MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        1
CHAPTER 235
 MEMBERSHIP OF INTERNATIONAL FINANCIAL 
ORGANISATIONS ACT
To enable Malta to become a member of the International Bank for
Reconstruction and Development, the International Finance Corporation
and the International Development Association.
(26th June, 1973) *
Enacted by ACT XXVIII of 1973.
Short title.
Financial Organisations Act.
Interpretation.
"Association" means the International Development Association;
"Association Agreement" means the Articles of Agreement for
the establishment and operation of the Association as set out in the
First Schedule to this Act;
"Bank" means the International Bank for Reconstruction and
Development;
"Bank Agreement" means the Articles of Agreement for the
establishment and operation of the Bank as set out in the Second
Schedule to this Act;
"Corporation" means the International Finance Corporation;
"Corporation Agreement" means the Articles of Agreement for
the establishment and operation of the Corporation as set out in the
Third Schedule to this Act;
"Malta" has the same meaning as is assigned to it in section 124
of the Constitution;
"Membership Resolution" means the resolutions adopted by the
Board of Governors of the Bank, the Corporation and the
Association, respectively, specifying the terms and conditions upon
which Malta shall be admitted to membership in these
Organisations;
"Minister" means the Minister responsible for finance.
Authorisation for 
signing of and 
accepting the 
Agreements.
3. The Minister is hereby authorised on behalf of the
Government of Malta to sign any one or more of the following
agreements, that is to say, the Bank Agreement, the Corporation
Agreement and the Association Agreement and to deposit, in the
case of the Bank Agreement, with the Government of the United
States, and, in the cases of the Corporation Agreement and the
Association Agreement with the Bank, instruments of acceptance
of the said Agreements and of the terms and conditions respectively
prescribed thereunder relating to the admission of Malta to
membership, or by instruments under his hand, to empower such
person as may be named in such instruments to sign the said
* See  Government Notice No. 445 of 26th June, 1973.
    2   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
Agreements and to deposit the said instruments of acceptance as
aforesaid.
Effect of signature 
of the Agreements.
4. The provisions of the following sections shall have effect
in relation to each of the Agreements referred to in section 3 of this
Act immediately upon the signing of the relative Agreement in
accordance with the provisions of that section * .
Financial 
provisions relating 
to membership.
5. (1) There may be paid out of the Consolidated Fund on the
warrant of the Minister all sums required for the purpose of
making- 
( a ) all payments required to be made from time to time to
the Bank under the provisions of the Membership
Resolution and the Bank Agreement;
( b ) all payments required to be made from time to time to
the Corporation under the provisions of the
Membership Resolution and the Corporation
Agreement;
( c ) all payments required to be made from time to time to
the Association under the provisions of the
Membership Resolution and the Association
Agreement.
(2) The Minister may, if he thinks fit, create and issue, or direct
the Central Bank of Malta (as depository for the Government of
Malta for the purposes of Section 11 of Article V of the Bank
Agreement) to create and issue, to the Bank or the Association,
non-interest bearing and non-negotiable notes or other obligations
as is provided for by Section 12 of Article V of the Bank
Agreement and by paragraph ( e ) of Section 2 of Article II of the
Association Agreement (which sections relate to the acceptance by
the Bank or the Association, as the case may be, of notes or similar
obligations in place of currency):
   Provided that where the Minister has directed the Central Bank
of Malta to create and issue notes or other obligations as aforesaid,
the Minister shall also undertake as a firm and irrevocable
commitment to repay to the Central Bank of Malta such amount or
amounts of notes or other obligations as may be called for payment
by the Bank or the Association, such repayments to be made as
soon as possible and in no case later than a month after the date of
payment to the Bank or the Association; and in case of any such
payment all repayments due as aforesaid shall be a charge on the
Consolidated Fund and the sums required for such repayments are
hereby appropriated for that purpose.
(3) Any sums received by the Central Bank of Malta from the
Bank or the Corporation on account of Malta’s subscription to the
capital stock thereof and any sums received by the Central Bank of
Malta from the Association on account of Malta’s subscriptions
therein or of supplementary resources provided by it shall be paid
into the Consolidated Fund.
*The Bank Agreement was signed on the 26th September, 1983.
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        3
Certain provisions 
of the Agreements 
given force of law 
in Malta.
6. The provisions of:
( a ) Sections 2 to 9 inclusive of Article VII of the Bank
Agreement;
( b ) Sections 2 to 9 inclusive of Article VI of the
Corporation Agreement; and
( c ) Sections 2 to 9 inclusive of Article VIII of the
Association Agreement
shall have force of law in Malta, so however, that nothing in
Section 9 of Article VII of the Bank Agreement, Section 9 of
Article VI of the Corporation Agreement and Section 9 of Article
VIII of the Association Agreement shall be construed -
(i) as entitling the Bank, the Corporation or the
Association to import goods free of customs
duty without any restriction on their subsequent
sale in Malta;
(ii) as conferring on the Bank, the Corporation or
the Association any exemption from taxes and
duties which form part of the prices of goods
acquired by the Bank, the Corporation or the
Association in Malta; or
(iii) as conferring on the Bank, the Corporation or
the Association any exemption from taxes or
duties which are in fact no more than charges for
services rendered.
Power of Minister 
to make orders.
7. The Minister may by order make such provisions as are
necessary for carrying into effect any of the provisions of the Bank
Agreement, the Corporation Agreement and the Association
Agreement.
English text to 
prevail in 
Schedules.
8. In the Schedules to this Act, in the case of any conflict
between the Maltese and the English text, the English text shall
prevail.
    4   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
SCHEDULES 
FIRST SCHEDULE 
ġ SECTION  2ħ
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   D E V E L O P M E N T   A S S O C I A T I O N
 The Governments on whose behalf this Agreement is signed,
Considering:  
That mutual cooperation for constructive economic purposes, healthy
development of the world economy and balanced growth of international trade foster
international relationships conducive to the maintenance of peace and world
prosperity;
That an acceleration of economic development which will promote higher
standards of living and economic and social progress in the less-developed countries
is desirable not only in the interests of those countries but also in the interests of the
international community as a whole;
That achievement of these objectives would be facilitated by an increase in the
international flow of capital, public and private, to assist in the development of the
resources of the less-developed countries, do hereby agree as follows:
Introductory Article
The INTERNATIONAL DEVELOPMENT ASSOCIATION (hereinafter called
"the Association") is established and shall operate in accordance with the following
provisions: 
Article I
Purposes 
The purposes of the Association are to promote economic development, increase
productivity and thus raise standards of living in the less-developed areas of the
world included within the Association’s membership, in particular by providing
finance to meet their important developmental requirements on terms which are
more flexible and bear less heavily on the balance of payments than those of
conventional loans, thereby furthering the developmental objectives of the
International Bank for Reconstruction and Development (hereinafter called "the
Bank") and supplementing its activities.
The Association shall be guided in all its decisions by the provisions of this
Article. 
Article II
Membership; Initial Subscriptions 
SECTION 1.  Membership
( a ) The original members of the Association shall be those members of the Bank
listed in Schedule A hereto which, on or before the date specified in Article XI,
Section 2   ( c ), accept membership in the Association.
( b ) Membership shall be open to other members of the Bank at such times and in
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        5
accordance with such terms as the Association may determine.
SECTION 2.  Initial Subscriptions
( a ) Upon accepting membership, each member shall subscribe funds in the
amount assigned to it. Such subscriptions are herein referred to as initial
susbscriptions.
( b ) The initial subscription assigned to each original member shall be in the
amount set forth opposite its name in Schedule A, expressed in terms of United
States dollars of the weight and fineness in effect on January 1,1960.
( c ) Ten percent of the initial subscription of each original member shall be
payable in gold or freely convertible currency as follows: fifty percent within thirty
days after the date on which the Association shall begin operations pursuant to
Article XI, Section 4, or on the date on which the original member becomes a
member, whichever shall be later; twelve and one-half percent one year after the
beginning of operations of the Association; and twelve and one-half percent each
year thereafter at annual intervals until the ten percent portion of the initial
subscription shall have been paid in full.
( d ) The remaining ninety percent of the initial subscription of each original
member shall be payable in gold or freely convertible currency in the case of
members listed in Part I of Schedule A, and in the currency of the subscribing
member in the case of members listed in Part II of Schedule A. This ninety percent
portion of initial subscriptions of original members shall be payable in five equal
annual instalments as follows: the first such instalment within thirty days after the
date on which the Association shall begin operations pursuant to Article XI, Section
4, or on the date on which the original member becomes a member, whichever shall
be later; the second instalment one year after the beginning of operations of the
Association, and succeeding instalments each year thereafter at annual intervals until
the ninety percent portion of the initial subscription shall have been paid in full.
( e ) The Association shall accept from any member, in place of any part of the
member’s currency paid in or payable by the member under the preceding subsection
( d ) or under Section 2 of Article IV and not needed by the Association in its
operations, notes or similar obligations issued by the government of the member or
the depository designated by such member, which shall be non-negotiable, non-
interest-bearing and payable at their par value on demand to the account of the
Association in the designated depository.
( f ) For the purposes of this Agreement the Association shall regard as "freely
convertible currency":
(i) currency of a member which the Association determines, after
consultation with the International Monetary Fund, is adequately convertible into the
currencies of other members for the purposes of the Association’s operations; or
(ii) currency of a member which such member agrees, on terms satisfactory
to the Association, to exchange for the currencies of other members for the purposes
of the Association’s operations.
( g ) Except as the Association may otherwise agree, each member listed in Part I
of Schedule A shall maintain, in respect of its currency paid in by it as freely
convertible currency pursuant to subsection ( d ) of this Section, the same
convertibility as existed at the time of payment.
( h ) The conditions on which the initial subscriptions of members other than
original members may be made, and the amounts and the terms of payment thereof,
shall be determined by the Association pursuant to Section 1 ( b ) of this Article.
    6   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
SECTION 3.  Limitation on Liability
No member shall be liable, by reason of its membership, for obligations of the
Association.
Article III 
Additions to Resources 
SECTION 1.  Additional Subscriptions 
( a ) The Association shall at such time as it deems appropriate in the light of the
schedule for completion of payments on initial subscriptions of original members,
and at intervals of approximately five years thereafter, review the adequacy of its
resources and, if it deems desirable, shall authorize a general increase in
subscriptions. Notwithstanding the foregoing, general or individual increases in
subscriptions may be authorized at any time, provided that an individual increase
shall be considered only at the request of the member involved. Subscriptions
pursuant to this Section are herein referred to as additional subscriptions.
( b ) Subject to the provisions of paragraph ( c ) below, when additional
subscriptions are authorized, the amounts authorized for subscription and the terms
and conditions relating thereto shall be as determined by the Association.
( c ) When any additional subscription is authorized, each member shall be given
an opportunity to subscribe, under such conditions as shall be reasonably determined
by the Association, an amount which will enable it to maintain its relative voting
power, but no member shall be obligated to subscribe.
( d ) All decisions under this Section shall be made by a two-thirds majority of
the total voting power.
SECTION 2.  Supplementary Resources Provided by a Member in the Currency of
Another Member
( a ) The Association may enter into arrangements, on such terms and conditions
consistent with the provisions of this Agreement as may be agreed upon, to receive
from any member, in addition to the amounts payable by such member on account of
its initial or any additional subscription, supplementary resources in the currency of
another member, provided that the Association shall not enter into any such
arrangement unless the Association is satisfied that the member whose currency is
involved agrees to the use of such currency as supplementary resources and to the
terms and conditions governing such use. The arrangements under which any such
resources are received may include provisions regarding the disposition of earnings
on the resources and regarding the disposition of the resources in the event that the
member providing them ceases to be a member or the Association permanently
suspends its operations.
( b ) The Association shall deliver to the contributing member a Special
Development Certificate setting forth the amount and currency of the resources so
contributed and the terms and conditions of the arrangement relating to such
resources. A Special Development Certificate shall not carry any voting rights and
shall be transferable only to the Association.
( c ) Nothing in this Section shall preclude the Association from accepting
resources from a member in its own currency on such terms as may be agreed upon.
 
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        7
Article IV
Currencies 
SECTION 1.  Use of Currencies
( a ) Currency of any member listed in Part II of Schedule A, whether or not
freely convertible, received by the Association pursuant to Article II, Section 2 ( d ),
in payment of the ninety percent portion payable thereunder in the currency of such
member, and currency of such member derived therefrom as principal, interest or
other charges, may be used by the Association for administrative expenses incurred
by the Association in the territories of such member and, insofar as consistent with
sound monetary policies, in payment for goods and services produced in the
territories of such member and required for projects financed by the Association and
located in such territories; and in addition when and to the extent justified by the
economic and financial situation of the member concerned as determined by
agreement between the member and the Association, such currency shall be freely
convertible or otherwise usable for projects financed by the Association and located
outside the territories of the member.
( b ) The usability of currencies received by the Association in payment of
subscriptions other than initial subscriptions of original members, and currencies
derived therefrom as principal, interest or other charges, shall be governed by the
terms and conditions on which such subscriptions are authorized.
( c ) The usability of currencies received by the Association as supplementary
resources other than subscriptions, and currencies derived therefrom as principal,
interest or other charges, shall be governed by the terms of the arrangements
pursuant to which such currencies are received.
( d ) All other currencies received by the Association may be freely used and
exchanged by the Association and shall not be subject to any restriction by the
member whose currency is used or exchanged; provided that the foregoing shall not
preclude the Association from entering into any arrangements with the member in
whose territories any project financed by the Association is located restricting the
use by the Association of such member’s currency received as principal, interest or
other charges in connection with such financing.
( e ) The Association shall take appropriate steps to ensure that, over reasonable
intervals of time, the portions of the subscriptions paid under Article II, Section 2 ( d )
by members listed in Part I of Schedule A shall be used by the Association on an
approximately  pro rata  basis, provided, however, that such portions of such
subscriptions as are paid in gold or in a currency other than that of the subscribing
member may be used more rapidly.
SECTION 2.  Maintenance of Value of Currency Holdings
( a ) Whenever the par value of a member’s currency is reduced or the foreign
exchange value of a member’s currency has, in the opinion of the Association,
depreciated to a significant extent within that member’s territories, the member shall
pay to the Association within a reasonable time an additional amount of its own
currency sufficient to maintain the value, as of the time of subscription, of the
amount of the currency of such member paid in to the Association by the member
under Article II, Section 2( d ) ,  and currency furnished under the provisions of the
present paragraph, whether or not such currency is held in the form of notes accepted
pursuant to Article II, Section 2( e ), provided, however, that the foregoing shall apply
only so long as and to the extent that such currency shall not have been initially
disbursed or exchanged for the currency of another member.
    8   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
( b ) Whenever the par value of a member’s currency is increased, or the foreign
exchange value of a member’s currency has, in the opinion of the Association,
appreciated to a significant extent within that member’s territories, the Association
shall return to such member within a reasonable time an amount of that member’s
currency equal to the increase in the value of the amount of such currency to which
the provisions of paragraph ( a ) of this Section are applicable.
( c ) The provisions of the preceding paragraphs may be waived by the
Association when a uniform proportionate change in the par value of the currencies
of all its members is made by the International Monetary Fund.
( d ) Amounts furnished under the provisions of paragraph ( a ) of this Section to
maintain the value of any currency shall be convertible and usable to the same extent
as such currency.
Article V 
Operations
SECTION 1.  Use of Resources and Conditions of Financing
( a ) The Association shall provide financing to further development in the less-
developed areas of the world included within the Association’s membership.
( b ) Financing provided by the Association shall be for purposes which in the
opinion of the Association are of high developmental priority in the light of the
needs of the area or areas concerned and, except in special circumstances, shall be
for specific projects.
( c ) The Association shall not provide financing if in its opinion such financing
is available from private sources on terms which are reasonable for the recipient or
could be provided by a loan of the type made by the Bank.
( d ) The Association shall not provide financing except upon the
recommendation of a competent committee, made after a careful study of the merits
of the proposal. Each such committee shall be appointed by the Association and shall
include a nominee of the Governor or Governors representing the member or
members in whose territories the project under consideration is located and one or
more members of the technical staff of the Association. The requirement that the
committee include the nominee of a Governor or Governors shall not apply in the
case of financing provided to a public international or regional organization.
( e ) The Association shall not provide financing for any project if the member in
whose territories the project is located objects to such financing, except that it shall
not be necessary for the Association to assure itself that individual members do not
object in the case of financing provided to a public international or regional
organization.
( f ) The Association shall impose no conditions that the proceeds of its
financing shall be spent in the territories of any particular member or members. The
foregoing shall not preclude the Association from complying with any restrictions on
the use of funds imposed in accordance with the provisions of these Articles,
including restrictions attached to supplementary resources pursuant to agreement
between the Association and the contributor.
( g ) The Association shall make arrangements to ensure that the proceeds of any
financing are used only for the purposes for which the financing was provided, with
due attention to considerations of economy, efficiency and competitive international
trade and without regard to political or other non-economic influences or
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        9
considerations.
( h ) Funds to be provided under any financing operation shall be made available
to the recipient only to meet expenses in connection with the project as they are
actually incurred.
SECTION 2.  Form and Terms of Financing
( a ) Financing by the Association shall take the form of loans. The Association
may, however, provide other financing, either
(i) out of funds subscribed pursuant to Article III, Section 1, and funds
derived therefrom as principal, interest or other charges, if the authorization for such
subscriptions expressly provides for such financing; or
(ii) in special circumstances, out of supplementary resources furnished to
the Association, and funds derived therefrom as principal, interest or other charges,
if the arrangements under which such resources are furnished expressly authorized
such financing.
( b ) Subject to the foregoing paragraph, the Association may provide financing
in such forms and on such terms as it may deem appropriate, having regard to the
economic position and prospects of the area or areas concerned and to the nature and
requirements of the project.
( c ) The Association may provide financing to a member, the government of a
territory included within the Association’s membership, a political subdivision of
any of the foregoing, a public or private entity in the territories of a member or
members, or to a public international or regional organization.
( d ) In the case of a loan to an entity other than a member, the Association may,
in its discretion, require a suitable governmental or other guarantee or guarantees. 
( e ) The Association, in special cases, may make foreign exchange available for
local expenditures.
SECTION 3.  Modifications of Terms of Financing
The Association may, when and to the extent it deems appropriate in the light of
all relevant circumstances, including the financial and economic situation and
prospects of the member concerned, and on such conditions as it may determine,
agree to a relaxation or other modification of the terms on which any of its financing
shall have been provided.
SECTION 4.  Cooperation with Other International Organizations and Members
Providing Development Assistance
The Association shall cooperate with those public international organizations and
members which provide financial and technical assistance to the less-developed
areas of the world.
SECTION 5.  Miscellaneous Operations
In addition to the operations specified elsewhere in this Agreement, the
Association may:
(i) borrow funds with the approval of the member in whose currency the
loan is denominated;
(ii) guarantee securities in which it has invested in order to facilitate their
sale;
(iii) buy and sell securities it has issued or guaranteed or in which it has
    10   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
invested;
(iv) in special cases, guarantee loans from other sources for purposes not
inconsistent with the provisions of these Articles;
(v) provide technical assistance and advisory services at the request of a
member; and
(vi) exercise such other powers incidental to its operations as shall be
necessary or desirable in furtherance of its purposes.
SECTION 6.  Political Activity Prohibited
The Association and its officers shall not interfere in the political affairs of any
member; nor shall they be influenced in their decisions by the political character of
the member or members concerned. Only economic considerations shall be relevant
to their decisions, and these considerations shall be weighed impartially in order to
achieve the purposes stated in this Agreement.
Article VI 
Organization and Management 
SECTION 1.  Structure of the Association
The Association shall have a Board of Governors, Executive Directors, a President
and such other officers and staff to perform such duties as the Association may
determine.
SECTION 2.  Board of Governors
( a ) All the powers of the Association shall be vested in the Board of Governors.
( b ) Each Governor and Alternate Governor of the Bank appointed by a member
of the Bank which is also a member of the Association shall  ex officio  be a Governor
and Alternate Governor, respectively, of the Association. No Alternate Governor
may vote except in the absence of his principal. The Chairman of the Board of
Governors of the Bank shall  ex officio  be Chairman of the Board of Governors of the
Association except that if the Chairman of the Board of Governors of the Bank shall
represent a state which is not a member of the Association, then the Board of
Governors shall select one of the Governors as Chairman of the Board of Governors.
Any Governor or Alternate Governor shall cease to hold office if the member by
which he was appointed shall cease to be a member of the Association.
( c ) The Board of Governors may delegate to the Executive Directors authority
to exercise any of its powers, except the power to:
(i) admit new members and determine the conditions of their admission;
(ii) authorize additional subscriptions and determine the terms and
conditions relating thereto;
(iii) suspend a member;
(iv) decide appeals from interpretations of this Agreement given by the
Executive Directors;
 (v) make arrangements pursuant to Section 7 of this Article to cooperate
with other international organizations (other than informal arrangements of a
temporary and administrative character);
(vi) decide to suspend permanently the operations of the Association and to
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        11
distribute its assets;
(vii)  determine the distribution of the Association’s net income pursuant to
Section 12 of this Article; and
(viii)  approve proposed amendments to this Agreement.
( d ) The Board of Governors shall hold an annual meeting and such other
meetings as may be provided for by the Board of Governors or called by the
Executive Directors.
( e ) The annual   meeting of the Board of Governors shall be held in conjunction
with the annual meeting of the Board of Governors of the Bank.
( f ) 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.
( g ) The Association may by regulation establish a procedure whereby the
Executive Directors may obtain a vote of the Governors on a specific question
without calling a meeting of the Board of Governors.
( h ) 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 Association.
( i ) Governors and Alternate Governors shall serve as such without
compensation from the Association.
SECTION 3.  Voting  
( a ) Each original member shall, in respect of its initial subscription, have 500
votes plus one additional vote for each $5,000 of its initial subscription.
Subscriptions other than initial subscriptions of original members shall carry such
voting rights as the Board of Governors shall determine pursuant to the provisions of
Article II, Section 1 ( b ) or Article III, Section 1 ( b ) and ( c ), as the case may be.
Additions to resources other than subscriptions under Article II, Section 1 ( b ) and
additional subscriptions under Article III, Section 1, shall not carry voting rights.
( b ) Except as otherwise specifically provided, all matters before the Association
shall be decided by a majority of the votes cast.
SECTION 4.  Executive Directors
( a ) The Executive Directors shall be responsible for the conduct of the general
operations of the Association, and for this purpose shall exercise all the powers
given to them by this Agreement or delegated to them by the Board of Governors.
( b ) The Executive Directors of the Association shall be composed  ex officio  of
each Executive Director of the Bank who shall have been (i) appointed by a member
of the Bank which is also a member of the Association, or (ii) elected in an election
in which the votes of at least one member of the Bank which is also a member of the
Association shall have counted toward his election. The Alternate to each such
Executive Director of the Bank shall  ex officio  be an Alternate Director of the
Association. Any Director shall cease to hold office if the member by which he was
appointed, or if all the members whose votes counted toward his election, shall cease
to be members of the Association.
( c ) Each Director who is an appointed Executive Director of the Bank shall be
entitled to cast the number of votes which the member by which he was appointed is
entitled to cast in the Association. Each Director who is an elected Executive
Director of the Bank shall be entitled to cast the number of votes which the member
or members of the Association whose votes counted toward his election in the Bank
    12   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
are entitled to cast in the Association. All the votes which a Director is entitled to
cast shall be cast as a unit.
( d ) An Alternate Director shall have full power to act in the absence of the
Director who shall have appointed him. When a Director is present, his Alternate
may participate in meetings but shall not vote.
( e ) A quorum for any meeting of the Executive Directors shall be a majority of
the Directors exercising not less than one-half of the total voting power.
( f ) The Executive Directors shall meet as often as the business of the
Association may require.
( g ) The Board of Governors shall adopt regulations under which a member of
the Association not entitled to appoint an Executive Director of the Bank may send a
representative to attend any meeting of the Executive Directors of the Association
when a request made by, or a matter particularly affecting, that member is under
consideration.
SECTION 5.  President and Staff
( a ) The President of the Bank shall be  ex officio  President of the Association.
The President shall be Chairman of the Executive Directors of the Association 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.
( b ) The President shall be chief of the operating staff of the Association. Under
the direction of the Executive Directors he shall conduct the ordinary business of the
Association and under their general control shall be responsible for the organization,
appointment and dismissal of the officers and staff. To the extent practicable,
officers and staff of the Bank shall be appointed to serve concurrently as officers and
staff of the Association.
( c ) The President, officers and staff of the Association, in the discharge of their
offices, owe their duty entirely to the Association and to no other authority. Each
member of the Association shall respect the international character of this duty and
shall refrain from all attempts to influence any of them in the discharge of their
duties.
( d ) In appointing officers and staff the President 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.
SECTION 6.  Relationship to the Bank
( a ) The Association shall be an entity separate and distinct from the Bank and
the funds of the Association shall be kept separate and apart from those of the Bank.
The Association shall not borrow from or lend to the Bank except that this shall not
preclude the Association from investing funds not needed in its financing operations
in obligations of the Bank.
( b ) The Association may make arrangements with the Bank regarding facilities,
personnel and services and arrangements for reimbursement of administrative
expenses paid in the first instance by either organization on behalf of the other.
( c ) Nothing in this Agreement shall make the Association liable for the acts or
obligations of the Bank, or the Bank liable for the acts or obligations of the
Association.
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        13
SECTION 7.  Relations with Other International Organizations
The Association shall enter into formal arrangements with the United Nations and
may enter into such arrangements with other public international organizations
having specialized responsibilities in related fields.
SECTION 8.  Location of Offices
The principal office of the Association shall be the principal office of the Bank.
The Association may establish other offices in the territories of any member.
SECTION 9.  Depositories
Each member shall designate its central bank as a depository in which the
Association may keep holdings of such member’s currency or other assets of the
Association, or, if it has no central bank, it shall designate for such purpose such
other institution as may be acceptable to the Association. In the absence of any
different designation, the depository designated for the Bank shall be the depository
for the Association.
SECTION 10.  Channel of Communication
Each member shall designate an appropriate authority with which the Association
may communicate in connection with any matter arising under this Agreement. In
the absence of any different designation, the channel of communication designated
for the Bank shall be the channel for the Association.
SECTION 11.  Publication of Reports and Provision of Information
( a ) The Association shall publish an annual report containing an audited
statement of its accounts and shall circulate to members at appropriate intervals a
summary statement of its financial position and of the results of its operations.
( b ) The Association may publish such other reports as it deems desirable to
carry out its purposes.
( c ) Copies of all reports, statements and publications made under this Section
shall be distributed to members.
SECTION 12.  Disposition of Net Income
The Board of Governors shall determine from time to time the disposition of the
Association’s net income, having due regard to provision for reserves and
contingencies.
Article VII
Withdrawal; Suspension of Membership; Suspension of Operations 
SECTION 1.  Withdrawal by Members
Any member may withdraw from membership in the Association at any time by
transmitting a notice in writing to the Association at its principal office. Withdrawal
shall become effective upon the date such notice is received.
SECTION 2.  Suspension of Membership
( a ) If a member fails to fulfil any of its obligations to the Association, the
Association may suspend its membership by decision of a majority of the Governors,
exercising a majority of the total voting power. The member so suspended shall
automatically cease to be a member one year from the date of its suspension unless a
decision is taken by the same majority to restore the member to good standing.
    14   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
( b ) While under suspension, a member shall not be entitled to exercise any
rights under this Agreement except the right of withdrawal, but shall remain subject
to all obligations.
SECTION 3.  Suspension or Cessation of Membership in the Bank
Any member which is suspended from membership in, or ceases to be a member
of, the Bank shall automatically be suspended from membership in, or cease to be a
member of, the Association, as the case may be.
SECTION 4.  Rights and Duties of Governments Ceasing to be Members
( a ) When a government ceases to be a member, it shall have no rights under this
Agreement except as provided in this Section and in Article X ( c ) but it shall, except
as in this Section otherwise provided, remain liable for all financial obligations
undertaken by it to the Association, whether as a member, borrower, guarantor or
otherwise.
( b ) When a government ceases to be a member, the Association and the
government shall proceed to a settlement of accounts. As part of such settlement of
accounts, the Association and the government may agree on the amounts to be paid
to the government on account of its subscription and on the time and currencies of
payment. The term "subscription" when used in relation to any member government
shall for the purposes of this Article be deemed to include both the initial
subscription and any additional subscription of such member government.
( c ) If no such agreement is reached within six months from the date when the
government ceased to be a member, or such other time as may be agreed upon by the
Association and the government, the following provisions shall apply:
(i) The government shall be relieved of any further liability to the
Association on account of its subscription, except that the government shall pay to
the Association forthwith amounts due and unpaid on the date when the government
ceased to be a member and which in the opinion of the Association are needed by it
to meet its commitments as of that date under its financing operations.
(ii) The Association shall return to the government funds paid in by the
government on account of its subscription or derived therefrom as principal
repayments and held by the Association on the date when the government ceased to
be a member, except to the extent that in the opinion of the Association such funds
will be needed by it to meet its commitments as of that date under its financing
operations.
(iii) The Association shall pay over to the government a  pro rata  share of all
principal repayments received by the Association after the date on which the
government ceases to be a member on loans contracted prior thereto, except those
made out of supplementary resources provided to the Association under
arrangements specifying special liquidation rights. Such share shall be such
proportion of the total principal amount of such loans as the total amount paid by the
government on account of its subscription and not returned to it pursuant to clause
(ii) above shall bear to the total amount paid by all members on account of their
subscriptions which shall have been used or in the opinion of the Association will be
needed by it to meet its commitments under its financing operations as of the date on
which the government ceases to be a member. Such payment by the Association shall
be made in instalments when and as such principal repayments are received by the
Association, but not more frequently than annually. Such instalments shall be paid in
the currencies received by the Association except that the Association may in its
discretion make payment in the currency of the government concerned.
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        15
(iv) Any amount due to the government on account of subscription may be
withheld so long as that government, or the government of any territory included
within its membership, or any political subdivision or any agency of any of the
foregoing remains liable, as borrower or guarantor, to the Association, and such
amount may, at the option of the Association, be applied against any such liability as
it matures.
 (v) In no event shall the government receive under this paragraph ( c ) an
amount exceeding, in the aggregate, the lesser of the two following: ( a ) the amount
paid by the government on account of its subscription, or ( b ) such proportion of the
net assets of the Association, as shown on the books of the Association as of the date
on which the government ceased to be a member, as the amount of its subscription
shall bear to the aggregate amount of the subscriptions of all members.
(vi) All calculations required hereunder shall be made on such basis as shall
be reasonably determined by the Association.
( d ) In no event shall any amount due to a government under this Section be paid
until six months after the date upon which the government ceases to be a member. If
within six months of the date upon which any government ceases to be a member the
Association suspends operations under Section 5 of this Article, all rights of such
government shall be determined by the provisions of such Section 5 and such
government shall be considered a member of the Association for purposes of such
Section 5, except that it shall have no voting rights.
SECTION 5.  Suspension of Operations and Settlement of Obligations
( a ) The Association may permanently suspend its operations by vote of a
majority of the Governors exercising a majority of the total voting power. After such
suspension of operations the Association shall forthwith cease all activities, except
those incident to the orderly realization, conservation and preservation of its assets
and settlement of its obligations. Until final settlement of such obligations and
distribution of such assets, the Association shall remain in existence and all mutual
rights and obligations of the Association and its members under this Agreement shall
continue unimpaired, except that no member shall be suspended or shall withdraw
and that no distribution shall be made to members except as in this Section provided.
( b ) No distribution shall be made to members on account of their subscriptions
until all liabilities to creditors shall have been discharged or provided for and until
the Board of Governors, by vote of a majority of the Governors exercising a majority
of the total voting power, shall have decided to make such distribution.
( c ) Subject to the foregoing, and to any special arrangements for the disposition
of supplementary resources agreed upon in connection with the provision of such
resources to the Association, the Association shall distribute its assets to members
pro rata  in proportion to amounts paid in by them on account of their subscriptions.
Any distribution pursuant to the foregoing provision of this paragraph ( c ) shall be
subject, in the case of any member, to prior settlement of all outstanding claims by
the Association against such member. Such distribution shall be made at such times,
in such currencies, and in cash or other assets as the Association shall deem fair and
equitable. Distribution to the several members need not be uniform in respect of the
type of assets distributed or of the currencies in which they are expressed.
( d ) Any member receiving assets distributed by the Association pursuant to this
Section or Section 4 shall enjoy the same rights with respect to such assets as the
Association enjoyed prior to their distribution.
    16   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
Article VIII
Status, Immunities and Privileges 
SECTION 1.  Purposes of Article
To enable the Association to fulfil the functions with which it is entrusted, the
status, immunities and privileges provided in this Article shall be accorded to the
Association in the territories of each member.
SECTION 2.  Status of the Association
The Association 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.  Position of the Association with Regard to Judicial Process
Actions may be brought against the Association only in a court of competent
jurisdiction in the territories of a member in which the Association has an office, has
appointed an agent for the purpose of accepting service or notice of process, or has
issued or guaranteed securities. No actions shall, however, be brought by members
or persons acting for or deriving claims from members. The property and assets of
the Association shall, wheresoever located and by whomsoever held, be immune
from all forms of seizure, attachment or execution before the delivery of final
judgement against the Association.
SECTION 4.  Immunity of Assets from Seizure
Property and assets of the Association, 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 Association shall be inviolable. 
SECTION 6.  Freedom of Assets from Restrictions
To the extent necessary to carry out the operations provided for in this Agreement
and subject to the provisions of this Agreement, all property and assets of the
Association shall be free from restrictions, regulations, controls and moratoria of
any nature.
SECTION 7.  Privilege for Communications
The official communications of the Association shall be accorded by each member
the same treatment that it accords to 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
Association
  (i) shall be immune from legal process with respect to acts performed by
them in their official capacity except when the Association waives this immunity;
 (ii) not being local nationals, shall be accorded the same immunities from
immigration restrictions, alien registration requirements and national service
obligations and the same facilities as regards exchange restrictions as are accorded
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        17
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 Association, 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 Association 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 Association to Executive Directors, Alternates, officials or employees of the
Association 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 Association (including any dividend or interest thereon) by whomsoever held 
 (i) which discriminates against such obligation or security solely because
it is issued by the Association; 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 Association.
( d ) No taxation of any kind shall be levied on any obligation or security
guaranteed by the Association (including any dividend or interest thereon) by
whomsoever held
 (i) which discriminates against such obligation or security solely because
it is guaranteed by the Association; or
(ii) if the sole jurisdictional basis for such taxation is the location of any
office or place of business maintained by the Association.
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 Association of the detailed action which it has taken.
Article IX
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
Association 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 amendments, the Association
shall certify the fact by 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 Association provided in Article VII,
    18   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
Section 1;
 (ii) the right secured by Article III, Section 1 ( c );
(iii) the limitation on liability provided in Article II, Section 3.
( 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 X
 Interpretation and Arbitration
( a ) Any question of interpretation of the provisions of this Agreement arising
between any member and the Association or between any members of the
Association shall be submitted to the Executive Directors for their decision. If the
question particularly affects any member of the Association not entitled to appoint
an Executive Director of the Bank, it shall be entitled to representation in accordance
with Article VI, Section 4 ( g ).
( 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 of Governors, the Association 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 Association and a country
which has ceased to be a member, or between the Association and any member
during the permanent suspension of the Association, such disagreement shall be
submitted to arbitration by a tribunal of three arbitrators, one appointed by the
Association, another by the country involved and an umpire who, unless the parties
otherwise agree, shall be appointed by the President of the International Court of
Justice or such other authority as may have been prescribed by regulation adopted by
the Association. 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 XI 
Final Provisions 
SECTION 1.  Entry into Force
This Agreement shall enter into force when it has been signed on behalf of
governments whose subscriptions comprise not less than sixty-five percent of the
total subscription 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 September 15, 1960.
SECTION 2.  Signature
( a ) Each government on whose behalf this Agreement is signed shall deposit
with the Bank 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 Association as from the
date of the deposit on its behalf of the instrument referred to in paragraph ( a ) above
except that no government shall become a member before this Agreement enters into
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        19
force under Section 1 of this Article.
( c ) This Agreement shall remain open for signature until the close of business
on December 31, 1960, at the principal office of the Bank, on behalf of the
governments of the states whose names are set forth in Schedule A, provided that, if
this Agreement shall not have entered into force by that date the Executive Directors
of the Bank may extend the period during which this Agreement shall remain open
for signature by not more than six months.
( d ) After this Agreement shall have entered into force, it shall be open for
signature on behalf of the government of any state whose membership shall have
been approved pursuant to Article II, Section 1 ( b ).
SECTION 3.  Territorial Application
By its signature of this Agreement, each government accepts it both on its own
behalf and in respect of all territories for whose international relations such
government is responsible except those which are excluded by such government by
written notice to the Association.
SECTION 4.  Inauguration of the Association
( a ) As soon as this Agreement enters into force under Section 1 of this Article
the President shall call a meeting of the Executive Directors.
( b ) The Association shall begin operations on the date when such meeting is
held.
( c ) Pending the first meeting of the Board of Governors, the Executive
Directors may exercise all the powers of the Board of Governors except those
reserved to the Board of Governors under this Agreement.
SECTION 5.  Registration
The Bank is authorized to register this Agreement with the Secretariat of the
United Nations in accordance with Article 102 of the Charter of the United Nations
and the Regulations thereunder adopted by the General Assembly.
DONE at Washington, in a single copy which shall remain deposited in the
archives of the International Bank for Reconstruction and Development, which has
indicated by its signature below its agreement to act as depository of this Agreement,
to register this Agreement with the Secretariat of the United Nations and to notify all
governments whose names are set forth in Schedule A of the date when this
Agreement shall have entered into force under Article XI, Section 1 hereof.
    20   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
SCHEDULE A - INITIAL SUBSCRIPTIONS 
(US $ Millions) *
PART I
Australia  20.18  Germany  52.96  Union of South
Austria      5.04  Italy  18.16  Africa   10.09 
Belgium  22.70  Japan  33.59  United
Canada  37.83 Luxembourg    1.01 Kingdom  131.14 
Denmark    8.74  Netherlands  27.74  United States  320.29  
Finland    3.83  Norway    6.72  763.07 
France  52.96  Sweden  10.09
PART II
Afghanistan     1.01  Guatemala    0.40  Pakistan  10.09 
Argentina  18.83  Haiti    0.76  Panama   0.02 
Bolivia    1.06  Honduras    0.30  Paraguay   0.30 
Brazil  18.83  Iceland    0.10  Peru   1.77 
Burma    2.02  India  40.35  Philippines   5.04 
Ceylon    3.03  Indonesia  11.10  Saudi Arabia   3.70 
Chile    3.53  Iran    4.54  Spain  10.09 
China  30.26  Iraq    0.76  Sudan   1.01 
Colombia    3.53  Ireland    3.03  Thailand   3.03 
Costa Rica    0.20  Israel    1.68  Tunisia   1.51 
Cuba    4.71  Jordan    0.30  Turkey  5.80
Dominican  Korea    1.26  United Arab
  Republic    0.40  Lebanon    0.45     Republic  6.03
Ecuador    0.65  Libya    1.01  Uruguay  1.06 
El Salvador    0.30  Malaya    2.52  Venezuela   7.06 
Ethiopia    0.50  Mexico    8.74  Viet-Nam   1.51 
Ghana    2.36  Morocco    3.53  Yugoslavia   4.04 
Greece    2.52  Nicaragua    0.30  236.93
TOTAL   1000.00 
SECOND SCHEDULE
ġSECTION 2ħ
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   B A N K   F O R   R E C O N S T R U C T I O N   A N D  
D E V E L O P M E N T
The Governments on whose behalf the present Agreement is signed agree as
follows:
Introductory Article
The International Bank for Reconstruction and Development is established and
shall operate in accordance with the following provisions:
*In terms of United States dollars of the weight and fineness in effect on January 1,1960.
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        21
Article I 
Purposes 
The purposes of the Bank are:
  (i) To assist in the reconstruction and development of territories of
members by facilitating the investment of capital for productive purposes, including
the restoration of economies destroyed or disrupted by war, the reconversion of
productive facilities to peacetime needs and the encouragement of the development
of productive facilities and resources in less developed countries.
 (ii) To promote private foreign investment by means of guarantees or
participations in loans and other investments made by private investors; and when
private capital is not available on reasonable terms, to supplement private
investment by providing, on suitable conditions, finance for productive purposes out
of its own capital, funds raised by it and its other resources.
(iii) To promote the long-range balanced growth of international trade and
the maintenance of equilibrium in balances of payments by encouraging
international investment for the development of the productive resources of
members, thereby assisting in raising productivity, the standard of living and
conditions of labour in their territories.
(iv) To arrange the loans made or guaranteed by it in relation to
international loans through other channels so that the more useful and urgent
projects, large and small alike, will be dealt with first.
 (v) To conduct its operations with due regard to the effect of international
investment on business conditions in the territories of members and, in the
immediate postwar years, to assist in bringing about a smooth transition from a
wartime to a peacetime economy.
The Bank shall be guided in all its decisions by the purposes set forth above.
 
Article II
Membership in and Capital of the Bank 
SECTION 1.  Membership
( a ) The original members of the Bank shall be those members of the
International Monetary Fund which accept membership in the Bank before the date
specified in Article XI, Section 2 ( e ).
( b ) Membership shall be open to other members of the Fund, at such times and
in accordance with such terms as may be prescribed by the Bank.
SECTION 2.  Authorized capital
( a ) The authorized capital stock of the Bank shall be $10,000,000,000, *  in terms
of United States dollars of the weight and fineness in effect on July 1, 1944. The
capital stock shall be divided into 100,000 shares having a par value of $100,000
each, which shall be available for subscription only by members.
( b ) The capital stock may be increased when the Bank deems it advisable by a
three-fourths majority of the total voting power.
*As of December 31,1970, the authorized capital stock of the Bank had been increased to $27,000,000,000,
divided into 270,000 shares having a par value of $100,000 each.
    22   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
SECTION 3.  Subscription of shares
( a ) Each member shall subscribe shares of the capital stock of the Bank. The
minimum number of shares to be subscribed by the original members shall be those
set forth in Schedule A. The minimum number of shares to be subscribed by other
members shall be determined by the Bank, which shall reserve a sufficient portion of
its capital stock for subscription by such members.
( b ) The Bank shall prescribe rules laying down the conditions under which
members may subscribe shares of the authorized capital stock of the Bank in
addition to their minimum subscriptions.
( c ) If the authorized capital stock of the Bank is increased, each member shall
have a reasonable opportunity to subscribe, under such conditions as the Bank shall
decide, a proportion of the increase of stock equivalent to the proportion which its
stock theretofore subscribed bears to the total capital stock of the Bank, but no
member shall be obligated to subscribe any part of the increased capital. 
SECTION 4.  Issue price of shares
Shares included in the minimum subscriptions of original members shall be issued
at par. Other shares shall be issued at par unless the Bank by a majority of the total
voting power decides in special circumstances to issue them on other terms. 
SECTION 5.  Division and calls of subscribed capital
The subscription of each member shall be divided into two parts as follows:
 (i) twenty percent shall be paid or subject to call under Section 7 (i) of this
Article as needed by the Bank for its operations;
(ii) the remaining eighty percent shall be subject to call by the Bank only
when required to meet obligations of the Bank created under Article IV, Sections 1
( a ) (ii) and (iii).
Calls on unpaid subscriptions shall be uniform on all shares. 
SECTION 6.  Limitation on liability
Liability on shares shall be limited to the unpaid portion of the issue price of the
shares.
SECTION 7.  Method of payment of subscriptions for shares
Payment of subscriptions for shares shall be made in gold or United States dollars
and in the currencies of the members as follows:
  (i) under Section 5 (i) of this Article, two percent of the price of each share
shall be payable in gold or United States dollars, and, when calls are made, the
remaining eighteen percent shall be paid in the currency of the member;
 (ii) when a call is made under Section 5 (ii) of this Article, payment may be
made at the option of the member either in gold, in United States dollars or in the
currency required to discharge the obligations of the Bank for the purpose for which
the call is made;
(iii) when a member makes payments in any currency under (i) and (ii)
above, such payments shall be made in amounts equal in value to the member’s
liability under the call. This liability shall be a proportionate part of the subscribed
capital stock of the Bank as authorized and defined in Section 2 of this Article.
SECTION 8.  Time of payment of subscriptions
( a ) The two percent payable on each share in gold or United States dollars under
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        23
Section 7 (i) of this Article, shall be paid within sixty days of the date on which the
Bank begins operations, provided that
 (i) any original member of the Bank whose metropolitan territory has
suffered from enemy occupation or hostilities during the present war shall be granted
the right to postpone payment of one-half percent until five years after that date;
(ii) an original member who cannot make such a payment because it has not
recovered possession of its gold reserves which are still seized or immobilized as a
result of the war may postpone all payment until such date as the Bank shall decide.
( b ) The remainder of the price of each share payable under Section 7 (i) of this
Article shall be paid as and when called by the Bank, provided that
 (i) the Bank shall, within one year of its beginning operations, call not less
than eight percent of the price of the share in addition to the payment of two percent
referred to in ( a ) above;
(ii) not more than five percent of the price of the share shall be called in
any period of three months.
SECTION 9.  Maintenance of value of certain currency holdings of the Bank
( a ) 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 Bank,
depreciated to a significant extent within that member’s territories, the member shall
pay to the Bank within a reasonable time an additional amount of its own currency
sufficient to maintain the value, as of the time of initial subscription, of the amount
of the currency of such member which is held by the Bank and derived from
currency originally paid in to the Bank by the member under Article II, Section 7 (i),
from currency referred to in Article IV, Section 2 ( b ), or from any additional
currency furnished under the provisions of the present paragraph, and which has not
been repurchased by the member for gold or for the currency of any member which
is acceptable to the Bank.
( b ) Whenever the par value of a member’s currency is increased, the Bank shall
return to such member within a reasonable time an amount of that member’s
currency equal to the increase in the value of the amount of such currency described
in ( a ) above.
( c ) The provisions of the preceding paragraphs may be waived by the Bank
when a uniform proportionate change in the par values of the currencies of all its
members is made by the International Monetary Fund.
SECTION 10.  Restriction on disposal of shares
Shares shall not be pledged or encumbered in any manner whatever and they shall
be transferable only to the Bank.
Article III
General Provisions Relating to Loans and Guarantees 
SECTION 1.  Use of resources
( a ) The resources and the facilities of the Bank shall be used exclusively for the
benefit of members with equitable consideration to projects for development and
projects for reconstruction alike.
( b ) For the purpose of facilitating the restoration and reconstruction of the
economy of members whose metropolitan territories have suffered great devastation
    24   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
from enemy occupation or hostilities, the Bank, in determining the conditions and
terms of loans made to such members, shall pay special regard to lightening the
financial burden and expediting the completion of such restoration and
reconstruction.
SECTION 2.  Dealings between members and the Bank
Each member shall deal with the Bank only through its Treasury, central bank,
stabilization fund or other similar fiscal agency, and the Bank shall deal with
members only by or through the same agencies.
SECTION 3.  Limitations on guarantees and borrowings of the Bank
The total amount outstanding of guarantees, participations in loans and direct
loans made by the Bank shall not be increased at any time, if by such increase the
total would exceed one hundred percent of the unimpaired subscribed capital,
reserves and surplus of the Bank.
SECTION 4.  Conditions on which the Bank may guarantee or make loans
The Bank may guarantee, participate in, or make loans to any member or any
political sub-division thereof and any business, industrial, and agricultural enterprise
in the territories of a member, subject to the following conditions:
  (i) When the member in whose territories the project is located is not itself
the borrower, the member or the central bank or some comparable agency of the
member which is acceptable to the Bank, fully guarantees the repayment of the
principal and the payment of interest and other charges on the loan.
 (ii) The Bank is satisfied that in the prevailing market conditions the
borrower would be unable otherwise to obtain the loan under conditions which in the
opinion of the Bank are reasonable for the borrower.
(iii) A competent committee, as provided for in Article V, Section 7, has
submitted a written report recommending the project after a careful study of the
merits of the proposal.
(iv) In the opinion of the Bank the rate of interest and other charges are
reasonable and such rate, charges and the schedule for repayment of principal are
appropriate to the project.
 (v) In making or guaranteeing a loan, the Bank shall pay due regard to the
prospects that the borrower, and, if the borrower is not a member, that the guarantor,
will be in position to meet its obligations under the loan; and the Bank shall act
prudently in the interests both of the particular member in whose territories the
project is located and of the members as a whole.
(vi) In guaranteeing a loan made by other investors, the Bank receives
suitable compensation for its risk.
(vii) Loans made or guaranteed by the Bank shall, except in special
circumstances, be for the purpose of specific projects of reconstruction or
development. 
SECTION 5.  Use of loans guaranteed, participated in or made by the Bank
( a ) The Bank shall impose no conditions that the proceeds of a loan shall be
spent in the territories of any particular member or members.
( b ) The Bank shall make arrangements to ensure that the proceeds of any loan
are used only for the purposes for which the loan was granted, with due attention to
considerations of economy and efficiency and without regard to political or other
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        25
non-economic influences or considerations.
( c ) In the case of loans made by the Bank, it shall open an account in the name
of the borrower and the amount of the loan shall be credited to this account in the
currency or currencies in which the loan is made. The borrower shall be permitted by
the Bank to draw on this account only to meet expenses in connection with the
project as they are actually incurred.
SECTION 6.   Loans to the International Finance Corporation *
( a ) The Bank may make, participate in, or guarantee loans to the International
Finance Corporation, an affiliate of the Bank, for use in its lending operations. The
total amount outstanding of such loans, participations and guarantees shall not be
increased if, at the time or as a result thereof, the aggregate amount of debt
(including the guarantee of any debt) incurred by the said Corporation from any
source and then outstanding shall exceed an amount equal to four times its
unimpaired subscribed capital and surplus.
( b ) The provisions of Article III, Sections 4 and 5 ( c ) and of Article IV, Section
3 shall not apply to loans, participations and guarantees authorized by this Section. 
Article IV
Operations 
SECTION 1.  Methods of making or facilitating loans
( a ) The Bank may make or facilitate loans which satisfy the general conditions
of Article III in any of the following ways:
  (i) By making or participating in direct loans out of its own funds
corresponding to its unimpaired paid-up capital and surplus and, subject to Section 6
of this Article, to its reserves.
 (ii) By making or participating in direct loans out of funds raised in the
market of a member, or otherwise borrowed by the Bank.
(iii) By guaranteeing in whole or in part loans made by private investors
through the usual investment channels.
( b ) The Bank may borrow funds under   ( a ) (ii) above or guarantee loans under
( a ) (iii) above only with the approval of the member in whose markets the funds are
raised and the member in whose currency the loan is denominated, and only if those
members agree that the proceeds may be exchanged for the currency of any other
member without restriction.
SECTION 2.  Availability and transferability of currencies
( a ) Currencies paid into the Bank under Article II, Section 7 (i), shall be loaned
only with the approval in each case of the member whose currency is involved;
provided, however, that if necessary, after the Bank’s subscribed capital has been
entirely called, such currencies shall, without restriction by the members whose
currencies are offered, be used or exchanged for the currencies required to meet
contractual payments of interest, other charges or amortization on the Bank’s own
borrowings, or to meet the Bank’s liabilities with respect to such contractual
payments on loans guaranteed by the Bank.
( b ) Currencies received by the Bank from borrowers or guarantors in payment
*Section added by amendment effective December 17, 1965.
    26   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
on account of principal of direct loans made with currencies referred to in ( a ) above
shall be exchanged for the currencies of other members or reloaned only with the
approval in each case of the members whose currencies are involved; provided,
however, that if necessary, after the Bank’s subscribed capital has been entirely
called, such currencies shall, without restriction by the members whose currencies
are offered, be used or exchanged for the currencies required to meet contractual
payments of interest, other charges or amortization on the Bank’s own borrowings,
or to meet the Bank’s liabilities with respect to such contractual payments on loans
guaranteed by the Bank.
( c ) Currencies received by the Bank from borrowers or guarantors in payment
on account of principal of direct loans made by the Bank under Section 1 ( a ) (ii) of
this Article, shall be held and used, without restriction by the members, to make
amortization payments, or to anticipate payment of or repurchase part or all of the
Bank’s own obligations.
( d ) All other currencies available to the Bank, including those raised in the
market or otherwise borrowed under Section 1 ( a ) (ii) of this Article, those obtained
by the sale of gold, those received as payments of interest and other charges for
direct loans made under Sections 1 ( a ) (i) and (ii), and those received as payments of
commissions and other charges under Section 1 ( a ) (iii), shall be used or exchanged
for other currencies or gold required in the operations of the Bank without restriction
by the members whose currencies are offered.
( e ) Currencies raised in the markets of members by borrowers on loans
guaranteed by the Bank under Section 1 ( a ) (iii) of this Article, shall also be used or
exchanged for other currencies without restriction by such members.
SECTION 3.  Provision of currencies for direct loans
The following provisions shall apply to direct loans under Sections 1 ( a ) (i) and
(ii) of this Article:
( a ) The Bank shall furnish the borrower with such currencies of members, other
than the member in whose territories the project is located, as are needed by the
borrower for expenditures to be made in the territories of such other members to
carry out the purposes of the loan.
( b ) The Bank may, in exceptional circumstances when local currency required
for the purposes of the loan cannot be raised by the borrower on reasonable terms,
provide the borrower as part of the loan with an appropriate amount of that currency.
( c ) The Bank, if the project gives rise indirectly to an increased need for foreign
exchange by the member in whose territories the project is located, may in
exceptional circumstances provide the borrower as part of the loan with an
appropriate amount of gold or foreign exchange not in excess of the borrower’s local
expenditure in connection with the purposes of the loan.
( d ) The Bank may, in exceptional circumstances, at the request of a member in
whose territories a portion of the loan is spent, repurchase with gold or foreign
exchange a part of that member’s currency thus spent but in no case shall the part so
repurchased exceed the amount by which the expenditure of the loan in those
territories give rise to an increased need for foreign exchange.
SECTION 4.  Payment provisions for direct loans
Loan contracts under Section 1 ( a ) (i) or (ii) of this Article shall be made in
accordance with the following payment provisions:
( a ) The terms and conditions of interest and amortization payments, maturity
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        27
and dates of payment of each loan shall be determined by the Bank. The Bank shall
also determine the rate and any other terms and conditions of commission to be
charged in connection with such loan.
In the case of loans made under Section 1 ( a ) (ii) of this Article during the first ten
years of the Bank’s operations, this rate of commission shall be not less than one
percent per annum and not greater than one and one-half percent per annum, and
shall be charged on the outstanding portion of any such loan. At the end of this
period of ten years, the rate of commission may be reduced by the Bank with respect
both to the outstanding portions of loans already made and to future loans, if the
reserves accumulated by the Bank under Section 6 of this Article and out of other
earnings are considered by it sufficient to justify a reduction. In the case of future
loans the Bank shall also have discretion to increase the rate of commission beyond
the above limit, if experience indicates that an increase is advisable.
( b ) All loan contracts shall stipulate the currency or currencies in which
payments under the contract shall be made to the Bank. At the option of the
borrower, however, such payments may be made in gold, or subject to the agreement
of the Bank, in the currency of a member other than that prescribed in the contract.
 (i) In the case of loans made under Section 1 ( a ) (i) of this Article, the loan
contracts shall provide that payments to the Bank of interest, other charges and
amortization shall be made in the currency loaned, unless the member whose
currency is loaned agrees that such payments shall be made in some other specified
currency or currencies. These payments, subject to the provisions of Article II,
Section 9 ( c ), shall be equivalent to the value of such contractual payments at the
time the loans were made, in terms of a currency specified for the purpose by the
Bank by a three-fourths majority of the total voting power.
(ii) In the case of loans made under Section 1 ( a ) (ii) of this Article, the
total amount outstanding and payable to the Bank in any one currency shall at no
time exceed the total amount of the outstanding borrowings made by the Bank under
Section 1 ( a ) (ii) and payable in the same currency.
( c ) If a member suffers from an acute exchange stringency, so that the service of
any loan contracted by that member or guaranteed by it or by one of its agencies
cannot be provided in the stipulated manner, the member concerned may apply to the
Bank for a relaxation of the conditions of payment. If the Bank is satisfied that some
relaxation is in the interests of the particular member and of the operations of the
Bank and of its members as a whole, it may take action under either, or both, of the
following paragraphs with respect to the whole, or part, of the annual service:
 (i) The Bank may, in its discretion, make arrangements with the member
concerned to accept service payments on the loan in the member’s currency for
periods not to exceed three years upon appropriate terms regarding the use of such
currency and the maintenance of its foreign exchange value; and for the repurchase
of such currency on appropriate terms.
(ii) The Bank may modify the terms of amortization or extend the life of
the loan, or both.
SECTION 5.  Guarantees
( a ) In guaranteeing a loan placed through the usual investment channels, the
Bank shall charge a guarantee commission payable periodically on the amount of the
loan outstanding at a rate determined by the Bank. During the first ten years of the
Bank’s operations, this rate shall be not less than one percent per annum and not
greater than one and one-half percent per annum. At the end of this period of ten
years, the rate of commission may be reduced by the Bank with respect both to the
    28   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
outstanding portions of loans already guaranteed and to future loans if the reserves
accumulated by the Bank under Section 6 of this Article and out of other earnings
are considered by it sufficient to justify a reduction. In the case of future loans the
Bank shall also have discretion to increase the rate of commission beyond the above
limit, if experience indicates that an increase is advisable.
( b ) Guarantee commissions shall be paid directly to the Bank by the borrower. 
( c ) Guarantees by the Bank shall provide that the Bank may terminate its
liability with respect to interest if, upon default by the borrower and by the
guarantor, if any, the Bank offers to purchase, at par and interest accrued to a date
designated in the offer, the bonds or other obligations guaranteed.
( d ) The Bank shall have power to determine any other terms and conditions of
the guarantee.
SECTION 6.  Special reserve
The amount of commissions received by the Bank under Sections 4 and 5 of this
Article shall be set aside as a special reserve, which shall be kept available for
meeting liabilities of the Bank in accordance with Section 7 of this Article. The
special reserve shall be held in such liquid form, permitted under this Agreement, as
the Executive Directors may decide.
SECTION 7.  Methods of meeting liabilities of the Bank in case of defaults
In cases of default on loans made, participated in, or guaranteed by the Bank: 
( a ) The Bank shall make such arrangements as may be feasible to adjust the
obligations under the loans, including arrangements under or analogous to those
provided in Section 4 ( c ) of this Article.
( b ) The payments in discharge of the Bank’s liabilities on borrowings or
guarantees under Section 1 ( a ) (ii) and (iii) of this Article shall be charged:
 (i) first, against the special reserve provided in Section 6 of this Article, 
(ii) then, to the extent necessary and at the discretion of the Bank, against
the other reserves, surplus and capital available to the Bank.
( c ) Whenever necessary to meet contractual payments of interest, other charges
or amortization on the Bank’s own borrowings, or to meet the Bank’s liabilities with
respect to similar payments on loans guaranteed by it, the Bank may call an
appropriate amount of the unpaid subscriptions of members in accordance with
Article II, Section 5 and 7. Moreover, if it believes that a default may be of long
duration, the Bank may call an additional amount of such unpaid subscriptions not to
exceed in any one year one percent of the total subscriptions of the members for the
following purposes:
 (i) To redeem prior to maturity, or otherwise discharge its liability on, all
or part of the outstanding principal of any loan guaranteed by it in respect of which
the debtor is in default.
(ii) To repurchase, or otherwise discharge its liability on, all or part of its
own outstanding borrowings.
SECTION 8.  Miscellaneous operations
In addition to the operations specified elsewhere in this Agreement, the Bank shall
have the power:
  (i) To buy and sell securities it has issued and to buy and sell securities
which it has guaranteed or in which it has invested, provided that the Bank shall
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        29
obtain the approval of the member in whose territories the securities are to be bought
or sold.
 (ii) To guarantee securities in which it has invested for the purpose of
facilitating their sale.
(iii) To borrow the currency of any member with the approval of that
member. 
(iv) To buy and sell such other securities as the Directors by a three-fourths
majority of the total voting power may deem proper for the investment of all or part
of the special reserve under Section 6 of this Article.
In exercising the powers conferred by this Section, the Bank may deal with any
person, partnership, association, corporation or other legal entity in the territories of
any member.
SECTION 9.  Warning to be placed on securities
Every security guaranteed or issued by the Bank shall bear on its face a
conspicuous statement to the effect that it is not an obligation of any government
unless expressly stated on the security.
SECTION 10.  Political activity prohibited
The Bank and its officers shall not interfere in the political affairs of any member;
nor shall they be influenced in their decisions by the political character of the
member or members concerned. Only economic considerations shall be relevant to
their decisions, and these considerations shall be weighed impartially in order to
achieve the purposes stated in Article I.
Article V 
Organization and Management 
SECTION 1.  Structure of the Bank
The Bank shall have a Board of Governors, Executive Directors, a President and
such other officers and staff to perform such duties as the Bank may determine. 
SECTION 2.  Board of Governors
( a ) All the powers of the Bank 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) Increase or decrease the capital stock;
(iii) Suspend a member;
(iv) Decide appeals from interpretations of this Agreement given by the
Executive Directors;
 (v) Make arrangements to cooperate with other international organizations
(other than informal arrangements of a temporary and administrative character);
    30   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
(vi) Decide to suspend permanently the operations of the Bank and to
distribute its assets;
(vii) Determine the distribution of the net income of the Bank.
( 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
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 ) The Board of Governors may by regulation establish a procedure whereby
the Executive Directors, when they deem such action to be in the best interest of the
Bank, may obtain a vote of the Governors on a specific question without calling a
meeting of the Board.
( f ) 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 Bank.
( g ) Governors and alternates shall serve as such without compensation from the
Bank, but the Bank shall pay them reasonable expenses incurred in attending
meetings.
( h ) 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
President.
SECTION 3.  Voting
( a ) Each member shall have two hundred fifty votes plus one additional vote for
each share of stock held.
( b ) Except as otherwise specifically provided, all matters before the Bank shall
be decided by a majority of the votes cast.
SECTION 4.   Executive Directors
( a ) The Executive Directors shall be responsible for the conduct of the general
operations of the Bank, and for this purpose, shall exercise all the powers delegated
to them by the Board of Governors.
( b ) There shall be twelve Executive Directors, who need not be governors, and
of whom:
 (i) five shall be appointed, one by each of the five members having the
largest number of shares;
(ii) seven shall be elected according to Schedule B by all the Governors
other than those appointed by the five members referred to in (i) above.
For the purpose of this paragraph, "members" means governments of countries
whose names are set forth in Schedule A, whether they are original members or
become members in accordance with Article II, Section 1 ( b ). When governments of
other countries become members, the Board of Governors may, by a four-fifths
majority of the total voting power, increase the total number of directors by
increasing the number of directors to be elected.
Executive directors shall be appointed or elected every two years.
( c ) Each executive director shall appoint an alternate with full power to act for
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        31
him when he is not present. When the executive directors appointing them are
present, alternates may participate in meetings but shall not vote.
( d ) 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 governors 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.
( e ) The Executive Directors shall function in continuous session at the principal
office of the Bank and shall meet as often as the business of the Bank may require. 
( f ) A quorum for any meeting of the Executive Directors shall be a majority of
the Directors, exercising not less than one-half of the total voting power.
( g ) Each appointed director shall be entitled to cast the number of votes allotted
under Section 3 of this Article to the member appointing him. Each elected director
shall be entitled to cast the number of votes which counted toward his election. All
the votes which a director is entitled to cast shall be cast as a unit.
( h ) 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.
( i ) The Executive Directors may appoint such committees as they deem
advisable. Membership of such committees need not be limited to governors or
directors or their alternates.
SECTION 5.  President and staff
( a ) The Executive Directors shall select a President who shall not be a governor
or an executive director or an alternate for either. The President 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 President shall cease to hold office when the
Executive Directors so decide.
( b ) The President shall be chief of the operating staff of the Bank and shall
conduct, under the direction of the Executive Directors, the ordinary business of the
Bank. Subject to the general control of the Executive Directors, he shall be
responsible for the organization, appointment and dismissal of the officers and staff.
( c ) The President, officers and staff of the Bank, in the discharge of their
offices, owe their duty entirely to the Bank and to no other authority. Each member
of the Bank shall respect the international character of this duty and shall refrain
from all attempts to influence any of them in the discharge of their duties.
( d ) In appointing the officers and staff the President 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.
SECTION 6.  Advisory Council
( a ) There shall be an Advisory Council of not less than seven persons selected
by the Board of Governors including representatives of banking, commercial,
industrial, labour, and agricultural interests, and with as wide a national
representation as possible. In those fields where specialized international
organizations exist, the members of the Council representative of those fields shall
    32   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
be selected in agreement with such organizations. The Council shall advise the Bank
on matters of general policy. The Council shall meet annually and on such other
occasions as the Bank may request.
( b ) Councillors shall serve for two years and may be reappointed. They shall be
paid their reasonable expenses incurred on behalf of the Bank.
SECTION 7.  Loan committees
The committees required to report on loans under Article III, Section 4, shall be
appointed by the Bank. Each such committee shall include an expert selected by the
governor representing the member in whose territories the project is located and one
or more members of the technical staff of the Bank.
SECTION 8.  Relationship to other international organizations
( a ) The Bank, within the terms of this Agreement, shall cooperate 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
effected only after amendment to this Agreement under Article VIII.
( b ) In making decisions on applications for loans or guarantees relating to
matters directly within the competence of any international organization of the types
specified in the preceding paragraph and participated in primarily by members of the
Bank, the Bank shall give consideration to the views and recommendations of such
organization.
SECTION 9.  Location of offices
( a ) The principal office of the Bank shall be located in the territory of the
member holding the greatest number of shares.
( b ) The Bank may establish agencies or branch offices in the territories of any
member of the Bank.
SECTION 10.  Regional offices and councils
( a ) The Bank may establish regional offices and determine the location of, and
the areas to be covered by, each regional office.
( b ) Each regional office shall be advised by a regional council representative of
the entire area and selected in such manner as the Bank may decide.
SECTION 11.  Depositories
( a ) Each member shall designate its central bank as a depository for all the
Bank’s holdings of its currency or, if it has no central bank, it shall designate such
other institution as may be acceptable to the Bank.
( b ) The Bank may hold other assets, including gold, in depositories designated
by the five members having the largest number of shares and in such other
designated depositories as the Bank may select. Initially, at least one-half of the gold
holdings of the Bank shall be held in the depository designated by the member in
whose territory the Bank has its principal office, and at least forty percent shall be
held in the depositories designated by the remaining four members referred to above,
each of such depositories to hold, initially, not less than the amount of gold paid on
the shares of the member designating it. However, all transfers of gold by the Bank
shall be made with due regard to the costs of transport and anticipated requirements
of the Bank. In an emergency the Executive Directors may transfer all or any part of
the Bank’s gold holdings to any place where they can be adequately protected.
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        33
SECTION 12.  Form of holdings of currency
The Bank shall accept from any member, in place of any part of the
member’s currency, paid into the Bank under Article II, Section 7 (i), or to meet
amortization payments on loans made with such currency, and not needed by the
Bank in its operations, notes or similar obligations issued by the Government of the
member or the depository designated by such member, which shall be non-
negotiable, non-interest-bearing and payable at their par value on demand by credit
to the account of the Bank in the designated depository.
SECTION 13.  Publication of reports and provision of information
( a ) The Bank shall publish an annual report containing an audited statement of
its accounts and shall circulate to members at intervals of three months or less a
summary statement of its financial position and a profit and loss statement showing
the results of its operations.
( b ) The Bank may publish such other reports as it deems desirable to carry out
its purposes.
( c ) Copies of all reports, statements and publications made under this Section
shall be distributed to members.
SECTION 14.  Allocation of net income
( a ) The Board of Governors shall determine annually what part of the Bank’s
net income, after making provision for reserves, shall be allocated to surplus and
what part, if any, shall be distributed.
( b ) If any part is distributed, up to two percent non-cumulative shall be paid, as
a first charge against the distribution for any year, to each member on the basis of
the average amount of the loans outstanding during the year made under Article IV,
Section 1 ( a ) (i), out of currency corresponding to its subscription. If two percent is
paid as a first charge, any balance remaining to be distributed shall be paid to all
members in proportion to their shares. Payments to each member shall be made in its
own currency, or if that currency is not available in other currency acceptable to the
member. If such payments are made in currencies other than the member’s own
currency, the transfer of the currency and its use by the receiving member after
payment shall be without restriction by the members.
Article VI
Withdrawal and Suspension of Membership: Suspension of Operations
SECTION 1.  Right of members to withdraw
Any member may withdraw from the Bank at any time by transmitting a notice in
writing to the Bank at its principal office. Withdrawal shall become effective on the
date such notice is received.
SECTION 2.  Suspension of membership
If a member fails to fulfil any of its obligations to the Bank, the Bank may suspend
its membership by decision of a majority of the Governors, exercising a majority of
the total voting power. The member so suspended shall automatically cease to be a
member one year from the date of its suspension unless a decision is taken by the
same majority to restore the member to good standing.
While under suspension, a member shall not be entitled to exercise any rights
under this Agreement, except the right of withdrawal, but shall remain subject to all
    34   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
obligations.
SECTION 3.  Cessation of membership in International Monetary Fund
Any member which ceases to be a member of the International Monetary Fund
shall automatically cease after three months to be a member of the Bank unless the
Bank by three-fourths of the total voting power has agreed to allow it to remain a
member.
SECTION 4.  Settlement of accounts with governments ceasing to be members
( a ) When a government ceases to be a member, it shall remain liable for its
direct obligations to the Bank and for its contingent liabilities to the Bank so long as
any part of the loans or guarantees contracted before it ceased to be a member are
outstanding; but it shall cease to incur liabilities with respect to loans and guarantees
entered into thereafter by the Bank and to share either in the income or the expenses
of the Bank.
( b ) At the time a government ceases to be a member, the Bank shall arrange for
the repurchase of its shares as a part of the settlement of accounts with such
government in accordance with the provisions of ( c ) and ( d ) below. For this purpose
the repurchase price of the shares shall be the value shown by the books of the Bank
on the day the government ceases to be a member.
( c ) The payment for shares repurchased by the Bank under this Section shall be
governed by the following conditions:
  (i) Any amount due to the government for its shares shall be withheld so
long as the government, its central bank or any of its agencies remains liable, as
borrower or guarantor, to the Bank and such amount may, at the option of the Bank,
be applied on any such liability as it matures. No amount shall be withheld on
account of the liability of the government resulting from its subscription for shares
under Article II, Section 5 (ii). In any event, no amount due to a member for its
shares shall be paid until six months after the date upon which the government
ceases to be a member.
 (ii) Payments for shares may be made from time to time, upon their
surrender by the government, to the extent by which the amount due as the
repurchase price in ( b ) above exceeds the aggregate of liabilities on loans and
guarantees in ( c ) (i) above until the former member has received the full repurchase
price.
(iii) Payments shall be made in the currency of the country receiving
payment or at the option of the Bank in gold.
(iv) If losses are sustained by the Bank on any guarantees, participations in
loans, or loans which were outstanding on the date when the government ceased to
be a member, and the amount of such losses exceeds the amount of the reserve
provided against losses on the date when the government ceased to be a member,
such government shall be obligated to repay upon demand the amount by which the
repurchase price of its shares would have been reduced, if the losses had been taken
into account when the repurchase price was determined. In addition, the former
member government shall remain liable on any call for unpaid subscriptions under
Article II, Section 5 (ii), to the extent that it would have been required to respond if
the impairment of capital had occurred and the call had been made at the time the
repurchase price of its shares was determined.
( d ) If the Bank suspends permanently its operations under Section 5 ( b ) of this
Article, within six months of the date upon which any government ceases to be a
member, all rights of such government shall be determined by the provisions of
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        35
Section 5 of this Article.
SECTION 5.  Suspension of operations and settlement of obligations
( a ) In an emergency the Executive Directors may suspend temporarily
operations in respect of new loans and guarantees pending an opportunity for further
consideration and action by the Board of Governors.
( b ) The Bank may suspend permanently its operations in respect of new loans
and guarantees by vote of a majority of the Governors, exercising a majority of the
total voting power. After such suspension of operations the Bank shall forthwith
cease all activities, except those incident to the orderly realization, conservation, and
preservation of its assets and settlement of its obligations.
( c ) The liability of all members for uncalled subscriptions to the capital stock of
the Bank and in respect of the depreciation of their own currencies shall continue
until all claims of creditors, including all contingent claims, shall have been
discharged.
( d ) All creditors holding direct claims shall be paid out of the assets of the
Bank, and then out of payments to the Bank on calls on unpaid subscriptions. Before
making any payments to creditors holding direct claims, the Executive Directors
shall make such arrangements as are necessary, in their judgement, to insure a
distribution to holders of contingent claims ratably with creditors holding direct
claims.
( e ) No distribution shall be made to members on account of their subscriptions
to the capital stock of the Bank until:
 (i) all liabilities to creditors have been discharged or provided for, and
(ii) a majority of the Governors, exercising a majority of the total voting
power, have decided to make a distribution.
( f ) After a decision to make a distribution has been taken under ( e ) above, the
Executive Directors may by a two-thirds majority vote make successive distributions
of the assets of the Bank to members until all of the assets have been distributed.
This distribution shall be subject to the prior settlement of all outstanding claims of
the Bank against each member.
( g ) Before any distribution of assets is made, the Executive Directors shall fix
the proportionate share of each member according to the ratio of its shareholding to
the total outstanding shares of the Bank.
( h ) The Executive Directors shall value the assets to be distributed as at the date
of distribution and then proceed to distribute in the following manner:
  (i) There shall be paid to each member in its own obligations or those of
its official agencies or legal entities within its territories, insofar as they are
available for distribution, an amount equivalent in value to its proportionate share of
the total amount to be distributed.
 (ii) Any balance due to a member after payment has been made under (i)
above shall be paid, in its own currency, insofar as it is held by the Bank, up to an
amount equivalent in value to such balance.
(iii) Any balance due to a member after payment has been made under (i)
and (ii) above shall be paid in gold or currency acceptable to the member, insofar as
they are held by the Bank, up to an amount equivalent in value to such balance.
(iv) Any remaining assets held by the Bank after payments have been made
to members under (i), (ii), and (iii) above shall be distributed  pro rata  among the
    36   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
members.
( i ) Any member receiving assets distributed by the Bank in accordance with ( h )
above, shall enjoy the same rights with respect to such assets as the Bank enjoyed
prior to their distribution.
Article VII
Status, Immunities and Privileges 
SECTION 1.  Purposes of Article
To enable the Bank to fulfil the functions with which it is entrusted, the status,
immunities and privileges set forth in this Article shall be accorded to the Bank in
the territories of each member.
SECTION 2.  Status of the Bank
The Bank 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.  Position of the Bank with regard to judicial process
Actions may be brought against the Bank only in a court of competent jurisdiction
in the territories of a member in which the Bank has an office, has appointed an
agent for the purpose of accepting service or notice of process, or has issued or
guaranteed securities. No actions shall, however, be brought by members or persons
acting for or deriving claims from members. The property and assets of the Bank
shall, wheresoever located and by whomsoever held, be immune from all forms of
seizure, attachment or execution before the delivery of final judgement against the
Bank.
SECTION  4.  Immunity of assets from seizure
Property and assets of the Bank, 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 Bank shall be inviolable. 
SECTION  6.  Freedom of assets from restrictions
To the extent necessary to carry out the operations provided for in this Agreement
and subject to the provisions of this Agreement, all property and assets of the Bank
shall be free from restrictions, regulations, controls and moratoria of any nature. 
SECTION 7.  Privilege for communications
The official communications of the Bank shall be accorded by each member the
same treatment that it accords to 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 Bank
  (i) shall be immune from legal process with respect to acts performed by
them in their official capacity except when the Bank waives this immunity;
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        37
 (ii) not being local nationals, shall be accorded 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 Bank, 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 Bank 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 Bank to executive directors, alternates, officials or employees of the Bank 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 Bank (including any dividend or interest thereon) by whomsoever held -
 (i) which discriminates against such obligation or security solely because
it is issued by the Bank; 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 Bank.
( d ) No taxation of any kind shall be levied on any obligation or security
guaranteed by the Bank (including any dividend or interest thereon) by whomsoever
held -
 (i) which discriminates against such obligation or security solely because
it is guaranteed by the Bank; or
(ii) if the sole jurisdictional basis for such taxation is the location of any
office or place of business maintained by the Bank.
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 Bank of the detailed action which it has taken.
Article VIII 
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
Bank 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 amendments, the Bank shall certify
the fact by formal communication addressed to all members.
( b ) Notwithstanding ( a ) above, acceptance by all members is required in the
    38   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
case of any amendment modifying
  (i) the right to withdraw from the Bank provided in Article VI, Section 1; 
 (ii) the right secured by Article II, Section 3 ( c );
(iii) the limitation on liability provided in Article II, Section 6.
( 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 IX
Interpretation 
( a ) Any question of interpretation of the provisions of this Agreement arising
between any member and the Bank or between any members of the Bank 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 V, Section 4 ( h ).
( 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 Bank 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 Bank and a country which has
ceased to be a member, or between the Bank and any member during the permanent
suspension of the Bank, such disagreement shall be submitted to arbitration by a
tribunal of three arbitrators, one appointed by the Bank, another by the country
involved 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 Bank. 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 X 
Approval Deemed Given
Whenever the approval of any member is required before any act may be done by
the Bank, except in Article VIII, approval shall be deemed to have been given unless
the member presents an objection within such reasonable period as the Bank may fix
in notifying the member of the proposed act.
Article XI 
Final Provisions 
SECTION 1.  Entry into force
This Agreement shall enter into force when it has been signed on behalf of
governments whose minimum subscriptions comprise not less than sixty-five percent
of the total subscriptions 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.
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        39
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 Bank 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 1
( b ) ,  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 the price of each share in gold or United States dollars for the purpose
of meeting administrative expenses of the Bank. This payment shall be credited on
account of the payment to be made in accordance with Article II, Section 8 ( a ) .  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 Bank 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 1 ( b ).
( 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 and 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 Bank
( a ) As soon as this Agreement enters into force under Section 1 of this Article,
each member shall appoint a governor and the member to whom the largest number
of shares is allocated in Schedule A shall call the first meeting of the Board of
Governors.
    40   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
( 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, to which the largest number of shares are allocated in Schedule A, shall
appoint provisional executive directors. If one or more of such governments have not
become members, the executive directorships which 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 B 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.
( d ) The Bank shall notify members when it is ready to commence operations.
 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 1 ( b ).
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        41
SCHEDULE A
SUBSCRIPTIONS 
                            ( millions of                            ( millions of                              ( millions of 
                               dollars )                              dollars )                                dollars )
Australia  200  France  450  Panama  .2 
Belgium  225  Greece    25  Paraguay  .8 
Bolivia    7  Guatemala     2 Peru  17.5 
Brazil  105  Haiti     2  Philippine
Canada  325  Honduras      1  Commonwealth 15 
Chile    35 Iceland      1  Poland 125 
China  600  India  400  Union of South 
Colombia    35  Iran    24  Africa  100 
Costa Rica      2  Iraq      6  Union of Soviet 
Cuba    35  Liberia      .5  Socialist 
Czechoslovakia  125  Luxembourg     10  Republics  1200 
* Denmark  Mexico     65  United Kingdom 1300 
Dominican Republic    2  Netherlands   275  United States  3175 
Ecuador      3.2  New Zealand     50  Uruguay  10.5 
Egypt    40  Nicaragua       .8  Venezuela 10.5 
El Salvador   1  Norway     50  Yugoslavia  40 
Ethiopia   3
TOTAL    9100
SCHEDULE B
ELECTION OF EXECUTIVE DIRECTORS
1. The election of the elective executive directors shall be by ballot of the
Governors eligible to vote under Article V, Section 4 ( b ).
2. In balloting for the elective executive directors, each governor eligible to
vote shall cast for one person all of the votes to which the member appointing him is
entitled under Section 3 of Article V. The seven persons receiving the greatest
number of votes shall be executive directors, except that no person who receives less
than fourteen percent of the total of the votes which can be cast (eligible votes) shall
be considered elected.
3. When seven 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 fifteen 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 fifteen percent of the eligible votes, the
fifteen percent shall be deemed to include, first, the votes of the governor casting the
*The quota of Denmark shall be determined by the Bank after Denmark accepts membership in accordance
with these Articles of Agreement.
    42   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
largest number of votes for such person, then the votes of the governor casting the
next largest number, and so on until fifteen percent is reached.
5. Any governor, part of whose votes must be counted in order to raise the total
of any person above fourteen percent shall be considered as casting all of his votes
for such person even if the total votes for such person thereby exceed fifteen percent.
6. If, after the second ballot, seven persons have not been elected, further
ballots shall be held on the same principles until seven persons have been elected,
provided that after six persons are elected, the seventh may be elected by a simple
majority of the remaining votes and shall be deemed to have been elected by all such
votes.
THIRD SCHEDULE 
ġSECTION 2ħ
ARTICLES OF AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION
The Governments on whose behalf this Agreement is signed agree as follows:
 Introductory Article
The International Finance Corporation (hereinafter called the Corporation) is
established and shall operate in accordance with the following provisions:
Article I 
Purpose 
The purpose of the Corporation is to further economic development by
encouraging the growth of productive private enterprise in member countries,
particularly in the less developed areas, thus supplementing the activities of the
International Bank for Reconstruction and Development (hereinafter called the
Bank). In carrying out this purpose, the Corporation shall:
  (i) in association with private investors, assist in financing the
establishment, improvement and expansion of productive private enterprises which
would contribute to the development of its member countries by making
investments, without guarantee of repayment by the member government concerned,
in cases where sufficient private capital is not available on reasonable terms;
 (ii) seek to bring together investment opportunities, domestic and foreign
private capital, and experienced management; and
(iii) seek to stimulate, and to help create conditions conducive to, the flow
of private capital, domestic and foreign, into productive investment in member
countries.
The Corporation shall be guided in all its decisions by the provisions of this
Article.
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        43
Article II 
Membership and Capital 
SECTION 1.  Membership
( a ) The original members of the Corporation shall be those members of the
Bank listed in Schedule A hereto which shall, on or before the date specified in
Article IX, Section 2 ( c ), accept membership in the Corporation.
( b ) Membership shall be open to other members of the Bank at such times and in
accordance with such terms as may be prescribed by the Corporation.
SECTION 2.  Capital Stock
( a ) The authorized capital stock of the Corporation shall be $100,000,000, in
terms of United States dollars. *
( b ) The authorized capital stock shall be divided into 100,000 shares having a
par value of one thousand United States dollars each. Any such shares not initially
subscribed by original members shall be available for subsequent subscription in
accordance with Section 3 ( d ) of this Article.
( c ) The amount of capital stock at any time authorized may be increased by the
Board of Governors as follows:
 (i) by a majority of the votes cast, in case such increase is necessary for
the purpose of issuing shares of capital stock on initial subscription by members
other than original members, provided that the aggregate of any increases authorized
pursuant to this subparagraph shall not exceed 10,000 shares;
(ii) in any other case, by a three-fourths majority of the total voting power.
( d ) In case of an increase authorized pursuant to paragraph ( c ) (ii) above, each
member shall have a reasonable opportunity to subscribe, under such conditions as
the Corporation shall decide, to a proportion of the increase of stock equivalent to
the proportion which its stock theretofore subscribed bears to the total capital stock
of the Corporation, but no member shall be obligated to subscribe to any part of the
increased capital.
  ( e ) Issuance of shares of stock, other than those subscribed either on initial
subscription or pursuant to paragraph ( d ) above, shall require a three-fourths
majority of the total voting power.
  ( f ) Shares of stock of the Corporation shall be available for subscription only
by, and shall be issued only to, members.
SECTION 3.  Subscriptions
( a ) Each original member shall subscribe to the number of shares of stock set
forth opposite its name in Schedule A. The number of shares of stock to be
subscribed by other members shall be determined by the Corporation.
( b ) Shares of stock initially subscribed by original members shall be issued at
par.
( c ) The initial subscription of each original member shall be payable in full
within 30 days after either the date on which the Corporation shall begin operations
pursuant to Article IX, Section 3 ( b ), or the date on which such original member
becomes a member, whichever shall be later, or at such date thereafter as the
*On September 3, 1963, the authorized capital stock was increased to $110,000,000, divided into 110,000
shares of $1,000 each.
    44   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
Corporation shall determine. Payment shall be made in gold or United States dollars
in response to a call by the Corporation which shall specify the place or places of
payment.
( d ) The price and other terms of subscription of shares of stock to be subscribed,
otherwise than on initial subscription by original members, shall be determined by
the Corporation.
SECTION 4.  Limitation on Liability
No member shall be liable, by reason of its membership, for obligations of the
Corporation.
SECTION 5.  Restriction on Transfers and Pledges of Shares
Shares of stock shall not be pledged or encumbered in any manner whatever, and
shall be transferable only to the Corporation.
Article III 
Operations 
SECTION 1.  Financing Operations
The Corporation may make investments of its funds in productive private
enterprises in the territories of its members. The existence of a government or other
public interest in such an enterprise shall not necessarily preclude the Corporation
from making an investment therein.
SECTION 2.  Forms of Financing *
The Corporation may make investments of its funds in such form or forms as it
may deem appropriate in the circumstances.
SECTION 3.  Operational Principles
The operations of the Corporation shall be conducted in accordance with the
following principles:
  (i) the Corporation shall not undertake any financing for which in its
opinion sufficient private capital could be obtained on reasonable terms;
 (ii) the Corporation shall not finance an enterprise in the territories of any
member if the member objects to such financing;
(iii) the Corporation shall impose no conditions that the proceeds of any
financing by it shall be spent in the territories of any particular country;
*Amended September 21, 1961. Original Text:
( a )   The Corporation’s financing shall not take the form of investments in capital stock. Subject to the
foregoing, the Corporation may make investments of its funds in such form or forms as it may deem
appropriate in the circumstances, including  ( but without limitation )  investments according to the holder
thereof, the right to participate in earnings and the right to subscribe to, or to convert the investment into,
capital stock.
( b )   The Corporation shall not itself exercise any right to subscribe to, or to convert any investment into,
capital stock.
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        45
(iv) the Corporation shall not assume responsibility for managing any
enterprise in which it has invested and shall not exercise voting rights for such
purpose or for any other purpose which, in its opinion, properly is within the scope
of managerial control  * ;
 (v) the Corporation shall undertake its financing on terms and conditions
which it considers appropriate, taking into account the requirements of the
enterprise, the risks being undertaken by the Corporation and the terms and
conditions normally obtained by private investors for similar financing;
(vi) the Corporation shall seek to revolve its funds by selling its
investments to private investors whenever it can appropriately do so on satisfactory
terms;
(vii) the Corporation shall seek to maintain a reasonable diversification in its
investments.
SECTION 4.  Protection of Interests
Nothing in this Agreement shall prevent the Corporation, in the event of actual or
threatened default on any of its investments, actual or threatened insolvency of the
enterprise in which such investment shall have been made, or other situations which,
in the opinion of the Corporation, threaten to jeopardize such investment, from
taking such action and exercising such rights as it may deem necessary for the
protection of its interests.
SECTION 5.  Applicability of Certain Foreign Exchange Restrictions
Funds received by or payable to the Corporation in respect of an investment of the
Corporation made in any member’s territories pursuant to Section 1 of this Article
shall not be free, solely by reason of any provision of this Agreement, from generally
applicable foreign exchange restrictions, regulations and controls in force in the
territories of that member.
SECTION 6.  Miscellaneous Operations
In addition to the operations specified elsewhere in this Agreement, the
Corporation shall have the power to:
  (i) borrow funds, and in that connection to furnish such collateral or other
security therefor as it shall determine provided, however, that before making a
public sale of its obligations in the markets of a member, the Corporation shall have
obtained the approval of that member and of the member in whose currency the
obligations are to be denominated; if and so long as the Corporation shall be
indebted on loans from or guaranteed by the Bank, the total amount outstanding of
borrowings incurred or guarantees given by the Corporation shall not be increased if,
at the time or as a result thereof, the aggregate amount of debt (including the
guarantee of any debt) incurred by the Corporation from any source and then
outstanding shall exceed an amount equal to four times its unimpaired subscribed
capital and surplus † ;
 (ii) invest funds not needed in its financing operations in such obligations
as it may determine and invest funds held by it for pension or similar purposes in any
marketable securities, all without being subject to the restrictions imposed by other
sections of this Article;
*Amended September 21, 1961. 
Original Text:
( iv )   The Corporation shall not assume responsibility for managing any enterprise in which it has invested;
†Last clause added by amendment effective September 1, 1965.
    46   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
(iii) guarantee securities in which it has invested in order to facilitate their
sale; 
(iv) buy and sell securities it has issued or guaranteed or in which it has
invested;
(v) exercise such other powers incidental to its business as shall be
necessary or desirable in furtherance of its purposes.
SECTION 7.  Valuation of Currencies
Whenever it shall become necessary under this Agreement to value any currency
in terms of the value of another currency, such valuation shall be as reasonably
determined by the Corporation after consultation with the International Monetary
Fund.
SECTION 8.  Warning To Be Placed on Securities
Every security issued or guaranteed by the Corporation shall bear on its face a
conspicuous statement to the effect that it is not an obligation of the Bank or, unless
expressly stated on the security, of any government.
SECTION 9.  Political Activity Prohibited
The Corporation and its officers shall not interfere in the political affairs of any
member; nor shall they be influenced in their decisions by the political character of
the member or members concerned. Only economic considerations shall be relevant
to their decisions, and these considerations shall be weighed impartially in order to
achieve the purposes stated in this Agreement.
Article IV 
Organization and Management 
SECTION l.  Structure of the Corporation
The Corporation shall have a Board of Governors, a Board of Directors, a
Chairman of the Board of Directors, a President and such other officers and staff to
perform such duties as the Corporation may determine.
SECTION 2.  Board of Governors
( a ) All the powers of the Corporation shall be vested in the Board of Governors. 
( b ) Each Governor and Alternate Governor of the Bank appointed by a member
of the Bank which is also a member of the Corporation shall  ex officio  be a Governor
or Alternate Governor, respectively, of the Corporation. No Alternate Governor may
vote except in the absence of his principal. The Board of Governors shall select one
of the Governors as Chairman of the Board of Governors. Any Governor or Alternate
Governor shall cease to hold office if the member by which he was appointed shall
cease to be a member of the Corporation.
( c ) The Board of Governors may delegate to the Board of Directors authority to
exercise any of its powers, except the power to:
  (i) admit new members and determine the conditions of their admission; 
 (ii) increase or decrease the capital stock;
(iii) suspend a member;
(iv) decide appeals from interpretations of this Agreement given by the
Board of Directors;
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        47
 (v) make arrangements to cooperate with other international organizations
(other than informal arrangements of a temporary and administrative character);
(vi) decide to suspend permanently the operations of the Corporation and to
distribute its assets;
(vii) declare dividends;
(viii) amend this Agreement.
( d ) The Board of Governors shall hold an annual meeting and such other
meetings as may be provided for by the Board of Governors or called by the Board
of Directors.
( e ) The annual meeting of the Board of Governors shall be held in conjunction
with the annual meeting of the Board of Governors of the Bank.
( f ) 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.
( g ) The Corporation may by regulation establish a procedure whereby the Board
of Directors may obtain a vote of the Governors on a specific question without
calling a meeting of the Board of Governors.
( h ) The Board of Governors, and the Board of Directors to the extent
authorized, may adopt such rules and regulations as may be necessary or appropriate
to conduct the business of the Corporation.
( i ) Governors and Alternate Governors shall serve as such without
compensation from the Corporation.
SECTION 3.  Voting  
( a ) Each member shall have two hundred fifty votes plus one additional vote for
each share of stock held.
( b ) Except as otherwise expressly provided, all matters before the Corporation
shall be decided by a majority of the votes cast.
SECTION 4.  Board of Directors
( a ) The Board of Directors shall be responsible for the conduct of the general
operations of the Corporation, and for this purpose shall exercise all the powers
given to it by this Agreement or delegated to it by the Board of Governors.
( b ) The Board of Directors of the Corporation shall be composed  ex officio  of
each Executive Director of the Bank who shall have been either (i) appointed by a
member of the Bank which is also a member of the Corporation, or (ii) elected in an
election in which the votes of at least one member of the Bank which is also a
member of the Corporation shall have counted toward his election. The Alternate to
each such Executive Director of the Bank shall  ex officio  be an Alternate Director of
the Corporation. Any Director shall cease to hold office if the member by which he
was appointed, or if all the members whose votes counted toward his election, shall
cease to be members of the Corporation.
( c ) Each Director who is an appointed Executive Director of the Bank shall be
entitled to cast the number of votes which the member by which he was so appointed
is entitled to cast in the Corporation. Each Director who is an elected Executive
Director of the Bank shall be entitled to cast the number of votes which the member
or members of the Corporation whose votes counted toward his election in the Bank
are entitled to cast in the Corporation. All the votes which a Director is entitled to
cast shall be cast as a unit.
    48   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
( d ) An Alternate Director shall have full power to act in the absence of the
Director who shall have appointed him. When a Director is present, his Alternate
may participate in meetings but shall not vote.
( e ) A quorum for any meeting of the Board of Directors shall be a majority of
the Directors exercising not less than one-half of the total voting power.
( f ) The Board of Directors shall meet as often as the business of the
Corporation may require.
( g ) The Board of Governors shall adopt regulations under which a member of
the Corporation not entitled to appoint an Executive Director of the Bank may send a
representative to attend any meeting of the Board of Directors of the Corporation
when a request made by, or a matter particularly affecting, that member is under
consideration.
SECTION 5.  Chairman, President and Staff
( a ) The President of the Bank shall be  ex officio  Chairman of the Board of
Directors of the Corporation, 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.
( b ) The President of the Corporation shall be appointed by the Board of
Directors on the recommendation of the Chairman. The President shall be chief of
the operating staff of the Corporation. Under the direction of the Board of Directors
and the general supervision of the Chairman, he shall conduct the ordinary business
of the Corporation and under their general control shall be responsible for the
organization, appointment and dismissal of the officers and staff. The President may
participate in meetings of the Board of Directors but shall not vote at such meetings.
The President shall cease to hold office by decision of the Board of Directors in
which the Chairman concurs.
( c ) The President, officers and staff of the Corporation, in the discharge of their
offices, owe their duty entirely to the Corporation and to no other authority. Each
member of the Corporation shall respect the international character of this duty and
shall refrain from all attempts to influence any of them in the discharge of their
duties.
( d ) Subject to the paramount importance of securing the highest standards of
efficiency and of technical competence, due regard shall be paid, in appointing the
officers and staff of the Corporation, to the importance of recruiting personnel on as
wide a geographical basis as possible.
SECTION 6.  Relationship to the Bank
( a ) The Corporation shall be an entity separate and distinct from the Bank and
the funds of the Corporation shall be kept separate and apart from those of the
Bank. *  The provisions of this Section shall not prevent the Corporation from making
arrangements with the Bank regarding facilities, personnel and services and
arrangements for reimbursement of administrative expenses paid in the first instance
by either organization on behalf of the other.
( b ) Nothing in this Agreement shall make the Corporation liable for the acts or
obligations of the Bank, or the Bank liable for the acts or obligations of the
Corporation.
*Amended September 1, 1965.
Original text included the following:
"The Corporation shall not lend to or borrow from the Bank."
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        49
SECTION 7.  Relations With Other International Organizations
The Corporation, acting through the Bank, shall enter into formal arrangements
with the United Nations and may enter into such arrangements with other public
international organizations having specialized responsibilities in related fields. 
SECTION 8.  Location of Offices
The principal office of the Corporation shall be in the same locality as the
principal office of the Bank. The Corporation may establish other offices in the
territories of any member.
SECTION 9.  Depositories
Each member shall designate its central bank as a depository in which the
Corporation may keep holdings of such member’s currency or other assets of the
Corporation or, if it has no central bank, it shall designate for such purpose such
other institution as may be acceptable to the Corporation.
SECTION 10.  Channel of Communication
Each member shall designate an appropriate authority with which the Corporation
may communicate in connection with any matter arising under this Agreement. 
SECTION 11.  Publication of Reports and Provision of Information
( a ) The Corporation shall publish an annual report containing an audited
statement of its accounts and shall circulate to members at appropriate intervals a
summary statement of its financial position and a profit and loss statement showing
the results of its operations.
( b ) The Corporation may publish such other reports as it deems desirable to
carry out its purposes.
( c ) Copies of all reports, statements and publications made under this Section
shall be distributed to members.
SECTION 12.  Dividends
( a ) The Board of Governors may determine from time to time what part of the
Corporation’s net income and surplus, after making appropriate provision for
reserves, shall be distributed as dividends.
( b ) Dividends shall be distributed  pro rata  in proportion to capital stock held by
members.
( c ) Dividends shall be paid in such manner and in such currency or currencies as
the Corporation shall determine.
Article V
Withdrawal; Suspension of Membership; Suspension of Operations 
SECTION 1.  Withdrawal by Members
Any member may withdraw from membership in the Corporation at any time by
transmitting a notice in writing to the Corporation at its principal office. Withdrawal
shall become effective upon the date such notice is received.
SECTION 2.  Suspension of Membership
( a ) If a member fails to fulfil any of its obligations to the Corporation, the
Corporation may suspend its membership by decision of a majority of the
    50   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
Governors, exercising a majority of the total voting power. The member so
suspended shall automatically cease to be a member one year from the date of its
suspension unless a decision is taken by the same majority to restore the member to
good standing.
( b ) While under suspension, a member shall not be entitled to exercise any
rights under this Agreement except the right of withdrawal, but shall remain subject
to all obligations.
SECTION 3.  Suspension or Cessation of Membership in the Bank
Any member which is suspended from membership in, or ceases to be a member
of, the Bank shall automatically be suspended from membership in, or cease to be a
member of, the Corporation, as the case may be.
SECTION 4.  Rights and Duties of Governments Ceasing To Be Members
( a ) When a government ceases to be a member it shall remain liable for all
amounts due from it to the Corporation. The Corporation shall arrange for the
repurchase of such government’s capital stock as a part of the settlement of accounts
with it in accordance with the provisions of this Section, but the government shall
have no other rights under this Agreement except as provided in this Section and in
Article VIII ( c ) .
( b ) The Corporation and the government may agree on the repurchase of the
capital stock of the government on such terms as may be appropriate under the
circumstances, without regard to the provisions of paragraph ( c ) below. Such
agreement may provide, among other things, for a final settlement of all obligations
of the government to the Corporation.
( c ) If such agreement shall not have been made within six months after the
government ceases to be a member or such other time as the Corporation and such
government may agree, the repurchase price of the government’s capital stock shall
be the value thereof shown by the books of the Corporation on the day when the
government ceases to be a member. The repurchase of the capital stock shall be
subject to the following conditions:
  (i) payments for shares of stock may be made from time to time, upon their
surrender by the government, in such instalments, at such times and in such available
currency or currencies as the Corporation reasonably determines, taking into account
the financial position of the Corporation;
 (ii) any amount due to the government for its capital stock shall be
withheld so long as the government or any of its agencies remains liable to the
Corporation for payment of any amount and such amount may, at the option of the
Corporation, be set off, as it becomes payable, against the amount due from the
Corporation;
(iii) if the Corporation sustains a net loss on the investments made pursuant
to Article III, Section 1, and held by it on the date when the government ceases to be
a member, and the amount of such loss exceeds the amount of the reserves provided
therefor on such date, such government shall repay on demand the amount by which
the repurchase price of its shares of stock would have been reduced if such loss had
been taken into account when the repurchase price was determined.
( d ) In no event shall any amount due to a government for its capital stock under
this Section be paid until six months after the date upon which the government
ceases to be a member. If within six months of the date upon which any government
ceases to be a member the Corporation suspends operations under Section 5 of this
Article, all rights of such government shall be determined by the provisions of such
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        51
Section 5 and such government shall be considered still a member of the Corporation
for purposes of such Section 5, except that it shall have no voting rights. 
SECTION 5.  Suspension of Operations and Settlement of Obligations
( a ) The Corporation may permanently suspend its operations by vote of a
majority of the Governors exercising a majority of the total voting power. After such
suspension of operations the Corporation shall forthwith cease all activities, except
those incident to the orderly realization, conservation and preservation of its assets
and settlement of its obligations. Until final settlement of such obligations and
distribution of such assets, the Corporation shall remain in existence and all mutual
rights and obligations of the Corporation and its members under this Agreement
shall continue unimpaired, except that no member shall be suspended or withdraw
and that no distribution shall be made to members except as in this Section provided.
( b ) No distribution shall be made to members on account of their subscriptions
to the capital stock of the Corporation until all liabilities to creditors shall have been
discharged or provided for and until the Board of Governors, by vote of a majority of
the Governors exercising a majority of the total voting power, shall have decided to
make such distribution.
( c ) Subject to the foregoing, the Corporation shall distribute the assets of the
Corporation to members  pro rata  in proportion to capital stock held by them,
subject, in the case of any member, to prior settlement of all outstanding claims by
the Corporation against such member. Such distribution shall be made at such times
, in such currencies, and in cash or other assets as the Corporation shall deem fair
and equitable. The shares distributed to the several members need not necessarily be
uniform in respect of the type of assets distributed or of the currencies in which they
are expressed.
( d ) Any member receiving assets distributed by the Corporation pursuant to this
Section shall enjoy the same rights with respect to such assets as the Corporation
enjoyed prior to their distribution.
Article VI
Status, Immunities and Privileges 
SECTION 1.  Purposes of Article
To enable the Corporation to fulfil the functions with which it is entrusted, the
status, immunities and privileges set forth in this Article shall be accorded to the
Corporation in the territories of each member.
SECTION 2.  Status of the Corporation
The Corporation 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.  Position of the Corporation with Regard to Judicial Process
Actions may be brought against the Corporation only in a court of competent
jurisdiction in the territories of a member in which the Corporation has an office, has
appointed an agent for the purpose of accepting service or notice of process, or has
issued or guaranteed securities. No actions shall, however, be brought by members
    52   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
or persons acting for or deriving claims from members. The property and assets of
the Corporation shall, wheresoever located and by whomsoever held, be immune
from all forms of seizure, attachment or execution before the delivery of final
judgment against the Corporation.
SECTION 4.  Immunity of Assets from Seizure
Property and assets of the Corporation, 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 Corporation shall be inviolable. 
SECTION 6.  Freedom of Assets from Restrictions
To the extent necessary to carry out the operations provided for in this Agreement
and subject to the provisions of Article III, Section 5, and the other provisions of this
Agreement, all property and assets of the Corporation shall be free from restrictions,
regulations, controls and moratoria of any nature.
SECTION 7.  Privilege for Communications
The official communications of the Corporation shall be accorded by each
member the same treatment that it accords to the official communications of other
members.
SECTION 8.  Immunities and Privileges of Officers and Employees
All Governors, Directors, Alternates, officers and employees of the Corporation: 
  (i) shall be immune from legal process with respect to acts performed by
them in their official capacity;
 (ii) not being local nationals, shall be accorded 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 Corporation, 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 Corporation 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 Corporation to Directors, Alternates, officials or employees of the Corporation
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 Corporation (including any dividend or interest thereon) by whomsoever held: 
 (i) which discriminates against such obligation or security solely because
it is issued by the Corporation; 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
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        53
business maintained by the Corporation.
( d ) No taxation of any kind shall be levied on any obligation or security
guaranteed by the Corporation (including any dividend or interest thereon) by
whomsover held:
 (i) which discriminates against such obligation or security solely because
it is guaranteed by the Corporation; or
(ii) if the sole jurisdictional basis for such taxation is the location of any
office or place of business maintained by the Corporation.
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 Corporation of the detailed action which it has taken. 
SECTION 11.  Waiver
The Corporation in its discretion may waive any of the privileges and immunities
conferred under this Article to such extent and upon such conditions as it may
determine.
Article VII 
Amendments 
( a ) This Agreement may be amended by vote of three-fifths of the Governors
exercising four-fifths of the total voting power.
( b ) Notwithstanding paragraph ( a ) above, the affirmative vote of all Governors
is required in the case of any amendment modifying:
  (i) the right to withdraw from the Corporation provided in Article V,
Section l;
 (ii) the pre-emptive right secured by Article II, Section 2 ( d ); 
(iii) the limitation on liability provided in Article II, Section 4.
( c ) Any proposal to amend this Agreement, whether emanating from a member,
a Governor or the Board of Directors, shall be communicated to the Chairman of the
Board of Governors who shall bring the proposal before the Board of Governors.
When an amendment has been duly adopted, the Corporation shall so certify by
formal communication addressed to all members. Amendments shall enter into force
for all members three months after the date of the formal communication unless the
Board of Governors shall specify a shorter period.
Article VIII 
Interpretation and Arbitration
( a ) Any question of interpretation of the provisions of this Agreement arising
between any member and the Corporation or between any members of the
Corporation shall be submitted to the Board of Directors for its decision. If the
question particularly affects any member of the Corporation not entitled to appoint
an Executive Director of the Bank, it shall be entitled to representation in accordance
with Article IV, Section 4 ( g ).
( b ) In any case where the Board of Directors has given a decision under ( a )
    54   CAP. 235. ħ    MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS
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 of Governors, the Corporation may, so far as it deems necessary, act on the
basis of the decision of the Board of Directors.
( c ) Whenever a disagreement arises between the Corporation and a country
which has ceased to be a member, or between the Corporation and any member
during the permanent suspension of the Corporation, such disagreement shall be
submitted to arbitration by a tribunal of three arbitrators, one appointed by the
Corporation, another by the country involved and an umpire who, unless the parties
otherwise agree, shall be appointed by the President of the International Court of
Justice or such other authority as may have been prescribed by regulation adopted by
the Corporation. 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 IX 
Final Provisions 
SECTION 1.  Entry into Force
This Agreement shall enter into force when it has been signed on behalf of not less
than 30 governments whose subscriptions comprise not less than 75 percent of the
total subscriptions 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 October 1, 1955.
SECTION 2.  Signature
( a ) Each government on whose behalf this Agreement is signed shall deposit
with the Bank an instrument setting forth that it has accepted this Agreement without
reservation 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 Corporation as from the
date of the deposit on its behalf of the instrument referred to in paragraph ( a ) above
except that no government shall become a member before this Agreement enters into
force under Section 1 of this Article.
( c ) This Agreement shall remain open for signature until the close of business
on December 31, 1956, at the principal office of the Bank on behalf of the
governments of the countries whose names are set forth in Schedule A.
( d ) After this Agreement shall have entered into force, it shall be open for
signature on behalf of the government of any country whose membership has been
approved pursuant to Article II, Section 1 ( b ) .
SECTION 3 . Inauguration of the Corporation
( a ) As soon as this Agreement enters into force under Section 1 of this Article
the Chairman of the Board of Directors shall call a meeting of the Board of
Directors. 
( b ) The Corporation shall begin operations on the date when such meeting is
held.
( c ) Pending the first meeting of the Board of Governors, the Board of Directors
may exercise all the powers of the Board of Governors except those reserved to the
Board of Governors under this Agreement.
MEMBERSHIP OF INTERNATIONAL FINANCIAL ORGANISATIONS ġ CAP. 235.        55
DONE at Washington, in a single copy which shall remain deposited in the
archives of the International Bank for Reconstruction and Development, which has
indicated by its signature below its agreement to act as depository of this Agreement
and to notify all governments whose names are set forth in Schedule A of the date
when this Agreement shall enter into force under Article IX, Section 1 hereof.
SCHEDULE A 
SUBSCRIPTIONS TO CAPITAL STOCK OF THE INTERNATIONAL FINANCE 
CORPORATION
     Amount      Amount
  Number of  ( in United  Number of  ( in United
    Country           Shares      States dollars )         Country Shares        States dollars )
Australia   2,215 2,215,000  Iran      372      372,000 
Austria      554     554,000  Iraq        67        67,000 
Belgium   2,492  2,492,000  Israel        50        50,000 
Bolivia        78       78,000  Italy   1,994   1,994,000 
Brazil   1,163  1,163,000  Japan   2,769   2,769,000
  Burma      166     166,000  Jordan        33        33,000 
Canada   3,600  3,600,000  Lebanon        50        50,000 
Ceylon      166          166,000  Luxembourg      111      111,000 
Chile      388     388,000  Mexico      720      720,000 
China   6,646  6,646,000  Netherlands   3,046   3,046,000
Colombia      388     388,000  Nicaragua          9          9,000
Costa Rica        22       22,000  Norway      554      554,000
Cuba      388     388,000  Pakistan   1,108   1,108,000
Denmark     753     753,000  Panama          2          2,000
Dominican  Paraguay        16        16,000
     Republic        22       22,000  Peru      194      194,000
Ecuador        35       35,000  Philippines       166      166,000
Egypt      590     590,000  Sweden   1,108   1,108,000
  El Salvador        11       11,000  Syria        72        72,000
Ethiopia        33       33,000  Thailand      139      139,000
Finland      421     421,000  Turkey      476      476,000
France   5,815  5,815,000  Union of 
Germany   3,655  3,655,000    South Africa  1,108   1,108,000
Greece      277     277,000  United
Guatemala        22       22,000  Kingdom   14,400  14,400,000
Haiti        22       22,000  United States  35,168 35,168,000
Honduras        11       11,000  Uruguay      116      116,000
Iceland        11       11,000  Venezuela      116      116,000
India   4,431  4,431,000  Yugoslavia      443     
Indonesia   1,218      1,218,000
Total:  100,000   $100,000,000
