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SECTORAL AGREEMENTS ON SERVICES 
IN THE WESTERN HEMISPHERE

SG/TU/WG.SERV/DOC.2/97/Rev. 2
25 February 1998
Original: English


(Continuation)

PART II - SUMMARY OF PROVISIONS IN THE SECTORAL AGREEMENTS ON SERVICES IN THE WESTERN HEMISPHERE

 

1. FINANCIAL SERVICES 

A. Sub-Regional Sectoral Agreements

1 | 2 | 3

 

1. Convenio de Pagos y Créditos Recíprocos (Agreement on Reciprocal Payments and Credits)

DATE: August 25, 1982

REVISIONS: March 8, 1991; September 16, 1992; and September 28, 1994

MEMBERS: Argentina, Bolivia, Brazil, Colombia, Chile, Dominican Republic, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela

Summary of Provisions

Definitions: 
“Agreement”, “Agent”, “Central Bank(s)” or “Members”, “Commission”, “Compensation”, “International Exchanges”, “Council”, “Common Correspondent”, “Accounts”, “Debits”, “Dollar(s)”, “Authorized Institution(s)”, “Instrument(s)”, “Credit Line(s)”, “Period”, “Automatic Program(s) of Payment”, “Regulation”, “Bilateral Balance(s)”, “Multilateral Balance”, “Transference(s)”.


Objective
Article 1:
The “central banks” agree to establish “credit lines” in dollars among themselves and to create a system of “compensation” of the balances registered in the “accounts” through which the payments originating in direct operations of any nature, taking place between residents of the respective countries and the “central banks”, are forwarded.

Admissible payments, their canalization and institutions which are qualified to operate
Article 2:
The payments corresponding to direct operations of any nature between residents of the different countries and the “central banks” are susceptible to be directed through the system established in this “Agreement”.

The merchandise’s origin will be taken as reference for the commercial operations, while for services and capital movements the people’s residence will be considered.

Article 4: The canalization of payments through the system established in this “Agreement” will be voluntary, so its regulations will not interfere with the existing practices of payments and transferences in each of the central banks’ country.

Article 5: The “central banks” will promote, when possible, the increase in financial relations between commercial banks of the respective countries.

Admissible payments, their canalization and institutions which are qualified to operate
Article 6:
The payments forwarded through this “Agreement” will take place only through “central banks” or “authorized institutions” of the respective countries. It is the responsibility of each “central bank” to authorize or revoke the character of “authorized institution” of its respective country.

The controversies between the “authorized institutions” regarding the execution of the operations will be solved directly between themselves. The “central banks”, therefore, do not take charge for any differences that may arise between the “authorized institutions”. 

MFN Treatment 
Article 8: The “central banks” agree to adopt, within their jurisdiction scope, the necessary measures to apply treatment no less favorable than the one conferred to similar operations with third countries, to the payments and “transferences” of funds mentioned before and which pass through the system established in this “Agreement”. 

Interests
Article 9:
The “debits” of each of the “central banks” originating with payments that circulate through the mechanism, shall produce interests, which will be calculated at the rate and form established in the “Regulation”.

Government
Warranty of convertibility and transferability
Article 10:
The “central banks” guarantee the immediate convertibility of the respective national currencies which are delivered to “authorized institutions” for payments canalized through this “Agreement” , as well as the transferability, of the resulting “dollars” after the conversion.

Government
Article 15:
The Government of the “Agreement” will correspond to the “Council”. The Council’s attributions are:

a) Watch over the functioning of the “Agreement” and adopt the measures considered appropriate for its safeguard;

b) Interpret the provisions of the “Agreement”;

c) Approve the regulations and operative procedures required by the “Agreement”;

d) Recommend modifications to the “agreement” to the “central banks”;

f) Designate the “Agent” and also the “Common Correspondent”;

g) All the attributions originating in the other provisions of the “Agreement”.

Administration 
Article 16: The “Agreement” will be administered by the “Agent” designated by the “Council”. The “Agent” has the following functions and attributions:

a) Communicate the established “Credit lines” to the “central banks”; 

b) Gather the information given by the “central banks” regarding the state of the “accounts”, and determine and communicate the positions to be compensated among pairs of “central banks”;

c) Determine the net balances of each “central bank” in face of the others, taking as a basis the resulting balances after the balance “compensation” between pairs of “central banks”;

d) Instruct the “central banks” which end up as net debtors to transfer their overall resulting balance to the “common correspondent” in the “Agent’s” name;

e) Order the “common correspondent” to transfer the amounts corresponding to the favorable net balances of the creditor “central bank” or “central banks”, including, when appropriate, the proportional share for the funds’ investment, given a cablegraphic notification;

f) Apply the procedures which are established in the “regulation”, regarding the “Automatic Program of Payment”;

g) Cancel the “compensation” when one or more “central banks” do not transfer their net debtor balances for the “Agent’s” credit in the “Common Correspondent” within the time frame stipulated by the “Agent”, according to the “Regulation”; and return the received sums to the “central bank(s)” having made transferences for a “compensation” which was canceled. 

h) Calculate and communicate to the “central banks” the interest rate that corresponds to the “credit lines”, and determine the applicable rate to the “Automatic Program of Payment”, according to the “Regulation”.

i) Call a meeting of the “Council” at the request of a “central bank” or to considerate a request of adherence;

j) The other functions conferred by this “Agreement” and its “Regulation”;

k) The other functions of an administrative character conferred by the “Council”.

Adherence
Article 17:
This “Agreement” remains open to the adherence of any central bank, or institution which in its respective country executes such functions, as requested.

Article 18: The participation in this “Agreement” will imply the adherence of the respective central bank to the Multilateral Agreement on Reciprocal Support (Agreement of Saint Domingo). 

“Central banks” Withdrawal from the “Agreement”
Article 19: Any “central bank” can withdraw from the “Agreement” , given a previous cablegraphic notification to the “Agent” and to the other “central banks”.

Such withdrawal will be effective at the end of the “period” immediately following the date when the mentioned notification is made, so the rights and obligations corresponding to its participation in the “Agreement” will remain valid until completely satisfied.

Entry into Force and Duration
Article 20:
This “Agreement” will enter into force on the date of its subscription. Its duration is indefinite.

Modifying Protocol signed on March 8, 1991
First:
The following definitions are extended: “Automatic Program(s) of Payment”, “Regulation”.
Second: Articles 16, 22, 23, 28, 29, 30 and 31 of the “Agreement” are modified.

Modifying Protocol signed on September 16, 1992
Article 2 of the Agreement on Reciprocal Payments and Credits is modified.

Protocol for the Settlement of Disputes between Central Banks participating in the Agreement of Reciprocal Payments and Credits (September 28, 1994)

Definitions: 
Article 1: The following definitions are valid in this “Protocol”: “Central Banks”, “Participating Central Banks”, “Council”, “Agreement”, “Commission”, “Party(ies)”, “Council’s Resolutions”, “Regulation”, “General Secretariat”.

Objective: 
Article 2: The disputes between the “participating central banks” over the fulfillment or non-fulfillment of the provisions contained in the “Agreement”, in its “Regulation”, and in the “Council Resolutions” regarding operations to take place after the signature of this Protocol, will be subject to the settlement procedures established in it.

Mediation and Conciliation:
Article 3:
The “parties” of a dispute will seek to solve it through direct negotiations, attempting to reach a mutually satisfactory settlement.

Article 4: If through direct negotiations an agreement is not reached or it the dispute is only partially settled, any of the “parties” may request to the “General Secretariat” the incorporation of the dispute’s topic in the following meeting of the “Commission”.

If the period between the request and the next meeting of the “Commission” exceeds ninety (90) calendar days, the “General Secretariat” will decide with the “parties” on the convenience of calling a meeting of the “Commission” on a closer date. With this purpose, the “General Secretariat” will carry pertinent consultations with the other “central banks”.

Constitution of the Tribunal
Article 7:
When the dispute is not settled through the application of the procedures mentioned before, any of the “parties” will send a written communication to the “General Secretariat” describing its intention to appeal to the arbitral procedure established in this Protocol. The “General Secretariat” will inform the “Commission” and will immediately notify the other “party”, which will be obliged to submit to the arbitral procedure.

 

2. Acuerdo de Garantías Uniformes de Disponibilidad y Transferebilidad para la Acceptación Bancaria Latinoamericana - ALALC (Agreement on the Uniform Warranties of Availability and Transferability for the Latin American Banking Acceptance - ALALC)

DATE: September 20, 1973

MEMBERS: Argentina, Bolivia, Brazil, Colombia, Chile, Dominican Republic, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela

Summary of Provisions

Definitions: 
“Latin American Banking Acceptance - ALALC”, “Agreements of Reciprocal Credit”, “Compensation Agreements”:
the Agreement on Multilateral Compensation of Reciprocal Settlements and Credits signed by the ALALC countries’ “central banks” in Mexico city, September 22, 1965, “Authorized Institution”, “Central Banks”

Objective: 
First Article:
Each “central bank” signatary of this Agreement guarantees that the “authorized institutions” of its country can:

a) Acquire the necessary US dollars to pay the “Latin American banking acceptances” that are due, and to which they have subscribed as acceptant; and

b) Freely transfer these dollars to banking institutions where the payment of the “banking acceptances” must be made.

Scope: 
Second Article:
The warranties of convertibility and transferability of this Agreement reach not only the acceptant bank, but also the others obliged to the “Latin American banking acceptance-ALALC” in question, as well as the holders who obtained the payment in local currency through a judicial or extrajudicial channel.

Third Article: These warranties also cover all letras de cambio (financial bonds) which have been accepted by “authorized institutions”, whose format and text follow the model in the Annex to this Agreement and which gather all features to become a “Latin American banking acceptance - ALALC”.

Entry into Force:
Fourth Article:
This Agreement will enter into force on the signing date for each “central bank” and is open to the participation of all “central banks” that have adhered to the “compensation agreement”.

Withdrawal:
Fifth Article:
Each “central bank” may withdraw from this Agreement at any moment through communication to the Secretariat of the ALALC. Notwithstanding, the obligations which have been assumed because of this Agreement will subsist until the total cancellation of the acceptances with payment pending.

 

3. Acuerdo Multilateral de Apoyo Recíproco para hacer frente a Deficiencias Transitorias de Liquidez (Multilateral Agreement on Reciprocal Support to face Transitory Deficiencies of Liquidity - Agreement of Saint Domingo)

DATE: September 26, 1969 Last Revision: September 22, 1981

MEMBERS: Argentina, Bolivia, Brazil, Colombia, Chile, Dominican Republic, Ecuador, Mexico, Paraguay, Peru, Uruguay and Venezuela

Summary of Provisions

Definitions: 
“Agreement”, “Compensation Agreement”:
the Agreement on Reciprocal Payments and Credits signed in Mexico city on September 22, 1965, “Agent”, “Contribution(s)”, “Central Bank(s)” or “Members”, “Catastrophe”, “Commission”, “Compensation(s)”, “Commitment(s) of Contribution”, “Net Commitment(s) of Contribution”, “Council”, “Common Correspondent”, “Credit”, “Quota(s)”, “SDR”, “Disposal(s)”, “Dollar(s)”, “Mechanism(s)”, “First Mechanism”, “Second Mechanism”, “Third Mechanism”, “Period(s)”, “Global Resources”, “System”, 

“Contribution”: the supporting amount contributed by a “central bank” to attend to other “central bank’s” “disposal”. 

“Disposal”: the supporting amount which a “central bank” receives because of this Agreement.

1.Objective of the “System” 
With the objective to give reciprocal support to help a “member’ to face transitory deficiencies of liquidity, the “central banks” commit to make “contributions” in favor of the “central bank” which is in this situation, when it is a result of the “compensation”, of a global deficit in the balance of payments, or of a “catastrophe”.

2. Resources for the “System”
The resources with which the “System” will count will equal the sum of “global resources” of each of the “mechanisms” which are established in this Agreement. The “global resources” with which each “mechanism” will count will be fixed by the “council” and must be contained in the corresponding Regulation.

3. Rights and Obligations
The “credits” originating in the “contributions” and “disposals”, which will always be expressed in dollars, will establish rights and obligations between the “central bank” managing the funds and the one receiving them, which are exclusively bilateral.

The “disposals” and “contributions” mentioned in each “mechanism”, refer exclusively to such “mechanism”, unless something different is explicitly specified.

4. Interests
The “disposals” will produce interests under the terms and conditions established in each mechanism.

5. Transferability of the “credits”
The “credits” will be given by a “central bank” to another, with a proper notification to the debtor through the “Agent.” The supply of “credits” will not imply in any modification to the terms originally agreed. The supply of “credits” will not affect the “net commitments of contribution” of the supplier or of the assignee.

6. Additional Contributions
The “system” remains open to additional contributions by the “members” or other entities, under the terms established in each “mechanism”, or in their Regulation by the “Council”.

7. Government
The Government of the “Agreement” will correspond to the “Council”. The Council’s attributions are:

a) Establish the “global resources” and the “quotas”;

b) Watch over the functioning of the “System”;

c) Interpret the provisions of the “Agreement”;

d) Approve the regulations which are necessary for the functioning of the “system”;

e) Recommend modifications to the “agreement” to the “central banks”;

f) Designate the “Agent” and also the “common correspondent”;

g) All the attributions originating in the other provisions of the “Agreement”. The “central banks” will participate in the “Council”, with voice and vote rights.

8. Administration of the “Agreement”
Each of the “mechanisms” of the “System” will be administered by the “Agent” designated by the “Council”.

9. Adherence
This Agreement remains open to the adherence of the “central banks” or equivalent institutions which request it. The adherence will be decided by the “central banks” which are signatary of this Agreement, without a negative vote.

10. Withdrawal of “members”
Any “central bank” can denounce the “Agreement” or withdraw from one of the “mechanisms” of the “System”, given a previous cablegraphic notification to the “Agent” and to the other “central banks”. The withdrawal will be effective in conformity with the rules established by each “mechanism”. The rights and obligations corresponding to its participation in the “Agreement” will remain valid until completely satisfied.

In the case of the withdrawal of a “member” from some of the “mechanisms”, the mechanism’s “global resources” will decrease in an amount equivalent to the “quota” corresponding to such “member”.

11. Entry into Force and Duration
This Agreement will enter into force on the date of its subscription.

The “first mechanism” will enter into force simultaneously with the “Agreement”; the “second mechanism” and the “third mechanism” will enter into force once the conditions established in articles 40 and 54, respectively, are fulfilled.

This Agreement is of unlimited duration.

 

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