chapter 24 A Concluding Summary

International Monetary Fund
Published Date:
October 1985
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This final chapter is a summary of the main features of the Fund’s law and practice on membership and nonmembership as discussed in the preceding chapters of this study.


1. The 45 countries that were represented at the Bretton Woods Conference and therefore were listed in Schedule A of the Articles were entitled to become original members of the Fund by accepting membership on or before December 31, 1945. Thirty countries exercised this privilege. All but one of the remaining 15 countries became members in due course, but not as original members. Three of the 44 countries have withdrawn after becoming members. Original members have no special rights or duties under the Articles.

2. Membership is open to countries other than original members at such times and in accordance with such terms as may be prescribed by the Fund. At the end of 1973, 126 countries were members of the Fund. The drafters of the Articles looked on decisions to admit countries as having something of a political character, and therefore the exercise of this power, including the power to establish terms, is reserved to the plenary organ, the Board of Governors, in which the governor appointed by each member votes individually. A majority of the votes cast, on the basis of the Fund’s system of weighted voting power, suffices for a decision to admit an applicant country, which can be taken to be evidence of an intention to encourage admission. There is an ambiguity in the By-Laws of the Board of Governors and the Rules and Regulations of the Executive Directors, which could be read to mean that the Executive Directors can decide not to proceed with a country’s application for membership, but such an action would be inconsistent with the reserved power of the Board of Governors.

3. A standard, and somewhat elaborate, procedure was developed many years ago for dealing with applications for membership, but the formal procedures may be preceded in some cases by lengthy preliminary contacts with the Managing Director and staff and by approaches to members through diplomatic channels.

4. An applicant government that decides to enter the Fund under the resolution of the Board of Governors admitting the country to membership is required to deposit an instrument stating that it accepts in accordance with its law the Articles and all the terms and conditions prescribed in the resolution, and that it has taken all steps necessary to enable it to carry out its obligations under the Articles and the resolution. The governments of original members were required to deposit a similar instrument (except for the reference to a resolution, because original members were entitled to membership without a resolution). The representations in the instrument have continuing effect, and therefore a member may be required to make them good if at any date after admission it becomes apparent that not all the domestic steps were taken that should have been taken. This necessity may arise because of some oversight on the member’s part or because of an interpretation of the Articles adopted by the Fund after the member entered the organization. The Fund does not permit a country to accept membership subject to reservations.

5. The Fund’s criteria for membership are that an applicant is a “country,” that it is in formal control of its external relations, and that it is able and willing to perform the obligations of membership. The last two criteria are sometimes combined or confused. The criterion of ability to perform the obligations of membership can be deemed to be satisfied even though the applicant may have to rely on the cooperation of other members to enable it to perform the obligations.

6. The Articles employ the word “country” instead of “state” as a criterion for membership because of certain considerations that were pertinent at the time of the Bretton Woods Conference. It is doubtful, however, that there is any practical difference now between the words “country” and “state.” The word “country” has given the Fund some flexibility. For example, it has enabled the Fund without doctrinal difficulty to admit an applicant country even though its borders had not been delineated with finality, or even though the applicant government controlled only part of the territory of what had been regarded as a single entity in international law and there was no immediate prospect of unified control under a single authority.

7. The Fund makes its own findings on whether an applicant is a “country,” and makes them solely for its own purposes. Therefore, it is not bound by the recognition of states accorded or withheld by members or by other international organizations, but in practice the Fund may pay attention to the actions taken by members in general, or by particular members, such as those in the same region as the applicant, or by the United Nations, other specialized agencies, or regional organizations. Moreover, decisions of the Fund are taken by governors and executive directors and their attitudes are likely to be influenced by the decisions, or absence of decisions, with respect to recognition that have been taken by the members that have appointed or elected them. Although the Fund tends to avoid action that might be regarded as premature and political, there have been occasions on which it has recognized an applicant as a country before the United Nations or most members or members with a majority of the total voting power in the Fund had taken comparable action.

8. The Fund makes its own findings with respect to the existence of a government with which to deal. The Fund’s recognition of a government, as distinguished from the recognition of an applicant as a “country” or recognition of changes in membership, has rarely been a problem, and most findings are made informally by the Managing Director and staff. This practice applies to both constitutional and unconstitutional changes of government.

9. The Fund’s recognition of governments, like its recognition of countries, is made for its own purposes, is not determined as a matter of law by the actions of members, and does not bind members in their own external relations, however the governors and executive directors appointed or elected by them may have acted in the Fund. Nevertheless, the state of relations among members may have a practical effect on the Fund’s transactions, particularly those conducted through the General Account, and in the election of executive directors.

10. Membership is available to countries individually. The Articles include no arrangements for the joint membership of countries, however close the political or monetary ties may be among them. The Articles make no provision for regionalism except for the assurance given to the American Republics not entitled to appoint executive directors that they will be able to elect two directors (a number now increased to three by the exercise of a power of the Board of Governors). The Fund does not refuse to admit a country to membership because its partners in a close association are not members or applicants for membership.

11. The Fund’s pragmatic reaction to the applications of Italy, Austria, Germany, and Japan has had a formative effect on its practice in connection with the criteria of the control of foreign relations and the capacity to perform the obligations of membership. In responding favorably to these four early applications, the Fund took into account, first, circumstances that made it unlikely that, under the arrangements governing occupation, the applicants would be hindered in the performance of their obligations by the occupying powers, and, second, the fact that some of the occupying powers were members of the Fund and therefore unlikely for that reason to interfere with the performance of another member’s obligations. There was a strong disposition among members to bring the applicants into the Fund, a feeling that problems were unlikely to arise, and a conviction that if they should arise it would be possible to resolve them without excessive difficulty.

12. The norm probably contemplated by the drafters of the Articles was that a member would issue its own currency for its own exclusive use, but this norm has not become a criterion for membership. There have been many and varied departures from the norm that have not prevented membership. Some applicants have had no domestic currency, or their domestic currency has not been the main circulating medium, or they have treated the currency of another member as their own currency, or they have had two or more currencies, or they have shared a common currency with other members or with the dependencies of other members or with nonmembers or with some combination of them. Until mid-1956 there was some feeling in the Fund that the existence of a domestic currency, even though it might not be the main circulating currency, should be a criterion for membership because in the absence of a domestic currency many of the obligations would seem to have no relevance for the applicant. The main problems that have been considered in connection with the applications of countries that departed from the norm have indeed revolved around the question whether they would be able to perform the obligations of membership under the Articles. Pragmatic considerations similar to those mentioned in paragraph 11 above have been taken into account in dealing with applications by countries that departed from the norm, and the Fund has sometimes been liberal in finding that the criterion of ability to perform the obligations of membership was satisfied. The Fund has been influenced by the fact that another member was responsible for the currency used by the applicant, or that a combination of members was responsible for the currency, or that another member supported the currency, but no single theory can explain all the decisions to admit applicants that departed from the norm. Indeed, after a time, what had been regarded as anomalous cases became so common that no theory was sought to explain the eligibility of these applicants.

13. There can be no doubt that the architects of the Fund contemplated a place within the structure for countries with state-controlled economies. The U. S. S. R. attended the Bretton Woods Conference, and various issues its delegates raised there and in earlier discussions led to the modification of some proposed provisions and the incorporation of others in order to make it easier for the U. S. S. R. to take up membership. Among the provisions introduced into the Articles at the urging of the U. S. S. R. was Article IV, Section 5 (e), which became deeply involved in the proceedings that led to the withdrawal of Czechoslovakia. Notwithstanding the adoption of provisions of this kind, it is not clear how the drafters of the Articles reconciled membership for countries with state-controlled economies with all the obligations of membership. The U. S. S. R. has not entered the Fund, but other countries with state-controlled economies have become members.

14. Small states, however defined, have not posed the kind of problem for the Fund that they have raised for other international organizations, largely because of the Fund’s system of weighted voting power. The Fund has not been disposed to adopt a policy of denying membership to small countries, and it would not have been possible to formulate a policy that did not discriminate in favor of small countries that had become members already. The exclusion of small states from the Fund would have prevented them from becoming members of the World Bank and its affiliates and therefore would have denied them the assistance that these organizations give in promoting development.

15. The Fund has had problems of its own connected with small countries, for example in connection with quotas. At one time, the Fund observed a policy of granting a minimum quota in order to increase the benefits available to small countries, but even the minimum became unrealistically large for some of the small countries that applied, and the policy had to be abandoned. The influx of small countries has contributed to the creation of larger constituencies in the election of some executive directors, and has placed burdens on these directors that the Fund has sought to alleviate. Another problem has arisen from the fact that a large number of small countries may have what they regard as homogeneous interests but insufficient voting power to give them the assurance that in practice they will be able to elect an executive director.

16. One result of the increase in the number of members of all sizes has been the tendency toward constituencies of greater diversity. This development has increased the difficulties for executive directors, who can cast their votes only as a unit, in determining the positions they will take on some issues. The problem is all the more serious because it is on issues of greater importance that directors are likely to canvass the opinions of their constituents.

17. Another result of the increase in the number of members is that it may be more difficult to adopt certain decisions of the Board of Governors because they cannot be adopted without the favorable votes of a majority of the governors as well as a majority of the total voting power. These decisions, however, are confined to decisions of the Board of Governors to compel a member to withdraw. Similarly, proposed amendments of the Articles cannot become effective without the acceptance of certain proportions of the total membership and of total voting power. Proposals to amend have been equally rare, and in the future, as in the past, amendment is likely to be resorted to only in order to bring about important changes in the international monetary system or in the Fund. The provision requiring broad consent, in terms of members as well as voting power, is reasonable, but the effect of the provision would cause concern if it inhibited or delayed reforms.

18. In applying the criterion of ability to perform the obligations of membership, the Fund has not made a detailed examination of the applicant’s ability to perform each obligation. Various pragmatic considerations have been relied on when it seemed that there might be problems of compliance. The willingness of an applicant to perform the obligations to provide information and to consult with the Fund has been given special emphasis. The Fund has wanted the assurance of collaboration in its relations with a prospective member, including the assurance of an opportunity to influence the member in its choice of monetary policies.

19. The criterion of the control of foreign relations relies more on form than substance. According to this criterion, an applicant, to be eligible for membership, must not be subject to the legal right of another country to control the applicant’s external affairs. An applicant that is formally independent is not debarred from membership even though it is subject to considerable influence by another country in the conduct of foreign relations.

20. It is legitimate to conclude that the Fund has applied its criteria for membership with flexibility rather than precision. The Fund has been guided by an unformulated policy of readiness to accept as wide a membership as possible. It has been said that organizations open to all states under their charters desire universality and that their effectiveness increases the more closely their membership approaches universality. This generalization cannot be tested in one respect by reference to the Fund’s experience, because so far most countries with state-controlled economies have not become members.

21. The Fund’s liberal practice of admission has made it unnecessary to consider the question whether the Fund is bound by its Articles to admit an applicant that satisfies the Fund’s criteria for membership. The issue would involve the question whether these criteria are sufficient as well as necessary.

22. The Fund can prescribe terms for membership for all but original members, and it has exercised this power in the form of a resolution of the Board of Governors for each applicant. The Fund has a discretion to establish the terms appropriate for each applicant, but the practice has been to standardize the content of resolutions as much as possible.

23. The terms that have given rise to most negotiations with applicants have related to the quota and the subscription to be paid in gold. The quota is an essential datum in the relation between the Fund and a member because many rights and obligations are determined by it. The Fund attempts to fit the applicant’s quota into the hierarchy of members’ quotas, but there are frequent problems, sometimes because the data used in the calculation of quotas are not available for a newly independent country. Negotiations have been protracted on some occasions, not because the applicant wanted a larger quota than was being offered but because, for a variety of reasons, it wanted a smaller one. Applicants have often regretted that they had rejected the maximum quota offered to them. It should be clear that the Fund prescribes terms and is under no legal necessity to agree them with an applicant, but the normal practice is to ascertain that the terms contemplated by the Fund are acceptable to the applicant. Nothing is gained by going to the trouble of adopting a resolution when it is known that the applicant will not accept membership under it.

24. A member’s total subscription is equal to its quota. In prescribing the proportion of a subscription that must be paid in gold, the Fund has been influenced, without being legally bound, by the formula in the Articles that governed the subscriptions of original members. The minimum subscription in gold payable by original members was equivalent to the smaller of two amounts: 25 per cent of quota and 10 per cent of net official holdings of gold and U. S. dollars. For other members, this formula has been modified in the course of time in order to adapt it to new developments. Often the formula has not been made explicit in resolutions even though it was the basis for calculating the amount that was made payable. The amount of the gold subscription has had special prominence in connection with applications for membership because the rest of the subscription is payable in a member’s own currency and represents no transfer of reserves. Moreover, the currency subscription is not necessarily a strengthening of the Fund’s resources if for an indefinite period the Fund’s policies will preclude the use of the currency in its transactions. The Fund has insisted on the subscription of some gold even though in some circumstances no more than a token amount could be prescribed. The Fund did not forgo a gold subscription until 1973, when it considered an application by a country that held no gold and could not obtain it from official sources because of problems connected with the price of gold and its future role in the international monetary system.

25. Other terms in membership resolutions prescribe the procedure for the initial determination of a par value for the member’s currency and impose an obligation on the member to obtain the agreement of the Fund for any change in exchange rates before an initial par value is established.

26. In accordance with the general purpose of the Fund to give assistance in support of appropriate par values for the currencies of members, it is prescribed by membership resolutions that a member may enter into exchange transactions with the Fund after an initial par value is established. After several unsuccessful efforts to liberalize this term, it was finally decided by the Fund that the term would be modified so that a member would be allowed to engage in exchange transactions, under such conditions and in such amounts as the Executive Directors might determine, even before the establishment of an initial par value. It had become apparent that, for one reason or another, a number of members would be unable to establish par values for lengthy periods, and that during these periods the Fund’s advice to these members might be more effective if the Fund could help them financially.

27. Certain other terms are prescribed as standard practice, but there have been special terms to meet special circumstances, such as the terms for Indonesia’s readmission before it had discharged the agreement for the settlement of accounts entered into on its earlier withdrawal. A member that defaults in the performance of any term of a resolution does not forfeit its membership, but the Fund could take action against it for the failure to fulfill an undertaking.

28. Except for the rights and obligations that are governed by its membership resolution, a new member has the same rights and obligations as all other members. The terms included in resolutions have been circumscribed by a policy that new members should not have permanent rights and obligations that differ from those of original members, and it has been unnecessary therefore to consider whether it would be valid to establish different rights and obligations. With three special exceptions, the terms included in resolutions have not dealt with events after agreement on an initial par value, and therefore the differences in rights and obligations between original and other members disappear on that date, but the period before that date has been protracted for some members.

29. The practice referred to in paragraph 28 is consistent with the spirit of the Articles, which make no permanent distinctions among categories of members. An effort at the Bretton Woods Conference to incorporate a reference to the needs of developing countries in the purposes of the Fund was defeated. The principle of the formal equality of all members has been modified by special policies designed for the benefit of developing members, although it has been necessary to formulate the policies so that they are applicable in principle to all members. The transitional arrangements of Article XIV are available to all members, but the members still taking advantage of these arrangements are overwhelmingly developing members. It is questionable, therefore, whether the principle of formal equality is realistic or beneficial for developing members, and there is evidence that formal distinctions among members may be made in the international monetary system of the future. In recent years, however, the principle of formal equality was useful in establishing the right of all members to participate in the Special Drawing Account, through which special drawing rights are allocated, and in the Committee of the Board of Governors on Reform of the International Monetary System and Related Issues (the Committee of Twenty).

30. A country accepts membership on its own behalf and in respect of its dependencies (“all their colonies, overseas territories, all territories under their protection, suzerainty, or authority and all territories in respect of which they exercise a mandate”). Dependencies cannot be admitted to membership, and the Fund, unlike some other international organizations, has no category of limited or associate membership.

31. A member is responsible to the Fund for observance of the Articles in its dependencies, whatever may be the degree of autonomy they exercise and however difficult it may be for the member to ensure observance. A dependency cannot become a member even though it has its own currency and balance of payments and even though its economic and financial weight in the world is greater than that of many members, some of which do not have currencies of their own. Some members might have welcomed membership for some of their dependencies, and so might these dependencies, but it is doubtful that a strong case could be made for more than a few of them. Most dependencies have a modest role in international trade and payments, and membership, whether full or limited, might create administrative and political problems.

32. The legal character of the exchange regime of a dependency under the Articles may differ from the legal character of the exchange regime of the member that has accepted the Articles in respect of the dependency.

33. The Fund has not found it necessary to develop precise definitions of the various classes of dependencies. The words “all territories under their … authority” create a residual category that can accommodate all territories that cannot be classified readily into some other category of dependency. For example, the words apply to trust territories even though they are not mentioned in the Articles, and to occupied territories even though legally they are part of the territory of a member other than the occupying member.

34. A member ceases to be responsible under the Articles for a former dependency if the territory becomes independent or is incorporated into the territory of another member. There is no single procedure for informing the Fund of a member’s cessation of responsibility, and on some occasions the Fund has made its own findings. When a member ceases to be responsible for a former dependency, no problems of settlement or of the assumption of indebtedness between the Fund and the territory can arise because a dependency cannot engage in transactions with the Fund and a member cannot engage in transactions on behalf of a dependency.

35. A former dependency of a member has no claim to membership on the basis of succession or any other doctrine of international law, and it must apply in the ordinary way if it wishes to become a member. If it becomes a member, its relationship with the Fund is unaffected by decisions of the Fund taken in relation to it as a dependency on the initiative of the member formerly responsible for it.

36. Territorial and constitutional changes can create problems connected with membership, and neither the express provisions of the Articles nor international law may give much help in solving these problems. The Fund has not had to deal with a situation in which a member disappears and two or more new international persons emerge on its territory. The separation of India and Pakistan was treated as a situation in which India retained its international personality and membership in the Fund and Pakistan was considered a new country that had to apply for membership. The quota of a member cannot be reduced without its consent, and the quota of India remained unchanged. There have been other occasions on which the emergence of new countries has reduced the territory, resources, and population of a member, but on no occasion has this event led to a reduction in quota. In these circumstances, it may be difficult to defend the consequences of the rule requiring a member’s consent for the reduction of its quota.

37. The amalgamation of Egypt and Syria to form the United Arab Republic was held by the Fund to have produced a single member without the necessity for a new application, but notwithstanding this conclusion the Fund treated the two countries as separate regions and continued to hold their currencies. When the amalgamation was dissolved, the two countries resumed their membership, once again without the necessity for new applications, on the theory that their identities had been fused without extinction. Not all commentators have concurred in the theory of unity without union. The Fund regarded its treatment of the United Arab Republic as transitional on the hypothesis that ultimate union was intended, and therefore the solution is no precedent for constitutional arrangements intended to be permanent in which two or more territories that maintain distinct identities, including currencies of their own, form a single state. In these circumstances, the Fund has not held more than one of these currencies as the currency of the member. It is not possible to predict the Fund’s reaction to any future arrangements of a novel kind that members may enter into, in view of its willingness to find practical solutions when faced with abnormal problems.

38. The Special Drawing Account is not a separate international organization even though some of its features resemble, and indeed were based on, those of an affiliate with an international personality of its own, and even though each member of the Fund may decide whether or not to become a participant in the Account. A member of the Fund that has chosen not to participate in the Special Drawing Account may be permitted to become a holder of special drawing rights but cannot receive allocations of them.

39. Membership in the United Nations or in any other international organization is not a condition precedent to membership in the Fund, but the Fund is likely to take the reaction of the United Nations into account in determining whether an applicant is a “country” if there is any doubt. Membership in the World Bank is open only to members of the Fund.


40. A member may be deemed to have withdrawn from the Fund, whether it wishes to or not, for failure to agree with the Fund on a suitable par value when called upon by the Fund to establish an initial par value; or it may withdraw voluntarily and with immediate effect by delivering a written notice to the Fund; or it may be required to withdraw. The Fund can compel a member to withdraw, in accordance with specified procedures and safeguards, under certain provisions that deal with special situations or under a more general provision that refers to a member’s failure to perform any of its obligations under the Articles.

41. No member has been deemed to have withdrawn; three members (Poland, Cuba, and Indonesia) have withdrawn voluntarily, but one of them (Indonesia) has become a member again; and one (Czechoslovakia) has been compelled to withdraw, although it insisted that it had withdrawn voluntarily.

42. The Fund has practiced a policy of the sparing use of measures that appear to be censorious and has preferred to develop other techniques to protect its resources. The ultimate remedy of compulsory withdrawal for the neglect of particular obligations releases a country from all obligations. In the debates on the withdrawal of Czechoslovakia, some protagonists expressed the view that an international organization is like a private club, and that there is a minimum set of expectations, or rules of the club, from which it is not practicable to exempt members. Other protagonists thought that an international organization resembled an international society, and that the exile of members weakens the structure of society. The latter view probably prevails in the Fund today. There is evidence for this conclusion in the absence of any provision in the amendment of the Articles of July 28, 1969 under which a participant in the Special Drawing Account can be compelled to terminate its participation or withdraw from the Fund because of any failure to fulfill obligations with respect to special drawing rights.

43. The compulsory withdrawal of a member must be preceded by its ineligibility to use the Fund’s resources, although withdrawal is not a necessary consequence of ineligibility. The Fund has been reluctant to declare members ineligible because this action may suggest that it will be followed by expulsion. The Fund has made only one declaration of ineligibility (Czechoslovakia); it initiated the procedure of ineligibility against Cuba but did not complete it because of Cuba’s voluntary withdrawal; and one member (France) became ineligible automatically, that is, without a declaration by the Fund. The proceedings leading to first the ineligibility and then the compulsory withdrawal of Czechoslovakia were lengthy and complicated and involved many issues of international law and of the application of the Articles, particularly to members with state-controlled economies.

44. When a member withdraws, whether voluntarily or compulsorily, normal transactions in its currency cease and the member must settle all accounts with reasonable despatch by agreement with the Fund. If agreement is not reached promptly, the provisions of the Articles on settlement apply. These provisions are an ingenious comprehensive code that give scope for flexible arrangements between the parties but fill any gap if they cannot agree. Settlement under these provisions is completed five years after withdrawal. In all four withdrawals, the Fund and the ex-member reached agreement after negotiations that were sometimes complex. The agreements were influenced by the code for settlement in the Articles but departed from them in many respects. All four agreements involved net payments to the Fund. It was not necessary to use the procedure prescribed by the Articles for the arbitration of disagreements between the Fund and an ex-member.

45. The withdrawal of a member produces legal consequences in domestic law, in the Fund, and in other international organizations. Under the Articles of the World Bank, a country withdrawing from the Fund ceases after a time to be a member of the Bank unless it is decided by a special majority that the country shall remain a member. Withdrawal from the Fund may have other consequences for the country in the World Bank Group.


46. The Fund’s practice puts a considerable gloss on the principle of international law that a treaty does not create obligations or rights for “third states.” Article XI imposes obligations on members in their relations with nonmembers, but there are many obscurities in this provision, and it has not been influential in practice. There have been a number of more specialized techniques by which it was sought to affect the conduct of nonmembers by acting through members.

47. The most interesting of the specialized techniques is the obligation under the General Agreement on Tariffs and Trade (gatt) of a contracting party to enter into a “special exchange agreement” if it is not a member of the Fund. The complementary character of “trade” and “exchange” was recognized at the Bretton Woods Conference, and the purpose of the special exchange agreement is to bind a contracting party that is not a member of the Fund to refrain from measures in one field that would frustrate the intent of provisions applying in the other field. An elaborate standard form of special exchange agreement with provisions closely related to the Articles of the Fund has been prepared. The obligations under it, however, are owed to the Contracting Parties and not to the Fund.

48. Only four special exchange agreements have been entered into and none is in effect today. It was perhaps not realized that if a country chose not to enter the Fund or withdrew from it, the country might be unwilling to enter into an agreement that imposed obligations on it parallel to those of the Articles. The Contracting Parties have therefore granted waivers to contracting parties that are nonmembers of the Fund to release them from the obligation to sign a special exchange agreement, although with general undertakings by the contracting party to observe in exchange matters the intent of the gatt and the principles of the standard special exchange agreement. Special exchange agreements and waivers have become less important as a result of the growth of the Fund’s membership.

49. In the reverse situation, a country may be a member of the Fund but not a contracting party to the gatt. The question has arisen whether the Fund could do anything to fill the gap in the economic obligations of the country. The Fund has considered it inadmissible to give a more extensive interpretation for this purpose to certain provisions of its Articles when applied to members that are not contracting parties.

50. The Fund has extended certain benefits to contracting parties to the gatt that have signed special exchange agreements. The Fund’s prescription of a nonmember as an “other holder” of special drawing rights is another example of benefits that a country may be permitted to enjoy pursuant to a treaty to which it is a stranger. The major benefit to nonmembers is not among those that can be formally extended to them: it is the orderly international monetary environment that can be achieved if the Fund succeeds in its purposes.

51. The Fund has an objective international personality that goes beyond the express provisions of its charter. It is able, therefore, to enter into relations with nonmembers even though there is no explicit authority for this purpose in the Articles. The leading, but not the only, example of this activity is the agreement of June 11, 1964 with Switzerland by which that nonmember became associated with the Fund’s General Arrangements to Borrow. Agreements with nonmembers or arrangements in which they participate must be consistent with the purposes of the Fund, and those entered into have been for the obvious benefit of members.

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