Bretton Woods Agreements (Amendment) Act , 1969

1 Interpretation.

1.—In this Act—

“the Central Bank” means the Central Bank of Ireland;

“the Principal Act” means the Bretton Woods Agreements Act, 1957;

“the proposed amendment” means the amendment which it is proposed to make to the Fund Agreement the text of which amendment is set out in the Schedule to this Act.

2 Approval of acceptance of proposed amendment.

2.—Acceptance by the Government of the proposed amendment is hereby approved.

3 Provisions relating to special drawing rights.

3.—(1) If, but only if, the proposed amendment (in this section referred to as the amendment) is made and the Government becomes a participant in the Special Drawing Account for which provision is included in the amendment, the provisions of this section shall have effect.

(2) The Central Bank is hereby authorised on behalf of the Government,

(a) to receive from the Fund any special drawing rights allocated to the Government in pursuance of the amendment, and

(b) to acquire in pursuance of the amendment special drawing rights other than those mentioned in paragraph (a) of this subsection.

(3) The Central Bank shall, on behalf of the Government, exercise the rights and accept and discharge the obligations whether relating to special drawing rights received or acquired under this section or otherwise arising from participation in the Special Drawing Account.

4 Amendment of section 3 of Principal Act.

4.—(1) Section 3 of the Principal Act is hereby amended as follows:

(a) subsection (2) shall be construed and have effect as requiring the payments mentioned in paragraphs (a), (b), (c), (d), (f) and (g) thereof, as and when they become appropriate to be made on behalf of the Government, to be made by the Central Bank,

(b) by the deletion in subsection (3) of “Fund or the” and “Section 5 of Article III of the Fund Agreement and”,

(c) subsection (6) shall in relation to any moneys receivable by the Government from the Fund be construed and have effect as if “Any moneys receivable by the Government from the Fund shall be paid to the Central Bank.” were substituted for all the words therein, and

(d) “paragraphs (e), (h), (i) and (j) of subsection (2) of” shall be inserted after “under” in both subsection (4) and subsection (7).

(2) Subject to subsection (3) of this section, section 3 (8) of the Principal Act is hereby amended by the insertion of “and paragraph (b) of Article XXVII” and “or paragraph (b) of Article XXVII” after “Article VIII” in paragraph (c) and “Section 9 of Article IX” respectively.

(3) Subsection (2) of this section shall come into operation if, and only if, section 3 of this Act comes into effect.

5 Certain asset vested in Central Bank.

5.—(1) The asset represented by the claim relating to the amount by which the Government's quota in the Fund exceeds the aggregate of any outstanding amounts represented either by notes or other obligations created and issued to the Fund by the Minister for Finance pursuant to section 3 (3) of the Principal Act or by the Central Bank pursuant to section 6 of this Act is hereby vested in the Central Bank.

(2) Any amount by which the Government's said quota exceeds the aggregate of any outstanding amounts represented by notes or other obligations so created and issued by the Minister for Finance shall be credited by the Central Bank against any sum advanced to that Minister under section 3 (7) of the Principal Act and outstanding.

6 Central Bank may create and issue to Fund certain obligations.

6.—The Central Bank may create and issue to the Fund, in such form as the Central Bank 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 any payments in respect of any such notes or obligations so created and issued shall be made by the Central Bank.

7 Construction of references to Fund Agreement in Principal and this Act.

7.—In this Act and in the Principal Act any reference to the Fund Agreement shall be construed as a reference to that agreement as amended under and in accordance with the Fund Agreement.

8 Commencement of sections 4 (1), 5 and 6.

8.—Sections 4 (1), 5 and 6 of this Act shall come into operation on such day as the Minister for Finance may, with the agreement of the Central Bank, fix therefor by order.

9 Expenses of Minister for Finance.

9.—Any expenses incurred by the Minister for Finance in the administration of this Act shall be paid out of moneys provided by the Oireachtas.

10 Short title, construction and collective citation.

10.—(1) This Act may be cited as the Bretton Woods Agreements (Amendment) Act, 1969.

(2) The Principal Act and this Act shall be construed together as one Act.

(3) The Principal Act and this Act may be cited together as the Bretton Woods Agreements Acts, 1957 and 1969.

SCHEDULE PROPOSED AMENDMENT TO THE ARTICLES OF AGREEMENT OF THE INTERNATIONAL MONETARY FUND

PREPARED PURSUANT TO BOARD OF GOVERNORS RESOLUTION No. 22-8

A

The Introductory Article shall read:

“(i) The International Monetary Fund is established and shall operate in accordance with the provisions of this Agreement as originally adopted, and as subsequently amended in order to institute a facility based on special drawing rights and to effect certain other changes.

(ii) To enable the Fund to conduct its operations and transactions, the Fund shall maintain a General Account and a Special Drawing Account. Membership in the Fund shall give the right to participation in the Special Drawing Account.

(iii) Operations and transactions authorised by this Agreement shall be conducted through the General Account except that operations and transactions involving special drawing rights shall be conducted through the Special Drawing Account.”

B

ARTICLE I

“(v) To give confidence to members by making the Fund's resources temporarily 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.”

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

C

ARTICLE III

“Section 2. Adjustment of quotas

The Fund shall at intervals of not more than five years conduct a general 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. An eighty-five per cent majority of the total voting power shall be required for any change in quotas proposed as the result of a general review and a four-fifths majority of the total voting power shall be required for any other change in quotas. No quota shall be changed without the consent of the member concerned.”

“(c) A majority of eighty-five per cent of the total voting power shall be required for any decisions dealing with the payment, or made with the sole purpose of mitigating the effects of the payment, of increases in quotas proposed as the result of a general review of quotas.”

D

ARTICLE IV

“Section 7. Uniform changes in par values

Notwithstanding the provisions of Section 5 (b) of this Article, the Fund by an eighty-five per cent majority of the total voting power may make uniform proportionate changes in the par values of the currencies of all members. 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.”

“(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 made the Fund decides otherwise by an eighty-five per cent majority of the total voting power.”

E

ARTICLE V

“(iii) The proposed purchase would be a gold tranche purchase, or would not cause the Fund's holdings of the purchasing member's currency to increase by more than twenty-five per cent of its quota during the period of twelve months ending on the date of the purchase or to exceed two hundred per cent of its quota;”

“(c) A member's use of the resources of the Fund shall be in accordance with the purposes of the Fund. The Fund shall adopt policies on the use of its resources that will assist members to solve their balance of payments problems in a manner consistent with the purposes of the Fund and that will establish adequate safeguards for the temporary use of its resources.”

“(d) A representation by a member under (a) above shall be examined by the Fund to determine whether the proposed purchase would be consistent with the provisions of this Agreement and with the policies adopted under them, with the exception that proposed gold tranche purchases shall not be subject to challenge.”

“(b) At the end of each financial year of the Fund, a member shall repurchase from the Fund with each type of monetary reserve, as determined in accordance with Schedule B, part of the Fund's holdings of its currency under the following conditions:

(i) Each member shall use in repurchases of its own currency from the Fund an amount of its monetary reserves equal in value to the following changes that have occurred during the year: one-half of any increase in the Fund's holdings of the member's currency, plus one-half of any increase, or minus one-half of any decrease, in the member's monetary reserves, or, if the Fund's holdings of the member's currency have decreased, one-half of any increase in the member's monetary reserves minus one-half of the decrease in the Fund's holdings of the member's currency.”

“(c) None of the adjustments described in (b) above shall be carried to a point at which

(i) the member's monetary reserves are below one hundred fifty per cent of its quota, or

(ii) the Fund's holdings of its currency are below seventy-five per cent of its quota, or

(iii) the Fund's holdings of any currency required to be used are above seventy-five per cent of the quota of the member concerned, or

(iv) the amount repurchased exceeds twenty-five per cent of the quota of the member concerned.”

“(d) The Fund by an eighty-five per cent majority of the total voting power may revise the percentages in (c) (i) and (iv) above and revise and supplement the rules in paragraph 1 (c), (d), and (e) and paragraph 2 (b) of Schedule B.”

“(a) Any member buying the currency of another member from the Fund in exchange for its own currency shall pay, in addition to the parity price, a service charge uniform for all members of not less than one-half per cent and not more than one per cent, as determined by the Fund, provided that the Fund in its discretion may levy a service charge of less than one-half per cent on gold tranche purchases.”

“Section 9. Remuneration

(a) The Fund shall pay remuneration, at a rate uniform for all members, on the amount by which seventy-five per cent of a member's quota exceeded the average of the Fund's holdings of the member's currency, provided that no account shall be taken of holdings in excess of seventy-five per cent of quota. The rate shall be one and one-half per cent per annum, but the Fund in its discretion may increase or reduce this rate, provided that a three-fourths majority of the total voting power shall be required for any increase above two per cent per annum or reduction below one per cent per annum.

(b) Remuneration shall be paid in gold or a member's own currency as determined by the Fund.”

F

ARTICLE VI

“(a) A member may not use the Fund's 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 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 resources of the Fund.”

“Section 2. Special provisions for capital transfers

A member shall be entitled to make gold tranche purchases to meet capital transfers.”

G

ARTICLE XII

“(ii) Approve a revision of quotas, or to decide on the payment, or on the mitigation of the effects of payment of increases in quotas proposed as the result of a general review of quotas.”

“(iii) Approve a uniform change in the par values of the currencies of all members, or to decide when such a change is made that the provisions relating to the maintenance of gold value of the Fund's assets shall not apply.”

“(ix) Revise the provisions on repurchase or to revise and supplement the rules for the distribution of repurchases among types of reserves.”

“(x) Make transfers to general reserve from any special reserve.”

“Reserves and distribution of net income”

“(b) If any distribution is made of the net income of any year, there shall first be distributed to members eligible to receive remuneration under Article V, Section 9, for that year an amount by which two per cent per annum exceeded any remuneration that has been paid for that year. Any distribution of the net income of that year beyond that amount shall be made to all members in proportion to their quotas. Payments to each member shall be made in its own currency.”

“(c) The Fund may make transfers to general reserve from any special reserve.”

H

ARTICLE XVIII

Article XVIII (b) shall read:

“(b) In any case where the Executive Directors have given a decision under (a) above, any member may require, within three months from the date of the decision, that the question be referred to the Board of Governors, whose decision shall be final. Any question referred to the Board of Governors shall be considered by a Committee on Interpretation of the Board of Governors. Each Committee member shall have one vote. The Board of Governors shall establish the membership, procedures, and voting majorities of the Committee. A decision of the Committee shall be the decision of the Board of Governors unless the Board by an eighty-five per cent majority of the total voting power decides otherwise. Pending the result of the reference to the Board the Fund may, so far as it deems necessary, act on the basis of the decision of the Executive Directors.”

I

ARTICLE XIX

“(a) A member's monetary reserves means its official holdings of gold, of convertible currencies of other members, and of the currencies of such non-members as the Fund may specify.”

“(e) The sums deemed to be official holdings of other official institutions and other banks under (c) above shall be included in the member's monetary reserves.”