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INTERNATIONAL SUGAR AGREEMENT ACT 1978 No. 26 of 1978 - SCHEDULE
SCHEDULE
Section 3
INTERNATIONAL SUGAR AGREEMENT, 1977
CHAPTER I-OBJECTIVES
Article 1
Objectives
The objectives of this International Sugar Agreement (hereinafter referred to
as this Agreement), in the light of the terms of resolution 93 (IV) adopted by
the United Nations Conference on Trade and Development (hereinafter referred
to as UNCTAD) at its fourth session are as follows:
(a) To raise the level of international trade in sugar, particularly in
order to increase the export earnings of developing exporting
countries;
(b) To achieve stable conditions in the international trade in sugar,
including avoidance of excessive price fluctuations, at price levels
which would be remunerative and just to producers and equitable to
consumers, and take into account, inter alia, the effect of inflation
or deflation; variations in exchange rates: the trend in the prices,
consumption, production, trade and stocks of sugar and alternative
sweeteners; and the influence on sugar prices of changes in the world
economic situation or monetary system;
(c) To provide adequate supplies of sugar to meet the requirements of
importing countries at fair and reasonable prices;
(d) To increase sugar consumption and in particular to promote measures to
encourage consumption in countries where per capita consumption is
low;
(e) To promote equilibrium between supply of, and demand for, sugar within
an expanding world sugar trade;
(f) To facilitate the co-ordination of sugar marketing policies and the
organization of the market;
(g) To provide for adequate participation in, and growing access to, the
markets of the developed countries for sugar from the developing
countries;
(h) To assess closely developments in the use of any form of substitutes
for sugar, including cyclamates and other artificial sweeteners; and
(i) To further international co-operation in sugar questions.
CHAPTER II-DEFINITIONS
Article 2
Definitions
For the purposes of this Agreement:
(1) ''Organization'' means the International Sugar Organization referred to in
article 3;
(2) ''Council'' means the International Sugar Council referred to in article
3;
(3) ''Member'' means-
(a) a Party to this Agreement, other than a Party with a notification
under article 77, sub-paragraph 1 (b), currently in effect, or
(b) a territory or group of territories in respect of which a notification
has been made under article 77, paragraph 3;
(4) ''exporting Member'' means any exporting country or territory listed as
such in annex V to this Agreement which becomes a Member of the Organization,
or any country or territory not so listed which is given the status of an
exporting Member upon accession to this Agreement or pursuant to article 6;
(5) ''importing Member'' means any importing country listed as such in annex V
to this Agreement which becomes a Member of the Organization, or any country
not so listed which is given the status of an importing Member upon accession
to this Agreement or pursuant to article 6;
(6) ''Fund'' means the Stock Financing Fund established under article 49;
(7) ''special vote'' means a vote requiring at least two thirds of the votes
cast by exporting Members present and voting and at least two thirds of the
votes cast by importing Members present and voting, on condition that these
votes are cast by at least half the number of Members present and voting;
(8) ''distributed simple majority vote'' means a vote requiring more than half
of the total votes of exporting Members present and voting and more than half
of the total votes of importing Members present and voting, on condition that
these votes are cast by at least half of the number of Members in each
category present and voting;
(9) ''financial year'' means the quota year;
(10) ''quota year'' means the period from 1 January to 31 December inclusive;
(11) ''tonne'' means a metric ton, i.e. 1,000 kilogrammes, and ''pound'' means
a pound avoirdupois, i.e. 453.592 grammes; amounts of sugar specified in this
Agreement are in terms of raw value, net weight (the raw value of any amount
of sugar means its equivalent in terms of raw sugar testing 96 degrees by the
polariscope);
(12) ''sugar'' means sugar in any of its recognized commercial forms derived
from sugar cane or sugar beet, including edible and fancy molasses, syrups and
any other form of liquid sugar used for human consumption, but
(a) ''sugar'' as defined above shall not include final molasses or low
grade types of non-centrifugal sugar produced by primitive methods
nor, for the purposes of establishing the level of exports under this
Agreement, sugar destined for uses other than human consumption as
food. The Council shall determine the conditions under which sugar
shall be considered to be destined for uses other than human
consumption as food;
(b) if the Council resolves that the increased use of sugar mixtures
becomes a threat to the objectives of this Agreement, these mixtures
shall be deemed to be sugar in respect of their sugar content. The
increase in the quantity of sugar mixtures exported over the quantity
exported before the entry into force of this Agreement shall, in
respect of its sugar content, be charged against the quota in effect
or export entitlement of the exporting Member concerned;
(13) ''free market'' means the total of net imports of the world market,
except those resulting from the operation of the special arrangements referred
to in chapter IX of this Agreement;
(14) ''net imports'' means total imports of sugar after deducting total
exports of sugar;
(15) ''net exports'' means total exports of sugar (excluding sugar supplied as
stores for ships victualling at domestic ports) after deducting total imports
of sugar;
(16) ''basic export tonnage'' means the quantity established pursuant to
article 34;
(17) ''global quota'' means the quantity specified in article 40, paragraph 2,
as may be adjusted in accordance with the provisions of article 44;
(18) ''quota in effect'' means the quantity of sugar which a Member may export
to the free market in excess of its total imports from that market during the
relevant quota year, as may be established and adjusted in accordance with
this Agreement;
(19) ''cent'' or ''cents'' means United States cent or cents;
(20) ''daily price'' means the price calculated in accordance with the
provisions of article 61, paragraph 1;
(21) ''prevailing price'' on any market day is the average of the daily price
over the immediately preceding period of 15 consecutive market days including
that market day; the position of the prevailing price in relation to any
specific price level is as defined in article 61, paragraph 2;
(22) ''entry into force'' means the date on which this Agreement enters into
force provisionally or definitively, as provided in article 75;
(23) Any reference in this Agreement to a ''Government invited to the United
Nations Sugar Conference, 1977'' shall be construed as including a reference
to the European Economic Community (hereinafter referred to as the EEC);
accordingly any reference in this Agreement to ''signature of this Agreement''
or to the ''deposit of an instrument of ratification, acceptance, approval or
accession'' by a Government shall, in the case of the EEC, be construed as
including signatures on behalf of the EEC by its competent authority and the
deposit of the instrument required by the institutional procedures of the EEC
to be deposited for the conclusion of an international agreement;
(24) ''developing exporting Members'' and ''developing importing Members'' are
those referred to as such in annex III. CHAPTER III-THE INTERNATIONAL SUGAR
ORGANIZATION, ITS MEMBERSHIP AND
STATUS
Article 3
Continuation, headquarters and structure of the
International Sugar Organization
1. The International Sugar Organization established under the International
Sugar Agreement, 1968, and maintained in existence under the International
Sugar Agreement, 1973, shall continue in being for the purpose of
administering the present Agreement and supervising its operation, with the
membership, powers and functions set out in this Agreement.
2. The headquarters of the Organization shall be in London, unless the Council
decides otherwise by special vote.
3. The Organization shall function through the International Sugar Council,
its Executive Committee, its Executive Director and its staff, as well as the
Stock Financing Fund and such other bodies as are provided for in this
Agreement.
Article 4
Membership of the Organization
1. Each Party shall constitute a single Member of the Organization except as
otherwise provided in paragraphs 2 or 3 of this article.
2. (a) When a Party makes a notification under article 77, subparagraph 1 (a),
declaring that this Agreement shall extend to a developing territory or
territories which wish to participate in this Agreement, there may be, with
the express consent and approval of those concerned, either:
(i) joint membership for that Party together with these
territories; or
(ii) when that Party has made a notification under article 77,
paragraph 3 separate membership, singly, all together or in
groups for the territories that would individually constitute
an exporting Member and separate membership for the territories
that would individually constitute an importing Member.
(b) When a Party makes a notification under article 77, subparagraph 1 (b)
and paragraph 3, there shall be separate membership as set out in
subparagraph (a) (ii) of this paragraph.
3. A Party which has made a notification under article 77, subparagraph 1 (b),
and has not withdrawn that notification shall not be a Member of the
Organization.
Article 5
Privileges and immunities
1. The Organization shall have legal personality. It shall in particular have
the capacity to contract, acquire and dispose of movable and immovable
property and to institute legal proceedings.
2. The status, privileges and immunities of the Organization in the territory
of the United Kingdom shall continue to be governed by the Headquarters
Agreement between the Government of the United Kingdom of Great Britain and
Northern Ireland and the International Sugar Organization signed at London on
29 May 1969.
3. If the seat of the Organization is moved to a country which is a Member of
the Organization, that Member shall, as soon as possible, conclude with the
Organization an agreement to be approved by the Council relating to the
status, privileges and immunities of the Organization, of its Executive
Director, its staff and experts and of representatives of Members while in
that country for the purpose of exercising their functions.
4. Unless any other taxation arrangements are implemented under the agreement
envisaged in paragraph 3 of this article and pending the conclusion of that
agreement, the new host Member shall:
(a) grant exemption from taxation on the remuneration paid by the
Organization to its employees, except that such exemption need not
apply to its own nationals; and
(b) grant exemption from taxation on the assets, income and other property
of the Organization.
5. If the seat of the Organization is to be moved to a country which is not a
Member of the Organization, the Council shall, before that move, obtain a
written assurance from the Government of that country.
(a) that it shall, as soon as possible, conclude with the Organization an
agreement as described in paragraph 3 of this article; and
(b) that, pending the conclusion of such an agreement, it shall grant the
exemptions provided for in paragraph 4 of this article.
6. The Council shall endeavour to conclude the agreement described in
paragraph 3 of this article with the Government of the country to which the
seat of the Organization is to be moved before transferring the seat.
Article 6
Change of status
A Member may change its category of membership on such terms and conditions as
the Council may establish in consultation with the Member concerned. In the
case of an importing Member changing to the category of an exporting Member,
the Council shall also, by special vote, determine the basic export tonnage or
export entitlement of that Member, which shall be deemed to be listed in annex
I or annex II, as appropriate.
CHAPTER IV-THE INTERNATIONAL SUGAR COUNCIL
Article 7
Composition of the International Sugar Council
1. The highest authority of the Organization shall be the International Sugar
Council, which shall consist of all the Members of the Organization.
2. Each Member shall be represented by a representative and, if it so desires,
by one or more alternates. A Member may also appoint one or more advisers to
its representative or alternates.
Article 8
Powers and functions of the Council
1. The Council shall exercise all such powers and perform or arrange for the
performance of all such functions as are necessary to carry out the express
provisions of this Agreement.
2. The Council shall adopt, by special vote, such rules and regulations as are
necessary to carry out the provisions of this Agreement and are consistent
therewith, including rules of procedure for the Council, its committees, and
the Fund, and the financial and staff regulations of the Organization. The
Council may, in its rules of procedure, provide a procedure whereby it may,
without meeting, decide specific questions.
3. The Council shall keep such records as are required to perform its
functions under this Agreement and such other records as it considers
appropriate.
4. The Council shall publish an annual report and such other information as it
considers appropriate.
Article 9
Chairman and Vice-Chairman of the Council
1. For each quota year the Council shall elect from among the delegations a
Chairman and a Vice-Chairman, who shall not be paid by the Organization.
2. The Chairman and the Vice-Chairman shall be elected, one from among the
delegations of the importing Members and the other from among those of the
exporting Members. Each of these offices shall, as a general rule, alternate
each quota year between the two categories of Members; provided, however, that
this shall not prevent the re-election under exceptional circumstances of the
Chairman or Vice-Chairman or both when the Council so decides by special vote.
In the case of such re-election of either officer, the rule set out in the
first sentence of this paragraph shall continue to apply.
3. In the temporary absence of both the Chairman and the Vice-Chairman or the
permanent absence of one or both, the Council may elect from among the
delegations new officers, temporary or permanent as appropriate, taking
account of the principle of alternating representation set out in paragraph 2
of this article.
4. Neither the Chairman nor any other officer presiding at meetings of the
Council shall vote. He may, however, appoint another person to exercise the
voting rights of the Member which he represents.
Article 10
Sessions of the Council
1. As a general rule, the Council shall hold one regular session in each half
of the quota year.
2. In addition to meeting in the other circumstances specifically provided for
in this Agreement, the Council shall meet in special session whenever it so
decides or on the request of:
(a) any five Members;
(b) Members having at least 250 votes;
(c) the Executive Committee; or
(d) the Price Review Committee.
3. Notice of sessions shall be given to Members at least 30 calendar days in
advance, except in case of emergency, when such notice shall be given at least
10 calendar days in advance, and except where the provisions of this Agreement
prescribe a different period.
4. Sessions shall be held at the headquarters of the Organization unless the
Council decides otherwise by special vote. If any Member invites the Council
to meet elsewhere than at the headquarters of the Organization, and the
Council agrees so to do, that Member shall pay the additional costs involved.
Article 11
Votes
1. The exporting Members shall together hold 1,000 votes and the importing
Members shall together hold 1,000 votes.
2. No member shall hold more than 300 votes or less than 5 votes.
3. There shall be no fractional votes.
4. The total 1,000 votes of exporting Members shall be distributed among them
pro rata to the weighted average of the following factors:
(a) their basic export tonnages or export entitlements, as appropriate . .
. . . . . . . . . . . . . . . . . . . . . . . . . . 50 per cent
(b) their total net exports
(i) to the free market . . . . . . . . . . . . . . . . . . . 18 per
cent
(ii) under special arrangements . . . . . . . . . . . . . . . 7 per
cent
(c) their total production . . . . . . . . . . . . . . . . . . . 25 per
cent The figures to be used for the purposes of (b) and (c) above
shall be, for each factor, the average of the best two of the three
preceding years for which figures are available.
5. Votes of importing Members shall be distributed among them in proportion to
their net imports from the free market and under special arrangements,
calculated separately according to the following formula:
(a) Each importing Member shall have that portion of 900 votes which its
average annual net imports from the free market over the preceding
four years, disregarding the year of its lowest imports from the free
market, bear to the total of such average imports from the free market
of all importing Members;
(b) Each importing Member shall have that portion of 100 votes which its
imports under special arrangements for the preceding year bear to
total imports under special arrangements of all importing Members for
the preceding year.
6. Votes shall be distributed at the beginning of each quota year in
accordance with the provisions of this article, which distribution shall
remain in effect for a full quota year except as provided in paragraph 7 of
this article.
7. Whenever the membership of the Organization, the territorial composition of
a Member or the composition of the free market changes, or when any Member has
its voting rights suspended or recovers its voting rights under any provision
of this Agreement, the Council shall redistribute the total votes within the
affected category or categories of Members on the basis of the formulae in
this article.
Article 12
Voting procedure of the Council
1. Each Member shall be entitled to cast the number of votes it holds under
article 11. It shall not be entitled to divide such votes.
2. By informing the Chairman in writing, any exporting Member may authorize
any other exporting Member, and any importing Member may authorize any other
importing Member, to represent its interests and to cast its votes at any
meeting or meetings of the Council. A copy of such authorizations shall be
examined by any credentials committee that may be set up under the rules of
procedure of the Council.
3. A Member authorized by another Member to cast the votes held by the
authorizing Member under article 11 shall cast such votes as authorized and in
accordance with paragraph 2 of this article.
Article 13
Decisions of the Council
1. All decisions of the Council shall be taken and all recommendations shall
be made by distributed simple majority vote, unless this Agreement provides
for a special vote.
2. In arriving at the number of votes necessary for any decision of the
Council, votes of Members abstaining shall not be reckoned. Where a Member
avails itself of the provisions of article 12, paragraph 2, and its votes are
cast at a meeting of the Council, such Member shall, for the purposes of
paragraph 1 of this article, be considered as present and voting.
3. All decisions of the Council under this Agreement shall be binding upon
Members.
Article 14
Co-operation with other organizations
1. The Council shall make whatever arrangements are appropriate for
consultation or co-operation with the United Nations and its organs, in
particular UNCTAD, and with the Food and Agriculture Organization and such
other specialized agencies of the United Nations and intergovernmental
organizations as may be appropriate.
2. The Council, bearing in mind the particular role of UNCTAD in international
commodity trade, shall as appropriate keep UNCTAD informed of its activities
and programmes of work.
3. The Council may also make whatever arrangements are appropriate for
maintaining effective contact with international organizations of sugar
producers, traders and manufacturers.
Article 15
Admission of observers
1. The Council may invite any non-member State to attend any of its meetings
as an observer.
2. The Council may also invite any of the organizations referred to in article
14, paragraph 1, to attend any of its meetings as an observer.
Article 16
Quorum for the Council
The quorum for any meeting of the Council shall be the presence of more than
half of all exporting Members and more than half of all importing Members, the
Members thus present holding at least two thirds of the total votes of all
Members in their respective categories. If there is no quorum on the day
appointed for the opening of any Council session, or if in the course of any
Council session there is no quorum at three successive meetings, the Council
shall be convened seven days later; at that time, and throughout the remainder
of that session, the quorum shall be the presence of more than half of all
exporting Members and more than half of all importing Members, the Members
thus present representing more than half of the total votes of all Members in
their respective categories. Representation in accordance with article 12,
paragraph 2, shall be considered as presence.
CHAPTER V-THE EXECUTIVE COMMITTEE
Article 17
Composition of the Executive Committee
1. The Executive Committee shall consist of ten exporting Members and ten
importing Members, who shall be elected for each quota year in accordance with
article 18 and may be re-elected.
2. Each member of the Executive Committee shall appoint one representative and
may appoint in addition one or more alternates and advisers.
3. The Executive Committee shall elect its Chairman for each quota year. He
shall not have the right to vote and may be re-elected.
4. The Executive Committee shall meet at the headquarters of the Organization,
unless it decides otherwise. If any Member invites the Executive Committee to
meet elsewhere than at the headquarters of the Organization, and the Executive
Committee agrees so to do, that Member shall pay the additional costs
involved.
Article 18
Election of the Executive Committee
1. The exporting and importing members of the Executive Committee shall be
elected in the Council by the exporting and importing Members of the
Organization respectively. The election within each category shall be held in
accordance with paragraphs 2 to 7 inclusive of this article.
2. Each Member shall cast all the votes to which it is entitled under article
11 for a single candidate. A Member may cast for another candidate any votes
which it exercises pursuant to article 12, paragraph 2.
3. The ten candidates receiving the largest number of votes shall be elected;
however, to be elected on the first ballot a candidate must secure at least 60
votes.
4. If less than ten candidates are elected on the first ballot, further
ballots shall be held in which only Members which did not vote for any of the
candidates elected shall have the right to vote. In each further ballot, the
minimum number of votes required for election shall be successively diminished
by five until the ten candidates are elected.
5. Any Member which did not vote for any of the members elected may
subsequently assign its votes to one of them, subject to paragraphs 6 and 7 of
this article.
6. A member shall be deemed to have received the number of votes originally
cast for it when it was elected and, in addition, the number of votes assigned
to it, provided that the total number of votes shall not exceed 300 for any
member elected.
7. If the votes deemed received by an elected member would otherwise exceed
300, Members which voted for or assigned their votes to such elected member
shall arrange among themselves for one or more of them to withdraw their votes
from that member and assign or re-assign them to another elected member so
that the votes received by each elected member shall not exceed the limit of
300.
8. If a member of the Executive Committee is suspended from the exercise of
its voting rights under any of the relevant provisions of this Agreement, each
Member which has voted for it or assigned its votes to it in accordance with
this article may, during such time as that suspension is in force, assign its
votes to any other member of the Committee in its category, subject to
paragraph 6 of this article.
9. If a member of the Committee ceases to be a Member of the Organization, the
Members which voted for or assigned votes to it and Members which have not
voted for, or assigned votes to, another member of the Committee shall, during
the next session of the Council, elect a Member to fill the vacancy on the
Committee. Any Member which voted for, or assigned its votes to, the member
which has ceased to be a Member of the Organization and which does not vote
for the Member elected to fill the vacancy on the Committee, may assign its
votes to another member of the Committee, subject to paragraph 6 of this
article.
10. In special circumstances, and after consultation with the member of the
Executive Committee for which it voted or to which it assigned its votes in
accordance with the provisions of this article, a Member may withdraw its
votes from that member for the remainder of the quota year. That Member may
then assign these votes to another member of the Executive Committee in its
category but may not withdraw these votes from that other member for the
remainder of that year. The member of the Executive Committee from which the
votes have been withdrawn shall retain its seat on the Executive Committee for
the remainder of that year. Any action taken pursuant to the provisions of
this paragraph shall become effective after the Chairman of the Executive
Committee has been informed in writing thereof.
Article 19
Delegation of powers by the Council to the Executive Committee
1. The Council may, by special vote, delegate to the Executive Committee the
exercise of any or all of its powers, other than the following:
(a) location of the headquarters of the Organization under article 3,
paragraph 2;
(b) decisions regarding change of status of Members under article 6;
(c) appointment of the Executive Director under article 22, paragraph 1,
and appointment of the Manager of the Fund under article 50, paragraph
4;
(d) approval of the administrative budget and assessment of contributions
under article 24, and approval of the accounts of the Fund under
article 50, paragraph 2;
(e) application of article 29 to new special arrangements under paragraph
5 of that article;
(f) determination of basic export tonnages under article 34, paragraph 2;
(g) allocations of basic export tonnages under article 35, paragraph 4;
(h) establishment of the global quota under article 40;
(i) decision under article 41, paragraph 2;
(j) revision of the limitations on maximum stocks under article 48,
paragraph 4;
(k) adoption of rules of procedure for the Fund under article 49,
paragraph 3;
(l) adjustments of the rate of contributions, and suspension of
contributions, to the Fund under article 51, paragraph 1;
(m) adjustments of the rate of lending by the Fund under article 53,
paragraph 1;
(n) decisions regarding the disposition of the assets of the Fund under
article 54;
(o) adjustment of price levels under article 62;
(p) relief from obligations under article 69;
(q) decision on disputes under article 70;
(r) suspension of voting and other rights of a Member under article 71,
paragraph 3;
(s) accessions under article 76;
(t) exclusion of a Member from the Organization under article 80;
(u) recommendation of amendments under article 82;
(v) extension or termination of this Agreement under article 83.
2. The Council may at any time revoke any delegation of powers to the
Executive Committee.
Article 20
Voting procedure and decisions of the Executive Committee
1. Each member of the Executive Committee shall be entitled to cast the number
of votes received by it under article 18, and cannot divide these votes.
2. Any decisions taken by the Executive Committee shall require the same
majority as that decision would require if taken by the Council.
3. Any Member shall have the right of appeal to the Council, under such
conditions as the Council may prescribe in its rules of procedure, against any
decision of the Executive Committee.
Article 21
Quorum for the Executive Committee
The quorum for any meeting of the Executive Committee shall be the presence of
more than half of all exporting members of the Committee and more than half of
all importing members of the Committee, the members thus present representing
at least two thirds of the total votes of all members of the Committee in
their respective categories.
CHAPTER VI-THE EXECUTIVE DIRECTOR AND THE STAFF
Article 22
The Executive Director and the staff
1. The Council, after having consulted the Executive Committee, shall appoint
the Executive Director by special vote. The terms of appointment of the
Executive Director shall be fixed by the Council in the light of those
applying to corresponding officials of similar intergovernmental
organizations.
2. The Executive Director shall be the chief administrative officer of the
Organization and shall be responsible for the performance of any duties
devolving upon him in the administration of this Agreement.
3. The Executive Director shall appoint the staff in accordance with
regulations established by the Council. In framing such regulations the
Council shall have regard to those applying to officials of similar
intergovernmental organizations.
4. Neither the Executive Director nor any member of the staff shall have any
financial interest in the sugar industry or sugar trade.
5. The Executive Director and the staff shall not seek or receive instructions
regarding their duties under this Agreement from any Member or from any
authority external to the Organization. They shall refrain from any action
which might reflect on their position as international officials responsible
only to the Organization. Each member shall respect the exclusively
international character of the responsibilities of the Executive Director and
the staff and shall not seek to influence them in the discharge of their
responsibilities.
CHAPTER VII-FINANCE
Article 23
Expenses
1. The expenses of delegations to the Council, representatives on the
Executive Committee and representatives on any of the committees of the
Council or of the Executive Committee shall be met by the Members concerned.
2. The expenses necessary for the administration of this Agreement, excluding
the costs of administering the Fund, shall be met by annual contributions from
Members, assessed in accordance with article 24. If, however, a Member
requests special services, the Council may require that Member to pay for
them.
3. Appropriate accounts shall be kept for the administration of this
Agreement.
Article 24
Determination of the administrative budget and assessment of contributions
1. During the second half of each financial year, the Council shall approve
the administrative budget of the Organization for the following financial year
and shall assess the contribution of each Member to that Budget.
2. The contribution of each Member to the administrative budget for each
financial year shall be in the proportion which the number of its votes at the
time the administrative budget for that financial year is approved bears to
the total votes of all Members. In assessing contributions, the votes of each
Member shall be calculated without regard to the suspension of any Member's
voting rights and any redistribution of votes resulting therefrom.
3. The initial contribution of any Member joining the Organization after the
entry into force of this Agreement shall be assessed by the Council on the
basis of the number of votes to be held by it and the period remaining in the
current financial year as well as for the following financial year if that
Member joins the Organization between the adoption of the budget for, and the
beginning of, that year, but assessments made upon other Members shall not be
altered. In assessing contributions of Members joining the Organization after
the adoption of a budget for a given quota year or years, the votes of such
Members shall be calculated without regard to the suspension of any Member's
voting rights and any redistribution of votes resulting therefrom.
4. If this Agreement enters into force more than eight months before the
beginning of the first full financial year of this Agreement, the Council
shall at its first session approve an administrative budget covering the
period up to the commencement of the first full financial year. Otherwise the
first administrative budget shall cover both the initial period and the first
full financial year.
5. The Council may take such measures as it might deem appropriate when
adopting the budget for the first year of this Agreement and for the first
year following any extension of this Agreement under article 83 in order to
mitigate the effects on contributions for those years resulting from a
possibly limited membership of this Agreement at the time of the adoption of
budgets for those years.
Article 25
Payment of contributions
1. Contributions to the administrative budget for each financial year shall be
payable in freely convertible currencies and shall become due on the first day
of that financial year; contributions of Members in respect of the financial
year in which they join the Organization shall be due on the date on which
they become Members.
2. If, at the end of four months following the date on which its contribution
is due in accordance with paragraph 1 of this article, a Member has not paid
its full contribution to the administrative budget, the Executive Director
shall request the Member to make payment as quickly as possible. If, at the
expiration of two months after the request of the Executive Director, the
Member has still not paid its contribution, its voting rights in the Council
and in the Executive Committee shall be suspended until such time as it has
made full payment of the contribution.
3. A Member whose voting rights have been suspended under paragraph 2 of this
article shall not be deprived of any of its other rights or relieved of any of
its obligations under this Agreement, unless the Council so decides by special
vote. It shall remain liable to pay its contribution and to meet any other of
its financial obligations under this Agreement.
Article 26
Audit and publication of accounts
As soon as possible after the close of each financial year, the financial
statements of the Organization for that financial year, certified by an
independent auditor, shall be presented to the Council for approval and
publication.
CHAPTER VIII-SCOPE OF THE REGULATION OF EXPORTS
Article 27
Scope
This Agreement regulates supplies of sugar to the free market and makes
provision for other related matters. It takes account of the special
arrangements referred to in chapter IX and allows for certain donations of
sugar to be made without charge to quotas in effect or export entitlements, as
referred to in article 28.
Article 28
Donations of sugar
1. Donations of sugar by an exporting Member through assistance programmes of
the United Nations or of any of its specialized agencies shall not be charged
against the quota in effect or export entitlement of the donor Member, unless
the Council decides otherwise.
2. The Council shall lay down the conditions under which donations of sugar by
an exporting Member other than those under paragraph 1 of this article shall
not be charged against the quota in effect or export entitlement of the donor
Member. These conditions shall provide, inter alia, for prior consultation and
adequate safeguards to normal patterns of trade. No sugar so donated shall
qualify for exemption under this paragraph unless it is exclusively for
domestic consumption in the recipient countries.
3. All donations of sugar by an exporting Member shall be notified promptly to
the Council by the donor Member. Without prejudice to paragraphs 1 and 2 of
this article, any Member which considers that any donations are causing or are
likely to cause prejudice to its interests may request the Council to examine
the matter. The Council shall, upon such examination, make such
recommendations as it deems appropriate.
4. In its annual report, the Council shall include a report on developments
concerning donations of sugar.
CHAPTER IX-SPECIAL ARRANGEMENTS
Article 29
General provisions
1. None of the provisions of the other chapters of this Agreement shall
interfere with or restrict the rights and obligations of Members under the
special arrangements referred to in articles 30, 31, 32 and 33. These special
arrangements shall be dealt with as provided for in those articles, subject to
paragraphs 2 to 4 of this article.
2. Members recognize that the basic export tonnages and export entitlements
established pursuant to articles 34 and 35 are based on the continuity and
stability of the special arrangements referred to in articles 30, 31, 32 and
33. If there is any change in the membership of one or more of the special
arrangements referred to in those articles and this change affects a Member or
Members, or if there is any significant change in the position of one or more
Members participating in one or more of these arrangements, the Council shall
meet to consider appropriate compensating adjustments to the basic export
tonnages or export entitlements established pursuant to articles 34 and 35 in
accordance with the following provisions:
(a) Subject to subparagraphs (b), (c) and (d) of this paragraph, the basic
export tonnages of the Member or Members involved shall be reduced by
the full extent of any increase (or increased by, or established at a
level equal to, the full extent of any reduction) in their annual
export entitlements under the special arrangement or arrangements
concerned, resulting from the changes in membership or position
referred to above;
(b) Where compensating adjustments have been made under subparagraph (a)
of this paragraph, the Council shall also establish any necessary
transitional arrangements covering the year in which such changes
occur;
(c) Where compensating adjustments as envisaged in subparagraphs (a) and
(b) of this paragraph cannot be made to the basic export tonnages
established pursuant to article 34, because the changes in membership
or position in the special arrangements referred to above involve a
major structural change in the sugar market or a significant change in
the position of any major supplier or suppliers under any such special
arrangement, the Council shall make recommendations to Members for an
amendment of this Agreement under the provisions of article 82 or for
the immediate renegotiation of the basic export tonnages. Pending the
incorporation of changes in basic export tonnages resulting from such
amendment or renegotiation, the changes in, or establishment of, basic
export tonnages shall be applied on a provisional basis;
(d) Any Member or Members not satisfied with the results of the
renegotiation under subparagraph (c) of this paragraph may withdraw
from this Agreement in accordance with the provisions of article 79.
3. Members which participate in the special arrangements referred to in
article 30 shall arrange for the Council to be informed of the details of
those arrangements, of the amounts of sugar to be imported or exported under
them in each year of this Agreement, and of any change in the nature of those
arrangements within 30 days of its occurrence.
4. Members participating in any of the special arrangements mentioned in this
chapter shall conduct their sugar trade within those arrangements in a manner
which shall not prejudice the objectives of this Agreement. Where special
arrangements involve re-exports of sugar to the free market, Members
participating in such arrangements shall take such measures as they deem
appropriate to ensure that, in those cases where there are no quantitative
provisions in the relevant articles of this Agreement relating to such
re-exports, any increase of trade under those arrangements over and above the
quantities annually traded before the entry into force of this Agreement does
not result in an increase of re-exports to the free market.
5. At the request of the Members concerned, the Council may, by special vote,
apply the provisions of this article to special arrangements established after
the entry into force of this Agreement. The basic export tonnages of the
Member or Members involved shall be automatically reduced by the full extent
of their annual export entitlements under the special arrangement or
arrangements concerned.
Article 30
Exports to the European Economic Community
Exports to the EEC under the terms of the Lome H Convention of 1975, the
decision of the Council of the EEC of 29 June 1975 relating to the association
of overseas countries and territories with the EEC, and the Agreement of 19
July 1975 between the EEC and India, up to the amounts covered by those acts
and agreements as may be adjusted under the provisions of those acts and
agreements, shall not be charged against the quotas in effect or export
entitlements of the Members concerned under chapter X.
Article 31
Exports by Cuba to socialist countries
1. Exports by Cuba to the following socialist countries shall not be charged
against its quota in effect under chapter X: Bulgaria, Czechoslovakia, the
German Democratic Republic, Hungary, Mongolia, Poland, Romania and the Union
of Soviet Socialist Republics.
2. Exports by Cuba to Albania, China, the Democratic People's Republic of
Korea, Viet Nam and Yugoslavia up to a total of 650,000 tonnes in each of the
first two quota years of this Agreement shall not be charged against its quota
in effect under chapter X in those years. The quantity up to which Cuba's
exports to those countries will not be charged against Cuba's quota in effect
in the third, fourth and fifth quota years shall be determined by the Council
in the first quarter of the third quota year in the light of performance
during the first two quota years. Such quantity as may be exported to these
countries in the first two quota years in excess of an annual total of 650,000
tonnes shall be used for the purposes either of determining the relevant
quantity for the third, fourth and fifth quota years or of establishing Cuba's
basic export tonnage for these years under article 34, paragraph 2, but not
for both purposes.
Article 32
Status of, and exports by, the Union of Soviet Socialist Republics
1. Without prejudice to article 31, all imports by the Union of Soviet
Socialist Republics from all origins shall be taken into account and shall
therefore give the USSR the status of an importing Member.
2. Without prejudice to its status as established in this article, the USSR
shall undertake to limit its total exports of sugar to the free market in each
of the first two quota years of this Agreement to 500,000 tonnes.
3. The quantity specified in paragraph 2 of this article and the tonnages to
be subsequently established for the following quota years under paragraph 6 of
this article shall not include exports by the USSR to any of the countries
referred to in article 31, paragraphs 1 and 2.
4. Exports by the USSR under this article shall not be subject to any
reduction under chapter X.
5. The USSR shall not be bound by this article during any period when, by
virtue of article 44, paragraph 4, quotas and other limitations on exports are
inoperative.
6. When considering basic export tonnages for the third, fourth and fifth
quota years under article 34, paragraph 2, the Council shall, in agreement
with the USSR, establish the tonnages for the USSR's exports for those years.
Article 33
Status of, and exports by, the German Democratic Republic
1. The German Democratic Republic shall undertake on becoming an importing
Member to limit its total exports of sugar to the free market in each of the
first two quota years of this Agreement to 75,000 tonnes.
2. Exports by the German Democratic Republic under this article shall not be
subject to any reduction under chapter X.
3. The German Democratic Republic shall not be bound by this article during
any period when, by virtue of article 44, paragraph 4, quotas and other
limitations on exports are inoperative.
4. When considering basic export tonnages for the third, fourth and fifth
quota years under article 34, paragraph 2, the Council shall, in agreement
with the German Democratic Republic, establish the tonnages for the German
Democratic Republic's exports for those years.
CHAPTER X-REGULATION OF EXPORTS
Article 34
Allocation and adjustment of basic export tonnages
1. The exporting countries listed in annex I shall, upon becoming Members,
have the basic export tonnages for each of the first two quota years of this
Agreement as specified therein, subject to article 76, subparagraph 2 (b) and
paragraph 3.
2. (a) In the first quarter of the third quota year, the basic export tonnages
specified in annex I shall be renegotiated. In that renegotiation account
shall be taken of:
(i) the assessment of the free market for the relevant period and
the proportion of that market available to exporting Members
with basic export tonnages;
(ii) the basic export tonnages of Members as specified in annex I;
(iii) export performance and fulfilment of quota and stock
obligations during the first two quota years based on
statistics satisfactory to the Council. For this purpose the
exporting Members concerned undertake to supply to the Council
statistics on their production, consumption, exports and
imports for the quota year 1979 not later than 15 February
1980;
(iv) cases where the Council has accepted by special vote that force
majeure or other special circumstances affected export
performance or the fulfilment of obligations under this
Agreement;
(v) the role of sugar in the economy, dependence upon the free
market and the special position of small developing Members
whose export earnings are heavily dependent upon the export of
sugar;
(vi) realized expansion projects by developing exporting Members
with basic export tonnages not exceeding 300,000 tonnes or
listed in annex II which have been registered in detail by the
Members concerned with the Executive Director upon entry into
force of this Agreement as committed projects of major
significance for the economies of the countries concerned;
(vii) any other relevant factors.
(b) The purpose of the renegotiation shall be to establish revised basic
export tonnages acceptable to Members. Upon completion of the
renegotiation the Council may determine by special vote, which shall
include in this instance the affirmative votes of at least two thirds
of the exporting Members present and voting, the revised basic export
tonnages for each of the third, fourth and fifth quota years.
(c) In the event that the Council has not established revised basic export
tonnages for a particular quota year by the process set forth in
subparagraph (b) of this paragraph before the end of the first quarter
of that year, the basic export tonnage for each Member listed in annex
I shall be determined in accordance with the following formula:
(i) for the third quota year, 50 per cent of its basic export
tonnage and 50 per cent of its average relative export
performance during 1978 and 1979;
(ii) for the fourth quota year, the average of its relative export
performance during 1978, 1979 and 1980, excluding the year of
its lowest relative export performance;
(iii) for the fifth quota year, the average of its relative export
performance in 1979, 1980 and 1981, excluding the year of its
lowest relative export performance.
(d) Relative export performance for each quota year shall mean, for each
Member subject to the formula in subparagraph (c) of this paragraph,
its net exports to the free market, less any excess beyond the
tolerance in article 45, paragraph 2, and less the amount of any
deficit in its stock obligations under article 46, divided by the
aggregate of such net exports as so adjusted for that quota year for
all Members subject to the formula, and multiplied by the aggregate of
their basic export tonnages including any allocations under article 39
for the previous quota year. In cases where the Council has accepted
by special vote that a Member's net exports to the free market were
affected by force majeure or other special circumstances, that
Member's net exports shall be adjusted to the extent so accepted by
the Council. Similarly, in cases where the Council has for similar
reasons granted temporary relief of stock obligations, the relief so
granted shall not be treated as a deficit.
(e) A Member which, in each of the previous quota years, has fulfilled its
quota in effect without incurring any shortfall, whether declared or
not, and has taken up its full share of any redistributed shortfalls
up to the level of its basic export tonnage, and which has exported to
the free market the full amount of its basic export tonnage in any
quota year in which quotas were suspended at least six months before
the end of that year and has not, in any quota year, been in default
of its stock obligations, shall not, as a result of the application of
the formula in subparagraph (c) of this paragraph, receive a lower
basic export tonnage than its basic export tonnage in the immediately
preceding quota year.
(f) The basic export tonnage assigned to a Member acceding to this
Agreement after the first quota year, or assigned to a Member pursuant
to article 35 shall not be reduced as a result of the application of
the formula in subparagraph (c) of this paragraph, unless such Member
has had a basic export tonnage for the entire applicable quota years
on which the pertinent part of the formula is based.
(g) The following procedure shall apply for each developing exporting
Member with an initial basic export tonnage of 300,000 tonnes or less
with any realized expansion project involving investment in
agricultural development and increased milling capacity resulting in
additional sugar production for the free market in excess of 10,000
tonnes which has been registered in detail with the Executive Director
upon entry into force of this Agreement as a committed project of
major significance for the economy of the country concerned and which
was subject to verification by the Council within three months of the
entry into force of this Agreement. There shall be added to the basic
export tonnage established under subparagraphs (c) (i), (ii) and (iii)
of this paragraph, as appropriate, an amount of 80 per cent of any
unexportable surplus arising from such a project at the beginning of
the relevant quota year. By unexportable surplus is meant that
quantity of sugar which is held in stock at 31 December over and above
domestic consumption requirements, the full stock obligation under
article 46, and any quantities due to be shipped under special
arrangements, excluding any stocks held in breach of article 48, which
surplus could not be exported against quotas in effect, provided that:
(i) the unexportable surplus shall be subject to verification
according to such rules and procedures as may be established by
the Council;
(ii) the Member in question has met all the conditions set out in
sub-paragraph (e) of this paragraph;
(iii) the aggregate of such additions does not exceed 200,000 tonnes
in each of the quota years 1980, 1981 and 1982. In the event of
any excess the individual additions shall be reviewed and
reduced to the extent necessary by the Committee established
under article 39, paragraph 1, in accordance with the
principles and procedures in that article and taking into
account any allocations already made under article 39 to the
Member concerned;
(iv) the residual amount of the unexportable surplus shall not be
taken into account in subsequent quota years.
3. Notwithstanding paragraph 1 of this article, Colombia's situation shall be
taken into account during the negotiations referred to in paragraph 2 of this
article, at which time Colombia shall be provided with a basic export tonnage
commensurate with its production and domestic consumption.
Article 35
Provisions for Members with small export entitlements
1. Each exporting Member listed in annex II shall, in each quota year, have an
export entitlement to the free market of 70,000 tonnes which shall not be
subject to any adjustment under this chapter.
2. Each Member referred to in paragraph 1 of this article shall inform the
Council at least 45 calendar days before the beginning of a quota year of the
amounts of sugar it expects to have available for export to the free market
within its export entitlement in that quota year. In addition, each such
Member shall notify the Council of any change in its expected exports as
provided for in article 42. Any such Member which fails to comply with the
notification procedure in this paragraph shall have its voting rights
suspended for the relevant quota year.
3. The Members referred to in paragraph 1 of this article shall not be subject
to the obligations to hold special stocks under article 46. They shall,
however, be entitled to hold such stocks up to the quantity, and under the
conditions, referred to in paragraph 1 of that article.
4. Any Member referred to in paragraph 1 of this article which considers that,
in the light of the development of its production, it should be authorized to
export to the free market more than 70,000 tonnes in any quota year, may
request the Council to allocate to it a basic export tonnage in excess of that
entitlement. If and when the Council by special vote accedes to the request by
allocating to that Member such basic export tonnage as it considers
appropriate, that Member shall be deemed to be listed in annex I and shall
become subject to all the provisions of this Agreement applicable to the
Members listed in that annex.
Article 36
Special provisions for the calculation of net exports
1. All imports by Czechoslovakia, Hungary, Poland and Romania, except those
under article 31, shall be deducted from those Members' total exports when
calculating their net exports to the free market.
2. Transfers of sugar within the East African Community by any one of the
Partner States of the Community of up to a total amount of 10,000 tonnes shall
not be charged against its export entitlement in the relevant quota year; this
amount shall not be subject to any adjustments under this chapter.
3. Sugar exported to the members of the Caribbean Community which do not
produce sugar (namely, Antigua, Dominica, Grenada, Montserrat, St Lucia and St
Vincent) by Barbados, Belize, Jamaica, Guyana, St Kitts-Nevis-Anguilla and
Trinidad and Tobago shall not be charged against their quotas in effect or
export entitlements in the relevant quota year, provided that the total amount
of sugar traded within the Community does not exceed 20,000 tonnes within any
one quota year. The exporting Members concerned undertake to inform the
Council before the beginning of each quota year of the amount of sugar they
intend to export to the other members of the Caribbean Community.
Article 37
Provisions relating to land-locked developing exporting Members
1. The fact that one of the land-locked developing exporting Members has not
used all of its quota in effect or export entitlement, as appropriate, in one
or more quota years shall not be a ground for considering that it has not
fulfilled its obligations under this Agreement, thereby incurring the
cancellation of its entitlement in the renegotiation provided for in article
34, paragraph 2.
2. In view of the fact that sugar exports of land-locked developing countries
are hampered and burdened by the additional cost of transport to seaports, the
Council shall consider, in consultation with UNCTAD, in what manner
land-locked developing exporting Members might best benefit from the special
fund for the land-locked developing countries established by General Assembly
resolution 3504 (XXX) of 15 December 1975, up to the maximum such Members are
entitled to export.
Article 38
Net exports by developing importing Members
A developing importing Member may, after due notification to the Council
before the beginning of a quota year, export sugar in quantities exceeding its
imports, provided that, by the end of that quota year, its net exports do not
exceed 10,000 tonnes. Such entitlement shall not be considered as a basic
export tonnage and shall not be subject to any adjustments under this chapter.
The Members concerned shall, however, comply with such conditions as may be
prescribed by the Council in respect of exports by exporting Members.
Article 39
Hardship reserve
1. The Council shall establish a Special Hardship Reserve Committee
(hereinafter referred to in this article as the Special Committee), under the
chairmanship of the Executive Director, to examine such applications as may be
made by developing exporting Members which are experiencing hardship as a
result of special difficulties and which are in temporary need of additional
export entitlements in excess of their respective quotas in effect or export
entitlements under other provisions of this Agreement. The Special Committee
may make allocations to assist such developing exporting Members up to a total
of 200,000 tonnes in the first quota year of this Agreement and up to a total
of 300,000 tonnes in each of the subsequent quota years.
2. The Special Committee shall be composed of not more than six Members. In
selecting the members of the Committee, the Council shall ensure that they do
not represent any interests likely to be affected by a decision on allocations
under paragraph 1 of this article.
3. In making allocations under this article, the Special Committee shall
generally take into account the prevailing market situation and shall seek to
avoid weakening further a weak market situation, but it may make allocations
irrespective of the market situation. The Special Committee's decision shall
be given effect to by the Council unless amended by special vote.
4. Allocations under this article shall be made only to developing Members
with basic export tonnages or export entitlements under other provisions of
this Agreement of 300,000 tonnes or less.
5. Of the total allocations which may be made in accordance with this article,
priority shall be given to small developing Members whose export earnings are
heavily dependent upon the export of sugar. Equally, special consideration
shall be given to the claims of those Members whose economies are becoming
increasingly dependent upon sugar.
6. The balance of the allocations which may be made under this article may be
allocated in accordance with the principles and procedures set out in
paragraphs 1 and 2 of this article to any developing exporting Member which
provides evidence of hardship to the Special Committee. Intended expansion of
the productive capacity of an industry shall not in itself provide
justification for an allocation under this paragraph.
7. An allocation under this article shall not be considered as constituting an
increase in the basic export tonnage of the Member concerned. It shall form
part of the quota in effect of that Member, and that quota in effect shall not
be subject to any reductions under article 44, paragraph 3, in that quota
year.
Article 40
Establishment and allocation of the global quota
1. Prior to 20 November in each quota year, the Council shall adopt an
estimate of net import requirements of the free market for the forthcoming
quota year. In so doing, the Council shall take into account all relevant
factors affecting the demand for and supply of sugar, which shall include,
inter alia, the trends in consumption, prospective stock variations and
current and anticipated price trends.
2. The Council shall then establish a global quota which shall be the estimate
arrived at pursuant to paragraph 1 of this article, less the sum of:
(a) the expected volume of exports to the free market from Members listed
in annex II;
(b) the expected volume of any other exports to the free market
permissible under this Agreement other than quotas in effect; and
(c) expected exports to the free market by non-Members. In so doing the
Council shall not be bound by the constraints of article 41.
3. If, by 25 November of the quota year, the Council has not reached agreement
on a global quota for the forthcoming quota year, the Executive Director shall
submit a proposal to the Council. The Council shall proceed to a decision on
the proposal by special vote. If the Council fails to agree by 1 December of
the quota year, the global quota for the forthcoming quota year shall be
established at the level of the global quota in effect on that date.
4. The Executive Director shall distribute the global quota, whenever it is
established or subsequently adjusted, to individual exporting Members listed
in annex I pro rata to their basic export tonnages, subject to the adjustments
required or permissible under other provisions of this Agreement.
5. Except as provided in article 43, any deductions from the individual quota
in effect of a Member provided for in other provisions of this Agreement shall
be redistributed pro rata to the basic export tonnages of other exporting
Members listed in annex I which are in a position to accept increases in their
quotas in effect.
Article 41
Minimum export entitlements
1. The export quota of any Member listed in annex I shall not be initially
established under article 40, nor subsequently reduced under article 44, below
85 per cent of the basic export tonnage of that Member except as provided for
in paragraphs 2, 4 and 7 of this article, and provided that no quota reduction
under this article or under article 44 shall result in a quota in effect lower
than 70,000 tonnes.
2. If the prevailing price remains below 11 cents per pound for 75 consecutive
market days in the first two quota years of this Agreement, quotas in effect
shall be reduced by a further 2.5 per cent of the total basic export tonnages
of the Members concerned, unless the Council decides otherwise, and subject to
paragraphs 3 and 4 of this article and to article 42, paragraph 1.
3. Notwithstanding the provisions of paragraph 2 of this article, the quotas
in effect of exporting Members listed in annex I whose average net exports to
the free market over the period 1974-1976 amounted to at least 60 per cent of
their average production in those years shall not be reduced under articles 40
and 44 below 85 per cent of their basic export tonnages, unless those Members
accept the further reduction in paragraph 2 of this article.
4. The quota reduction in paragraph 2 of this article which is not accepted by
the Members referred to in paragraph 3 of this article shall be redistributed
among the other Members listed in annex I, subject to article 42, paragraph 1,
up to a total additional reduction in the quota in effect of each such other
Member not exceeding 1 per cent of its individual basic export tonnage.
5. If paragraphs 2 and 4 of this article are applied in any of the first two
quota years, the Members referred to in paragraph 3 of this article which do
not accept the additional reduction shall not participate in any subsequent
quota increases, whether under article 43 or article 44 and whether in the
same quota year of thereafter, up to the quantity of the additional reduction
which they have not accepted. In those quota increases the quantity involved
shall be first distributed among the Members affected by paragraph 4 of this
article; thereafter all such increases in quotas in effect shall be allocated
in accordance with the provisions of article 40, paragraph 4.
6. When calculating export performance for the purposes of article 34,
paragraph 2, total net exports of each Member referred to in paragraph 3 of
this article which did not accept the additional reduction under paragraph 2
of this article shall be reduced by the amount it did not accept, and the
export performance of each other Member listed in annex I which was affected
by paragraph 4 of this article shall be increased by the amount of the
additional reduction it consequently incurred.
7. The limitations in paragraphs 1, 2 and 3 of this article shall not apply
where deductions from quotas in effect for a quota year are to be made in
accordance with article 45, paragraph 5, or article 46, paragraph 8.
Article 42
Notice of, and action on, unused quotas
1. Each exporting Member listed in annex I shall keep the Council informed as
to whether or not it expects that it will use all of its quota in effect and,
if not, of what part of that quota it expects will be used. For this purpose,
each such exporting Member shall make at least two notifications to the
Council in each quota year, as follows: one, as soon as possible after the
establishment and allocation of the global quota under article 40, but not
later than 15 May, and another, as soon as possible after 15 May but not later
than 30 September. Any difference between the quantity notified under this
paragraph and the quota in effect prior to the notification shall be
considered as a shortfall and the quota in effect of the Member concerned
shall be reduced by that amount. The quota in effect of a Member whose quota
in effect has been reduced under this paragraph shall not be further reduced
as a result of the operation of articles 40, 41 or 44, until the quota in
effect of other Members has been reduced to the same percentage level of their
basic export tonnages.
2. If an exporting Member fails to submit to the Council by 15 May a
notification in accordance with paragraph 1 of this article, it shall have its
voting rights suspended for the remainder of that quota year.
3. If an exporting Member fails to submit to the Council between 15 May and 30
September a notification in accordance with paragraph 1 of this article, it
shall not be eligible to share in any subsequent quota increases in that quota
year.
4. If by 30 September an exporting Member notifies the Council under Paragraph
1 of this article that it expects to use more than the quantity which it had
notified to the Council by 15 May, it shall be entitled to export the
difference between the amounts involved in the two notifications, subject to
the following provisions:
(a) if such difference does not exceed 10,000 tonnes, no further action
shall be taken by the Council;
(b) if such difference exceeds 10,000 tonnes, the exporting Member
concerned shall receive priority in the re-allocations of any
shortfalls that may be made subsequently in that quota year to the
extent of the amount of such excess;
(c) the quota in effect of the Member concerned for the relevant quota
year shall be increased to include the amounts in subparagraphs (a)
and (b) above;
(d) if no re-allocation of shortfalls are made, the difference between the
total excess and 10,000 tonnes shall be charged against the quota in
effect of the Member concerned in the following quota year;
(e) any excess under the provisions of this paragraph shall not be
considered as an excess within the meaning of article 45.
5. If the net exports of an exporting Member to the free market during a quota
year fall short of its quota in effect on 1 October of that quota year, less
any subsequent net reduction as a result of the operation of article 44, the
difference shall, subject to paragraphs 6 and 7 of this article, be deducted
from the total amount of sugar which would otherwise have been allocated to
that Member in the subsequent quota year as a result of quota increases under
the relevant provisions of this Agreement.
6. Deductions under paragraph 5 of this article shall be made only to the
extent that the difference as established under that paragraph exceeds 10,000
tonnes, or 5 per cent of the quota in effect on 1 October of the Member
concerned up to a maximum of 30,000 tonnes, whichever is larger.
7. The Council may decide not to apply the provisions of paragraphs 2, 3 and 5
of this article, if it is satisfied by an explanation from the Member
concerned that it did not fulfil its obligations by reasons of force majeure
or other special circumstances.
8. The Council may, after consultation with an exporting Member, determine
that such Member will be unable to use all or part of its quota in effect.
Such determination by the Council shall not have the effect of reducing the
quota in effect of the Member concerned nor of depriving that Member of its
right to fill that quota later in the quota year. A determination by the
Council under this paragraph shall not relieve the Member concerned of its
obligations under paragraph 1 of this article nor exempt it from the measures
referred to in paragraphs 2, 3 and 5 of this article.
Article 43
Redistribution of shortfalls
1. The Council shall decide whether shortfalls declared under article 42
should, or should not, be redistributed in whole or in part. In so doing, the
Council shall have regard to the trend of the price and its likely movements.
However, unless the Council decides otherwise,
(a) there shall be no redistribution of shortfalls if, and as long as, the
prevailing price is below 12 cents per pound;
(b) all shortfalls shall be redistributed if, and as long as, the
prevailing price is above 12 cents per pound.
2. Redistribution of shortfalls shall be made only among those exporting
Members listed in annex I which are in a position to accept the resultant
increases in their quotas in effect. Such redistributions shall, subject to
article 41, paragraph 5, article 42, paragraphs 3 and 4, and paragraph 3 of
this article, be made on the following basis:
(a) pro rata to the basic export tonnages of all those exporting Members
until their quotas in effect reach the level of their individual basic
export tonnages;
(b) thereafter, 20 per cent of any shortfall to be redistributed shall be
allocated exclusively to developing exporting Members pro rata to
their basic export tonnages, and the remaining 80 per cent shall be
allocated to all exporting Members participating in the redistribution
pro rata to their basic export tonnages; provided that, if quotas in
effect are subsequently reduced, the provisions of subparagraphs (a)
and (b) of this paragraph shall apply in reverse.
3. Whenever shortfalls are redistributed, shortfalls declared by developing
exporting Members with basic export tonnages not exceeding 180,000 tonnes
shall be initially redistributed, pro rata to their basic export tonnages,
among the other Members in that category which are in a position to accept
increases in their quotas in effect. Shortfalls which are not taken up in such
initial redistribution shall then be redistributed in accordance with
paragraph 2 of this article.
Article 44
Price stabilization mechanism
1. The Council shall keep the market situation under review and shall act as
provided for in this chapter with a view to maintaining the free market price
within a range of 11 to 21 cents per pound. A. Quota mechanism
2. The Council may review the level of the global quota at any time during
each quota year and, in any event, shall do so at its first regular session in
that quota year. It may adjust that level as it deems appropriate. The Council
shall normally act in anticipation of the automatic actions envisaged in
paragraphs 3 and 4 of this article and may, if it deems appropriate, provide
for the phased implementation of the action referred to in paragraph 3. The
Council shall also review and, if it so decides, adjust the level of the
global quota at each change of the exporters' membership of the Organization.
3. Unless the Council decides otherwise, the following provisions shall apply:
(a) when the prevailing price, having been at higher levels,
(i) moves below 13 cents per pound, the global quota shall be
reduced by 5 per cent;
(ii) moves below 12 cents per pound, the global quota shall be
reduced by 5 per cent;
(iii) moves below 11.50 cents per pound, the global quota shall be
reduced by 5 per cent;
(b) when the prevailing price, having been at lower levels,
(i) moves above 13 cents per pound, the global quota shall be
increased by 5 per cent;
(ii) moves above 14 cents per pound, the global quota shall be
increased by 5 per cent;
(iii) moves above 14.50 cents per pound, the global quota shall be
increased by 5 per cent;
(c) notwithstanding the provisions of subparagraph (a) of this paragraph,
when the prevailing price is below 11 cents per pound, quotas in
effect of individual exporting Members listed in annex I shall be
limited to their minimum export entitlements as provided in article
41.
4. The Council shall have discretion to suspend quotas and other limitations
on exports under any of the provisions of this Agreement whenever the
prevailing price is between 14 and 15 cents per pound, but all such
restrictions shall be suspended immediately the prevailing price rises above
15 cents per pound. Conversely, whenever the prevailing price is below 15
cents per pound the Council shall have discretion regarding the price level at
which quotas and other limitations on exports shall be established or
re-established, provided that all such restrictions shall be introduced if the
prevailing price falls below 14 cents per pound.
5. Notwithstanding the provisions of paragraphs 2 and 3 of this article, no
adjustment in the level of the global quota for a given quota year shall be
made within the last 45 days of that quota year.
6. The Executive Director shall notify all exporting Members listed in annex I
of their quotas in effect and of any changes thereto under this chapter. B.
Release of special stocks
7. Unless the Council decides otherwise, the following provisions shall apply:
(a) if, after having been below that level, the prevailing price rises
above 19 cents per pound, exporting Members holding stocks under
article 46 shall make available for prompt sale and prompt dispatch to
the free market such stocks as they hold under that article up to a
level of one third of their total obligation as specified in paragraph
3 of that article;
(b) if the prevailing price rises above 20 cents per pound, these
exporting Members shall make available for prompt sale and prompt
dispatch to the free market such remaining stocks as they hold under
article 46 up to a quantity which, together with such stocks as they
have previously released under subparagraph (a) of this paragraph,
would amount to two thirds of their total obligation as specified in
article 46, paragraph 3;
(c) if the prevailing price rises above 21 cents per pound, these
exporting Members shall make available for prompt sale and prompt
dispatch to the free market the balance of the stocks which they hold
at that time under article 46.
8. The priority referred to in article 60, paragraph 2, shall apply when
stocks are released in accordance with paragraph 7 of this article.
9. Whenever an exporting Member holding stocks under article 46 releases such
stocks pursuant to paragraph 7 of this article, it shall so notify the Council
and provide copies of shipping documents indicating the amount released.
Article 45
Undertakings on quotas and export entitlements and excesses in net exports
1. Each exporting Member listed in annex I and each Member with an export
entitlement to the free market under any of the relevant provisions of chapter
IX or chapter X shall ensure that its quota in effect or export entitlement,
as appropriate, at the end of the relevant quota year is not exceeded. To this
end, no such exporting Member shall, prior to the establishment and allocation
of the global quota under article 40 for a given quota year, commit for export
to the free market in that quota year more than its minimum export entitlement
as provided for in article 41. Furthermore, each such exporting Member shall
adopt such additional measures as the Council, by special vote, may establish
to ensure effective compliance with the quota system.
2. Excesses in net exports to the free market over the quota in effect or
export entitlement by the end of the quota year of not more than 10,000 tonnes
or 5 per cent of the basic export tonnage or export entitlement of the Member
concerned, whichever is less, shall not be considered as being in breach of
paragraph 1 of this article. Similarly, if an exporting Member listed in annex
I cannot fully implement a quota reduction arising from the operation of
articles 40, 41 and 44 because at the time of the reduction that Member has
already, within its previously applicable quota in effect, exported or sold
sugar to the free market in excess of its quota in effect applying after the
quota reduction, and if the quota in effect of that Member at the end of the
relevant quota year is also below the amount of such prior commitments, then
the latter difference shall not be considered as being in breach of paragraph
1 of this article.
3. Any excess in net exports within the relevant quantity defined in paragraph
2 of this article shall be charged against the quota in effect or export
entitlement, of the Member concerned in the following quota year.
4. Any first excess in net exports beyond the relevant quantity in paragraph 2
of this article shall be similarly charged against the quota in effect of the
Member concerned in the following quota year, such charge being without
prejudice to the provisions of article 71.
5. If an exporting Member listed in annex I exceeds its quota in effect at the
end of a quota year for a second or subsequent time, an amount equal to the
excess beyond the relevant quantity defined in paragraph 2 of this article
shall be charged against that Member's quota in effect in the following quota
year. In addition, unless the Council, by special vote, decides on a lesser
deduction, an amount equal to that excess shall be deducted from that Member's
quota in effect in that following quota year. Any charge or deduction under
this paragraph shall be without prejudice to the provisions of article 71.
6. If, during a quota year in which quotas were inoperative for part of the
year but were re-established, or established, before the end of that year,
total exports by an exporting Member listed in annex I exceed its quota in
effect at the end of that year, the quantity to be charged against its quota
in effect for the following quota year shall be the amount of the calculated
excess, less:
(a) any quantity exported during the period when quotas were inoperative;
and
(b) any quantity exported during the period when quotas were operative on
the basis of sales made during the inoperative period, provided that
those exports take place within 90 days of the date of sale.
7. Each exporting Member listed in annex I and each Member with an export
entitlement to the free market under any of the relevant provisions of Chapter
IX or chapter X shall notify the Council before 1 April in any quota year of
its net exports, or its exports, as appropriate, in the previous quota year,
so as to enable the Council to determine whether the provisions of paragraph 1
of this article have been complied with.
CHAPTER XI-STOCKS
Article 46
Special stocks
1. Exporting countries listed in annex I shall, upon becoming Members,
maintain special stocks in accordance with this article for the purposes of
article 44. Any Member listed in annex II may, if it so notifies the Council,
hold up to 10,000 tonnes as special stocks, in which case all rights and
obligations relating to special stocks under this Agreement shall apply to
that Member.
2. Special stocks shall consist of uncommitted sugar and shall be additional
to any sugar held by the exporting Members concerned for domestic needs or for
the purposes of special arrangements referred to in chapter IX. Each such
exporting Member may hold special stocks either within its own territory or in
the territory of any other country, provided that in each instance the
quantity held is subject to verification in accordance with article 47.
3. (a) The aggregate level of special stocks to be held by exporting countries
listed in annex I shall be 2.5 million tonnes and, subject to sub-paragraph
(b) of this paragraph, shall be apportioned among those countries pro rata to
their individual basic export tonnages.
(b) For the purposes of the apportionment and adjustment referred to in
sub-paragraphs (a) and (c) of this paragraph, respectively, the first
70,000 tonnes of the basic export tonnage of a developing exporting
Member with a basic export tonnage not exceeding 180,000 tonnes shall
not be taken into account, provided, however, that any such Member may
have its special stock quantity determined pro rata to its full basic
export tonnage if it so notifies the Council within six months of
becoming a Member. Any Member which, having been listed in annex II,
has been allocated, under article 35, paragraph 4, a basic export
tonnage not exceeding 180,000 tonnes, may also have its special stock
quantity determined pro rata to its full basic export tonnage if it so
notifies the Council within six months of being allocated such a basic
export tonnage. Such notifications shall be irrevocable for the
duration of this Agreement.
(c) If one or more exporting countries listed in annex I does not become a
Member within six months of the entry into force of this Agreement, or
wherever there is a change in the exporters' membership, the special
stock obligations of the exporting Members listed in annex I shall be
adjusted pro rata to their respective basic export tonnages by the
amount necessary to ensure that the aggregate level of special stocks
held by exporting Members listed in annex I is maintained at 2.5
million tonnes, provided that no Member shall be obliged to increase
the level of its special stocks by more than 7 per cent of the level
it would otherwise hold if all the exporting countries listed in annex
I were Members.
4. Any exporting Member may voluntarily hold additional sugar in special
stocks beyond its obligation under paragraph 3 of this article, provided that
the Council, by special vote, has approved such additional stockholding. Where
the Council approves such additional stockholding, all rights and obligations
relating to special stocks under this Agreement shall apply to such Member in
respect of such additional stockholding.
5. With a view to ensuring that special stocks are accumulated as rapidly as
possible, the Council shall provide in its rules of procedure for the initial
establishment, the maintenance and the replenishment, after release under
article 44, paragraph 7, of special stocks and shall prescribe procedures to
ensure that obligations under this article are being met, provided that no
special stocks shall be accumulated whenever quotas and other limitations on
exports are inoperative. Unless the Council, by special vote, decides
otherwise and subject to the proviso in the first sentence of this paragraph,
total special stocks shall be accumulated as follows by each Member concerned:
(a) not less than 40 per cent of its total stocking obligations in the
first 12 months during which quotas are operative following the entry
into force of this Agreement or the release of special stocks under
article 44, paragraph 7;
(b) not less than 80 per cent of its total stocking obligations in the
first 24 months during which quotas are operative following the entry
into force of this Agreement or the release of special stocks under
article 44, paragraph 7; and
(c) the balance of its total stocking obligations in the first 36 months
during which quotas are operative following the entry into force of
this Agreement, or the release of special stocks under article 44,
paragraph 7.
6. If, owing to special circumstances, an exporting Member considers that it
cannot accumulate during a given quota year the special stocks as provided for
in paragraph 5 of this article, it shall state its case to the Council, which
may, by special vote, vary for a specified period the level of special stocks
to be held by the Member concerned.
7. In special circumstances, the Council may, by special vote, authorize
individual exporting Members to release a portion of special stocks in
situations other than those specified in article 44, paragraph 7. In such
cases, the Council shall prescribe the timetable according to which such
stocks shall be replenished to the required quantity.
8. Any exporting Member which fails to meet its obligations to accumulate and
maintain special stocks, as verified pursuant to article 47, shall have the
amount of the deficit from its obligations deducted from its current quota in
effect if quotas are operative or from its quota in effect whenever quotas are
next operative. If an exporting Member fails to meet its obligations for a
second time or more, twice the amount of the deficit shall be deducted from
its current quota in effect if quotas are operative, or from its quota in
effect whenever quotas are next operative. An exporting Member failing to meet
its obligations for a second time or more shall also have its voting rights
suspended until such time as it has met its obligations and the Council has
decided to restore that Member's voting rights.
9. If, following the release of special stocks under article 44, paragraph 7,
in whole or in part, quotas and other limitations on exports again become
operative, the Council may decide, by special vote, that special stocks shall
be replenished in a manner different from that provided for in paragraph 5 of
this article.
Article 47
Verification of stocks
1. Each exporting Member holding special stocks pursuant to article 46 shall
provide to the Fund established under article 49 certificates of existence
issued by the Government of the Member for the quantity of sugar held under
article 46.
2. Certificates of existence provided to the Fund pursuant to paragraph 1 of
this article shall be subject to verification by on-site inspection by
independent inspectors commissioned by the Council and agreed to by the
exporting Member concerned. The Council shall establish a schedule for such
inspection, which shall provide for at least one annual inspection within 30
days before the start of the sugar harvest of each exporting Member having
only one annual sugar harvest. For exporting Members with two or more
harvests, such inspection shall be scheduled within 30 days before the
beginning of each sugar harvest and, in the case of exporting Members having a
continuous crop cycle, at least twice each quota year.
3. The Council may establish further rules for the verification of special
stocks.
Article 48
Maximum stocks
1. Each exporting Member listed in annex I undertakes to adjust its production
so that either:
(a) total stocks held by that Member over and above such stocks as it
might hold as special stocks under article 46 shall not exceed, on a
fixed date each year immediately preceding the start of the new crop,
such date to be agreed with the Council, an amount equal to 20 per
cent of its production in the immediately preceding calendar year or
of its average production in the four preceding calendar years,
whichever is larger; or
(b) the quantity of sugar held by that Member over and above stocks for
domestic consumption requirements and such stocks as it might hold as
special stocks under article 46 shall not exceed, on a fixed date each
year immediately preceding the start of the new crop, such date to be
agreed with the Council, an amount equal to 20 per cent of its total
exports in the preceding calendar year or of its average total exports
in the four preceding calendar years, whichever is larger.
2. Each exporting country listed in annex I shall, on becoming a Member,
notify the Council which of the alternatives in paragraph 1 of this article it
accepts as applicable to it.
3. On application by any such exporting Member, the Council may, if it
considers such action justified by special circumstances, authorize that
Member to hold quantities in excess of the amounts deriving from paragraph 1
of this article.
4. During the course of the renegotiation referred to in article 34, paragraph
2, the Council shall consider the operation of this article and shall, if
necessary, revise the limitations in paragraph 1 of this article by special
vote.
CHAPTER XII-STOCK FINANCING FUND
Article 49
Establishment of the Stock Financing Fund
1. There is established a Stock Financing Fund for the purpose of providing
financial assistance in accordance with article 53 to exporting Members
holding special stocks pursuant to article 46.
2. The Fund shall be located at the headquarters of the Organization and
shall, as a subordinate body of the Organization, be covered by the
Headquarters Agreement referred to in article 5, paragraph 2.
3. The Fund shall operate in accordance with this chapter and such rules of
procedure, regulations and directives as the Council may, by special vote,
adopt to carry out the provisions of this chapter.
4. The provisions of this chapter shall come into effect on the first day of
the first month following 180 days after the entry into force of this
Agreement.
5. Without prejudice to article 80 and unless the Council decides otherwise by
special vote, any Member which has failed to meet its obligations under this
chapter shall have its voting rights suspended until such time as it has met
its obligations.
Article 50
Management of the Fund
1. The accounts of the Fund shall be maintained separately from all other
accounts of the Organization.
2. The costs of administering the Fund shall be paid from the accounts of the
Fund and shall be approved by the Council separately from its administrative
budget referred to in article 24.
3. The provisions of article 26 shall govern the audit of the accounts of the
Fund. The Council or the Executive Director may arrange for a more frequent
audit of these accounts if it is deemed necessary.
4. The Council, after consulting the Executive Director, shall, by special
vote, appoint the Manager of the Fund on such terms as the Council shall fix.
The Manager shall be subject to the provisions of article 22, paragraphs 4 and
5. He shall, within the provisions of this chapter and in conformity with such
rules of procedure, regulations and directives as may be adopted by the
Council under article 49, paragraph 3, be responsible to the Executive
Director for the management of the Fund.
Article 51
Contributions to the Fund
1. There shall be a contribution to the Fund in accordance with this article
on free market sugar exported from, or imported into, the customs territory of
Members. The rate of contribution shall be 0.28 cent per pound for raw sugar
tel quel; this rate shall be adjusted for white and refined sugar by such
factor or factors as shall be established in the rules of procedure. At any
time after 1 January 1979, the Council may, by special vote, increase or
decrease the rate of contribution, provided that the capacity of the Fund to
cover the level of payments required under this chapter is maintained and
provided further that, if it is increased, such rate shall not exceed 0.33
cent per pound; the Council may, by special vote, suspend the contribution if
it is no longer required to meet the level of payments under this chapter.
2. Subject to paragraph 4 of this article, no Member shall permit the import
of free market sugar into its customs territory, unless such import is
accompanied by a certificate authorized by the Council to the effect that the
appropriate contribution has been paid to the Fund.
3. Subject to paragraph 5 of this article, no exporting Member and no
importing Member with an export entitlement to the free market under chapter
IX shall permit the export from its customs territory of free market sugar
which is not demonstrably destined for import by Members, unless such export
is accompanied by a certificate authorized by the Council to the effect that
the appropriate contribution has been paid to the Fund.
4. Imports for internal consumption by importing Members in the category of
the least developed countries, as defined by the United Nations, shall not be
subject to the payment of a contribution, provided that these Members apply
the certification procedure in paragraph 2 of this article in such a manner as
shall be prescribed in the rules of procedure.
5. The Council shall provide in its rules of procedure for the issuance of
standard certificates of contribution, and for the collection of the
appropriate contribution, through authorized agents. Such rules shall also
ensure that the contribution is not paid twice in respect of any quantity of
sugar. These rules take into account commercial practices of the sugar trade
and shall be designed to avoid encumbering the movement of sugar while
ensuring the integrity of the contribution system. They shall also contain
provisions covering the export, or import, of free market sugar through
transit countries, whether or not refined therein.
6. Contributions shall be paid in freely convertible currencies and shall be
exempt from foreign-exchange restrictions.
Article 52
Additional resources of the Fund
1. The Council may accept unconditional voluntary contributions to the Fund
from any source.
2. For the purpose of providing the Fund with bridging finance to cover
short-term discrepancies between receipts and payments, the Council may, by
special vote, decide to borrow from private sources, governments, or
international financial institutions, provided that no Member shall be liable
for such obligations of the Organization.
3. The Council may, by special vote, decide to take appropriate steps to
protect and if possible increase the resources of the Fund which are
temporarily surplus to those needed for the purposes of this chapter, provided
that all reasonable steps shall be taken to avoid the risk of loss of
resources and to ensure that there will be adequate liquidity for the purposes
of this chapter.
Article 53
Lending by the Fund
1. Subject to the provisions of this chapter, the Fund shall lend, free of
interest, to each exporting Member holding special stocks pursuant to the
requirements of article 46 an amount equal to 1.50 cents per pound per year on
stocks so held in conformity with their minimum obligations under paragraph 5
of that article. If the Fund has adequate financial reserves, the Council may
also, by special vote, authorize the Fund to make loans in respect of special
stocks held by Members in excess of their minimum obligations under article
46, paragraph 5, first within their total obligations under paragraph 3 of
that article and secondly under paragraph 4 of that article. Where stocks are
held for a period of less than one year, the amount lent shall be in
proportion to the period within the year during which stocks are held. Loans
from the Fund shall be made on a quarterly basis, beginning with the first
quarter after the coming into effect of this chapter, and, if the financial
reserves of the Fund so allow, shall apply retroactively in respect of such
special stocks as may have been constituted under article 46 prior to the
provisions of this chapter coming into effect. These loans shall be used by
the exporting Members concerned for the exclusive purpose of helping to defray
the costs of holding stocks under article 46. The Council may, by special
vote, adjust the rate of lending, having regard to the limitations imposed
under article 51, paragraph 1.
2. No loans from the Fund shall be made to any exporting Member unless such
Member provides to the Fund a certificate of existence, issued by the
Government of such Member, for the sugar accumulated in accordance with
article 46, paragraph 5, and has agreed to verification of those stocks
pursuant to article 47.
3. Exporting Members shall repay to the Fund the amount of any loans
attributable to sugar required to be made available for purchase from stocks
pursuant to article 44, paragraph 7, within 90 days of the date such sugar is
so required to be made available. Exporting Members which fail to make such
repayments shall be subject to the same provisions as those Members which fail
to pay their contributions to the administrative budget of the Organization
under article 25, paragraphs 2 and 3.
4. No exporting Member shall be eligible for loans from the Fund during any
period in which it is not in compliance with its obligations under article 46,
article 51, and paragraph 3 of this article.
5. All loans and repayments shall be made in freely convertible currencies and
shall be exempt from foreign-exchange restrictions.
Article 54
Procedures on termination of this Agreement
1. On termination of this Agreement, the contribution referred to in article
51 shall cease to be due and the Fund shall cease to make any further loans.
Contributions paid prior to the termination of this Agreement and received
thereafter shall be added to the assets of the Fund.
2. All loans outstanding from the Fund which were not due pursuant to article
53 prior to termination of this Agreement shall not be subject to repayment.
3. Any liabilities of the Fund shall be met from the remaining assets of the
Fund. If these assets are insufficient to meet outstanding liabilities,
Members shall be assessed the additional amounts necessary to meet these
liabilities of the Fund, except for those excluded under the provisions of
article 52, paragraph 2, in proportion to their shares of the aggregate of
total free market net imports and net exports by Members while this chapter
was in effect, unless the Council decides otherwise by special vote. Any such
assessments shall be added to the contributions of the Members concerned to
the administrative budget of the Organization referred to in article 24.
4. Subject to the provisions of paragraph 5 of this article, the Council
shall, by special vote, decide upon the disposition of any assets of the Fund
remaining after payment of all liabilities. Such disposition may include the
transfer of such remaining assets, in whole or in part, to a comparable fund
under a successor international sugar agreement.
5. In the event of a transfer of assets as referred to in paragraph 4 of this
article, any Member shall be entitled to receive that share of the assets of
the Fund remaining after payment of all liabilities which corresponds to its
share of the aggregate of total free market net imports and net exports by
Members during the period when this chapter was in effect, less any amount due
from that Member under article 53 prior to the termination of this Agreement;
any Member desiring to avail itself of this provision shall so inform the
Council within three months of the decision of the Council under paragraph 4
of this article. Similarly, any Member which does not become a Party to the
successor agreement referred to in that paragraph within six months of the
entry into force of that agreement shall be entitled to its share of any
assets of the Fund which may have been transferred to the comparable fund
referred to in paragraph 4 of this article.
Article 55
Relationship with a Common Fund
At such time as a Common Fund is established within the framework of the
UNCTAD Integrated Program for Commodities, the Council may consider and make
appropriate recommendations regarding measures through which the Organization
may take full advantage of any financial arrangements available under such a
Common Fund.
CHAPTER XIII-ADDITIONAL OBLIGATIONS AND UNDERTAKINGS OF MEMBERS
Article 56
Undertakings by Members and exports by importing Members
1. Members undertake to adopt such measures as are necessary to enable them to
fulfil their obligations under this Agreement and fully to co-operate with one
another in securing the attainment of the objectives of this Agreement.
2. Importing Members undertake to ensure that, except as provided for in
article 38, and in respect of sugar en admission temporaire, their total
exports of sugar shall not exceed their total imports of sugar in the same
quota year.
Article 57
Imports from non-Members
1. Each Member, for each quota year, except as otherwise provided in
paragraphs 2 and 3 of this article, shall limit its maximum imports of sugar
from non-Member countries as a group to the following percentages of the
average annual quantity which it imported from such countries as a group over
the four-year period 1973-1976, disregarding the year of lowest imports from
such countries as a group:
(a) 75 per cent, if, and as long as, the prevailing price is above 11
cents per pound, subject to subparagraph 3 (a) of this article;
(b) 55 per cent, if, and as long as, the prevailing price is below 11
cents per pound.
2. The limitations in paragraph 1 of this article shall not apply to imports
from a country or territory which was a party to the International Sugar
Agreement, 1968, but which cannot become a Party to this Agreement in
accordance with articles 72, 73, 74 or 76. However, each member shall limit
its imports from such non-Members in each quota year to an amount equal to its
average annual imports from those non-Members in 1966-1968, 1971-1973 or
1974-1976, whichever period for the Member concerned results in the highest
quantity. If the Council determines that any non-Member covered by this
paragraph is conducting its sugar trade in a manner which interferes with the
objectives of this Agreement, it may, by special vote, require the Members
concerned to apply to their annual imports from such non-Member the percentage
limitation in subparagraph 1 (a) of this article.
3. The limitations in paragraphs 1 and 2 of this article shall not apply:
(a) whenever the prevailing price is above 21 cents per pound; the
limitations in subparagraph 1 (a) and paragraph 2 of this article
shall be reinstated when the prevailing price falls below 19 cents per
pound, unless the Council decides otherwise;
(b) to the importation of quantities previously purchased in excess of the
relevant limitations in paragraphs 1 or 2 of this article, provided
that such quantities are for shipment no more than 90 days after the
relevant limitations were re-established, and provided further that
these quantities are notified to the Executive Director in accordance
with paragraph 4 of this article.
4. Purchases from non-Members which were arranged during the period when the
limitations in paragraphs 1 and 2 of this article were not applicable for
shipment after the date when such limitations were re-established shall be
notified by the Member concerned to the Executive Director in accordance with
such rules of procedure as may be established by the Council.
5. Any Member which considers that in a particular quota year it cannot fully
carry out its obligations under this article or that these obligations damage,
or threaten to damage, its re-export trade in sugar or export trade in
sugar-containing products may be relieved of its obligations under paragraph 1
of this article if, and to the extent that, the Council so decides by special
vote. The Council shall, in accordance with the provisions of article 69,
define in its rules of procedure the circumstances in which and the conditions
under which Members may be relieved of their obligations under paragraph 1 of
this article, having regard in particular to exceptional and urgent cases
arising in the course of customary trade.
6. The obligations established in the preceding paragraphs of this article
shall not derogate from any conflicting bilateral or multilateral obligations
which Members have entered into with non-Member countries prior to the entry
into force of this Agreement, provided that any Member which has such
conflicting obligations shall carry them out in such a way as to minimize any
conflict with the obligations established in the preceding paragraphs. Such
Member shall take steps as soon as possible to bring its obligations into
harmony with the provisions of this article and shall inform the Council of
the details of the conflicting obligations as well as of the steps taken to
minimize or eliminate the conflict.
7. The Council shall provide in its rules of procedure for the notification by
Members of their imports from non-Members and for the presentation by the
Executive Director of periodic reports and of a comprehensive report after the
completion of each quota year, showing, inter alia, for the period covered in
each report:
(a) the quantities of sugar exported by individual non-Members to all
destinations; and
(b) the quantites imported by individual Members from non-Members.
8. (a) Any import by a Member under this article in excess of the quantities
which it is permitted to import thereunder shall be deducted from the quantity
which such Member would otherwise be permitted to import under this article in
the immediately following quota year, unless the Council decides otherwise.
(b) Where deductions under the provisions of subparagraph (a) of this
paragraph are to be made, but cannot be fully applied because the
quantity to be deducted exceeds the annual entitlement of the Member
concerned, the Council shall have recourse to article 71.
9. Any Member which considers that serious prejudice to its interests under
this Agreement is caused or threatened by subsidized exports from a non-Member
may refer the matter to the Council, which shall examine it in the light of
all relevant circumstances and may make recommendations designed to limit the
effects of that subsidization on that Member.
10. The limitations in paragraph 1 of this article shall not apply to
quantities of refined sugar imported from a non-Member which itself imports at
least an equivalent quantity of free market raw sugar from Members. The
council shall establish specific rules for the conditions under which this
paragraph shall apply.
Article 58
Access to markets
Every developed importing Member undertakes to ensure access to its market for
imports of sugar from exporting Members and shall adopt such measures
compatible with its domestic legislation as it deems appropriate to its own
circumstances to ensure such access to its market.
Article 59
Importers' co-operation in defence of the price
Should the Council deem it desirable, it shall make recommendations to Members
which import sugar regarding ways and means of assisting Members which export
sugar in their endeavour to ensure that sales take place at prices consistent
with the appropriate provisions of this Agreement.
Article 60
Assurances in respect of supplies
1. Members which export sugar undertake that they will offer to Members which
import sugar, in a manner consistent with their traditional trading patterns
and, if they are exporting Members, within such limits as may be imposed by
their quotas in effect or export entitlements, when these are operative,
supplies of sugar sufficient to enable Members which import sugar to meet
their import requirements from the free market.
2. Members which export sugar shall at all times give priority on commercially
equal terms to Members which import sugar, as against non-Members, in all
offers of sale to the free market.
3. No Member which exports sugar shall sell sugar on the free market to
non-Members on terms commercially more favourable than those which it would be
prepared to offer at the same time to Members which import sugar from the free
market, taking into account normal trade practices and traditional trade
arrangements.
4. Nothing in this article shall prevent any Member which exports sugar from
giving more favourable commercial terms to developing importing Members.
CHAPTER XIV-PRICES
Article 61
Daily and prevailing prices
1. For the purposes of this Agreement, the daily price of sugar shall be:
(a) the average of the spot price under the New York Coffee and Sugar
Exchange Sugar Contract No. 11 and the London Sugar Market daily price
for Contract No. 2, after conversion of the latter to United States
cents per pound free on board and stowed Caribbean port, on the basis
of the appropriate current market rate of exchange in London as shall
be specified in the rules of procedure, which shall also specify such
other relevant factors as should be taken into account when
calculating the price; or
(b) the lower of the two prices referred to in subparagraph (a) of this
paragraph plus five points, if the difference between the two prices
is more than ten points.
2. (a) For the purposes of this Agreement, the prevailing price on any market
day shall be deemed to be above (or below) a specific level if it is, and
remains, above (or below) the specified level for five consecutive market
days.
(b) The prevailing price shall be deemed to remain above (or below) the
stated figure until the conditions in subparagraph (a) of this
paragraph are met for it to be below (or above) that stated figure.
(c) When the conditions in subparagraph (a) of this paragraph are met for
a provision of this Agreement to become applicable, that provision
shall become operative as follows:
(i) if the provision allows for a discretion of the Council to
decide on a course of action different from that prescribed in
the provision-on the third market day following that on which
those conditions are met;
(ii) in all other cases-on the market day following that on which
those conditions are met.
3. In the event of either of the prices referred to in subparagraph 1 (a) of
this article not being available or not representing the price at which sugar
is being sold basis 96 degrees polarization on the free market, the Council
shall, by special vote, decide to use such other criteria as it deems fit.
Such criteria shall be based on spot quotations on recognized sugar exchanges,
taking into consideration the respective volume of trade and adequacy of
reflection of world prices by such exchanges.
Article 62
Adjustment of prices
1. At its second regular session each quota year the Council shall review the
prices referred to in this Agreement.
2. In conducting this review the Council shall take into consideration all
factors which might affect the achievement of the objectives of this
Agreement, including, inter alia, the effect of inflation or deflation;
variations in exchange rates; the trend in the prices, consumption,
production, trade and stocks of sugar and alternative sweetners; and the
influence on sugar prices of changes in the world economic situation or
monetary system. Relevant data necessary for conducting this review shall be
provided in accordance with paragraph 4 of this article.
3. In the light of this review, the Council may, by special vote, make such
adjustments in the prices applicable to the next quota year as it deems
necessary to maintain the objectives of this Agreement, provided that the
difference between the minimum and maximum prices shall remain 10 cents per
pound.
4. A Price Review Committee, comprising four exporting and four importing
Members under the chairmanship of the Executive Director, shall be established
by the Council. The terms of reference of the Committee shall be as follows:
(a) to collect and assess data on:
(i) prices, consumption, production, trade and stocks of sugar and
alternative sweeteners;
(ii) the influence on sugar prices of changes in the world economic
situation or monetary system, including the effect of world
inflation or deflation and variations in exchange rates;
(iii) any other factors which might affect the achievement of the
objectives of this Agreement;
(b) to submit its findings to the Council in advance of its second regular
session each quota year.
5. In exceptional circumstances resulting from upheavals in the international
economic or monetary situation, or whenever a major change in the value of the
United States dollar occurs, the Price Review Committee shall meet to consider
the situation. In the light of its examination, the Committee may, if it deems
appropriate, request the convening of a special session of the Council to
consider what action, if any, should be taken, including any necessary
adjustment in the prices. Any decision by the Council to adjust prices under
this paragraph shall be taken by special vote and shall take effect forthwith.
6. The provisions of article 82 shall not be applicable to the adjustment of
prices under this article.
CHAPTER XV-MEASURES LINKED WITH PRODUCTION AND CONSUMPTION
Article 63
Labour standards
Members shall ensure that fair labour standards are maintained in their
respective sugar industries and, as far as possible, shall endeavour to
improve the standard of living of agricultural and industrial workers in the
various branches of sugar production, and of growers of sugar cane and sugar
beet.
Article 64
Support measures
1. Members recognize that subsidies on the production or marketing of sugar
which operate directly or indirectly to increase exports of sugar or to reduce
imports of sugar may endanger the fulfilment of the objectives of this
Agreement.
2. If any Member grants or maintains any such subsidy, including any form or
income or price support, it shall, during each quota year, notify the Council
in writing of the extent and nature of the subsidization and of the
circumstances making the subsidization necessary. The notification referred to
in this paragraph shall be given at the request of the Council, which request
shall be made at least once each quota year in such form and at such time as
may be provided in the rules of procedure of the Council.
3. In any case in which a Member considers that serious prejudice to its
interests under this Agreement is caused or threatened by such subsidization,
the Member granting the subsidy shall, upon request, discuss with the other
Member or Members concerned, or with the Council, the possibility of limiting
the subsidization. In any case in which the matter is brought before the
Council, the Council may examine the case with the Members concerned and make
such recommendations as it deems appropriate, bearing in mind the particular
circumstances of the Member granting the subsidies.
Article 65
Measures to encourage consumption
1. Each Member shall take such action as it deems appropriate to encourage the
consumption of sugar and to remove any obstacles which restrict the growth of
sugar consumption, having regard to the effects on sugar consumption of
customs duties, internal taxes and fiscal charges and quantitative or other
controls, and to all other important factors relevant to an assessment of the
situation.
2. Each Member shall periodically inform the Council of the measures it has
adopted under paragraph 1 of this article and of their effects.
3. The Council shall establish a Sugar Consumption Committee composed of both
exporting and importing Members.
4. The Committee shall study, inter alia, the following:
(a) the effects on sugar consumption of the use of any form of substitutes
for sugar, including both natural and artificial sweeteners;
(b) the relative tax treatment of sugar and other sweeteners or raw
materials for the production of the latter;
(c) the effects on the consumption of sugar in different countries of (i)
taxation and restrictive measures, (ii) economic conditions and, in
particular, balance-of-payments difficulties, and (iii) climatic and
other conditions;
(d) means of promoting consumption, particularly in countries where per
capita consumption is low;
(e) ways and means of co-operating with agencies concerned with the
expansion of consumption of sugar and related foodstuffs;
(f) research into new uses of sugar, its by-products and the plants from
which it is derived; and shall submit its reports to the Council.
CHAPTER XVI-INFORMATION, STUDIES AND ANNUAL REVIEW
Article 66
Information and studies
1. The Organization shall act as a centre for the collection and publication
of:
(a) statistical information on world production, prices, exports and
imports, consumption and stocks of sugar; and
(b) in so far as is considered appropriate, technical information on the
cultivation and processing of sugar beet or sugar cane and on the
utilization of sugar.
2. Members undertake to make available and to supply within the time which may
be prescribed in the rules of procedure all such statistics and information as
may be identified in those rules as necessary to enable the Organization to
discharge its functions under this Agreement. Should this become necessary,
the Organization shall use such relevant information as may be available to it
from other sources.
3. The information to be supplied by Members under paragraph 2 of this article
shall, if the Council so requires, include regular statistical reports on
sugar production, consumption, stocks, prices and taxes. Members shall furnish
the information requested in as detailed a manner as is practicable. No
information shall be published by the organization which might serve to
identify the operations of persons or companies producing, processing or
marketing sugar.
4. If a Member fails to supply, or finds difficulty in supplying, within a
reasonable time, statistical and other information required for the proper
functioning of the Organization, the Council may require the Member concerned
to explain the reasons therefor. If it is found that technical assistance is
needed in the matter, the Council may take any necessary measures.
5. The Organization shall at appropriate times, but not less than twice a
year, publish estimates of production and consumption of sugar for the current
quota year.
6. The Oganization may, to the extent it considers necessary, promote or
conduct studies of the economics of sugar production and distribution,
including trends and projections, the impact of governmental measures in
exporting and importing countries on the production and consumption of sugar,
the opportunities for expansion of sugar consumption for traditional and
possible new uses, and the effects of the operation of this Agreement on
exporters and importers of sugar, including their terms of trade. In the
promotion of such studies and research, the Organization may co-operate with
international organizations and research institutions.
Article 67
Reporting on exports, imports and stocks
1. The Council shall, in its rules of procedure, provide for the maintenance
by the Executive Director of a record of:
(a) the global quota and the quotas in effect, and any subsequent changes
therein, throughout a quota year;
(b) exports by the exporting Members concerned against their quotas in
effect or export entitlements, and imports by such members;
(c) imports and exports by importing Members.
2. The rules shall also provide for the periodic reporting by Members of the
information referred to in subparagraphs 1 (b) and (c) of this article, and
for the publication of that information by the Organization, together with
such other data as the Council may prescribe.
3. The Council may, at any time, adopt measures to ascertain the quantities of
sugar exported or imported by Members and by non-Members. Such measures may
include the issuance of certificates of origin and other export documents.
4. Each exporting Member holding special stocks pursuant to article 46 shall
report to the Executive Director the quantities of sugar held as special
stocks on 1 January, 1 April, 1 July and 1 October in each quota year not more
than 30 calendar days after these dates.
Article 68
Annual review
1. The Council shall as far as possible in each quota year review the
operation of this Agreement in the light of the objectives set out in article
1 and the effects of this Agreement on the market and on the economies of
individual countries, and in particular of the developing countries, in the
preceding quota year. The Council shall then formulate recommendations to
Members regarding ways and means of improving the functioning of this
Agreement.
2. The report of each annual review shall be published in such form and manner
as the Council may decide.
CHAPTER XVII-RELIEF FROM OBLIGATIONS
Article 69
Relief from obligations
1. Where it is necessary on account of exceptional circumstances or emergency
or force majeure not expressly provided for in this Agreement, the Council
may, by special vote, relieve a Member of an obligation under this Agreement
if it is satisfied by an explanation from that Member that the implementation
of that obligation constitutes a serious hardship for, or imposes an
inequitable burden on, such Member.
2. The Council, in granting relief to a Member under the terms of paragraph 1
of this article, shall state explicity the terms and conditions on which, and
the period for which, the Member is relieved of such obligation, and the
reasons for which the relief is granted.
3. The existence in the country of a Member, in one or more years, of
exportable sugar in excess of that Member's total permissible exports under
chapters IX and X of this Agreement, after providing for its domestic
consumption and stocks, shall not constitute the sole basis for application to
the Council for a waiver of obligations. For exporting Members listed in annex
I, such additional export authorizations as may be granted under this article
shall form part of the quota in effect of the Member concerned but shall not
be subject to any subsequent adjustments under chapter X. Additional export
authorizations granted under this article shall not be taken into account when
computing export performance for the purposes of article 34, subparagraph 2
(c).
CHAPTER XVIII-DISPUTES AND COMPLAINTS
Article 70
Disputes
1. Any dispute concerning the interpretation or application of this Agreement
which is not settled among the Members involved shall, at the request of any
Member party to the dispute, be referred to the Council for decision.
2. In any case where a dispute has been referred to the Council under
paragraph 1 of this article, a majority of Members holding not less than one
third of the total votes may require the Council, after discussion, to seek
the opinion of an advisory panel constituted under paragraph 3 of this article
on the issue in dispute before giving its decision.
3. (a) Unless the Council decides otherwise by special vote, the panel shall
consist of five persons as follows:
(i) two persons, one having wide experience in matters of the kind
in dispute and the other having legal standing and experience,
nominated by the exporting Members;
(ii) two such persons nominated by the importing Members; and
(iii) a Chairman selected unanimously by the four persons nominated
under (i) and (ii) above or, if they fail to agree, by the
Chairman of the Council.
(b) Nationals of Members and of non-Members shall be eligible to serve on
the advisory panel.
(c) Persons appointed to the advisory panel shall act in their personal
capacities and without instructions from any Government.
(d) The expenses of the advisory panel shall be paid by the Organization.
4. The opinion of the advisory panel and the reasons therefor shall be
submitted to the Council, which, after considering all the relevant
information, shall decide the dispute by special vote.
Article 71 Action by the Council on complaints and on non-fulfilment of
obligations by
Members
1. Any complaint that a Member has failed to fulfil its obligations under this
Agreement shall, at the request of the Member making the complaint, be
referred to the Council, which, subject to prior consultation with the Members
concerned, shall take a decision on the matter.
2. Any decision by the Council that a Member is in breach of its obligations
under this Agreement shall specify the nature of the breach.
3. Whenever the Council, whether as the result of a complaint or otherwise,
finds that a Member has committed a breach of this Agreement, it may, without
prejudice to such other measures as are specifically provided for in other
articles of this Agreement, by special vote:
(a) suspend that Member's voting rights in the Council and in the
Executive Committee; and, if it deems it necessary,
(b) suspend further rights of such Member, including that of being
eligible for, or of holding office in, the Council or in any of its
committees until it has fulfilled its obligations; or, if such breach
significantly impairs the operation of this Agreement,
(c) take action under article 80.
CHAPTER XIX-FINAL PROVISIONS
Article 72
Signature
This Agreement shall be open for signature at United Nations Headquarters from
28 October until 31 December 1977 by any Government invited to the United
Nations Sugar Conference, 1977.
Article 73
Ratification, acceptance and approval
1. This Agreement shall be subject to ratification, acceptance or approval by
the signatory Governments in accordance with their respective constitutional
procedures.
2. Instruments of ratification, acceptance or approval shall be deposited with
the Secretary General of the United Nations not later than 31 December 1977.
The Council under the International Sugar Agreement, 1973, as extended, or the
Council under this Agreement may, however, grant extensions of time to
signatory Governments which are unable to deposit their instruments by that
date.
Article 74
Notification of provisional application
1. A signatory Government which intends to ratify, accept or approve this
Agreement, or a Government for which the Council has established conditions
for accession but which has not yet been able to deposit its instrument, may,
at any time, notify the Secretary-General of the United Nations that it will
apply this Agreement provisionally either when it enters into force in
accordance with article 75 or, if it is already in force, at a specified date.
2. A Government which has notified under paragraph 1 of this article that it
will apply this Agreement either when it enters into force or, if it is
already in force, at a specified date shall, from that time, be a provisional
Member until it deposits its instrument of ratification, acceptance, approval
or accession and thus becomes a Member.
Article 75
Entry into force
1. This Agreement shall enter into force definitively on 1 January 1978, or on
any date within six months thereafter, if by that date Governments holding 55
per cent of the votes of the exporting countries and 65 per cent of the votes
of the importing countries in accordance with the distribution established in
annex V have deposited their instruments of ratification, acceptance, approval
or accession with the Secretary-General of the United Nations. It shall also
enter into force definitively at any time thereafter if it is provisionally in
force and these percentage requirements are satisfied by the deposit of
instruments of ratification, acceptance, approval or accession.
2. This Agreement shall enter into force provisionally on 1 January 1978, or
on any date within two months thereafter, if by that date Governments
satisfying the percentage requirements of paragraph 1 of this article have
deposited their instruments of ratification, acceptance, approval or
accession, or have notified under article 74 that they will apply this
Agreement provisionally.
3. Governments which have deposited instruments of ratification, acceptance,
approval or accession, or have deposited notifications of provisional
application, by 1 June 1978 or such later date as may be determined by the
Council, shall apply as from 1 January 1978 for the first quota year the
provisions of this Agreement relating to the regulation of exports, special
stocks, and imports from non-Members, except to the extent that such
application is the case of an importing Member was not possible by reason of
the lack of domestic legal authority, prior to such Government becoming a
Member or a provisional Member.
4. On 1 January 1978, or on any date within 12 months thereafter, and at the
end of each subsequent six-month period during which this Agreement is
provisionally in force, the Governments of any of those countries which have
deposited instruments of ratification, acceptance, approval or accession may
decide to put this Agreement definitely into force among themselves in whole
or in part. These Governments, and Governments which have deposited
notifications of provisional application, may also decide that this Agreement
shall enter into force provisionally, if it is not already provisionally in
force, or continue provisionally in force, or lapse.
Article 76
Accession
1. This Agreement shall be open to accession by the Governments of all States
upon conditions established by the Council. Accession shall be effected by the
deposit of an instrument of accession with the Secretary-General of the United
Nations. Instruments of accession shall state that the Government accepts all
the conditions established by the Council.
2. In establishing the conditions referred to in paragraph 1 of this article,
the Council may, by special vote, establish a basic export tonnage, or export
entitlement, which shall be deemed to be listed in annex I or annex II, as
appropriate.
(a) for a country which is not so listed;
(b) for a country which is so listed but does not accede within twelve
months of the date of entry into force of this Agreement; provided,
however, that, if such country is listed in annex I and it accedes
within twelve months of the date of entry into force of this
Agreement, the basic export tonnage figure specified in that annex for
that country shall be applicable to it.
3. In the case of accession by the EEC, the conditions of paragraph 2 of this
article shall not necessarily apply. The Council may instead, by special vote
establish such special conditions, including the establishment of the relevant
voting entitlement, as may be mutually acceptable, having regard to the
objectives of this Agreement.
4. The Council under the International Sugar Agreement, 1973, as extended,
may, pending the entry into force of this Agreement, establish the conditions
referred to in paragraph 1 of this article, subject to confirmation by the
Council under this Agreement.
Article 77
Territorial application
1. Any Government may, at the time of signature or deposit of an instrument of
ratification, acceptance, approval or accession or at any time thereafter, by
notification to the Secretary-General of the United Nations, declare that this
Agreement:
(a) shall also extend to any of the developing territories for whose
international relations it is for the time being ultimately
responsible and which has notified the Government concerned that it
wishes to participate in this Agreement; or
(b) shall extend only to any of the developing territories for whose
international relations it is for the time being ultimately
responsible and which has notified the Government concerned that it
wishes to participate in this Agreement; and this Agreement shall
extend to the territories named therein from the date of such
notification if this Agreement has already entered into force for that
Government or, if the notification has been made prior thereto, on the
date on which this Agreement enters into force for that Government.
Any Government which has made a notification under (b) above may
subsequently withdraw that notification and may make a notification or
notifications to the Secretary-General of the United Nations under (a)
above.
2. When a territory to which this Agreement has been extended under paragraph
1 of this article subsequently assumes responsibility for its international
relations, the Government of that territory may, within 90 days after the
assumption of responsibility for its international relations, declare by
notification to the Secretary-General of the United Nations that it has
assumed the rights and obligations of a Contracting Party to this Agreement.
It shall, as from the date of such notification, become a Contracting Party to
this Agreement. If such Contracting Party is an exporting country and is not
listed in annex I or annex II, the Council shall, after consultation with such
Contracting Party, establish, by special vote, a basic export tonnage or
export entitlement for it which shall be deemed to be listed in annex I or
annex II, as appropriate. If such Contracting Party is listed in annex I or
annex II, its basic export tonnage or export entitlement, as the case may be,
shall be as specified therein.
3. Any Contracting Party which desires to exercise its rights under article 4
in respect of any of the territories for whose international relations it is
for the time being ultimately responsible may do so by making a notification
to that effect to the Secretary-General of the United Nations, either at the
time of the deposit of its instrument of ratification, acceptance, approval or
accession, or at any later time. If the territory which becomes a separate
Member is an exporting Member and is not listed in annex I or annex II, the
Council, after consultation with such Member, shall establish, by special
vote, a basic export tonnage or export entitlement for it which shall be
deemed to be listed in annex I or annex II, as appropriate. If such territory
is listed in annex I or annex II, its basic export tonnage or export
entitlement, as the case may be, shall be as specified therein.
4. Any Contracting Party which has made a notification under subparagraph 1
(a) or (b) of this article may, at any time thereafter by notification to the
Secretary-General of the United Nations, declare in accordance with the wishes
of the territory that this Agreement shall cease to extend to the territory
named in the notification, and this Agreement shall cease to extend to such
territory from the date of such notification.
5. A Contracting Party which has made a notification under subparagraph 1 (a)
or (b) of this article shall remain ultimately responsible for the performance
of obligations under this Agreement by territories which in accordance with
the provisions of this article and of article 4 are separate Members of the
Organization, unless and until such territories make a notification under
paragraph 2 of this article.
Article 78
Reservations
1. No reservations other than those mentioned in paragraphs 2, 3 and 4 of this
article may be made with regard to any of the provisions of this Agreement.
2. Any Government which was a Party to the International Sugar Agreement,
1973, as extended, with one or more reservations to the International Sugar
Agreement, 1968, or to the International Sugar Agreement, 1973, as extended,
may, on signature, ratification, acceptance, approval of, or accession to this
Agreement, make reservations similar in terms or in effect to those previous
reservations.
3. Any Government entitled to become a Party to this Agreement may, on
signature, ratification, acceptance, approval or accession, make reservations
which do not affect the economic functioning of this Agreement. Any dispute as
to whether a particular reservation comes within this paragraph shall be
settled in accordance with the procedure in article 70.
4. In any other instance where reservations are made, the Council shall
examine them and decide, by special vote, whether they are to be accepted and,
if so, under what conditions. Such reservations shall become effective only
after the Council has taken a decision on the matter. Such reservations shall
be deposited with the Secretary-General of the United Nations upon
notification of the decision of the Council.
Article 79
Withdrawal
1. Any Member may withdraw from this Agreement at any time after the entry
into force of this Agreement by giving written notice of withdrawal to the
Secretary-General of the United Nations. The Member shall simultaneously
inform the Council of the action it has taken.
2. Withdrawal under this article shall be effective 30 days after the receipt
of the notice by the Secretary-General of the United Nations.
Article 80
Exclusion
If the Council finds that any Member is in breach of its obligations under
this Agreement and decides further that such failure significantly impairs the
operation of this Agreement, it may, by special vote, exclude such Member from
the Organization. The Council shall immediately notify the Secretary-General
of the United Nations of any such decision. Ninety days after the date of the
Council's decision, that Member shall cease to be a Member of the
Organization.
Article 81
Settlement of accounts with withdrawing or excluded Members
1. The Council shall determine any settlement of accounts with a withdrawing
or excluded Member. The Organization shall retain any amounts already paid by
a withdrawing or excluded Member. Such Member shall be bound to pay any
amounts due from it to the Organization at the time the withdrawal or
exclusion becomes effective, and shall be bound to repay to the Fund
established under article 49 any loans which had been made to such withdrawing
or excluded Member; provided, however, that in the case of a Member which is
unable to accept an amendment and consequently ceases to participate in the
Organization under the provisions of article 82, paragraph 2, the Council may
determine any settlement of accounts which it finds equitable.
2. A Member which has withdrawn or been excluded from, or has otherwise ceased
to participate in, the Organization shall not be entitled to any share of the
proceeds of liquidation or the other assets of the Organization, nor to any
share of the assets of the Fund established under article 49; nor shall it be
burdened with any part of the deficit, if any, of the Organization or the Fund
upon termination of this agreement.
Article 82
Amendment
1. The Council may, by special vote, recommend an amendment of this Agreement
to the Parties. The Council may fix a time after which each Party shall notify
the Secretary-General of the United Nations of its acceptance of the
amendment. The amendment shall become effective 100 days after the
Secretary-General of the United Nations has received notifications of
acceptance from Parties holding at least 850 of the total votes of exporting
Members and representing at least three quarters of those Members and from
Parties holding at least 800 of the total votes of importing Members and
representing at least three quarteres of those Members, or on such later date
as the Council may have determined by special vote. The Council may fix a time
within which each Party shall notify the Secretary-General of the United
Nations of its acceptance of the amendment and, if the amendment has not
become effective by such time, it shall be considered withdrawn. The Council
shall provide the Secretary-General of the United Nations with the information
necessary to determine whether the notifications of acceptance received are
sufficient to make the amendment effective.
2. Any Member on behalf of which notification of acceptance of an amendment
has not been made by the date on which such amendment becomes effective shall
as of that date cease to participate in this Agreement, unless such Member has
satisfied the Council that acceptance could not be secured in time owing to
difficulties in completing its constitutional procedures, and the Council
decides to extend for such Member the period fixed for acceptance. Such Member
shall not be bound by the amendment before it has notified its acceptance
thereof.
Article 83
Duration, extension and termination
1. This Agreement shall remain in force until the end of the fifth quota year
after its entry into force, unless extended under paragraph 2 of this article
or terminated earlier under paragraph 3 of this article.
2. Before the end of the fifth quota year, the Council may, by special vote,
extend this Agreement for a period not exceeding two quota years. The Council
shall notify the Secretary-General of the United Nations of any such
extension. Notwithstanding the provisions of article 79, paragraph 2, a Member
which does not wish to participate in this Agreement as extended under this
article may withdraw from this Agreement at the end of the fifth quota year by
giving written notice of withdrawal to the Secretary-General of the United
Nations. Such Member shall inform the Council accordingly.
3. The Council may at any time decide, by special vote, to terminate this
Agreement with effect from such date and subject to such conditions as it may
determine. In that event the Council shall continue in being for such time as
may be required to carry out the liquidation of the Organization and shall
have such powers and exercise such functions as may be necessary for the
purposes.
Article 84
Transitional measures
1. Where in accordance with the International Sugar Agreement, 1973, as
extended, the consequences of anything done, to be done or omitted to be done
would, for the purposes of the operation of that Agreement, have taken effect
in a subsequent year, those consequences shall have the same effect under this
Agreement as if the provision of the 1973 Agreement, as extended, had
continued in effect for those purposes.
2. Notwithstanding the provisions of article 40, paragraph 1, and of paragraph
1 of this article, the global quota for the quota year 1978 shall be
established by the Council at its first session in 1978. Furthermore, the
administrative budget for 1978 shall be provisionally approved by the Council
under the International Sugar Agreement, 1973, as extended, at its last
regular session in 1977, subject to confirmation by the Council under this
Agreement at its first session in 1978.
Article 85
Authentic texts of this Agreement
The texts of this Agreement in the Chinese, English, French, Russian and
Spanish languages shall all be equally authentic. The originals shall be
deposited in the archives of the United Nations.
IN WITNESS WHEREOF the undersigned, having been duly authorized to this effect
by their respective Governments, have signed this Agreement on the dates
appearing opposite their signatures.
----------
ANNEX I
BASIC EXPORT TONNAGES AS ESTABLISHED UNDER ARTICLE 34, PARAGRAPH 1
'000 tonnes r.v.
Argentina . . . . . . . . . . . . . . . . . . . . . 450
Australia . . . . . . . . . . . . . . . . . . . . . 2,350
Austria . . . . . . . . . . . . . . . . . . . . . . 80
Bolivia . . . . . . . . . . . . . . . . . . . . . . 90
Brazil . . . . . . . . . . . . . . . . . . . . . . . 2,350
Colombia . . . . . . . . . . . . . . . . . . . . . . 75
Costa Rica . . . . . . . . . . . . . . . . . . . . . 105
Cuba . . . . . . . . . . . . . . . . . . . . . . . . 2,500
Czechoslovakia . . . . . . . . . . . . . . . . . . . 175
Dominican Republic . . . . . . . . . . . . . . . . . 1,100
Ecuador . . . . . . . . . . . . . . . . . . . . . . 80
El Salvador . . . . . . . . . . . . . . . . . . . . 145
Fiji . . . . . . . . . . . . . . . . . . . . . . . . 125
Guatemala . . . . . . . . . . . . . . . . . . . . . 300
Guyana . . . . . . . . . . . . . . . . . . . . . . . 145
Jamaica . . . . . . . . . . . . . . . . . . . . . . 130
Trinadad and Tobago . . . . . . . . . . . . . . . . 85
India . . . . . . . . . . . . . . . . . . . . . . . 825
Maritius . . . . . . . . . . . . . . . . . . . . . . 175
Mexico . . . . . . . . . . . . . . . . . . . . . . . 75
Mozambique . . . . . . . . . . . . . . . . . . . . . 100
Nicaragua . . . . . . . . . . . . . . . . . . . . . 125
Panama . . . . . . . . . . . . . . . . . . . . . . . 90
Peru . . . . . . . . . . . . . . . . . . . . . . . . 350
Philippines . . . . . . . . . . . . . . . . . . . . 1,400
Poland . . . . . . . . . . . . . . . . . . . . . . . 300
South Africa . . . . . . . . . . . . . . . . . . . . 875
Swaziland . . . . . . . . . . . . . . . . . . . . . 105
Thailand . . . . . . . . . . . . . . . . . . . . . . 1,200
----------
ANNEX II EXPORTING COUNTRIES AND TERRITORIES WITH AN ANNUAL EXPORT ENTITLEMENT
OF 70,000 TONNES Bangladesh Barbados Belize St. Kitts-Nevis-Anguilla Congo
Ethiopia Haiti Honduras Hungary Indonesia Madagascar Malawi Paraguay Romania
Sudan Turkey Uganda United Republic of Cameroon United Republic of Tanzania
Uruguay Venezuela Zambia
----------
ANNEX III
1. For the purposes of this Agreement, the provisions relating to developing
exporting Members shall apply to all exporting Members in:
(a) Latin America, including the Greater Caribbean area;
(b) Africa, except South Africa;
(c) Asia; and
(d) Oceania, except Australia; and to Romania.
2. The Members to which the provisions of this Agreement relating to
developing importing Members shall apply shall be determined by the Council in
the light of the importers' membership of this Agreement.
----------
ANNEX IV LEAST DEVELOPED COUNTRIES AS DEFINED BY THE UNITED NATIONS, AS AT 7
OCTOBER 1977 Afghanistan Bangladesh Benin Bhutan Botswana Burundi Central
African Empire Chad Democratic Yemen Ethiopia Gambia Guinea Haiti Lao People's
Democratic Republic Lesotho Malawi Maldives Mali Nepal Niger Rwanda Somalia
Sudan Uganda United Republic of Tanzania Upper Volta Western Samoa Yemen
----------
ANNEX V LISTS OF EXPORTING AND IMPORTING COUNTRIES AND TERRITORIES AND
ALLOCATION OF VOTES FOR THE PURPOSE OF ARTICLE 75
EXPORTERS
Argentina . . . . . . . . . . . . . . . . . . . . . 24
Australia . . . . . . . . . . . . . . . . . . . . . 81
Austria . . . . . . . . . . . . . . . . . . . . . . 6
Bangladesh . . . . . . . . . . . . . . . . . . . . . 5
Barbados . . . . . . . . . . . . . . . . . . . . . . 5
Belize . . . . . . . . . . . . . . . . . . . . . . . 5
Guyana . . . . . . . . . . . . . . . . . . . . . . . 7
Jamaica . . . . . . . . . . . . . . . . . . . . . . 7
St. Kitts-Nevis-Anguilla . . . . . . . . . . . . . . 5
Trinidad and Tobago . . . . . . . . . . . . . . . . 5
Bolivia . . . . . . . . . . . . . . . . . . . . . . 5
Brazil . . . . . . . . . . . . . . . . . . . . . . . 112
Colombia . . . . . . . . . . . . . . . . . . . . . . 11
Congo . . . . . . . . . . . . . . . . . . . . . . . 5
Costa Rica . . . . . . . . . . . . . . . . . . . . . 5
Cuba . . . . . . . . . . . . . . . . . . . . . . . . 118
Czechoslovakia . . . . . . . . . . . . . . . . . . . 11
Dominican Republic . . . . . . . . . . . . . . . . . 36
Ecuador . . . . . . . . . . . . . . . . . . . . . . 5
El Salvador . . . . . . . . . . . . . . . . . . . . 6
Ethiopia . . . . . . . . . . . . . . . . . . . . . . 5
European Economic Community . . . . . . . . . . . . 124
Fiji . . . . . . . . . . . . . . . . . . . . . . . . 6
Guatemala . . . . . . . . . . . . . . . . . . . . . 11
Haiti . . . . . . . . . . . . . . . . . . . . . . . 5
Honduras . . . . . . . . . . . . . . . . . . . . . . 5
Hungary . . . . . . . . . . . . . . . . . . . . . . 5
India . . . . . . . . . . . . . . . . . . . . . . . 63
Indonesia . . . . . . . . . . . . . . . . . . . . . 10
Madagascar . . . . . . . . . . . . . . . . . . . . . 5
Malawi . . . . . . . . . . . . . . . . . . . . . . . 5
Mauritius . . . . . . . . . . . . . . . . . . . . . 12
Mexico . . . . . . . . . . . . . . . . . . . . . . . 27
Mozambique . . . . . . . . . . . . . . . . . . . . . 5
Nicaragua . . . . . . . . . . . . . . . . . . . . . 5
Pakistan . . . . . . . . . . . . . . . . . . . . . . 6
Panama . . . . . . . . . . . . . . . . . . . . . . . 5
Paraguay . . . . . . . . . . . . . . . . . . . . . . 5
Peru . . . . . . . . . . . . . . . . . . . . . . . . 17
Philippines . . . . . . . . . . . . . . . . . . . . 58
Poland . . . . . . . . . . . . . . . . . . . . . . . 22
Romania . . . . . . . . . . . . . . . . . . . . . . 5
South Africa . . . . . . . . . . . . . . . . . . . . 38
Sudan . . . . . . . . . . . . . . . . . . . . . . . 5
Swaziland . . . . . . . . . . . . . . . . . . . . . 5
Thailand . . . . . . . . . . . . . . . . . . . . . . 39
Turkey . . . . . . . . . . . . . . . . . . . . . . . 8
Uganda . . . . . . . . . . . . . . . . . . . . . . . 5
United Republic of Cameroon . . . . . . . . . . . . 5
United Republic of Tanzania . . . . . . . . . . . . 5
Urguay . . . . . . . . . . . . . . . . . . . . . . . 5
Venezuela . . . . . . . . . . . . . . . . . . . . . 5
Zambia . . . . . . . . . . . . . . . . . . . . . . . 5
----
Total . . . . . . . . . . . . . . . . . . . . . . 1,000
----
IMPORTERS
Algeria . . . . . . . . . . . . . . . . . . . . . . 27
Bulgaria . . . . . . . . . . . . . . . . . . . . . . 12
Canada . . . . . . . . . . . . . . . . . . . . . . . 66
Chile . . . . . . . . . . . . . . . . . . . . . . . 9
Egypt . . . . . . . . . . . . . . . . . . . . . . . 12
Finland . . . . . . . . . . . . . . . . . . . . . . 9
German Democratic Republic . . . . . . . . . . . . . 5
Ghana . . . . . . . . . . . . . . . . . . . . . . . 5
Iraq . . . . . . . . . . . . . . . . . . . . . . . . 25
Israel . . . . . . . . . . . . . . . . . . . . . . . 11
Ivory Coast . . . . . . . . . . . . . . . . . . . . 5
Japan . . . . . . . . . . . . . . . . . . . . . . . 184
Kenya . . . . . . . . . . . . . . . . . . . . . . . 5
Libyan Arab Jamahiriya . . . . . . . . . . . . . . . 8
Malaysia . . . . . . . . . . . . . . . . . . . . . . 23
Morocco . . . . . . . . . . . . . . . . . . . . . . 19
New Zealand . . . . . . . . . . . . . . . . . . . . 12
Nigeria . . . . . . . . . . . . . . . . . . . . . . 10
Norway . . . . . . . . . . . . . . . . . . . . . . . 10
Portugal . . . . . . . . . . . . . . . . . . . . . . 21
Republic of Korea . . . . . . . . . . . . . . . . . 16
Singapore . . . . . . . . . . . . . . . . . . . . . 5
Somalia . . . . . . . . . . . . . . . . . . . . . . 5
Spain . . . . . . . . . . . . . . . . . . . . . . . 24
Sri Lanka . . . . . . . . . . . . . . . . . . . . . 5
Sweden . . . . . . . . . . . . . . . . . . . . . . . 6
Switzerland . . . . . . . . . . . . . . . . . . . . 14
Syrian Arab Republic . . . . . . . . . . . . . . . . 13
Tunisia . . . . . . . . . . . . . . . . . . . . . . 11
Union of Soviet Socialist Republics . . . . . . . . 105
United States of America . . . . . . . . . . . . . . 297
Upper Volta . . . . . . . . . . . . . . . . . . . . 5
Yugoslavia . . . . . . . . . . . . . . . . . . . . . 11
Zaire . . . . . . . . . . . . . . . . . . . . . . . 5
----
Total . . . . . . . . . . . . . . . . . . . . . . 1,000
---- (Here follow signatures on behalf of parties to the Agreement, including
Australia.)
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