The present installment in the series of articles on the effects of the law of the International Monetary Fund on litigation discusses decisions by courts in England, the United States, the Netherlands, and Italy, as well as decisions by the Court of Justice of the European Communities and by an arbitral tribunal. The following questions are among the issues affected by the Fund’s Articles of Agreement that are raised by these cases:
1. What is the meaning of “exchange contracts” in Article VIII, Section 2(b) of the Articles?
2. What is the relationship between Article VIII, Section 2(b) and the private international law of the forum?
3. On whom does the burden rest of proving that the conditions of Article VIII, Section 2(b) are met or are not met, and what is the effect on the allocation of the burden of proof between the parties if the court itself introduces the question of applying Article VIII, Section 2(b)?
4. What is the currency “involved” under Article VIII, Section 2(b)?
5. Does Article VIII, Section 2(b) apply to an exchange contract if the exchange control regulations that are in issue were adopted after the contract was entered into?
6. Should the parties to an exchange contract be allowed to negate the effect of exchange control regulations?
7. Does Article VIII, Section 2(b) apply to exchange control regulations if they are part of the law of the forum?
8. If a payment is made under an exchange contract that is unenforceable under Article VIII, Section 2(b), can the amount paid be recovered as an unjust enrichment of the payee?.
9. Should a party be awarded damages if the other party undertook to apply for or to obtain an exchange license and failed to perform the undertaking?
10. If a court rejects the application of Article VIII, Section 2(b) and gives judgment in favor of a plaintiff notwithstanding the exchange control regulations that are part of the law of another member of the Fund, will that member’s court recognize and execute the judgment?
11. What is the relationship between the provisions of the Articles and the provisions of the Treaty of Rome on movements of capital?
12. Are the former par values of currencies still relevant in issues that courts are called upon to resolve?
Most of these questions relate to the interpretation of Article VIII, Section 2(b), which throughout the three successive versions of the Articles has read as follows:
Exchange contracts which involve the currency of any member and which are contrary to the exchange control regulations of that member maintained or imposed consistently with this Agreement shall be unenforceable in the territories of any member. In addition, members may, by mutual accord, cooperate in measures for the purpose of making the exchange control regulations of either member more effective, provided that such measures and regulations are consistent with this Agreement.
Sir Joseph Gold, Senior Consultant and formerly the General Counsel and Director of the Legal Department of the International Monetary Fund, is a graduate of the Universities of London and Harvard. He is the author of numerous books, pamphlets, and essays on the Fund and on international and national monetary law.
 2 Lloyd’s Rep. 498.
 Q.B. 208;  3 W.L.R. 242; 3 All E.R. 142.
(Washington: International Monetary Fund, 1982), pp. 299–303, 332–53. (The book is cited hereinafter as Gold, Volume II.)
 2 W.L.R. 1039;  2 All E.R. 720.
 1 All E.R. 817;  1 Q.B. 683;  1 Q.B. 703.(C.A.); Gold, Volume II, pp. 202–18.
Gold, Volume II, p. 350.
 2 W.L.R., p. 1050;  2 All E.R., p. 729.
Court of Appeal (Civil Division) Transcript No. 197B of 1977, C.A.; The Times (London), May 3, 1977, p. 11; Halsbury’s Laws of England: Annual Abridgment, 1977 (London: Butterworth, 1978), p. 453, paragraph 906; Gold, Volume II, pp. 258–65.
 2 W.L.R., p. 1050;  2 All E.R., p. 729 (per Lord Diplock).
On the duty of the court, see Gold, Volume II, pp. 118–19, 114–45; on enforceability, see Joseph Gold, The Fund Agreement in the Courts (Washington: International Monetary Fund, 1962) (hereinafter cited as Gold, Volume I), pp. 60–66, 77–78, 148; Gold, Volume II, pp. 140, 152.
 2 W.L.R., p. 1051;  2 All E.R., p. 730 (per Lord Diplock, in whose opinion all members of the House of Lords concurred).
The same principle would apply to the obligation of the issuing bank to the buyer.
See Gold, Volume II, pp. 337–40, 348–53.
On running together related contractual arrangements, the case should be compared with Southwestern Shipping Corporation v. National City Bank of New York, 173 N.Y.S. 2d 509 (1958), 178 N.Y.S. 2d 1019 (1958), 190 N.Y.S. 2d 352 (1959), 80 S. Ct. 198,361 U.S. 895 (1959), Gold, Volume I, pp. 97–100,102–108, and with Sharif v. Azad  1 Q.B. 605,  3 W.L.R. 1285,  3 All E.R. 785, C.A., Gold, Volume II, pp. 107–16, 158–59 (fn. 48), 266–67.
The decision has provoked much comment on both aspects of the case. See, for example, C.C. Hodgekiss, “Commercial Law Note,” Australian Law Journal (Sydney), Vol. 56 (November 1982), pp. 606–608; J.G. Collier, Case Note, Cambridge Law Journal, Vol. 42 (April 1983), pp. 49–51; Michael Goldsmith, Droit etpratique du commerce international/International Trade Law and Practice (Paris), Vol. 9 (1983), pp. 184–86; Anthony Walker, “American Accord—Third party fraud and letters of credit,” International Financial Law Review (London), July 1982, pp. 4–6; Stuart Isaacs, “American Accord—English courts and exchange contracts,” id., pp. 7–10; Clive M. Schmitthoff, Case Note, Journal of Business Law (London), July 1982, pp. 319–21; F.A. Mann, “Documentary Credits and Bretton Woods,” Law Quarterly Review (London), Vol. 98 (1982), pp. 526–32; Guy W. Lewin, “Irrevocable Letters of Credit and Third Party Fraud: The American Accord,” Virginia Journal of International Law (Charlottesville), Vol. 24 (1983), pp. 55–96; David R. Stack, “The Conflicts of Law in International Letters of Credit,” id., pp. 171–200.
Gold, Volume I, p. 108. The “exchange contract” was not solely the result of the scheme to evade Peru’s exchange control regulations, because all the other relationships, including Royal’s contractual obligation, were treated by the House of Lords as part of the “exchange contract.”
Selected Decisions of the International Monetary Fund and Selected Documents, 10th Issue (Washington, April 30, 1983)(hereinafter cited as Selected Decisions), pp. 233–34.
Unreported, but noted in European Law Letter (August 1980), pp. 7–8.
Banco do Brasil, S.A. v. A.C. Israel Commodity Co. Inc., 216 N.Y.S. 2d 669 (1961), 2 N.Y. 2d 371,190 N.E. 2d 235,239 N.Y.S. 2d 872 (1963), 376 U.S. 906, 84 S. Ct. 657 (1964). Gold, Volume I, pp. 135–39; Volume II, pp. 22–27, 197–202.
Selected Decisions, p. 234.
The lower court in Weston Banking Corporation v. Turkiye Garanti Bankasi A.S., 446 N.Y. 2d 67, p. 69, took a different view.
See La Semaine Juridique (Paris), Vol. 57, No. 39 (September 28,1983), case 20045 (Société civile immobilière ‘Les Jardins de Grimaua’ and another v. Société d’Etudes Juridique Fiscales et Financières).
Libra Bank Limited, Libra International Bank, S.A., Banco de la Provincia de Buenos Aires, Banco Espirito Santo e Comercial de Lisboa, Banco de Vizcaya, S.A., Banque Internationale a Luxembourg, S.A., Banque Rothschild, and the National Bank of Washington v. Banco Nacional de Costa Rica, S.A., 570 F. Supp. 870, 896 (U.S. Dist. Ct., S.D.N.Y., July 6 and August 12, 1983).
Id., 570 F. Supp. 870 (U.S. Dist. Ct., S.D.N.Y., July 6,1983); See David R. Lindskog, “Act of state or act of desperation,” International Financial Law Review (London), December 1983, pp. 4–8.
See footnote 20.
The court in the Libra Bank case (see footnote 24) relied on some of the Cuban insurance cases (Gold, Volume II, pp. 43–94). In the cases in which the courts refused to recognize the relevance of Cuba’s exchange controls, payments by the defendants to the plaintiffs would not have affected Cuba’s balance of payments because of changes in circumstances between the dates of the contracts of insurance and the dates of judicial proceedings in courts in the United States.
“The court declines to depart from the interpretation of exchange contracts consistently propounded by the courts that have directly addressed the issue. The court holds that a contract to borrow United States currency, which requires repayment in United States currency, and which designates New York as the situs of repayment, is not an exchange contract within the meaning of Article VIII, section 2(b). The Bretton Woods Agreement is therefore inapplicable to this case.” (570 F. Supp. 900)
See footnote 27.
See, for example, Article XI.
For a discussion of the necessity for the immediate effect of exchange controls on existing executory contracts, see Jean-Paul Chaumeton, La Semaine Juridique (Paris), Vol. 56 (October 6,1982), in commenting on 19856, a case in which Article VIII, Section 2(b) was not involved.
F.A. Mann, The Legal Aspect of Money, 4th ed. (Oxford: Clarendon Press, 1982) (hereinafter cited as Mann, Legal Aspect), pp. 377, 379.
Sharif v. Azad  3 W.L.R. 1285; Federal Supreme Court of Federal Republic of Germany, Decision of April 12,1970, Neue Juristische Wochenschrift (Munich), Vol. 23 (August 20, 1970), pp. 1507–1508 (Gold, Volume II, p. 144). See also Gold, Volume I, pp. 60–66.
United City Merchants (Investments) Ltd. et al. v. Royal Bank of Canada et al.  2 W.L.R. 1039;  2 All E.R. 720.
Gold, Volume II, pp. 334, 358.
All acts are presumed to have been done rightly and properly.
 1 Q.B., p. 696; Gold, Volume II, p. 205.
456 N.Y.S. 2d 684.
See Joseph Gold, SDRs, Currencies, and Gold: Fourth Survey of New Legal Developments, IMF Pamphlet Series, No. 33 (Washington: International Monetary Fund, 1980), p. 68.
86 A.D. 2d 511, 446 N.Y.S. 2d 67.
For a case involving exchange control regulations (of Cuba) in which the New York Court of Appeals held that the doctrine of the Act of State applied, see French v. Banco Nacional de Cuba, 295 N.Y.S. 2d 433, 23 N.Y. 2d 46 (1968) (discussed in Gold, Volume II, pp. 131–39).
J. Zeevi and Sons, Ltd. et al. v. Grindlay’s Bank (Uganda) Limited, 37 N.Y. 2d 220, 371 N.Y.S. 2d 892, 333 N.E. 2d 168, cert. den. 423 U.S. 866, 96 S. Ct. 126. On the issue involving the Articles in that case, see Gold, Volume II, pp. 219–21.
456 N.Y.S. 2d, p. 688.
The court did not consider whether the claim was for the purpose of transferring capital or for payment in respect of a current transaction. Article XXX(d) includes within the definition of payments for current transactions “(2) payments due as interest on loans…” and “(3) payments of moderate amount for amortization of loans…” The claim was for repayment of the full debt. The difference between an apparent capital transfer and a possible payment for a current transaction may have affected the outcome in the two awards of the arbitral tribunal that are discussed later in this article.
456 N.Y.S. 2d, p. 689.
Bernard S. Meyer, “Recognition of Exchange Controls After the International Monetary Agreement, Yale Law Journal (New Haven), Vol. 62 (May 1953), pp. 867–910.
For the view that the defense of Article VIII, Section 2(b) takes precedence over the defense of the Act of State, see John Williams, “Act of State and Transnational Monetary Obligations,” International Practitioner’s Notebook (New York), No. 24 (1983), pp. 2–4.
Judge Meyer drew attention also to Article XIV, Section 4, under which the Fund can make representations to a member that it should withdraw restrictions and can compel withdrawal if the member persists in maintaining the restrictions. An issue of interpretation arises in connection with withdrawal. The reference should be to Article XIV, Section 3 of the present Articles. That provision refers to “Article XXVI, Section 2(a)” and not to “Article XXVI, Section 2.” Section 2(a) provides for ineligibility to use the Fund’s resources. The issue is whether ineligibility under Section 2(a) can lead in all cases to action by the Fund under Section 2(b), which provides for compulsory withdrawal from membership in the Fund.
Selected Decisions, p. 234.
Joseph Gold, Legal and Institutional Aspects of the International Monetary System: Selected Essays (Washington: International Monetary Fund, 1979), pp. 148–216.
Gold, Volume II, pp. 116–20. The Regional Court of Hamburg, Division 12 for Commercial Matters, approached the Fund in October 1979, through the Embassy of the Federal Republic of Germany in Washington, D.C., with a request for advice on whether certain exchange control regulations of Ethiopia in issue in Domex S.A. v. Schluter & Maack were consistent with the Articles.
Gold, Volume II, p. 261.
Gold, Volume II, pp. 144, 259–60. See also United City Merchants (Investments) Ltd. et al. v. Royal Bank of Canada et al.  2 W.L.R., p. 1050;  2 All E.R., p. 729.
456 N.Y.S. 2d, p. 692.
See footnote 42.
See footnote 20.
456 N.Y.S. 2d, p. 693.
Robert E. Bostrom, “Enforcement of Foreign Exchange Regulations,” International Practitioner’s Notebook (New York), No. 22 (1983), pp. 6–8, at p. 8.
Gold, Volume I, pp. 62–66, 77–78; Volume II, pp. 16–17, 88, 140–43, 150–53,160, 262,276–77, 298, 355. Mann, Legal Aspect, has advanced the view that a contract not contrary to exchange control regulations when entered into is not affected by the provision if the contract is contrary to regulations when performance is sought, but that a contract originally unenforceable can later become enforceable if the circumstances have changed (p. 379). The explanation offered is that in the latter case there is no longer “any need or legislative rationale for construing the provision so as to maintain a consequence not required by the law of the member State concerned.” This explanation is unsatisfactory because the member’s concern induces it to control the performance of executory contracts by regulations adopted after the contracts were made. The test of the balance of payments applies to both cases, because the balance of payments is the concern of both the Fund and the legislating member.
Philip R. Wood, “External governing law—either a fortress or a paper-house,” International Financial Law Review (London), July 1982, pp. 11–14, at p. 13. See also the arbitral tribunal’s statement of the argument of counsel as cited in Congimex Companhia Geral de Comercio Importadora e Exportadora, S.A.R.L. v. Tradax Export S.A.  2 Lloyd’s Rep. 687 (Queen’s Bench Division (Commercial Court), England, June 11, 1981): “Mr. Buckley recognized that by a decision of the Court of Appeal binding on me supervening illegality is only a defence if (1) it arises by the proper law of the contract, or (2) it arises by the law of the place of performance. In the case of exchange contracts, there is a third category by virtue of the Bretton Woods Order in Council. That is not said to be relevant here.”
Case No. 149, Chamber One, Award No. 53–149–1. Iranian Assets Litigation Reporter (Edgemont, Pennsylvania), July 1, 1983 (hereinafter cited as IAL Reporter), p. 6819. For articles on the tribunal, see Robert B. von Mehren, “The Iran-U.S.A. Arbitral Tribunal,” American Journal of Comparative Law (Berkeley, California), Vol. 31 (Fall 1983), pp. 713–30; and David P. Steward and Laura B. Sherman, “Developments at the Iran-United States Claims Tribunal,” Virginia Journal of International Law (Charlottesville), Vol. 24 (Fall 1983), pp. 1–53.
(Washington, 1979). The report contains information on the trade and payments aspects of a member’s restrictive system, as well as on the member’s exchange arrangements. Publication of this information is neutral on the question whether the restrictions on payments and transfers applied by a member are consistent with the Articles.
IAL Reporter, p. 6821.
See footnote 18.
IAL Reporter, p. 6822. The tribunal, in using the phrase “should respect,” may or may not have meant “must respect.” Article VIII, Section 2(b) imposes an obligation on members. Article V of the Claims Settlement Declaration provides that: “The Tribunal shall decide all cases on the basis of respect for law, applying such choice of law rules and principles of commercial and international law as the Tribunal determines to be applicable, taking into account relevant usages of the trade, contract provisions and changed circumstances.” See “Article VIII, Section 2(b), Governments, Private Parties, and Arbitration,” Appendix D in Gold, Volume II, pp. 462–64.
The question whether or not this treaty is still in force is the subject of dispute between Iran and the United States. See Congressional Record, daily ed., November 14, 1983, S. 16055–16060; International Law Perspective, Vol. 9 (November 1983), p. 2.
On this principle, the drawee of the checks need not prove the underlying transaction that gave rise to the checks.
Case No. 57, Chamber Two, Award No. 46-57-2. The award was signed by only two of the three members of the tribunal.
La Semaine Juridique (Paris), Vol. 56 (October 6, 1982), Case No. 19856, observations by Jean-Paul Chaumeton, last paragraph and footnote 10.
Revue critique de droit international privé (Paris), Vol. 69 (January-March 1980), p. 68.
Gold, Volume II, pp. 353–58.
H.U. Jessurun d’Oliveira, “Eigen huis is vreemde valuta waard,” Ars Aequi, Vol. 29 (April 1980), pp. 254–62, at pp. 261–62.
He argued also that unenforceability is determined as of the date of entry into a contract, and that an unenforceable contract remains unenforceable notwithstanding subsequent changes in facts. Therefore, the subsequent independence of Surinam, becoming Suriname, should not have affected the outcome of the case. Indeed, he continued, if the countries had to respect each other’s exchange control regulations within the context of the Kingdom, the obligation was strengthened as a result of independence. Neither commentator asks why it was necessary to provide, by means of Article VIII, Section 2(b), that courts shall apply their own exchange control law.
Selected Decisions, pp. 233–34.
Gold, Volume I, pp. 87–94; Volume II, pp. 157–59.
IAL Reporter, p. 6820.
Gold, Volume II, pp. 23, 190–97, 280–81. Toprak Mahsulleri Ofisi v. Finagrain Compagnie Commerciale Agricole et Financiere S.A.  2 Lloyd’s Rep. 98, decided by the English Court of Appeal, dealt with the question, among other issues, of responsibility for obtaining an exchange license. The exchange control regulations of Turkey were involved in the case, but Article VIII, Section 2(b) was not raised as a defense, no doubt because of the restrictive interpretation of “exchange contracts” by English courts. The case demonstrates that if Article VIII, Section 2(b) does not apply, a contract is not unenforceable under English law because the contract is illegal under the law of a party’s residence unless the contract is governed by that law or is to be performed only in that country.
Mann, Legal Aspect, pp. 397–400.
Batra v. Ebrahim, see footnote 9, and the dictum of Lord Denning quoted by Mann, Legal Aspect, p. 399.
See footnote 34.
Gold, Volume II, pp. 157–58. Note, however, the sweeping statement by the Iran-United States Claims Tribunal in Benjamin R. Isaiah v. Bank Mellat (Case No. 219, Chamber Two, Award No. 35-219-2): “In any event, exchange regulations are not relevant to a claim for unjust enrichment.” Article VIII, Section 2(b) was not mentioned in the case.
Selected Decisions, p. 233.
Different situations, but involving similar strain, are discussed in Gold, Volume II, pp. 267–72, 417–18.
See footnote 5.
Pp. 6–7 of the record (translation). The English rule, as stated by Dicey and Moris in The Conflict of Laws (10th edition, London, 1980), Vol. 2, p. 1086, is as follows: “Rule 188—A foreign judgment (other than a Scottish or Northern Irish judgment extended to England under the Judgments Extension Act, 1868) is impeachable on the ground that its enforcement or, as the case may be, recognition, would be contrary to public policy.” See Israel Discount Bank of New York v. Hadjipateras and another  3 All E.R. 129 (CA).
A consequence would be that related contracts, such as indemnities, could be deemed lawful.
“Giurisprudenza Italiana,” Rivista di diritto Internationale privato e processuale (1981)(hereinafter cited as Rivista), pp. 107–15.
On July 7, 1981, a few days after the Supreme Court’s decision in the Terruzzi case, the Italian Supreme Court took a decision on exchange control by the special procedure of Sezioni Riunite, the purpose of which is to give a final interpretation of law when conflicting decisions have been rendered by various divisions of the Supreme Court. The decision of July 7, 1981, in a case not involving the export or import of goods, affirms that contracts between residents and nonresidents entered into in violation of Italy’s exchange control laws are null and void. (Francesco de Luca, “Italian exchange controls and non-residents,” International Financial Law Review (London), May 1982, pp. 31–32). A subsequent decision, of July 21, 1981, makes the distinction between contracts for the export and import of goods and other contracts that is made in the Terruzzi case. It seems, however, that a resident who acts in bad faith in entering into a contract without authorization is subject to criminal penalties and may be liable in damages to the other party. Furthermore, the contracts that are null and void according to the decision of July 7,1981 are not contrary to morals, so that a nonresident who has made a payment under the contract is entitled to recover the amount paid. (Mario Romita, “Nullity of Transactions Violating Exchange Control Laws of Italy: Consequences for Non-Residents in Italy and Possible Remedies,” International Practitioner’s Notebook (New York), No. 22 (1983), pp. 2–3).
Rivista, p. 112 (translation).
 1 Q.B., p. 696 (per Kerr, J., as he then was).
Rivista, loc. cit. (translation).
See footnote 2.
An issue of Community law ruled on by the Supreme Court is not discussed here.
Case 230/80,  E.C.R. 2595;  1 C.M.L.R. 365. On the Casati case, see J. Kodwo Bentil, “Free Movement of Capital in the Common Market,” New Law Journal (London), Vol. 132 (October 14 and November 11, 1982), pp. 963–65, 1049–50; Michael Petersen, “Capital Movements and Payments under the EEC Treaty after Casati,” European Law Review (London), Vol. 7 (1982), pp. 167–82; Philippe Chappatte, “Free movement of capital in Europe,” International Financial Law Review (London), May 1982, pp. 35–36. See also Martin Seidel, “Escape Clauses in European Community Law,” Common Market Law Review (Leyden), Vol. 15 (1978), pp. 283–308.
“Use of the Funa’s general resources for capital transfers
(a) A member may not use the Fund’s general resources to meet a large or sustained outflow of capital except as provided in Section 2 of this Article, and the Fund may request a member to exercise controls to prevent such use of the general resources of the Fund. If, after receiving such a request, a member fails to exercise appropriate controls, the Fund may declare the member ineligible to use the general resources of the Fund.
(b) Nothing in this Section shall be deemed:
(i) to prevent the use of the general resources of the Fund for capital transactions of reasonable amount required for the expansion ot exports of in the ordinary course of trade, banking, or other business; or
(ii) to affect capital movements which are met out of a member’s own resources, but members undertake that such capital movements will be in accordance with the purposes of the Fund.”
“Controls of capital transfers
Members may exercise such controls as are necessary to regulate international capital movements, but no member may exercise these controls in a manner which will restrict payments for current transactions or which will unduly delay transfers of funds in settlement of commitments, except as provided in Article VII, Section 3(b) and in Article XIV, Section 2.”
(a) If a member fails to fulfill any of its obligations under this Agreement, the Fund may declare the member ineligible to use the general resources of the Fund. Nothing in this Section shall be deemed to limit the provisions of Article V, Section 5 or Article VI, Section 1.”
The question of interpretation is similar to the one discussed in footnote 46.
For a discussion of the concept, see Regina v. Ernest George Thompson et al. Case 7/78  1 C.M.L.R. 47.
Compare also Section 5.3 of the Resolution of the European Council of December 5,1978 on the establishment of the European Monetary System and related matters: “The EMS is and will remain fully compatible with the relevant articles of the IMF Agreement.” See Commission of the European Communities, European Economy (Brussels), No. 3 (July 1979), p. 96.
See Gold, Volume II, pp. 439–57.
In Re Air Crash Disaster at Warsaw, Poland, on March 14, 1980, 535 F. Suppl. 833 (1982). (Discussed in Joseph Gold, “The Fund Agreement in the Courts—XVIII: The SDR in the Courts,” Staff Papers, International Monetary Fund (Washington), Vol. 29 (December 1982), pp. 665–67).
Maschinenfabrik Kern, A.G. v. Northwest Airlines Inc., 562 F. Supp. 232 (N.D. 111. 1983); Deere & Co. v. Deutsche Lufthansa A. G., No. 81C 4726 (N.D. 111., December 30, 1982); Electronic Memories & Magnetics Corp. v. The Flying Tiger Line, Inc., Index No. 784512 (Cal. Super. Ct., San Francisco, August 25, 1982).
See the cases cited in footnote 28, p. 22 of the brief dated August 29,1983, of Trans World Airlines in Trans World Airlines, Inc. v. Franklin Mint et al. in the October Term of the Supreme Court of the United States. The judgment in one of the cases Costell v. Iberia, Lineas Aereas de Espana, S.A. (Court of Appeal of Valencia, Spain) is reproduced in translation at pp. BA6-BA12 of the brief.
Case 248/80,  E.C.R. 197.
See J.A. Usher, “Uniform External Protection—EEC Customs Legislation before the Court of Justice,” Common Market Law Review (Leyden), Vol. 19 (1982), pp. 389–412.
Part I, Section I of the Annex to Regulation No. 950/68 of the Council of June 28, 1968 on the Common Customs Tariff (Official Journal, English Special Edition 1968 (I), p. 275).
Regulation No. 2779/78 of November 23, 1978 (Official Journal L 333, p. 5); Regulation No. 2800/78 of November 27, 1978 (Official Journal L 335, p. 1).
That is, a fixed sum expressed in money or in some other accounting unit and applied to weight, size, or number but not value.
The par value was the one established under the Articles on October 27, 1969. The central rate (DM 3.2225) communicated to the Fund on December 21, 1971 was not a par value.
DM 18,386.19 would have been due if the duty of 11 percent had applied.
The court made the strange statement that it was only on April 1,1978 that the Second Amendment entered into force “and it was only in that way that the international monetary system found a new point of reference, namely the new special drawing rights” ( E.C.R., p. 211).
The interpretation advocated would have the effect of reducing, to an extent not justified on economic grounds, specific duties fixed originally at a level giving competing Community products a particular degree of protection, and thus would reduce the desired level of protection.” ( E.C.R., p. 213).
See the argument of the Commission at pp. 203–205.
See Joseph Gold, SDRs, Currencies, and Gold: Fifth Survey of New Legal Developments, IMF Pamphlet Series, No. 36 (Washington: International Monetary Fund, 1981), pp. 71–77, 100–101.
 E.C.R., p. 214. Nevertheless, the EUA was first introduced as early as 1975 for expressing the amounts of aid mentioned in Article 42 of the Lome Convention and for the accounts of the European Investment Bank and the European Coal and Steel Community. It was adopted for use in the Community’s budget in December 1977. The Commission had proposed adoption of the EUA for all purposes of the Community in 1976. The Advocate General, in an opinion of September 16, 1981, concluded that the delay by the Community in adopting the most reasonably practicable solution for attaining the objectives of the Treaty was not justified and that, for this reason, General Rule C.3 should be considered invalid, but this conclusion was not accepted.
Case 567/79A,  E.C.R. 2371.
The market rate on the relevant date was more than 26 lire per Belgian franc.
The text of Article 9 is quoted as it appears in the judgment, but in the statement of facts and issues it is quoted as follows: “Loans covered by this provision shall be expressed in Belgian francs. The payments in respect thereof shall be made in the currency of the country in which the property to be financed is situated, on the basis of the parity ruling at the time of the payment.”
 E.C.R. 2378.
 E.C.R., p. 2389. In Grogan v. Commission, Case 127/80  E.C.R. 869, the European Court decided that inaction by the Council to rectify exchange rates that no longer bore any relation to economic reality had to be taken into account when considering the applicant’s argument that the legitimate expectations of pensioners had not been protected. Numerous cases came before the court in which the validity and consequences of substituting the EUA for former par values were issues. See Buy I v. Commission (Case 817/79), Adam v. Commission (Case 828/79), Battaglia v. Commission (Case 1253/79), DePascale v. Commission (Case 164/80), Curtis v. European Parliament (Case 167/80), Knoeppel v. Commission (Case 1205/79), Battaglia and Bevilaequa v. Commission (Joined Cases 5 and 18/80);  E.C.R. 245, 269, 297, 909, 931, 2407, 2431, and 2449. See also Airola v. Commission  E.C.R. 2717.