Offices of the Bank (Article 40)
(I) The principal office of the Bank shall be located in . (21 The Bank may establish agencies or branch offices elsewhere.
I The text of this Article follows the lBRD, Art. V (9), which, however, requires that the principal office should be located in the territory of the member "holding.
the greatest number of shares". lADB expressly states that its principal office should be in Washington, D.C. (Art. XIV (1».
2. Under paragraph (2) of the Article the Bank may establish its agencies or branch offices within or without the territories of members. It should be recalled that the United Nations maintains its European office in Switzerland, a non-mem-ber country; the European Coal and Steel Community and the European Economic Community have powers - which they have exercised - to establish offices in non-member countries, for instance, in the United Kingdom and the United States of America.
(1) The principal office of the Bank shall be located in the territory of a Member State. The choice of the location of the principal office of the Bank shall be made by the Board of Governors at its first meeting, taking into account the availability of facilities for the proper functioning of the Bank.
(2) Notwithstanding the provisions of Article 35, the choice of the location of the principal office of the Bank shall be made by the Board of Governors in ac-cOl'dance with the conditions that applied to the adoption of this Agreement.
(3) The Bank may establish branch offices or agencies elsewhere.
ARTICLE 39 OFFICES OF THE BANK
(l) The principal office of the Bank shall be located in the territory of a member State. The choice of the location of the principal office of the Bank shall be made by the Board of Governors at its fip';t meeting, taking into account the availability of facilities for the proper functioning of the Bank.
(2) Notwithstanding the provisions of Article 35 of this Agreement, the choice of the location of the principal office of the Bank shall be made by the Board of Governors in accordance with the conditions that applied to the adoption of thh Agret:ment.
(3) The Bank may establish branch offices or agencies elsewhere.
166
Draft prepared by the Committee of Nine
Explanatory notes submitted by the
Committee of Nine
Amendments proposed by Governments
Final lext adopted by the Conference
CHANNEL OF COMMUNICATIONS, DEPOSITORIES Channel of communications, depositories (Article 41)
(I) Each member shall designate an appropriate authority with which the Bank may communicate in connexion with any mattcr arising under this Agreement.
(2) Each member shall designate its central bank or such other iustitution as may be agreed by the Bank, as a depository with which the Bank may keep its hold-ings of currency of that member as well as other assets of the Bank.
(3) The Bank may hold its assets, including gold and convertible currencies, with such depositories as the Board of Dircclors shall determine.
l. Art. 41 combines in a single Article in an amplified form two sets of provisions contained on these two subjects in the constituent instruments of the other lending agencies -IBRD, Art. III (2) and V (II); IFC, Art. IV (9) and (10); IDA, Art. VI (9) and (10); IADB, Art. XIV (3) and (4).
2. Communication channels; Paragraph (I) requires - as the IFC and IDA do - each member to designate an "authority" rather than - as the IBRD does -leave it open to the Bank to deal with the "Treasury, central bank, stablisation fund or other similar fiscal agency" of the member concerned. The term "authority"
emphasizes the public character of the entity chosen without limiting the member unduly in its choice. Thus, one member may designate its central bank, and another member e.g. its governmental department responsible for economic development.
3. Depositories; Paragraph (2) is drafted on the lines of corresponding pro-visions of the IDA and IADB. However, it has been thought useful to add the provisions contained in paragraph (3) which, in the first place, determine that it is for the Board of Directors, as part of its responsibility for the conduct of the operations of the Bank, to decide on the depositories for the Bank's assets and, secondly, make it clear that such depositories need not be confined to institutions in the territories of members where the Bank's activities make this desirable. Thus, the Bank might find it useful, e.g. in connexion with the management of a special fund entrusted to it, to agree that gold or certain currencies should be held, before their utiliz.:Ition, with a depository in a non-member country.
None.
ARTICLE 40
CHANNEL OF COMMUNICATIONS, DEPOSITORIES
(1) Each member shall designate an appropriate authority with which the Bank may communicate in connexion with any matter arising under this Agreement.
(2) Each member shall designate its central bank or such other institution as may be agreed by the Bank, as a depository with which the Bank may keep its holding"
of currency of that member as well as other assets of the Bank.
(3) The Bank may hold its assets, including gold and convertible currencies, with such depositories as the Board of Directors shall determine.
Draft prepared by the Committee of Nine
Explanatary notes submitted by the Committee of Nine
Amendments proposed by Governments
Final text adopted by the Conference
PUBLICATION OF THE AGREEMENT, REPORTS AND PROVISION OF INFORMATION
Publication of tbe Agreement, Reports and Provisions of Information (Article 42)
(I) The Bank shall endeavour to make available the text of this Agreement in the principal languages used in Africa.
(2) The Bank shall publish and transmit to its members an annual report contain-ing an audited statement of the accounts.Itshall also transmit quarterly to the mem-bers a summary statement of its financial position and a profit and loss statement showing the results of its operations. The annual report and the quarterly state-ments shall be drawn up in accordance with the provisions of paragraph (4) of Article 13 of this Agreement.
(3) The Bank may also publish such other reports as it deems desirable to carry out its purpose and functions. They shall be transmitted to the members of the Bank.
I. In order to gain and broaden support for the Bank throughout Africa, para-graph (1) of Art. 42 provides for the distribution of the text of the Agreement in the principal languages used in Africa which the Bank should ensure within the means available to it.
2. Paragraph (2) and (3) are drafted on the lines of IADB, Art. VIII (6) which is similar, though not identical, with IBRD, Art. V (13); IFC, Art. IV (II); IDA, Art. VI (11). These paragraphs emphasize, as the other cited provisions do, that the annual report must be made public but not the quarterly statements. As regards the nced for an audit, see Art. 29 (2) and the notes thereto. In accordance with Art.
13 (4), the financial ;tatement, contained in the annual report and the quarterly statements must show the ordinary operations and the special operations of the Bank separately.
3. It may be noted that the by-laws of the IBRD require the Executive Directors to present at the annual meeting of the Board of Governors an "annual report in which shall be discussed the operations and policies of the Bank and which shall make recommendations to the Board of Governors on the problems confronting the Bank" (s.II). The by-laws of the other lending agencies contain similar pro-visions (IFC by-laws s.8; IDA by-laws s.2; IADB by-laws s.2).
Libya: Itis not clear from this article in which languages the Bank will publish its financial documents, reports, and conduct its correspondence with member countries. It is, therefore, recommended that paragraph 2 of this article should be amended to include the following sentence: "The working languages of the Bank shall be English, French, Arabic and any other African language which is thc offi-cial language of five or more member States."
ARTICLE 41
PUBLICATION OF THE AGREEMENT, WORKING LANGUAGES, PROVISION OF INFORMATION AND REPORTS
(1) The Bank shall endeavour to make available the text of this Agreement and all its important documents in the principal languages used in Africa. The working languages of the Bank shall be, if possible, African languages, English and French.
(2) Members shall furnish the Bank with all information it may request of them in order to facilitate the performance of its functions.
(3) The Bank shall publish and transmit to its members an Annual Report con-taining an audited statement of the accounts. It shall also transmit quarterly to
168
-the members a summary statement of its financial position and a profit and loss statement showing the resnlts of its operations. The Annual Report and the Quarterly Statements shall be drawn up in accordance with the provisions of paragraph (4) of Article 13 of this Agreement.
(4) The Bank may also publish such other reports as it deems desirable to carry out its purpose and functions. They shall be transmitted to the members of the Bank.
DraJt prepared by the Committee oj Nine
Explanatory notes submitted by the Committee of Nine
Amendments proposed by Governments
Final text adopted by the Co~ference
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ALLOCATION OF NET INCOME AUocation of net income (Article 43)
(I) The Board of Governors shall determine annually what part of the net income of the Bank, including the net income accruing to its special funds, shall be allo-cated~after making provision for reserves ~to surplus and what part, if any, shall be distributed.
(2) The distribution referred to in the preceding paragraph shall be made in pro-portion to the number of shares held by each member.
(3) Payments shall be made in such manner and in such currency as the Eoard of Governors shall determine.
1. In accordance with IBRD, Art. V (14), this Article - as a "management"
rule - has been placed in chapter V; the IADB (Art. VII (4» treats the question in the context of miscellaneous powers.
2. Paragraph (1) is inspired by the text of the IBRD, paragraphs (2) and (3) by that of the IADB. The IBRD provides for a specific allocation scheme of profits.
if any.
3. Both the IBRD and IADB lay down that the transfer of currency and its use by the receiving member shall not be restricted provided the currency received by the member is other than its own. This is provided in Art. 27(I)(e) of the Agreement.
None.
ARTICLE 42
ALLOCATION OF NET INCOME
(1) The Board of Governors shall determine annually what part of the net in-come of the Bank, including the net inin-come accruing to its Special Funds, shall be allocated - after making provision for reserves - to surplus and what part, if any. shall be distributed.
(2) The distribution referred to in the preceding paragraph shall be made in pro-portion to the number of shares held by each member.
(3) Payments shall be made in such manner and in such currency as the Board of Governors shall determine.
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170-"
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Notes submitted by the Committee
0/
NineCHAPTER VI
Withdrawal and Suspension of Members:
Temporary Suspension and Termination of Operations of the Bank
l. The issues with which this chapter is concerned are provided for in IBRD Arts. 11 (I) and VI; IFC Arts. II (I) and V: IDA Arts. 11 (I) and V11; IADB Arts.
11 (I), IX and X.
2. Arts. 44 and 45 concern the withdrawal and suspension of members. Arts. 46 to 50 contain rules relating to the settlement of accounts, temporary suspension and termination of operations of the Bank. These Articles follow closely the rele-vant provisions of the IBRD. However, their wording is somewhat simplified and adapted to the terminology and system of numbering of the present Agreement.
"Permanent suspension of operations" is styled - as in the case of the IADB
-"Termination of operations of the Bank". The corresponding provisions of the IBRD have been split up - again as in the IADB - into four Articles.
Draft prepared by the Committee of Nine
Explanatory notes submitted by the Committee of Nine
Amendments proposed Governments
Final text adopted by the Conference
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WITHDRAWAL Withdrawal (Article 44)
(I) Any member may withdraw from the Bank at any time by transmitting a notice in writing to the Bank at its principal office.
(2) Withdrawal by a member shall become effective on the date specified in its notice but in no event less than six months after the date that notice has been re-ceived by the Bank.
i. This Article is based on IADB, Art. IX (I); see also IBRD, Art. VI (I).
2. In the case of withdrawal of a member from the IBRD or the IADB the mem-ber concerned remains liable for its direct obligations and its contingent liabilities to which it was subject at the date of the receipt of the withdrawal notice. The diff-erence between the financial implications of the solutions adopted in the two con-stituent instruments is therefore not substantial. (In the case of the IADB, the with-drawal notice may be cancelled before it becomes effective.) As to the rules for settlement of accounts with the withdrawing member, see Art. 46.
3. The right of a member to withdraw from the Bank may be modified by amend-ment to the Agreeamend-ment only if the modification is accepted by all members (sec Art. 61 (2) (iii)).
None.
CHAPTER VI
WIthdrawal and Suspension of Members,
Temporary Suspension and Termination of Operations of the Bank
ARTICLE 43 WITHDRAWAL
(I) Any member may withdraw from the Bank at any time by transmitting a notice in writing to the Bank at its principal office.
(2) Withdrawal by a member shan become effective on the date specified in its notice in but no event less than six months after the date that notice has been re-ceived by the Bank.
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172-.',
Draft prepared by the Committee of Nine
Explanatory notes submitted by the Committee of Nine
Amendments proposed by Governments and by International Organizations
Final text adopted by the Conference
SUSPENSION Suspension (Article 45)
(1) Ifa member fails to fulfil any of its obligations to the Bank, its membership shall be suspended unless the Board of Governors decides otherwise by a decision taken by a majority of the governors exercising a majority of the total voting power of the members.
(2) A member so suspended shall automatically cease to be a member of the Bank one year from the date of suspension unless a decision is taken by the Board of Governors by the same majority to restore the member to good standing.
(3) 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.
1. Suspension under paragraph (I) of the proposed Article is automatic. Thus, the provisions of paragraph (I) differ from IBRD Art. VI (2); IFC, V (2); IDA, Art. VII (2); and IADB, Art. IX (2), under which suspension requires a decision of the Board of Governors taken by a qualified majority.
2. Once membership is suspended, the member concerned will, under paragraph (2) of Article 45, after one year, automatically cease to be a member of the Bank --unless the Board of Governors decides otherwise by the "same majority" as is required to dispense with its initial suspension. As to the settlement of accounts with a State whose membership ceases, see Art. 46.
3. In order to avoid uncertainty, the Board of Directors will in practice, by a decision have to record the suspension of a member and the date from which it runs. In view of this, the by-laws of the Bank should include a provision similar to that of s.21 of the IBRD by-laws under which, before suspension, the matter must be considered by the Executive Directors who inform the member concerned in reasonable time of the complaint against it and allow it an adequate opportunity for stating its case. They then recommend to the Board of Governors appropriate action, etc.
4. Paragraph (3) of Art. 45 follows the language of the relevant provisions of IBRD, IFC, IDA and IADB.
UAR: Suspension of members should not be automatic. A new formula similar to that applied by other international lending institutions should be found.
Liberia: This Article should be redrafted because
(a) While it is headed "Suspension", its provisions, especially paragraph (2), are equivalent to expulsion in that it provides for cessation of member-ship; and
(b) Paragraph (I) makes suspcnsion automatic if a member fails to fulfil its obligations.
Suspension from membership is such a grave step that the required decision should not be automatic, but only taken after consulation by the body actually governing the Bank.
IBRD: The practical requirement of a decision by the Board of Directors recording the suspension of a member would seem to defeat the purpose sought to be achieved by the automatic suspension provided for in paragraph (1).
ARTICLE 44 SUSPENSION
(I) If it appears to the Board of Directors that a member fails to fulfil any of its obligations to the Bank, that member shall be suspended by that Board unless the
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Board of Governors at a subsequent meeting, called by the Board of Directors for that purpose, decides otherwise by a decision taken by a majority of the Governors exercising a majority of the total voting power of the members.
(2) A member so suspended shall automatically cease to be a member of the Bank one year from the date of suspension unless a decision is taken by the Foard of Governors by the same majority to restore the member to good standing.
(3) 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.
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174-Drajt prepared by the Committee oj Nine
Explanatory notes submitted by the Committee oj Nine
SETILEMENT OF ACCOUNTS Settlement of Accounts (Article 46)
(1) After the date on which a State ceases to be a member (hereinafter in this Article called the "termination date"), the member 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 the termination date is out-standing; 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.
(2) At the time a State ceases to be a member. the Bank shall arrange for the re-purchase of its shares as a part of the settlement of accounts with that State in accordance with the provisions of paragraphs (3) and (4) of this Article. For this purpose, the repurchase price of the shares shall be the value shown by the books of the Bank on the termination date.
(3) The payment for shares repurchased by the Bank under this Article shall be governed by the following conditions:
(a) Any amount due to the State concerned for its shares shall be withheld so long as that State, 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 State resulting from its subscription for shares in accordance with paragraph 4 of Article 7 of this Agreement. In any event1 no amount due to a member for its shares shall be paid until six months after the termination date.
(b) Payments for shares may be made from time to time, upon their surrender
(b) Payments for shares may be made from time to time, upon their surrender