Article I. Purpose and functions
Section 1. Purpose
The purpose of the Corporation shall be to promote the economic development of its
regional developing member countries by encouraging the establishment, expansion,
and modernization of private enterprises, preferably those that are small and medium-scale,
in such a way as to supplement the activities of the Inter-American Development Bank
(hereinafter referred to as "the Bank").
Enterprises with partial share participation by government or other public entities,
whose activities strengthen the private sector of the economy, are eligible for financing
by the Corporation.
Section. 2. Functions
In order to accomplish its purpose, the Corporation shall undertake the following
functions in support of the enterprises referred to in Section 1:
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(a) Assist, alone or in association with other lenders or investors, in the financing
of the establishment, expansion and modernization of enterprises, utilizing such instruments
and/or mechanisms as the Corporation deems appropriate in each instance;
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(b) Facilitate their access to private and public capital, domestic and foreign, and to
technical and managerial know-how;
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(c) Stimulate the development of investment opportunities conducive to the flow of private
and public capital, domestic and foreign, into investments in the member countries;
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(d) Take in each case the proper and necessary measures for their financing, bearing in
mind their needs and principles based on prudent administration of the resources of
the Corporation; and
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(e) Provide technical cooperation for the preparation, financing and execution of projects,
including the transfer of appropriate technology.
Section 3. Policies
The activities of the Corporation shall be conducted in accordance with the operating,
financial and investment policies set forth in detail in Regulations approved by the
Board of Executive Directors of the Corporation, which Regulations may be amended
by said Board.
Article II. Members and capital
Section 1. Members
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(a) The founding members of the Corporation shall be those member countries of the Bank
that have signed this Agreement by the date specified in Article XI, Section l(a)
and made the initial payment required in Section 3(b) of this Article.
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(b) The other member countries of the Bank may accede to this Agreement on such date and
in accordance with such conditions as the Board of Governors of the Corporation may
determine by a majority representing at least two-thirds of the votes of the members,
which shall include two-thirds of the Governors.
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(c) The word "members" as used in this Agreement shall refer only to member countries
of the Bank which are members of the Corporation.
Section 2. Resources
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(a) The initial authorized capital stock of the Corporation shall be two hundred million
dollars of the United States of America (US$200,000,000).
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(b) The authorized capital stock shall be divided into twenty thousand (20,000) shares
having a par value of ten thousand dollars of the United States of America (US$10,000)
each. Any shares not initially subscribed by the founding members in accordance with
Section 3(a) of this Article shall be available for subsequent subscription in accordance
with Section 3(d) hereof.
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(c) The Board of Governors may increase the authorized capital stock as follows:
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(i) by two-thirds of the votes of the members, when such increase is necessary for the
purpose of issuing shares, at the time of initial subscription, to members of the
Bank other than founding members, provided that the aggregate of any increases authorized
pursuant to this subparagraph does not exceed 2,000 shares;
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(ii) in any other case, by a majority representing at least three-fourths of the votes
of the members, which shall include two-thirds of the Governors.
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(d) In edition to the authorized capital referred to above, the Board of Governors may,
after the date in which the initial authorized capital has been fully paid in, authorize
the issue of callable capital and establish the terms and conditions for the subscription
thereof, as follows:
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(i) Such decision shall be approved by a majority representing at least three-fourths
of the votes of the members which shall include two-thirds of the Governors; and
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(ii) the callable capital shall be divided into shares with a par value of ten thousand
dollars of the United States of America (US$ 10,000) each.
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(e) The callable capital shares shall be subject to call only when required to meet the
obligations of the Corporation created under Article III, Section 7(a). In the event
of such a call, payment may be made at the option of the member in United States dollars,
or in the currency required to discharge the obligations of the Corporation for the
purpose for which the call is made. Calls on the shares shall be uniform and proportionate
for all shares. Obligations of the members to make payments on any such calls are
independent of each other and failure of one or more members to make payments on any
such calls shall not exuse any other member from its obligation to make payment. Successive
calls may be made if necessary to meet the obligations of the Corporation.
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(f) The other resources of the Corporation shall consist of:
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(i) amounts accruing by way of dividends, commissions, interest, and other funds derived
from the investments of the Corporation;
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(ii) amounts received upon the sale of investments or the repayment of loans;
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(iii) amounts raised by the Corporation by means of borrowings; and
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(iv) other contributions and funds entrusted to its administration.
Section 3. Subscriptions
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(a) Each founding member shall subscribe the number of shares specified in Annex A.
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(b) The payment for capital stock, set forth in Annex A, by each founding member shall
be made in four annual, equal and consecutive installments each of twenty-five percent
of such amount. The first installment shall be paid by each member in full within
three months after the date on which the Corporation begins operation pursuant to
Article XI, Section 3 below, or the date on which such founding member accedes to
this Agreement, or by such date or dates thereafter as the Board of Executive Directors
of the Corporation specifies. The remaining three installments shall be paid on such
dates as are determined by the Board of Executive Directors of the Corporation but
not earlier than December 31, 1985, December 31, 1986, and December 31, 1987, respectively.
The payment of each of the last three installments of capital subscribed by each of
the member countries shall be subject to fulfillment of such legal requirements as
may be appropriate in the respective countries. Payment shall be made in United States
dollars. The Corporation shall specify the place or places of payment.
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(c) Shares initially subscribed by the founding members shall be issued at par.
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(d) The conditions governing the subscription of shares to be issued after the initial
share subscription by the founding members which shall not have been subscribed under
Article II, Section 2(b), as well as the dates of payment thereof, shall be determined
by the Board of Executive Directors of the Corporation.
Section 4. Restriction on transfers and pledge of shares
Shares of the Corporation may not be pledged, encumbered or transferred in any manner
whatever except to the Corporation, unless the Board of Governors of the Corporation
approves a transfer between members by a majority of the Governors representing four-fifths
of the votes of the members.
Section 5. Preferential subscription right
In case of an increase in capital, in accordance with Section 2(c) and (d) of this
Article, each member shall be entitled, subject to such terms as may be established
by the Corporation, to a percentage of the increased shares equivalent to the proportion
which its shares heretofore subscribed bears to the total capital of the Corporation.
However, no member shall be obligated to subscribe to any part of the increased capital.
Section 6. Limitation on liability
The liability of members on the shares subscribed by them shall be limited to the
unpaid portion of their price at issuance. No member shall be liable, by reason of
its membership, for obligations of the Corporation.
Section 1. Operating procedures
In order to accomplish its purposes, the Corporation is authorized to:
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(a) Identify and promote projects which meet criteria of economic feassibility and efficiency,
with preference given to projects that have one or more of the following characteristics:
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(i) they promote the development and use of material and human resources in the developing
countries which are members of the Corporation;
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(ii) they provide incentives for the creation of jobs;
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(iii) they encourage savings and the use of capital in productive investments;
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(iv) they contribute to the generation and/or savings of foreign exchange;
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(v) they foster management capability and technology transfer; and
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(vi) they promote broader public ownership of enterprises through the participation of
as many investors as possible in the capital stock of such enterprises;
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(b) Make direct investments, through the granting of loans, and preferably through the
subscription and purchase of shares or convertible debt instruments, in enterprises
in which a majority of the voting power is held by investors with Latin American citizenship,
and make indirect investments in such enterprises through other financial institutions;
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(c) Promote the participation of other sources of financing and/or expertise through appropriate
means, including the organization of loan syndicates, the underwriting of securities
and participations, joint ventures, and other forms of association such as licensing
arrangements, marketing or management contracts;
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(d) Conduct cofinancing operations and assist domestic financial institutions, international
institutions and bilateral investment institutions;
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(e) Provide technical cooperation, financial and general management assistance, and act
as financial agent of enterprises;
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(f) Help to establish, expand, improve and finance development finance companies in the
private sector and other institutions to assist in the development of said sector;
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(g) Promote the underwriting of shares and securities issues, and extend such underwriting
provided the appropriate conditions are met, either individually or jointly with other
financial entities;
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(h) Administer funds of other private, public or semi-public institutions; for this purpose,
the Corporation may sign management and trustee contracts;
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(i) Conduct currency transactions essential to the activities of the Corporation; and
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(j) Issue bonds, certificates of indebtedness and participation certificates, and enter
into credit agreements.
Section 2. Other forms of investments
The Corporation may make investments of its funds in such form or forms as it may
deem appropriate in the circumstances, in accordance with Section 7(b) below.
Section 3. Operating principles
The operations of the Corporation shall be governed by the following principles:
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(a) It shall not establish as a condition that the proceeds of its financing be used to
procure goods and services originating in a predetermined country;
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(b) It shall not assume responsibility for managing any enterprise in which it has invested
and shall not exercise its voting rights for such purpose or for any other purpose
which, in its opinion, is properly within the scope of managerial control;
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(c) It shall provide financing on terms and conditions which it considers appropriate
taking into account the requirements of the enterprises, the risks assumed by the
Corporation and the terms and conditions normally obtained by private investors for
similar financings;
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(d) It shall seek to revolve its funds by selling its investments, provided such sale
can be made in an appropriate form and under satisfactory conditions, to the extent
possible in accordance with Section l(a)(vi) above;
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(e) It shall seek to maintain a reasonable diversification in its investments;
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(f) It shall apply financial, technical, economic, legal and institutional feasibility
criteria to justify investments and the adequacy of the guarantees offered; and
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(g) It shall not undertake any financing for which, in its opinion, sufficient capital
could be obtained on adequate terms.
Section 4. Limitations
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(a) With the exception of the investment of liquid assets of the Corporation referred
to in Section 7(b) of this Article, investments of the Corporation shall be made only
in enterprises located in developing regional member countries; such investments shall
be made following sound rules of financial management.
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(b) The Corporation shall not provide financing or undertake other investments in an enterprise
in the territory of a member country if its government objects to such financing or
investment.
Section 5. Protection of interests
Nothing in this Agreement shall prevent the Corporation from taking such action and
exercising such rights as it may deem necessary for the protection of its interests
in the event of default on any of its investments, actual or threatened insolvency
of enterprises in which such investments have been made, or other situations which,
in the opinion of the Corporation, threaten to jeopardize such investments.
Section 6. Applicability of certain foreign exchange restrictions
Funds received by or payable to the Corporation in respect of an investment of the
Corporation made in any member's territories shall not be free, solely by reason of
any provision of this Agreement, from generally applicable foreign exchange restrictions,
regulations and controls in force in the territories of that member.
Section 7. Other powers
The Corporation shall also have the power to:
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(a) Borrow funds and for that purpose furnish such collateral or other security as the
Corporation shall determine, provided that the total amount outstanding on borrowing
incurred or guarantees given by the Corporation, regardless of source, shall not exceed
an amount equal to the sum of its subscribed capital, plus its earned surplus and
reserves;
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(b) Invest funds not immediately needed in its financial operations, as well as funds
held by it for other purposes, in such marketable obligations and securities as the
Corporation may determine;
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(c) Guarantee securities in which it has invested in order to facilitate their sale;
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(d) Buy and/or sell securities it has issued or guaranteed or in which it has invested;
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(e) Handle, on such terms as the Corporation may determine, any specific matters incidental
to its business as may be entrusted to the Corporation by its shareholders or third
parties, and discharge the duties of trustee in respect of trusts; and
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(f) Exercise all other powers inherent and which may be necessary or useful for the accomplishment
of its purposes, including the signing of contracts and conducting of necessary legal
actions.
Section 8. Political activity prohibited
The Corporation and its officers shall not interfere in the political affairs of any
member; nor shall they be influenced in their decisions by the political character
of the member or members concerned. Only economic considerations shall be relevant
to decisions of the Corporation, and these considerations shall be weighed impartially
in order to achieve the purposes stated in this Agreement.
Article IV. Organization and management
Section 1. Structure of the Corporation
The Corporation shall have a Board of Governors, a Board of Executive Directors, a
Chairman of the Board of Executive Directors, a General Manager and such other officers
and staff as may be determined by the Board of Executive Directors of the Corporation.
Section 2. Board of Governors
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(a) All the powers of the Corporation shall be vested in the Board of Governors.
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(b) Each Governor and Alternate Governor of the Inter-American Development Bank appointed
by a member country of the Bank which is also a member of the Corporation shall, unless
the respective country indicates to the contrary, be a Governor or Alternate Governor
ex-officio, respectively, of the Corporation. No Alternate Governor may vote except
in the absence of his principal. The Board of Governors shall select one of the Governors
as Chairman of the Board of Governors. A Governor and Alternate Governor shall cease
to hold office if the member by which they were appointed ceases to be a member of
the Corporation.
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(c) The Board of Governors may delegate all its powers to the Board of Executive Directors,
except the power to:
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(i) admit new members and determine the conditions of their admission;
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(ii) increase or decrease the capital stock;
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(iii) suspend a member;
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(iv) consider and decide appeals on interpretations of this Agreement made by the Board
of Executive Directors;
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(v) approve, after receipt of the auditors' report, the general balance sheets and the
statements of profit and loss of the institution;
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(vi) rule on reserves and the distribution of net income, and declare dividends;
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(vii) engage the services of external auditors, to examine the general balance sheets and
the statements of profit and loss of the institution;
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(viii) amend this Agreement; and
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(ix) decide to suspend permanently the operations of the Corporation and to distribute
its assets.
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(d) The Board of Governors shall hold an annual meeting, which shall be held in conjunction
with the annual meeting of the Board of Governors of the Inter-American Development
Bank. It may meet on other occasions by call of the Board of Executive Directors.
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(e) A quorum for any meeting of the Board of Governors shall be a majority of the Governors
representing at least two-thirds of the votes of the members. The Board of Governors
may establish a procedure whereby the Board of Executive Directors, if it deems appropriate,
may submit a specific question to a vote of the Governors without calling a meeting
of the Board of Governors.
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(f) The Board of Governors and the Board of Executive Directors, to the extent the latter
is authorized, may issue such rules and regulations as may be necessary or appropriate
to conduct the business of the Corporation.
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(g) Governors and Alternate Governors shall serve as such without compensation from the
Corporation.
Section 3. Voting
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(a) Each member shall have one vote for each fully paid share held by it and for each
callable share subscribed.
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(b) Except as otherwise provided, all matters before the Board of Governors or the Board
of Executive Directors shall be decided by a majority of the votes of the members.
Section 4. Board of Executive Directors
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(a) The Board of Executive Directors shall be responsible for the conduct of the operations
of the Corporation and for this purpose shall exercise all the powers given it by
this Agreement or delegated to it by the Board of Governors.
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(b) The Executive Directors and Alternates shall be elected or appointed among the Executive
Directors and Alternates of the Bank except when:
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(i) a member country or a group of member countries of the Corporation is represented
in the Board of Executive Directors of the Bank by an Executive Director and an Alternate
which are citizens of countries which are not members of the Corporation; and
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(ii) given the different structure of participation and composition, the member countries
referred to in (c)(iii) below, as per the rotation arrangement agreed upon among said
member countries, designate their own representatives for the positions corresponding
to them in the Board of Executive Directors of the Corporation, whenever they could
not be adequately represented by Directors or Alternates of the Bank.
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(c) The Board of Executive Directors of the Corporation shall be composed as follows:
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(i) one Executive Director shall be appointed by the member country having the largest
number of shares in the Corporation;
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(ii) nine Executive Directors shall be elected by the Governors for the regional developing
member countries;
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(iii) four Executive Directors shall be elected by the Governors for the remaining member
countries.
The procedure for the election of Executive Directors shall be set forth in the Regulations
to be adopted by the Board of Governors by a majority of at least two-thirds of the
votes of the members.
Each Executive Director may designate an Alternate Director who shall have full power
to act for him when he is not present.
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(d) No Executive Director may simultaneously serve as a Governor of the Corporation.
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(e) Elected Executive Directors shall be elected for terms of three years and may be reelected
for successive terms.
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(f) Each Director shall be entitled to cast the number of votes which the member or members
of the Corporation whose votes counted towards his nomination or election are entitled
to cast.
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(g) All the votes which a Director is entitled to cast shall be cast as a unit.
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(h) In the event of the temporary absence of an Executive Director is Alternate, the Executive
Director or, in his absence the Alternate Director may appoint a person to represent
him.
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(i) A Director shall cease to hold office if all the members whose votes counted towards
his nomination or election cease to be members of the Corporation.
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(j) The Board of Executive Directors shall operate at the headquarters of the Corporation,
or exceptionally at such other location as shall be designated by said Board, and
shall meet as frequently as the business of the institution requires.
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(k) A quorum for any meeting of the Board of Executive Directors shall be a majority of
the Directors representing not less than two-thirds of the votes of the members.
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(l) Every member of the Corporation may send a representative to attend every meeting
of the Board of Executive Directors when a matter especially affecting that member
is under consideration. Such right of representation shall be regulated by the Board
of Governors.
Section 5. Basic organization
The Board of Executive Directors shall determine the basic organization of the Corporation,
including the number and general responsibilities of the principal administrative
and professional positions, and shall adopt the budget of the institution.
Section 6. Executive Committee of the Board of Executive Directors
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(a) The Executive Committee of the Board of Executive Directors shall be composed as follows:
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(i) one person who is the Director or alternate appointed by the member country having
the largest number of shares in the Corporation;
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(ii) two persons from among the Directors representing the regional developing member countries
of the Corporation; and
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(iii) one person from the Directors representing the other member countries.
The election of members of the Executive Committee and their alternates in categories
(ii) and (iii) above shall be made by the members of each respective group pursuant
to procedures to be worked out within each group.
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(b) The Chairman of the Board of Executive Directors shall preside over meetings of said
Committee. In his absence, a member of the Committee chosen by a process of rotation
shall preside over meetings.
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(c) The Committee shall consider all loans and investments by the Corporation in enterprises
in the member countries.
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(d) All loans and investments shall require the vote of a majority of the Committee for
approval. A quorum for any meeting of the Committee shall be three. An absence or
abstention shall be considered a negative vote.
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(e) A report with respect to each operation approved by the Committee shall be submitted
to the Board of Executive Directors. At the request of any Director, such operation
shall be presented to the Board for a vote. In the absence of such request within
the period established by the Board, an operation shall be deemed approved by the
Board.
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(f) In the event that there is a tie vote regarding a proposed operation, such proposal
shall be returned to Management for further review and analysis; if upon reconsideration
in the Committee, a tie vote shall again occur, the Chairman of the Board of Executive
Directors shall have the right to cast the deciding vote in the Committee.
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(g) In the event that the Committee shall reject an operation, the Board of Executive
Directors, upon the request of any Director, may require that Management's report
on such operation, together with a summary of the Committee's review, be submitted
to the Board for discussion and possible recommendation with regard to the technical
and policy issues related to the operation and to comparable operations in the future.
Section 7. Chairman, General Manager and officers
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(a) The President of the Bank shall be ex-officio Chairman of the Board of Executive Directors
of the Corporation. He shall preside over meetings of the Board of Executive Directors
but without the right to vote except in the event of a tie. He may participate in
meetings of the Board of Governors, but shall not vote at such meetings.
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(b) The General Manager of the Corporation shall be appointed by the Board of Executive
Directors, by a four-fifths majority of the total voting power, on the recommendation
of the Chairman of the Board of Executive Directors, for such term as he shall indicate.
The General Manager shall be chief of the officers and staff of the Corporation. Under
the direction of the Board of Executive Directors and the general supervision of the
Chairman of the Board of Executive Directors, he will conduct the ordinary business
of the Corporation and, in consultation with the Board of Executive Directors and
the Chairman of the Board of Executive Directors, shall be responsible for the organization,
appointment and dismissal of the officers and staff. The General Manager may participate
in meetings of the Board of Executive Directors but shall not vote at such meetings.
The General Manager shall cease to hold office by resignation or by decision of the
Board of Executive Directors, by a three-fifths majority of the total voting power,
in which the Chairman of the Board of Executive Directors concurs.
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(c) Whenever activities must be carried out that require specialized knowledge or cannot
be handled by the regular staff of the Corporation, the Corporation shall obtain technical
assistance from the staff of the Bank, or if it is unavailable, the services of experts
and consultants may be engaged on a temporary basis.
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(d) The officers and staff of the Corporation owe their duty entirely to the Corporation
in the discharge of their office and shall recognize no other authority. Each member
country shall respect the international character of such obligation.
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(e) The Corporation shall have due regard for the need to assure the highest standards
of efficiency, competence and integrity as the paramount consideration in appointing
the staff of the Corporation and in establishing their conditions of service. Due
regard shall also be paid to the importance of recruiting the staff on as wide a geographic
basis as possible, taking into account the regional character of the institution.
Section 8. Relations with the Bank
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(a) The Corporation shall be an entity separate and distinct from the Bank. The funds
of the Corporation shall be kept separate and apart from those of the Bank. The provisions
of this Section shall not prevent the Corporation from making arrangements with the
Bank regarding facilities, personnel, services and others concerning reimbursement
of administrative expenses paid by either organization on behalf of the other.
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(b) The Corporation shall seek insofar as possible to utilize the facilities, installations
and personnel of the Bank.
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(c) Nothing in this Agreement shall make the Corporation liable for the acts or obligations
of the Bank, or the Bank liable for the acts or obligations of the Corporation.
Section 9. Publication of annual reports and circulation of reports
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(a) The Corporation shall publish an annual report containing an audited statement of
its accounts. It shall also send the members a quarterly summary of its financial
position and a profit and loss statement indicating the results of its operations.
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(b) The Corporation may also publish any such other reports as it deems appropriate in
order to carry out its purpose and functions.
Section 10. Dividends
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(a) The Board of Governors may determine what part of the Corporation's net income and
surplus, after making provision for reserves, shall be distributed as dividends.
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(b) Dividends shall be distributed pro rata in proportion to paid-in capital stock held
by each member.
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(c) Dividends shall be paid in such manner and in such currency or currencies as the Corporation
may determine.
Article V. Withdrawal and suspension of members
Section 1. Right of withdrawal
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(a) Any member may withdraw from the Corporation by notifying the Corporation's principal
office in writing of its intention to do so. Such withdrawal shall become effective
on the date specified in the notice but in no event prior to six months from the date
on which such notice was delivered to the Corporation. At any time before the withdrawal
becomes effective, the member may, upon written notice to the Corporation, renounce
its intention to withdraw.
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(b) Even after withdrawing, a member shall remain liable for all obligations to the Corporation
to which it was subject at the date of delivery of the withdrawal notice, including
those specified in Section 3 of this Article. However, if the withdrawal becomes effective,
a member shall not incur any liability for obligations resulting from operations of
the Corporation effected after the date on which the withdrawal notice was received
by the latter.
Section 2. Suspension of membership
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(a) A member that fails to fulfill any of its obligations to the Corporation under this
Agreement may be suspended by decision of the Board of Governors by a majority representing
at least three-fourths of the votes of the members, which shall include two-thirds
of the Governors.
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(b) A member so suspended shall automatically cease to be a member of the Corporation
within one year from the date of suspension unless the Board of Governors decides,
by the same majority specified in paragraph (a) preceding, to lift the suspension.
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(c) While under suspension, a member may exercise none of the rights conferred upon it
by this Agreement, except the right of withdrawal, but it shall remain subject to
fulfillment of all its obligations.
Section 3. Terms of withdrawal from membership
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(a) From the time its membership ceases, a member shall no longer share in the profits
or losses of the institution and shall incur no liability with respect to loans and
guarantees entered into by the Corporation thereafter. The Corporation shall arrange
for the repurchase of such member's capital stock as part of the settlement of accounts
with it in accordance with the provisions of this Section.
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(b) The Corporation and a member may agree on the withdrawal from membership and the repurchase
of shares of said member on terms appropriate under the circumstances. If such agreement
is not reached within three months after the date on which such member expresses its
desire to withdraw from membership, or within a term agreed upon between both parties,
the repurchase price of the member's shares shall be equal to the book value thereof
on the date when the member ceases to belong to the institution, such book value to
be determined by the Corporation's audited financial statements.
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(c) Payment for shares shall be made, upon surrender of the corresponding share certificates,
in such installments and at such times and in such available currencies as the Corporation
shall determine, taking into account its financial position.
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(d) No amount due to a former member for its shares under this Section may be paid until
one month after the date upon which such member ceases to belong to the institution.
If within that period the Corporation suspends operations, the rights of such member
shall be determined by the provisions of Article VI and the member shall be considered
still a member of the Corporation for purposes of said Article, except that it shall
have no voting rights.
Article VI. Suspension and termination of operations
Section 1. Suspension of operations
In an emergency the Board of Executive Directors may suspend operations in respect
of new investments, loans and guarantees until such time as the Board of Governors
has the opportunity to consider the situation and take pertinent measures.
Section 2. Termination of operations
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(a) The Corporation may terminate its operations by decision of the Board of Governors
by a majority representing at least three-fourths of the votes of the members, which
shall include two-thirds of the Governors. Upon termination of operations, the Corporation
shall forthwith cease all activities except those incident to the conservation, preservation
and realization of its assets and settlement of its obligations.
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(b) Until final settlement of such obligations and distribution of such assets, the Corporation
shall remain in existence and all mutual rights and obligations of the Corporation
and its members under this Agreement shall continue unimpaired, except that no member
shall be suspended or withdraw and that no distribution shall be made to members except
as provided in this Article.
Section 3. Liability of members and payment of debts
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(a) The liability of members arising from capital subscriptions shall remain in force
until the Corporation's obligations, including contingent obligations, are settled.
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(b) All creditors holding direct claims shall be paid out of the assets of the Corporation
to which such obligations are chargeable and then out of payments to the Corporation
on unpaid capital subscriptions to which such claims are chargeable. Before making
any payments to creditors holding direct claims, the Board of Executive Directors
shall make such arrangements as are necessary in its judgement to ensure a pro rata
distribution among holders of direct and contingent claims.
Section 4. Distribution of assets
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(a) No distribution of assets shall be made to members on account of the shares held by
them in the Corporation until all liabilities to creditors chargeable to such shares
have been discharged or provided for. Moreover, such distribution must be approved
by a decision of the Board of Governors by a majority representing at least three-fourths
of the votes of the members, which shall include two-thirds of the Governors.
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(b) Any distribution of assets to the members shall be in proportion to the number of
shares held and shall be effected at such times and under such conditions as the Corporation
deems fair and equitable. The proportions of assets distributed need not be uniform
as to type of assets. No member shall be entitled to receive its proportion in such
distribution of assets until it has settled all its obligations to the Corporation.
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(c) Any member receiving assets distributed pursuant to this Article shall enjoy the same
rights with respect to such assets as the Corporation enjoyed prior to their distribution.
Article VII. Juridical personality, immunities, exemptions and privileges
Section 1. Scope
To enable the Corporation to fulfill its purpose and the functions with which it is
entrusted, the status, immunities, exemptions and privileges set forth in this Article
shall be accorded to the Corporation in the territories of each member country.
Section 2. Juridical personality
The Corporation shall possess juridical personality and, in particular, full capacity:
Section 3. Judicial proceedings
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(a) Actions may be brought against the Corporation only in a court of competent jurisdiction
in the territories of a member country in which the Corporation has an office, has
appointed an agent for the purpose of accepting service or notice of process, or has
issued or guaranteed securities. No action shall be brought against the Corporation
by members or persons acting for or deriving claims from member countries. However,
such countries or persons shall have recourse to such special procedures to settle
controversies between the Corporation and its member countries as may be prescribed
in this Agreement, in the by-laws and regulations of the Corporation or in contracts
entered into with the Corporation.
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(b) Property and assets of the Corporation shall, wheresoever located and by whomsoever
held, be immune from all forms of seizure, attachment or execution before the delivery
of final judgment against the Corporation.
Section 4. Immunity of assets
Property and assets of the Corporation, wheresoever located and by whomsoever held,
shall be immune from search, requisition, confiscation, expropriation or any other
form of taking or foreclosure by executive or legislative action.
Section 5. Inviolability of archives
The archives of the Corporation shall be inviolable.
Section 6. Freedom of assets from restrictions
To the extent necessary to enable the Corporation to carry out its purpose and functions
and to conduct its operations in accordance with this Agreement, all property and
other assets of the Corporation shall be free from restrictions, regulations, controls
and moratoria of any nature, except as may otherwise be provided in this Agreement.
Section 7. Privilege for communications
The official communications of the Corporation shall be accorded by each member country
the same treatment that it accords to the official communications of other members.
Section 8. Personal immunities and privileges
All Governors, Executive Directors, Alternates, officers, and employees of the Corporation
shall have the following privileges and immunities:
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(a) Immunity from legal process with respect to acts performed by them in their official
capacity, except when the Corporation waives this immunity;
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(b) When not local nationals, the same immunities from immigration restrictions, alien
registration requirements and military service obligations and the same facilities
as regards exchange provisions as are accorded by a member country to the representatives,
officials, and employees of comparable rank of other member countries; and
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(c) The same privileges in respect of traveling facilities as are accorded by member countries
to representatives, officials, and employees of comparable rank of other member countries.
Section 9. Immunities from taxation
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(a) The Corporation, its property, other assets, income, and the tions and transactions
it carries out pursuant to this Agreement, shall be immune from all taxation and from
all customs duties. The Corporation shall also be immune from any obligation relating
to the payment, withholding or collection of any tax or duty.
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(b) No tax shall be levied on or in respect of salaries and emoluments paid by the Corporation
to officials or employees of the Corporation who are not local citizens or other local
nationals.
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(c) No tax of any kind shall be levied on any obligation or security issued by the Corporation,
including any dividend or interest thereon, by whomsoever held:
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(i) which discriminates against such obligation or security solely because it is issued
by the Corporation; or
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(ii) if the sole jurisdictional basis for such taxation is the place or currency in which
it is issued, made payable or paid, or the location of any office or place of business
maintained by the Corporation.
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(d) No tax of any kind shall be levied on any obligation or security guaranteed by the
Corporation, including any dividend or interest thereon, by whomsoever held:
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(i) which discriminates against such obligation or security solely because it is guaranteed
by the Corporation; or
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(ii) if the sole jurisdictional basis for such taxation is the location of any office or
place of business maintained by the Corporation.
Section 10. Implementation
Each member country, in accordance with its juridical system, shall take such action
as is necessary to make effective in its own territories the principles set forth
in this Article and shall inform the Corporation of the action which it has taken
on the matter.
Section 11. Waiver
The Corporation in its discretion may waive any of the privileges or immunities conferred
under this Article to such extent and upon such conditions as it may determine.
Section 1. Amendments
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(a) This Agreement may be amended only by decision of the Board of Governors by a majority
representing at least four-fifths of the votes of the members, which shall include
two-thirds of the Governors.
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(b) Notwithstanding the provisions of (a) above, the unanimous agreement of the Board
of Governors shall be required for the approval of any amendment modifying:
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(i) the right to withdraw from the Corporation as provided in Article V, Section 1;
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(ii) the right to purchase shares of the Corporation as provided in Article II, Section
5; and
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(iii) the limitation on liability as provided in Article II, Section 6.
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(c) Any proposal to amend this Agreement, whether emanating from a member country or the
Board of Executive Directors, shall be communicated to the Chairman of the Board of
Governors, who shall bring the proposal before the Board of Governors. When an amendment
has been adopted, the Corporation shall so certify in an official communication addressed
to all members. Amendments shall enter into force for all members three months after
the date of the official ommunication unless the Board of Governors shall specify
a different period.
Article IX. Interpretation and arbitration
Section 1. Interpretation
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(a) Any question of interpretation of the provisions of this Agreement arising between
any member and the Corporation or between members shall be submitted to the Board
of Executive Directors for decision. Members especially affected by the question under
consideration shall be entitled to direct representation before the Board of Executive
Directors as provided in Article IV, Section 4, paragraph (1).
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(b) In any case where the Board of Executive Directors has given a decision under the
above paragraph, any member may require that the question be submitted to the Board
of Governors, whose decision shall be final. Pending the decision of the Board of
Governors, the Corporation may, insofar as it deems it necessary, act on the basis
of the decision of the Board of Executive Directors.
Section 2. Arbitration
If a disagreement should arise between the Corporation and a member which has ceased
to be such, or between the Corporation and any member after adoption of a decision
to terminate the operations of the institution, such disagreement shall be submitted
to arbitration by a tribunal of three arbitrators. One of the arbitrators shall be
appointed by the Corporation, another by the member concerned, and the third, unless
the parties otherwise agree, by the President of the International Court of Justice.
If all efforts to reach an unanimous agreement fail, decisions shall be reached by
a majority vote of the three arbitrators. The third arbitrator shall be empowered
to settle all questions of procedure in any case where the parties are in disagreement
with respect thereto.
Article X. General provisions
Section 1. Headquarters of the Corporation
The headquarters of the Corporation shall be located in the same locality as the headquarters
of the Bank. The board of Executive Directors of the Corporation may establish other
offices in the territories of any of its member countries by a majority representing
at least two-thirds of the votes of the members.
Section 2. Relations with other organizations
The Corporation may enter into agreements with other organizations for purposes consistent
with this Agreement.
Section 3. Channels of communication
Each member shall designate an official entity for purposes of communication with
the Corporation on matters connected with this Agreement.
Article XI. Final provisions
Section 1. Signature and acceptance
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(a) This Agreement shall be deposited with the Bank, where it shall remain open for signature
by the representatives of the countries listed in Annex A until December 31, 1985
or such later date as shall be established by the Board of Executive Directors of
the Corporation. In case this Agreement shall not have entered into force, a later
date may be determined by the representatives of the signatory countries of the Final
Act of the Negotiations on the Creation of the Inter-American Investment Corporation.
Each signatory of this Agreement shall deposit with the Bank an instrument setting
forth that it has accepted or ratified this Agreement in accordance with its own laws
and has taken the steps necessary to enable it to fulfill all of its obligations under
this Agreement.
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(b) The Bank shall send certified copies of this Agreement to its members and duly notify
them of each signature and deposit of the instrument of acceptance or ratification
made pursuant to the foregoing paragraph, as well as the date thereof.
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(c) On or after the date on which the Corporation commences operations, the Bank may receive
the signature and the instrument of acceptance or ratification of this Agreement from
any country whose membership has been approved in accordance with Article II, Section
1(b).
Section 2. Entry into force
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(a) This Agreement shall enter into force when it has been signed and instruments of acceptance
or ratification have been deposited, in accordance with Section 1 of this Article,
by representatives of countries whose subscriptions comprise not less than two-thirds
of the total subscriptions set forth in Annex A, which shall include:
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(i) the subscription of the member country with the largest number of shares, and
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(ii) subscriptions of regional developing member countries with a total of shares greater
than all other subscriptions.
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(b) Countries whose instruments of acceptance or ratification were deposited prior to
the date on which the agreement entered into force shall become members on that date.
Other countries shall become members on the dates on which their instruments of acceptance
or ratification are deposited.
Section 3. Commencement of operations
As soon as this Agreement enters into force under Section 2 of this Article, the President
of the Bank shall call a meeting of the Board of Governors. The Corporation shall
begin operations on the date when such meeting is held.
