PROPOSAL FOR A COUNCIL DECISION CONCERNING THE CONCLUSION OF THE AGREEMENT ESTABLISHING THE COMMON FUND FOR COMMODITIES
Date: 1989-09-21
Institutions: European Commission
Subjects: commodity agreement, common commercial policy, common fund, primary product

COMMISSION  OF  THE  EUROPEAN  COMMUNITIES 

COM(89) 445 final 

Brussels, 21 September 1989 

Proposal for a 

COUNCIL  DECISION 

concerning the conclusion of the Agreement  establishing 

the Common  Fund for commodities 

(presented by the Commission) 

Common Fund for commodities: conclusion of the 1960 Agreement 

EXPLANATORY  MEMORANDUM 

Following the Commission's reoanmendation of 22 October 1960 for a Council 
Decision an Community participation In the Common Fund for commodities and 
the signing by the Community of the Agreement establishing the Fund 
(OOM(ÔO) 621 final) and the adoption of the Decision by the Council, the 
Community signed the Agreement, deposited with the Secretary-General of the 
United Nations In New York, on 21 October 1961. 

The Agreement  stipulates that its entry into force is subject to the three following 
conditions : 

(a) ratification by at least 90 states; 

(b) subscription of at least two thirds of the directly contributed 

capital; 

(c) attainment of at least 50% of the target for pledges of voluntary 

contributions to the second aooount. 

Given that all these conditions have been met, a Council Decision is now 
needed for the conclusion of the 1960 Agreement, 

Moreover, pursuant to Article 57(1) of the Agreement a meeting has been 
palled for 19 June at the United Nations Secretariat In New York, bringing 
together the 64 countries which deposited the instruments of ratification 
before 30 September 1963, to determine the date on which the Agreement will 
effectively enter into force.  This meeting, which duly took place, decided upon 
entry into force as from 19 June 1989. 

I 

- 2 -

In view of the oommercial, economic and political importance of the 
Agreement, the Community and its Member States should speak with a single 
voice in the preparatory discussions and within the bodies set up under the 
Agreement. 

Such is the aim of this proposal for a Council Decision, which the 
Commission is asked to approve. 

PROPOSAL  FOR  A  CttJMCTL  DBCISICN 

Of 

concerning the conclusion of the Agreement establishing the 

Common Fund for commodities 

TEE COUNCIL OF THE EUROPEAN COMMUNITIES, 

Having regard to the Treaty establishing the European Economic Community, 
and in particular Articles 113 and 116 thereof, 

Having regard to the proposal from the Commission, 

Whereas the Agreement establishing the Common Fund for commodities was 
signed by the Community on 21 October 1981; 

Whereas it Is Important, therefore, that the Community and its Member 
States oonclude the Agreement establishing the Common Fund for commodities 
deposited with the Secretary-General of the United Nations Organization, 

HAS UMJ1DKD AS FOLLOWS: 

Article 1 

The Agreement establishing the Common Fund for commodities is hereby 
approved on behalf of the Community. 

The Community and those of its Member States which have completed the 
relevant internal procedures shall deposit the instruments of approval of 
the Agreement with the Secretariat-General of the United Nations. 

The text of the Agreement is annexed to this Decision. 

y 

- 2 -

Article 2 

The President of the Council is hereby authorized to designate the person 
empowered to deposit the Instrument of approval on behalf of the Community. 

This Decision shall be published in the Official Journal of  the 
Communities. 

European 

Article 3 

Done at Brussels, 

For the Council 

The President 

TD/IPC/CF/CONF/25 

AGREEMENT  ESTABLISHING  THE  COMMON  FUND 

FOR  COMMODITIES 

UNITED  NATIONS 

c 

NOTE 

Symbols  of  United  Nations  documents  are  composed  of  capital  letters 
combined  with figures. Mention  of  such  a symbol  indicates  a reference  to a 
United  Nations  document. 

TD/IPC/CF/CONF/25 

UNITED  NATIONS  PUBLICATION 

Sales No. E 81 II D 8 

Price: fU.S.  4.00 

3 

CONTENTS 

Part One 

Agreement  establishing  the  Common  Fund  for  Commodities  .

.

.. 

Page 

1 

Part Two 

Final Act of the United  Nations Negotiating Conference  on a Common 

Fund  under  the Integrated  Programme  for  Commodities  .

.

.. 

27 

Annex: Resolution  adopted  by  the  Conference 

30 

Ui 

<? 

Part One 

Agreement establishing  the  common fund for  commodities 

PREAMBLE 

4niek 

I.  Definitions 

1  Objectives 
3.  Functions 

CONTENTS 

C H A T T ER  1.  D E P I N T / I O NS 

CHAPTER  11.  OBJECTIVES AND  FUNCTIONS 

CHATTER  III.  MEMRERSHIP 

4.  Eligibility 
5.  Members 
6.  Limitation of liability 

.. 
.. 

.
.

.
.

CHATTER  IV.  RELATIONSHIP OF  KTOS AND ICBs WITH THE  FUND 

7.  Relationship of ICOs and ICBs with the  Fund 

C H A T T ER  V.  C A P I T AL  A ND  O T H ER  R E S O U R C ES 

9.  Unit of Account  and currencies 
9.  Capital  resources 
10.  Subscription of Shares 
11.  Payment of Shares 
12.  Adequacy of subscription»  of  shares of  Directl)  Contributed  Capital 
13.  Voluntary contributions 
14.  Resources deriving from  the association  of  ICOs with  the  Fund 

. 

. 

A.  Cash déposas 
B  Guarantee Capital  and  Guarantees  . 
C  Stock  Warrants 

. 

15.  Borrowings 

CHAPTER  VI.  OPERATIONS 

16.  General  provisions 
A.  Use of resources 
B.  Two accounts 
C.  The Special  Reserve 
D.  General  powers 
E  General operating principles 

. 

. 

. 

17.  The First Account 
A.  Resources 
B.  Principles of First Account  operations 

1 

? 

Article 

C.  The  MFR 
D.  Obligations  to the  Fund  of Associated  ICOs and of  their participants  .
E.  Obligations of the  Fund  to Associated  ICOs 
F.  Default  of Associated  ICOs 
G.  Liabilities arising  from  First Account  borrowings 
H.  Disposal  by the  Fund  of  forfeited  stocks 

.

.. 

18.  The  Second Account 

A  Resources 
B.  Financial  Limits  Tor the  Second  Account 
C.  Principles of Second  Account  operations 
D.  Borrowing  for the Second  Account 

CHAPTER  VII.  ORGANIZATION  AND  MANAGEMENT 

19.  Structure  of  the  Fund 
20.  Governing Council 
21.  Voting in  the Governing  Council 
22  Executive  Board 
23.  Voting  in  the Executive  Board 
24.  Managing  Director  and staff 
25.  Consultative  Committee 
26.  Budgetary  and  audit  provisions 
27.  Location  of  headquarters 
28.  Publication of  reports 
29.  Relations  with  the  United  Nations  and other  organizations 

CHAPTER  VIII.  WITHDRAWAL  AND SUSPENSION  OF MEMBERSHIP AND  WITHDRAWAL 
OF ASSOCIATED ICOS 

30.  Withdrawal  of  Members 
31.  Suspension  of  membership 
31  Settlement  of  accounts 
33.  Withdrawal  of Associated  ICOs 

CHAPTER  IX.  SUSPENSION  AND TERMINATION  OF OPERATIONS AM» armEssENT 
OF OtUGATIONS 

34.  Temporary  suspension  of operations 
35.  Termination  of operations 
36.  Settlement  of obligations: general  provisions 
37.  Setdement of  obligations: First Account 
38.  Settlement of obligations: Second  Account 
39.  Settlement  of obligations: other  assets of the  Fund 

CHAPTER  X.  STATUS, PRIVILEGES AND  IMMUNITIES 

40.  Purposes 
41.  Legal  status of the Fund 
42.  Immunity  from juridical  proceedings 
43.  Immunity of  assets from other actions 
44.  Immunity  of  archives 
45.  Freedom  of  assets from  icsuietiuat 
46.  Privileges for communications 
47.  Immunities and  privileges of specified  individuals 
48.  Immunities  from  taxation 
49.  Waiver  of immunities, exemptions  and  privileges 
50.  Application of this chapter 

CHAPTER  XI.  AMENDMENTS 

C H A P T ER  XII.  I N T E R P R É T A T I ON  A ND  ARBITRATION 

51.  Amendments 

52. 
53. 

Interpretation 
Arbitration 

fag, 

9 

9 
10 
10 
10 
10 

10 
10 
11 
II 
II 

14 
14 
14 
15 

W 
16 
16 
17 
17 
17 
17 
17 
17 
17 
18 

18 

18 
18 

,'-')  O 

Arttck 

CHAPTER  XIII.  FINAL  PROVISIONS 

54.  Signature and ratification,  acceptance or approval 
55.  Depositary 
56.  Accession 
57.  Entry into force 
58.  Reservations 

A  Subscriptions  of  Shares of Directly Contributed  Capital 
B.  Special  arrangements  for  the  least  developed  countries  pursuant  to  article  11, para 

SCHEDULES 

graph 6 

C.  Eligibility  criteria  for ICBs 
D.  Allocation  of  vota 
£  Election  of Executive Directors 
F.  Unit of Account 

*t* 

19 
19 
19 
19 
19 

20 

23 
23 
23 
25 
26 

NOTE: For the purposes of article  11, the conversion rates for Usable Currencies in terms of 

the  Unit of  Account, as at the date of  the Agreement (27 June  1980). are as follows. 

Cmrwrncy 

. 

Deutsche  mark  . 
French  fiant. 
. 
Japanese yen 
. 
Pound sterling  . 
. 
United States dollar 

Cmrrtncy mmio 
tfAemmi 

ft*  Umi 

2.33306 
5.42029 

287.452 

a563927 
1.32162 

Preamble 

Chapter I. Definitions 

The Parties. 
Determined to promote economic co-operation and 
understanding among all States, particularly between 
developed  and  developing  countries,  based  on  the 
principles of equity ana sovereign equality and there 
by to contribute to the establishment of a New Inter 
national  Economic Order. 

Recognizing the need for improved  forms of inter 
national co-operation in  the field of commodities as 
an essential condition for the establishment of a New 
International  Economic  Order,  aimed  at  promoting 
economic and social development, particularly of de 
veloping countries. 

Desirous  of  promoting  global  action  to  improve 

market  structures  in  international  trade  in  com 
modities of interest  to developing countries, 

Recoiling resolution 93 (IV) on the Integrated Pro 
gramme for Commodities adopted  at the fourth ses 
sion of the United Nations Conference on Trade and 
Development (hereinafter  referred  to as UiyCTAD), 
Have  agreed to  establish  hereby  the  Common 
Fund for Commodities, which shall operate in accor 
dance with  the following provisions: 

Article  J 

DEFINITIONS 

For the purposes of this Agreement : 
1.  "Fund"  means  the  Common  Fund  for  Com 

modities established  by this Agreement. 

2 

"International  Commodity  Agreement  or Ar 
rangement"  (hereinafter  referred  to as ICA) means 
any intergovernmental agreement or arrangement to 
promote international  co-operation in a commodity. 
the parties to which include producers and consum 
ers  covering  the  bulk  of  world  trade  in  the  com 
modity concerned. 

3.  "International  Commodity  Organization" 
(hereinafter  referred  to as ICO) means the organiza 
tion  established  by an ICA to implement  the provi 
sions of the ICA. 

4.  "Associated  ICO" means an ICO which is as 

sociated  with  the Fund  pursuant  to article 7. 

5.  "Association  Agreement"  means  the  agree 
ment  entered  into  between  an  ICO  and  the  Fund 
pursuant  to article 7. 

4* 

6.  "Maximum  Financial  Requirements"  (here 
inafter  referred  to  as  MFR)  means  the  maximum 
amount  of  funds  that  may  be drawn  and  borrowed 
by  an  Associated  ICO  from  the  Fund,  to  be  deter 
mined  in  accordance  with  article  17, paragraph  8. 

7.  "International  Commodity  Body"  (hereinafter 
referred  to  as ICB)  means  a body  designated  in  ac 
cordance  with  article  7,  paragraph  9. 

8.  "Unit  of  Account"  means  the  unit  of  account 
of  the  Fund  as defined  in  accordance  with  article 8. 
paragraph  1. 

9.  "Usable  Currencies"  means  (a)  the  deutsche 
mark, the French franc,  the Japanese yen. the pound 
sterling,  the  United  States  dollar and  any other cur 
rency  which  has  been  designated  from  time  to  time 
by a competent  international  monetary  organization 
as  being  in  fact  widely  used  to  make  payments  for 
international  transactions  and  widely  traded  in  the 
principal  exchange  markets, and (b) any other freely 
available  and  effectively  usable  currency  which  the 
Executive  Board  may  designate  by  a  Qualified  Ma 
jority  after  the  approval  of  the  country  whose  cur 
rency  the  Fund  proposes  to  designate  as  such.  The 
Governing  Council  shall  designate  a  competent  in 
ternational  monetary  organization  under  (a)  above 
and  shall  adopt  by  a  Qualified  Majority  rules  and 
regulations  regarding  the  designation  of  currencies 
under (b) above, in accordance with prevailing inter 
national  monetary  practice.  Currencies  may  be  re 
moved from  the list of Usable Currencies by the Exe 
cutive  Board  by a  Qualified  Majority. 

10.  "Directly Contributed Capital" means capital 
specified  in  article  9,  paragraph  1  (a)  and  para 
graph 4. 

11.  "Paid-in  Shares"  means 

the  shares  of 
Directly  Contributed  Capital  specified  in  article  9. 
paragraph  2 (a),  and  article  10. paragraph 2. 

12.  "Payable  Shares"  means 

the  shares  of 
Directly  Contributed  Capital  specified  in  article  9. 
paragraph  2 (£),  and  article  10, paragraph  2 (b). 

13.  "Guarantee Capital" means capital  provided 
to  the  Fund,  pursuant  to article  14, paragraph 4. by 
Members of  the Fund participating in an Associated 
ICO. 

14.  "Guarantees"  means guarantees  provided  to 
the Fund, pursuant to article  14. paragraph 5. by par 
ticipants  in  an Associated  ICO which  are not  Mem 
bers of  the  Fund. 

15.  "Stock  Warrants"  means  stock  warrants, 
warehouse  receipts  or  other  documents  of  title 
evidencing  ownership  of commodity  stocks. 

16.  "Total  voting  power"  means  the  sum  of  the 

votes  held  by  all  the  Members  of  the  Fund. 

17.  "Simple  Majority"  means  more  than  half  of 

all  votes cast. 

18.  "Qualified  Majority' 

thirds of  all  votes cast. 

means  at  least  two 

19.  "Highly  Qualified  Majority"  means  at  least 

three  fourths  of  all  votes cast. 

20. 
votes. 

Votes cast"  means  affirmative  and  negative 

Chapter II. Objectives and  functions 

Article  2 

OBJECTIVES 

The objectives  of  the  Fund  shall  be: 
(a) To  serve  as  a  key  instrument  in  attaining  the 
agreed  objectives  of  the  Integrated  Programme  for 
Commodities  as  embolied  in  resolution  93  (IV)  of 
UNCTAD; 

(b) To facilitate  the conclusion  and  functioning  of 
ICAs. particularly concerning commodities of special 
interest  to developing countries. 

Article  3 

FUNCTIONS 

In fulfilment  of its objectives,  the Fund shall exer 

cise  the following  functions: 

(a) To  contribute,  through  its  First  Account  as 
hereinafter  provided,  to  the  financing  of  interna 
tional  buffer  stocks  and  internationally  co-ordinated 
national  stocks,  all  within  the  framework  of  ICAs; 

(b) To  finance,  through 

its  Second  Account. 
measures  in  the  field  of  commodities  other  than 
stocking, as hereinafter  provided; 

(c) To  promote  co-ordination  and  consultation 
through its Second Account  with regard to measures 
in the field of commodities  other than  stocking, and 
their  financing,  with  a  view  to  providing  a  com 
modity  focus. 

Chapter III. Membership 

Article  4 

ELIGIBILITY 

Membership  in  the Fund  shall  be open  to: 
(a) All States Members of the United Nations or of 
any of its specialized agencies or of the International 
Atomic  Energy  Agency; and 

(b) Any  intergovernmental  organization  of  re 
gional  economic  integration  which  exercises  compe 
tence  in  fields  of  activity  of  the  Fund.  Such  inter 
governmental  organizations  shall  not  be  required  to 
undertake any financial obligations  to the Fund; nor 
shall  they hold any  votes. 

Article  5 

MEMBERS 

The Members of the Fund (hereinafter  referred  to 

as Members) shall  be: 

(a) Those  States  which  have  ratified,  accepted  or 
approved  this Agreement  in  accordance  with  article 
54; 

(b) Those States which have acceded to this Agree 

ment in  accordance  with  article 56; 

y\Z 

(c) Those  intergovernmental  organizations  refer 
red to in article 4 (b) which have ratified,  accepted  or 
approved  this  Agreement  in  accordance  with  article 
54; 

(d) Those  intergovernmental  organizations  refer 
red  to  in  article  4  (b)  which  have  acceded  to  this 
Agreement  in  accordance  with  article  56. 

Article  6 

LIMITATION  OF LIABILITY 

No  member  shall  be  Liable,  by  reason  only  of  its 

membership,  for  acts  or  obligations  of  the  Fund. 

7.  An Associated  ICO may, if the Association  Ag 
reement  so provides and  with  the consent  of the pre 
ceding  Associated  ICO  covering  the  same  com 
modity,  succeed  to  the  rights  and  obligations  of  the 
preceding  Associated  ICO. 

8.  The  Fund  shall  not  intervene  directly  in  com 
modity  markets.  However,  the  Fund  may  dispose  of 
commodity  stocks  only  pursuant  to  article  17, para 
graphs  15 to  17. 

9.  For  the  purpose  of  the  Second  Account,  the 
Executive  Board  shall  from  time  to  time  designate 
appropriate  commodity  bodies,  including  ICOs. 
whether  or  not  they  are  Associated  ICOs.  as  ICBs. 
provided  that  they  meet  the criteria  set out  in  sched 
ule  C. 

Chapter  IV. Relationship  of  ICOs  and  ICBs 
with  the Fund 

Chapter V. Capital  and other  resources 

Article  7 

Article  8 

RELATIONSHIP OF  ICOs AND  ICBs WITH THE  FUND 

UNIT OF  ACCOUNT AND CURRENCIES 

1.  The facilities  of the Fund's  First  Account  shall 
be  used  only  by  ICOs  established  to implement  the 
provisions  of ICAs providing  for  either  international 
buffer  stocks or internationally  co-ordinated  national 
stocks, and which have concluded an Association  Ag 
reement.  The  Association  Agreement  shall  comply 
with  the  terms  of  this  Agreement  and  of  any  rules 
and  regulations  consistent  therewith  to  be  adopted 
by  the  Governing  Council. 

2.  An  ICO  established  to  implement  the  provi 
sions  of  an  ICA  which  provides  for  international 
buffer  stocks  may  become  associated  with  the  Fund 
for  the  purposes  of  the  First  Account,  provided  that 
the  ICA  is  negotiated  or  renegotiated  on.  and  con 
forms  to, the principle of joint  ouffer  stock  financing 
by  producers  and  consumers  participating  therein. 
For  the  purposes  of  this  Agreement,  levy-financed 
ICAs shall  be  eligible for  association  with  the  Fund. 
3.  A  proposed  Association  Agreement  shall  be 

Sresented  by the Managing Director  to the  Executive 

oard  and,  with  the  recommendation  of  the  Board, 
the  Governing  Council  for  approval  by  a 

to 
Qualified  Majority. 

4. 

In  carrying  out  the  provisions  of  the  Associ 
ation  Agreement  between  the  Fund  and  an  Asso 
ciated  ICO  each  institution  shall  respect  the  auto 
nomy of  the other.  The Association  Agreement  shall 
specify  the mutual rights and obligations of the  Fund 
and the Associated  ICO, in  terms consistent  with  the 
relevant  provisions  of  this  Agreement 

5.  An  Associated  ICO shall  be entitled  to  borrow 
from  the Fund  through  its First Account without  pre 
judice  to  its  eligibility  to  obtain  financing  from  the 
Second  Account,  provided  that  the  Associated  ICO 
and  its  participants  have  performed  and  are  duly 
performing  their  obligations  to  the  Fund. 

6.  An  Association  Agreement  shall  provide  for  a 
settlement  of  accounts  between  the  Associated  ICO 
and  the  Fund  before  any  renewal  of  the  Association 
Agreement 

1.  The  Unit  of  Account  of  the  Fund  shall  be  as 

defined  in  schedule  F. 

2.  The  Fund  shall  hold, and  conduct  its financial 
transactions 
in.  Usable  Currencies.  Except  as 
provided  in  article  16, paragraph  5 (b\  no  Member 
shall  maintain  or  impose  restrictions  on  the  holding. 
use  or  exchange  by  the  Fund  of  Usable  Currencies 
deriving  from: 

(a) Payment  of subscriptions  of  Shares  of  Directly 

Contributed  Capital; 

(b) Payment  of  Guarantee  Capital,  cash  in  lieu  of 
Guarantee  Capital,  Guarantees  or  cash  deposits  re 
sulting  from  the  association  of  ICOs  with  the  Fund; 

(c) Payment  of  voluntary  contributions; 
(d) Borrowing; 
(e) Disposal  of forfeited  stocks, pursuant  to article 

17, paragraphs  15 to  17; 

(/)  Payment  on  account  of  principal,  income,  in 
terest  or  other  charges  in  respect  of  loans  or  invest 
ments  made  out  of  any  of  the  funds  referred  to  in 
this  paragraph. 

3.  The  Executive  Board  shall  determine 

the 
method  of  valuation  of  Usable  Currencies,  in  terms 
of the Unit of Account, in accordance with prevailing 
international  monetary  practice. 

Article  9 

CAPITAL RESOURCES 

1.  The  capital  of  the  Fund  shall  consist  of: 
(a) Directly  Contributed  Capital  to be divided  into 
47,000 Shares to be issued  by the Fund,  having a par 
value  of  7,566.47145  Units  of  Account  each  and  a 
total  value  of  355,624,158  Units  of  Account;  and 

(b) Guarantee  Capital  provided  directly  to  the 

Fund  in  accordance  with  article  14, paragraph  4. 

-1J 

2.  The Shares  to  be issued  by  ihe  Fund  shall  be 

divided m«:o: 

(a) 37,DOO Paid-in  Shares; and 
ib)  10,000  Payable  Shares. 
3.  Shares of DirecUy Contributed Capital shall be 
available for subscription only by Members in accor 
dance with  the  previsions  of  article  10, 

4.  Tht  Shares  of  Directly  Contributed  Capital: 
(a) Shall, if necessary,  be increased by the Govern 
ing  Council  upon  the  accession  of  any  State  under 
article -56; 

(b) May  be increased  by  the Governing Council in 

accordance  with  article  12; 

(c)  Shall  be  increased  by  the  amount  needed  pur 

suant  io  article  17, paragraph  14. 

5.  If  the  Governing  Council  makes  available  for 
subscription  the  unsubscribed  Shares  of  Directly 
Contributed  Capital  pursuant  to  article  12,  para 
graph  3.  or  increases  the  Shares  of  Directly  Con 
tributed  Capital  pursuant  to paragraph 4 (b) or 4 (c) 
of this article, each  Member shall have the right, but 
shall  not  be  required,  to subscribe  such  Shares. 

Article 10 
SUBSCRIPTION OF SHARES 

1.  Each  Member  referred  to in  article  5 (a) shall 

subscribe,  as set  forth  in  schedule  A: 

(a)  100 Paid-in  Shares; and 
(b) Any  additional  Paid-in  and  Payable Shares. 
2.  Each  Member  referred  to in article  5 (b) shall 

subscribe: 

(a)  100 Paid-in  Shares; and 
(b) Any  additional  Paid-in  and  Payable  Shares  to 
be  determined  by  the  Governing  Council  by  a 
Qualified  Majority  in  a  manner  consistent  with  the 
allocation of Shares in schedule A and in accordance 
with the terms and conditions agreed pursuant to art 
icle 56. 

3.  Each  Member may  allocate  to the Second Ac 
count a part of its subscription under paragraph  1  (a) 
of  this article with  a view  to an aggregate  allocation 
to the Second  Account,  on  a voluntary  basis,  of not 
less  than  52,965.300  Units of  Account 

4.  Shares  of  Directly  Contributed  Capital  shall 
not  be  pledged  or  encumbered  by  Members  in  any 
manner whatsoever and shall  be transferable only  to 
the Fund. 

Article JI 
PAYMENT OF  SHARES 

1.  Payments  of  Shares  of  Directly  Contributed 
Capital  subscribed  by  each  Member shall  be made: 
(a) In  any  Usable  Currency  at  the  rate of  conver 
sion  between  that  Usable  Currency  and  the  Unit  of 
Account  as at  the date  of  payment; or 

(b) In a Usable Currency selected  by that  Member 
at the time of deposit of its instrument of ratification. 
acceptance or approval, and at the rate of conversion 
between  that  Usable  Currency  and  the  Unit  of  Ac 

count as at the date of this Agreement  The  Gov»fl 
ing Council  shall  adopt  rules  and  regulations cover 
ing  the  payment  of  subscriptions  in Uss.blt  Curren 
cies  in  the  case  of  designation  of  additional  Usable 
Currencies or removal of UsaMe Currencies from ihe 
list of Usable Currencies in accordance with article 1, 
definition  9. 
At  the  time  of  deposit  of  its  instrument  of  ratifica 
tion,  acceptance  or  approval,  each  Member  shall 
select one of the procedures above, which shall apply 
to all  such  payments. 

2.  When  undertaking  any  review  in  accordance 
with  article  12, paragraph  2,  the  Governing  Council 
shall review the operation of the method of payment 
referred  to in paragraph  I of  this  article,  in  the light 
of  exchange-rate  fluctuations,  and.  taking  into  ac 
count  developments  in  the  practice  of  international 
lending 
institutions,  shall  decide  by  a  Highly 
Qualified  Majority on changes, if any, in  the method 
of payment of subscriptions of any additional  Shares 
of  Directly  Contributed  Capital  subsequently  issued 
in  accordance  with  article  12. paragraph 3. 

3.  Each  Member referred  to in article 5 (a) shall: 
(a) Pay  30  per  cent  of  its  total  subscription  of 
Paid-in  Shares  within  60  days  after  the  entry  into 
force of  this Agreement,  or within  30 davs  after  the 
date  of  deposit  of  its  instrument  of  ratification,  ac 
ceptance  or approval,  whichever  is later; 

(b) One  year  after  the  payment  provided  for  in 
subparagraph  (a) above, pay'20  per cent  of  its total 
subscription  of  Paid-in  Snares  and  deposit  with  the 
Fund  irrevocable,  non-negotiable,  non-interest-bear 
ing promissory notes in an amount  of  10 per cent of 
its  total  subscription  of  Paid-in  Shares.  Such  notes 
shall be encashed as and when decided by the Execu 
tive  Board; 

(c) Two  years  after  the  payment  provided  for  in 
subparagraph  (a) above, deposit  with  the  Fund irre 
vocable,  non-negotiable,  non-interest-bearing  pro 
missory notes in an amount of 40 per cent of its total 
subscription  of  Paid-in  Shares. 
Such  notes  shall  be  encashed  as  and  when  decided 
by the Executive Board by a Qualified  Majority, hav 
ing due regard to the operational  needs of the Fund, 
except  that the promissory  notes in respect of Shares 
allocated to the Second Account shall be encashed as 
and  when decided  by  the  Executive  Board. 

4.  The  amount  subscribed  by  each  Member  for 
Payable  Shares shall  be subject  to call  by  the  Fund 
only  as provided  in  article  17, paragraph  12. 

5.  Calls  on  Shares  of  Directly  Contributed  Cap 
ital  shall  be  made  pro  rata  from  all  Members  with 
respect  to  whichever  class  or  classes  of  Shares  are 
being  called,  except  as  provided  for  in  paragraph  3 
(c) of  this  article. 

6.  Special  arrangements for payment of subscrip 
tions  of  Shares  of  Directly  Contributed  Capital  by 
the least  developed  countries shall  be as set  forth  in 
schedule  B. 

7.  Subscriptions  of  Shares  of  Directly  Con 
tributed  Capital  may, when  relevant,  be paid  by the 
appropriate  agencies  of  Members  concerned. 

^ 

Article 12 

ADEQUACY OF SUBSCRIPTIONS OF  SHARES OF  DIRECTLY 
CONTRIBUTED  CAPITAL 

1.  In the event that  18 months after the entry into 
force  of  this  Agreement  subscriptions  of  Shares  of 
Directly Contributed  Capital  fall short of the amount 
specified  in  article  9,  paragraph  1 (a),  the  adequacy 
of the subscriptions shall  be reviewed  by the Govern 
ing  Council  as  soon  as  possible  thereafter. 

2.  The Governing Council shall further review, at 
such  intervals  as  it  may  deem  appropriate,  the 
adequacy  of  the  Directly  Contributed  Capital  avail 
able  to the  First Account.  The first such review  shall 
take  place  not  later  than  the  end  of  the  third  year 
after  the  entry  into  force  of  this  Agreement. 

3.  As a result of any review under paragraph  1  or 
2  of  this  article,  the  Governing  Council  may  decide 
to  make  available  for  subscription  unsubscribed 
Shares or to issue additional  Shares of Directly Con 
tributed  Capital  on  a  basis  of  assessment  to  be  de 
cided  by  the  Governing  Council. 

4.  Decisions by the Governing Council  under this 
article shall  be taken by a Highly Qualified  Majority. 

Article 13 

VOLUNTARY CONTRIBUTIONS 

1.  The  Fund  may  accept  voluntary  contributions 
from  Members and other sources. Such contributions 
shall  be  paid  in  Usable  Currencies. 

2.  The  target  for  the  initial  voluntary  contribu 
tions  for  use  in  the  Second  Account  shall  be 
211.861.200 Units of Account, in addition  to the allo 
cation  made  in  accordance  with  article  10.  para 
graph  3. 

3. 

(a) The  Governing  Council  shall  review  the 
adequacy of the resources of the Second Account not 
later  than  the  end  of  the  third  year  after  the  entry 
into  force  of  this  Agreement.  In  the  light  of  the  ac 
tivities of the Second  Account,  the Governing Coun 
cil  may  also  undertake  such  a  review  at  such  other 
times  as  it decides. 

(b) In  the light of any such reviews, the Governing 
Council  may decide  to replenish  the resources of the 
Second  Account  and  make  the  necessary  arrange 
ments.  Any  such  replenishments  shall  be  voluntary 
for Members and in accordance with this Agreement. 
4.  Voluntary contributions shall  be made without 
restrictions  as  to  their use by  the Fund,  except  as to 
their  designation  by  the  contributor  for  use  in  the 
First or  Second  Account. 

Article 14 

RESOURCES DERIVING FROM THE  ASSOCIATION OF ICOs 
WITH THE  FUND 

A.  Cash deposits 

1.  Upon the association of an ICO with the Fund, 
the Associated ICO shall, except as specified  in para 
graph 2 of this article, deposit  with the Fund in cash 
m  Usable  Currencies,  and  for  the  account  of  that 

Associated  ICO, one  third  of  its  MFR.  Such  deposit 
shall  be  made  in  full  or  in  instalments  as  the Asso 
ciated  ICO and  the  Fund  may  agree,  taking  into ac 
count all  relevant factors, including  the Funds liqui 
dity  position,  the  need  for  maximizing  the  financial 
benefit  to  be  derived  from  the  availability  of  cash 
deposits  of  Associated  ICOs  and  the capacity  of  the 
Associated  ICO concerned  to raise the cash required 
for  meeting  its  deposit  obligation. 

2.  An  Associated  ICO which  is  holding  stocks at 
the  time of its association  with  the Fund  may  meet a 
part  or all  of  its deposit  obligation  under paragraph 
1 of  this  article  by  pledging  to, or  assigning  in  trust 
for,  the  Fund  Stock  Warrants of  equivalent  value. 

3.  An  Associated  ICO  may  deposit  with  th* 
Fund, on  mutually  acceptable  terms and conditions. 
any cash surplus, in addition  to deposits made under 
paragraph  1 of  this article. 

B.  Guarantee Capital and  Guarantees 

4.  Upon the association of an ICO with the Fund. 
Members  participating  in  that  Associated  ICO shall 
provide directly  to the Fund Guarantee  Capital on a 
oasis determined by the Associated ICO and satisfac 
tory  to  the  Fund.  The  aggregate  value  of  the 
Guarantee  Capital,  and  any  Guarantees  or  cash 
provided under paragraph 5 of this article shall equal 
two  thirds  of  the  MFR  of  that  Associated  ICO. ex 
cept  as  provided  for  in  paragraph  7  of  this  article 
Guarantee  Capital  may. when  relevant,  be  provided 
by  the  appropriate  agencies  of  the  Members  con 
cerned,  on  a basis  satisfactory  to  the  Fund. 

5.  If  participants  in  an  Associated  ICO  are  not 
Members,  that  Associated  ICO  shall  deposit  cash 
with  the  Fund,  in  addition  to  the cash  referred  to in 
paragraph  1  of  this  article,  in  the  amount  of  the 
Guarantee  Capital  which  such  participants  would 
have  provided  had  they  been  Members;  except  that 
the  Governing  Council  may  by  a  Highly  Qualified 
Majority  permit  that  Associated  ICO  to  arrange 
either for the provision of additional Guarantee Cap 
ital  of  the  same  amount  by  Members  participating 
in  that  Associated  ICO.  or  for  the  provision  of 
Guarantees  of  the  same  amount  by  participants  in 
that  Associated  ICO  which  are  not  Members  Such 
Guarantees shall  carry financial obligations compar 
able  to those of Guarantee  Capital  and shall  be in a 
form  satisfactory  to  the  Fund. 

6.  Guarantee  Capital  and  Guarantees  shall  be 
subject  to call  by  the  Fund  only  in  accordance  with 
article  17,  paragraphs  11  to  13.  Payment  of  such 
Guarantee  Capital  and  Guarantees shall  be made m 
Usable  Currencies. 

7.  If an Associated  ICO is meeting its deposit ob 
ligation  in  instalments  pursuant  to  paragraph  1 of 
this article, such Associated  ICO and its participants 
shall, upon the payment of each instalment, provide. 
as appropriate. Guarantee  Capital,  cash  or Guaran 
tees,  m  accordance  with  paragraph  5 of  this  article. 
which  in the aggregate shall  equal  twice thé amount 
of  that  instalment. 

C.  Stock  Warrants 

8.  An Associated ICO shall pledge to. or assign in 
trust  for.  the  Fund  all  Stock  Warrants  of  com-

rl 

r 

modities purchased with the proceeds of withdrawals 
of cash deposits  made under paragraph  1  of this art 
icle, or with the proceeds of loans obtained  from  the 
Fund,  as security  for  the  payment  by  the  Associated 
ICO  of  its  obligations  to  the  Fund.  The  Fund  shall 
dispose  of  stocks  only  in  accordance  with  article  17, 
paragraphs  15  to  1/.  Upon  the  sale  of  the  com 
modities  evidenced  by such  Stock  Warrants,  the As 
sociated  ICO  shall  apply  the  proceeds  of  such  sales 
first to  repay  the  balance  due  on  any  loan  to  the 
Associated  ICO from  the  Fund  and  then  to meet  its 
cash  deposit  obligation  in  accordance  with  para 
graph  1 of  this article. 

9.  All  Stock  Warrants pledged  to. or  assigned  in 
trust  for,  the  Fund  shall  be valued,  for  the purposes 
of paragraph  2 of  this  article, on  a basis specified  in 
rules  and  regulations  adopted  by  the  Governing 
Council. 

Article 15 

BORROWINGS 

The  Fund  may  borrow  in  accordance  with  article 
16. paragraph 5 (a), provided that the total outstand 
ing  amount  of  borrowings  by  the  Fund  for  its  First 
Account  operations  shall  not  at  any  time  exceed  an 
amount  representing  the  aggregate  of: 

(a) The  uncalled  portion  of  Payable  Shares; 
(b) The  uncalled  Guarantee  Capital  and  Guaran 
tees of  participants  in Associated  ICOs under article 
14, paragraphs  4  to  7; and 

(c)  The  Special  Reserve  established  pursuant  to 

article  16. paragraph  4. 

Chapter  VI.  Operations 

Article 16 

GENERAL PROVISIONS 

A.  Use of resources 

1.  The  resources  and  facilities  of  the  Fund  shall 
be used exclusively  to achieve its objectives and  fulfil 
its  functions. 

B.  Two  accounts 

2  The  Fund  shall  establish,  and  maintain  its re 
sources  in,  two  separate  Accounts:  a  First  Account, 
with  resources  as  provided  for  in  article  17,  para 
graph  1, to contribute  to the financing of commodity 
stocking;  and  a  Second  Account,  with  resources  as 
provided  for  in  article  18,  paragraph  1,  to finance 
measures  in  the  field  of  commodities  other  than 
stocking,  without  jeopardizing  the  integral  unity  of 
the  Fund.  Such  separation  of  Accounts  shall  be  re 
flected  in  the financial statements  of  the  Fund. 

3.  The  resources  of  each  Account  shall  be  held, 
used,  committed,  invested  or  otherwise  disposed  of 
entirely  separately  from  the  resources  of  tne  other 
Account.  The resources of  one  Account shall  not  be 

charged  with  losses,  or  used  to  discharge  liabilities, 
arising out of the operations or other activities of the 
other  Account 

C  The Special Reserve 

4.  The  Governing  Council  shall  establish,  out of 
the earnings of  the  First Account, net of administra 
tive  expenses,  a  Special  Reserve,  not  exceeding  10 
per cent of Directly  Contributed Capital  allocated  to 
the First Account, for meeting liabilities arising from 
First  Account  borrowings,  as  provided  for  in  article 
17, paragraph  11  Notwithstanding  the provisions of 
paragraphs  2  and  3  of  this  article,  the  Governing 
Council  shall  decide  by  a  Highly  Qualified  Majority 
how  to dispose  of  any  net  earnings  not  allocated  to 
the  Special  Reserve. 

D.  General powers 

5.  In  addition  to any  powers  set  forth  elsewhere 
in this Agreement,  the Fund may exercise the follow 
ing powers  in connexion  with  its operations,  subject 
to  and  consistent  with  general  operating  principles 
and  the  terms of  this Agreement: 

(a) To borrow from  Members,  international finan 
cial institutions and, for  First Account operations, in 
capital  markets,  in  accordance  with  the  law  of  the 
country  in  which  the  borrowing  is  made,  provided 
that  the  Fund  shall  have  obtained  the  approval  of 
such country  and  of  any  country  in  the  currency  of 
which  the  borrowing  is denominated; 

(b) To invest  funds  at  any  time not  needed  for its 
operations in such financial instruments as the Fund 
may  determine,  in  accordance  with  the  law  of  the 
country  in whose  territory  the investment  is made; 
(c) To  exercise  such  other  powers  necessary  to 
further its objectives and functions and to implement 
the provisions  of  this  Agreement 

E  General operating principles 
6.  The Fund shall operate according to the provi 
sions  of  this  Agreement  and  any  rules  and  regula 
tions which the Governing Council may adopt pursu 
ant  to article  20. paragraph  6. 

7.  The  Fund  shall  make  arrangements  to  ensure 
that  the proceeds of  any  loan  or grant  made  or par 
ticipated in by the Fund is used only for the purposes 
for which the  loan  or grant  was made. 

8.  Every  security  issued  by  the  Fund  shall  bear 
on its face a conspicuous  statement  to the effect  that 
it  is  not  the  obligation  of  any  Member  unless  ex 
pressly  stated  otherwise  on  the security. 

9.  The  Fund  shall  seek  to  maintain  reasonable 

diversification  in  its investments. 

10.  The  Governing  Council  shall  adopt  suitable 
rules  and  regulations  for  the  procurement  of  goods 
and  services  from  the  resources  of  the  Fund.  Such 
rules and regulations shall conform, as a general rule. 
of the principles of international competitive  bidding 
among  suppliers  in  the  territories  of  Members,  and 
shall  give  appropriate  preference  to  experts,  techni 
cians  and  suppliers  from  developing  countries 
Members of  the  Fund. 

AC 

11.  The  Fund  shall  establish  close  working rela 
tionships  with  international  and  regional  financial 
institutions and may, as is practicable, establish such 
relationships  with  national  entities  of  Members, 
whether public or private, which  are concerned  with 
investment  of  development  funds  in  commodity  de 
velopment  measures.  The  Fund  may  participate  in 
co-financing  with  such  institutions. 

11  In its operations and within its sphere of com 
petence,  the  Fund  shall  co-operate  with  ICBs  and 
Associated  ICOs in  the protection  of  the interests of 
developing importing countries, if such countries are 
adversely  affected  by measures  under the  Integrated 
Programme  for  Commodities. 

13.  The Fund shall operate in a prudent manner, 
shall  take actions it deems necessary' to conserve and 
safeguard  its  resources  ans  shall  not  engage  in  cur 
rency  speculation. 

with its ability to obtain finance and with the need to 
cover  its  costs  of  borrowing  for  funds  lent  to  such 
Associated  ICOs. 

5.  The  Fund  shall  pay  interest  on  all  other cash 
balances  of  Associated  ICOs  at  appropriate  rates 
consistent  with  the  return  on  its  financial  invest 
ments,  and  taking  into  account  the  rate  charged  on 
loans  to Associated  ICOs  and  the  cost  of  borrowing 
for  First Account  operations. 

6.  The  Governing  Council  shall  adopt  rules and 
regulations  laying  down  the  operating  principles 
within which it shall determine interest  rates charged 
and  paid  in  accordance  with  paragraphs  4  and  5 of 
this  article.  In so doing  the  Governing  Council  shall 
be  guided  by  the need  to maintain  the financial via 
bility  of  the  Fund  and  shall  bear  in  mind  the  prin 
ciple  of  non-discriminatory  treatment  as  between 
Associated  ICOs. 

Article 17 

THE  FIRST  ACCOUNT 

A. Resources 

1.  The resources of the First Account shall consist 

of: 

(a) Subscriptions  by  Members  of  Shares  of 
Directly  Contributed  Capital,  except  such  part  of 
their subscriptions as may be allocated  to the Second 
Account  in  accordance  with  article  10. paragraph  3; 
(b) Cash  deposits  from  Associated  ICOs  pursuant 

to article  14. paragraphs  1 to 3; 

(c) Guarantee  Capital,  cash  in  lieu  of  Guarantee 
Capital  and  Guarantees  provided  by participants in 
Associated  ICOs pursuant  to article  14, paragraphs 4 
to 7; 

(d) Voluntary  contributions  allocated  to  the  First 

Account; 

(e)  Proceeds  of  borrowings  pursuant  to  article  15; 
(/)  Net  earnings  which  may  accrue  from  oper 

ations  of  the  First  Account; 

(g) The  Special  Reserve  referred  to  in  article  16. 

paragraph 4; 

(h) Stock Warrants from Associated ICOs pursuant 

to  article  14, paragraphs  8 and 9. 

B.  Principles of First Account  operations 

1  The  Executive  Board  shall  approve  the  terms 
of  borrowing  arrangements  for  First  Account  oper 
ations. 

3.  Directly  Contributed  Capital  allocated  to  the 

First  Account  shall  be  employed: 

(a) To enhance the creditworthiness of the Fund in 

respect  of  its  First  Account  operations; 

(b) As  working  capital,  to  meet  the  short-term 

Liquidity  needs  of  the  First  Account; and 

(c) To provide revenues to cover the administrative 

expenses  of  the  Fund. 

4.  The  Fund shall charge  interest  on  loans  made 
to Associated  ICOs  at  rates  as  low  as are  consistent 

C.  The MFR 

7.  An  Association  Agreement  shall  specify  the 
MFR  of  the  Associated  ICO  and  the  steps  to  be 
taken  in  the  event  of  modification  of  its  MFR. 

8.  The  MFR  of  an  Associated  ICO shall  include 
the  acquisition  cost  of  stocks,  determined  by  multi 
plying the authorized  size of its stocks as specified  in 
the  Association  Agreement  by  an  appropriate  pur 
chase price as determined by that Associated ICO. In 
addition, an Associated  ICO may include in its MFR 
specified  carrying costs,  exclusive  of  interest  charges 
on  loans, in  an amount  not  exceeding  20 per cent  of 
the  acquisition  cost. 

D.  Obligations to  the Fund of Associated ICOs 
and of their participants 

9.  An Association  Agreement  shall  provide, inter 

alia: 

(a) For  the  manner  in  which  the  Associated  ICO 
and its participants shall  undertake the obligations to 
the Fund specified  in article  14 in respect of deposits. 
Guarantee  Capital,  cash  in  lieu  of  Guarantee  Ca 
pital,  and  Guarantees,  and  Stock  Warrants: 

(b) That the Associated ICO shall not borrow  from 
any third party for its buffer stocking operations, un 
less  the Associated  ICO  and  the  Fund  have reached 
mutual agreement on a basis by the Executive Board: 
(c) That  the  Associated  ICO  shall  at  all  times  be 
responsible,  and  liable  to  the  Fund,  for  the  main 
tenance  and  preservation  of  stocks  for  which  Stock 
Warrants  have  been  pledged  to. or assigned  in trust 
for. the Fund, and shall maintain adequate insurance 
on, and appropriate security and other arrangements 
with  respect  to,  the  holding  and  handling  of  such 
stocks; 

(</) That  the  Associated  ICO  shall  enter  into  ap 
propriate credit agreements with the Fund  specifying 
the terms and conditions of any loan  from  the Fund 
to that  Associated  ICO, including  the  arrangements 
for  repayment  of  principal  and  payment  of  interest. 
(e) That  the Associated  ICO shall,  as appropriate. 
keep the Fund  informed  of  conditions  and  develop 
ments in the commodity  markets with which  the As 
sociated  ICO is concerned. 

- ' -; 

E  Obligations  of the Fund to Associated ICOs 

10.  An Association Agreement shall also provide, 

inter alia: 

(j)That. subject  to the provisions of paragraph  11 
(a) of  this  article,  the  Fund  shall  provide  for  with 
drawal  by the Associated  ICO on demand, in  whole 
or in part  of  the amounts deposited  pursuant  to art 
icle  14, paragraphs  1 and 2; 

(b) That  the  Fund  shall  make  loans  to  the  Asso 
ciated  ICO  in  an  aggregate  principal  amount  not 
exceeding  the  sum  of  the  uncalled  Guarantee  Cap 
ital, cash  in lieu of  Guarantee  Capital, and Guaran 
tees provided  by participants  in  the Associated  ICO 
by  virtue  of  their  participation  in  that  Associated 
ICO pursuant  to  article  14, paragraphs  4  to 7; 

(c) That  withdrawals  and  borrowings  by  each  As 
sociated  ICO pursuant  to subparagraphs  (a) and  (b) 
above  shall  be  used  only  to  meet  stocking  costs in 
cluded  in  the  MFR  in  accordance with  paragraph  8 
of  this  article.  Not  more  than  any  amount  included 
in the MFR of each Associated ICO to meet specified 
carrying costs in accordance with paragraph 8 of this 
article  shall  be  used  to meet  such costs; 

(d) That, except as provided for in paragraph  11 (c) 
of  this  article,  the  Fund  shall  promptly  make  Stock 
Warrants available  to  the Associated  ICO for  use in 
its  buffer  stock sales; 

(e) That  the  Fund  shall  respect  the  confidentiality 

of  information  provided  by  the  Associated  ICO. 

F.  Default of Associated ICOs 

11.  In the event of imminent  default  by an Asso 
ciated  ICO on  any of its borrowings  from  the Fund, 
the Fund  shall  consult  with  that Associated  ICO on 
measures  to  avoid  such  a  default.  To  meet  any  de 
fault  by an Associated  ICO. the  Fund  shall  have re 
course  to  the  following  resources,  in  the  following 
order,  up  to  the amount  of  the  default: 

(a) Any cash of the defaulting Associated ICO held 

in  the  Fund; 

(b) Proceeds of pro rata calls of Guarantee Capital 
and  Guarantees  provided  by  participants  in  the de 
faulting Associated  ICO by virtue of  their participa 
tion in that  Associated  ICO; 

(c) Subject  to  paragraph  15  of  this  article,  any 
Stock  Warrants pledged  to, or assigned  in  trust  for, 
the Fund  by  the defaulting Associated  ICO. 

G.  Liabilities arising from  First Account  bommings 
11  In  the  event  that  the  Fund  cannot  otherwise 
meet its liabilities in respect of its First Account bor 
rowings,  it  shall  meet  such  liabilities  out  of  the  fol 
lowing  resources  in  the  following  order;  provided 
that  if an Associated  ICO shall  have  failed; to meet 
its obligations towards the Fund, the Fund shall have 
already,  to  the  fullest  extent  possible,  made  use  of 
the resources  referred  to in paragraph  11 of  this ar 
ticle: 

(a) The Special  Reserve; 
(b) Proceeds of subscriptions of  Paid-in  Shares al 

located  to  the  First  Account; 

(c)  Proceeds of subscriptions  of  Payable Shares; 
(d) Proceeds of pro rata calls of Guarantee CapitJ 
and  Guarantees  provided  by  participants  in  a  de 
faulting  Associated  ICO by virtue of  their participa 
tion  in other Associated  ICOs. 
Payments  made  by  participants  in  Associated  ICOs 
in accordance with (d) above shall  be reimbursed by 
the Fund as soon as possible from resources provided 
in  accordance  with  paragraphs  11,  15,  16 and  17 of 
this article; any such  resources  remaining  after  such 
reimbursement  shall  be  used  to  reconstitute  in  re 
verse order,  the resources  referred  to in  (a),  (b) and 
(c) above. 

13.  The  proceeds  of  pro  rata  calls  of  all 
Guarantee  Capital  and Guarantees  shall  be  used by 
the  Fund,  following  recourse  to  the  resources  listed 
in paragraph  12 {a), (b) and (c) of this article, to meet 
any of its liabilities other than liabilities arising from 
the default  of  an Associated  ICO. 

14.  To  enable  the  Fund  to  meet  any  liabilities 
which  may  be  outstanding  after  recoursé  to  the re 
sources  mentioned  in  paragraphs  12 and  13 of  this 
article,  the  Shares  of  Directly  Contributed  Capital 
shall  be  increased  by  the  amount  needed  to  meet 
such  liabilities  and  the  Governing  Council  shall  be 
convened in an emergency session to decide upon the 
modalities  for such  increase. 

H.  Disposal by  the Fund of forfeited stocks 

15.  The  Fund  shall  be  free  to  dispose  of  com 
modity  stocks  forfeited  to  it  by  a  defaulting  Asso 
ciated  ICO pursuant  to paragraph  11 of  this  article. 
provided  that  the  Fund  shall  seek  to  avoid  distress 
sales  of  such  stocks  by  postponing  the  sales  to  the 
extent  consistent  with  the  need  to  avoid  default  on 
the  Fund's own  obligations. 

16.  The  Executive  Board  shall  at appropriate in 
tervals review disposals of stocks  to which  the  Fund 
has recourse in accordance  with paragraph  11 (c) of 
this article,  in consultation  with  the Associated  ICO 
concerned,  and shall  decide  by a Qualified  Majority 
whether  to  postpone  such disposals. 

17.  The proceeds of such disposals of stocks shall 
be  used first to  meet  any  liabilities  of  the  Fund  in 
curred  in its  First  Account  borrowings  in  respect  of 
the Associated  ICO concerned,  and  then  to reconsti 
tute, in  the reverse order,  the resources  listed  under 
paragraph  12 of  this article. 

Article  18 

THE  SECOND  ACCOUNT 

A.  Resources 
1.  The  resources  of  the  Second  Account  shall 

consist  of: 

i 
i 

(a) The  part  of  Directly  Contributed  Capital  allo 
cated  to  the Second  Account  in  accordance  with ar 
ticle  10, paragraph 3; 

(b) Voluntary  contributions  made  to  the  Second 

Account; 

10 

/ 1^ 

-1 

(c)  Such  net  income  as  may  accrue  from  time  to 

time  in  the  Second  Account; 

(d) Borrowings; 
(e) Any  other  resources  placed  at  the  disposal  of, 
received or acquired  by. the Fund  for its Second Ac 
count  operations  pursuant  to  this  Agreement. 

B.  Financial  limits for  the Second Account 

2. '  The  aggregate  amount  of  loans  and  grants 
made,  and  of  participations  therein,  by  the  Fund 
through  its  Second  Account  operations  shall  not 
exceed  the aggregate  amount  of  the resources of  the 
Second  Account. 

C.  Principles of  Second Account  operations 

3.  The  Fund  may  make  or participate  in  loans 
and.  except  for  that  portion  of  the  Directly  Con 
tributed  Capita]  allocated  to  the  Second  Account, 
grants  for  the financing of  measures  in  the  field  of 
commodities  other  than  stocking  from  the  resources 
of  the  Second  Account,  subject  to  the  provisions  of 
this  Agreement  and  in  particular  to  the  following 
terms  and conditions: 

(a) The measures shall be commodity  development 
measures,  aimed  at  improving  the  structural  condi 
tions  in  markets  and  at  enhancing  the  long-term 
competitiveness  and  prospects  of  particular  com 
modities.  Such  measures  shall  include  research  and 
development,  productivity  inprovements.  marketing 
and  measures  designed  to  assist,  as a rule  by  means 
of  joint  financing  or  through  technical  assistance, 
vertical  diversification,  whether  undetaken  alone,  as 
in the case of perishable commodities and other com 
modities  whose  problems  cannot  be  adequately 
solved  by  stocking, or in  addition  to  and  in support 
of  stocking  activities. 

(b) The  measures  shall  be  jointly  sponsored  and 
followed  up by producers  and consumers within  the 
framework  of  an  ICB. 

(c)  The  operations  of  the  Fund  in  the  Second 
Account  may inke the form of loans and grants to an 
ICB or an agency thereof, or to a Member or Memb 
ers designated  by such  ICB on  terms and  conditions 
which  the  Executive  Board  decides  are appropriate, 
having  regard  to  the  economic  situation  of  the  ICB 
or  the  Member  or  Members  concerned  and  the  na 
ture  and  requirements  of  the  proposed  operation. 
Such loans may be covered by governmental or other 
suitable  guarantees  from  the ICB or the  Member or 
Members  designated  by  such  ICB. 

(d) The ICB sponsoring a project  to be financed by 
the Fund  through its Second Account shall submit to 
the  Fund  a detailed  written  proposal  specifying  the 
purpose,  duration,  location  and  cost  of  the  project 
and  the  agency  responsible  for  its execution. 

(e) Before  any  loan  or  grant  is  made,  the  Manag 
ing  Director  shall  present  to  the  Executive  Board  a 
detailed  appraisd  of  the  proposal  along  with  his re 
commendations  and  the  advice  of  the  Consultative 
Committee,  as  appropriate,  in  accordance  with  art 
icle  25,  paragraph  2.  Decisions  with  regard  to  the 
selection  and approval of proposals shall  be made by 

the  Executive  Board  by  a  Qualified  Majority  in  ac 
cordance  with  this Agreement  and  any  rules and re 
gulations  for  the  operations  of  the  Fund  adopted 
pursuant  thereto. 

(/)  For  the  appraisal  of  project  proposals  pre 
sented to it for financing, the Fund shall, as a general 
rule, use the services of international  or regional ins 
titutions  and  may,  where  appropriate,  use  the  ser 
vices  of  other  competent  agencies  and  consultants 
specialized  in the field. The Fund  may also entrust to 
such institutions the administration of loans or grants 
and  the  supervision  of  the  implementation  of  pro 
jects  financed  by  it.  Such  institutions,  agencies  and 
consultants  shall  be  selected  according  to  rules  and 
regulations  adopted  by  the  Governing  Council. 

(g) In  making  or  participating  in  any  loan,  the 
Fund  shall  pay  due  regard  to  the  prospects  that  the 
borrower and any guarantor shall  be in a position  to 
meet  their obligations  to the Fund  in respect  of such 
transactions. 

(A) The  Fund  shall  enter  into  an  agreement  with 
the ICB, an agency  thereof, the Member or Members 
concerned, specifying  the amounts,  terms and condi 
tions  of  the  loan  or  grant  and  providing,  inter alia. 
for  any  governmental  or  other  appropriate  guaran 
tees in accordance with this Agreement  and with any 
rules  and  regulations  established  by  the  Fund. 

(0  Funds  to  be  provided  under  any  financing 
operation  shall  be  made  available  to  the  recipient 
only  to meet  expenses  in connexion  with  the project 
as  they  are  actually  incurred. 

(/')  The  Fund  shall  not  refinance  projects  initially 

financed from  other sources. 

(k)  Loans  shall  be  repayable  in  the  currency  or 

currencies  loaned. 

(/)  The Fund shall as far as possible avoid duplica 
tion of its Second  Account  activities with existing in 
ternational  and  regional  financial  institutions,  but 
may  participate  in  co-financing  with  such  institu 
tions. 

(m)In  determining  its  priorities  for  the  use  of  the 
resources of the Second Account, the Fund shall give 
due  emphasis  to commodities  of interest  to  the least 
developed  countries. 

(n) In considering projects for the Second  Account 
due  emphasis  shall  be  given  to  the  commodities  of 
interest  to developing countries, particularly  those of 
small  producers-exporters. 

(o) The  Fund  shall  pay  due  regard  to  desirability 
of not using a disproportionate  amount of its Second 
Account  resources  for  the  benefit  of  any  particular 
commoditv. 

D.  Borrowing for  the Second Account 
4.  The  Fund's  borrowing  for  the  Second  Ac 
count,  under  article  16. paragraph  5 (a),  shall  be in 
accordance with  rules and  regulations to be adopted 
by the Governing Council  and shall be subject  to the 
following: 

(a) Such  borrowing  shall  be on  concessional  terms 
to be specified  in rules and regulations to be adopted 

11 

V 

by the Fund  and its proceeds  shall  not  be re-lent on 
terms  which  are  more  concessional  than  those  on 
which  they  are acquired. 

(J) To  take  decisions  pursuant  to article  16. para 
graph  4,  relating  to  net  earnings  after  provision  for 
the  Special  Reserve; 

(b) For the purposes of accounting, the proceeds of 
the  borrowing  shall  be  placed  in  a  loan  account 
whose  resources  shall  be  held,  used,  committed,  in 
vested  or  otherwise  disposed  of,  entirely  separately 
from other resources of the Fund, including the other 
resources  of  the  Second  Account 

(c) The  other  resources  of  the  Fund,  including 
other resources of  the  Second  Account, shall  not  be 
charged" with  losses,  or  used  to  discharge  liabilities, 
arising out of operations or other activities of such a 
loan  account 

(d) The  borrowings  for  the  Second  Account  shall 

be  approved  by  the  Executive  Board. 

* 

Chapter VII. Organization  and management 

Article  19 

STRUCTURE OF THE  FUND 

The Fund shall have a Governing Council, an Exe 
cutive  Board, a Managing  Director  and such staff as 
may  be necessary  to carry  out  its  functions. 

Article  20 

GOVERNING COUNCIL 

1.  All  the powers of  the  Fund  shall  be vested  in 

the  Governing  Council. 

2.  Each Member shall appoint one Governor and 
one  alternate  to serve  on  the  Governing  Council  at 
the  pleasure  of  the  appointing  Member.  The  alter 
nate may participate  in  meetings  but  may  vote only 
in  the absence  of  his principal. 

3.  The  Governing  Council  may  delegate  to  the 
Executive  Board authority  to exercise any powers of 
the Governing  Council,  except  the  power 

(a) To  determine  the  fundamental  policy  of  the 

Fund; 

(b) To agree on terms and conditions for accession 

to this Agreement  in  accordance  with  article 56; 

(c) To suspend  a Member; 
(a) To increase or decrease  the  Shares of  Directly 

Contributed  Capital: 

(e) To adopt  amendments  to  this Agreement; 
if)  To terminate the operations of the Fund and to 
distribute  the  Fund's  assets  in  accordance  with 
chapter IX; 

(g) To appoint  the  Managing  Director; 
(A) To  decide  appeals  by  Members  on  decisions 
made  by  the  Executive  Board  concerning  the inter 
pretation  or application  of  this  Agreement; 

(0  To approve the audited annual statement of ac 

counts of  the Fund; 

(k) To approve  proposed  Association  Agreements; 
(/)  To approve proposed agreements with other in 
ternational  organizations  in  accordance  with  article 
29,  paragraphs  1 and 2; 

(m)To decide on replenishments of the Second Ac 

count  in accordance with  article  13. 

4.  The  Governing  Council  shall  hold  an  annual 
meeting and such special  meetings  as it may decide, 
or as are called for  by  15 Governors holding at least 
one fourth of the total voting power, or as requested 
by  the  Executive  Board. 

5.  A  quorum  for  any  meeting  of  the  Governing 
Council  shall  be  constituted  by  a  majority  of  the 
Governors  holding  not  less  than  two  thirds  of  the 
total  voting power. 

6.  The  Governing  Council  shall  by  a  Highly-
Qualified  Majority  establish  such  rules  and  regula 
tions  consistent  with  this  Agreement  as  it  deems 
necessary  for  the  conduct  of  the  business  of  the 
Fund. 

7.  Governors  and  alternates  shall  serve  as  such 
without  compensation  from  the  Fund,  unless  the 
Governing  Council  decides  by  a  Qualified  Majority 
to pay them reasonable per diem and travel expenses 
incurred  in  attending  meetings. 

8.  At each annual meeting, the Governing Coun 
cil  shall  elect  a  Chairman  from  among  the  Gover 
nors.  The  Chairman  shall  hold  office  until  the  elec 
tion  of  his successor.  He  may  be  re-elected  for  one 
successive  term. 

Article 21 

VOTING  IN THE  GOVERNING  COUNCIL 

1.  Votes  in  the  Governing  Council  shall  be  dis 
tributed  among  Member  States  in  accordance  with 
schedule  D. 

2.  Decisions  in  the  Governing  Council  shall. 

whenever  possible,  be  taken  without  vote. 

3.  Except  as  otherwise  provided  in  this  Agree 
ment, all matters before the Governing Council shall 
be decided  by a  Simple  Majority. 

4.  The  Governing  Council  may  by  rules  and re 
gulations  establish  a procedure  whereby  the  Execu 
tive  Board  may  obtain  a  vote  of  the  Council  on  a 
specific  question  without  calling  a  meeting  of  the 
council. 

Article 22 

E X E C U T I VE  B O A RD 

1.  The  Executive  Board  shall  be  responsible  for 
the conduct of  the operations  of  the  Fund  and shall 
report  to  the  Governing  Council  thereon.  For  this 
purpose the Executive  Board shall exercise  the pow 
ers accorded to it elsewhere in this Agreement or de 
legated  to it by  the Governing  Council.  In  the exer 
cise  of  any  delegated  powers,  the  Executive  Board 

12 

Zo 

shall  take  decisions  by  the  same  levels  of  majority 
that  would  apply  were  such  powers  retained  by  the 
Governing  Council. 

2.  The  Managing  Director  shall  conduct,  under 
the direction  of  the Governing Council  and  the Exe 
cutive  Board,  the  ordinary  business  of  the  Fund. 

2.  The  Governing  Council  shall  elect  28  Execu 
tive  Directors  and  one  alternate  to  each  Executive 
Director  in  the  manner  specified  in  schedule E. 

3.  Each Executive Director and alternate shall  be 
elected  for  a  term  of  two  years  and  may  be  re 
elected. They  shall  continue  in office  until  their suc 
cessors  are  elected.  An  alternate  may  participate  in 
meetings  but  may  vote  only  in  the  absence  of  his 
principal. 

3.  The  Managing  Director shall  be the chief exe 
cutive  officer  of  the  Fund  and  the  Chairman  of  the 
Executive Board, and shall participate in its meetings 
without  the right to vote. 

4.  The  term  of  office  of  the  Managing  Director 
shall  be  four  years  and  he  may  be  reappointed  for 
one successive  term.  However,  he shall  cease  to hold 
office  at any  time  the  Governing  Council  so decides 
by  a Qualified  Majority. 

4.  The  Executive  Board  shall  function  at  the 
headquarters of the  Fund  and shall  meet  as often  as 
the  business  of  the  Fund  may require. 

5. 

(a) The  Executive  Directors  and  their  alter 
nates  shall  serve  without  remuneration  from  the 
Fund. The Fund may, however, pay them reasonable 
per  diem  and  travel  expenses  incurred  in  attending 
meetings. 

(b) Notwithstanding  subparagraph  (a)  above,  the 
Executive  Directors  and  their  alternates  shall  be re 
munerated  by  the  Fund  if  the  Governing  Council 
decides by a Qualified  Majority  that  they shall  serve 
on  a full-time  basis. 

6.  A  quorum  for  any  meeting  of  the  Executive 
Board shall be constituted by a majority of Executive 
Directors holding not less than two thirds of the total 
voting power. 

7.  The  Executive  Board  may  invite  the  executive 
heads of Associated ICOs and of ICBs to participate, 
without  vote,  in  the  deliberations  of  the  Executive 
Board. 

8.  The  Executive  Board  shall  invite  the  Secre 
tary-General  of  UNCTAD  to attend  the meetings of 
the  Executive  Board  as an observer. 

9.  The  Executive  Board may  invite  the represen 
tatives of other  interested  international  bodies  to at 
tend  its meetings  as observers. 

Article  23 

V O T I NG  IN  T HE  E X E C U T I VE  B O A RD 

1  Each  Executive  Director  shall  be  entitled  to 
cast the number of votes attributable to the Members 
he represents. These votes need  not  be cast as a unit 
the  Executive  Board  shall, 

2.  Decisions 

in 

whenever  possible,  be  taken  without  vote. 

3.  Except  as  otherwise  provided  in  this  Agree 
ment, all matters before the Executive Board shall be 
decided  by  a Simple  Majority. 

Article  24 

MANAGING  DIRECTOR AND STAFF 

5.  The  Managing  Director  shall  be  responsible 
for  the  organization,  appointment  and  dismissal  of 
the staff pursuant  to staff  rules and regulations  to be 
adopted  by  the  Fund.  In  appointing  the  staff  the 
Managing  Director  shall,  subject  to  the  paramount 
importance  of  securing  the  highest  standards  of 
efficiency  and  of  technical  competence,  pay  due  re 
gard to recruiting personnel on as wide as geographi 
cal  basis  as possible. 

6.  The  Managing  Director  and  staff,  in  the  dis 
charge  of  their  functions,  shall  owe  their  duty  enti 
rely  to  the  Fund  and  to  no  other  authority.  Each 
Member  shall  respect  the  international  character  of 
this  duty  and  shall  refrain  from  all  attempts  to  in 
fluence the Managing  Director  or any of  the staff in 
the  discharge  of  their  functions. 

Article 25 

CONSULTATIVE  COMMITTEE 

1.  (a) The  Governing  Council  shall,  taking  into 
account the need to make the Second Account opera 
tional  as soon  as possible,  establish  as early  as poss 
ible  a  Consultative  Committee,  in  accordance  with 
rules  and  regulations  to  be  adopted  by  the  Govern 
ing Council, to facilitate the operations of the Second 
Account 

(b) In  the  composition  of  the  Consultative  Com 
mittee,  due  regard  shall  be  paid  to  the  need  for  a 
broad  and  equitable  geographical  distribution,  in 
dividual  expertise in commodity  development  issues, 
and  the desirability  of  a broad  representation  of in 
terests,  including  of  voluntary  contributors. 

2.  The  functions  of  the  Consultative  Committee 

shall  be: 

(a) To advise the Executive Board on technical and 
economic  aspects  of  the  programmes  of  measures 
proposed  by ICBs to the  Fund  for financing and co-
financing through  the  Second  Account  and  on  the 
priorities  to  be  attached  to such  proposals; 

(b)To  advise,  at  the  request  of  the  Executive 
Board, on specific aspects connected with the apprai 
sal  of  particular  projects  being  considered  for  finan 
cing  through  the  Second  Account; 

1.  The  Governing  Council  shall  by  a  Qualified 
Majority  appoint  the  Managing  Director.  If  the ap 
pointee  is, at  the  time of  his  appointment,  a Gover 
nor or an Executive Director, or an alternate, he shall 
resign  from  such  position  prior  to  taking  up  his 
duties  as  Managing  Director. 

(c) To  advise  the  Executive  Board  on  guidelines 
and  criteria  for  determining  the  relative  priorities 
among measures within  the scope of  the Second Ac 
count,  for  appraisal  procedures,  for  making  grants 
and  loan  assistance,  and  for co-financing  with  other 
international financial institutions  and  other entities: 

13 

7 

(d) To  comment  on  reports  from  the  Managing 
Director  on  the  supervision,  implementation  and 
evaluation  of projects  being financed through  the Se 
cond  Account. 

3.  The  Fund  may  establish  working  arrange 
ments  with  the  bodies  refereed  to  in  paragraph  2 of 
this  article,  as  may  be  decided  by  the  Executive 
Board. 

Article 26 

BUDGETARY  AND AUDIT PROVISIONS 

1.  The  administrative  expenses of  the  Fund  shall 

be  covered  by  revenues  of  the  First  Account. 

1  The  Managing  Director  shall  prepare  an  an 
nual  administrative  budget,  which  shall  be  consid 
ered  by  the  Executive  Board  and  be  transmitted,  to 
gether  with  its  recommendations,  to  the  Governing 
Council  for  approval. 

3  The  Managing  Director  shall  arrange  for  an 
annual  independent  and  external  audit  of  the  ac 
counts  of  the  Fund.  The  audited  statement  of 
acoounts,  after  consideration  by 
the  Executive 
Board,  shall  be  transmitted,  together  with  its  recom 
mendations,  to  the  Governing  Council  for  approval. 

Article  27 

LOCATION OF HEADQUARTERS 

The  headquarters  of  the  Fund  shall  be  located  in 
the place decided  upon  by the Governing Council  by 
a  Qualified  Majority,  if  possible  at  its  first  annual 
meeting.  The  Fund  may,  by  a  decision  of  the 
Governing  Council,  establish  other  offices,  as neces 
sary,  in  the  territory  of  any  Member. 

Article  28 

PUBLICATION OF REPORTS 

The  Fund  shall  issue  and  transmit  to  Members  an 
annual  report  containing  an  audited  statement  of ac 
counts.  After  adoption  by  the  Governing  Council, 
such  report  and  statement  shall  also  be  transmitted 
for  information 
to  the  General  Assembly  of  the 
United  Nations,  to  the  Trade  and  Development 
Board of UNCTAD, to Associated ICOs and  to other 
interested  international  organizations. 

Article  29 

Chapter VIII. Withdrawal  and  suspension 
of  membership and withdrawal  of Associated  ICOs 

Article  30 

WITHDRAWAL OF  MEMBERS 

A Member may at any  time, except  as provided  for 
in  article  35, paragraph  2 (b). and  subject  to  the pro 
visions  of  article  32,  withdraw  from  the  Fund  by 
transmitting  a  notice  in  writing  to  the  Fund.  Such 
the  date 
withdrawal  shall  become  effective  on 
specified  on  the  notice,  which  shall  be  not  less  than 
twelve  months  after  receipt  of  the  notice  by  the 
Fund. 

Article  31 

SUSPENSION OF MEMBERSHIP 

1.  If  a  Member  fails  to  fulfil  any  of  its  financial 
obligations to the Fund,  the Governing Council  may. 
except  as provided  for  in  article  35, paragraph  2 (b), 
by  a  Qualified  Majority,  suspend  its  membership. 
The  Member  so suspended  shall  automatically  cease 
to be a Member one year from  the date of its suspen 
sion, unless the Governing  Council decides  to extend 
the  suspension  for  a  further  period  of  one  year. 

2.  When  the  Governing  Council  is  satisfied  that 
the suspended  Member  has fulfilled  its financial obli 
gations  to  the  Fund,  the  Council  shall  restore  the 
Member  to  good  standing. 

3.  While  under  suspension,  a  Member  shall  not 
be  entitled  to  exercise  any  rights  under  this  Agree 
ment,  except  the right  of  withdrawal  and  to  arbitra 
tion during the  termination  of the  Fund's operations, 
but  shall  remain  subject  to  compliance  with  all  its 
obligations  under  this  Agreement. 

Article  32 

SETTLEMENT OF ACCOUNTS 

RELATIONS WITH THE  UNITED  NATIONS AND OTHER 
ORGANIZATIONS 

1.  The Fund  may enter into negotiations  with  the 
United  Nations  with  a  view  to concluding  an  agree 
ment  to  bring  the  Fund  into  relationship  with  the 
United  Nations  as one of the specialized  agencies re 
ferred  to  in  Article  57 of  the  Charter  of  the  United 
Nations.  Any  agreement  concluded  in  accordance 
with  Article  63  of  the  Charter  shall  require  the  ap 
proval  of  the  Governing  Council,  upon  the  recom 
mendation  of  the  Executive  Board. 

2.  The  Fund  may  co-operate  closely  with  UNC 
TAD  and  the  organizations  of  the  United  Nations 
system, other  intergovernmental  organizations,  inter 
national  financial  institutions,  non-governmental  or 
ganizations  and  governmental  agencies  concerned 
with  related fields of activities  and,  if deemed  neces 
sary,  enter  into  agreements  with  such  bodies. 

1.  When  a  Member  ceases  to  be  a  Member,  it 
shall  remain  liable  thereafter  to  meet  all  calls  made 
by the Fund  before,  and  payments outstanding  as  of. 
the date  on  which  it  ceased  to  be  a  Member  in  re 
spect  of  its obligations  to  the  Fund.  It  shall  also  re 
main  liable  to  meet  its  obligations  in  respect  of  its 
Guarantee Capital, until arrangements satisfactory  to 
the  Fund  have been  made which  comply  with  article 
14,  paragraphs  4  to  7.  Each  Association  Agreement 
shall  provide  that,  if  a  participant  in  the  respective 
Associated  ICO  ceases  to  be  a  Member,  the  Asso 
ciated  ICO  shall  ensure  that  such  arrangements  are 
completed  not  later  than  the  date  on  which  the 
Member  ceases  to  be  a  Member. 

2.  When  a  Member  ceases  to  be  a  Member,  the 
Fund  shall  arrange  for  the  repurchase  of  its  Shares 
consistent  with  article  16,  paragraphs  2  and  3,  as  a 
part of the settlement  of accounts with  that  Member, 

14 

2  L 

and  shall  cancel  its Guarantee  Capital  provided  that 
the  obligations  and  requirements  specified  in  para 
graph  1  of this article have been  met. The  repurchase 
price of the Shares shall be value shown  by the books 
of  the  Fund  as at  the date  the  Member  ceases  to  be 
a  Member, provided  that any amount  thus due to the 
Member may be applied  by the Fund  to any liability 
outstanding  to the Fund  from  that  Member  pursuant 
to paragraph  1 of  this  article. 

Fund  and of its Members under  this Agreement  shall 
continue  unimpaired,  except  that: 

(a) The  Fund  shall  not  be  obliged  to  provide  for 
withdrawal  on  demand  of  Associated  ICO  deposits 
in accordance  with  article  17, paragraph  10 (a), or to 
make  new  loans  to  Associated  ICOs  in  accordance 
with  article  17, paragraph  10 (6); 

(b) No  Member  may  withdraw  or  be  suspended 

after  the  decision  to  terminate  has  been  taken. 

Article  33 

WITHDRAWAL OF  ASSOCIATED  ICOs 

1.  An  Associated  ICO  may.  subject  to  the  terms 
and  conditions  of  the  Association  Agreement,  with 
draw  from  association  with  the  Fund,  provided  that 
such  Associated  ICO  shall  repay  all  outstanding-
loans  received  from  the  Fund  before  the  date  on 
which such  withdrawal  becomes effective.  The Asso 
ciated  ICO  and  its  participants  shall  remain  liable 
thereafter  only  to  meet  calls  made  by  the  Fund  be 
fore  that  date  in  respect  of  their  obligations  to  the 
Fund. 

2.  When  an  Associated  ICO  ceases  to  be  asso 
ciated  with  the Fund,  the Fund  shall, after  the  fulfil 
ment  of  the  obligations  specified  in  paragraph  1 of 
this  article: 

(a) Arrange for  the refund  of any cash deposit  and 
for  the return  of any  Stock  Warrants  it holds for  the 
account  of  that  Associated  ICO; 

(b) Arrange for  the refund  of any cash deposited  in 
lieu  of  Guarantee  Capital,  and  cancel  relevant 
Guarantee  Capital  and  Guarantees. 

Chapter  IX. Suspension  and  termination 
of  operations  and settlement  of  obligations 

Article  34 

TEMPORARY  SUSPENSION OF OPERATIONS 

In  an  emergency,  the  Executive  Board  may  tem 
porarily  suspend  such  of  the  Fund's  operations  as it 
considers  necessary  pending  an  opportunity  for 
further  consideration  and  action  by  the  Governing 
Council. 

Article  35 

TERMINATION  OF OPERATIONS 

1.  The  Governing  Council  may  terminate  the 
Fund's  operations  by  a  decision  taken  by  a  vote  of 
two thirds of  the total number  of Governors  holding 
not  less than  three  fourths  of  the  total  voting  power. 
Upon  such  termination,  the  Fund  shall  forthwith 
cease  all  activities,  except  those necessary  for  the  or 
derly  realization  and  conservation  of  its  assets  and 
the  settlement  of  its  outstanding  obligations. 

Article  36 

SETTLEMENT OF OBLIGATIONS  GENERAL PROVISIONS 

1.  The Executive  Board  shall  make such  arrange 
ments  as are  necessary  to  ensure  the orderly  realiza 
tion  of  the  Fund's  assets.  Before  making  any  pay 
ments  to  creditors  holding  direct  claims,  the  Execu 
tive Board  shall,  by a Qualified  Majority,  make such 
reserves or  arrangements  as are necessary, in  its sole 
judgement,  to ensure a distribution  to holders of con 
tingent  claims pro  rata with  creditors  holding  direct 
claims. 

2.  No  distribution  of  assets  shall  be  made  in  ac 

cordance  with  this  chapter  until: 

(a) Ail  liabilities  of  the  Account  in  question  have 

been  discharged  or  provided  for;  and 

(b) The Governing  Council  has decided  to make a 

distribution  by  a  Qualified  Majority. 

3.  Following a decision of the Governing  Council 
under  paragraph  2  (b)  of  this  article,  the  Executive 
Board  shall  make  successive  distributions  of  any  re 
maining  assets  of  the  Account  in  question  until  all 
such  assets  have  been  distributed.  Such  distribution 
to  any  Member  or  any  participant  in  an  Associated 
ICO  which  is  not  a  Member  shall  be  subject  to  the 
prior  settlement  of  all  outstanding  claims  of  the 
Fund  against  that  Member  or  participant  and  shall 
be  effected  at  such  times  and  in  such  currencies  or 
other assets as the Governing Council shall deem  fair 
and  equitable. 

Article  37 

SETTLEMENT OF OBLIGATIONS:  FIRST ACCOUNT 

1.  Any  loans  outstanding  to  Associated  ICOs  in 
respect  of  First  Account  operations  at  the  time  of  a 
decision  to  terminate  the  Fund's  operations  shall  be 
repaid  by  the  Associated  ICOs  concerned  within  12 
months  of  the  decision  to  terminate.  On  repayment 
of such loans. Stock Warrants pledged  to, or assigned 
in  trust  for,  the  Fund  in  respect  of  those  loans  shall 
be  returned  to  the  Associated  ICOs. 

2.  Stock Warrants pledged  to. or assigned  in  trust 
for,  the  Fund  in  respect  of  commodities  acquired 
with  cash  deposits  or  Associated  ICOs  shall  be  re 
turned  to such  Associated  ICOs  in  a  manner  consis 
tent  with  the  treatment  of  cash  deposits  and  sur 
pluses  specified  in  paragraph  3  (b) of  this  article,  to 
the  extent  that  such  Associated  ICOs  have  fully  dis 
charged  their  obligations  to  the  Fund. 

2.  Until  final  settlement  of  its  obligations  and 
final distribution  of  its assets,  the  Fund  shall  remain 
in  existence,  and  all  rights  and  obligations  of  the 

3.  The  following  liabilities  incurred  by  the  F <no 
in  respect  of  First  Account  operations  shall  be  dis 
charged  pari passu  through  the  use  of  the  asse:s  of 

15 

< S 

the  First  Account,  in  accordance  with  article  17, 
paragraphs  12 to  14: 

(a) Liabilities  to  creditors  of  the  Fund;  and 
(b) Liabilities to Associated  ICOs in respect of cash 
deposits  and  surpluses  held  in  the  Fund  in  accor 
dance  with  article  14, paragraphs  1, 2. 3 and  8, to the 
extent  that  such  Associated  ICOs  have  fully  dis 
charged  their  obligations  to  the  Fund. 

4.  Distribution  of  any  remaining  assets  of  the 
First  Account  shall  be  made  on  the  following  basis 
and  in  the  following  order: 

(a) Amounts  up  to  the  value of any  Capital  called 
from  and  paid  by  Members  in  accordance  with  ar 
ticle  17,  paragraphs  12  (d)  and  13.  shall  be  dis 
tributed  to  such  Members pro rata to  their  shares  in 
the  total  value of such  Guarantee  Capital  called  and 
paid; 

(b) Amounts  up  to  the  value  of  any  Guarantees 
called  from  and  paid  by  participants  in  Associated 
ICOs which  are not  Members  in  accordance  with  ar 
ticle  17.  paragraphs  12  (d)  and  13,  shall  be  dis 
tributed  to  such  participants  pro  rata to  their  shares 
in the total value of such Guarantees called and  paid. 
5.  Distribution  of  any  assets of  the  First  Account 
remaining  after  the  distributions  provided  for  in 
paragraph  4 of this article shall be made to  Members 
pro  rata to  their  subscriptions  of  Shares  of  Directly 
Contributed  Capital  allocated  to  the  First  Account. 

Article  38 

SETTLEMENT OF OBLIGATIONS:  SECOND  ACCOUNT 

1.  Liabilities  incurred  by  the  Fund  in  respect  of 
Second  Account  operations  shall  be  discharged 
through  the  use  of  the  resources  of  the  Second  Ac 
count,  pursuant  to  article  18, paragraph  4. 

2.  Distribution  of  any  remaining  assets of the Se 
cond  Account  shall  be  made  first  to  Members  up  to 
the  value  of  their  subscriptions  of  Shares of  Directly 
Contributed  Capital  allocated  to  that  Account  pur 
suant to article  10. paragraph  3, and  then to contribu 
tors to that Account pro rata to their share in the total 
amount  contributed  pursuant  to  article  13. 

Article  39 

SETTLEMENT OF OBLIGATIONS: OTHER ASSETS 
OF THE  FUND 

1.  Any  other  asset  shall  be  realized  at  a  time or 
times to be decided  by the Governing  Council, in the 
light  of  recommendations  made  by  the  Executive 
Board  and  in  accordance  with  procedures  deter 
mined  by the Executive  Board  by a Qualified  Major 
ity. 

2.  Proceeds  realized  by  the  sale  of  such  assets 
shall  be  used  to  discharge  pro  rata the  liabilities  re 
ferred  to  in  article  37,  paragraph  3.  and  article  38, 
paragraph  1.  Any  remaining  assets  shall  be  dis 
tributed  first  on  the  basis  and  in  the  order  specified 
in  article  37, paragraph  4, and  then  to  Members pro 
rata  to their subscriptions of Shares of Directly  Con 
tributed  Capital. 

Chapter X. Status, privileges and  immunities 

Article  40 

PURPOSES 

To  enable  the  Fund  to  fulfil  the  functions  with 
which  it  is  entrusted,  the  status,  privileges  and  im 
munities set forth  in  this chapter shall be accorded  to 
the  Fund  in  the  territory  of  each  Member. 

Article  41 

LEGAL STATUS OF THE  FUND 

The  Fund  shall  possess  full  juridical  personality, 
and.  in  particular,  the  capacity  to  conclude  interna 
tional  agreements  with  States  and 
international 
organizations,  to enter  into  contracts,  to acquire  and 
dispose of immovable  and  movable  property,  and  to 
institute  legal  proceedings. 

Article  42 

IMMUNITY  FROM JURIDICAL  PROCEEDINGS 

1.  The  Fund  shall  enjoy  immunity  from  every 
form  of  legal  process,  except  for  actions  which  may 
be  brought  against  the  Fund: 

(a) By lenders of funds  borrowed  by the Fund  with 

respect  to  such  funds; 

(b) By buyers or  holders of securities  issued  by  the 

Fund  with  respect  to  such  securities;  and 

(c)  By  assignees  and  successors  in  interest  thereof 

with  respect  to  the  aforementioned  transactions. 
Such  actions  may  be  brought  only  before  courts  of 
competent  jurisdiction  in  places  in  which  the  Fund 
has agreed  in writing  with  the other  party  to be sub 
ject  However,  if  no  provision  is  made  as  to  the 
forum,  or  if  an  agreement  as  to  the  jurisdiction  of 
such courts is not  effective  for  reasons other  than  the 
fault  of  the  party  bringing  legal  action  against  the 
Fund,  then  such  action  may  be  brought  before  a 
competent  court  in  the  place  in  which  the  Fund  has 
its  headquarters  or  has  appointed  an  agent  for  the 
purpose  of  accepting  service  or  notice  of  process. 

2.  No  action  shall  be  brought  against  the  Fund 
by Members, Associated  ICOs, ICBs. or their partici 
pants,  or  persons  acting  for  or  deriving  claims  from 
them, except  in cases as in paragraph  1  of this article. 
Nevertheless, Associated  ICOs, ICBs, or their partici 
pants  shall  have  recourse  to such  special  procedures 
to  settle  controversies  between  themselves  and  the 
Fund  as  may  be  prescribed  in  agreements  with  the 
Fund,  and,  m  the  case  of  Members,  in  this  Agree 
ment  and  in  any  rules  and  regulations  adopted  by 
the  Fund. 

3.  Notwithstanding  the provisions of paragraph  1 
of  this  article,  property  and  assets  of  the  Fund, 
wherever  located  and  by  whomsoever  held,  shall  be 
immune  from  search,  any  form  of  taking,  foreclo 
sure,  seizure,  all  forms  of  attachment,  injunction,  or 
other  judicial  process  impeding  disbursement  of 
funds  or  covering  or  impeding  disposition  of  any 
commodity  stocks or  Stock  Warrants,  and  any  other 
interlocutory  measures  before  the  delivery  of  a final 

16 

2,1] 

judgement  against  the Fund  by a court having juris 
diction in accordance with paragraph  1  of this article. 
The  Fund  may  agree  with  its  creditors  to  limit  the 
property or assets of the Fund which may be subject 
to execution  in satisfaction  of  a final judgement 

(c)  Shall  be granted  the same  treatment  in  respect 
of travelling facilities as is accorded by each Member 
to  representatives,  officials  and  employees  of  com 
parable  rank  of  other international financial institu 
tions  of  which  it  is a member. 

Article  43 

IMMUNITY OF ASSETS FROM OTHER ACTIONS 

"The property and assets of the Fund, wherever lo 
cated  and  by  whomsoever  held,  shall  be  immune 
from search,  requisition,  confiscation,  expropriation 
and any other from of interference or taking whether 
by executive  or legislative  action. 

Article  44 

IMMUNITY OF ARCHIVES 

The archives of  the Fund,  wherever  located, shall 

be inviolable. 

Article 45 

F R E E D OM  OF  A S S E TS  F R OM  R E S T R I C T I O NS 

To the extent necessary  to carry out the operations 
provided  for  in  this  Agreement  and  subject  to  the 
provisions of  this Agreement  all property and assets 
of  the  Fund  shall  be  free  from  restrictions,  regula 
tions, controls,  and  mora tori a of  any nature. 

Article 46 

PRIVILEGE FOR COMMUNICATIONS 

As far as may be compatible with any international 
convention on  telecommunications  in force and con 
cluded  under the auspices of the  International  Tele 
communication  Union to which a Member is a party, 
the official  communications of  the Fund shall  be ac 
corded  by  each  Member  the  same  treatment  that  is 
accorded  to  the  official  communications  of  other 
Members. 

Article 47 

IMMUNITIES AND PRIVILEGES OF SPECIFIED INDIVIDUALS 

All  Governors,  Executive  Directors,  their  alter 
nates,  the  Managing  Director, members of  the Con 
sultative Committee, experts performing missions for 
the Fund, and the staff, other than persons in domes 
tic service  of  the  Fund: 

(a) Shall  be  immune  from  legal  process  with  res 
pect  to acts performed  by  them  in  their official  cap 
acity  except  when  the  Fund  waives  such  immunity; 
(b) When  they  are  not  nationals  of  the  Member 
concerned, shall be accorded, as well as their families 
forming  part  of  their  household,  the  same  im 
munities  from  immigration  restrictions,  alien  regis 
tration requirements  and national  service obligations 
and  the  same  facilities  as  regards  exchange  restric 
tions  as  are  accorded  by  such  Member  to the repre 
sentatives,  officials  and  employees  of  comparable 
rank  of  other  international  financial  institutions  of 
which  it  is  a member; 

Article  48 

IMMUNITIES FROM  TAXATION 

1.  Within  the  scope  of  its  official  activities,  the 
Fund,  its assets, property,  income  and  its operations 
and  transactions  authorized  by this Agreement  shall 
be exempt  from  all  direct  taxation  and  from  all cus 
toms  duties  on  goods  imported  or  exported  for  its 
official  use, provided  that  this shall  not  prevent  any 
Member from imposing its normal taxes and customs 
duties on  commodities  which  originate  from  the ter 
ritory  of such Member and which are forfeited  to the 
Fund  through any circumstance.  The  Fund shall not 
claim  exemption  from  taxes which are no more than 
charges  for  services  rendered. 

2.  When  purchases  of  goods  or  services  of  sub 
stantial  value  necessary  for  the  official  activities  of 
the Fund are made by or on behalf of the Fund, and 
when  the  price  of  such  purchases  includes  taxes  or 
duties, appropriate measures shall, to the extent poss 
ible and subject to the law of the Member concerned. 
be  taken  by such  Member to  grant  exemption  from 
such  taxes  or  duties  or provide  for  their  reimburse 
ment  Goods  imported  or  purchased  under  an 
exemption  provided  for  in  this  article  shall  not  be 
sold  or otherwise  disposed  of  in  the  territory  of  the 
Member which granted the exemption, except  under 
conditions  agreed  with  that  Member. 

3.  No  tax  shall  be  levied  by  Members  on  or  in 
respect of salaries and emoluments paid or any other 
form  of  payment  made  by  the  Fund  to  Governors. 
Executive Directors, their alternates, members of the 
Consultative Committee, the Managing Director and 
staff,  as  well  as experts  performing  missions  for  the 
Fund,  who  are  not  their  citizens,  nationals  or  sub 
jects. 

4.  No  taxation  of any kind shall  be levied on any 
obligation  or  security  issued  or  guaranteed  by  the 
Fund, including any dividend or interest  thereon, by 
whomsoever  held: 

(a) Which  discriminates  against  such obligation or 
security  solely  because  it  is issued  or guaranteed  by 
the  Fund; or 

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

Article  49 

WAIVER OF IMMUNITIES,  EXEMPTIONS AND PRIVILEGE 
Î.  The  immunities,  exemptions  and  privileges 
provided  in  this  chapter  are  granted  m  '.he lite. w5ts 
of  the  Fund.  The  Fund  may  waive,  to  such  exient 
and  upon  such  conditions  as  it  nay  ds.er.*: ie. 
-
Immunities,  exemptions  and  privileges  provide-  '•<< 

17 

this chapter  in  cases  where  its action  would  not  pre 
judice  the  interests  of  the  Fund. 

2.  The  Managing  Director  shall  have  the  power, 
as may  be delegated  to him  by the Governing  Coun 
cil, and  the duty  to waive the immunity  of any of  the 
staff,  and  experts  performing  missions  for  the  Fund, 
in  cases  where  the  immunity  would  impede  the 
course  of  justice  and  can  be  waived  without  pre 
judice  to  the  interests  of  the  Fund. 

Article  50 

APPLICATION  OF THIS CHAPTER 

Each  Member shall  take such action  as is necessary 
for  the purpose of making effective  in its territory  the 
principles  and  obligations  set  forth  in  this  chapter. 

Chapter  XI.  Amendments 

Article  51 

AMENDMENTS 

1.  (a)  Any  proposal  to  amend  this  Agreement 
emanating  from  a  Member  shall  be  notified  to  all 
Members  by  the  Managing  Director  and  referred  to 
the  Executive  Board,  which  shall  submit  its  recom 
mendations  thereon  to  the  Governing  Council. 

Chapter XII. Interpretation  and  arbitration 

Article  52 

INTERPRETATION 

1.  Any  question  of  interpretation  or  application 
of  the  provisions  of  this  Agreement  arising  between 
any  Member  and  the  Fund  or  between  Members 
shall  be  submitted  to  the  Executive  Board  for  deci 
sion.  Such  Member  or  Members  shall  be  entitled  to 
participate  in  the  deliberations  of  the  Executive 
Board  during  the  consideration  of  such  question  in 
accordance  with  rules  and  regulations  to  be  adopted 
by  the  Governing  Council. 

2. 

In  any  case  where  the  Executive  Board  has 
given  a  decision  under  paragraph  1 of  this  article, 
any  Member  may  require, within  three  months  from 
the date of notification  of the decision,  that  the ques 
tion  be  referred  to  the  Governing  Council,  which 
shall  take  a decision  at  its  next  meeting  by  a  Highly 
Qualified  Majority.  The  decision  of  the  Governing 
Council  shall  be final. 

3.  Where  the  Governing  Council  has  been  un 
able  to  reach  a  decision  under  paragraph  2  of  this 
article, the question  shall  be submitted  to  arbitration 
in  accordance  with  the  procedures  laid  down  in  ar 
ticle  53.  paragraph  2,  if  any  Member  so  requests 
within  three  months  after  the  final  day  of  consider 
ation  of  the  question  by  the  Governing  Council. 

(b)  Any  proposal 

this  Agreement 
emanating  from 
the  Executive  Board  shall  be 
notified  to  all  Members  by  the  Managing  Director 
and  referred  to  the  Governing  Council. 

to  amend 

Article  53 

ARBITRATION 

2.  Amendments shall  be adopted  by the  Govern 
ing Council  by a Highly  Qualified  Majority.  Amend 
ments  shall  enter  into  force  six  months  after  their 
adoption  unless  otherwise  specified  by  the  Govern 
ing  Council. 

3.  Notwithstanding  paragraph  2  of  this  article, 

any  amendment  modifying: 

(a) The right of any Member  to withdraw  from  the 

Fund; 

(b) Any  voting  majority  requirement  provided  for 

in  this  Agreement; 

(c) The limitation  on  liability  provided  in article 6; 
(d)  The  right  to  subscribe  or  not  to  subscribe 
Scares  of  Directly  Contributed  Capital  pursuant  to 
article  9,  paragraph  5; 

{e) The  procedure  for  amending  this  Agreement; 
shall  not  come  into  force  until  accepted  by  all 
Members. Acceptance shall  be deemed  to have  been 
given unless any  Member  notifies  its objection  to the 
Managing Director in writing within six months  after 
the adoption  of  the amendment.  Such  period  of  time 
msy  be  extended  by  the  Governing  Council  at  the 
time  of  the  adoption  of  the  amendment,  at  the  re 
quest  of  any  Member. 

4.  The  Managing  Director  shall  immediately  no 
tify  all  Members  and  the  Depositary  of  any  amend 
ments  that  are  adopted  and  of  the date  of  the  entry 
into  force  of  any  such  amendments. 

1.  Any  dispute  between 

the  Fund  and  any 
Member  which  has withdrawn, or  between  the  Fund 
and  any  Member  during  the  termination  of  the 
Fund's operations, shall  be submitted  to  arbitration. 
2.  The  arbitral  tribunal  shall  consist  of  three  ar 
bitrators. Each party  to the dispute shall appoint  one 
arbitrator.  The two arbitrators  so appointed  shall ap 
point  the  third  arbitrator,  who  shall  be  the  Chair 
man.  If  within  45 days  of  receipt  of  the  request  for 
arbitration  either  party  has  not  appointed  an  arbi 
trator, or  if within  30 days of the appointment  of  the 
two arbitrators  the  third  arbitrator  has  not  been  ap 
pointed, either party may request  the President of the 
International  Court  of Justice, or  such  other  author 
ity as may have been prescribed  by rules and  regula 
tions adopted  by  the Governing  Council,  to  appoint 
an  arbitrator.  If  the  President  of  the  International 
Court  of Justice  has been  requested  under  this  para 
graph  to appoint  an  arbitrator and  if the President  is 
a national of a State party  to the dispute or is  unable 
to discharge  his  duties,  the  authority  to  appoint  the 
arbitrator  shall  devolve  on  the  Vice-President  of  the 
Court,  or,  if  he  is similarly  precluded,  on  the  oldest 
among  the  members  of  the  Court  not  so  precluded 
who have been  longest on  the bench.  The  procedure 
of arbitration  shall be fixed by  the arbitrators  but  the 
Chairman shall have full  power to settle all questions 
of  procedure  in  any  case  of  disagreement  with  re 
spect  thereto. A majority  vote of  the arbitrators  shall 
be sufficient  to  reach  a decision, which  shall  be final 
and  binding  upon  the  parties. 

18 

ZC 

3.  Unless  a different  procedure  for  arbitration  is 
provided  for  in  an  Association  Agreement,  any dis 
pute between the Fund and the Associated ICO shall 
be subject  to arbitration  in  accordance with  the pro 
cedures  provided  for  in paragraph  2 of  this article. 

Chapter  XIII. Final  provisions 

Article  54 

SIGNATURE AND RATIFICATION, ACCEPTANCE 
OR APPROVAL 

1.  This Agreement shall be open  for signature by 
all  States  listed  in  schedule  A.  and  by  intergovern 
mental  organizations  specified  in  article  4  (b).  at 
United  Nations  Headquarters  in  New  York  from 
1  October  1980 until  one  year  after  the  date  of  its 
entry  into  force. 

2.  Any  signatory  State  or  signatory  intergovern 
mental  organization  may  become  a  party  to  this 
Agreement  by  depositing  an  instrument  of  ratifica 
tion,  acceptance  or  approval  until  18  months  after 
the  date  of its  entry  into  force. 

Article  55 

DEPOSITARY 

acceptance  or  approval  from  at  least  90  States. 
provided  that  their  total  subscriptions  of  Shares  of 
Directly  Contributed  Capital  comprise  not  less than 
two  thirds  of  the  total  subscriptions  of  Shares  of 
Directly  Contributed  Capital  allocated  to  all  the 
States specified  in schedule A and  that not  less than 
50  per  cent  of  the  target  for  pledges  of  voluntary 
contributions to the Second Account specified  in art 
icle  13.  paragraph  Z  has  been  met.  and  further 
provided  that  the foregoing  requirements have  been 
fulfilled  by  31  March  1982 or by  such  later date as 
the  States  that  have  deposited  such  instruments  by 
the  end  of  that  period  may  decide  by  a  two-third's 
majority  vote  of  those  States.  If  the  foregoing 
requirements  have  not  been  fulfilled  by  that  later 
date, the States that have deposited such  instruments 
by  that later date may decide  by a two-thirds major 
ity  vote  of  those  States  on  a  subsequent  date.  The 
States  concerned  shall  notify  the  Depositary  of  any 
decisions  taken  under  this paragraph. 

2.  For  any  State  or  intergovernmental  organiz 
ation  that  deposits  an  instrument  of  ratification,  ac 
ceptance or approval after the entry into force of this 
Agreement,  and  for  any  State  or  intergovernmental 
organization  that  deposits  an  instrument  of  acces 
sion,  this  Agreement  shall  enter  into  force  on  the 
date  of  such  deposit. 

The Secretary-General of the United  Nations shall 

be  the  Depositary  of  this  Agreement. 

Article  58 

RESERVATIONS 

Article 56 

ACCESSION 

After  the  entry  into  force  of  this  Agreement  any 
Slate  or intergovernmental  organization  specified  in 
article  4  may  accede  to  this  Agreement  upon  such 
terms  and  conditions  as  are  agreed  between  the 
Governing  Council  and  that  State  or  intergovern 
mental  organization.  Accession  shall  be  effected  by 
the  deposit  of  an  instrument  of  accession  with  the 
Depositary. 

Article  57 

ENTRY INTO  FORCE 

1.  This Agreement shall enter into force  upon re 
ceipt by the Depositary of instruments of ratification. 

Reservations may not be made with respect  to any 
of  the provisions  of  this Agreement  except  with re 
spect  to article 53. 

IN  WITNESS  WHEREOF  the  undersigned,  being  duly 
authorized  thereto,  have  affixed  their  signatures 
under  this Agreement  on  the dates indicated. 

DONE  at  Geneva  on  the  twenty-seventh  day  of 
June, one thousand  nine hundred and  eighty, in one 
original  in  the  Arabic.  Chinese.  English.  French. 
Russian  and  Spanish  languages, all  texts  being equ 
ally  authentic. 

(Certified as an authentic text. ) 

19 

9 

SCHEDULES 

SCHEDULE  A 

Subscriptions of Starts of Directly Contributed Capital 

PauUn  Sharrs 

Payable 

Shorts 

Total 

Stmt 

Number 

Afghanistan 
Albania 
Algeria 
Angola 
Argentina 
Australia 
Austria 
Bahamas 
Bahrain 
Bangladesh 
Barbados 
Belgium 
Benin 
Bhutan 
Bolivia 
Botswana 
Brazil 
Bulgaria 
Burma 
Burundi 
Byelorussian  Soviet 
Socialist  Republic 

.

.

.. 

. 

. 

Canada 
Cape  Verde 
Central  African  Republic 
Chad 
Chile 
China 
Colombia 
Comoros 
Congo 
Costa  Rica 
Cuba 
Cyprus 
Czechoslovakia 
Democratic  Kampuchea. 
. 
Democratic  People's  Republic 

. 

.

.

.. 

.

.

.. 

. 

. 

. 

of  Korea 

Democratic Yemen 
Denmark 
Djibouti 
Dominica 
Dominican  Republic 
Ecuador 
Egyp« 
El Salvador 
Equatorial  Guinea. 
Ethiopia 
Fiji 
Finland 
France 
Gabon 
Gambia 
German  Democratic 

Republic 
Germany. 

Federal  Republic of 

. 

. 

. 

Ghana 
Greece 
Grenada 
Guatemala 
Guinea 

Value 
(Vmu  of 
Account) 

794 480 
779 347 
892 844 
885 277 
1 157 670 
3 215 750 
1861352 
* 764 214 
764 214 
976 075 
771780 
2640 699 
764 214 
756 647 
855 011 
764 214 
2 557 467 
1 150 104 
786 913 
756 647 

756 647 
5 538 657 
756 647 
771780 
779 347 
1309 000 
8 406 350 
1 142 537 
756 647 
779 347 
892 844 
1392 231 
756 647 
2209410 
764 214 

786 913 
764 214 
1 831 086 
756 647 
756647 
915 543 
885 277 
1112 271 
892 844 
764 214 
817 179 
794 480 
1 483 028 
10479 563 
824 745 
77! 780 

105 
103 
118 
117 
153 
425 
246 
101 
101 
129 
102 
349 
101 
100 
113 
101 
338 
152 
104 
100 

100 
732 
100 
102 
103 
173 
1 111 
151 
100 
103 
118 
184 
100 
292 
101 

104 
101 
242 
100 
100 
121 
117 
147 
118 
101 
108 
105 
196 

1385 

109 
102 

351 

2 655 831 

1819 

129 
100 
100 
120 
105 

13 763 412 
976 075 
756 647 
756 647 
907 977 
794 480 

20 

Number 

2 
1 
9 
8 
26 
157 
70 
1 
1 
14 
1 
121 
1 
0 
6 
1 
115 
25 
2 
0 

0 
306 
0 
1 
1 
35 
489 
25 
0 
1 
8 
41 
0 
93 
1 

2 
1 
68 
0 
0 
10 
8 
22 
9 
1 
4 
2 
46 
621 
4 
1 

121 

831 
14 
0 
0 
10 
2 

Value 
[Units of 
Account) 

15 133 
7566 
68 098 
60532 
196 728 
1 187 936 
529 653 
7 566 
7 566 
105 931 
7566 
915 543 
7566 
0 
45 399 
7 566 
870 144 
189 162 
15 133 
0 

0 
2 315 340 
0 
7 566 
7566 
264 827 
3 700005 
189 162 
0 
7566 
60 532 
310225 
0 
703 682 
7566 

15 133 
7566 
514 520 
0 
0 
75 665 
60 532 
166462 
68 098 
7 566 
30 266 
15 133 
348 058 
4 698 779 
30266 
7 566 

915 543 

6 287 738 
105 931 
0 
0 
75 665 
15 133 

Number 

107 
104 
127 
125 
179 
582 
316 
102 
102 
143 
103 
470 
102 
100 
119 
102 
453 
177 
106 
100 

100 

1038 

100 
103 
104 
208 
1600 

176 
100 
104 
126 
225 
100 
385 
102 

106 
102 
310 
100 
100 
131 
125 
169 
127 
102 
112 
107 
242 
2006 

113 
103 

Value 
(Units of 
Account) 

809 612 
786 913 
960 942 
945 809 
1 354 398 
4 403 686 
2 391005 
771 780 
771780 
1082 005 
779 347 
3 556 242 
771 780 
756 647 
900410 
771 780 
3 427 612 
1 339 265 
•802 046 
756 647 

756 647 
7 853 997 
756 647 
779 347 
786 913 
1 573 826 
12 106 354 
1331699 
756 647 
786 913 
953 375 
1 702 456 
756 647 
2913 092 
771780 

802 046 
771780 
2 345 606 
7 5 6 M7 
756 647 
991208 
945 809 
1 278 734 
960 942 
734 780 
847 445 
809612 
1831086 
15 178 342 
855 011 
779 347 

472 

3 571375 

2 650 
143 
100 
100 
130 
107 

20051 149 
1082 005 
756 647 
756 647 
983 641 
809612 

ZÏ 

SCHEDULE A  (continued) 

Souscriptions of Starts of Directly CootriootW Capital 

raisin  Snares 

raymjble  Shares 

Total 

Number 

100 
108 
103 
100 
110 
205 
100 
197 
181 
126 
111 
100 
118 
845 
147 
113 
2 303 

104 
116 
103 

101 
105 
too 
118 
105 
100 
100 
106 
103 
248 
100 
103 
101 
108 
109 
144 
100 
103 
137 
106 
100 
101 
430 
100 
114 
101 
134 
202 
100 
122 
105 
116 
105 
136 
183 
362 
100 
100 
151 
142 
103 
100 

fame 
{Ummof 
Aetmmi) 

756 647 
817 179 
779 347 
756647 
832 312 
1551 127 
756 647 
1 490 595 
1369 531 
953 375 
839 878 
756 647 
892 844 
6 393 668 
1 112 271 
855 011 
17 425 584 
786 913 
877 711 
779 347 

764 214 
794 480 
756 647 
892 844 
794 480 
756 647 
756 647 
802 046 
779 347 
1876 485 
756 647 
779 347 
764 214 
817 179 
824 745 
1 089 572 
756 647 
779 347 
1 036 607 
802 046 
756 647 
764 214 
3 253 583 
756 647 
862 578 
764 2)4 
1013907 
1 528 427 
756 647 
923 110 
794 480 
877 711 
794 480 
1029040 
1384 664 
2 739063 
756 647 
756 647 
1 142 537 
1 074 439 
779 347 
756647 

21 

Number 

0 
4 
2 
0 
5 
51 
0 
47 
39 
12 
6 
0 
8 
360 
22 
6 
1064 
2 
7 
1 

0 
2 
0 
8 
3 
0 
0 
3 
1 
72 
0 
1 
1 
4 
5 
21 
0 
1 
18 
3 
0 
0 
159 
0 
6 
1 
16 
49 
0 
II 
3 
8 
2 
17 
40 
126 
0 
0 
25 
20 
1 
0 

Vame 
{Ummof 
Accmmt) 

Number 

Value 
(Units of 
Account) 

0 
30266 
15 133 
0 
37 832 
385 890 
0 
355 624 
295 092 
90798 
45 399 
0 
60532 
2 723 930 
166 462 
45 399 
8 050 726 
15 133 
52 965 
7 566 

0 
15 133 
0 
60532 
22 699 
0 
0 
22 699 
7 566 
544 786 
0 
7566 
7566 
30266 
37 832 
158 896 
0 
7 566 
136 196 
22 699 
0 
0 
1 203 069 
0 
45 399 
7 566 
121064 
370 757 
0 
83 231 
22 699 
60532 
15 133 
128 630 
302 659 
953 375 
0 
0 
189 162 
151 329 
7566 
0 

100 
112 
105 
100 
115 
256 
100 
244 
220 
138 
117 
100 
126 

1205 

169 
119 
3 367 
106 
123 
104 

101 
107 
100 
126 
108 
100 
100 
109 
104 
320 
100 
104 
102 
112 
114 
165 
100 
104 
155 
109 
100 
101 
589 
100 
120 
102 
150 
251 
100 
133 
108 
124 
107 
153 
223 
488 
100 
100 
176 
162 
104 
100 

756 647 
847 445 
794 480 
756 647 
870 144 
1937 017 
756 647 
1846219 
1664 624 
1044 173 
885 277 
756 647 
953 375 
9 117 598 
1 278 734 
900410 
25 476 309 
802 046 
930676 
786 913 

764 214 
809 612 
756 647 
953 375 
817 179 
756647 
756 647 
824 745 
786 913 
2421271 
756 647 
786 913 
771780 
847 445 
862 578 
1248468 
756 647 
786 9)3 
1 172 803 
824 745 
756 647 
764 214 
4 456652 
756 647 
907 977 
77) 780 
1 134 971 
1899 184 
756 647 
1006 34) 
817 179 
938 242 
809612 
1 157 670 
1 687 323 
3 692 438 
756 647 
756 647 
1331699 
1 225 768 
786 913 
756 647 

r 

.  . 

Suit 

Guinea-Bissau  .  . 
Guyana 
Haiti 
Holy See 
Honduras 
Hungary 
Iceland 
India 
Indonesia 
Iran 
Iraq 
Ireland 
Israel 
Italy 
Ivory Coast 
Jamaica 
Japan 
Jordan 
Kenya 
Kuwait 
Lao People's 

. 

Democratic Republic . 

.

.

.

.

.. 

.. 

Lebanon 
Lesotho 
Liberia 
Libyan Arab Jamahiriya 
Liechtenstein 
Luxembourg 
Madagascar 
Malawi 
Malaysia 
Maldives 
Mali 
Malta 
Mauritania 
Mauritius 
Mexico 
Monaco 
Mongolia 
Morocco 
Mozambique 
Nauru 
Nepal 
Netherlands 
New Zealand 
Nicaragua 
Niger 
Nigeria 
Norway 
Oman 
Pakistan 
Panama 
Papua New  Guinea  .  . 
Paraguay 
Peru 
Philippines 
Poland 
Portugal 
Qatar 
Republic of Korea 
Romania 
Rwanda 
Saint Lucia 

.  . 

.. 

.

.

SCHEDULE A (concluded) 

Subscription of Share» of Directly attributed  Capital 

State 

Number 

Value 
(Units of 
Account) 

Number 

Value 
(Umuof 
Account) 

Number 

Value 
(Units of 
Account) 

PauUa  Shares 

Payable  Shares 

Total 

Saint  Vincent 

and the Grenadines 

.

.. 

.  . 

.  .  . 

Samoa 
San  Marino  .
SaoJEooic and Principe. 
Saudi  Arabia 
Senegal 
Seychelles 
Sierra  L e o n e . . .. 
Singapore 
Solomon  Islands 
Somalia 
South  A f r i c a . . .. 
Spain 
Sri  Lanka 
Sudan 
Suriname 
Swaziland 
Sweden 
Switzerland 
Syrian  Arab  Republic 
Thailand 
Togo 
tonga 
Trinidad  and Tobago. 
Tunisia 
Turkey 
Uganda 
Ukrainian  Soviet 

.. 

.

.

Socialist  Republic  . 

Union of Soviet 

Socialist  Republics . 
United  Arab  Emirates 
United  Kingdom 

of  Great  Britain 
and  Northern  Ireland 

United  Republic 

of Cameroon  .  .  . 

United  Republic 

of  Tanzania  .  .  . 

United  Sûtes 
of America 

.  .  . 

.

.

.. 

Upper  Vol  t a . . .. 
Uruguay 
Venezuela 
Viet  Nam 
Yemen 
Yugoslavia 
'.  . 
Zaire 
Zambia 
Zimbabwe 

.. 

.. 

.

.

.

.

100 
100 
100 
101 
105 
113 
100 
103 
134 
101 
101 
309 
447 
124 
124 
104 
104 
363 
326 
113 
137 
105 
100 
103 
113 
100 
118 

100 

756 647 
756 647 
756 647 
764 214 
794 480 
855 011 
756 647 
779 347 
1013 907 
764 214 
764 214 
2 338 040 
3 382 213 
938 242 
938 242 
786 913 
786913 
2 746 629 
2 466 670 
855 011 
1 036 607 
794 480 
756 647 
779 347 
855 011 
756 647 
892 844 

756 647 

1865 
101 

14 111469 
764 214 

0 
0 
0 
0 
2 
7 
0 
1 
17 
0 
1 
101 
167 
12 
12 
2 
2 
127 
109 
7 
18 
3 
0 
2 
6 
0 
9 

0 

853 
1 

0 
0 
0 
0 
15 133 
52 965 
0 
7 566 
128 630 
0 
7 566 
764 214 
1263 601 
90 798 
90 798 
15 133 
15 133 
960 942 
824 745 
52 965 
136 196 
22 699 
0 
15 133 
45 399 
0 
68 098 

0 

100 
100 
100 
101 
107 
120 
100 
104 
151 
101 
102 
410 
614 
136 
136 
106 
106 
490 
435 
120 
155 
108 
100 
105 
119 
100 
127 

100 

756 647 
756 647 
756 647 
764 214 
809 612 
907 977 
756 647 
786 913 
1 142 537 
764 214 
771 780 
3 102 253 
4645813 
1029 040 
1029 040 
802 046 
802 046 
3 707 571 
3 291415 
907 977 
1 172 803 

817 17§_ 
756 647 
794 480 
900410 
756 647 
960 942 

756 647 

6 454 200 
7 566 

2718 

102 

20 565 669 
771780 

1051 

7 952 361 

459 

3 473 010 

1510 

11425 372 

116 

113 

5 012 
101 
107 
120 
108 
101 
151 
147 
157 
100 

877 711 

855 Oil 

37 923 155 
764 214 
809612 
907 977 
817 179 
764 214 
1 142 537 
1 112 271 
1 187 936 
756 647 

8 

6 

2 373 
1 
4 
10 
4 
1 
24 
22 
27 
0 

60 532 

45 399 

17 955 237 
7 566 
30 266 
75 665 
30 266 
7 566 
181595 
166 462 
204 295 
0 

124 

119 

7 385 
102 
111 
130 
112 
102 
175 
169 
184 
100 

938 242 

900410 

55 878 392 
771780 
839 878 
983 641 
847 445 
771780 
1324 133 
1 278 734 
1392 231 
756 647 

22 

_> O 

SCHEDULEB 

Special anaageaeats for the least developed contrite  panuaat  to article  II,  paragraph 6 

1.  Members in  the category of  least  developed  countries  as defined  by the  United  Nations 
shall  pay  the  Paid-in  Shares referred  to in article  10, paragraph  I (b),  in  the following manner: 
(a) A payment of 30 per cent shall be made in three equal instalments over a period of three 

years; 

(o) A subsequent payment of 30 per cent shall  be made in instalments as and when decided 

by the Executive Board; 

(r) After  payment  of  (a)  and  (b)  above,  the  remaining  40  per  cent  shall  be  evidenced  by 
Members  by  the  deposit  of  irrevocable,  non-negotiable,  non-interest-bearing  promissory  notes, 
and shall  be paid  as and  when  decided  by the  Executive Board. 

2  Notwithstanding  the provisions of article 31. a least developed  country shall not  be sus 
pended  from  its membership  for its failure  to fulfil  the financial obligations  referred  to in para 
graph  I of this schedule  without  being given  the full  opportunity  to represent  its case,  within a 
reasonable period of time, and satisfy  the Governing Council of its inability  to fulfil  such obliga 
tions. 

SCHEDULE  C 

QigMUty criteria for ICBs 

1.  An ICB shall be established on an intergovernmental  basis, with membership open to all 
States Members of the United Nations or of any of its specialized agencies or of the International 
Atomic Energy Agency. 

2 

It shall  be concerned  on a continuing basis with the trade, production  and consumption 

aspects of the commodity  in question. 

3. 

lu membership shall comprise producers and consumers which shall represent an adequ 

ate share of exports and of imports of  the commodity  concerned. 

4.  It shall bave an effective  decision-making process that reflects  the interests of its partici 

pants. 

5.  It shall be in a position  to adopt a suitable method  for ensuring the proper discharge of 
any technical or other responsibilities arising from its association with the activities of the Second 
Account. 

SCHEDULE  D 

ABocatfoa of votes 

1.  Each  Member  State  referred  to  in  article  5 (a) shall  hold: 
(a)  150 basic votes; 
(b) The number of  votes  allocated  to it in  respect  of  Shares of 
Directly Contributed Capita) which it has subscribed, as set out in 
the annex  to this schedule; 

(c) One  vote  for  each  37.832  Units  of  Account  of  Guarantee 

Capital provided  by it; 

(d) Any votes allocated  to it in accordance with paragraph 3 of 

this schedule. 

1  Each  Member  State  referred  to  in  article  5 (b) shall  bold: 
(a) 150 basic votes; 
(b) A  number  of  votes  in  respect  of  Shares  of  Directly  Con 
tributed Capital which it bas subscribed, to be determined  by the 
Governing Council  by a Qualified  Majority on  a basis consistent 
with the allocation of votes provided for ir the annex to this sched 
ule; 

(r) One  vote  for  each  37,832  Units  of  Account  of  Guarantee 

Capital  provided  by it; 

(d) Any votes allocated  to it in accordance  with paragraph  3 of 

this schedule. 

3.  In the event of unsubscribed or additional Shares of Directly 
Contributed Capital  being made available  for subscription  in ac 
cordance  with article  9.  paragraph  4  (b) and  (r).  and  article  12, 
paragraph  3.  two  additional  votes  shall  be  allocated  to  each 
Member State for each  additional  Share of  Directly  Contributed 
Capital  which it subscribes. 

4.  The  Governing  Council  shall  keep  the  voting  structure 
under constant review and. if the actual voting structure is signifi 
cantly different  from that provided for in the annex  to this sched 
ule, shall make any necessary adjustments in accordance with the 
fundamental  principles  governing  the  distribution  of  votes  re 
flected  in this schedule. In making such adjustments, the Govern 
ing Council  shall  take into consideration: 

(a) The membership; 
(b) The number of  Shares of  Directly  Contributed  Capital; 
(c) The amount of Guarantee Capital. 

5.  Adjustments  in  the  distribution  of  votes  pursuant  to para 
graph 4 of  this schedule  shall  be  made  in  accordance  with  rules 
and regulations  to be adopted  for  this purpose  by the Governing 
Council at its first annual meeting by a Highly Qualified Majorir> 

23 

•i  7 

Annex  to  schedule  D 

ALLOCATION  OF  VOTES 

Stair 

Basic 
»otet 

Additional 
votes 

Total 

State 

Banc 

Additional 

. 

. 
. 
. 

. 

. 

. 

.

. 

. 

. 

. 

. 

. 
. 
. 

. 
. 
. 

. 
. 
. 

Afghanistan 
Albania 
Algeria 
Angola 
: 
Argentina 
Australia. 
Austria 
Bahamas. 
Bahrain 
Bangladesh 
Barbados 
Belgium 
Benin 
Bhutan 
Bolivia 
Botswana 
Brazil 
Bulgana 
Burma 
Burundi 
Byelorussian  Soviet 

. 

. 

. 

. 

. 

.

.. 
. 

Socialist  Republic. 

Canada 
. 
Cape  Verde 
Central  African 
Republic 

.

.

.

Chad 
Chile 
China 
Colombia 
Comoros 
Congo 
Costa  Rica 
Cuba 
Cyprus 
Czechoslovakia 
Democratic 

.

Kampuchea  . 

.

.

. 

. 

.. 

.. 

.. 

. 

. 

. 

.

.

.

.

.. 

Democratic  People's 
Republic  of  Korea 
. 

Democratic  Yemen 
.. 
Denmark 
Djibouti 
Dominica 
Dominican  Republic 
Ecuador 
Egypt 
. 
El  Salvador. 
Equatorial  Guinea 
Ethiopia 
F'j» 
Finland 
France 
Gabon 
Gambia 
German  Democratic 
.. 

Republic 

. 
. 

. 

.

.

Germany.  Federal 
Republic  o f. 

.

Ghana 
Greece 
Grenada 
Guatemala 
Guinea 
Guinea-Bissau. 
Guyana 
Haiti 
Holy  See 
Honduras 
Hungary 
K eland 
l u j ia 
Indonesia 
Iran 
Iraq 
Ireland 

.
.

.

.

.. 

. 

. 

.
.

.. 
.. 

.

.. 

150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150  . 
150 
150 
150 
150 
150 
150 
150 
150 
150 

150 
150 
150 

150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 

150 

150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 

150 

150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
ISO 
150 
150 
150 
150 
150 

207 
157 
245 
241 
346 
925 
502 
197 
197 
276 
199 
747 
197 
193 
230 
197 
874 
267 
205 
193 

151 
1650 
193 

199 
201 
402 
2 850 
340 
193 
201 
243 
434 
193 
5*2 

197 

205 
197 
493 
193 
193 
253 
241 
326 
245 
197 
216 
207 
385 
3  188 
218 
199 

713 

4  212 
276 
159 
193 
251 
207 
193 
2)6 
203 
159 
222 
387 
159 
471 
425 
266 
226 
159 

357 
307 
395 
391 
496 
1075 
652 
347 
347 
426 
349 
897 
347 
343 
380 
347 
1024 
417 
355 
343 

301 
1 800 
343 

349 
351 
552 
3 000 
490 
343 
351 
393 
584 
343 
732 

}47 

355 
347 
643 
343 
343 
403 
391 
476 
395 
347 
366 
357 
535 
3 338 
368 
349 

863 

4  362 
426 
309 
343 
401 
357 
343 
366 
353 
309 
372 
537 
309 
621 
575 
416 
376 
309 

Israel 
Italy 
Ivory  Coast 
Jamaica 
Japan 
Jordan 
Kenva 
Kuwait 
Lao  People's 

Democratic  Republic 

. 
. 
. 
. 

. 

. 

. 
. 
. 
. 

. 
. 
. 
. 

Lebanon 
Lesotho 
Liberia 
Libyan  Arab 
Jamahiriya 
Liechtenstein 
Luxembourg 
Madagascar 
Malawi 
Malaysia 
Maldives 
Mali 
Malta 
Mauritania 
Mauritius 
Mexico 
Monaco 
Mongolia 
Morocco 
Mozambique 
Nauru 
Nepal 
Netherlands 
New  Zealand 
Nicaragua 
Niger 
Nigeria 
Norway 
Oman 
Pakistan 
Panama 
Papua  New  Guinea  . 
Paraguay 
Peru 
Philippines 
Poland 
Portugal 
Qatar 
Republic  of  Korea 
Romania 
Rwanda 
Saint  Lucia 
Saint  Vincent  and 
the  Grenadines 

. 
. 

. 
. 

. 

. 
. 

. 

. 

Samoa 
San  Marino 
Sao  Tome 

. 

. 

. 
. 
. 
. 

. 

. 
. 

. 

. 

. 

. 
. 

. 
. 

. 
. 

.
.

.. 
.. 

. 

. 

.. 

.

and  Principe 

.

.

.

.

Saudi  Arabia 
Senegal 
Seychelles 
Sierra  Leone 
Singapore 
Solomon  Islands  . 
Somalia 
South  Africa 
Spain 
Sri  Lanka 
Sudan 
Surinam e 
Swaziland 
Sweden 
Switzerland 
Syrian  Arab 
Republic 

.

Thailand 

24 

ISO 
150 
150 
150 
150 
150 
150 
150 

150 
150 
150 
150 

150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
ISO 
150 
150 
150 
150 
150 
150 
150 
150 
ISO 
150 
150 

150 
150 
150 

150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 
150 

ISO 
150 

243 
1915 
326 
230 
5 352 
205 
237 
201 

195 
207 
193 
243 

208 
159 
159 
210 
201 
618 
193 
201 
197 
216 
220 
319 
159 
157 
299 
210 
193 
195 
936 
159 
232 
197 
290 
399 
193 
257 
208 
239 
207 
295 
430 
737 
159 
193 
340 
313 
201 
193 

193 
193 
159 

195 
207 
232 
193 
201 
291 
195 
197 
652 
976 
263 
263 
205 
205 
779 
691 

232 
299 

Total 

393 
2 065 
476 
380 
5 502 
355 
387 
351 

345 
357 
343 
393 

358 
309 
309 
360 
351 
768 
343 
351 
347 
366 
370 
469 
309 
307 
449 
360 
343 
345 
1086 
309 
382 
347 
440 
549 
343 
•  407 
358 
389 
357 
445 
580 
887 
309 
343 
490 
463 
351 
343 

343 
343 
309 

345 
357 
382 
343 
351 
441 
345 
347 
802 
1 126 
413 
413 
355 
355 
929 
841 

382 
449 

3<f. 

BOSK 
mn 

150 
150 

150 
150 
150 
150 

150 

150 

150 

Additional 
rule* 

206 
193 

203 
230 
159 
245 

151 

4 107 

197 

. 

Stair 

Togo 
Tonga 
Trinidad 

.

.. 

and Tobago 

Tunisia 
Turkey 
Uganda 
Ukrainian Soviet 

Socialist  Republic. 

Union of Soviet 

Socialist  Republics 

United Arab 
Emirates 

United  Kingdom 

of  Great  Britain 
and  Northern  Ireland 

Total 

Stair 

Basic 
rotes 

Additional 
rtiiei 

United  Republic 
of Cameroon 
United  Republic 
of  Tanzania 
.
United  States 
of America 
Upper  Volta 

.
.

. 

. 

. 

.

.
.

.. 

.. 
.. 

Viet Nam 

358 
343 

353 
380 
309 
395 

301 

4 257 

347 

150 

150 

ISO 
150 
150 
150 
150 
150 
150 
150 
150 
150 
24 450 

239 

230 

11738 
197 
214 
251 
216 
197 
338 
326 
355 
193 
79 924 

Total 

389 

380 

11888 
347 
364 
401 
366 
347 
488 
476 
505 
343 
104 374 

150 

2400 

2 550 

Zimbabwe 

OVERALL TOTAL 

SCHEDULE  E 

Election of  Executive  Directors 

1.  The Executive Directors and their alternates shall be elected 

by ballot of  the Governors. 

2.  Balloting  shall  be  for candidatures.  Each candidature  shall 
comprise a person nominated by a Member for Executive Director 
and a person nominated by the same Member or another Member 
for alternate. The two persons forming each candidature need not 
be of  the same  nationality. 

3.  Each Governor shall cast for one candidature all of the votes 
to which  the  Member which  appointed  that  Governor  is  entitled 
under schedule D. 

4.  The 28 candidatures  receiving  the greatest number of votes 
shall  be  elected,  provided  that  no  candidature  has  received  less 
than  25  per cent  of  the  total  voting power. 

5.  If 28 candidatures  are  not  elected  on  the first ballot  a se 

cond  ballot shall  be held  in which  shall  vote only: 

(a) Those Governors who voted in the first ballot for a candida 

ture not elected; 

(b) Those Governors whose votes for an elected candidature are 
deemed  under  paragraph  6  of  this  schedule  to  have  raised  the 
votes  cast  for  that  candidature  above  3.5  per  cent  of  the  total 
voting power. 

6.  In determining whether the votes cast by a Governor are to 
be deemed  to have  raised  the total of any candidature  above  3.5 
per cent of the total voting power, the percentage shall be deemed 
to  exclude, first, the  votes  of  the  Governor  casting  the  smallest 
number of votes for that candidature, then the votes of the Gover 
nor casting  the second  smallest  number of  votes, and  so on  until 
3.5 per cent, or a figure below 3.5 per cent but above 25  per cent, 
is reached; except that any Governor whose votes must be counted 
in order  to raise  the  total  of  any candidature  above  2.5  per cent 
shall be considered as casting all of his votes for that candidature. 

even if the total votes for that candidature  thereby  exceed  3.5 per 
cent 

7.  If.  on  any  ballot,  two or more Governors  holding  an equal 
number  of  votes  have  voted  for  the  same  candidature  and  the 
votes  of  one  or  more,  but  not  all.  of  such  Governors  could  be 
deemed  to  have  raised  the  total  votes  above  3.5  per  cent  of  the 
tout  voting power, whoever among them shall  be entitled  to vote 
on the next ballot  if a next ballot is required, shall be determined 
by lot. 

8.  For determining whether a candidature is elected  at the se 
cond  ballot,  and  who  are  the  Governors  whose  votes  shall  be 
deemed  to  have  elected  that  candidature,  the  minimum  and 
maximum  percentages specified  in paragraphs 4 and  5 (b) of this 
schedule  and  the procedures  described  in  paragraphs  6 and  7 of 
this schedule  shall  apply. 

9.  If,  after  the  second  ballot,  28  candidatures  have  not  been 
elected,  further  ballots  shall  be  held on  the same  principles  until 
27  candidatures  have  been  elected.  After  this,  the  twenty-eighth 
candidature shall be elected  by a simple majority of the remaining 
votes. 

10.  In the event that a Governor votes for an unsuccessful can 
didature  in  the  last  ballot  held,  that  Governor  may  designate  a 
successful  candidature, if the latter agrees, to represent in the Exe 
cutive Board the Member which appointed  that Governor.  In this 
case, the ceiling of 3.5 per cent specified  in paragraph  5 ib) of this 
schedule  shall  not apply  to the  candidature  so designated 

11.  When  a  State  accedes  to  this  Agreement  in  the  interval 
between elections of the Executive Directors, it may designate any 
of the Executive Directors, if the latter agrees, to represent it in the 
Executive  Board.  In this case,  the ceiling of  3.5 per cent  specified 
in  paragraph  5 (b) of  this schedule  shall  not apply. 

2$ 

33 

SCHEDULE  F 

Us*  of 

The value of one  Unit  of  Account shall  be the sum of  the values of  the fbttowing currency 

units converted  into any one  of  those currencies: 

. 

United  Sûtes dollar 
Deutsche  mark 
Japanese  yen 
French  franc 
Pound  sterling 
Italian  lira 
Netherlands guilder 
Canadian  dollar 
Belgian  franc 
Saudi  Arabian riyal . 
Swedish  krona 
Iranian 
Australian  dollar 
Spanish  peseta 
Norwegian krone 
Austrian schilling. 

rial 

. 

. 

. 

0.40 
0.32 

21 

0.42 
0.050 

52 
0.14 
0.070 
1.6 
0.13 
Oil 
1.7 
0.017 
1.5 
0.10 
029 

Any change in the list of the currencies that determine the value of the Unit of Account, and 
in  the  amounts  of  these  currencies,  shall  be  made  in  accordance  with  rules  and régulations 
adopted by the Governing  Council by a Qualified  Majority  in conformity  with  the practice of a 
competent  international  monetary organization. ** 

26 

3</ 

Part  Two 

FINAL  ACT OF  THE  UNITED  NATIONS  NEGOTIATING  CONFERENCE  ON  A COMMON  FUND 
UNDER  THE  INTEGRATED  PROGRAMME  FOR  COMMODITIES 

1.  The  United  Nations Conference on Trade and 
Development,  in  its  resolution  93  (IV)  on  the  Inte 
grated  Programme  for  Commodities,  agreed  that 
steps would  be taken towards establishing a common 
fund  and  requested  the  Secretary-General  of  UNC-
TAD to convene a negotiating conference open to all 
members of  UNCTAD  no  later  than  March  1977. It 
further  requested  the  Secretary-General  of  UNC 
TAD to convene  preparatory  meetings prior to such 
a  conference. 

2.  After  three  preparatory  meetings  had  been 
held  pursuant  to  that  request,  the  United  Nations 
Negotiating  Conference  on  a  Common  Fund  under 
the  Integrated  Programme  for  Commodities  was ac 
cordingly  convened  at  the  Palais  des  Nations.  Ge 
neva,  on  7  March  1977.  The  Conference  held  four 
sessions,  the first from  7  March  to  2 April  1977, the 
second  from  7  November  to  I  December  1977  and 
from  14 to 30 November  1978.  the  third  from  12 to 
19  March  1979  and  the  fourth  from  5  to  27  June 
19801. 

3.  At its third session  the Conference adopted re 
solution  1 (III)  on  the  fundamental  elements  of  the 
Common  Fund:  and  requested  the  Secretary-Gen 
eral of  UNCTAD  to convene an  Interim  Committee 
of the Negotiating Conference, open  to the participa 
tion of all  Stales members of UNCTAD.  to consider 
the  elements  requiring  further  elaboration,  to  draft 
the Articles of Agreement of the Common Fund, and 
to make recommendations  regarding the preparatory 
work required  to bring the Fund into operation. The 
Interim Committee held five sessions, the first from 3 
to  14 September  1979. the second from 22 October to 
2 November  1979. the  third  from  3  to  14 December 
1979.  and  the  fourth  from  18 February  to  5 March 
1980 and  the fifth from  8 to  19 April  1980. 

4.  Representatives  of  the  following  124  States 
members  of  UNCTAD  participated  in  one  or  more 
sessions  of  the  Conference,  namely  representatives 
of:  Afghanistan:  Algeria: Argentina;  Australia; Aus 
tria: Bangladesh; Barbados; Belgium; Benin; Bolivia; 
Botswana:  Brazil;  Bulgaria:  Burma:  Burundi;  Can 
ada: Central  African  Republic; Chad;  Chile; China; 
Colombia;  Congo;  Costa  Rica;  Cuba:  Cyprus; 
Czechoslovakia;  Democratic  People's  Republic  of 
Korea:  Democratic  Yemen,  Denmark;  Djibouti; 
Dominican  Republic;  Ecuador;  Egypt;  El  Salvador; 
Ethiopia; Finland: France: Gabon; Gambia; German 
Democratic  Republic;  Germany.  Federal  Republic 
of: Ghana: Greece: Guatemala: Guinea;  Haiti; Hon 
duras: Hungary: India; Indonesia; Iran: Iraq; Ireland: 
Israel:  Italy;  Ivory  Coast;  Jamaica;  Japan;  Jordan: 

1 T> * reports  of  the  Conference  were  circulated  under  the  fol-
lowingjymbols:  first  session.  TD/IPC/CF/CONF/8.  second  ses-
r.on,  TD/lPC/CF/CONF/14  (Part  I),  and  resumed  second  ses 
sion.  TD/IPC/CF/CONF/14  (Part  II):  third  session.  TD/IPC/ 
CF'CONF/19;  fcurth  session,  TD/IPC/CF/CONF/26. 

'TD/IPC/CONF/JÇ.  annex  I. 

Kenya;  Kuwait;  Lebanon;  Liberia,  Libyan  Arab 
Jamahiriya:  Luxembourg;  Madagascar.  Malawi; 
Malaysia;  Mali;  Malta;  Mauritius;  Mexico:  Mon 
golia;"  Morocco;  Mozambique;  Netherlands;  New 
Zealand; Nicaragua: Niger, Nigeria; Norway: Oman; 
Pakistan; Panama; Papua  New  Guinea; Peru; Philip 
pines;  Poland;  Portugal:  Qatar;  Republic  of  Korea; 
Romania;  Rwanda:  Saudi  Arabia:  Senegal:  Sierra 
Leone: Singapore: Somalia; Spain; Sri Lanka: Sudan. 
Swaziland;  Sweden;  Switzerland;  Syrian  Arab  Re 
public;  Thailand;  Togo;  Trinidad  and  Tobago: 
Tunisia;  Turkey;  Uganda;  Union  of  Soviet  Socialist 
Republics:  United  Arab  Emirates;  United  Kingdom 
of  Great  Britain  and  Northern  Ireland;  United  Re 
public  of  Cameroon;  United  Republic  of  Tanzania: 
United  States of America; Uruguay; Venezuela; Viet 
Nam: Yemen: Yugoslavia: Zaire; Zambia. 

5.  The following State member of UNCTAD was 
represented  at  the Conference  by an observer:  Holy 
See. 

6.  The following  United  Nations organs were re 
presented  at  the  Conference  by  observers:  Depart 
ment of International  Economic and Social Affairs of 
the  United  Nations  Secretariat.  Economic  Commis 
sion  for  Europe.  Economic  Commission  for  Africa. 
United  Nations  Industrial  Development  Organiza 
tion.  United  Nations  Environment  Programme. 
United  Nations  Development  Programme,  World 
Food  Council.  International  Trade  Centre. 

7.  The following  specialized  and related  agencies 
were represented  at the Conference  by observers: In 
ternational  Labour Organisation.  Food  and  Agricul 
ture  Organization  of  the  United  Nations.  World 
Bank. International  Monetary  Fund. General Agree 
ment  on  TarifTs and  Trade. 

8.  The following intergovernmental  organizations 
were represented at the Conference  by observers.  Af 
rican and  Mauritian  Common  Organization.  African 
Development  Bank. African Groundnut Council. As 
sociation of Iron Ore Exporting Countries. Common 
wealth Secretariat  Council of Arab Economic Unit>. 
Economic Community of the Great  Lakes Countries. 
European  Economic  Community.  European  Free 
Trade  Association.  Inter-American  Developement 
Bank  Intergovernmental  Council  of Copper  Export 
ing Countries.  International  Bauxite Association. In 
ternational  Cocoa  Organization.  Latin  American 
Economic  System.  League  of  Arab  States.  Organ 
isation  for  Economic  Co-operation  and  Develop 
ment.  Organization  of  African  Unity.  Organization 
of American States. Organization of the Islamic Con 
ference.  Organization  of  the  Petroleum  Exporting 
Countries.  Permanent  Secretariat  of  the  General 
Treatv  on  Central  American  Economic  Integration. 
OPEC Fund. 

9.  The following non-governmental  organizations 
were admitted  as observers  to the Conference  by de 
cision  of  the  Conference  at  its  second  session: 
Friends  World  Committee  for  Consultation  (Qua-

27 

kers). International  Chamber of Commerce. Interna 
tional Confederation  of  Free Trade  Unions, Interna 
tional  Co-operation  for  Socio-Economic  Develop 
ment.  International  Federation  of Cotton  and Allied 
Textile  Industries.  World  Developement  Movement, 
World  Federation  of  United  Nations  Associations. 

a  common  fund  pursuant  to  Conference  resolution 
93  (IV)  on  the  Integrated  Programme  for  Com 
modities".  The  President.  Vice-Presidents  and  Rap 
porteur  of  the  Conference  served  as  Chairman. 
Vice-Chairmen  and  Rapporteur  respectively  of  the 
Committee  of  the  Whole. 

10.  The  following  organization  participated  in 
the  Conference,  having  been  invited  pursuant  to 
General Assembly resolution 3280 (XXIX): Pan Afri-
canist  Congress  of  Azania. 

11.  The  Conference  elected  Mr.  H.  S.  Walker 

(Jamaica) as  its  President. 

12.  The Conference, at its first session, elected the 
following  Vice-Presidents: Mr. A. Alatas (Indonesia). 
Mr.  An  Chih-yuan  (China).  Mr.  M.  Armendâriz 
(Mexico).  Mr.  N.  Boerner  (United  States  of  Amer 
ica).  Mr.  J.  Cuttat  (Switzerland).  Mr.  O.  El-Shafei 
(Egypt).  Mr.  T.  Fabian  (Hungary).  Mr.  D.  Hilton 
(Canada). Mr. F. Jaramillo (Colombia).  Mr. S. A. M. 
S. Kibria (Bangladesh). Mr. D. N.  M. Mloka (United 
Republic  of  Tanzania).  Mr.  M.  Pravda  (Czechoslo 
vakia). Mr. M. Seo (Japan). Mr. J. R.  Steele (United 
Kingdom  of  Great  Britain  and  Northern  Ireland). 

13.  At  its second  session,  the Conference  elected 
as  Vice-Presidents  Mr.  A.  Gonzâlez-de-Leôn  (Me 
xico),  to  replace  Mr.  M.  Armendâriz  (Mexico).  Mr. 
D.  Laloux  (Belgium)  to  replace  Mr.  J.  R.  Steele 
(United  Kingdom  of  Great  Britain  and  Northern 
Ireland), and  Mr. A.  Wendt (United  States of Amer 
ica)  to  replace  Mr.  M.  Boerner  (United  States  of 
America). 

14.  At its resumed second session, the Conference 
elected as Vice-Presidents  representatives of:  Mexico 
(Mr.  M. Armendâriz  to replace  Mr. A. Gonzâlez-de-
Leôn of  Mexico); United  Republic of Tanzania (Mr. 
W.  Chagula  to  replace  Mr.  D.  N.  M.  Mloka  of  the 
United  Republic of Tanzania); Hungary (Mr.  F. Fu-
rulyas  to  replace  Mr.  T.  Fabian  of  Hungary); 
Czechoslovakia  (Mr.  R.  HIavaty  to  replace  Mr.  M. 
Pravda  of  Czechoslovakia);  Bangladesh  (Mr.  S. 
Karim  to  replace  Mr.  S.  A.  M.  S.  Kibria  of 
Bangladesh): Federal  Republic of Germany (Mr. W. 
Mueller-Thuns  to  replace  Mr.  D.  Laloux  of  Bel 
gium). 

15.  At  its  fourth  session,  the  Conference  elected 
as  Vice-President  Mr.  H.  Diaz-Thomé  (Mexico)  to 
replace Mr. M. Armendâriz (Mexico).  Mr. T. Fabian 
(Hungary)  to  replace  Mr.  F.  Furulyas  (Hungary). 
Mr. J. Ferriter (United  States of America) to replace 
Mr.  A.  Wendt  (United  States  of  America),  Mr.  S. 
Kobavashi  (Japan)  to  replace  Mr.  M.  Seo  (Japan). 
Mr.  ù.  Surquin  (Belgium)  to  replace  Mr.  J.  Cuttat 
(Switzerland)  and  Mr. Zheng  Tuobin  (China)  to re 
place  Mr.  An  Chih-yuan  (China). 

16.  The  Conference  elected  Mr.  S.  Wolnik 
(Poland)  as  Rapporteur.  At  its  second  session  it 
elected  Mr.  S.  Borowy  (Poland)  to  replace  Mr.  S. 
Wolnik  (Poland).  At  the  resumed  second  session  it 
elected  Mr. J. Toczek  (Poland)  to replace  Mr. S. Bo 
rowy (Poland). 

17.  At its first session, the Conference  established 
a Committee of the Whole and allocated  to it further 
consideration of item 9 of its agenda. "Negotiation of 

18.  At  its first session  the Conference  established 
a  Credentials  Committee  consisting  of  the  represen 
tatives of:  China,  Ecuador,  El Salvador.  Ivory Coast. 
Malaysia, Netherlands.  Union of Soviet  Socialist Re 
publics.  United  States  of  America  and  Zambia.  Mr. 
G  van der Tak (Netherlands) was elected  Chairman 
of  the  Credentials  Committee.  At  the  fourth  session 
of the Conference  Mr. van  der Tak was  replaced  by 
Mr. K. Fraterman (Netherlands)  as Chairman  of the 
Credentials  Committee. 

19.  At  the  first  session,  the  Committee  of  the 
Whole  established  three  negotiating  groups  to  deal 
with  the  following  aspects of  the  establishment  of a 
common  fund: 

Negotiating  Group  I:  Preamble;  objectives  and 

purposes ; modes  of  operation 

Negotiating  Group  II:  Financial  matters 
Negotiating  Group III: Decision-making  and  fund 
management 
20.  At  the  first  session  of  the  Conference. 
Negotiating Group I elected  Mr. T. G.  R. Tscherning 
(Sweden)  as  Chairman.  Mr.  S.  T.  Matturi  (Sierra 
Leone)  as  Vice-Chairman,  and  Mr.  L.  Sekulic 
(Yugoslavia)  as  Rapporteur.  Negotiating  Group  II 
elected  Mr.  A.  Al-Tijani  Salih  (United  Arab  Emir 
ates)  as  Chairman.  Mr.  K.  Waller  (Australia)  as 
Vice-Chairman,  and  Mrs. A.  Auguste  (Trinidad  and 
Tobago)  as  Rapporteur.  Negotiating  Group  III 
elected  Mr. J.  Muliro (Kenya)  as  Chairman.  Mr. L. 
A.  Denisov  (Union  of  Soviet  Socialist  Republics)  as 
Vice-Chairman.  and  Mr.  S.  Nagai  (Japan)  as  Rap 
porteur. 

21.  At  the second  session  of  the Conference.  Mr. 
T.  G.  R.  Tscherning  (Sweden)  was  replaced  by  Mr. 
K.  G.  Lagerfelt  (Sweden)  as Chairman  of  Negotiat 
ing  Group  I. 

22.  At  the  resumed  second  session  Mr.  K.  G. 
Lagerfelt  (Sweden)  was  replaced  by  Mr.  D.  Laloux 
(Belgium)  as Chairman  of  Negotiating  Group  I. Mr. 
A.  Al-Tijani  Salih  (United  Arab  Emirates)  was  re 
placed  by  Mr.  J.  K.  A.  Marker  (Pakistan)  as Chair 
man  of  Negotiating  Group  II.  and  Mr.  J.  Muliro 
(Kenya)  was  replaced  by  Mr.  M.  Oreibi  (Libyan 
Arab  Jamahiriya)  as  Chairman  of  Negotiating 
Group III. Mr. K. Waller (Australia) was replaced by 
Mr.  J.  W.  Keany  (Australia)  as  Vice-Chairman  of 
Negotiating Group II and  Mr. L. A.  Denisov  (Union 
of  Soviet  Socialist  Republics)  as  Vice-Chairman  of 
Negotiating  Group  III.  Mrs.  A.  Auguste  (Trinidad 
and Tobago) was  replaced  by  Mr.  P.  Dass (Trinidad 
and Tobago) as Rapporteur of Negotiating  Group II 
and  Mr.  S.  Nagai  (Japan)  was  replaced  by  Mr.  S. 
Naito  (Japan)  as  Rapporteur  of  Negotiating  Group 
III. 

23.  At  the  fourth  session  of  the  Conference,  the 
Committee  of  the  Whole  established  three  working 
groups,  to  which  it  allocated  consideration  of  a 
number of outstanding issues relating to the First Ac-

28 

% 

count.  Second  Account  and  administrative  and  legal 
questions,  respectively. 

24.  Mr.  J.-V.  Gbeho  (Ghana)  was  elected  as 
Chairman  of  Working  Group  I  and  Mr.  S.  Ko-
bayashi  (Japan)  as  Vice-Chairman.  Mr.  J.  K.  A. 
Marker (Pakistan) was elected  Chairman of Working 
Group II and  Mr. G.  Surquin  (Belgium) was elected 
Chairman  of  Working  Group III. 

25.  At  the  fourth  session  of  the  Conference,  the 
Committee  of  the  Whole  established  a  Legal  Draft 
ing Committee to examine the texts of articles for the 
purpose  of  ensuring  that  they  were  consistent  from 
the legal  and  linguistic standpoints and of correcting 
all  linguistic,  grammatical  and  typographical  errors 
in the Arabic. Chinese. English. French. Russian and 
Spanish  texts of  the Agreement.  The  Legal  Drafting 
Committee  was  composed  of  representatives  of  the 
following  States:  Brazil.  Canada.  China.  Colombia. 
Ghana.  Hungary.  India.  Iraq.  Jamaica.  Japan. 
Malaysia.  Netherlands.  Nigeria.  Senegal.  Spain. Su 
dan.  Thailand.  Union  of  Soviet  Socialist  Republics. 
United  Kingdom  of  Great  Britain  and  Northern 
Ireland.  United  States  of  America  and  Venezuela. 
Mr.  T.  De  Bruyn  (Netherlands)  was  elected  Chair 
man  of  the  Legal  Drafting  Committee. 

26.  The Conference  was opened  bv  Mr. Gamani 
Corea. Secretary-General of UNCTAD.  Mr. B. T. G. 
Chidzero.  Director  of  the  Commodities  Division  of 
UNCTAD,  acted  as  Director-in-charge of  the  Con 
ference.  At  the second  session  Mr. Chidzero  was re 
placed  by  Mr.  A.  Mclntyre.  Director  of  the  Com 
modities  Division  of  UNCTAD.  as  Director-in-
charee.  Mr.  K.  W.  Scott  acted  as  Secretary  of  the 
Conference.  Mr. Scott was replaced  by Mr. I. Nicolle 
as Secretary  at the resumed second session and at the 
third session  of  the Conference.  Mr. D.  W.  Caulfield 
acted  as  Legal  Adviser  to  the  Conference. 

"27.  On  the  basis  of  its  deliberations  as  recorded 
in  the  reports  of  the  Conference  on  its first, second. 

resumed second,  third  and  fourth sessions. ' the Con 
ference  prepared  the  AGREEMENT  ESTABLISHING  THE 
COMMON  FUND FOR COMMODITIES. 

28.  The  Conference  adopted  the  text  of  the 
Agreement  on  27  June  1980 and  provided  that  the 
Agreement should  be open for signature by all States 
listed  in schedule  A  to the Agreement,  and  by inter 
governmental  organizations  specified  in  article  4 (b) 
of  the  Agreement,  at  United  Nations  Headquarters 
in  New  York  from  1 October  1980  until  one  year 
after  the  date of  its entry  into  force. 

29.  The  Agreement  is  deposited  with  the  Secre 

tary-General  of  the  United  Nations. 

30.  The  Conference  also  adopted  on  27  June 
1980  a  resolution  establishing  a  Preparatory  Com 
mission  for  the  Common  Fund  for  Commodities. 
The text of the resolution adopted  by the Conference 
is  annexed  to  this  Final  Act. 

IN  WITNESS  WHEREOF  the  undersigned  representa 
tives  have  signed  this  Final  Act  on  behalf  of  their 
respective States. 

DONE  at Geneva,  this  twenty-seventh  day  of June, 
one  thousand  nine  hundred  and  eighty,  in  a  single 
copy  in  the  Arabic.  Chinese.  English.  French.  Rus 
sian  and  Spanish  languages,  each  text  being  equally 
authentic. 

President of the  Conference 
Secretary-General of  L'SCTAD 

Director-in-charge  of the  Conference 

Secretary of the  Conference 

'TD/IPC/CF/CONF/8,  TD/IPC/CF/CONF/M.  Part  I  and 

Part  II.  TD/IPC/CF/CONF/19  and  TD/IPC/CF/CONF/26 

29 

'"> 
o -/ 

Annex 

RESOLUTION  ADOPTED BY THE CONFERENCE 

Establishment  of a Preparatory  Coauaiaakia for bringfatg the 

lata 

The United Salions Negotiating  Conference  on a Common Fund 

under  the Integrated Programme for  Commodities 

1.  Decides that: 
(a) A  Preparatory  Commission  shall  be  established,  composed 
of 28 Sûtes. * The Preparatory Commission shall be open to repre 
sentatives  of  all  other  participants  in  the  Conference  eligible  to 
sign  the  Agreement  establishing  the  Common  Fund  for  Com 
modities; 

(b) The Preparatory Commission shall elect a Chairman and two 
Vice-Chairmen  from  among  the representatives of  the participat 
ing  Slates members  of  the Commission; 

(c) The Preparatory Commission shall continue in existence un 
til the first  meeting of the Governing Council of  the Fund  is con 
vened, whereupon  the Fund shall succeed to all rights and obliga 
tions of  the  Commission.  If  the  Agreement  has  not  entered  into 
force  by the time specified  in article  57. paragraph  1. thereof, the 
Preparatory  Commission  shall  be  terminated  no  later  than  three 
months  thereafter; 

(d) The  Preparatory  Commission shall: 
(i) Prepare  for  submission  to  the  Governing  Council  of  the 

Fund  proposals concerning  the following  instruments: 

a  Rules  of  procedure  of  the  Governing  Council  and  of  the 

Executive Board; 

b. Rules and regulations for the conduct of the business of the 

Fund; 

c. Working  papers  on  policies,  criteria  and  regulations  to 
govern  financing  operations  by  the  Fund,  including  an 
outline  of  a model  Association  Agreement; 

'  The names of the States are to be communicated to the Secre 
tary-General  of  UNCTAD  prior  to  the first meeting  of  the Pre 
paratory Commission. 

d  Rules and  regulations  for  the Consultative  Committee, 
e  Staff  regulations; 
/  An administrative  budget  reflecting  the staffing  and  finan 
cial  requirements  for  the first fiscal period  of  the  Fund; 

(a) Undertake any other  related tasks; 
1  Requests the Secretary-General  of  UNCTAD: 
(a) To  establish,  after  consultation  with  the  Chairman  of  the 
Preparatory  Commission,  a  Special  Unit  for  the servicing of  the 
Commission; 

(6) To convene the first annual meeting of the Governing Coun 
cil of the Fund as soon as possible after the entry into force of the 
Agreement; 

(c) To convene, within a period of three months after 31 March 
1982, a meeting of the States having deposited their instruments of 
ratification,  acceptance  or  approval,  if.  by  such  time,  the  Agree 
ment  has not  entered  into  force,  and.  if  appropriate,  to convene 
any subsequent  meeting; 

3.  Decides that, pursuant to General Assembly decision 34/446 
of  19 December  1979, the expenses incurred by the work referred 
to above, with the exclusion of expenses incurred by members of 
and participants in the Commission in attending its meetings, may 
be met from the funds advanced by the General Assembly, which 
shall be repaid by the Fund as soon as possible after the entry into 
force  of  the  Agreement  Should  these  funds  be  insufficient,  ad 
vances  may  be  provided  by Sûtes,  which  may  be  set  off  against 
their  subscriptions  of  Shares  of  Directly  Contributed  Capital  of 
the Fund. 

28th plenary  meeting 
27 June  1980 

30 

3g 

ISSN0254-147S 

COM (89) 445 final 

DOCUMENTS 

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