INTERNATIONAL DEVELOPMENT ASSOCIATION AGREEMENT ACT

Arrangement of Sections

1. Short title.

2. Authorisation of signature of Articles of Agreement of the International Development Association.

3. Status, immunities and privileges accorded in Sri Lanka to the Association.

4. Issue of notes or other obligations to the Association.

5. Payments out of the Consolidated Fund.

6. Issue of Government notes or obligations to the Central Bank.

7. Receipts.

8. Orders for carrying the Articles into effect.

SCHEDULES

7 of 1961.

AN ACT to enable Ceylon to become a member of the International Development Association.

[Date of Commencement: 20th February, 1961]

1. Short title.

This Act may be cited as the International Development Association Agreement Act.

2. Authorisation of signature of Articles of Agreement of the International Development Association.

The Minister in charge of the subject of Finance is hereby authorised by instrument under his hand to empower such person as may be named in the instrument, on behalf of the Government of Sri Lanka—

(a) to sign the Articles of Agreement* (hereinafter referred to as "the Articles”) of the International Development Association (hereinafter referred to as "the Association”) which are set out in the Schedule to this Act, and

(b) to deposit with the International Bank for Reconstruction and Development (hereinafter referred to as "the Bank”) an instrument stating that the Government has accepted the Articles without reservation in accordance with the law of Sri Lanka and has taken all steps to enable the Government to carry out all the obligations of the Government under the Articles, in order that Sri Lanka which is entitled to be an original member of the Association under Section 1(a)
of Article II of the Articles and Schedule A to the Articles, may accept membership in the Association.

3. Status, immunities and privileges accorded in Sri Lanka to the Association.

The provisions of Sections 2 to 9 of Article VIII of the Articles shall have the force of law in Sri Lanka, and accordingly the Association—

(a) shall have in Sri Lanka the status and capacity specified in Section 2 of the said Article VIII; and

(b) shall have in Sri Lanka the immunities and privileges specified in Sections 3 to 9 of the said Article VIII.

4. Issue of notes or other obligations to the Association.

The Minister in charge of the subject of Finance, if he thinks fit so to do, may, on behalf of the Government, create and issue to the Association, in such form as he thinks fit, any such non-interest bearing and non-negotiable notes or similar obligations payable at par value on demand to the account of the Association as the Association may, under subsection (e) of Section 2 of Article II of the Articles, determine to accept in place of any part of the subscription paid in or payable by Sri Lanka under subsection (f) of Section 2 of Article II, and Section 2 of Article IV, of the Articles.

5. Payments out of the Consolidated Fund.

There shall be paid out of the Consolidated Fund—

(a) such sums as may be required to pay to the Association the initial subscription of Sri Lanka under Section 2 of Article II of the Articles;

(b) such sums as may, from time to time, become payable to the Association by Sri Lanka under the Articles; and

(c) such sums as may be required for the redemption of any notes or obligations created and issued to the Association under this Act.

6. Issue of Government notes or obligations to the Central Bank.

(1) For the purpose of providing any sums required to be paid out of the Consolidated Fund under section 5, the Minister in charge of the subject of Finance is hereby authorised to raise loans, on behalf of the Government, by the creation and issue to the Central Bank of Ceylon, in such form as he thinks fit, of non-interest bearing and non-negotiable notes or obligations.

(2) Notwithstanding anything in the Monetary Law Act, the Central Bank of Ceylon is hereby authorised to accept and hold any notes or obligations created and issued in accordance with the provisions of subsection (1) of this section.

(3) There shall be paid out of the Consolidated Fund all sums required for the redemption of any notes or obligations created and issued to the Central Bank of Ceylon under subsection (1) of this section.

7. Receipts.

All sums received by or on behalf of the Government of Sri Lanka from the Association under the Articles shall be paid into the Consolidated Fund; and the sums so received, in so far as they represent capital, shall, unless otherwise provided in that behalf by any written law, be applied from time to time as the Minister in charge of the subject of Finance may direct in the redemption of notes or other obligations issued to the Central Bank under this Act.

8. Orders for carrying the Articles into effect.

The Minister in charge of the subject of Finance may, by Order published in the Gazette, make such other provision as he may consider reasonably necessary for carrying into effect any of the provisions of the Articles, and every Order made under this section and so published shall be laid before Parliament and shall have the force of law unless disapproved within fourteen days.

SCHEDULES

ARTICLES OF AGREEMENT OF THE INTERNATIONAL DEVELOPMENT ASSOCIATION

The Government on whose behalf this Agreement is signed considering.

That mutual co-operation for constructive economic purposes, healthy development of the world economy and balance growth of international trade foster international relationships conducive to the maintenance of peace and world prosperity.

That an acceleration of economic development which will promote higher standards of living and economic and social progress in the less-developed countries is desirable not only in the interests of those countries but also in the interests of the international community as a whole.

That achievement of these objectives would be facilitated by an increase in the international flow of capital, public and private, to assist in the development of the resources of the less-developed countries, do hereby agree as follows.

Introductory Article

The International Development Association (hereinafter called "the Association”) is established and shall operate in accordance with the following provisions.

ARTICLE I

Purposes

The purposes of the Association are to promote economic development, increase productivity and thus raise Standards of living in the less-developed areas of the world included within the Association's membership, in particular by providing finance to meet their important developmental requirements on terms which are more flexible and bear less heavily on the balance of payments than those of conventional loans, thereby furthering the developmental objectives of the International Bank for Reconstruction and Development (hereinafter called "the Bank”) and supplementing its activities.

The Association shall be guided in all its decisions by the provisions of this Article.

ARTICLE II

Membership; initial subscriptions

SECTION 1.—Membership

(a) the Original members of the Association shall be those members of the Bank listed in Schedule A hereto which, on or before the date specified in Article XI, Section 2(c), accept membership in the Association;

(b) membership shall be open to other members of the Bank at such times and in accordance with such terms as the Association may determine.

SECTION 2.—Initial Subscriptions

(a) Upon accepting membership, each member shall subscribe funds in the amount assigned to it. Such subscriptions are herein referred to as initial subscriptions;

(b) The initial subscription assigned to each original member shall be in the amount set forth opposite its name in Schedule A, expressed in terms of United Stales dollars of the weight and fineness in effect on January 1, 1960;

(c) Ten per cent of the initial subscription of each original member shall be payable in gold or freely convertible currency as follows: fifty per cent within thirty days after the date on which the Association shall begin operations pursuant to Article XI, Section 4, or on the date on which the original member becomes a member, whichever shall be later; twelve and one-half per cent one year after the beginning of operations of the Association; and twelve and one-half per cent each year thereafter at annual intervals until the ten per cent portion of the initial subscription shall have been paid in full;

(d) The remaining ninety per cent of the initial subscription of each original member shall be payable in gold or freely convertible currency in the case of members listed in Part I of Schedule A, and in the currency of the subscribing member in the case of members listed in Part II of Schedule A. This ninety percent portion of initial subscriptions of original members shall be payable in five equal annual installments as follows; the first such installment within thirty days after the date on which the Association shall begin operations pursuant to Article XI, Section 4, or on the date on which the original member becomes a member, whichever shall be later; the second installment one year after the beginning of operations of the Association, and succeeding installments each year thereafter at annual intervals until the ninety per cent portion of the initial subscription shall have been paid in full;

(e) The Association shall accept from any member, in place of any part of the member's currency paid in or payable by the member under the preceding subsection (d) or under Section 2 of Article IV and not needed by the Association in its operations, notes or similar obligations issued by the government of the member or the depository designated by such member, which shall be non-negotiable, non-interest bearing and payable at their par value on demand to the account of the Association in the designated depository;

(f) For the purpose of this Agreement the Association shall regard as "freely convertible currency—

(i) currency of a member which the Association determines, after consultation with the International Monetary Fund, is adequately convertible into the currencies of other members for the purposes of the Association's operations; or

(ii) currency of a member which such member agrees, on terms satisfactory to the Association, to exchange for the currencies of other members for the purposes of the Association's operations.

(g) Except as the Association may otherwise agree, each member listed in Part I of Schedule A shall maintain, in respect of its currency paid in by it as freely convertible currency pursuant to subsection (f) of this Section, the same convertibility as existed at the lime of payment;

(h) The conditions on which the initial subscriptions of members other than original members may be made, and the amounts and the terms of payment thereof, shall be determined by the Association pursuant to Section 1 of this Article.

SECTION 3.—Limitation on Liability

No member shall be liable, by reason of its membership, for obligations of the Association.

ARTICLE III

Additions to Resources

SECTION 1.—Additional Subscriptions

(a) The Association shall at such time as it deems appropriate in the light of the Schedule for completion of payments on initial subscriptions of original members, and at intervals of approximately five years thereafter, review the adequacy of its resources and, if it deems desirable, shall authorise a general increase in subscriptions. Notwithstanding the foregoing, general or individual Increases in subscriptions may be authorised at any lime, provided that an individual increase shall be considered only at the request of the member involved. Subscriptions pursuant to this Section are herein referred to as additional subscriptions;

(b) Subject to the provisions of paragraph (c) below, when additional subscriptions are authorised, the amounts authorised for subscription and the terms and conditions relating thereto shall be as determined by the Association;

(c) When any additional subscription is authorised, each member shall be given an opportunity to subscribe, under such conditions as shall be reasonably determined by the Association, an amount which will enable it to maintain its relative voting power, but no member shall be obligated to subscribe;

(d) All decisions under this Section shall be made by a two-third majority of the total voting power.

SECTION 2.—Supplementary Resources Provided by a Member in the Currency of another Member

(a) The Association may enter into arrangements, on such terms and conditions consistent with the provisions of this Agreement as may be agreed upon, to receive from any member, in addition to the amounts payable by such number on account of its initial or any additional subscription, supplementary resources in the currency of another member, provided that the Association shall not enter into any such arrangement unless the Association is satisfied that the member whose currency is involved agrees to the use of such currency as supplementary resources and to the terms and conditions governing such use. The arrangements under which any such resources are received may include provisions regarding the disposition of earnings on the resources and regarding the disposition of the resources in the event that the member providing them ceases to be a member or the Association permanently suspends its operations;

(b) The Association shall deliver to the contributing member a Special Development Certificate setting forth the amount and currency of the resources so contributed and the terms and conditions of the arrangement relating to such resources. A Special Development Certificate shall not carry any voting rights and shall be transferable only to the Association;

(c) Nothing in this Section shall preclude the Association from accepting resources from a member in its own currency on such terms as may be agreed upon.

ARTICLE IV

Currencies

SECTION 1. -Use of Currencies

(a) Currency of any member listed in Part II of Schedule A, whether or not freely convertible, received by the Association pursuant to Article II, Section 2 (f), in payment of the ninety per cent portion payable thereunder in the currency of such member, and currency of such member derived therefrom as principal, interest or other charges, may be used by the Association for administrative expenses incurred by the Association in the territories of such member and insofar as consistent with sound monetary policies, in payment for goods and services produced in the territories of such member and required for projects financed by the Association and located in such territories; and in addition when and to the extent justified by the economic and financial situation of the member concerned as determined by agreement between the member and the Association, such currency shall be freely convertible or otherwise usable for projects financed by the Association and located outside the territories of the member;

(b) The usability of currencies received by the Association in payment of subscriptions other than initial subscriptions of original members, and currencies derived therefrom as principal, interest or other charges, shall be governed by the terms and conditions on which such subscriptions are authorised;

(c) The usability of currencies received by the Association as supplementary resources other than subscriptions, and currencies derived therefrom as principal, interest or other charges, shall be governed by the terms of the arrangements pursuant to which such currencies are received;

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