Chapter

Appendix III: Principal Policy Decisions of the Executive Board

Author(s):
International Monetary Fund
Published Date:
October 2004
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Technical Assistance–Framework Administered Account–Establishment of China Technical Assistance Subaccount

In accordance with the terms and conditions of the Instrument establishing the Framework Administered Account for Technical Assistance Activities (Decision No. 10942-(95/33)),1 as amended, the Fund hereby approves the establishment of the “China Technical Assistance Subaccount,” which shall be used by the Fund to administer resources to be contributed by the government of the People’s Republic of China, as described in EBS/03/61 (5/16/03).

Decision No. 13015-(03/49)

Adopted May 23, 2003

Technical Assistance–Framework Administered Account-Establishment of Iraq Technical Assistance Subaccount

In accordance with the terms and conditions of the Instrument establishing the Framework Administered Account for Technical Assistance Activities (Decision No. 10942-(95/33)),2 as amended, the Fund hereby approves the establishment of the “Technical Assistance Subaccount for Iraq,” which shall be used by the Fund to administer resources to be contributed by the Governments of Australia.

Canada, Italy, and the United Kingdom, and any subsequent Contributors, as described in EBS/03/105 (7/15/03).

Decision No. 13062-(03/72)

Adopted July 22, 2003

Overdue Financial Obligations–Strengthened Cooperative Strategy–Review

The Fund has reviewed progress under the strengthened cooperative strategy with respect to overdue financial obligations to the Fund as described in EBS/03/118 (8/14/03). The Fund reaffirms its support for the strengthened cooperative strategy and agrees to extend the availability of the rights approach until end-August 2004 (EBS/03/118, 8/14/03).

Decision No. 13080-(03/80)

Adopted August 21, 2003

General Data Dissemination System–Amendment

The Executive Directors approve the draft amendment to the General Data Dissemination System as set forth in SM/03/212, Sup. 4 (10/29/03).

Decision No. 13126-(03/102)

Adopted November 6, 2003

Income Position for FY2004–Review

The Fund has reviewed the income position for FY2004 in accordance with Rule 1-6(4)(b) (EBS/03/163, 12/5/03).

Decision No. 13145-(03/114)

Adopted December 12, 2003

East African Development Bank–Termination of Status as Prescribed Holder of SDRs

The Fund notes that the status of the East African Development Bank as a prescribed holder of SDRs has been terminated as of December 10, 2003, and concurs in the arrangement made by the East African Development Bank to sell its SDR holdings in a transaction by agreement on February 5, 2004 (EBS/03/179, 12/30/03).

Decision No. 13167-(04/2)

Adopted January 8, 2004

Cooperation with Investigations on Fund Activities by Auditing Institutions of Members–Procedures

The Executive Board approves the procedures set forth in SM/04/7, 1/12/04.

Decision No. 13172-(04/6)

Adopted January 20, 2004

Eleventh General Review of Quotas–Period for Consent to Increases–Extension

Pursuant to Paragraph 4 of the Resolution of the Board of Governors No. 53-2,3 “Increase in Quotas of Fund Members-Eleventh General Review,” the Executive Board decides that notices of consent from members to increases in their quotas must be received in the Fund by 6:00 p.m., Washington time, on July 31, 2004 (EBD/04/6,1/21/04).

Decision No. 13181-(04/10)

Adopted January 28, 2004

Framework Administered Account for Technical Assistance Activities–Canadian Technical Assistance Subaccount

In accordance with the terms and conditions of the Instrument establishing the Framework Administered Account for Technical Assistance Activities (Decision No. 10942-(95/33)),4 as amended, the Fund hereby approves the establishment of the “Canadian Technical Assistance Subaccount,” which shall be used by the Fund to administer resources to be contributed by the Government of Canada, as described in EBS/04/7 (EBS/04/7,1/21/04).

Decision No. 13182-(04/10)

Adopted January 28, 2004

Strengthening the Effectiveness of Article VIII, Section 5

1. Pursuant to Article VIII, Section 5, the Fund decides that all members shall provide the information listed in Annex A to this decision, which is necessary for the Fund to discharge its duties effectively. Members shall provide the data specified in Annex A for the periods commencing after December 31, 2004. Annex A shall be reviewed no later than December 31, 2007.

2. When a member fails to provide information to the Fund as specified in Article VIII, Section 5, or in a decision of the Fund adopted pursuant to that Article including information listed in Annex A (hereinafter “information required under Article VIII, Section 5”), the procedural framework set forth in paragraphs 5 through 17 below shall apply. Failure to provide information includes both the nonprovision of information and the provision of inaccurate information.

3. A member has an obligation to provide information required under Article VIII, Section 5, to the best of its ability. Therefore, there is no breach of obligation if the member is unable to provide information required under Article VIII, Section 5, or to provide more accurate information than the information it has provided. However, a member that is unable to provide final data is obligated to provide provisional data to the best of its ability until it is in a position to provide the Fund with final data. When assessing a member’s ability to provide information, the Fund will give the member the benefit of any doubt.

4. In the context of performance criteria associated with the use of the Fund’s general resources, a member may be found in breach of its obligation under Article VIII, Section 5, only if (i) it has reported that a performance criterion was met when in fact it was not, or that a performance criterion was not observed by a particular margin and it is subsequently discovered that the margin of non-observance was greater than originally reported; and (ii) a purchase was made on the basis of the information provided by the member, or the information was reported to the Executive Board in the context of a review that was subsequently completed or of a decision of the Executive Board to grant a waiver for non-observance of the relevant performance criterion.

Procedures Prior to Report by the Managing Director to the Executive Board

5. Whenever it appears to the Managing Director that a member is not providing information required under Article VIII, Section 5, the Managing Director shall call upon the member to provide the required information; before making a formal representation to the member, the Managing Director shall inform, and enlist the cooperation of, the Executive Director for the member. If the member persists in not providing such information and has not demonstrated to the satisfaction of the Managing Director that it is unable to provide such information, the Managing Director shall notify the member of his intention to make a report to the Executive Board under Rule K-l for breach of obligation unless, within a specified period of not less than a month, such information is provided or the member demonstrates to his satisfaction that it is unable to provide such information.

6. Whenever it appears to the Managing Director that a member has provided inaccurate data on information required under Article VIII, Section 5, the Managing Director shall consult with the member to assess whether the inaccuracy is due to a lack of capacity on the part of the member. If, after consulting with the member, the Managing Director finds no reason to believe that the inaccuracy is due to a lack of capacity on the part of the member, he shall notify the member of his intention to make a report to the Executive Board for breach of obligation under Rule K-l unless the member demonstrates to his satisfaction within a period of not less than one month that it was unable to provide more accurate information.

7. If the Managing Director concludes that the nonprovision of information or the provision of inaccurate information is due to the member’s inability to provide the required information in a timely and accurate fashion, he may so inform the Executive Board. In that case, the Executive Board may decide to apply the provisions of paragraph 10 below.

Report by the Managing Director

8. After the expiration of the period specified in the Managing Director’s notification to the member, the Managing Director shall make a report to the Executive Board under Rule K-l for breach of obligation, unless the Managing Director is satisfied that the member’s response meets the requirements specified in his notification. The report shall identify the nature of the breach and include the member’s response (if any) to the Managing Director’s notification, and may recommend the type of remedial actions to be taken by the member.

Consideration of the Report

9. Within 90 days of the issuance of the Managing Director’s report, the Executive Board will consider the report with a view to deciding whether the member has breached its obligations. Before reaching a decision, the Executive Board may request from the staff and the authorities additional clarification of the facts respecting the alleged breach of obligation; the Executive Board will specify a deadline for the provision of such clarification.

10. If the Executive Board finds that the member’s failure to provide information required under Article VIII, Section 5 is due to its inability to provide the information in a timely and accurate fashion, the Executive Board may call upon the member to strengthen its capacity to provide the required information and ask the Managing Director to report periodically on progress made by the member in that respect. The member may request technical assistance from the Fund.

11. (a) If the Executive Board finds that the member has breached its obligation, the Executive Board may call upon the member to prevent the recurrence of such a breach in the future and to take specific measures to that effect. Such measures may include the implementation of improvements in the member’s statistical systems or any other measures deemed appropriate in view of the circumstances.

  • (b) In addition, if the Executive Board finds that the member is still not providing the required information, the Executive Board will call upon the member to provide such information.
  • (c) The Executive Board will specify a deadline for taking any remedial actions specified under (a) and (b); in principle, the deadline will not exceed 90 days for actions specified under (b). The decision may note the intention of the Managing Director to recommend the issuance of a declaration of censure if the specified actions are not implemented within the specified period. In order to assist the Executive Board in identifying the appropriate actions to address a breach of obligation under Article VIII, Section 5, the member may, before the Board meeting, provide the Executive Board with a statement specifying the remedial actions it intends to take and a proposed time frame. The member may also request technical assistance from the Fund.
  • (d) At the expiration of the period specified by the Executive Board, the Managing Director shall report to the Executive Board on the status of the specified actions. If the member has not taken the specified actions within the specified period, and depending on the circumstances of such failure, the Managing Director may recommend and the Executive Board may decide (i) to extend the period before further steps under the procedural framework are taken; (ii) to call upon the member to take additional remedial actions within a specified time frame; or (iii) to issue a declaration of censure against the member.

Declaration of Censure

12. If a member fails to implement the actions specified by the Executive Board before the established deadline, the Managing Director may recommend and the Executive Board may decide to issue a declaration of censure. Before the adoption of a declaration of censure, the Executive Board may issue a statement to the member setting out its concerns and giving the member a specified period to respond.

13. The declaration of censure will identify the breach of obligation under Article VIII, Section 5, and the specified remedial actions the member has failed to take within the specified time frame. The declaration may specify a new deadline for the implementation by the member of the specified remedial actions; in addition, the declaration may identify further remedial actions for the member to implement before the specified deadline. It will note that the member’s failure to implement any of the actions called for in the declaration within the specified time frame may result in the issuance of a complaint for ineligibility under Article XXVI (a) and the imposition of this measure. At the expiration of the period specified by the Executive Board, the Managing Director shall report to the Executive Board on the status of the specified actions.

Sanctions Under Article XXVI

14. Following the adoption of a declaration of censure, if the Executive Board finds that the member has failed to implement any of the actions called for in the declaration within the specified time frame, the Managing Director may issue a complaint to the Executive Board and recommend that the Executive Board declare the member ineligible to use the general resources of the Fund for its breach of obligation under Article VIII, Section 5. The Executive Board decision declaring the member ineligible to use the general resources of the Fund will note that the member’s persistence in its failure to fulfill its obligations under Article VIII, Section 5, following the declaration of ineligibility may result in the issuance of a complaint for the suspension of the member’s voting and related rights and in the imposition of this measure.

15. If the member persists in its failure to fulfill its obligations under Article VIII, Section 5, for six months after the declaration of ineligibility, the Managing Director may issue a complaint and recommend that the Fund suspend the member’s voting and related rights. The Executive Board decision suspending the member’s voting and related rights will note that the member’s persistence in its failure to fulfill its obligations under Article VIII, Section 5, following the declaration of suspension of voting and related rights may result in the issuance of a complaint for compulsory withdrawal and in the initiation of the proceedings for the compulsory withdrawal of the member from the Fund.

16. If the member persists in its failure to fulfill its obligation under Article VIII, Section 5, for six months after the suspension of its voting rights, the Managing Director may initiate proceedings for the compulsory withdrawal of the member from the Fund.

17. All the Executive Board decisions arising from a breach of obligation taken under the procedures described above, including a decision to issue the statement of concern referred to in paragraph 12 above, will give rise to a public announcement with prior review of the text by the Executive Board.

Annex A

The data referred to in paragraph 1 of this decision are the national data on the following matters:

  • (i) reserve, or base money;
  • (ii) broad money;
  • (iii) interest rates, both market-based and officially determined, including discount rates, money market rates, rates on treasury bills, notes and bonds;
  • (iv) revenue, expenditure, balance and composition of financing (that is, foreign financing and domestic bank and nonbank financing) for the general and central governments respectively;5 the stocks of central government and central government-guaranteed debt, including currency and maturity composition and, if the debt data are amenable to classification on the basis of the residency or nonresidency of the holder, the extent to which the debt is held by residents or nonresidents;
  • (v) balance sheet of the central bank;
  • (vi) external current account balance;
  • (vii) exports and imports of goods and services;
  • (viii) the international reserve assets and reserves liabilities of the monetary authorities, specifying separately any reserve assets that are pledged or otherwise encumbered as well as net derivative positions;
  • (ix) gross domestic product or gross national product;
  • (x) consumer price index;
  • (xi) gross external debt;6 and
  • (xii) consolidated balance sheet of the banking system.

Decision No. 13183-(04/10)

Adopted January 30, 2004

Transparency and Fund Policies–Issues and Next Steps–Amendments to Decision

Publication Policies of the Fund

Authorization and Consent

1. The Managing Director shall arrange for publication by the Fund of the documents on the attached list, subject to the consent of the member concerned in the case of Documents 1-11, 13, and 16-17, and to the authorization of the World Bank in the case of Documents 6 and 11. For purposes of this decision (i) Documents 1-4, 6, 9-10, 11, 13, and 17 will be referred to as “Country Documents”; (ii) Documents 5, 7-8, and 16 will be referred to as “Country Policy Intentions Documents”; and (iii) Documents 14 and 15 will be referred to as “Fund Policy Documents.”

2. The Executive Board encourages each member to consent, where required, to the publication by the Fund of a document under this decision. It is recognized that for some members such publication would be a longer-term objective.

3. (a) A member’s consent to Fund publication of Documents 5-11 and 13 shall be voluntary but presumed. From July 1, 2004, onwards, a member’s consent to Fund publication of Documents 1, 2, and 4 shall also be voluntary but presumed; until July 1, 2004, consent to the publication of these documents shall be voluntary. A member’s consent to Fund publication of Documents 3 and 16-17 shall be voluntary.

  • (b) The presumption referred to in paragraph 3(a) means that Fund publication of an applicable document would be expected to occur within 30 calendar days of the Executive Board meeting at which that document was considered. If, by the time of the relevant Executive Board meeting, the member concerned has not decided whether it will consent to the publication of the document, the Secretary will remind the member to communicate its publication decision to the Fund within 30 calendar days following the Executive Board meeting. Unless the member’s explicit consent is received by the Fund, Documents 1-11,13, and 16-17 shall not be published.

4. (a) In the case of a member’s Poverty Reduction Strategy Paper (PRSP), Interim PRSR or PRSP progress report (Document 5), the Managing Director will not recommend its endorsement by the Executive Board if the member concerned does not consent to its publication.

  • (b) From July 1, 2004, onwards, the Managing Director will generally not recommend that the Executive Board approve a request to use Fund resources that would result in the relevant member obtaining exceptional access to the Fund’s general resources, unless that member consents to the publication of the associated staff report. The use of Fund resources under an arrangement that was approved before July 1, 2004, shall not be affected by this policy, unless there is a change in the terms, conditions, or timing of the arrangement. For purposes of this paragraph (i) approval of the use of Fund resources includes the completion of a review under an arrangement; and (ii) “exceptional access” means access by a member to the Fund’s general resources, under any type of Fund financing, in excess of an annual limit of 100 percent of the member’s quota, or a cumulative limit (net of scheduled repurchases) of 300 percent of the member’s quota.

5. For the purposes of paragraph 1, a member’s actual consent shall normally be communicated to the Secretary of the Fund. Such consent may be communicated by the Executive Director elected, appointed, or designated by the member.

6. In respect of documents circulated to the Executive Board for which publication requires a member’s consent, the Secretary’s cover note will indicate whether a communication has been received from the member in this regard and, if so, the member’s intentions.

Member’s Statement Regarding Fund Staff Reports

7. If a Fund staff report (Documents 1, 9, and 17) on a member is to be published under this decision, the member concerned shall be given the opportunity to provide a statement regarding the staff report and the Executive Board assessment. Such statement shall be communicated to the Fund and published together with the staff report.

Deletions to Documents which Pertain to Members

8. Prior to publication of a Country Document, or a certain Country Policy Intentions Document (Documents 7-8) that has been the basis of a Fund decision, or Document 16 the member concerned may propose deletions to the Managing Director. In the case of a serious disagreement between the Managing Director and the member, the Managing Director or the Executive Director elected, appointed, or designated by that member may refer the matter to the Executive Board for its consideration. Deletions, if any, should be limited to highly market-sensitive material, mainly on exchange rates and interest rates, in banking and fiscal areas, and in vulnerability assessments. In particular, deletions will not apply to information in the public domain or politically sensitive information that is not highly market sensitive. In the case of Documents 1, 7-9, and 16-17, information relating to any performance criterion or structural benchmark may not be deleted unless the information is of such character that would have enabled it to be communicated to the Fund in a side letter pursuant to Decision No. 12067, adopted September 22, 1999. If, in a particular case, the Managing Director is of the view that the deletions would result in a document that, if published, would undermine the overall assessment and credibility of the Fund, the Managing Director may recommend to the Executive Board that the document not be published.

9. Deletions will not generally apply to a PRSP an Interim PRSR or a PRSP progress report that has been the basis of a Fund decision.

Chairman’s Statements in Respect of Use of Fund Resources

10. After the Executive Board adopts a decision regarding a member’s use of Fund resources (including a decision completing a review under a Fund arrangement) or completes a discussion on a member’s participation in the HIPC Initiative, PRSP Interim PRSP. or PRSP progress report, a Chairman’s statement on the discussion, emphasizing the key points made by Executive Directors, will be released to the public. Where relevant, the Chairman’s statement will contain a summary of HIPC Initiative decisions pertaining to the member and the Executive Board’s views on the member’s PRSR Interim PRSP, or PRSP progress report. Waivers for nonobservance or of applicability of performance criteria, if any, will be mentioned in the press release containing the Chairman’s statement. Before the statement is released, it will be read by the Chairman to the Executive Board, and Executive Directors will have an opportunity to comment at that time. The Executive Director elected, appointed, or designated by the member concerned will have the opportunity to review the Chairman’s statement, to propose very minor revisions, if any, and to consent to its publication immediately after the Executive Board meeting. Notwithstanding the above, no Chairman’s Statement released under this paragraph shall contain any reference to a discussion or decision pertaining to (i) a member’s overdue financial obligations to the Fund, where a press release following an Executive Board decision to limit the member’s use of Fund resources because of the overdue financial obligations has not yet been issued; or (ii) a request to amend a repurchase expectation schedule pursuant to paragraph 1(b) of Decision No. 5703-(78/39)7 or paragraph 10(a) of Decision No. 4377-(74/114).8 In the case of an Executive Board meeting pertaining solely to a discussion or decision described in either (i) or (ii) above, no Chairman’s statement will be released.

Non-Publication of PINs and Chairman’s Statements in Selected Cases–Release by the Fund of Factual Statements in Lieu

11. (a) From July 1, 2004, onwards, if a member does not consent to the publication of a Public Information Notice (PIN) following the Executive Board’s conclusion of an Article IV consultation with that member, or following a post-program monitoring or ex post assessment discussion pertaining to that member (Document 13), a brief factual statement informing that the Executive Board has concluded that consultation or discussion will be released instead.

  • (b) If a member does not consent to the publication of a Chairman’s Statement (Document 10) under paragraph 10 where one would be applicable, a brief factual statement describing the Executive Board’s decision relating to that member’s use of Fund resources (including any information on waivers, HIPC initiative decisions, and endorsements of Documents 5) will be released instead.

Fund Policy Documents

12. After the Executive Board meets on policy issues, it shall be presumed, unless otherwise decided by the Executive Board, that the staff report considered at the meeting (Document 14) and/or a Public Information Notice (PIN, Document 15) on the discussion will be published. This presumption of publication shall not apply to Executive Board meetings on policy issues dealing with the administrative matters of the Fund, such as the Fund’s operating budget, personnel policies, staff retirement plan and asset management, for which the Executive Board may decide to publish Documents 14 and/or 15 on a case-by-case basis. In deciding to publish or not to publish Documents 14 and/or 15, the factors on which that decision shall be based shall include whether the discussions have reached completion or, if not completed, whether informing the public of the state of the discussions would be useful. The staff shall make a recommendation on the publication of a staff policy paper and/or a PIN on its cover. A PIN on policy discussions will be based on the decision that may have been adopted by the Executive Board or the Chairman’s summing-up of the discussions. It will also include a short section setting out background information.

13. (a) Prior to the publication of a Fund policy staff report, the Managing Director may make necessary factual corrections and deletions to the report (including of highly market-sensitive material and country-specific references). However, staff’s proposals in a report shall not be modified prior to its publication. In cases where confusion might arise from differences between staff’s proposals in the report and the Executive Board’s conclusions regarding those proposals as reflected in the PIN pertaining to the Executive Board discussion, it would be clearly indicated in the published version of the report which staff proposals the Executive Board did not endorse.

  • (b) Paragraph 13(a) shall not apply to the World Economic Outlook and Global Financial Stability Report. In accordance with established practice, staff may modify these documents prior to their publication in order to, inter alia, take into account views expressed at the relevant Executive Board meeting.

Timing and Means of Fund Publication

14. Documents may be published under this decision only after their consideration by the Executive Board, except for (i) PRSPs, Interim PRSPs, or PRSP progress reports; (ii) documents circulated to the Executive Board for information only; and (iii) Reports on Observance of Standards and Codes (ROSCs) and Assessment of Financial Sector Supervision and Regulation (AFSSR) reports. Documents under items (i)-(iii) may be published immediately after circulation to the Executive Board.

15. Publication by the Fund under this decision shall normally mean publication on its website but may include publication through other media.

Repeal of Superseded Decisions

16. The following decisions are repealed: (i) “Use of Fund Resources-Release of Chairman’s Statement,” Decision No. 11971-(99/58), adopted June 3, 1999; (ii) “Public Information Notices for Policy Matters,” Decision No. 11972-(99/58), adopted June 3, 1999; (iii) “Publication of Letters of Intent, Memoranda of Economic and Financial Policies and Policy Framework Papers,” Decision No. 11974-(99/58), adopted June 3, 1999; and (iv) “Release of Information-Reports on Recent Economic Developments and Statistical Appendices and Annexes,” Decision No. 10138-(94/61), adopted July 11, 1994. The decision set forth in EBD/98/64 (6/19/98), which was approved on a lapse-of-time basis on June 24, 1998, is repealed to the extent that it relates to the publication of the final decision and completion point documents under the HIPC Initiative.

Article XII, Section 8

17. Nothing in this decision shall be construed to be inconsistent with the power of the Fund to decide under Article XII, Section 8, by a 70 percent majority of the total voting power, to publish a report made to a member regarding its monetary or economic conditions and developments which directly tend to produce a serious disequilibrium in the international balance of payments of members.

Other Matters/Review

18. In the case of a document pertaining to a country that is not a member of the Fund (i) all references to “member” in this decision shall be taken to mean “country”; and (ii) all references to “Executive Director elected, appointed, or designated by that member” shall be taken to refer to the appropriate authorities of the country concerned.

19. This decision shall be reviewed in light of experience at regular intervals not to exceed 24 months.

List of Documents Covered by the Decision

I. Surveillance and Supporting Documents

  • Article IV and Combined Article IV/Use of Fund Resources Staff Reports
  • Selected Issues Papers and Statistical Appendices
  • Reports on Observance of Standards and Codes (ROSCs), Financial Sector Stability Assessment (FSSA) reports, and Assessment of Financial Sector Supervision and Regulation (AFSSR) reports
  • Public Information Notices (PINs) following Article IV consultations and regional surveillance discussions

II. Use of Fund Resources by a Member

  • 5. Poverty Reduction Strategy Papers (PRSPs), Interim PRSPs, and PRSP Progress Reports
  • 6. Joint Fund/World Bank Staff Assessments of PRSPs, Interim PRSPs, and PRSP Progress Reports
  • 7. Letters of Intent and Memoranda of Economic and Financial Policies (LOIs/MEFPs)
  • 8. Technical Memoranda of Understanding (TMUs) with policy content
  • 9. Use of Fund Resources, Post-Program Monitoring and Ex Post Assessment Staff Reports (excluding staff reports dealing solely with a member’s overdue financial obligations to the Fund)
  • 10. Chairman’s Statements
  • 11. Preliminary, decision point, and completion point documents under the HIPC Initiative
  • 12. Statements on Fund decisions on waivers of applicability, or for nonobservance, of performance criteria
  • 13. PINs following Executive Board discussions on post-program monitoring and ex post assessments

III. Fund Policy Documents

  • 14. Fund policy issues papers
  • 15. PINs following Executive Board discussions on policy issues

IV. Other Documents

  • 16. LOIs/MEFPs for Staff Monitored Programs (SMPs)
  • 17. Stand-alone Staff Reports on SMPs

Decision No. 13197-(04/16)

Adopted February 20, 2004

Trade-Related Balance of Payments Adjustments–Fund Support

1. The Fund is prepared to provide financial assistance to members that are experiencing balance of payment difficulties as a result of trade liberalization measures undertaken by other countries. Such assistance shall be made available (i) in the upper credit tranches under a Stand-By Arrangement, (ii) under the Extended Fund Facility, or (iii) under the Poverty Reduction and Growth Facility, and shall be subject to the general access limits established from time to time under such policies. Liberalization measures undertaken by other members would normally be limited to measures introduced either (i) under a WTO agreement or (ii) on a nondiscriminatory basis.

2. Financing under this decision may be provided to address the existing or anticipated balance of payments difficulties identified in paragraph 1 either at the time of the approval of an arrangement or completion of a program review under such an arrangement, upon the Fund’s determination that the member is implementing economic adjustment policies that are designed to address the identified balance of payments problems.

3. When making a request for financing under paragraph 2 above, the member may also request that the Fund indicate its willingness to consider providing additional financing if the balance of payments difficulties identified in paragraph 1 above that may arise during the course of the arrangement are larger than anticipated at the time of the approval of the original request under paragraph 2 above. This additional financing, which shall not exceed 10 percent of quota, may be requested by the member and be provided at any time during the period of the arrangement upon a determination by the Fund, in the context of a special review under the arrangement, that (i) the member’s adjustment program is broadly on track, and (ii) the additional financing is justified by unanticipated balance of payments difficulties of the type identified in paragraph 1.

4. Nothing in this decision shall be understood as preventing a member from requesting Fund financial assistance outside this decision to address the balance of payments problems identified in paragraph 1.

5. This decision shall be reviewed no later than April 30, 2007 (SM/04/63, Sup. 1,4/1/04).

Decision No. 13229-(04/33)

Adopted April 2, 2004

PRGF-HIPC Trust Instrument–Amendment

The Executive Board approved the following decision, with one objection from Ms. Jacklin (US):

The Instrument to Establish a Trust for Special PRGF Operations for the Heavily indebted Poor Countries and Interim PRGF Subsidy Operations (annexed to Decision No. 11436-(97/10),9 adopted February 4, 1997), as amended, shall be amended as follows:

The third sentence of Section III, Paragraph 3(e), shall be amended to read:

7. “The Trustee retains the right to commit additional assistance at the completion point, beyond that already committed, but only so as to bring the ratio of the net present value of debt-to-exports to 150 percent (or debt-to-fiscal revenue to 250 percent), if the deterioration in the member’s debt sustainability is primarily attributable to a fundamental change in the member’s economic circumstances due to exogenous factors” (EBS/04/43,3/18/04).

Decision No. 13224-(04/33)

Adopted April 1, 2004

PRGF Trust and PRGF-HIPC Trust–Reserve Account–Review

Pursuant to Decision No. 10286-(93/23) ESAF,10 adopted on February 22, 1993, as amended, the Fund has reviewed the adequacy of balances in the Reserve Account of the PRGF Trust and determines that they are sufficient to meet all obligations that could give rise to payments from the Account to lenders to the Loan Account of the PRGF Trust in the six months from April 1, 2004 to September 30, 2004.

Decision No. 13226-(04/34) PRGF

Adopted April 5, 2004

Income Position, Rate of Charge, and Burden Sharing for FY2004 and FY2005–Review–Disposition of Net Income for FY2004

1. The Fund’s net income for FY2004 derived from the application of paragraph 2 of Decision No. 12988-(03/36),11 adopted April 21, 2003, shall be placed in the Fund’s Special Reserve after the end of the financial year.

2. The expense derived from the application of International Accounting Standard 19-Employee Benefits during FY2004 shall be charged against the Fund’s Special Reserve and shall be recorded separately in the financial records of the Fund (EBS/04/55, 4/14/04).

Decision No. 13235-(04/42)

Adopted April 30, 2004

Income Position, Rate of Charge, and Burden Sharing for FY2004 and FY2005–Review–Rate of Charge on Use of Fund Resources for FY2005

1. Notwithstanding Rule 1-6(4)(a), effective May 1, 2004, the proportion of the rate of charge referred to in Rule 1-6(4) to the SDR interest rate under Rule T-1 shall be 154.0 percent.

2. The net income target for FY2005 shall be SDR 191 million. Any net income for financial year 2005 in excess of SDR 191 million shall be used to reduce retroactively the proportion of the rate of charge for financial year 2005. If net income for financial year 2005 is below SDR 191 million, the amount of projected net income for financial year 2006 shall be increased by the equivalent of that shortfall. For the purpose of this provision, net income shall be calculated without taking into account net operational income generated by the surcharges on purchases under the Supplemental Reserve Facility, the surcharge on purchases in the credit tranches and under the Extended Fund Facility or the effect on income of the implementation of International Accounting Standard 19-Employee Benefits (EBS/04/55, 4/14/04).

Decision No. 13236-(04/42)

Adopted April 30, 2004

Income Position, Rate of Charge, and Burden Sharing for FY2004 and FY2005–Review–Burden Sharing Implementation in FY2005

Section I. Principles of Burden Sharing

1. The financial consequences for the Fund that stem from the existence of overdue financial obligations shall be shared between debtor and creditor member countries.

2. The sharing shall be applied in a simultaneous and symmetrical fashion (EBS/04/55, 4/14/04).

Section II. Determination of Rate of Charge

The rate of charge referred to in Rule 1-6(4) shall be adjusted in accordance with the provisions of Section IV of this decision and Section IV of Executive Board Decision No. 12189-(00/45), adopted April 28, 2000 (EBS/04/55, 4/14/04).

Section III. Adjustment for Deferred Charges

Notwithstanding paragraph 1(a) of Section IV of Executive Board Decision No. 12189-(00/45),12 adopted April 28, 2000, the rate of charge and the rate of remuneration determined under that Section shall be rounded to two decimal places (EBS/04/55, 4/14/04).

Section IV. Amount for Special Contingent Account-1

1. An amount of SDR 94 million shall be generated during financial year 2005 in accordance with the provisions of this Section and shall be placed to the Special Contingent Account-1 referred to in Decision No. 9471-(90/98),13 adopted June 20, 1990.

2. (a) In order to generate the amount to be placed to the Special Contingent Account-1 in accordance with paragraph 1 of this Section, notwithstanding Rule 1-6(4)(a) and (b) and Rule 1-10, the rate of charge referred to in Rule 1-6(4) and, subject to the limitation in (b), the rate of remuneration prescribed in Rule 1-10 shall be adjusted in accordance with the provisions of this paragraph.

  • (b) Notwithstanding paragraph 1 above, adjustments to the rate of charge and the rate of remuneration under this paragraph shall be rounded to two decimal places. No adjustment in the rate of remuneration under this paragraph shall be carried to the point where the average remuneration coefficient would be reduced below 85 percent for an adjustment period.
  • (c) The adjustments under this paragraph shall be made as of May 1, 2004, August 1, 2004, November 1, 2004, and February 1, 2005; shortly after July 31 for the period from May 1 to July 31; shortly after October 31 for the period from August 1 to October 31; shortly after January 31 for the period from November 1 to January 31; shortly after April 30 for the period from February 1 to April 30.

3. (a) Subject to paragraph 3 of Decision No. 8780-(88/12),14 adopted January 29, 1988, the balances held in the Special Contingent Account-1 shall be distributed in accordance with the provisions of this paragraph to members that have paid additional charges or have received reduced remuneration as a result of the adjustment when there are no outstanding overdue charges and repurchases, or at such earlier time as the Fund may decide.

  • (b) Distributions under (a) shall be made in proportion to the amounts that have been paid or have not been received by each member because of the respective adjustments.
  • (c) If a member that is entitled to a payment under this paragraph has any overdue obligation to the Fund in the General Department at the time of payment, the member’s claim under this paragraph shall be set off against the Fund’s claim In accordance with Decision No. 8271-(86/74),15 adopted April 30, 1986, or any subsequent decision of the Fund.
  • (d) Subject to paragraph 4 of Decision No. 8780-(88/12), adopted January 29, 1988, if any loss is charged against the Special Contingent Account-1, it shall be recorded in accordance with the principles of proportionality set forth in (b) (EBS/04/55, 4/14/04).

Section V. Review

The operation of this decision shall be reviewed when the adjustment in the rate of remuneration reduces the remuneration coefficient to the limit set forth in paragraph 2(b) of Section IV of this decision and Section IV of Executive Board Decision No. 12189-(00/45),16 adopted April 28, 2000 (EBS/04/55, 4/14/04).

Decision No. 13237-(04/42)

Adopted April 30, 2004

Income Position, Rate of Charge, and Burden Sharing for FY2004 and FY2005–Review–Cost of Administering PRGF Trust

For financial year 2005, no reimbursement shall be made to the General Resources Account from the PRGF Trust Reserve Account for the cost of administering the PRGF Trust (EBS/04/55, 4/14/04).

Decision No. 13238-(04/42) PRGF

Adopted April 30, 2004

Income Position, Rate of Charge, and Burden Sharing for FY2004 and FY2005–Review–Surcharges on Purchases Under Supplemental Reserve Facility, and in Credit Tranches and Under Extended Fund Facility—Disposition of Net Operating Income

For financial year 2005, after meeting the cost of administering the PRGF Trust, any remaining net operational income generated by the surcharges on purchases under the Supplemental Reserve Facility and the surcharges on purchases in the credit tranches and under the Extended Fund Facility shall be placed after the end of that financial year to the General Reserve (EBS/04/55, 4/14/04).

Decision No. 13239-(04/42) SRF

Adopted April 30, 2004

Income Position, Rate of Charge, and Burden Sharing for FY2004 and FY2005–Review of System of Special Charges

The Fund has reviewed the system of special charges applicable to overdue obligations to the General Resources Account, the Structural Adjustment Facility, and the Trust Fund (EBS/04/55, 4/14/04).

Decision No. 13240-(04/42) G/SAF/TR

Adopted April 30, 2004

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