Special Report On The Proposed Amendment Of The Articles Of Agreement Of The International Monetary Fund

This chapter provide details of the proposed Third Amendment of the Articles of Agreement of the IMF. This paper also examines the conditions for the imposition of suspension of voting and related rights of a member, then the consequences of suspension, and finally the conditions and effects of a termination of suspension. The Fund's Articles of Agreement empowers the Fund to declare a member ineligible to use the general resources of the Fund if the member fails to fulfil any of its obligations under the Articles. The commentary in the chapter analyzes the proposed amendment and describes the main aspects of the new power that would be conferred upon the Fund. The chapter also describes the procedure for the adoption of the proposed amendment. It proposes a resolution for adoption by the Board of Governors.

The October 2007 Communiqué of the IMFC called on the Executive Board to develop specific proposals on a new income model and a new expenditure framework by the time of the 2008 Spring Meetings. On April 7, 2008, the Executive Board endorsed a new income model for the Fund and considered a new medium-term budgetary envelope for financial years 2009–11, which includes deep spending cuts, and approved administrative, restructuring, and capital budgets for financial year 2009. As a key element of this new income-expenditure framework, the Executive Board ecommended the adoption by the Board of Governors of an amendment of the Articles of Agreement to expand the Fund’s investment authority. The Executive Board’s recommendation was sent to the Board of Governors, with the voting period running through 6:00 p.m., Washington time, May 5, 2008.

This paper updates the status of consents to the proposed quota increases under the 14th General Review of Quotas and of acceptances of the Proposed Seventh Amendment on the Reform of the Executive Board (“Board Reform Amendment”) as set out in the Board of Governors Resolution No. 66-2.

Revised in 1993, this edition incorporates the Third Amendment of the Articles of Agreement. Reprinted in December 2004. Reprinted in January 2008 (200 copies)