Fourth Amendment Of The Articles Of Agreement Of The International Monetary Fund

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

1. The text of Article XV, Section 1 shall be amended to read as follows:

(a) To meet the need, as and when it arises, for a supplement to existing reserve assets, the Fund is authorized to allocate special drawing rights in accordance with the provisions of Article XVIII to members that are participants in the Special Drawing Rights Department.

(b) In addition, the Fund shall allocate special drawing rights to members that are participants in the Special Drawing Rights Department in accordance with the provisions of Schedule M.

2. A new Schedule M shall be added to the Articles, to read as follows:

Schedule M

Special One-Time Allocation

of Special Drawing Rights

1. Subject to 4 below, each member that, as of September 19, 1997, is a participant in the Special Drawing Rights Department shall, on the 30th day following the effective date of the fourth amendment of this Agreement, receive an allocation of special drawing rights in an amount that will result in its net cumulative allocation of special drawing rights being equal to 29.315788813 percent of its quota as of September 19, 1997, provided that, for participants whose quotas have not been adjusted as proposed in Resolution No. 45-2 of the Board of Governors, calculations shall be made on the basis of the quotas proposed in that resolution.

2. (a) Subject to 4 below, each country that becomes a participant in the Special Drawing Rights Department after September 19, 1997 but within three months of the date of its membership in the Fund shall receive an allocation of special drawing rights in an amount calculated in accordance with (b) and (c) below on the 30th day following the later of: (i) the date on which the new member becomes a participant in the Special Drawing Rights Department, or (ii) the effective date of the fourth amendment of this Agreement.

(b) For the purposes of (a) above, each participant shall receive an amount of special drawing rights that will result in such participant’s net cumulative allocation being equal to 29.315788813 percent of its quota as of the date on which the member becomes a participant in the Special Drawing Rights Department, as adjusted:

(i) first, by multiplying 29.315788813 percent by the ratio of the total of quotas, as calculated under 1 above, of the participants described in (c) below to the total of quotas of such participants as of the date on which the member became a participant in the Special Drawing Rights Department, and

(ii) second, by multiplying the product of (i) above by the ratio of the total of the sum of the net cumulative allocations of special drawing rights received under Article XVIII of the participants described in (c) below as of the date on which the member became a participant in the Special Drawing Rights Department and the allocations received by such participants under 1 above to the total of the sum of the net cumulative allocations of special drawing rights received under Article XVIII of such participants as of September 19, 1997 and the allocations received by such participants under 1 above.

(c) For the purposes of the adjustments to be made under (b) above, the participants in the Special Drawing Rights Department shall be members that are participants as of September 19, 1997 and (i) continue to be participants in the Special Drawing Rights Department as of the date on which the member became a participant in the Special Drawing Rights Department, and (ii) have received all allocations made by the Fund after September 19, 1997.

3. (a) Subject to 4 below, if the Federal Republic of Yugoslavia (Serbia/Montenegro) succeeds to the membership in the Fund and the participation in the Special Drawing Rights Department of the former Socialist Federal Republic of Yugoslavia in accordance with the terms and conditions of Executive Board Decision No. 10237-(92/150), adopted December 14, 1992, it shall receive an allocation of special drawing rights in an amount calculated in accordance with (b) below on the 30th day following the later of: (i) the date on which the Federal Republic of Yugoslavia (Serbia/Montenegro) succeeds to membership in the Fund and participation in the Special Drawing Rights Department in accordance with the terms and conditions of Executive Board Decision No. 10237-(92/150), or (ii) the effective date of the fourth amendment of this Agreement.

(b) For the purposes of (a) above, the Federal Republic of Yugoslavia (Serbia/ Montenegro) shall receive an amount of special drawing rights that will result in its net cumulative allocation being equal to 29.315788813 percent of the quota proposed to it under paragraph 3(c) of Executive Board Decision No. 10237-(92/150), as adjusted in accordance with 2(b)(ii) and (c) above as of the date on which the Federal Republic of Yugoslavia (Serbia/ Montenegro) qualifies for an allocation under (a) above.

4. The Fund shall not allocate special drawing rights under this Schedule to those participants that have notified the Fund in writing prior to the date of the allocation of their desire not to receive the allocation.

5. (a) If, at the time an allocation is made to a participant under 1, 2, or 3 above, the participant has overdue obligations to the Fund, the special drawing rights so allocated shall be deposited and held in an escrow account within the Special Drawing Rights Department and shall be released to the participant upon discharge of all its overdue obligations to the Fund.

(b) Special drawing rights being held in an escrow account shall not be available for any use and shall not be included in any calculations of allocations or holdings of special drawing rights for the purposes of the Articles, except for calculations under this Schedule. If special drawing rights allocated to a participant are held in an escrow account when the participant terminates its participation in the Special Drawing Rights Department or when it is decided to liquidate the Special Drawing Rights Department, such special drawing rights shall be canceled.

(c) For purposes of this paragraph, overdue obligations to the Fund consist of overdue repurchases and charges in the General Resources Account, overdue principal and interest on loans in the Special Disbursement Account, overdue charges and assessments in the Special Drawing Rights Department, and overdue liabilities to the Fund as trustee.

(d) Except for the provisions of this paragraph, the principle of separation between the General Department and the Special Drawing Rights Department and the unconditional character of special drawing rights as reserve assets shall be maintained.

International Monetary Fund

Note On Procedure For Adoption Of The Proposed

Fourth Amendment Of The Articles Of Agreement

Of The International Monetary Fund

This note describes the procedure for adoption of the proposed Fourth Amendment of the Articles of Agreement of the International Monetary Fund.

1. The procedure for adoption of amendments of the Articles of Agreement of the Fund is set forth in Article XXVIII of the Articles. The procedure is in two stages: first, the proposed amendment must be approved by the Board of Governors of the Fund by a majority of the votes cast; and, secondly, it must be accepted by three-fifths of the members, having eighty-five percent of the total voting power. When the required conditions have been met, the Fund certifies this fact by a formal communication to all members, and the amendment enters into force for all members, regardless of whether they have accepted the proposed amendment, three months after the date of the certification, unless a shorter period was specified by the Fund when submitting the proposed amendment for acceptance by the members.

With respect to the proposed Fourth Amendment, the first stage was completed on September 23, 1997, when the proposed amendment was approved by the Board of Governors of the Fund (Resolution No. 52-4). The second stage is being initiated by the letter of the Secretary of the Fund to which this Note is attached, asking members whether they accept the proposed Fourth Amendment. The Fund has decided that the proposed Fourth Amendment will enter into force on the date of the certification by the Fund that three-fifths of the members having eighty-five percent of the total voting power have accepted it. Since the proposed amendment pertains exclusively to the Special Drawing Rights Department, all members, including those whose voting rights have been suspended, may participate in the adoption of the proposed amendment by notifying their acceptance.

2. When accepting the proposed Fourth Amendment, each member should ensure that three conditions are fulfilled. First, it should take any domestic legal steps that may be a prerequisite for the acceptance of the proposed amendment, such as the adoption of a statute, decree or other regulation. Secondly, the competent person or body should accept the proposed amendment. Thirdly, this acceptance should be communicated to the Fund. These three conditions are elaborated upon in subparagraphs (a), (b), and (c) below.

(a) First, measures may need to be taken under national law to enable the member to accept the proposed amendment, which is a modification of an international agreement. These domestic legal steps will vary according to the law and, in particular, the constitution of each country. In many countries, the acceptance of the proposed amendment will require the prior consent of the legislature or the executive, or both.

(b) Secondly, the acceptance should be effected on behalf of the member by the competent person or body. This competence will be derived either directly from the constitution or some other general legal provision of the member, or from the specific statute, decree or other regulation that may have been adopted to authorize the acceptance of the proposed amendment.

(c) Thirdly, the acceptance should be communicated to the Fund. When the person who communicates the acceptance has the authority to accept the proposed amendment, the communication may take the form of a declaration of acceptance on behalf of the member. A draft form of declaration of acceptance is set forth in Annex I. Alternatively, the acceptance given by the competent person or body on behalf of the member may be notified to the Fund by a designated official. A draft form of notification of acceptance is set forth in Annex II.

3. It is for each member to ascertain the requirements that must be complied with under its national law in order to accept the proposed Fourth Amendment. However, given that an amendment of the Articles is a modification of an international agreement, the Fund must be satisfied that each declaration or notification of acceptance will be regarded as a valid expression of the member’s consent under the relevant rules of the law of treaties. Therefore, any declaration or notification of acceptance (unless it is signed by the Head of State, Head of Government (e.g., Prime Minister), or Minister for Foreign Affairs) should be accompanied by copies of the relevant documents demonstrating that the proposed amendment is being or has been duly accepted on behalf of the member by the person or body vested with the necessary authority to take such a decision. When these documents do not clearly demonstrate such authority, confirmation of such authority should be provided in a memorandum of law signed by the Minister of Justice, Attorney General or other competent legal official of the member.

4. The Fourth Amendment will enter into force only when the Fund certifies that three-fifths of the members having eighty-five percent of the total voting power have accepted it. Any consequential changes in domestic statutes or regulations would not, therefore, need to become effective until the date of certification by the Fund of the entry into force of the Fourth Amendment.

Annex (I)

Declaration Of Acceptance

(To be Addressed to the Secretary of the Fund)

I have the honor to inform you that [member] hereby accepts the proposed Fourth Amendment of the Articles of Agreement of the International Monetary Fund.

[A copy of the statute/decree/regulation pursuant to which this acceptance is given is attached.]

Annex (II)

Notification Of Acceptance

(To be Addressed to the Secretary of the Fund)

I have the honor to inform you that [member] has accepted the proposed Fourth Amendment of the Articles of Agreement of the International Monetary Fund.

[A copy of the text of the acceptance [and of the statute/decree/regulation pursuant to which this acceptance is given] is attached.]