Bretton Woods Agreements Act , 1957

1 Interpretation.

1.—In this Act—

“the Fund Agreement” means the agreement, for the establishment and operation of an international body to be called the International Monetary Fund, which was drawn up at the United Nations Monetary and Financial Conference held at Bretton Woods in New Hampshire in the United States of America in July, 1944, and of which the text of the Articles is set out in Part I of the Schedule to this Act;

“the Bank Agreement” means the agreement, for the establishment and operation of an international body to be called the International Bank for Reconstruction and Development, which was drawn up at the United Nations Monetary and Financial Conference held at Bretton Woods in New Hampshire in the United States of America in July, 1944, and of which the text of the Articles is set out in Part II of the Schedule to this Act;

“the Fund” means the International Monetary Fund established under the Fund Agreement;

“the Bank” means the International Bank for Reconstruction and Development established under the Bank Agreement.

2 Approval of acceptance.

2.—Acceptance by the Government of the Fund Agreement and the Bank Agreement is hereby approved.

3 Financial and other provisions.

3.—(1) The subsequent subsections of this section shall come into operation on the day on which the Fund Agreement and the Bank Agreement are signed on behalf of the Government.

(2) The following payments, as and when they become appropriate to be made on behalf of the Government, shall be made out of the Central Fund or the growing produce thereof:

(a) payments in respect of subscription to the Fund,

(b) payments under paragraph (a) of Section 4 of Article III of the Fund Agreement,

(c) payments under paragraph (b) or paragraph (d) of Section 8 of Article IV of the Fund Agreement,

(d) payments under Section 3, Section 7 or Section 8 of Article V of the Fund Agreement,

(e) payments under Section 3 of Article XIII of the Fund Agreement,

(f) payments under Schedule D of the Fund Agreement,

(g) payments under Schedule E of the Fund Agreement,

(h) payments in respect of subscription to the Bank,

(i) payments under Section 9 of Article II of the Bank Agreement,

(j) payments under subparagraph (iv) of paragraph (c) of Section 4 of Article VI of the Bank Agreement.

(3) The Minister for Finance may create and issue to the Fund or the Bank, in such form as he thinks fit, any such non-interest-bearing and non-negotiable notes or other obligations as are provided for by Section 5 of Article III of the Fund Agreement and Section 12 of Article V of the Bank Agreement, and any payments in respect of any such notes or obligations so created and issued shall be made out of the Central Fund or the growing produce thereof.

(4) The Minister for Finance may borrow from any person, and the Bank of Ireland may advance to him, any sum or sums required for payments under this section and, for the purpose of such borrowing, he may create and issue any securities bearing such rate of interest and subject to such conditions as to repayment, redemption or otherwise as he thinks fit.

(5) The principal and interest of any securities issued under subsection (4) of this section and the expenses incurred in connection with their issue shall be charged on the Central Fund or the growing produce thereof.

(6) Any moneys received by the Government from the Fund or the Bank or raised by securities under subsection (4) of this section shall be placed to the credit of the account of the Exchequer and shall form part of the Central Fund and be available in any manner in which that Fund is available.

(7) The Central Bank of Ireland shall act as a depository for the holdings of currency of the State and other assets of the Fund and the Bank and may advance to the Minister for Finance any sum or sums required for payments under this section.

(8) The provisions of—

(a) Sections 2, 3, 4, 5, 6, 7, 8 and 9 of Article IX of the Fund Agreement,

(b) Sections 2, 3, 4, 5, 6, 7, 8 and 9 of Article VII of the Bank Agreement, and

(c) the first sentence of paragraph (b) of Section 2 of Article VIII of the Fund Agreement,

shall have the force of law in the State, subject to the proviso that nothing in Section 9 of Article IX of the Fund Agreement or in Section 9 of Article VII of the Bank Agreement shall be construed—

(i) as entitling the Fund or the Bank to import goods free of customs duty without any restriction on their subsequent sale in the country to which they were imported,

(ii) as conferring on the Fund or the Bank any exemption from duties or taxes which form part of the price of goods sold, or

(iii) as conferring on the Fund or the Bank any exemption from taxes or duties which are in fact no more than charges for services rendered.

4 Short title.

4.—This Act may be cited as the Bretton Woods Agreements Act, 1957.

SCHEDULE. Agreements.

PART I. ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND

The Governments on whose behalf the present Agreement is signed agree as follows:

The International Monetary Fund is established and shall operate in accordance with the following provisions:

The purposes of the International Monetary Fund are:

(i) To promote international monetary co-operation through a permanent institution which provides the machinery for consultation and collaboration on international monetary problems.

(ii) To facilitate the expansion and balanced growth of international trade, and to contribute thereby to the promotion and maintenance of high levels of employment and real income and to the development of the productive resources of all members as primary objectives of economic policy.

(iii) To promote exchange stability, to maintain orderly exchange arrangements among members, and to avoid competitive exchange depreciation.

(iv) To assist in the establishment of a multilateral system of payments in respect of current transactions between members and in the elimination of foreign exchange restrictions which hamper the growth of world trade.

(v) To give confidence to members by making the Fund's resources available to them under adequate safeguards, thus providing them with opportunity to correct maladjustments in their balance of payments without resorting to measures destructive of national or international prosperity.

(vi) In accordance with the above, to shorten the duration and lessen the degree of disequilibrium in the international balances of payments of members.

The Fund shall be guided in all its decisions by the purposes set forth in this Article.

Original members.

The original members of the Fund shall be those of the countries represented at the United Nations Monetary and Financial Conference whose Governments accept membership before the date specified in Article XX, Section 2 (e).

Other members.

Membership shall be open to the Governments of other countries at such times and in accordance with such terms as may be prescribed by the Fund.

Quotas.

Each member shall be assigned a quota. The quotas of the members represented at the United Nations Monetary and Financial Conference which accept membership before the date specified in Article XX, Section 2 (e), shall be those set forth in Schedule A. The quotas of other members shall be determined by the Fund.

Adjustment of quotas.

The Fund shall at intervals of five years review, and if it deems it appropriate propose an adjustment of, the quotas of the members. It may also, if it thinks fit, consider at any other time the adjustment of any particular quota at the request of the member concerned. A four-fifths majority of the total voting power shall be required for any change in quotas and no quota shall be changed without the consent of the member concerned.

Subscriptions: time, place, and form of payment.

(a) The subscription of each member shall be equal to its quota and shall be paid in full to the Fund at the appropriate depository on or before the date when the member becomes eligible under Article XX, Section 4 (c) or (d), to buy currencies from the Fund.

(b) Each member shall pay in gold, as a minimum, the smaller of

(i) 25 per cent. of its quota; or

(ii) 10 per cent. of its net official holdings of gold and United States dollars as at the date when the Fund notifies members under Article XX, Section 4 (a) that it will shortly be in a position to begin exchange transactions.

Each member shall furnish to the Fund the data necessary to determine its net official holdings of gold and United States dollars.

(c) Each member shall pay the balance of its quota in its own currency.

(d) If the net official holdings of gold and United States dollars of any member as at the date referred to in (b) (ii) above are not ascertainable because its territories have been occupied by the enemy, the Fund shall fix an appropriate alternative date for determining such holdings. If such date is later than that on which the country becomes eligible under Article XX, Section 4 (c) or (d), to buy currencies from the Fund, the Fund and the member shall agree on a provisional gold payment to be made under (b) above, and the balance of the member's subscription shall be paid in the member's currency, subject to appropriate adjustment between the member and the Fund when the net official holdings have been ascertained.

Payments when quotas are changed.

(a) Each member which consents to an increase in its quota shall, within thirty days after the date of its consent, pay to the Fund 25 per cent. of the increase in gold and the balance in its own currency. If, however, on the date when the member consents to an increase, its monetary reserves are less than its new quota, the Fund may reduce the proportion of the increase to be paid in gold.

(b) If a member consents to a reduction in its quota, the Fund shall, within thirty days after the date of the consent, pay to the member an amount equal to the reduction. The payment shall be made in the member's currency and in such amount of gold as may be necessary to prevent reducing the Fund's holdings of the currency below 75 per cent. of the new quota.

Substitution of securities for currency.

The Fund shall accept from any member in place of any part of the member's currency which in the judgment of the Fund is not needed for its operations, notes or similar obligations issued by the member or the depository designated by the member under Article XIII, Section 2, which shall be non-negotiable, non-interest-bearing and payable at their par value on demand by crediting the account of the Fund in the designated depository. This Section shall apply not only to currency subscribed by members but also to any currency otherwise due to, or acquired by, the Fund.

Expression of par values.

(a) The par value of the currency of each member shall be expressed in terms of gold as a common denominator or in terms of the United States dollar of the weight and fineness in effect on July 1, 1944.

(b) All computations relating to currencies of members for the purpose of applying the provisions of this Agreement shall be on the basis of their par values.

Gold purchases based on par values.

The Fund shall prescribe a margin above and below par value for transactions in gold by members, and no member shall buy gold at a price above par value plus the prescribed margin, or sell gold at a price below par value minus the prescribed margin.

Foreign exchange dealings based on parity.

The maximum and the minimum rates for exchange transactions between the currencies of members taking place within their territories shall not differ from parity—

(i) in the case of spot exchange transactions, by more than one per cent.; and

(ii) in the case of other exchange transactions, by a margin which exceeds the margin for spot exchange transactions by more than the Fund considers reasonable.

Obligations regarding exchange stability.

(a) Each member undertakes to collaborate with the Fund to promote exchange stability, to maintain orderly exchange arrangements with other members, and to avoid competitive exchange alterations.

(b) Each member undertakes, through appropriate measures consistent with this Agreement, to permit within its territories exchange transactions between its currency and the currencies of other members only within the limits prescribed under Section 3 of this Article. A member whose monetary authorities, for the settlement of international transactions, in fact freely buy and sell gold within the limits prescribed by the Fund under Section 2 of this Article shall be deemed to be fulfilling this undertaking.

Changes in par values.

(a) A member shall not propose a change in the par value of its currency except to correct a fundamental disequilibrium.

(b) A change in the par value of a member's currency may be made only on the proposal of the member and only after consultation with the Fund.

(c) When a change is proposed, the Fund shall first take into account the changes, if any, which have already taken place in the initial par value of the member's currency as determined under Article XX, Section 4. If the proposed change, together with all previous changes, whether increases or decreases,

(i) does not exceed 10 per cent. of the initial par value, the Fund shall raise no objection;

(ii) does not exceed a further 10 per cent. of the initial par value, the Fund may either concur or object, but shall declare its attitude within seventy-two hours if the member so requests;

(iii) is not within (i) or (ii) above, the Fund may either concur or object, but shall be entitled to a longer period in which to declare its attitude.

(d) Uniform changes in par values made under Section 7 of this Article shall not be taken into account in determining whether a proposed change falls within (i), (ii), or (iii) of (c) above.

(e) A member may change the par value of its currency without the concurrence of the Fund if the change does not affect the international transactions of members of the Fund.

(f) The Fund shall concur in a proposed change which is within the terms of (c) (ii) or (c) (iii) above if it is satisfied that the change is necessary to correct a fundamental disequilibrium. In particular, provided it is so satisfied, it shall not object to a proposed change because of the domestic social or political policies of the member proposing the change.

Effect of unauthorized changes.

If a member changes the par value of its currency despite the objection of the Fund, in cases where the Fund is entitled to object, the member shall be ineligible to use the resources of the Fund unless the Fund otherwise determines; and if, after the expiration of a reasonable period, the difference between the member and the Fund continues, the matter shall be subject to the provisions of Article XV, Section 2 (b).

Uniform changes in par values.

Notwithstanding the provisions of Section 5 (b) of this Article, the Fund by a majority of the total voting power may make uniform proportionate changes in the par values of the currencies of all members, provided each such change is approved by every member which has 10 per cent. or more of the total of the quotas. The par value of a member's currency shall, however, not be changed under this provision if, within seventy-two hours of the Fund's action, the member informs the Fund that it does not wish the par value of its currency to be changed by such action.

Maintenance of gold value of the Fund's assets.

(a) The gold value of the Fund's assets shall be maintained notwithstanding changes in the par or foreign exchange value of the currency of any member.

(b) Whenever (i) the par value of a member's currency is reduced, or (ii) the foreign exchange value of a member's currency has, in the opinion of the Fund, depreciated to a significant extent within that member's territories, the member shall pay to the Fund within a reasonable time an amount of its own currency equal to the reduction in the gold value of its currency held by the Fund.

(c) Whenever the par value of a member's currency is increased, the Fund shall return to such member within a reasonable time an amount in its currency equal to the increase in the gold value of its currency held by the Fund.

(d) The provisions of this Section shall apply to a uniform proportionate change in the par values of the currencies of all members, unless at the time when such a change is proposed the Fund decides otherwise.

Separate currencies within a member's territories.

A member proposing a change in the par value of its currency shall be deemed, unless it declares otherwise, to be proposing a corresponding change in the par value of the separate currencies of all territories in respect of which it has accepted this Agreement under Article XX, Section 2 (g). It shall, however, be open to a member to declare that its proposal relates either to the metropolitan currency alone, or only to one or more specified separate currencies, or to the metropolitan currency and one or more specified separate currencies.

Agencies dealing with the Fund.

Each member shall deal with the Fund only through its Treasury, central bank, stabilization fund, or other similar fiscal agency and the Fund shall deal only with or through the same agencies.

Limitation on the Fund's operations.

Except as otherwise provided in this Agreement, operations on the account of the Fund shall be limited to transactions for the purpose of supplying a member, on the initiative of such member, with the currency of another member in exchange for gold or for the currency of the member desiring to make the purchase.

Conditions governing use of the Fund's resources.

(a) A member shall be entitled to buy the currency of another member from the Fund in exchange for its own currency subject to the following conditions:

(i) The member desiring to purchase the currency represents that it is presently needed for making in that currency payments which are consistent with the provisions of this Agreement;

(ii) The Fund has not given notice under Article VII, Section 3, that its holdings of the currency desired have become scarce;

(iii) The proposed purchase would not cause the Fund's holdings of the purchasing member's currency to increase by more than 25 per cent. of its quota during the period of twelve months ending on the date of the purchase nor to exceed 200 per cent. of its quota, but the 25 per cent. limitation shall apply only to the extent that the Fund's holdings of the member's currency have been brought above 75 per cent. of its quota if they had been below that amount;