 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     1
CHAPTER 209
MALTA MEMBERSHIP OF THE INTERNATIONAL 
MONETARY FUND ACT 
To enable Malta to become a member of the International Monetary
Fund.
(31st July, 1968) *
Enacted by ACT XXI of 1968, as amended by Act XXXI of 1969.
Short title.
International Monetary Fund Act.
Interpretation. 
Amended by: 
XXXI.1969.2.  
Cap. 204.
2. In this Act, unless the context otherwise requires -
"Central Bank of Malta" means the bank established by section 3
of the Central Bank of Malta Act;
"Fund" means the International Monetary Fund established by
the Fund Agreement;
"Fund Agreement" means the Articles of Agreement of the
International Monetary Fund (being the Articles of Agreement
adopted at the United Nations Monetary and Financial Conference
on the 22nd July, 1944) as set out in the Schedule to this Act but,
for the purpose of sections 6 and 8, as from time to time amended;
"Malta" has the same meaning as is assigned to it in section 124
of the Constitution;
"Membership Resolution" means the resolution adopted by the
Board of Governors of the Fund, specifying the terms and
conditions upon which Malta shall be admitted to membership of
the Fund;
"Minister" means the Minister for the time being charged with
responsibility for finance;
"Special Drawing Account" means the Special Drawing Account
established by the Fund Agreement as modified by the amendments
approved by the Board of Governors of the Fund on the 31st May,
1968;
"special drawing rights" means any special drawing rights
ensuing from or in connection with participation in the Special
Drawing Account.
Authorisation for 
signing of and 
acceptance of the 
Fund Agreement.
3. The Minister is hereby authorised on behalf of the
Government of Malta to sign the Fund Agreement and to deposit
with the Government of the United States the instrument of
acceptance of the said Fund Agreement and of the terms and
conditions prescribed thereunder relating to the admission of Malta
to membership, or by instrument under his hand to empower such
person as may be named in such instrument to sign the said Fund
Agreement and to deposit the said instrument of acceptance as
* See  Government Notice No. 549 of 31st July, 1968.
  2    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
aforesaid.
Authorisation for 
participation in the 
Special Drawing 
Account. 
Added by: 
XXXI. 1969.3.
4. The Minister is hereby authorised on behalf of the
Government of Malta to take all such steps as may be necessary in
order that Malta may become a participant in the Special Drawing
Account and to that effect to deposit with the Fund such instrument
as is necessary for the purpose of the said participation.
Effect of signature. 
Amended by: 
XXXI. 1969.4.
5. The provisions of the following sections shall have effect
immediately that the Fund Agreement is signed as aforesaid except
as regards the provisions of paragraph ( b ) of subsection (1) of
section 6, of subsection (4) of the same section and of subsection
(2) of section 7 of this Act, which shall have effect as from the date
of the deposit by Malta with the Fund of the instrument referred to
in section 4 of this Act * .
Financial 
provisions relating 
to membership in 
the Fund.  Amended 
by: XXXI. 1969.5.
6. (1)  It shall be the function of the Central Bank of Malta  -
( a ) to pay the amounts from time to time payable to the
Fund on account of Malta under the provisions of the
Membership Resolution and Fund Agreement;
( b ) on behalf of Malta to fulfil all its obligations, to
exercise all its rights and to perform all its functions
ensuing from Malta’s participation in the Special
Drawing Account.
(2) The Central Bank of Malta may, if it thinks fit, create and
issue to the Fund any such non-interest bearing and non-negotiable
notes or other obligations as are provided for by Section 5 of
Article III of the Fund Agreement (which Section relates to the
acceptance by the Fund of notes or similar obligations in place of
currency).
(3) The Central Bank of Malta is hereby authorised to receive
from the Fund any sums relating to Malta’s subscription and any
sums to be received by reason of operations or transactions
between Malta and the Fund under Article V of the Fund
Agreement.
(4) Any interest due to Malta or any charge or assessment due
by Malta, as the case may be, by reason of Malta’s participation
and position in the Special Drawing Account, shall be payable to or
by the Central Bank of Malta on behalf of Malta.
Certain provisions 
of Fund Agreement 
given force of law 
in Malta. 
Amended by: 
XXXI.1969.6.
7. (1) The provisions of Sections 2 and 9 inclusive of Article
IX of the Fund Agreement and the first sentence of Section 2   ( b ) of
Article VIII of the Fund Agreement shall have the force of law in
Malta, so, however, that nothing in Section 9 of Article IX of the
Fund Agreement shall be construed -
( a ) as entitling the Fund to import goods free of customs
duty without any restriction on their subsequent sale in
Malta;
( b ) as conferring on the Fund any exemption from taxes
and duties which form part of the price of goods
*The Fund Agreement was signed on the 11th September, 1968 and the instrument
referred to in section 4 of this Act was deposited on the 28th November, 1969.
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     3
acquired by the Fund in Malta; or 
( c ) as conferring on the Fund any exemption from taxes or
duties which are in fact no more than charges for
services rendered.
(2) Notwithstanding the provisions of any other law, no tax of
any kind shall be levied on special drawing rights or on operations
or transactions in special drawing rights.
Power of Minister 
to make orders.
8.   The Minister may by order make such provisions as are
necessary for carrying into effect any of the provisions of the Fund
Agreement. 
  4    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
SCHEDULE 
( S E C T I O N  2 )
A R T I C L E S  O F  A G R E E M E N T  O F  T H E  I N T E R N A T I O N A L  M O N E T A R Y  F U N D
The Governments on whose behalf the present Agreement is signed agree as
follows:
Introductory Article
The International Monetary Fund is established and shall operate in accordance
with the following provisions:
Article I. Purposes
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 Fund’s resources 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 decisions by the purposes set forth in this
Article. 
Article II. Membership
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 the date specified in
Article XX, Section 2   ( e ).
SECTION 2.  Other members . - Membership shall be open to the governments of
other countries at such times and in accordance with such terms as may be prescribed
by the Fund.
Article III. Quotas and Subscriptions
SECTION 1.  Quotas . - Each member shall be assigned a quota. The quotas of the
members represented at the United Nations Monetary and Financial Conference
which accept membership before the date specified in Article XX, Section 2 ( e ),
shall be those set forth in Schedule A. The quotas of other members shall be
determined by the Fund.
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     5
SECTION 2.  Adjustment of quotas . - The Fund shall at intervals of five years
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. A four-fifths majority
of the total voting power shall be required for any change in quotas and no quota
shall be changed without the consent of the member concerned.
SECTION 3.  Subscriptions :  time, place, and form of payment.  -   ( a )   The
subscription of each member shall be equal to its quota and shall be paid in full to
the Fund at the appropriate depository on or before the date when the member
becomes eligible under Article XX, Section 4   ( c )   or   ( d ), to buy currencies from the
Fund.
( b ) Each member shall pay in gold, as a minimum, the smaller of 
 (i) twenty-five percent of its quota; or
(ii) ten percent of its net official holdings of gold and United States dollars as at
the date when the Fund notifies members under Article XX, Section 4 ( a )
that it will shortly be in a position to begin exchange transactions.
Each member shall furnish to the Fund the data necessary to determine its net
official holdings of gold and United States dollars.
( c ) Each member shall pay the balance of its quota in its own currency.
( d ) If the net official holdings of gold and United States dollars of any member
as at the date referred to in ( b ) (ii) above are not ascertainable because its territories
have been occupied by the enemy, the Fund shall fix an appropriate alternative date
for determining such holdings. If such date is later than that on which the country
becomes eligible under Article XX, Section 4 ( c ) or ( d ), to buy currencies from the
Fund, the Fund and the member shall agree on a provisional gold payment to be
made under   ( b ) above, and the balance of the member’s subscription shall be paid in
the member’s currency, subject to appropriate adjustment between the member and
the Fund when the net official holdings have been ascertained.
SECTION 4.  Payments when quotas are changed.  - ( a ) Each member which
consents to an increase in its quota shall, within thirty days after the date of its
consent, pay to the Fund twenty-five percent of the increase in gold and the balance
in its own currency. If, however, on the date when the member consents to an
increase, its monetary reserves are less than its new quota, the Fund may reduce the
proportion of the increase to be paid in gold.
( b ) If a member consents to a reduction in its quota, the Fund shall, within thirty
days after the date of the consent, pay to the member an amount equal to the
reduction. The payment shall be made in the member’s currency and in such amount
of gold as may be necessary to prevent reducing the Fund’s holdings of the currency
below seventy-five percent of the new quota.
SECTION 5.  Substitution of securities for currency.  - The Fund shall accept from
any member in place of any part of the member’s currency which in the judgement of
the Fund is not needed for its operations, notes or similar obligations issued by the
member or the depository designated by the member under Article XIII, Section 2,
which shall be non-negotiable, non-interest bearing and payable at their par value on
demand by crediting the account of the Fund in the designated depository. This
Section shall apply not only to currency subscribed by members but also to any
currency otherwise due to, or acquired by, the Fund.
  6    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
Article IV. Par Values of Currencies
SECTION 1.  Expression of par values . - ( a )   The par value of the currency of each
member shall be expressed in terms of gold as a common denominator or in terms of
the United States dollars of the weight and fineness in effect on July 1, 1944.
( b ) All computations relating to currencies of members for the purpose of
applying the provisions of this Agreement shall be on the basis of their par values. 
SECTION 2.  Gold purchases based on par values.  - The Fund shall prescribe a
margin above and below par value for transactions in gold by members, and no
member shall buy gold at a price above par value plus the prescribed margin, or sell
gold at a price below par value minus the prescribed margin.
SECTION 3.  Foreign exchange dealings based on parity. - The maximum and the
minimum rates for exchange transactions between the currencies of members taking
place within their territories shall not differ from parity
 (i) in the case of spot exchange transactions, by more than one percent; and 
(ii) in the case of other exchange transactions, by a margin which exceeds the
margin for spot exchange transactions by more than the Fund considers
reasonable.
SECTION 4.  Obligations regarding exchange stability.  - ( a ) Each member
undertakes to collaborate with the Fund to promote exchange stability, to maintain
orderly exchange arrangements with other members, and to avoid competitive
exchange alterations.
( b ) Each member undertakes, through appropriate measures consistent with this
Agreement, to permit within its territories exchange transactions between its
currency and the currencies of other members only within the limits prescribed under
Section 3 of this Article. A member whose monetary authorities, for the settlement
of international transactions, in fact freely buy and sell gold within the limits
prescribed by the Fund under Section 2 of this Article shall be deemed to be
fulfilling this undertaking.
SECTION 5.  Changes in par values.  - ( a ) A member shall not propose a change in
the par value of its currency except to correct a fundamental disequilibrium.
( b ) A change in the par value of a member’s currency may be made only on the
proposal of the member and only after consultation with the Fund.
( c ) When a change is proposed, the Fund shall first take into account the
changes, if any, which have already taken place in the initial par value of the
member’s currency as determined under Article XX, Section 4. If the proposed
change, together with all previous changes, whether increases or decreases,
  (i) does not exceed ten percent of the initial par value, the Fund shall raise no
objection;
 (ii) does not exceed a further ten percent of the initial par value, the Fund may
either concur or object, but shall declare its attitude within seventy-two
hours if the member so requests;
(iii) is not within (i) or (ii) above, the Fund may either concur or object, but shall
be entitled to a longer period in which to declare its attitude.
( d ) Uniform changes in par values made under Section 7 of this Article shall not
be taken into account in determining whether a proposed change falls within (i), (ii),
or (iii) of   ( c ) above.
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     7
( e ) A member may change the par value of its currency without the concurrence
of the Fund if the change does not affect the international transactions of members of
the Fund.
( f ) The Fund shall concur in a proposed change which is within the terms of ( c )
(ii) or ( c ) (iii) above if it is satisfied that the change is necessary to correct a
fundamental disequilibrium. In particular, provided it is so satisfied, it shall not
object to a proposed change because of the domestic social or political policies of
the member proposing the change.
SECTION 6.  Effect of unauthorized changes.  - If a member changes the par value
of its currency despite the objection of the Fund, in cases where the Fund is entitled
to object, the member shall be ineligible to use the resources of the Fund unless the
Fund otherwise determines; and if, after the expiration of a reasonable period, the
difference between the member and the Fund continues, the matter shall be subject
to the provisions of Article XV, Section 2 ( b ).
SECTION 7.  Uniform changes in par values.  - Notwithstanding the provisions of
Section 5 ( b ) of this Article, the Fund by a majority of the total voting power may
make uniform proportionate changes in the par values of the currencies of all
members, provided each such change is approved by every member which has ten
percent or more of the total of the quotas. The par value of a member’s currency
shall, however, not be changed under this provision if, within seventy-two hours of
the Fund’s action, the member informs the Fund that it does not wish the par value of
its currency to be changed by such action.
SECTION 8.  Maintenance of gold value of the Fund’s assets.  - ( a ) The gold value
of the Fund’s assets shall be maintained notwithstanding changes in the par or
foreign exchange value of the currency of any member.
( b ) Whenever (i) the par value of a member’s currency is reduced, or (ii) the
foreign exchange value of a member’s currency has, in the opinion of the Fund,
depreciated to a significant extent within that member’s territories, the member shall
pay to the Fund within a reasonable time an amount of its own currency equal to the
reduction in the gold value of its currency held by the Fund.
( c ) Whenever the par value of a member’s currency is increased, the Fund shall
return to such member within a reasonable time an amount in its currency equal to
the increase in the gold value of its currency held by the Fund.
( d ) The provisions of this Section shall apply to a uniform proportionate change
in the par values of the currencies of all members, unless at the time when such a
change is proposed the Fund decides otherwise.
SECTION 9.  Separate currencies within a member’s territories.  - A member
proposing a change in the par value of its currency shall be deemed, unless it
declares otherwise, to be proposing a corresponding change in the par value of the
separate currencies of all territories in respect of which it has accepted this
Agreement under Article XX, Section 2   ( g ). It shall, however, be open to a member
to declare that its proposal relates either to the metropolitan currency alone, or only
to one or more specified separate currencies, or to the metropolitan currency and one
or more specified separate currencies.
Article V. Transactions with the Fund
SECTION 1.  Agencies dealing with the Fund.  - Each member shall deal with the
Fund only through its Treasury, central bank, stabilization fund, or other similar
fiscal agency and the Fund shall deal only with or through the same agencies.
  8    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
SECTION 2.  Limitation on the Fund’s operations . - Except as otherwise provided
in this Agreement, operations on the account of the Fund shall be limited to
transactions for the purpose of supplying a member, on the initiative of such
member, with the currency of another member in exchange for gold or for the
currency of the member desiring to make the purchase.
SECTION 3.  Conditions governing use of the Fund’s resources.  - ( a )   A member
shall be entitled to buy the currency of another member from the Fund in exchange
for its own currency subject to the following conditions:
  (i) The member desiring to purchase the currency represents that it is presently
needed for making in that currency payments which are consistent with the
provisions of this Agreement;
 (ii) The Fund has not given notice under Article VII, Section 3, that its holdings
of the currency desired have become scarce;
(iii) The proposed purchase would not cause the Fund’s holdings of the
purchasing member’s currency to increase by more than twenty-five percent
of its quota during the period of twelve months ending on the date of the
purchase nor to exceed two hundred percent of its quota, but the twenty-five
percent limitation shall apply only to the extent that the Fund’s holdings of
the member’s currency have been brought above seventy-five percent of its
quota if they had been below that amount;
 (iv) The Fund has not previously declared under Section 5 of this Article, Article
IV, Section 6, Article VI, Section 1, or Article XV, Section 2 ( a ), that the
member desiring to purchase is ineligible to use the resources of the Fund.
( b ) A member shall not be entitled without the permission of the Fund to use the
Fund’s resources to acquire currency to hold against forward exchange transactions.
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 ( a )
of this Article, especially in the case of members with a record of avoiding large or
continuous use of the Fund’s 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 gold, silver, securities, or other 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 resources . - Whenever the Fund is of
the opinion that any member is using the 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 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 Fund’s resources or may, after giving reasonable notice to the member, declare it
ineligible to use the resources of the Fund.
SECTION 6.  Purchases of currencies from the Fund for gold.  -   ( a )   Any member
desiring to obtain, directly or indirectly, the currency of another member for gold
shall, provided that it can do so with equal advantage, acquire it by the sale of gold
to the Fund.
( b ) Nothing in this Section shall be deemed to preclude any member from
selling in any market gold newly produced from mines located within its territories.
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     9
SECTION 7.  Repurchase by a member of its currency held by the Fund.  - ( a ) A
member may repurchase from the Fund and the Fund shall sell for gold any part of
the Fund’s holdings of its currency in excess of its quota.
( b ) At the end of each financial year of the Fund, a member shall repurchase
from the Fund with gold or convertible currencies, as determined in accordance with
Schedule B, part of the Fund’s holdings of its currency under the following
conditions:
 (i) Each member shall use in repurchases of its own currency from the Fund an
amount of its monetary reserves equal in value to one-half of any increase
that has occurred during the year in the Fund’s holdings of its currency plus
one-half of any increase, or minus one-half of any decrease, that has
occurred during the year in the member’s monetary reserves. This rule shall
not apply when a member’s monetary reserves have decreased during the
year by more than the Fund’s holdings of its currency have increased.
(ii) If after the repurchase described in (i) above (if required) has been made, a
member’s holdings of another member’s currency (or of gold acquired from
that member) are found to have increased by reason of transactions in terms
of that currency with other members or persons in their territories, the
member whose holdings of such currency (or gold) have thus increased shall
use the increase to repurchase its own currency from the Fund.
( c ) None of the adjustments described in ( b ) above shall be carried to a point at
which
  (i) the member’s monetary reserves are below its quota, or
 (ii) the Fund’s holdings of its currency are below seventy-five percent of its
quota, or
(iii) the Fund’s holdings of any currency required to be used are above seventy-
five percent of the quota of the member concerned.
SECTION 8.  Charges . - ( a ) Any member buying the currency of another member
from the Fund in exchange for its own currency shall pay a service charge uniform
for all members of three-fourths percent in addition to the parity price. The Fund in
its discretion may increase this service charge to not more than one percent or reduce
it to not less than one-half percent.
( b ) The Fund may levy a reasonable handling charge on any member buying
gold from the Fund or selling gold to the Fund.
( c ) The Fund shall levy charges uniform for all members which shall be payable
by any member on the average daily balances of its currency held by the Fund in
excess of its quota. These charges shall be at the following rates:
  (i) On amounts not more than twenty-five percent in excess of the quota : no
charge for the first three months; one-half percent  per annum  for the next
nine months; and thereafter an increase in the charge of one-half percent for
each subsequent year.
 (ii) On amounts more than twenty-five percent and not more than fifty percent in
excess of the quota : an additional one-half percent for the first year; and an
additional one-half percent for each subsequent year.
(iii) On each additional bracket of twenty-five percent in excess of the quota : an
additional one-half percent for the first year; and an additional one-half
percent for each subsequent year.
  10    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
( d ) Whenever the Fund’s holdings of a member’s currency are such that the
charge applicable to any bracket for any period has reached the rate of four percent
per annum , the Fund and the member shall consider means by which the Fund’s
holdings of the currency can be reduced. Thereafter, the charges shall rise in
accordance with the provisions of ( c ) above until they reach five percent and failing
agreement, the Fund may then impose such charges as it deems appropriate.
( e ) The rates referred to in ( c )   and   ( d ) above may be changed by a three-fourths
majority of the total voting power.
( f ) All charges shall be paid in gold. If, however, the member’s monetary
reserves are less than one-half of its quota, it shall pay in gold only that proportion
of the charges due which such reserves bear to one-half of its quota, and shall pay
the balance in its own currency.
Article VI. Capital Transfers
SECTION 1.  Use of the Fund’s resources for capital transfers . - ( a ) A member
may not make net use of the Fund’s resources to meet a large or sustained out flow
of capital, and the Fund may request a member to exercise controls to prevent such
use of the resources of the Fund. If, after receiving such a request, a member fails to
exercise appropriate controls, the Fund may declare the member ineligible to use the
resources of the Fund.
( b ) Nothing in this Section shall be deemed
 (i) to prevent the use of the resources of the Fund for capital transactions of
reasonable amount required for the expansion of exports or in the ordinary
course of trade, banking or other business, or
(ii) to affect capital movements which are met out of a member’s own resources
of gold and foreign exchange, but members undertake that such capital
movements will be in accordance with the purposes of the Fund.
SECTION 2.  Special provisions for capital transfers.  - If the Fund’s holdings of
the currency of a member have remained below seventy-five percent of its quota for
an immediately preceding period of not less than six months, such member, if it has
not been declared ineligible to use the resources of the Fund under Section 1 of this
Article, Article IV, Section 6, Article V, Section 5, or Article XV, Section 2 ( a ),
shall be entitled, notwithstanding the provisions of Section 1 ( a ) of this Article, to
buy the currency of another member from the Fund with its own currency for any
purpose, including capital transfers. Purchases for capital transfers under this
Section shall not, however, be permitted if they have the effect of raising the Fund’s
holdings of the currency of the member desiring to purchase above seventy-five per
cent of its quota, or of reducing the Fund’s holdings of the currency desired below
seventy-five percent of the quota of the member whose currency is desired.
SECTION 3.  Controls of capital transfers . - Members may exercise such controls
as are necessary to regulate international capital movements, but no member may
exercise these controls in a manner which will restrict payments for current
transactions or which will unduly delay transfers of funds in settlement of
commitments, except as provided in Article VII, Section 3   ( b ), and in Article XIV,
Section 2.
Article VII.  Scarce Currencies
SECTION 1.  General scarcity of currency.  - If the Fund finds that a general
scarcity of a particular currency is developing, the Fund may so inform members and
may issue a report setting forth the causes of the scarcity and containing
recommendations designed to bring it to an end. A representative of the member
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     11
whose currency is involved shall participate in the preparation of the report.
SECTION 2.  Measures to replenish the Fund’s holdings of scarce currencies.  -
The Fund may, if it deems such action appropriate to replenish its holdings of any
member’s currency, take either or both of the following steps:
 (i)Propose to the member  that, on terms and  conditions  agreed  between the
Fund and the member, the latter lend its currency to the Fund or that, with
the approval of the member, the Fund borrow such currency from some other
source either within or outside the territories of the member, but no member
shall be under any obligation to make such loans to the Fund or to approve
the borrowing of its currency by the Fund from any other source.
(ii)Require the member to sell its currency to the Fund for gold.
SECTION 3.  Scarcity of the Fund’s holdings . - ( a ) If it becomes evident to the
Fund that the demand for a member’s currency seriously threatens the Fund’s ability
to supply that currency, the Fund, whether or not it has issued a report under Section
1 of this Article, shall formally declare such currency scarce and shall thenceforth
apportion its existing and accruing supply of the scarce currency with due regard to
the relative needs of members, the general international economic situation, and any
other pertinent considerations. The Fund shall also issue a report concerning its
action.
( b ) A formal declaration under   ( a ) above shall operate as an authorization to any
member, after consultation with the Fund, temporarily to impose limitations on the
freedom of exchange operations in the scarce currency. Subject to the provisions of
Article IV, Sections 3 and 4, the member shall have complete jurisdiction in
determining the nature of such limitations, but they shall be no more restrictive than
is necessary to limit the demand for the scarce currency to the supply held by, or
accruing to, the member in question; and they shall be relaxed and removed as
rapidly as conditions permit.
( c ) The authorization under ( b ) above shall expire whenever the Fund formally
declares the currency in question to be no longer scarce.
SECTION 4.  Administration of restrictions.  - Any member imposing restrictions
in respect of the currency of any other member pursuant to the provisions of Section
3 ( b ) of this Article shall give sympathetic consideration to any representations by
the other member regarding the administration of such restrictions.
SECTION 5.  Effect of other international agreements on restrictions.  - Members
agree not to invoke the obligations of any engagements entered into with other
members prior to this Agreement in such a manner as will prevent the operation of
the provisions of this Article.
Article VIII. General Obligations of Members
SECTION 1.  Introduction . - In addition to the obligations assumed under other
articles of this Agreement, each member undertakes the obligations set out in this
Article.
SECTION 2.  Avoidance of restrictions on current payments.  -   ( a )   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.
( b ) Exchange contracts which involve the currency of any member and which
are contrary to the exchange control regulations of that member maintained or
imposed consistently with this Agreement shall be unenforceable in the territories of
  12    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
any member. In addition, members may, by mutual accord, co-operate in measures
for the purpose of making the exchange control regulations of either member more
effective, provided that such measures and regulations are consistent with this
Agreement.
SECTION 3.  Avoidance of discriminatory currency practices.  - No member shall
engage in, or permit any of its fiscal agencies referred to in Article V, Section l, to
engage in, any discriminatory currency arrangements or multiple currency practices
except as authorized under this Agreement or approved by the Fund. If such
arrangements and practices are engaged in at the date when this 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 4 of that Article shall apply.
SECTION 4.  Convertibility of foreign held balances.  - ( a ) 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 shall have the option to pay either in the currency of the
member making the request or in gold.
( b ) The obligation in ( a ) above shall not apply
  (i) when the convertibility of the balances has been restricted consistently with
Section 2 of this Article, or Article VI, Section 3; or
 (ii) when 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; or
(iii) when the balances have been acquired contrary to the exchange regulations
of the member which is asked to buy them; or
(iv) when the currency of the member requesting the purchase has been declared
scarce under Article VII, Section 3 ( a ); or
 (v) when 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.
SECTION 5.  Furnishing of information.  -   ( a ) The Fund may require members to
furnish it with such information as it deems necessary for its operations, including,
as the minimum necessary for the effective discharge of the Fund’s duties, national
data on the following matters:
    (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.
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     13
 (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.
 (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.
( b ) 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. Members undertake, however, to furnish the desired
information in as detailed and accurate a manner as is practicable, and, so far as
possible, to avoid mere estimates.
( c ) The Fund may arrange to obtain further information by agreement with
members. It shall act as a centre for the collection and exchange of information on
monetary and financial problems, thus facilitating the preparation of studies
designed to assist members in developing policies which further the purposes of the
Fund.
SECTION 6.  Consultation between members regarding existing international
agreements.  - Where under this Agreement a member is authorized in the special or
temporary circumstances specified in the Agreement to maintain or establish
restrictions on exchange transactions, and there are other engagements between
members entered into prior to this Agreement which conflict with the application of
such restrictions, the parties to such engagements will consult with one another with
a view to making such mutually acceptable adjustments as may be necessary. The
provisions of this Article shall be without prejudice to the operation of Article VII,
Section 5.
Article IX. Status, Immunities and Privileges
SECTION 1.  Purposes of Article.  - To enable the Fund to fulfil the functions with
which it is entrusted, the status, immunities and privileges set forth in this Article
shall be accorded to the Fund in the territories of each member.
SECTION 2.  Status of the Fund.  - 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; 
(iii) to institute legal proceedings.
SECTION 3.  Immunity from judicial process.  - The Fund, its property and its
assets, wherever located and by whomsoever held, shall enjoy immunity from every
form of judicial process except to the extent that it expressly waives its immunity for
the purpose of any proceedings or by the terms of any contract.
  14    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
SECTION 4.  Immunity from other action.  - Property and assets of the Fund,
wherever located and by whomsoever held, shall be immune from search,
requisition, confiscation, expropriation or any other form of seizure by executive or
legislative action.
SECTION 5.  Immunity of archives.  - The archives of the Fund shall be inviolable.
SECTION 6.  Freedom of assets from restrictions.  - To the extent necessary to
carry out the operations provided for in this Agreement, all property and assets of the
Fund shall be free from restrictions, regulations, controls and moratoria of any
nature.
SECTION 7.  Privilege for communications.  - The official communications of the
Fund shall be accorded by members the same treatment as the official
communications of other members.
SECTION 8.  Immunities and privileges of officers and employees.  - All governors,
executive directors, alternates, officers and employees of the Fund
  (i) shall be immune from legal process with respect to acts performed by them
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 the representatives, officials, and employees of
comparable rank of other members;
(iii) shall be granted the same treatment in respect of travelling facilities as is
accorded by members to representatives, officials and employees of
comparable rank of other members.
SECTION 9.  Immunities from taxation. -  ( a ) The Fund, its assets, property,
income and its operations and transactions authorized by this 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.
SECTION 10.  Application of Article.  - Each member shall take such action as is
necessary in its own territories for the purpose of making effective in terms of its
own law the principles set forth in this Article and shall inform the Fund of the
detailed action which it has taken.
Article X. Relations with Other International Organizations
The Fund shall cooperate within the terms of this Agreement with any general
international organization and with public international organizations having
specialized responsibilities in related fields. Any arrangements for such cooperation
which would involve a modification of any provision of this Agreement may be
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     15
effected only after amendment to this Agreement under Article XVII.
Article XI. Relations with Non-member Countries
SECTION 1.  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
with persons in a non-member’s territories which would be contrary to the
provisions of this Agreement or the purposes of the Fund;
 (ii) Not to cooperate with a non-member or with persons in a non-member’s
territories in practices which would be contrary to the provisions of this
Agreement or the purposes of the Fund; and
(iii) To cooperate with the Fund with a view to the application in its territories of
appropriate measures to prevent transactions with non-members or with
persons in their territories which would be contrary to the provisions of this
Agreement or the purposes of the Fund.
SECTION 2.  Restrictions on transactions with non-member countries.  - Nothing
in this Agreement shall affect the right of any member to impose restrictions on
exchange transactions with non-members or with persons in their territories unless
the Fund finds that such restrictions prejudice the interests of members and are
contrary to the purposes of the Fund.
Article XII. Organization and Management
SECTION 1.  Structure of the Fund.  - The Fund shall have a Board of Governors,
Executive Directors, a Managing Director, and a staff.
SECTION 2 . Board of Governors.  -   ( a ) All powers of the Fund shall be vested in
the Board of Governors, consisting of one governor and one alternate appointed by
each member in such manner as it may determine. Each governor and each alternate
shall serve for five years, subject to the pleasure of the member appointing him, and
may be reappointed. No alternate may vote except in the absence of his principal.
The Board shall select one of the governors as chairman.
( b ) The Board of Governors may delegate to the Executive Directors authority
to exercise any powers of the Board, except the power to:
   (i) Admit new members and determine the conditions of their admission. 
  (ii) Approve a revision of quotas.
 (iii) Approve a uniform change in the par value of the currencies of all members. 
 (iv) Make arrangements to cooperate with other international organizations
(other than informal arrangements of a temporary or administrative
character).
  (v) Determine the distribution of the net income of the Fund. 
 (vi) Require a member to withdraw.
 (vii) Decide to liquidate the Fund.
(viii) Decide appeals from interpretations of this Agreement given by the
Executive Directors.
( c ) The Board of Governors shall hold an annual meeting and such other
meetings as may be provided for by the Board or called by the Executive Directors.
Meetings of the Board shall be called by the Directors whenever requested by five
  16    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
members or by members having one-quarter of the total voting power.
( d ) A quorum for any meeting of the Board of Governors shall be a majority of
the governors exercising not less than two-thirds of the total voting power.
( e ) Each governor shall be entitled to cast the number of votes allotted under
Section 5 of this Article to the member appointing him.
( f ) The Board of Governors may by regulation establish a procedure whereby
the Executive Directors, when they deem such action to be in the best interests of the
Fund, may obtain a vote of the governors on a specific question without calling a
meeting of the Board.
( g ) The Board of Governors, and the Executive Directors to the extent
authorized, may adopt such rules and regulations as may be necessary or appropriate
to conduct the business of the Fund.
( h ) Governors and alternates shall serve as such without compensation from the
Fund, but the Fund shall pay them reasonable expenses incurred in attending
meetings.
( i ) The Board of Governors shall determine the remuneration to be paid to the
Executive Directors and the salary and terms of the contract of service of the
Managing Director.
SECTION 3.  Executive Directors.  - ( a ) The Executive Directors shall be
responsible for the conduct of the general operations of the Fund, and for this
purpose shall exercise all the powers delegated to them by the Board of Governors.
( b ) There shall be not less than twelve directors who need not be governors, and
of whom
  (i) five shall be appointed by the five members having the largest quotas;
 (ii) not more than two shall be appointed when the provisions of ( c ) below
apply; 
(iii) five shall be elected by the members not entitled to appoint directors, other
than the American Republics; and
(iv) two shall be elected by the American Republics not entitled to appoint
directors.
For the purposes of this paragraph, members means governments of countries
whose names are set forth in Schedule A, whether they become members in
accordance with Article XX or in accordance with Article II, Section 2. When
governments of other countries become members, the Board of Governors may, by a
four-fifths majority of the total voting power, increase the number of directors to be
elected.
( c ) If, at the second regular election of directors and thereafter, the members
entitled to appoint directors under ( b ) (i) above do not include the two members, the
holdings of whose currencies by the Fund have been, on the average over the
preceding two years, reduced below their quotas by the largest absolute amounts in
terms of gold as a common denominator, either one or both of such members, as the
case may be, shall be entitled to appoint a director.
( d ) Subject to Article XX, Section 3 ( b ) elections of elective directors shall be
conducted at intervals of two years in accordance with the provisions of Schedule C,
supplemented by such regulations as the Fund deems appropriate. Whenever the
Board of Governors increases the number of directors to be elected under ( b ) above,
it shall issue regulations making appropriate changes in the proportion of votes
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     17
required to elect directors under the provisions of Schedule C.
( e ) Each director shall appoint an alternate with full power to act for him when
he is not present. When the directors appointing them are present, alternates may
participate in meetings but may not vote.
( f ) Directors shall continue in office until their successors are appointed or
elected. If the office of an elected director becomes vacant more than ninety days
before the end of his term, another director shall be elected for the remainder of the
term by the members who elected the former director. A majority of the votes cast
shall be required for election. While the office remains vacant, the alternate of the
former director shall exercise his powers, except that of appointing an alternate.
( g ) The Executive Directors shall function in continuous session at the principal
office of the Fund and shall meet as often as the business of the Fund may require.
( h ) A quorum for any meeting of the Executive Directors shall be a majority of
the directors representing not less than one-half of the voting power.
( i ) Each appointed director shall be entitled to cast the number of votes allotted
under Section 5 of this Article to the member appointing him. Each elected director
shall be entitled to cast the number of votes which counted towards his election.
When the provisions of Section 5   ( b ) of this Article are applicable, the votes which a
director would otherwise be entitled to cast shall be increased or decreased
correspondingly. All the votes which a director is entitled to cast shall be cast as a
unit.
( j ) The Board of Governors shall adopt regulations under which a member not
entitled to appoint a director under   ( b ) above may send a representative to attend any
meeting of the Executive Directors when a request made by, or a matter particularly
affecting, that member is under consideration.
( k ) The Executive Directors may appoint such committees as they deem
advisable. Membership of committees need not be limited to governors or directors
or their alternates.
SECTION 4.  Managing Director and staff. -  ( a ) The Executive Directors shall
select a Managing Director who shall not be a governor or an executive director. The
Managing Director shall be chairman of the Executive Directors, 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 Directors so
decide.
( b ) The Managing Director shall be chief of the operating staff of the Fund and
shall conduct, under the direction of the Executive Directors, the ordinary business
of the Fund. Subject to the general control of the Executive Directors, he shall be
responsible for the organization, appointment and dismissal of the staff of the Fund.
( c ) 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 his
functions.
( d ) 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.
  18    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
SECTION 5.  Voting. -  ( a ) Each member shall have two hundred fifty votes plus
one additional vote for each part of its quota equivalent to one hundred thousand
United States dollars.
( b ) 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 
 (i) by the addition of one vote for the equivalent of each four hundred thousand
United States dollars of net sales of its currency up to the date when the vote
is taken, or
(ii) by the subtraction of one vote for the equivalent of each four hundred
thousand United States dollars of its net purchases of the currencies of other
members 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.
( c ) For the purpose of all computations under this Section, United States dollars
shall be deemed to be of the weight and fineness in effect on July 1, 1944, adjusted
for any uniform change under Article IV, Section 7, if a waiver is made under
Section 8 ( d ) of that Article.
( d ) Except as otherwise specifically provided, all decisions of the Fund shall be
made by a majority of the votes cast.
SECTION 6.  Distribution of net income. -  ( a ) The Board of Governors shall
determine annually what part of the Fund’s net income shall be placed to reserve and
what part, if any, shall be distributed.
( b ) If any distribution is made, there shall first be distributed a two percent non-
cumulative payment to each member on the amount by which seventy-five percent of
its quota exceeded the Fund’s average holdings of its currency during that year. The
balance shall be paid to all members in proportion to their quotas. Payments to each
member shall be made in its own currency.
SECTION 7.  Publication of reports. -  ( a ) 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 transactions and its holdings of gold and
currencies of members.
( b ) The Fund may publish such other reports as it deems desirable for carrying
out its purposes.
SECTION 8.  Communication of views to members. -  The Fund shall at all times
have the right to communicate its views informally to any member on any matter
arising under this Agreement. The Fund may, by a two-thirds majority of the total
voting power, decide to publish a report made to a member regarding its monetary or
economic conditions and developments which directly tend to produce a serious
disequilibrium in the international balance of payments of members. If the member
is not entitled to appoint an executive director, it shall be entitled to representation
in accordance with Section 3   ( j ) of this Article. The Fund shall not publish a report
involving changes in the fundamental structure of the economic organization of
members.
Article XIII. Offices and Depositories
SECTION 1.  Location of offices.  - 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.
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     19
SECTION 2.  Depositories . - ( a ) Each member country 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.
( b ) 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.
However, 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 Directors may transfer all or any part of the Fund’s gold holdings to any
place where they can be adequately protected.
SECTION 3.  Guarantee of the Fund’s 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.
Article XIV. Transitional Period
SECTION 1.  Introduction . - The Fund is not intended to provide facilities for
relief or reconstruction or to deal with international indebtedness arising out of the
war.
SECTION 2.  Exchange restrictions.  - In the post-war transitional period members
may, notwithstanding the provisions of any other articles of this Agreement,
maintain and adapt to changing circumstances (and, in the case of members whose
territories have been occupied by the enemy, introduce where necessary) restrictions
on payments and transfers for current international transactions. Members shall,
however, 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 maintenance of exchange stability. In
particular, members shall withdraw restrictions maintained or imposed 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 resources of the Fund.
SECTION 3.  Notification to the Fund.  - Each member shall notify the Fund before
it becomes eligible under Article XX, Section 4 ( c )   or   ( d ), to buy currency from 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 the above-mentioned
obligations.
SECTION 4.  Action of the Fund relating to restrictions.  - Not later than three
years after the date on which the Fund begins operations and in each year thereafter,
the Fund shall report on the restrictions still in force under Section 2 of this Article.
Five years after the date on which the Fund begins operations, and in each year
thereafter, any member still retaining any restrictions inconsistent with Article VIII,
Sections 2, 3, or 4, shall consult the Fund 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 favourable for the withdrawal of any particular
restriction, or for the general abandonment of restrictions, inconsistent with the
provisions of any other article of this Agreement. The member shall be given a
suitable time to reply to such representations. If the Fund finds that the member
  20    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
persists in maintaining restrictions which are inconsistent with the purposes of the
Fund, the member shall be subject to Article XV, Section 2   ( a ).
SECTION 5.  Nature of transitional period.  - In its relations with members, the
Fund shall recognize that the post-war transitional period will be one of change and
adjustment and in making decisions on requests occasioned thereby which are
presented by any member it shall give the member the benefit of any reasonable
doubt.
Article XV. Withdrawal from Membership
SECTION 1.  Right of members to withdraw.  - Any member may withdraw from
the Fund at any time by transmitting a notice in writing to the Fund at its principal
office. Withdrawal shall become effective on the date such notice is received.
SECTION 2.  Compulsory withdrawal.  - ( a )   If a member fails to fulfil any of its
obligations under this Agreement, the Fund may declare the member ineligible to use
the resources of the Fund. Nothing in this Section shall be deemed to limit the
provisions of Article IV, Section 6, Article V, Section 5, or Article VI, Section 1.
( b ) If, after the expiration of a reasonable period the member persists in its
failure to fulfil any of its obligations under this Agreement, or a difference between
a member and the Fund under Article IV, Section 6, continues, that member may be
required to withdraw from membership in the Fund by a decision of the Board of
Governors carried by a majority of the governors representing a majority of the total
voting power.
( c ) Regulations shall be adopted to ensure that before action is taken against
any member under ( a )   or   ( b ) above, the member shall be informed in reasonable time
of the complaint against it and given an adequate opportunity for stating its case,
both orally and in writing.
SECTION 3.  Settlement of accounts with members withdrawing . - When a member
withdraws from the Fund, normal transactions of the Fund in its currency shall cease
and settlement of all accounts between it and the Fund shall be made with reasonable
despatch by agreement between it and the Fund. If agreement is not reached
promptly, the provisions of Schedule D shall apply to the settlement of accounts.
Article XVI. Emergency Provisions
SECTION 1.  Temporary suspension.  -   ( a ) In the event of an emergency or the
development of unforeseen circumstances threatening the operations of the Fund, the
Executive Directors by unanimous vote may suspend for a period of not more than
one hundred twenty days the operation of any of the following provisions:
 (i) Article IV, Sections 3 and 4 ( b ) .
 (ii) Article V, Sections 2, 3, 7, 8 ( a )   and   ( f ). 
(iii) Article VI, Section 2.
(iv) Article XI, Section 1.
( b ) Simultaneously with any decision to suspend the operation of any of the
foregoing provisions, the Executive Directors shall call a meeting of the Board of
Governors for the earliest practicable date.
( c ) The Executive Directors may not extend any suspension beyond one
hundred twenty days. Such suspension may be extended, however, for an additional
period of not more than two hundred forty days, if the Board of Governors by a four-
fifths majority of the total voting power so decides, but it may not be further
extended except by amendment of this Agreement pursuant to Article XVII.
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     21
( d ) The Executive Directors may, by a majority of the total voting power,
terminate such suspension at any time.
SECTION 2.  Liquidation of the Fund. -  ( a ) The Fund may not be liquidated except
by decision of the Board of Governors. In an emergency, if the Executive Directors
decide that liquidation of the Fund may be necessary, they may temporarily suspend
all transactions, pending decision by the Board.
( b ) If the Board of Governors decides to liquidate the Fund, the Fund shall
forthwith cease to engage in any activities except those incidental to the orderly
collection and liquidation of its assets and the settlement of its liabilities, and all
obligations of members under this Agreement shall cease except those set out in this
Article, in Article XVIII, paragraph ( c ), in Schedule D, paragraph 7, and in Schedule
E.
( c ) Liquidation shall be administered in accordance with the provisions of
Schedule E.
Article XVII. Amendments
( a ) Any proposal to introduce modifications in this Agreement, whether
emanating from a member, a governor or the Executive Directors, shall be
communicated to the chairman of the Board of Governors who shall bring the
proposal before the Board. If the proposed amendment is approved by the Board the
Fund shall, by circular letter or telegram, ask all members whether they accept the
proposed amendment. When three-fifths of the members, having four-fifths of the
total voting power, have accepted the proposed amendment, the Fund shall certify
the fact by a formal communication addressed to all members.
( b ) Notwithstanding   ( a )   above, acceptance by all members is required in the
case of any amendment modifying
  (i) the right to withdraw from the Fund (Article XV, Section 1);
 (ii) the provision that no change in a member’s quota shall be made without its
consent (Article III, Section 2);
(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 (Article IV, Section 5 ( b )). 
( c ) Amendments shall enter into force for all members three months after the
date of the formal communication unless a shorter period is specified in the circular
letter or telegram.
Article XVIII. Interpretation
( a ) Any question of interpretation of the provisions of this Agreement arising
between any member and the Fund or between any members of the Fund shall be
submitted to the Executive Directors for their decision. If the question particularly
affects any member not entitled to appoint an executive director it shall be entitled to
representation in accordance with Article XII, Section 3   ( j ) .
( b ) In any case where the Executive Directors have given a decision under ( a )
above, any member may require that the question be referred to the Board of
Governors, whose decision shall be final. Pending the result of the reference to the
Board the Fund may, so far as it deems necessary, act on the basis of the decision of
the Executive Directors.
( c ) Whenever a disagreement arises between the Fund and a member which has
withdrawn, or between the Fund and any member during liquidation of the Fund,
such disagreement shall be submitted to arbitration by a tribunal of three arbitrators,
  22    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
one appointed by the Fund, another by the member or withdrawing member and an
umpire who, unless the parties otherwise agree, shall be appointed by the President
of the Permanent Court of International Justice or such other authority as may have
been prescribed by regulation adopted by the Fund. The umpire shall have full power
to settle all questions of procedure in any case where the parties are in disagreement
with respect thereto.
Article XIX. Explanation of Terms
In interpreting the provisions of this Agreement the Fund and its members shall be
guided by the following:
( a ) A member’s monetary reserves means its net official holdings of gold, of
convertible currencies of other members, and of the currencies of such non-members
as the Fund may specify.
( b ) The official holdings of a member means central holdings (that is, the
holdings of its Treasury, central bank, stabilization fund, or similar fiscal agency).  
( c ) The holdings of other official institutions or other banks within its territories
may, in any particular case, be deemed by the Fund, after consultation with the
member, to be official holdings to the extent that they are substantially in excess of
working balances; provided that for the purpose of determining whether, in a
particular case, holdings are in excess of working balances, there shall be deducted
from such holdings amounts of currency due to official institutions and banks in the
territories of members or non-members specified under   ( d )   below.
( d ) A member’s holdings of convertible currencies means its holdings of the
currencies of other members which are not availing themselves of the transitional
arrangements under Article XIV, Section 2, together with its holdings of the
currencies of such non-members as the Fund may from time to time specify. The
term currency for this purpose includes without limitation coins, paper money, bank
balances, bank acceptances, and government obligations issued with a maturity not
exceeding twelve months.
( e ) A member’s monetary reserves shall be calculated by deducting from its
central holdings the currency liabilities to the Treasuries, central banks, stabilization
funds, or similar fiscal agencies of other members or non-members specified under
( d ) above, together with similar liabilities to other official institutions and other
banks in the territories of members, or non-members specified under   ( d )   above. To
these net holdings shall be added the sums deemed to be official holdings of other
official institutions and other banks under   ( c ) above.
( f ) The Fund’s holdings of the currency of a member shall include any
securities accepted by the Fund under Article III, Section 5.
( g ) The Fund, after consultation with a member which is availing itself of the
transitional arrangements under Article XIV, Section 2, may deem holdings of the
currency of that member which carry specified rights of conversion into another
currency or into gold to be holdings of convertible currency for the purpose of the
calculation of monetary reserves.
( h ) For the purpose of calculating gold subscriptions under Article III, Section
3, a member’s net official holdings of gold and United States dollars shall consist of
its official holdings of gold and United States currency after deducting central
holdings of its currency by other countries and holdings of its currency by other
official institutions and other banks if these holdings carry specified rights of
conversion into gold or United States currency.
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     23
( i ) 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;
(4) Moderate remittances for family living expenses.
The Fund may, after consultation with the members concerned, determine whether
certain specific transactions are to be considered current transactions or capital
transactions.
Article XX. Final Provisions
SECTION 1.  Entry into force.  - This 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 this Article have been deposited on their behalf, but in no event shall this
Agreement enter into force before May 1, 1945.
SECTION 2.  Signature . - ( a ) Each government on whose behalf this Agreement is
signed shall deposit with the Government of the United States of America an
instrument setting forth that it has accepted this Agreement in accordance with its
law and has taken all steps necessary to enable it to carry out all of its obligations
under this Agreement.
( b ) Each government shall become a member of the Fund as from the date of the
deposit on its behalf of the instrument referred to in   ( a ) above, except that no
government shall become a member before this Agreement enters into force under
Section 1 of this Article.
( c ) The Government of the United States of America shall inform the
governments of all countries whose names are set forth in Schedule A, and all
governments whose membership is approved in accordance with Article II, Section
2, of all signatures of this Agreement and of the deposit of all instruments referred to
in ( a ) above.
( d ) At the time this Agreement is signed on its behalf, 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 the purpose
of meeting administrative expenses of the Fund. The Government of the United
States of America shall hold such funds in a special deposit account and shall
transmit them to the Board of Governors of the Fund when the initial meeting has
been called under Section 3 of this Article. If this Agreement has not come into force
by December 31, 1945, the Government of the United States of America shall return
such funds to the governments that transmitted them.
( e ) This Agreement shall remain open for signature at Washington on behalf of
the governments of the countries whose names are set forth in Schedule A until
December 31, 1945.
( f ) After December 31, 1945, this Agreement shall be open for signature on
behalf of the government of any country whose membership has been approved in
accordance with Article II, Section 2.
  24    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
( g ) By their signature of this Agreement, all governments accept it both on their
own behalf and in respect of all their colonies, overseas territories, all territories
under their protection, suzerainty, or authority and all territories in respect of which
they exercise a mandate.
( h ) In the case of governments whose metropolitan territories have been under
enemy occupation, the deposit of the instrument referred to in ( a ) above may be
delayed until one hundred eighty days after the date on which these territories have
been liberated. If, however, it is not deposited by any such government before the
expiration of this period the signature affixed on behalf of that government shall
become void and the portion of its subscription paid under ( d ) above shall be
returned to it.
( i ) Paragraphs ( d )   and   ( h ) shall come into force with regard to each signatory
government as from the date of its signature.
SECTION 3.  Inauguration of the Fund. -  ( a ) As soon as this Agreement enters into
force under Section 1 of this Article, each member shall appoint a governor and the
member having the largest quota shall call the first meeting of the Board of
Governors.
( b ) At the first meeting of the Board of Governors, arrangements shall be made
for the selection of provisional executive directors. The governments of the five
countries for which the largest quotas are set forth in Schedule A shall appoint
provisional executive directors. If one or more of such governments have not
become members, the executive directorships they would be entitled to fill shall
remain vacant until they become members, or until January 1, 1946, whichever is the
earlier. Seven provisional executive directors shall be elected in accordance with the
provisions of Schedule C and shall remain in office until the date of the first regular
election of executive directors which shall be held as soon as practicable after
January 1, 1946.
( c ) The Board of Governors may delegate to the provisional executive directors
any powers except those which may not be delegated to the Executive Directors. 
SECTION 4 . Initial determination of par values. -  ( a ) When the Fund is of the
opinion that it will shortly be in a position to begin exchange transactions, it shall so
notify the members and shall request each member to communicate within thirty
days the par value of its currency based on the rates of exchange prevailing on the
sixtieth day before the entry into force of this Agreement. No member whose
metropolitan territory has been occupied by the enemy shall be required to make
such a communication while that territory is a theater of major hostilities or for such
period thereafter as the Fund may determine. When such a member communicates
the par value of its currency the provisions of ( d ) below shall apply.
( b ) The par value communicated by a member whose metropolitan territory has
not been occupied by the enemy shall be the par value of that member’s currency for
the purposes of this Agreement unless, within ninety days after the request referred
to in ( a ) above has been received, (i) the member notifies the Fund that it regards the
par value as unsatisfactory, or (ii) the Fund notifies the member that in its opinion
the par value cannot be maintained without causing recourse to the Fund on the part
of that member or others on a scale prejudicial to the Fund and to members. When
notification is given under (i) or (ii) above, the Fund and the member shall, within a
period determined by the Fund in the light of all relevant circumstances, agree upon
a suitable par value for that currency. If the Fund and the member do not agree
within the period so determined, the member shall be deemed to have withdrawn
from the Fund on the date when the period expires.
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     25
( c ) When the par value of a member’s currency has been established under ( b )
above, either by the expiration of ninety days without notification, or by agreement
after notification, the member shall be eligible to buy from the Fund the currencies
of other members to the full extent permitted in this Agreement, provided that the
Fund has begun exchange transactions.
( d ) In the case of a member whose metropolitan territory has been occupied by
the enemy, the provisions of ( b ) above shall apply, subject to the following
modifications:
  (i) The period of ninety days shall be extended so as to end on a date to be fixed
by agreement between the Fund and the member.
 (ii) Within the extended period the member may, if the Fund has begun
exchange transactions, buy from the Fund with its currency the currencies of
other members, but only under such conditions and in such amounts as may
be prescribed by the Fund.
(iii) At any time before the date fixed under (i) above, changes may be made by
agreement with the Fund in the par value communicated under ( a ) above. 
( e ) If a member whose metropolitan territory has been occupied by the enemy
adopts a new monetary unit before the date to be fixed under   ( d ) (i) above, the par
value fixed by that member for the new unit shall be communicated to the Fund and
the provisions of ( d )   above shall apply.
( f ) Changes in par values agreed with the Fund under this Section shall not be
taken into account in determining whether a proposed change falls within (i), (ii), or
(iii) of Article IV, Section 5 ( c ).
( g ) A member communicating to the Fund a par value for the currency of its
metropolitan territory shall simultaneously communicate a value, in terms of that
currency, for each separate currency, where such exists, in the territories in respect
of which it has accepted this Agreement under Section 2 ( g ) of this Article, but no
member shall be required to make a communication for the separate currency of a
territory which has been occupied by the enemy while that territory is a theater of
major hostilities or for such period thereafter as the Fund may determine. On the
basis of the par value so communicated, the Fund shall compute the par value of
each separate currency. A communication or notification to the Fund under ( a ),   ( b )
or   ( d ) above regarding the par value of a currency, shall also be deemed, unless the
contrary is stated, to be a communication or notification regarding the par value of
all the separate currencies referred to above. Any member may, however, make a
communication or notification relating to the metropolitan or any of the separate
currencies alone. If the member does so, the provisions of the preceding paragraphs
(including   ( d ) above, if a territory where a separate currency exists has been
occupied by the enemy) shall apply to each of these currencies separately.
( h ) The Fund shall begin exchange transactions at such date as it may determine
after members having sixty-five percent of the total of the quotas set forth in
Schedule A have become eligible, in accordance with the preceding paragraphs of
this Section, to purchase the currencies of other members, but in no event until after
major hostilities in Europe have ceased.
( i ) The Fund may postpone exchange transactions with any member if its
circumstances are such that, in the opinion of the Fund, they would lead to use of the
resources of the Fund in a manner contrary to the purposes of this Agreement or
prejudicial to the Fund or the members.
  26    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
( j ) The par values of the currencies of governments which indicate their desire
to become members after December 31, 1945, shall be determined in accordance
with the provisions of Article II, Section 2.
Done at Washington, in a single copy which shall remain deposited in the archives
of the Government of the United States of America, which shall transmit certified
copies to all governments whose names are set forth in Schedule A and to all
governments whose membership is approved in accordance with Article II, Section
2.
Schedule A. Quotas
g I N   M I L L I O N S   O F   U N I T E D   S T A T E S   D O L L A R S h 
Australia ...................... 200  Iran  .................................. 25 
Belgium ....................... 225 Iraq ..................................... 8 
Bolivia .......................... 10  Liberia  ............................... 5 
Brazil  ......................... 150  Luxembourg  ..................... 10 
Canada  ....................... 300  Mexico .............................. 90 
Chile ............................. 50  Netherlands  .................... 275 
China ........................... 550  New Zealand  .................... 50 
Colombia ....................... 50  Nicaragua  ........................... 2 
Costa Rica ......................  5  Norway ............................. 50
  Cuba .............................. 50  Panama  ..............................  .5 
Czechoslovakia ............ 125  Paraguay  ............................ 2 
Denmark ....................... ( * ) Peru .................................. 25
Dominican Republic ........ 5  Philippine Commonwealth 15 
Ecuador ........................... 5  Poland  ............................ 125 
Egypt  ............................ 45  Union of South Africa  .... 100 
El Salvador ...................... 2.5  Union of Soviet Socialist
Ethiopia ........................... 6  Republics  .................... 1,200 
France  .......................  450  United Kingdom ........... 1,300 
Greece ..........................  40  United States................ 2,750 
Guatemala ......................  5  Uruguay  ........................... 15 
Haiti  ............................... 5  Venezuela ......................... 15 
Honduras ........................  2.5  Yugoslavia ........................ 60
Iceland  ........................... 1
India  ........................... 400
Total ....................       8,800
Schedule B. Provisions with Respect to Repurchase by a Member of Its 
Currency Held by the Fund
1. In determining the extent to which repurchase of a member’s currency from
the Fund under Article V, Section 7 ( b ), shall be made with each type of monetary
reserve, that is, with gold and with each convertible currency, the following rule,
subject to 2 below, shall apply:
*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.
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     27
( a ) If the member’s monetary reserves have not increased during the year, the
amount payable to the Fund shall be distributed among all types of reserves in
proportion to the member’s holdings thereof at the end of the year.
( b ) If the member’s monetary reserves have increased during the year a part of
the amount payable to the Fund equal to one-half of the increase shall be distributed
among those types of reserves which have increased in proportion to the amount by
which each of them has increased. The remainder of the sum payable to the Fund
shall be distributed among all types of reserves in proportion to the member’s
remaining holdings thereof.
( c ) If after all the repurchases required under Article V, Section 7 ( b ), had been
made, the result would exceed any of the limits specified in Article V, Section 7   ( c ),
the Fund shall require such repurchases to be made by the members proportionately
in such manner that the limits will not be exceeded.
2. The Fund shall not acquire the currency of any non-member under Article V,
Section 7   ( b )   and   ( c ) .
3. In calculating monetary reserves and the increase in monetary reserves
during any year for the purpose of Article V, Section 7 ( b )   and   ( c ), no account shall
be taken, unless deductions have otherwise been made by the member for such
holdings, of any increase in those monetary reserves which is due to currency
previously inconvertible having become convertible during the year; or to holdings
which are the proceeds of a long-term or medium-term loan contracted during the
year; or to holdings which have been transferred or set aside for repayment of a loan
during the subsequent year.
4. In the case of members whose metropolitan territories have been occupied
by the enemy, gold newly produced during the five years after the entry into force of
this Agreement from mines located within their metropolitan territories shall not be
included in computations of their monetary reserves or of increases in their monetary
reserves.
Schedule C. Election of Executive Directors
l. The election of the elective executive directors shall be by ballot of the
governors eligible to vote under Article XII, Section 3   ( b ) (iii) and (iv).
2. In balloting for the five directors to be elected under Article XII, Section 3
( b ) (iii), each of the governors eligible to vote shall cast for one person all of the
votes to which he is entitled under Article XII, Section 5 ( a ). The five persons
receiving the greatest number of votes shall be directors, provided that no person
who received less than nineteen percent of the total number of votes that can be cast
(eligible votes) shall be considered elected.
3. When five persons are not elected on the first ballot, a second ballot shall be
held in which the person who received the lowest number of votes shall be ineligible
for election and in which there shall vote only ( a )   those governors who voted in the
first ballot for a person not elected, and   ( b ) those governors whose votes for a person
elected are deemed under 4 below to have raised the votes cast for that person above
twenty percent of the eligible votes.
4. In determining whether the votes cast by a governor are to be deemed to
have raised the total of any person above twenty percent of the eligible votes the
twenty percent shall be deemed to include, first, the votes of the governor casting the
  28    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
largest number of votes for such person, then the votes of the governor casting the
next largest number, and so on until twenty percent is reached.
5. Any governor part of whose votes must be counted in order to raise the total
of any person above nineteen percent shall be considered as casting all of his votes
for such person even if the total votes for such person thereby exceed twenty
percent.
6. If, after the second ballot, five persons have not been elected, further ballots
shall be held on the same principles until five persons have been elected, provided
that after four persons are elected, the fifth may be elected by a simple majority of
the remaining votes and shall be deemed to have been elected by all such votes.
7.  The directors to be elected by the American Republics under Article XII,
Section 3   ( b ) (iv) shall be elected as follows:
( a ) Each of the directors shall be elected separately.
( b ) In the election of the first director, each governor representing an American
Republic eligible to participate in the election shall cast for one person all the votes
to which he is entitled. The person receiving the largest number of votes shall be
elected provided that he has received not less than forty-five percent of the total
votes.
( c ) If no person is elected on the first ballot, further ballots shall be held, in
each of which the person receiving the lowest number of votes shall be eliminated,
until one person receives a number of votes sufficient for election under ( b )   above.
( d ) Governors whose votes contributed to the election of the first director shall
take no part in the election of the second director.
( e ) Persons who did not succeed in the first election shall not be ineligible for
election as the second director.
( f ) A majority of the votes which can be cast shall be required for election of
the second director. If at the first ballot no person receives a majority, further ballots
shall be held in each of which the person receiving the lowest number of votes shall
be eliminated, until some person obtains a majority.
( g ) The second director shall be deemed to have been elected by all the votes
which could have been cast in the ballot securing his election.
Schedule D. Settlement of Accounts with Members Withdrawing
l. The Fund shall be obligated to pay to a member withdrawing an amount
equal to its quota, plus any other amounts due to it from the Fund, less any 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.
2. If the Fund’s holdings of the currency of the withdrawing member are not
sufficient to pay the net amount due from the Fund, the balance shall be paid in gold,
or in such other manner as may be agreed. If the Fund and the withdrawing member
do not reach agreement within six months of the date of withdrawal, the currency in
question held by the Fund shall be paid forthwith to the withdrawing member. Any
balance due shall be paid in ten half yearly instalments during the ensuing five years.
Each such instalment shall be paid, at the option of the Fund, either in the currency
of the withdrawing member acquired after its withdrawal or by the delivery of gold.
 MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND   g CAP. 209.     29
3. If the Fund fails to meet any instalment which is due in accordance with the
preceding paragraphs, the withdrawing member shall be entitled to require the Fund
to pay the instalment in any currency held by the Fund with the exception of any
currency which has been declared scarce under Article VII, Section 3.
4. If the Fund’s holdings of the currency of a withdrawing member exceed the
amount due to it, and if agreement on the method of settling accounts is not reached
within six months of the date of withdrawal, the former member shall be obligated to
redeem such excess currency in gold or, at its option, in the currencies of members
which at the time of redemption are convertible. Redemption shall be made at the
parity existing at the time of withdrawal from the Fund. The withdrawing member
shall complete redemption within five years of the date of withdrawal, or within such
longer period as may be fixed by the Fund, but shall not be required to redeem in any
half-yearly period more than one-tenth of the Fund’s excess holdings of its currency
at the date of withdrawal plus further acquisitions of the currency during such half-
yearly period. If the withdrawing member does not fulfil this obligation, the Fund
may in an orderly manner liquidate in any market the amount of currency which
should have been redeemed.
5. Any member desiring to obtain the currency of a member which has
withdrawn shall acquire it by purchase from the Fund, to the extent that such
member has access to the resources of the Fund and that such currency is available
under 4 above.
6. The withdrawing member guarantees the unrestricted use at all times of the
currency disposed of under 4 and 5 above for the purchase of goods or for payment
of sums due to it or to persons within its territories. It shall compensate the Fund for
any loss resulting from the difference between the par value of its currency on the
date of withdrawal and the value realized by the Fund on disposal under 4 and 5
above.
7. In the event of the Fund going into liquidation under Article XVI, Section 2,
within six months of the date on which the member withdraws, the account between
the Fund and that government shall be settled in accordance with Article XVI,
Section 2, and Schedule E.
Schedule E. Administration of Liquidation
1. In the event of liquidation the liabilities of the Fund other than the
repayment of subscriptions shall have priority in the distribution of the assets of the
Fund. In meeting each such liability the Fund shall use its assets in the following
order:
( 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.
2. After the discharge of the Fund’s liabilities in accordance with 1 above, the
balance of the Fund’s assets shall be distributed and apportioned as follows:
( a ) The Fund shall distribute its holdings of gold among the members whose
currencies are held by the Fund in amounts less than their quotas. These members
shall share the gold so distributed in the proportions of the amounts by which their
  30    CAP. 209. h      MALTA MEMBERSHIP OF THE INTERNATIONAL MONETARY FUND  
quotas exceed the Fund’s holdings of their currencies.
( b ) The Fund shall distribute to each member one-half the Fund’s holdings of its
currency but such distribution shall not exceed fifty percent of its quota.
( c ) The Fund shall apportion the remainder of its holdings of each currency
among all the members in proportion to the amounts due to each member after the
distributions under ( a )   and   ( b )   above.
3. Each member shall redeem the holdings of its currency apportioned to other
members under 2 ( c )   above, and shall agree with the Fund within three months after
a decision to liquidate upon an orderly procedure for such redemption.
4. If a member has not reached agreement with the Fund within the three-
month period referred to in 3 above, the Fund shall use the currencies of other
members apportioned to that member under 2   ( c ) above to redeem the currency of
that member apportioned to other members. Each currency apportioned to a member
which has not reached agreement shall be used, so far as possible, to redeem its
currency apportioned to the members which have made agreements with the Fund
under 3 above.
5. If a member has reached agreement with the Fund in accordance with 3
above, the Fund shall use the currencies of other members apportioned to that
member under 2   ( c ) above to redeem the currency of that member apportioned to
other members which have made agreements with the Fund under 3 above. Each
amount so redeemed shall be redeemed in the currency of the member to which it
was apportioned.
6. After carrying out the preceding paragraphs, the Fund shall pay to each
member the remaining currencies held for its account.
7. Each member whose currency has been distributed to other members under 6
above shall redeem such currency in gold or, at its option, in the currency of the
member requesting redemption, or in such other manner as may be agreed between
them. If the members involved do not otherwise agree, the member obligated to
redeem shall complete redemption within five years of the date of distribution, but
shall not be required to redeem in any half yearly period more than one-tenth of the
amount distributed to each other member. If the member does not fulfil this
obligation, the amount of currency which should have been redeemed may be
liquidated in an orderly manner in any market.
8. Each member whose currency has been distributed to other members under 6
above guarantees the unrestricted use of such currency at all times for the purchase
of goods or for payment of sums due to it or to persons in its territories. Each
member so obligated agrees to compensate other members for any loss resulting
from the difference between the par value of its currency on the date of the decision
to liquidate the Fund and the value realized by such members on disposal of its
currency.
