Cap. 235 Art. 4to be deemed to votes, the casting the in accordance for such person 6. If, after ballots shall be provided that majority of the votes. ARTICLES OF The The established and The purpose encouraging the particularly in International Bank). In (i) in establishment, would investments, in cases where (ii)

In determining whether the votes cast by a governor are have raised the total of any person above fifteen percent of the eligible fifteen percent shall be deemed to include, first, the votes of the governor

*The quota of Denmark shall be determined by the Bank after Denmark accepts membership with these Articles of Agreement. even if the total votes for such person thereby exceed fifteen percent.

the second ballot, seven persons have not been elected, further held on the same principles until seven persons have been elected, after six persons are elected, the seventh may be elected by a simple remaining votes and shall be deemed to have been elected by all such

THIRD SCHEDULE

[SECTION 2] AGREEMENT OF THE INTERNATIONAL FINANCE CORPORATION

Governments on whose behalf this Agreement is signed agree as follows:

Introductory Article International Finance Corporation (hereinafter called the Corporation) is shall operate in accordance with the following provisions:

Article I

Purpose of the Corporation is to further economic development by growth of productive private enterprise in member countries, the less developed areas, thus supplementing the activities of the Bank for Reconstruction and Development (hereinafter called the carrying out this purpose, the Corporation shall: association with private investors, assist in financing the improvement and expansion of productive private enterprises which contribute to the development of its member countries by making without guarantee of repayment by the member government concerned, sufficient private capital is not available on reasonable terms; to bring together investment opportunities, domestic and foreign and experienced management; and to stimulate, and to help create conditions conducive to, the flow capital, domestic and foreign, into productive investment in member

Corporation shall be guided in all its decisions by the provisions of this

(a) The original members of the Corporation shall be those Bank listed in Schedule A hereto which shall, on or before the Article IX, Section 2 (c), accept membership in the Corporation.

(b) Membership shall be open to other members of the Bank at accordance with such terms as may be prescribed by the Corporation. SECTION 2. Capital Stock

(a) The authorized capital stock of the Corporation shall be terms of United States dollars.*

(b) The authorized capital stock shall be divided into 100,000 par value of one thousand United States dollars each. Any such shares subscribed by original members shall be available for subsequent accordance with Section 3 (d) of this Article.

(c) The amount of capital stock at any time authorized may be Board of Governors as follows:

(i) by a majority of the votes cast, in case such increase the purpose of issuing shares of capital stock on initial subscription other than original members, provided that the aggregate of any increases pursuant to this subparagraph shall not exceed 10,000 shares;

(ii) in any other case, by a three-fourths majority of the total

(d) In case of an increase authorized pursuant to paragraph (c) member shall have a reasonable opportunity to subscribe, under such the Corporation shall decide, to a proportion of the increase of stock the proportion which its stock theretofore subscribed bears to the total of the Corporation, but no member shall be obligated to subscribe increased capital.

(e) Issuance of shares of stock, other than those subscribed subscription or pursuant to paragraph (d) above, shall require majority of the total voting power.

(f) Shares of stock of the Corporation shall be available for by, and shall be issued only to, members. SECTION 3. Subscriptions

(a) Each original member shall subscribe to the number of shares forth opposite its name in Schedule A. The number of shares subscribed by other members shall be determined by the Corporation.

(b) Shares of stock initially subscribed by original members par.

(c) The initial subscription of each original member shall be within 30 days after either the date on which the Corporation shall pursuant to Article IX, Section 3 (b), or the date on which such becomes a member, whichever shall be later, or at such date

*On September 3, 1963, the authorized capital stock was increased to $110,000,000, shares of $1,000 each. on initial subscription by original members, shall be determined by

Limitation on Liability shall be liable, by reason of its membership, for obligations of the

Restriction on Transfers and Pledges of Shares shall not be pledged or encumbered in any manner whatever, and transferable only to the Corporation.

Article III Operations

Financing Operations Corporation may make investments of its funds in productive private territories of its members. The existence of a government or other in such an enterprise shall not necessarily preclude the Corporation investment therein. * Forms of Financing Corporation may make investments of its funds in such form or forms as it appropriate in the circumstances.

Operational Principles operations of the Corporation shall be conducted in accordance with the principles: Corporation shall not undertake any financing for which in its private capital could be obtained on reasonable terms; Corporation shall not finance an enterprise in the territories of any member objects to such financing; Corporation shall impose no conditions that the proceeds of any shall be spent in the territories of any particular country;

21, 1961. Original Text: Corporation’s financing shall not take the form of investments in capital stock. Subject to the Corporation may make investments of its funds in such form or forms as it may deem circumstances, including (but without limitation) investments according to the holder participate in earnings and the right to subscribe to, or to convert the investment into, shall not itself exercise any right to subscribe to, or to convert any investment into,

(v) the Corporation shall undertake its financing on terms which it considers appropriate, taking into account the requirements enterprise, the risks being undertaken by the Corporation and conditions normally obtained by private investors for similar financing;

(vi) the Corporation shall seek to revolve its funds investments to private investors whenever it can appropriately do terms;

(vii) the Corporation shall seek to maintain a reasonable diversification investments.

SECTION 4. Protection of Interests Nothing in this Agreement shall prevent the Corporation, in the threatened default on any of its investments, actual or threatened enterprise in which such investment shall have been made, or other in the opinion of the Corporation, threaten to jeopardize such investment, taking such action and exercising such rights as it may deem necessary protection of its interests.

SECTION 5. Applicability of Certain Foreign Exchange Restrictions Funds received by or payable to the Corporation in respect of an Corporation made in any member’s territories pursuant to Section shall not be free, solely by reason of any provision of this Agreement, applicable foreign exchange restrictions, regulations and controls territories of that member.

SECTION 6. Miscellaneous Operations In addition to the operations specified elsewhere in this Corporation shall have the power to:

(i) borrow funds, and in that connection to furnish such collateral security therefor as it shall determine provided, however, that public sale of its obligations in the markets of a member, the Corporation obtained the approval of that member and of the member in whose obligations are to be denominated; if and so long as the Corporation indebted on loans from or guaranteed by the Bank, the total amount borrowings incurred or guarantees given by the Corporation shall not at the time or as a result thereof, the aggregate amount of debt guarantee of any debt) incurred by the Corporation from any outstanding shall exceed an amount equal to four times its unimpaired † capital and surplus ;

(ii) invest funds not needed in its financing operations in as it may determine and invest funds held by it for pension or similar marketable securities, all without being subject to the restrictions sections of this Article;

*Amended September 21, 1961. Original Text:

(iv) The Corporation shall not assume responsibility for managing any enterprise in which †Last clause added by amendment effective September 1, 1965. exercise such other powers incidental to its business as shall be desirable in furtherance of its purposes. Valuation of Currencies shall become necessary under this Agreement to value any currency value of another currency, such valuation shall be as reasonably the Corporation after consultation with the International Monetary

Warning To Be Placed on Securities issued or guaranteed by the Corporation shall bear on its face a statement to the effect that it is not an obligation of the Bank or, unless on the security, of any government.

Political Activity Prohibited Corporation and its officers shall not interfere in the political affairs of any shall they be influenced in their decisions by the political character of members concerned. Only economic considerations shall be relevant decisions, and these considerations shall be weighed impartially in order to purposes stated in this Agreement.

Article IV

Organization and Management Structure of the Corporation

Corporation shall have a Board of Governors, a Board of Directors, a Board of Directors, a President and such other officers and staff to duties as the Corporation may determine.

Board of Governors powers of the Corporation shall be vested in the Board of Governors. Governor and Alternate Governor of the Bank appointed by a member which is also a member of the Corporation shall ex officio be a Governor Governor, respectively, of the Corporation. No Alternate Governor may the absence of his principal. The Board of Governors shall select one as Chairman of the Board of Governors. Any Governor or Alternate cease to hold office if the member by which he was appointed shall member of the Corporation.

Board of Governors may delegate to the Board of Directors authority to its powers, except the power to:

admit new members and determine the conditions of their admission; increase or decrease the capital stock; suspend a member;

decide appeals from interpretations of this Agreement given by the Directors;

(vii) declare dividends;

(viii) amend this Agreement.

(d) The Board of Governors shall hold an annual meeting meetings as may be provided for by the Board of Governors or called of Directors.

(e) The annual meeting of the Board of Governors shall be held with the annual meeting of the Board of Governors of the Bank.

(f) A quorum for any meeting of the Board of Governors shall the Governors, exercising not less than two-thirds of the total voting

(g) The Corporation may by regulation establish a procedure whereby of Directors may obtain a vote of the Governors on a specific calling a meeting of the Board of Governors.

(h) The Board of Governors, and the Board of Directors authorized, may adopt such rules and regulations as may be necessary to conduct the business of the Corporation.

(i) Governors and Alternate Governors shall serve as compensation from the Corporation.

SECTION 3. Voting

(a) Each member shall have two hundred fifty votes plus one additional each share of stock held.

(b) Except as otherwise expressly provided, all matters before shall be decided by a majority of the votes cast.

SECTION 4. Board of Directors

(a) The Board of Directors shall be responsible for the conduct operations of the Corporation, and for this purpose shall exercise given to it by this Agreement or delegated to it by the Board of Governors.

(b) The Board of Directors of the Corporation shall be composed each Executive Director of the Bank who shall have been either (i) member of the Bank which is also a member of the Corporation, or election in which the votes of at least one member of the Bank member of the Corporation shall have counted toward his election. each such Executive Director of the Bank shall ex officio be an Alternate the Corporation. Any Director shall cease to hold office if the member was appointed, or if all the members whose votes counted toward cease to be members of the Corporation.

(c) Each Director who is an appointed Executive Director of entitled to cast the number of votes which the member by which he is entitled to cast in the Corporation. Each Director who is an elected Director of the Bank shall be entitled to cast the number of votes which or members of the Corporation whose votes counted toward his election are entitled to cast in the Corporation. All the votes which a Director cast shall be cast as a unit. exercising not less than one-half of the total voting power.

Board of Directors shall meet as often as the business of the require.

Board of Governors shall adopt regulations under which a member of not entitled to appoint an Executive Director of the Bank may send a attend any meeting of the Board of Directors of the Corporation made by, or a matter particularly affecting, that member is under

Chairman, President and Staff President of the Bank shall be ex officio Chairman of the Board of Corporation, but shall have no vote except a deciding vote in case of division. He may participate in meetings of the Board of Governors but such meetings.

President of the Corporation shall be appointed by the Board of recommendation of the Chairman. The President shall be chief of staff of the Corporation. Under the direction of the Board of Directors supervision of the Chairman, he shall conduct the ordinary business Corporation and under their general control shall be responsible for the appointment and dismissal of the officers and staff. The President may meetings of the Board of Directors but shall not vote at such meetings. shall cease to hold office by decision of the Board of Directors in Chairman concurs. President, officers and staff of the Corporation, in the discharge of their their duty entirely to the Corporation and to no other authority. Each Corporation shall respect the international character of this duty and from all attempts to influence any of them in the discharge of their to the paramount importance of securing the highest standards of technical competence, due regard shall be paid, in appointing the of the Corporation, to the importance of recruiting personnel on as geographical basis as possible.

Relationship to the Bank Corporation shall be an entity separate and distinct from the Bank and Corporation shall be kept separate and apart from those of the provisions of this Section shall not prevent the Corporation from making with the Bank regarding facilities, personnel and services and reimbursement of administrative expenses paid in the first instance organization on behalf of the other. in this Agreement shall make the Corporation liable for the acts or the Bank, or the Bank liable for the acts or obligations of the

1, 1965. the following: shall not lend to or borrow from the Bank." international organizations having specialized responsibilities in related SECTION 8. Location of Offices

The principal office of the Corporation shall be in the same principal office of the Bank. The Corporation may establish other territories of any member.

SECTION 9. Depositories Each member shall designate its central bank as a depository Corporation may keep holdings of such member’s currency or other Corporation or, if it has no central bank, it shall designate for such other institution as may be acceptable to the Corporation.

SECTION 10. Channel of Communication Each member shall designate an appropriate authority with which may communicate in connection with any matter arising under this SECTION 11. Publication of Reports and Provision of Information

(a) The Corporation shall publish an annual report containing statement of its accounts and shall circulate to members at appropriate summary statement of its financial position and a profit and loss statement the results of its operations.

(b) The Corporation may publish such other reports as it deems carry out its purposes.

(c) Copies of all reports, statements and publications made under shall be distributed to members. SECTION 12. Dividends

(a) The Board of Governors may determine from time to time Corporation’s net income and surplus, after making appropriate reserves, shall be distributed as dividends.

(b) Dividends shall be distributed pro rata in proportion to capital members.

(c) Dividends shall be paid in such manner and in such currency the Corporation shall determine.

Article V Withdrawal; Suspension of Membership; Suspension of Operations

SECTION 1. Withdrawal by Members Any member may withdraw from membership in the Corporation transmitting a notice in writing to the Corporation at its principal office. shall become effective upon the date such notice is received. SECTION 2. Suspension of Membership

(a) If a member fails to fulfil any of its obligations to the Corporation may suspend its membership by decision of a under suspension, a member shall not be entitled to exercise any Agreement except the right of withdrawal, but shall remain subject

Suspension or Cessation of Membership in the Bank which is suspended from membership in, or ceases to be a member shall automatically be suspended from membership in, or cease to be a Corporation, as the case may be.

Rights and Duties of Governments Ceasing To Be Members government ceases to be a member it shall remain liable for all from it to the Corporation. The Corporation shall arrange for the such government’s capital stock as a part of the settlement of accounts accordance with the provisions of this Section, but the government shall rights under this Agreement except as provided in this Section and in

Corporation and the government may agree on the repurchase of the the government on such terms as may be appropriate under the without regard to the provisions of paragraph (c) below. Such provide, among other things, for a final settlement of all obligations government to the Corporation.

agreement shall not have been made within six months after the ceases to be a member or such other time as the Corporation and such agree, the repurchase price of the government’s capital stock shall thereof shown by the books of the Corporation on the day when the ceases to be a member. The repurchase of the capital stock shall be following conditions: payments for shares of stock may be made from time to time, upon their government, in such instalments, at such times and in such available currencies as the Corporation reasonably determines, taking into account position of the Corporation;

amount due to the government for its capital stock shall be as the government or any of its agencies remains liable to the payment of any amount and such amount may, at the option of the set off, as it becomes payable, against the amount due from the the Corporation sustains a net loss on the investments made pursuant Section 1, and held by it on the date when the government ceases to be the amount of such loss exceeds the amount of the reserves provided date, such government shall repay on demand the amount by which price of its shares of stock would have been reduced if such loss had account when the repurchase price was determined. event shall any amount due to a government for its capital stock under paid until six months after the date upon which the government member. If within six months of the date upon which any government member the Corporation suspends operations under Section 5 of this of such government shall be determined by the provisions of such

(a) The Corporation may permanently suspend its operations majority of the Governors exercising a majority of the total voting suspension of operations the Corporation shall forthwith cease all those incident to the orderly realization, conservation and preservation and settlement of its obligations. Until final settlement of such distribution of such assets, the Corporation shall remain in existence rights and obligations of the Corporation and its members under shall continue unimpaired, except that no member shall be suspended and that no distribution shall be made to members except as in this

(b) No distribution shall be made to members on account of their to the capital stock of the Corporation until all liabilities to creditors discharged or provided for and until the Board of Governors, by vote the Governors exercising a majority of the total voting power, shall make such distribution.

(c) Subject to the foregoing, the Corporation shall distribute Corporation to members pro rata in proportion to capital stock subject, in the case of any member, to prior settlement of all outstanding the Corporation against such member. Such distribution shall be made in such currencies, and in cash or other assets as the Corporation shall equitable. The shares distributed to the several members need not uniform in respect of the type of assets distributed or of the currencies are expressed.

(d) Any member receiving assets distributed by the Corporation Section shall enjoy the same rights with respect to such assets as enjoyed prior to their distribution.

Article VI

Status, Immunities and Privileges SECTION 1. Purposes of Article

To enable the Corporation to fulfil the functions with which it status, immunities and privileges set forth in this Article shall be Corporation in the territories of each member.

SECTION 2. Status of the Corporation The Corporation shall possess full juridical personality and, capacity:

(i) to contract;

(ii) to acquire and dispose of immovable and movable property;

(iii) to institute legal proceedings. SECTION 3. Position of the Corporation with Regard to Judicial Process

Actions may be brought against the Corporation only in a court jurisdiction in the territories of a member in which the Corporation appointed an agent for the purpose of accepting service or notice of issued or guaranteed securities. No actions shall, however, be brought Immunity of Assets from Seizure assets of the Corporation, wherever located and by whomsoever immune from search, requisition, confiscation, expropriation or any seizure by executive or legislative action.

Immunity of Archives of the Corporation shall be inviolable.

Freedom of Assets from Restrictions necessary to carry out the operations provided for in this Agreement provisions of Article III, Section 5, and the other provisions of this property and assets of the Corporation shall be free from restrictions, controls and moratoria of any nature.

Privilege for Communications communications of the Corporation shall be accorded by each member treatment that it accords to the official communications of other members.

Immunities and Privileges of Officers and Employees Directors, Alternates, officers and employees of the Corporation: be immune from legal process with respect to acts performed by official capacity; being local nationals, shall be accorded the same immunities from restrictions, alien registration requirements and national service the same facilities as regards exchange restrictions as are accorded the representatives, officials, and employees of comparable rank of be granted the same treatment in respect of travelling facilities as members to representatives, officials and employees of comparable members. Immunities from Taxation

Corporation, its assets, property, income and its operations and authorized by this Agreement, shall be immune from all taxation and duties. The Corporation shall also be immune from liability for the payment of any tax or duty. shall be levied on or in respect of salaries and emoluments paid by to Directors, Alternates, officials or employees of the Corporation citizens, local subjects, or other local nationals.

taxation of any kind shall be levied on any obligation or security issued Corporation (including any dividend or interest thereon) by whomsoever held:

which discriminates against such obligation or security solely because Corporation; or the sole jurisdictional basis for such taxation is the place or currency issued, made payable or paid, or the location of any office or place of maintained by the Corporation. it is guaranteed by the Corporation; or

(ii) if the sole jurisdictional basis for such taxation is the office or place of business maintained by the Corporation.

SECTION 10. Application of Article Each member shall take such action as is necessary in its own purpose of making effective in terms of its own law the principles Article and shall inform the Corporation of the detailed action which SECTION 11. Waiver

The Corporation in its discretion may waive any of the privileges conferred under this Article to such extent and upon such conditions determine.

Article VII Amendments

(a) This Agreement may be amended by vote of three-fifths exercising four-fifths of the total voting power.

(b) Notwithstanding paragraph (a) above, the affirmative vote is required in the case of any amendment modifying:

(i) the right to withdraw from the Corporation provided Section l;

(ii) the pre-emptive right secured by Article II, Section 2

(iii) the limitation on liability provided in Article II, Section

(c) Any proposal to amend this Agreement, whether emanating a Governor or the Board of Directors, shall be communicated to the Board of Governors who shall bring the proposal before the Board When an amendment has been duly adopted, the Corporation shall formal communication addressed to all members. Amendments shall for all members three months after the date of the formal communication Board of Governors shall specify a shorter period.

Article VIII Interpretation and Arbitration

(a) Any question of interpretation of the provisions of this Agreement between any member and the Corporation or between any Corporation shall be submitted to the Board of Directors for its question particularly affects any member of the Corporation not entitled an Executive Director of the Bank, it shall be entitled to representation with Article IV, Section 4 (g).

(b) In any case where the Board of Directors has given a decision above, any member may require that the question be referred ceased to be a member, or between the Corporation and any member permanent suspension of the Corporation, such disagreement shall be arbitration by a tribunal of three arbitrators, one appointed by the another by the country involved and an umpire who, unless the parties shall be appointed by the President of the International Court of other authority as may have been prescribed by regulation adopted by Corporation. The umpire shall have full power to settle all questions of case where the parties are in disagreement with respect thereto.

Article IX Final Provisions

Entry into Force Agreement shall enter into force when it has been signed on behalf of not less governments whose subscriptions comprise not less than 75 percent of the subscriptions set forth in Schedule A and when the instruments referred to in this Article have been deposited on their behalf, but in no event shall enter into force before October 1, 1955. Signature government on whose behalf this Agreement is signed shall deposit instrument setting forth that it has accepted this Agreement without accordance with its law and has taken all steps necessary to enable it of its obligations under this Agreement. government shall become a member of the Corporation as from the deposit on its behalf of the instrument referred to in paragraph (a) above government shall become a member before this Agreement enters into Section 1 of this Article. Agreement shall remain open for signature until the close of business 31, 1956, at the principal office of the Bank on behalf of the the countries whose names are set forth in Schedule A. this Agreement shall have entered into force, it shall be open for behalf of the government of any country whose membership has been pursuant to Article II, Section 1 (b).

Inauguration of the Corporation as this Agreement enters into force under Section 1 of this Article of the Board of Directors shall call a meeting of the Board of

Corporation shall begin operations on the date when such meeting is the first meeting of the Board of Governors, the Board of Directors the powers of the Board of Governors except those reserved to the Governors under this Agreement.

Washington, in a single copy which shall remain deposited in the SCHEDULE A

SUBSCRIPTIONS TO CAPITAL STOCK OF THE INTERNATIONAL CORPORATION

Amount Number of (in United Number of Country Shares States dollars) Country Shares

Australia 2,215 2,215,000 Iran 372 Austria 554 554,000 Iraq 67 Belgium 2,492 2,492,000 Israel 50 Bolivia 78 78,000 Italy 1,994 Brazil 1,163 1,163,000 Japan 2,769 Burma 166 166,000 Jordan 33 Canada 3,600 3,600,000 Lebanon 50 Ceylon 166 166,000 Luxembourg 111 Chile 388 388,000 Mexico 720 China 6,646 6,646,000 Netherlands 3,046 Colombia 388 388,000 Nicaragua 9 Costa Rica 22 22,000 Norway 554 Cuba 388 388,000 Pakistan 1,108 Denmark 753 753,000 Panama 2 Dominican Paraguay 16 Republic 22 22,000 Peru 194 Ecuador 35 35,000 Philippines 166 Egypt 590 590,000 Sweden 1,108 El Salvador 11 11,000 Syria 72 Ethiopia 33 33,000 Thailand 139 Finland 421 421,000 Turkey 476 France 5,815 5,815,000 Union of Germany 3,655 3,655,000 South Africa 1,108 Greece 277 277,000 United Guatemala 22 22,000 Kingdom 14,400 Haiti 22 22,000 United States 35,168 Honduras 11 11,000 Uruguay 116 Iceland 11 11,000 Venezuela 116 India 4,431 4,431,000 Yugoslavia 443 Indonesia 1,218 1,218,000 Total: 100,000