Selected Decisions and Selected Documents of the IMF, Thirty- Eighth Issue -- Lapse of Time Procedures for Article IV Consultations

Prepared by the Legal Department of the IMF
As updated as of February 29, 2016

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ARTICLE IV
Exchange Arrangements and Surveillance

LAPSE OF TIME PROCEDURES FOR ARTICLE IV CONSULTATIONS

  • 1. The completion of an Article IV consultation on a lapse of time basis may be proposed by the Managing Director with the approval of the Executive Director for the member concerned, or by the Executive Director for the member concerned, in accordance with the procedures set forth herein.

  • 2. Eligibility:

    • (a) Subject to 2(b) below, the lapse of time procedure would be proposed for Article IV consultations where the following conditions apply: (i) there are no acute or significant risks, or general policy issues requiring Board discussion; (ii) policies or circumstances are unlikely to have a significant regional or global impact in the near term; (iii) in the event a parallel program review is being completed, it is also being completed on a lapse of time basis; and (iv) the use of Fund resources is not under discussion or anticipated.

    • (b) The lapse of time procedure for an Article IV consultation will not be proposed where: (i) the last Article IV consultation was concluded on a lapse of time basis; (ii) more than 24 months has elapsed since Board discussion of an Article IV consultation; or (iii) the country is on a 24-month consultation cycle and has not been considered by the Executive Board under a program review in the preceding twelve months.

  • 3. Procedures for Proposing Lapse of Time for Article IV Consultations:

    • (a) By the Managing Director: On the basis of the eligibility criteria set forth in paragraph 2 above, a judgment would be made by the Managing Director on whether a country meets the eligibility criteria. If the criteria are met, the Managing Director, with the approval of the Executive Director for the member concerned, would propose completion of an Article IV consultation on lapse of time at the time the staff paper is circulated to the Executive Board. The cover memorandum for the circulated staff paper will: (i) include a deadline for Executive Directors to object to a proposal by the Managing Director for lapse of time completion that is consistent with paragraph 4 below; (ii) specify the date upon which the decision will become effective if no objection to the proposal for lapse of time is received; (iii) specify a reserved date, consistent with minimum circulation periods for Article IV consultations, for discussion if an Executive Director objects to the proposal for lapse of time consideration; and (iv) explain the reasons why lapse of time completion is warranted. Should the Managing Director judge that a member meets the lapse of time criteria, but the Executive Director for the member concerned does not approve, the cover memorandum circulating the staff paper would include a notation to this effect.

    • (b) By the Executive Director for the Member Concerned: On the basis of the eligibility criteria set forth in paragraph 2 above, the Executive Director for the member concerned may propose the completion of an Article IV consultation by lapse of time no more than two business days after the issuance of the staff paper to the Executive Board, and preferably, as soon as possible after the circulation of the staff paper. The Executive Director’s notification will: (i) include a deadline for Executive Directors to object to the proposal by the Executive Director for the member concerned for lapse of time completion that is consistent with paragraph 4 below; (ii) specify the date upon which the decision will become effective if no objection to the proposal for lapse of time is received; (iii) specify a reserved date, consistent with minimum circulation periods for Article IV consultations, for discussion if an Executive Director objects to the proposal for lapse of time consideration; and (iv) explain the reasons why lapse of time completion is warranted.

  • 4. Objections: An Executive Director may object to a proposal for lapse of time consideration up to two business days before the end of the lapse of time period. A Director need not announce the reasons for an objection, but would be expected to inform the Executive Director for the member concerned of those reasons.

  • 5. Effective Date: If no objection is received to a proposal for lapse of time completion of an Article IV consultation, the decision recording the completion of the Article IV consultation will be recorded in the minutes of the next Board meeting with effect on the date of effectiveness stated in the cover note described in paragraph 3(a) or 3(b) above.

  • 6. Review: A review of the lapse of time procedures for Article IV consultations is expected to be conducted 12 months after the date of the effectiveness of this Decision.

  • 7. Transitional Provisions and Repeal of Earlier Procedures:

    • (a) The provisions of this Decision concerning lapse of time procedures for Article IV consultations shall apply to staff reports issued following the date of the effectiveness of this Decision.

    • (b) The “Procedures for Completion of Article IV Consultations on a Lapse of Time Basis” set forth in SM/96/214, Supp. 1, 11/6/96 are hereby repealed.

Part A of Decision No. 14766-(10/115), November 29, 2010,

as amended by Decision No. 15207-(12/74),

July 19, 2012

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