General Agreement on Tariffs and Trade

Article XIV
Exceptions to the Rule of Non-discrimination

1. A contracting party which applies restrictions under Article XII or
under Section B of Article XVIII may, in the application of such
restrictions, deviate from the provisions of Article XIII in a manner
having equivalent effect to restrictions on payments and transfers for
current international transactions which that contracting party may at
that time apply under Article VIII or XIV of the Articles of Agreement of
the International Monetary Fund, or under analogous provisions of a
special exchange agreement entered into pursuant to paragraph 6 of
Article XV.

2. A contracting party which is applying import restrictions under
Article XII or under Section B of Article XVIII may, with the consent of
the CONTRACTING PARTIES, temporarily deviate from the provisions of
Article XIII in respect of a small part of its external trade where the
benefits to the contracting party or contracting parties concerned
substantially outweigh any injury which may result to the trade of other
contracting parties.

3. The provisions of Article XIII shall not preclude a group of
territories having a common quota in the International Monetary Fund from
applying against imports from other countries, but not among themselves,
restrictions in accordance with the provisions of Article XII or of
Section B of Article XVIII on condition that such restrictions are in all
other respects consistent with the provisions of Article XIII.

4. A contracting party applying import restrictions under Article XII or
under Section B of Article XVIII shall not be precluded by Articles XI to
XV or Section B of Article XVIII of this Agreement from applying measures
to direct its exports in such a manner as to increase its earnings of
currencies which it can use without deviation from the provisions of
Article XIII.

5. A contracting party shall not be precluded by Articles XI to XV,
inclusive, or by Section B of Article XVIII, of this Agreement from
applying quantitative restrictions:

(a) having equivalent effect to exchange restrictions authorized under
Section 3 (b) of Article VII of the Articles of Agreement of the
International Monetary Fund, or

(b) under the preferential arrangements provided for in Annex A of this
Agreement, pending the outcome of the negotiations referred to
therein.

Article XV
Exchange Arrangements

1. The CONTRACTING PARTIES shall seek co-operation with the International
Monetary Fund to the end that the CONTRACTING PARTIES and the Fund may
pursue a co-ordinated policy with regard to exchange questions within the
jurisdiction of the Fund and questions of quantitative restrictions and
other trade measures within the jurisdiction of the CONTRACTING PARTIES.

2. In all cases in which the CONTRACTING PARTIES are called upon to
consider or deal with problems concerning monetary reserves, balances of
payments or foreign exchange arrangements, they shall consult fully with
the International Monetary Fund. In such consultations, the CONTRACTING
PARTIES shall accept all findings of statistical and other facts
presented by the Fund relating to foreign exchange, monetary reserves and
balances of payments, and shall accept the determination of the Fund as
to whether action by a contracting party in exchange matters is in
accordance with the Articles of Agreement of the International Monetary
Fund, or with the terms of a special exchange agreement between that
contracting party and the CONTRACTING PARTIES. The CONTRACTING PARTIES,
in reaching their final decision in cases involving the criteria set
forth in paragraph 2 (a) of Article XII or in paragraph 9 of Article
XVIII, shall accept the determination of the Fund as to what constitutes
a serious decline in the contracting party’s monetary reserves, a very
low level of its monetary reserves or a reasonable rate of increase in
its monetary reserves, and as to the financial aspects of other matters
covered in consultation in such cases.

3. The CONTRACTING PARTIES shall seek agreement with the Fund regarding
procedures for consultation under paragraph 2 of this Article.

4. Contracting parties shall not, by exchange action, frustrate the
intent of the provisions of this Agreement, nor, by trade action, the
intent of the provisions of the Articles of Agreement of the
International Monetary Fund.

5. If the CONTRACTING PARTIES consider, at any time, that exchange
restrictions on payments and transfers in connexion with imports are
being applied by a contracting party in a manner inconsistent with the
exceptions provided for in this Agreement for quantitative restrictions,
they shall report thereon to the Fund.

6. Any contracting party which is not a member of the Fund shall, within
a time to be determined by the CONTRACTING PARTIES after consultation
with the Fund, become a member of the Fund, or, failing that, enter into
a special exchange agreement with the CONTRACTING PARTIES. A contracting
party which ceases to be a member of the Fund shall forthwith enter into
a special exchange agreement with the CONTRACTING PARTIES. Any special
exchange agreement entered into by a contracting party under this
paragraph shall thereupon become part of its obligations under this
Agreement.

7. (a) A special exchange agreement between a contracting party and the
CONTRACTING PARTIES under paragraph 6 of this Article shall provide to
the satisfaction of the CONTRACTING PARTIES that the objectives of this
Agreement will not be frustrated as a result of action in exchange
matters by the contracting party in question.

(b) The terms of any such agreement shall not impose obligations on
the contracting party in exchange matters generally more restrictive than
those imposed by the Articles of Agreement of the International Monetary
Fund on members of the Fund.

8. A contracting party which is not a member of the Fund shall furnish
such information within the general scope of section 5 of Article VIII of
the Articles of Agreement of the International Monetary Fund as the
CONTRACTING PARTIES may require in order to carry out their functions
under this Agreement.

9. Nothing in this Agreement shall preclude:

(a) the use by a contracting party of exchange controls or exchange
restrictions in accordance with the Articles of Agreement of the
International Monetary Fund or with that contracting party’s
special exchange agreement with the CONTRACTING PARTIES, or

(b) the use by a contracting party of restrictions or controls on
imports or exports, the sole effect of which, additional to the
effects permitted under Articles XI, XII, XIII and XIV, is to make
effective such exchange controls or exchange restrictions.

Author: international

Mentioned in these Entries

General Agreement on Tariffs and Trade.