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1. Signed on June 20,1991; Entered into force on June 20,1991.
ional juridical person, hereinafter referred to as "the Bank" a-
nd the REPUBLIC OF CHINA, hereinafter "Participant" have agreed
to execute this Participation Agreement.
The Bank, under Board of Governors Resolution, approved the Sta-
tutes appearing as Annex A of this Agreement and which is consi-
dered as to be part of the same, by which the "FUND FOR THE ECO-
The Fund", was created.
The Statutes permit the participation in the Fund of non-region-
al countries which shall have executed this Participation Agree-
Based upon the foregoing, the parties agree to the following:
The Participant commits itself to contribute to the Fund with a
AMERICA (US$150,000,000.00), integrated in the following manner:
a) Twenty five percent (25%), equivalent to THIRTY SEVEN MILLION
ERICA (US$37,500,000.00), within a period of two (2) years in
annual and consecutive installments, the first of which shall
be paid within ninety (90) days after entering into force of
the present Agreement.
b) The remaining seventy five percent (75%) shall be paid upon
request by the Bank and only in the case that the Bank and t-
he Fund resources are not sufficient to pay obligations incu-
rred in obtaining resources for the Fund, provided such obli-
gations shall have been accepted in accordance with paragraph
d) of Article 12 of the Statutes.
The contributions mentioned in this Article shall be paid in do-
llars of the United States of America.
The payment request referred to in paragraph b) of First above,
shall be in proportion to the contribution of each Participant
and uniform for all Participants. Such payment is an independent
obligation for each of the participants. If the Bank makes a pa-
yment request and the total of the payments received by the Bank
are, for any reason, insufficient to cover the obligations due,
or near maturing referred to in paragraph b) of First above, the
Bank shall have the right of making new payment requests to the
Participants, up to the amount necessary to comply with said ob-
ligations. The Participant shall under no circumstance be oblig-
ed to satisfy requests for an amount greater than the existing
balance of the contribution referred to in paragraph b) of First
If a request has been made to satisfy the obligations referred
to in First, b), due to a Participant's delay in making a timely
payment, the Bank shall be obliged, as soon as the Participant
makes the payment, to return to the other Participants who shall
have paid, the amounts which respectively correspond to them. In
all cases, if for any reason at the time of payment there is a
surplus in relation to the matured obligations which gave rise
to the request, the Bank shall return the unused amounts to the
Participants in proportion to the contributions they shall have
By agreement among the Bank and the Participants, the amounts w-
hich the Participant had paid by reason of a payment request, m-
ay be returned to the participant or considered as payments in
cash which the Participant had to pay, according to the paragra-
ph a), First, in which case the contribution obligation shall c-
ontinue exigible by such amount, according to paragraph b) Firs-
The payment requests of the contributions referred to in paragr-
aph b), First, shall be made by the Bank, with prior notificati-
on to the representatives referred to in Fifth hereof and to ea-
ch Participant country.
For the contribution referred to in paragraph a) of First above,
the Bank shall issue to the Participant one or more Certificates
of Participation, which shall be convertible into shares of the
Bank, in accordance with Article 19 of the Statutes.
Having modified the Bank's Constitutive Agreement, in order to
permit the admission of countries out of the region as partners
of the Bank, once the pertinent legal requisites in its country
have been complied with, the Participant accepts that its Certi-
ficate of Participation be exchanged for shares in the Bank's c-
apital. The contributions referred to in paragraph b) of First,
shall become part of the Bank's authorized and underwritten cap-
ital, in accordance with the indications contained in Article 19
of the Statutes.
The Participant shall be represented in accordance with Articles
10 and 11 of the Statutes, without prejudice to the provisions
referred to in Article 21 of the Same.
The Fund shall operate only during the necessary time to implem-
ent the amendments to the Bank's Constitutive Agreement and con-
solidate the Fund in CABEI'S Capital.
Thus, the contributions of the Participants to the Fund will be
in force for the same period of the Fund.
As long as this process is unfinished and in the event of the B-
ank's dissolution and liquidation, the following rules will be
a) With respect to the contributions under paragraph a) of Arti-
cle 7 of the Statutes, the Participant shall receive only the
prorated part corresponding to them of the net liquid value
of the Fund.
b) The contributions contemplated in paragraph b) of said Artic-
le, shall serve only as support for the obligations which sh-
all have been contracted in accordance with paragraph d) of
Article 12 of the Statutes.
The Participant will not be able to withdraw the resources cont-
ributed to the Fund within the first five years of its incorpor-
ation, except if it is for its integration as partner of the Ba-
nk. If the Participant withdraws as member of the Fund, its res-
ponsibility for the direct obligations with the Bank will not c-
ease, with respect to loans or credits obtained or guarantees g-
ranted prior to the date in which the Participant ceased as mem-
ber. However, it shall not have any responsibility with respect
to the loans and credits obtained or guarantees granted after i-
ts retirement as Participant.
The rights and obligations of the Participant that is no longer
a member, will be determined in accordance with the balance she-
et for special liquidation, that for such purpose is prepared on
the date of its effective separation.
Any communication, notification or request given, made or sent
by the Participant or the Bank, in accordance with this Agreeme-
nt, shall be in writing and shall be considered as duly given,
made or sent to the Party to whom it is addressed, when it shall
have been delivered personally or by mail, telegram, telex, cab-
le or radiogram, to said Party, at the following addresses:
To the Participant:
The Central Bank of China
2, Roosevelt Road, Sec. 1
Taipei 10757 Republic of China
Telex: 21532 GOVTBANK
to the Bank:
Central American Bank for
Econ omic Integration
P.O. Box 772
Tegucigalpa, Honduras Central America
Telex: 1103 BANCADIE/1269 BCIEHT
The above addresses may be modified, provided the corresponding
notification is given, in accordance with this Agreement.
In case of any difference in the interpretation of this Agreeme-
nt or of any controversy arising under this Agreement which is
not resolved by agreement between both parties, said parties sh-
all submit unconditionally and irrevocably to the proceedings a-
nd decision of an Arbitration Tribunal composed of and formed by
three persons as follows: One of the arbitrators shall be appoi-
nted by the Bank, another by the Participant, and a third by bo-
th the Bank and the Participant. In the case that agreement is
not reached with respect to this appointment, the third member
shall be designated by the Secretary General of the Organization
of American States. It is understood that the third arbitrator
may decide all procedural issues in those cases in which the pa-
rties are not in agreement on the subject matter. The decision
of the Tribunal shall not be subject to appeal.
The Participant commits itself to taking all the necessary meas-
ures and expending its best efforts so that, within the briefest
possible time, the pertinent internal legal requisites are comp-
lied with to permit its incorporation as non regional member to
the Bank, after the amendment of the Constitutive Agreement of
the Bank, in order to facilitate the admission of new members to
the Bank.
This Agreement enters into effect on the date expressed at the
end of the same.
This Agreement is prepared and signed in both Spanish and Engli-
sh. In the event of ambiguity or conflict between the two versi-
ons, the Spanish language version will prevail.
Both parties sign two copies of this Agreement, one for each of
the parties, both of the same meaning and equally binding.
At the twentieth day of the month of June of the year nineteen
hundred and ninety one.
Chuan-li Huang
Embajador de la Republica de
China en Honduras
Ambassador of the Republic of
China in Honduras.
Article 1.
The Fund for the Economic and Social Development of Central Ame-
rica of the Central American Bank for Economic Integration, her-
einafter "the Bank", in which non regional countries may partic-
ipate. These Statutes contain the rules for the functioning, op-
eration and organization of said Fund.
Article 2.
The objectives of the Fund shall be to contribute to the econom-
ic and social development of Central America, by means of the
financing of regional programs and projects, in accordance with
the guidelines and dispositions contained in these Statutes. The
Fund shall consist of the total of the financial resources at i-
ts disposal, in accordance with the present Statutes.
The Fund's resources shall be a part of the Bank's general patr-
imony and will be used exclusively for the objectives and the e-
xeculion of the operations as foreseen in the Statutes.
Article 3.
Non regional countries, hence forward called "Participants", may
belong to the Fund when invited to participate if they are appr-
oved by the Board of Governors, and which sign the Participation
Agreement referred to in Article 5.
Article 4.
The Fund shall have the following resources:
a) The paid-in contributions of the Participant.
b) The resources obtained by the Bank with the contributions me-
ntioned in paragraph b) of Article 7, as collateral.
c) Those obtained for the Fund from international entities and
organizations by any legal means.
d) Other resources obtained by the Bank for the Fund by any leg-
al means.
e) The profits generated by the operations of the Fund.
Article 5.
Each of the Participants shall subscribe with the Bank a Partic-
ipation Agreement, subject to Board of Director's authorization,
which shall be similar for all Participants, with indication of
the amount, payment conditions, nature and terms of the contrib-
utions. For their paid-in cash contributions, the Participants
shall receive from the Bank the corresponding Certificates of P-
articipation. Relative to the contributions referred to in para
graph b) of Article 7, the pertaining Participation Agreement s-
hall govern.
Article 6.
The total amount of the Participants contributions shall be nine
hundred eighty (980) million Dollars of the United States of Am-
Article 7.
Each Participant shall subscribe one-hundred percent (100%) of
its contribution, which shall be integrated as follows:
a) 25% in cash, within a period of up to four (4) years, in ann-
ual and consecutive installments, the first of which shall be
paid on the date set forth in the respective Participation A-
b) The remaining 75% upon request by the Bank and only in the c-
ase that the Bank and the Fund resources are not sufficient
to pay obligations incurred in obtaining resources, provided
such obligations shall have been accepted in accordance with
paragraph d) of Article 12.
Article 8.
The resources of the Fund may be used to finance the following
programs and projects:
a) Infrastructure projects for completion of existing regional
systems or which compensate for disparities in basic sectors
which hinder the balanced development of Central America.
b) Long-term in vestment projects in industries of a regional n-
ature or of interest to the Central American market, which w-
ill contribute to increase the goods available for Central A-
merican trade, or for the later and the export sector.
c) Coordinated projects in farming techniques tending to improv-
e, expand or substitute crops that lead to regional Central
American supply.
d) Projects to finance enterprises requiring expansion or rehab-
ilitation of their operations, modernization of their proces-
ses or modifications in the structure of their production in
order to improve their efficiency and competitive capacity w-
ithin the Common Market, so as to facilitate free Central Am-
erican trade.
e) Projects to finance services essential in the operation of t-
he Common Market.
f) Social Development Programs to attend social needs of the Ce-
ntral American countries, which the Bank considers to be of
regional interest.
g) Housing programs; and
h) Other productive programs or projects which complement the e-
conomic growth among the Central American countries and incr-
ease their interregional trade as well as with third countri-
The Fund resources shall be used jointly with other resources
of the Bank and in cofinancing operations with other institu-
Article 9.
The Board of Directors of the Bank, with the agreement of the R-
epresentatives, is empowered to issue and amend the internal re-
gulations, rules and policies which shall be required for the s-
ound management of the Fund, and to solve all issues relative to
problems arising regarding the Fund.
Article 10.
Each twenty-five percent (25%) of the total amount of the contr-
ibutions referred to in Article 6 shall confer the right to app-
oint a representative to the Fund. Consequently, the number of
representatives may not exceed four.
Notwithstanding the above, no individual Participant shall have
the right to appoint more than one (1) Representative, even if
it has a participation greater than the indicated twenty-five p-
ercent (25%). In any case, if only one or more countries have b-
een incorporated, and have not completed the said 25%, they are
empowered to appoint a representative who will act as such until
the date in which a new Representative is appointed by the Rart-
icipants which have subscribed 25%.
Article 11.
For as long as two thirds of the total amount of the contributi-
ons referred to in Article 6 have not been underwritten, the Ba-
nk, with the agreement of the Participants, may adopt other rul-
es of representation, while maintaining at all times the maximum
number of Representatives referred to in Article 10.
Article 12.
The Representatives shall have the following powers:
a) To accept or not the allocation of the Fund's resources for
specific programs and projects.
b) To accept or not the regulations relative to the acquisition
of goods and services to be financed with the Fund's resourc-
c) To approve the transfer of Fund's resources to other funds of
the Bank.
d) To accept or refuse that the contributions mentioned in para-
graph b) of Article 7 of these Statutes be used as collateral
for obligations contracted by the Bank for the purpose of pr-
oviding resources to the Fund. The amount of the obligations
thus contracted may not exceed the total amount of said cont-
e) Make the recommendations deemed necessary in connection with
the proper functioning of the Fund.
Article 13.
For the implementation of the power conferred by these Statutes
to the Representatives, resolutions will be made by majority of
votes, except in the circumstances described in paragraph c) of
Article 12, where the unanimity of votes shall be required, with
the understanding that each one of the Representatives is entit-
led to only one vote. The resolution adopted must be communicat-
ed to the Bank. In its meetings the Board of Directors may requ-
est the Representatives to intervene, with the right of voice b-
ut not of vote. In the same manner, the Representatives may req-
uest the intervention of the Board of Directors in its meetings.
In which case the Directors will have the right of voice but not
of vote.
Article 14.
The Bank shall maintain in separate accounts the entries of the
credits and debits of the Fund's operations and shall thus be s-
hown in its profit and losses statements, as well as in its bal-
ance sheets.
Article 15.
The Fund's operations and accounts shall be subject to the same
verification and auditing procedures determined by the rules.
Article 16.
The Fund shall operate only during the necessary time to implem-
ent amendments to the Bank's Constitutive Agreement and consoli-
date the Fund in CABEI's capital. Thus, the contributions of the
Participants shall be in the Fund just during the time it stands
in force.
For as long as this process shall not have been concluded, and
in the eventuality of the Bank's dissolution and liquidation, t-
he following shall govern:
a) With respect to the contributions under paragraph a) of Arti-
cle 7, the Participants shall receive only the prorated part
corresponding to them of the net liquid value of the Fund.
b) With respect to the contributions contemplated in paragraph b
) of the same Article, they shall be lien only for obligatio-
ns contracted in accordance with paragraph d) of Article 12.
article 17.
Matters not provided for in these Statutes and its regulations,
shall be governed by the usual banking practices of the multila-
teral organizations, wherever applicable, and by the Participat-
ion Agreements executed with the Participants.
Article 18.
These Statutes can be modified by the Bank's Board of Governors,
with the prior acceptance of three-quarters of the Participants,
which represent, at least, a seventy-five percent (75%) of the
underwritten contributions.
Article 20.
If within a period of six (6) years, beginning with the date of
signing of the first Participation Agreement, the modification
to the Bank's Constitutive Agreement for the incorporation of P-
articipants, as partners, has not been implemented, the Fund's
resources will be considered in trust and the Participants with
the Bank will agree upon the conditions subject to such trust,
procuring that the same tend to obtain the incorporation of cou-
ntries outside the Region in the Bank's social capital.
Article 21.
The representation granted to the Participants in these Statutes
will be valid for a two-year term, beginning as of the effective
legal date of the Protocol containing the modifications to the
Bank's Constitutive Agreement which permit the incorporation of
the Participants in the Bank's social capital. Subsequently the
powers established in Article 12, will be performed by the Board
of Directors.