(b) A member shall be entitled to purchase the currencies of other
members from the Fund in exchange for an equivalent amount of its
own currency subject to the following conditions:
(i) | | the member's use of the general resources of the Fund would be
in accordance with the provisions of this Agreement and the policies
adopted under them; |
(ii) | | the member represents that it has a need to make the purchase
because of its balance of payments or its 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 previously declared under Section 5 of this
Article, Article VI, Section 1, or Article XXVI, Section 2(a) that
the member desiring to purchase is ineligible to use the general
resources of the Fund. |
(c) The Fund shall examine a request for a purchase to determine
whether the proposed purchase would be consistent with the
provisions of this Agreement and the policies adopted under them,
provided that requests for reserve tranche purchases shall not be
subject to challenge.
(d) The Fund shall adopt policies and procedures on the selection of
currencies to be sold that take into account, in consultation with
members, the balance of payments and reserve position of members and
developments in the exchange markets, as well as the desirability of
promoting over time balanced positions in the Fund, provided that if
a member represents that it is proposing to purchase the currency of
another member because the purchasing member wishes to obtain an
equivalent amount of its own currency offered by the other member,
it shall be entitled to purchase the currency of the other member
unless the Fund has given notice under Article VII, Section 3 that
its holdings of the currency have become scarce.
(e) | (i) | |
Each member shall ensure that balances of its currency
purchased from the Fund are balances of a freely usable currency or
can be exchanged at the time of purchase for a freely usable
currency of its choice at an exchange rate between the two
currencies equivalent to the exchange rate between them on the basis
of Article XIX, Section 7(a). |
| (ii) | | Each member whose currency is purchased from the Fund or is
obtained in exchange for currency purchased from the Fund shall
collaborate with the Fund and other members to enable such balances
of its currency to be exchanged, at the time of purchase, for the
freely usable currencies of other members. |
| (iii) | | An exchange under (i) above of a currency that is not freely
usable shall be made by the member whose currency is purchased
unless that member and the purchasing member agree on another
procedure. |
| (iv) | | A member purchasing from the Fund the freely usable currency of
another member and wishing to exchange it at the time of purchase
for another freely usable currency shall make the exchange with the
other member if requested by that member. The exchange shall be made
for a freely usable currency selected by the other member at the
rate of exchange referred to in (i) above. |
(f) Under policies and procedures which it shall adopt, the Fund may
agree to provide a participant making a purchase in accordance with
this Section with special drawing rights instead of the currencies
of other members.
Section 4. Waiver of
conditions
The Fund may in its discretion, and on terms which safeguard its
interests, waive any of the conditions prescribed in Section
3(b)(iii) and (iv) of this Article, especially in the case of
members with a record of avoiding large or continuous use of the
Fund's general resources. In making a waiver it shall take into
consideration periodic or exceptional requirements of the member
requesting the waiver. The Fund shall also take into consideration a
member's willingness to pledge as collateral security acceptable
assets having a value sufficient in the opinion of the Fund to
protect its interests and may require as a condition of waiver the
pledge of such collateral security.
Section 5. Ineligibility to use the Fund's
general resources
Whenever the Fund is of the opinion that any member is using the
general resources of the Fund in a manner contrary to the purposes
of the Fund, it shall present to the member a report setting forth
the views of the Fund and prescribing a suitable time for reply.
After presenting such a report to a member, the Fund may limit the
use of its general resources by the member. If no reply to the
report is received from the member within the prescribed time, or if
the reply received is unsatisfactory, the Fund may continue to limit
the member's use of the general resources of the Fund or may, after
giving reasonable notice to the member, declare it ineligible to use
the general resources of the Fund.
Section 6. Other purchases and sales of
special drawing rights by the Fund
(a) The Fund may accept special drawing rights offered by a
participant in exchange for an equivalent amount of the currencies
of other members.
(b) The Fund may provide a participant, at its request, with special
drawing rights for an equivalent amount of the currencies of other
members. The Fund's holdings of a member's currency shall not be
increased as a result of these transactions above the level at which
the holdings would be subject to charges under Section 8(b)(ii) of
this Article.
(c) The currencies provided or accepted by the Fund under this
Section shall be selected in accordance with policies that take into
account the principles of Section 3(d) or 7(i) of this Article. The
Fund may enter into transactions under this Section only if a member
whose currency is provided or accepted by the Fund concurs in that
use of its currency.
Section 7. Repurchase by a member of its
currency held by the Fund
(a) A member shall be entitled to repurchase at any time the Fund's
holdings of its currency that are subject to charges under Section
8(b) of this Article.
(b) A member that has made a purchase under Section 3 of this
Article will be expected normally, as its balance of payments and
reserve position improves, to repurchase the Fund's holdings of its
currency that result from the purchase and are subject to charges
under Section 8(b) of this Article. A member shall repurchase these
holdings if, in accordance with policies on repurchase that the Fund
shall adopt and after consultation with the member, the Fund
represents to the member that it should repurchase because of an
improvement in its balance of payments and reserve position.
(c) A member that has made a purchase under Section 3 of this
Article shall repurchase the Fund's holdings of its currency that
result from the purchase and are subject to charges under Section
8(b) of this Article not later than five years after the date on
which the purchase was made. The Fund may prescribe that repurchase
shall be made by a member in installments during the period
beginning three years and ending five years after the date of a
purchase. The Fund, by an eighty-five percent majority of the total
voting power, may change the periods for repurchase under this
subsection, and any period so adopted shall apply to all members.
(d) The Fund, by an eighty-five percent majority of the total voting
power, may adopt periods other than those that apply in accordance
with (c) above, which shall be the same for all members, for the
repurchase of holdings of currency acquired by the Fund pursuant to
a special policy on the use of its general resources.
(e) A member shall repurchase, in accordance with policies that the
Fund shall adopt by a seventy percent majority of the total voting
power, the Fund's holdings of its currency that are not acquired as
a result of purchases and are subject to charges under Section
8(b)(ii) of this Article.
(f) A decision prescribing that under a policy on the use of the
general resources of the Fund the period for repurchase under (c) or
(d) above shall be shorter than the one in effect under the policy
shall apply only to holdings acquired by the Fund subsequent to the
effective date of the decision.
(g) The Fund, on the request of a member, may postpone the date of
discharge of a repurchase obligation, but not beyond the maximum
period under (c) or (d) above or under policies adopted by the Fund
under (e) above, unless the Fund determines, by a seventy percent
majority of the total voting power, that a longer period for
repurchase which is consistent with the temporary use of the general
resources of the Fund is justified because discharge on the due date
would result in exceptional hardship for the member.
(h) The Fund's policies under Section 3(d) of this Article may be
supplemented by policies under which the Fund may decide after
consultation with a member to sell under Section 3(b) of this
Article its holdings of the member's currency that have not been
repurchased in accordance with this Section 7, without prejudice to
any action that the Fund may be authorized to take under any other
provision of this Agreement.
(i) All repurchases under this Section shall be made with special
drawing rights or with the currencies of other members specified by
the Fund. The Fund shall adopt policies and procedures with regard
to the currencies to be used by members in making repurchases that
take into account the principles in Section 3(d) of this Article.
The Fund's holdings of a member's currency that is used in
repurchase shall not be increased by the repurchase above the level
at which they would be subject to charges under Section 8(b)(ii) of
this Article.
(j) | (i) | | If a member's currency specified by the Fund under (i) above
is not a freely usable currency, the member shall ensure that the
repurchasing member can obtain it at the time of the repurchase in
exchange for a freely usable currency selected by the member whose
currency has been specified. An exchange of currency under this
provision shall take place at an exchange rate between the two
currencies equivalent to the exchange rate between them on the basis
of Article XIX, Section 7(a). |
| (ii) | | Each member whose currency is specified by the Fund for
repurchase shall collaborate with the Fund and other members to
enable repurchasing members, at the time of the repurchase, to
obtain the specified currency in exchange for the freely usable
currencies of other members. |
| (iii) | | An exchange under (j)(i) above shall be made with the member
whose currency is specified unless that member and the repurchasing
member agree on another procedure. |
| (iv) | | If a repurchasing member wishes to obtain, at the time of the
repurchase, the freely usable currency of another member specified
by the Fund under (i) above, it shall, if requested by the other
member, obtain the currency from the other member in exchange for a
freely usable currency at the rate of exchange referred to in (j)(i)
above. The Fund may adopt regulations on the freely usable currency
to be provided in an exchange. |
(a) | (i) | | 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, provided that 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. |
| (ii) | | 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 (i) above on
purchases under the arrangement. |
(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.
(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.
(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.
(e) A member shall pay all charges in special drawing rights,
provided that 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.
Section 9. Remuneration
(a) The Fund shall pay remuneration on the amount by which the
percentage of quota prescribed under (b) or (c) below exceeds the
Fund's average daily balances of a member's currency held in the
General Resources Account other than balances acquired under a
policy that has been the subject of an exclusion under Article
XXX(c). The rate of remuneration, which shall be determined by the
Fund by a seventy percent majority of the total voting power, shall
be the same for all members and shall be not more than, nor less
than four-fifths of, the rate of interest under Article XX, Section
3. In establishing the rate of remuneration, the Fund shall take
into account the rates of charge under Article V, Section 8(b).
(b) The percentage of quota applying for the purposes of (a) above
shall be:
(i) | | for each member that became a member before the second amendment
of this Agreement, a percentage of quota corresponding to
seventy-five percent of its quota on the date of the second
amendment of this Agreement, and for each member that became a
member after the date of the second amendment of this Agreement, a
percentage of quota calculated by dividing the total of the amounts
corresponding to the percentages of quota that apply to the other
members on the date on which the member became a member by the total
of the quotas of the other members on the same date; plus |
(ii) | | the amounts it has paid to the Fund in currency or special
drawing rights under Article III, Section 3(a) since the date
applicable under (b)(i) above; and minus |
(iii) | | the amounts it has received from the Fund in currency or
special drawing rights under Article III, Section 3(c) since the
date applicable under (b)(i) above. |
(c) The Fund, by a seventy percent majority of the total voting
power, may raise the latest percentage of quota applying for the
purposes of (a) above to each member to:
(i) | | a percentage, not in excess of one hundred percent, that shall
be determined for each member on the basis of the same criteria for
all members, or |
(ii) | | one hundred percent for all members. |
(d) Remuneration shall be paid 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.
Section 10. Computations
(a) The value of the Fund's assets held in the accounts of the
General Department shall be expressed in terms of the special
drawing right.
(b) All computations relating to currencies of members for the
purpose of applying the provisions of this Agreement, except Article
IV and Schedule C, shall be at the rates at which the Fund accounts
for these currencies in accordance with Section 11 of this Article.
(c) Computations for the determination of amounts of currency in
relation to quota for the purpose of applying the provisions of this
Agreement shall not include currency held in the Special
Disbursement Account or in the Investment Account.
Section 11. Maintenance of
value
(a) The value of the currencies of members held in the General
Resources Account shall be maintained in terms of the special
drawing right in accordance with exchange rates under Article XIX,
Section 7(a).
(b) An adjustment in the Fund's holdings of a member's currency
pursuant to this Section shall be made on the occasion of the use of
that currency in an operation or transaction between the Fund and
another member and at such other times as the Fund may decide or the
member may request. Payments to or by the Fund in respect of an
adjustment shall be made within a reasonable time, as determined by
the Fund, after the date of adjustment, and at any other time
requested by the member.
Section 12. Other operations and
transactions
(a) The Fund shall be guided in all its policies and decisions under
this Section by the objectives set forth in Article VIII, Section 7
and by the objective of avoiding the management of the price, or the
establishment of a fixed price, in the gold market.
(b) Decisions of the Fund to engage in operations or transactions
under (c), (d), and (e) below shall be made by an eighty-five
percent majority of the total voting power.
(c) The Fund may sell gold for the currency of any member after
consulting the member for whose currency the gold is sold, provided
that the Fund's holdings of a member's currency held in the General
Resources Account shall not be increased by the sale above the level
at which they would be subject to charges under Section 8(b)(ii) of
this Article without the concurrence of the member, and provided
that, at the request of the member, the Fund at the time of sale
shall exchange for the currency of another member such part of the
currency received as would prevent such an increase. The exchange of
a currency for the currency of another member shall be made after
consultation with that member, and shall not increase the Fund's
holdings of that member's currency above the level at which they
would be subject to charges under Section 8(b)(ii) of this Article.
The Fund shall adopt policies and procedures with regard to
exchanges that take into account the principles applied under
Section 7(i) of this Article. Sales under this provision to a member
shall be at a price agreed for each transaction on the basis of
prices in the market.
(d) The Fund may accept payments from a member in gold instead of
special drawing rights or currency in any operations or transactions
under this Agreement. Payments to the Fund under this provision shall
be at a price agreed for each operation or transaction on the basis
of prices in the market.
(e) The Fund may sell gold held by it on the date of the second
amendment of this Agreement to those members that were members on
August 31, 1975 and that agree to buy it, in proportion to their
quotas on that date. If the Fund intends to sell gold under (c)
above for the purpose of (f)(ii) below, it may sell to each
developing member that agrees to buy it that portion of the gold
which, if sold under (c) above, would have produced the excess that
could have been distributed to it under (f)(iii) below. The gold
that would be sold under this provision to a member that has been
declared ineligible to use the general resources of the Fund under
Section 5 of this Article shall be sold to it when the ineligibility
ceases, unless the Fund decides to make the sale sooner. The sale of
gold to a member under this subsection (e) 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.
(f) Whenever under (c) above the Fund sells gold held by it on the
date of the second amendment of this Agreement, an amount of the
proceeds 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 and, except as the Fund may decide otherwise under
(g) below, any excess shall be held in the Special Disbursement
Account. The assets held in the Special Disbursement Account shall
be held separately from the other accounts of the General
Department, and may be used at any time:
(i) | | to make transfers to the General Resources Account for immediate
use in operations and transactions authorized by provisions of this
Agreement other than this Section; |
(ii) | | for operations and transactions that are not authorized by
other provisions of this Agreement but are consistent with the
purposes of the Fund. Under this subsection (f)(ii) balance of
payments assistance may be made available on special terms to
developing members in difficult circumstances, and for this purpose
the Fund shall take into account the level of per capita income; |
(iii) | | for distribution to those developing members that were members
on August 31, 1975, in proportion to their quotas on that date, of
such part of the assets that the Fund decides to use for the
purposes of (ii) above as corresponds to the proportion of the
quotas of these members on the date of distribution to the total of
the quotas of all members on the same date, provided that the
distribution under this provision to a member that has been declared
ineligible to use the general resources of the Fund under Section 5
of this Article shall be made when the ineligibility ceases, unless
the Fund decides to make the distribution sooner. |
Decisions to use assets pursuant to (i) above shall be taken by a
seventy percent majority of the total voting power, and decisions
pursuant to (ii) and (iii) above shall be taken by an eighty-five
percent majority of the total voting power.
(g) The Fund may decide, by an eighty-five percent majority of the
total voting power, to transfer a part of the excess referred to in
(f) above to the Investment Account for use pursuant to the
provisions of Article XII, Section 6(f).
(h) Pending uses specified under (f) above, the Fund may invest a
member's currency held in the Special Disbursement Account in
marketable obligations of that member or in marketable obligations
of international financial organizations. The income of investment
and interest received under (f)(ii) above shall be placed in the
Special Disbursement Account. No investment shall be made without
the concurrence of the member whose currency is used to make the
investment. The Fund shall invest only in obligations denominated in
special drawing rights or in the currency used for investment.
(i) The General Resources Account shall be reimbursed from time to
time in respect of the expenses of administration of the Special
Disbursement Account paid from the General Resources Account by
transfers from the Special Disbursement Account on the basis of a
reasonable estimate of such expenses.
(j) The Special Disbursement Account shall be terminated in the
event of the liquidation of the Fund and may be terminated prior to
liquidation of the Fund by a seventy percent majority of the total
voting power. Upon termination of the account because of the
liquidation of the Fund, any assets in this account shall be
distributed in accordance with the provisions of Schedule K. Upon
termination prior to liquidation of the Fund, any assets in this
account shall be transferred to the General Resources Account for
immediate use in operations and transactions. The Fund, by a seventy
percent majority of the total voting power, shall adopt rules and
regulations for the administration of the Special Disbursement
Account.
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