§ 286l. — British loan; authorization to Secretary of the Treasury to carry out agreement.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 22USC286l]
TITLE 22--FOREIGN RELATIONS AND INTERCOURSE
CHAPTER 7--INTERNATIONAL BUREAUS, CONGRESSES, ETC.
SUBCHAPTER XV--INTERNATIONAL MONETARY FUND AND BANK FOR RECONSTRUCTION
AND DEVELOPMENT
Sec. 286l. British loan; authorization to Secretary of the
Treasury to carry out agreement
The Secretary of the Treasury, in consultation with the National
Advisory Council on International Monetary and Financial Problems, is
authorized to carry out the agreement dated December 6, 1945, between
the United States and the United Kingdom which was transmitted by the
President to the Congress on January 30, 1946, and the action of the
Secretary of the Treasury in signing the agreement dated March 6, 1957,
amending said agreement is approved.
(July 15, 1946, ch. 577, Sec. 1, 60 Stat. 535; Pub. L. 85-21, Apr. 20,
1957, 71 Stat. 17.)
References in Text
Agreement dated December 6, 1945, between the United States and the
United Kingdom, referred to in text, is set out as a note below.
Codification
Section was not enacted as a part of act July 31, 1945, ch. 339, 59
Stat. 512, known as the Bretton Woods Agreements Act, which comprises
this subchapter.
Amendments
1957--Pub. L. 85-21 inserted ``, and the action of the Secretary of
the Treasury in signing the agreement dated March 6, 1957, amending said
agreement is approved''.
Delegation of Functions
Functions of National Advisory Council on International Monetary and
Financial Problems delegated to National Advisory Council on
International Monetary and Financial Policies, see section 2(a) of Ex.
Ord. No. 11269, Feb. 14, 1966, 31 F.R. 2813, set out as a note under
section 286b of this title.
Purposes
In defining the purposes of act July 15, 1946, sections 286l and
286m of this title, Congress stated that:
``Whereas in the Bretton Woods Agreements Act [this subchapter] the
Congress has declared it to be the policy of the United States `to seek
to bring about further agreement and cooperation among nations and
international bodies, as soon as possible, on ways and means which will
best reduce obstacles to and restrictions upon international trade,
eliminate unfair trade practices, promote mutually advantageous
commercial relations, and otherwise facilitate the expansion and
balanced growth of international trade and promote the stability of
international economic relations'; and
``Whereas in further implementation of the purposes of the Bretton
Woods Agreements, the Governments of the United States and the United
Kingdom have negotiated an agreement dated December 6, 1945, designed to
expedite the achievement of stable and orderly exchange arrangements,
the prompt elimination of exchange restrictions and discriminations, and
other objectives of the above-mentioned policy declared by the
Congress.''
Financial Agreement Between the Governments of the United States and the
United Kingdom
It is hereby agreed between the Government of the United States of
America and the Government of the United Kingdom of Great Britain and
Northern Ireland as follows:
1. Effective date of the agreement: The effective date of this
Agreement shall be the date on which the Government of the United States
notifies the Government of the United Kingdom that the Congress of the
United States has made available the funds necessary to extend to the
Government of the United Kingdom the line of credit in accordance with
the provisions of this Agreement.
2. Line of credit: The Government of the United States will extend
to the Government of the United Kingdom a line of credit of
$3,750,000,000 which may be drawn upon at any time between the effective
date of this Agreement and December 31, 1951, inclusive.
3. Purpose of the line of credit: The purpose of the line of credit
is to facilitate purchases by the United Kingdom of goods and services
in the United States, to assist the United Kingdom to meet transitional
post-war deficits in its current balance of payments, to help the United
Kingdom to maintain adequate reserves of gold and dollars, and to assist
the Government of the United Kingdom to assume the obligations of
multilateral trade, as defined in this and other agreements.
4. Amortization and interest:
(i) The amount of the line of credit drawn by December 31, 1951,
shall be repaid in 50 annual installments beginning on December 31,
1951, with interest at the rate of 2 percent per annum. Interest for the
year 1951 shall be computed on the amount outstanding on December 31,
1951, and for each year thereafter, interest shall be computed on the
amount outstanding on January 1 of each such year.
Forty-nine annual installments of principal repayments and interest
shall be equal, calculated at the rate of $31,823,000 for each
$1,000,000,000 of the line of credit drawn by December 31, 1951, and the
fiftieth installment shall be at the rate of $31,840,736.65 for each
such $1,000,000,000. Each installment shall consist of the full amount
of the interest due and the remainder of the installment shall be the
principal to be repaid in that year. Payments required by this section
are subject to the provisions of section 5.
(ii) The Government of the United Kingdom may accelerate repayment
of the amount drawn under this line of credit.
5. Deferment of annual installments.
(i) In any calendar year after December 31, 1956, in which the
Government of the United Kingdom advises the Government of the United
States that it finds that a deferment is necessary in view of the
present and prospective conditions of international exchange and the
level of its gold and foreign exchange reserves, the Government of the
United Kingdom may defer the payment of the annual installment for that
year of principal repayment and interest specified under Section 4. Not
more than seven (7) annual installments may be so deferred. The first of
any such deferred installments shall be paid on December 31, 2001, and
the others shall be paid annually thereafter, in order.
(ii) In addition, the installment of interest in respect of the year
1956 is hereby deferred, in lieu of any right of waiver hitherto
existing. This installment shall be paid on December 31 of the year
following that in which the last of all other installments, including
installments deferred under the preceding paragraph, is due.
(iii) Deferred installments shall bear interest at the rate of 2
percent per annum, payable annually on December 31 of each year
following that in which deferment occurs.
(iv) Payment of deferred installments may be accelerated, in whole
or in part, at the option of the Government of the United Kingdom.
[Amended Mar. 6, 1957, eff. Apr. 25, 1957.]
6. Relation of this line of credit to other obligations. The
Government of the United Kingdom undertakes not to defer an installment
under Section 5 of this Agreement in any year, unless it also defers the
installment due in that year under the Financial Agreement between the
Government of Canada and the Government of the United Kingdom, dated
March 6, 1946. [Amended Mar. 6, 1957, eff. Apr. 25, 1957.]
7. Sterling area exchange arrangements: The Government of the United
Kingdom will complete arrangements as early as practicable and in any
case not later than one year after the effective date of this Agreement,
unless in exceptional cases a later date is agreed upon after
consultation, under which immediately after the completion of such
arrangements the sterling receipts from current transactions of all
sterling area countries (apart from any receipts arising out of military
expenditure by the Government of the United Kingdom prior to December
31, 1948, to the extent to which they are treated by agreement with the
countries concerned on the same basis as the balances accumulated during
the war) will be freely available for current transactions in any
currency area without discrimination; with the result that any
discrimination arising from the so-called sterling area dollar pool will
be entirely removed and that each member of the sterling area will have
its current sterling and dollar receipts at its free disposition for
current transactions anywhere.
8. Other exchange arrangements:
(i) Government of the United Kingdom agrees that after the effective
date of this Agreement it will not apply exchange controls in such a
manner as to restrict (a) payments or transfers in respect of products
of the United States permitted to be imported into the United Kingdom or
other current transactions between the two countries or (b) the use of
sterling balances to the credit of residents of the United States
arising out of current transactions. Nothing in this paragraph (i) shall
affect the provisions of Article VII of the Articles of Agreement of the
International Monetary Fund when those Articles have come into force.
(ii) The Governments of the United States and the United Kingdom
agree that not later than one year after the effective date of this
Agreement, unless in exceptional cases a later date is agreed upon after
consultation, they will impose no restrictions on payments and transfers
for current transactions. The obligations of this paragraph (ii) shall
not apply:
(a) to balances of third countries and their nationals accumulated
before this paragraph (ii) becomes effective; or
(b) to restrictions imposed in conformity with the Articles of
Agreement of the International Monetary Fund, provided that the
Governments of the United Kingdom and the United States will not
continue to invoke the provisions of Article XIV, Section 2 of those
Articles after this paragraph (ii) becomes effective, unless in
exceptional cases after consultation they agree otherwise; or
(c) to restrictions imposed in connection with measures designed to
uncover and dispose of assets of Germany and Japan.
(iii) This section and section 9, which are in anticipation of more
comprehensive arrangements by multilateral agreement, shall operate
until December 31, 1951.
9. Import arrangements: If either the Government of the United
States or the Government of the United Kingdom imposes or maintains
quantitative import restrictions, such restrictions shall be
administered on a basis which does not discriminate against imports from
the other country in respect of any product; provided that this
undertaking shall not apply in cases in which (a) its application would
have the effect of preventing the country imposing such restrictions
from utilizing, for the purchase of needed imports, inconvertible
currencies accumulated up to December 31, 1946, or (b) there may be
special necessity for the country imposing such restrictions to assist,
by measures not involving a substantial departure from the general rule
of non-discrimination, a country whose economy has been disrupted by
war, or (c) either government imposes quantitative restrictions having
equivalent effect to any exchange restrictions which that government is
authorized to impose in conformity with Article VII of the Articles of
Agreement of the International Monetary Fund. The provisions of this
section shall become effective as soon as practicable but not later than
December 31, 1946.
10. Accumulated sterling balances:
(i) The Government of the United Kingdom intends to make agreements
with the countries concerned, varying according to the circumstances of
each case, for an early settlement covering the sterling balances
accumulated by sterling area and other countries prior to such
settlement (together with any future receipts arising out of military
expenditure by the Government of the United Kingdom to the extent to
which they are treated on the same basis by agreement with the countries
concerned). The settlements with the sterling area countries will be on
the basis of dividing these accumulated balances into three categories
(a) balances to be released at once and convertible into any currency
for current transactions, (b) balances to be similarly released by
installments over a period of years beginning in 1951, and (c) balances
to be adjusted as a contribution to the settlement of war and postwar
indebtedness and in recognition of the benefits which the countries
concerned might be expected to gain from such a settlement. The
Government of the United Kingdom will make every endeavor to secure the
early completion of these arrangements.
(ii) In consideration of the fact that an important purpose of the
present line of credit is to promote the development of multilateral
trade and facilitate its early resumption on a non-discriminatory basis,
the Government of the United Kingdom agrees that any sterling balances
released or otherwise available for current payments will, not later
than one year after the effective date of this Agreement unless in
special cases a later date is agreed upon after consultation, be freely
available for current transactions in any currency area without
discrimination.
11. Definitions:
For the purposes of this Agreement:
(i) The term ``current transactions'' shall have the meaning
prescribed in Article XIX (i) of the Articles of Agreement of the
International Monetary Fund.
(ii) The term ``sterling area'' means the United Kingdom and the
other territories declared by the Defence (Finance) Definition of the
Sterling Area) (No. 2) Order, 1944, to be included in the sterling area,
namely ``the following territories excluding Canada and Newfoundland,
that is to say--
(a) any Dominion,
(b) any other part of His Majesty's dominions,
(c) any territory in respect of which a mandate on behalf of the
League of Nations has been accepted by His Majesty and is being
exercised by His Majesty's Government in the United Kingdom or in any
Dominion,
(d) any British protectorate or protected State,
(e) Egypt, the Anglo-Egyptian Sudan and Iraq.
(f) Iceland and the Faroe Islands.''
12. Consultation on Agreement: Either government shall be entitled
to approach the other for a reconsideration of any of the provisions of
this Agreement, if in its opinion the prevailing conditions of
international exchange justify such reconsideration, with a view to
agreeing upon modifications for presentation to their respective
legislatures.
Signed in duplicate at Washington, District of Columbia this 6th day
of December, 1945.
For the Government of the United States of America:
Fred M. Vinson,
Secretary of the Treasury
of the United States of America.
For the Government of the United Kingdom of Great Britain and
Northern Ireland:
Halifax.
