Selected Decisions and Selected Documents of the International Monetary Fund
Chapter

Article V, Sections 8 and 9 Charges and Remuneration

Author(s):
International Monetary Fund
Published Date:
April 2004
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Charges: Future Changes in Charges on Fund’s Holdings of Members’ Currencies in Excess of Quota

Changes in any schedule of charges levied under Article V, Section 8(c), (d), and (e)1 shall apply to all holdings subject to the schedule that are obtained by the Fund after the date of this decision.

Decision No. 4239-(74/67)

June 13, 1974

Surcharge on Purchases in Credit Tranches and Under Extended Fund Facility

1. The rate of charge under Article V, Section 8(b) on the Fund’s combined holdings of a member’s currency in excess of 200 percent of the member’s quota in the Fund resulting from purchases in the credit tranches and under the extended Fund facility made after the date of this decision shall be 100 basis points per annum above the rate of charge referred to in Rule I-6(4) as adjusted for purposes of burden sharing, provided that the rate on such holdings in excess of 300 percent of the member’s quota shall be 200 basis points per annum above the rate of charge referred to in Rule I-6(4) as adjusted for purposes of burden sharing.

2. This decision shall be reviewed after November 30, 2004.

Decision No. 12346-(00/117)

November 28, 2000

Charges: Media of Payment in General Resources Account

1. A member whose holdings of SDRs are insufficient for the payment of the total of estimated charges due and payable by it within the next thirty days may:

(a) obtain SDRs from the General Resources Account up to a reasonable estimate of the balance of SDRs needed for the payment; or

(b) pay the balance of the charges in the currencies of other members.

2. A member that is unable to pay charges in SDRs because it is not a participant in the Special Drawing Rights Department and has not been prescribed as an other holder may pay all charges payable under Article V, Section 8 in the currencies of other members.

3. The currencies for which the SDRs would be sold under paragraph 1(a) or that would be paid under paragraph 1(b) and paragraph 2 shall be selected by the Fund from those currencies that the Fund would receive in accordance with the operational budget in effect at the time.

Decision No. 5702-(78/39) G/S

March 22, 1978, effective April 1, 1978,

as amended by Decision No. 7096-(82/57) G/S,

April 23, 1982

Charges: Accounting for Charges from Members with Overdue Obligations

The Executive Board decides that, effective November 1, 1986, accrued charges on the use of the Fund’s general resources from a member that is overdue in meeting any financial obligation to the Fund for six months or more will not be included in accrued income unless the member is current in the payment of charges. Charges that are not included in accrued income will instead be reported as deferred income, and will be recorded as income only when paid. Once charges from a member have been reported as deferred income, charges subsequently accrued will not be included in accrued income until the member becomes current in the payment of charges.

Decision No. 8433-(86/175)1

October 31, 1986

Charges: Special Charges on Overdue Financial Obligations to the Fund

I. Overdue Repurchases

1. …2 [T]he Fund has reviewed the rates of charge to be levied under Article V, Section 8(c) on its holdings of a member’s currency that have not been repurchased in accordance with the requirements of the Articles or decisions of the Fund.

2. Within three business days after (i) the due date for the repurchase by a member of the Fund’s holdings of its currency or (ii) the effective date of this decision, whichever is the later, the Fund shall consult with the member on the reduction of the Fund’s holdings of the member’s currency that should have been repurchased. The consultation shall take place by rapid means of communication.

3. Unless the Fund’s holdings of the member’s currency are reduced within the period referred to in Section IV below by the amount that should have been repurchased, the rate of charge on the holdings that should have been repurchased shall be increased by a percentage equal to the excess, if any, of the rate of interest on the SDR over the rate of charge levied on the holdings under Rule I-6(4). For the purposes of this calculation, any adjustments in the rate of charge referred to in Rule I-6(4) that may be made to cover deferred income or for placement to the Special Contingent Account shall not be taken into consideration.

II. Overdue Charges in the General Resources Account

A special charge equal to the rate of interest on the SDR shall be paid by a member on the unpaid amount of charges owed by it under Article V, Section 8(0) and (b).

III. Overdue Interest and Repayments on Trust Fund Loans

The Fund shall levy a special charge on (i) the amount of overdue interest on Trust Fund loans, at a rate equal to one half of the sum of the rate of interest on Trust Fund loans and the rate of interest on the SDR, and (ii) the overdue amounts of repayments of Trust Fund loans, at a rate equal to one half of the sum of the rate of interest on Trust Fund loans and the rate of interest on the SDR, less one-half percent.

IV. Waiver of Special Charges

Special charges under Sections I, II, and III above shall be levied in respect of an overdue financial obligation as of the due date or the effective date of this decision, whichever is the later, unless the obligation is discharged within ten business days after the applicable date.

Effective May 1, 1992, special charges under Sections I and II above shall not be levied on overdue obligations of a member that is overdue in meeting any financial obligation to the Fund subject to special charges under Sections I and II above for six months or more.

Effective May 1, 1993, special charges under Section III above shall not be levied on overdue obligations of a member that is overdue for six months or more in meeting any financial obligation to the Fund subject to special charges under Section III above.

V. Notification and Payment of Special Charges

1. Special charges levied under this decision shall be payable following the end of each of the Fund’s financial quarters and the member shall be notified promptly of any special charges due. The charges shall be payable on the second business day following the dispatch of the notification.

2. Special charges in respect of overdue repurchases and charges in the General Resources Account shall be paid in SDRs to that Account. Special charges in respect of overdue repayments and interests on Trust Fund loans shall be paid in U.S. dollars to the Special Disbursement Account. Such payments may be made also in SDRs to a prescribed holder on behalf of the Special Disbursement Account, provided that use of SDRs is in accordance with Decision No. 8642-(87/101) S/TR, adopted July 9, 1987.

VI. Entry into Effect and Review

This Decision will enter into effect on February 1, 1986. It will be reviewed shortly after October 31, 1986 at the time of the mid-year review of the Fund’s income position for the financial year ending April 30, 1987, and thereafter annually in connection with the annual reviews of the Fund’s income position.

Decision No. 8165-(85/189) G/TR

December 30, 1985, effective February 1, 1986,

as amended by Decision Nos. 8496-(87/3) G/TR, January 7, 1987,

8641-(87/101) G/S/TR, July 9, 1987,

8923-(88/110) G/TR, July 21, 1988,

10000-(92/58) G/TR, April 17, 1992,

10337-(93/49) G/TR, April 9, 1993,

10352-(93/49) G/TR, April 9, 1993,

10551-(94/1) G/TR, January 7, 1994,

and 13001-(03/39) G/TR,

April 25, 2003

Charges: System of Special Charges—2003 Review

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/03/43, 4/7/03)

Decision No. 12991-(03/36) G/SAF/TR

April 21 2003

Charges: Setoff in Connection with a Retroactive Reduction of Charges Due by Members in Arrears

1. When the Fund decides upon a retroactive reduction in the rate of charge specified in Rule I-6(4), the amount to be paid to a member that has charges or repurchases overdue, in the General Resources Account, on the effective date of the payment by the Fund, shall be set off pro tanto, as of that date, against such overdue obligations in the following manner: the member shall be requested to specify which overdue obligations, among the categories listed in paragraph 2, it wishes to discharge by the setoff; in the absence of a response by the member within seven business days after the request, the setoff shall apply to the member’s overdue obligations, within the categories listed in paragraph 2, in the descending order of maturities.

2. The setoff under paragraph 1 shall apply to:

(a) special charges due on the amount of overdue charges under Executive Board Decision No. 8165-(85/189) G/TR, December 30, 1985;

(b) special charges due on the amount of overdue repurchases under Article V, Section 8(c);

(c) charges due under Article V, Section 8(a) or (b);

(d) overdue repurchase obligations.

Decision No. 8271-(86/74)

April 30, 1986

Corresponds to Article V, Section 8(c), (d), and (e) of the Articles of Agreement after the Second Amendment.

Replaced Decision No. 7930-(85/41), March 13, 1985.

Deleted by Decision No. 10551-(94/1) G/TR, January 7, 1994.

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