Selected Decisions and Selected Documents of the IMF, Thirty- Sixth Issue -- Administered Account to Subsidize Post-Conflict Emergency Assistance to Poverty Reduction and Growth Facility-Eligible Members-Establishment

Prepared by the Legal Department of the IMF
As updated as of December 31, 2011

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ARTICLE V, SECTION 2(b)
Technical and Financial Services
Financial Services

ADMINISTERED ACCOUNT TO SUBSIDIZE POST-CONFLICT
EMERGENCY ASSISTANCE TO POVERTY REDUCTION AND GROWTH FACILITY ELIGIBLE MEMBERS—ESTABLISHMENT

Pursuant to Article V, Section 2(b), the Fund adopts the Instrument to Establish an Account (“The Post-Conflict Emergency Assistance Subsidy Account for PRGF-Eligible Members”) to subsidize the rate of charge on post-conflict purchases made by PRGF-eligible members under Decision No. 12341-(00/117), November 28, 2000, which is annexed to this decision (EBS/01/63, 4/27/01).

Decision No. 12481-(01/45),
May 4, 2001,
as amended by Decision Nos. 12848-(02/94), September 6, 2002,
14354-(09/79), July 23, 2009,
effective January 7, 2010, and
14521-(10/3),
January 11, 2010


Instrument to Establish the Post-Conflict and Natural Disaster Emergency Assistance Subsidy Account for PRGF-Eligible Members

To help fulfill its purposes, the International Monetary Fund (the “Fund”) has adopted this Instrument to establish an account in accordance with Article V, Section 2(b) (the “Account”) which shall be governed by, and administered in accordance with, the following provisions:

Paragraph 1. Purpose of the Account

The purpose of the Account shall be the administration and disbursement of resources provided to the Account by Contributors for the subsidization of the rate of charge on postconflict and natural disaster emergency assistance purchases made by PRGF-eligible members under Decision No. 12341-(00/117), November 28, 2000 (“eligible purchases”). A member is PRGF-eligible if it is included in the list of members annexed to Decision No. 8240-(86/56) SAF.

Paragraph 2. Sub-accounts

(a) The Account shall have at least three separate sub-accounts to hold and administer

    (i) resources contributed for the subsidization of the rate of charge on post-conflict emergency assistance only;

    (ii) resources contributed for the subsidization of the rate of charge on natural disaster emergency assistance only; and

    (iii) resources contributed for both the subsidization of the rate of charge on postconflict emergency and natural disaster emergency assistance.

(b) Further sub-accounts may be established to hold and administer resources for the purposes of the Account contributed for a specific eligible member. Resources contributed to subsidize post-conflict emergency assistance prior to [date of amendment] will be placed into the sub-account referred to under (i) of this paragraph, unless otherwise specified, by the Contributor, and used only for the subsidization of the rate of charge on post-conflict emergency assistance purchases by eligible members.

Paragraph 3. Resources of the Account

The resources held in the Account shall consist of:

(i) grant contributions made to the Account for the purposes of paragraph 1;

(ii) loans, deposits and other types of investments made by Contributors to the Account to generate income to be used for the purposes of paragraph 1; and

(iii) net earnings from the investment of resources held in the Account.

Paragraph 4. Contributions to the Account

The Fund may accept contributions of resources to the Account on such terms and conditions as may be agreed between the Fund and the respective Contributors, subject to the provisions of this Account. For this purpose, the Managing Director is authorized to accept grants and enter into loan, deposit or other types of investment agreements with the Contributors to the Account.

Paragraph 5. Unit of Account

The SDR shall be the unit of account.

Paragraph 6. Media of payment of contributions and exchange of resources

(a) Resources provided to the Account shall be in any freely usable currency or such other media as may be agreed by the Fund and the Contributor.

(b) Resources held in the Account may be currencies or currencies exchanged for SDRs in accordance with such arrangements as may be made by the Fund for holding and use of SDRs.

(c) The Fund may exchange any of the resources held in the Account provided that any balance of a currency held in the Account may be exchanged only with the consent of the issuer of such currency.

(d) Payments made from the Account shall be made in SDRs or such other media as may be determined by the Fund.

Paragraph 7. Use of the Resources

(a) The resources of the Account (including any net income from the investment of such resources) shall be used to provide grants to subsidize postconflict and/or natural disaster emergency assistance purchases under Decision No. 12341-(00/117) that have been made by PRGT-eligible members as of January 7, 2010 (“eligible recipients”), in order to subsidize to an annual rate of 0.25 percent the rate of charge payable to the Fund on the Fund’s holdings of the members’ currency resulting from those purchases. Only charges payable after the establishment of the Account will be eligible for subsidization. An otherwise eligible recipient will not be eligible for grants under this provision while in arrears to the General Resources Account, the Special Disbursement Account, the SDR Department, or to a Trust administered by the Fund as Trustee. Once arrears are cleared, only charges payable after such clearance will be eligible for subsidization. The subsidization of emergency natural disaster assistance will be provided upon request by eligible recipients.

(b) The grants will be made available to eligible recipients at the same time as quarterly charges on eligible purchases fall due, subject to the availability of adequate resources in the Account, in an amount sufficient to reduce that quarterly rate of charge to 0.25 percent on an annual basis. If, in any quarter, the resources of the Account are insufficient to subsidize the rate of charge on all eligible purchases to 0.25 percent for that quarter, the subsidy to each eligible recipient shall be pro-rated to bring the effective rate of charge paid after subsidization to the closest common percentage to 0.25 percent.

(c) Earmarked resources contributed to the Account shall be used in accordance with the terms agreed with the Contributor and shall not be taken into consideration in the determination of the grant subsidy under subparagraph (b) above. An eligible recipient beneficiary of earmarked resources shall not receive a lower grant subsidy than provided under subparagraph (b) above.

(d) Notwithstanding subparagraphs (a) through (c) of this Paragraph 7, for the period from January 7, 2010 through January 31, 2013, the resources of the Account (including any net income from the investment of such resources) shall be used to provide grants to subsidize postconflict and/or natural disaster emergency assistance purchases under Decision No 12341-(00/117) that have been made by PRGT-eligible members as of January 7, 2010, in order to subsidize to an annual rate of zero percent the rate of charge payable to the Fund on the Fund’s holdings of the member’s currency resulting from those purchases. For purposes of this subparagraph (d), “PRGT-eligible members” shall be those members on the list annexed to Decision No. 8240-(86/56) SAF, as amended, as such list may be amended from time to time. A PRGT-eligible member will not be eligible for grants under this subparagraph (d) while in arrears to the General Resources Account, the Special Disbursement Account, the SDR Department, or to a Trust administered by the Fund as Trustee. Once arrears are cleared, only charges payable after such clearance will be eligible for subsidization. The subsidization of emergency natural disaster assistance pursuant to this subparagraph (d) will be provided upon request by eligible recipients.

Paragraph 8. Authority to Invest Resources in the Account

(a) Resources held in the Account and not immediately needed for operations of the Account shall be invested at the discretion of the Managing Director, subject to the provisions of subparagraph (c).

(b) The Managing Director is authorized (i) to make all arrangements, including the establishment of accounts in the name of the Fund, with such depositories as he deems necessary to carry out the operations of the Account, and (ii) to take all other measures he deems necessary to implement the provisions of this Instrument.

(c) Investments may be made in any of the following: (i) marketable obligations issued by an international financial organization and denominated in SDRs or in the currency of a member of the Fund; (ii) marketable obligations issued by a member or by a national official financial institution of a member and denominated in SDRs or in the currency of that member; and (iii) deposits with a commercial bank, a national official financial institution of a member, or an international financial institution that are denominated in SDRs or in the currency of a member.

Paragraph 9. Administration of the Account

(a) Assets held in the Account shall be kept separate from the assets and property of all other accounts of, or administered by, the Fund. The assets and property held in such other accounts shall not be used to discharge or meet any liabilities, obligations or losses of the Fund incurred in the administration of the Account; nor shall the assets of the Account be used to discharge or meet any liabilities, obligations or losses incurred by the Fund in the administration of such other accounts.

(b) The Fund shall maintain separate financial records and prepare separate financial statements for the Account. The financial statements for the Account shall be expressed in SDRs and prepared in accordance with International Accounting Standards.

(c) The external audit firm selected under Section 20 of the Fund’s By-Laws shall audit the operations and transactions conducted through the Account. The audit shall relate to the financial year of the Fund.

(d) The Fund shall report on the resources and position of the Account in the Annual report of the Executive Board to the Board of Governors and shall include in that Annual report the audit report of the external audit firm on the Account.

(e) Subject to the provisions of this Instrument, the Fund, in administering the Account, shall apply, mutatis mutandis, the same rules and procedures as apply to operations of the General Resources Account of the Fund.

Paragraph 10. Fees

(a) No charge shall be levied in respect of the services rendered by the Fund in the administration, operation, and termination of this Account.

(b) All investment costs, including but not limited to costs associated with the exchange of currencies, purchase of securities, and hiring of external asset managers and custodian banks, shall be borne by, and deducted from, the Account.

Paragraph 11. Termination

(a) The Account may be terminated at any time by the Fund, and shall be terminated when there are no longer any Fund holdings of a member’s currency resulting from postconflict and/or natural disaster emergency assistance purchases under Decision No 12341-(00/117) that had been made by eligible recipients as of January 7, 2010.

(b) Termination shall be effective on the date that all Contributors have received a notice of termination or on such later date, if any, as may be specified in the notice of termination.

(c) Any balance remaining in the Account on the date of its termination and after discharge of all obligations of the Account shall be transferred promptly to each of the Contributors in the proportion that the SDR equivalent of its respective contribution bears on the total contributions; except that

    (i) in the case of earmarked contributions that have been fully used no such transfer shall be made, and

    (ii) a Contributor may instruct that its share or a specified portion thereof be utilized for such other purposes as may be mutually agreed between the Contributor and the Managing Director.

Paragraph 12. Amendments

The provisions of this Instrument may be amended by a decision of the Fund. Should the Fund amend the terms and conditions of this Instrument in a manner that changes the purpose for which contributions are to be used, each Contributor shall have the right to withdraw its individual unused contribution in the proportion that the SDR equivalent of its respective contribution bears to the total contributions.

Paragraph 13. Settlement of Questions

Any questions arising under this Instrument shall be settled by mutual agreement between the Fund and the Contributors. (EBS/05/4, 1/10/05)

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