Proposal for a COUNCIL DECISION concerning the approval by the European Union of the Cereals Trade Convention and the Food Aid Convention, constituting the International Cereals Agreement of 1995
Date: 1995-05-18
Institutions: European Commission
Subjects: cereals, enlargement of the Union, food aid, international agreement, trade agreement

COMMISSION  OF THE EUROPEAN  COMMUNITIES 

Brussels,  18.05.1995 
COM(95)  1K1 final 

95/0115 (CNS) 

Proposal  for  a 

COUNCIL  DECISION 

concerning  the  approval  by  the  European  Union  of  the  Cereals  Trade  Convention 
and the  Food  Aid  Convention,  constituting  the  International  Cereals 
Agreement  of  1995 

(presented  by  the  Commission) 

EXPLANATORY  MEMORANDUM 

1.  The  1949  International  Wheat  Agreement  has  been  revised,  renewed,  updated  or 
extended  on  various occasions, ending with the conclusion  of  the  International  Wheat 
Agreement  of  1986. 

The provisions of that Agreement, comprising the Wheat Trade Convention of  1986 and 
the Food  Aid  Convention  of  1986, as extended,  will  expire  on  30 June  1995. 

2. 

The signatories to the current Agreement have agreed that the  1986 International  Wheat 
Agreement must be updated and renamed the International Cereals Agreement of  1995, 
which  comprises two distinct  legal instruments: 

(a) 

the Cereals Trade  Convention,  1995, and 

(b) 

the  Food  Aid  Convention,  1995. 

Each of these two  Conventions, or either of them as appropriate, will be submitted  for 
signature  and  ratification,  acceptance  Or approval  by  the  governments  (including  the 
Community) mentioned in the annex (where the Cereals Trade Convention is concerned) 
and  to the  governments  concerned  (where thé Food  Aid  Convention  is concerned),  in 
conformity  with their  respective constitutional  or institutional  procedures. 

The  participation  of the  three new Member  States  in the  Cereals Trade Convention  is 
mentioned  in  the  annex  to  the  Convention  but  is no  longer  required.  It  is planned  to 
make a declaration  taking  account of that  situation. 

3. 

The text of the two legal instruments was adopted during a meeting and a governmental 
conference  attended  by  the  Community  and  organized  by  the  International  Wheat 
Council  on 6 and  7 December  1994. 

The new agreement  is different  from  the old one in three points: 

the  Wheat  Convention  has  been  extended  to  cover  all  cereals  and  becomes  the 
Cereals Trade  Convention 

the  basis  for  calculating  votes  and  therefore  contributions  to  the  administrative 
budget  has  been  revised  and  will  be  adjusted  periodically,  taking  account  of 
developments  in trade 

the rules of  procedure  have been updated. 

4. 

The  new  International  Cereals Agreement,  comprising  the  two  legal  instruments, will 
the  signature  of  the  governments  wishing  to  become  members  of  the 
be  open  for 
Agreement  at  the  headquarters  of  the  United  Nations  in  New  York  from  1 May  to 
30 June  1995  inclusive. 

During that period, the governments which have signed the Conventions will then have 
to deposit their instrument of ratification, acceptance or approval at the headquarters of 
the United Nations in New York. 

5.  A  governmental  conference  will  take place as soon as possible after  30 June  1995  in 
order to  determine whether the Agreement has in fact met the conditions required for 
its entry into force  on 1 July 1995. In order for the Cereals Trade Convention to enter 
into  force  automatically  on that date, governments holding at least  88% of  the  votes 
must have deposited  an mstrument of ratification  or accession by 30  June  1995. The 
percentage is fixed at 75% for the Food Aid  Convention. 

The  Community  must  deposit  its  instrument  of  approval  with  the  depositary  by 
30 June 1995 at the latest. 

The  Member States  are also required to  become  contracting  parries to  the Food  Aid 
Convention by reason of the food aid measures envisaged. 

F^iraH  ,T^Pa<T annual contribution to the administrative budget 

-2 

Proposal for a 

COUNCIL DECISION 

concerning the approval by the European Union of the Cereals Trade Convention 
and the Food Aid Convention, constituting the International Cereals 
Agreement of  1995 

THE COUNCIL OF THE EUROPEAN UNION. 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 

Articles  113 and 130 Y,  in conjunction with the first sentence of Article 228 (2) and the first 

subparagraph of paragraph 3 thereof, 

Having regard to the proposal from the Commission1, 

Having regard to the opinion of the European Parliament2, 

Whereas the Cereals Trade and Food Aid Conventions, constituting the International Cereals 

Agreement,  1995,  were  negotiated  to  replace  the  1949  International  Wheat  Agreement; 

whereas the Agreement is open until 30 June  1995 for the signature and the deposit of the 

ratification,  acceptance or approval instruments; 

Whereas, under  Article  130  U of  the  Treaty,  Community policy  in the sphere of development 

cooperation should foster the sustainable economic and social development of the developing 

countries, their smooth and gradual integration into  the world  economy  and the  campaign -

against poverty in those countries; 

Whereas, with regard to food aid, application of the International Cereals Agreement,  1995, 

implies action on the part of the Community and of the Member States; 

OJNoL 
OJNoL 

Whereas  all  Member  States  have  expressed  their  intention  to  become  contracting  parties  to 

the  Food  Aid  Convention, 

HAS  DECIDED  AS FOLLOWS: 

Article 1 

The  Cereals Trade  Convention,  1995,  and  the  Food  Aid  Convention,  1995, constituting the 

International  Cereals  Agreement,  1995,  are  hereby  approved  in  the  name  of  the  European 

Community. 

The texts  of the  Conventions are attached to this Decision. 

The President of the Council is hereby authorized to designate the person empowered to sign 

the two  Conventions  and to  deposit the  instruments of approval. 

Article 2 

On  signing  the  Cereals  Trade  Convention  and  depositing  the  instrument  of  approval,  the 

European  Community  will  deposit the following  declaration: 

Article 3 

"The  Republic  of  Austria,  the  Republic  of  Finland  and  the  Kingdom  of  Sweden,  having 

become  Member  States  of  the  European  Community  on  1 January  1995, will  no  longer  be 

individual  members  of  this  Convention  but  will  be  covered  by  the  membership  of  the 

Community. The European Community accordingly also undertakes to exercise the rights and 

perform  the  undertakings  laid  down  in this Convention  for  those three  countries." 

Done  at 

For the  Council 

The  President 

4r 

INTERNATIONAL GRAINS AGREEMENT, 1995 

PREAMBLE 

THE SIGNATORIES TO THIS AGREEMENT 

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

Considering that  the  provisions  of  the 

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

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

(a) 

the Grains Trade Convention, 1995 and 

(b) 

the Food Aid Convention, 1995, 

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

GRAINS TRADE CONVENTION, 1995 

PART I - GENERAL 

ARTICLE 1 

Objectives 

The objectives of this Convention are: 

(a) 

(b) 

(c) 

(d) 

to  further  international  co-operation  in  all  aspects  of  trade  in  grains, 
especially insofar as these affect the food grain situation; 

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

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

to  provide  a 
members' concerns regarding trade in grains. 

for  exchange  of 

forum 

information  and discussion  of 

ARTICLE 2 

Definitions 

For the purposes of this Convention: 

(1) 

(a) 

"Council"  means  the International  Grains  Council  established  by the 
International  Wheat  Agreement,  1949  and  continued  in  being  by 
Article 9 

(b) 

(i) 

"member" means a party to this Convention; 

(ii) 

(iii) 

"exporting  member"  means  a  member  so  designated  under 
Article 12; 

"importing  member"  means  a  member  so  designated  under 
Article 12; 

(c) 

(d) 

(e) 

"Executive  Committee"  means  the  Committee  established  under 
Article 15; 

"Market  Conditions  Committee"  means  the  Committee  established 
under Article 16; 

"grain" or  "grains"  means  bariey,  maize,  millet,  oats,  rye, sorghum, 
triticaie  and  wheat,  and  their  products,  and  such  other  grains  and 
products as the Council may decide; 

(f) 

(i) 

"purchase"  means  a  purchase  of  grain  for  import,  or  the 
quantity of grain so purchased, as the context requires; 

(ii) 

(iii) 

"sale" means a sale of grain for export, or the quantity of such 
grain so sold, as the context requires; 

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

"special vote" means a vote requiring at least two thirds of the votes 
(as  calculated  under  Article  12)  cast  by  the  exporting  members 
present and voting, and at least two thirds of the votes (as calculated 
under Article  12) cast by the importing members present and voting, 
counted separately; 

"crop  year"  or  "fiscal  year"  means  the  period  from  1  July  to  the 
following 30 June; 

# 

"working  day"  means  a  working  day  at  the  headquarters  of  the 
Council. 

(g) 

(h) 

(i) 

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

(3)  Any  reference 

in  t h is  Convention  to  "Government",.  "Governments"  or 

"member"  s h a ll  be  c o n s t r u e d,  where  required,,  as  covering  a ll  separate 
customs  t e r r i t o ry  w i t h in 
and  Trade  or 

tne  General  Agreement  on  T a r i f fs 
the  World  Trade  O r g a n i z a t i o n. 

the  meaning  of 
the  Agreement  e s t a b l i s h i ng 

ARTICLE 3 

Information, reports and studies 

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

(a) 

supply, demand and market conditions; 

(b) 

(c) 

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

developments  concerning  the  improvement  and  expansion  of  trade, 
utilization,  storage  and 
in  developing 
countries. 

transportation,  especially 

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

ARTICLE 4 

Consultations on market developments 

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

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

ARTICLE 5 

Commercial purchases and special transactions 

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

the  usual  commercial  practices 

in  Article  2  which  conforms 

to 

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

(a) 

(b) 

(c) 

(d) 

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

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

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

trade 

under 

agreements  with 

payments 
sales 
arrangements  which  include  clearing  accounts  for  settling  credit 
balances bilaterally through the exchange of goods, except where the 
exporting  member and the  importing  member  concerned  agree  that 
the  sale  shall  be  regarded  as commercial; 

special 

(é) 

barter transactions: 

(i) 

(ii) 

which  result 
grain is  exchanged at other than prevailing world prices, or 

intervention  of  Governments  where 

from  the 

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

(f) 

(g) 

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

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

Any  question  raised  by  the  Executive  Director  or  by  any  member  as  to 
Î3) 
whether  a transaction  is a commercial  purchase  as defined  in  paragraph  (1)  of this 
Article  or  a  special  transaction  as  defined  in  paragraph  (2)  of  this  Article  shall be 
decided by the Council. 

ARTICLE 6 

Guidelines relating to concessional transactions 

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

To 

to  ensure  that  concessional 

this  end  both  supplying  and  recipient  members  shall  undertake 
(2) 
appropriate  measures 
transactions  are  additional  to 
commercial  sales  which  could  reasonably  be  anticipated  in  the  absence  of  such 
transactions,  and would increase consumption  or  stocks  in  the  recipient  country. 
Such  measures  shall,  for  countries  which  are  members  of  FAO,  be  consistent 
with  the  FAO Principles of Surplus Disposal and Guiding Lines and the consultative 
obligations of FAO members, and may include the requirement that a specified  level 
of  commercial  imports  of  grains  agreed with the recipient  country  be  maintained 
on  a global  basis  by  that  country.  In establishing  or  adjusting  this  level, full  regard 
shall  be  had  to  the  commercial  import  levels  in  a  representative  period,  to  recent 
trends  in  utilisation  and  imports,  and  to  the  economic  circumstances  of 
the 
in  particular, 
recipient  country, 

its balance-of-payments situation. 

including, 

Members,  when  engaging 

(3) 
transactions,  shall 
consult with exporting  members whose commercial  sales  might be affected  by such 
transactions  to  the  maximum  possible  extent  before  such  arrangements  are 
concluded with recipient countries. 

in  concessional  export 

The  Secretariat  shall  periodically  report  to the Council  on developments  in 

(4) 
concessional transactions in grains. 

ARTICLE 7 

Reporting and recording 

for  each  crop  year, 

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

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

(3) 

For the  purposes of this Article: 

(a) 

members  shall  send  to 
the  Executive  Director  such  information 
concerning  the  quantities  of  grain  involved  in  commercial  sales  and 
its 
transactions  as 
purchases  and  special 
competence  may require, including: 

the  Council  within 

(i) 

(ii) 

to  special 

the 
in  relation 
transactions  as will enable  them to  be classified  in  accordance 
with Article 5; 

transactions,  such  detail  of 

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

(b) 

(c) 

any member when exporting grain shall send to the  Executive  Director 
such  information  relating  to  their  export  prices  as  the  Council  may 
require; 

the  Council  shall  obtain  regular  information  on  currently  prevailing 
report  such 
and  members  shall 
grain 
supplementary  information as the Council may  require. 

transportation  costs, 

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

resale, 

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

ARTICLE 8 

Disputes and complaints 

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

(2) 
Any member which considers that its interests as a party to this Convention 
have been seriously prejudiced by actions of any one or more members affecting the 
In  such  a 
operation of this Convention may bring the matter  before  the  Council. 
case,  the  Council  shall immediately consult with the members concerned in order 
to  resolve  the  matter. 
through  such 
consultations,  the  Council  shall  consider  the  matter  further  and  may  make 
recommendations to the members concerned. 

the  matter 

resolved 

is  not 

If 

PART II - ADMINISTRATION 

ARTICLE 9 

Constitution of the Council 

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

Members  may  be  represented at  Council  meetings  by  delegates,  alternates 

(2) 
and advisers. 

(3) 
The  Council  shall  elect  a  Chairman  and  a  Vice-Chairman  who  shall  hold 
office  for  one  crop  year.  The  Chairman  shall  have  no vote  and the  Vice-Chairman 
shall have no vote while acting as Chairman. 

ARTICLE 10 

Powers and functions of the Council 

(1) 

The Council shall establish its Rules of Procedure. 

The  Council  shall  keep  such  records  as  are  required  by  the  terms  of  this 

(2) 
Convention and may keep such other records as it considers desirable. 

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

(4) 
The  Council  may,  by  special  vote,  delegate  to  any  of  its committees, or 
to  the  Executive  Director,  the  exercise  of  powers  or  functions  other  than  the 
following: 

(a) 

decisions on matters under Article 8; 

(b) 

review, under Article  11, of the votes of members listed in the Annex; 

(c) 

determination  of  exporting  and  importing  members and distribution 
of their votes under Article 12; 

(d) 

location of the seat of the Council under paragraph (1 ) of Article 13; 

10 

(e) 

(f) 

(g) 

(h) 

(i) 

(j) 

appointment  of  the  Executive  Director  under  paragraph  (2)  of 
Article 17; 

adoption 
budget 
contributions under Article 21; 

the 

of 

and 

assessment 

of  members' 

suspension  of  the  voting  rights  of  a  member  under paragraph (6) 
of Article  21; 

any  request  to  the  Secretary-General  of  UNCTAD  to  convene  a 
negotiating conference under Article 22; 

exclusion of a member from the Council under Article 30; 

recommendation of an amendment under Article 32; 

(k) 

extension  or  termination  of  this  Convention  under Article 33. 

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

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

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

ARTICLE 11 

Votes for entry into force and budgetary  procedures 

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

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

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

3) 

11 

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

All redistributions of votes under this Article shall be conducted in accordance 

(5) 
with the Rules of Procedure. 

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

ARTICLE 12 

Determination of exporting and importing members and 
distribution of their votes 

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

the  purposes  of this  Convention. 

for 

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

the  exporting  members  shall 

For  the  purposes  of  the  allocation  of  votes  under  paragraph  (2)  of 
together  hoid  1,000  votes,  and 

this 
(3) 
Article, 
the 
importing  members  shall  together  hold  1,000  votes.  No  member  shall  hold 
more 
than  333  votes  as  an  exporting  member  or  more  than  333  votes  as  an 
importing member. There shall be no fractional votes. 

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

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

The  distribution  of  the  votes  of  exporting  and  importing  members  shall  be 
(6) 
reviewed  by the Council whenever the  lists of the exporting and importing  members 

12 

are changed  under  paragraphs  (4)  or  (5)  of this Article.  Any  redistribution  of  votes 
under this paragraph shall be subject to the conditions set out in paragraph (3) of this 
Article. 

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

the  Council  shall  redistribute 

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

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

ARTICLE 13 

Seat, sessions and quorum 

The  seat  of  the  Council  shall  be  in  London  unless  the  Council  decides 

(1) 
otherwise. 

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

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

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

13 

ARTICLE 14 

Decisions 

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

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

ARTICLE 15 

Executive Committee 

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

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

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

The  votes  of 

the 

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

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

14 

ARTICLE 16 

Market Conditions Committee 

(1) 
The Council shall establish a Market  Conditions  Committee, which shall be a 
Committee of the whole.  The  Chairman of  the Market Conditions Committee shall 
be the Executive Director, unless the Council decides otherwise. 

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

the  Chairman  of 

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

The Committee  shall supplement the guidance given by the Council to assist 

(4) 
the Secretariat  in carrying out the work envisaged in Article 3. 

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

ARTICLE 17 

Secretariat 

(1) 
The Council shall have a Secretariat consisting of an Executive Director, who 
shall be its chief administrative officer,  and such staff  as  may  be  required  for  the 
work  of  the  Council  and  its Committees. 

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

The  staff  shall  be  appointed  by  the  Executive  Director  in  accordance 

(3) 
with regulations established by the Council. 

(4) 
It shall be a condition of employment of the Executive Director and of the staff 
that  they  do  not  hold  or shall cease to  hold financial interest  in the  grain trade  and 
this 
that  they  shall  not  seek  or  receive 
Convention  from  any  Government  or  from  any  other  authority  external 
to  the 
Council. 

instructions  regarding  their  duties  under 

15 

ARTICLE  18 

Admission  of  observers 

The  Council  may  invite  any  non-member  State,  and  any  intergovernmental 

organization, to  attend any  of  its meetings  as an  observer. 

ARTICLE  19 

Co-operation  with  other  intergovernmental  organisations 

The  Council  may  make  whatever  arrangements  are  appropriate 

for 
(1) 
consultation  or  co-operation  with  the  United  Nations,  its  organs,  and  such  other 
specialized  agencies  and  intergovernmental  organisations  as  may  be  appropriate,  in 
particular  the  United  Nations  Conference  on Trade  and  Development,  the  Food  and 
Agriculture  Organization,  the  Common  Fund  for  Commodities  and  the  World  Food 
Programme. 

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

If 

finds 

the  Council 

that  any  terms  of  this  Convention  are  materially 
(3) 
inconsistent  with  such  requirements  as  may  be  laid  down  by  the  United  Nations 
through 
regarding 
intergovernmental  commodity  agreements,  the  inconsistency  shall  be deemed  to  be 
this  Convention  and  the 
a  circumstance  affecting  adversely 
procedure  prescribed  in Article  32 shall  be applied. 

its  appropriate  organs  or  by 

its  specialised  agencies 

the  operation  of 

ARTICLE  20 

Privileges  and  immunities 

The  Council  shall  have  legal  personality. 

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

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

The  Agreement 

to 
(3) 
independent  of  the  present  Convention.  It  shall  however  terminate: 

in  paragraph  (2)  of 

referred 

this  Article  shall  be 

16 

(a) 

(b) 

by  agreement  between  the  Government  of  the  United  Kingdom  of 
Great Britain and Northern Ireland and the Council, or 

in the  event  of the  seat  of  the  Council  being  moved from  the  United 
Kingdom, or 

(c) 

in the event of the Council ceasing to exist. 

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

ARTICLE 21 

Finance 

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

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

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

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

(5) 

Contributions shall be payable immediately  upon assessment. 

If, at the end of six months following the date on which its contribution is due 
(6) 
in  accordance  with  paragraph  (5)  of  this  Article,  a  member  has  not  paid  its  full 
contribution,  the  Executive  Director  shall  request  the  member  to  make  payment  as 
quickly  as  possible. 
If,  at  the  expiration  of  six  months  after  the  request  of  the 
Executive  Director, the member  has still not  paid its contribution,  its voting  rights  in 

17 

the  Council  and  in  the  Executive  Committee  shall  be suspended  until  such 
time  as  it  has  made  full  payment  of  the contribution. 

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

The  Council  shall,  each  fiscal  year,  publish  an  audited  statement  of  its 

(8) 
receipts and expenditures in the previous fiscal year. 

The  Council  shall,  prior  to  its  dissolution,  provide  for  the  settlement  of  its 

(9) 
liabilities and the disposal of its records and assets. 

ARTICLE 22 

Economic provisions 

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

18 

PART III - FINAL PROVISIONS 

ARTICLE 23 

Depositary 

The  Secretary-General  of  the  United  Nations  is  hereby  designated  as  the 

(1) 
depositary of this Convention. 

The  depositary  shall  notify all signatory and acceding Governments  of each 
application  of,  and 
this  Convention,  as  well  as  each  notification  and  notice  received 

(2) 
signature,  ratification,  acceptance,  approval,  provisional 
accession 
to, 
under Articles 29 and 32. 

ARTICLE 24 

Signature 

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

ARTICLE 25 

Ratification, acceptance, approval 

This  Convention  shall  be  subject  to  ratification,  acceptance  or  approval  by 
its  respective  constitutional 

in  accordance  with 

(1) 
each  signatory  Government 
procedures. 

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

19 

ARTICLE 26 

Provisional application 

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

ARTICLE 27 

Accession 

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

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

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

ARTICLE 28 

Entry into force 

This  Convention  shall  enter 

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

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

20 

ARTICLE 29 

Withdrawal 

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

ARTICLE 30 

Exclusion 

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

ARTICLE 31 

Settlement of accounts 

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

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

21 

ARTICLE 32 

Amendment 

recommend 

The  Council  may  by  special  vote 

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

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

the  Council 

ARTICLE 33 

Duration, extension and  termination 

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

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

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

22 

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

The Council shall notify the depositary of any action taken under paragraph 

(5) 
(2) or paragraph (3) of this Article. 

ARTICLE 34 

Relationship of Preamble to Convention 

This  Convention 

includes  the  Preamble  to  the 

International  Grains 

Agreement, 1995. 

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

Established at London, this  07.12.1994^ 

and Spanish languages being equally authentic. 

'-the texts of this Convention in the English, French, Russian 

23^ 

ANNEX TO THE 
GRAINS TRADE CONVENTION, 1995 

VOTES UNDER ARTICLE 11 
(from 1  July 1995 to 30 June 1998) 

PART A 

Algeria 
Argentina 
Australia 
Austria 
Barbados 
Bolivia 
Canada 
Côte d'Ivoire 
Cuba 
Ecuador 
Egypt (Arab Republic of) 
European Community 
Finland 
Hungary 
India 
Iran 
Iraq 
Israel 
Japan 
Korea, Republic 
Malta 
Mauritius 
Morocco 
Norway 
Pakistan 
Panama 
Russian Federation 
Saudi Arabia 
South Africa 
Sweden 
Switzerland 
Tunisia 
Turkey 
United States of America 
Vatican City 
Yemen Arab Republic 

; 

24 

15 
97 
122 
5 
5 
5 
243 
5 
6 
5 
55 
443 
5 
13 
32 
9 
9 
8 
187 
26 
5 
5 
10 
11 
14 
5 
100 
17 
16 
10 
15 
5 
7 
475 
5 
5 

2,000 

Bangladesh 
Belarus 
Brazil..... 
Bulgaria 
Chile 
China (People's Republic of) 
Colombia 
Cyprus 
Czech Republic 
Dominican Republic 
El Salvador 
Estonia 
Ethiopia 
Ghana 
Guatemala 
Indonesia 
Jamaica 
Jordan 
Kazakhstan 
Kenya 
Kuwait 
Latvia 
Lithuania 
Malaysia 
Mexico 
New Zealand 
Nigeria 
Paraguay 
Peru 
Philippines 
Poland 
Romania 
Senegal 
Slovakia 
Sri Lanka 
Sudan 
Syrian Arab Rep 
Taiwan 
Tanzania 
Thailand 
Trinidad and Tobago 
Ukraine 
Uruguay 
Uzbekistan 
Venezuela 
Viet Nam 
Zaire 
Zambia 
Zimbabwe 

PART B 

25 

9 
5 
32 
7 
6 
77 
5 
5 
6 
5 
5 
5 
5 
5 
5 
9 
5 
5 
5 
5 
5 
5 
5 
8 
28 
5 
6 
5 
9 
7 
31 
14 
5 
6 
5 
5 
7 
26 
5 
17 
5 
8 
5 
14 
13 
5 
5 
5 
5 

FOOD AID CONVENTION, 1995 

PART I - OBJECTIVE AND DEFINITIONS 

ARTICLE I 

Objective 

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

ARTICLE II 

Definitions 

For the purposes of this Convention: 

(1) 

(a) 

"c.i.f." means cost, insurance and freight; 

(b) 

"Committee" means the Food Aid Committee referred to in Article IX of this 
Convention; 

(c) 

"Convention" means the Food Aid Convention, 1995; 

(d) 

"developing country", unless the Committee  decides  otherwise,  means any 
country  or  territory  which  is  recognised  by  the  Development  Assistance 
Committee of OECD as a developing country or territory. 

(e) 

"Executive Director" means the Executive Director of the International Grains 
Council; 

(f) 

"f.o.b." means free on board; 

(g) 

"pulses" includes the following species: 

Cicer arietinum 
Lens culinaris 
Lupins angustifolius/albus 
Phaseolus vulgaris/lunatus 
Pisum sativum 
Vicia faba 
Vigna angularis/sinensis/unguiculata 
Vigna radiata/mungo 

and any other species which the Committee may decide. 

(h) 

"member" means a party to this Convention; 

(i) 

"products of primary processing" include: 

(i) 
(ii) 
(iii) 

(iv) 
(v) 
(vi) 

cereal flours; 
cereal groats and cereal meal; 
other worked cereal grains  (e.g. rolled, flaked,  polished,  pearled and 
kibbled, but not further  prepared)  except husked, glazed, polished or 
broken rice; 
germ of cereals, whole, rolled, flaked or ground; 
bulgur;  and 
any other similar grain product which the Committee may decide; 

(j) 

"products of secondary processing" include: 

(i) 
(ii) 

macaroni, spaghetti and similar products; and 
any other product, whose  manufacture  involves the  use of a product 
of primary processing, which the Committee may decide; 

(k) 

"rice" includes husked, glazed, polished or broken rice; 

(I) 

"Secretariat" means the Secretariat of the International Grains Council; 

(m) 

"tonne" means a metric ton of 1,000 kilograms; 

(n) 

"Usual Marketing  Requirement"  or "UMR"  is the term,  as  currently  used by 
intemationai  organisations,  for  the 
the  FAO  and  other  responsible 
commitment by a country receiving a concessional transaction to maintain the 
normal level of commercial  imports of the commodity concerned, in addition 
to the imports provided under the concessional transaction. 

(o) 

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

(p) 

"year"  means  the  period  from  1  July  to  the  following  30  June,  unless 
otherwise stated. 

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

PART II - MAIN  PROVISIONS 

ARTICLE III 

Contributions of members 

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

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

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

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

Member 

Argentina 
Australia 
Canada 
European Community and its 

member States 

Japan 
Norway 
Switzerland 
United States of America 

Tonnes 

35,000 
300,000 
400,000 

1,755,000 
300,000 
20,000 
40,000 
4,470,000 

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

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

(7) 

Cash contributions under sub-paragraph (b) of Article IV: 

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

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

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

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

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

ARTICLE  IV 

Terms  of food aid  contributions 

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

(a) 

gifts of grain; 

(b) 

gifts or grants of cash to be used to purchase grain for the recipient  country. 

(c) 

(d) 

sales  of  grain  for  the  currency  of  the  recipient  country  which 
is  not 
transferable  and  is  not  convertible  into  currency  or  goods  and  services  for 
use by the donor members^ 

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

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

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

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

ARTICLE V 

Channelling of contributions 

Members  may,  in  respect  of  their  contributions  under  this  Convention,  specify  a 

(1) 
recipient country or countries. 

Members  may  make  their  contributions  bilaterally  or  through  intergovernmental 

(2) 
organizations and/or non-governmental organizations. 

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

ARTICLE VI 

Wheat equivalents 

(1) 
For  the  purposes  of  this  Convention,  all  contributions  under  Article  111 shall  be 
evaluated  in  terms  of  their  wheat  equivalent.  The  evaluation  shall  take  account,  where 
appropriate,  of  the  grain  content  of  grain  products,  and  the  commercial  value  of  the 
contribution relative to wheat. 

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

(3) 
Contributions  of  cash  under  sub-paragraph  (b)  of  Article  IV  shall  be  evaluated  at 
prevailing  international  market  prices  of  wheat.  The  Committee  shall  establish  a  Rule  of 
Procedure for the annual determination of the "prevailing international market price". 

^ 

The Committee shall establish Rules of Procedure for the determination of the wheat 

(4) 
equivalent of contributions made in forms other than wheat, rice or cash. 

ARTICLE VII 

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

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

6 

(2)  Members shall ensure in particular: 

(a) 

(b) 

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

that  international food aid transactions,  including bilateral food aid which is 
monetised,  shall  be  carried  out  in  a  manner  consistent  with  the  FAO 
"Principles  of  Surplus  Disposal  and  Consultative  Obligations"  including, 
where appropriate, the system of Usual Marketing Requirements (UMRs). 

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

ARTICLE VIII 

Special provision for exceptional needs 

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

(1) 
review. 

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

ARTICLE IX 

Food Aid Committee 

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

(2) 

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

(3) 

The Committee shall appoint a Chairman and a Vice-Chairman. 

ARTICLE X 

Powers and functions of the Committee 

The Committee shall keep under review the way in which the obligations undertaken 

(1) 
under this Convention have been fulfilled; 

The Committee shall exchange information on a regular basis on the functioning of 

(2) 
the food aid arrangements under this Convention; 

The Committee  may  receive  information from  recipient  countries  and consult with 

(3) 
them; 

(4) 

The Committee shall issue reports as necessary; 

The Committee shall establish such Rules of Procedure as are necessary to carry 

(5) 
out the provisions of this Convention; 

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

ARTICLE XI 

Seat, sessions and quorum 

(1) 

The seat of the Committee shall be in London. 

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

The  presence  of  delegates  representing  two  thirds  of  the  membership  of  the 

(3) 
Committee shall be necessary to constitute a quorum at any session of the Committee. 

ARTICLE XII 

Decisions 

The decisions of the Committee shall be reached by consensus. 

ARTICLE XIII 

Admission of observers 

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

8 

ARTICLE XIV 

Administrative provisions 

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

ARTICLE XV 

Defaults and disputes 

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

PART III - FINAL PROVISIONS 

ARTICLE XVI 

Depositary 

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

of this Convention. 

ARTICLE XVII 

Signature 

This Convention shall be open for signature at United Nations headquarters from 1 
May 1995 until and including 30 June 1995 by the Governments referred to in paragraph (4) 
of Article 111. 

9 

ARTICLE XVIII 

Ratification, acceptance or approval 

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

ARTICLE XIX 

Provisional application 

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

ARTICLE XX 

Accession 

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

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

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

10 

ARTICLE XXI 

Entry into force 

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

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

ARTICLE XXII 

Duration, extension and termination 

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

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

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

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

11 

ARTICLE XXIII 

Withdrawal and rejoining 

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

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

ARTICLE XXIV 

Relationship of this Convention to the 
International Grains Agreement, 1995 

This  Convention  shall  replace  the  Food  Aid  Convention,  1986,  as  extended,  and 

shall be one of the constituent instruments of the International Grains Agreement, 1995. 

ARTICLE XXV 

Notification by depositary 

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

ARTICLE XXVI 

Authentic texts 

The texts of this Convention in the English, French, Russian and Spanish  languages 

shall all be equally  authentic. 

12 

ISSN 0254-1475 

COM(95) 183  final 

DOCUMENTS 

EN 

03  11 

Catalogue number  : CB-CO-95-203-EN-C 

ISBN 92-77-88743-5 

Office for Official Publications of the European Communities 

L-2985 Luxembourg