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PART XIV
FINAL PROVISIONS

54. Entering into effect of agreement

(1) This Agreement shall enter into effect—
1. (a) when it has been signed on behalf of all the Participating Governments; and
1. (b) when each Participating Government deposits with the Authority an instrument of acceptance stating—
  1. (i) that it has accepted this Agreement in accordance with its laws and has taken all steps necessary to enable the Bank to operate, in accordance with this Agreement, within its territory including the enactment of such laws as may be necessary to satisfy the provisions of this Agreement,
  1. (ii) that the Participating Government agrees that, in respect of its territory, the Bank shall exercise exclusive powers in respect of those matters enumerated in Articles 18 paragraph (1), 19 paragraph (1), 20, 21, 33, and 34 of this Agreement.

(2) The Bank shall be deemed to have been established immediately upon the performance of the provisions of paragraph (1) hereof by all the Participating Governments.

(3) The Authority shall be deemed to cease to exist immediately upon the establishment of the Bank.

(4) The East Caribbean Currency Agreement 1965 and all amendments thereto shall cease and terminate on the establishment of the Bank.

(5) Each Participating Government shall take the necessary action to make effective the provisions of this Agreement and enact such legislation as may be necessary to give effect to the Agreement.

55. Provision for amendments

An amendment to this Agreement may be proposed to the Council by the Bank or by any Participating Government and shall be effective when it is agreed to by all the Participating Governments and each Participating Government deposits with the Bank an instrument stating that it has accepted the amendment in accordance with its law and has taken all steps necessary to make it effective in its territory.

56. Accession of new members to the Agreement

After the entry into force of this Agreement, a territory other than one listed in the Preamble may in the discretion of the Council be permitted to become a member of the Bank by accession to this Agreement on such terms as the Council shall determine by a ²/₃ majority vote of the total number of its members. Any such territory shall deposit, on or before a date appointed by the Council an instrument of Accession with the Bank which shall notify such deposit and the date thereof to the parties to this Agreement.

In Witness Whereof the representatives of the Participating Governments being duly authorised in their behalf, have signed this Agreement.

Done at Port of Spain this 5th day of July, 1983.

Signed by LESTER B. BIRD

For the Government of Antigua and Barbuda

Signed by M. EUGENIA CHARLES

For the Government of The Commonwealth of Dominica

Signed by MAURICE BISHOP

For the Government of Grenada

Signed by JOHN A. OSBOURNE

For the Government of Montserrat

Signed by KENNEDY A. SIMMONDS

For the Government of St. Christopher and Nevis

Signed by JOHN M. COMPTON

For the Government of Saint Lucia

Signed by R. MILTON CATO

For the Government of Saint Vincent and the Grenadines

Annex I
to the Agreement Establishing the Eastern Caribbean Central Bank

FORMULA FOR SHARING OF THE PROFITS OR LOSSES OF THE BANK

(1) The distributable profits or losses of the Bank shall be distributed among the Participating Governments according to the formula set forth below.

(2) The Bank in respect of each financial year shall determine the share of its distributable profits or losses attributable to returns or losses on investments of its external reserves used as backing for the currency as well as the distributable profits or losses attributable to revenue or loss on other earning activities of the Bank.

(3) The share of distributable profits or losses attributable to returns or losses on investment of its external assets shall be distributed between the Member States in proportion to the respective amount of currency in circulation in each Member State. In order to facilitate the determination from time to time of the currency in circulation in all Member States, the Bank in its preparation of any new issue of currency notes to be put into circulation at the date of commencement of this Agreement, shall order that such notes be coded in such a manner as to permit the issue of notes only of a particular code to a Member State, and any subsequent determination of the currency in circulation in that State shall take account of redemptions of notes of the particular code issued to a Member State, notwithstanding that such notes may have been redeemed from elsewhere.

(4) The share of distributable profits or losses attributable to revenue or loss on other earning activities of the Bank shall be distributable on the basis of the imputed equity interest of each Member State, which shall be the proportion of profits or losses provided for under the formula in operation in 1969 adjusted to take account of the ratios determined under paragraph (3) of this Annex, but so as to ensure that the aggregate of all proportions is one.

(Substituted by S.I. 16/2017)

Annex II
to the Agreement Establishing the Eastern Caribbean Central Bank

COMPENSATION ARRANGEMENT TO COVER LOSSES DUE TO CHANGES IN THE EXTERNAL VALUE OF THE EC DOLLAR

(1) In the first instance, compensation would be considered in respect of net losses in the capital value of assets. On this basis, the following would apply—
1. (a) Compensation would be considered in the first instance to cover overall net losses in capital value of assets only where these are being managed by the Bank as fiscal agent and depository of Participating Governments;
1. (b) Where net adverse movements in current payment commitments occur, the increment in these can be met by the Bank, in whole or in part and for limited time period, both the proportion and time period to be subject to the decision of the Council on the recommendation of the Bank after detailed objective study;
1. (c) Where the net losses of capital value have occurred as a result of a decision by the Council to vary the parity, as far as possible the objective of the compensation should be to maintain the capital value of assets of those few states which have sustained net losses;
1. (d) Where an involuntary devaluation has occurred, that is where either the reserve currency has been altered in parity, or where the par value of some other major currency has been altered, every effort should be made to assist in maintaining the net capital value of the asset portfolio of each Participating Government;
1. (e) Prior to any action towards compensation in any of the situations enumerated above, the Bank is required to make a full and careful determination of all gains and losses both in respect of its own portfolio and in respect of the portfolios of Participating Governments, and to present this determination to the Monetary Council with a recommendation from the Board with respect to any compensation to be considered;
1. (f) The provisions of Article (29) of the Agreement should be extended to provide for assistance by the Bank in maintaining the capital value of the external asset portfolios of Participating Governments as well as that of the Bank itself, and this could be facilitated by an allocation by Council from the annual profits of the Bank to the “Revaluation Reserve Account”.

(2) Additionally, compensation would be considered as compensatory financing for payments deficits attributable to a change in the exchange value of the EC dollar. In this case the following would apply—
1. (a) As in the case of the compensation for capital value losses, the basis for compensatory financing would be a detailed study by ECCB, in collaboration with the Participating Governments, of the impact of the change in parity on the economy as a whole. The methodology of such a study would be informed by appropriate internationally accepted guidelines for quantifying the impact of changes in parity value of the currency.
1. (b) Power should be granted to the Central Bank to establish special funds for various purposes, and specifically to establish a special fund for compensatory financing of the sort contemplated here in cases of changes in the parity value of the currency, natural disasters or other situations producing drastic declines in export earnings.
1. (c) The special fund for compensatory financing should be based on the Bank's own resources as well as on resources mobilised from outside of the Bank. In some cases such outside funds may be made available in liquid resources in advance to the Bank, while in other cases the Bank may negotiate with other organisations for a line of credit or access to resources to be made available in case the expected event occurs.
1. (d) In the case of compensatory arrangements resulting from deliberate changes in parity, the IMF would no doubt be privy to the economic circumstances justifying the changes and should stand ready to assist any country deemed to be a net loser.
1. (e) The funding mechanism should aim at providing short-term credit for tiding over the initial period of adversity as well as funding to assist in longer term adjustment of the economy.
1. (f) The compensatory funding should be supplementary to any compensatory financing of export fluctuations provided by the IMF and should provide as far as possible for entitlement with minimum conditionality.
1. (g) The mechanism should provide for a combination of loans to Participating Governments, liquidity expansion through additional credit, and balance of payments assistance, the particular combination of facilities depending on the results of the impact study and the wishes of the Participating Government concerned.
1. (h) Where any Participating Government has suffered an adverse impact as a result of the factors mentioned, special consideration will be given to any request which it may make for temporary use of resources made available by the Bank, and allocated to Member States but for the time being not utilised.
1. (i) The CGCED should be asked to give priority attention to the provision of resources for assistance under this head.
1. (j) Once the studies which the Bank is required to undertake indicate an adverse impact the compensatory procedures should be automatically activated to the extent possible e.g. through the provision of increased liquidity to the banking system and increased foreign exchange. Government borrowing of course, will have to be the subject of a formal application.