## Termination of the Administered Account for Liberia

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**Canonical URL:** [Termination of the Administered Account for Liberia](https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2013/_030413.pdf)

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### Background and purpose
- The Administered Account for Liberia (“Liberia Administered Account” or LAA) was established on March 14, 2008 to: (i) receive resources contributed for the financing of the IMF’s share of debt relief to Liberia; and (ii) use these resources to make contributions in the context of debt relief to Liberia under the Heavily Indebted Poor Country (HIPC) Initiative, and to deliver “beyond-HIPC” debt relief to Liberia (Attachment).
- As stipulated in the Instrument (paragraph 10(a)), “The Account shall remain in effect for as long as necessary, in the judgment of the Fund, to conduct and wind up the business of the account.”
- Liberia reached the HIPC completion point in June 2010 and the full delivery of “beyond-HIPC” debt relief exhausted the balances in the Account, leaving no pending business and enabling termination.

### Pending contributions and financial status
- A number of members have not completed pledged contributions to the Fund’s debt relief to Liberia.
- “Not all members who had pledged resources had completed the internal procedures necessary to effect their contributions by June 2010 when Liberia reached the HIPC completion point, and the Fund relied on other resources in the PRG-HIPC Trust to finance the debt relief.”
- “As of end-January 2013, pledged contributions totaling SDR 17.7 million (March 2008 NPV terms) from eight members have yet to be received to replenish the PRG-HIPC Trust.”

### Proposed Executive Board decision
- Proposed decision for adoption by a majority of the votes cast:
  - “The Fund considers the purpose of the Administered Account for Liberia (the ‘Account’) has been fulfilled. Pursuant to Paragraph 10 of the Instrument for the establishment of the Account, set forth in Decision No. 13973-(07/80) adopted September 14, 2007 and effective March 14, 2008, the Account is hereby terminated.”

### Key provisions of the Instrument to Establish the Administered Account for Liberia (selected highlights)
- Paragraph 1 — Purpose:
  - The Account’s purpose is “to provide a vehicle to facilitate fundraising for, and delivery of, debt relief to Liberia in respect of obligations owed to the Fund.”
  - The Account will (a) receive resources contributed for the financing of debt relief to Liberia; and (b) use these resources, pursuant to paragraph 6, to make contributions in the context of HIPC Initiative debt relief to Liberia, and to deliver “beyond-HIPC” debt relief to Liberia.
- Paragraph 2 — Resources:
  - Resources consist of: (a) SCA-1 balances and proceeds of deferred charges adjustments transferred to the Account pursuant to paragraphs 3 and 4, respectively, of Decision No. 13973-(07/80); (b) grant contributions made to the Account; and (c) net earnings from the investment of resources held in the Account.
- Paragraph 3 — Contributions:
  - The Fund may accept contributions on terms agreed between the Fund and Contributors, subject to the Instrument.
- Paragraph 4 — Unit of account:
  - “The SDR shall be the unit of account.”
- Paragraph 5 — Media of payment and exchange:
  - (a) Resources may be in SDRs, any freely usable currency, or other media as agreed.
  - (b) The Fund may exchange resources but any balance of a currency may be exchanged only with the consent of the issuer of such currency.
  - (c) Payments by the Account shall be in SDRs, any freely usable currency, or other media determined by the Fund.
- Paragraph 6 — Use of resources and modalities:
  - (a) Resources shall be used (i) to make contributions to the PRGF-HIPC Trust in the context of HIPC Initiative debt relief to Liberia, and (ii) to enable the Account to deliver “beyond-HIPC” debt relief by repaying eligible debt to the Fund on behalf of Liberia.
  - (b) “Eligible debt” for beyond-HIPC relief is defined as portions of Liberia’s debt that (i) arise from the first purchase and/or first loan disbursement under arrangements approved by the Fund for Liberia immediately following arrears clearance, (ii) are equal to the amount of Liberia’s arrears to the Fund immediately before arrears clearance, and (iii) are still outstanding when Liberia reaches the completion point under the HIPC Initiative, and are not scheduled to be repaid by assistance committed or disbursed under the HIPC Initiative.
  - (c) Contributions to the PRGF-HIPC Trust shall be made shortly before Liberia is scheduled to receive debt relief from that Trust; amounts for beyond-HIPC relief shall be estimated and set aside shortly before the completion point.
  - (d) Resources set aside for beyond-HIPC relief shall be used at the completion point to repay to the Fund, on behalf of Liberia, an amount equivalent to Liberia’s eligible debt.
- Paragraph 7 — Investment authority:
  - (a) Unneeded resources may be invested at the discretion of the Managing Director, subject to subparagraph (b).
  - (b) Permitted investments include (i) marketable obligations issued by international financial organizations denominated in SDRs or a member currency, (ii) marketable obligations issued by a member or national official financial institution denominated in SDRs or that member’s currency, and (iii) deposits with commercial banks, national official financial institutions, or international financial institutions denominated in SDRs or a member’s currency. Currency exchange investments require consultation or consent as specified.
- Paragraph 8 — Administration:
  - (a) Assets of the Account shall be kept separate from other Fund accounts.
  - (b) The Fund shall maintain separate financial records and financial statements for the Account, expressed in SDRs and prepared in accordance with International Financial Reporting Standards.
  - (c) The external audit firm selected under Section 20 of the Fund’s By-Laws shall audit the Account’s operations; the audit shall relate to the Fund’s financial year.
  - (d) The Fund shall report on the Account in the Annual Report of the Executive Board to the Board of Governors and include the audit report.
  - (e) The Fund shall apply, mutatis mutandis, the same rules and procedures as apply to operations of the General Resources Account.
  - (f) The Managing Director is authorized to make arrangements, including establishing accounts and taking measures necessary to implement the Instrument.
- Paragraph 9 — Fees:
  - (a) “No charge shall be levied in respect of the services rendered by the Fund in the administration, operation, and termination of this Account.”
  - (b) All investment costs, including costs associated with exchange of currencies, purchase of securities, and hiring of external asset managers and custodian banks, shall be borne by, and deducted from, the Account.
- Paragraph 10 — Period of operation and liquidation:
  - (a) “The Account shall remain in effect for as long as is necessary, in the judgment of the Fund, to conduct and to wind up the business of the Account.”
  - (b) Any balance remaining on termination, after discharge of obligations, shall be transferred to the PRGF-HIPC Trust for use in accordance with that Trust Instrument; provided that, at the request of a Contributor, its pro rata share of any remaining resources, or any portion of such share, shall be distributed to the Contributor.
- Paragraph 11 — Amendments:
  - The Instrument may be amended only by a decision of the Fund; if amendments change permissible uses of contributions, each Contributor may consent or withdraw its unused contribution (pro rata).
- Paragraph 12 — Settlement of questions:
  - “Any questions arising under this Instrument between a Contributor and the Fund shall be settled by mutual agreement between the Contributor and the Fund.”

*Prepared by the Finance and Legal Departments; Approved by Andrew Tweedie and Sean Hagan; March 4, 2013.*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/np/pp/eng/2013/_030413.pdf_