Proposal for a Council Decision concerning the approval by the European Union of the Cereals Trade Convention and the Food Aid Convention, constituting the International Cereals Agreement of 1995

(95/C 191/03)

COM(95) 183 final - 95/0115(CNS)

(Submitted by the Commission on 18 May 1995)

THE COUNCIL OF THE EUROPEAN UNION,

Having regard to the Treaty establishing the European Community, and in particular Articles 113 and 130y, in conjunction with the first sentence of Article 228 (2) and the first subparagraph of paragraph 3 thereof,

Having regard to the proposal from the Commission,

Having regard to the opinion of the European Parliament,

Whereas the Cereals Trade and Food Aid Conventions, constituting the International Cereals Agreement, 1995, were negotiated to replace the 1949 International Wheat Agreement; whereas the Agreement is open until 30 June 1995 for the signature and the deposit of the ratification, acceptance or approval instruments;

Whereas, pursuant to Article 130u of the Treaty, Community policy in the sphere of development cooperation should foster the sustainable economic and social development of the developing countries, their smooth and gradual integration into the world economy and the campaign against poverty in those countries;

Whereas, with regard to food aid, application of the International Cereals Agreement, 1995, implies action on the part of the Community and of the Member States;

Whereas all Member States have expressed their intention to become contracting parties to the Food Aid Convention,

HAS DECIDED AS FOLLOWS:

Article 1

The Cereals Trade Convention, 1995, and the Food Aid Convention, 1995, constituting the International Cereals Agreement, 1995, are hereby approved in the name of the European Community.

The texts of the Conventions are attached to this Decision.

Article 2

The President of the Council is hereby authorized to designate the person empowered to sign the two Conventions and to deposit the instruments of approval.

Article 3

On signing the Cereals Trade Convention and depositing the instrument of approval, the European Community will deposit the following declaration:

'The Republic of Austria, the Republic of Finland and the Kingdom of Sweden, having become Member States of the European Community on 1 January 1995, will no longer be individual members of this Convention but will be covered by the membership of the Community. The European Community accordingly also undertakes to exercise the rights and perform the undertakings laid down in this Convention for those three countries.`

INTERNATIONAL GRAINS AGREEMENT, 1995

PREAMBLE

THE SIGNATORIES TO THIS AGREEMENT,

CONSIDERING that the International Wheat Agreement, 1949, was revised, renewed, updated or extended on successive occasions leading to the conclusion of the International Wheat Agreement, 1986,

CONSIDERING that the provisions of the International Wheat Agreement, 1986, consisting of the Wheat Trade Convention, 1986, on the one hand, and the Food Aid Convention, 1986, on the other, as extended, will expire on 30 June 1995, and that it is desirable to conclude an agreement for a new period,

HAVE AGREED that the International Wheat Agreement, 1986, shall be updated and renamed the International Grains Agreement, 1995, which shall consist of two separate legal instruments;

(a) the Grains Trade Convention, 1995; and

(b) the Food Aid Convention, 1995;

and that each of these two Conventions, or either of them as appropriate, shall be submitted for signature and ratification, acceptance or approval, in conformity with their respective constitutional or institutional procedures, by the Governments concerned.

GRAINS TRADE CONVENTION, 1995

PART I GENERAL

Article 1

Objectives

The objectives of this Convention are:

(a) to further international cooperation in all aspects of trade in grains, especially in so far as these affect the food grain situation;

(b) to promote the expansion of international trade in grains, and to secure the freest possible flow of this trade, including the elimination of trade barriers and unfair and discriminatory practices, in the interest of all members, in particular developing members;

(c) to contribute to the fullest extent possible to the stability of international grain markets in the interests of all members, to enhance world food security, and to contribute to the development of countries whose economies are heavily dependent on commercial sales of grain; and

(d) to provide a forum for exchange of information and discussion of members' concerns regarding trade in grains.

Article 2

Definitions

For the purposes of this Convention:

1. (a) 'Council` means the International Grains Council established by the International Wheat Agreement, 1949 and continued in being by Article 9;

(b) (i) 'member` means a party to this Convention;

(ii) 'exporting member` means a member so designated pursuant to Article 12;

(iii) 'importing member` means a member so designated pursuant to Article 12;

(c) 'Executive Committee` means the Committee established pursuant to Article 15;

(d) 'Market Conditions Committee` means the Committee established pursuant to Article 16;

(e) 'grain` or 'grains` means barley, maize, millet, oats, rye, sorghum, triticale and wheat, and their products, and such other grains and products as the Council may decide;

(f) (i) 'purchase` means a purchase of grain for import, or the quantity of grain so purchased, as the context requires;

(ii) 'sale` means a sale of grain for export, or the quantity of such grain so sold, as the context requires;

(iii) where reference is made in this Convention to a purchase or sale, it shall be understood to refer not only to purchases or sales concluded between the Governments concerned, but also to purchases or sales concluded between private traders, and to purchases or sales concluded between a private trader and the Government concerned;

(g) 'special vote` means a vote requiring at least two-thirds of the votes (as calculated pursuant to Article 12) cast by the exporting members present and voting, and at least two-thirds of the votes (as calculated pursuant to Article 12) cast by the importing members present and voting, counted separately;

(h) 'crop year` or 'fiscal year` means the period from 1 July to the following 30 June;

(i) 'working day` means a working day at the headquarters of the Council.

2. Any reference in this Convention to a 'Government` or 'Governments` or 'member` shall be construed as including a reference to the European Community (hereinafter referred to as the EC). Accordingly, any reference in this convention to 'signature` or to the 'deposit of instruments of ratification, acceptance, or approval` or 'an instrument of accession` or 'a declaration of provisional application` by a Government shall, in the case of the EC, be construed as including signature or declaration of provisional application on behalf of the EC by its competent authority and the deposit of the instrument required by the institutional procedures of the EC to be deposited for the conclusion of an international agreement.

3. Any reference in this Convention to 'Government`, 'Governments` or 'member` shall be construed, where required, as covering all separate customs territory within the meaning of the General Agreement on Tariffs and Trade or the Agreement establishing the World Trade Organization.

Article 3

Information, reports and studies

1. To facilitate the achievement of the objectives in Article 1, make possible a fuller exchange of views at Council sessions, and provide information on a continuing basis to serve the general interest of members, arrangements shall be made for regular reports and exchange of information, and also special studies, as appropriate, covering grains, focusing primarily upon the following:

(a) supply, demand and market conditions;

(b) developments in national policies and their effects on the international market;

(c) developments concerning the improvement and expansion of trade, utilization, storage and transportation, especially in developing countries.

2. To improve the collection and presentation of information for those reports and studies referred to in paragraph 1 of this Article, to make it possible for more members to participate directly in the work of the Council, and to supplement the guidance already given by the Council in the course of its sessions, there shall be established a Market Conditions Committee, whose meetings shall be open to all members of the Council. The Committee shall have the functions specified in Article 16.

Article 4

Consultations on market developments

1. If the Market Conditions Committee, in the course of its continuous review of the market pursuant to Article 16, is of the opinion that developments in the international grain market seriously threaten to affect the interests of members, or if such developments are called to the Committee's attention by the executive director on his own initiative or at the request of any member of the Council, it shall immediately report the facts concerned to the Executive Committee. The Market Conditions Committee, in so informing the Executive Committee, shall give particular regard to those circumstances which threaten to affect the interests of members.

2. The Executive Committee shall meet within 10 working days to review such developments and, if it deems it appropriate, request the chairman of the Council to convene a session of the Council to consider the situation.

Article 5

Commercial purchases and special transactions

1. A commercial purchase for the purposes of this Convention is a purchase as defined in Article 2 which conforms to the usual commercial practices in international trade and which does not include those transactions referred to in paragraph 2 of this Article.

2. A special transaction for the purposes of this Convention is one which includes features introduced by the Government of a member concerned which do not conform to usual commercial practices. Special transactions include the following:

(a) sales on credit in which, as a result of government intervention, the interest rate, period of payment, or other related terms do not conform to the commercial rates, periods or terms prevailing in the world market;

(b) sales in which the funds of the purchase of grain are obtained under a loan from the Government of the exporting member tied to the purchase of grain;

(c) sales for currency of the importing member which is not transferable or convertible into currency or goods for use in the exporting member;

(d) sales under trade agreements with special payment arrangements which include clearing accounts for settling credit balances bilaterally through the exchange of goods, except where the exporting member and the importing member concerned agree that the sale shall be regarded as commercial;

(e) barter transactions:

(i) which result from the intervention of governments where grain is exchanged at other than prevailing world prices; or

(ii) which involve sponsorship under a government purchase programme, except where the purchase of grain results from a barter transaction in which the country of final destination was not named in the original barter contract;

(f) a gift of grain or a purchase of grain out of a monetary grant by the exporting member made for that specific purpose;

(g) any other categories of transactions, as the Council may prescribe, that include features introduced by the Government of a member concerned which do not conform to usual commercial practices.

3. Any question raised by the executive director or by any member as to whether a transaction is a commercial purchase as defined in paragraph 1 of this Article or a special transaction as defined in paragraph 2 of this Article shall be decided by the Council.

Article 6

Guidelines relating to concessional transactions

1. Members undertake to conduct any concessional transactions in grains in such a way as to avoid harmful interference with normal patterns of production and international commercial trade.

2. To this end both supplying and recipient members shall undertake appropriate measures to ensure that concessional transactions are additional to commercial sales which could reasonably be anticipated in the absence of such transactions, and would increase consumption or stocks in the recipient country. Such measures, shall, for countries which are members of the Food and Agriculture Organization (FAO), be consistent with the FAO Principles of surplus disposal and guiding lines and the consultative obligations of FAO members, and may include the requirement that a specified level of commercial imports of grains agreed with the recipient country be maintained on a global basis by that country. In establishing or adjusting this level, full regard shall be had to the commercial import levels in a representative period, to recent trends in utilization and imports, and to the economic circumstances of the recipient country, including, in particular, its balance-of-payments situation.

3. Members, when engaging in concessional export transactions, shall consult with exporting members whose commercial sales might be affected by such transactions to the maximum possible extent before such arrangements are concluded with recipient countries.

4. The secretariat shall periodically report to the Council on developments in concessional transactions in grains.

Article 7

Reporting and recording

1. Members shall provide regular reports, and the Council shall maintain records for each crop year, showing separately commercial and special transactions, of all shipments of grain by members and all imports of grain from non-members. The Council shall also maintain, to the extent possible, records of all shipments between non-members.

2. Members shall provide, as far as possible, such information as the Council may require concerning their grain supply and demand, and report promptly all changes in their national grain policies.

3. For the purposes of this Article:

(a) members shall send to the executive director such information concerning the quantities of grain involved in commercial sales and purchases and special transactions as the Council within its competence may require, including:

(i) in relation to special transactions, such detail of the transactions as will enable them to be classified in accordance with Article 5;

(ii) such information as may be available as to the type, class, grade and quality of the grains concerned;

(b) any member when exporting grain shall send to the executive director such information relating to their export prices as the Council may require;

(c) the Council shall obtain regular information on currently prevailing grain transportation costs, and members shall report such supplementary information as the Council may require.

4. In the case of any grain which reaches the country of final destination after resale in, passage through, or transhipment from the ports of, a country other than that in which it originated, members shall to the maximum extent possible make available such information as will enable the shipment to be entered in the records as a shipment between the country of origin and the country of final destination. In the case of a resale, the provisions of this paragraph shall apply if the grain originated in the country of origin during the same crop year.

5. The Council shall make rules of procedure for the reports and records referred to in this Article. Those rules shall prescribe the frequency and the manner in which those reports shall be made and shall prescribe the duties of members with regard thereto. The Council shall also make provision for the amendment of any records or statements kept by it, including provision for the settlement of any dispute arising in connection therewith. If any member repeatedly and unreasonably fails to make reports as required by this Article, the Executive Committee shall arrange consultations with that member to remedy the situation.

Article 8

Disputes and complaints

1. Any dispute concerning the interpretation or application of this Convention which is not settled by negotiation shall, at the request of any member which is a party to the dispute, be referred to the Council for decision.

2. Any member which considers that its interests as a party to this Convention have been seriously prejudiced by actions of any one or more members affecting the operation of this Convention may bring the matter before the Council. In such a case, the Council shall immediately consult with the members concerned in order to resolve the matter. If the matter is not resolved through such consultations, the Council shall consider the matter further and may make recommendations to the members concerned.

PART II ADMINISTRATION

Article 9

Constitution of the Council

1. The Council (formerly the International Wheat Council, as established by the International Wheat Agreement, 1949, and now renamed the International Grains Council) shall continue in being for the purposes of administering this Convention with the membership, powers and functions provided in this Convention.

2. Members may be represented at Council meetings by delegates, alternates and advisers.

3. The Council shall elect a chairman and a vice-chairman who shall hold office for one crop year. The chairman shall have no vote and the vice-chairman shall have no vote while acting as chairman.

Article 10

Powers and functions of the Council

1. The Council shall establish its rules of procedure.

2. The Council shall keep such records as are required by the terms of this Convention and may keep such other records as it considers desirable.

3. In order to enable the Council to discharge its functions under this Convention, the Council may request, and members undertake to supply, subject to the provisions of paragraph 2 of Article 7, such statistics and information as are necessary for this purpose.

4. The Council may, by special vote, delegate to any of its Committees, or to the executive director, the exercise of powers or functions other than the following:

(a) decisions on matters pursuant to Article 8;

(b) review, pursuant to Article 11, of the votes of members listed in the Annex;

(c) determination of exporting and importing members and distribution of their votes pursuant to Article 12;

(d) location of the seat of the Council pursuant to paragraph 1 of Article 13;

(e) appointment of the executive director pursuant to paragraph 2 of Article 17;

(f) adoption of the budget and assessment of members' contributions pursuant to Article 21;

(g) suspension of the voting rights of a member pursuant to paragraph 6 of Article 21;

(h) any request to the Secretary-General of Unctad to convene a negotiating conference pursuant to Article 22;

(i) exclusion of a member from the Council pursuant to Article 30;

(j) recommendation of an amendment pursuant to Article 32;

(k) extension or termination of this Convention pursuant to Article 33.

The Council may at any time revoke such delegation by a majority of the votes cast.

5. Any decision made under any powers or functions delegated by the Council in accordance with paragraph 4 of this Article shall be subject to review by the Council at the request of any member made within a period which the Council shall prescribe. Any decision in respect of which no request for review has been made within the prescribed period shall be binding on all members.

6. In addition to the powers and functions specified in this Convention the Council shall have such other powers and perform such other functions as are necessary to carry out the terms of this Convention.

Article 11

Votes for entry into force and budgetary procedures

1. For the purposes of the entry into force of this Convention, the calculations pursuant to paragraph 1 of Article 28 shall be based on the votes as set out in part A of the Annex.

2. For the purposes of the assessment of financial contributions pursuant to Article 21, the votes of members shall be based on those set out in the Annex, subject to the provisions of this Article and the associated Rules of Procedure.

3. Whenever this Convention is extended pursuant to paragraph 2 of Article 33, the Council shall review and adjust the votes of members under this Article. Such adjustments shall bring the distribution of votes more closely into line with current grain trade patterns, and shall be in accordance with the methods specified in the rules of procedure.

4. If the Council decides that a significant shift in world grain trading patterns has occurred it shall review, and may adjust, the votes of members. Such adjustments shall be regarded as amendments to this Convention, and shall be subject to the provisions of Article 32, except that an adjustment of votes may take effect only at the beginning of a fiscal year. After any adjustment to member's votes pursuant to this paragraph has taken effect, no further such adjustment may be put into effect before three years have elapsed.

5. All redistributions of votes pursuant to this Article shall be conducted in accordance with the rules of procedure.

6. For all purposes regarding the administration of this Convention, other than its entry into force pursuant to paragraph 1 of Article 28 and the assessment of financial contributions pursuant to Article 21, the votes to be exercised by members shall be as determined pursuant to Article 12.

Article 12

Determination of exporting and importing members and distribution of their votes

1. At the first session held under this Convention, the Council shall establish which members shall be exporting members and which members shall be importing members for the purposes of this Convention. In so deciding, the Council shall take account of the grain trading patterns of those members and of their own views.

2. As soon as the Council has determined which members shall be exporting and which shall be importing members under this Convention, the exporting members, on the basis of their votes pursuant to Article 11, shall divide their votes among them as they shall decide, subject to the conditions laid down in paragraph 3 of this Article, and the importing members shall similarly divide their votes.

3. For the purposes of the allocation of votes pursuant to paragraph 2 of this Article, the exporting members shall together hold 1 000 votes, and the importing members shall together hold 1 000 votes. No member shall hold more than 333 votes as an exporting member or more than 333 votes as an importing member. There shall be no fractional votes.

4. The lists of exporting and importing members shall be reviewed by the Council, in the light of changing patterns in their grain trade, after a period of three years following the entry into force of this Convention. They shall also be reviewed whenever this Convention is extended pursuant to paragraph 2 of Article 33.

5. At the request of any member, the Council may, at the beginning of any fiscal year, agree by special vote to the transfer of that member from the list of exporting members to the list of importing members, or from the list of importing members to the list of exporting members, as appropriate.

6. The distribution of the votes of exporting and importing members shall be reviewed by the Council whenever the lists of the exporting and importing members are changed pursuant to paragraphs 4 or 5 of this Article. Any redistribution of votes under this paragraph shall be subject to the conditions set out in paragraph 3 of this Article.

7. Whenever any Government becomes, or ceases to be, a party to this Convention, the Council shall redistribute the votes of the other exporting or importing members, as appropriate, in proportion to the number of votes held by each member, subject to the conditions set out in paragraph 3 of this Article.

8. Any exporting member may authorize any other exporting member, and any importing member may authorize any other importing member, to represent its interests and to exercise its votes at any meeting or meetings of the Council. Satisfactory evidence of such authorization shall be submitted to the Council.

9. If at any meeting of the Council a member is not represented by an accredited delegate and has not authorized another member to exercise its votes in accordance with paragraph 8 of this Article, or if at the date of any meeting any member has forfeited, has been deprived of, or has recovered its votes under any provisions of this Convention, the total votes to be exercised by the exporting members at that meeting shall be adjusted to a figure equal to the total of votes to be exercised at that meeting by the importing members and redistributed among exporting members in proportion to their votes.

Article 13

Seat, sessions and quorum

1. The seat of the Council shall be in London unless the Council decides otherwise.

2. The Council shall meet at least once during each half of each fiscal year and at such other times as the chairman may decide, or as otherwise required by this Convention.

3. The chairman shall convene a session of the Council if so requested by (a) five members or (b) one or more members holding a total of not less than 10 % of the total votes or (c) the Executive Committee.

4. The presence of delegates with a majority of the votes held by the exporting members and a majority of the votes held by the importing members, prior to any adjustment of votes pursuant to paragraph 9 of Article 12, shall be necessary to constitute a quorum at any meeting of the Council.

Article 14

Decisions

1. Except where otherwise specified in this Convention, decisions of the Council shall be by a majority of the votes cast by the exporting members and a majority of the votes cast by the importing members, counted separately.

2. Without prejudice to the complete liberty of action of any member in the determination and administration of its agricultural and price policies, each member undertakes to accept as binding all decisions of the Council under the provisions of this Convention.

Article 15

Executive Committee

1. The Council shall establish an Executive Committee consisting of not more than six exporting members elected annually by the exporting members and not more than eight importing members elected annually by the importing members. The Council shall appoint the chairman of the Executive Committee and may appoint a vice-chairman.

2. The Executive Committee shall be responsible to and work under the general direction of the Council. It shall have such powers and functions as are expressly assigned to it under this Convention and such other powers and functions as the Council may delegate to it under paragraph 4 of Article 10.

3. The exporting members on the Executive Committee shall have the same total number of votes as the importing members. The votes of the exporting members on the Executive Committee shall be divided among them as they shall decide, provided that no such exporting member shall have more than 40 % of the total votes of those exporting members. The votes of the importing members on the Executive Committee shall be divided among them as they shall decide, provided that no such importing member shall have more than 40 % of the total votes of those importing members.

4. The Council shall prescribe rules of procedure regarding voting in the Ececutive Committee and may make such other provision regarding rules of procedure in the Executive Committee as it thinks fit. A decision of the Executive Committee shall require the same majority of votes as this Convention prescribes for the Council when making a decision on a similar matter.

5. Any member of the Council which is not a member of the Executive Committee may participate, without voting, in the discussion of any question before the Executive Committee whenever the latter considers that the interests of that member are affected.

Article 16

Market Conditions Committee

1. The Council shall establish a Market Conditions Committee, which shall be a Committee of the whole. The chairman of the Market Conditions Committee shall be the executive director, unless the Council decides otherwise.

2. Invitations to attend the meetings of the Market Conditions Committee as observers may be extended to representatives of non-member Governments and international organizations, as the chairman of the Committee considers appropriate.

3. The Committee shall keep under continuous review, and report to members on all matters affecting the world grain economy. The Committee shall take account in its review of relevant information supplied by any member of the Council.

4. The Committee shall supplement the guidance given by the Council to assist the Secretariat in carrying out the work envisaged in Article 3.

5. The Committee shall advise in accordance with the relevant Articles of this Convention and on any matters which the Council or the Executive Committee may refer to it.

Article 17

Secretariat

1. The Council shall have a secretariat consisting of an executive director, who shall be its chief administrative officer, and such staff as may be required for the work of the Council and its Committees.

2. The Council shall appoint the executive director who shall be responsible for the performance of the duties devolving upon the secretariat in the administration of this Convention, and for the performance of such other duties as are assigned to him by the Council and its Committees.

3. The staff shall be appointed by the executive director in accordance with regulations established by the Council.

4. It shall be a condition of employment of the executive director and of the staff that they do not hold or shall cease to hold financial interest in the grain trade and that they shall not seek or receive instructions regarding their duties under this Convention from any Government or from any other authority external to the Council.

Article 18

Admission of observers

The Council may invite any non-member State, and any intergovernmental organization, to attend any of its meetings as an observer.

Article 19

Cooperation with other intergovernmental organizations

1. The Council may make whatever arrangements are appropriate for consultation or cooperation with the United Nations, its organs, and such other specialized agencies and intergovernmental organizations as may be appropriate, in particular the United Nations Conference on Trade and Development, the Food and Agriculture Organization, the Common Fund for Commodities and the World Food Programme.

2. The Council, bearing in mind the particular role of the United Nations Conference on Trade and Development in international commodity trade, will, as it considers appropriate, keep the United Nations Conference on Trade and Development informed of its activities and programmes of work.

3. If the Council finds that any terms of this Convention are materially inconsistent with such requirements as may be laid down by the United Nations through its appropriate organs or by its specialized agencies regarding intergovernmental commodity agreements, the inconsistency shall be deemed to be a circumstance affecting adversely the operation of this Convention and the procedure prescribed in Article 32 shall be applied.

Article 20

Privileges and immunities

1. The Council shall have legal personality. It shall in particular have the capacity to contract, acquire and dispose of movable and immovable property and to institute legal proceedings.

2. The status, privileges and immunities of the Council in the territory of the United Kingdom shall continue to be governed by the Headquarters Agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the International Wheat Council signed at London on 28 November 1968.

3. The Agreement referred to in paragraph 2 of this Article shall be independent of the present Convention. It shall however terminate:

(a) by agreement between the Government of the United Kingdom of Great Britain and Northern Ireland and the Council; or

(b) in the event of the seat of the Council being moved from the United Kingdom; or

(c) in the event of the Council ceasing to exist.

4. In the event of the seat of the Council being moved from the United Kingdom, the Government of the member in which the seat of the Council is situated shall conclude with the Council an international agreement relating to the status, privileges and immunities of the Council, its executive director, its staff and representatives of members at meetings convened by the Council.

Article 21

Finance

1. The expenses of delegations to the Council and of representatives on its Committees and working groups shall be met by their respective Governments. The other expenses necessary for the administration of this Convention shall be met by annual contributions from all members. The contribution of each member for each fiscal year shall be in the proportion which the number of its votes in the Annex bears to the total of the votes of members in the Annex, as adjusted pursuant to Article 11 to reflect the membership of the Convention at the time when the budget for that fiscal year is adopted.

2. At its first session after this Convention comes into force, the Council shall approve its budget for the fiscal year ending 30 June 1996, and assess the contribution to be paid by each member.

3. The Council shall, at a session during the second half of each fiscal year, approve its budget for the following fiscal year and assess the contribution to be paid by each member for that fiscal year.

4. The initial contribution of any member acceding to this Convention pursuant to paragraph 2 of Article 27 shall be assessed on the basis of the votes agreed with the Council as a condition for its accession, and the period of the current fiscal year remaining at the time of accession, but the assessments of contributions to be paid by the other members in that fiscal year shall not be altered.

5. Contributions shall be payable immediately upon assessment.

6. If, at the end of six months following the date on which its contribution is due in accordance with paragraph 5 of this Article, a member has not paid its full contribution, the executive director shall request the member to make payment as quickly as possible. If, at the expiration of six months after the request of the executive director, the member has still not paid its contribution, its voting rights in the Council and in the Executive Committee shall be suspended until such time as it has made full payment of the contribution.

7. A member whose voting rights have been suspended pursuant to paragraph 6 of this Article shall not be deprived of any of its other rights or relieved of any of its obligations under this Convention, unless the Council so decides by special vote. It shall remain liable to pay its contribution and to meet any other of its financial obligations under this Convention.

8. The Council shall, each fiscal year, publish an audited statement of its receipts and expenditures in the previous fiscal year.

9. The Council shall, prior to its dissolution, provide for the settlement of its liabilities and the disposal of its records and assets.

Article 22

Economic provisions

The Council may, at an appropriate time, examine the possibility of the negotiation of a new international agreement or convention with economic provisions, and report to members, making such recommendations as it deems appropriate. The Council may, when it is judged that such a negotiation could be successfully concluded, request the Secretary-General of the United Nations Conference on Trade and Development to convene a negotiating conference.

PART III FINAL PROVISIONS

Article 23

Depositary

1. The Secretary-General of the United Nations is hereby designated as the depositary of this Convention.

2. The depositary shall notify all signatory and acceding Governments of each signature, ratification, acceptance, approval, provisional application of, and accession to, this Convention, as well as each notification and notice received pursuant to Articles 29 and 32.

Article 24

Signature

This Convention shall be open for signature at United Nations Headquarters from 1 May 1995 until and including 30 June 1995 by the Governments listed in the Annex.

Article 25

Ratification, acceptance, approval

1. This Convention shall be subject to ratification, acceptance or approval by each signatory Government in accordance with its respective constitutional procedures.

2. Instruments of ratification, acceptance or approval shall be deposited with the depositary not later than 30 June 1995. The Council may, however, grant one or more extensions of time to any signatory Government which is unable to deposit its instrument by that date. The Council shall inform the depositary of all such extensions of time.

Article 26

Provisional application

Any signatory Government and any other Government eligible to sign this Convention, or whose application for accession is approved by the Council, may deposit with the depositary a declaration of provisional application. Any Government depositing such a declaration shall provisionally apply this Convention in accordance with its laws and regulations and be provisionally regarded as a party thereto.

Article 27

Accession

1. Any Government listed in the Annex may accede to the present Convention until and including 30 June 1995, except that the Council may grant one or more extensions of time to any Government which has not deposited its instrument by that date.

2. This Convention shall be open for accession after 30 June 1995 by the Governments of all States upon such conditions as the Council considers appropriate. Accession shall be effected by the deposit of an instrument of accession with the depositary. Such instruments of accession shall state that the Government accepts all the conditions established by the Council.

3. Where, for the purposes of the operation of this Convention, reference is made to members listed in the Annex, any member the Government of which has acceded to this Convention on conditions prescribed by the Council in accordance with this Article shall be deemed to be listed in the Annex.

Article 28

Entry into force

1. This Convention shall enter into force on 1 July 1995 if instruments of ratification, acceptance, approval or accession, or declarations of provisional application have been deposited not later than 30 June 1995 on behalf of Governments listed in part A of the Annex holding, at least, 88 % of the total votes set out in part A of the Annex.

2. If this Convention does not enter into force in accordance with paragraph 1 of this Article, the Governments which have deposited instruments of ratification, acceptance, approval or accession, or declarations of provisional application, may decide by mutual consent that it shall enter into force between themselves, or may take whatever action they consider the situation requires.

Article 29

Withdrawal

Any member may withdraw from this Convention at the end of any fiscal year by giving written notice of withdrawal to the depositary at least 90 days prior to the end of that fiscal year, but shall not thereby be released from any obligations under this Convention which have not been discharged by the end of that fiscal year. The member shall simultaneously inform the Council of the action it has taken.

Article 30

Exclusion

If the Council finds that any member is in breach of its obligations under this Convention and decides further that such breach significantly impairs the operation of this Convention, it may, by special vote, exclude such member from the Council. The Council shall immediately notify the depositary of any such decision. Ninety days after the date of the Council's decision, that member shall cease to be a member of the Council.

Article 31

Settlement of accounts

1. The Council shall determine any settlement of accounts which it finds equitable with a member which has withdrawn from this Convention or which has been excluded from the Council, or has otherwise ceased to be a party to this Convention. The Council shall retain any amounts already paid by such member. Such member shall be bound to pay any amounts due from it to the Council.

2. Upon termination of this Convention, any member referred to in paragraph 1 of this Article shall not be entitled to any share of the proceeds of the liquidation or the other assets of the Council; nor shall it be burdened with any part of the deficit, if any, of the Council.

Article 32

Amendment

1. The Council may by special vote recommend to members an amendment of this Convention. The amendment shall become effective 100 days after the depositary has received notifications of acceptance from exporting members which hold two-thirds of the votes of the exporting members and by importing members which hold two-thirds of the votes of the importing members, or on such later date as the Council may have determined by special vote. The Council may fix a time within which each member shall notify the depositary of its acceptance of the amendment and, if the amendment has not become effective by such time, it shall be considered withdrawn. The Council shall provide the depositary with the information necessary to determine whether the notifications of acceptance received are sufficient to make the amendment effective.

2. Any member on behalf of which notification of acceptance of an amendment has not been made by the date on which such amendment becomes effective shall as of that date cease to be a party to this Convention, unless such member has satisfied the Council that acceptance could not be secured in time owing to difficulties in completing its constitutional procedures and the Council decides to extend for such member the period fixed for acceptance. Such member shall not be bound by the amendment before it has notified its acceptance thereof.

Article 33

Duration, extension and termination

1. This Convention shall remain in force until 30 June 1998, unless extended pursuant to paragraph 2 of this Article, or terminated earlier pursuant to paragraph 3 of this Article, or replaced before that date by a new agreement or convention negotiated pursuant to Article 22.

2. The Council may, by special vote, extend this Convention beyond 30 June 1998 for successive periods not exceeding two years on each occasion. Any member which does not accept such extension of this Convention shall so inform the Council at least 30 days prior to the extension coming into force. Such a member shall cease to be a party to this Convention from the beginning of the period of extension, but it shall not thereby be released from any obligations under this Convention which have not been discharged prior to that date.

3. The Council may at any time decide, by special vote, to terminate this Convention with effect from such date and subject to such conditions as it may determine.

4. Upon termination of this Convention, the Council shall continue in being for such time as may be required to carry out its liquidation and shall have such powers and exercise such functions as may be necessary for that purpose.

5. The Council shall notify the depositary of any action taken pursuant to paragraph 2 or paragraph 3 of this Article.

Article 34

Relationship of Preamble to Convention

This Convention includes the Preamble to the International Grains Agreement, 1995.

IN WITNESS WHEREOF the undersigned, having been duly authorized to this effect by their respective Governments, have signed this Convention on the dates appearing opposite their signatures.

ESTABLISHED at London, this 7 December 1994, the texts of this Convention in the English, French, Russian and Spanish languages being equally authentic.

ANNEX TO THE GRAINS TRADE CONVENTION, 1995

Votes pursuant to Article 11 (from 1 July 1995 to 30 June 1998)

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FOOD AID CONVENTION, 1995

PART I OBJECTIVE AND DEFINITIONS

Article 1

Objective

The objective of this Convention is to secure, through a joint effort by the international community, the achievement of the World Food Conference target of at least 19 million tonnes of food aid annually to developing countries in the form of grain suitable for human consumption, and as determined by the provisions of this Convention.

Article 2

Definitions

For the purposes of this Convention:

1. (a) 'cif` means cost, insurance and freight;

(b) 'Committee` means the Food Aid Committee referred to in Article 9 of this Convention;

(c) 'Convention` means the Food Aid Convention, 1995;

(d) 'developing country`, unless the Committee decides otherwise, means any country or territory which is recognized by the Development Assistance Committee of OECD as a developing country or territory;

(e) 'executive director` means the executive director of the International Grains Council;

(f) 'fob` means free on board;

(g) 'pulses` includes the following species:

Cicer arietinum,

Lens culinaris,

Lupins angustifolius/albus,

Phaseolus vulgaris/lunatus,

Pisum sativum,

Vicia faba,

Vigna angularis/sinensis/unguiculata,

Vigna radiata/mungo

and any other species which the Committee may decide;

(h) 'member` means a party to this Convention;

(i) 'products of primary processing` include:

(i) cereal flours;

(ii) cereal groats and cereal meal;

(iii) other worked cereal grains (e.g. rolled, flaked, polished, pearled and kibbled, but not further prepared) except husked, glazed, polished or broken rice;

(iv) germ of cereals, whole, rolled, flaked or ground;

(v) bulgur; and

(vi) any other similar grain product which the Committee may decide;

(j) 'products of secondary processing` include:

(i) macaroni, spaghetti and similar products; and

(ii) any other product, whose manufacture involves the use of a product of primary processing, which the Committee may decide;

(k) 'rice` includes husked, glazed, polished or broken rice;

(l) 'secretariat` means the secretariat of the International Grains Council;

(m) 'tonne` means a metric tonne of 1 000 kilograms;

(n) 'usual marketing requirement` or 'UMR` is the term, as currently used by the FAO and other responsible international organizations, for the commitment by a country receiving a concessional transaction to maintain the normal level of commercial imports of the commodity concerned, in addition to the imports provided under the concessional transaction;

(o) 'wheat equivalent` means the amount of a member's contribution, whether provided in grain, in grain products, in rice or in cash, as evaluated in terms of wheat in accordance with the provisions of Article 6 of this Convention;

(p) 'year` means the period from 1 July to the following 30 June, unless otherwise stated.

2. Any reference in this Convention to a 'Government` or 'Governments` or a 'member` shall be construed as including a reference to the European Community (hereinafter referred to as the EC). Accordingly, any reference in this Convention to 'signature` or to the 'deposit of instruments of ratification, acceptance or approval` or 'an instrument of accession` or to a 'declaration of provisional application` by a Government shall, in the case of the EC, be construed as including signature or declaration of provisional application on behalf of the EC by its competent authority, and the deposit of the instrument required by the institutional procedures of the EC to be deposited for the conclusion of an international agreement.

PART II MAIN PROVISIONS

Article 3

Contributions of members

1. The members of this Convention agree to contribute to developing countries' grains as food aid, suitable for human consumption and of an acceptable type and quality, or the cash equivalent thereof, in the minimum annual amounts specified in paragraph 4. In supplying grain under this Convention, priority is to be given to countries or territories with food import needs which are classified by the Development Assistance Committee of the OECD as least developed countries (LDCs), other low-income countries (LICs) or lower middle-income countries (LMICs).

2. For the purposes of paragraph 1 of this Article, 'grain` or 'grains` means wheat, barley, maize, millet, oats, rye, sorghum and rice, or the products (including products of primary and secondary processing) derived therefrom, and also pulses, subject to the provisions of paragraph 3 of this Article, and any other type of grain or grain product, suitable for human consumption and of an acceptable type and quality, that the Committee may decide.

3. At the request of recipient countries, donors may provide limited quantities of pulses against their obligations under this Convention, provided these are of an acceptable type and quality and are suitable for human consumption. The Committee shall establish a rule of procedure to determine the maximum percentage of the wheat equivalent of members' minimum annual contributions, as set out in paragraph 4 of this Article, which may be provided in the form of pulses.

4. The minimum annual contribution, in wheat equivalent, of each member towards the achievement of the objective of Article 1 is as follows, subject to paragraph 9 of this Article:

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5. For the purposes of the operation of this Convention, any member wich has acceded to this Convention pursuant to paragraph 2 of Article 20 shall be deemed to be listed in paragraph 4 of this Article together with its minimum contribution as determined under the provisions of Article 20.

6. Contributions in the form of grains shall be placed in a fob forward position by members. However, donors are encouraged, as appropriate, to bear the costs of transporting their grain contributions under this Convention beyond the fob stage, especially in emergency situations or in the case of shipments to low-income, food deficit countries. Due reference to the payment of such costs shall be made in any review of the performance of members in this Convention.

7. Cash contributions under subparagraph (b) of Article 4:

(a) shall be used, as far as possible, to buy grain from developing countries. Preference shall be given to developing members of the Grains Trade and Food Aid Conventions, with first priority to developing members of the Food Aid Convention. However, in all transactions resulting from cash contributions, special regard shall be had, when deciding on a source of supply, to the quality of the grain, the cif price advantages of using that particular supplier, the possibilities of speedy delivery to the recipient country and the specific requirements of the recipient country;

(b) shall not normally be made to purchase grain which is of the same type that the country that is the source of supply has received as bilateral or multilateral food aid in the same year as the purchase, or in a previous year if the grain then received is still being used.

8. To the maximum extent possible, contributions shall be made by members on a forward planning basis, so that recipient countries may be able to take account, in their development programmes, of the likely flow of food aid they will receive during each year of this Convention. Furthermore, members should, to the extent possible, indicate in advance the amount of their contributions to be made in the form of gifts, and the grant element of any aid which is not in the form of gifts.

9. If a member is unable to provide the amount specified in paragraph 4 of this Article in a particular year, the unfulfilled amount shall be added to its amount in the following year, unless the Committee decides otherwise owing to high transport costs.

10. Members shall provide regular and timely reports to the Committee on the amount, content, channelling and terms of their contributions under this Convention.

Article 4

Terms of food aid contributions

Food aid under this Convention may be supplied on any of the following terms:

(a) gifts of grain;

(b) gifts or grants of cash to be used to purchase grain for the recipient country;

(c) sales of grain for the currency of the recipient country which is not transferable and is not convertible into currency or goods and services for use by the donor members (1);

(d) sales of grain on credit, with payment to be made in reasonable annual amounts over periods of 20 years or more and with interest at rates which are below commercial rates prevailing in world markets (2);

on the understanding that such aid shall be supplied to the maximum extent possible by way of gifts, especially in the case of least developed countries, low per capita income countries and other developing countries in serious economic difficulties.

Article 5

Channelling of contributions

1. Members may, in respect of their contributions under this Convention, specify a recipient country or countries.

2. Members may make their contributions bilaterally or through intergovernmental organizations and/or non-governmental organizations.

3. Members shall give full consideration to the advantages of directing a greater proportion of food aid through multilateral channels, in particular the World Food Programme.

Article 6

Wheat equivalents

1. For the purposes of this Convention, all contributions pursuant to Article 3 shall be evaluated in terms of their wheat equivalent. The evaluation shall take account, where appropriate, of the grain content of grain products, and the commercial value of the contribution relative to wheat.

2. Contributions of rice shall be evaluated in terms of wheat equivalent in accordance with the international export price relationship between rice and wheat. The Committee shall establish a rule of procedure for the annual determination of the wheat equivalent of rice.

3. Contributions of cash under subparagraph (b) of Article 4 shall be evaluated at prevailing international market prices of wheat. The Committee shall establish a rule of procedure for the annual determination of the 'prevailing international market price`.

4. The Committee shall establish rules of procedure for the determination of the wheat equivalent of contributions made in forms other than wheat, rice or cash.

Article 7

Impact on trade and agricultural production, and conduct of aid transactions

1. Members undertake to conduct all aid transactions under this Convention in such a way as to avoid harmful interference with normal patterns of production and international commercial trade.

2. Members shall ensure in particular:

(a) that the provision of international food aid is not tied directly or indirectly to commercial exports of agricultural products to recipient countries;

(b) that international food aid transactions, including bilateral food aid which is monetized, shall be carried out in a manner consistent with the FAO 'Principles of surplus disposal and consultative obligations` including, where appropriate, the system of usual marketing requirements (UMRs).

3. Members shall, as appropriate, act in accordance with the current guidelines and criteria for food aid, as approved by the governing body of the World Food Programme.

Article 8

Special provision for exceptional needs

1. The Committee shall keep the food situation in developing countries under regular review.

2. If it appears that, because of a substantial food production shortfall, or other cirumstances, a particular country, region or regions is faced with exceptional food needs, the Committee shall consider the matter. The Committee may recommend that members should respond to the situation by increasing the amount of food aid available.

Article 9

Food Aid Committee

1. The Food Aid Committee, established by the Food Aid Convention of the International Grains Arrangement, 1967, shall continue in being for the purpose of administering this Convention, with the powers and functions provided in this Convention.

2. The membership of the Committee shall consist of all parties to this Convention.

3. The Committee shall appoint a chairman and a vice-chairman.

Article 10

Powers and functions of the Committee

1. The Committee shall keep under review the way in which the obligations undertaken under this Convention have been fulfilled.

2. The Committee shall exchange information on a regular basis on the functioning of the food aid arrangements under this Convention.

3. The Committee may receive information from recipient countries and consult with them.

4. The Committee shall issue reports as necessary.

5. The Committee shall establish such rules of procedure as are necessary to carry out the provisions of this Convention.

6. In addition to the powers and functions specified in this Article, the Committee shall have such other powers and perform such other functions as are necessary to carry out the provisions of this Convention.

Article 11

Seat, sessions and quorum

1. The seat of the Committee shall be in London.

2. The Committee shall meet at least twice a year in conjunction with the statutory sessions of the International Grains Council. The Committee shall meet also at such other times as the chairman shall decide; or at the request of three members; or as otherwise required by this Convention.

3. The presence of delegates representing two-thirds of the membership of the Committee shall be necessary to constitute a quorum at any session of the Committee.

Article 12

Decisions

The decisions of the Committee shall be reached by consensus.

Article 13

Admission of observers

The Committee may, when appropriate, invite any non-Member State and representatives from other international organizations to attend its open meetings as observers.

Article 14

Administrative provisions

The Committee shall use the services of the secretariat for the performance of such administrative duties as the Committee may request, including the processing and distribution of documentation and reports.

Article 15

Defaults and disputes

In the case of a dispute concerning the interpretation or application of this Convention, or of a default in obligations under this Convention, the Committee shall meet and take appropriate action.

PART III FINAL PROVISIONS

Article 16

Depositary

The Secretary-General of the United Nations is hereby designated as the depositary of this Convention.

Article 17

Signature

This Convention shall be open for signature at United Nations Headquarters from 1 May 1995 until and including 30 June 1995 by the Governments referred to in paragraph 4 of Article 3.

Article 18

Ratification, acceptance or approval

This Convention shall be subject to ratification, acceptance or approval by each signatory Government in accordance with its constitutional procedures. Instruments of ratification, acceptance or approval shall be deposited with the depositary not later than 30 June 1995, except that the Committee may grant one or more extensions of time to any signatory Government that has not deposited its instrument of ratification, acceptance or approval by that date.

Article 19

Provisional application

Any signatory Government my deposit with the depositary a declaration of provisional application of this Convention. Any such Government shall provisionally apply this Convention in accordance with its laws and regulations and be provisionally regarded as a party thereto.

Article 20

Accession

1. This Convention shall be open for accession by any Government referred to in paragraph 4 of Article 3 that has not signed this Convention. Instruments of accession shall be deposited with the depositary not later than 30 June 1995, except that the Committee may grant one or more extensions of time to any Government that has not deposited its instrument of accession by that date.

2. Once this Convention has entered into force in accordance with Article 21, it shall be open for accession by any Government other than those referred to in paragraph 4 of Article 3, upon such conditions as the Committee considers appropriate. Instruments of accession shall be deposited with the depositary.

3. Any Government acceding to this Convention pursuant to paragraph 1 of this Article, or whose accession has been agreed by the Committee pursuant to paragraph 2 of this Article, may deposit with the depositary a declaration of provisional application of this Convention pending the deposit of its instrument of accession. Any such Government shall provisionally apply this Convention in accordance with its laws and regulations and be provisionally regarded as a party thereto.

Article 21

Entry into force

1. This Convention shall enter into force on 1 July 1995 if by 30 June 1995 the Governments, whose combined minimum contributions, as listed in paragraph 4 of Article 3, equal at least 75 % of the total contributions of all governments listed in that paragraph, have deposited instruments of ratification, acceptance, approval or accession, or declarations of provisional application, and provided that the Grains Trade Convention, 1995 is in force.

2. If this Convention does not enter into force in accordance with paragraph 1 of this Article, the Governments which have deposited instruments of ratification, acceptance, approval or accession, or declarations of provisional application, may decide by unanimous consent that it shall enter into force among themselves provided that the Grains Trade Convention, 1995 is in force.

Article 22

Duration, extension and termination

1. This Convention shall remain in force until and including 30 June 1998, unless extended pursuant to paragraph 2 of this Article or terminated earlier pursuant to paragraph 4 of this Article, provided that the Grains Trade Convention, 1995, or a new Grains Trade Convention replacing it, remains in force until and including that date.

2. The Committee may extend the Convention beyond 30 June 1998 for successive periods not exceeding two years on each occasion, provided always that the Grains Trade Convention, 1995, or a new Grains Trade Convention replacing it, remains in force during the period of the extension.

3. If the Convention is extended pursuant to paragraph 2 of this Article, the annual contributions of members pursuant to paragraph 4 of Article 3 may be subject to review by members before the entry into force of each extension. Their respective obligations, as reviewed, shall remain unchanged for the duration of each extension.

4. In the event of this Convention being terminated, the Committee shall continue in being for such time as may be required to carry out its liquidation, and shall have such powers, and exercise such functions, as may be necessary for that purpose.

Article 23

Withdrawal and rejoining

1. Any member may withdraw from this Convention at the end of any year by giving written notice of withdrawal to the depositary at least 90 days prior to the end of that year, but shall not thereby be released from any obligations incurred under this Convention which have not been discharged by the end of that year. The member shall simultaneously inform the Committee of the action it has taken.

2. Any member which withdraws from this Convention may thereafter rejoin by giving notice to the Committee. It shall be a condition of rejoining the Convention that the member shall be responsible for fulfilling its full annual obligations with effect from the year in which it rejoins.

Article 24

Relationship of this Conventions to the International Grains Agreement, 1995

This Convention shall replace the Food Aid Convention, 1986, as extended, and shall be one of the constituent instruments of the International Grains Agreement, 1995.

Article 25

Notification by depositary

The Secretary-General of the United Nations as depositary shall notify all signatory and acceding Governments of each signature, ratification, acceptance, approval, provisional application of, and accession to, this Convention.

Article 26

Authentic texts

The text of this Convention in the English, French, Russian and Spanish languages shall all be equally authentic.

(1) Under exceptional circumstances an exemption of not more than 10 % may be granted. This limitation may be waived for transactions which are to be used for the expansion of economic development activity in the recipient country, provided that the currency of the recipient country is not transferable or convertible in less than 10 years.

(2) The credit sales agreement may provide for payment of up to 15 % of principal upon delivery of the grain.