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Author(s):
International Monetary Fund
Published Date:
August 1999
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    Appendices
    Appendix I

    1 EC Council Regulation on Certain Provisions Relating to the Introduction of the Euro, No 1103/97 of 17 June 1997

    THE COUNCIL OF THE EUROPEAN UNION,

    Having regard to the Treaty establishing the European Community, and in particular Article 235 thereof,

    Having regard to the proposal of the Commission,1

    Having regard to the opinion of the European Parliament,2

    Having regard to the opinion of the European Monetary Institute,3

    • Whereas, at its meeting held in Madrid on 15 and 16 December 1995, the European Council confirmed that the third stage of Economic and Monetary Union will start on 1 January 1999 as laid down in Article 109j (4) of the Treaty; whereas the Member States which will adopt the euro as the single currency in accordance with the Treaty will be defined for the purposes of this Regulation as the participating Member States’;

    • Whereas, at the meeting of the European Council in Madrid, the decision was taken that the term ‘ECU’ used by the Treaty to refer to the European currency unit is a generic term; whereas the Governments of the fifteen Member States have achieved the common agreement that this decision is the agreed and definitive interpretation of the relevant Treaty provisions; whereas the name given to the European currency shall be the ‘euro’; whereas the euro as the currency of the participating Member States will be divided into one hundred sub-units with the name ‘cent’; whereas the European Council furthermore considered that the name of the single currency must be the same in all the official languages of the European Union, taking into account the existence of different alphabets;

    • Whereas a Regulation on the introduction of the euro will be adopted by the Council on the basis of the third sentence of Article 1091 (4) of the Treaty as soon as the participating Member States are known in order to define the legal framework of the euro; whereas the Council, when acting at the starting date of the third stage in accordance with the first sentence of Article 1091 (4) of the Treaty, shall adopt the irrevocably fixed conversion rates;

    • Whereas it is necessary, in the course of the operation of the common market and for the changeover to the single currency, to provide legal certainty for citizens and firms in all Member States on certain provisions relating to the introduction of the euro well before the entry into the third stage; whereas this legal certainty at an early stage will allow preparations by citizens and firms to proceed under good conditions;

    • Whereas the third sentence of Article 1091 (4) of the Treaty, which allows the Council, acting with the unanimity of participating Member States, to take other measures necessary for the rapid introduction of the single currency is available as a legal basis only when it has been confirmed, in accordance with Article 109j (4) of the Treaty, which Member States fulfil the necessary conditions for the adoption of a single currency; whereas it is therefore necessary to have recourse to Article 235 of the Treaty as a legal basis for those provisions where there is an urgent need for legal certainty; whereas therefore this Regulation and the aforesaid Regulation on the introduction of the euro will together provide the legal framework for the euro, the principles of which legal framework were agreed by the European Council in Madrid; whereas the introduction of the euro concerns day-to-day operations of the whole population in participating Member States; whereas measures other than those in this Regulation and in the Regulation which will be adopted under the third sentence of Article 1091 (4) of the Treaty should be examined to ensure a balanced changeover, in particular for consumers;

    • Whereas the ECU as referred to in Article 109g of the Treaty and as defined in Council Regulation (EC) No 3320/94 of 22 December 1994 on the consolidation of the existing Community legislation on the definition of the ECU following the entry into force of the Treaty on European Union4 will cease to be defined as a basket of component currencies on 1 January 1999 and the euro will become a currency in its own right; whereas the decision of the Council regarding the adoption of the conversion rates shall not in itself modify the external value of the ECU; whereas this means that one ECU in its composition as a basket of component currencies will become one euro; whereas Regulation (EC) No 3320/94 therefore becomes obsolete and should be repealed; whereas for references in legal instruments to the ECU, parties shall be presumed to have agreed to refer to the ECU as referred to in Article 109g of the Treaty and as defined in the aforesaid Regulation; whereas such presumption should be rebuttable taking into account the intentions of the parties;

    • Whereas it is a generally accepted principle of law that the continuity of contracts and other legal instruments is not affected by the introduction of a new currency; whereas the principle of freedom of contract has to be respected; whereas the principle of continuity should be compatible with anything which parties might have agreed with reference to the introduction of the euro; whereas, in order to reinforce legal certainty and clarity, it is appropriate explicitly to confirm that the principle of continuity of contracts and other legal instruments shall apply between the former national currencies and the euro and between the ECU as referred to in Article 109g of the Treaty and as defined in Regulation (EC) No 3320/94 and the euro; whereas this implies, in particular, that in the case of fixed interest rate instruments the introduction of the euro does not alter the nominal interest rate payable by the debtor; whereas the provisions on continuity can fulfil their objective to provide legal certainty and transparency to economic agents, in particular for consumers, only if they enter into force as soon as possible;

    • Whereas the introduction of the euro constitutes a change in the monetary law of each participating Member State; whereas the recognition of the monetary law of a State is a universally accepted principle; whereas the explicit confirmation of the principle of continuity should lead to the recognition of continuity of contracts and other legal instruments in the jurisdictions of third countries;

    • Whereas the term ‘contract’ used for the definition of legal instruments is meant to include all types of contracts, irrespective of the way in which they are concluded;

    • Whereas the Council, when acting in accordance with the first sentence of Article 1091 (4) of the Treaty, shall define the conversion rates of the euro in terms of each of the national currencies of the participating Member States; whereas these conversion rates should be used for any conversion between the euro and the national currency units or between the national currency units; whereas for any conversion between national currency units, a fixed algorithm should define the result; whereas the use of inverse rates for conversion would imply rounding of rates and could result in significant inaccuracies, notably if large amounts are involved;

    • Whereas the introduction of the euro requires the rounding of monetary amounts; whereas an early indication of rules for rounding is necessary in the course of the operation of the common market and to allow a timely preparation and a smooth transition to Economic and Monetary Union; whereas these rules do not affect any rounding practice, convention or national provisions providing a higher degree of accuracy for intermediate computations;

    • Whereas, in order to achieve a high degree of accuracy in conversion operations, the conversion rates should be defined with six significant figures; whereas a rate with six significant figures means a rate which, counted from the left and starting by the first non-zero figure, has six figures,

    HAS ADOPTED THIS REGULATION:

    Article 1

    For the purpose of this Regulation:

    ‘legal instruments’ shall mean legislative and statutory provisions, acts of administration, judicial decisions, contracts, unilateral legal acts, payment instruments other than banknotes and coins, and other instruments with legal effect,

    ‘participating Member States’ shall mean those Member States which adopt the single currency in accordance with the Treaty,

    ‘conversion rates’ shall mean the irrevocably fixed conversion rates which the Council adopts in accordance with the first sentence of Article 1091 (4) of the Treaty,

    ‘national currency units’ shall mean the units of the currencies of participating Member States, as those units are defined on the day before the start of the third stage of Economic and Monetary Union,

    ‘euro unit’ shall mean the unit of the single currency as defined in the Regulation on the introduction of the euro which will enter into force at the starting date of the third stage of Economic and Monetary Union.

    Article 2

    • Every reference in a legal instrument to the ECU, as referred to in Article 109g of the Treaty and as defined in Regulation (EC) No 3320/94, shall be replaced by a reference to the euro at a rate of one euro to one ECU. References in a legal instrument to the ECU without such a definition shall be presumed, such presumption being rebuttable taking into account the intentions of the parties, to be references to the ECU as referred to in Article 109g of the Treaty and as defined in Regulation (EC) No 3320/94.

    • Regulation (EC) No 3320/94 is hereby repealed.

    • This Article shall apply as from 1 January 1999 in accordance with the decision pursuant to Article 109j (4) of the Treaty.

    Article 3

    The introduction of the euro shall not have the effect of altering any term of a legal instrument or of discharging or excusing performance under any legal instrument, nor give a party the right unilaterally to alter or terminate such an instrument. This provision is subject to anything which parties may have agreed.

    Article 4

    • The conversion rates shall be adopted as one euro expressed in terms of each of the national currencies of the participating Member States. They shall be adopted with six significant figures.

    • The conversion rates shall not be rounded or truncated when making conversions.

    • The conversion rates shall be used for conversions either way between the euro unit and the national currency units. Inverse rates derived from the conversion rates shall not be used.

    • Monetary amounts to be converted from one national currency unit into another shall first be converted into a monetary amount expressed in the euro unit, which amount may be rounded to not less than three decimals and shall then be converted into the other national currency unit. No alternative method of calculation may be used unless it produces the same results.

    Article 5

    Monetary amounts to be paid or accounted for when a rounding takes place after a conversion into the euro unit pursuant to Article 4 shall be rounded up or down to the nearest cent. Monetary amounts to be paid or accounted for which are converted into a national currency unit shall be rounded up or down to the nearest sub-unit or in the absence of a sub-unit to the nearest unit, or according to national law or practice to a multiple or fraction of the sub-unit or unit of the national currency unit. If the application of the conversion rate gives a result which is exactly halfway, the sum shall be rounded up.

    Article 6

    This Regulation shall enter into force on the day following that of its publication in the Official Journal of the European Communities.

    This Regulation shall be binding in its entirety and directly applicable in all Member States.

    Done at Luxembourg, 17 June 1997.

    For the Council

    The President

    A. JORRITSMA-LEBBINK

    Appendix I
    2 EC Council Regulation on Certain Provisions Relating to the Introduction of the Euro, No 974‏98 of 3 May 1998

    THE COUNCIL OF THE EUROPEAN UNION,

    Having regard to the Treaty establishing the European Community, and in particular Article 1091(4), third sentence thereof,

    Having regard to the proposal from the Commission,1

    Having regard to the opinion of the European Monetary Institute,2

    Having regard to the opinion of the European Parliament,3

    • Whereas this Regulation defines monetary law provisions of the Member States which have adopted the euro; whereas provisions on continuity of contracts, the replacement of references to the ecu in legal instruments by references to the euro and rounding have already been laid down in Council Regulation (EC) No 1 103/97 of 17 June 1997 on certain provisions relating to the introduction of the euro4; whereas the introduction of the euro concerns day-to-day operations of the whole population in participating Member States; whereas measures other than those in this Regulation and in Regulation (EC) No 1103/97 should be examined to ensure a balanced changeover, in particular for consumers.

    • Whereas, at the meeting of the European Council in Madrid on 15 and 16 December 1995, the decision was taken that the term ‘ecu’ used by the Treaty to refer to the European currency unit is a generic term; whereas the Governments of the 15 Member States have reached the common agreement that this decision is the agreed and definitive interpretation of the relevant Treaty provisions; whereas the name given to the European currency shall be the ‘euro’; whereas the euro as the currency of the participating Member States shall be divided into one hundred sub-units with the name ‘cent’; whereas the definition of the name ‘cent’ does not prevent the use of variants of this term in common usage in the Member States; whereas the European Council furthermore considered that the name of the single currency must be the same in all the official languages of the European Union, taking into account the existence of different alphabets;

    • Whereas the Council when acting in accordance with the third sentence of Article 1091(4) of the Treaty shall take the measures necessary for the rapid introduction of the euro other than the adoption of the conversion rates;

    • Whereas whenever under Article 109k(2) of the Treaty a Member State becomes a participating Member State, the Council shall according to Article 1091(5) of the Treaty take the other measures necessary for the rapid introduction of the euro as the single currency of this Member State;

    • Whereas according to the first sentence of Article 1091(4) of the Treaty the Council shall at the starting date of the third stage adopt the conversion rates at which the currencies of the participating Member States shall be irrevocably fixed and at which irrevocably fixed rate the euro shall be substituted for these currencies;

    • Whereas given the absence of exchange rate risk either between the euro unit and the national currency units or between these national currency units, legislative provisions should be interpreted accordingly;

    • Whereas the term ‘contract’ used for the definition of legal instruments is meant to include all types of contracts, irrespective of the way in which they are concluded;

    • Whereas in order to prepare a smooth changeover to the euro a transitional period is needed between the substitution of the euro for the currencies of the participating Member States and the introduction of euro banknotes and coins; whereas during this period the national currency units will be defined as sub-divisions of the euro; whereas thereby a legal equivalence is established between the euro unit and the national currency units;

    • Whereas in accordance with Article 109g of the Treaty and with Regulation (EC) No 1103/97, the euro will replace the ECU as from 1 January 1999 as the unit of account of the institutions of the European Communities; whereas the euro should also be the unit of account of the European Central Bank (ECB) and of the central banks of the participating Member States; whereas, in line with the Madrid conclusions, monetary policy operations will be carried out in the euro unit by the European System of Central Banks (ESCB); whereas this does not prevent national central banks from keeping accounts in their national currency unit during the transitional period, in particular for their staff and for public administrations;

    • Whereas each participating Member State may allow the full use of the euro unit in its territory during the transitional period;

    • Whereas during the transitional period contracts, national laws and other legal instruments can be drawn up validly in the euro unit or in the national currency unit; whereas during this period, nothing in this Regulation should affect the validity of any reference to a national currency unit in any legal instrument;

    • Whereas, unless agreed otherwise, economic agents have to respect the denomination of a legal instrument in the performance of all acts to be carried out under that instrument;

    • Whereas the euro unit and the national currency units are units of the same currency; whereas it should be ensured that payments inside a participating Member State by crediting an account can be made either in the euro unit or the respective national currency unit; whereas the provisions on payments by crediting an account should also apply to those cross-border payments, which are denominated in the euro unit or the national currency unit of the account of the creditor; whereas it is necessary to ensure the smooth functioning of payment systems by laying down provisions dealing with the crediting of accounts by payment instruments credited through those systems; whereas the provisions on payments by crediting an account should not imply that financial intermediaries are obliged to make available either other payment facilities or products denominated in any particular unit of the euro; whereas the provisions on payments by crediting an account do not prohibit financial intermediaries from coordinating the introduction of payment facilities denominated in the euro unit which rely on a common technical infrastructure during the transitional period;

    • Whereas in accordance with the conclusions reached by the European Council at its meeting held in Madrid, new tradeable public debt will be issued in the euro unit by the participating Member States as from 1 January 1999; whereas it is desirable to allow issuers of debt to redenominate outstanding debt in the euro unit; whereas the provisions on redenomination should be such that they can also be applied in the jurisdictions of third countries; whereas issuers should be enabled to redenominate outstanding debt if the debt is denominated in a national currency unit of a Member State which has redenominated part or all of the outstanding debt of its general government; whereas these provisions do not address the introduction of additional measures to amend the terms of outstanding debt to alter, among other things, the nominal amount of outstanding debt, these being matters subject to relevant national law; whereas it is desirable to allow Member States to take appropriate measures for changing the unit of account of the operating procedures of organised markets;

    • Whereas further action at the Community level may also be necessary to clarify the effect of the introduction of the euro on the application of existing provisions of Community law, in particular concerning netting, set-off and techniques of similar effect;

    • Whereas any obligation to use the euro unit can only be imposed on the basis of Community legislation; whereas in transactions with the public sector participating Member States may allow the use of the euro unit; whereas in accordance with the reference scenario decided by the European Council at its meeting held in Madrid, the Community legislation laying down the time frame for the generalisation of the use of the euro unit might leave some freedom to individual Member States;

    • Whereas in accordance with Article 105a of the Treaty the Council may adopt measures to harmonise the denominations and technical specifications of all coins;

    • Whereas banknotes and coins need adequate protection against counterfeiting;

    • Whereas banknotes and coins denominated in the national currency units lose their status of legal tender at the latest six months after the end of the transitional period; whereas limitations on payments in notes and coins, established by Member States for public reasons, are not incompatible with the status of legal tender of euro banknotes and coins, provided that other lawful means for the settlement of monetary debts are available;

    • Whereas as from the end of the transitional period references in legal instruments existing at the end of the transitional period will have to be read as references to the euro unit according to the respective conversion rates; whereas a physical redenomination of existing legal instruments is therefore not necessary to achieve this result; whereas the rounding rules defined in Regulation (EC) No 1103/97 shall also apply to the conversions to be made at the end of the transitional period or after the transitional period; whereas for reasons of clarity it may be desirable that the physical redenomination will take place as soon as appropriate;

    • Whereas paragraph 2 of Protocol 11 on certain provisions relating to the United Kingdom of Great Britain and Northern Ireland stipulates that, inter alia, paragraph 5 of that Protocol shall have effect if the United Kingdom notifies the Council that it does not intend to move to the third stage; whereas the United Kingdom gave notice to the Council on 30 October 1997 that it does not intend to move to the third stage; whereas paragraph 5 stipulates that, inter alia, Article 1091(4) of the Treaty shall not apply to the United Kingdom;

    • Whereas Denmark, referring to paragraph 1 of Protocol 12 on certain provisions relating to Denmark has notified, in the context of the Edinburgh decision of 12 December 1992, that it will not participate in the third stage; whereas, therefore, in accordance with paragraph 2 of the said Protocol, all Articles and provisions of the Treaty and the Statute of the ESCB referring to a derogation shall be applicable to Denmark;

    • Whereas, in accordance with Article 1091(4) of the Treaty, the single currency will be introduced only in the Member States without a derogation;

    • Whereas this Regulation, therefore, shall be applicable pursuant to Article 189 of the Treaty, subject to Protocols 11 and 12 and Article 109k(l),

    HAS ADOPTED THIS REGULATION:

    PART I
    DEFINITIONS

    Article 1

    For the purpose of this Regulation:

    • –‘participating Member States’ shall mean Belgium, Germany, Spain, France, Ireland, Italy, Luxembourg, Netherlands, Austria, Portugal and Finland,

    • –‘legal instruments’ shall mean legislative and statutory provisions, acts of administration, judicial decisions, contracts, unilateral legal acts, payment instruments other than banknotes and coins, and other instruments with legal effect,

    • –‘conversion rate’ shall mean the irrevocably fixed conversion rate adopted for the currency of each participating Member State by the Council according to the first sentence of Article 1091(4) of the Treaty,

    • –‘euro unit’ shall mean the currency unit as referred to in the second sentence of Article 2,

    • –‘national currency units’ shall mean the units of the currencies of participating Member States, as those units are defined on the day before the start of the third stage of economic and monetary union,

    • –‘transitional period’ shall mean the period beginning on 1 January 1999 and ending on 31 December 2001,

    • –‘redenominate’ shall mean changing the unit in which the amount of outstanding debt is stated from a national currency unit to the euro unit, as defined in Article 2, but which does not have through the act of redenomination the effect of altering any other term of the debt, this being a matter subject to relevant national law.

    PART II
    SUBSTITUTION OF THE EURO FOR THE CURRENCIES OF THE PARTICIPATING MEMBER STATES

    Article 2

    As from 1 January 1999 the currency of the participating Member States shall be the euro. The currency unit shall be one euro. One euro shall be divided into one hundred cent.

    Article 3

    The euro shall be substituted for the currency of each participating Member State at the conversion rate.

    Article 4

    The euro shall be the unit of account of the European Central Bank (ECB) and of the central banks of the participating Member States.

    PART III
    TRANSITIONAL PROVISIONS

    Article 5

    Articles 6, 7, 8 and 9 shall apply during the transitional period.

    Article 6

    • The euro shall also be divided into the national currency units according to the conversion rates. Any subdivision thereof shall be maintained. Subject to the provisions of this Regulation the monetary law of the participating Member States shall continue to apply.

    • Where in a legal instrument reference is made to a national currency unit, this reference shall be as valid as if reference were made to the euro unit according to the conversion rates.

    Article 7

    The substitution of the euro for the currency of each participating Member State shall not in itself have the effect of altering the denomination of legal instruments in existence on the date of substitution.

    Article 8

    • Acts to be performed under legal instruments stipulating the use of or denominated in a national currency unit shall be performed in that national currency unit. Acts to be performed under legal instruments stipulating the use of or denominated in the euro unit shall be performed in that unit.

    • The provisions of paragraph 1 are subject to anything which parties may have agreed.

    • Notwithstanding the provisions of paragraph 1, any amount denominated either in the euro unit or in the national currency unit of a given participating Member State and payable within that Member State by crediting an account of the creditor, can be paid by the debtor either in the euro unit or in that national currency unit. The amount shall be credited to the account of the creditor in the denomination of his account, with any conversion being effected at the conversion rates.

    • Notwithstanding the provisions of paragraph 1, each participating Member State may take measures which may be necessary in order to:

      • –redenominate in the euro unit outstanding debt issued by that Member State’s general government, as defined in the European system of integrated accounts, denominated in its national currency unit and issued under its own law. If a Member State has taken such a measure, issuers may redenominate in the euro unit debt denominated in that Member State’s national currency unit unless redenomination is expressly excluded by the terms of the contract; this provision shall apply to debt issued by the general government of a Member State as well as to bonds and other forms of securitised debt negotiable in the capital markets, and to money market instruments, issued by other debtors,

      • –enable the change of the unit of account of their operating procedures from a national currency unit to the euro unit by:

        • markets for the regular exchange, clearing and settlement of any instrument listed in section B of the Annex to Council Directive 93/22/EEC of 10 May 1993 on investment services in the securities field5 and of commodities; and

        • systems for the regular exchange, clearing and settlement of payments.

    • Provisions other than those of paragraph 4 imposing the use of the euro unit may only be adopted by the participating Member States in accordance with any time frame laid down by Community legislation.

    • National legal provisions of participating Member States which permit or impose netting, set-off or techniques with similar effects shall apply to monetary obligations, irrespective of their currency denomination, if that denomination is in the euro unit or in a national currency unit, with any conversion being effected at the conversion rates.

    Article 9

    Banknotes and coins denominated in a national currency unit shall retain their status as legal tender within their territorial limits as of the day before the entry into force of this Regulation.

    PART IV
    EURO BANKNOTES AND COINS

    Article 10

    As from 1 January 2002, the ECB and the central banks of the participating Member States shall put into circulation banknotes denominated in euro. Without prejudice to Article 15, these banknotes denominated in euro shall be the only banknotes which have the status of legal tender in all these Member States.

    Article 11

    As from 1 January 2002, the participating Member States shall issue coins denominated in euro or in cent and complying with the denominations and technical specifications which the Council may lay down in accordance with the second sentence of Article 105a(2) of the Treaty. Without prejudice to Article 15, these coins shall be the only coins which have the status of legal tender in all these Member States. Except for the issuing authority and for those persons specifically designated by the national legislation of the issuing Member State, no party shall be obliged to accept more than 50 coins in any single payment.

    Article 12

    Participating Member States shall ensure adequate sanctions against counterfeiting and falsification of euro banknotes and coins.

    PART V
    FINAL PROVISIONS

    Article 13

    Articles 14, 15 and 16 shall apply as from the end of the transitional period.

    Article 14

    Where in legal instruments existing at the end of the transitional period reference is made to the national currency units, these references shall be read as references to the euro unit according to the respective conversion rates. The rounding rules laid down in Regulation (EC) No 1103/97 shall apply.

    Article 15

    • Banknotes and coins denominated in a national currency unit as referred to in Article 6(1) shall remain legal tender within their territorial limits until six months after the end of the transitional period at the latest; this period may be shortened by national law.

    • Each participating Member State may, for a period of up to six months after the end of the transitional period, lay down rules for the use of the banknotes and coins denominated in its national currency unit as referred to in Article 6(1) and take any measures necessary to facilitate their withdrawal.

    Article 16

    In accordance with the laws or practices of participating Member States, the respective issuers of banknotes and coins shall continue to accept, against euro at the conversion rate, the banknotes and coins previously issued by them.

    PART VI
    ENTRY INTO FORCE

    Article 17

    This Regulation shall enter into force on 1 January 1999.

    This Regulation shall be binding in its entirety and directly applicable in all Member States, in accordance with the Treaty, subject to Protocols 11 and 12 and Article 109k(1).

    Done at Brussels, 3 May 1998.

    For the Council

    The President

    G. BROWN

    Appendix II The Forty Recommendations of the Financial Action Task Force on Money Laundering

    INTRODUCTION

    1. The Financial Action Task Force on Money Laundering (FATF) is an inter-governmental body whose purpose is the development and promotion of policies to combat money laundering—the processing of criminal proceeds in order to disguise their illegal origin. These policies aim to prevent such proceeds from being utilised in future criminal activities and from affecting legitimate economic activities.

    2. The FATF currently consists of 26 countries1 and two international organisations.2 Its membership includes the major financial centre countries of Europe, North America and Asia. It is a multi-disciplinary body—as is essential in dealing with money laundering—bringing together the policy-making power of legal, financial and law enforcement experts.

    3. This need to cover all relevant aspects of the fight against moneylaundering is reflected in the scope of the forty FATF Recommendations—the measures which the Task Force have agreed to implement and which all countries are encouraged to adopt. The Recommendations were originally drawn up in 1990. In 1996 the forty Recommendations were revised to take into account the experience gained over the last six years and to reflect the changes which have occurred in the money laundering problem.3

    4. These forty Recommendations set out the basic framework for antimoney laundering efforts and they are designed to be of universal application. They cover the criminal justice system and law enforcement; the financial system and its regulation, and international cooperation.

    5. It was recognised from the outset of the FATF that countries have diverse legal and financial systems and so all cannot take identical measures. The Recommendations are therefore the principles for action in this field, for countries to implement according to their particular circumstances and constitutional frameworks allowing countries a measure of flexibility rather than prescribing every detail. The measures are not particularly complex or difficult, provided there is the political will to act. Nor do they compromise the freedom to engage in legitimate transactions or threaten economic development.

    6. FATF countries are clearly committed to accept the discipline of being subjected to multilateral surveillance and peer review. All member countries have their implementation of the forty Recommendations monitored through a two-pronged approach: an annual self-assessment exercise and the more detailed mutual evaluation process under which each member country is subject to an on-site examination. In addition, the FATF carries out cross-country reviews of measures taken to implement particular Recommendations.

    7. These measures are essential for the creation of an effective antimoney laundering framework.

    A. GENERAL FRAMEWORK OF THE RECOMMENDATIONS

    1. Each country should take immediate steps to ratify and to implement fully, the 1988 United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (the Vienna Convention).

    2. Financial institution secrecy laws should be conceived so as not to inhibit implementation of these recommendations.

    3. An effective money laundering enforcement program should include increased multilateral co-operation and mutual legal assistance in money laundering investigations and prosecutions and extradition in money laundering cases, where possible.

    B. ROLE OF NATIONAL LEGAL SYSTEMS IN COMBATING MONEY LAUNDERING

    Scope of the Criminal Offence of Money Laundering

    4. Each country should take such measures as may be necessary, including legislative ones, to enable it to criminalise money laundering as set forth in the Vienna Convention. Each country should extend the offence of drug money laundering to one based on serious offences. Each country would determine which serious crimes would be designated as money laundering predicate offences.

    5. As provided in the Vienna Convention, the offence of money laundering should apply at least to knowing money laundering activity, including the concept that knowledge may be inferred from objective factual circumstances.

    6. Where possible, corporations themselves—not only their employees—should be subject to criminal liability.

    Provisional Measures and Confiscation

    7. Countries should adopt measures similar to those set forth in the Vienna Convention, as may be necessary, including legislative ones, to enable their competent authorities to confiscate property laundered, proceeds from, instrumentalities used in or intended for use in the commission of any money laundering offence, or property of corresponding value, without prejudicing the rights of bona fide third parties.

    Such measures should include the authority to : 1) identify, trace and evaluate property which is subject to confiscation; 2) carry out provisional measures, such as freezing and seizing, to prevent any dealing, transfer or disposal of such property; and 3) take any appropriate investigative measures.

    In addition to confiscation and criminal sanctions, countries also should consider monetary and civil penalties, and/or proceedings including civil proceedings, to void contracts entered into by parties, where parties knew or should have known that as a result of the contract, the State would be prejudiced in its ability to recover financial claims, e.g. through confiscation or collection of fines and penalties.

    C. ROLE OF THE FINANCIAL SYSTEM IN COMBATING MONEY LAUNDERING

    8. Recommendations 10 to 29 should apply not only to banks, but also to non-bank financial institutions. Even for those non-bank financial institutions which are not subject to a formal prudential supervisory regime in all countries, for example bureaux de change, governments should ensure that these institutions are subject to the same anti-money laundering laws or regulations as all other financial institutions and that these laws or regulations are implemented effectively.

    9. The appropriate national authorities should consider applying Recommendations 10 to 21 and 23 to the conduct of financial activities as a commercial undertaking by businesses or professions which are not financial institutions, where such conduct is allowed or not prohibited. Financial activities include, but are not limited to, those listed in the attached annex. It is left to each country to decide whether special situations should be defined where the application of anti-money laundering measures is not necessary, for example, when a financial activity is carried out on an occasional or limited basis.

    Customer Identification and Record-Keeping Rules

    10. Financial institutions should not keep anonymous accounts or accounts in obviously fictitious names: they should be required (by law, by regulations, by agreements between supervisory authorities and financial institutions or by self-regulatory agreements among financial institutions) to identify, on the basis of an official or other reliable identifying document, and record the identity of their clients, either occasional or usual, when establishing business relations or conducting transactions (in particular opening of accounts or passbooks, entering into fiduciary transactions, renting of safe deposit boxes, performing large cash transactions).

    In order to fulfill identification requirements concerning legal entities, financial institutions should, when necessary, take measures:

    • to verify the legal existence and structure of the customer by obtaining either from a public register or from the customer or both, proof of incorporation, including information concerning the customer’s name, legal form, address, directors and provisions regulating the power to bind the entity.

    • to verify that any person purporting to act on behalf of the customer is so authorised and identify that person.

    11. Financial institutions should take reasonable measures to obtain information about the true identity of the persons on whose behalf an account is opened or a transaction conducted if there are any doubts as to whether these clients or customers are acting on their own behalf, for example, in the case of domiciliary companies (i.e. institutions, corporations, foundations, trusts, etc. that do not conduct any commercial or manufacturing business or any other form of commercial operation in the country where their registered office is located).

    12. Financial institutions should maintain, for at least five years, all necessary records on transactions, both domestic or international, to enable them to comply swiftly with information requests from the competent authorities. Such records must be sufficient to permit reconstruction of individual transactions (including the amounts and types of currency involved if any) so as to provide, if necessary, evidence for prosecution of criminal behaviour.

    Financial institutions should keep records on customer identification (e.g. copies or records of official identification documents like passports, identity cards, driving licenses or similar documents), account files and business correspondence for at least five years after the account is closed.

    These documents should be available to domestic competent authorities in the context of relevant criminal prosecutions and investigations.

    13. Countries should pay special attention to money laundering threats inherent in new or developing technologies that might favour anonymity, and take measures, if needed, to prevent their use in money laundering schemes.

    Increased Diligence of Financial Institutions

    14. Financial institutions should pay special attention to all complex, unusual large transactions, and all unusual patterns of transactions, which have no apparent economic or visible lawful purpose. The background and purpose of such transactions should, as far as possible, be examined, the findings established in writing, and be available to help supervisors, auditors and law enforcement agencies.

    15. If financial institutions suspect that funds stem from a criminal activity, they should be required to report promptly their suspicions to the competent authorities.

    16. Financial institutions, their directors, officers and employees should be protected by legal provisions from criminal or civil liability for breach of any restriction on disclosure of information imposed by contract or by any legislative, regulatory or administrative provision, if they report their suspicions in good faith to the competent authorities, even if they did not know precisely what the underlying criminal activity was, and regardless of whether illegal activity actually occurred.

    17. Financial institutions, their directors, officers and employees, should not, or, where appropriate, should not be allowed to, warn their customers when information relating to them is being reported to the competent authorities.

    18. Financial institutions reporting their suspicions should comply with instructions from the competent authorities.

    19. Financial institutions should develop programs against money laundering. These programs should include, as a minimum:

    • the development of internal policies, procedures and controls, including the designation of compliance officers at management level, and adequate screening procedures to ensure high standards when hiring employees;

    • an ongoing employee training programme;

    • an audit function to test the system.

    Measures to Cope with the Problem of Countries with No or Insufficient Anti-Money-Laundering Measures

    20. Financial institutions should ensure that the principles mentioned above are also applied to branches and majority owned subsidiaries located abroad, especially in countries which do not or insufficiently apply these Recommendations, to the extent that local applicable laws and regulations permit. When local applicable laws and regulations prohibit this implementation, competent authorities in the country of the mother institution should be informed by the financial institutions that they cannot apply these Recommendations.

    21. Financial institutions should give special attention to business relations and transactions with persons, including companies and financial institutions, from countries which do not or insufficiently apply these Recommendations. Whenever these transactions have no apparent economic or visible lawful purpose, their background and purpose should, as far as possible, be examined, the findings established in writing, and be available to help supervisors, auditors and law enforcement agencies.

    Other Measures to Avoid Money Laundering

    22. Countries should consider implementing feasible measures to detect or monitor the physical cross-border transportation of cash and bearer negotiable instruments, subject to strict safeguards to ensure proper use of information and without impeding in any way the freedom of capital movements.

    23. Countries should consider the feasibility and utility of a system where banks and other financial institutions and intermediaries would report all domestic and international currency transactions above a fixed amount, to a national central agency with a computerised data base, available to competent authorities for use in money laundering cases, subject to strict safeguards to ensure proper use of the information.

    24. Countries should further encourage in general the development of modern and secure techniques of money management, including increased use of checks, payment cards, direct deposit of salary checks, and book entry recording of securities, as a means to encourage the replacement of cash transfers.

    25. Countries should take notice of the potential for abuse of shell corporations by money launderers and should consider whether additional measures are required to prevent unlawful use of such entities.

    Implementation, and Role of Regulatory and Other Administrative Authorities

    26. The competent authorities supervising banks or other financial institutions or intermediaries, or other competent authorities, should ensure that the supervised institutions have adequate programs to guard against money laundering. These authorities should co-operate and lend expertise spontaneously or on request with other domestic judicial or law enforcement authorities in money laundering investigations and prosecutions.

    27. Competent authorities should be designated to ensure an effective implementation of all these Recommendations, through administrative supervision and regulation, in other professions dealing with cash as defined by each country.

    28. The competent authorities should establish guidelines which will assist financial institutions in detecting suspicious patterns of behaviour by their customers. It is understood that such guidelines must develop over time, and will never be exhaustive. It is further understood that such guidelines will primarily serve as an educational tool for financial institutions’ personnel.

    29. The competent authorities regulating or supervising financial institutions should take the necessary legal or regulatory measures to guard against control or acquisition of a significant participation in financial institutions by criminals or their confederates.

    D. STRENGTHENING OF INTERNATIONAL CO-OPERATION

    Administrative Co-operation

    Exchange of general information

    30. National administrations should consider recording, at least in the aggregate, international flows of cash in whatever currency, so that estimates can be made of cash flows and reflows from various sources abroad, when this is combined with central bank information. Such information should be made available to the International Monetary Fund and the Bank for International Settlements to facilitate international studies.

    31. International competent authorities, perhaps Interpol and the World Customs Organisation, should be given responsibility for gathering and disseminating information to competent authorities about the latest developments in money laundering and money laundering techniques. Central banks and bank regulators could do the same on their network. National authorities in various spheres, in consultation with trade associations, could then disseminate this to financial institutions in individual countries.

    Exchange of information relating to suspicious transactions

    32. Each country should make efforts to improve a spontaneous or “upon request” international information exchange relating to suspicious transactions, persons and corporations involved in those transactions between competent authorities. Strict safeguards should be established to ensure that this exchange of information is consistent with national and international provisions on privacy and data protection.

    Other Forms of Co-Operation

    Basis and means for co-operation in confiscation, mutual assistance and extradition

    33. Countries should try to ensure, on a bilateral or multilateral basis, that different knowledge standards in national definitions—i.e. different standards concerning the intentional element of the infraction—do not affect the ability or willingness of countries to provide each other with mutual legal assistance.

    34. International co-operation should be supported by a network of bilateral and multilateral agreements and arrangements based on generally shared legal concepts with the aim of providing practical measures to affect the widest possible range of mutual assistance.

    35. Countries should be encouraged to ratify and implement relevant international conventions on money laundering such as the 1990 Council of Europe Convention on Laundering, Search, Seizure and Confiscation of the Proceeds from Crime.

    Focus of improved mutual assistance on money laundering issues

    36. Co-operative investigations among countries’ appropriate competent authorities should be encouraged. One valid and effective investigative technique in this respect is controlled delivery related to assets known or suspected to be the proceeds of crime. Countries are encouraged to support this technique, where possible.

    37. There should be procedures for mutual assistance in criminal matters regarding the use of compulsory measures including the production of records by financial institutions and other persons, the search of persons and premises, seizure and obtaining of evidence for use in money laundering investigations and prosecutions and in related actions in foreign jurisdictions.

    38. There should be authority to take expeditious action in response to requests by foreign countries to identify, freeze, seize and confiscate proceeds or other property of corresponding value to such proceeds, based on money laundering or the crimes underlying the laundering activity. There should also be arrangements for coordinating seizure and confiscation proceedings which may include the sharing of confiscated assets.

    39. To avoid conflicts of jurisdiction, consideration should be given to devising and applying mechanisms for determining the best venue for prosecution of defendants in the interests of justice in cases that are subject to prosecution in more than one country. Similarly, there should be arrangements for coordinating seizure and confiscation proceedings which may include the sharing of confiscated assets.

    40. Countries should have procedures in place to extradite, where possible, individuals charged with a money laundering offence or related offences. With respect to its national legal system, each country should recognise money laundering as an extraditable offence. Subject to their legal frameworks, countries may consider simplifying extradition by allowing direct transmission of extradition requests between appropriate ministries, extraditing persons based only on warrants of arrests or judgements, extraditing their nationals, and/or introducing a simplified extradition of consenting persons who waive formal extradition proceedings.

    ∗∗∗∗∗∗

    Annex to Recommendation 9: List of Financial Activities undertaken by business or professions which are not financial institutions

    • Acceptance of deposits and other repayable funds from the public.

    • Lending.4

    • Financial leasing.

    • Money transmission services.

    • Issuing and managing means of payment (e.g. credit and debit cards, cheques, traveller’s cheques and bankers’ drafts…).

    • Financial guarantees and commitments.

    • Trading for account of customers (spot, forward, swaps, futures, options…) in:

      • money market instruments (cheques, bills, CDs, etc.);

      • foreign exchange;

      • exchange, interest rate and index instruments;

      • transferable securities;

      • commodity futures trading.

    • Participation in securities issues and the provision of financial services related to such issues.

    • Individual and collective portfolio management.

    • Safekeeping and administration of cash or liquid securities on behalf of clients.

    • Life insurance and other investment related insurance.

    • Money changing.

    Appendix III United Nations Convention on Independent Guarantees and Stand-By Letters of Credit

    CHAPTER I. SCOPE OF APPLICATION

    Article 1. Scope of application

    • This Convention applies to an international undertaking referred to in article 2:

      • If the place of business of the guarantor/issuer at which the undertaking is issued is in a Contracting State, or

      • If the rules of private international law lead to the application of the law of a Contracting State, unless the undertaking excludes the application of the Convention.

    • This Convention applies also to an international letter of credit not falling within article 2 if it expressly states that it is subject to this Convention.

    • The provisions of articles 21 and 22 apply to international undertakings referred to in article 2 independently of paragraph (1) of this article.

    Article 2. Undertaking

    • For the purposes of this Convention, an undertaking is an independent commitment, known in international practice as an independent guarantee or as a stand-by letter of credit, given by a bank or other institution or person (“guarantor/issuer”) to pay to the beneficiary a certain or determinable amount upon simple demand or upon demand accompanied by other documents, in conformity with the terms and any documentary conditions of the undertaking, indicating, or from which it is to be inferred, that payment is due because of a default in the performance of an obligation, or because of another contingency, or for money borrowed or advanced, or on account of any mature indebtedness undertaken by the principal/applicant or another person.

    • The undertaking may be given:

      • At the request or on the instruction of the customer (“principal/applicant”) of the guarantor/issuer;

      • On the instruction of another bank, institution or person (“instructing party”) that acts at the request of the customer (“principal/applicant”) of that instructing party; or

      • On behalf of the guarantor/issuer itself.

    • Payment may be stipulated in the undertaking to be made in any form, including:

      • Payment in a specified currency or unit of account;

      • Acceptance of a bill of exchange (draft);

      • Payment on a deferred basis;

      • Supply of a specified item of value.

    • The undertaking may stipulate that the guarantor/issuer itself is the beneficiary when acting in favour of another person.

    Article 3. Independence of undertaking

    For the purposes of this Convention, an undertaking is independent where the guarantor/issuer’s obligation to the beneficiary is not:

    • Dependent upon the existence or validity of any underlying transaction, or upon any other undertaking (including stand-by letters of credit or independent guarantees to which confirmations or counter-guarantees relate); or

    • Subject to any term or condition not appearing in the undertaking, or to any future, uncertain act or event except presentation of documents or another such act or event within a guarantor/issuer’s sphere of operations.

    Article 4. Internationality of undertaking

    • An undertaking is international if the places of business, as specified in the undertaking, of any two of the following persons are in different States: guarantor/issuer, beneficiary, principal/applicant, instructing party, confirmer.

    • For the purposes of the preceding paragraph:

      • If the undertaking lists more than one place of business for a given person, the relevant place of business is that which has the closest relationship to the undertaking;

      • If the undertaking does not specify a place of business for a given person but specifies its habitual residence, that residence is relevant for determining the international character of the undertaking.

    CHAPTER II. INTERPRETATION

    Article 5. Principles of interpretation

    In the interpretation of this Convention, regard is to be had to its international character and to the need to promote uniformity in its application and the observance of good faith in the international practice of independent guarantees and stand-by letters of credit.

    Article 6. Definitions

    For the purposes of this Convention and unless otherwise indicated in a provision of this Convention or required by the context:

    • “Undertaking” includes “counter-guarantee”and “confirmation of an undertaking”;

    • “Guarantor/issuer” includes “counter-guarantor” and “confirmer”;

    • “Counter-guarantee” means an undertaking given to the guarantor/issuer of another undertaking by its instructing party and providing for payment upon simple demand or upon demand accompanied by other documents, in conformity with the terms and any documentary conditions of the undertaking, indicating, or from which it is to be inferred, that payment under that other undertaking has been demanded from, or made by, the person issuing that other undertaking;

    • “Counter-guarantor” means the person issuing a counter-guarantee;

    • “Confirmation” of an undertaking means an undertaking added to that of the guarantor/issuer, and authorized by the guarantor/issuer, providing the beneficiary with the option of demanding payment from the confirmer instead of from the guarantor/issuer, upon simple demand or upon demand accompanied by other documents, in conformity with the terms and any documentary conditions of the confirmed undertaking, without prejudice to the beneficiary’s right to demand payment from the guarantor/issuer;

    • “Confirmer” means the person adding a confirmation to an undertaking;

    • “Document” means a communication made in a form that provides a complete record thereof.

    CHAPTER III. FORM AND CONTENT OF UNDERTAKING

    Article 7. Issuance, form and irrevocability of undertaking

    • Issuance of an undertaking occurs when and where the undertaking leaves the sphere of control of the guarantor/issuer concerned.

    • An undertaking may be issued in any form which preserves a complete record of the text of the undertaking and provides authentication of its source by generally accepted means or by a procedure agreed upon by the guarantor/issuer and the beneficiary.

    • From the time of issuance of an undertaking, a demand for payment may be made in accordance with the terms and conditions of the undertaking, unless the undertaking stipulates a different time.

    • An undertaking is irrevocable upon issuance, unless it stipulates that it is revocable.

    Article 8. Amendment

    • An undertaking may not be amended except in the form stipulated in the undertaking or, failing such stipulation, in a form referred to in paragraph (2) of article 7.

    • Unless otherwise stipulated in the undertaking or elsewhere agreed by the guarantor/issuer and the beneficiary, an undertaking is amended upon issuance of the amendment if the amendment has previously been authorized by the beneficiary.

    • Unless otherwise stipulated in the undertaking or elsewhere agreed by the guarantor/issuer and the beneficiary, where any amendment has not previously been authorized by the beneficiary, the undertaking is amended only when the guarantor/issuer receives a notice of acceptance of the amendment by the beneficiary in a form referred to in paragraph (2) of article 7.

    • An amendment of an undertaking has no effect on the rights and obligations of the principal/applicant (or an instructing party) or of a confirmer of the undertaking unless such person consents to the amendment.

    Article 9. Transfer of beneficiary’s right to demand payment

    • The beneficiary’s right to demand payment may be transferred only if authorized in the undertaking, and only to the extent and in the manner authorized in the undertaking.

    • If an undertaking is designated as transferable without specifying whether or not the consent of the guarantor/issuer or another authorized person is required for the actual transfer, neither the guarantor/issuer nor any other authorized person is obliged to effect the transfer except to the extent and in the manner expressly consented to by it.

    Article 10. Assignment of proceeds

    • Unless otherwise stipulated in the undertaking or elsewhere agreed by the guarantor/issuer and the beneficiary, the beneficiary may assign to another person any proceeds to which it may be, or may become, entitled under the undertaking.

    • If the guarantor/issuer or another person obliged to effect payment has received a notice originating from the beneficiary, in a form referred to in paragraph (2) of article 7, of the beneficiary’s irrevocable assignment, payment to the assignee discharges the obligor, to the extent of its payment, from its liability under the undertaking.

    Article 11. Cessation of right to demand payment

    • The right of the beneficiary to demand payment under the undertaking ceases when:

      • The guarantor/issuer has received a statement by the beneficiary of release from liability in a form referred to in paragraph (2) of article 7;

      • The beneficiary and the guarantor/issuer have agreed on the termination of the undertaking in the form stipulated in the undertaking or, failing such stipulation, in a form referred to in paragraph (2) of article 7;

      • The amount available under the undertaking has been paid, unless the undertaking provides for the automatic renewal or for an automatic increase of the amount available or otherwise provides for continuation of the undertaking;

      • The validity period of the undertaking expires in accordance with the provisions of article 12.

    • The undertaking may stipulate, or the guarantor/issuer and the beneficiary may agree elsewhere, that return of the document embodying the undertaking to the guarantor/issuer, or a procedure functionally equivalent to the return of the document in the case of the issuance of the undertaking in non-paper form, is required for the cessation of the right to demand payment, either alone or in conjunction with one of the events referred to in subparagraphs (a) and (b) of paragraph (1) of this article. However, in no case shall retention of any such document by the beneficiary after the right to demand payment ceases in accordance with subparagraph (c) or (d) of paragraph (1) of this article preserve any rights of the beneficiary under the undertaking.

    Article 12. Expiry

    The validity period of the undertaking expires:

    • At the expiry date, which may be a specified calendar date or the last day of a fixed period of time stipulated in the undertaking, provided that, if the expiry date is not a business day at the place of business of the guarantor/issuer at which the undertaking is issued, or of another person or at another place stipulated in the undertaking for presentation of the demand for payment, expiry occurs on the first business day which follows;

    • If expiry depends according to the undertaking on the occurrence of an act or event not within the guarantor/issuer’s sphere of operations, when the guarantor/issuer is advised that the act or event has occurred by presentation of the document specified for that purpose in the undertaking or, if no such document is specified, of a certification by the beneficiary of the occurrence of the act or event;

    • If the undertaking does not state an expiry date, or if the act or event on which expiry is stated to depend has not yet been established by presentation of the required document and an expiry date has not been stated in addition, when six years have elapsed from the date of issuance of the undertaking.

    CHAPTER IV. RIGHTS, OBLIGATIONS AND DEFENCES

    Article 13. Determination of rights and obligations

    • The rights and obligations of the guarantor/issuer and the beneficiary arising from the undertaking are determined by the terms and conditions set forth in the undertaking, including any rules, general conditions or usages specifically referred to therein, and by the provisions of this Convention.

    • In interpreting terms and conditions of the undertaking and in settling questions that are not addressed by the terms and conditions of the undertaking or by the provisions of this Convention, regard shall be had to generally accepted international rules and usages of independent guarantee or stand-by letter of credit practice.

    Article 14. Standard of conduct and liability of guarantor/issuer

    • In discharging its obligations under the undertaking and this Convention, the guarantor/issuer shall act in good faith and exercise reasonable care having due regard to generally accepted standards of international practice of independent guarantees or stand-by letters of credit.

    • A guarantor/issuer may not be exempted from liability for its failure to act in good faith or for any grossly negligent conduct.

    Article 15. Demand

    • Any demand for payment under the undertaking shall be made in a form referred to in paragraph (2) of article 7 and in conformity with the terms and conditions of the undertaking.

    • Unless otherwise stipulated in the undertaking, the demand and any certification or other document required by the undertaking shall be presented, within the time that a demand for payment may be made, to the guarantor/issuer at the place where the undertaking was issued.

    • The beneficiary, when demanding payment, is deemed to certify that the demand is not in bad faith and that none of the elements referred to in subparagraphs (a), (b) and (c) of paragraph (1) of article 19 are present.

    Article 16. Examination of demand and accompanying documents

    • The guarantor/issuer shall examine the demand and any accompanying documents in accordance with the standard of conduct referred to in paragraph (1) of article 14. In determining whether documents are in facial conformity with the terms and conditions of the undertaking, and are consistent with one another, the guarantor/issuer shall have due regard to the applicable international standard of independent guarantee or stand-by letter of credit practice.

    • Unless otherwise stipulated in the undertaking or elsewhere agreed by the guarantor/issuer and the beneficiary, the guarantor/issuer shall have reasonable time, but not more than seven business days following the day of receipt of the demand and any accompanying documents, in which to:

      • Examine the demand and any accompanying documents;

      • Decide whether or not to pay;

      • If the decision is not to pay, issue notice thereof to the beneficiary.

    The notice referred to in subparagraph (c) above shall, unless otherwise stipulated in the undertaking or elsewhere agreed by the guarantor/issuer and the beneficiary, be made by teletransmission or, if that is not possible, by other expeditious means and indicate the reason for the decision not to pay.

    Article 17. Payment

    • Subject to article 19, the guarantor/issuer shall pay against a demand made in accordance with the provisions of article 15. Following a determination that a demand for payment so conforms, payment shall be made promptly, unless the undertaking stipulates payment on a deferred basis, in which case payment shall be made at the stipulated time.

    • Any payment against a demand that is not in accordance with the provisions of article 15 does not prejudice the rights of the principal/applicant.

    Article 18. Set-off

    Unless otherwise stipulated in the undertaking or elsewhere agreed by the guarantor/issuer and the beneficiary, the guarantor/issuer may discharge the payment obligation under the undertaking by availing itself of a right of set-off, except with any claim assigned to it by the principal/applicant or the instructing party.

    Article 19. Exception to payment obligation

    • If it is manifest and clear that:

      • Any document is not genuine or has been falsified;

      • No payment is due on the basis asserted in the demand and the supporting documents; or

      • Judging by the type and purpose of the undertaking, the demand has no conceivable basis, the guarantor/issuer, acting in good faith, has a right, as against the beneficiary, to withhold payment.

    • For the purposes of subparagraph (c) of paragraph (1) of this article, the following are types of situations in which a demand has no conceivable basis:

      • The contingency or risk against which the undertaking was designed to secure the beneficiary has undoubtedly not materialized;

      • The underlying obligation of the principal/applicant has been declared invalid by a court or arbitral tribunal, unless the undertaking indicates that such contingency falls within the risk to be covered by the undertaking;

      • The underlying obligation has undoubtedly been fulfilled to the satisfaction of the beneficiary;

      • Fulfilment of the underlying obligation has clearly been prevented by wilful misconduct of the beneficiary;

      • In the case of a demand under a counter-guarantee, the beneficiary of the counter-guarantee has made payment in bad faith as guarantor/issuer of the undertaking to which the counter-guarantee relates.

    • In the circumstances set out in subparagraphs (a), (b) and (c) of paragraph (1) of this article, the principal/applicant is entitled to provisional court measures in accordance with article 20.

    CHAPTER V. PROVISIONAL COURT MEASURES

    Article 20. Provisional court measures

    • Where, on an application by the principal/applicant or the instructing party, it is shown that there is a high probability that, with regard to a demand made, or expected to be made, by the beneficiary, one of the circumstances referred to in subparagraphs (a), (b) and (c) of paragraph (1) of article 19 is present, the court, on the basis of immediately available strong evidence, may:

      • Issue a provisional order to the effect that the beneficiary does not receive payment, including an order that the guarantor/issuer hold the amount of the undertaking, or

      • Issue a provisional order to the effect that the proceeds of the undertaking paid to the beneficiary are blocked, taking into account whether in the absence of such an order the principal/applicant would be likely to suffer serious harm.

    • The court, when issuing a provisional order referred to in paragraph (1) of this article, may require the person applying therefor to furnish such form of security as the court deems appropriate.

    • The court may not issue a provisional order of the kind referred to in paragraph (1) of this article based on any objection to payment other than those referred to in subparagraphs (a), (b) and (c) of paragraph (1) of article 19, or use of the undertaking for a criminal purpose.

    CHAPTER VI. CONFLICT OF LAWS

    Article 21. Choice of applicable law

    The undertaking is governed by the law the choice of which is:

    • Stipulated in the undertaking or demonstrated by the terms and conditions of the undertaking; or

    • Agreed elsewhere by the guarantor/issuer and the beneficiary.

    Article 22. Determination of applicable law

    Failing a choice of law in accordance with article 21, the undertaking is governed by the law of the State where the guarantor/issuer has that place of business at which the undertaking was issued.

    CHAPTER VII. FINAL CLAUSES

    Article 23. Depositary

    The Secretary-General of the United Nations is the depositary of this Convention.

    Article 24. Signature, ratification, acceptance, approval, accession

    • This Convention is open for signature by all States at the Headquarters of the United Nations, New York, until 11 December 1997.

    • This Convention is subject to ratification, acceptance or approval by the signatory States.

    • This Convention is open to accession by all States which are not signatory States as from the date it is open for signature.

    • Instruments of ratification, acceptance, approval and accession are to be deposited with the Secretary-General of the United Nations.

    Article 25. Application to territorial units

    • If a State has two or more territorial units in which different systems of law are applicable in relation to the matters dealt with in this Convention, it may, at the time of signature, ratification, acceptance, approval or accession, declare that this Convention is to extend to all its territorial units or only one or more of them, and may at any time substitute another declaration for its earlier declaration.

    • These declarations are to state expressly the territorial units to which the Convention extends.

    • If, by virtue of a declaration under this article, this Convention does not extend to all territorial units of a State and the place of business of the guarantor/issuer or of the beneficiary is located in a territorial unit to which the Convention does not extend, this place of business is considered not to be in a Contracting State.

    • If a State makes no declaration under paragraph (1) of this article, the Convention is to extend to all territorial units of that State.

    Article 26. Effect of declaration

    • Declarations made under article 25 at the time of signature are subject to confirmation upon ratification, acceptance or approval.

    • Declarations and confirmations of declarations are to be in writing and to be formally notified to the depositary.

    • A declaration takes effect simultaneously with the entry into force of this Convention in respect of the State concerned. However, a declaration of which the depositary receives formal notification after such entry into force takes effect on the first day of the month following the expiration of six months after the date of its receipt by the depositary.

    • Any State which makes a declaration under article 25 may withdraw it at any time by a formal notification in writing addressed to the depositary. Such withdrawal takes effect on the first day of the month following the expiration of six months after the date of the receipt of the notification of the depositary.

    Article 27. Reservations

    No reservations may be made to this Convention.

    Article 28. Entry into force

    • This Convention enters into force on the first day of the month following the expiration of one year from the date of the deposit of the fifth instrument of ratification, acceptance, approval or accession.

    • For each State which becomes a Contracting State to this Convention after the date of the deposit of the fifth instrument of ratification, acceptance, approval or accession, this Convention enters into force on the first day of the month following the expiration of one year after the date of the deposit of the appropriate instrument on behalf of that State.

    • This Convention applies only to undertakings issued on or after the date when the Convention enters into force in respect of the Contracting State referred to in subparagraph (a) or the Contracting State referred to in subparagraph (b) of paragraph (1) of article 1.

    Article 29. Denunciation

    • A Contracting State may denounce this Convention at any time by means of a notification in writing addressed to the depositary.

    • The denunciation takes effect on the first day of the month following the expiration of one year after the notification is received by the depositary. Where a longer period is specified in the notification, the denunciation takes effect upon the expiration of such longer period after the notification is received by the depositary.

    DONE at New York, this eleventh day of December one thousand nine hundred and ninety-five, in a single original, of which the Arabic, Chinese, English, French, Russian and Spanish texts are equally authentic.

    IN WITNESS WHEREOF the undersigned plenipotentiaries, being duly authorized by their respective Governments, have signed the present Convention.

    * * *

    Appendix IV UNCITRAL Model Law on Electronic Commerce

    1996 with additional article 5 bis as adopted in 1998
    UNITED NATIONS

    GENERAL ASSEMBLY RESOLUTION 51/162 OF 16 DECEMBER 1996

    UNCITRAL MODEL LAW ON ELECTRONIC COMMERCE

    Resolution adopted by the General Assembly

    [on the report of the Sixth Committee (A/51/628)]

    51/162 Model Law on Electronic Commerce adopted by the United Nations Commission on International Trade Law

    The General Assembly,

    Recalling its resolution 2205 (XXI) of 17 December 1966, by which it created the United Nations Commission on International Trade Law, with a mandate to further the progressive harmonization and unification of the law of international trade and in that respect to bear in mind the interests of all peoples, in particular those of developing countries, in the extensive development of international trade,

    Noting that an increasing number of transactions in international trade are carried out by means of electronic data interchange and other means of communication, commonly referred to as “electronic commerce”, which involve the use of alternatives to paper-based methods of communication and storage of information,

    Recalling the recommendation on the legal value of computer records adopted by the Commission at its eighteenth session, in 1985, and paragraph 5(b) of General Assembly resolution 40/71 of 11 December 1985, in which the Assembly called upon Governments and international organizations to take action, where appropriate, in conformity with the recommendation of the Commission, so as to ensure legal security in the context of the widest possible use of automated data processing in international trade,

    Convinced that the establishment of a model law facilitating the use of electronic commerce that is acceptable to States with different legal, social and economic systems, could contribute significantly to the development of harmonious international economic relations,

    Noting that the Model Law on Electronic Commerce was adopted by the Commission at its twenty-ninth session after consideration of the observations of Governments and interested organizations,

    Believing that the adoption of the Model Law on Electronic Commerce by the Commission will assist all States significantly in enhancing their legislation governing the use of alternatives to paper-based methods of communication and storage of information and in formulating such legislation where none currently exists,

    1. Expresses its appreciation to the United Nations Commission on International Trade Law for completing and adopting the Model Law on Electronic Commerce contained in the annex to the present resolution and for preparing the Guide to Enactment of the Model Law;

    2. Recommends that all States give favourable consideration to the Model Law when they enact or revise their laws, in view of the need for uniformity of the law applicable to alternatives to paper-based methods of communication and storage of information;

    3. Recommends also that all efforts be made to ensure that the Model Law, together with the Guide, become generally known and available.

    85th plenary meeting

    16 December 1996

    UNCITRAL Model Law on Electronic Commerce

    [Original: Arabic, Chinese, English, French, Russian, Spanish]

    Part one. Electronic commerce in general

    Chapter I
    General provisions

    Article 1 Sphere of application1

    This Law2 applies to any kind of information in the form of a data message used in the context3 of commercial4 activities.

    Article 2
    Definitions

    For the purposes of this Law:

    • “Data message” means information generated, sent, received or stored by electronic, optical or similar means including, but not limited to, electronic data interchange (EDI), electronic mail, telegram, telex or telecopy;

    • “Electronic data interchange (EDI)” means the electronic transfer from computer to computer of information using an agreed standard to structure the information;

    • “Originator” of a data message means a person by whom, or on whose behalf, the data message purports to have been sent or generated prior to storage, if any, but it does not include a person acting as an intermediary with respect to that data message;

    • “Addressee” of a data message means a person who is intended by the originator to receive the data message, but does not include a person acting as an intermediary with respect to that data message;

    • “Intermediary”, with respect to a particular data message, means a person who, on behalf of another person, sends, receives or stores that data message or provides other services with respect to that data message;

    • “Information system” means a system for generating, sending, receiving, storing or otherwise processing data messages.

    Article 3
    Interpretation

    • In the interpretation of this Law, regard is to be had to its international origin and to the need to promote uniformity in its application and the observance of good faith.

    • Questions concerning matters governed by this Law which are not expressly settled in it are to be settled in conformity with the general principles on which this Law is based.

    Article 4
    Variation by agreement

    • As between parties involved in generating, sending, receiving, storing or otherwise processing data messages, and except as otherwise provided, the provisions of chapter III may be varied by agreement.

    • Paragraph (1) does not affect any right that may exist to modify by agreement any rule of law referred to in chapter II.

    Chapter II
    Application of legal requirements to data messages

    Article 5
    Legal recognition of data messages

    Information shall not be denied legal effect, validity or enforceability solely on the grounds that it is in the form of a data message.

    Article 5 bis
    Incorporation by reference

    (as adopted by the Commission at its thirty-first session, in June 1998)

    Information shall not be denied legal effect, validity or enforceability solely on the grounds that it is not contained in the data message purporting to give rise to such legal effect, but is merely referred to in that data message.

    Article 6
    Writing

    • Where the law requires information to be in writing, that requirement is met by a data message if the information contained therein is accessible so as to be usable for subsequent reference.

    • Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the information not being in writing.

    • The provisions of this article do not apply to the following: […].

    Article 7
    Signature

    • Where the law requires a signature of a person, that requirement is met in relation to a data message if:

      • a method is used to identify that person and to indicate that person’s approval of the information contained in the data message; and

      • that method is as reliable as was appropriate for the purpose for which the data message was generated or communicated, in the light of all the circumstances, including any relevant agreement.

    • Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the absence of a signature.

    • The provisions of this article do not apply to the following:

    Article 8
    Original

    • Where the law requires information to be presented or retained in its original form, that requirement is met by a data message if:

      • there exists a reliable assurance as to the integrity of the information from the time when it was first generated in its final form, as a data message or otherwise; and

      • where it is required that information be presented, that information is capable of being displayed to the person to whom it is to be presented.

    • Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for the information not being presented or retained in its original form.

    • For the purposes of subparagraph (a) of paragraph (1):

      • the criteria for assessing integrity shall be whether the information has remained complete and unaltered, apart from the addition of any endorsement and any change which arises in the normal course of communication, storage and display; and

      • the standard of reliability required shall be assessed in the light of the purpose for which the information was generated and in the light of all the relevant circumstances.

    • The provisions of this article do not apply to the following: […].

    Article 9
    Admissibility and evidential weight of data messages

    • In any legal proceedings, nothing in the application of the rules of evidence shall apply so as to deny the admissibility of a data message in evidence:

      • on the sole ground that it is a data message; or,

      • if it is the best evidence that the person adducing it could reasonably be expected to obtain, on the grounds that it is not in its original form.

    • Information in the form of a data message shall be given due evidential weight. In assessing the evidential weight of a data message, regard shall be had to the reliability of the manner in which the data message was generated, stored or communicated, to the reliability of the manner in which the integrity of the information was maintained, to the manner in which its originator was identified, and to any other relevant factor.

    Article 10
    Retention of data messages

    • Where the law requires that certain documents, records or information be retained, that requirement is met by retaining data messages, provided that the following conditions are satisfied:

      • the information contained therein is accessible so as to be usable for subsequent reference; and

      • the data message is retained in the format in which it was generated, sent or received, or in a format which can be demonstrated to represent accurately the information generated, sent or received; and

      • such information, if any, is retained as enables the identification of the origin and destination of a data message and the date and time when it was sent or received.

    • An obligation to retain documents, records or information in accordance with paragraph (1) does not extend to any information the sole purpose of which is to enable the message to be sent or received.

    • A person may satisfy the requirement referred to in paragraph (1) by using the services of any other person, provided that the conditions set forth in subparagraphs (a), (b) and (c) of paragraph (1) are met.

    Chapter III
    Communication of data messages

    Article 11
    Formation and validity of contracts

    • In the context of contract formation, unless otherwise agreed by the parties, an offer and the acceptance of an offer may be expressed by means of data messages. Where a data message is used in the formation of a contract, that contract shall not be denied validity or enforceability on the sole ground that a data message was used for that purpose.

    • The provisions of this article do not apply to the following: [… ].

    Article 12
    Recognition by parties of data messages

    • As between the originator and the addressee of a data message, a declaration of will or other statement shall not be denied legal effect, validity or enforceability solely on the grounds that it is in the form of a data message.

    • The provisions of this article do not apply to the following: […].

    Article 13
    Attribution of data messages

    • A data message is that of the originator if it was sent by the originator itself.

    • As between the originator and the addressee, a data message is deemed to be that of the originator if it was sent:

      • by a person who had the authority to act on behalf of the originator in respect of that data message; or

      • by an information system programmed by, or on behalf of, the originator to operate automatically.

    • As between the originator and the addressee, an addressee is entitled to regard a data message as being that of the originator, and to act on that assumption, if:

      • in order to ascertain whether the data message was that of the originator, the addressee properly applied a procedure previously agreed to by the originator for that purpose; or

      • the data message as received by the addressee resulted from the actions of a person whose relationship with the originator or with any agent of the originator enabled that person to gain access to a method used by the originator to identify data messages as its own.

    • Paragraph (3) does not apply:

      • as of the time when the addressee has both received notice from the originator that the data message is not that of the originator, and had reasonable time to act accordingly; or

      • in a case within paragraph (3)(b), at any time when the addressee knew or should have known, had it exercised reasonable care or used any agreed procedure, that the data message was not that of the originator.

    • Where a data message is that of the originator or is deemed to be that of the originator, or the addressee is entitled to act on that assumption, then, as between the originator and the addressee, the addressee is entitled to regard the data message as received as being what the originator intended to send, and to act on that assumption. The addressee is not so entitled when it knew or should have known, had it exercised reasonable care or used any agreed procedure, that the transmission resulted in any error in the data message as received.

    • The addressee is entitled to regard each data message received as a separate data message and to act on that assumption, except to the extent that it duplicates another data message and the addressee knew or should have known, had it exercised reasonable care or used any agreed procedure, that the data message was a duplicate.

    Article 14
    Acknowledgement of receipt

    • Paragraphs (2) to (4) of this article apply where, on or before sending a data message, or by means of that data message, the originator has requested or has agreed with the addressee that receipt of the data message be acknowledged.

    • Where the originator has not agreed with the addressee that the acknowledgement be given in a particular form or by a particular method, an acknowledgement may be given by:

      • any communication by the addressee, automated or otherwise; or

      • any conduct of the addressee, sufficient to indicate to the originator that the data message has been received.

    • Where the originator has stated that the data message is conditional on receipt of the acknowledgement, the data message is treated as though it has never been sent, until the acknowledgement is received.

    • Where the originator has not stated that the data message is conditional on receipt of the acknowledgement, and the acknowledgement has not been received by the originator within the time specified or agreed or, if no time has been specified or agreed, within a reasonable time, the originator:

      • may give notice to the addressee stating that no acknowledgement has been received and specifying a reasonable time by which the acknowledgement must be received; and

      • if the acknowledgement is not received within the time specified in subparagraph (a), may, upon notice to the addressee, treat the data message as though it had never been sent, or exercise any other rights it may have.

    • Where the originator receives the addressee’s acknowledgement of receipt, it is presumed that the related data message was received by the addressee. That presumption does not imply that the data message corresponds to the message received.

    • Where the received acknowledgement states that the related data message met technical requirements, either agreed upon or set forth in applicable standards, it is presumed that those requirements have been met.

    • Except in so far as it relates to the sending or receipt of the data message, this article is not intended to deal with the legal consequences that may flow either from that data message or from the acknowledgement of its receipt.

    Article 15
    Time and place of dispatch and receipt of data messages

    • Unless otherwise agreed between the originator and the addressee, the dispatch of a data message occurs when it enters an information system outside the control of the originator or of the person who sent the data message on behalf of the originator.

    • Unless otherwise agreed between the originator and the addressee, the time of receipt of a data message is determined as follows:

      • if the addressee has designated an information system for the purpose of receiving data messages, receipt occurs:

        • at the time when the data message enters the designated information system; or

        • if the data message is sent to an information system of the addressee that is not the designated information system, at the time when the data message is retrieved by the addressee;

      • if the addressee has not designated an information system, receipt occurs when the data message enters an information system of the addressee.

    • Paragraph (2) applies notwithstanding that the place where the information system is located may be different from the place where the data message is deemed to be received under paragraph (4).

    • Unless otherwise agreed between the originator and the addressee, a data message is deemed to be dispatched at the place where the originator has its place of business, and is deemed to be received at the place where the addressee has its place of business. For the purposes of this paragraph:

      • if the originator or the addressee has more than one place of business, the place of business is that which has the closest relationship to the underlying transaction or, where there is no underlying transaction, the principal place of business;

      • if the originator or the addressee does not have a place of business, reference is to be made to its habitual residence.

    • The provisions of this article do not apply to the following: […].

    Part two. Electronic commerce in specific areas

    Chapter I
    Carriage of goods

    Article 16
    Actions related to contracts of carriage of goods

    Without derogating from the provisions of part one of this Law, this chapter applies to any action in connection with, or in pursuance of, a contract of carriage of goods, including but not limited to:

      • furnishing the marks, number, quantity or weight of goods;

      • stating or declaring the nature or value of goods;

      • issuing a receipt for goods;

      • confirming that goods have been loaded;

      • notifying a person of terms and conditions of the contract;

      • giving instructions to a carrier;

      • claiming delivery of goods;

      • authorizing release of goods;

      • giving notice of loss of, or damage to, goods;

    • giving any other notice or statement in connection with the performance of the contract;

    • undertaking to deliver goods to a named person or a person authorized to claim delivery;

    • granting, acquiring, renouncing, surrendering, transferring or negotiating rights in goods;

    • acquiring or transferring rights and obligations under the contract.

    Article 17
    Transport documents

    • Subject to paragraph (3), where the law requires that any action referred to in article 16 be carried out in writing or by using a paper document, that requirement is met if the action is carried out by using one or more data messages.

    • Paragraph (1) applies whether the requirement therein is in the form of an obligation or whether the law simply provides consequences for failing either to carry out the action in writing or to use a paper document.

    • If a right is to be granted to, or an obligation is to be acquired by, one person and no other person, and if the law requires that, in order to effect this, the right or obligation must be conveyed to that person by the transfer, or use of, a paper document, that requirement is met if the right or obligation is conveyed by using one or more data messages, provided that a reliable method is used to render such data message or messages unique.

    • For the purposes of paragraph (3), the standard of reliability required shall be assessed in the light of the purpose for which the right or obligation was conveyed and in the light of all the circumstances, including any relevant agreement.

    • Where one or more data messages are used to effect any action in subparagraphs (f) and (g) of article 16, no paper document used to effect any such action is valid unless the use of data messages has been terminated and replaced by the use of paper documents. A paper document issued in these circumstances shall contain a statement of such termination. The replacement of data messages by paper documents shall not affect the rights or obligations of the parties involved.

    • If a rule of law is compulsorily applicable to a contract of carriage of goods which is in, or is evidenced by, a paper document, that rule shall not be inapplicable to such a contract of carriage of goods which is evidenced by one or more data messages by reason of the fact that the contract is evidenced by such data message or messages instead of by a paper document.

    • The provisions of this article do not apply to the following: […].

    * * * * *

    A link to the report is available on-line at http://www.occ.trcas.gov/emoncy/ccprfpap.htm.

    OJ No C 369, 7. 12. 1996, p. 8.

    OJ No C 380, 16. 12. 1996, p. 49.

    Opinion delivered on 29 November 1996.

    OJ No L 350, 31. 12. 1994, p. 27.

    OJ C 369, 7. 12. 1996, p. 10.

    OJ C 205, 5. 7. 1997, p. 18.

    OJ C 380, 16. 12. 1996, p. 50.

    OJ L 162, 19. 6. 1997, p. 1.

    OJ L 141, 11. 6. 1993, p. 27. Directive as amended by Directive 95/26/EC of the European Parliament and of the Council (OJ L 168, 18. 7. 1995, p. 7).

    Reference in this document to “countries” should be taken to apply equally to “territories” or “jurisdictions”. The twenty-six FATF member countries and governments are: Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, Iceland, Ireland, Italy, Japan, Luxembourg, the Kingdom of the Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, Turkey, United Kingdom, and the United States.

    The two international organisations are: the European Commission and the Gulf Cooperation Council.

    During the period 1990 to 1995, the FATF also elaborated various Interpretative Notes which are designed to clarify the application of specific Recommendations. Some of these Interpretative Notes have been updated in the Stocktaking Review to reflect changes in the Recommendations.

    Including inter alia

    • –consumer credit

    • –mortgage credit

    • –factoring, with or without recourse

    • –finance of commercial transactions (including forfeiting).

    The Commission suggests the following text for States that might wish to limit the applicability of this Law to international data messages: “This Law applies to a data message as defined in paragraph (1) of article 2 where the data message relates to international commerce.”

    This Law does not override any rule of law intended for the protection of consumers.

    The Commission suggests the following text for States that might wish to extend the applicability of this Law: “This Law applies to any kind of information in the form of a data message, except in the following situations: […].”

    The term “commercial” should be given a wide interpretation so as to cover matters arising from all relationships of a commercial nature, whether contractual or not. Relationships of a commercial nature include, but are not limited to, the following transactions: any trade transaction for the supply or exchange of goods or services; distribution agreement; commercial representation or agency; factoring; leasing; construction of works; consulting; engineering; licensing; investment; financing; banking; insurance; exploitation agreement or concession; joint venture and other forms of industrial or business cooperation; carriage of goods or passengers by air, sea, rail or road.

    Biographical Sketches

    Bijan B. Aghevli is currently the Deputy Director in the Asia and Pacific Department at the International Monetary Fund. He was previously a Senior Advisor in the Research Department and a Research Fellow at the London School of Economics. He has worked extensively on Asian countries and has published papers in the general area of international and monetary economics.

    Tobias M. C. Asser received his law degree from Leyden University, the Netherlands, and his Ph.D. in private international law from Cambridge University, England. Before he joined the Legal Department of the International Bank for Reconstruction and Development (IBRD) in 1968, he was a practicing attorney in Amsterdam. Among the positions in which he served at the IBRD were those of Assistant General Counsel, Operations, and Assistant General Counsel, Finance. In 1987, Mr. Asser transferred from the IBRD to the Legal Department of the International Monetary Fund, where he serves as Assistant General Counsel. Mr. Asser is also an Adjunct Professor at Georgetown University Law Center in Washington, D.C., where he teaches international financial law and private international law.

    Roy C. Baban is a Senior Counsel in the Legal Department. An economist and lawyer, he holds a Ph.D. in economics from the University of Manchester (U.K.) and a J.D. degree from Georgetown University. He is a member of the bars of the State of Virginia, the Fourth Circuit Court of Appeals, and the U.S. Supreme Court. He has served in the IMF Office of Geneva to observe the Multilateral Trade Negotiations under the auspices of the GATT and as an IMF resident representative in South Korea. He has published a number of articles in the field of international trade law.

    Thomas C. Baxter, Jr. received his B.A. from the University of Rochester in 1976 and his J.D. from the Georgetown University Law Center in 1979. He joined the Federal Reserve Bank of New York as an attorney in 1980, following an appointment as a law assistant to the Appellate Division of the New York Supreme Court. Currently, he is General Counsel and Executive Vice President of the Bank. Previously, he served as Deputy General Counsel and Senior Vice President and was responsible for matters of civil litigation, enforcement, aspects of the payment system, and supervisory functions of the Legal Department staff. Mr. Baxter is a co-author of Wire Transfers: A Guide to U.S. and International Laws Governing Funds Transfers (Probus, 1993) and has published several articles concerning the legal aspects of check collection, securities transfers, and electronic transfers of funds. He has also served as a lecturer on such subjects.

    Adam Bennett is Chief of the Stand-by Operations Division in the Policy Development and Review Department (PDR), IMF. He joined the IMF in 1985. After working in the European Department, he moved to PDR in 1990 to the Policy Review Division, where he worked on two major reviews of IMF programs. In 1994 he took charge of the Stand-by Operations Division, the division responsible for reviewing all the IMF’s proposed and ongoing stand-by and extended arrangements, both from the point of view of program design and in terms of the amount of money provided under the arrangements. Mr. Bennett has participated in numerous missions to member countries in connection with the use of IMF resources, including countries in Latin America, the Caribbean, Eastern Europe, and the former Soviet Union. Prior to joining the IMF, Mr. Bennett spent seven years working for the British government, mostly at the Treasury. He has also worked for two private sector investment banks in London. He has degrees from Cambridge University and the London School of Economics.

    William Blair graduated from Oxford University and was called to the English Bar in 1972. His practice focuses on banking and financial law. He is Visiting Professor of Law at the London School of Economics. Mr. Blair became a Queen’s Counsel in 1994. He is an editor of The Encyclopedia of Banking Law (Butterworths, 1982) and co-author of Banking and Financial Services Regulation (2nd ed., Butterworths, 1998). He sits as a Recorder (part-time judge).

    Stephen G. Cecchetti joined the Federal Reserve Bank of New York in August 1997 as executive vice president and director of research. He is also a member of the bank’s Management Committee. Before joining the New York Fed, Mr. Cecchetti had been a professor of economics at Ohio State University since 1992 and a member of the economics faculty since 1987. He also served as a visiting professor of economics at the University of Melbourne in 1996, Boston College in 1994 and 1995, and Princeton University in 1992 and 1993, and was on the faculty of the New York University Graduate School of Business from 1982 to 1987. He is a research associate of the National Bureau of Economic Research. Mr. Cecchetti earned his undergraduate degree in economics at Massachusetts Institute of Technology in 1977 and a doctoral degree in economics from the University of California at Berkeley in 1982.

    H. Rodgin Cohen is a partner with Sullivan & Cromwell specializing in the practice of banking law. His practice encompasses both mergers and acquisitions and regulatory issues in the banking industry. Mr. Cohen joined the firm in 1970 and has been a partner since 1977. He is a frequent speaker on banking law matters and the author of numerous articles on issues in commercial banking. Mr. Cohen is a graduate of Harvard College (B.A., 1965) magna cum laude, and Harvard Law School (LL.B., 1968).

    Florence A. Davis is Vice President and General Counsel of American International Group, Inc. She began her legal career as a litigator at Sullivan & Cromwell in 1979, where she was a member of the Commodities and Financial Futures practice group. In 1986, Ms. Davis joined Morgan Stanley and Co. Incorporated, where she was a Principal and filled a variety of positions in the Legal & Compliance Department, including Worldwide Director of Compliance and head of the Equity, Fixed Income and Futures legal teams. She is a 1976 graduate of Wellesley College (with highest honors) and a 1979 graduate of New York University School of Law where she was a Root-Tilden Scholar.

    Walter A. Effross joined the faculty of American University’s Washington College of Law as an associate professor in 1995 after practicing commercial and computer law for five years with McCarter & English in New Jersey. He graduated from Princeton University with honors and from Harvard Law School. Besides having published articles in a number of law reviews, Professor Effross is an editor of the Journal of Electronic Commerce, the American Bankruptcy Institute Journal, Electronic Money, and America On-Line’s E-Commerce Project.

    Hector Elizalde received his law degree from the Catholic University of Chile School of Law and a master’s degree in comparative jurisprudence from New York University School of Law. He is Assistant General Counsel in the Legal Department of the International Monetary Fund.

    Charles A. Enoch has an M.A. in economics from King’s College, Cambridge, and a Ph.D. in economics from Princeton. He worked at the Bank of England from 1976 to 1978 and from 1990 to 1993. Between 1978 and 1990 he was Alternate Executive Director for the United Kingdom at the IMF. Since 1993, he has been working in the Monetary and Exchange Affairs Department of the IMF, until April 1998 as Division Chief in the Monetary and Exchange Review Division and more recently as Assistant Director in charge of the Banking Supervision and Regulation Division.

    Chester B. Feldberg graduated from Union College in Schenectady, New York, and received his law degree from Harvard Law School. Since joining the Federal Reserve Bank of New York’s Legal Department in 1964, he has held various positions. Since January 1991, he has been the Executive Vice President in charge of the bank supervision group at the Federal Reserve Bank of New York. Under his direction, the bank supervision group is responsible for supervising all state member banks, bank holding companies, and foreign bank offices in the Second Federal Reserve District. Mr. Feldberg was named a member of the Basle Committee on Banking Supervision in November 1993.

    Stanley Fischer is the First Deputy Managing Director of the International Monetary Fund, a post he assumed in September 1994. Prior to taking up his position at the IMF, Mr. Fischer was the Killian Professor and Head of the Department of Economics at MIT (Massachusetts Institute of Technology). Mr. Fischer took the B.Sc. (Econ) and M.Sc. (Econ) at the London School of Economics from 1962–66, and obtained his Ph.D. in economics at MIT in 1969. He was Assistant Professor of Economics at the University of Chicago until 1973, when he returned to the MIT Department of Economics as an Associate Professor. He became Professor of Economics in 1977. He has held visiting positions at the Hebrew University, Jerusalem, and at the Hoover Institution at Stanford. From January 1988 to August 1990 he served as Vice President, Development Economics and as Chief Economist at the World Bank. He has also held consulting appointments with the U.S. State Department, the U.S. Treasury, the World Bank, the International Monetary Fund, and the Bank of Israel.

    Pierre Francotte is a member of the Management Team of the Euroclear Operations Centre, the dedicated unit of the Brussels branch of Morgan Guaranty Trust Company of New York that operates the Euroclear System. He is responsible for the Transaction Processing Division, which is in charge of the relationship with securities custodians and cash correspondents, and of the delivery of the settlement, cash, securities lending, and collateral management services. Previously, Mr. Francotte was head of the Legal Division. Mr. Francotte joined the Brussels office of Morgan Guaranty Trust Company of New York in 1993. Previously, Mr. Francotte was Assistant General Counsel at the International Monetary Fund. Mr. Francotte received a law degree and a postgraduate degree in financial and economic law from Brussels University in Belgium. He also earned a postgraduate law degree in comparative legal studies from Cambridge University in England.

    François Gianviti studied at the Sorbonne, the Paris School of Law, and New York University. He obtained a licence és lettres from the Sorbonne in 1959, a licence en droit from the Paris School of Law in 1960, a diplôme d’études supérieures de droit pénal et science criminelle in 1961, a diplôme d’études supérieures de droit privé in 1962, and a doctorat d’Etat en droit in 1967. From 1967 to 1969, he was a Lecturer in Law, first at the Nancy School of Law and subsequently at the Caen School of Law. In 1969, Mr. Gianviti obtained the agrégation de droit privé et science criminelle of French universities and was appointed Professor of Law at the University of Besançon. From 1970 through 1974, he was seconded to the Legal Department of the International Monetary Fund, where he served as Counsellor and, subsequently, as Senior Counsellor. In 1974, he became Professor of Law at the University of Paris XII, where he taught civil and commercial law, banking and monetary law, and private international law. He served as Dean of its School of Law from 1979 through 1985. In 1986, Mr. Gianviti became Director of the Legal Department and, in 1987, General Counsel of the International Monetary Fund. He is a member of the Committee on International Monetary Law of the International Law Association and has published books on property and many articles on aspects of French and international law.

    Thomas Glaessner joined Soros Fund Management LLC as a Senior Strategist in February 1998. Until the end of 1997, Mr. Glaessner was a Principal Financial Economist within the World Bank East Asia Region. Over this period he participated in numerous World Bank/IMF missions to East Asia in support of the restructuring of East Asian financial systems, particularly in Thailand and Korea during 1996–97. Mr. Glaessner was a Senior Financial Economist in the Latin American region of the World Bank between January 1988 and December 1995. Finally, prior to working for the World Bank, Mr. Glaessner spent five years with the International Finance Division of the Federal Reserve Board. In this capacity he worked in three different sections—Quantitative Studies, U.S. International Transactions, and International Development. Mr. Glaessner completed his Ph.D. in economics and finance at the University of Virginia and also undertook graduate work in economics and finance at the University of Wisconsin, Madison. He received his B.A. in economics and mathematics from Kenyon College and is a member of Phi Beta Kappa.

    Richard K. Gordon is Senior Counsel in the Legal Department of the IMF. He received a B.A. in history from Yale and a J.D. from Harvard. After joining the bar, Mr. Gordon practiced law with the firm Dewey Ballantine and spent a term as visiting lecturer in law at the School of Oriental and African Studies, University of London. He was appointed as the Deputy Director of the Harvard International Tax Program and as an Associate at the Harvard Institute for International Development in 1990. In 1991, he joined the Harvard Law School faculty. For the spring semester of 1999, Mr. Gordon was the Distinguished Visiting Professor of Law at Case Western Reserve University.

    Sean Hagan is an Assistant General Counsel at the International Monetary Fund. Prior to beginning work at the IMF in 1990, Mr. Hagan was in private practice, first in the New York office of Whitman Breed Abbot and Morgan, 1986–87, and subsequently in Tokyo at Masuda & Ejiri, 1987–90. Mr. Hagan received his J.D. from the Georgetown University Law Center (1986) and also holds a Master of Science in international economic policy from the London School of Economics and Political Science. He received his undergraduate degree from the University of London (Kings College).

    Joyce M. Hansen has been Deputy General Counsel and Senior Vice President of the Federal Reserve Bank of New York since July 1993. Ms. Hansen joined the FRBNY in 1979 and was appointed an officer in 1983. She served as the Chairman of the Federal Reserve Banks’ Subcommittee of Legal Counsel on Securities and Fiscal Service during 1992-95. She has served on various task forces and subcommittees of the Basle Committees on Banking Supervision and Payment and Settlement Systems. Ms. Hansen received a juris doctor degree cum laude from Georgetown University Law Center in 1979 and a bachelor of arts degree magna cum laude from Bryn Mawr College in 1974.

    Martin Hess received his degree in law and political science from the University of Zurich in 1978. He then spent two years as assistant at the Institute of International Law and International Constitutional Law at the University of Zurich. In 1984, he received his doctorate degree. He was admitted as a member of the Zurich Bar in 1987 and, in the same year, he joined the Legal Service of the Swiss National Bank where he last served as Assistant Director and Deputy Head of the Legal Service. Between 1994 and 1996, he worked as an associate in a Zurich law firm. In 1996 he joined Suter Attorneys at Law, a correspondent law firm to PricewaterhouseCoopers, where he became a partner in 1997. Mr. Hess’s practice focuses on banking and capital market law as well as on corporate law. In 1994 and 1997 he was a member of two missions of the International Monetary Fund to countries in Eastern Europe.

    Spence Hilton is Assistant Vice President in the Markets Group at the Federal Reserve Bank of New York. Mr. Hilton shares responsibility for formulating daily open market operations and has been involved with issues pertaining to the implementation of monetary policy since 1990. Since joining the New York Fed in 1981, he has also worked in the International Trade Division and the Domestic Business Conditions Division of the Research Function. Mr. Hilton holds a Ph.D. in economics from the University of Wisconsin.

    William E. Holder received his LL.B. and his B.A. from the University of Melbourne. He subsequently earned an LL.M. from Yale University and a Diploma from the Hague Academy of International Law. He has served as a Tutor in Law at the University of Melbourne, a Professor of Law at the University of Mississippi, a Reader in Law at the Australian National University, and an advisor on international law for the Australian Department of Foreign Affairs. Mr. Holder joined the International Monetary Fund in 1976 and has served as Deputy General Counsel since 1986. He is co-editor of The International Legal System: Cases and Materials with Emphasis on the Australian Perspective (Butterworths, 1972) and is the author of many articles on international law subjects.

    Claudio M. Loser is the Director of the Western Hemisphere Department of the International Monetary Fund, a post he assumed in 1994 after holding a number of positions with the IMF since 1972. Before joining the IMF, Mr. Loser worked as Professor of International Economics at the Universidad Nacional de Cuyo in Argentina and as Consultant for the Andean Pact in Lima, Peru. In 1967 he earned an M.A. in economics from the University of Chicago, in 1968 he obtained the Contador Público from the Universidad Nacional de Cuyo in Argentina, and in 1971, a Ph.D. in economics from the University of Chicago.

    J. Virgil Mattingly, Jr. received his undergraduate and law degrees from George Washington University. After four years of service as an attorney for the U.S. Army Judge Advocate General Corps, he joined the Board of Governors of the Federal Reserve System in 1974. He currently serves as General Counsel. Under his direction, the Legal Division is responsible for providing legal counsel to the Board on supervisory, regulatory, monetary, legislative, litigation, and other matters arising under the Board’s jurisdiction, as well as issues relating to the Board’s internal operations.

    Geoffrey P. Miller is Professor of Law at New York University Law School and Director of the Law School’s Center for the Study of Central Banks, an institution that studies the activities of bank regulators around the world. Professor Miller attended Columbia University Law School, where he was Editor-in-Chief of the Law Review, served as a judicial clerk to Judge Carl McGowan of the U.S. Court of Appeals for the District of Columbia Circuit and to Justice Byron White of the U.S. Supreme Court, and worked as an attorney in the U. S. Department of Justice Office of Legal Counsel and at a private law firm before entering law teaching. Prior to joining NYU in 1995, Miller was the Kirkland & Ellis Professor at the University of Chicago Law School, where he served as Associate Dean, Director of the Program in Law and Economics, and editor of the Journal of Legal Studies.

    Robert H. Mundheim is of Counsel, Shearman & Sterling. Before taking a position with Shearman & Sterling, he was Senior Executive Vice President and General Counsel of Salomon Smith Barney Holdings Inc., and Managing Director and member of the Management Board of Salomon Brothers Inc. and Smith Barney Inc. Prior to joining Salomon Inc. in September 1992, Mr. Mundheim was Co-Chairman of the New York law firm of Fried, Frank, Harris, Shriver Sc Jacobson and University Professor of Law and Finance at the University of Pennsylvania Law School, where he had taught since 1965. He served as Dean of that institution for seven and a half years (1982–89). Among his other professional activities, Mr. Mundheim has been General Counsel to the U.S. Treasury Department (1977–80); Special Counsel to the Securities and Exchange Commission (1962–63); and Vice Chairman, Governor-at-Large, and a member of the Executive Committee of the National Association of Securities Dealers (1988–91). He is also a member of the Council of the American Law Institute. Mr. Mundheim received a B.A. (magna cum laude) from Harvard College in 1954 and an LL.B. (magna cum laude) from Harvard Law School three years later.

    John M. Niehuss is the General Counsel of the Inter-American Development Bank, a position he assumed in January 1992. Prior to that he was in private law practice. He has also served at the World Bank as Director of Cofinancing and Financial Advisory Services and as a loan officer. He was Vice President, International, for Merrill Lynch Capital Markets. Mr. Niehuss’ government service includes positions in the U.S. Treasury Department as Senior Deputy Assistant Secretary for International Economic Policy and as Deputy Assistant Secretary for Energy and Investment Policy. He also served as Assistant Director for the Council on International Economic Policy. Mr. Niehuss earned a B.A. in economics from Amherst College in 1958 and received a J.D. from the University of Michigan Law School in 1962. He has also studied at the London School of Economics and the Faculte Internationale de Droit Compare.

    Kathleen A. O’Neil is executive vice president and head of the financial services group, as well as a member of the Management Committee of the Federal Reserve Bank of New York. Her responsibilities include overseeing business development, cash, check, funds, securities, and fiscal services. She served as Executive Vice President of the corporate group from March 1995 until February 1998, functioning concurrently as the bank’s chief administrator, chief financial officer, and senior risk officer. She has held a variety of positions in several of the bank’s businesses and in Federal Reserve System groups since 1976. Ms. O’Neil earned a B.S. degree in economics from John Carroll University, Cleveland, and an M.B.A. degree in finance from the Wharton Graduate School of Business of the University of Pennsylvania.

    Andrés Rigo, a national of Spain, is the Deputy General Counsel, Operations, of the World Bank. He has a law degree from the University of Madrid and a Ph.D. in international law from the University of Cambridge. He joined the World Bank in April 1973 after being Associate Professor of International Law at the Universidad Autonoma of Madrid and adviser to the government of Venezuela on the law of the sea. In August 1982, he was promoted to Chief Counsel, and in that capacity he headed several divisions of the department, in particular the Africa Division since 1987. He served as Assistant General Counsel, Operations, from May 1992 until 1994 when he was promoted to his current position.

    James Steven Rogers is Associate Dean for Academic Affairs and Professor of Law at Boston College Law School. He received his A.B. summa cum laude from the University of Pennsylvania in 1973, and a J.D. magna cum laude from Harvard Law School in 1976. He has taught commercial law, contracts, bankruptcy, corporations, restitution, and constitutional law. Professor Rogers has participated in various recent and current projects to revise the American Uniform Commercial Code (UCC), including the project on negotiable instruments (UCC Articles 3 and 4) in 1989–90, and the current project on secured transactions (UCC Articles 9). Professor Rogers served as Reporter (principal drafter) for the Drafting Committee to Revise UCC Article 8.

    Debra A. Valentine is the Federal Trade Commission’s first female General Counsel, the Commission’s chief legal officer and adviser. Ms. Valentine joined the Federal Trade Commission in May 1995 as Deputy Director for Policy Planning. Before coming to the Commission, Ms. Valentine was a partner at O’Melveny & Myers, where she specialized in complex civil litigation and regulatory matters. Ms. Valentine graduated Phi Beta Kappa from Princeton University in 1976, spent a year in Munich, Germany as a Fulbright Scholar, and went to Yale Law School, where she was an editor on the Tale Law Journal. She clerked on the U.S. Court of Appeals for the Third Circuit before coming to Washington, D.C.

    Thomas P. Vartanian is the Managing Partner of the Washington office of Fried, Frank, Harris, Shriver & Jacobson. He is also Chairman of the office’s Corporate Department and head of its Financial Institutions Group, which represents a wide array of financial services companies and electronic money and technology firms. Mr. Vartanian is an Adjunct Professor in the graduate law program at Georgetown University Law Center and incoming Chairman of the American Bar Association’s Committee on Cyberspace Law. Prior to joining Fried Frank, Mr. Vartanian was the General Counsel of the Federal Home Loan Bank Board and the Federal Savings and Loan Insurance Corporation. Prior to that, he was Special Assistant to the Chief Counsel of the Office of the Comptroller of the Currency and Senior Trial Litigator for the agency. He has been a staff counsel to the Depository Institution’s Deregulation Committee, the Vice President’s Task Group on Regulation of Financial Services, and the Administrative Conference of the United States.

    Antonio Sainz de Vicuña is the General Counsel of the European Monetary Institute (EMI). Prior to joining the EMI, he held positions as Chief International Legal Counsel of Banco Español, Chief Legal Adviser to Spain’s Ministry of Foreign Affairs, member of the Secretariat of State for the European Community, legal adviser to Spain’s Deputy Prime Minister and Minister of Economy, and legal adviser to the Ministry of Finance dependencies in Vizcaya and Navarra. Mr. Sainz de Vicuña graduated in economic sciences and in law from the Universidad Computense de Madrid in 1971, and holds a diploma in international law from Cambridge University.

    Gary M. Welsh is the Director for Regulatory Advisory Services at PricewaterhouseCoopers in Washington, D.C. He joined PricewaterhouseCoopers (PwC) in January 1995 as a Director in the Regulatory Advisory Services practice in Washington, D.C. and engages in financial sector consulting for U.S. and non-U.S. banks, foreign governments, central banks, and financial regulatory agencies. Mr. Welsh also provides support to PwC audit, tax, and management consulting staff on bank regulatory matters and issues, and represents PwC in bank trade association and other professional fora. Prior to joining PwC, Mr. Welsh was General Counsel of the Institute of International Bankers in New York City. He has also been a partner in a Washington, D.C. law firm and was an Assistant General Counsel of the Federal Reserve Board in the 1970s. Mr. Welsh received his B.A. degree magna cum laude from Harvard University and his law degree cum laude from Harvard Law School.

    COMMENTATORS

    Michael Decker currently serves as Vice President, Policy Analysis for The Bond Market Association, representing securities firms and banks that underwrite, trade, and sell debt securities, both domestically and internationally. Mr. Decker manages public policy development and analysis in the Association’s Washington office. He joined The Bond Market Association in 1990. Before that, he was a financial consultant to the U.S. Agency for International Development. He graduated from the University of North Carolina at Chapel Hill in 1986 with a B.A. in political science, and in 1989 earned a master of public management degree with a concentration in public finance from the University of Maryland School of Public Affairs.

    John D. Hawke, Jr. is the Comptroller of the Currency, an appointment he assumed on December 8, 1998. The Office of the Comptroller of the Currency regulates national banks. Prior to that he was the Under Secretary of the Treasury for Domestic Finance. In that position, he oversaw the development of policy and legislation in the areas of financial institutions, Treasury securities and public debt management, capital markets, government financial management services, federal lending, and government-sponsored enterprises. Prior to joining Treasury, Mr. Hawke was a senior partner at the law firm of Arnold & Porter. Mr. Hawke has been an adjunct professor of law at the Georgetown University Law Center, where he taught federal regulation of banking. He has also taught courses on bank acquisitions and financial regulation at the Columbia University School of Law and at the Boston University School of Law.

    Douglas H. Jones is currently the Senior Deputy General Counsel of the FDIC Legal Division responsible for bank and thrift supervisory activities and legislation. His responsibilities include the development of legislative and regulatory initiatives, oversight of the agency’s administrative enforcement activities, and the supervision of complex financial assistance and bank resolution transactions. He is a 1973 graduate of the University of Maryland School of Law. He has been with the FDIC for 24 years and has been a deputy general counsel for the last 17 years. His previous positions at the FDIC have included Special Assistant to the Chairman, Special Counsel to the General Counsel, and Acting General Counsel.

    Lucee S. Kirka has been a Senior Counsel with the SEC since 1993 and joined the SEC’s Office of International Affairs in April 1997. From 1992 through 1998, she was with the SEC’s Division of Enforcement. Ms. Kirka received a B.S. in business administration with a concentration in finance from California State University, Long Beach, and a J.D. degree from the University of Southern California. Her professional experience includes six years of private practice.

    Herbert V. Morais received his bachelor of laws degree from the University of Singapore and his master of laws and doctor of juridical science degrees in international law from Harvard Law School, where he was a Fulbright and Harvard Scholar. From 1968 to 1970, he was Sub-Dean and Lecturer in Law at the University of Singapore. During 1970–73, he was in private practice, first with the law firm of Donaldson & Burkinshaw in Kuala Lumpur and Singapore, and then with Sullivan & Cromwell in New York. For the past 26 years, Mr. Morais has been a practicing international lawyer, holding senior legal positions with the Asian Development Bank, the World Bank, and the International Monetary Fund, where he has served as Assistant General Counsel since March 1994. As Chief Counsel in the World Bank, Mr. Morais was the principal lawyer responsible for negotiating World Bank participation in several major sovereign debt rescheduling transactions (particularly under the Brady initiative) and in several project finance and cofinancing transactions. As Assistant General Counsel in the IMF, Mr. Morais works primarily on general legal issues, new initiatives in the areas of international monetary and financial law, and governance and legal reform.

    Kathleen M. O’Day graduated from Assumption College in Worcester, Massachusetts and received her J.D. from Boston College Law School. Ms. O’Day currently serves as Associate General Counsel in the Legal Division of the Board of Governors of the Federal Reserve System. Her areas of responsibility include legislative and regulatory matters relating to foreign banks operating in the United States and U.S. banks operating abroad and issues arising in connection with international trade agreements.

    Jacques J. Polak, a citizen of the Netherlands, holds a Ph.D. in economics from the University of Amsterdam. After working in the League of Nations (1937–43), the Netherlands Embassy in Washington (1943–44), and the United Nations Relief and Rehabilitation Organization (1944–46), he joined the staff of the International Monetary Fund in 1947. From 1958, he was the IMF’s Director of Research and from 1966 also its Economic Counselor. After retiring from these positions, he served from 1981 to 1986 as a member of the Executive Board of the IMF. From 1987 to 1997, he was the president of the Per Jacobsson Foundation in Washington.

    Pierre Poret is with the Private Office of the Secretary-General of the OECD. He joined the OECD in 1986 as an economist in the Economics Department. In 1991, he became Principal Administrator in the OECD Directorate for Fiscal, Financial, and Enterprise Affairs, in charge of the implementation of the OECD Codes of Liberalisation and related analytical work, reviews of countries applying to OECD membership, and OECD outreach activities in international capital movements and trade in financial services. He was also part of the OECD Secretariat team working on the proposed Multilateral Agreement on Investment, in respect of financial matters. Mr. Poret is a French citizen; he graduated from Paris IX University in 1982 with a doctorate in economics.

    William A. Ryback is the Senior Officer responsible for the oversight of Supervision Operations of the Board of Governors of the Federal Reserve System. He coordinates the System’s supervision of bank-holding companies, state member banks, foreign banking organizations, capital markets and specialty areas including Trust, EDP, and Section-20 companies. Formerly, Mr. Ryback was responsible for implementation of the enhanced oversight program for foreign banking operations in the United States. Mr. Ryback was the Board of Governor’s representative on the Basle Committee on Banking Supervision from 1986 to 1994. Prior to joining the Board in March 1986, Mr. Ryback held various positions at the Office of the Comptroller of the Currency, his last position being Director of Multinational and Regional Bank Policy. He holds a B.S. degree in finance from Seton Hall University.

    Henry N. Schiffman received a B.A. from Cornell University and a J.D. from New York University. He was a Fulbright Fellow at the Faculty of Law and Economics of the University of Paris. His legal career involved work at the Board of Governors of the Federal Reserve System in Washington and the Organization for Economic Cooperation and Development Secretariat in Paris. He is currently a consultant at the International Monetary Fund, where he provides technical assistance on central bank, commercial bank, and bankruptcy law.

    Richard B. Smith is a retired partner and now senior counsel of Davis Polk & Wardwell in New York City. He is a former Commissioner of the U.S. Securities and Exchange Commission (1967–71) and a former member of the Council of the Administrative Conference of the U.S. (1971–74). He is a member of the American Law Institute, having been an adviser to its Federal Securities Code (1978) and Principles of Corporate Governance (1992) projects. He was a member of the U.S. Working Committee for the Group of Thirty Clearance and Settlement Project (1989–95). He was also a member of the Drafting Committee to Revise Article 8 of the Uniform Commercial Code (1994) and is presently a Uniform Law Commissioner for the state of New York. He is a graduate of Yale College and the University of Pennsylvania Law School.

    Robert D. Strahota has been an Assistant Director in the SEC’s Office of International Affairs since September 1993. During 1992–93, Mr. Strahota served as SEC Senior Adviser to the Polish Securities Commission and was awarded an Officer’s Cross for meritorious service to the Polish Republic. During 1991–92, he was an Attorney-Fellow in the SEC’s Office of General Counsel. Mr. Strahota also is an Adjunct Professor at the Georgetown University Law Center where he teaches a graduate course on Global Securities Markets. Mr. Strahota received a B.A. degree in economics and an M.B.A. degree with concentrations in accounting and finance from Cornell University, and a J.D. degree from the Catholic University of America School of Law. His professional experience includes 19 years of private practice with the law firm of Kirkland & Ellis and eight years in the SEC’s Division of Corporation Finance.

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