Proposal for a COUNCIL DECISION concerning the signing and notification of provisional application of the International Natural Rubber Agreement 1995 on behalf of the Community
Date: 1995-12-05
Institutions: European Commission
Subjects: UNO, buffer stock, common commercial policy, international agreement, market stabilisation, natural rubber

COMMISSION OF THE EUROPEAN COMMUNITIES 

Brussels,  05.12.1995 
COM(95) 616  final 

95/0310 (ACQ 

Proposal  for  a 

COUNCIL  DECISION 

concerning the signing and  notification  of provisional  application  of  the 

International  Natural  Rubber  Agreement  1995 

on  behalf  of the  Community 

(presented  by  the  Commission) 

EXPLANATORY  MEMORANDUM 

1. 

Negotiations for a Third International Natural Rubber Agreement were concluded 
on  17 February 1995 at the end of the third session of the Negotiating  Conference. 
This  international  commodity  agreement  was  negotiated  in  the  context  of  the 
• Integrated Programme for Commodities covered by Resolutions 93  (IV),the "new 
partnership for development  : Cartagena Commitment" and the relevant objectives 
in the final document  "Cartagena Spirit" adopted by the United Nations Trade and 
Development Conference at its eighth session. 

2. 

The main aims of the Agreement are : 

to promote and strengthen international  cooperation  in all branches of the 
world  natural  rubber sector in particular by providing  an effective  framework  for 
the discussion of matters relating to the sectors ; 

to  contribute  to  the  stabilization  of the world  market  in natural  rubber in 
the  interests  of  both  producers  and  consumers,  notably  by  seeking  to  avoid 
excessive price fluctuations and to ensure a long-term balance between  supply and 
demand ; 

to facilitate the expansion of international trade in natural rubber. 

3. 

Apart  from  the  exchange  of  basic  statistical  data,  the  methods/ envisaged  for 
achieving  these  aims  include  the  setting  up  of  a  price  protection  mechanism 
comprising : 

a price range expressed  in Singgit/kg  l  and automatically  readjustable  on 
the  basis  of  the  volume  of  buffer  stock  transactions  and /  or  price  levels  on  the 
world market ; 

a buffer stock of a total capacity of 550.0001 of natural rubber, made up of 

a normal buffer stock of 400.0001 and a contingency buffer stock of  150.000 t. 

4. 

The  principal  amendments  made by the  1995  Agreement  to  the  1987  Agreement 
relate to : 

the  strengthening  of  procedures  for  the  revision  of  the  price  range  by 

increasing the automaticity of the procedure and of any adjustment ; 

the  reduction  from  15  months  to  12  months  of  the  interval  at  which  the 

reference price must be reviewed; 

increase in the Lower Indicative Price from 150 cents/kg to  157 cents/kg ; 

reduction in initial duration from 5 years to 4 years ; 

inclusion of an article on environmental aspects ; 

Singgit : average value of the Malaysian Ringgit and the Singapore dollar. 

3^ 

inclusion of the post of Deputy Executive Director in the agreement. 

5. 

6. 

7. 

8. 

The  sources  of  finance  envisaged  remain  the  same  as  in  the  1987  Agreement 
(contribution by the member countries to the administrative budget  and the  buffer 
stock). 

The Agreement  has been negotiated  by the Community and its Member  States in 
accordance  with  the  common  position  defined  by  the  Council.  It  is  open  for 
signature from 3 April  1995 to 28 December  1995. The 1987 Agreement is due to 
expire en  28  December  1995  and,  as it  has already been  extended  by 2  years,  it 
cannot be extended  further.  In order to avoid any legal  hiatus or any gaps  in the 
working of the intervention  mechanisms  of the two Agreements,  the  Commission 
proposes that the Community and its Member States should : 

sign the 1995 Agreement as soon as possible ; 

state their intention to apply the said Agreement on a provisional basis. 

It is important  that the Community and  its Member  States  should  simultaneously 
sign  and give  notification  of  the  provisional  application  of  this  Agreement,  since 
they have both to become contracting parties and act together. 

The  attached  proposal,  which the Council  is asked to  adopt,  has been  drafted  to 
this end. 

1£ 

Proposal  for  a 

COUNCIL  DECISION 

concerning the signing and notification  of provisional  application  of the 

International  Natural  Rubber Agreement  1995 

on  behalf of the  Community 

THE COUNCIL  OF  THE  EUROPEAN  UNION, 

Having  regard  to  the  Treaty  establishing  the  European  Community,  and  in  particular 
Article  113 in connection  with Article 228 § 2, thereof, 

Having regard to the proposal from  the Commission, 

Whereas the International Natural Rubber Agreement of  1995 negotiated  in the context  of 
the Integrated  Programme for  Commodities Resolution  93  (IV), the  "new  partnership  for 
development  : Cartagena  Commitment"  and the relevant  objectives  in the  final  document 
"Cartagena  Spirit"  adopted  by the United Nations  Trade  and  Development  Conference  at 
its eighth session is open for  signature from  3 April to 28 December  1995. 

Whereas  the  International  Natural  Rubber  Agreement  of  1987  expires  on  28  December 
1995  ; whereas  it  is therefore  advisable to  apply the  new  Agreement  with  effect  from  29 
December  1995 in order to  avoid  any gap in the working  of the intervention  mechanisms 
of the two Agreements, if the ratification  procedures were not completed by that date ; 

Whereas the aims of the Agreement  are : 

- 

- 

to  promote  and  strengthen  international  cooperation  in  all  branches  of  the  world 
natural  rubber  sector,  in  particular  by  providing  an  effective  framework  for  the 
discussion  of matters relating to the sectors ; 

to contribute to  the stabilization  of the world  market  in natural  rubber  in the  interests 
of  both  producers  and  consumers,  notably  by  seeking  to  avoid  excessive  price 
fluctuations  and to ensure a long-term balance between  supply and  demand ; 

- 

to facilitate  the expansion  of international trade in natural  rubber. 

Whereas,  apart  from  the  exchange  of  basic  statistical  data,  the  methods  envisaged  for 
achieving these aims include a price protection  mechanism comprising : 

- 

a price range expressed  in Singgit/kg  (Singgit  : average  value of the Malaysian  ringgit 
and the Singapore  dollar) and automatically  readjustable  on the basis of the volume of 
buffer  stock  transactions and / or price levels on the world  market ; 

^ 

-  a buffer  stock of a total capacity of 550.000 t of natural rubber, made up of a normal 

buffer stock of 400.0001 and a contingency buffer stock of  150.0001. 

Whereas  the  aims  pursued  by  the  Agreement  fall  within  the  bounds  of  the  common 
commercial policy ; 

Whereas the following sources of finance are envisaged : 

- 

- 

contributions by the members of the Agreement to the administrative budget ; 

contributions by the members of the Agreement to the buffer stock ; 

Whereas  the  application  of  the  said  Agreement  involves financial contributions  by  the 
Member States ; 

Whereas,  consequently,  it  is  important  that  the  Community  should  sign  the  Agreement 
deposited  with  the  Secretary-General  of the United Nations  and give  notification  before 
29  December  1995  of  its  intention  to  apply  the  new  Agreement  on  a  provisional  basis, 
pending its definitive conclusion, 

HAS  DECIDED  AS  FOLLOWS  : 

Article 1 

The Community  shall  sign the International Natural  Rubber Agreement,  1995,  deposited 
with  the  Secretary-General  of  the  United  Nations,  the  text  of  which  is  annexed  to  this 
Decision,  and  state  its  intention  to  apply  the  International  Natural  Rubber  Agreement, 
1995, on a provisional basis, in accordance with the Articles of the Agreement. 

Article 2 

The President of the Council is hereby authorized to designated the person empowered  to 
sign the Agreement  and to deposit the notification  of provisional  application on behalf of 
the Community. 

Done at Brussels, 

For the Council, 

The President, 

^ 

DECLARATIONS TO BE ENTERED IN THE MINUTES 

1. 

2. 

The  Council  and  the  Commission  declare  that  this  Decision  is  being  adopted  in 
order  to  enable  the  International  Natural  Rubber  Agreement  1995  to  become 
effective  on  29  December  1995.  It  is  being  taken  with  the  pragmatic  aim  of 
adhering  as  closely  as  possible to  existing  practices  and  it  does  not  prejudice  the 
basis  and  nature  of  future  measures  concerning  commodities,  including  the 
renewal of this  Agreement. 

The  Member  States'  representatives  meeting  within  the  Council  declare  that  their 
governments  are  prepared 
to  sign  the  new  International  Natural  Rubber 
Agreement  1995 as soon as possible, together with the Community,  and to ensure, 
by common accord with the European Community, its provisional  application. 
Those states which cannot decide to apply the Agreement  on a provisional basis by 
an act of their Government will begin their parliamentary  ratification  procedures  as 
soon  as possible. Pending ratification  they will take all measures to  ensure that  the 
Agreement  can be applied  as regards the Community's competencies. 

UNITED  NATIONS  CONFERENCE  ON  TRADE  AND  DEVELOPMENT 

Geneva 

TD/RUBBER.3/11 

INTERNATIONAL  NATURAL  RUBBER 
AGREEMENT, 1995 

UNITED  NATIONS 
New York and Geneva, 1995 

\l\ 

INTERNATIONAL  NATURAL  RUBBER  AGREEMENT,  1 9 95 

CONTENTS 

PREAMBLE 

Article 

1.  Objectives 

2.  Definitions 

CHAPTER I.  OBJECTIVES 

CHAPTER II.  DEFINITIONS 

' 

~ 

Page 

4 

5 

6 

CHAPTER III.  ORGANIZATION AND ADMINISTRATION 

3.  Establishment, headquarters and structure of the 

International Natural Rubber Organization 

4.  Membership in the Organization 
5.  Membership by intergovernmental organizations 

. . 

8 
8 
v  8 

CHAPTER IV.  THE INTERNATIONAL NATURAL RUBBER COUNCIL 

6.  Composition of the International Natural Rubber Council  . 
7.  Powers and functions of the Council 
8.  Delegation of powers 
9.  Cooperation with other organizations 

10.  Admission of observers 
11.  Chairman and Vice-Chairman 
12.  Executive Director, Deputy Executive Director, Buffer Stock-

Manager and other staff 

13.  Sessions  . . . . . . . .. 
14.  Distribution of votes 
15.  Voting procedure 
16.  Quorum 
17.  Decisions 
18.  Establishment of committees 
19.  Panel of experts 

. 

9 
9 
10 
10 
10 
10 

11 

11 

12 
13 
13 
13 
14 
14 

CHAPTER V.  PRIVILEGES AND IMMUNITIES 

20.  Privileges and immunities 

CHAPTER VI.  ACCOUNTS AND AUDIT 

21.  Financial accounts 
22.  Form of payment 
23.  Audit 

15 

16 
16 
16 

I 

CHAPTER VII.  THE ADMINISTRATIVE ACCOUNT 

24.  Approval of the administrative budget and assessment of 

contributions 

25.  Payment of contributions to the administrative budget  . .' 

CHAPTER VIII.  THE BUFFER STOCK 

Price range 

26.  Size of the Buffer Stock 
27.  Financing of the Buffer Stock 
28.  Payment of contributions to the Buffer Stock Account  . .. 
29. 
30.  Operation of the Buffer Stock  . 
31.  Review and revision of the price range  . . . . 
32.  . Market indicator price 
33.  Composition of buffer stocks 
34.  Location of buffer stocks 
35.  Maintaining the quality of the buffer stocks 
36.  Restriction or suspension of buffer stock operations  . . -. 
Penalties relating to contributions to the Buffer Stock 
37. 
Account 

. . 

, 

38.  Adjustment of contributions to the Buffer Stock Account 
39.  The Buffer Stock and changes in exchange rates 
40.  Liquidation procedures for the Buffer Stock Account  . .. 

. 

Page 

17^ 
17 

18 
18 
19 
20 
20 
22 
23 
24 
24 
25 
25 

26 
26 
27 
28 

CHAPTER IX.  RELATIONSHIP WITH THE COMMON FUND FOR COMMODITIES 

41.  Relationship with the Common Fund.for Commodities 

. . .. 

30 

CHAPTER X.  SUPPLY AND MARKET ACCESS AND OTHER MEASURES 

Supply and market access 

42. 
43.  Other measures 

31 
31 

CHAPTER XI.  CONSULTATION ON DOMESTIC POLICIES 

44.  Consultation 

•; 

32 

CHAPTER XII.  STATISTICS, STUDIES AND INFORMATION 

45.  Statistics and information 
46.  Annual assessment, estimates and studies 
47.  Annual review 

CHAPTER XIII.  MISCELLANEOUS 

48.  General obligations and liabilities of members 
49.  Obstacles to trade 
50.  Transportation and market structure of natural rubber  . . 
51.  Differential and remedial measures  * . . . .. 
52.  Relief from obligations 
53.  Fair labour standards 
54.  Environmental aspects 

33 
33 
33 

34 
34 
34 
35 
35 
35 
35 

CHAPTER  XIV. 

COMPLAINTS A ND DISPUTES 

55. 
56.  Disputes 

Complaints 

. . . . . . . . . . . . . . . . .. 

•...'. 

CHAPTER XV.  FINAL PROVISIONS 

Signature 
Depositary 
Ratification, acceptance and approval 
Notification of provisional application 
Entry  into  force 
Accession 
Amendments 
withdrawal 
Exclusion 
Settlement of accounts with withdrawing or excluded 
members or members unable to accept an amendment  . . . .. 
Duration, extension and termination  . 
Reservations 

1 

- 

Page 

36 
3 6 

3 8 
3 8 
38 
38 

39 
40 
40 
41 
41 

41 
42 
43 

ANNEXES 

Shares of individual  exporting  countries  in total n et exports 
of  countries, as established  for the purposes of article  61 
Shares of individual importing countries and groups of 
countries in total net imports of countries, as established 
for the purposes of article 61 
Cost of the Buffer  Stock as estimated by the President of 
the  United  Nations  Conference on Natural  Rubber,  1994  . . 

44 

45 

46 

57. 
58. 
59. 
60. 
6 1. 
62. 
63. 
64. 
65. 
66. 

67. 
68. 

A. 

B. 

C. 

PREAMBLE 

The  Contracting 

Parties, 

Recalling 

the  Declaration  and  the  Programme  of  Action  on  the 

Establishment of a New international Economic Order, * 

Recognizing 

in  particular  the  importance  of  the  United  Nations 
Conference  on  Trade  and  Development  resolutions  93  (IV),  124  (V)  and 
resolution 155 (VI) on the Integrated Programme for Commodities,* the Cartagena 
Commitment and the relevant objectives contained in "The Spirit of Cartagena" 
adopted by the United Nations Conference on Trade and Development, 

Recognizing 

the  importance  of  natural  rubber  to  the  economies  of 
members,  particularly  to  the  exports  of  exporting  members  and  to  supply 
requirements of importing members, 

Recognizing 

further  that the stabilization of natural rubber prices is 
in the interests of producers, consumers and natural rubber markets, and that 
an international natural rubber agreement can significantly assist the growth 
and  development  of  the  natural  rubber  industry  to  the  benefit  of  both 
producers and consumers, 

Have  agreed  as follows: 

* 

General Assembly resolutions 3201 (S-VI) and 3202 (S-vi) of 1 May 1974 

CHAPTBR  I. 

OBJECTIVES 

Article 1 

Objectives 

The  objectives  of  the  International  Natural  Rubber  Agreement,  19 9 5 
(hereinafter  referred  to as  this Agreement),  in the  light  of  the  resolution 
93  (IV), of the New Partnership for Development: the Cartagena Commitment and 
the relevant objectives contained  in "The Spirit of Cartagena" adopted by the 
alia  as follows: 
United Nations Conference on Trade and Development, are  inter 

(a) 

(b) 

(c) 

(d) 

(e) 

(f) 

(g) 

(h) 

(i) 

To achieve a balanced growth between the supply of and demand for 
natural  rubber,  thereby  helping  to  alleviate  the  serious 
difficulties  arising  from  surpluses  or  shortages  of  natural 
rubber; 

To  achieve  stable  conditions  in  natural  rubber  trade  through 
avoiding  excessive  natural  rubber  price  fluctuations,  which 
adversely  affect  the  long-term  interests  of  both  producers  and 
consumers,  and  stabilizing  these  prices  without  distorting 
long-term  market  trends,  in  the  interests  of  producers  and 
consumers; 

To  help  stabilize, the  export  earnings  from  natural  rubber  of 
exporting  members,  and  to  increase  their  earnings  based  on 
expanding natural rubber export volumes at fair and  remunerative 
prices,  thereby helping  to provide  the necessary  incentives  for 
a  dynamic  and  rising  rate  of  production  and  the  resources  for 
accelerated  economic growth and social development; 

To seek to ensure adequate supplies of natural rubber to meet the 
requirements  of  importing members at  fair  and  reasonable  prices 
and to improve the reliability and continuity of these supplies; 

To  take  feasible  steps  in the event of  a surplus  or shortage of 
natural rubber to mitigate the economic difficulties that members 
might  encounter; 

To  seek  to expand  international  trade  in  and  to  improve  market 
access  for natural  rubber and processed products  thereof; 

To  improve  the competitiveness  of natural  rubber by encouraging 
research and development on the problems of natural  rubber; 

To  encourage  the  efficient  development  of  the  natural  rubber 
economy by seeking  to facilitate and promote  improvements  in the 
processing, marketing and distribution of raw natural rubber; and 

To  further  international  cooperation  in  and  consultations  on 
natural  rubber  matters  affecting  supply  and  demand,  and  to 
facilitate promotion and coordination of natural rubber research, 
assistance and other programmes. 

CHAPTER II.  DEFINITIONS 

l' 

Article 2 

Definitions 

For the purposes of this Agreement: 

1. 

2. 

3. 

4. 

5. 

6. 

7. 

8. 

9. 

"Natural rubber" means the unvulcanized elastomer, whether in solid or 
liquid forms, from  Hevea  brasiliensis 
and any other plant which  the 
Council may decide for the purposes of this Agreement; 

"Contracting  party"  means  a  Government,  or  an  intergovernmental 
organization referred to in article 5, which has consented to be bound 
by this Agreement provisionally or definitively; 

"Member" means a contracting party as defined in definition  (2) above; 

"Exporting member" means a member which exports natural rubber and has 
declared itself to be an exporting member, subject to the agreement of 
the Council; 

"Importing member" means a member which imports natural rubber and has 
declared itself to be an importing member, subject to the agreement of 
the Council; 

"Organization"  means  the  International  Natural  Rubber  Organization 
referred to in article 3; 

"Council" means the International Natural Rubber Council, referred to 
in article 6; 

"Special vote" means a vote-requiring at least two thirds^of the votes 
cast by exporting members present and voting and at least two thirds of 
the  votes  cast  by  importing  members  present  and  voting,  counted 
separately, on condition that these votes are cast by at least half the 
members in each category present and voting; 

"Exports of natural rubber" means any natural rubber which leaves the 
customs territory of any member, and "imports of natural rubber" means 
any natural rubber which enters the domestic commerce in the customs 
territory  of  any  member,  provided  that  for  the  purpose^  of  these 
definitions, customs  territory shall, in the case of  a member which 
comprises more than one customs territory, be deemed to refer to the 
combined customs territories of that member; 

10.  "Distributed simple majority vote" means a vote requiring more than half 
of the total votes of exporting members present and voting and more than 
half of the total votes of importing members present and voting, counted 
separately; 

11.  "Freely usable currencies" means the deutsche mark, the French franc, 

the Japanese yen, the pound sterling, and the United States dollar; 

12. 

"Financial  year"  means  the  period  from  1  January  to  31  December 
inclusive; 

13.  "Entry into force" means the date on which this Agreement enters into 

force provisionally or definitively in accordance with article 61; 

14.  "Tonne" means a metric ton, i.e.  1,000 kilogrammes; 

15.  "Malaysian/Singapore cent" means the average of the Malaysian sen and 

the Singapore cent at the prevailing rates of exchange; 

16. 

17. 

18. 

"Time-weighted  net  contribution  of  a  member"  means  its  net  cash 
. contributions  weighted  by  the  number  of  days  during  which  the 
constituent  parts  of' the  net  cash  contribution  have  stayed  at  the 
disposition of the Buffer Stock.  In calculating the number of days, the 
day when the contribution was received by  the Organization will not be 
taken into account, nor the day when the reimbursement was effected, nor 
the** day when this Agreement  terminates; 

"First  quoted  month"  means  the  calendar  month  of  shipment  officially 
quoted to the Organization by a market for inclusion in the daily market 
indicator price; 

"Established commercial market" means  a natural  rubber  trading  centre 
where a rubber trade association or regulatory body exists meeting  the 
following criteria: 

(a) 

a  written  constitution  which  includes  sanctions  that  could  be 
taken against erring members; 

(b)  qualification  standards,  including  financial  standards,  that 

members must maintain; 

(c) 

official written contracts  that are legally binding; 

(d) 

full and binding arbitration  to all market participants; 

(e)  publishes official daily prices  for physical  rubber. 

CHAPTER  III.  ORGANIZATION  AND  ADMINISTRATION 

Article 3 

Establishment, headquarters  and structure of the 
International  Natural Rubber  Organization 

i. 
The  International  Natural  Rubber  Organization,  established  by  the 
International Natural Rubber Agreement, 1979, shall continue in being for the 
purpose of administering  the provisions and supervising the operation of  this 
Agreement. 

2. 
The Organization shall function through the International Natural Rubber 
Council,  its Executive Director  and  its staff, and such other bodies  as  are 
provided  for  in this Agreement. 

3. 
Subject  to  the  requirement  in  paragraph  4  of  this  article,  the 
headquarters of the Organization shall be in Kuala Lumpur, unless the Council, 
by  special vote, decides otherwise. 

4. 
the territory of a member. 

The headquarters  of  the Organization  shall  at all  times be  located  in 

Article 4 

Membership  in the Organization 

1. 

There  shall be  two categories of membership, namely, 

(a)  Exporting; and 
(b) 

Importing. 

2. 
The Council  shall establish criteria regarding  a change by a member  in 
its category of membership  as defined  in paragraph 1 of this article, taking 
fully into account the provisions of articles 24 and 27.  A member which meets 
such-criteria may change  its category of membership  subject  to the agreement 
of  the Council by special vote. 

3. 
Organization. 

Each  contracting  party  shall  constitute  a  single  member  of  the 

Article  5 

, 

Membership by  intergovernmental  organizations 

1. 
Any reference in this Agreement to a "Government" or "Governments" shall 
be  construed  as  including  a reference  to  the  European  Community  and  to  any 
intergovernmental  organization  having  responsibilities  in  respect  of  the 
negotiation,  conclusion  and  application  of  international  agreements,  in 
particular commodity agreements.  Accordingly, any reference in this Agreement 
to  signature,  ratification,  acceptance  or  approval,  or  to  notification  of 
provisional  application,  or  to  accession  shall,  in  the  case  of  such 
intergovernmental  organizations,  be  construed  as  including  a  reference  to 
signature,  ratification,  acceptance  or  approval,  or  to  notification  of 
provisional  application,  or  to  accession,  by  such  intergovernmental 
organizations. 

In  the  case  of  votes  on  matters  within  their  competence,  such 
2. 
intergovernmental  organizations  shall  exercise  their  voting  rights  with  a 
number of votes equal  to the total number of votes attributed, in accordance 
with article  14, to their member States.  In such cases, the member States of 
such  intergovernmental  organizations  shall  not  exercise  their  individual 
voting rights. 

***** 

CHAPTBR IV.  THE INTERNATIONAL NATURAL RUBBER COUNCIL 

Article 6 

^Composition of the International Natural Rubber Council 

1. 
The highest authority of the Organization  shall be the International 
Natural  Rubber  Council,  which  shall  consist  of  all  the  members  of  the 
Organization. 

2. 
designate alternates and advisers to attend sessions of the Council. 

Each member shall be represented in the Council by one delegate, and may 

3. 
the delegate during the latter's absence or in special circumstances. 

An alternate delegate shall be empowered to act and vote on behalf cf 

Article 7 

Powers and functions of the Council 

The Council shall exercise all such powers and perform or arrange for 
1. 
the  performance  of  all  such  functions  as  are  necessary  to carry  out  the 
provisions of this Agreement, but it shall not have the power, and shall not 
be  taken  to have been authorized  by  the members, to  incur any obligation 
outside the scope of this Agreement.  In particular, it shall not have the 
capacity  to  borrow  money,  without,  however,  limiting  the  application  of 
article 41, nor shall it enter into any trading contract for natural rubber, 
except  as  provided  for  specifically  in  paragraph  5  of  article  30.  In 
exercising its capacity to contract, the Council shall ensure that thr terms 
of paragraph 4 of article 48 are brought by written notice to the attention 
of the other parties entering into such contracts, but any failure to do so 
shall not in itself invalidate such contracts, nor shall it be deemed to oe 
a waiver of such limitation of liability of the members. 

2. 
The Council shall, by special vote, adopt such rules and regulations as 
are necessary to carry out the provisions of this Agreement and are consistent 
therewith.  These shall include its own rules of procedure and those of the 
committees  referred  to  in  article  18,  rules  for  the  administration  and 
operation of the Buffer Stock, and the financial and staff regulations of the 
Organization.  The Council may,  in  its rules  of  procedure, proVide  for a 
procedure whereby it may, without meeting, decide specific questions. 

3. 
For the purposes of paragraph 2 of this article, the Council shall, at 
its first session after the entry into force of  this Agreement, review the 
rules  and  regulations  established  under  the  International  Natural  Rubber 
Agreement,  19 87,  and  adopt  them  with  such  modifications  as  it  deems 
appropriate.  Pending such adoption, the rules and regulations established 
under the International Natural Rubber Agreement, 1987, shall apply. 

4. 
of  its functions under this Agreement. 

The Council shall keep such records as are required for the performance 

5. 
Organization and such other information as it considers appropriate. 

The Council  shall publish an annual  report on  the activities of  the 

Article 8 

Delegation of powers 

r 

1. 
The Council may, by special vote, delegate to any committee established 
under article 18 the exercise of any or all of its powers which, in accordance 
with the provisions of this Agreement, do not require a special vote- of the 
Council.  Notwithstanding this delegation, the Council may at any time discuss 
and decicfe any issue that may have been delegated to any of its committees. 

2. 
committee. 

The  Council  may, by  special vote,  revoke  any  power  delegated  to  a 

Article 9 

Cooperation with other organizations 

1. 
The  Council  may  make  whatever  arrangements  are  appropriate  for 
consultation  or  cooperation  with  the  United  Nations,  its  organs  and 
specialized  agencies,  and  other  intergovernmental  organizations  as 
appropriate. 

2. 
appropriate international non-governmental organizations. 

The Council may  also make arrangements  for maintaining  contact with 

Article 10 

Admission of observers 

The  Council  may  invite  any  non-member  Government,  or  any  of  the 
organizations referred to in article 9, to attend as an observer any of the 
meetings of the Council or of any committee established under article 18. 

Article 11 

Chairman and vice-chairman 

1. 

The Council shall elect for each year a Chairman and a vice-chairman. 

2. 
The Chairman, and the vice-chairman shall be elepted, one from among the 
representatives  of  exporting  members  and  the  other  from-  among  the 
representatives of importing members.  These offices shall alternate each year 
between the two categories of members, provided, however, that this shall not 
prohibit the re-election of either or both, under exceptional circumstances, 
by special vote of the Council. 

In the temporary absence of the Chairman, he shall be replaced by the 
3. 
vice-Chairman. 
In  the  temporary  absence  of  both  the  Chairman  and  the 
Vice-chairman or the permanent absence of one or both of them, the Council may 
elect new officers from among the representatives of  the exporting members 
and/or  from  among  the  representatives  of  the  importing  members,  as 
appropriate, on a temporary or permanent basis' as may be required. 

4. 
Neither the Chairman nor any other officer presiding at a meeting of the 
Council  shall  vote  at  that meeting.  The voting  rights  of  the member  he 
represents may, however, be exercised  in accordance with  the provisions of 
paragraph 3 of article 6, or paragraphs 2 and 3 of article 15. 

10 

Article 12 

Executive Director, Deputy Executive Director, 
Buffer Stock Manager and other staff 

1. 
Deputy Executive Director and a Buffer Stock Manager. 

The  Council  shall, by  special  vote, appoint  an  Executive  Director, 

The  terms  and  conditions  of  appointment  of  the  Executive  Director, 
2. 
Deputy Executive Director and the Buffer Stock Manager shall be determined by 
the Council. 

3. 
The Executive Director shall be the chief administrative officer of the 
Organization and shall be responsible to the Council for the administration 
and operation of this Agreement  in accordance with  the provisions of  this 
Agreement and decisions of the Council. 

4. 
The Deputy Executive Director shall at all times be responsible to the 
Executive Director.  The Deputy Executive Director shall act as the Executive 
Director when the latter is for any reason unable to perform his duties or 
when  the office of the Executive Director  is temporarily vacant-^  in which 
event, he shall be directly responsible to the Council for the administration 
and  operation  of  the Agreement.  The  Deputy  Executive  Director  shall  be 
involved in all matters pertaining to the Agreement. 

5. 
The Buffer Stock Manager shall be responsible to the Executive Director 
and  the Council for the functions conferred upon him by this Agreement, as 
well  as  for  such additional  functions  as the Council -may determine.  The 
Buffer Stock Manager shall be responsible for the day-to-day operation of the 
Buffer Stock, and shall keep the Executive Director informed of the general 
operations of the Buffer Stock so that the Executive Director may ensure its 
effectiveness in meeting the objectives of this Agreement. 

The  Executive  Director  shall  appoint  the  staff  in  accordance  with 
6. 
regulations established by the Council.  The staff shall be responsible to the 
Executive Director. 

7. 
Neither the Executive Director nor any member of the staff, including 
the Deputy Executive Director and the Buffer Stock Manager, shall have any 
financial interest in the rubber industry or trade, or associated commercial 
activities. 

8. 
In the performance of their duties, the Executive Director, the Deputy 
Executive Director, the Buffer Stock Manage^ and other staff shall not seek 
or receive instructions from any member of from any other authority external 
to the Council or to any committee established under article 18.  They shall 
refrain  from  any  action  which  might  reflect  on  their  positions  as 
international officials responsible only to the Council.  Each member shall 
respect the exclusively international character of the responsibilities of the 
Executive Director, the Deputy Executive Direction, the Buffer Stock Manager 
and other staff and shall not seek to influence them in the discharge of their 
responsibilities. 

Article 13 

Sessions 

1. 
half of the year. 

As a general rule, the Council shall hold one regular session in each 

2. 
In addition to sessions in circumstances specifically provided for in 
this Agreement, the Council shall also meet in special session whenever it so 
decides or at the request of: 

(a)  The Chairman of the Council; 

11 

1 

(b) 
(c) 
(d) 
(e) 

The Executive Director; 
A majority of  the exporting members; 
A majority of  the importing members; 
An  exporting  member  or  exporting  members  holding  at  least  200 
votes; or 

(f)  An  importing  member  or  importing  members  holding  at  least  200 

votes. 

ir 

3. 
Sessions shall be held at the headquarters of the Organization,  unless 
the Council, by special vote, decides otherwise.  If on the invitation of any 
member  the  Council  meets  elsewhere  than  at  the  headquarters  of  the 
Organization,  that  member  shall  pay  the  additional  costs  incurred  by  the 
Council. 

4. 
Notice  of  any  sessions  and  the  agenda  for  such  sessions  shall  be 
communicated  to members by  the Executive  Director,  in consultation with  the 
Chairman  of  the  Council,  at  least  30  days  in  advance,  except  in  cases  of 
emergency when notice shall be communicated  at least 10 days  in advance. 

Article 14 

Distribution of votes 

1. 
members  shall  together hold  1,000 votes. 

The exporting members shall together hold 1,000 votes and the importing 

2. 
Each  exporting  member  shall receive one  initial vote out of  the  1,000 
votes except  that in the case of an exporting member with net exports of  less 
than 10,000  tonnes annually the initial vote shall not apply.  The remainder 
of  such votes  shall be  distributed  among  the exporting members as nearly  as 
possible  in  proportion  to  the  volume  of  their  respective  net  exports  of 
natural rubber for the period of five^ calendar years commencing  six calendar 
years prior  to the distribution of votes. 

3. 
The votes of importing members shall be distributed among them as nearly 
as possible  in proportion  to the average of  their respective net  imports of 
natural  rubber  during  the  period  of  three  calendar  years  commencing  four 
calendar years prior to the distribution of votes, except that each importing 
member  shall  receive  one vote  even  if  its proportional  net  import  share  is 
otherwise not  sufficiently  large to so justify. 

4. 
For the purposes of paragraphs 2 and 3 of this article, paragraphs 2 and 
3 of  article  27 relating  to contributions of  importing members,, and  article 
38,  the Council shall, at its first session, establish a table of£ net  exports 
of  exporting  members  and  a  table of net  imports  of  importing members  which 
shall be revised  annually  in accordance with  this article. 

5. 

There  shall be no  fractional votes. 

The Council  shall, at the first  session  after  the entry  into  force of 
6. 
this Agreement, distribute the votes for that year, to remain in effect until 
the  first  regular  session  of  the  following  year,  except  as provided  for  in 
paragraph  7 of  this  article.  Subsequently  for each year, the Council  shall 
distribute  the  votes  at  the beginning  of  the  first  regular  session  of  that 
Such  distribution  shall  remain  in  effect  until  the  first  regular 
year. 
session of  the  following  year, except as provided  for in paragraph 7 of  this 
article. 

7. 
whenever  the membership of  the Organization changes or when any member 
has  its  voting  rights  suspended  or  restored  under  any  provision  of  this 
Agreement,  the  Council  shall  redistribute  the  votes  within  the  affected 
category  or  categories  of members  in accordance with  the provisions  of  this 
article. 

12 

In the event of the exclusion of a member pursuant to article 65, or the 
8. 
withdrawal of a member pursuant to  article 64 or article 63, resulting in the 
reduction  of  the  total  trade  share  of ^those members  remaining  in  either 
category below 80 per cent, the Council ^shall meet and decide on the terms, 
conditions and future of this Agreement, including in particular the need to 
maintain effective buffer stock operations without causing  undue financial 
burden to the remaining members. 

Article 15 

Voting procedure 

1. 
the Council and shall not be entitled to divide its votes. 

Each member shall be entitled to cast the number of votes it holds in 

2. 
By written notification to the Chairman of the Council, any exporting 
member may authorize any other exporting member, and any importing member may 
authorize  any  other  importing  member,  to  represent  its  interests  and  to 
exercise its voting rights at any session or meeting of the Council. 

3. 
shall cast such votes as authorized. 

A member authorized by another member to cast the latter member's votes 

4. 
A member when present and not voting shall be deemed to have abstained. 

when abstaining, a member shall'be deemed not to have cast its votes. 

Article 16 

Quorum 

The quorum for any meeting of the Council shall be the presence of a 
1. 
majority of exporting members and a majority of importing members, provided 
that  such  members  hold  at  least  two  thirds  of  the  total  votes  in  their 
respective categories. 

If there is no quorum in accordance with paragraph 1 of this article on 
2. 
the day fixed  for the meeting and on the following  day, the quorum on the 
third day and  thereafter  shall«be the presence of a majority of exporting 
members and a majority of importing members, provided that such members hold 
a majority cf the total votes in their respective categories. 

','. 

3. 
considered as presence. 

Representation  in accordance with paragraph 2 of article 15 shall be 

Article 17 

Decisions 

All decisions of the Council  shall be taken and all  recommendations 
1. 
shall be made by distributed simple majority vote, unless otherwise provided 
for in this Agreement. 

2. 
Where a member avails itself of the provisions of article 15 and its 
votes  are  cast  at  a meeting  of  the  Council,  such  member  shall,  for  the 
purposes of paragraph 1 of this article, be considered as present and voting. 

13 

1 

Article 18 

Establishment of  committees 

1. 
Agreement, 1979, shall continue  in being: 

The following committees established by the International Natural Rubber 

(a)  Committee on Administration; 
(b)  <> Committee on Buffer Stock Operations; 
(c)  Committee on Statistics; and 
(d)  Committee on Other Measures. 

Additional committees may also be established by special vote of the Council. 

2. 
Each committee shall be responsible to the Council.  The Council shall, 
by  special  vote,  determine  the  membership  and  terms  of  reference  of  each 
committee. 

Article 19 

Panel of experts 

1. 
and trade of exporting  and  importing members. 

The Council may  establish a panel of  experts  from  the rubber  industry 

2. 
Any such panel would be  available  to provide  advice and assistance  to 
the Council  and  its committees, particularly  on buffer  stock operations  and 
on the other measures referred to in article  43. 

3. 
panel would be  determined by  the Council. 

The membership,  functions  and administrative  arrangements  of  any  such 

14 

CHAPTER V. 

PRIVILEGES AND  IMMUNITIES 

Article 20 

Privileges and  immunities 

1. '  The  Organization  shall  have  legal  personality. 
In  particular,  but 
without  prejudice  to  the  provisions  of  paragraph  4  of  article 48,  the 
Organization  shall have  the capacity  to contract,  to acquire and dispose of 
movable, and  immovable property, and to institute  legal proceedings. 

2. 
The  status,  privileges  and  immunities  of  the  Organization,  of  its 
Executive  Director, Deputy'Executive Director, Buffer  Stock Manager  as well 
as other staff and experts, and of members' delegations  shall continue  to be 
governed  by  the  Headquarters  Agreement  between  the host  Government  and  the 
Organization  signed  on  10  June  1987,  with  such  amendments  as  might  be 
necessary  for  the proper functioning of  this Agreement. 

If the headquarters of the Organization is moved to another country, the 
3. 
Government  of  that  country  shall,  as  soon  as  possible,  conclude  with  the 
Organization  a Headquarters Agreement  to be approved by  the Council. 

4. 
Pending  the  conclusion  of  the  Headquarters  Agreement  pursuant  to 
paragraph  3  of  this  article,  the  Organization  shall  request  the  host 
Government  to grant, to the extent  consistent  with  its  laws, exemption  from 
taxation on remuneration paid by the Organization to its employees, and on the 
assets,  income and other property of  the Organization. 

The  Organization  may  also  conclude,  with  one  or  more  Governments, 
5. 
agreements  to  be  approved  by  the  Council  relating  to  such  privileges  and 
immunities  as may be necessary for the proper  functioning of  this Agreement. 

6. 
shall, however, terminate: 

The Headquarters Agreement shall be  independent of  this Agreement.  It 

(a) 

By agreement between the host Government  and  the Organization; 

(b) 

In  the event  that  the headquarters  of  the Organization  is moved 
from  the country of  the host Government; or 

(c) 

In the event  that the Organization  ceases  to exist. 

15 

1 

CHAPTER VI.  ACCOUNTS AND AUDIT 

Article 21 

Financial  accounts 

1. 
established  two accounts : 

For the operation and administration of this Agreement, there shall be 

(a)  The Buffer Stock Account; and 
(b)  The Administrative Account. 

2. 
All the following receipts and expenditures  in the creation, operation 
and maintenance  of  the Buffer  Stock  shall be brought  into  the Buffer  Stock 
Account: contributions  from members  under article 27, revenue from  sales  of 
or  expenditure  in  respect  of  acquisition  of  buffer  stocks;  interest  on 
deposits of the Buffer Stock Account; and costs relating to purchase and sales 
commissions, storage, transportation and handling, maintenance and rotation, 
and  insurance.  The Council may, however, by  special  vote, bring  any  other 
type of receipts or expenditures attributable to buffer stock transactions or 
operations  into the Buffer Stock Account. 

3. 
All other  receipts and  expenditures  relating  to the operation of  this 
Agreement shall be brought into the Administrative Account.  Such expenditures 
shall  normally  be met  by  contributions  from members  assessed  in  accordance 
with article 24. 

4. 
observers  to the Council or  to any committee established under article 18. 

The Organization shall not be liable for the expenses of delegations or 

Article 22 

Form of payment 

Payments to the Administrative and Buffer Stock Accounts shall be made 
in freely usable currencies or currencies which are convertible  in the major 
foreign exchange markets  into  freely usable  currencies, and shall be  exempt 
from foreign exchange restrictions. 

Article 23 

Audit 

1. 
of  auditing  its books of account. 

Each financial year, the Council shall appoint auditors for the purpose 

2. 
An independently audited  statement of the Administrative Account  shall 
be  made  available  to members  as  soon  as  possible, but  not  later  than  four 
months,  after  the  close  of  each  financial  year.  An  independently  audited 
statement of  the Buffer Stock Account shall be made available to members  not 
earlier than 60 days, but not  later than four months, after the close of  each 
financial year.  The audited statements of the Administrative and Buffer Stock 
Accounts shall be considered  for approval by the Council at its next  regular 
session, as appropriate.  A summary of the audited accounts and balance  sheet 
shall thereafter be published. 

16 

CHAPTBR VII.  THE ADMINISTRATIVE ACCOUNT 

Article 24 

Approval6,of the administrative budget and assessment of contributions 

1. 
At its first session after the entry into force of this Agreement, the 
Council  shall approve the administrative budget  for the period between the 
date  of  the  entry  into  force  and  the  end  of  the  first  financial  year. 
Thereafter, during the second half of each financial year, the Council shall 
approve  the  administrative budget  for  the  following  financial  year.  The 
Council  shall  assess  the  contribution  of  each  member  to  that  budget  in 
accordance with paragraph 2 of this article. 

2. 
The contribution of each member to the. administrative budget for each 
financial year shall be in the proportion which the number of its votes at the 
time the administrative budget for that financial year is approved bears to 
the total votes of all the members.  In assessing contributions, the votes of 
each  member  shall  be  calculated  without  regard  to  the  suspension  of  any 
member's voting rights or any redistribution of votes resulting therefrom. 

3. 
The initial contribution to the administrative budget of any Government 
which becomes a member after the entry into force of this Agreement shall be 
assessed by the Council on the basis of- the number of votes to be held by that 
member and of the period from the date on which it becomes a member to the end 
of  the current financial year.  The assessment made upon other members for 
that financial year shall not,' however, be altered. 

Article 25 

Payment of contributions to the administrative budget 

1. 
Contributions to the first administrative budget shall become due on a 
date  to be  decided by the Council at its first session.  Contributions to 
subsequent  administrative budgets shall become due by  28  February  in each 
financial  year.  The initial contribution of a Government which becomes a 
member after the entry into force of this Agreement, assessed in accordance 
with  paragraph  3 of  article 24, shall,  for  the  financial  year concerned, 
become due 60 days after the date on which it becomes a member. 

If a member has not paid its full contribution  to the administrative 
2. 
budget within two months after such contribution becomes due in accordance 
with paragraph 1 of this article, the Executive Director shall request that 
member to make payment as quickly as possible.  If a member has not paid its 
contribution within two months after such request by the Executive Director, 
its voting rights in the Organization shall be suspended unless the Council 
decides otherwise.  If a member has still not paid  its contribution within 
four months after such request by the Executive Director, all rights of that 
member under  this Agreement shall be suspended by  the Council, unless the 
Council, by special vote, decides otherwise. 

3. 
-For contributions received late, the Council shall levy a penalty charge 
at the prime interest rate in 'the host country from the date the contributions 
become due.  The Council may waive such penalty charge up to 31 March of the 
same financial year on request from a member if, because of its internal laws 
and regulations, it is not able to pay the contributions to the administrative 
budget by the due date, in accordance with paragraph 1 of this article. 

4. 
A member whose rights have been suspended  under paragraph 2 of  this 
article shall in particular remain liable to pay its contribution and to meet 
any other of its financial obligations under this Agreement. 

17 

1 

CHAPTBR  VIII. 

THE  BUFFBR  STOCK 

Article  26 

Size  of  the  Buffer  Stock 

In order  to achieve  the  objectives  of  this  Agreement,  an  international 
Buffer  Stock  shall  be' established.  The  total  capacity  of  the  Buffer  Stock 
shall  be  550,000  tonnes,  including  the  total  stocks  still  held  under  the 
International Natural Rubber Agreement, 1987.  It shall be  the sole  instrument 
of market  intervention  for price  stabilization  in this Agreement.  The  Buffer 
Stock  shall  comprise: 

(a) 

The  normal  Buffer  Stock  of  400,000  tonnes;  and 

(b) 

The  contingency  Buffer  Stock  of  150,000  tonnes. 

Article  27 

Financing  of  the  Buffer  Stock 

1. 
Members commit themselves to finance the total cost of the  international 
Buffer  Stock  of  550,000  tonnes  established  under  article  26,  it  being 
understood  that  shares  in  the  Buffer  Stock  Account  of  the  International 
Natural Rubber Agreement,  1987, of  those members of  the International  Natural 
Rubber Agreement, 19 87, which became members of  this Agreement  shall, with  the 
consent of each member, be  carried over  to the Buffer Stock Account under  this 
Agreement  in  accordance  with  the procedures  determined  under  the  provisions 
of  paragraph  3  of  article  4 0  of  the  International  Natural  Rubber  Agreement, 
1987. 

2. 
The financing  of both  the normal Buffer Stock and the contingency  Buffer 
Stock  shall  be  shared  equally  between  the  exporting  and  importing  categories 
of  members.  Contributions  of  members  to  the  Buffer  Stock.Account  shall  be 
apportioned  according  to  their  shares  of  the votes  in  the  Council,  except  as 
provided  for  in paragraphs  3  and  4 of  this  article. 

Any  importing member  whose  share of  total net  imports  as set out  in  the 
3 . 
table  to  be  established  by  the  Council  under  paragraph  4  of  article  14 
represents  0.1  per  cent  or  less  of  total  net  imports  shall  contribute  to  the 
Buffer  Stock  Account  as  follows: 

(a) 

If its share of  total net  imports  is less than or equal' to 0.1 per 
cent but more  than 0.05  per  cent, such member  shall  contribute  an 
amount  assessed  on  the  basis  of  its  actual  share  of  total  net 
imports; 

(b) 

If  its  share  of  total  net  imports  is  0.05  per  cent  or  less,  such 
member shall  contribute an amount assessed on the basis of a  share 
of  0.05  per  cent  of  total  net  imports. 

4. 
During  any  period  in  which  this  Agreement  is" in  force  provisionally 
either under paragraph  2 or  subparagraph  (b) of paragraph  4 of article  61,  the 
financial commitment  of each,exporting or importing member  to the Buffer  Stock 
Account  shall  not  in  total  exceed  that  member's  contribution,  calculated  on 
the  basis  of  the  number  of  votes  corresponding  to  the  percentage  shares  set 
out  in  the  tables  to  be  established  by  the  Council  under  paragraph  4  of 
article  14,  of  the  totals  of  275,000  tonnes  falling  to  the  exporting  and 
importing  categories  of  members  respectively.  The  financial  obligations  of 
members when  this Agreement  is  in force provisionally  shall be shared  equally 
by  exporting  and  importing  categories  of  members. 
At  any  time  when  the 
aggregate  commitment  of  one  category  exceeds  that of  the other,  the  larger  of 
the  two  aggregates  shall  be  brought  equal  to  the  smaller  of  the  two 

aggregates, each member's votes in that aggregate being reduced in proportion 
to  the  shares  of  votes  derived  from  the  tables  to  be  established  by  the 
Council  under paragraph  4 of  article  14.  Notwithstanding  the provisions  of 
this paragraph and of paragraph  1 of article 28, a member's contribution may 
not exceed 125 per cent of the amount of its total contribution calculated on 
the basis  of  its share  in world  trade as  indicated  in annex A or annex B to 
this Agreement. 

<> 

5. 
The  total  costs of  the normal  and contingency  Buffer  Stock of  550,000 
tonnes  shall  be  financed by  contributions  by members  in cash  to the  Buffer 
Such  contributions  may,  when  relevant,  be  paid  by  the 
Stock  Account. 
appropriate  agencies of members  concerned. 

6. 
The  total costs of  the 550,000-tonne  international  Buffer  Stock  shall 
be paid from  the Buffer Stock Account.  Such costs shall include all expenses 
involved  in  acquiring  and  operating  the  550,000-tonne  international  Buffer 
Stock.  In  the  event  that  the  estimated  cost,  as  given  in annex  C  to  this 
Agreement, cannot fully cover the total cost of acquisition and operations of 
the Buffer  Stock, the Council shall meet and make  the necessary  arrangements 
to  call  up  the  required  contributions  to  cover, such  costs  according  to 
percentage  shares of votes. 

Payment of contributions  to the Buffer  Stock  Account 

Article 28 

There  shall  be  an  initial  contribution  in  cash  to  the  Buffer  Stock 
1. 
Account  equivalent  to  7 0  million  Malaysian  ringgit. 
This  amount,  which 
represents  a working  capital  reserve  for buffer  stock  operations,  shall  be 
apportioned  among all members according  to their percentage  shares of votes, 
taking  into consideration paragraph  3 of article 27, and shall be due within 
60 days  after  the  first Council  session  after  the  entry  into  force of  this 
Agreement.  The  initial contribution of a member  due  in accordance with this 
paragraph  shall, with the consent  of  that member, be made wholly or  in part 
by  transfer  of  that  member's  share  in  the  cash  held  in  the  Buffer  Stock 
Account under  the International Natural Rubber Agreement, 1987. 

2. 
The  Executive  Director  may  at  any  time,  and  independently  of  the 
arrangements  in paragraph  1 of this article, call  for contributions  provided 
that the Buffer Stock Manager has certified that the Buffer Stock Account may 
require  such  funds  in the next four months. 

3. 
When  a  contribution  is  called,  it  shall  be  due  from  members  within 
60 days of  the date of notification.  If requested  by  any member or members 
accounting  for  200 votes  in  the Council,  the Council  shall  meet  in  special 
session and may modify or disapprove the call-up based on an assessment of the 
need  for  funds  to  support  buffer  stock  operations  in  the  next  four months. 
If  the  Council  cannot  reach  a  decision,  contributions  shall  be  due  from 
members  in accordance with  the Executive Director's  notification. 

4. 
Contributions called up for the normal and the contingency Buffer Stock 
shall be valued  at the lower trigger action price  in effect at the time such 
contributions  are called. 

5. 
handled  as follows: 

The  call-up  of contributions  to the contingency  Buffer  Stock  shall  be 

(a) 

At  the  300,000 - tonne  review  provided  for  in  article  31,  the 
Council shall make all financial and other arrangements which may 
be  necessary  for  the  prompt  implementation  of  the  contingency 
Buffer  Stock  including  call-up o'f funds  if necessary; 

(b) 

If  the  Council  by  special  vote  under  article  30,  paragraph  2 
decides to bring the contingency Buffer Stock into operation, then 
the Council shall  ensure that: 

19 

(i) 

All  members  have  made  all  necessary  arrangements  for 
financing  their respective  shares of  the contingency  Buffer 
Stock;  and 

(ii)  The  contingency  Buffer  Stock has been  invoked  and  is  fully 
primed  for  action  in  accordance  with  the  terms  of 
article  30. 

Article  29 

Price  range 

1. 

There  shall  be  established,  for  the  operations  of  the  Buffer  Stock: 

(a) 
(b) 
(c) 
(d) 
(e) 
(f) 
(g) 

A  reference  price; 
A  lower  intervention  price; 
An  upper  intervention  price; 
A  lower  trigger  action  price; 
An  upper  trigger  action  price; 
A  lower  indicative  price;  and 
An  upper  indicative  price. 

~ 

2. 
the  reference  price  applicable  on  28  December  1995. 

On  the entry  into force of  this  Agreement,  the reference  price  shall  be 

3. 
There  shall  be  an  upper  intervention  price  and  a  lower  intervention 
price  calculated  respectively  at plus  and  minus  15 per  cent  of  the  reference 
price,  unless  the Council, by  special  vote,  decides  otherwise. 

4. 
There  shall be  an upper  trigger  action price  and  a  lower  trigger  action 
price  calculated  respectively  at plus  and  minus  20  per  cent  of  the  reference 
price,  unless  the  Council,  by  special  vote,  decides  otherwise. 

5. 
article  shall  be  rounded  to  the nearest  cent. 

The  prices  calculated  in  accordance  with  paragraphs  3  and  4  of  this 

6. 
On  the  entry  into  force  of  this  Agreement,  the  lower  and  upper 
indicative  prices  shall be  initially fixed  at 157 and 270  Malaysian/Singapore 
cents  per  kilogramme,  respectively. 

Article  30 

Operation  of  the  Buffer  Stock 

1. 
If,  in  relation  to  the  price  range  provided  for  in  article  29,  or  as 
subsequently revised  in accordance with  the provisions  of  articles  31 and  39, 
the market  indicator  price  provided  for  in  article  32  is: 

(a) 

(b) 

(c) 

At  or  above  the  upper  trigger  action  price,  the  Buffer  Stock 
Manager  shall  defend  the  upper  trigger  action  price  by  offering 
natural  rubber  for  sale  until  the  market  indicator  price  falls 
below  the  upper  trigger  action  pricer 

Above  the  upper  intervention  price,  the Buffer  Stock Manager  may 
sell natural  rubber  in defence of  the upper  trigger  action price; 

At  the  upper  or  lower  intervention  price,  or  between  them,  the 
Buffer  Stock  Manager  shall  neither  buy  nor  sell  natural  rubber, 
except  in  order  to  carry  out  his  responsibilities  for  rotation 
under  article  35; 

(d) 

Below  the  lower  intervention  price,  the Buffer  Stock Manager  may 
buy natural  rubber  in defence  of  the  lower  trigger  action  price; 

20 

(e) 

At  or  below- the  lower  trigger  action  price,  the  Buffer  Stock 
Manager  shall  defend  the  lower  trigger  action  price  by  offering 
to buy natural rubber until the market  indicator price exceeds  the 
lower  trigger  action  price. 

2. 
when  sales  or  purchases  for  the  Buffer  Stock  reach  the  4,00,000-tonne 
level,  the  Council  shall,  by  special  vote,  decide  whether  to  bring  the 
contingency  Buffer  Stock  into  operation  at: 

(a) 

The  lower  or  upper  trigger  action  price;  or 

(b) 

Any  price  between  the  lower  trigger  action  price, and  the  lower 
indicative price, or  the upper trigger  action price  and  the  upper 
indicative  price. 

3. 
Unless  the Council, by  special  vote,  decides  otherwise  under  paragraph 
2  of  this  article,  the Buffer  Stock  Manager  shall  use  the  contingency  Buffer 
Stock  to defend  the  lower  indicative  price by bringing  the contingency  Buffer 
Stock  into  operation  when  the  market  indicator  price  is  at  a  level  2 
Malaysian/Singapore cents per kilogramme above the lower indicative price,  and 
to defend  the upper  indicative price by bringing  the contingency  Buffer  Stock 
into  operation  when  the  market  indicator  price  is  ât  a  level  2  Malaysian/ 
Singapore  cents  per  kilogramme  below  the  upper  indicative  price. 

The  total  facilities  of  the  Buffer  Stock,  including  the  normal  Buffer 
4. 
Stock and the contingency Buffer Stock-, shall be  fully utilized  to ensure  that 
the market  indicator  price  does  not  fall below  the  lower  indicative  price  or 
rise  above  the  upper  indicative  price. 

Sales  and  purchases  by  the  Buffer  Stock  Manager  shall  be  effected 
5. 
through  established  commercial  markets  at  prevailing  prices,  and  all  his 
transactions  shall be in physical  rubber available  for shipment not later  than 
one month  after the end of  the  first quoted month  in the market  concerned,  or 
for  delivery  in  a  consuming  market  during  the  delivery  month  or  months 
For  the 
normally  corresponding  to  such  shipment  months  in  that  market. 
purpose of the efficient operation of  the Buffer Stock,  the Council may  decide 
by  consensus  to  allow  the  Buffer  Stock  Manager  to  purchase  future  contracts 
up  to  a  maximum  of  two  months  forward  on  the  strict  and  absolute  condition 
that  tenders  are  taken  up  on  maturity. 

6. 
To  facilitate  the  operation  of  the  Buffer  Stock,  the  Council  shall 
establish  branch  offices  and  such  facilities  of  the  Buffer  Stock  Manager's 
office, where necessary,  in established  rubber markets  and approved  warehouse 
locations. 

7. 
The Buffer Stock Manager  shall prepare  a monthly  report on buffer  stock 
transactions  and  the Buffer  Stock  Account's  financial  position.  Thirty  days 
after  the end of each month,  the report  for that month  shall be made  available 
to  members. 

8. 
The  information  on buffer  stock  transactions  shall  include  quantities, 
prices,  types,  grades  and  markets  of  all  buffer  stock  operations,  including 
rotations  effected.  The  information  on  the Buffer  Stock  Account's  financial 
position  shall  also  include  interest  rates  on  and  terms  and  conditions  of 
deposits,  the  currencies  operated  in  and  other  relevant  information  on  the 
items  referred  to  in paragraph  2  of  article  21. 

21 

Article  31 

Review  and  revision  of  the  price  range 

A.  Reference  price 

Any review or revision of the reference  price,  including  those  following 
1. 
net  changes  in  the  Buffer  Stock  under  paragraph  2  of  this  article,  shall  be 
based  on  market  trends.  Immediately  before  the  first  meeting  of  the  Council 
after  the  Agreement  enters  into  force  and  every  12  months  thereafter,  the 
Buffer  Stock Manager  shall  calculate  the  average  daily market  indicator  price 
for  the  previous  six  months  and  compare  this  value  with  the  two  intervention 
prices.  The  date  of  this  calculation  shall be  fixed  at  least  three  months  in 
advance  except  for the first review and  immediately  precede  a Council  session. 

(a) 

(b) 

(c) 

If  the  average  of  the  six-month  daily  market  indicator  prices  is 
at  the upper  intervention  price,  at  the  lower  intervention  price, 
or  between  these  two  prices,  no  revision  of  the  reference  price 
shall  take  place. 

If  the  average  of  the  six-month  daily  market  indicator  prices  is 
below  the  lower  intervention  price,  the  reference  price  shall  be 
automatically  revised  downward  by  5  per  cent  of  its  level  and 
become  effective  the  following  day.  Normally  the  Council  would 
meet  on  that  day  and  take  note  of  the  revision.  The  Council  may 
review  the  reference  price  and  may,  by  special  vote,  decide  on  a 
higher  percentage  adjustment  downwards  of  the  reference  price. 

If  the  average  of  the  six-month  daily  market  indicator  prices  is 
above  the  upper  intervention  price,  the  reference  price  shall  be 
automatically  revised  upwards  by  5  per  cent  of  its  level  and 
become  effective  the  following  day.  Normally  the  Council  would 
meet  on  that  day  and  take  note  of  the  revision.  The  Council  may 
review  the  reference  price  and  may,  by  special  vote,  decide  on  a 
higher  percentage  adjustment  upwards  of  the  reference  price. 

(d) 

However,  at  the  first  regular  session  of  the  Council  after  the 
entry  into  force  of  the  Agreement  any  automatic  revision  under 
article  31,  paragraph  1,  subparagraphs  (b) or  (c)  shall  be  4  per 
cent. 

(e) 

For  the  purposes  of  the  comparison,  the  reference  price  and  the 
six-month  daily market  indicator  price  will  be  calculated  to  two 
decimal  places. 

2. 
Following  a net  change  to  the  Buffer  Stock  of .100,000  tonnes  since  the 
last  regular  session  of  the  Council,  the  Executive  Director  shall  convene  a 
special  session  of  the  Council  to assess  the  situation.  The  Council  may,  by 
special  vote,  decide  to  take  appropriate  measures  which  may  include: 

(a) 

Suspension  of  buffer  stock  operations; 

(b) 

Change  in  the  rate  of  buffer  stock  purchases  or  sales;  and 

(c) 

Revision  of  the  reference  price. 

If net buffer  stock purchases  or  sales  amounting  to 300,000  tonnes  have 
3. 
taken place  since  (a)  the  last revision  under  paragraph  3 of  article  31 of  the 
International  Natural Rubber Agreement,  1987,  (b) the  last revision under  this 
paragraph,  or  (c)  the  last  revision  under  paragraph  2  of  this  article, 
whichever  is  most  recent,  the  reference  price  shall  be  lowered  or  raised, 
respectively,  by  3 per  cent  of  its  current  level  unless  the  Council,  by 
special  vote,  decides  to  lower  or  raise  it,  respectively,  by  a  higher 
percentage  amount. 

22 

Notwithstanding  the provisions of article 29, paragraph 4, revision of 
4. 
the reference price shall not result in the trigger action price breaching the 
indicative price. 

5. 
Notwithstanding  the provisions  of article 31, paragraph  1 and  article 
31,  paragraph  3,  revision  of  the  reference  price  shall  not  result  in  the 
intervention price breaching  the level at which the contingency Buffer  Stock 
will be brought  into operation under article 30, paragraph  3. 

B.  indicative prices 

6. 
prices at reviews provided  for in this section of  this article. 

The Council may, by special vote, revise the lower and upper  indicative 

7. 
The  Council  shall  ensure  that  any  revision  of  indicative  prices  is 
consistent with  evolving market  trends and conditions.  In this  connection, 
the Council shall take into consideration the trend of natural rubber prices, 
consumption, supply, production costs and stocks, as well  as the quantity of 
natural  rubber  held  in  the  Buffer  Stock  and  the  financial  position  of  the 
Buffer  Stock Account. 

8. 

The  lower and upper  indicative prices shall be  reviewed: 

(a) 

24 months  after  the  last  review pursuant  to paragraph 7  (a)  of 
article 31 of  the  International  Natural  Rubber Agreement, 1987, 
or in the event that this.-Agreement enters into force after 1 May 
1996, at the first  session of  the Council  under  this Agreement, 
and every 24 months  thereafter; 

(b) 

In  exceptional  circumstances,  at  the  request  of  a  member  or 
members accounting  for 200 or more votes  in the Council; and 

(c)  when the reference price has been revised  (i) downwards since the 
last  revision, of  the  lower  indicative  price  or  the  entry  into 
force of the International Natural Rubber Agreement, 1987, or  (ii) 
upwards since the last revision of the upper indicative price or 
the  .entry  into  force  of  the  International  Natural  Rubber 
Agreement, 1987, by at least 3 per cent under paragraph 3 of  this 
article and at least 5 per cent under paragraph  1 of this article, 
or by at least this amount under paragraphs 1, 2 and/or 3 of  this 
article, provided  that the average of the daily market  indicator 
price  for  the  60 days  subsequent  to  the  last  revision  of  the 
reference price  is either below the  lower  intervention price  or 
above the upper  intervention price, respectively. 

Notwithstanding  paragraphs  6,  7 and  8 of  this article,  there shall  be 
9. 
no upward  revision  in the  lower or upper  indicative price  if the average  of 
the daily market indicator prices over the six-month period prior to a review 
of  the  price  range  under  this  article  is  below  the  reference  price. 
Similarly,  there  shall  be  no  downward  revision  in  the  lower  or  upper 
indicative price if the average of the daily market indicator prices over the 
six-month period prior  to a review of  the price range under  this  article  is 
above  the reference price. 

Article 32 

Market  indicator price 

There  shall be established  a daily market  indicator  price which  shall 

1. 
be a composite, weighted average  - reflecting the market  in natural  rubber -
of  daily  official  prices  as  defined  by  the  Council  on  the  Kuala  Lumpur, 
London, New York and Singapore markets, and such other established  commercial 
markets  as  the  Council  may  decide.  Initially,  the  daily  market  indicator 
price shall comprise RSS 1, RSS 3 and TSR 20 and their weighting  shall be  in 
All  quotations  shall  be  converted  into  f.o.b. 
the  ratio  of  2:3:5. 
Malaysian/Singapore  ports  in Malaysian/Singapore  currency. 

23 

2. 
The  type/grade  composition  weightings,  method  of  computing  the  daily 
market  indicator price  and  the number of markets  shall be  reviewed  and may, 
by  special  vote,  be  revised  by  the  Council  to  ensure  that  it  reflects  the 
market in natural rubber.  The Council may, by special vote, decide to include 
additional  established  commercial  markets  in  the  calculation  of  the  daily 
market  indicator  price  if  such  markets  are  deemed  to  influence  the 
international  price of natural  rubber. 

3. 
The  market  indicator  price  shall  be  deemed  above,  at  or below  price 
levels  specified  in  this  Agreement  if  the  average  of  the  daily  market 
indicator  prices  for  the  last  five market  days  is  above,  at  or  below  such 
price  levels. 

Article 33 

Composition of buffer  stocks 

1. 
At its first session after the entry into force of  this Agreement, the 
Council  shall name  the  internationally  recognized  standard  types and grades 
of ribbed smoked sheets and technically specified rubbers for inclusion in the 
Buffer  Stock, provided  that the following  criteria  are met: 

(a) 

The  lowest  types  and  grades  of  natural  rubber  authorized  for 
inclusion  in the Buffer. Stock shall be RSS 3 and TSR 20; and 

(b) 

All  types  and  grades  allowed  under  subparagraph  (a)  of  this 
paragraph which  account  for at  least  3 per  cent of  the  previous 
calendar  year's  international  trade  in natural  rubber  shall  be 
named. 

2. 
The  Council  may,  by  special  vote,  change  these  criteria  and/or  the 
selected  types/grades if that is necessary  to ensure that the composition of 
the Buffer  Stock  reflects  the evolving  market  situation,  attainment  of  the 
stabilization objectives  of  this Agreement  and  the need  to maintain  a  high 
commercial  standard  of quality of buffer stocks. 

3. 
The  Buffer  Stock  Manager  shall  make  every  effort  to  ensure  that  the 
composition  of  the Buffer  Stock closely  reflects  the export/import  patterns 
for  natural  rubber,  while• promoting  the  stabilization  objectives  of  this 
Agreement. 

' . * 

4. 
The  Council  may, by  special  vote,  direct  the  Buffer  Stock Manager  to 
change  the  composition  of  the  Buffer  Stock  if  the  objective  of  price 
stabilization  so dictates. . 

Article 34 

Location of buffer  stocks 

1. 
The  location  of  buffer  stocks  shall  ensure  economic  and  efficient 
commercial operations.  In accordance with this principle, the buffer  stocks 
shall  be  located  in  the  territory of both  exporting  and  importing  members, 
unless  the Council, by special vote, decides otherwise.  The distribution of 
the buffer  stock rubber  shall be consistent with attaining  the  stabilization 
objectives  of  the Agreement while minimizing costs. 

2. 
In order  to maintain high commercial  quality  standards, buffer  stocks 
shall  be  stored  only  in  warehouses  approved  on  the  basis  of  criteria 
established  by  the  Council  of  the  International  Natural  Rubber  Agreement, 
19 87, or revised by  the Council under  this Agreement. 

24 

After  the  entry  into  force  of  this  Agreement,  the  Council  shall 
3. 
establish and approve the,list of warehouses and the necessary arrangements 
for their use.  The Council may, if necessary, review the list of warehouses 
approved by the Council of the International Natural Rubber Agreement, 1987, 
and the criteria established by the said Council and maintain or revise them 
accordingly. 

4. 
The Council shall also periodically review the location of the buffer 
stocks and may, by special vote, direct the Buffer Stock Manager tô change the 
location of  the buffer  stocks  to ensure economic  and efficient  commercial 
operations. 

Article 35 

Maintaining the quality of the buffer stocks 

The  Buffer  Stock  Manager  shall  ensure  that  all  buffer  stocks  are 
purchased and maintained at a high commercial standard of quality.  To help 
him achieve this, lie may rotate natural rubber stored in the Buffer Stock as 
necessary to ensure such standards, taking into appropriate consideration the 
cost of such rotation and its impact on the stability of the market.  The 
costs of rotation shall be brought into the Buffer Stock Account. 

Restriction or suspension of buffer stock operations 

Article 36 

1. 
Notwithstanding  the  provisions  of  article  30,  the  Council,  if  in 
session, may, by  special  vote, restrict or suspend  the operations  of  the 
Buffer Stock, if in its opinion the discharge of the obligations laid upon the 
Buffer Stock Manager by that article will not achieve the objectives of this 
Agreement. 

2. 
If the Council  is not in session, the Executive Director may, after 
consultation with  the Chairman, restrict or suspend the operations of  the 
Buffer Stock, if in his opinion the discharge of the obligations laid upon the 
Buffer Stock Manager by article 30 will not achieve the objectives of  this 
Agreement. 

3. 
Immediately after a decision to restrict or suspend the operations of 
the Buffer Stock under paragraph 2 of this article, the Executive Director 
shall  convene  a  session  of  the  Council  to  review  such  decision. 
Notwithstanding the provisions of paragraph 4 of article 13, the Council shall 
meet within 10 days after the date of restriction or suspension arid shall, by 
special  vote,, confirm  or  cancel  such  restriction  or  suspension.  If  the 
Council cannot come to a decision at that session, buffer stock operations 
shall be resumed without any restriction imposed under this article. 

4. 
As  long as any restriction or suspension of buffer stock  operations 
decided in accordance with this article remains in force, the Council shall 
review this decision at intervals of not longer than three months.  If at a 
session to make such a review the Council does not confirm, by special vote, 
the continuation  of  the  restriction or  suspension, or does not  come  to a 
decision, buffer stock operations shall be resumed without restriction. 

25 

Article 37 

Penalties  relating  to contributions  to the Buffer  Stock Account 

1. 
If a member  does not fulfil its obligation to contribute  to the Buffer 
Stock  Account  by  the  last  day  such  contribution  becomes  due,  it  shall  be 
considered  to be  in arrears.  A member  in arrears  for  60 days or more  shall 
not  count  as  a  member  for  the  purpose  of  voting  on  matters  covered  in 
paragraph  2 of  this article. 

2. 
The voting  and other  rights  in the Council of  a member  in arrears  for 
60 days or more under paragraph 1 of  this article shall be  suspended,  unless 
the Council, by special vote, decides otherwise. 

3. 
A member in arrears shall bear interest charges at the prime rate in the 
host country beginning on the last day such payments become due.  Coverage of 
arrears  by  the  remaining  importing  and  exporting  members  shall  be  on  a 
voluntary basis. 

4. 
A member  shall not be considered as in arrears  if any shortfall  in its 
contribution  is only a result  of  fluctuations  in currency  exchange  rates  in 
the 60 days  following  the call for payments.  In this case, no  interest will 
be  charged  on  the shortfall.  However,  any such shortfall  should  be  covered 
by  the member within  the 60 days following  the payment. 

when  the default has been remedied  to the satisfaction of  the Council, 
5. 
the voting and other rights of the member in arrears for 60 days or more shall 
be  restored.  If  the  arrears  have  been  made  good  by  other  members,  these 
members  shall be fully  reimbursed. 

Adjustment  of contributions  to the Buffer  Stock Account 

Article 38 

1. 
When  the votes  are redistributed  at  the  first  regular  session  in each 
financial  year  or whenever  the membership  of  the Organization  changes,  the 
Council  shall make the necessary adjustment  of each member's  contribution  to 
the Buffer  Stock Account  in accordance with  the provisions  of  this  article. 
For  this purpose,  the Executive Director  shall determine: 

(a) 

(b) 

(c) 

The net cash contribution of each member, by subtracting  refunds 
of contributions to that member in accordance with paragraph 2 of 
this article from the sum of all contributions paid by that member 
since the entry  into force of  this Agreement; 

The  total net  call-ups, by  summing  the consecutive  call-ups  and 
subtracting the total of refunds made in accordance with paragraph 
2 of  this article; 

The revised net contribution for each member, by apportioning  the 
total  net  call-ups  among  members  on  the basis  of  each  member's 
revised  voting  share  in  the  Council  pursuant  to  article  14, 
subject  to paragraph  3 of  article  27, provided  that  the  voting 
share of each member  shall, for the purpose  of  this  article, be 
calculated without regard to the suspension of any member's voting 
rights or any redistribution of votes resulting  therefrom. 

Where  a member's net cash contribution exceeds its revised net contribution, 
a  refund of  the difference minus any outstanding penalty  interest on arrears 
shall be made to that member from the Buffer Stock Account,  where a member's 
revised net contribution exceeds  its net cash contribution, a payment of  the 
difference plus an/ outstanding penalty  interest on arrears  shall be made by 
that member  to the Buffer Stock Account. 

26 

If  the Council, having  regard  to paragraphs  2 and  3 of  article 28, 
2. 
decides that there are net cash contributions in excess of funds required to 
support buffer stock operations within the next four months, the Council shall 
refund such excess net cash contributions less initial contributions unless 
it decides, by special vote, either  to make no such refund  or to refund a 
smaller amount.  Members' shares of  the amount  to be refunded  shall be in 
proportion  to  their net  cash contributions, minus any  outstanding  penalty 
interest on arrears.  The contribution liability of members in arrears shall 
be reduced in the same proportion as the refund bears to the total net cash 
contributions. 

3. 
At the request of a member, the refund to which it is entitled may be 
retained in the Buffer Stock Account.  If a member requests that its refund 
be retained in the Buffer Stock Account, this amount shall be credited against 
any additional  contribution  requested  in accordance with  article  28.  The 
credit retained in the Buffer Stock Account at the request of a member shall 
bear interest at the average rate of interest earned on funds in the Buffer 
Stock Account,  beginning  the  last  day when  the amount  should  normally  be 
reimbursed to that member until-the day preceding the actual reimbursement. 

The Executive Director shall immediately notify members of any required 
4. 
payments  or  refunds  resulting  from  adjustments  made  in  accordance  with 
paragraphs 1 and 2 of this article.  Such payments by members or refunds to 
members  shall be made within  60 days  from the date the Executive  Director 
issues such notification. 

5. 
in the event that the amount of cash in the Buffer Stock Account exceeds 
the value of total net cash contributions of members, such surplus funds shall 
be distributed upon termination of this Agreement. 

Article 39 

The Buffer Stock and changes in exchange rates 

1^ 
In  the  event  that  the  exchange  rate  between  the  Malaysian 
ringgit/Singapore  dollar  and  the  currencies  of  the  major  natural  rubber 
exporting and importing members changes to the extent that the operations of 
the Buffer Stock are significantly affected, the Executive Director shall, in 
accordance with article 36, or members may, in accordance with article 13, 
call for a special session of the Council.  The Council shall meet within 10 
days to confirm or cancel measures already taken by the Executive Director 
pursuant to article 36, and may, by special vote, decide to take appropriate 
measures, including the possibility of revising the price range, pursuant to 
the principles of the first sentences of paragraphs 1 and 6 of article 31. 

The Council shall, by special vote, establish a procedure to determine 

2. 
a significant, change in the parities of these currencies for the sole purpose 
of ensuring the timely convening of the Council. 

3. 
In the event that there is a divergency between the Malaysian ringgit 
and  the  Singapore  dollar  to  the  extent  that  buffer  stock  operations  are 
significantly affected, the Council shall meet to review the situation and may 
consider the adoption of a single currency. 

27 

Liquidation  procedures  for  the Buffer  Stock  Account 

Article  40 

1. 
On  termination  of  this  Agreement,  the  Buffer  Stock  Manager  shall 
estimate  the  total  expense  of  liquidating  or  transferring  to  a  new 
international  natural  rubber  agreement  the assets of  the Buffer  Stock  Account 
in  accordance  with  the  provisions  of  this  article,  and  shall  reserve  that 
amount  in  a.separate  account.  If  these  balances  are  inadequate,  the  Buffer 
Stock Manager  shall  sell a sufficient quantity of natural  rubber  in the Buffer 
Stock  to provide  the  additional  sum  required. 

2. 
follows: 

Each  member's  share  in  the Buffer  Stock Account  shall  be  calculated  as 

(a) 

(b) 

(c) 

(d) 

The  value  of  the  Buffer  Stock  shall  be  the  value  of  the  total 
quantity of natural  rubber of each type/grade  therein,  calculated 
at the lowest of  the current prices of the respective  types/grades 
on  markets  referred  to  in  article  32  during  the  30  market  days 
preceding  the  date  of  termination  of  this  Agreement; 

The  value  of  the  Buffer  stock  Account  shall  be  the  value  of  the 
Buffer  Stock  plus  the  cash  assets  of  the Buffer  Stock  Account  on 
the  date  of  the  termination  of  this  Agreement  less  any  amount 
reserved  under  paragraph  1 of  this  article; 

Each  member's  net  cash  contribution  shall  be  the  sum  of  its 
contributions paid  throughout  the duration of  this Agreement  less 
all  refunds  made  under  article  38;  penalty  interest  on  arrears 
paid  in  accordance  with  paragraph  3  of  article  37  shall  not 
constitute  a  contribution  to  the  Buffer  Stock  Account; 

If  the value of  the Buffer Stock Account  is either greater or  less 
than  total net  cash contributions,  the surplus  shall be  allocated 
among  members  in  proportion  to  each  member's  time-weighted  net 
contribution  share  under  this  Agreement.  Any  deficit  shall  be 
allocated  among  members  in  proportion  to  each  member's  average 
number  of  votes  held  during  its  period  of  membership. 
In 
assessing  the  share  of  the  deficits  to be  borne  by  each  member, 
the votes of each member shall be calculated without  regard  to  the 
suspension  of  any member's voting  rights  or any redistribution  of 
votes  resulting  therefrom; 

(e) 

Each member's  share in the Buffer Stock Account  shall comprise  its 
net  cash  contribution,  reduced  or  increased  by  its  shares  in 
deficits or  surpluses  in the Buffer  Stock Account,  and  reduced  by 
its  liability,  if  any,  for .outstanding  interest  on  arrears. 

3. 
If this Agreement  is to be immediately replaced with a new  international 
natural  rubber agreement,  the Council shall, by special vote, adopt  procedures 
to  ensure  efficient  transfer  to  the  new  agreement,  as  required  by  that 
agreement,  of  shares  in  the  Buffer  Stock  Account  of  members  which  intend  to 
participate  in  the  new  agreement. 
Any  member  which  does  not  wish  to 
participate  in  the  new  agreement  shall  be  entitled  to  the  payment  of  its 
share: 

(a) 

(b) 

From  available  cash  in proportion  to  its  percentage  share  of  the 
total  net  cash  contributions  to  the Buffer  Stock  Account,  within 
three  months;  and 

From  the  net  proceeds  from  the  disposal  of  the  buffer  stocks,  by 
way  of  orderly  sales  or  by  way  of  transfer  to  the  new 
international  natural  rubber  agreement  at  current  market  prices, 
which  must  be  concluded  within  12  months;  unless  the  Council 
decides, by  special vote, to increase payments  under  subparagraph 
(a)  of  this  paragraph. 

28 

If  this  Agreement  terminates  without  being  replaced  by  a  new 
4. 
international  natural  rubber  agreement  which provides  for a buffer  stock,  the 
Council  shall,  by  special  vote,  adopt  procedures  to  govern  orderly  disposal 
of  the  Buffer  Stock  within  the  maximum  period  specified  in  paragraph  6  of 
article  67,  subject  to  the  following  constraints: 

(a) 

No  further  purchases  of  natural  rubber  shall  be  made; 

(b) 

The  Organization  shall  incur  no  new  expenses  except  those 
necessary  to  dispose  of  the  Buffer  Stock. 

5. 
Subject  to  an  election  by  any  member  to  take  natural  rubber  in 
accordance  with  paragraph  6  of  this  article,  any  cash  which  remains  in  the 
Buffer  Stock  Account  shall  be  forthwith  distributed  to members  in  proportion 
to  their  shares  as  determined  in paragraph  2 of  this  article. 

6. 
In  lieu  of  all  or part  of  a cash payment,  each member  may  elect  to  take 
its  share  in the assets  of  the Buffer  Stock Account  in natural  rubber;  subject 
to  procedures  adopted  by  the  Council. 

7.  .  The  Council  shall  adopt  appropriate  procedures  for  adjustment  and 
payment  of members'  shares  in the Buffer  Stock Account.  This adjustment  shall 
account  for: 

(a) 

Any  discrepancy  between  the price  of  natural  rubber  specified  in 
subparagraph  (a) of paragraph  2' of  this  article  and  the prices  at 
which  part  or  all  of  the  Buffer  Stock  is  sold  pursuant  to 
procedures  for  disposal  of  the Buffer  Stock;  and 

(b) 

The difference between estimated  and actual  liquidation  expenses. 

8. 
The  Council  shall,  within  30  days  following  final  transactions  of  the 
Buffer  Stock  Account,  meet  to  effect  final  settlement  of  accounts  among 
members  within  30  days  thereafter. 

29 

CHAPTER IX.  RELATIONSHIP WITH THE COMMON FUND POR COMMODITIES 

) 

Relationship with the Common Fund for Commodities 

Article 41 

1. 
Common Fund for Commodities. 

The Organization  shall  take full advantage of  the  facilities of  the 

2. 
In respect of the implementation of any project funded under the Second 
Account of the Common Fund for Commodities, the Organization, as a designated 
International  Commodity  Body,  shall  not  incur  any  financial  obligation 
including  for  guarantees  given  by  individual  members  or  other  entities. 
Neither the Organization, nor any member by reason of its membership in the 
Organization, shall be responsible for any liability arising from borrowing 
or lending by any other member or entity in connection with such projects. 

30 

CHAPTER  X. 

SUPPLY AND MARKET ACCBSS AND OTHER  MEASURES 

Article 42 

Supply and market  access 

1. 
Exporting  members  to  the  fullest  extent  possible  undertake  to  pursue 
policies  and  programmes which maintain  continuous  availability  to  consumers 
of natural  rubber supplies. 

2. 
policies which will maintain access  to their markets  for natural  rubber. 

Importing  members  to  the  fullest  extent  possible  undertake  to  pursue 

Article 43 

Other measures 

1. 
With a view  to achieving  the objectives of  this Agreement, the Council 
shall  identify  and  propose  appropriate  measures  and  techniques  directed 
towards  promoting: 

(a) 

The  development  of  the  natural  rubber  economy  by  producing 
members,  through  expanded-and  improved  production,  productivity 
and marketing, thereby increasing the export earnings of producing 
members  while  at  the  same  time  improving  the  reliability  of 
supply.  For this purpose, the Committee on Other Measures  shall 
undertake  economic and technical analyses  in order  to  identify: 

(i)  Natural  rubber  research  and  development  programmes  and 
projects  of  benefit  to  exporting  and  importing  members, 
including  scientific research  in specific areas; 

(ii)  Programmes and projects to improve the productivity of  the 

natural  rubber  industry; 

(iii) Ways  and  means  to  upgrade  natural  rubber  supplies  and 
and 

specification 

quality 
achieve 
presentation of natural rubber; and 

uniformity 

in 

(iv)  Methods  of  improving  the  processing,  marketing  and 

distribution of raw natural rubber; 

(b) 

The development of end-uses of natural rubber.  For this purpose, 
the  Committee  on  Other  Measures  shall  undertake  appropriate 
economic  and  technical  analyses  in order  to  identify  programmes 
and projects  leading to increased and new uses of natural rubber. 

2. 
The Council  shall consider the financial  implications of such measures 
and  techniques  and  seek  to promote and facilitate  the provision  of  adequate 
financial  resources,  as  appropriate,  from  such  sources  as  international 
financial  institutions  and  the  Second  Account  of  the. Common  Fund  for 
Commodities. 

3. 
The Council may accept any voluntary contribution in support of approved 
projects to implement this article.  The management of financial contributions 
shall be  subject  to rules  to be established by special vote of  the Council. 

The  Council  may  make  recommendations,  as  appropriate,  to  members, 
4. 
international  institutions  and  other  organizations  to  promote  the 
implementation  of  specific measures under this article. 

5. 
The Committee on Other Measures shall periodically  review  the progress 
of  those  measures  which  the  Council  decides  to  promote  and  recommend,  and 
shall report  thereon  to the Council. 

31 

CHAPTER XI.  CONSULTATION ON DOMESTIC POLICIES 

Article 44 

Consultation 

The Council shall consult, at the request of any member, on government 
natural rubber policies directly affecting supply or demand.  The Council may 
submit its recommendations to members for their consideration. 

32 

CHAPTBR XII.  STATISTICS, STUDIBS AND  INFORMATION 

Article 45 

Statistics and information 

1. 
The  Council  shall  collect,  collate  and  as  necessary  publish  such 
statistical information on natural rubber and related areas as is necessary 
for the satisfactory operation of this Agreement. 

2. 
Members shall promptly and to the fullest extent possible furnish to the 
Council available data by specific types and grades concerning production, 
consumption and international trade in natural rubber. 

3. 
The  Council  may  also  request  members  to  furnish  other  available 
information, including information on related areas which may be required for 
the satisfactory operation of this Agreement. 

Members shall furnish all the above-mentioned statistics and information 
4. 
within a reasonable time to the fullest extent possible consistent with their 
national legislation and by the ways most appropriate for them. 

5. 
The  Council  shall  establish  close  relationships  with  appropriate 
international organizations, including the International Rubber Study Group, 
and  with  commodity  exchanges  in order  to help  ensure  the  availability of 
recent  and reliable data on production, consumption, stocks, international 
trade and prices of natural rubber, and other factors that influence demand 
for and supply of natural rubber. 

6. 
The Council  shall  endeavour  to ensure  that no  information published 
shall prejudice the confidentiality of the operations of persons or companies 
producing, processing or marketing natural rubber or related products. 

Article 46 

Annual assessment, estimates and studies 

1. 
The Council  shall prepare an annual assessment  on  the world natural 
rubber situation and related areas in the light of the information supplied 
by  members  and  from  all  relevant  intergovernmental  and  international 
organizations. 

2. 
At  least  once  in  every  half  year,  the  Council  shall  also  estimate 
production, consumption, exports and  imports of natural rubber by specific 
types and grades, if possible, for the following six months.  It shall inform 
the members of these estimates. 

3. 
The  Council  shall  undertake,  or  make  appropriate  arrangements  to 
undertake, studies of trends in natural rubber production, consumption, trade, 
marketing and prices, as well as of the short-term and long-term problems of 
the world natural rubber economy. 

Article 47 

Annual review 

The  Council  shall  each year  review  the  operation  of  this Agreement 
including conformity to its spirit and promotion of its objectives.  It may 
then make recommendations to members regarding ways and means of improving the 
functioning of this Agreement. 

33 

CHAPTBR XIII.  MISCELLANEOUS 

Article 48 

General obligations and liabilities of members 

1. 
Members  shall  for  the  duration  of  this  Agreement  use  their  best 
endeavours and cooperate to promote the attainment of the objectives of this 
Agreement and shall not take any action in contradiction to those objectives. 

2. 
Members  shall  in  particular  seek  to  improve  the  conditions  of  the 
natural  rubber  economy  and  to encourage  the production and use of natural 
rubber in order  to promote the growth and the modernization of the natural 
rubber economy for the mutual benefit of producers and consumers. 

3.  .Members shall accept as binding all decisions of the Council under this 
Agreement  and  will  not  implement  measures which would  have  the  effect of 
limiting or running counter to those decisions. 

The liability of members arising from the operation of this Agreement, 
4. 
whether  to  the Organization  or  to  third parties, shall be  limited  to the 
extent  of  their  obligations  regarding  contributions  to the  administrative 
budget  and  to  financing  of  the Buffer  Stock  under  and  in accordance  with 
chapters  VII  and  VIII  of  this Agreement  and  any  obligations  that may  be 
assumed by the Council under article 41. 

Article 49 

Obstacles to trade 

1. 
The Council shall, in accordance with the annual assessment of the world 
natural rubber situation referred to in article 46, identify any obstacles to 
the  expansion' of  trade  in  natural  rubber  in  its  raw,  semi-processed  or 
modified forms. 

2. 
The Council may, in order to further the purposes of this article, make 
recommendations to members to seek in appropriate international fora mutually 
acceptable  practical  measures  designed  to remove progressively  and, where 
possible, to eliminate such obstacles.  The Council shall periodically examine 
the results of such recommendations. 

Transportation and market structure of natural rubber 

Article 50 

The Council should encourage and facilitate the promotion of reasonable 
and equitable freight rates and improvements in the transport system, so as 
to provide regular supplies to markets and to effect savings in the cost of 
the products marketed. 

34 

Article 51 

Differential and remedial measures 

Developing importing members, and least developed countries which are 
members, whose interests are adversely affected by measures taken under this 
Agreement may apply to the Council for appropriate differential and remedial 
measures.  The Council  shall consider  taking  such appropriate measures  in 
accordance with paragraphs 3 and 4 of section ill of resolution 93 (IV) of the 
United Nations Conference on Trade and Development. 

Article 52 

Relief from obligations 

1. 
Where  it  is  necessary  on  account  of. exceptional  circumstances  or 
emergency or  force  majeure  not expressly provided for in this Agreement, the 
Council may, by special vote, relieve a member of an obligation under this 
Agreement if it is satisfied by an explanation from that member regarding the 
reasons why the obligation cannot be met. 

2. 
The Council, in granting relief to a member under paragraph 1 of this 
article, shall state explicitly the terms and conditions on which, and the 
period for which, the member is relieved of such obligation, and the reasons 
for which the relief is granted. 

Article 53 

Fair labour standards 

Members declare that they will endeavour to maintain labour standards 
designed  to  improve  the  levels  of  living  of  workers  in  their  respective 
natural rubber sectors. 

Article 54 

Environmental aspects 

Members shall endeavour to pay due attention to environmental aspects 
as agreed at the eighth session of the United Nations Conference on Trade and 
Development and the United Nations Conference on Environment and Development, 
held in 1992. 

35 

CHAPTBR XIV. 

COMPLAINTS AND DISPUTBS 

Article 55 

Complaints 

1. 
Any complaint  that a member has failed  to fulfil its obligations  under 
this Agreement  shall, at the request of  the member making  the complaint, be 
referred to the Cpuncil, which, subject to prior consultation with the members 
concerned,  shall take a decision on the matter. 

2. 
obligations under this Agreement  shall specify the nature of the breach. 

Any  decision  by  the  Council  that  a  member  is  in  breach  of  its 

whenever the Council, whether as the result of a complaint or otherwise, 
3. 
finds- that  a  member  has  committed  a breach  of  this  Agreement,  it  may,  by 
special vote, and without prejudice to such other measures as are specifically 
provided  for  in other articles of  this Agreement: 

(a) 

Suspend  that  member's  voting  rights  in  the  Council  and,  if  it 
deems  necessary,  suspend  any  other  rights  of  such  member, 
including  those  of  holding  office  in  the  Council  or  in  any 
committee established under article 18 and of being eligible  for 
membership  of  such  committees,  until  it  has  fulfilled  its 
obligations; or 

(b)  Take action under article 65, if such breach significantly impairs 

the operation of  this Agreement. 

Article 56 

Disputes 

Any  dispute  concerning  the  interpretation  or  application  of  this 
1. 
Agreement  which  is  not  settled  among  the  members  involved  shall,  at  the 
request  of  any member  party  to  the  dispute, be  referred  to  the Council  for 
decision. 

In  any  case  where  a  dispute  has  been  referred  to  the  Council  under 
2. 
paragraph 1 of this article, a majority of members holding at least one third 
of  the  total  votes  may  require  the  Council,  after  discussion,  to  seek  the 
opinion of an advisory panel constituted under paragraph 3 of this article on 
the issue  in dispute before giving  its_ decision. 

3. 

(a)  Unless  the  Council,  by  special  vote,  decides  otherwise,  the 

advisory panel  shall consist of five persons as follows: 

(i)  Two persons, one having wide experience  in matters of  the 
kind  in  dispute  and  the  other  having  legal  standing  and 
experience, nominated by the exporting members; 

(ii)  Two such persons nominated by  the importing members; and 

(iii) A  chairman  selected  unanimously  by  the  four  persons, 
nominated  under  (i) and  (ii) of  this  subparagraph  or,  if 
they fail  to agree, by the Chairman of the Council. 

(b)  Nationals of members and of non-members shall be eligible to serve 

on the advisory panel. 

(c) 

Persons  appointed  to  the  advisory  panel  shall  act  in  their 
personal capacities and without instructions from any government. 

36 

(d)  The  expenses  of  the  advisory  panel  shall  be  paid  by  the 

Organization. 

4. 
The opinion of  the advisory panel and  the reasons  therefor  shall be 
submitted  to  the  Council  which,  after  considering  all  the  relevant 
information, shall, by special vote, decide the dispute. 

37 

CHAPTBR  XV. 

FINAL  PROVISIONS 

Article 57 

Signature 

This  Agreement  shall  be  open  for  signature  at  United  Nations 
Headquarters  from  3  April  1995  to  28  December  1995  inclusive  by  the 
Governments invited to the United Nations Conference on Natural Rubber, 1994. 

Article 58 

Depositary 

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

depositary of this Agreement. 

Article 59 

Ratification, acceptance and approval 

1. 
This Agreement shall be subject to ratification, acceptance or approval 
by  the  signatory  Governments  in  accordance  with  their  respective 
constitutional or institutional procedures. 

Instruments of ratification, acceptance or approval shall be deposited 
2. 
with the depositary not later than 1 January 1997.  The Council may, however, 
grant extensions of time to signatory Governments which have been unable to 
deposit their instruments by that date. 

Each Government depositing an instrument of ratification, acceptance or 
3. 
approval shall, at the time of such deposit, declare itself to be an exporting 
member or an importing member. 

Article 60 

Notification of provisional application 

A signatory Government which intends to ratify, accept or approve this 
1. 
Agreement, or a Government for which the Council has established  conditions 
for accession but which has not yet been able to deposit its instrument, may 
at any time notify the depositary that it will fully apply this Agreement 
provisionally, either when it enters into force in accordance with article 61 
or, if it is already in force, at a specified date. 

2. 
Notwithstanding  the  provisions  of  paragraph  1  of  this  article,  a 
Government may provide in its notification of provisional application that it 
will apply this Agreement only within the limitations of its constitutional 
and/or legislative procedures and its domestic laws and'regulations.  However, 
such Government shall meet all its financial obligations to this Agreement. 
The provisional membership of a Government which notifies in this manner shall 
not exceed 12 months from the provisional entry into force of this Agreement, 
unless the Council decides otherwise pursuant to paragraph 2 of article 59. 

38 

Article 61 

Entry into force 

This Agreement shall enter  into force definitively on 29 December  1995 
1. 
or on any date thereafter, if by that date Governments accounting for at least 
80  per  cent  of  net  exports  as  set  out  in  annex  A  to  this  Agreement,  and 
Governments accounting  for at least 80 per cent of net  imports as set out  in 
annex B to this Agreement, have deposited their  instruments of ratification, 
acceptance, approval or accession, or have assumed full financial  commitment 
to  this Agreement. 

2. 
This Agreement shall enter into force provisionally on 29 December 1995> 
or on any date before 1 January  1997, if Governments accounting  for at  least 
75  per  cent  of  net  exports  as  set  out  in  annex  A  to  this  Agreement,  and 
Governments  accounting  for at least 75 per cent of net  imports as set out  in 
annex B to this Agreement, have deposited  their  instruments of ratification, 
acceptance or approval, or have notified  the depositary under paragraph  1 of 
article  60 that they will apply this Agreement provisionally and assume full 
financial commitment  to this Agreement.  The Agreement  shall remain in force 
provisionally  up  to  a  maximum  of  12  months,  unless  it  enters  into  force 
definitively  under  paragraph  1  of  this  article  or  the  Council  decides 
otherwise  in accordance with paragraph 4 of this article. 

If this Agreement does not come into force provisionally under paragraph 
3. 
2  of  this  article  by  1  January  1997,-  the  Secretary  General  of  the  United 
Nations shall invite, at the earliest time he considers practicable after that 
date,  the  Governments  which  have  deposited  instruments  of  ratification, 
acceptance  or  approval  or  have  notified  him  that  they  will  apply  this 
Agreement provisionally,  to meet with  a view to recommending  whether or  not 
such  Governments  should  take  the  necessary  steps  to  put  this  Agreement 
provisionally or definitively into force among themselves, in whole or in part. 
If  no  conclusion  is  reached  at  this meeting,  the  Secretary-General  of  the 
United Nations may convene such further meetings as he considers appropriate. 

4. 
If  the requirements  for definitive  entry  into force of  this  Agreement 
under paragraph 1 of this article have not been met within 12 calendar months 
of  the provisional  entry  into force of  this Agreement  under paragraph  2 of 
this article,  the Council  shall, not  later than one month before  the end of 
the 12-month period mentioned above, review the future of this Agreement and, 
subject  to paragraph  1 of  this article, by special vote, decide: 

(a) 

To put  this Agreement  definitively  into  force  among  the  current 
members  in whole or in part; 

(b)  To keep  this Agreement provisionally  in force among  the  current 

members  in whole or  in part  for an additional year; or 

(c) 

To renegotiate  this Agreement. 

If no  decision  is reached by  the Council, this Agreement  shall  terminate  at 
the expiry of  the 12-month period.  The Council  shall  inform  the  depositary 
of  any decision  taken under  this paragraph. 

For  any  Government  that  deposits  its  instrument  of  ratification, 
5. 
acceptance,  approval  or  accession  after  the  entry  into  force  of  this 
Agreement, it shall  enter  into force for that Government  on the date of  such 
deposit. 

6. 
The  Executive  Director  of  the  Organization  shall  convene  the  first 
session of  the Council as soon as possible after the entry into force of  this 
Agreement. 

39 

Article 62 

Accession 

1. 
This Agreement  shall be open for accession by the Government  of any 
State.  Accession  shall be subject  to conditions to be established by  the 
Council, which shall  include, inter  alia,  a time limit for the deposit of 
instruments  of  accession,  the  number  of  votes  to  be  held  and  financial 
obligations. 
The  Council  may,  however,  grant  extensions  of  time  to 
Governments which are unable to deposit their instruments of accession within 
the time limit set in the conditions of accession. 

2. 
Accession shall be effected by the deposit of an instrument of accession 
with the depositary.  Instruments of accession shall state that the Government 
accepts all the conditions established by the Council. 

Article 63 

Amendments 

1. 
to the members. 

The Council may, by special vote, recommend amendments of this Agreement 

2. 
depositary of their acceptance of the amendment. 

The  Council  shall  fix  a  date  by  which  members  shall  notify  the 

3. 
An amendment shall become effective 90 days after the depositary has 
received notifications of acceptance from members constituting at least two 
thirds of the exporting members and accounting for at least 85 per cent of the 
votes of the exporting members, and from members constituting at least two 
thirds of the importing members and accounting for at least 85 per cent of the 
votes of the importing members. 

4. 
After the depositary informs the Council.that the requirements for the 
amendment  to  become  effective  have  been  met,  and  notwithstanding  the 
provisions of paragraph 2 of this article relating to the date fixed by the 
Council, a member may still notify the depositary of its acceptance of the 
amendment,  provided  that  such  notification  is made  before  the  amendment 
becomes effective. 

5. 
Any member which has not notified its acceptance of an amendment by the 
date on which such amendment becomes effective shall cease to be a contracting 
party as from that date, -unless such member has satisfied the Council that its 
acceptance could not be obtained in time owing to difficulties in completing 
its constitutional  or institutional procedures, and  the Council decides to 
extend  for  that member  the period  for acceptance of  the amendment.  Such 
member  shall  not  be  bound  by  the  amendment  before  it  has  notified  its 
acceptance thereof. 

If the requirements for the amendment to become effective have not been 
6. 
met by the date fixed by the Council in accordance with paragraph 2 of this 
article, the amendment shall be considered withdrawn. 

40 

Article 64 

withdrawal 

A member may withdraw  from this Agreement  at any  time after  the  entry 
1. 
into force of this Agreement by giving notice of withdrawal to the depositary. 
That  member  shall  simultaneously  inform  the  Council  of  the  action  it  has 
taken. 

2. 
shall cease  to be a contracting party to this Agreement. 

One  year  after  its notice  is received by  the  depositary,  that  member 

Article 65 

Exclusion 

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

Article 66 . 

Settlement of accounts with withdrawing  or excluded  members 
or members unable to accept an amendment 

1. 
In  accordance  with  this  article,  the  Council  shall  determine  any 
settlement  of  accounts with a member which ceases  to be  a contracting  party 
to this Agreement owing to: 

(a) 

Non-acceptance  of  an  amendment  to  this  Agreement  pursuant  to 
article  63; 

(b) 

Withdrawal  from this Agreement pursuant  to article  64; or 

(c) 

Exclusion from this Agreement pursuant  to article 65. 

2. 
The  Council  shall  retain  any contribution  paid  to  the  Administrative 
Account by a member which ceases to be a contracting party to this Agreement. 

3. 
The  Council  shall  refund  the  share  in  the  Buffer  Stock  Account  in 
accordance with article 40 to a member which ceases to be a contracting party 
owing  to  non-acceptance  of  an  amendment  to  this  Agreement,  withdrawal  or 
exclusion, less  its share in any surpluses. 

(a) 

Such  refund  to a member which  ceases  to be  a  contracting  party 
owing  to non-acceptance  of  an amendment  to  this Agreement  shall 
be made one year after the amendment concerned enters into force. 

41 

(b) 

Such refund  to a member which withdraws  shall be made within  60 
days after  that member  ceases  to be a contracting  party  to  this 
Agreement,  unless  as  a  result  of  this  withdrawal  the  Council 
decides to terminate this Agreement under  paragraph 5 of article 
67 prior to such a refund, in which case the provisions of article 
40 and paragraph  6 of article 67 shall apply. 

(c) 

Such refund to a member which is excluded shall be made within 60 
days  after  a  member  ceases  to  be  a  contracting  party  to  this 
Agreement. 

4. 
In  the  event  that  the  Buffer  Stock  Account  is  unable  to  settle  the 
payment in cash due under subparagraph  (à), (b) or  (c) of paragraph 3 of  this 
article without either undermining  the viability of the Buffer Stock Account 
or leading to a call-up of additional contributions from members to cover such 
refunds,  payment  shall  be  deferred  until  the  requisite  amount  of  natural 
rubber  in  the Buffer  Stock  can be  sold  at  or  above  the  upper  intervention 
price.  In the event that, before the end of the one-year period specified  in 
article 64, the Council  informs  a withdrawing member  that payment will  have 
to  be  deferred  in  accordance  with  this  paragraph,  the  period  of  one  year 
between notification of  intention to withdraw and the actual withdrawal may, 
if  the  withdrawing  member  so  wishes,  be  extended  until  such  time  as  the 
Council  informs that member  that payment of its share can be effected within 
60 days. 

A member  which  has  received  an  appropriate  refund  under  this  article 
5. 
shall  not  be  entitled  to  any  share  of  the  proceeds  of  liquidation  of  the 
Organization.  Nor shall such a member be liable for any deficit  incurred by 
the Organization after  such refund has been made. 

Article 67 

Duration, extension and  termination 

1. 
This Agreement  shall  remain  in force for a period  of  four years  after 
its entry  into force, unless  extended  under paragraph  3 or  terminated  under 
paragraph  4 or paragraph  5 of  this article. 

2. 
Before the expiry of the four-year period referred to in paragraph  1 of 
this  article,  the  Council  may, by  special  vote, decide  to  renegotiate  this 
Agreement. 

3. 
The Council may, by special vote, extend this Agreement by a period or 
periods not exceeding  two years in all, commencing from the date of expiry of 
the four-year period  specified  in paragraph  1 of this article. 

4. 
If a new international natural rubber agreement is negotiated and enters 
into  force  during  any  period  of  extension  of  this  Agreement  pursuant  to 
paragraph 3 of this article, this Agreement, as extended, shall terminate upon 
the entry  into force of  the new agreement. 

5. 
Agreement with effect  from such date as it may determine. 

The Council may at any time, by special vote, decide  to terminate  this 

42 

Notwithstanding  the termination of  this Agreement,  the Council shall 
6. 
continue  in being  for a period not exceeding  three years to carry out the 
liquidation of the Organization, including the settlement of accounts, and the 
disposal of assets in accordance with the provisions of article 40 and subject 
to relevant decisions to be taken by special vote, and shall have during that 
period such powers and functions as may be necessary for these purposes. 

7. 
article. 

The Council shall notify the depositary of any decision taken under this 

Article 68 

Reservations 

No reservations may be made with respect to any of the provisions of 

this Agreement. 

IN WITNESS WHEREOF the undersigned, being duly authorized thereto, have 

affixed their signatures under this Agreement on the dates indicated. 

DONE at Geneva, this seventeenth day of February, one thousand nine hundred 
and ninety-five, the texts of this Agreement in the Arabic, Chinese, English, 
French, Russian and Spanish languages being equally authentic. 

43 

ANNEXES 

Annex A 

Shares of individual exporting countries in  total 
net exports of countries, as established  for 
the purposes of article  61 

Bolivia 
Cameroon 
Côte d'Ivoire 
Indonesia 
Malaysia 
Nigeria 
Singapore 
Sri Lanka 
Thailand 

Percentage 

0.040 
0.867 
1.764 
31.108 
27.971 
2.946 
0.000 
2.096 
33.208 

TOTAL 

100.000 

Shares  are percentages  of  total net exports  of natural  rubber  in  the five-
year period, 1989-1993. 

44 

Annex B 

Shares of individual importing countries and groups 
of countries in total net imports of countries, 
as established for the purposes of article 61 

Argentina 
China 
Colombia 
Cuba 
Democratic People's Republic of Korea 
European Community: 

Austria 
Belgium-Luxembourg 
Denmark 
Finland 
France 
Germany 
Greece 
Ireland 
Italy 
Netherlands 
Portugal 
Spain 
Sweden 
United Kingdom 

India 
Japan 
Lebanon 
Morocco 
Norway 
Pakistan 
Republic of Korea 
Russian Federation 
Slovakia. 
Switzerland 
United States of America 

Percentage 

0.943 
8.843 
0.700 
0.043 
0.195 
26.968 
0.723 
1.535 
0.067 
0.221 
5.559 
6.437 
0.276 
0.224 
3.754 
0.321 
0.239 
3.397 
0.292 
3.923 
0.450 
21.694 
0.003 
0.237 
0.022 
0.715 
8.830 
1.149 
0.334 
0.059 
28.815 

TOTAL 

100.000 

Shares are percentages  of  total net  imports of natural rubber  in the 
three-year period, 1991-1993. 

45 

v; 

Annex C 

Cost of the Buffer Stock as estimated bv the President of 
the United Nations Conference on Natural Rubber, 1994 

Based on the cost of acquiring  and operating  the Buffer  Stock of 
roughly 360,000 tonnes from 1982 until March 1987 and 221,000 tonnes from 1990 
through December 1994, the cost of acquiring and operating a Buffer Stock of 
550,000 tonnes might be calculated by multiplying this figure by the lower 
trigger action price and adding a further 30 per cent thereof. 

46 

ISSN 0254-1475 

COM(95) 616 final 

DOCUMENTS 

EN 

11  03 

Catalogue number  : CB-CO-95-651-EN-C 

ISBN 92-77-97083-9 

Office  for Official Publications of the European Communities 

L-2985 Luxembourg 

k\