Abstract

The Fund is one of the international organizations that have a power of internal authoritative interpretation. This power is conferred on the Fund by Article XVIII and is exercised by the same organs, the Executive Directors and the Board of Governors, as exercise most of the other powers of the Fund. Although voting is avoided, if a vote had to be taken on a matter of interpretation, it would be taken in accordance with the system of weighted voting that prevails in the Fund, and a majority of the votes cast would be decisive.

The Fund is one of the international organizations that have a power of internal authoritative interpretation. This power is conferred on the Fund by Article XVIII and is exercised by the same organs, the Executive Directors and the Board of Governors, as exercise most of the other powers of the Fund. Although voting is avoided, if a vote had to be taken on a matter of interpretation, it would be taken in accordance with the system of weighted voting that prevails in the Fund, and a majority of the votes cast would be decisive.

The interpretations adopted under Article XVIII number no more than ten at this date, and there are special reasons why each of them has been given that formality. In only one case of an interpretation under Article XVIII has there been a reference of the question from the Executive Directors to the Board of Governors. An episode in 1961 showed that the Executive Directors may take action to clarify a long-standing interpretation. That episode is even more interesting because of the speculation it provokes about the reversibility of formal interpretations for original error.

The Executive Directors have adopted numerous decisions of an interpretative character without subsuming them under Article XVIII. Many of these decisions have been collected in Selected Decisions, and some have appeared in other publications of the Fund, but not all decisions have been made public. The interpretative decisions taken without recourse to Article XVIII have been reached by the application of the same legal principles as would have been observed had the decisions been taken under Article XVIII. The decisions adopted outside Article XVIII are not necessarily of less importance than Article XVIII interpretations. They are regarded by the Fund and members as part of the corpus juris of the Fund even though they have not been given the cachet of Article XVIII.

The Fund’s approach to the interpretation of its Articles has been based on the constant awareness that the Articles are a legal document that was intended to regulate the monetary and economic affairs of states and was drafted in language influenced by economic and financial experts. Travaux préparatories, although fragmentary and sometimes unorthodox, have been freely utilized, always with due weight to the character of the material referred to. Private law sources and analogies have sometimes had a formative influence on the interpretation and development of Fund law. When there are concepts or principles of sufficient generality, they can be particularly persuasive in the formation of consensus. One interpretative decision, based on estoppel and laches, is of special interest because it prevented the retrospective application of an interpretation and also because it illustrates the need to isolate the central substance of a concept or principle of private law from the local incidents attached to it.

There has been little authority on the question whether interpretations under Article XVIII are binding on tribunals in member countries. In a proceeding before the Federal Communications Commission, a U.S. regulatory agency, it was decided, in conformity with the view of the U.S. Department of State, that the U.S. Government was bound by these interpretations. The little judicial authority that has accumulated, at least in the courts of two members, is consistent with the binding force of these interpretations. If under a member’s law an Article XVIII interpretation is not binding on domestic tribunals, the member is obliged to take the steps to make it binding.

An international tribunal should regard itself as concluded by an interpretation under Article XVIII. Moreover, an international tribunal should hold that a question of interpretation of the Fund’s Articles that is in issue before it must be remitted to the Fund for decision. The parties in the Case Concerning Rights of Nationals of the United States of America in Morocco, decided by the International Court of Justice, seemed to agree with this latter proposition, although they disagreed about the party on which the burden rested to seek an interpretation from the Fund. Domestic courts should not refuse to interpret provisions of the Articles that have been incorporated in the lex fori on the ground that they have not been interpreted by the Fund.

The view has been expressed that the Fund should issue more interpretations for the purposes of Article VIII, Section 2(b), in the interests of courts and litigants who are often forced to grapple with this brief but difficult provision. It is true that the Fund has developed a practice of confining itself to answering questions about the consistency of exchange control regulations with the Articles, but members have been equally reticent and have not requested interpretations. There has been one occasion, however, on which the Fund has received and responded to a request for assistance by a court in a member country transmitted through the member’s executive director.

Article XVIII is understood to apply only to questions of the interpretation of the provisions of the Articles. It does not apply to interpretations by the Executive Directors that relate exclusively to the By-Laws, Resolutions, and other actions of the Board of Governors, but there are other ways of appealing such interpretations to the Board of Governors.

Article XVIII does not apply to the interpretation of the General Arrangements to Borrow or certain other agreements entered into by the Fund or to the stand-by arrangements granted by the Fund to its members, excppt to the extent that questions of the interpretation of the Articles are involved and must be dealt with under Article XVIII. The Fund sometimes makes an express reservation of these questions, as in the General Arrangements. This reservation is also made in the United Nations Convention on the Privileges and Immunities of the Specialized Agencies. The Fund has not requested any advisory opinions of the International Court of Justice.