International Monetary Agreements
No. 37 of 1966
An Act to amend the International Monetary Agreements Act 1947–1963 in consequence of an amendment of the Articles of Agreement of the International Bank for Reconstruction and Development.
[Assented to 12 September, 1966]
BE it enacted by the Queen’s Most Excellent Majesty, the Senate, and the House of Representatives of the Commonwealth of Australia, as follows:—
Short title and citation.
1.—(1.) This Act may be cited as the International Monetary Agreements Act 1966.
(2.) The International Monetary Agreements Act 1947–1963 is in this Act referred to as the Principal Act.
(3.) The Principal Act, as amended by this Act, may be cited as the International Monetary Agreements Act 1947–1966.
Commencement.
2. This Act shall come into operation on the day on which it receives the Royal Assent.
Definitions.
3. Section 3 of the Principal Act is amended by omitting the definition of “the Bank Agreement”, and inserting in its stead the following definition:—
“‘the Bank Agreement’ means the Articles of Agreement of the International Bank for Reconstruction and Development set out in the Second Schedule to this Act, as amended in accordance with the resolution of the Board of Governors of that Bank set out in the Third Schedule to this Act, and having effect from the seventeenth day of December, One thousand nine hundred and sixty-five, being an amendment that has been accepted in accordance with Article VIII of those Articles.”.
4. Section 4 of the Principal Act is repealed and the following section inserted in its stead:—
Membership of Australia of the Fund and of the Bank.
“4. The membership of Australia of the Fund and of the Bank is approved.”.
Third Schedule.
5. The Principal Act is amended by adding at the end thereof the following Schedule:—
THIRD SCHEDULE Section 3.
RESOLUTION OF THE BOARD OF GOVERNORS OF THE INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT
Resolution No. 221
Loans to International Finance Corporation
WHEREAS the Executive Directors have communicated to the Chairman of the Board of Governors a proposal to introduce modifications in the Articles of Agreement; and
WHEREAS the Chairman has brought the proposal before the Board of Governors;
NOW THEREFORE the Board of Governors resolves as follows:
In accordance with the recommendations of the Executive Directors, the Board of Governors hereby approves the amendment of the Articles of Agreement by the addition to Article III of a new Section 6, entitled Loans to the International Finance Corporation and reading as follows:
“(a) The Bank may make, participate in, or guarantee loans to the International Finance Corporation, an affiliate of the Bank, for use in its lending operations. The total amount outstanding of such loans, participations and guarantees shall not be increased if, at the time or as a result thereof, the aggregate amount of debt (including the guarantee of any debt) incurred by the said Corporation from any source and then outstanding shall exceed an amount equal to four times its unimpaired subscribed capital and surplus.
(b) The provisions of Article III, Sections 4 and 5(c) and of Article IV, Section 3 shall not apply to loans, participations and guarantees authorized by this Section.”
Overview
The International Monetary Agreements Act 1966 was enacted to address the need for updating the legal framework governing Australia's participation in international financial institutions, specifically the International Bank for Reconstruction and Development, in light of amendments to the Articles of Agreement of the Bank. This Act was introduced to ensure the alignment of Australian legislation with the evolving international financial architecture and to reflect the acceptance of amendments to the Bank's Articles of Agreement by the Board of Governors. Enacted by the Australian Parliament, the Act aims to facilitate Australia's continued membership in the International Monetary Fund and the International Bank for Reconstruction and Development by incorporating the latest amendments to the Bank's Articles of Agreement, thus enabling the Bank to make loans to the International Finance Corporation under certain conditions.
The Act amends the International Monetary Agreements Act 1947–1963 by updating the definition of "the Bank Agreement" to reflect the amended Articles of Agreement and by confirming Australia's membership in both the Fund and the Bank. It also includes a resolution by the Board of Governors approving modifications to the Bank's Articles of Agreement, allowing the Bank to make loans to the International Finance Corporation, subject to specific conditions and limitations. This legislative update was essential to maintain the relevance and effectiveness of Australia's participation in these critical international financial institutions.
Scope and Application
The International Monetary Agreements Act 1966 is a piece of legislation enacted by the Commonwealth of Australia that amends the International Monetary Agreements Act 1947–1963 to reflect changes to the Articles of Agreement of the International Bank for Reconstruction and Development. This Act applies to the government of Australia and its agencies, as it pertains to the approval of Australia's membership in the International Monetary Fund and the International Bank for Reconstruction and Development, as well as the modifications to the Bank's Articles of Agreement. The Act is geographically applicable to the Commonwealth and its territories and is limited to the specific amendments outlined within the legislation. The Act does not extend its application beyond what is explicitly stated, and no subordinate instruments are mentioned to further define its scope. The primary purpose of the Act is to ensure that Australia's participation in these international financial institutions remains aligned with the evolving terms and conditions set forth by the respective agreements.
Key Provisions
The International Monetary Agreements Act 1966 primarily focuses on amending the International Monetary Agreements Act 1947–1963, reflecting the changes in the Articles of Agreement of the International Bank for Reconstruction and Development (World Bank). Section 3 of the Act redefines "the Bank Agreement" to mean the Articles of Agreement of the World Bank as amended by a specific resolution of the Board of Governors, effective from December 17, 1965. Section 4 of the Act formally approves Australia’s membership of the International Monetary Fund (IMF) and the World Bank. Additionally, it incorporates a new Third Schedule detailing the resolution by the Board of Governors, which allows the World Bank to make loans, participate in, or guarantee loans to the International Finance Corporation (IFC), an affiliate of the Bank, under specific conditions.
The Act imposes several obligations on the parties involved. Firstly, it mandates the approval of Australia’s membership in both the IMF and the World Bank. Secondly, it requires the World Bank to adhere to the conditions set forth in the amended Articles of Agreement, specifically concerning loans to the IFC. The Act requires that the aggregate amount of debt incurred by the IFC from any source and then outstanding must not exceed four times its unimpaired subscribed capital and surplus. It also stipulates that certain provisions of the Articles of Agreement do not apply to loans, participations, and guarantees authorized under the new Section 6.
There are no explicit provisions within the text of the Act detailing offences, penalties, or civil/criminal consequences for breach. However, non-compliance with the terms of the Articles of Agreement, as amended by the Board of Governors' resolution, could potentially lead to disciplinary actions or other measures taken by the World Bank or its member countries. It is essential for parties to comply with these international financial regulations to maintain their standing within the global financial community and to ensure the effective functioning of the institutions involved.