Bretton Woods Agreements (Amendment) Act 2022

1. Definitions

1. In this Act—

“call” has the meaning assigned to it in the NAB Decision;

“CCRT” means the Catastrophe Containment and Relief Trust established pursuant to Decision No. 14649-(10/64) adopted by the Executive Board of the International Monetary Fund on 25 June 2010, as amended from time to time;

“credit arrangement” has the meaning assigned to it in the NAB Decision;

“Minister” means the Minister for Finance;

“NAB Decision” means—

(a) Decision No. 11428-(97/6) on the New Arrangements to Borrow, adopted by the Executive Board of the International Monetary Fund on 27 January 1997 (as amended before the date of the passing of this Act), the text of which, for ease of reference, is set out in the Schedule, and

(b) any further amendments to that Decision.

2. Approval of NAB Decision

2. (1) The terms of the NAB Decision and the State’s adherence to the NAB Decision are hereby approved.

(2) The Minister shall have all such powers as are necessary to give effect to the State’s adherence to the NAB Decision, including consenting on behalf of the State to amendments to the NAB Decision following consultation with the Central Bank.

(3) The Central Bank shall, on behalf of the State, perform the obligations and exercise the rights of the State arising from the State’s adherence to the NAB Decision, and is authorised, in particular, to make a payment to the Fund arising from a call by the Fund.

(4) The Central Bank shall have all such powers as are necessary to perform the obligations and exercise the rights of the State arising from the State’s adherence to the NAB Decision.

(5) Any moneys received by or on behalf of the State in accordance with the NAB Decision shall be paid to the Central Bank.

3. Publication of approval of amendments to NAB Decision

3. Where Dáil Éireann approves, pursuant to Article 29. 5.2; of the Constitution, an amendment to the NAB Decision, the Minister shall, as soon as may be thereafter, cause notice of such approval, including the amendment so approved, to be published in Iris Oifigiúil.

4. Provision of guarantee to Central Bank

4. (1) The Minister may guarantee, in such form and manner and on such terms and conditions as the Minister thinks fit following consultation with the Central Bank, either or both the payment to the Central Bank of the principal of, and any interest on, any moneys advanced by the Central Bank arising from a call by the Fund.

(2) The amount of any guarantee under subsection (1) or the aggregate amount of any such guarantees shall not exceed the total amount due to the Central Bank by the Fund under the NAB Decision.

(3) All moneys from time to time required by the Minister to meet amounts which may become payable by the Minster under a guarantee under subsection (1) shall be advanced out of the Central Fund or the growing produce thereof.

(4) Moneys paid by the Minister under a guarantee under subsection (1) shall be repaid to the Minister as and when such moneys are recovered by the Central Bank.

(5) Where the whole or any part of the moneys required by subsection (4) to be repaid to the Minister has not been repaid in accordance with that subsection as soon as may be after the date of the advance, the amount so remaining outstanding shall be repaid to the Central Fund out of moneys provided by the Oireachtas.

(6) Notwithstanding subsection (5), the Central Bank shall have a continuing obligation to use all reasonable means to recover any moneys advanced by the Central Bank arising from a call by the Fund.

(7) Moneys paid by the Central Bank to the Minister under this section shall be paid into or disposed of for the benefit of the Exchequer in such manner as the Minister thinks fit.

(8) The Central Bank shall, commencing in the year 2023, submit a report to the Minister before 1 March in each year setting out—

(a) particulars of any guarantee under subsection (1) provided during the previous financial year,

(b) the amount of any payments made by the Minister during the previous financial year under a guarantee under subsection (1) and any amounts repaid to the Minister under subsection (4),

(c) the amount of moneys covered by any guarantee under subsection (1) which was outstanding at the end of the previous financial year, and

(d) an account of any means used by the Central Bank in the previous financial year to recover any moneys advanced by the Central Bank arising from a call by the Fund.

(9) The report under subsection (8) shall be included in the annual report under section 10 of the Bretton Woods Agreements (Amendment) Act 1999.

5. Contributions to Catastrophe Containment and Relief Trust

5. (1) The Minister may, subject to subsections (2) and (3), make payments in respect of the CCRT out of the Central Fund or the growing produce thereof.

(2) Where the Minister proposes to make a payment under subsection (1), the proposal shall be laid before Dáil Éireann as soon as may be and, if a resolution annulling such a proposal is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the proposal is laid before it, the proposal shall be annulled accordingly and the Minister shall not make such a payment.

(3) The aggregate amount of any payment that the Minister may make under subsection (1) shall not exceed €50,000,000.

6. Contributions to prescribed trust funds

6. (1) For the purposes of this section “prescribed trust fund” means a trust or other contribution-based financing mechanism prescribed by the Minister in accordance with subsection (2).

(2) The Minister may by order prescribe a trust or other contribution-based financing mechanism to be a prescribed trust fund where it is established in accordance with Article V, Section 2(b) of the Articles of Agreement of the Fund.

(3) The Minister may, subject to subsections (4) and (5), make payments in respect of a prescribed trust fund out of the Central Fund or the growing produce thereof.

(4) Where the Minister proposes to make a payment under subsection (3), the proposal shall be laid before Dáil Éireann as soon as may be and, if a resolution annulling such a proposal is passed by Dáil Éireann within the next 21 days on which Dáil Éireann has sat after the proposal is laid before it, the proposal shall be annulled accordingly and the Minister shall not make such a payment.

(5) The aggregate amount of any payment that the Minister may make under subsection (3)—

(a) in respect of a single prescribed trust fund, shall not exceed €50,000,000, and

(b) in respect of all prescribed trust funds, the PRGT (within the meaning of the Bretton Woods Agreements (Amendment) Act 1999) and the CCRT, shall not exceed €325,000,000.

(6) An order under subsection (2) shall be laid before each House of the Oireachtas as soon as may be after it is made and, if a resolution annulling the order is passed by either such House within the next 21 days on which that House sits after the order is laid before it, the order shall be annulled accordingly, but without prejudice to the validity of anything previously done thereunder.

7. Payment to Central Bank in respect of certain transactions

7. (1) The Minister may make a payment out of the Central Fund or the growing produce thereof to the Central Bank of an amount not exceeding €6,600,000, being the amount that was payable to the Central Bank in respect of the State’s share of the proceeds of each of the—

(a) deferred charges adjustment, and

(b) SCA-1 account,

and that was transferred by the Fund to the Somalia Administered Account and the Sudan Administered Account.

(2) In this section—

“deferred charges adjustment” shall be construed in accordance with Section V 2(b) of Decision No. 8348-(86/122) on “Income Position-Principles of “Burden Sharing,” Income Target for FY 1987 and FY 1988, Rate of Charge, and Rate of Remuneration”, adopted by the Executive Board of the International Monetary Fund on 25 July 1986, as amended from time to time;

“SCA-1 account” means the First Special Contingent Account established by Decision No. 8619-(87/90), adopted by the Executive Board of the International Monetary Fund on 17 June 1987;

“Somalia Administered Account” means the account established by Decision No. 16626-(19/103), adopted by the Executive Board of the International Monetary Fund on 18 December 2019;

“Sudan Administered Account” means the account established by Decision No. 17042-(21/46), adopted by the Executive Board of the International Monetary Fund on 10 May 2021.

8. Amendment of Bretton Woods Agreements Act 1957

8. Section 3 of the Bretton Woods Agreements Act 1957 is amended in subsection (2)—

(a) in paragraph (k), by the substitution of “PRGT” for “ESAF Trust”,

(b) in paragraph (l), by the substitution of “1999,” for “1999.”, and

(c) by the insertion of the following paragraphs after paragraph (l):

“(m) payments in respect of the CCRT within the meaning of the Bretton Woods Agreements (Amendment) Act 2022,

(n) payments in respect of a prescribed trust fund within the meaning of section 6 of the Bretton Woods Agreements (Amendment) Act 2022.”.

9. Amendment of Bretton Woods Agreements (Amendment) Act 1999

9. The Bretton Woods Agreements (Amendment) Act 1999 is amended—

(a) in section 1, by the substitution of the following definition for the definition of “ESAF Trust”:

“‘PRGT’ means the Poverty Reduction and Growth Trust, formerly known as the Enhanced Structural Adjustment Facility Trust, established pursuant to Decision No. 8759-(87/176) adopted by the Executive Board of the International Monetary Fund on 18 December 1987, as amended from time to time;”,

(b) in section 4—

(i) in subsection (1), by the substitution of “PRGT” for “ESAF Trust” in each place where it occurs, and

(ii) by the substitution of the following subsection for subsection (5):

“(5) The aggregate amount of sums that the Minister may pay in respect of the PRGT for the purposes of subsection (1) shall not exceed €75,000,000.”,

(c) in section 7, by the substitution of “PRGT” for “ESAF Trust”, and

(d) in section 10(2)—

(i) by the substitution of “1957 to 2022” for “1957 to 1999” in each place where it occurs,

(ii) in paragraph (d), by the substitution of “section 9(10);” for “section 9(10).”, and

(iii) by the insertion of the following paragraph after paragraph (d):

“(e) a copy of the report submitted by the Central Bank to the Minister under section 4(8) of the Bretton Woods Agreements (Amendment) Act 2022.”.

10. Amendment of Finance Act 2010

10. Section 163 of the Finance Act 2010 is repealed.

11. Short title, construction, collective citation and commencement

11. (1) This Act may be cited as the Bretton Woods Agreements (Amendment) Act 2022.

(2) The Bretton Woods Agreements Acts 1957 to 2012 and this Act shall be construed together as one Act and may be cited together as the Bretton Woods Agreements Acts 1957 to 2022.

(3) This Act shall come into operation on such day or days as the Minister may appoint by order or orders either generally or with reference to any particular purpose or provision and different days may be so appointed for different purposes and different provisions.

SCHEDULE Text of New Arrangements to Borrow

Section 1

Preamble

In order to enable the International Monetary Fund (the “Fund”) to fulfill more effectively its role in the international monetary system, a number of countries with the financial capacity to support the international monetary system have agreed to provide resources to the Fund up to specified amounts in accordance with the terms and conditions of this decision. As the Fund is a quota-based institution, the credit arrangements provided for under the terms of this decision shall only be drawn upon when quota resources need to be supplemented in order to forestall or cope with an impairment of the international monetary system. In order to give effect to these intentions, the following terms and conditions are adopted under Article VII, Section 1(i) of the Fund’s Articles of Agreement.

Paragraph 1. Definitions

(a) As used in this decision the term:

(i)“amount of a credit arrangement” means the maximum amount expressed in special drawing rights that a participant undertakes to make available to the Fund under a credit arrangement;

(ii)“Articles” means the Articles of Agreement of the Fund;

(iii)“available commitment” means a participant’s credit arrangement less any drawn and outstanding balances;

(iv)“borrowed currency” or “currency borrowed” means currency transferred to the Fund’s account under a credit arrangement;

(v)“call” means a notice by the Fund to a participant to make a transfer under its credit arrangement to the Fund’s account;

(vi)“credit arrangement” means an undertaking to provide resources to the Fund on the terms and conditions of this decision;

(vii)“currency actually convertible” means currency included in the Fund’s financial transactions plan for transfers;

(viii)“drawer” means a member that purchases borrowed currency from the General Resources Account of the Fund;

(ix)“indebtedness of the Fund” means the amount the Fund is committed to repay under a credit arrangement;

(x)“member” means a member of the Fund;

(xi)“participant” means a participating member or a participating institution;

(xii)“participating institution” means an official institution of a member that has entered into a credit arrangement with the Fund with the consent of the member; and

(xiii)“participating member” means a member that has entered into a credit arrangement with the Fund.

(b) For the purposes of this decision, the Monetary Authority of Hong Kong (the “HKMA”) shall be regarded as an official institution of the member whose territories include Hong Kong, provided that:

(i) loans by the HKMA and payments by the Fund to the HKMA under this decision shall be made in the currency of the United States of America, unless the currency of another member is agreed between the Fund and the HKMA;

(ii) the references to balance of payments and reserve position in paragraphs 5(c), 6(b), 6(c), 7(a), and 11(e) shall be understood to refer to the balance of payments and reserve position of Hong Kong. The HKMA shall not be eligible to vote on a proposal for activation under paragraph 5(c), included in a resources mobilization plan under paragraph 6(b), or subject to calls under paragraph 7(a), and shall be excluded from calls in accordance with paragraph 6(c), if, at the time of voting on any such proposal, approval of any such resource mobilization plan, or making of any such call, the HKMA notifies the Fund that Hong Kong’s present and prospective balance of payments and reserve position does not allow it to meet calls under its credit arrangement; and

(iii) the HKMA shall have the right to request early repayment in accordance with paragraph 13(c) with respect to claims transferred to the HKMA if at the time of the transfer the balance of payments position of Hong Kong is, in the opinion of the Fund, sufficiently strong to justify such a right.

Paragraph 2. Credit Arrangements

(a) A member or institution that adheres to this decision undertakes to provide resources to the Fund on the terms and conditions of this decision up to the amount in special drawing rights set forth in Annex I to this decision (“Annex I”), which may be amended from time to time in order to take into account changes in credit arrangements resulting from the application of paragraphs 3(b), 4, 15(b), 16, 17, and 19(b).

(b) Except as set forth in paragraph 1(b)(i) or otherwise agreed with the Fund, resources provided to the Fund under this decision shall be made in the currency of the participant. Agreements under this paragraph for the use of the currency of another member shall be subject to the concurrence of any member whose currency shall be used.

Paragraph 3. Adherence

(a) Any member or institution specified in Annex I as a new participant may adhere to this decision in accordance with paragraph 3(c).

(b) Any member or institution not specified in Annex I, may apply to become a participant at any time. Any such member or institution that wishes to become a participant shall, after consultation with the Fund, give notice of its willingness to adhere to this decision, and, if the Fund and participants representing 85 percent of total credit arrangements shall so agree, the member or institution may adhere in accordance with paragraph 3(c). When giving notice of its willingness to adhere under this paragraph 3(b), a member or institution shall specify the amount, expressed in special drawing rights, of the credit arrangement which it is willing to enter into, provided that the amount shall not be less than the credit arrangement of the participant with the smallest credit arrangement. The admission of a new participant shall lead to a proportional reduction in the credit arrangements of all existing participants whose credit arrangements are above that of the participant with the smallest credit arrangement: such proportional reduction in the credit arrangements of participants shall be in an aggregate amount equal to the amount of the new participant’s credit arrangement less any increase in total credit arrangements decided in accordance with paragraph 4(a), provided that no participant’s credit arrangement shall be reduced below the minimum amount set out in Annex I.

(c) A member or institution shall adhere to this decision by depositing with the Fund an instrument setting forth that it has adhered in accordance with its law and has taken all steps necessary to enable it to carry out the terms and conditions of this decision. On the deposit of the instrument the member or institution shall be a participant as of the date of the deposit.

Paragraph 4. Changes in Amounts of Credit Arrangements

(a) When a member or institution is authorized under paragraph 3(b) to adhere to this decision, the total amount of credit arrangements may be increased by the Fund with the agreement of participants representing 85 percent of total credit arrangements; the increase shall not exceed the amount of the new participant’s credit arrangement.

(b) The amounts of participants’ individual credit arrangements may be reviewed from time to time in the light of developing circumstances and changed with the agreement of the Fund and of participants representing 85 percent of total credit arrangements, including each participant whose credit arrangement is changed. This provision may be amended only with the consent of all participants.

Paragraph 5. Activation Period