## aa ## Source details **Canonical URL:** [aa](https://www.imf.org/-/media/files/publications/ft/aa/index/aa.pdf) ## Other formats - [Markdown version](/-/media/files/publications/ft/aa/index/aa.pdf.md) - [Structured JSON version](/-/media/files/publications/ft/aa/index/aa.pdf.json) --- ### Introductory Article and Purposes (Article I) - The International Monetary Fund is established and shall operate in accordance with the provisions of this Agreement as originally adopted and subsequently amended. - The Fund shall maintain a General Department and a Special Drawing Rights Department to conduct operations and transactions. - Membership in the Fund shall give the right to participation in the Special Drawing Rights Department. - Operations and transactions authorized by the Agreement shall be conducted through the General Department (consisting of the General Resources Account, the Special Disbursement Account, and the Investment Account), except that operations and transactions involving special drawing rights shall be conducted through the Special Drawing Rights Department. - Purposes of the Fund: - (i) To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems. - (ii) To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy. - (iii) To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation. - (iv) To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade. - (v) To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. - (vi) In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members. - The Fund shall be guided in all its policies and decisions by the purposes set forth in this Article. ### Membership; Quotas and Subscriptions (Article II; Article III) - Original members: countries represented at the United Nations Monetary and Financial Conference whose governments accept membership before December 31, 1945. - Membership open to other countries on terms prescribed by the Board of Governors, including terms for subscriptions consistent with principles applied to existing members. - Quotas and subscriptions: - Each member shall be assigned a quota expressed in special drawing rights. - The subscription of each member shall be equal to its quota and shall be paid in full to the Fund at the appropriate depository. - The Board of Governors shall at intervals of not more than five years conduct a general review of quotas and may propose adjustments; an eighty‑five percent majority of the total voting power is required for any change in quotas. - When quotas are changed, participating members shall pay twenty‑five percent of the increase in special drawing rights within a period determined by the Fund, subject to specified payment media and conditions. - Schedule A — Quotas (In millions of United States dollars): - Australia . . . . . . . . . . . . . . . . . . . . . . . . . 200 - Belgium . . . . . . . . . . . . . . . . . . . . . . . . . . 225 - Bolivia . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 - Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . 150 - Canada . . . . . . . . . . . . . . . . . . . . . . . . . 300 - Chile . . . . . . . . . . . . . . . . . . . . . . . . . . 50 - China . . . . . . . . . . . . . . . . . . . . . . . . . . 550 - Colombia . . . . . . . . . . . . . . . . . . . . . . . 50 - Costa Rica . . . . . . . . . . . . . . . . . . . . . . . 5 - Cuba . . . . . . . . . . . . . . . . . . . . . . . . . 50 - Czechoslovakia . . . . . . . . . . . . . . . . . . 125 - Denmark* . . . . . . . . . . . . . . . . . . . . . . . * - Dominican Republic . . . . . . . . . . . . . . . . . 5 - Ecuador . . . . . . . . . . . . . . . . . . . . . . . . 5 - Egypt . . . . . . . . . . . . . . . . . . . . . . . . . 45 - El Salvador . . . . . . . . . . . . . . . . . . . . .2.5 - Ethiopia . . . . . . . . . . . . . . . . . . . . . . . 6 - France . . . . . . . . . . . . . . . . . . . . . . . 450 - Greece . . . . . . . . . . . . . . . . . . . . . . . 40 - Guatemala . . . . . . . . . . . . . . . . . . . . . 5 - Haiti . . . . . . . . . . . . . . . . . . . . . . . . . 5 - Honduras . . . . . . . . . . . . . . . . . . . .2.5 - Iceland . . . . . . . . . . . . . . . . . . . . . . . 1 - India . . . . . . . . . . . . . . . . . . . . . . . 400 - Iran . . . . . . . . . . . . . . . . . . . . . . . . 25 - Iraq . . . . . . . . . . . . . . . . . . . . . . . . . 8 - Liberia . . . . . . . . . . . . . . . . . . . . .5 - Luxembourg . . . . . . . . . . . . . . . . . 10 - Mexico . . . . . . . . . . . . . . . . . . . . . 90 - Netherlands . . . . . . . . . . . . . . . . . . 275 - New Zealand . . . . . . . . . . . . . . . . . . 50 - Nicaragua . . . . . . . . . . . . . . . . . . . . . 2 - Norway . . . . . . . . . . . . . . . . . . . . . . 50 - Panama . . . . . . . . . . . . . . . . . . . .5 - Paraguay . . . . . . . . . . . . . . . . . . . . . 2 - Peru . . . . . . . . . . . . . . . . . . . . . . . 25 - Philippine Commonwealth . . . . . . . . . . .15 - Poland . . . . . . . . . . . . . . . . . . . . . 125 - Union of South Africa . . . . . . . . . . 100 - Union of Soviet Socialist Republics . . . . . . . . . . . . . . . 1200 - United Kingdom . . . . . . . . . . . . 1300 - United States . . . . . . . . . . . . . 2750 - Uruguay . . . . . . . . . . . . . . . . . . 15 - Venezuela . . . . . . . . . . . . . . . . . 15 - Yugoslavia . . . . . . . . . . . . . . . . . . 60 - *The quota of Denmark shall be determined by the Fund after the Danish Government has declared its readiness to sign this Agreement but before signature takes place. ### Exchange Arrangements, Surveillance, and Obligations (Article IV) - General obligations (Art. IV, Sec. 1): - Members shall collaborate with the Fund and other members to assure orderly exchange arrangements and to promote a stable system of exchange rates. - Members shall: (i) endeavor to direct economic and financial policies toward fostering orderly economic growth with reasonable price stability; (ii) seek to promote stability by fostering orderly underlying economic and financial conditions and a monetary system that does not tend to produce erratic disruptions; (iii) avoid manipulating exchange rates to prevent effective balance of payments adjustment or to gain an unfair competitive advantage; and (iv) follow exchange policies compatible with the undertakings under this Section. - Notification and types of exchange arrangements (Art. IV, Sec. 2): - Members shall notify the Fund, within thirty days after the date of the second amendment, of the exchange arrangements they intend to apply and promptly of any changes. - Arrangements under the system prevailing on January 1, 1976, may include maintenance of a value for currency in terms of the special drawing right, cooperative arrangements, or other arrangements of member’s choice. - Surveillance (Art. IV, Sec. 3): - The Fund shall oversee the international monetary system and exercise firm surveillance over members’ exchange rate policies; members shall provide necessary information and consult when requested. - Par values (Art. IV, Sec. 4): - The Fund, by an eighty­five percent majority of the total voting power, may determine conditions permit introducing a widespread system of stable but adjustable par values and shall notify members that Schedule C applies upon such determination. - Separate currencies within a member’s territories (Art. IV, Sec. 5): - Fund and member actions under Article IV relate to separate currencies of territories where the member accepted the Agreement unless declared otherwise. ### Use of General Resources, Purchases, Repurchases, and Ineligibility (Article V) - Agencies dealing with the Fund (Art. V, Sec. 1): members shall deal with the Fund through their Treasury, central bank, stabilization fund, or similar fiscal agency. - Limitation on operations (Art. V, Sec. 2): transactions on the account of the Fund are limited to supplying a member, on its initiative, with SDRs or currencies of other members from the General Resources Account in exchange for the member’s currency; the Fund may perform financial and technical services not on its account without imposing obligations on a member without consent. - Conditions governing use of general resources (Art. V, Sec. 3): - Purchases must be for use in accordance with the Agreement and Fund policies and the member must represent need because of balance of payments or reserve position; reserve tranche purchases are not subject to challenge. - The Fund shall adopt policies on selection of currencies to be sold and may provide SDRs instead of currencies under adopted policies. - Waiver of conditions (Art. V, Sec. 4): the Fund may waive conditions safeguarding its interests, considering members’ records and may require acceptable collateral. - Ineligibility (Art. V, Sec. 5): the Fund may limit use of general resources for members using resources contrary to Fund purposes; failure to reply or unsatisfactory reply may result in continued limits or a declaration of ineligibility. - Repurchase rights and timing (Art. V, Sec. 7): - A member is entitled to repurchase at any time Fund holdings of its currency subject to charges under Section 8(b). - Repurchase of holdings subject to charges under Section 8(b) shall be not later than five years after date of purchase; Fund may prescribe repurchase in installments during period beginning three years and ending five years after purchase. - The Fund, by an eighty­five percent majority, may change repurchase periods or adopt different uniform periods pursuant to special policies; members shall repurchase other holdings in accordance with policies adopted by a seventy percent majority. - Repurchases shall be made with SDRs or currencies of other members specified by the Fund and shall not increase the Fund’s holdings of a member’s currency above levels subject to charges under Section 8(b)(ii). ### Charges (Article V, Section 8) - Service charges on purchases (Art. V, Sec. 8(a)): - The Fund shall levy a service charge on purchases; a lower service charge may apply to reserve tranche purchases. - The service charge on reserve tranche purchases shall not exceed one-half of one percent. - The Fund may levy a charge for stand-by or similar arrangements and may offset such charges against service charges under specified conditions. - Charges on average daily balances (Art. V, Sec. 8(b)): - Charges shall be levied on Fund average daily balances of a member’s currency to the extent they (i) were acquired under a policy excluded under Article XXX(c), or (ii) exceed the amount of the member’s quota after excluding balances referred to in (i); rates normally shall rise at intervals during the period balances are held. - Charges for failure to repurchase (Art. V, Sec. 8(c)): - If a member fails to make a required repurchase, the Fund may impose charges as it deems appropriate on holdings that should have been repurchased. - Determination and uniformity of rates (Art. V, Sec. 8(d)): a seventy percent majority of total voting power required for determination of the rates under (a) and (b) which shall be uniform for all members, and under (c). - Payment and currency of charges (Art. V, Sec. 8(e)): - Members shall pay all charges in special drawing rights except in exceptional circumstances the Fund may permit payment in specified other members’ currencies or in the member’s own currency; Fund holdings shall not be increased above levels triggering charges under (b)(ii) as a result. ### Special Drawing Rights (SDRs), SDR Department, Allocations, and Operations (Articles XV–XXIII; Schedule M) - Authority and allocation (Art. XV; Art. XVIII): - The Fund is authorized to allocate SDRs as needed to participants in the SDR Department; allocation and cancellation decisions are made for basic periods normally five years in duration. - The Fund shall seek to meet the long-term global need to supplement existing reserve assets in a manner promoting attainment of Fund purposes and avoiding world stagnation/deflation or excess demand/inflation. - Valuation rule (Art. XV, Sec. 2): method of valuation of the SDR shall be determined by a seventy percent majority; an eighty-five percent majority required for a change in principle of valuation. - Separation of Departments (Art. XVI): operations involving SDRs are conducted through the SDR Department; other operations through the General Department; assets held in one Department are not available to meet liabilities of the other except as specified. - Participants and holders (Art. XVII): members become participants by depositing instruments undertaking obligations of participants; the Fund may prescribe holders and terms under an eighty-five percent majority for certain prescriptions. - Allocation mechanics (Art. XVIII): - Rates of allocations expressed as percentages of quotas on dates of each decision; cancellations expressed as percentages of net cumulative allocations. - Decisions to allocate or cancel made by Board of Governors; the Fund may change rates or intervals during a basic period because of unexpected major developments (Art. XVIII, Sec. 3). - Operations and counterparties (Art. XIX): - Participants entitled to use SDRs to obtain currency from designated participants; Fund may prescribe operations and make representations if operations are prejudicial to designation process. - Use is expected only if participant has need because of balance of payments or reserve position; failure to fulfill expectation may lead to Fund representations and possible consequences under Art. XXIII. - Designation and obligations to provide currency (Art. XIX, Sec. 4–5): - A participant designated by the Fund shall provide on demand a freely usable currency to a participant using SDRs under Section 2(a); designation principles include strength of balance of payments and gross reserve position and promotion of balanced holdings. - Reconstitution rules (Art. XIX, Sec. 6; Schedule G): participants using SDRs shall reconstitute holdings according to rules; a seventy percent majority required to adopt/modify/abrogate reconstitution rules. - Interest, charges, and assessments (Art. XX; Art. XXI): - Interest at same rate for all holders paid by the Fund on amount of holdings of SDRs. - Charges at same rate for all participants paid to the Fund on net cumulative allocation plus negative balances or unpaid charges; rate of charges equal to rate of interest; rate determined by seventy percent majority. - Payments of interest, charges, and assessments to be made in SDRs, with procedures for obtaining SDRs or currencies if necessary. - Administration and legal protections (Art. XXI): SDR Department administered with special provisions; no tax on SDRs or operations; questions of interpretation and arbitration have prescribed routes. - Suspension and termination (Art. XXII–XXV): - Executive Board may suspend provisions relating to SDRs in emergency by an eighty­five percent majority for periods not more than one year (Art. XXIII, Sec. 1). - Termination of participation, settlement, and liquidation procedures detailed in Articles XXIV–XXV and Schedules H, I. - Schedule M — Special One-Time Allocation of SDRs (overview and clauses): - Clause 1: Each participant as of September 19, 1997 shall, on the 30th day following the effective date of the fourth amendment, receive an allocation resulting in net cumulative allocation equal to 29.315788813 percent of its quota as of September 19, 1997. - Clause 2: Countries becoming participants after September 19, 1997 but within three months of membership shall receive allocations on the 30th day following the later of the date they become participants or the effective date of the fourth amendment, with quantity rules adjusting 29.315788813 percent by specified ratios. - Clause 3: Federal Republic of Yugoslavia (Serbia/Montenegro) succession provisions reference Executive Board Decision No. 10237-(92/150) and an allocation equal to 29.315788813 percent of the quota proposed under that Decision, adjusted in accordance with Clause 2(b)(ii) and (c). - Notification and escrow rules (paragraphs 4–5): Fund shall not allocate SDRs to participants that have notified in writing they do not wish to receive allocation; allocations to participants with overdue obligations shall be held in escrow until overdue obligations discharged; overdue obligations defined (repurchases, charges, loans, assessments, trustee liabilities). ### Repurchase obligations, Gold–SDR conversion, Transitional Arrangements (Schedules B, I and related provisions) - Repurchase obligations accrued before the second amendment (Schedule B): - Repurchase obligations under Article V, Section 7(b) accrued before the date of the second amendment and undischarged at that date shall be discharged not later than they would have been discharged under provisions before the second amendment. - Gold–SDR equivalence (conversion rule): - "0.888 671 gram of fine gold shall be equivalent to one special drawing right". - Amounts payable under conversion determined on that basis and on value of currency in terms of the SDR at date of discharge. - Repurchase of excess holdings: - A member’s currency held by the Fund in excess of seventy­five percent of the member’s quota at the date of the second amendment and not subject to repurchase under accrued-obligations clause shall be repurchased as follows: - (i) Holdings resulting from a purchase shall be repurchased in accordance with the policy under which the purchase was made. - (ii) Other holdings shall be repurchased not later than four years after the date of the second amendment. - Transitional gold-sale arrangements if equivalent arrangements not completed: - Fund shall sell up to 25 million ounces of fine gold held on August 31, 1975, to members agreeing to buy it, in proportion to their quotas on that date, at price equivalent at time of sale to one SDR per 0.888 671 gram of fine gold. - Fund shall sell up to 25 million ounces for benefit of developing members as specified with proceeds and distributions defined. ### Governance, Organization, Managing Director, and Staff (Articles XII; Section 4) - Organizational structure (Art. XII): - The Fund shall have a Board of Governors, an Executive Board, a Managing Director, and a staff, and a Council if the Board of Governors decides by an eighty-five percent majority that Schedule D shall be applied. - Board of Governors: - One Governor and one Alternate appointed by each member; Board selects one Governor as Chairman; Board may delegate authority to Executive Board except powers conferred directly by the Agreement. - Meetings called as provided or by request of fifteen members or members having one-quarter of total voting power; quorum is a majority of Governors having not less than two-thirds of total voting power. - Executive Board: - Responsible for conducting business of the Fund; composition of twenty Executive Directors elected by members, with Managing Director as chairman; Board of Governors may change number of Executive Directors by eighty-five percent majority. - Executive Board shall function in continuous session at the principal office and meet as often as required; quorum is a majority of Executive Directors having not less than one-half of the total voting power. - Managing Director and staff (Section 4): - Executive Board selects a Managing Director who shall not be a Governor or an Executive Director; Managing Director is chairman of Executive Board with no vote except a deciding vote in case of equal division. - Managing Director is chief of operating staff and conducts ordinary business under direction of Executive Board; responsible for organization, appointment, and dismissal of staff. - Staff owe duty entirely to the Fund; members shall respect international character of that duty and refrain from attempts to influence staff; Managing Director shall seek highest standards of efficiency and technical competence and wide geographical recruitment. - Voting (Article XII, Section 5): - Total votes of each member equal sum of basic votes and quota-based votes. - Basic votes: number resulting from equal distribution among all members of 5.502 percent of aggregate sum of total voting power of all members, provided there shall be no fractional basic votes. - Quota-based votes: one vote for each part of quota equivalent to one hundred thousand special drawing rights. - Adjustments for net purchases/sales: addition/subtraction of one vote per four hundred thousand special drawing rights of net sales or net purchases respectively, subject to caps. - Except as otherwise provided, all decisions made by majority of votes cast. ### Reserves, Investment Account, Distribution of Net Income (Article XII, Section 6) - Annual determination of part of net income to be placed to general reserve, special reserve, or distributed. - Distribution rules: - Any distribution of net income to members shall be in proportion to their quotas; Fund may decide by seventy percent majority to distribute any part of general reserve. - Payments under these provisions shall be made in SDRs unless Fund or member decides payment to member shall be made in its own currency. - Investment Account: - Fund may establish an Investment Account; assets held separately from other accounts of General Department. - Fund may transfer to Investment Account proceeds of sale of gold in accordance with Article V, Section 12(g) and, by seventy percent majority, may transfer for immediate investment currencies held in General Resources Account; amount of transfers shall not exceed total amount of general reserve and special reserve at time of decision. - Use and governance of member currencies in Investment Account subject to rules adopted by seventy percent majority consistent with specified subparagraphs. ### Reporting, Communications, Immunities, and Relations (Articles VIII–XI; XII, Sections 7–8; IX) - Reporting and information (Art. VIII, Sec. 5; Art. XII, Sec. 7): - Fund may require members to furnish information necessary for its activities, including national data on official holdings of gold and foreign exchange, production of gold, exports and imports, balance of payments, international investment position, national income, price indices, buying/selling rates, exchange controls, and clearing arrangements. - Fund shall publish an annual report containing an audited statement of accounts and issue, at intervals of three months or less, summary statements of its operations and holdings of SDRs, gold, and currencies. - Immunities and privileges (Art. IX): - Fund shall possess full juridical personality; enjoy immunity from judicial process except to extent it waives immunity; property and assets immune from search, requisition, confiscation, expropriation, or seizure; archives inviolable; communications accorded same treatment as official communications of members. - Officers and employees enjoy immunity from legal process for official acts and specified immigration and travel facilities; Fund, its assets, income, and operations immune from taxation and customs duties with specified exceptions for local nationals. - Relations with other international organizations and non-member countries (Art. X–XI): - Fund shall cooperate with general international organizations and specialized public international organizations; undertakings regarding transactions with non-members and measures to prevent transactions contrary to Agreement provisions are specified. ### Transitional Arrangements; Amendments; Entry into Force (Article XIV; Article XXVIII; Article XXXI) - Transitional arrangements (Art. XIV): - Members shall notify Fund whether they intend to avail themselves of transitional arrangements in Section 2 or accept obligations of Article VIII, Sections 2, 3, and 4; members availing transitional arrangements may maintain restrictions on payments and transfers for current international transactions in effect when they became members, adapting them to changing circumstances. - Fund shall make annual reports on restrictions in force under Section 2 and members retaining inconsistent restrictions shall consult Fund annually. - Amendments (Art. XXVIII): - Proposal to modify Agreement communicated to Chairman of Board of Governors; when three-fifths of members having eighty-five percent of total voting power have accepted proposed amendment, Fund certifies acceptance; acceptance by all members required for amendments modifying specified core provisions. - Entry into force and signature (Art. XXXI): - Agreement enters into force when signed on behalf of governments having sixty-five percent of total of quotas set forth in Schedule A and instruments referred to in Section 2(a) of Article XXXI deposited on their behalf, but not before May 1, 1945. - At signature each government shall transmit one one-hundredth of one percent of its total subscription in gold or United States dollars for administrative expenses; funds held in special deposit account and transmitted to Board of Governors when initial meeting called; Agreement remains open for signature at Washington until December 31, 1945. ### Special Drawing Rights Department liquidation, withdrawal, and settlement (Schedules I, J, K, L and related Articles) - Installments and default consequences (Schedule I): - Installments under either 1 or 2 fall due six months after date of termination and at intervals of six months thereafter. - During liquidation of SDR Department participants shall discharge obligations in ten half-yearly installments, or such longer period as Fund may decide; first half-yearly payment due six months after decision to liquidate SDR Department. - While a participant is in default with respect to any payment required by 1 or 5 of Schedule I, no amounts shall be paid to it in accordance with 3 or 5 of Schedule I. - Settlement with withdrawing members (Schedule J): - Fund obligated to pay a withdrawing member an amount equal to its quota plus or minus amounts due, but no payment until six months after withdrawal. - If Fund’s holdings of withdrawing member’s currency are insufficient, balance shall be paid in a freely usable currency or other agreed manner; absence of agreement within six months leads to payment in ten half-yearly installments over ensuing five years. - Remedies and guarantees include rights of withdrawing member to require payment in currencies held by Fund and guarantees by withdrawing member regarding use of currency disposed. - Liquidation distribution rules (Schedule K): - Priority in distribution: liabilities other than repayment of subscriptions have priority; order of asset use specified (a) currency of liability, (b) gold, (c) other currencies in proportion to quotas. - After liabilities discharged, assets distributed per multi-step allocation including specific treatment of gold held on August 31, 1975 and apportionments relative to quotas and amounts due. - Redemption, timing, guarantees, and value determination rules specified; Fund determines value of gold on basis of market prices. - Suspension of voting rights (Schedule L): - Members whose voting rights suspended shall not participate in adoption of proposed amendments or appoint Governors/Councillors/Executive Directors, and their votes shall not be cast; officers and representatives cease to hold office with transitional provisions for short-term continuance where votes are cast for other members. *International Monetary Fund — Articles of Agreement and Schedules (selected sections and schedules as supplied).* ### 1. Original members. . . . . . . . . . . . . . . . . . . . . . . . . . .3 ### aa - 1. Original members ### Introductory Article - The International Monetary Fund is established and shall operate in accordance with the provisions of this Agreement as originally adopted and subsequently amended. - The Fund shall maintain a General Department and a Special Drawing Rights Department to conduct operations and transactions. - Membership in the Fund shall give the right to participation in the Special Drawing Rights Department. - Operations and transactions authorized by the Agreement shall be conducted through the General Department (consisting of the General Resources Account, the Special Disbursement Account, and the Investment Account), except that operations and transactions involving special drawing rights shall be conducted through the Special Drawing Rights Department. *Articles of Agreement of the International Monetary Fund* ### Purposes (Article I) - The purposes of the International Monetary Fund are: - (i) To promote international monetary cooperation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems. - (ii) To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy. - (iii) To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation. - (iv) To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade. - (v) To give confidence to members by making the general resources of the Fund temporarily available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity. - (vi) In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members. - The Fund shall be guided in all its policies and decisions by the purposes set forth in this Article. *Articles of Agreement of the International Monetary Fund* ### Membership (Article II) - Section 1. Original members: - The original members of the Fund shall be those of the countries represented at the United Nations Monetary and Financial Conference whose governments accept membership before December 31, 1945. - Section 2. Other members: - Membership shall be open to other countries at such times and in accordance with such terms as may be prescribed by the Board of Governors. - These terms, including the terms for subscriptions, shall be based on principles consistent with those applied to other countries that are already members. *Articles of Agreement of the International Monetary Fund* ### Quotas and Subscriptions (Article III) - Section 1. Quotas and payment of subscriptions: - Each member shall be assigned a quota expressed in special drawing rights. - The quotas of the members represented at the United Nations Monetary and Financial Conference which accept membership before December 31, 1945, shall be those set forth in Schedule A. - The quotas of other members shall be determined by the Board of Governors. - The subscription of each member shall be equal to its quota and shall be paid in full to the Fund at the appropriate depository. - Section 2. Adjustment of quotas: - (a) The Board of Governors shall at intervals of not more than five years conduct a general review, and if it deems it appropriate propose an adjustment, of the quotas of the members. It may also, if it thinks fit, consider at any other time the adjustment of any particular quota at the request of the member concerned. - (b) The Fund may at any time propose an increase in the quotas of those members of the Fund that were members on August 31, 1975, in proportion to their quotas on that date in a cumulative amount not in excess of amounts transferred under Article V, Section 12(f)(i) and (j) from the Special Disbursement Account to the General Resources Account. - (c) An eighty‑five percent majority of the total voting power shall be required for any change in quotas. - (d) The quota of a member shall not be changed until the member has consented and until payment has been made unless payment is deemed to have been made in accordance with Section 3(b) of this Article. - Section 3. Payments when quotas are changed: - (a) Each member which consents to an increase in its quota under Section 2(a) of this Article shall, within a period determined by the Fund, pay to the Fund twenty‑five percent of the increase in special drawing rights, but the Board of Governors may prescribe that this payment may be made, on the same basis for all members, in whole or in part in the currencies of other members specified, with their concurrence, by the Fund, or in the member’s own currency. - A non‑participant shall pay in the currencies of other members specified by the Fund, with their concurrence, a proportion of the increase corresponding to the proportion to be paid in special drawing rights by participants. - The balance of the increase shall be paid by the member in its own currency. - The Fund’s holdings of a member’s currency shall not be increased above the level at which they would be subject to charges under Article V, Section 8(b)(ii), as a result of payments by other members under this provision. - (b) [Text following (b) begins in the source but is not included in the supplied content.] *Articles of Agreement of the International Monetary Fund* ### Section 2(b) of this Article shall be deemed to have paid to the Fund an ### Article IV — Obligations Regarding Exchange Arrangements; Article V — Operations and Transactions of the Fund ### General obligations of members (Art. IV, Sec. 1) - Each member undertakes to collaborate with the Fund and other members to assure orderly exchange arrangements and to promote a stable system of exchange rates. - Members shall: - (i) endeavor to direct economic and financial policies toward fostering orderly economic growth with reasonable price stability; - (ii) seek to promote stability by fostering orderly underlying economic and financial conditions and a monetary system that does not tend to produce erratic disruptions; - (iii) avoid manipulating exchange rates or the international monetary system to prevent effective balance of payments adjustment or to gain an unfair competitive advantage; and - (iv) follow exchange policies compatible with the undertakings under this Section. ### Notification and types of exchange arrangements (Art. IV, Sec. 2) - Each member shall notify the Fund, within thirty days after the date of the second amendment of this Agreement, of the exchange arrangements it intends to apply and shall notify the Fund promptly of any changes. - Exchange arrangements under the system prevailing on January 1, 1976, may include: - maintenance of a value for currency in terms of the special drawing right or another denominator other than gold; - cooperative arrangements to maintain currency values relative to other members’ currencies; or - other exchange arrangements of a member’s choice. - The Fund, by an eighty­five percent majority of the total voting power, may make provision for general exchange arrangements without limiting members’ right to choose compatible arrangements. ### Surveillance over exchange arrangements (Art. IV, Sec. 3) - The Fund shall oversee the international monetary system to ensure effective operation and shall oversee members’ compliance with obligations under Section 1. - The Fund shall exercise firm surveillance over members’ exchange rate policies and adopt specific guiding principles. - Members shall provide necessary information for surveillance and shall consult with the Fund when requested. - Principles shall respect domestic social and political policies and consider members’ circumstances. ### Par values (Art. IV, Sec. 4) - The Fund may determine, by an eighty­five percent majority of the total voting power, that conditions permit introducing a widespread system of stable but adjustable par values. - Determination based on underlying world economic stability, including price movements and rates of expansion, sources of liquidity, symmetrical action by surplus and deficit members, intervention arrangements, and treatment of imbalances. - Upon such determination, the Fund shall notify members that Schedule C applies. ### Separate currencies within a member’s territories (Art. IV, Sec. 5) - Member actions under this Article apply to separate currencies of territories where the member accepted the Agreement unless the member declares otherwise. - Fund actions under this Article shall be deemed to relate to all such currencies unless the Fund declares otherwise. ### Agencies dealing with the Fund (Art. V, Sec. 1) - Each member shall deal with the Fund only through its Treasury, central bank, stabilization fund, or other similar fiscal agency; the Fund shall deal only with or through the same agencies. ### Limitation on the Fund’s operations and transactions (Art. V, Sec. 2) - Transactions on the account of the Fund are limited to supplying a member, on the member’s initiative, with special drawing rights or currencies of other members from the General Resources Account in exchange for the member’s currency. - The Fund may perform financial and technical services, including administering resources contributed by members, but operations involved in such services shall not be on the account of the Fund and shall not impose obligations on a member without its consent. ### Conditions governing use of the Fund’s general resources (Art. V, Sec. 3) - The Fund shall adopt policies on use of its general resources, including stand-by or similar arrangements and special policies for special balance of payments problems. - Conditions for a member to purchase currencies of other members from the Fund: - (i) use in accordance with this Agreement and Fund policies; - (ii) the member represents a need because of its balance of payments or reserve position or developments in its reserves; - (iii) the proposed purchase would be a reserve tranche purchase, or would not cause the Fund’s holdings of the purchasing member’s currency to exceed two hundred percent of its quota; - (iv) the Fund has not declared the member ineligible under Article V, Section 5 or other specified provisions. - The Fund shall examine requests for purchases for consistency with this Agreement; reserve tranche purchases are not subject to challenge. - The Fund shall adopt policies and procedures on selection of currencies to be sold, taking into account members’ balance of payments and reserve positions, exchange market developments, and promoting balanced positions in the Fund; a purchasing member proposing to obtain an equivalent amount of its own currency offered by another member is entitled to that currency unless the Fund has given notice under Article VII, Section 3 that holdings have become scarce. - Currency balances purchased from the Fund must be freely usable currencies or exchangeable at time of purchase for a freely usable currency at an exchange rate equivalent to that based on Article XIX, Section 7(a). - Members whose currency is purchased or obtained in exchange shall collaborate with the Fund and other members to enable such exchangeability at the time of purchase. - Exchanges involving currencies that are not freely usable are to be made by the member whose currency is purchased unless agreed otherwise. - A member purchasing another member’s freely usable currency and wishing to exchange it at time of purchase for another freely usable currency shall make the exchange with the other member if requested; the exchange shall be at the rate referred to above. - Under adopted policies and procedures, the Fund may provide special drawing rights instead of currencies to a participant making a purchase. ### Waiver of conditions (Art. V, Sec. 4) - The Fund may, in its discretion and on terms safeguarding its interests, waive conditions in Section 3(b)(iii) and (iv), especially for members with records of avoiding large or continuous use of general resources. - In granting waivers, the Fund shall consider periodic or exceptional requirements and may require pledge of acceptable collateral as a condition. ### Ineligibility to use the Fund’s general resources (Art. V, Sec. 5) - If the Fund believes a member is using general resources contrary to Fund purposes, it shall present a report to the member prescribing a suitable time for reply. - After presenting the report, the Fund may limit use of general resources; if no reply is received within the prescribed time or the reply is unsatisfactory, the Fund may continue limits or declare the member ineligible to use general resources after giving reasonable notice. ### Special drawing rights transactions (Art. V, Sec. 6) - The Fund may accept special drawing rights offered by a participant in exchange for equivalent amounts of currencies of other members. - The Fund may provide a participant, at its request, with special drawing rights for an equivalent amount of the currencies of other members; such transactions shall not increase the Fund’s holdings of a member’s currency above levels subject to charges under Section 8(b)(ii). - Currencies provided or accepted by the Fund shall be selected in accordance with policies reflecting principles of Section 3(d) or 7(i); a member whose currency is provided or accepted must concur. ### Repurchase by a member of its currency held by the Fund (Art. V, Sec. 7) - A member is entitled to repurchase at any time the Fund’s holdings of its currency that are subject to charges under Section 8(b). - Members who purchased under Section 3 are expected normally, as their balance of payments and reserve position improves, to repurchase such holdings; the Fund may represent that repurchase is appropriate after consultation. - Repurchase timing and periods: - A member shall repurchase holdings subject to charges under Section 8(b) not later than five years after the date of the purchase. - The Fund may prescribe repurchase in installments during the period beginning three years and ending five years after the purchase date. - The Fund, by an eighty­five percent majority of the total voting power, may change repurchase periods; any period so adopted shall apply to all members. - The Fund, by an eighty­five percent majority, may adopt different uniform periods for repurchase pursuant to special policies. - Members shall repurchase holdings not acquired as a result of purchases and subject to charges under Section 8(b)(ii) in accordance with policies adopted by a seventy percent majority of the total voting power. - Decisions shortening repurchase periods under a policy apply only to holdings acquired after the effective date of the decision. - The Fund may, on request, postpone a repurchase discharge date but not beyond maximum periods under (c) or (d) or adopted policies, unless the Fund determines by a seventy percent majority that a longer period is justified due to exceptional hardship. - The Fund’s policies may permit selling under Section 3(b) holdings not repurchased, without prejudice to other authorized actions. - Repurchases shall be made with special drawing rights or currencies of other members specified by the Fund; the Fund shall adopt procedures on currencies to be used that take into account Section 3(d) principles and repurchases shall not increase the Fund’s holdings of a member’s currency above levels subject to charges under Section 8(b)(ii). - If a currency specified for repurchase is not freely usable: - (i) the specified member shall ensure the repurchasing member can obtain it at repurchase in exchange for a freely usable currency selected by the specified member at an exchange rate equivalent to that under Article XIX, Section 7(a); - (ii) each member whose currency is specified shall collaborate to enable repurchasing members to obtain the specified currency at repurchase; - (iii) exchanges under (j)(i) shall be made with the member whose currency is specified unless agreed otherwise; and - (iv) if a repurchasing member wishes to obtain, at repurchase, a freely usable currency of another member specified by the Fund, it shall obtain that currency from the other member if requested, in exchange for a freely usable currency at the rate referred to in (j)(i). - The Fund may adopt regulations on the freely usable currency to be provided in an exchange. *Source: Article IV and Article V of the Fund’s Articles of Agreement.* ### Section 8. Charges ### Section 8. Charges ### Service charges on purchases (Article V, Section 8(a)) - The Fund shall levy a service charge on the purchase by a member of special drawing rights or the currency of another member held in the General Resources Account in exchange for its own currency. - The Fund may levy a lower service charge on reserve tranche purchases than on other purchases. - The service charge on reserve tranche purchases shall not exceed one-half of one percent. - The Fund may levy a charge for stand-by or similar arrangements. - The Fund may decide that the charge for an arrangement shall be offset against the service charge levied under (a)(i) on purchases under the arrangement. ### Charges on average daily balances (Article V, Section 8(b)) - The Fund shall levy charges on its average daily balances of a member’s currency held in the General Resources Account to the extent that they: - (i) have been acquired under a policy that has been the subject of an exclusion under Article XXX(c), or - (ii) exceed the amount of the member’s quota after excluding any balances referred to in (i) above. - The rates of charge normally shall rise at intervals during the period in which the balances are held. ### Charges for failure to repurchase (Article V, Section 8(c)) - If a member fails to make a repurchase required under Section 7 of this Article, the Fund, after consultation with the member on the reduction of the Fund’s holdings of its currency, may impose such charges as the Fund deems appropriate on its holdings of the member’s currency that should have been repurchased. ### Determination and uniformity of rates (Article V, Section 8(d)) - A seventy percent majority of the total voting power shall be required for the determination of the rates of charge under (a) and (b) above, which shall be uniform for all members, and under (c) above. ### Payment and currency of charges (Article V, Section 8(e)) - A member shall pay all charges in special drawing rights. - In exceptional circumstances the Fund may permit a member to pay charges: - in the currencies of other members specified by the Fund, after consultation with them, or - in its own currency. - The Fund’s holdings of a member’s currency shall not be increased as a result of payments by other members under this provision above the level at which they would be subject to charges under (b)(ii) above. *Source: Article V, Section 8 of the IMF Agreement (Sections excerpted under “Section 8. Charges”)* ### Section 2. Avoidance of restrictions on current payments ### aa - Section 2. Avoidance of restrictions on current payments ### Avoidance of restrictions on current payments (Art. VIII, Sec. 2) - Subject to the provisions of Article VII, Section 3(b) and Article XIV, Section 2, no member shall, without the approval of the Fund, impose restrictions on the making of payments and transfers for current international transactions. - Exchange contracts involving the currency of any member that are contrary to that member’s exchange control regulations maintained or imposed consistently with the Agreement shall be unenforceable in the territories of any member. - Members may, by mutual accord, cooperate in measures to make the exchange control regulations of either member more effective, provided such measures and regulations are consistent with the Agreement. ### Avoidance of discriminatory currency practices (Art. VIII, Sec. 3) - No member shall engage in, or permit any of its fiscal agencies referred to in Article V, Section 1 to engage in, any discriminatory currency arrangements or multiple currency practices, whether within or outside margins under Article IV or prescribed by or under Schedule C, except as authorized under the Agreement or approved by the Fund. - If such arrangements and practices are engaged in at the date when the Agreement enters into force, the member concerned shall consult with the Fund as to their progressive removal unless they are maintained or imposed under Article XIV, Section 2, in which case the provisions of Section 3 of Article XIV shall apply. ### Convertibility of foreign-held balances (Art. VIII, Sec. 4) - Each member shall buy balances of its currency held by another member if the latter, in requesting the purchase, represents: - (i) that the balances to be bought have been recently acquired as a result of current transactions; or - (ii) that their conversion is needed for making payments for current transactions. - The buying member may pay either in special drawing rights, subject to Article XIX, Section 4, or in the currency of the member making the request. - The obligation to buy shall not apply when: - (i) the convertibility of the balances has been restricted consistently with Section 2 of Article VIII or Article VI, Section 3; - (ii) the balances have accumulated as a result of transactions effected before the removal by a member of restrictions maintained or imposed under Article XIV, Section 2; - (iii) the balances have been acquired contrary to the exchange regulations of the member asked to buy them; - (iv) the currency of the member requesting the purchase has been declared scarce under Article VII, Section 3(a); or - (v) the member requested to make the purchase is for any reason not entitled to buy currencies of other members from the Fund for its own currency. ### Furnishing of information (Art. VIII, Sec. 5) - The Fund may require members to furnish such information as it deems necessary for its activities, including, as the minimum necessary for the effective discharge of the Fund’s duties, national data on: - (i) official holdings at home and abroad of (1) gold, (2) foreign exchange; - (ii) holdings at home and abroad by banking and financial agencies, other than official agencies, of (1) gold, (2) foreign exchange; - (iii) production of gold; - (iv) gold exports and imports according to countries of destination and origin; - (v) total exports and imports of merchandise, in terms of local currency values, according to countries of destination and origin; - (vi) international balance of payments, including (1) trade in goods and services, (2) gold transactions, (3) known capital transactions, and (4) other items; - (vii) international investment position, i.e., investments within the territories of the member owned abroad and investments abroad owned by persons in its territories so far as it is possible to furnish this information; - (viii) national income; - (ix) price indices, i.e., indices of commodity prices in wholesale and retail markets and of export and import prices; - (x) buying and selling rates for foreign currencies; - (xi) exchange controls, i.e., a comprehensive statement of exchange controls in effect at the time of assuming membership in the Fund and details of subsequent changes as they occur; and - (xii) where official clearing arrangements exist, details of amounts awaiting clearance in respect of commercial and financial transactions, and of the length of time during which such arrears have been outstanding. - In requesting information the Fund shall take into consideration the varying ability of members to furnish the data requested. - Members shall be under no obligation to furnish information in such detail that the affairs of individuals or corporations are disclosed, but shall furnish the desired information in as detailed and accurate a manner as is practicable and, so far as possible, avoid mere estimates. - The Fund may arrange to obtain further information by agreement with members and shall act as a centre for the collection and exchange of information on monetary and financial problems to facilitate studies designed to assist members in developing policies that further the purposes of the Fund. ### Consultation regarding existing international agreements (Art. VIII, Sec. 6) - Where a member is authorized by the Agreement in special or temporary circumstances to maintain or establish restrictions on exchange transactions and there are prior engagements between members that conflict with such restrictions, the parties to those engagements shall consult with one another to make mutually acceptable adjustments as necessary. - These provisions are without prejudice to the operation of Article VII, Section 5. ### Collaboration on reserve assets (Art. VIII, Sec. 7) - Each member undertakes to collaborate with the Fund and with other members to ensure that the member’s policies with respect to reserve assets are consistent with the objectives of promoting better international surveillance of international liquidity and making the special drawing right the principal reserve asset in the international monetary system. ### Status, immunities, and privileges of the Fund (Art. IX, Sec. 1–10) - Purpose: To enable the Fund to fulfill its functions, the status, immunities, and privileges set forth shall be accorded to the Fund in the territories of each member. - Status: The Fund shall possess full juridical personality and, in particular, the capacity: - (i) to contract; - (ii) to acquire and dispose of immovable and movable property; and - (iii) to institute legal proceedings. - Immunity from judicial process: The Fund, its property and assets, wherever located and by whomsoever held, shall enjoy immunity from every form of judicial process except to the extent the Fund expressly waives its immunity for the purpose of any proceedings or by terms of any contract. - Immunity from other action: Property and assets of the Fund shall be immune from search, requisition, confiscation, expropriation, or any other form of seizure by executive or legislative action. - Immunity of archives: The archives of the Fund shall be inviolable. - Freedom of assets from restrictions: To the extent necessary to carry out the Agreement’s activities, all property and assets of the Fund shall be free from restrictions, regulations, controls, and moratoria of any nature. - Privilege for communications: Official communications of the Fund shall be accorded by members the same treatment as official communications of other members. - Immunities and privileges of officers and employees: - (i) shall be immune from legal process with respect to acts performed in their official capacity except when the Fund waives this immunity; - (ii) not being local nationals, shall be granted the same immunities from immigration restrictions, alien registration requirements, and national service obligations and the same facilities as regards exchange restrictions as are accorded by members to representatives, officials, and employees of comparable rank of other members; - (iii) shall be granted the same treatment in respect of traveling facilities as accorded to representatives, officials, and employees of comparable rank of other members. - Immunities from taxation: - (a) The Fund, its assets, property, income, and operations and transactions authorized by the Agreement shall be immune from all taxation and from all customs duties; the Fund shall also be immune from liability for the collection or payment of any tax or duty. - (b) No tax shall be levied on or in respect of salaries and emoluments paid by the Fund to Executive Directors, Alternates, officers, or employees of the Fund who are not local citizens, local subjects, or other local nationals. - (c) No taxation of any kind shall be levied on any obligation or security issued by the Fund, including any dividend or interest thereon, by whomsoever held: - (i) which discriminates against such obligation or security solely because of its origin; 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 Fund. - Application: Each member shall take such action as is necessary in its own territories to make effective in terms of its own law the principles set forth in this Article and shall inform the Fund of the detailed action taken. ### Relations with other international organizations and non-member countries (Art. X; Art. XI, Sec. 1–2) - The Fund shall cooperate within the terms of the Agreement with any general international organization and with public international organizations having specialized responsibilities in related fields. Any cooperation that would modify any provision of the Agreement may be effected only after amendment under Article XXVIII. - Undertakings regarding relations with non-member countries (each member undertakes): - (i) not to engage in, nor to permit any of its fiscal agencies referred to in Article V, Section 1 to engage in, any transactions with a non-member or persons in a non-member’s territories contrary to the provisions of the Agreement or the purposes of the Fund; - (ii) not to cooperate with a non-member or persons in a non-member’s territories in practices contrary to the provisions of the Agreement or the purposes of the Fund; and - (iii) to cooperate with the Fund to apply appropriate measures in its territories to prevent transactions with non-members or persons in their territories contrary to the provisions of the Agreement or the purposes of the Fund. - Restrictions on transactions with non-member countries: Nothing in the Agreement affects the right of any member to impose restrictions on exchange transactions with non-members or persons in their territories unless the Fund finds such restrictions prejudice the interests of members and are contrary to the purposes of the Fund. ### Organization and management (Art. XII) - Structure: The Fund shall have a Board of Governors, an Executive Board, a Managing Director, and a staff, and a Council if the Board of Governors decides, by an eighty-five percent majority of the total voting power, that Schedule D shall be applied. - Board of Governors: - All powers not conferred directly on the Board of Governors, the Executive Board, or the Managing Director shall be vested in the Board of Governors. - The Board shall consist of one Governor and one Alternate appointed by each member; each Governor and each Alternate shall serve until a new appointment is made. No Alternate may vote except in the absence of his principal. - The Board shall select one of the Governors as Chairman. - The Board may delegate to the Executive Board authority to exercise any powers of the Board of Governors, except those conferred directly by the Agreement. - Meetings: The Board shall hold meetings as provided or called by the Executive Board; meetings shall be called whenever requested by fifteen members or by members having one-quarter of the total voting power. - Quorum: A majority of the Governors having not less than two-thirds of the total voting power. - Each Governor shall be entitled to cast the number of votes allotted under Section 5 of the Article to the member appointing him. - The Board may establish a procedure whereby the Executive Board may obtain a vote of the Governors without calling a meeting. - Governors and Alternates serve without compensation from the Fund, but the Fund may pay reasonable expenses incurred in attending meetings. - The Board shall determine remuneration for Executive Directors and their Alternates and the salary and terms of the Managing Director. - The Board of Governors and the Executive Board may appoint committees; membership need not be limited to Governors or Executive Directors or their Alternates. - Executive Board: - Responsible for conducting the business of the Fund and shall exercise all powers delegated to it by the Board of Governors. - Composition: Subject to (c), the Executive Board shall consist of twenty Executive Directors elected by the members, with the Managing Director as chairman. - The Board of Governors, by an eighty-five percent majority of the total voting power, may increase or decrease the number of Executive Directors. - Elections of Executive Directors shall be conducted at intervals of two years in accordance with regulations adopted by the Board of Governors, which shall include a limit on the total number of votes that more than one member may cast for the same candidate. - Each Executive Director shall appoint an Alternate with full power to act when the Executive Director is not present; the Board of Governors may adopt rules enabling an Executive Director elected by more than a specified number of members to appoint two Alternates. - Vacancies: If an Executive Director’s office becomes vacant more than ninety days before the end of his term, another Executive Director shall be elected for the remainder of the term by the members that elected the former Executive Director; a majority of the votes cast is required for election. While vacant, the Alternate shall exercise the former Executive Director’s powers, except appointing an Alternate. - The Executive Board shall function in continuous session at the principal office of the Fund and meet as often as required. - Quorum: A majority of the Executive Directors having not less than one-half of the total voting power. - Voting: - (i) Each Executive Director shall be entitled to cast the number of votes which counted towards his election. - (ii) When Section 5(b) is applicable, the votes an Executive Director would otherwise be entitled to cast shall be increased or decreased correspondingly; all votes an Executive Director is entitled to cast shall be cast as a unit. - (iii) When the suspension of the voting rights of a member is terminated under Article XXVI, Section 2(b), arrangements are specified for casting votes allotted to the member. - The Board of Governors shall adopt regulations under which a member may send a representative to attend any Executive Board meeting when a request made by, or a matter particularly affecting, that member is under consideration. *From the Articles of Agreement of the International Monetary Fund (selected sections).* ### Section 4. Managing Director and staff ### Section 4. Managing Director and staff ### Managing Director: appointment, role, and tenure - The Executive Board shall select a Managing Director who shall not be a Governor or an Executive Director. - The Managing Director shall be chairman of the Executive Board, but shall have no vote except a deciding vote in case of an equal division. - He may participate in meetings of the Board of Governors, but shall not vote at such meetings. - The Managing Director shall cease to hold office when the Executive Board so decides. ### Managing Director: responsibilities and staff authority - The Managing Director shall be chief of the operating staff of the Fund and shall conduct, under the direction of the Executive Board, the ordinary business of the Fund. - Subject to the general control of the Executive Board, he shall be responsible for the organization, appointment, and dismissal of the staff of the Fund. ### Staff duties, independence, and recruitment - The Managing Director and the staff of the Fund, in the discharge of their functions, shall owe their duty entirely to the Fund and to no other authority. - Each member of the Fund shall respect the international character of this duty and shall refrain from all attempts to influence any of the staff in the discharge of these functions. - In appointing the staff the Managing Director shall, subject to the paramount importance of securing the highest standards of efficiency and of technical competence, pay due regard to the importance of recruiting personnel on as wide a geographical basis as possible. ### Source attribution *International Monetary Fund — Articles XII, Sections 4–6 (Managing Director and staff) of the Agreement.* ### Section 5. Voting ### Composition of a member’s total votes - The total votes of each member shall be equal to the sum of its basic votes and its quota-based votes. - The basic votes of each member shall be the number of votes that results from the equal distribution among all the members of 5.502 percent of the aggregate sum of the total voting power of all the members, provided that there shall be no fractional basic votes. - The quota-based votes of each member shall be the number of votes that results from the allocation of one vote for each part of its quota equivalent to one hundred thousand special drawing rights. ### Adjustments for net purchases and net sales - Whenever voting is required under Article V, Section 4 or 5, each member shall have the number of votes to which it is entitled under (a) above adjusted - by the addition of one vote for the equivalent of each four hundred thousand special drawing rights of net sales of its currency from the general resources of the Fund up to the date when the vote is taken, or - by the subtraction of one vote for the equivalent of each four hundred thousand special drawing rights of its net purchases under Article V, Section 3(b) and (f) up to the date when the vote is taken, - provided that neither net purchases nor net sales shall be deemed at any time to exceed an amount equal to the quota of the member involved. ### Decision rule - Except as otherwise specifically provided, all decisions of the Fund shall be made by a majority of the votes cast. ### Source attribution *International Monetary Fund — Article XII, Section 5 (Voting) of the Agreement.* ### Section 6. Reserves, distribution of net income, and investment ### Annual determination and reserves use - The Fund shall determine annually what part of its net income shall be placed to general reserve or special reserve, and what part, if any, shall be distributed. - The Fund may use the special reserve for any purpose for which it may use the general reserve, except distribution. ### Distribution rules - If any distribution is made of the net income of any year, it shall be made to all members in proportion to their quotas. - The Fund, by a seventy percent majority of the total voting power, may decide at any time to distribute any part of the general reserve. Any such distribution shall be made to all members in proportion to their quotas. - Payments under (c) and (d) above shall be made in special drawing rights, provided that either the Fund or the member may decide that the payment to the member shall be made in its own currency. ### Investment Account: establishment and limits - The Fund may establish an Investment Account for the purposes of this subsection (f). The assets of the Investment Account shall be held separately from the other accounts of the General Department. - The Fund may decide to transfer to the Investment Account a part of the proceeds of the sale of gold in accordance with Article V, Section 12(g) and, by a seventy percent majority of the total voting power, may decide to transfer to the Investment Account, for immediate investment, currencies held in the General Resources Account. - The amount of these transfers shall not exceed the total amount of the general reserve and the special reserve at the time of the decision. ### Uses and governance of member currencies in Investment Account - The Fund may use a member’s currency held in the Investment Account for investment as it may determine, in accordance with rules and regulations adopted by the Fund by a seventy percent majority of the total voting power. The rules and regulations adopted pursuant to this provision shall be consistent with (vii), (viii), and (ix) below. - The income of investment may be invested in accordance with the provisions of this subsection (f). Income not invested shall be held in the Investment Account or may be used for meeting the expenses of conducting the business of the Fund. - The Fund may use a member’s currency held in the Investment Account to obtain the currencies needed to meet the expenses of conducting the business of the Fund. ### Termination, distribution, and transfers on reduction - The Investment Account shall be terminated in the event of liquidation of the Fund and may be terminated, or the amount of the investment may be reduced, prior to liquidation of the Fund by a seventy percent majority of the total voting power. - Upon termination of the Investment Account because of liquidation of the Fund, any assets in this account shall be distributed in accordance with the provisions of Schedule K, provided that a portion of these assets corresponding to the proportion of the assets transferred to this account under Article V, Section 12(g) to the total of the assets transferred to this account shall be deemed to be assets held in the Special Disbursement Account and shall be distributed in accordance with Schedule K, paragraph 2(a)(ii). - Upon termination of the Investment Account prior to liquidation of the Fund, a portion of the assets held in this account corresponding to the proportion of the assets transferred to this account under Article V, Section 12(g) to the total of the assets transferred to the account shall be transferred to the Special Disbursement Account if it has not been terminated, and the balance of the assets held in the Investment Account shall be transferred to the General Resources Account for immediate use in operations and transactions. - On a reduction of the amount of the investment by the Fund, a portion of the reduction corresponding to the proportion of the assets transferred to the Investment Account under Article V, Section 12(g) to the total of the assets transferred to this account shall be transferred to the Special Disbursement Account if it has not been terminated, and the balance of the reduction shall be transferred to the General Resources Account for immediate use in operations and transactions. ### Source attribution *International Monetary Fund — Article XII, Section 6 (Reserves, distribution of net income, and investment) of the Agreement.* ### Section 7. Publication of reports ### Reporting obligations - The Fund shall publish an annual report containing an audited statement of its accounts, and shall issue, at intervals of three months or less, a summary statement of its operations and transactions and its holdings of special drawing rights, gold, and currencies of members. - The Fund may publish such other reports as it deems desirable for carrying out its purposes. ### Source attribution *International Monetary Fund — Article XII, Section 7 (Publication of reports) of the Agreement.* ### Section 8. Communication of views to members ### Right to communicate informally - The Fund shall at all times have the right to communicate its views informally to any member on any matter arising under this Agreement. ### Source attribution *International Monetary Fund — Article XII, Section 8 (Communication of views to members) of the Agreement.* ### Article XIII. Offices and Depositories ### Location of principal office and branches - The principal office of the Fund shall be located in the territory of the member having the largest quota, and agencies or branch offices may be established in the territories of other members. ### Depositories: designation and holdings - Each member shall designate its central bank as a depository for all the Fund’s holdings of its currency, or if it has no central bank it shall designate such other institution as may be acceptable to the Fund. - The Fund may hold other assets, including gold, in the depositories designated by the five members having the largest quotas and in such other designated depositories as the Fund may select. - Initially, at least one-half of the holdings of the Fund shall be held in the depository designated by the member in whose territories the Fund has its principal office and at least forty percent shall be held in the depositories designated by the remaining four members referred to above. - All transfers of gold by the Fund shall be made with due regard to the costs of transport and anticipated requirements of the Fund. In an emergency the Executive Board may transfer all or any part of the Fund’s gold holdings to any place where they can be adequately protected. ### Guarantee of assets - Each member guarantees all assets of the Fund against loss resulting from failure or default on the part of the depository designated by it. ### Source attribution *International Monetary Fund — Articles XIII, Sections 1–3 (Offices and Depositories) of the Agreement.* ### Article XIV. Transitional Arrangements ### Notification and acceptance of obligations - Each member shall notify the Fund whether it intends to avail itself of the transitional arrangements in Section 2 of this Article, or whether it is prepared to accept the obligations of Article VIII, Sections 2, 3, and 4. - A member availing itself of the transitional arrangements shall notify the Fund as soon thereafter as it is prepared to accept these obligations. ### Exchange restrictions during transition - A member that has notified the Fund that it intends to avail itself of transitional arrangements under this provision may, notwithstanding the provisions of any other articles of this Agreement, maintain and adapt to changing circumstances the restrictions on payments and transfers for current international transactions that were in effect on the date on which it became a member. - Members shall have continuous regard in their foreign exchange policies to the purposes of the Fund, and, as soon as conditions permit, they shall take all possible measures to develop such commercial and financial arrangements with other members as will facilitate international payments and the promotion of a stable system of exchange rates. - Members shall withdraw restrictions maintained under this Section as soon as they are satisfied that they will be able, in the absence of such restrictions, to settle their balance of payments in a manner which will not unduly encumber their access to the general resources of the Fund. ### Fund oversight and representations - The Fund shall make annual reports on the restrictions in force under Section 2 of this Article. Any member retaining any restrictions inconsistent with Article VIII, Sections 2, 3, or 4 shall consult the Fund annually as to their further retention. - The Fund may, if it deems such action necessary in exceptional circumstances, make representations to any member that conditions are favorable for the withdrawal of any particular restriction, or for the general abandonment of restrictions, inconsistent with the provisions of any other articles of this Agreement. - The member shall be given a suitable time to reply to such representations. If the Fund finds that the member persists in maintaining restrictions which are inconsistent with the purposes of the Fund, the member shall be subject to Article XXVI, Section 2(a). ### Source attribution *International Monetary Fund — Article XIV, Sections 1–3 (Transitional Arrangements) of the Agreement.* ### Articles XV–XVIII. Special Drawing Rights; Departments; Allocation and Cancellation ### Authority and allocations (Article XV) - To meet the need, as and when it arises, for a supplement to existing reserve assets, the Fund is authorized to allocate special drawing rights in accordance with the provisions of Article XVIII to members that are participants in the Special Drawing Rights Department. - In addition, the Fund shall allocate special drawing rights to members that are participants in the Special Drawing Rights Department in accordance with the provisions of Schedule M. ### Valuation rule (Article XV, Section 2) - The method of valuation of the special drawing right shall be determined by the Fund by a seventy percent majority of the total voting power, provided, however, that an eighty-five percent majority of the total voting power shall be required for a change in the principle of valuation or a fundamental change in the application of the principle in effect. ### Separation of Departments (Article XVI) - All operations and transactions involving special drawing rights shall be conducted through the Special Drawing Rights Department. All other operations and transactions on the account of the Fund authorized by or under this Agreement shall be conducted through the General Department. - Operations and transactions pursuant to Article XVII, Section 2 shall be conducted through the General Department as well as the Special Drawing Rights Department. - All assets and property of the Fund, except resources administered under Article V, Section 2(b), shall be held in the General Department, provided that assets and property acquired under Article XX, Section 2 and Articles XXIV and XXV and Schedules H and I shall be held in the Special Drawing Rights Department. - Any assets or property held in one Department shall not be available to discharge or meet the liabilities, obligations, or losses of the Fund incurred in the conduct of the operations and transactions of the other Department, except that the expenses of conducting the business of the Special Drawing Rights Department shall be paid by the Fund from the General Department which shall be reimbursed in special drawing rights from time to time by assessments under Article XX, Section 4 made on the basis of a reasonable estimate of such expenses. ### Participants and holders (Article XVII) - Each member that deposits with the Fund an instrument undertaking all the obligations of a participant in the Special Drawing Rights Department shall become a participant, except that no member shall become a participant before the provisions pertaining exclusively to the Special Drawing Rights Department have entered into force and instruments have been deposited by members that have at least seventy-five percent of the total of quotas. - The Fund may hold special drawing rights in the General Resources Account and may accept and use them in operations and transactions conducted through the General Resources Account with participants. - The Fund may prescribe: - as holders, non-members, members that are non-participants, institutions that perform functions of a central bank for more than one member, and other official entities; - the terms and conditions on which prescribed holders may be permitted to hold special drawing rights and may accept and use them in operations and transactions with participants and other prescribed holders; and - the terms and conditions on which participants and the Fund through the General Resources Account may enter into operations and transactions in special drawing rights with prescribed holders. - An eighty-five percent majority of the total voting power shall be required for prescriptions under (i) above. ### Allocation and cancellation principles (Article XVIII) - In all its decisions with respect to the allocation and cancellation of special drawing rights the Fund shall seek to meet the long-term global need, as and when it arises, to supplement existing reserve assets in such manner as will promote the attainment of its purposes and will avoid economic stagnation and deflation as well as excess demand and inflation in the world. - The first decision to allocate special drawing rights shall take into account, as special considerations, a collective judgment that there is a global need to supplement reserves, and the attainment of a better balance of payments equilibrium, as well as the likelihood of a better working of the adjustment process in the future. - Decisions of the Fund to allocate or cancel special drawing rights shall be made for basic periods which shall run consecutively and shall be five years in duration. The first basic period shall begin on the date of the first decision to allocate special drawing rights or such later date as may be specified in that decision. Any allocations or cancellations shall take place at yearly intervals. - The rates at which allocations are to be made shall be expressed as percentages of quotas on the date of each decision to allocate. The rates at which special drawing rights are to be cancelled shall be expressed as percentages of net cumulative allocations of special drawing rights on the date of each decision to cancel. The percentages shall be the same for all participants. - For any basic period the Fund may provide that: - the duration of the basic period shall be other than five years; or - the allocations or cancellations shall take place at other than yearly intervals; or - the basis for allocations or cancellations shall be the quotas or net cumulative allocations on dates other than the dates of decisions to allocate or cancel. - A member that becomes a participant after a basic period starts shall receive allocations beginning with the next basic period in which allocations are made after it becomes a participant unless the Fund decides that the new participant shall start to receive allocations beginning with the next allocation after it becomes a participant. - A participant shall receive allocations of special drawing rights made pursuant to any decision to allocate unless: - the Governor for the participant did not vote in favor of the decision; and - the participant has notified the Fund in writing prior to the first allocation of special drawing rights under that decision that it does not wish special drawing rights to be allocated to it under the decision. - If on the effective date of any cancellation the amount of special drawing rights held by a participant is less than its share of the special drawing rights that are to be cancelled, the participant shall eliminate its negative balance as promptly as its gross reserve position permits and shall remain in consultation with the Fund for this purpose. Special drawing rights acquired by the participant after the effective date of the cancellation shall be applied against its negative balance and cancelled. ### Source attribution *International Monetary Fund — Articles XV–XVIII (Special Drawing Rights; Departments; Allocation and Cancellation) of the Agreement.* ### Section 3. Unexpected major developments ### Section 3. Unexpected major developments ### Authority to modify allocations and basic periods - The Fund may change the rates or intervals of allocation or cancellation during the rest of a basic period or change the length of a basic period or start a new basic period if at any time the Fund finds it desirable to do so because of unexpected major developments. (Art. XVIII, Sec. 3) ### Decisions on allocations and cancellations (Art. XVIII, Sec. 4) - Decisions under Section 2(a), (b), and (c) or Section 3 shall be made by the Board of Governors on the basis of proposals of the Managing Director concurred in by the Executive Board. - The Managing Director shall, before making any proposal, conduct consultations to ascertain that there is broad support among participants for the proposal and, for the first allocation, shall satisfy himself that the provisions of Section 1(b) have been met. - The Managing Director shall make proposals: - not later than six months before the end of each basic period; - if no decision has been taken with respect to allocation or cancellation for a basic period, whenever he is satisfied that the provisions of consultation and support have been met; - when, in accordance with Section 3, he considers it desirable to change rates or intervals of allocation or cancellation, change the length of a basic period, or start a new basic period; - within six months of a request by the Board of Governors or the Executive Board; - provided that if under (i), (iii), or (iv) he ascertains there is no proposal he considers consistent with Section 1 that has broad support, he shall report to the Board of Governors and to the Executive Board. - An eighty­five percent majority of the total voting power shall be required for decisions under Section 2(a), (b), and (c) or Section 3, except for decisions under Section 3 with respect to a decrease in the rates of allocation. (Art. XVIII, Sec. 4) ### Operations and transactions in special drawing rights (Art. XIX) - Use and counterparties: - Special drawing rights may be used in the operations and transactions authorized by or under the Agreement. (Art. XIX, Sec. 1) - A participant is entitled to use its special drawing rights to obtain an equivalent amount of currency from a participant designated under Section 5. (Art. XIX, Sec. 2(a)) - A participant may, in agreement with another participant, use its special drawing rights to obtain an equivalent amount of currency from the other participant. (Art. XIX, Sec. 2(b)) - Fund-prescribed operations and representations: - The Fund, by a seventy percent majority of the total voting power, may prescribe operations in which a participant is authorized to engage in agreement with another participant on such terms and conditions as the Fund deems appropriate. (Art. XIX, Sec. 2(c)) - The Fund may make representations to a participant that enters into operations under (b) or (c) that may be prejudicial to the process of designation or otherwise inconsistent with Article XXII; a participant that persists shall be subject to Article XXIII, Section 2(b). (Art. XIX, Sec. 2(d)) - Requirement of need: - In transactions under Section 2(a), a participant will be expected to use its special drawing rights only if it has a need because of its balance of payments or its reserve position or developments in its reserves, and not for the sole purpose of changing the composition of its reserves. (Art. XIX, Sec. 3(a)) - The use shall not be subject to challenge on that basis, but the Fund may make representations; persistent failure to fulfill the expectation shall subject the participant to Article XXIII, Section 2(b). (Art. XIX, Sec. 3(b)) - The Fund may waive the expectation in (a) where use by a participant from a designated participant would promote reconstitution under Section 6(a), prevent or reduce a negative balance of the other participant, or offset a failure by the other participant to fulfill the expectation in (a). (Art. XIX, Sec. 3(c)) ### Obligations to provide currency and designation of providers (Art. XIX, Sec. 4–5) - Obligation to provide currency: - A participant designated by the Fund under Section 5 shall provide on demand a freely usable currency to a participant using special drawing rights under Section 2(a). - A participant’s obligation to provide currency shall not extend beyond the point at which its holdings of special drawing rights in excess of its net cumulative allocation are equal to twice its net cumulative allocation or such higher limit as may be agreed between a participant and the Fund. (Art. XIX, Sec. 4(a)) - A participant may provide currency in excess of the obligatory limit or any agreed higher limit. (Art. XIX, Sec. 4(b)) - Designation principles: - The Fund shall ensure a participant can use its special drawing rights by designating participants to provide currency for specified amounts of special drawing rights for Sections 2(a) and 4. Designations shall follow general principles and other principles the Fund may adopt. (Art. XIX, Sec. 5(a)) - Designation principles include: - A participant shall be subject to designation if its balance of payments and gross reserve position is sufficiently strong, though a participant with a strong reserve position may be designated even with a moderate balance of payments deficit; designations shall promote over time a balanced distribution of holdings. (Art. XIX, Sec. 5(a)(i)) - Participants shall be subject to designation to promote reconstitution under Section 6(a), reduce negative balances, or offset failures to fulfill Section 3(a). (Art. XIX, Sec. 5(a)(ii)) - In designating participants, priority normally shall be given to those that need to acquire special drawing rights to meet the objectives under (ii). (Art. XIX, Sec. 5(a)(iii)) - To promote balanced distribution, the Fund shall apply the rules for designation in Schedule F or such rules as may be adopted; rules may be reviewed at any time and new rules adopted if necessary. (Art. XIX, Sec. 5(b)–(c)) ### Reconstitution rules (Art. XIX, Sec. 6) - Participants that use their special drawing rights shall reconstitute their holdings in accordance with the rules for reconstitution in Schedule G or such rules as may be adopted. - The rules for reconstitution may be reviewed at any time; unless new rules are adopted or rules are abrogated, the rules in force at the time of review shall continue to apply. - A seventy percent majority of the total voting power shall be required for decisions to adopt, modify, or abrogate the rules for reconstitution. (Art. XIX, Sec. 6) ### Exchange rates for transactions between participants (Art. XIX, Sec. 7) - Exchange rates shall be such that participants using special drawing rights shall receive the same value whatever currencies might be provided and whichever participants provide those currencies; the Fund shall adopt regulations to give effect to this principle. (Art. XIX, Sec. 7(a)) - The Fund, by an eighty­five percent majority of the total voting power, may adopt policies under which in exceptional circumstances the Fund, by a seventy percent majority of the total voting power, may authorize participants entering into transactions under Section 2(b) to agree on exchange rates other than those applicable under (a). (Art. XIX, Sec. 7(b)) - The Fund shall consult a participant on the procedure for determining rates of exchange for its currency. (Art. XIX, Sec. 7(c)) - For these purposes the term participant includes a terminating participant. (Art. XIX, Sec. 7(d)) ### SDR Department interest, charges, and payments (Art. XX; Art. XXI, Sec. 5) - Interest: - Interest at the same rate for all holders shall be paid by the Fund to each holder on the amount of its holdings of special drawing rights; the Fund shall pay the amount due whether or not sufficient charges are received to meet the payment of interest. (Art. XX, Sec. 1) - Charges: - Charges at the same rate for all participants shall be paid to the Fund by each participant on the amount of its net cumulative allocation of special drawing rights plus any negative balance of the participant or unpaid charges. (Art. XX, Sec. 2) - Rate determination: - The Fund shall determine the rate of interest by a seventy percent majority of the total voting power. The rate of charges shall be equal to the rate of interest. (Art. XX, Sec. 3) - Assessments: - When it is decided under Article XVI, Section 2 that reimbursement shall be made, the Fund shall levy assessments for this purpose at the same rate for all participants on their net cumulative allocations. (Art. XX, Sec. 4) - Payment of interest, charges, and assessments: - Interest, charges, and assessments shall be paid in special drawing rights. A participant that needs special drawing rights to pay any charge or assessment shall be obligated and entitled to obtain them, for currency acceptable to the Fund, in a transaction with the Fund conducted through the General Resources Account; if sufficient SDRs cannot be obtained this way, the participant shall be obligated and entitled to obtain them with a freely usable currency from a participant the Fund specifies. Special drawing rights acquired after the date for payment shall be applied against unpaid charges and cancelled. (Art. XXI, Sec. 5) ### Administration and legal protections (Art. XXI) - Administration: - The General Department and the Special Drawing Rights Department shall be administered in accordance with Article XII, with special provisions for meetings and voting related exclusively to the SDR Department. Executive Directors elected by members that are participants shall vote on matters exclusively pertaining to the SDR Department and cast votes allotted to those members. (Art. XXI, (a)(i)–(ii)) - Questions of general administration, including reimbursement under Article XVI, Section 2, and any question whether a matter pertains to both Departments or exclusively to the SDR Department shall be decided as if they pertained exclusively to the General Department; decisions affecting operations through both Departments shall be made by the majorities required for matters pertaining exclusively to each Department. (Art. XXI, (a)(iii)) - Tax and immunity: - In addition to privileges and immunities under Article IX, no tax of any kind shall be levied on special drawing rights or on operations or transactions in special drawing rights. (Art. XXI, (b)) - Interpretation and arbitration: - Questions of interpretation on matters pertaining exclusively to the SDR Department shall be submitted to the Executive Board pursuant to Article XXIX(a) only on request of a participant; only a participant may require referral to the Board of Governors under Article XXIX(b). The Board of Governors shall decide whether a Governor appointed by a member that is not a participant shall be entitled to vote in the Committee on Interpretation on such questions. (Art. XXI, (c)) - Disagreements between the Fund and a terminating participant or any participant during liquidation with respect to matters arising exclusively from participation in the SDR Department shall be submitted to arbitration in accordance with Article XXIX(c). (Art. XXI, (d)) ### General obligations and suspension of SDR operations (Art. XXII–XXIII) - General obligations: - Each participant undertakes to collaborate with the Fund and with other participants to facilitate the effective functioning of the SDR Department and the proper use of SDRs, and with the objective of making the SDR the principal reserve asset in the international monetary system. (Art. XXII) - Emergency suspension: - In the event of an emergency or unforeseen circumstances threatening Fund activities with respect to the SDR Department, the Executive Board, by an eighty­five percent majority of the total voting power, may suspend for a period of not more than one year the operation of any provisions relating to operations and transactions in SDRs; Article XXVII, Section 1(b), (c), and (d) shall then apply. (Art. XXIII, Sec. 1) - Failure to fulfill obligations: - If the Fund finds a participant has failed to fulfill obligations under Article XIX, Section 4, the right of the participant to use its SDRs shall be suspended unless the Fund otherwise decides. (Art. XXIII, Sec. 2(a)) - If the Fund finds a participant has failed to fulfill any other obligation with respect to SDRs, the Fund may suspend the right to use SDRs it acquires after the suspension. (Art. XXIII, Sec. 2(b)) - Regulations shall ensure a participant is informed immediately of complaints and given an adequate opportunity to state its case orally and in writing before action is taken; whenever informed of a complaint relating to (a) it shall not use SDRs pending disposition of the complaint. (Art. XXIII, Sec. 2(c)) - Suspension or limitation shall not affect a participant’s obligation to provide currency in accordance with Article XIX, Section 4. (Art. XXIII, Sec. 2(d)) - The Fund may terminate a suspension at any time; a suspension imposed for failure to fulfill obligations under Article XIX, Section 6(a) shall not be terminated until one hundred eighty days after the end of the first calendar quarter during which the participant complies with the rules for reconstitution. (Art. XXIII, Sec. 2(e)) - The right to use SDRs shall not be suspended because of ineligibility to use the Fund’s general resources under Article V, Section 5, Article VI, Section 1, or Article XXVI, Section 2(a); Article XXVI, Section 2 shall not apply because a participant has failed to fulfill any obligations with respect to SDRs. (Art. XXIII, Sec. 2(f)) ### Termination of participation (Art. XXIV) - Right to terminate: - Any participant may terminate its participation in the SDR Department at any time by transmitting a notice in writing to the Fund at its principal office; termination becomes effective on the date the notice is received. (Art. XXIV, Sec. 1(a)) - A participant that withdraws from membership in the Fund shall be deemed to have simultaneously terminated its participation in the SDR Department. (Art. XXIV, Sec. 1(b)) - Settlement on termination: - Upon termination, all operations and transactions by the terminating participant in SDRs shall cease except as permitted under agreement to facilitate settlement or as provided in Sections 3, 5, and 6 or in Schedule H; interest and charges accrued to the date of termination and assessments levied before that date but not paid shall be paid in SDRs. (Art. XXIV, Sec. 2(a)) - The Fund shall be obligated to redeem all SDRs held by the terminating participant, and the terminating participant shall be obligated to pay to the Fund an amount equal to its net cumulative allocation and any other amounts due because of participation; these obligations shall be set off against each other and the amount of SDRs used in the setoff shall be cancelled. (Art. XXIV, Sec. 2(b)) - A settlement shall be made with reasonable despatch by agreement between the terminating participant and the Fund with respect to any obligation after the setoff; if agreement is not reached promptly the provisions of Schedule H shall apply. (Art. XXIV, Sec. 2(c)) *International Monetary Fund.* ### Section 3. Interest and charges ### Section 3. Interest and charges ### Interest and charges on balances after termination - After the date of termination the Fund shall pay interest on any outstanding balance of special drawing rights held by a terminating participant. - The terminating participant shall pay charges on any outstanding obligation owed to the Fund at the times and rates prescribed under Article XX. - Payment shall be made in special drawing rights. - A terminating participant shall be entitled to obtain special drawing rights with a freely usable currency to pay charges or assessments: - in a transaction with a participant specified by the Fund or by agreement from any other holder; or - to dispose of special drawing rights received as interest in a transaction with any participant designated under Article XIX, Section 5 or by agreement with any other holder. - (Art. XXIV, Sec. 2–3) ### Settlement of obligation to the Fund (terminating participant pays Fund) - Currency received by the Fund from a terminating participant shall be used by the Fund to redeem special drawing rights held by participants in proportion to the amount by which each participant’s holdings of special drawing rights exceed its net cumulative allocation at the time the currency is received by the Fund. - Special drawing rights so redeemed and special drawing rights obtained by a terminating participant under the provisions of this Agreement to meet any installment due under an agreement on settlement or under Schedule H and set off against that installment shall be cancelled. - (Art. XXIV, Sec. 4) ### Settlement of obligation to a terminating participant (Fund redeems SDRs) - Whenever the Fund is required to redeem special drawing rights held by a terminating participant, redemption shall be made with currency provided by participants specified by the Fund. - Specified participants shall be designated in accordance with the principles in Article XIX, Section 5. - Each specified participant shall provide at its option: - the currency of the terminating participant; or - a freely usable currency to the Fund; - and shall receive an equivalent amount of special drawing rights. - A terminating participant may use its special drawing rights to obtain its own currency, a freely usable currency, or any other asset from any holder, if the Fund so permits. - (Art. XXIV, Sec. 5) ### General Resources Account transactions to facilitate settlement - To facilitate settlement with a terminating participant, the Fund may decide that a terminating participant shall: - (i) use any special drawing rights held by it after the setoff in Section 2(b) of Article XXIV, when they are to be redeemed, in a transaction with the Fund conducted through the General Resources Account to obtain its own currency or a freely usable currency at the option of the Fund; or - (ii) obtain special drawing rights in a transaction with the Fund conducted through the General Resources Account for a currency acceptable to the Fund to meet any charges or installment due under an agreement or the provisions of Schedule H. - (Art. XXIV, Sec. 6) ### Liquidation of the Special Drawing Rights Department - The Special Drawing Rights Department may not be liquidated except by decision of the Board of Governors. - In an emergency the Executive Board may temporarily suspend allocations or cancellations and all operations and transactions in special drawing rights pending decision by the Board of Governors. - A decision by the Board of Governors to liquidate the Fund is a decision to liquidate both the General Department and the Special Drawing Rights Department. - If liquidated: - all allocations or cancellations and all operations and transactions in special drawing rights and the activities of the Fund with respect to the Special Drawing Rights Department shall cease except those incidental to orderly discharge of obligations and except those set out in: this Article, Article XX, Article XXI(d), Article XXIV, Article XXIX(c), Schedule H, any agreement reached under Article XXIV subject to paragraph 4 of Schedule H, and Schedule I. - interest and charges that accrued to the date of liquidation and assessments levied before that date but not paid shall be paid in special drawing rights. - the Fund shall be obligated to redeem all special drawing rights held by holders. - each participant shall be obligated to pay the Fund an amount equal to its net cumulative allocation of special drawing rights and such other amounts as may be due and payable because of its participation in the Special Drawing Rights Department. - Liquidation shall be administered in accordance with the provisions of Schedule I. - (Art. XXV) ### Withdrawal from membership and related settlements - Any member may withdraw from the Fund at any time by transmitting a notice in writing to the Fund at its principal office; withdrawal becomes effective on the date such notice is received. - Compulsory withdrawal process: - (a) If a member fails to fulfill any obligations under this Agreement, the Fund may declare the member ineligible to use the general resources of the Fund. - (b) If, after a reasonable period following a declaration of ineligibility, the member persists in failure, the Fund may, by a seventy percent majority of the total voting power, suspend the voting rights of the member. During suspension, Schedule L applies. The Fund may terminate the suspension at any time by a seventy percent majority of the total voting power. - (c) If, after a reasonable period following suspension, the member persists in failure, that member may be required to withdraw from membership by a decision of the Board of Governors carried by a majority of the Governors having eighty-five percent of the total voting power. - (d) Regulations shall ensure that before action under (a), (b), or (c) the member is informed in reasonable time of the complaint and given an adequate opportunity to state its case orally and in writing. - Settlement of accounts on withdrawal: - Normal operations and transactions of the Fund in the withdrawing member’s currency shall cease. - Settlement of all accounts between it and the Fund shall be made with reasonable despatch by agreement; if agreement is not reached promptly, Schedule J applies. - (Art. XXVI, Sec. 1–3) ### Emergency provisions and liquidation of the Fund - Temporary suspension by the Executive Board (by an eighty-five percent majority of the total voting power) for not more than one year may suspend operation of specified provisions in an emergency or unforeseen circumstances threatening Fund activities: - (i) Article V, Sections 2, 3, 7, 8(a)(i) and (e); - (ii) Article VI, Section 2; - (iii) Article XI, Section 1; - (iv) Schedule C, paragraph 5. - A suspension may be extended beyond one year only by the Board of Governors, by an eighty-five percent majority of the total voting power, for an additional period of not more than two years if the emergency continues. - The Executive Board may, by a majority of the total voting power, terminate such suspension at any time. - The Fund may adopt rules with respect to the subject matter of a provision during the period in which its operation is suspended. - Liquidation of the Fund: - The Fund may not be liquidated except by decision of the Board of Governors. - In an emergency the Executive Board may temporarily suspend all operations and transactions pending decision by the Board of Governors. - If the Board of Governors decides to liquidate the Fund: - the Fund shall cease activities except those incidental to orderly collection and liquidation of assets and settlement of liabilities; - all obligations of members under this Agreement shall cease except those set out in this Article, in Article XXIX(c), in Schedule J, paragraph 7, and in Schedule K; - liquidation shall be administered in accordance with the provisions of Schedule K. - (Art. XXVII, Sec. 1–2) ### Amendments procedure - Any proposal to modify the Agreement shall be communicated to the chairman of the Board of Governors who shall bring the proposal before the Board of Governors. - If approved by the Board of Governors, the Fund shall ask all members whether they accept the proposed amendment. - When three-fifths of the members, having eighty-five percent of the total voting power, have accepted the proposed amendment, the Fund shall certify the fact by formal communication to all members. - Acceptance by all members is required for amendments modifying: - (i) the right to withdraw from the Fund (Article XXVI, Section 1); - (ii) the provision that no change in a member’s quota shall be made without its consent (Article III, Section 2(d)); - (iii) the provision that no change may be made in the par value of a member’s currency except on the proposal of that member (Schedule C, paragraph 6). - Amendments enter into force for all members three months after the date of the formal communication unless a shorter period is specified. - (Art. XXVIII) ### Interpretation, arbitration, and final recourse - Questions of interpretation arising between a member and the Fund or between members shall be submitted to the Executive Board for decision; a member particularly affected is entitled to representation in accordance with Article XII, Section 3(j). - Any member may require, within three months from the date of the Executive Board decision, that the question be referred to the Board of Governors, whose decision shall be final. Referred questions are considered by a Committee on Interpretation of the Board of Governors; each Committee member has one vote. A Committee decision is the decision of the Board of Governors unless the Board, by an eighty-five percent majority of the total voting power, decides otherwise. - Pending the result of a reference to the Board of Governors the Fund may act on the basis of the Executive Board decision. - Disagreements arising between the Fund and a withdrawing member, or between the Fund and any member during liquidation, shall be submitted to arbitration by a tribunal of three arbitrators: one appointed by the Fund, one by the member, and an umpire who, unless parties agree otherwise, shall be appointed by the President of the International Court of Justice or other authority prescribed by Fund regulation. The umpire has full power to settle procedural questions where parties disagree. - (Art. XXIX, Art. XXIX(c)) ### Explanation of terms and definitions - Fund’s holdings of a member’s currency in the General Resources Account include any securities accepted by the Fund under Article III, Section 4. - Stand-by arrangement: a decision by the Fund assuring a member it will be able to make purchases from the General Resources Account in accordance with the decision during a specified period and up to a specified amount. - Reserve tranche purchase: a purchase by a member of special drawing rights or the currency of another member in exchange for its own currency which does not cause the Fund’s holdings of the member’s currency in the General Resources Account to exceed its quota, subject to specified exclusions. - Payments for current transactions means payments which are not for the purpose of transferring capital and includes, without limitation: - (1) all payments due in connection with foreign trade, other current business, including services, and normal short-term banking and credit facilities; - (2) payments due as interest on loans and as net income from other investments; - (3) payments of moderate amount for amortization of loans or for depreciation of direct investments; and - (4) moderate remittances for family living expenses. - Net cumulative allocation of special drawing rights means the total amount of special drawing rights allocated to a participant less its share of special drawing rights that have been cancelled under Article XVIII, Section 2(a). - A freely usable currency means a member’s currency that the Fund determines (i) is, in fact, widely used to make payments for international transactions, and (ii) is widely traded in the principal exchange markets. - (Art. XXX, Art. XXXI definitions) ### Final provisions on entry into force and signature - The Agreement shall enter into force when it has been signed on behalf of governments having sixty-five percent of the total of the quotas set forth in Schedule A and when the instruments referred to in Section 2(a) of Article XXXI have been deposited on their behalf, but in no event shall this Agreement enter into force before May 1, 1945. - Signature and accession rules: - Each government signing shall deposit with the Government of the United States of America an instrument stating acceptance in accordance with its law and that it has taken all steps necessary to carry out obligations under the Agreement. - Each country becomes a member as from the date of deposit of that instrument, except that no country shall become a member before the Agreement enters into force under Section 1. - At signature each government shall transmit to the Government of the United States of America one one-hundredth of one percent of its total subscription in gold or United States dollars for administrative expenses; the Government of the United States of America shall hold such funds in a special deposit account and transmit them to the Board of Governors when the initial meeting has been called. If the Agreement has not come into force by December 31, 1945, such funds shall be returned. - The Agreement shall remain open for signature at Washington on behalf of the governments whose names are set forth in Schedule A until December 31, 1945. - (Art. XXXI, Sec. 1–2; Sec. 2(a)–(g)) ### Schedule A — Quotas (In millions of United States dollars) - Australia . . . . . . . . . . . . . . . . 200 - Belgium . . . . . . . . . . . . . . . . . 225 - Bolivia . . . . . . . . . . . . . . . . . . 10 - Brazil . . . . . . . . . . . . . . . . . . 150 - Canada . . . . . . . . . . . . . . . . . 300 - Chile . . . . . . . . . . . . . . . . . . . 50 - China . . . . . . . . . . . . . . . . . . 550 - Colombia . . . . . . . . . . . . . . . . 50 - Costa Rica . . . . . . . . . . . . . . . . 5 - Cuba . . . . . . . . . . . . . . . . . . . 50 - Czechoslovakia . . . . . . . . . . 125 - Denmark* . . . . . . . . . . . . . . . . * - Dominican Republic . . . . . . . . . 5 - Ecuador . . . . . . . . . . . . . . . . . 5 - Egypt . . . . . . . . . . . . . . . . . . . 45 - El Salvador . . . . . . . . . . . . . .2.5 - Ethiopia . . . . . . . . . . . . . . . . . 6 - France . . . . . . . . . . . . . . . . 450 - Greece . . . . . . . . . . . . . . . . . . 40 - Guatemala . . . . . . . . . . . . . . . 5 - Haiti . . . . . . . . . . . . . . . . . . . . 5 - Honduras . . . . . . . . . . . . . .2.5 - Iceland . . . . . . . . . . . . . . . . . . 1 - India . . . . . . . . . . . . . . . . . . . 400 - Iran . . . . . . . . . . . . . . . . . . . . . 25 - Iraq . . . . . . . . . . . . . . . . . . . . . . 8 - Liberia . . . . . . . . . . . . . . . . . .5 - Luxembourg . . . . . . . . . . . . . 10 - Mexico . . . . . . . . . . . . . . . . . . 90 - Netherlands . . . . . . . . . . . . . 275 - New Zealand . . . . . . . . . . . . . . 50 - Nicaragua . . . . . . . . . . . . . . . . . 2 - Norway . . . . . . . . . . . . . . . . . . 50 - Panama . . . . . . . . . . . . . . . . .5 - Paraguay . . . . . . . . . . . . . . . . . 2 - Peru . . . . . . . . . . . . . . . . . . . . 25 - Philippine Commonwealth . . . . .15 - Poland . . . . . . . . . . . . . . . . . 125 - Union of South Africa . . . . . . 100 - Union of Soviet Socialist Republics . . . . . . . . . . . . . . 1200 - United Kingdom . . . . . . . . . . 1300 - United States . . . . . . . . . . . . 2750 - Uruguay . . . . . . . . . . . . . . . . . 15 - Venezuela . . . . . . . . . . . . . . . . 15 - Yugoslavia . . . . . . . . . . . . . . . . 60 - *The quota of Denmark shall be determined by the Fund after the Danish Government has declared its readiness to sign this Agreement but before signature takes place. - (Schedule A) *Source: Articles of Agreement, International Monetary Fund.* ### 1. Repurchase obligations that have accrued pursuant to Article V, ### aa - 1. Repurchase obligations that have accrued pursuant to Article V, ### Repurchase obligations accrued before second amendment - Repurchase obligations that have accrued pursuant to Article V, Section 7(b) before the date of the second amendment of this Agreement and that remain undischarged at that date shall be discharged not later than the date or dates at which the obligations had to be discharged in accordance with the provisions of this Agreement before the second amendment. ### Conversion of gold obligations to special drawing rights (SDRs) - A member shall discharge with special drawing rights any obligation to pay gold to the Fund in repurchase or as a subscription that is outstanding at the date of the second amendment of this Agreement, but the Fund may prescribe that these payments may be made in whole or in part in the currencies of other members specified by the Fund. - A nonparticipant shall discharge an obligation that must be paid in special drawing rights pursuant to this provision with the currencies of other members specified by the Fund. ### Gold–SDR equivalence and valuation - For the purposes of conversion to SDRs: "0.888 671 gram of fine gold shall be equivalent to one special drawing right". - The amount of currency payable under the conversion provision shall be determined on that basis and on the basis of the value of the currency in terms of the special drawing right at the date of discharge. ### Repurchase of excess currency holdings - A member’s currency held by the Fund in excess of seventy­five percent of the member’s quota at the date of the second amendment of this Agreement and not subject to repurchase under the accrued-obligations clause shall be repurchased as follows: - (i) Holdings that resulted from a purchase shall be repurchased in accordance with the policy on the use of the Fund’s general resources under which the purchase was made. - (ii) Other holdings shall be repurchased not later than four years after the date of the second amendment of this Agreement. ### Applicability and continuity of rules - Repurchases under accrued-obligations clause not subject to SDR conversion, repurchases of excess holdings, and any specification of currencies under the SDR conversion provision shall be in accordance with Article V, Section 7(i). - All rules and regulations, rates, procedures, and decisions in effect at the date of the second amendment of this Agreement shall remain in effect until they are changed in accordance with the provisions of this Agreement. ### Transitional gold-sale arrangements (if equivalent arrangements not completed) - If arrangements equivalent in effect to subparagraphs (a) and (b) below have not been completed before the date of the second amendment: - (a) The Fund shall sell up to 25 million ounces of fine gold held by it on August 31, 1975, to those members that were members on that date and that agree to buy it, in proportion to their quotas on that date. The sale to a member under this subparagraph (a) shall be made in exchange for its currency and at a price equivalent at the time of sale to one special drawing right per 0.888 671 gram of fine gold. - (b) The Fund shall sell up to 25 million ounces of fine gold held by it on August 31, 1975, for the benefit of developing members that were members on that date, provided that the part of any profits or surplus value of the gold that corresponds to the proportion of such a member’s quota on August 31, 1975, to the total of the quotas of all members on that date shall be transferred directly to each such member. - Requirements under Article V, Section 12(c) concerning consultation, concurrence, or exchange of a member’s currency shall apply with respect to currency received by the Fund as a result of sales of gold under subparagraph (b), other than sales to a member in return for its own currency, and placed in the General Resources Account. - Upon sale of gold under paragraph 7, an amount of the proceeds in the currencies received equivalent at the time of sale to one special drawing right per 0.888 671 gram of fine gold shall be placed in the General Resources Account. - Other assets held by the Fund under arrangements pursuant to subparagraph (b) shall be held separately from the general resources of the Fund; assets that remain subject to disposition by the Fund upon termination of arrangements pursuant to (b) shall be transferred to the Special Disbursement Account. ### Par values: establishment, change, and termination - The Fund shall notify members that par values may be established for the purposes of this Agreement in terms of the special drawing right, or in terms of such other common denominator as is prescribed by the Fund; the common denominator shall not be gold or a currency. - A member intending to establish a par value shall propose a par value to the Fund within a reasonable time after notice. - A member that does not intend to establish a par value shall consult with the Fund and ensure its exchange arrangements are consistent with the purposes of the Fund and adequate to fulfill obligations under Article IV, Section 1. - The Fund shall concur in or object to a proposed par value within a reasonable period after receipt; a proposed par value shall not take effect if the Fund objects. The Fund shall not object because of the domestic social or political policies of the proposing member. - Each member that has a par value undertakes to apply appropriate measures so that the maximum and minimum rates for spot exchange transactions between its currency and currencies of other members maintaining par values shall not differ from parity by more than four and one-half percent or by such other margin(s) as the Fund may adopt by an eighty­five percent majority of the total voting power. - A member shall not propose a change in par value except to correct, or prevent the emergence of, a fundamental disequilibrium; changes may be made only on the proposal of the member and only after consultation with the Fund. - The Fund shall concur in or object to proposed changes within a reasonable period; the Fund shall concur if satisfied the change is necessary to correct or prevent a fundamental disequilibrium and shall not object because of a member’s domestic social or political policies. A proposed change shall not take effect if the Fund objects. If a member changes par value despite the Fund’s objection, the member shall be subject to Article XXVI, Section 2. The Fund shall discourage maintenance of an unrealistic par value. - A par value established under this Agreement shall cease to exist if the member informs the Fund of intent to terminate it; the Fund may object to termination by an eighty­five percent majority of the total voting power. If a member terminates a par value despite the Fund’s objection, the member shall be subject to Article XXVI, Section 2. - A par value shall cease to exist if the Fund finds the member does not maintain rates for a substantial volume of exchange transactions in accordance with the four-and-one-half percent rule, provided the Fund first consults the member and gives sixty days notice of its intention to consider making such a finding. - If a par value has ceased to exist, the member shall consult with the Fund and ensure its exchange arrangements are consistent with the Fund’s purposes and adequate to fulfill Article IV, Section 1 obligations. - A member whose par value has ceased to exist may at any time propose a new par value for its currency. - Notwithstanding other provisions, by a seventy percent majority of the total voting power the Fund may make uniform proportionate changes in all par values if the SDR is the common denominator and the changes will not affect the value of the SDR. A member may opt out of such a change by informing the Fund within seven days after the Fund’s action. ### Council: composition, functions, and powers - Each member or group of members that has the number of votes allotted to it cast by an Executive Director shall appoint to the Council one Councillor (a Governor, Minister, or person of comparable rank) and may appoint not more than seven Associates. The Board of Governors may change the number of Associates by an eighty­five percent majority of total voting power. A Councillor or Associate serves until a new appointment or next regular election of Executive Directors, whichever is sooner. - Executive Directors (or their Alternates) and Associates may attend Council meetings unless the Council decides to hold a restricted session. Each member or group appointing a Councillor shall appoint an Alternate entitled to attend and act in the Councillor’s absence. - The Council shall supervise the management and adaptation of the international monetary system, including the continuing operation of the adjustment process and developments in global liquidity, and shall review developments in the transfer of real resources to developing countries. - The Council shall consider proposals pursuant to Article XXVIII(a) to amend the Articles of Agreement. - The Board of Governors may delegate to the Council authority to exercise any powers of the Board except powers conferred directly on the Board of Governors by the Agreement. - Each Councillor is entitled to cast the number of votes allotted under Article XII, Section 5 to the member or group appointing him; a Councillor appointed by a group may cast votes allotted to each member in the group separately. If the number of votes allotted to a member cannot be cast by an Executive Director, the member may arrange with a Councillor to cast its votes. - The Council shall not take action pursuant to powers delegated by the Board that is inconsistent with any action taken by the Board of Governors; the Executive Board shall not take action pursuant to powers delegated by the Board that is inconsistent with actions taken by either the Board of Governors or the Council. - The Council shall select a Councillor as chairman, adopt necessary regulations, determine procedures, and hold meetings as provided by the Council or called by the Executive Board. - The Council has powers corresponding to those of the Executive Board under specified provisions (Article XII, Section 2(c),(f),(g),(j); Article XVIII, Section 4(a) and 4(c)(iv); Article XXIII, Section 1; Article XXVII, Section 1(a)). - For decisions by the Council on matters pertaining exclusively to the Special Drawing Rights Department, only Councillors appointed by a member that is a participant or a group with at least one participant shall be entitled to vote; such Councillors shall cast votes allotted to the participant(s) that appointed them. - The Council may by regulation enable the Executive Board to obtain a vote of Councillors on a specific question without a meeting when delay would be inappropriate and a special meeting unwarranted. - Article IX, Section 8 shall apply to Councillors, their Alternates, Associates, and others entitled to attend Council meetings. - When an Executive Director is entitled to cast votes allotted to a member pursuant to Article XII, Section 3(i)(iii), the Councillor appointed by the group whose members elected that Executive Director shall be entitled to vote and cast the number of votes allotted to that member. ### Transitional provisions with respect to Executive Directors - The first sentence of Article XII, Section 2(a) shall be deemed to include a reference to the Council. - Upon entry into force of the relevant Schedule: - (a) Each Executive Director who was appointed pursuant to former Article XII, Sections 3(b)(i) or 3(c) and was in office immediately prior to entry into force shall be deemed to have been elected by the member who appointed him. - (b) Each Executive Director who cast the number of votes of a member pursuant to former Article XII, Section 3(i)(ii) immediately prior to entry into force shall be deemed to have been elected by such a member. ### Designation rules during the first basic period - Participants subject to designation under Article XIX, Section 5(a)(i) shall be designated for such amounts as will promote over time equality in the ratios of the participants’ holdings of SDRs in excess of their net cumulative allocations to their official holdings of gold and foreign exchange. - The designation formula shall: - (i) designate participants in proportion to their official holdings of gold and foreign exchange when the described ratios are equal; and - (ii) designate in such manner as gradually to reduce the difference between low and high ratios. ### Reconstitution rules during the first basic period - Participants shall use and reconstitute SDR holdings so that five years after the first allocation and at the end of each calendar quarter thereafter, the average of total daily holdings of SDRs over the most recent five-year period will be not less than thirty percent of the average of daily net cumulative allocation of SDRs over the same period. - Two years after the first allocation and at the end of each calendar month thereafter the Fund shall calculate for each participant whether and to what extent the participant would need to acquire SDRs between the date of calculation and the end of any five-year period to comply with the reconstitution requirement. The Fund shall adopt regulations on calculation bases and timing of designation under Article XIX, Section 5(a)(ii) to assist compliance. - The Fund shall give special notice to a participant when calculations indicate it is unlikely to comply with the reconstitution requirement unless it ceases to use SDRs for the remainder of the period covered by the calculation. - A participant needing to acquire SDRs to fulfill the obligation shall be obligated and entitled to obtain them for currency acceptable to the Fund in a transaction with the Fund conducted through the General Resources Account. If sufficient SDRs cannot be obtained this way, the participant shall be obligated and entitled to obtain them with a freely usable currency from a participant specified by the Fund. - Participants shall also pay due regard to pursuing over time a balanced relationship between their holdings of SDRs and their other reserves. - If a participant fails to comply with reconstitution rules, the Fund shall determine whether circumstances justify suspension under Article XXIII, Section 2(b). ### Termination of participation: settlement and redemption rules - If the obligation remaining after setoff under Article XXIV, Section 2(b) is to the terminating participant and agreement on settlement is not reached within six months of termination: - The Fund shall redeem this balance of SDRs in equal half-yearly installments within a maximum of five years of the date of termination. - The Fund shall redeem this balance as it may determine either (a) by payment to the terminating participant of amounts provided by remaining participants to the Fund in accordance with Article XXIV, Section 5, or (b) by permitting the terminating participant to use its SDRs to obtain its own currency or a freely usable currency from a participant specified by the Fund, the General Resources Account, or any other holder. - If the obligation remaining after setoff is to the Fund and agreement on settlement is not reached within six months of termination: - The terminating participant shall discharge this obligation in equal half-yearly installments within three years of the date of termination or within such longer period as may be fixed by the Fund. - The terminating participant shall discharge the obligation as the Fund may determine either (a) by payment to the Fund of a freely usable currency, or (b) by obtaining SDRs, in accordance with Article XXIV, Section 6, from the General Resources Account or in agreement with a participant specified by the Fund or from any other holder, and the setoff of these SDRs against the installment due. ### Administration of liquidation of the Special Drawing Rights Department - Provisions for discharge and setoff of obligations related to termination of participation apply in the administration of liquidation of the Special Drawing Rights Department in accordance with the settlement and redemption rules specified above. *International Monetary Fund* ### 3. Installments under either 1 or 2 above shall fall due six months ### aa - 3. Installments under either 1 or 2 above shall fall due six months ### Timing of installments and default consequences - Installments under either 1 or 2 fall due six months after the date of termination and at intervals of six months thereafter. - During liquidation of the Special Drawing Rights Department, participants shall discharge obligations in ten half-yearly installments, or in such longer period as the Fund may decide is needed. - The first half-yearly payment in liquidation is due six months after the decision to liquidate the Special Drawing Rights Department. - While a participant is in default with respect to any payment required by 1 or 5 of Schedule I, no amounts shall be paid to it in accordance with 3 or 5 of Schedule I. ### Liquidation of the Special Drawing Rights Department (Schedule I) - If the Special Drawing Rights Department goes into liquidation under Article XXV within six months of a participant’s termination, settlement between the Fund and that government shall be made in accordance with Article XXV and Schedule I. - If the Fund itself is decided to be liquidated within six months of the decision to liquidate the Special Drawing Rights Department, liquidation of the Special Drawing Rights Department shall not proceed until special drawing rights held in the General Resources Account have been distributed in accordance with the rule set out (apportionment among participants in proportion to amounts due after distributions under Schedule K). - Redemption order and method with amounts received under Schedule I, paragraph 1: - (a) SDRs held by governments that terminated participation more than six months before the Board of Governors’ decision to liquidate shall be redeemed in accordance with terms of any agreement under Article XXIV or Schedule H. - (b) SDRs held by holders that are not participants shall be redeemed before those held by participants, in proportion to amounts held by each holder. - (c) For participants, the Fund determines the proportion of SDRs held in relation to net cumulative allocation and redeems from participants with the highest proportion progressively until proportions equalize, continuing the process until available redemption is exhausted. - Any amount a participant is entitled to receive in redemption under paragraph 3 shall be set off against any amount to be paid under paragraph 1. - Interest and charges during liquidation: - The Fund shall pay interest on the amount of SDRs held by holders. - Each participant shall pay charges on the net cumulative allocation of SDRs to it less payments made under paragraph 1. - Rates of interest and charges and time of payment are determined by the Fund. - Payments of interest and charges shall be made in SDRs to the extent possible. - A participant without sufficient SDRs to meet charges shall pay with a currency specified by the Fund. - SDRs received as charges in amounts needed for administrative expenses shall not be used for payment of interest but shall be transferred to the Fund and redeemed first with the currencies used by the Fund to meet its expenses. - Equalization and final closure: - If after final payments participants not in default do not hold SDRs in the same proportion to net cumulative allocation, those holding a lower proportion shall purchase from those holding a higher proportion as arranged by the Fund to equalize proportions. - Each participant in default shall pay to the Fund its own currency equal to its default; the Fund shall apportion this currency and residual claims among participants in proportion to the SDRs held by each and these SDRs shall be cancelled. - The Fund shall then close the books of the Special Drawing Rights Department and all of the Fund’s liabilities arising from allocations of SDRs and administration of the SDR Department shall cease. - Guarantees by participants whose currency is distributed: - Each participant whose currency is distributed guarantees the unrestricted use of such currency at all times for purchase of goods or payment of sums due to it or persons in its territories. - Each such participant agrees to compensate other participants for any loss resulting from the difference between the value at which the Fund distributed its currency under Schedule I and the value realized by such participants on disposal. ### Settlement of accounts with withdrawing members (Schedule J) - General settlement principles: - Settlement of accounts with respect to the General Resources Account shall be made according to paragraphs 1 to 6 of Schedule J. - The Fund is obligated to pay to a member withdrawing an amount equal to its quota, plus any other amounts due from the Fund, less amounts due to the Fund, including charges accruing after the date of its withdrawal; but no payment shall be made until six months after the date of withdrawal. - Payments shall be made in the currency of the withdrawing member; the Fund may transfer holdings of that currency from the Special Disbursement Account or the Investment Account in exchange for an equivalent amount of other members’ currencies with their concurrence. - If Fund’s holdings of withdrawing member’s currency are insufficient: - Balance shall be paid in a freely usable currency, or in such other manner as agreed. - If no agreement within six months of withdrawal, the Fund shall pay the currency in question forthwith; any balance due shall be paid in ten half-yearly installments during the ensuing five years. - Each installment may be paid, at the Fund’s option, either in the withdrawing member’s currency acquired after withdrawal or in a freely usable currency. - Remedies and guarantees: - If the Fund fails to meet any installment due, the withdrawing member may require payment in any currency held by the Fund except currencies declared scarce under Article VII, Section 3. - If Fund’s holdings of the withdrawing member’s currency exceed the amount due and no agreement is reached within six months, the former member must redeem excess in a freely usable currency at the rates the Fund would sell such currencies at the date of withdrawal. - Redemption must be completed within five years or such longer period as fixed by the Fund, but not more than one-tenth of the Fund’s excess holdings in any half-yearly period. - If the withdrawing member fails to redeem, the Fund may orderly liquidate in any market the amount that should have been redeemed. - Members desiring to obtain the currency of a withdrawn member shall acquire it by purchase from the Fund to the extent they have access to general resources and the currency is available under paragraph 4. - Withdrawing member guarantees unrestricted use at all times of currency disposed under paragraphs 4 and 5, and shall compensate the Fund for any loss resulting from difference between SDR value on date of withdrawal and value realized by the Fund on disposal. - Special cases: - If withdrawing member is indebted as a result of transactions through the Special Disbursement Account under Article V, Section 12(f)(ii), indebtedness shall be discharged in accordance with its terms. - If the Fund holds withdrawing member’s currency in Special Disbursement Account or Investment Account, the Fund may exchange in any market for currencies of members the amount remaining after use under paragraph 1; proceeds shall be kept in that account and applicable redemption and guarantee provisions apply. - If the Fund holds obligations of withdrawing member in Special Disbursement Account or Investment Account, the Fund may hold them until maturity or dispose sooner; proceeds governed by paragraph 8. - If the Fund goes into liquidation under Article XXVII, Section 2 within six months of the date of withdrawal, accounts between the Fund and that government shall be settled in accordance with Article XXVII, Section 2 and Schedule K. ### Administration of Fund liquidation and distribution of assets (Schedule K) - Priority in distribution of assets upon liquidation: - Liabilities other than repayment of subscriptions have priority. - Order of assets used to meet each such liability: - (a) the currency in which the liability is payable; - (b) gold; - (c) all other currencies in proportion, so far as may be practicable, to the quotas of the members. - After discharge of liabilities, balance of assets distributed as follows: - (a)(i) Calculate value of gold held on August 31, 1975 that it continues to hold on date of decision to liquidate, in accordance with paragraph 9 and also on basis of one special drawing right per 0.888 671 gram of fine gold on the date of liquidation; gold equivalent to the excess of the former value over the latter distributed to members that were members on August 31, 1975 in proportion to their quotas on that date. - (ii) Distribute any assets held in the Special Disbursement Account on the date of decision to liquidate to members that were members on August 31, 1975 in proportion to their quotas on that date; each type of asset distributed proportionately to members. - (b) Distribute remaining holdings of gold among members whose currencies are held by the Fund in amounts less than their quotas, in proportions, but not in excess of, amounts by which their quotas exceed the Fund’s holdings of their currencies. - (c) Distribute to each member one-half the Fund’s holdings of its currency but not to exceed fifty percent of its quota. - (d) Apportion the remainder of holdings of gold and each currency: - (i) among all members in proportion to, but not in excess of, amounts due to each member after distributions under (b) and (c), provided distribution under 2(a) shall not be taken into account for determining the amounts due; - (ii) any excess holdings of gold and currency among all members in proportion to their quotas. - Redemption and agreements: - Each member shall redeem holdings of its currency apportioned to other members under 2(d) and shall agree with the Fund within three months after decision to liquidate upon an orderly procedure for redemption. - If no agreement within three months, the Fund shall use currencies of other members apportioned to that member to redeem the currency of that member apportioned to others, using such currencies so far as possible to redeem currency apportioned to members who made agreements. - After these steps, the Fund shall pay to each member the remaining currencies held for its account. - Guarantees and redemption timing: - Each member whose currency has been distributed to other members under distribution provisions shall redeem such currency in the currency of the member requesting redemption or other agreed manner. - If no agreement, redemption must be completed within five years of distribution date, not exceeding one-tenth of the amount distributed to each other member in any half-yearly period; failure allows orderly market liquidation. - Each member whose currency has been distributed guarantees unrestricted use at all times for purchase of goods or payment of sums due to it or to persons in its territories and agrees to compensate others for losses from differences between SDR value on date of decision to liquidate and value realized on disposal. - The Fund shall determine the value of gold under this Schedule on the basis of prices in the market. - For purposes of the Schedule, quotas shall be deemed to have been increased to the full extent to which they could have been increased in accordance with Article III, Section 2(b). ### Suspension of voting rights (Schedule L) - In case of suspension of voting rights under Article XXVI, Section 2(b): - The member shall not: - (a) participate in adoption of a proposed amendment of the Agreement or be counted in total number of members for that purpose, except in cases specified (amendments requiring acceptance by all members under Article XXVIII(b) or pertaining exclusively to the Special Drawing Rights Department); - (b) appoint a Governor or Alternate Governor, appoint or participate in appointment of a Councillor or Alternate Councillor, or elect or participate in election of an Executive Director. - The number of votes allotted to the member shall not be cast in any organ of the Fund and shall not be included in calculation of total voting power except for acceptance of amendments pertaining exclusively to the SDR Department and calculation of basic votes pursuant to Article XII, Section 5(a)(i). - Officers and representatives: - (a) The Governor and Alternate Governor appointed by the member shall cease to hold office. - (b) The Councillor and Alternate Councillor appointed by the member, or in whose appointment the member participated, shall cease to hold office, provided that if such Councillor was entitled to cast votes allotted to other members whose voting rights have not been suspended, another Councillor and Alternate Councillor shall be appointed by such other members under Schedule D; pending such appointment, the Councillor and Alternate Councillor shall continue to hold office for a maximum of thirty days from suspension. - (c) The Executive Director elected by the member, or in whose election the member has participated, shall cease to hold office, unless such Executive Director was entitled to cast votes allotted to other members whose voting rights have not been suspended. In that latter case: - (i) If more than ninety days remain before the next regular election of Executive Directors, another Executive Director shall be elected for the remainder of the term by such other members by a majority of the votes cast; pending such election, the Executive Director shall continue to hold office for a maximum of thirty days from the date of suspension. - (ii) If not more than ninety days remain before the next regular election of Executive Directors, the Executive Director shall continue to hold office for the remainder of the term. *Provisions of the Agreement and its Schedules governing Special Drawing Rights Department liquidation, settlement of accounts with withdrawing members, Fund liquidation distribution, and suspension of voting rights as set out by the Fund.* ### 4. The member shall be entitled to send a representative to attend any ### aa - 4. The member shall be entitled to send a representative to attend any ### Entitlement to send a representative - A member shall be entitled to send a representative to attend any meeting of the Board of Governors, the Council, or the Executive Board, but not any meeting of their committees, when a request made by, or a matter particularly affecting, the member is under consideration. ### Schedule M — Special One-Time Allocation of Special Drawing Rights (overview) - Schedule M establishes a Special One-Time Allocation of Special Drawing Rights (SDRs) tied to the fourth amendment of the Agreement. - Allocations are governed by specific timing and adjustment rules for: - members who were participants in the Special Drawing Rights Department as of September 19, 1997; - countries that become participants after September 19, 1997; and - the Federal Republic of Yugoslavia (Serbia/Montenegro) upon succession as specified. ### Clause 1 — Allocation to participants as of September 19, 1997 - Each member that, as of September 19, 1997, is a participant in the Special Drawing Rights Department shall, on the 30th day following the effective date of the fourth amendment of this Agreement, receive an allocation of special drawing rights in an amount that will result in its net cumulative allocation of special drawing rights being equal to 29.315788813 percent of its quota as of September 19, 1997. - For participants whose quotas have not been adjusted as proposed in Resolution No. 45–2 of the Board of Governors, calculations shall be made on the basis of the quotas proposed in that resolution. ### Clause 2 — Allocation to countries becoming participants after September 19, 1997 - General timing rule: - Subject to 4 below, each country that becomes a participant in the Special Drawing Rights Department after September 19, 1997, but within three months of the date of its membership in the Fund shall receive an allocation of special drawing rights on the 30th day following the later of: - (i) the date on which the new member becomes a participant in the Special Drawing Rights Department, or - (ii) the effective date of the fourth amendment of this Agreement. - Quantity rule (2(b)): - Each participant shall receive an amount of SDRs that will result in its net cumulative allocation being equal to 29.315788813 percent of its quota as of the date on which the member becomes a participant in the Special Drawing Rights Department, as adjusted: - (i) first, by multiplying 29.315788813 percent by the ratio of the total of quotas, as calculated under 1 above, of the participants described in (c) below to the total of quotas of such participants as of the date on which the member became a participant in the Special Drawing Rights Department, and - (ii) second, by multiplying the product of (i) above by the ratio of the total of the sum of the net cumulative allocations of special drawing rights received under Article XVIII of the participants described in (c) below as of the date on which the member became a participant in the Special Drawing Rights Department and the allocations received by such participants under 1 above to the total of the sum of the net cumulative allocations of special drawing rights received under Article XVIII of such participants as of September 19, 1997, and the allocations received by such participants under 1 above. - Participant set for adjustment purposes (2(c)): - Participants in the Special Drawing Rights Department for the adjustments are: - members that are participants as of September 19, 1997, and - (i) continue to be participants in the Special Drawing Rights Department as of the date on which the member became a participant in the Special Drawing Rights Department, and - (ii) have received all allocations made by the Fund after September 19, 1997. ### Clause 3 — Allocation on succession by the Federal Republic of Yugoslavia (Serbia/Montenegro) - Timing and eligibility: - Subject to 4 below, if the Federal Republic of Yugoslavia (Serbia/Montenegro) succeeds to the membership in the Fund and the participation in the Special Drawing Rights Department of the former Socialist Federal Republic of Yugoslavia in accordance with the terms and conditions of Executive Board Decision No. 10237-(92/150), adopted December 14, 1992, it shall receive an allocation of special drawing rights on the 30th day following the later of: - (i) the date on which the Federal Republic of Yugoslavia (Serbia/Montenegro) succeeds to membership in the Fund and participation in the Special Drawing Rights Department in accordance with Executive Board Decision No. 10237-(92/150), or - (ii) the effective date of the fourth amendment of this Agreement. - Quantity rule (3(b)): - The Federal Republic of Yugoslavia (Serbia/Montenegro) shall receive an amount of special drawing rights that will result in its net cumulative allocation being equal to 29.315788813 percent of the quota proposed to it under paragraph 3(c) of Executive Board Decision No. 10237-(92/150), as adjusted in accordance with 2(b)(ii) and (c) above as of the date on which the Federal Republic of Yugoslavia (Serbia/Montenegro) qualifies for an allocation under (a) above. *Source: Schedule M, Special One-Time Allocation of Special Drawing Rights, as set out in the Agreement text.* ### 4. The Fund shall not allocate special drawing rights under this ### aa - 4. The Fund shall not allocate special drawing rights under this ### Notification of non-receipt (paragraph 4) - The Fund shall not allocate special drawing rights under this Schedule to those participants that have notified the Fund in writing prior to the date of the allocation of their desire not to receive the allocation. ### Treatment of allocations to participants with overdue obligations (paragraph 5) - 5(a) - If, at the time an allocation is made to a participant under 1, 2, or 3 above, the participant has overdue obligations to the Fund, the special drawing rights so allocated shall be deposited and held in an escrow account within the Special Drawing Rights Department and shall be released to the participant upon discharge of all its overdue obligations to the Fund. - 5(b) - Special drawing rights being held in an escrow account shall not be available for any use and shall not be included in any calculations of allocations or holdings of special drawing rights for the purposes of the Articles, except for calculations under this Schedule. - If special drawing rights allocated to a participant are held in an escrow account when the participant terminates its participation in the Special Drawing Rights Department or when it is decided to liquidate the Special Drawing Rights Department, such special drawing rights shall be canceled. - 5(c) - For purposes of this paragraph, overdue obligations to the Fund consist of: - overdue repurchases and charges in the General Resources Account, - overdue principal and interest on loans in the Special Disbursement Account, - overdue charges and assessments in the Special Drawing Rights Department, - and overdue liabilities to the Fund as trustee. - 5(d) - Except for the provisions of this paragraph, the principle of separation between the General Department and the Special Drawing Rights Department and the unconditional character of special drawing rights as reserve assets shall be maintained. *Schedule M — M. Special One-Time Allocation of Special Drawing Rights (Articles of Agreement)* ### Introduction of widespread system of exchange arrangements based on sta- ### aa - Introduction of widespread system of exchange arrangements based on sta- ### Special Drawing Rights (SDRs) and Special Drawing Rights Department - Definition: Art. XVII, Sec. 1. - Authority for allocation and cancellation: Art. XV, Sec. 1; Art. XVIII. - Basic periods, designation and reconstitution: Art. XVIII, Sec. 2, 3, 4; Sched. F, G. - Allocation mechanics and rates: Art. XVIII, Sec. 2(b), 3, 4(c)(iii), (d). - Net cumulative allocations: Art. XVIII, Sec. 2(c)(iii); Art. XIX, Sec. 4(a); Art. XX, Sec. 2, 4; Art. XXV(c); Sched. F(a); Sched. G, par. 1(a)(i); Sched. I, par. 5, 7; Sched. M, par. 2(b), 3(b). - One-time special allocation: Art. XV, Sec. 1; Sched. M. - Use of SDRs for payments and operations: - Payment of 25 percent of quota increase: Art. III, Sec. 3(a). - Payment of interest, charges, and assessments: Art. V, Sec. 8(e); Art. XX, Sec. 5; Art. XXIV, Sec. 2(a), 3. - Payment of remuneration: Art. V, Sec. 9(d). - Repurchases and replenishment: Art. V, Sec. 7(i); Art. VII, Sec. 1(ii). - Participants’ obligations and reconstitution: - Reconstitution obligation: Art. XIX, Sec. 6; Sched. G. - General obligations of participants: Art. XXII. - Requirement of need for use: Art. XIX, Sec. 3(a). - Failure to fulfill obligations and consequences: Art. XXIII, Sec. 2; Sched. G, par. 2. - Operations and transactions: - Operations and transactions between participants: Art. XIX, Sec. 2. - Exchange rates for transactions between participants: Art. XIX, Sec. 7. - Operations and transactions with prescribed holders: Art. XVII, Sec. 3(iii). - Liquidation and termination: - Liquidation procedures: Art. XXV; Sched. I; Sched. M, par. 5(b). - Termination of participation: Art. XXIV; Sched. H. - Redemption by Fund in liquidation: Sched. I, par. 1, 3, 4. - Administration and separation from General Department: Art. XVI; Art. XXI; Introd. Art. (ii), (iii). - Immunities: Art. XXI(b). ### Participants in Special Drawing Rights Department — designation, provision of currency, and settlement - Designation to provide currency for SDRs: Art. XIX, Sec. 4(a), 5; Sched. F. - Designation rules and review: Art. XIX, Sec. 5(c). - Designation, due regard for replenishing currencies with SDRs: Art. VII, Sec. 1(ii). - Obligation to provide currency: - Obligation to provide currency for SDRs: Art. VII, Sec. 1(ii); Art. XIX, Sec. 4; Art. XXIII, Sec. 2(d). - Failure to fulfill obligation to provide currency: Art. XXIII, Sec. 2(a), (c)–(e). - Failure to fulfill expectation of requirement of need: Art. XIX, Sec. 3(b), (c), 5(a)(ii). - Operations and transactions between participants and with prescribed holders: Art. XIX, Sec. 2; Art. XVII, Sec. 3(iii). - Reconstitution and acquisition: - Acquisition of SDRs from General Resources Account to fulfill obligation: Sched. G, par. 1(a)(iv). - Participants subject to designation to promote reconstitution: Art. XIX, Sec. 3(c), 5(a)(ii); Sched. G, par. 1(a)(ii). - Rules during first basic period: Sched. G, par. 1. - Payments and settlement roles: see Balance of payments; Current transactions. ### Use of the Fund’s General Resources and Repurchases - Conditions governing use of general resources: Art. V, Sec. 3; Art. XXVII, Sec. 1(a)(i). - Reserve tranche purchases: - Conditions governing use: Art. V, Sec. 3(b)(iii). - Definition: Art. XXX(c). - Not subject to challenge: Art. V, Sec. 3(c). - Service charge: Art. V, Sec. 8(a)(i). - Use to meet capital transfers: Art. VI, Sec. 2; Art. XXVII, Sec. 1(a)(ii). - Repurchases of currency held by Fund: - Conditions governing repurchases: Art. V, Sec. 7(b)–(j); Art. XXVII, Sec. 1(a)(i); Sched. B. - Entitlement to repurchase at any time holdings subject to charges: Art. V, Sec. 7(a); Art. XXVII, Sec. 1(a)(i). - Installments prescribed during 3- to 5-year period: Art. V, Sec. 7(c). - Not later than five years after purchase: Art. V, Sec. 7(c). - Postponement: Art. V, Sec. 7(g). - Temporary suspension: Art. XXVII, Sec. 1(a)(i). - Sale of Fund holdings of currency not repurchased: Art. V, Sec. 7(h). - With SDRs or currencies specified by Fund: Art. V, Sec. 7(i). - Ineligibility for use of general resources: - Ineligibility for failure to fulfill obligations or persistent restrictions: Art. V, Sec. 5; Art. VI, Sec. 1(a); Art. XXIII, Sec. 2(f); Art. XXVI, Sec. 2(a); Art. XIV, Sec. 3. - Ineligibility when member persists in maintaining restrictions: Art. XIV, Sec. 3. - Special policies and stand-by arrangements: Art. V, Sec. 3(a); Art. V, Sec. 7(d), (f); Art. XXX(b). ### Quotas, Subscriptions, and Remuneration - Quotas: - Adjustment and general review: Art. III, Sec. 2; Art. III, Sec. 2(a) (review at intervals of not more than five years). - Consent of member and payment required for change: Art. III, Sec. 2(d). - Increase to full extent possible in event of liquidation: Sched. K, par. 10. - Increases, payment: Art. III, Sec. 3(a), (b), (d). - Original and other members: Art. III, Sec. 1; Sched. A. - Subscriptions: - Equal to member’s quota: Art. III, Sec. 1. - Payment media: special drawing rights, currencies of other members specified by Fund, or member’s own currency: Art. III, Sec. 3(a). - Amount to be transmitted to U.S. Government when the Agreement is signed: Art. XXXI, Sec. 2(d), (h). - Remuneration on members’ creditor positions: - Percentage of quota applying to remuneration and payment on amount by which prescribed percentage of a member’s quota exceeds average daily balances of Fund’s holdings of the member’s currency: Art. V, Sec. 9. - Payment in SDRs or in member’s own currency: Art. V, Sec. 9(d). - Rate determination and relation to rate of interest and charges: Art. V, Sec. 9(a). ### Reserves, Scarce Currencies, and Related Policies - Reserves: - Balanced relationship of holdings of SDRs and other reserves: Sched. G, par. 1(b). - Objective of making SDR principal reserve asset: Art. VIII, Sec. 7. - Obligation to collaborate regarding policies on reserve assets: Art. VIII, Sec. 7. - Position taken into account in selection of currencies to be sold: Art. V, Sec. 3(d). - Scarce currencies: - Administration of restrictions: Art. VII, Sec. 4. - Measures to replenish Fund’s holdings and notification/report on general scarcity: Art. VII, Sec. 1; Art. VII, Sec. 2. - Exceptions relating to entitlement to purchase other members’ currency and to buying foreign-held balances: Art. V, Sec. 3(d); Art. VIII, Sec. 4(b)(iv). - Formal declaration by Fund: Art. VII, Sec. 3(a), (b). ### Exchange Arrangements, Par Values, and Spot Transactions - Exchange arrangements consistent with Fund purposes: Art. IV, Sec. 2(c); Sched. C, par. 3, 9. - Introduction of a widespread system of exchange arrangements based on stable but adjustable par values: Art. IV, Sec. 4. - Price movements and indices: - Consideration of price movements in determination to introduce par values: Art. IV, Sec. 4. - Price indices information furnishing: Art. VIII, Sec. 5(a)(ix). - Obligation to direct policies toward price stability: Art. IV, Sec. 1(i). - Spot exchange transactions and margins: Art. XXVII, Sec. 1(a)(iv); Sched. C, par. 5. - Uniform proportionate changes in par values: Sched. C, par. 11. - Termination of a member’s par value and related scheduling provisions: Sched. C, par. 8; Sched. C, par. 7 (maintenance to be discouraged). ### Reports, Surveillance, and Transitional Arrangements - Reports and publication: - Annual report and audited statement of accounts: Art. XII, Sec. 7(a). - Summary statement of operations and transactions and holdings of SDRs, gold, and members’ currencies: Art. XII, Sec. 7(a). - Publication of report on a member’s monetary or economic conditions which tend to produce serious disequilibrium: Art. XII, Sec. 8. - Exchange restrictions annual report and consultations: Art. XIV, Sec. 3. - Transitional provisions: - Transitional arrangements for repurchase, payment of additional subscriptions, gold, and certain operational matters: Sched. B. - Transitional provisions with respect to Executive Directors: Sched. E. - Transitional reporting and adaptation of restrictions: Art. XIV, Sec. 1–3. ### Voting thresholds, majorities, and decision-making - 70 percent majority requirement applies to: - Authorization to agree on exchange rates for certain transactions: Art. XIX, Sec. 7(b). - Charges determinations, distribution from general reserve, imposition of charges on failure to repurchase, investment-account rules, postponement of repurchase, prescription of medium of payment for additional subscription, among others: Art. V, Sec. 8(a), (b), (d); Art. XII, Sec. 6(d); Art. V, Sec. 8(c), (d); Art. XII, Sec. 6(f)(vi); Art. V, Sec. 7(g); Art. III, Sec. 3(a), (d). - 85 percent majority requirement applies to: - Adjustment in quotas: Art. III, Sec. 2(c). - Allocation and cancellation of SDRs: Art. XVIII, Sec. 2(a)–(c), 4(a), (d). - Change in rates or intervals of allocation or cancellation or change in length of a basic period or start of a new basic period: Art. XVIII, Sec. 3, 4(a), (d). - Compulsory withdrawal of member: Art. XXVI, Sec. 2(c). - Decisions to engage in certain gold operations or transactions: Art. V, Sec. 12(b)–(e). *International Monetary Fund* ### Introduction of par values, Art. IV, Sec. 4 ### Introduction of par values, Art. IV, Sec. 4 ### Key provisions referenced - Introduction of par values, Art. IV, Sec. 4 - Provision for general exchange arrangements, Art. IV, Sec. 2(c) - Valuation of special drawing right, change in principle or in application of principle in effect, Art. XV, Sec. 2 - Prescription of other holders of special drawing rights, Art. XVII, Sec. 3(i) - Temporary suspension of certain provisions, Art. XXVII, Sec. 1(a), (b) - Temporary suspension of operations and transactions in special drawing rights, Art. XXIII, Sec. 1 - Amendment of the Agreement, Art. XXVIII(a) ### Policies, uses of Fund resources, and special accounts - Policies on use of Fund’s general resources, exclusions of purchases and holdings for purpose of calculating member’s reserve tranche, Art. XXX(c)(iii) - Repurchase, change of periods or adoption of other periods pursuant to special policy on use of general resources, Art. V, Sec. 7(c), (d) - Transfer of part of excess from sale of gold to Investment Account, Art. V, Sec. 12(g) - Use of assets of Special Disbursement Account for operations and transactions not authorized by other provisions and for distribution to developing members, Art. V, Sec. 12(f)(ii), (iii) - Adjustment of votes, waiver of conditions and ineligibility to use Fund’s general resources, Art. V, Sec. 4, 5; Art. XII, Sec. 5(b) - Waiver of conditions governing use of general resources, Art. V, Sec. 4 ### Voting, governance, and representation - Voting - Basic votes, Art. XII, Sec. 5(a)(i); Sched. L, par. 2 - Number of votes, members, Art. XII, Sec. 5 - Quorum for meetings of Board of Governors, Art. XII, Sec. 2(d) - Quorum for meetings of Executive Board, Art. XII, Sec. 3(h) - Majority of votes cast for Fund decisions unless otherwise provided for, Art. XII, Sec. 5(c) - Majority of total voting power of Executive Board for termination of suspension of operation of certain provisions, Art. XXVII, Sec. 1(c) - Special majorities; see 70 percent majority requirement; 85 percent majority requirement; Majority of total voting power - Suspension of voting rights, Art. XII, Sec. 3(i)(iii); Art. XXVI, Sec. 2(b); Sched. D, par. 5(e); Sched. L - Weighted voting, Art. XII, Sec. 2(e), 3(i), 5 - Quorum and without-meeting provisions: Without meeting, Governors, Art. XII, Sec. 2(f); Sched. D, par. 5(a); Without meeting, Council, Sched. D, par. 5(c) ### Executive Board, Board of Governors, Councils, and appointments - Board of Governors, matters pertaining exclusively to Special Drawing Rights Department, Art. XXI(a)(i) - Board of Governors, meetings called by Executive Board, Art. XII, Sec. 2(c) - Board of Governors, matters pertaining exclusively to Special Drawing Rights Department, Art. XXI(a)(i) - Executive Board, matters relating exclusively to Special Drawing Rights Department, Art. XXI(a)(ii) - Decisions, General Department, Special Drawing Rights Department, Art. XXI(a)(iii) - Election of Executive Directors, procedures, Art. XII, Sec. 3(d), (f), (i); Sched. E - Election of Executive Director to fill vacancy, Art. XII, Sec. 3(f) - Cast by Councillor for member whose votes cannot be cast by an Executive Director, Sched. D, par. 3(b), 5(b) - Number of votes, cast by Executive Directors, Art. XII, Sec. 3(i) - Number of votes, Councillors, Sched. D, par. 3(b), 5(b) - Alternate Governor, Art. XII, Sec. 2(a) - Board of Governors, meetings called by Executive Board, Art. XII, Sec. 2(c) - Council, matters pertaining exclusively to Special Drawing Rights Department, Sched. D, par. 5(b) - Without meeting, Council, Sched. D, par. 5(c) ### Procedural and objection rights - Objection to termination of par value, Sched. C, par. 8 - Sched. C, par. 5: Margins for spot exchange transactions, adoption, Art. XXVII, Sec. 1(a)(iv) - Temporary suspension references: Temporary suspension of certain provisions, Art. XXVII, Sec. 1(a), (b); Temporary suspension of operations and transactions in special drawing rights, Art. XXIII, Sec. 1 ### Miscellaneous index reference - 123 --- _Source: https://www.imf.org/-/media/files/publications/ft/aa/index/aa.pdf_