in addition to interest, a 
commission on loans made or participated in as part of its 
ordinary operations. The terms and conditions of this 
commission shall be determined by the Board of 
Directors. 
2. In guaranteeing a loan as part of its ordinary 
operations, or in underwriting the sale of securities, the Bank 
shall charge fees, payable at rates and times determined by 
the Board of Directors, to provide suitable compensation for 
its risks. 
3. The Board of Directors may determine any other 
charges of the Bank in its ordinary operations and any 
commission, fees or other charges in its special 
operations. 
No C 241 / 8 Official Journal of the 
Article 16 
Special Reserve 
1. The amount of commissions and fees received by the 
Bank pursuant to Article 15 of this Agreement shall be set 
aside as a special reserve which shall be kept for meeting the 
losses of the Bank in accordance with Article 17 of this 
Agreement. The special reserve shall be held in such liquid 
form as the Bank may decide. 
2. If the Board of Directors determines that the size of the 
special reserve is adequate, it may decide that all or part of the 
said commission or fees shall henceforth form part of the 
income of the Bank. 
Article 17 
Methods of meeting the losses of the Bank 
1. In the Bank's ordinary operations, in cases of arrears or 
default on loans made, participated in, or guaranteed by the 
Bank, and in cases of losses on underwriting and in equity 
investment, the Bank shall take such action as it deems 
appropriate. The Bank shall maintain appropriate provisions 
against possible losses. 
2. Losses arising in the Bank's ordinary operations shall 
be charged: 
(i) first, to the provisions referred to in paragraph 1 of this 
Article; 
(ii) second, to net income; 
(iii) third, against the special reserve provided for in 
Article 16 of this Agreement; 
(iv) fourth, against its general reserve and surpluses; 
(v) fifth, against the unimpaired paid-in capital; and 
(vi) last, against an appropriate amount of the uncalled 
subscribed callable capital which shall be called in 
accordance with the provisions of paragraphs 4 and 5 
of Article 6 of this Agreement. 
Article 18 
Special Funds 
1. The Bank may accept the administration of Special 
Funds which are designed to serve the purpose and come 
within the functions of the Bank. The full cost of 
administering any such Special Fund shall be charged to that 
Special Fund. 
2. Special Funds accepted by the Bank may be used in any 
manner and on any terms and conditions consistent with the 
purpose and the functions of the Bank, with the other 
applicable provisions of this Agreement, and with the 
agreement or agreements relating to such Funds. 
3. The Bank shall adopt such rules and regulations as may 
be required for the establishment, administration and use of European Communities 26. 9. 90 
each Special Fund. Such rules and regulations shall be 
consistent with the provisions of this Agreement, except for 
those provisions expressly applicable only to ordinary 
operations of the Bank. 
Article 19 
Special Funds resources 
The term 'Special Funds resources' shall refer to the resources 
of any Special Fund and shall include: 
(i) funds accepted by the Bank for inclusion in any Special 
Fund; 
(ii) funds repaid in respect of loans or guarantees, and the 
proceeds of equity investments, financed from the 
resources of any Special Fund which, under the rules 
and regulations governing that Special Fund, are 
received by such Special Fund; and 
(iii) income derived from investment of Special Funds 
resources. 
CHAPTER IV 
BORROWING AND OTHER MISCELLANEOUS POWERS 
Article 20 
General Powers 
1. The Bank shall have, in addition to the powers 
specified elsewhere in this Agreement, the power to: 
(i) borrow funds in member countries or elsewhere, 
provided always that: 
(a) before making a sale of its obligations in the 
territory of a country, the Bank shall have obtained 
its approval; and 
(b) where the obligations of the Bank are to be 
denominated in the currency of a member, the 
Bank shall have obtained its approval; 
(ii) invest or deposit funds not needed in its operations; 
(iii) buy and sell securities, in the secondary market, which 
the Bank has issued or guaranteed or in which it has 
invested; 
(iv) guarantee securities in which it has invested in order to 
facilitate their sale; 
(v) underwrite, or participate in the underwriting of, 
securities issued by any enterprise for purposes 
consistent with the purpose and functions of the 
Bank; 
(vi) provide technical advice and assistance which serve its 
purpose and come within its functions; 
(vii) exercise such other powers and adopt such rules and 
regulations as may be necessary or appropriate in 
furtherance of its purpose and functions, consistent 
with the provisions of this Agreement; and 
26. 9. 90 Official Journal of the European Communities No C 241/9 
(viii) conclude agreements of cooperation with any public or 
private entity or entities. 
2. Every security issued or guaranteed by the Bank shall 
bear on its face a conspicuous statement to the effect that it is 
not an obligation of any government or member, unless it is 
in fact the obligation of a particular government or member, 
in which case it shall so state. 
CHAPTER V 
CURRENCIES 
Article 21 
Determination and use of currencies 
1. Whenever it shall become necessary under this 
Agreement to determine whether any currency is fully 
convertible for the purposes of this Agreement, such 
determination shall be made by the Bank, taking into account 
the paramount need to preserve its own financial interests, 
after consultation, if necessary, with the International 
Monetary Fund. 
2. Members shall not impose any restrictions on the 
receipt, holding, use or transfer by the Bank of the 
following: 
(i) currencies or ecus received by the Bank in payment of 
subscriptions to its capital stock, in accordance with 
Article 6 of this Agreement; 
(ii) currencies obtained by the Bank by borrowing; 
(iii) currencies and other resources administered by the 
Bank as contributions to special Funds; and 
(iv) currencies received by the Bank in payment on account 
of principal, interest, dividends or other charges in 
respect of loans or investments, or the proceeds of 
disposal of such investments made out of any of the 
funds referred to in subparagraphs (i) to (iii) of this 
paragraph, or in payment of commission, fees or other 
charges. 
CHAPTER VI 
ORGANIZATION AND MANAGEMENT 
Article 22 
Structure 
The Bank shall have a Board of Governors, a Board of 
Directors, a President, one or more Vice-Presidents and such 
other officers and staff as may be considered necessary. Article 23 
Board of Governors: Composition 
1. Each member shall be represented on the Board of 
Governors and shall appoint one Governor and one 
Alternate. Each Governor and Alternate shall serve at the 
pleasure of the appointing member. No Alternate may vote 
except in the absence of his or her principal. At each of its 
annual meetings, the Board shall elect one of the Governors 
as Chairman who shall hold office until the election of the 
next Chairman. 
2. Governors and Alternates shall serve as such without 
remuneration from the Bank. 
Article 24 
Board of Governors: powers 
1. All the powers of the Bank shall be vested in the Board 
of Governors. 
2. The Board of Governors may delegate to the Board of 
Directors any or all of its powers, except the power to: 
(i) admit new members and determine the conditions of 
their admission; 
(ii) increase or decrease the authorized capital stock of the 
Bank; 
(iii) suspend a member; 
(iv) decide appeals from interpretations or applications of 
this Agreement given by the Board of Directors; 
(v) authorize the conclusion of general agreements for 
cooperation with other international organizations; 
(vi) elect the Directors and the President of the Bank; 
(vii) determine the remuneration of the Directors and 
Alternate Directors and the salary and other terms of 
the contract of service of the President; 
(viii) approve, after reviewing the auditors' report, the 
general balance sheet and the statement of profit and 
loss of the Bank; 
(ix) determine the reserves and the allocation and 
distribution of the net profits of the Bank; 
(x) amend this Agreement; 
(xi) decide to terminate the operations of the Bank and to 
distribute its assets; and 
(xii) exercise such other powers as are expressly assigned to 
the Board of Governors in this Agreement. 
No C 241/10 Official Journal of the European Communities 26. 9. 90 
3. The Board of Governors shall retain full power to 
exercise authority over any matter delegated or assigned to 
the Board of Directors under paragraph 2 of this Article, or 
elsewhere in this Agreement. 
Article 25 
Board of Governors: procedure 
1. The Board of Governors shall hold an annual meeting 
and such other meetings as may be provided for by the Board 
or called by the Board of Directors. Meetings of the Board of 
Governors shall be called, by the Board of Directors, 
whenever requested by not less than five members of the 
Bank or members holding not less than one-quarter of the 
total voting power of the members. 
2. Two-thirds of the Governors shall constitute a quorum 
for any meeting of the Board of Governors, provided such 
majority represents not less than two-thirds of the total 
voting power of the members. 
3. The Board of Governors may by regulation establish a 
procedure whereby the Board of Directors may, when the 
latter deems such action advisable, obtain a vote of the 
Governors on a specific question without calling a meeting of 
the Board of Governors. 
4. The Board of Governors, and the Board of Directors to 
the extent authorized, may adopt such rules and regulations 
and establish such subsidiary bodies as may be necessary or 
appropriate to conduct the business of the Bank. 
Article 26 
Board of Directors: composition 
1. The Board of Directors shall be composed of 23 
members who shall not be members of the Board of 
Governors, and of whom: 
(i) 11 shall be elected by the Governors representing 
Belgium, Denmark, France, the Federal Republic of 
Germany, Greece, Ireland, Italy, Luxembourg, the 
Netherlands, Portugal, Spain, the United Kingdom, the 
European Economic Community and the European 
Investment Bank; and 
(ii) 12 shall be elected by the Governors representing other 
members, of whom: 
(a) four, by th e Governors representing those countries 
listed in Annex A as Central and Eastern European 
countries eligible for assistance from the Bank; 
(b) four, by the Governors representing those countries 
listed in Annex A as other European countries; 
(c) four, by the Governors representing those countries 
listed in Annex A as non-European countries. Directors, as well as representing members whose Governors 
have elected them, may also represent members who assign 
their votes to them. 
2. Directors shall be persons of high competence in 
economic and financial matters and shall be elected in 
accordance with Annex B. 
3. The Board of Governors may increase or decrease the 
size, or revise the composition, of the Board of Directors, in 
order to take into account changes in the number of members 
of the Bank, by an affirmative vote of not less than two-thirds 
of the Governors, representing not less than three-fourths of 
the total voting power of the members. Without prejudice to 
the exercise of these powers for subsequent elections, the 
number and composition of the second Board of Directors 
shall be as set out in paragraph 1 of this Article. 
4. Each Director shall appoint an Alternate with full 
power to act for him or her when he or she is not present. 
Directors and Alternates shall be nationals of member 
countries. No member shall be represented by more than one 
Director. An Alternate may participate in meetings of the 
Board but may vote only when he or she is acting in place of 
his or her principal. 
5. Directors shall hold office for a term of three years and 
may be re-elected; provided that the first Board of Directors 
shall be elected by the Board of Governors at its inaugural 
meeting, and shall hold office until the next immediately 
following annual meeting of the Board of Governors or, if 
that Board shall so decide at that annual meeting, until its 
next subsequent annual meeting. They shall continue in 
office until their successors shall have been chosen and 
assumed office. If the office of a Director becomes vacant 
more than 180 days before the end of his or her term, a 
successor shall be chosen in accordance with Annex B, for 
the remainder of the term, by the Governors who elected the 
former Director. A majority of the votes cast by such 
Governors shall be required for such election. If the office of a 
Director becomes vacant 180 days or less before the end of 
his or her term, a successor may similarly be chosen for the 
remainder of the term, by the votes cast by such Governors 
who elected the former Director, in which election a majority 
of the votes cast by such Governors shall be required. While 
the office remains vacant, the Alternate of the former 
Director shall exercise the powers of the latter, except that of 
appointing an Alternate. 
Article 27 
Board of Directors: powers 
Without prejudice to the powers of the Board of Governors 
as provided in Article 24 of this Agreement, the Board of 
Directors shall be responsible for the direction of the general 
operations of the Bank and, for this purpose shall, in addition 
to the powers assigned to it expressly by this Agreement, 
exercise all the powers delegated to it by the Board of 
Governors, and in particular: 
(i) prepare the work of the Board of Governors; 
26. 9. 90 Official Journal of the European Communities No C 241/11 
(ii) in conformity with the general directions of the Board 
of Governors, establish policies and take decisions 
concerning loans, guarantees, investments in equity 
capital, borrowing by the Bank, the furnishing of 
technical assistance, and other operations of the 
Bank; 
(iii) submit the audited accounts for each financial year for 
approval of the Board of Governors at each annual 
meeting; and 
(iv) approve the budget of the Bank. 
Article 28 
Board of Directors: procedure 
1. The Board of Directors shall normally function at the 
principal office of the Bank and shall meet as often as the 
business of the Bank may require. 
2. A majority of the Directors shall constitute a quorum 
for any meeting of the Board of Directors, provided such 
majority represents not less than two-thirds of the total 
voting power of the members. 
3. The Board of Governors shall adopt regulations under 
which, if there is no Director of its nationality, a member may 
send a representative to attend, without right to vote, any 
meeting of the Board of Directors when a matter particularly 
affecting that member is under consideration. 
Article 29 
Voting 
1. The voting power of each member shall be equal to the 
number of its subscribed shares in the capital stock of the 
Bank. In the event of any member failing to pay any part of 
the amount due in respect of its obligations in relation to 
paid-in shares under Article 6 of this Agreement, such 
member shall be unable for so long as such failure continues 
to exercise that percentage of its voting power which 
corresponds to the percentage which the amount due but 
unpaid bears to the total amount of paid-in shares subscribed 
to by that member in the capital stock of the Bank. 
2. In voting in the Board of Governors, each Governor 
shall be entitled to cast the votes of the member he or she 
represents. Except as otherwise expressly provided in this 
Agreement, all matters before the Board of Governors shall 
be decided by a majority of the voting power of the members 
voting. 
3. In voting in the Board of Directors each Director shall 
be entitled to cast the number of votes to which the 
Governors who have elected him or her are entitled and those 
to which any Governors who have assigned their votes to him 
or her, pursuant to Section D of Annex B, are entitled. A 
Director representing more than one member may cast 
separately the votes of the members he or she represents. Except as otherwise expressly provided in this Agreement, 
and except for general policy decisions in which cases such 
policy decisions shall be taken by a majority of not less than 
two-thirds of the total voting power of the members voting, 
all matters before the Board of Directors shall be decided by a 
majority of the voting power of the members voting. 
Article 30 
The President 
1. The Board of Governors, by a vote of a majority of the 
total number of Governors, representing not less than a 
majority of the total voting power of the members, shall elect 
a President of the Bank. The President, while holding office, 
shall not be a Governor or a Director or an Alternate for 
either. 
2. The term of office of the President shall be four years. 
He or she may be re-elected. He or she shall, however, cease 
to hold office when the Board of Governors so decides by an 
affirmative vote of not less than two-thirds of the Governors, 
representing not less than two-thirds of the total voting 
power of the members. If the office of the President for any 
reason becomes vacant, the Board of Governors, in 
accordance with the provisions of paragraph 1 of this 
Article, shall elect a successor for up to four years. 
3. The President shall not vote, except that he or she may 
cast a deciding vote in case of an equal division. He or she 
may participate in meetings of the Board of Governors and 
shall chair the meetings of the Board of Directors. 
4. The President shall be the legal representative of the 
Bank. 
5. The President shall be chief of the staff of the Bank. He 
or she shall be responsible for the organization, appointment 
and dismissal of the officers and staff in accordance with 
regulations to be adopted by the Board of Directors. In 
appointing officers and staff, he or she shall, subject to the 
paramount importance of efficiency and technical 
competence, pay due regard to recruitment on a wide 
geographical basis among members of the Bank. 
6. The President shall conduct, under the direction of the 
Board of Directors, the current business of the Bank. 
Article 31 
Vice President(s) 
1. One or more Vice-Presidents shall be appointed by the 
Board of Directors on the recommendation of the President. 
A Vice-President shall hold office for such term, exercise such 
authority and perform such functions in the administration 
of the Bank, as may be determined by the Board of Directors. 
In the absence or incapacity of the President, a Vice-President 
shall exercise the authority and perform the functions of the 
President. 
No C 241/12 Official Journal of the European Communities 26. 9. 90 
2. A Vice-President may participate in meetings of the 
Board of Directors but shall have no vote at such meetings, 
except that he or she may cast the deciding vote when acting 
in place of the President. 
Article 32 
International character of the Bank 
1. The Bank shall not accept Special Funds or other loans 
or assistance that may in any way prejudice, deflect or 
otherwise alter its purpose or functions. 
2. The Bank, its President, Vice-President(s), officers and 
staff shall in their decisions take into account only 
considerations relevant to the Bank's purpose, functions and 
operations, as set out in this Agreement. Such considerations 
shall be weighed impartially in order to achieve and carry out 
the purpose and functions of the Bank. 
3. The President, Vice-President(s), officers and staff of 
the Bank, in the discharge of their offices, shall owe their duty 
entirely to the Bank and to no other authority. Each member 
of the Bank shall respect the international character of this 
duty and shall refrain from all attempts to influence any of 
them in the discharge of their duties. 
Article 33 
Location of offices 
1. The principal office of the Bank shall be located in 
London. 
2. The Bank may establish agencies or branch offices in 
the territory of any member of the Bank. 
Article 34 
Depositories and channels of communication 
1. Each member shall designate its central bank, or such 
other institution as may be agreed upon with the Bank, as a 
depository for all the Bank's holdings of its currency as well 
as other assets of the Bank. 
2. Each member shall designate an appropriate official 
entity with which the Bank may communicate in connection 
with any matter arising under this Agreement. 
Article 35 
Publication of reports and provision of information members at intervals of three months or less a summary 
statement of its financial position and a profit and loss 
statement showing the results of its operations. The financial 
accounts shall be kept in ecus. 
2. The Bank shall report annually on the environmental 
impact of its activities and may publish such other reports as 
it deems desirable to advance its purpose. 
3. Copies of all reports, statements and publications 
made under this Article shall be distributed to members. 
Article 36 
Allocation and distribution of net income 
1. The Board of Governors shall determine at least 
annually what part of the Bank's net income, after making 
provision for reserves and, if necessary, against possible 
losses under paragraph 1 of Article 17 of this Agreement, 
shall be allocated to surplus or other purposes and what part, 
if any, shall be distributed. Any such decision on the 
allocation of the Bank's net income to other purposes shall be 
taken by a majority of not less than two-thirds of the 
Governors, representing not less than two-thirds of the total 
voting power of the members. No such allocation, and no 
distribution, shall be made until the general reserve amounts 
to at least 10% of the authorized capital stock. 
2. Any distribution referred to in the preceding paragraph 
shall be made in proportion to the number of paid-in shares 
held by each member; provided that in calculating such 
number account shall be taken only of payments received in 
cash and promissory notes encashed in respect of such shares 
on or before the end of the relevant financial year. 
3. Payments to each member shall be made in such 
manner as the Board of Governors shall determine. Such 
payments and their use by the receiving country shall be 
without restriction by any member. 
CHAPTER VII 
WITHDRAWAL AND SUSPENSION OF MEMBERSHIP, 
TEMPORARY SUSPENSION AND TERMINATION OF 
OPERATIONS 
Article 37 
Right of members to withdraw 
1. Any member may withdraw from the Bank at any time 
by transmitting a notice in writing to the Bank at its principal 
office. 
1. The Bank shall publish an annual report containing an 
audited statement of its accounts and shall circulate to 2. Withdrawal by a member shall become effective, and 
its membership shall cease, on the date specified in its notice 
26. 9. 90 Official Journal of the European Communities No C 241/13 
but in no event less than six months after such notice is 
received by the Bank. However, at any time before the 
withdrawal becomes finally effective, the member may notify 
the Bank in writing of the cancellation of its notice of 
intention to withdraw. 
Article 38 
Suspension of membership 
1. If a member fails to fulfil any of its obligations to the 
Bank, the Bank may suspend its membership by decision of a 
majority of not less than two-thirds of the Governors, 
representing not less than two-thirds of the total voting 
power of the members. 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 not less than the 
same majority to restore the member to good standing. 
2. While under suspension, a member shall not be entitled 
to exercise any rights under this Agreement, except the right 
of withdrawal, but shall remain subject to all its 
obligations. 
Article 39 
Settlement of accounts with former members 
1. After the date on which a member ceases to be a 
member, such former member shall remain liable for its 
direct obligations to the Bank and for its contingent liabilities 
to the Bank so long as any part of the loans, equity 
investments or guarantees contracted before it ceased to be a 
member are outstanding; but it shall cease to incur such 
liabilities with respect to loans, equity investments and 
guarantees entered into thereafter by the Bank and to share 
either in the income or the expenses of the Bank. 
2. At the time a member ceases to be a member, the Bank 
shall arrange for the repurchase of such former member's 
shares as a part of the settlement of accounts with such 
former member in accordance with the provisions of this 
Article. For this purpose, the repurchase price of the shares 
shall be the value shown by the books of the Bank on the date 
of cessation of membership, with the original purchase price 
of each share being its maximum value. 
3. The payment for shares repurchased by the Bank under 
this Article shall be governed by the following conditions: 
(i) any amount due to the former member for its shares 
shall be withheld so long as the former member, its 
central bank or any of its agencies or instrumentalities 
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 
former member resulting from its subscription for 
shares in accordance with paragraphs 4, 5 and 7 of Article 6 of this Agreement. In any event, no amount 
due to a member for its shares shall be paid until six 
months after the date upon which the member ceases to 
be a member; 
(ii) payments for shares may be made from time to time, 
upon their surrender by the former member, to the 
extent by which the amount due as the repurchase price 
in accordance with paragraph 2 of this Article exceeds 
the aggregate amount of liabilities on loans, equity 
investments and guarantees in subparagraph (i) of this 
paragraph until the former member has received the full 
repurchase price; 
(iii) payments shall be made on such conditions and in such 
fully convertible currencies, or ecus, and on such dates, 
as the Bank determines; and 
(iv) if losses are sustained by the Bank on any guarantees, 
participations in loans, or loans which were 
outstanding on the date when the member ceased to be 
a member, or if a net loss is sustained by the Bank on 
equity investments held by it on such date, and the 
amount of such losses exceeds the amount of the 
reserves provided against losses on the date when the 
member ceased to be a member, such former member 
shall repay, upon demand, the amount by which the 
repurchase price of its shares would have been reduced 
if the losses had been taken into account when the 
repurchase price was determined. In addition, the 
former member shall remain liable on any call for 
unpaid subscriptions under Article 6 (4) of this 
Agreement, to the extent that it would have been 
required to respond if the impairment of capital had 
occurred and the call had been made at the time the 
repurchase price of its shares was determined. 
4. If the Bank terminates its operations pursuant to 
Article 41 of this Agreement within six months of the date 
upon which any member ceases to be a member, all rights of 
such former member shall be determined in accordance with 
the provisions of Articles 41 to 43 of this Agreement. 
Article 40 
Temporary suspension of operations 
In an emergency, the Board of Directors may suspend 
temporarily operations in respect of new loans, guarantees, 
underwriting, technical assistance and equity investments 
pending an opportunity for further consideration and action 
by the Board of Governors. 
Article 41 
Termination of operations 
The Bank may terminate its operations by the affirmative 
vote of not less than two-thirds of the Governors, 
representing not less than three-fourths of the total voting 
power of the members. Upon such termination of operations 
the Bank shall forthwith cease all activities, except those 
incident to the orderly realization, conservation and 
preservation of its assets and settlement of its obligations. 
No C 241/14 Official Journal of the European Communities 26. 9. 90 
Article 42 
Liability of members and payment of claims 
1. In the event of termination of the operations of the 
Bank, the liability of all members for uncalled subscriptions 
to the capital stock of the Bank shall continue until all claims 
of creditors, including all contingent claims, shall have been 
discharged. 
2. Creditors on ordinary operations holding direct claims 
shall be paid first out of the assets of the Bank, secondly out 
of the payments to be made to the Bank in respect of unpaid 
paid-in shares, and then out of payments to be made to the 
Bank in respect of callable capital stock. Before making any 
payments to creditors holding direct claims, the Board of 
Directors shall make such arrangements as are necessary, in 
its judgment, to ensure a pro rata distribution among holders 
of direct and holders of contingent claims. 
Article 43 
Distribution of assets 
1. No distribution under this Chapter shall be made to 
members on account of their subscriptions to the capital 
stock of the Bank until: 
(i) all liabilities to creditors have been discharged or 
provided for; and 
(ii) the Board of Governors has decided by a vote of not less 
than two-thirds of the Governors, representing not less 
than three-fourths of the total voting power of the 
members, to make a distribution. 
2. Any distribution of the assets of the Bank to the 
members shall be in proportion to the capital stock held by 
each member and shall be effected at such times and under 
such conditions as the Bank shall deem fair and equitable. 
The shares of assets distributed need not be uniform as to 
type of assets. No member shall be entitled to receive its share 
in such a distribution of assets until it has settled all of its 
obligations to the Bank. 
3. Any member receiving assets distributed pursuant to 
this Article shall enjoy the same rights with respect to such 
assets as the Bank enjoyed prior to their distribution. 
CHAPTER VIII 
STATUS, IMMUNITIES, PRIVILEGES AND EXEMPTIONS 
Article 44 
Purposes of Chapter 
To enable the Bank to fulfil its purpose and the functions 
with which it is entrusted, the status, immunities, privileges and exemptions set forth in this Chapter shall be accorded to 
the Bank in the territory of each member country. 
Article 45 
Status of the Bank 
The Bank shall possess full legal personality and, in 
particular, the full legal capacity: 
(i) to contract; 
(ii) to acquire, and dispose of, immovable and movable 
property; and 
(iii) to institute legal proceedings. 
Article 46 
Position of the Bank with regard to judicial process 
Actions may be brought against the Bank only in a court of 
competent jurisdiction in the territory of a country in which 
the Bank has an office, has appointed an agent for the 
purpose of accepting service or notice of process, or has 
issued or guaranteed securities. No actions shall, however, 
be brought by members or persons acting for or deriving 
claims from members. The property and assets of the Bank 
shall, wheresoever located and by whomsoever held, be 
immune from all forms of seizure, attachment or execution 
before the delivery of final judgment against the Bank. 
Article 47 
Immunity of assets from seizure 
Property and assets of the Bank, wheresoever located and by 
whomsoever held, shall be immune from search, requisition, 
confiscation, expropriation or any other form of taking or 
foreclosure by executive or legislative action. 
Article 48 
Immunity of archives 
The archives of the Bank, and in general all documents 
belonging to it or held by it, shall be inviolable. 
Article 49 
Freedom of assets from restrictions 
To the extent necessary to carry out the purpose and 
functions of the Bank and subject to the provisions of this 
26. 9. 90 Official Journal of the European Communities No C 241/15 
Agreement, all property and assets of the Bank shall be free 
from restrictions, regulations, controls and moratoria of any 
nature. 
Article 50 
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 any other member. 
Article 51 
Immunities of officers and employees 
All Governors, Directors, Alternates, officers and employees 
of the Bank and experts performing missions for the Bank 
shall be immune from legal process with respect to acts 
performed by them in their official capacity, except when the 
Bank waives this immunity, and shall enjoy inviolability of 
all their official papers and documents. This immunity shall 
not apply, however, to civil liability in the case of damage 
arising from a road traffic accident caused by any such 
Governor, Director, Alternate, officer, employee or 
expert. 
Article 52 
Privileges of officers and employees 
1. All Governors, Directors, Alternates, officers and 
employees of the Bank and experts of the Bank performing 
missions for the Bank: 
(i) not being local nationals, shall be accorded the same 
immunities from immigration restrictions, alien 
registration requirements and national service 
obligations, and the same facilities as regards exchange 
regulations, as are accorded by members to the 
representatives, officials, and employees of comparable 
rank of other members; and 
(ii) shall be granted the same treatment in respect of 
travelling facilities as is accorded by members to 
representatives, officials and employees of comparable 
rank of other members. 
2. The spouses and immediate dependants oi those 
Directors, Alternate Directors, officers, employees and 
experts of the Bank who are resident in the country in which 
the principal office of the Bank is located shall be accorded 
opportunity to take employment in that country. The 
spouses and immediate dependants of those Directors, 
Alternate Directors, officers, employees and experts of the 
Bank who are resident in a country in which any agency or 
branch office of the Bank is located should, wherever 
possible, in accordance with the national law of that country, 
be accorded similar opportunity in that country. The Bank shall negotiate specific agreements implementing the 
provisions of this paragraph with the country in which the 
principal office of the Bank is located and, as appropriate, 
with the other countries concerned. 
Article 53 
Exemption from taxation 
1. Within the scope of its official activities the Bank, its 
assets, property, and income shall be exempt from all direct 
taxes. 
2. When purchases or services of substantial value and 
necessary for the exercise of the official activities of the Bank 
are made or used by the Bank and when the price of such 
purchases or services includes taxes or duties, the member 
that has levied the taxes or duties shall, if they are 
identifiable, take appropriate measures to grant exemption 
from such taxes or duties or to provide for their 
reimbursement. 
3. Goods imported by the Bank and necessary for the 
exercise of its official activities shall be exempt from all 
import duties and taxes, and from all import prohibitions 
and restrictions. Similarly goods exported by the Bank and 
necessary for the exercise of its official activities shall be 
exempt from all export duties and taxes, and from all export 
prohibitions and restrictions. 
4. Goods acquired or imported and exempted under this 
Article shall not be sold, hired out, lent or given away against 
payment or free charge, except in accordance with conditions 
laid down by the members which have granted exemptions or 
reimbursements. 
5. The provisions of this Article shall not apply to taxes or 
duties which are no more than charges for public utility 
services. 
6. Directors, Alternate Directors, officers and employees 
of the Bank shall be subject to an internal effective tax for the 
benefit of the Bank on salaries and emoluments paid by the 
Bank, subject to conditions to be laid down and rules to be 
adopted by the Board of Governors within a period of one 
year from the date of entry into force of this Agreement. 
From the date on which this tax is applied, such salaries and 
emoluments shall be exempt from national income tax. The 
members may, however, take into account the salaries and 
emoluments thus exempt when assessing the amount of tax 
to be applied to income from other sources. 
7. Notwithstanding the provisions of paragraph 6 of this 
Article, a member may deposit, with its instrument of 
ratification, acceptance or approval, a declaration that such 
member retains for itself, its political subdivisions or its local 
authorities the right to tax salaries and emoluments paid by 
the Bank to citizens or nationals of such member. The Bank 
No C 241/16 Official Journal of the European Communities 26. 9. 90 
shall be exempt from any obligation for the payment, 
withholding or collection of such taxes. The Bank shall hot 
make any reimbursement for such taxes. 
8. Paragraph 6 of this Article shall not apply to pensions 
and annuities paid by the Bank. 
9. No tax of any kind shall be levied on any obligation or 
security issued by the Bank, including any dividend or 
interest thereon, by whomsoever held: 
(i) which discriminates against such obligation or security 
solely because it is issued by the Bank, or 
(ii) if the sole jurisdictional basis for such taxation is the 
place or currency in which it is issued, made payable or 
paid, or the location of any office or place of business 
maintained by the Bank. 
10. No tax of any kind shall be levied on any obligation or 
security guaranteed by the Bank, including any dividend or 
interest thereon, by whomsoever held: 
(i) which discriminates against such obligation or security 
solely because it is guaranteed by the Bank; or 
(ii) if the sole jurisdictional basis for such taxation is the 
location of any office or place of business maintained by 
the Bank. 
Article 54 
Implementation of Chapter 
Each member shall promptly take such action as is necessary 
for the purpose of implementing the provisions of this 
Chapter and shall inform the Bank of the detailed action 
which it has taken. 
Article 55 
Waiver of immunities, privileges and exemptions 
The immunities, privileges and exemptions conferred under 
this Chapter are granted in the interest of the Bank. The 
Board of Directors may waive to such extent and upon such 
conditions as it may determine any of the immunities, 
privileges and exemptions conferred under this Chapter in 
cases where such action would, in its opinion, be appropriate 
in the best interests of the Bank. The President shall have the 
right and the duty to waive any immunity, privilege or 
exemption in respect of any officer, employee or expert of the 
Bank, other than the President or a Vice-President, where, in 
his or her opinion, the immunity, privilege or exemption 
would impede the course of justice and can be waived 
without prejudice to the interests of the Bank. In similar 
circumstances and under the same conditions, the Board of 
Directors shall have the right and the duty to waive any 
immunity, privilege or exemption in respect of the President 
and each Vice-President. CHAPTER IX 
AMENDMENTS, INTERPRETATION, ARBITRATION 
Article 56 
Amendments 
1. Any proposal to amend this Agreement, whether 
emanating 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 that 
Board. If the proposed amendment is approved by the Board 
the Bank shall, by any rapid means of communication, ask all 
members whether they accept the proposed amendment. 
When not less than three-fourths of the members (including 
at least two countries from Central and Eastern Europe listed 
in Annex A), having not less than four-fifths of the total 
voting power of the members, have accepted the proposed 
amendment, the Bank shall certify that fact by formal 
communication addressed to all members. 
2. Notwithstanding paragraph 1 of this Article: 
(i) acceptance by all members shall be required in the case 
of any amendment modifying: 
(a) the right to withdraw from the Bank; 
(b) the rights pertaining to purchase of capital stock 
provided for in Article 5 (3) of this Agreement; 
(c) the limitations on liability provided for in Article 5 
(7) of this Agreement; and 
(d) the purpose and functions of the Bank defined by 
Articles 1 and 2 of this Agreement; 
(ii) acceptance by not less than three-fourths of the 
members having not less than 85 % of the total voting 
power of the members shall be required in the case of 
any amendment modifying Article 8 (4) of this 
Agreement. 
When the requirements for accepting any such proposed 
amendment have been met, the Bank shall certify that fact by° 
formal communication addressed to all members. 
3. Amendments shall enter into force for all members 
three months after the date of the formal communication 
provided for in paragraphs 1 and 2 of this Article unless the 
Board of Governors specifies a different period. 
Article 57 
Interpretation and application 
1. Any question of interpretation or application of the 
provisions of this Agreement arising between any member 
and the Bank, or between any members of the Bank, shall be 
submitted to the Board of Directors for its decision. If there is 
no Director of its nationality in that Board, a member 
26. 9. 90 Official Journal of the European Communities No C 241/17 
particularly affected by the question under consideration 
shall be entitled to direct representation in the meeting of the 
Board of Directors during such consideration. The 
representative of such member shall, however, have no vote. 
Such right of representation shall be regulated by the Board 
of Governors. 
2. In any case where the Board of Directors has given a 
decision under paragraph 1 of this Article, any member may 
require that the question be referred to the Board of 
Governors, whose decision shall be final. Pending the 
decision of the Board of Governors, the Bank may, so far as it 
deems it necessary, act on the basis of the decision of the 
Board of Directors. 
Article 58 
Arbitration 
If a disagreement should arise between the Bank and a 
member which has ceased to be a member, or between the 
Bank and any member after adoption of a decision to 
terminate the operations of the Bank, such disagreement 
shall be submitted to arbitration by a tribunal of three 
arbitrators, one appointed by the Bank, another by the 
member or former member concerned, and the third, unless 
the parties otherwise agree, by the President of the 
International Court of Justice or such other authority as may 
have been prescribed by regulations adopted by the Board of 
Governors. A majority vote of the arbitrators shall be 
sufficient to reach a decision which shall be final and binding 
upon the parties. The third arbitrator shall have full power to 
settle all questions of procedure in any case where the parties 
are in disagreement with respect thereto. 
Article 59 
Approval deemed given 
Whenever the approval or the acceptance of any member is 
required before any act may be done by the Bank, except 
under Article 56 of this Agreement, approval or acceptance 
shall be deemed to have been given unless the member 
presents an objection within such reasonable period as the 
Bank may fix in notifying the member of the proposed 
act. 
CHAPTER X 
FINAL PROVISIONS 
Article 60 
Signature and deposit 
1. This Agreement deposited with the Government of the 
French Republic (hereinafter called 'the Depository'), shall 
remain open until 31 December 1990 for signature by the prospective members whose names are set forth in Annex A 
to this Agreement. 
2. The Depository shall communicate certified copies of 
this Agreement to all the Signatories. 
Article 61 
Ratification, acceptance or approval 
1. The Agreement shall be subject to ratification, 
acceptance or approval by the Signatories. Instruments of 
ratification, acceptance or approval shall, subject to 
paragraph 2 of this Article, be deposited with the Depository 
not later than 31 March 1991. The Depository shall duly 
notify the other Signatories of each deposit and the date 
thereof. 
2. Any Signatory may become a party to this Agreement 
by depositing an instrument of ratification, acceptance or 
approval until one year after the date of its entry into force or, 
if necessary, until such later date as may be decided by a 
majority of Governors, representing a majority of the total 
voting power of the members. 
3. A Signatory whose instrument referred to in 
paragraph 1 of this Article is deposited before the date on 
which this Agreement enters into force shall become a 
member of the Bank on that date. Any other Signatory which 
complies with the provisions of the preceding paragraph sh all 
become a member of the Bank on the date on which its 
instrument of ratification, acceptance or approval is 
deposited. 
Article 62 
Entry into force 
1. This Agreement shall enter into force when 
instruments of ratification, acceptance or approval have been 
deposited by Signatories whose initial subscriptions 
represent not less than two thirds of the total subscriptions 
set forth in Annex A, including at least two countries from 
Central and Eastern Europe listed in Annex A. 
2. If this Agreement has not entered into force by 31 
March 1991, the Depository may convene a conference of 
interested prospective members to determine the future 
course of action and decide a new date by which instruments 
of ratification, acceptance or approval shall be deposited. 
Article 63 
Inaugural meeting and commencement of operations 
1. As soon as this Agreement enters into force under 
Article 62 of this Agreement, each member shall appoint a 
Governor. The Depository shall call the first meeting of the 
No C 241/18 Official Journal of the European Communities 26. 9. 90 
Board of Governors within 60 days of entry into force of 
this Agreement under Article 62 or as soon as possible 
thereafter. 
2. At its first meeting, the Board of Governors: 
(i) shall elect the President; 
(ii) shall elect the Directors of the Bank in accordance with 
Article 26 of this Agreement; (iii) shall make arrangements for determining the date of the 
commencement of the Bank's operations; and 
(iv) shall make such other arrangements as appear to it 
necessary to prepare for the commencement of the 
Bank's operations. 
3. The Bank shall notify its members of the date of 
commencement of its operations. 
Done at Paris on 29 May 1990 in a single original, whose English, French, German and Russian texts 
are equally authentic, which shall be deposited in the archives of the Depository which shall transmit a 
duly certified copy to each of the other prospective members whose names are set forth in 
Annex A. 
26. 9. 90 Official Journal of the European Communities No C 241/19 
ANNEX A 
Initial subscriptions to the authorized capital stock for prospective members (*) which may become members in 
accordance with Article 61 
A. EUROPEAN COMMUNITIES 
a) Belgium 
Denmark 
France 
Germany, Federal Republic of 
Greece 
Ireland 
Italy 
Luxembourg 
Netherlands 
Portugal 
Spain 
United Kingdom 
b) European Economic Community 
European Investment Bank 
B. OTHER EUROPEAN COUNTRIES 
Austria 
Cyprus 
Finland 
Iceland 
Israel 
Liechtenstein 
Malta 
Norway 
Sweden 
Switzerland 
Turkey 
C. RECIPIENT COUNTRIES 
Bulgaria 
Czechoslovakia 
German Democratic Republic 
Hungary 
Poland 
Romania 
Union of Soviet Socialist Republics 
Yugoslavia 
D. NON-EUROPEAN COUNTRIES 
Australia 
Canada 
Egypt 
Japan 
Korea, Republic of 
Mexico 
Morocco 
New Zealand 
United States of America 
E. NON-ALLOCATED SHARES 
TOTAL Number of 
shares 
22 800 
12 000 
85 175 
85 175 
6 500 
3 000 
85 175 
2 000 
24 800 
4 200 
34 000 
85 175 
30 000 
30 000 
22 800 
1 000 
12 500 
1 000 
6 500 
200 
100 
12 500 
22 800 
22 800 
11 500 
7 900 
12 800 
15 500 
7 900 
12 800 
4 800 
60 000 
12 800 
10 000 
34 000 
1000 
85 175 
6 500 
3 000 
1 000 
1 000 
100 000 
125 
1 000 000 Capital 
subscription 
(ECU million) 
228,00 
120,00 
851,75 
851,75 
65,00 
30,00 
851,75 
20,00 
248,00 
42,00 
340,00 
851,75 
300,00 
300,00 
228,00 
10,00 
125,00 
10,00 
65,00 
2,00 
1,00 
125,00 
228,00 
228,00 
115,00 
79,00 
128,00 
155,00 
79,00 
128,00 
48,00 
600,00 
128,00 
100,00 
340,00 
10,00 
851,75 
65,00 
30,00 
10,00 
10,00 
1 000,00 
1,25 
10 000,00 
(') Prospective members are listed under the above categories only for the purpose of this Agreement. Recipient countries are 
referred to elsewhere in this Agreement as Central and Eastern European countries. 
No C 241/20 Official Journal of the European Communities 26. 9. 90 
ANNEX B 
Section A — Election of Directors by Governors representing Belgium, Denmark, France, the Federal Republic of 
Germany, Greece, Ireland, Italy, Luxembourg, the Netherlands, Portugal, Spain, the United Kingdom, the 
European Economie Community and the European Investment Bank (hereinafter referred to as Section A 
Governors) 
1. The provisions set out below in this Section shall apply 
exclusively to this Section. 
2. Candidates for the office of Director shall be nominated by 
Section A Governors, provided that a Governor may nominate only 
one person. The election of Directors shall be by ballot of Section A 
Governors. 
3. Each Governor eligible to vote shall cast for one person all of 
the votes to which the member appointing him or her is entitled 
under Article 29 (1) and (2) of this Agreement. 
4. Subject to paragraph 10 of this Section, the 11 persons 
receiving the highest number of votes shall be Directors, except that 
no person who receives less than 4,5 % of the total of the votes which 
can be cast (eligible votes) in Section A shall be considered 
elected. 
5. Subject to paragraph 10 of this Section, if 11 persons are not 
elected on the first ballot, a second ballot shall be held in which, 
unless there were no more than 11 candidates, the person who 
received the lowest number of votes in the first ballot shall be 
ineligible for election and in which there shall vote only: 
(a) those Governors who voted in the first ballot for a person not 
elected, and 
(b) those Governors whose votes for a person elected are deemed 
under paragraphs 6 and 7 below of this Section to have raised 
the votes cast for that person above 5,5% of the eligible 
votes. 
6. In determining whether the votes cast by a Governor are 
deemed to have raised the total votes cast for any person above 5,5 % 
of the eligible votes, the 5,5 % shall be deemed to include, first, the 
votes of the Governor casting the largest number of votes for such 
1.' The provisions set out below in this Section shall apply 
exclusively to this Section. 
2. Candidates for the office of Director shall be nominated by 
Section B (i) Governors, provided that a Governor may nominate 
only one person. The election of Directors shall be by ballot of 
Section B (i) Governors. 
3. Each Governor eligible to vote shall cast for one person all of 
the votes to which the member appointing him or her is entitled 
under Article 29 (1) and (2) of this Agreement. 
4. Subject to paragraph 10 of this Section, the four persons 
receiving the highest number of votes shall be Directors, except that person, then the votes of the Governor casting the next largest 
number and so on, until 5,5% is reached. 
7. Any Governor, part of whose votes must be counted in order 
to raise the total of votes cast for any person above 4,5 % shall be 
considered as casting all of his or her votes for such person, even if 
the total votes for such person thereby exceed 5,5 % and shall not be 
eligible to vote in a further ballot. 
8. Subject to paragraph 10 of this Section, if, after the second 
ballot, 11 persons have not been elected, further ballots shall be held 
in conformity with the principles and procedures laid down in this 
Section, until 11 persons have been elected, provided that, if at any 
stage 10 persons are elected, notwithstanding the provisions of 
paragraph 4 of this Section, the 11th may be elected by a simple 
majority of the remaining votes cast. 
9. In the case of an increase or decrease in the number of 
Directors to be elected by Section A Governors, the minimum and 
maximum percentages specified in paragraphs 4,5,6 and 7 of this 
Section shall be appropriately adjusted by the Board of 
Governors. 
10. So long as any Signatory, or group of Signatories, whose 
share of the total amount of capital subscriptions provided in 
Annex A is more than 2,4%, has not deposited its instrument or 
their instruments of ratification, approval or acceptance, there shall 
be no election for one Director in respect of each such Signatory or 
group of Signatories. The Governor or Governors representing such 
a Signatory or group of Signatories shall elect a Director in respect of 
each Signatory or group of Signatories, immediately after the 
Signatory becomes a member or the group of Signatories become 
members. Such Director shall be deemed to have been elected by the 
Board of Governors at its inaugural meeting, in accordance with 
Article 26 (3) of this Agreement, if he or she is elected during the 
period in which the first Board of Directors shall hold office. 
no person who receives less than 12 % of the total of the votes which 
can be cast (eligible votes) in Section B (i) shall be considered 
elected. 
5. Subject to paragraph lOof this Section, if four persons are not 
elected on the first ballot, a second ballot shall be held in which, 
unless there were no more than four candidates, the person who 
received the lowest number of votes in the first ballot shall be 
ineligible for election and in which there shall vote only: 
(a) those Governors who voted in the first ballot for a person not 
elected, and 
(b) those Governors whose votes for a person elected are deemed 
under paragraphs 6 and 7 below of this Section to have raised Section B — Election of Directors by Governors representing other countries 
Section B (i) — Election of Directors by Governors representing those countries listed in Annex A as Central and 
Eastern European Countries (recipient countries) (hereinafter referred to as Section B (i) 
Governors) 
26. 9. 90 Official Journal of the European Communities No C 241/21 
the votes cast for that person above 13% of the eligible 
votes. 
6. In determining whether the votes cast by a Governor are 
deemed to have raised the total votes cast for any person above 13 % 
of the eligible votes, the 13 % 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 13% is reached. 
7. Any Governor, part of whose votes must be counted in order 
to raise the total of votes cast for any person above 12% shall be 
considered as casting all of his or her votes for such person, even if 
the total votes for such person thereby exceed 13 % and shall not be 
eligible to vote in a further ballot. 
8. Subject to paragraph 10 of this Section, if, after the second 
ballot, four persons have not been elected, further ballots shall be 
held in conformity with the principles and procedures laid down in 
1. The provisions set out below in this Section shall apply 
exclusively to this Section. 
2. Candidates for the office of Director shall be nominated by 
Section B (ii) Governors provided that a Governor may nominate 
only one person. The election of Directors shall be by ballot of 
Section B (ii) Governors. 
3. Each Governor eligible to vote shall cast for one person all of 
the votes to which the member appointing him or her is entitled 
under Article 29 (1) and (2) of this Agreement. 
4. Subject to paragraph 10 of this Section, the four persons 
receiving the highest number of votes shall be Directors, except that 
no person who receives less than 20,5 % of the votes which can be 
cast (eligible votes) in Section B (ii) shall be considered elected. 
5. Subject to paragraph 10 of this Section, if four persons are not 
elected on the first ballot, a second ballot shall be held in which, 
unless there were no more than four candidates, the person who 
received the lowest number of votes in the first ballot shall be 
ineligible for election and in which there shall vote only: 
(a) those Governors who voted in the first ballot for a person not 
elected, and 
(b) those Governors whose votes for a person elected are deemed 
under paragraphs 6 and 7 below of this Section to have raised 
the votes cast for that person above 21,5% of the eligible 
votes. 
6. In determining whether the votes cast by a Governor are 
deemed to have raised the total votes cast for any person above 
21,5 % of the eligible votes, the 21,5 % shall be deemed to include, this Section, until four persons have been elected, provided that, if at 
any stage three persons are elected, notwithstanding the provisions 
of paragraph 4 of this Section, the fourth may be elected by a simple 
majority of the remaining votes cast. 
9. In the case of an increase or decrease in the number of 
Directors to be elected by Section B (i) Governors, the minimum and 
maximum percentages specified in paragraphs 4, 5, 6 and 7 of this 
Section shall be appropriately adjusted by the Board of 
Governors. 
10. So long as any Signatory, or group of Signatories, whose 
share of the total amount of capital subscriptions provided in 
Annex A is more than 2,8 % has not deposited its instrument or their 
instruments of ratification, approval or acceptance, there shall be no 
election for one Director in respect of each such a Signatory or group 
of Signatories. The Governor or Governors representing such a 
Signatory or group of Signatories shall elect a Director in respect of 
each Signatory or group of Signatories, immediately after the 
Signatory becomes a member or the group of Signatories become 
members. Such Director shall be deemed to have been elected by the 
Board of Governors at its inaugural meeting, in accordance with 
Article 26 (3) of this Agreement, if he or she is elected during the 
period in which the first Board of Directors shall hold office. 
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 21,5% is reached. 
7. Any Governor, part of whose votes must be counted in order 
to raise the total of votes cast for any person above 20,5 % shall be 
considered as casting all of his or her votes for such person, even if 
the total votes for such person thereby exceed 21,5 % and shall not 
be eligible to vote in a further ballot. 
8. Subject to paragraph 10 of this Section, if, after the second 
ballot, four persons have not been elected, further ballots shall be 
held in conformity with the principles and procedures laid down in 
this Section, until four persons have been elected, provided that, if at 
any stage three persons are elected, notwithstanding the provisions 
of paragraph 4 of this Section, the fourth may be elected by a simple 
majority of the remaining votes cast. 
9. In the case of an increase or decrease in the number of 
Directors to be elected by Section B (ii) Governors, the minimum and 
maximum percentages specified in paragraphs 4, 5, 6 and 7 of this 
Section shall be appropriately adjusted by the Board of 
Governors. 
10. So long as any Signatory, or group of Signatories, whose 
share of the total amount of capital subscriptions provided in 
Annex A is more than 2,8 %, has not deposited its instrument or 
their instruments of ratification, approval or acceptance, there shall 
be no election for one Director in respect of each such Signatory or 
group of Signatories. The Governor or Governors representing such 
a Signatory or group of Signatories shall elect a Director in respect of 
each Signatory or group of Signatories, immediately after the 
Signatory becomes a member or the group of Signatories become 
members. Such Director shall be deemed to have been elected by the 
Board of Governors at its inaugural meeting, in accordance with 
Article 26 (3) of this Agreement, if he or she is elected during the 
period in which the first Board of Directors shall hold office. Section B (ii) — Election of Directors by Governors representing those countries listed in Annex A as other 
European countries (hereinafter referred to as Section B (ii) Governors) 
No C 241/22 Official Journal of the European Communities 26. 9. 90 
Section B (iii) — Election of Directors by Governors representing those countries listed in Annex A as 
Non-European Countries (hereinafter referred to as Section B (Hi) Governors) 
1. The provisions set out below in this Section shall apply 
exclusively to this Section. 
2. Candidates for the office of Director shall be nominated by 
Section B (iii) Governors, provided that a Governor may nominate 
only one person. The election of Directors shall be by ballot of 
Section B (iii) Governors. 
3. Each Governor eligible to vote shall cast for one person all of 
the votes to which the member appointing him or her is entitled 
under Article 29 (1) and (2) of this Agreement. 
4. Subject to paragraph 10 of this Section, the four persons 
receiving the highest number of votes shall be Directors, except that 
no person who receives less than 8 % of the total of the votes which 
can be cast (eligible votes) in Section B (iii) shall be considered 
elected. 
5. Subject to paragraph 10 of this Section, if four persons are not 
elected on the first ballot, a second ballot shall be held in which, 
unless there were no more than four candidates, the person who 
received the lowest number of votes in the first ballot shall be 
ineligible for election and in which there shall vote only: 
(a) those Governors who voted in the first ballot for a person not 
elected, and 
(b) those Governors whose votes for a person elected are deemed 
under paragraphs 6 and 7 below of this Section to have raised 
the votes cast for that person above 9 % of the eligible votes. t 
6. In determining whether the votes cast by a Governor are 
deemed to have raised the total votes cast for any person above 9 % 
of the eligible votes, the 9% 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% is reached. 
7. Any Governor, part of whose votes must be counted in order 
to raise the total of votes cast for any person above 8 % shall be 
considered as casting all of his or her votes for such person, even if 
the total votes for such person thereby exceed 9 % and shall not be 
eligible to vote in a further ballot. 
8. Subject to paragraph 10 of this Section, if, after the second 
ballot, four persons have not been elected, further ballots shall be 
held in conformity with the principles and procedures laid down in this Section, until four persons have been elected, provided that, if at 
any stage three persons are elected, notwithstanding the provisions 
of paragraph 4 of this Section, the fourth may be elected by a simple 
majority of the remaining votes cast. 
9. In the case of an increase or decrease in the number of 
Directors to be elected by Section B (iii) Governors, the minimum 
and maximum percentages specified in paragraphs 4, 5, 6 and 7 of 
this Section shall be appropriately adjusted by the Board of 
Governors. 
10. So long as any Signatory, or group of Signatories, whose 
share of the total amount of capital subscriptions provided in 
Annex A is more than 5 %, has not deposited its instrument or their 
instruments of ratification, approval or acceptance, there shall be no 
election for one Director in respect of each such Signatory or group 
of Signatories. The Governor or Governors representing such a 
Signatory or group of Signatories shall elect a Director in respect of 
each Signatory or group of Signatories, immediately after the 
Signatory becomes a member or the group of Signatories become 
members. Such Director shall be deemed to have been elected by the 
Board of Governors at its inaugural meeting, in accordance with 
Article 26 (3) of this Agreement, if he or she is elected during the 
period in which the first Board of Directors shall hold office. 
Section C: Arrangements for the election of Directors representing 
countries not listed in Annex A 
If the Board of Governors decides, in accordance with Article 26 (3) 
of this Agreement, to increase or decrease the size, or revise the 
composition, of the Board of Directors, in order to take into account 
changes in the number of members of the Bank, the Board of 
Governors shall first consider whether any amendments are required 
to this Annex, and may make any such amendments as it deems 
necessary as part of such decision. 
Section D: Assignment of votes 
Any Governor who does not participate in voting for the election or 
whose vote does not contribute to the election of a Director under 
Section A or Section B (i) or Section B (ii) or Section B (iii) of this 
Annex may assign the votes to which he or she is entitled to an elected 
Director, provided that such Governor shall first have obtained the 
agreement of all those Governors who have elected that Director to 
such assignment. 
A decision by any Governor not to participate in voting for the 
election of a Director shall not affect the calculation of the eligible 
votes to be made under Section A, Section B (i), Section B (ii) or 
Section B (iii) of this Annex.