Reports of the Joint Procedures Committee
- International Monetary Fund. Secretary's Department
- Published Date:
- November 1994
|Vice Chairmen —||Niger, Sweden|
|Reporting Member —||Trinidad and Tobago|
Other Members: Botswana, Brazil, Bulgaria, Cape Verde, France, Germany, India, Japan, Jordan, Kazakhstan, Namibia, Peru, Philippines, Russian Federation, Saudi Arabia, Switzerland, United Kingdom, United States, Uruguay
October 6, 1994
At the meeting of the Joint Procedures Committee held on October 5, 1994, items of business on the agenda of the Board of Governors of the International Monetary Fund were considered.
The Committee submits the following report and recommendations:
1. 1994 Annual Report
The Committee noted that provision had been made for the annual discussion of the business of the Fund.
2. Report of the Chairman of the Interim Committee
The Committee noted the presentation made by the Chairman of the Interim Committee.2
The Committee recommends that the Board of Governors of the Fund thank the Interim Committee for its work.
3. 1994 Regular Election of Executive Directors
The Committee noted that the 1994 Regular Election of Executive Directors of the Fund (Annex I) had taken place and that the next Regular Election of Executive Directors will take place at the Annual Meeting of the Board of Governors in 1996.
4. Financial Statements, Report on Audit, and Administrative and Capital Budgets
The Committee considered the Report on Audit for the financial year ended April 30, 1994, the Financial Statements contained therein (Fund Document No. 7 and Appendix IX of the 1994 Annual Report), the Administrative Budget for the financial year ending April 30, 1995, and the Capital Budget for capital projects beginning in financial year 1995 (Fund Document No. 9 and Appendix VIII of the 1994 Annual Report).
The Committee recommends that the Board of Governors of the Fund adopt the draft resolution set forth in Fund Document No. 8.3
5. Amendments of Rules and Regulations
The Committee has reviewed and noted the letter of the Managing Director and Chairman of the Executive Board to the Chairman of the Board of Governors, dated October 4,1994, reproduced as Fund Document No. 10, regarding amendments of the Rules and Regulations set forth in Attachment I to that document (Annex II).
The Committee recommends that the Board of Governors of the Fund adopt the draft resolution set forth in Attachment II of Fund Document No. 10.4
|/s/ M. Saifur Rahman||/s/ T. Ainsworth Harewood|
|Bangladesh—Chairman||Trinidad and Tobago—Reporting Member|
Annex I to Report I: Regulations for the conduct of the 1994 Regular election of Executive Directors
Definitions: In these Regulations, unless the context shall otherwise require:
(a) “Articles” means the Articles of Agreement of the Fund.
(b) “Board” means the Board of Governors of the Fund.
(c) “Chairman” means the Chairman or Vice-Chairman acting as Chairman of the Board.
(d) “Governor” includes the Alternate Governor or any temporary Alternate Governor when acting for the Governor.
(e) “Secretary” means the Secretary or any Acting Secretary of the Fund.
(f) “Election” means the 1994 Regular Election of Executive Directors.
(g) “Eligible votes” means the total number of votes that can be cast in an election.
Date of Election: The election shall be held during a plenary session of the Annual Meeting to be held Wednesday, October 5, 1994.
Eligibility: The Governors eligible to vote in the election shall be all of the Governors except those of the members that:
(a) are entitled to appoint an Executive Director pursuant to Article XII, Section 3(b)(i);
(b) have notified the Managing Director, in accordance with the procedure established by the Executive Board, of their intention to appoint an Executive Director pursuant to Article XII, Section 3(c).
Schedule E: Subject to the Supplementary regulations seth forth herein, the provisions of Schedule E of the Articles shall apply to the conduct of the election.
Number of Executive Directors to be Elected: Nineteen Executive Directors shall be elected. “Nineteen persons” shall be substituted for “fifteen persons” in paragraphs 2, 3, and 6, and “eighteen persons” shall be substituted for “fourteen persons,” and “nineteenth” shall be substituted for “fifteenth” in paragraph 6 of Schedule E.
Proportion of Votes Required to Elect: In paragraphs 2 and 5 of Schedule E “four percent” and in paragraphs 3, 4, and 5, “nine percent” shall not be changed.
(a) Any person nominated by one of more Governors eligible to vote in the election shall be eligible for election as an Executive Director.
(b) Each nomination shall be made on a Nomination Form furnished by the Secretay, signed by the Governor or Governors making the nomination and deposited with the Secretary.
(c) A Governor may nominate only one person.
(d) Nominations may be made until 12 o’clock noon on the day before the day on which the election is scheduled to be held. The Secretary shall post and distribute a list of the candidates.
Supervision of the Election: The Chaiman shall appoint such tellers and other assistants and take such other actions as he deems necessary for the conduct of the election.
Ballots and Balloting:
(a) One ballot form shall be furnished, before a ballot is taken, to each Governor eligible to vote. On any particular ballot, only ballot forms distributed for that ballot shall be counted.
(b) Each ballot shall be conducted by the deposit of ballot forms, signed by Governors eligible to vote, in a ballot box.
(c) When a ballot has been completed, the Chairman shall cause the ballots to be counted and the names of the persons elected to be announced promptly after the tellers have completed their tally of the ballot forms. If a succeeding ballot is necessary, the Chairman shall announce the names of the candidates to be voted on and the members whose Governors are entitled to vote.
(d) If the tellers shall be of the opinion that any particular ballot is not properly executed, the shall, if possible, afford the Governor concerned an opportunity to correct it before tallying the results, and such ballot form, if so corrected, shall be deemed valid.
(e) If a Governor does not vote for any candidate when entitled to do so, he shall not be entitled to vote on any subsequent ballot and his votes shall not be counted under Article XII, Section 3(i)(iii), toward the election of any Executive Director.
(f) If, at the time of any ballot, a member does not have a duly appointed Governor, such member shall be taken not to have voted on that ballot.
(g) If a second or subsequent ballot should be required under Schedule E, but the number of remaining candidates is equal to the number of vacancies to be filled, those candidates shall be deemed to have been elected on the preceding ballot, provided that paragraph 14 of these Regulations shall apply.
If on any ballot there are more candidates than the number of Executive Directors to be elected and two or more candidates tie with the lowest number of votes, no candidate shall be ineligible for election in the next succeding ballot, but if the same situation is repeated on such succeeding ballot, the Chairman shall eliminate by lot one of the candidates from the following ballot.
If any two or more Governors having an equal number of votes shal have voted for the same candidate and the votes of one or more, but not all, of such Governors could be deemed under paragraph 4 of Schedule E to have raised the total votes received by the candidate above nine percent of the eligible votes, the Chairman shall determine by lot the Governor of Governors, as the case may be, who shall be entitled to vote on the next ballot.
When on any ballot the number of candidates is the same as the number of Executive Directors to be elected, and no candidate is deemed to have received more than nine percent of the eligible votes, each candidate shall be considered elected by the number of votes received even though a candidate may have received less than four percent of the eligible votes.
If the votes cast by a Governor raise the total votes received by a candidate from below to above nine percent of the eligible votes, the votes cast by the governor shall be deemed under paragraph 4 of Schedule E not to have raised the total votes of the candidate above nine percent.
Any member whose Governor has voted on the last ballot for a candidate not elected may, before the effective date of the election as seth forth in section 16 below and subject to the limits specified above on the total number of votes that may be cast toward the election of an Executive Director, designate and Executive Director who was elected, and that member’s votes shall be deemed to have counted toward the election of the Executive Director so designated.
Announcement and Review of Result:
(a) After the last ballot, the Chairman shall cause to be distributed a statement setting forth the result of the election.
(b) The Board of Governors, at the request of any Governor, will review the result of the election in order to determine whether, in light of the objectives set forth in Chapter 0, Section 2, of the Report by the Executive Directors to the Board of Governors on the Proposed Second Amendment to the Articles of Agreement, an additional Executive Director should be elected to serve for the term of office commencing November 1, 1994.
Effective Date of Election of Executive Directors: The effective date of election shall be November 1,1994, and the term of office of the elected Executive Directors, and of any Executive Director appointed under Article XII, Section 3(c), shall commence on that date. Incumbent elected Executive Directors shall serve through October 31, 1994.
General: Any question arising in connection with the conduct of the election shall be resolved by the tellers, subject to appeal, at the request of any Governor, to the Chairman and from him to the Board. Whenever possible, any such question shall be put without identifying the members or Governors concerned.
As approved by Board of Governors Resolution No. 49-7, September 2, 1994
|Candidate Elected||Members Whose Votes Counted Toward Election5||Number of Votes|
|Muhammad Al-Jasser||Saudi Arabia||51,556|
|Luis Enrique Berrizbeitia||Costa Rica||1,440|
|Ian Clark||Antigua and Barbuda||335|
|St. Kitts and Nevis||315|
|St. Vincent and the Grenadines||310|
|Barnabas S. Dlamini||Angola||2,323|
|K. P. Geethakrishnan||Bangladesh||4,175|
|J. E. Ismael||Cambodia||900|
|Lao People’s Democratic Republic||641|
|Trinidad and Tobago||2,718|
|Yves-Marie T. Koissy||Benin||703|
|Central African Republic||662|
|São Tomé and Príncipe||305|
|Abbas Mirakhor||Afghanistan, Islamic State of||1,454|
|Iran, Islamic Republic of||11,035|
|Carlos Saito Saito||Argentina||15,621|
|A. Shakour Shaalan||Bahrain||1,078|
|Syrian Arab Republic||2,349|
|United Arab Emirates||4,171|
|Yemen, Republic of||2,015|
|Dmitri V. Tulin||Russian Federation||43,381|
|Ewen L. Waterman||Australia||23,582|
|Micronesia, Federated States of||285|
|Papua New Guinea||1,203|
|J.A.H. de Beaufort Wijnholds||Armenia||925|
|Macedonia, former Yugoslav Republic of||746|
|/s/ Mamadou Diop||/s/ Stefan Ingves|
Annex II to Report I
October 4, 1994
Dear Mr. Chairman:
In accordance with Section 16 of the By-Laws, the attached amendments of the Rules and Regulations adopted since the 1993 regular meeting (Attachment I) are submitted for review by the Board of Governors. A draft resolution for approval by Governors appears in Attachment II.
Several provisions of the I-Rules, which had essentially remained unchanged since 1981, had become obsolete and needed to be deleted while other provisions required updating. Moreover, several changes had been made recently in the system of setting the rate of charge, which needed to be incorporated into the I-Rules. Updating of the I-Rules also provided the opportunity to simplify or harmonize certain provisions on charges. First, it was proposed that a general definition of holdings subject to Rule 1-6(4) in line with the definition in Article V, Section 8(b) be substituted for the listing of holdings in the introductory sentence of Rule 1-6(4) and in Rule 1-6(7). Second, since Rule I-10(a) sets the rate of remuneration at 100 percent of the SDR rate, and since the rate of remuneration cannot be increased further, it was proposed to delete in Rule 1-6(4)(c) the option to retroactively increase the remuneration rate at the end of the financial year. Finally, it was proposed that the commitment charge on extended arrangements be incorporated in the I-Rules and harmonized with the commitment charge on stand-by arrangements by amending Rule 1-8 accordingly.
As a result of the decision by the Executive Board on January 7, 1994, Rules 1-1, 2, 3, the introductory sentence of Rule 1-6(4), Rule I-6(4)(a), (b) and (c), and Rule 1-8 were amended as shown in Attachment I. Rules 1-4 and 5, Rule 1-6(1), (2), (3), (5), (6), (7), (8), (9), (10), (11), and the Note to Rule 1-6(10) and (11) were deleted.
Rule T-1(d) provided for a review of the rate of interest on holdings of SDRs at the conclusion of each financial year. Since consideration is given to the rate of interest on SDR holdings at the time of the review of the valuation of the SDR basket, which is every five years, and since there had been no substantive review of the rate of interest on holdings of SDRs on the occasion of the annual income discussions, the Executive Board also decided, on January 7,1994, to delete that review provision.
The Executive Board has made no other changes in the Rules and Regulations since the last Annual Meeting.
Very truly yours,
Chairman of the Executive Board
Chairman of the Board of Governors
1994 Annual Meeting
International Monetary Fund
Attachment I. Rules and Regulations Amended Since the 1993 Annual Meeting
1. Rule I. Text as amended January 7, 1994.
1-1. The service charge payable by a member buying, in exchange for its own currency, the currency of another member or SDRs from the General Resources Account shall be 0.5 percent, except that no service charge shall be payable in respect of any purchase to the extent that it is a reserve tranche purchase. The service charge shall be paid at the time the transaction is consummated.
1-2. The Fund shall notify each member by cable, as soon as possible after July 31, October 31, January 31, and April 30, of the charges it owes to the Fund pursuant to Article V, Section 8(b) or (c) for the three calendar months ending on each such date. The charges shall be payable on the third business day following the dispatch of the notification.
1-3. Charges levied under Article V, Section 8(b) or (c) shall be computed for each member on the basis of the daily balances of its currency held by the Fund that are subject to charges. The Fund’s holdings of each member’s currency shall consist of all of its currency except amounts, not in excess of 0.1 percent of quota, in a special account to meet administrative expenses and amounts in sundry cash accounts.
(4) The rate of charge on holdings (i) acquired as a result of a purchase under a policy that has been the subject of an exclusion under Article XXX (c), or (ii) that exceed the amount of the member’s quota after excluding any balances referred to in (i), shall be determined in accordance with (a), (b), and (c) below.
(a) The rate of charge shall be determined at the beginning of each financial year as a proportion of the SDR interest rate under Rule T-1. The proportion shall be determined on the basis of the estimated income and expense of the Fund during the year, and the target amount of net income for the year. The latter shall be 5 percent of the Fund’s reserves at the beginning of the year or such other percentage as the Executive Board may determine particularly in the light of the results in the previous financial year.
(b) A mid-year review of the Fund’s income position shall be held shortly after October 31 of each year. If actual net income for the first six months of the financial year, on an annual basis, is below the target amount for the year by an amount equal to, or greater than, two percent of the Fund’s reserves at the beginning of the financial year, the Executive Board will consider how to deal with the situation. If by December 15 no agreement has been reached as a result of this consideration, the proportion of the SDR interest rate under Rule T-1 determined under (a) at the beginning of the year shall be increased as of November 1 to the level necessary to reach the target amount of net income for the year.
(c) A review of the Fund’s income position shall be held shortly after the end of each financial year. If the net income for the year just ended is in excess of the target amount for the year, the Executive Board will consider whether the whole or a part of the excess should be used to reduce the rate of charge retroactively for the year just ended, or to place all or part of the excess to reserve.
(d) If the Fund’s net income for a financial year is in excess of the target amount for that year, the Executive Board may for the purposes of the determinations and estimates referred to in (a) and (b) above in respect of the immediately subsequent financial year, decide to deem any part of the excess over the target amount that has been placed to reserve as income for that subsequent financial year.
1-7. Already deleted.
1-8. The following provisions shall apply to stand-by and extended arrangements:
(a) A charge of ¼ of 1 percent per annum shall be payable at the beginning of each twelve-month period of an arrangement on the total amount of the arrangement that could be purchased during that period.
(b) When a purchase is made under an arrangement, the amount of the charge paid shall be reduced in the proportion the amount of the purchase bears to the total amount that can be purchased under the arrangement during the period of twelve months or less in which the purchase was made. A refund equal to the reduction shall be made.
(c) If a member notifies the Fund that it wishes to cancel an arrangement, the Fund shall repay to the member a portion of the charge. The portion repaid shall represent the charge for the period remaining unexpired at the date of cancellation for the amount that could still be purchased under the arrangement at the date of cancellation for which the member has paid a charge.
(d) Refunds for reductions under subparagraph (b) above and repayments under subparagraph (c) above of a charge paid for an arrangement shall be made in the media selected by the Fund.
(a) Remuneration shall accrue daily. The amount that has accrued during each quarter of the financial year of the Fund shall be paid as of the beginning of the following quarter.
(b) A member that wishes to receive in its own currency the whole or a specified portion of the remuneration payable to it shall so notify the Fund.
(a) The rate of remuneration shall be equal to 100 percent of the rate of interest on holdings of SDRs under Rule T-l (hereafter referred to as “SDR interest rate”).
(b) The relationship of the rate of remuneration to the SDR interest rate will be referred to as the “remuneration coefficient.”
2. Rule T. Text as amended January 7, 1994.
October 6, 1994
The Joint Procedures Committee met on October 5,1994 and submits the following report and recommendations:
1. Development Committee
The Committee noted that the Report of the Chairman of the Joint Ministerial Committee of the Boards of Governors of the Bank and the Fund on the Transfer of Real Resources to Developing Countries (Development Committee) has been presented to the Boards of Governors of the Fund and the Bank pursuant to paragraph 5 of Resolutions Nos. 29-9 and 294 of the Fund and Bank, respectively (Fund Document No. 5 and Bank Document No. 3).2
The Committee recommends that the Boards of Governors of the Fund and the Bank note the report and thank the Development Committee for its work.
2. Officers and Joint Procedures Committee for 1994/95
The Committee recommends that the Governor for Benin be Chairman, and that the Governors for Paraguay and Romania be Vice Chairmen, of the Boards of Governors of the Fund and of the World Bank Group, to hold office until the close of the next Annual Meetings.
It is further recommended that a Joint Procedures Committee be established to be available, after the termination of these meetings and until the close of the next Annual Meetings, for consultation at the discretion of the Chairman, normally by correspondence and, if the occasion requires, by convening; and that this Committee shall consist of the Governors for the following members: Barbados, Benin, Chile, China, Ecuador, Finland, France, Germany, Israel, Italy, Japan, Kiribati, Korea, Lithuania, Mauritius, Paraguay, Romania, Saudi Arabia, Tanzania, Ukraine, United Kingdom, United States, and Zimbabwe.
It is recommended that the Chairman of the Joint Procedures Committee shall be the Governor for Benin, and the Vice Chairmen shall be the Governors for Paraguay and Romania, and that the Governor for Korea shall serve as Reporting Member.
|/s/ M. Saifur Rahman||/s/ T. Ainsworth Harewood|
|Bangladesh—Chairman||Trinidad and Tobago—Reporting Member|
Report I and the Resolutions contained therein were adopted by the Board of Governors of the Fund in Joint Session with the Boards of Governors of the Bank, IFC, and IDA, on October 6, 1994.
See pages 22-25.
Resolution No. 49-8; see page 257.
Resolution No. 49-9; see page 257.
Somalia and South Africa did not participate in this election. Sudan and Zaïre did not participate owing to the suspension of the voting rights of these members under Article XXVI, Section 2(b).
Report II dealt with the business of the Boards of Governors of the Bank, IFC and IDA. Report III and the recommendations contained therein were adopted by the Boards of Governors of the Fund and of the Bank, IFC and IDA in Joint Session, on October 6, 1994.
See pages 83 and 84.