CELEX: 31990D0674
Language: en
Date: 1990-11-19 00:00:00
Title: 90/674/EEC: Council Decision of 19 November 1990 on the conclusion of the Agreement establishing the European Bank for Reconstruction and Development

Avis juridique important

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31990D0674

90/674/EEC: Council Decision of 19 November 1990 on the conclusion of the Agreement establishing the European Bank for Reconstruction and Development  

Official Journal L 372 , 31/12/1990 P. 0001 - 0002 Finnish special edition: Chapter 11 Volume 16 P. 0135  Swedish special edition: Chapter 11 Volume 16 P. 0135 

COUNCIL DECISION   of 19 November 1990  on the conclusion of the Agreement establishing the European Bank for  Reconstruction and Development  (90/674/EEC) THE COUNCIL OF THE EUROPEAN  COMMUNITIES, Having regard to the Treaty establishing the European Economic Community, and in particular  Article 235 thereof, Having regard to the proposal from the Commission, Having regard to the opinion of the European Parliament  (1), Whereas the people of Central and Eastern Europe have close historical ties with the people of the  Community; whereas these ties are being strengthened by agreements for cooperation and trade; Whereas the countries of Central and Eastern Europe are committed to the fundamental principles of  multiparty democracy, the rule of law and respect for human rights; whereas these countries are  willing to implement reforms in order to evolve towards market-oriented economies; Whereas the economic reforms will contribute in a significant way to the vigorous development of  economic relations between those countries and the Community; and whereas this will help promote,  throughout the Community, a harmonious development of economic activities; Whereas the transition to market-oriented economies will require considerable investment  principally in the private sector but also in the public sector; whereas the establishment of a  special bank could help supply the finance necessary for such investment; Whereas 40 countries, together with the European Economic Community and the European Investment  Bank, have signified their intention of becoming members of a European Bank for Reconstruction and  Development which is European in its basic character and broadly international in its membership;  whereas they have established Articles of Agreement to that end; Whereas conclusion of the Agreement by the European Economic Community is necessary to achieve the  Community's objectives in the field of economic external relations; whereas the Treaty does not  provide, for the adoption of this Decision, powers other than those of Article 235, HAS DECIDED AS FOLLOWS: Article 1 The Agreement establishing a European Bank  for Reconstruction and Development is hereby approved on behalf of the European Economic  Community. The text of the Agreement is annexed to this Decision. Article 2 The Governor and Alternate  Governor of the Bank who represent the Community under Article 23 (1) of the Agreement shall be  appointed by the Commission. Article 3 1.  The Commission shall designate, on behalf of the  Community, the institution to act as depository under Article 34 (1) of the Articles of Agreement. 2.  The Commission shall be the official entity with which the Bank may communicate as laid down  in Article 34 (2) of the Articles of Agreement. Article 4 The President of the Council shall  deposit, on behalf of the Community, the instrument of approval provided for in Article 61 of the  Articles of Agreement. Article 5 This Decision shall be published in the Official Journal of the  European Communities. (1) Done at Brussels, 19 November 1990. For the Council  The President  G. CARLI  2 . At the time a member ceases to be a member, the Bank shall arrange for the repurchase of such former member's shares as a part of the settlement of accounts with such former member in accordance with the provisions of this Article . For this purpose, the repurchase price of the shares shall be the value shown by the books of the Bank on the date of cessation of membership, with the original purchase price of each share being its maximum value .  3 . The payment for shares repurchased by the Bank under this Article shall be governed by the following conditions :  ( i ) any amount due to the former member for its shares shall be withheld so long as the former member, its central bank or any of its agencies or instrumentalities remains liable, as borrower or guarantor, to the Bank and such amount may, at the option of the Bank, be applied on any such liability as it matures . No amount shall be withheld on account of the liability of the former member resulting from its subscription for shares in accordance with paragraphs 4, 5 and 7 of Article 6 of this Agreement . In any event, no amount due to a member for its shares shall be paid until six ( 6 ) months after the date upon which the member ceases to be a member;  ( ii ) payments for shares may be made from time to time, upon their  surrenderthe former member, to the extent by which the amount due as the repurchase price in accordance with paragraph 2 of this Article exceeds the aggregate amount of liabilities on loans, equity investments and guarantees in subparagraph ( i ) of this paragraph until the former member has received the full repurchase price;  ( iii ) payments shall be made on such conditions and in such fully convertible currencies, or ecu, and on such dates as the Bank determines;  and  ( iv ) if losses are sustained by the Bank on any guarantees, participations in loans, or loans which were outstanding on the date when the member ceased to be a member, or if a net loss is sustained by the Bank on equity investments held by it on such date, and the amount of such losses exceeds the amount of the reserves provided against losses on the date when the member ceased to be a member, such former member shall repay, upon demand, the amount by which the repurchase price of its shares would have been reduced if the losses had been taken into  account when the repurchase price was determined . In addition, the former member shall remain liable on any call for unpaid subscriptions under paragraph 4 of Article 6 of this Agreement, to the extent that it would have been required to respond if the impairment of capital had occurred and the call had been made at the time the repurchase price of its shares was determined .  4 . If the Bank terminates its operations pursuant to Article 41 of this Agreement within six ( 6 ) months of the date upon which any member ceases to be a member, all rights of such former member shall be determined in accordance with the provisions of Articles 41 to 43 of this Agreement .  Article 40  Temporary suspension of operations  In an emergency, the Board of Directors may suspend temporarily operations in respect of new loans, guarantees, underwriting, technical assistance and equity investments pending an opportunity for further consideration and action by the Board of Governors .  Article 41  Termination of operations  The Bank may terminate its operations by the affirmative vote of not less than two-thirds of the governors, representing not less than three-fourths of the total voting power of the members . Upon such termination of operations the Bank shall forthwith cease all activities, except those incident to the orderly realization, conservation and preservation of its assets and settlement of its obligations .  Article 42  Liability of members and payment of claims  1 . In the event of termination of the operations of the Bank, the liability of all members for uncalled subscriptions to the capital stock of the Bank shall continue until all claims of creditors, including all contingent claims, shall have been discharged .  2 . Creditors on ordinary operations holding direct claims shall be paid first out of the assets of the Bank, secondly out of the payments to be made to the Bank in respect of unpaid paid-in shares, and then out of payments to be made to the Bank in respect of callable capital stock . Before making any payments to creditors holding direct claims, the Board of Directors shall make such arrangements as are necessary, in its judgement, to ensure a pro rata distribution among holders of direct and holders of contingent claims .  Article 43  Distribution of assets  1 . No distribution under this chapter shall be made to members on account of their subscriptions to the capital stock of the Bank until :  ( i ) all liabilities to creditors have been discharged or provided for;  and  ( ii ) the Board of Governors has decided by a vote of not less than two-thirds of the governors, representing not less than three-fourths of the total voting power of the members, to make a distribution .  2 . Any distribution of the assets of the Bank to the members shall be in proportion to the capital stock held by each member and shall be effected at such times and under such conditions as the Bank shall deem fair and equitable . The shares of assets distributed need not be uniform as to type of assets . No member shall be entitled to receive its share in such a distribution of assets until it has settled all of its obligations to the Bank .  3 . Any member receiving assets distributed pursuant to this Article shall enjoy the same rights with respect to such assets as the Bank enjoyed prior to their distribution .  CHAPTER VIII  STATUS, IMMUNITIES, PRIVILEGES AND EXEMPTIONS  Article 44  Purposes of chapter  To enable the Bank to fulfil its purpose and the functions with which it is entrusted, the status, immunities, privileges and exemptions set forth in this chapter shall be accorded to the Bank in the territory of each member country .  Article 45  Status of the Bank  The Bank shall possess full legal personality and, in particular, the full legal  capacit(i ) to contract;  ( ii ) to acquire and dispose of immovable and movable property;  and  ( iii ) to institute legal proceedings .  Article 46  Position of the Bank with regard to judicial process  Actions may be brought against the Bank only in a court of competent jurisdiction in the territory of a country in which the Bank has an office, has appointed an agent for the purpose of accepting service or notice of process, or has issued or guaranteed securities . No actions shall,  however, be brought by members or persons acting for or deriving claims from members . The property and assets of the Bank shall, wheresoever located and by whomsoever held, be immune from all forms of seizure, attachment or execution before the delivery of final judgment against the Bank .  Article 47  Immunity of assets from seizure  Property and assets of the Bank, wheresoever located and by whomsoever held, shall be immune from search, requisition, confiscation, expropriation or any other form of taking or foreclosure by executive or legislative action .  Article 48  Immunity of archives  The archives of the Bank, and in general all documents belonging to it or held by it, shall be inviolable .  Article 49  Freedom of assets from restrictions  To the extent necessary to carry out the purpose and functions of the Bank and subject to the provisions of this Agreement, all property and assets of the Bank shall be free from restrictions, regulations, controls and moratoria of any nature .  Article 50  Privilege for communications  The official communications of the Bank shall be accorded by each member the same treatment that it accords to the official communications of any other member .  Article 51  Immunities of officers and employees  All governors, directors, alternates, officers and employees of the Bank and experts performing missions for the Bank shall be immune from legal process with respect to acts performed by them in their official capacity, except when the Bank waives this immunity, and shall enjoy inviolability of all their official papers and documents . This immunity shall not apply, however, to civil liability in the case of damage arising from a road traffic accident caused by any such governor, director, alternate, officer, employee or expert .  Article 52  Privileges of officers and employees  1 . All governors, directors, alternates, officers and employees of the Bank and experts of the Bank performing missions for the Bank :  ( i ) not being local nationals, shall be accorded the same immunities from immigration restrictions, alien registration requirements and national service obligations, and the same facilities as regards exchange regulations, as are accorded by members to the representatives, officials and employees of comparable rank of other members;  and  ( ii ) shall be granted the same treatment in respect of travelling facilities as is accorded by members to representatives, officials and employees of comparable rank of other members .  2 . The spouses and immediate dependants of those directors, alternate directors, officers, employees and experts of the Bank who are resident in the country in which the principal office of the Bank is located shall be accorded opportunity to take employment in that country . The spouses and immediate dependants of those directors, alternate directors, officers, employees and experts of the Bank who are resident in a country in which any agency or branch office of the Bank is located should, wherever possible, in accordance with the national law of that country, be accorded similar opportunity in that country . The Bank shall negotiate specific agreements implementing the provisions of this paragraph with the country in which the principal office of the Bank is located and, as appropriate, with the other countries concerned .  Article 53  Exemption from taxation  1 . Within the scope of its official activities the Bank, its assets, property and income shall be exempt from all direct taxes .  2 . When purchases or services of substantial value and necessary for the exercise of the official activities of the Bank are made or used by the Bank and when the price of such purchases op services includes taxes or duties, the member that has levied the taxes or duties shall, if they are identifiable, take  appropriate measures to grant exemption from such taxes or duties or to provide for their reimbursement .  3 . Goods imported by the Bank and necessary for the exercise of its official activities shall be exempt from all import duties and taxes, and from all import prohibitions and restrictions . Similarly, goods exported by the Bank and necessary for the exercise of its official activities shall be exempt from all export duties and taxes, and from all export prohibitions and restrictions .  4 . Goods acquired or imported and exempted under this Article shall not be sold, hired out, lent or given away against payment or free of charge, except in accordance with conditions laid down by the members which have granted exemptions or reimbursements .  5 . The provisions of this Article shall not apply to taxes or duties which are no more than charges for public utility services .  6 . Directors, alternate directors, officers and employees of the Bank shall be subject to an internal effective tax for the benefit of the Bank on salaries and emoluments paid by the Bank, subject to conditions to be laid down and rules to be adopted by the Board of Governors within a period of one year from the date of entry into force of this Agreement . From the date on which this tax is applied, such salaries and emoluments shall be exempt from national income tax . The members may, however, take into account the salaries and emoluments thus exempt when assessing the amount of tax to be applied to income from other sources .  7 . Notwithstanding the provisions of paragraph 6 of this Article, a member may deposit, with its instrument of ratification, acceptance or approval, a declaration that such member retains for itself, its political subdivisions or its local authorities the right to tax salaries and emoluments paid by the Bank to citizens or nationals of such member . The Bank shall be exempt from any obligation for the payment, withholding or collection of such taxes . The Bank shall not make any reimbursement for such taxes .  8 . Paragraph 6 of this Article shall not apply to pensions and annuities paid by the Bank .  9 . No tax of any kind shall be levied on any obligation or security issued by the Bank, including any dividend or interest thereon, by whomsoever held :  ( i ) which discriminates against such obligation or security solely because it is issued by the Bank;  or  ( ii ) if the sole jurisdictional basis for such taxation is the place or currency in which it is issued, made payable or paid, or the location of any office or place of business maintained by the Bank .  10 . No tax of any kind shall be levied on any obligation or security guaranteed by the Bank, including any dividend or interest thereon, by whomsoever held :  ( i ) which discriminates against such obligation or security solely because it is guaranteed by the Bank;  or  ( ii ) if the sole jurisdictional basis for such taxation is the location of any office or place of business maintained by the Bank .  Article 54  Implementation of chapter  Each member shall promptly take such action as is necessary for the purpose of implementing the provisions of this chapter and shall inform the Bank of the detailed action which it has taken .  Article 55  Waiver of immunities, privileges and exemptions  The immunities, privileges and exemptions conferred under this chapter are granted in the interest of the Bank . The Board of Directors may waive to such extent and upon such conditions as it may determine any of the immunities, privileges and exemptions conferred under this chapter in cases where such action would, in its opinion, be appropriate to the best interests of the Bank . The President shall have the right and the duty to waive any immunity, privilege or exemption in respect of any officer, employee or expert of the Bank, other than the President or a Vice-President,  where, in his or her opinion, the immunity, privilege or exemption would impede the course of justice and can be waived without prejudice to the interests of the Bank . In similar circumstances and under the same conditions, the Board of Directors shall have the right and the duty to waive any immunity, privilege or exemption in respect of the President and each Vice-President .  CAHPTER IX  AMENDMENTS, INTERPRETATION, ARBITRATION  Article 56  Amendments  1 . Any proposal to amend this Agreement, whether emanating from a member, a governor or the Board of Directors, shall be communicated to the chairman of the Board of Governors who shall bring the proposal before that Board . If the proposed amendment is approved by the Board the Bank shall, by any rapid means of communication, ask all members whether they accept the proposed amendment . When not less than three-fourths of the members ( including at least two countries from Central and Eastern Europe listed in Annex A ), having not less than four-fifths of the total voting power of the members, have accepted the proposed amendments, the Bank shall certify that fact by formal communications addressed to all members .  2 . Notwithstanding paragraph I of this Article :  ( i ) acceptance by all members shall be required in the case of any amendment modifying :  ( a ) the right to withdraw from the Bank;  ( b ) the rights pertaining to purchase of capital stock provided for in paragraph 3 of Article 5 of this Agreement;  ( c ) the limitations on liability provided for in paragraph 7 of Article 5 of this Agreement;  and  ( d ) the purpose and functions of the Bank defined by Articles 1 and 2 of this Agreement;  ( ii ) acceptance by not less than three-fourths of the members having not less than eighty-five ( 85 ) percent of the total voting power of the members shall be required in the case of any amendment modifying paragraph 4 of Article 8 of this Agreement .  When the requirements for accepting any such proposed amendment have been met, the Bank shall certify that fact by formal communication addressed to all members .  3 . Amendments shall enter into force for all members three ( 3 ) months after the date of the formal communication provided for in paragraphs 1 and 2 of this Article unless the Board of Governors specifies a different period .  Article 57  Interpretation and application  1 . Any question of interpretation or application of the provisions of this Agreement arising between any member and the Bank, or between any members of the Bank, shall be submitted to the Board of Directors for its decision . If there is no director of its nationality in that Board, a member particularly affected by the question under consideration shall be entitled to direct representation in the meeting of the Board of Directors during such consideration . The representative of such member shall, however, have no vote . Such right of representation shall be regulated by the Board of Governors .  2 . In any case where the Board of Directors has given a decision under paragraph I of this Article, any member may require that the question be referred to the Board of Governors, whose decision shall be final . Pending the decision of the Board of Governors, the Bank may, so far as it deems it necessary, act on the basis of the decision of the Board of Directors .  Article 58  Arbitration  If a disagreement should arise between the Bank and a member which has ceased to be a member, or between the Bank and any member after adoption of a decision to terminate the operations of the Bank, such disagreement shall be submitted to arbitration by a tribunal of three ( 3 ) arbitrators, one appointed by the Bank, another by the member or former member concerned and the third, unless the parties otherwise agree, by the President of the International Court of Justice or such other authority as may have been prescribed by regulations adopted by the Board of Governors . A majority vote of the arbitrators shall be sufficient to reach a decision which shall be final and binding upon the parties . The third arbitrator shall have full power to settle all questions of procedure in any case where the parties are in disagreement with respect thereto .  Article 59  Approval deemed given  Whenever the approval or the acceptance of any member is required before any act may be done by the Bank, except under Article 56 of this Agreement, approval or acceptance shall be deemed to have been given unless the member presents an objection within such reasonable period as the Bank may fix in notifying the member of the proposed act .  CHAPTER X  FINAL PROVISIONS  Article 60  Signature and deposit  1 . This Agreement deposited with the Governement of the French Republic ( hereinafter called "the depository '), shall remain open until 31 December 1990 for signature by the prospective members whose names are set forth in Annex A to this Agreement .  2 . The depository shall communicate certified copies  othis Agreement to all the signatories .  Article 61  Ratification acceptance or approval  1 . The Agreement shall be subject to ratification, acceptance or approval by the signatories . Instruments of ratification, acceptance or approval shall, subject to paragraph 2 of this Article, be deposited with the depository not later than 31 March 1991 . The depository shall duly notify the other signatories of each deposit and the date thereof .  2 . Any signatory may become a party to this Agreement by depositing an instrument of ratification, acceptance or approval until one year after the date of its entry into force or, if necessary, until such later date as may be decided by a majority of governors, representing a majority of the total voting power of the members .  3 . A signatory whose instrument referred to in paragraph I of this Article is deposited before the date on which this Agreement enters into force shall become a member of the Bank on that date . Any other signatory which complies with the provisions of the preceding paragraph shall become a member of the Bank on the date on which its instrument of ratification, acceptance or approval is deposited .  Article 62  Entry into force  1 . This Agreement shall enter into force when instruments of ratification, acceptance or approval have been deposited by signatories whose initial subscriptions represent not less than two-thirds of the total subscriptions set forth in Annex A, including at least two countries from Central and Eastern Europe listed in Annex A .  2 . If this Agreement has not entered into force by 31 March 1991, the depository may convene a conference of interested prospective members to determine the future course of action and decide a new date by which instruments of ratification, acceptance or approval shall be deposited .  Article 63  Inaugural meeting and commencement of operations  1 . As soon at this Agreement enters into force under Article 62 of this Agreement, each member shall appoint a governor . The depository shall call the first meeting of the Board of Governors within sixty ( 60 ) days of entry into force of this Agreement under Article 62 or as soon as possible thereafter .  2 . At its first meeting, the Board of Governors :  ( i ) shall elect the President;  ( ii ) shall elect the directors of the Bank in accordance with Article 26 of this Agreement;  ( iii ) shall make arrangements for determining the date of the commencement of the Bank's operations;  and  ( iv ) shall make such other arrangements as appear to it necessary to prepare for the commencement of the Bank's operations .  3 . The Bank shall notify its members of the date of commencement of its operations .  Done at Paris on 29 May 1990 in a single original, whose English, French, German and Russian texts are equally authentic, which shall be deposited in the archives of the depository which shall transmit a duly certified copy to each of the other prospective members whose names are set forth in Annex A .  ANNEX A  INITIAL SUBSCRIPTIONS TO THE AUTHORIZED CAPITAL STOCK FOR PROSPECTIVE MEMBERS ( 1 ) WHICH MAY BECOME MEMBERS IN ACCORDANCE WITH ARTICLE 61  ( in million ecus )  1.2.3Number of shares  Capital subscription   //   //  //  1.2.3.4A .  EUROPEAN COMMUNITIES   //  //  //  ( a ) Belgium  22 800  228,00   //  Denmark  12 000  120,00   //  France  85 175  851,75   //  Federal Republic of Germany  85 175  851,75   //  Greece  6 500  65,00   //  Ireland  3 000  30,00   //  Italy  85 175  851,75   //  Luxembourg  2 000  20,00   //  Netherlands  24 800  248,00   //  Portugal  4 200  42,00   //  Spain  34 000  340,00   //  United Kingdom  85 175  851,75   //  ( b ) European Economic Community  30 000  300,00   //  European Investment Bank  30 000  300,00  B .  OTHER EUROPEAN COUNTRIES   //  //  //  Austria  22 800  228,00   //  Cyprus  1 000  10,00   //  Finland  12 500  125,00   //  Iceland  1 000  10,00   //  Israel  6 500  65,00   //  Liechtenstein  200  2,00   //  Malta  100  1,00   //  Norway  12 500  125,00   //  Sweden  22 800  228,00   //  Switzerland  22 800  228,00   //  Turkey  11 500  115,00  C .  RECIPIENT COUNTRIES   //  //  //  Bulgaria  7 900  79,00   //  Czechoslovakia  12 800  128,00   //  German Democratic Republic  15 500  155,00   //  Hungary  7 900  79,00   //  Poland  12 800  128,00   //  Romania  4 800  48,00   //  Union of Soviet Socialist Republics  60 000  600,00   //  Yugoslavia12 800  128,00  D .  NON-EUROPEAN COUNTRIES   //  //  //  Australia  10 000  100,00   //  Canada  34 000  340,00   //  Egypt  1 000  10,00   //  Japan  85 175  851,75   //  Republic of Korea  6 500  65,00   //  Mexico  3 000  30,00   //  Morocco  1 000  10,00   //  New Zealand  1 000  10,00   //  United States of America  100 000  1,000,00  E .  NON-ALLOCATED SHARES  125  1,25   //  //  //  Total  1 000 000  10 000,00   //   //  //  //  ( 1 ) Prospective members are listed under the above categories only for the purpose of this Agreement . Recipient countries are referred to elsewhere in this Agreement as Central and Eastern European countries .  ANNEX B  SECTION A  ELECTION OF DIRECTORS BY GOVERNORS REPRESENTING BELGIUM, DENMARK, FRANCE, THE FEDERAL REPUBLIC OF GERMANY, GREECE, IRELAND, ITALY, LUXEMBOURG, THE NETHERLANDS, PORTUGAL, SPAIN THE UNITED KINGDOM, THE EUROPEAN ECONOMIC COMMUNITY AND THE EUROPEAN INVESTMENT BANK ( HEREINAFTER REFERRED TO AS SECION A GOVERNORS )  1 . The provisions set out below in this section shall apply exclusively to this Section .  2 . Candidates for the office of director shall be nominated by Section A governors, provided that a governor may nominate only one person . The election of directors shall be by ballot of Section A governors .  3 . Each governor eligible to vote shall cast for one person all of the votes to which the member appointing him or her is entitled under paragraphs I and 2 of Article 29 of this Agreement .  4 . Subject to paragraph 10 of this Section, the 11 persons receiving the highest number of votes shall be directors, except that no person who receives less than 4,5 % of the total of the votes which can be cast ( eligible votes ) in Section A shall be considered elected .  5 . Subject to paragraph 10 of this Section, if 11 persons are not elected on the first ballot, a second ballot shall be held in which, unless there were no more than 11 candidates, the person who received the lowest number of votes in the first ballot shall be ineligible for election and in which there shall vote only :  ( a ) those governors who voted in the first ballot for a person not elected;  and  ( b ) those governors whose votes for a person elected are deemed under paragraphs 6 and 7 below of this Section to have raised the votes cast for that person above 5,5 % of the eligible votes .  6 . In determining whether the votes cast by a governor are deemed to have raised the total votes cast for any person above 5,5 % of the eligible votes, the 5,5 % shall be deemed to include, first, the votes of the governor casting the largest number of votes for such person, then the votes of the governor casting the next largest number and so on, until 5,5 % is reached .  7 . Any governor, part of whose votes must be counted in order to raise the total of votes cast for any person above 4,5 % shall be considered as casting all of his or her votes for such person, even if the total votes for such person thereby exceed 5,5 % and shall not be eligible to vote in a further ballot .  8 . Subject to paragraph 10 of this Section, if, after the second ballot, 11 persons have not been elected, further ballots shall be held in conformity with the principles and procedures laid down in this Section, until 11 persons have been elected, provided that, if at any stage 10 persons are elected, notwithstanding the provisions of paragraph 4 of this Section, the 11th may be elected by a simple majority of the remaining votes cast .  9 . In the case of an increase or decrease in the number of directors to be elected by Section A governors, the minimum and maximum percentages specified in paragraphs 4, 5, 6 and 7 of this Section shall be appropriately adjusted by the Board of Governors .  10 . So long as any signatory, or group of signatories, whose share of the total amount of capital subscriptions provided in Annex A is more than 2,4 %, has not deposited its instrument or their instruments of ratification, approval or acceptance, there shall be no election for one director in respect of each such signatory or group of signatories . The governor or governors representing such a signatory or group of signatories sall elect a director in respect of each signatory or group of signatories, immediately after the signatory becomes a member or the group of signatories become members . Such director shall be deemed to have been elected by the Board of Governors at its  inauguralmeeting, in accordance with paragraph 3 of Article 26 of this Agreement, if he or she is elected during the period in which the first Board of Directors shall hold office .  SECTION B  ELECTION OF DIRECTORS BY GOVERNORS REPRESENTING OTHER COUNTRIES  Section B ( i ) _ Election of Directors by governors representing those countries listed in Annex A as Central and Eastern European countries ( recipient countries ) ( hereinafter referred to as Section B ( i ) governors )  1 . The provisions set out below in this Section shall apply exclusively to this Section .  2 . Candidates for the office of director shall be nominated by Section B ( i ) governors, provided that a governor may nominate only one person . The election of directors shall be by ballot of Section B ( i ) governors .  3 . Each governor eligible to vote shall cast for one person all of the votes to which the member appointing him or her is entitled under paragraphs 1 and 2 of Article 29 of this Agreement .  4 . Subject to paragraph 10 of this Section, the four persons receiving the highest number of votes shall be directors, except that no person who receives less than 12 % of the votes which can be cast ( eligible votes ) in Section B ( i ) shall be considered elected .  5 . Subject to paragraph 10 of this Section, if four persons are not elected on the first ballot, a second ballot shall be held in which, unless there were no more than four candidates, the person who received the lowest number of votes in the first ballot shall be ineligible for election and in which there shall vote only :  ( a ) those governors who voted in the first ballot for a person not elected;  and  ( b ) those governors whose votes for a person elected are deemed under paragraphs 6 and 7 below of this Section to have raised the votes cast for that person above 13 % of the eligible votes .  6 . In determining whether the votes cast by a governor are deemed to have raised the total votes cast for any person above 13 % of the eligible votes, the 13 % shall be deemed to include, first, the votes of the governor casting the largest number of votes for such person, then the votes of the governor casting the next largest number and so on, until 13 % is reached .  7 . Any governor, part of whose votes must be counted in order to raise the total of votes cast for any person above 12 % shall be considered as casting all his or her votes for such person, even if the total votes for such person thereby exceed 13 % and shall not be eligible to vote in a further ballot .  8 . Subject to paragraph 10 of this Section, if, after the second ballot, four persons have not been elected, further ballots shall be held in conformity with the principles and procedures laid down in this Section, until four persons have been elected, provided that, if at any stage three persons are elected, notwithstanding the provisions of paragraph 4 of this Section, the fourth may be elected by a simple majority of the remaining votes cast .  9 . In the case of an increase or decrease in the number of directors to be elected by Section B ( i ) governors, the minimum and maximum percentages specified in paragraphs 4, 5, 6 and 7 of this Section shall be appropriately adjusted by the Board of Governors .  10 . So long as any signatory, or group of signatories, whose share of the total amount of capital subscriptions provided in Annex A is more than 2,8 %, has not deposited its instrument or their instruments of ratification, approval or acceptance, there shall be no election for one director in respect of each such signatory or group of signatories . The governor or governors representing such a signatory or group of signatories shall elect a director in respect of each signatory or group of signatories, immediately after the signatory becomes a member or the group of signatories become members . Such director shall be deemed to have been elected by the Board of Governors at its inaugural  meeting, in accordance with paragraph 3 of Article 26 of this Agreement, if he or she is electetd during the period in which the first Board of Directors shall hold office .  Section  B ( ii ) _ Election of Directors by governors representing those countries listed in Annex A as other European countries ( hereinafter referred to as Section B ( ii ) governors )  1 . The provisions set out below in this Section shall apply exclusively to this Section .  2 . Candidates for the office of director shall be nominated by Section B ( ii ) governors, provided that a governor may nominate only one person . The election of directors shall be by ballot of Section B ( ii ) governors .  3 . Each governor eligible to vote shall cast for one person all of the votes to which the member appointing him or her is entitled under paragraphs 1 and 2 of Article 29 of this Agreement .  4 . Subject to paragraph 10 of this Section, the four persons receiving the highest number of votes shall be directors, except that no person who receives less than 20,5 % of the votes which can be cast ( eligible votes ) in Section B ( ii ) shall be considered elected .  5 . Subject to paragraph 10 of this Section, if four persons are not elected on the first ballot, a second ballot shall be held in which, unless there were no more than four candidates, the person who received the lowest number of votes in the first ballot shall be ineligible for election and in which there shall vote only :  ( a ) those governors who voted in the first ballot for a person not elected;  and  ( b ) those governors whose votes for a person elected are deemed under paragraphs 6 and 7 below of this Section to have raised the votes cast for that person above 21,5 % of the eligible votes .  6 . In determining whether the votes cast by a governor are deemed to have raised the total votes cast for any person above 21,5 % of the eligible votes, the 21,5 % shall be deemed to include, first, the votes of the governor casting the largest number of votes for such person, then the votes of the governor casting the next largest number and so on, until 21,5 % is reached .  7 . Any governor, part of whose votes must be counted in order to raise the total of votes cast for any person above 20,5 % shall be considered as casting all his or her votes for such person, even if the total votes for such person thereby exceed 21,5 % and shall not be eligible to vote in a further ballot .  8 . Subject to paragraph 10 of this Section, if, after the second ballot, four persons have not been elected, further ballots shall be held in conformity with the principles and procedures laid down in this Section, until four persons have been elected, provided that, if at any stage three persons are elected, notwithstanding the provisions of paragraph 4 of this Section, the fourth may be elected by a simple majority of the remaining votes cast .  9 . In the case of an increase or decrease in the number of directors to be elected by Section B ( ii ) governors, the minimum and maximum percentages specified in paragraphs 4, 5, 6 and 7 of this Section shall be appropriately adjusted by the Board of Governors .  10 . So long as any signatory, or group of signatories, whose share of the total amount of capital subscriptions provided in Annex A is more than 2,8 %, has not deposited its instrument or their instruments of ratification, approval or acceptance, there shall be no election for one director in respect of each such signatory or group of signatories . The governor or governors representing such a signatory or group of signatories shall elect a director in respect of each signatory or group of signatories, immediately after the signatory becomes a member or the group of signatories become members . Such director shall be deemed to have been elected by the Board of Governors at its inaugural meeting, in accordance with paragraph 3 of Article 26 of this Agreement, if he or she is electetd  during the period in which the first Board of Directors shall hold office .  Section B ( iii ) _ Election of directors by governors representing those countries listed in Annex A as non-European countries ( hereinafter referred to as Section B ( iii ) governors )  1 . The provisions set out below in this Section shall apply exclusively to this Section .  2 . Candidates for the office of director shall be nominated by Section B ( iii ) governors, provided that a governor may nominate only one person . The election of directors shall be by ballot of Section B ( iii ) governors .  3 . Each governor eligible to vote shall cast for one person all of the votes to which the member appointing him or her is entitled under paragraphs 1 and 2 of Article 29 of this Agreement .  4 . Subject to paragraph 10 of this Section, the four persons receiving the highest number of votes shall be directors, except that no person who receives less than 8 % of the votes which can be cast ( eligible votes ) in Section B ( iii ) shall be considered elected .  5 . Subject to paragraph 10 of this Section, if four persons are not elected on the first ballot, a second ballot shall be held in which, unless there were no more than four candidates, the person who received the lowest number of votes in the first ballot shall be ineligible for election and in which there shall vote only :  ( a ) those governors who voted in the first ballot for a person not elected;  and  ( b ) those governors whose votes for a person elected are deemed under paragraphs 6 and 7 below of this Section to have raised the votes cast for that person above 9 % off the eligible votes .  6 . In determining whether the votes cast by a governor are deemed to have raised the total votes cast for any person above 9 % of the eligible votes, the 9 % shall be deemed to include, first, the votes of the governor casting the largest number of votes for such person, then the votes of the governor casting the next largest number and so on, until 9 % is reached .  7 . Any governor, part of whose votes must be counted in order to raise the total of votes cast for any person above 8 % shall be considered as casting all of his or her votes for such person, even if the total votes for such person thereby exceed 9 % and shall not be eligible to vote in a further ballot .  8 . Subject to paragraph 10 of this Section, if, after the second ballot, four persons have not been elected, further ballots shall be held in conformity with the principles and procedures laid down in this Section, until four persons have been elected, provided that, if at any stage three persons are elected, notwithstanding the provisions of paragraph 4 of this Section, the fourth may be elected by a simple majority of the remaining votes cast .  9 . In the case of an increase or decrease in the number of directors to be elected by Section B ( iii ) governors, the minimum and maximum percentages specified in paragraphs 4, 5, 6 and 7 of this Section shall be appropriately adjusted by the Board of Governors .  10 . So long as any signatory, or group of signatories, whose share of the total amount of capital subscriptions provided in Annex A is more than 5 %, has not deposited its instrument or their instruments of ratification, approval or acceptance, there shall be no election for one director in respect of each such signatory or group of signatories . The governor or governors representing such a signatory or group of signatories shall elect a director in respect of each signatory or group of signatories, immediately after the signatory becomes a member or the group of signatories become members . Such director shall be deemed to have been elected by the Board of Governors at its inaugural meeting, in accordance with paragraph 3 of Article 26 of this Agreement, if he or she is electetd during the  periin which the first Board of Directors shall hold office .  SECTION C  ARRANGEMENTS FOR THE ELECTION OF DIRECTORS REPRESENTING COUNTRIES NOT LISTED IN ANNEX A  If the Board of Governors decides, in accordance with paragraph 3 of Article 26 of this Agreement, to increase or decrease the size, or revise the composition, of the Board of Directors, in order to take into account changes in the number of members of the Bank, the Board of Governors shall first consider whether any amendments are required to this Annex, and may make any such amendments as it deems necessary as part of such decision .  SECTION D  ASSIGNMENT OF VOTES  Any Governor who does not participate in voting for the election or whose vote does not contribute to the election of a director under Section A or Section B ( i ) or Section B ( ii ) or Section B ( iii ) of this Annex may assign the votes to which he or she is entitled to an elected Director, provided that such governor shall first have obtained the agreement of all those governors who have elected that director to such assignment .  A decision by any governor not to participate in voting for the election of a director shall not affect the calculation of the eligible votes to be made under Section A, Section B ( i ), Section B ( ii ) or Section B ( iii ) of this Annex .