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II SÉRIE — NÚMERO 72

m) The Council, by special majorily, determines dial the financial position of the Agency permits all or part of such amounts to be returned out of the Agency's revenues.

b) Any refund effected under this article to a member shall be made in freely usable currency in the proportion of the payments made by that member to the total amount paid pursuant to calls made prior to such refund.

c) The equivalent of amounts refunded under this article to a member shall become part of the callable capital obligations of the member under article 7, H).

CHAPTER III Operations Article 11

Covered risks

a) Subject to the provisions of sections b) and c) below, the Agency may guarantee eligible investments against a loss resulting from one or more of the following types of risk:

0 Currency transfer — any introduction attributable to the host government of restrictions on the transfer outside the host country of its currency into a freely usable currency or another currency acceptable to the holder of the guarantee, including a failure of the host government to act within e reasonable period of time on an application by such holder for such transfer,

it) Expropriation and similar measures — any legislative action or administrative action or omission attributable to the host government which has the effect of depriving the holder of a guarantee of his ownership or control of, or a substantial benefit from, his investment, with the exception of non-discriminatory measures of general application which governments normally take for the purpose of regulating economic activity in their territories;

Hi) Breach of contract — any repudiation or breach by the host government of a contact with the holder of a guarantee, when: a) the holder of a guarantee docs not have recourse to a judicial or arbitral forum to determine the claim of repudiation or breach; or b) a decision by such forum is not rendered within such reasonable period of time as shall be prescribed in the contracts of guarantee pursuant to the Agency's regulations; or c) such a decision cannot be enforced; and

iv) War and civil disturbance — any military action or civil disturbance in any territory of the host country to which this Convention shall be applicable as provided in article 66.

b) Upon the joint application of the investor and the host country, the Board, by special majorily, may approve Ihc extension of coverage under this article to specific noncommercial risks other than those referred to in section a) above, but in no case 10 the risk of devaluation or depreciation of currency.

c) Losses resulting from the following shall not be covered:

0 Any host government action or omission to which the holder of the guarantee has agreed or for which he has been responsible; and

ii) Any host government action or omission or any other event occurring before the conclusion of the contract of guarantee.

Article 12 Eligible investments

a) Eligible investments shall include equity interests, including medium or long-term loans made or guaranteed by holders of equity in the enterprise concerned, and such forms of direct investment as may be determined by the Board.

b) The Board, by special majorily, may extend eligibility to any other medium or long-term form of investment, except that loans other than those mentioned in section a) above may be eligible only if they arc related to a specific investment covered or to be convcred by the Agency.

c) Guarantees shall be restricted to investments the implementation of which begins subsequent to the registration of the application for the guarantee by the Agency. Such investments may include:

i) Any transfer of foreign exchange made to modernize, expand, or develop an existing investment; and

ii) The use of earnings from existing investments which could otherwise be transferred outside the host country.

d) In guaranteeing an investment, the Agency shall satisfy itself as lo:

i) The economic soundness of ihc investment and its contribution to the development of the host country;

ii) Compliance of the investment with the host country's laws and regulations;

Hi) Consistency of the invesunent wilh the declared development objectives and priorities of the host country; and

iv) The investment conditions in the host country, including the availability of fair and equitable treatment and legal protection for the investment.

Article 13

Eligible investors

a) Any natural person and any juridical person may be eligible to receive the Agency's garantcc provided that:

0 Such natural person is a national of a member other than the host country;

ii) Such juridical person is incorporated and has its principal place of business in a member or the majority of its capital is owned by a member or members or nationals thereof, provided that such member is not the host country in any of the above cases; and

Hi) Such juridical person, whether or not it is privately owned, operates on a commercial basis.