THE COUNCIL

HAVING REGARD to Article 13 (c) of the Convention for European Economic Co-operation of 16th April 1948;

HAVING REGARD to the Agreement for the Establishment of a European Payments Union of 19th September 1950;

HAVING REGARD to the Decision of the Council of 10th June 1955 concerning the Renewal of the European Payments Union, the Establishment of a European Fund, and the Rules of Commercial Policy to be followed by Member countries in connection with the Return to Convertibility;

HAVING REGARD to the Reports of the Managing Board of the European Payments Union of 22nd April and of 25th July 1955 (Doc. No. C (55) 91 and C (55) 189 (1st Revision)];

HAVING REGARD to the Comments of the Joint Trade and Intra-European Payments Committee of 7th June and of 26th July 1955 on those Reports [Doc. No. C (55) 127 and C (55) 206]; and

CONSIDERING the arrangements made by the Contracting Parties to the said Agreement for the Establishment of a European Payments Union in order to provide for the termination of that Agreement in connection with the return to convertibility by some Member countries;

I.           APPROVES the text of the attached Draft European Monetary Agreement (hereinafter called the “Agreement”) and of the Draft Protocol of Provisional Application of the Agreement.

II.          RECOMMENDS the said Draft Agreement and the said Draft Protocol to all the Members of the Organisation for signature.[1]

III.         DECIDES to take such action and perform such duties as are provided for in the Agreement immediately the latter is applied.

IV.         INSTRUCTS the Secretary-General to make with the Bank for International Settlements the arrangements required in order to ensure the execution of the Agreement as from the date from which it is applied.

V.          DECIDES:

1.           Not later than 31st March 1956 — if by that date the Agreement is not being applied — the Managing Board of the European Payments Union shall carry out a comprehensive review of the provisions of that Agreement and shall submit to the Council proposals with regard to the modifications, if any, which should be made in that Agreement.

2.           The proposals by the Managing Board referred to in the preceding paragraph shall be considered by the Council, in consultation with the Government of the United States of America, together with the Report by the Managing Board on the conditions on which the European Payments Union could remain in force after 30th June 1956.

ANNEX I

EUROPEAN MONETARY AGREEMENT

The Governments of the Federal Republic of Germany, the Republic of Austria, the Kingdom of Belgium, the Kingdom of Denmark, the French Republic, the Kingdom of Greece, Ireland, the Republic of Iceland, the Italian Republic, the Grand Duchy of Luxembourg, the Kingdom of Norway, the Kingdom of the Netherlands, the Portuguese Republic, the United Kingdom of Great Britain and Northern Ireland, Sweden, the Swiss Confederation, and the Turkish Republic;

Considering the arrangements made by the Contracting Parties to the Agreement for the Establishment of a European Payments Union of 19th September 1950, in order to provide for the termination of that Agreement in connection with the return to convertibility by some Contracting Parties;

Considering that, in order to maintain a high and stable level of trade and liberalisation between the Contracting Parties as well as of employment in their respective countries — bearing in mind the need for their internal financial stability — while facilitating a return to full multilateral trade and convertibility, it is desirable that upon the termination of the Agreement for the Establishment of a European Payments Union a source of credit should be established which could be called upon by all the Contracting Parties;

Desiring also to establish, when the operations of the European Payments Union are terminated, a multilateral system of settlements compatible with the exchange arrangements contemplated by the Contracting Parties;

Considering that, while that multilateral system should allow the Contracting Parties to adopt different methods of determining their rates of exchange, it is, nevertheless, the intention of all the Contracting Parties that the margins beyond which they will not allow their currencies to fluctuate should be as moderate and stable as possible;

Confident that the functioning of the European Fund and of the Multilateral System of Settlements will assist the Contracting Parties to dispense with bilateral arrangements in their mutual trade and payments relations;

Desiring to establish an institutional framework for the continuance of monetary co-operation in Europe and to aid the Contracting Parties to carry out the decisions of the Organisation for European Economic Co-operation (hereinafter called the “Organisation”) relating to commercial policy and to the liberalisation of trade and of invisible transactions;

Considering the adoption, on 29th July 1955, of a Recommendation of the Council of the Organisation (hereinafter called the “Council”) approving the text of the present Agreement, recommending it to the Members of the Organisation for signature, and providing that the Organisation should assume the functions envisaged under the present Agreement as from the date from which it will apply;

Have agreed as follows:

ARTICLE 1

EUROPEAN FUND AND MULTILATERAL SYSTEM OF SETTLEMENTS

The Contracting Parties hereby establish between themselves a European Fund (hereinafter called the “Fund”) and a Multilateral System of Settlements (hereinafter called the “System of Settlements”), which shall be operated within the framework of the Organisation.

PART I

EUROPEAN FUND

ARTICLE 2

PURPOSES OF THE FUND

The purposes of the Fund shall be:

(i)        To provide the Contracting Parties with credit in order to aid them to withstand temporary overall balance of payments difficulties in cases where these difficulties endanger the maintenance of the level of their intra-European liberalisation measures; and

(ii)       To facilitate the operation of the System of Settlements.

ARTICLE 3

CAPITAL OF THE FUND

The capital of the Fund shall consist of:

(a)        

(i)        An amount of 113,037,000 units of account within the meaning of Article 24;

(ii)       An amount of 123,538,000 United States dollars obligated by the Government of the United States of America; and

(iii)      Claims against Norway and Turkey for 10,000,000 and 25,000,000 units of account, respectively; transferred from the European Payments Union to the Fund;

(b)       Contributions by the Contracting Parties amounting, in aggregate, to 328,425,000 units of account. The amounts of these contributions are shown in Table A:

TABLE A

ARTICLE 4

PAYMENT OF CAPITAL

(a)       The amount of 113,037,000 units of account referred to in the preceding Article will be transferred to the Fund in gold, in United States dollars or in convertible currencies of countries other than the Contracting Parties to the Agreement for the Establishment of a European Payments Union as soon as the present Agreement comes into force.

(b)       The claims for 10,000,000 and 25,000,000 units of account referred to in the preceding Article will be transferred to the Fund as soon as the present Agreement comes into force. These claims shall bear interest at the rate of 3 per cent per annum and shall be repaid to the Fund in gold and by thirteen equal annual annuities, the first annuity falling due at the end of the third year from the date on which the present Agreement comes into force. Interest due in respect of the first two years from that date shall be paid half-yearly in gold to the Fund.

(c)       The amount of 123,538,000 United States dollars referred to in the preceding Article will be placed at the disposal of the Fund in accordance with the decisions of the Organisation to the extent necessary to maintain the liquid assets of the Fund at the level required for it to meet its obligations at any time, provided that:

(i)        Before any payment in respect of this amount is made, the Contracting Parties have paid to the Fund in respect of their contributions a total amount of 148,037,000 units of account; and that

(ii)       At the same time as any such payment is made, the Contracting Parties pay in respect of their contributions an amount equivalent to that payment.

(d)       The contributions of the Contracting Parties shall be paid to the Fund in accordance with the decisions of the Organisation to the extent necessary to maintain the liquid assets of the Fund at the level required for it to meet its obligations at any time. The payments shall be made in gold, in proportion to the amount of the contributions. The Organisation may, however, decide that, in view of their special position, certain Contracting Parties shall not be called upon to pay contributions in whole or in part until there has been full payment of the other contributions, provided that the amounts the payment of which will thus be deferred shall not, in aggregate, exceed 56,850,000 units of account. Such a decision shall be subject to review if the position of the Contracting Parties should change.

ARTICLE 5

REPAYMENTS

(a)       To the extent that the whole or part of the amounts paid by virtue of Article 4 cease to be required by the Fund, they may, in accordance with a decision of the Organisation, be repaid or blocked in a special account of the Fund.

(b)       Repayments in accordance with a decision of the Organisation shall be made in gold to the Contracting Parties in proportion to the amounts of their contributions. Any repayment of contributions the payment of which had been deferred in accordance with a decision under paragraph (d) of Article 4 shall, however, be made before repayment of the other contributions. Amounts repaid by virtue of the present Article may be called up again in accordance with the provisions of Article 4.

(c)       An amount equal to any repayment made by virtue of the present Article shall be blocked in a special account of the Fund, except to the extent that such repayment relates to amounts of contributions the payment of which had been deferred by a decision taken under paragraph (d) of Article 4.

(d)       The amounts blocked by virtue of the preceding paragraph may not be used for the purposes of the present Agreement before its termination. However, should the Contracting Parties again be called upon to make payments in respect of their contributions, these amounts shall be placed again at the disposal of the Fund up to a sum equivalent to that of the payments which are made. Until all the blocked amounts have been placed again at the disposal of the Fund, no further payment may be made to the Fund in respect of the amount of 123,538,000 United States dollars referred to in Article 3.

ARTICLE 6

INTEREST

The contributions paid to the Fund by virtue of Article 4 shall bear interest paid out of the income of the Fund at a rate which shall be determined by the Organisation. Payments of interest shall be made in gold.

ARTICLE 7

THE GRANTING OF CREDITS

(a)       Credits may be granted by the Fund to any Contracting Parties which so request. The decision to grant such credits shall be taken by the Organisation, which shall also decide on the period for repayment, the rate of interest and of service charges, as well as on any financial or other terms attached to the credit.

(b)       Credits shall be expressed in units of account. They shall be drawn and repaid in gold, and interest and service charges shall be paid in gold.

(c)       The period for which credits may be granted shall not exceed two years. Any credit drawn shall be repaid within a period which shall not exceed two years from the date on which it was granted. It may be repaid before the date on which repayment is due.

(d)       Credit drawn may be represented by an instrument which the Organisation may assign with the consent of the Contracting Party concerned and of the Contracting Party against the currency of which the assignment may be made. Such an assignment cannot be accompanied by the granting of a guarantee by the Fund.

PART II

MULTILATERAL SYSTEM OF SETTLEMENTS

ARTICLE 8

PURPOSES OF THE SYSTEM OF SETTLEMENTS

The purposes of the System of Settlements shall be to facilitate the settlement of transactions in the currencies and between the monetary areas of the Contracting Parties by enabling them to obtain interim finance and the settlement of their claims, regularly, on terms laid down in advance, and thus to assist them to attain the objectives and to satisfy the conditions set out in the Preamble to the present Agreement.

ARTICLE 9

EXCHANGE RATE MARGINS

(a)       Each Contracting Party shall, for the purpose of limiting the fluctuations of its currency, fix buying and selling rates for gold, the United States dollar or some other currency and shall notify each of the other Contracting Parties and the Organisation of the rates so fixed, which shall be used as a basis for the calculations and settlements provided for in the present Part of the Agreement.

(b)       If a Contracting Party fixes a single rate for both buying and selling, it shall notify that rate in accordance with the provisions of the preceding paragraph.

(c)       The obligations arising under the present Article shall not apply with regard to the currency of a Contracting Party for which buying and selling rates are not published by the central bank of any other Contracting Party.

ARTICLE 10

INTERIM FINANCE

(a)       Each Contracting Party shall place amounts of its currency requested by any other Contracting Party at the disposal of the latter, without requiring a settlement in gold or in the currency of any third country, during the periods between the settlements provided for in Article 12.

(b)       A Contracting Party may not, however, by virtue of the present Article place at the disposal of other Contracting Parties amounts of currency exceeding, in aggregate, the equivalent of the amount shown in respect of that Contracting Party in Table B; nor shall a Contracting Party be entitled by virtue of the present Article to require other Contracting Parties to place at its disposal amounts of their currencies exceeding, in aggregate, the equivalent of the amount shown in respect of that Contracting Party in Table B.

TABLE B

(c)       Amounts of currencies placed at the disposal of a Contracting Party under the present Article shall bear interest, to be paid by that Contracting Party, at a uniform rate determined by the Organisation.

ARTICLE 11

CLAIMS AND DEBTS

(a)       Each Contracting Party shall notify at the end of each period in respect of which settlements are carried out (hereinafter called an “accounting period”):

(i)        Any amounts of currency placed by it at the disposal of each of the other Contracting Parties and any amounts of currencies placed at its disposal by each of the other Contracting Parties under Article 10 which are outstanding at the end of that accounting period;

(ii)       Any amounts which that Contracting Party holds in the currency of each of the other Contracting Parties — specifying amounts bought under ad hoc Arrangements notified in accordance with the provisions of Article 15 — which it decides should be subject to settlement under the present Agreement; and

(iii)      Any balance on an account kept under a Bilateral Payments Agreement notified in accordance with Article 16. Any balance notified by virtue of the present sub-paragraph shall not exceed the credit margins provided for by that Agreement as notified in accordance with the provisions of Article 16.

(b)       For the calculation of bilateral claims or debts of each Contracting Party with regard to each of the other Contracting Parties at the end of an accounting period, the amounts notified under paragraph (a) of the present Article for that accounting period shall be converted into United States dollars:

(i)        As regards the amounts referred to in paragraph (a) (i) of the present Article, on the basis of the buying rate notified in accordance with Article 9;

(ii)       As regards the amounts referred to in paragraph (a) (ii) of the present Article, on the basis of the selling rate notified in accordance with Article 9; and

(iii)      As regards the balances referred to in paragraph (a) (iii) of the present Article, on the basis of the rate agreed between the Contracting Parties concerned.

(c)       If the buying and selling rates notified by a Contracting Party in accordance with Article 9 are fixed in relation to gold or to a currency other than the United States dollar, that Contracting Party shall also give notification of the relationship to be used, for the purposes of the calculations and settlements provided for in the present Part of the Agreement, between gold or the currency in relation to which its buying and selling rates have been notified, on the one hand, and the United States dollar, on the other hand.

(d)       The net claim or debt of a Contracting Party at the end of an accounting period shall be an amount equal to the difference between the sum of its bilateral claims and the sum of its bilateral debts calculated in accordance with paragraph (b) of the present Article.

ARTICLE 12

SETTLEMENTS

(a)       The net claim or debt of each Contracting Party at the end of each accounting period shall be settled by a payment in United States dollars made by the Fund or made to the Fund, and the bilateral claims or debts or the Contracting Parties shall be settled accordingly.

(b)       The value date for settlements shall be determined, for each accounting period, in accordance with the decisions of the Organisation.

(c)       Any default in making a payment in United States dollars due to the Fund by virtue of the present Article shall, to the extent that the default brings the aggregate of amounts due to the Fund by virtue of the present Article, and not paid, over 50,000,000 United States dollars, be borne the Contracting Parties which, for the accounting period concerned, have bilateral claims as regards the defaulting Contracting Party, in proportion to the amount of such bilateral claims. For this purpose, these Contracting Parties shall make payments in United States dollars to the Fund and shall receive claims against the Fund for an equivalent amount. When the defaulting Contracting Party makes a payment to the Fund under the present Article, repayments in respect of the said claims shall be made by the Fund in proportion to the amounts of such claims.

(d)       The debts of the Contracting Parties towards the Fund resulting from any default in making a payment in United States dollars due to the Fund by virtue of the present Article, as well as any debts of the Fund towards the Contracting Parties resulting from the application of paragraph(c) of the present Article, shall be expressed in units of account.

ARTICLE 13

MODIFICATIONS OF EXCHANGE RATE MARGINS

When either the buying or selling rate notified in accordance with Article 9 is modified by a Contracting Party during an accounting period:

(i)        The amounts and balances referred to in paragraph (a) of Article 11 shall be notified, in respect of the period before the modification, by the Contracting Party concerned and, as regards their relations with that Contracting Party, by the other Contracting Parties, as soon as possible after the modification; and

(ii)       The bilateral claims and debts of the Contracting Party concerned shall be calculated in two parts, that is to say for the period before and for the period after the modification, on the basis of the buying and selling rates notified for those periods respectively.

ARTICLE 14

MODIFICATION IN THE UNITED STATES PRICE OR POLICY FOR GOLD

(a)       In the event of a modification in the price for gold fixed by the United States of America or of a restriction of the buying and selling policy for gold followed by the United States financial authorities in relation to any Contracting Party:

(i)        The Contracting Parties shall, as soon as possible after such modification or restriction, notify the amounts and balances referred to in paragraph (a) of Article 11 in respect of the period before that modification or restriction;

(ii)       The bilateral claims and debts of the Contracting Parties shall be calculated for the period before the modification or restriction on the basis of the selling rates notified in accordance with Article 9 or the agreed rates referred to in paragraph (b) (iii) of Article 11, after excluding the amounts notified by virtue of paragraph (a) (i) of Article 11; and the claim or debt of each Contracting Party calculated on this basis shall be settled, on the value date determinated by the Organisation, in accordance with the rules laid down in Article 12;

(iii)      The amounts notified by virtue of paragraph (a) (i) of Article 11, calculated in United States dollars on the basis of the buying rates notified in respect of the period before such modification or restriction, shall be re-calculated in terms of gold on the basis of the price for gold (excluding any commission) fixed by the United States of America until the time of such modification or restriction; and the claim or debt corresponding to the net amount in respect of each Contracting Party shall be settled in gold on the value date determined by the Organisation; and

(iv)     Any default in making a payment due by virtue of the present Article shall be deemed to be a default in making a payment in United States dollars due by virtue of Article 12.

(b)       In the event of a modification in the price for gold fixed by the United States of America:

(i)        The Organisation shall, as soon as possible after that modification, carry out a comprehensive review of the operation of the provisions of the present Part of the Agreement in order to decide what amendments ought to be made to those provisions to take account of that modification;

(ii)       Such a decision shall require the concurrence of Contracting Parties whose contributions amount, in aggregate, to at least 50 per cent of the total amount of the contributions within the meaning of Article 33, and the provisions of the present Part of the Agreement shall cease to apply, at the end of the accounting period in which the decision is taken, with regard to any Contracting Party which does not take part in that decision. The settlements relating to that accounting period shall nevertheless be carried out.

(c)       In the event of a restriction of the buying and selling policy for gold followed by the United States financial authorities in relation to any Contracting Party:

(i)        The Organisation shall, as soon as possible after that restriction, carry out a comprehensive review of the operation of the provisions of the present Part of the Agreement in order to decide on the conditions on which those provisions may remain in force after such restriction;

(ii)       If a Contracting Party does not take part in a decision of the Organisation taken by virtue of the preceding sub-paragraph, the provisions of the present Part of the Agreement shall cease to apply with regard to that Contracting Party, and those provisions shall, without prejudice to the provisions of paragraph (c) of Article 33, remain in force between the other Contracting Parties on conditions which they shall determine; the withdrawal of the Contracting Party concerned shall take effect as from the date of the restriction. The settlements provided for in the present paragraph shall nevertheless be carried out.

(d)       If a modification or restriction within the meaning of the present Article has taken place and if the settlements relating to the accounting period before such modification or restriction have not yet been carried out, the calculation and the settlement of the claims and debts relating to that accounting period shall be carried out in accordance with the provisions of paragraph (a) of the present Article.

ARTICLE 15

« AD HOC » ARRANGEMENTS

Ad hoc Arrangements made between two Contracting Parties for the support or their currencies, as well as any amendments which might be made thereto, shall be notified to the Organisation by the Contracting Parties concerned if they desire that the balances of an account kept under such an Arrangement be taken into account in the calculation of their bilateral claims and debts.

ARTICLE 16

BILATERAL PAYMENTS AGREEMENTS

(a)       If Bilateral Payments Agreements providing for credit margins are maintained or entered into by two Contracting Parties, such Agreements shall be notified to the Organisation together with details of their duration and of the financial provisions contained therein and, in particular, the amount of the credit margins, the currency of account and the rate agreed for the purposes of the calculations and settlements provided for in the present Part of the Agreement. The Contracting Parties concerned shall also notify the Organisation of any amendments which might be made to the financial clauses of those Agreements.

(b)       The Organisation may make recommendations to the Contracting Parties concerned with regard to the revision of the provisions of such a Bilateral Agreement, if it considers that those provisions may prejudice the satisfactory operation of the System of Settlements or are contrary to the objectives set out in the Preamble to the present Agreement.

(c)       If effect is not given to such recommendations, the Organisation may decide that balances of accounts kept under the Agreements to which those recommendations relate shall not be taken into account in the calculation of bilateral claims and debts of the Contracting Parties concerned. If, however, in disregard of such a decision of the Organisation, the balances referred to in that decision have been taken into account in settlements carried out under Article 12, the Contracting Party, the net claims of which have been increased or the net debts of which reduced by the inclusion of those balances, shall make an equivalent payment in United States dollars to the Fund and the Fund shall make an equivalent payment in United States dollars to the other Contracting Party concerned.

(d)       The provisions of the preceding paragraph shall also apply if a balance notified in accordance with paragraph (a) (iii) of Article 11 exceeds the credit margin provided for by the Bilateral Payments Agreement in question as notified to the Organisation in accordance with the provisions of paragraph (a) of the present Article.

PART III

ADMINISTRATION AND FINANCE

ARTICLE 17

ADMINISTRATIVE ORGANS

The Fund and the System of Settlements shall be operated under the authority of the Council by a Board of Management and by the Bank for International Settlements acting in accordance with an Agreement between the Organisation and the Bank as agent for the Organisation (hereinafter called the “Agent”).

ARTICLE 18

THE COUNCIL

(a)       Subject to the provisions of Article 19, the Council shall have power to take such decisions as may be necessary for the execution of the present Agreement.

(b)       Subject to the provisions of paragraphs (c) to (f) of the present Article and of Articles 14, 31 and 32:

(i)        Decisions of the Council under the present Agreement shall be taken by mutual agreement of all Contracting Parties, except those which are absent or abstain; and

(ii)       Such decisions shall be binding on all Contracting Partie sand, subject to the provisions of paragraph (e) (i) of Article 30 and of paragraph (e) (i) of Article 33, shall cease to be binding on a Contracting Party with regard to which the present Agreement terminates.

(c)       The agreement of a Contracting Party shall not be required for:

(i)        The adoption of any decision concerning the suspension with regard to it of the application of the present Agreement in accordance with paragraph (a) of Article 29;

(ii)       The establishment by the Organisation, in accordance with paragraph (b) of Article 29, that that Contracting Party has not made a payment due by virtue of the provisions of Part II of the present Agreement;

(iii)      The adoption of any decision taken in the course of any period during which the application of the present Agreement is suspended with regard to that Contracting Party; or

(iv)      The adoption of a recommendation that a Bilateral Payments Agreement to which that Contracting Party is a Party should be revised, or the adoption of a decision that the balance of an account kept under that Agreement should not be taken into account in the calculation of its bilateral claims and debts.

(d)       The agreement of a Contracting Party with regard to which the provisions of Part II of the present Agreement have ceased to be in force shall not be required for the adoption of any decision relating to the amendment or execution of the provisions of Part II, with the exception of paragraph (c) of Article 12; and, subject to the provisions of paragraphs (b) and (c) of Article 14 and of paragraph (b) of Article 31, such a decision shall not be binding with regard to that Contracting Party.

(e)       Decisions of the Council concerning the liquidation of the Fund shall require the mutual agreement of all Members or the Organisation which are or have at any time been Contracting Parties to the present Agreement, except those Members which are absent or abstain. These decisions shall be binding on all Members of the Organisation which are or have at any time been Contracting Parties to the present Agreement.

(f)        Any decision of the Council taken by virtue of paragraph (b) or (c) or Article 33 shall require the mutual agreement of all Members of the Organisation, except those which are absent or abstain.

ARTICLE 19

BOARD OF MANAGEMENT

(a)       The Board of Management shall consist of not more than seven members, who shall be appointed by the Council from persons nominated by the Contracting Parties. Any member appointed upon the nomination of a Contracting Party in respect of which the present Agreement terminates under Articles 30 or 32 shall thereupon cease to be a member of the Board. Unless the Organisation decides otherwise, any member appointed upon the nomination of a Contracting Party in respect of which the application of the present Agreement is suspended by virtue of Article 29 shall, for the period of suspension, not attend the meetings of the Board of Management. Unless the Council decides otherwise, the term of office of members of the Board shall be one year; they may be re-appointed.

(b)        Each member of the Board of Management shall designate an alternate with the approval of the Council. The alternate shall not be changed, save with the approval of the Council. An alternate may attend the meetings of the Board of Management and shall exercise the functions of a member if the latter is unable to attend.

(c)       The Council shall designate each year, from among the members of the Board of Management, a Chairman and two Vice-Chairmen.

(d)       A representative appointed by the Government of the United States of America may attend the meetings of the Board of Management with the right to participate in discussion but not in decisions. The representative may appoint an alternate who may attend the meetings of the Board of Management and shall exercise the functions of the representative if the latter is unable to attend.

(e)       The Chairman of the Intra-European Payments Committee of the Organisation may also attend the meetings of the Board of Management with the right to participate in discussion but not in decisions. The Board of Management may invite other persons to attend its meetings.

(f)        The Board of Management shall be responsible for supervising the execution of the present Agreement and, to this end, shall exercise such powers as may be delegated to it by the Council. These functions shall be exercised in accordance with the decisions of the Council. The Board of Management shall make periodic reports to the Council on the execution of its mandate.

(g)       The decisions of the Board of Management shall be taken by a majority including not less than four of its members. The decisions of the Board of Management may not be modified by the Council unless they are contrary to the present Agreement or to decisions taken previously by the Council.

(h)       The decisions of the Board of Management shall be binding on all Contracting Parties unless and until the Council takes a decision by virtue of paragraph (g) of the present Article and, subject to the provisions of paragraph (e) (i) of Article 30 and paragraph (e) (i) of Article 33, they shall cease to be binding on a Contracting Party with regard to which the present Agreement terminates. However, subject to the provisions of paragraphs (b) and (c) of Article 14 and of paragraph (b) of Article 31, the decisions of the Board of Management relating to the execution of the provisions of Part II of the present Agreement shall not be binding on any Contracting Party with regard to which the provisions of Part II have ceased to be in force.

(i)        The Board of Management shall adopt its own rules of procedure.

ARTICLE 20

THE AGENT

(a)       The Agent shall be entrusted with the execution, in accordance with the decisions of the Council and the Board of Management, of all financial operations under the present Agreement, as far as the Fund and the System of Settlements are concerned, and, in particular, with the management of the assets of the Fund referred to in Article 22.

(b)       If a Contracting Party, in placing information at the disposal of the Agent for the purposes of the present Agreement, intimates that it desires the information to be treated as confidential, the Agent shall have due regard to the intimation in making use of the information.

(c)       The Agent shall submit periodic reports to the Organisation.

ARTICLE 21

THE CENTRAL BANKS

The execution of all financial operations under the present Agreement, as far as any Contracting Party is concerned, shall be carried out by its central bank. For the purposes of the present Agreement, the central bank of a Contracting Party shall mean the central bank or any other monetary authority designated by that Contracting Party.

ARTICLE 22

ASSETS OF THE FUND

(a)       The assets of the Fund shall be entrusted to the Organisation for the purposes of the present Agreement.

(b)       The assets of the Fund shall consist of amounts paid to the Fund in accordance with the present Agreement and claims of the Fund arising under the provisions of the present Agreement, as well as the proceeds of, and income from, those amounts and claims.

(c)       The assets of the Fund shall be used for effecting payments to be made by the Fund in accordance with the present Agreement, and for meeting obligations of the Fund arising under the provisions of the present Agreement, as well as expenses incurred in connection with those payments and with the management of the assets of the Fund, and, if the Organisation so decides, expenses incurred by virtue of Articles 20 and 23.

ARTICLE 23

ACCOUNTS

(a)       The accounts of the Fund shall be kept by the Agent, who shall draw up and submit to the Board of Management each year a balance sheet and an income and expenditure account.

(b)       The accounts and the balance sheet shall be audited by independent auditors appointed by the Council, to which they shall report.

(c)       The balance sheet and the income and expenditure account shall be submitted by the Board of Management to the Council for approval.

ARTICLE 24

UNIT OF ACCOUNT

Accounts of the Fund shall be kept in terms of a unit of account of 0.88867088 grammes of fine gold.

ARTICLE 25

PRIVILEGES AND IMMUNITIES

(a)       The provisions of Parts II and III of Supplementary Protocol No. I to the Convention for European Economic Co-operation of 16th April 1948 shall apply to the Fund and to its assets, including income, without prejudice to the provisions of paragraphs (b) and (c) of the present Article.

(b)       The assets of the Fund, including income, wherever located and by whomsoever held, and the operations and transactions authorised under the present Agreement shall be immune from all taxation and from all customs duties.

(c)       The provisions of Article 5 of the Protocol referred to in paragraph (a) of the present Article shall apply to gold included in the assets of the Fund and to all transactions concerning such gold.

PART IV

FINAL PROVISIONS

ARTICLE 27

AMENDMENTS

The provisions of Articles 3 (including Table A), 4 (d), 7, 9 to 16 (including Table B), 19, 24 and 28 to 33 may be amended by decision of the Organisation.

ARTICLE 27

RATIFICATION

(a)       The present Agreement shall be ratified by the Signatories, which, for this purpose, shall submit it without delay to their appropriate constitutional authorities.

(b)       Instruments of ratification shall be deposited with the Secretary-General of the Organisation, who shall notify each deposit to all the Signatories.

(c)       The present Agreement shall come into force upon the deposit of instruments of ratification by all the Signatories, provided that:

(i)        The Agreement for the Establishment of a European Payments Union has been terminated in accordance with the provisions of paragraph (c) of Article 36 of that Agreement;

(ii)       The conditions, laid down in paragraph 12 bis of Annex B to the Agreement for the Establishment of a European Payments Union, for the transfer of the amounts referred to in paragraph (a) of Article 3 of the present Agreement have been complied with; and

(iii)      Signatories of the present Agreement the contributions of which amount, in aggregate, to at least 50 per cent of the total amount of contributions fixed in Article 3 have notified the Organisation, before the termination of the Agreement for the Establishment of a European Payments Union, of their intention to apply the present Agreement.

(d)       The present Agreement shall not, however, come into force for any of its Signatories with regard to which the Agreement for the Establishment of a European Payments Union should have terminated before the termination of that Agreement, and the contribution of such a Signatory shall not be taken into account for the purposes of paragraph (c) of the present Article.

(e)       If the appropriate constitutional authorities of a Signatory decline to authorise the ratification of the present Agreement, the Signatory concerned shall notify the Organisation, which shall decide what measures, if any, shall be taken to enable the Agreement to come into force.

ARTICLE 28

ACCESSION

(a)       Any Member of the Organisation which has not signed the present Agreement may notify the Organisation of its desire to accede thereto.

(b)       If the Organisation approves the accession, it shall determine the conditions and the date on which accession may take effect, without prejudice to the provisions of paragraph (d) of the present Article.

(c)       Subject to the provisions of paragraphs (a) and (b) of the present Article, accession shall be effected by the deposit by the Member concerned of an instrument of accession with the Secretary-General of the Organisation, who shall notify such deposit to all Contracting Parties.

(d)       As from the date on which its accession takes effect, the provisions of Part I of the present Agreement shall apply to the Member concerned as if it had been a Contracting Party as from the date on which the present Agreement came into force.

ARTICLE 29

SUSPENSION

(a)       Provided that the case has been considered by the Board of Management or any other body previously established or designated by the Organisation for this purpose, the Organisation may decide to suspend the application of the present Agreement with regard to a Contracting Party, on conditions which shall be determined by the Organisation:

(i)        If that Contracting Party fails to fulfil an obligation arising under the present Agreement or under any of the decisions of the Organisation taken by virtue of the present Agreement or relating to commercial policy or to the liberalisation of trade or of invisible transactions; or

(ii)       For any other reason which shall have been determined by a previous decision of the Organisation.

(b)       If the Organisation establishes that a Contracting Party has not made a payment due by virtue of the provisions of Part II of the present Agreement, the application of the present Agreement shall be suspended with regard to that Contracting Party. Such suspension shall only be brought to an end by virtue of a decision of, and on conditions determined by, the Organisation.

(c)       Unless the Organisation decides otherwise, if the provisions of the present Article apply:

(i)        Any decision taken by the Organisation by virtue of Article 7 with regard to the Contracting Party concerned shall cease to be in force;

(ii)       Credits granted by the Fund to that Contracting Party and drawn by it shall be repaid on the date of its suspension; and

(iii)      The provisions of Articles 4 and 6 shall continue to apply to that Contracting Party.

ARTICLE 30

WITHDRAWAL

(a)       The present Agreement shall terminate with regard to any Contracting Party which withdraws from the Organisation on the date on which its withdrawal takes effect or, if the provisions of Part II of the present Agreement apply to that Contracting Party, at the end of the accounting period in the course of which the withdrawal takes effect, unless the Organisation decides on another date.

(b)       The Organisation may terminate the present Agreement, on conditions determined by it, with regard to a Contracting Party with regard to which the application of the present Agreement is suspended in accordance with the provisions of paragraph (a) or (b) of Article 29.

(c)       In agreement with, and on conditions determined by, the Organisation, a Contracting Party may terminate the present Agreement with regard to itself.

(d)       After the end of the third year from the coming into force of the present Agreement, a Contracting Party may terminate the present Agreement with regard to itself by giving three months’ notice to the Secretary-General of the Organisation. The withdrawal shall take effect on the date on which the period of notice expires or, if the provisions of Part II of the present Agreement apply to the Contracting Party concerned, at the end of the accounting period during which the period of notice expires, provided that the Contracting Party concerned has complied with all its obligations to the Fund on that date. The Secretary-General shall inform all the Contracting Parties of the receipt of any notice given in accordance with the present paragraph.

(e)       If the provisions of paragraphs (a) or (d) of the present Article apply:

(i)        The settlements relating to the accounting period at the end of which the present Agreement terminates with regard to the Contracting Party concerned shall, where appropriate, be carried out;

(ii)       The provisions of paragraph (b) of Article 4 shall remain in force;

(iii)      Credits granted by the Fund to that Contracting Party and drawn by it shall be repaid on the date on which the present Agreement terminates with regard to that Contracting Party, and the decisions taken by the Organisation by virtue of Article 7 shall cease to apply with regard to that Contracting Party; and

(iv)     The contribution paid by that Contracting Party shall be repaid to it in accordance with the following rules: That Contracting Party shall receive a share of the liquid assets held by the Fund on the date on which the present Agreement terminates with regard to itself, and a share of the amounts repaid to the Fund, after its withdrawal, in respect of credits granted by virtue of Article 7 and drawn on before its withdrawal. These shares shall be equal to that fraction of the liquid assets and the amounts repaid, respectively, which the contribution paid by that Contracting Party and not repaid to it represents of the amount of the capital of the Fund paid, and not repaid or blocked in a special account, on the date on which the present Agreement terminates with regard to that Contracting Party.

(f)        The provisions of paragraph (e) (iii) and (iv) of the present Article shall not, however, apply to a Contracting Party if, before the date on which the present Agreement terminates with regard to that Contracting Party, either the Organisation decides to terminate the present Agreement, or the sum of the contributions of the Contracting Parties excluding those which have given notice to the Organisation in accordance with paragraph (d) of the present Article should amount to less than 50 per cent of the total amount of the contributions.

ARTICLE 31

PROLONGATION OF PART II OF THE AGREEMENT

(a)       Not later than three months before the end of the first year from the coming into force of the present Agreement, the Organisation shall, without prejudice to the provisions of paragraph (c) of Article 14, carry out a comprehensive review of the operation of the provisions of Part II of the present Agreement, in order to decide, in consultation with the Government of the United States of America, on the conditions on which the provisions of Part II may remain in force as from the end of that year.

(b)       The provisions of Part II of the present Agreement shall, at the end of the first year from the coming into force of the present Agreement, cease to apply with regard to any Contracting Party Which does not take part in the decision taken by the Organisation by virtue of paragraph (a) of the present Article. However, the settlements relating to the accounting period at the end of which the provisions of Part II of the present Agreement cease to apply with regard to the Contracting Party concerned shall nevertheless be carried out.

(c)       The provisions of the present Agreement shall, without prejudice to the provisions of paragraph (c) of Article 33, remain in force between the other Contracting Parties on conditions which they shall determine.

ARTICLE 32

PROLONGATION OF THE AGREEMENT

(a)       Not later than three months before the end of the third year from the coming into force of the present Agreement, the Organisation shall, without prejudice to the provisions of Article 31, carry out a comprehensive review of the operation of the present Agreement, in order to decide, in consultation with the Government of the United States of America, on the conditions on which it may remain in force as from the end of that year.

(b)       The present Agreement shall terminate at the end of the third year from its coming into force with regard to any Contracting Party which does not take part in the decision taken by the Organisation by virtue of paragraph (a) of the present Article, and paragraphs (e) and (f) of Article 30 shall then apply to that Contracting Party.

(c)       The present Agreement shall, without prejudice to the provisions of paragraph (b) of Article 33, remain in force between the other Contracting Parties on conditions which they shall determine.

ARTICLE 33

TERMINATION

(a)       The present Agreement may be terminated by decision of the Organisation at any time.

(b)       Unless the Organisation decides otherwise, the present Agreement shall terminate at any time after the end of the third year from its coming into force if the contributions of the Contracting Parties should amount, in aggregate, to less than 50 per cent of the total amount of the contributions.

(c)       Unless the Organisation decides otherwise, the provisions of Part II of the present Agreement shall cease to apply if the contributions of the Contracting Parties to which the provisions of Part II apply should amount, in aggregate, to less than 50 per cent of the total amount of the contributions.

(d)       For the purposes of paragraphs (b) and (c) of the present Article, the contributions shall be the amounts fixed by Article 3, at the date on which the present Agreement comes into force, in respect of those Contracting Parties with regard to which the present Agreement comes into force.

(e)       Upon the termination of the present Agreement and without prejudice to the application of the provisions of paragraph (e) of Article 30:

(i)        The settlements relating to the accounting period at the end of which the present Agreement terminates shall, where appropriate, be carried out;

(ii)       The provisions of paragraph (b) of Article 4 shall remain in force;

(iii)      The credits granted by the Fund to the Contracting Parties by virtue of Article 7 and drawn by them shall be repaid in accordance with the terms on which they were granted; and

(iv)      The Fund shall be liquidated in accordance with the provisions of the Annex to the present Agreement, which shall form an integral part thereof and which shall remain in force until the provisions of that Annex are carried out.

ANNEX

LIQUIDATION OF THE FUND

1.

(a)       Upon the termination of the present Agreement, the Fund shall remain in existence, for the purposes of its liquidation, until the date on which the last repayment falls due in respect of the credits granted by virtue of Article 7 of the Agreement (the repayments of such credits, excluding the interest paid, are hereinafter called “repayments of credit”).

(b)       If all the repayments of credit have not been made by this date, the Organisation may decide to continue the existence of the Fund until, at the latest, the date on which the last repayment of credit is made. This decision shall be taken in agreement with the Government of the United States of America if the latter has previously exercised the option provided for in sub-paragraph (c) of paragraph 9 of the present Annex.

2.

(a)       The liquid assets of the Fund at the termination of the Agreement or, where appropriate, on completion of the settlements relating to the accounting period at the end of which the Agreement terminates and the amounts corresponding to repayments of credit, the amounts corresponding to repayments made by virtue of paragraph (b) of Article 4 of the Agreement, and the amounts paid to the Fund or placed at its disposal by virtue of sub-paragraph (b) of paragraph 5 and sub-paragraph (c) of paragraph 6 of the present Annex, shall be used for:

(i)        The repayment of the contributions paid by the Contracting Parties, in proportion to such contributions; and for

(ii)       The reconstitution of the amounts transferred from the European Payments Union to the Fund and referred to in Article 3 (a) of the Agreement, up to a total amount equivalent to 271,575,000 United States dollars (hereinafter called the “Residual Capital”).

(b)       The claims of the Contracting Parties in respect of the repayment of their contributions, resulting from the provisions of the preceding sub-paragraph, shall be set off against their debts, if any, in respect of repayments of credit, the next repayment of credit to fall due being set off first.

(c)       Subject to the provisions of paragraphs 3 and 4 of the present Annex, the amount used to repay contributions shall be equal to the amount used to reconstitute the Residual Capital.

3.           Before any payment is made by virtue of paragraph 2:

(i)        Any amount blocked by virtue of Article 5 of the Agreement and not placed again at the disposal of the Fund shall be used to reconstitute the Residual Capital;

(ii)       The amount by which the interest paid to, and the income of, the Fund have exceeded the interest paid by, and the expenses incurred by, the Fund until the termination of the Agreement or, where appropriate, on completion of the settlements relating to the accounting period at the end of which the Agreement terminates, shall be distributed between the Residual Capital and each of the Contracting Parties in proportion to the average payments made to the Fund by virtue of, respectively, paragraphs (a) to (c) and paragraph (d) of Article 4 of the Agreement, taking account of the interest payments already made to each of the Contracting Parties; and, finally,

(iii)      Any contributions the payment of which had been deferred in accordance with a decision taken by the Organisation by virtue of paragraph (d) of Article 4 of the Agreement shall be repaid in accordance with the rules laid down for the repayment of contributions in sub-paragraphs (a) and (b) of paragraph 2 of the present Annex.

4.           In pursuance of a decision to be taken by the Organisation in the closing stages of the liquidation:

(i)        The claims of the Fund referred to in paragraph (b) of Article 4 of the Agreement shall be credited to the Residual Capital, which shall be deemed to be reconstituted to the extent of the amount of such claims not yet paid to the Fund, provided that, at the same time, an equal amount of the contributions of the Contracting Parties shall be repaid in accordance with the rules laid down for the repayment of contributions in sub-paragraphs (a) and (b) of paragraph 2 of the present Annex; and

(ii)       An amount of the contributions of the Contracting Parties shall be repaid, or an amount shall be used to reconstitute the Residual Capital, in accordance with the rules laid down in sub-paragraphs (a) and (b) of paragraph 2 of the present Annex, so that the amount of the contributions not yet repaid shall be equal to the amount of the Residual Capital paid to the Fund but not yet reconstituted.

5.

(a)       Any default in the repayments of credit shall be borne, as to one half, by the Residual Capital and, as to the other half, by the Contracting Parties in proportion to the amounts of their contributions. For this purpose, a claim shall be allotted to the Residual Capital, which shall be deemed to be reconstituted up to an amount equal to that claim, and a claim shall be allotted to each of the Contracting Parties, the contribution of each being deemed to be repaid up to the amount of the claim allotted to it; repayments of credit made by the defaulting Contracting Party shall be used to make repayments in respect of these claims.

(b)        To the extent that any claim allotted, by virtue of the present paragraph, to the Residual Capital, or to a Contracting Party, should exceed, respectively, the amount of the Residual Capital paid to the Fund and not yet reconstituted or the amount of the contribution of that Contracting Party paid and not repaid, an amount of gold shall be transferred from the Residual Capital and placed at the disposal of the Fund or paid to the Fund by that Contracting Party, as appropriate.

(c)       When the Fund ceases to exist the claims, if any, allotted by virtue of the present paragraph, in so far as they have not yet been repaid, shall be replaced by claims against the defaulting Contracting Party. The Organisation shall determine uniform conditions for such claims.

6.

(a)       Any default in making a payment due to the Fund by virtue of Article 12 of the Agreement or by virtue of a decision taken by virtue of paragraph (c) of Article 16 of the Agreement shall, up to an amount of 50,000,000 United States dollars, be borne, when the Fund ceases to exist, as to one-half by the Residual Capital and as to the other half by the Contracting Parties, in proportion to the amounts of their contributions.

(b)       For this purpose, a claim against the defaulting Contracting Party shall be allotted to the Residual Capital, which shall be deemed to be reconstituted up to an amount equal to that claim, and a claim against the defaulting Contracting Party shall be allotted to each other Contracting Party, the contribution of the latter being deemed to be repaid up to an amount equal to the claim allotted to it. The Organisation shall determine uniform conditions for such claims.

(c)       To the extent that any claim allotted to the Residual Capital or to a Contracting Party, by virtue of the present paragraph, should exceed,respectively, the amount of the Residual Capital paid to the Fund and not yet reconstituted or the amount of the contribution of that Contracting Party paid and not repaid, an amount of gold shall be transferred from the Residual Capital and placed at the disposal of the Fund or paid to the Fund by that Contracting Party, as appropriate.

(d)       When the Fund ceases to exist, the claims, if any, allotted by virtue of paragraph (c) of Article 12 of the Agreement shall be replaced by claims against the defaulting Contracting Party. The Organisation shall determine uniform conditions for such claims.

7.           No repayment shall be made by virtue of the present Annex to any Contracting Party which has failed to make a payment in gold or in United States dollars due to the Fund.

8.           The amount by which the receipts of the Fund in respect of the interest have exceeded its expenses since the termination of the Agreement or, where appropriate, since the execution of the settlements relating to the accounting period at the end of which the Agreement terminates, shall be distributed between the Residual Capital and each of the Contracting Parties in proportion to the average payments to the Fund by virtue of, respectively, paragraphs (a) to (c) and paragraph (d) of Article 4 of the Agreement.

9.

(a)       Subject to the provisions of sub-paragraphs (b) and (c) of the present paragraph, the amounts used to reconstitute the Residual Capital, any amount of that Capital which has not yet been placed at the disposal of the Fund in paragraph (c) of Article 4 of the Agreement, and the amounts distributed to the Residual Capital by virtue of paragraphs 3 (ii) and 8 of the present Annex shall be distributed among the Member countries of the Organisation in the proportions fixed in Table C, each asset being shared among those Members in those proportions. For the purpose of this distribution, any amount which has not been placed at the disposal of the Fund in accordance with the rules laid down in paragraph (c) of Article 4 of the Agreement shall be placed at the disposal of the Fund.

TABLE C

(b)       If, however, any Signatory of the Agreement fails to make a payment in gold or United States dollars due by virtue of the Agreement or of a decision of the Organisation taken in accordance with the Agreement, it shall not participate in the distribution provided for in the present paragraph, unless the Organisation decides otherwise.

(c)       The application of the provisions of sub-paragraphs (a) and (b) of the present paragraph shall be subject to the agreement of the Government of the United States of America, which, in consultation with the Organisation, may decide to earmark the whole or part of the amounts referred to in sub-paragraph (a) of the present paragraph for the benefit of the Member countries of the Organisation, either individually or as a group. Should the Government of the United States of America decide that the provisions of sub-paragraphs (a) and (b) of this paragraph shall not be applied, it will so notify the Organisation within three months after the termination of the present Agreement.

(d)       The amounts distributed by virtue of sub-paragraphs (a) and (b) or of sub-paragraph (c) of the present paragraph shall be used to facilitate the maintenance of transferability of European currencies or to promote the liberalisation of trade by the Member countries of the Organisation with one another or with other countries, to promote industrial and agricultural production and to further the maintenance of internal financial stability.

(e)       Any claims of the Contracting Parties on the Fund in respect of the distribution of Residual Capital shall be set off against their debts, if any, to the Fund, the next repayment of such debts to fall due being set off first. Any amounts not allotted, as a result of any claim being thus set off, shall be used in accordance with the rules laid down in paragraph 2 of the present Annex.

In witness whereof, the undersigned Plenipotentiaries, duly empowered, have appended their signatures, to the present Agreement.[2]

Done in Paris this fifth day of August, Nineteen Hundred and Fifty-Five, in the English and French languages, both texts being equally authentic, in single copy which shall remain deposited with the Secretary-General of the Organisation for European Economic Co-operation, by whom certified copies shall be communicated to all the Signatories.

ANNEX II

PROTOCOL OF PROVISIONAL APPLICATION OF THE EUROPEAN MONETARY AGREEMENT

The Signatories of the European Monetary Agreement (hereinafter called the “ Agreement ”), signed this day;

Considering the Agreement for the Establishment of a European Payments Union of 19th September 1950, and, in particular, Article 36 of that Agreement;

Desirous of giving effect to the Agreement in the event that the Agreement for the Establishment of a European Payments Union terminates in accordance with the provisions of paragraph (c) of Article 36 of that Agreement;

Have agreed as follows:

1.

(a)       Subject to the provisions of paragraph 3, the Parties to the present Protocol shall apply the Agreement provisionally as if the Agreement had come into force as from the termination of the Agreement for the Establishment of a European Payments Union in accordance with the provisions of paragraph (c) of Article 36 of the said Agreement, provided that:

(i)        The conditions, laid down in paragraph 12 bis of Annex B to the said Agreement, for the transfer of the amounts referred to in paragraph (a) of Article 3 of the Agreement have been complied with; and

(ii)       The Signatories of the Agreement, the contributions of which amount, in aggregate, to at least 50 per cent of the total amount of the contributions fixed in Article 3 of the Agreement, should notify the Organisation, before the termination of the Agreement for the Establishment of a European Payments Union, of their intention to apply the Agreement.

(b)       The Agreement shall not, however, be applied by the Parties to the present Protocol with regard to which the Agreement for the Establishment of a European Payments Union should have terminated before the termination of that Agreement and the contributions of those Parties shall not be taken into account for the purposes of sub-paragraph (a) of the present paragraph.

2.           Subject to the provisions of paragraph 3, the present Protocol shall come into force on this day’s date and shall continue in force until the Agreements comes into force, provided that the provisions of Articles 29, 30, 31, 32 and 33 of the Agreement shall apply in relation to the present Protocol as they apply to the Agreement.

3.           If, at the time of its signature, a Party to the present Protocol declares that the Agreement can, as far as that Party is concerned, be applied subject only to the condition that it be ratified in accordance with its constitutional processes:

(i)        The present Protocol shall come into force, in so far as the said Party is concerned, on the date when its instrument of ratification is deposited in accordance with the provisions of Article 27 of the Agreement; and

(ii)       The Agreement shall then be applied provisionally, in so far as that Party is concerned, as if it had come into force as from the date provided for in paragraph 1, or, if that Party when depositing its instrument of ratification notifies the Organisation for European Economic Co-operation (hereinafter called the «Organisation») that this is not possible, then as from the date on which that instrument is deposited or, where appropriate, as from the beginning of the accounting period in the course of which that instrument is deposited.

4.           Any Member of the Organisation which accedes to the Agreement, in accordance with the provisions of Article 28 thereof, before its coming into force, may accede to the present Protocol on such conditions and with effect from such date has te Organisation shall decide.

5.

(a)       Any Party to the present Protocol may withdraw therefrom by giving notice in writing of its intention to withdraw to the Secretary-General of the Organisation (hereinafter called the « Secretary-General ») in the event that such Party is unable to ratify the Agreement and has notified the Organisation of this in accordance with paragraph (e) of Article 27 of the Agreement.

(b)       As from the date on which such notice is given or, where appropriate, as from the end of the first accounting period following the date on which such notice is given, or at such later date as may be specified in the notice, the Party giving it shall cease to be a Party to the present Protocol.

(c)       The Secretary-General will immediately inform all Parties to the present Protocol and the Agent, within the meaning of Article 20 of the Agreement, of any notice given under the present paragraph.

6.           Unless the Organisation decides otherwise, the present Protocol shall terminate if the contributions of the Parties to the present Protocol should amount, in aggregate, to less than 50 per cent of the total amount of the contributions. For the purposes of the present paragraph, the contributions shall be the amounts fixed by Article 3 of the Agreement at the date when the Agreement begins to apply in respect of the Parties to the present Protocol with regard to which the Agreement is applied.

7.           If the provisions of paragraphs 5 or 6 apply:

(a)       The settlements relating to the accounting period at the end of which the present Protocol terminates in respect of the Party concerned, or in respect of the Parties generally, shall, where appropriate, be carried out; and

(b)       The rights and obligations of the Party or Parties concerned shall be determined, in accordance with the provisions of paragraphs (e) and (f) of Article 30 of the Agreement, or of the Annex to the Agreement, as the case may be.

In witness whereof, the undersigned Plenipotentiaries, duly empowered, have appended their signatures to the present Protocol.

Done in Paris this fifth day of August, Nineteen Hundred and Fifty-Five, in the English and French languages, both texts being equally authentic, in a single copy which shall remain deposited with the Secretary-General of the Organisation for European Economic Co-operation, by whom certified copies will be communicated to all Signatories of the present Protocol.

In adopting this Recommendation,

I.            The Council noted:

1.           The Statement by the Delegate for Sweden according to which Sweden agreed to become Contracting Party to the European Monetary Agreement, with a contribution to the Fund amounting to 15 million dollars.

2.           The Statement by the Representative of the United States according to which the Government of the United States agreed to transfer to the European Fund the remaining portion of the capital assets originally contributed by the United States to the European Payments Union, when the Fund came into existence. In this connection, the Council authorised the Secretary-General to reply to the letter addressed to him by the Representative of the United States on this subject [Doc. No. C (55) 234].

3.           The Statement made by the Representative of the Bank for International Settlements according to which the Bank would be prepared to undertake the functions of Agent of the Organisation for the purpose of the European Fund and the Multilateral System of Settlements, as laid down in the European Monetary Agreement.

4.           The Statement by the Delegate for Switzerland according to which the Swiss Authorities consider that it is essential that, in due course, before the coming into force of the European Monetary Agreement, consultations should take place between the governments and the central banks of the Member countries on the margins of fluctuations to be permitted for the various currencies and the systems of convertibility and non-convertibility to be adopted or maintained at the time of the termination of the European Payments Union.

5.           The reply by the Chairman according to which it would be helpful if either the Council or the Consultative Committee of the Council[3] could study that problem without waiting until the return to convertibility was imminent.

II.           The Council also agreed to the following interpretations concerning certain articles of the European Monetary Agreement.

1.           The Council noted the interpretations given by the Joint Trade and Intra-European Payments Committee to Articles 2 and 9 of the Agreement, as set out in paragraphs 6 and 10 of the Committee’s comments [Doc. No. C (55) 206], i.e.:

(a)       “Paragraph 6. The Joint Committee considered that Article 2 of the European Monetary Agreement should not be interpreted as excluding the possible granting of credit by the European Fund to a Member country which the Organisation had recognised as being justified in not adopting the whole of the liberalisation measures provided for in the Code or in withdrawing measures which it had taken.”

(b)       “Paragraph 10. The Joint Committee wishes to emphasise that the provisions of Article 9 of the European Monetary Agreement should not be interpreted as limiting the rights of a country to buy or sell its own currency either on its own or any other market at rates within the limits notified in accordance with the provisions of Article 9.”

2.           The Council agreed, on the other hand, that the bilateral payments agreements referred to in Article 11 (a) (iii) and Article 16 of the Agreement were the inter-governmental agreements providing, for the settlement of current payments, credit margins in addition to the amounts of interim finance provided for in Article 10 of the Agreement, and which therefore directly concern the functioning of the Multilateral System of Settlements provided for in the Agreement.

III.          As far as the Board of Management provided for in Article 19 of the European Monetary Agreement is concerned, the Council:

1.           Noted the statement by the Delegate for Austria regarding the composition of the Board, and expressing the wish that when the members of the Board came to be nominated, the application for membership of countries which had not yet been represented to date on the Managing Board of the European Payments Union would be considered and formally received.

2.           Agreed that the Council would request the opinion of the Board of Management before deciding to grant a credit on conditions other than those proposed by the Board or before rejecting proposals of the Board.

3.           Decided that the Board of Management should make appropriate proposals to the Council in the event of its proving necessary, owing to exceptional unforeseen circumstances, to revise the Agreement before the end of the first three years of application of that Agreement.

IV.         The Council noted and approved the wish expressed by the Managing Board of the European Payments Union in paragraph 58 of its Report referred to above [Doc. No. C (55) 189 (1st Revision)], as follows:

“Paragraph 58. It is also recommended that a moderate interest charge (for example, in present circumstances, at the rate of about 1,5 per cent per annum) should be made in respect of all drawings of interim finance, and that this charge should be uniform for all such drawings. But it should be clearly understood to be an abuse of the system if interim finance were to be drawn merely for the purpose of earning an interest profit either in the market of the lending country or elsewhere.”


[1]   The European Monetary Agreement and the Protocol of Provisional Application of that Agreement were signed by the Representatives of the Member countries on 5th August 1955.

The Council noted, when approving this Draft Agreement and Protocol, that:

(a)          Switzerland would sign these Agreements only ad referendum and would avail itself of the provisions of paragraph 3 of the Protocol of Provisional Application of the Agreement;

(b)          Germany would sign this Protocol only subject to ratification.

[2]   The present Agreement has been signed on behalf of Ireland subject to the following reservation:

« In the existing circumstances, as Ireland is a member of the sterling area, the provisions of the present Agreement require no specific action by her and signature on her behalf is subject to the understanding that its operation will not modify the arrangements governing payments between her and the other Contracting Parties. »

[3]   See the Resolution establishing a Consultative Committee of the Council, supra, p. 249.