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II SÉRIE-A — NÚMERO 20

interest accrued to a date designated in the offer, the bonds or other obligations guaranteed.

d) The Bank shall have power to determine any other terms and conditions of the guarantee.

Section 6 Special reserve

The amount of commissions received by the Bank under sections 4 and 5 of this article shall be set aside as a special reserve, which shall be kept available for meeting liabilities of the Bank in accordance with section 7 of this article. The special reserve shall be held in such liquid form, permitted under this Agreement, as the executive directors may decide.

Section 7

Methods of meeting liabilities of the Bank in case of defaults

In cases of default on loans made, participated in, or guaranteed by the Bank:

a) The Bank shall make such arrangements as may be feasible to adjust the obligations under the loans, including arrangements under or analogous to those provided in section 4, c), of this article;

b) The payments in discharge of the Bank's liabilities on borrowings or guarantees under section 1, a), if) and Hi), of this article shall be charged:

0 First, against the special reserve provided

in section 6 of this article; ¿0 Then, to the extent necessary and at the

discretion of the Bank, against the other

reserves, surplus and capital available to

the Bank;

c) Whenever necessary to meet contratual payments of interest, other charges or amortization on the Bank's own borrowings, or to meet the Bank's liabilities with respect to similar payments on loans guaranteed by it, the Bank may call an appropriate amount of the unpaid subscriptions of members in accordance with article ii, sections 5 and 7. Moreover, if it believes that a default may be of long duration, the Bank may call an additional amount of such unpaid subscriptions not to exceed in any one year one percent of the total subscriptions of the members for the following purposes:

0 To redeem prior to maturity, or otherwise discharge its liability on, all or part of the outstanding principal of any loan guaranteed by it in respect of which the debtor is in default; ii) To repurchase, or otherwise discharge its liability on, all or part of its own outstanding borrowings.

Section 8 Miscellaneous operations

In addition to the operations specified elsewhere in this Agreement, the Bank shall have the power:

0 To buy and sell securities it has issued and to buy and sell securities which it has guaranteed or in which it has invested, provide that the Bank shall obtain the approval of the member in whose territories the securities are to be bougth or sold;

ii) To guarantee securities in which it has invested for the purpose of facilitating their sale;

Hi) To borrow the currency of any member with the approval of that member;

iv) To buy and sell such other securities as the directors by a three-fourths majority of the total voting power may deem proper for the investment of all or part of the special reserve under section 6 of this article.

In exercising the powers conferred by this section, the Bank may deal with any person, partnership, association, corporation or other legal entity in the territories of any member.

Section 9 Warning to be placed on securities

Every security guaranteed or issued by the Bank shall bear on its face a conspicuous statement to the effect that it is not an obligation of any government unless expressly stated on the security.

Section 10 Political activity prohibited

The Bank and its officers shall not interfere in the political affairs of any member; nor shall they be influenced in their decisions by the political character of the member or members concerned. Only economic considerations shall be relevant to their decisions, and these considerations shall be weighed impartially in order to achieve the purposes stated in article i.

ARTICLE v Organization and management

Section 1 Structure of the Bank

The Bank shall have a board of governors, excutive directors, a president and such other officers and staff to perform such duties as the Bank may determine.

Section 2 Board of governors

a) All the powers of the Bank shall be vested in the board of governors consisting of one governor and one alternate appointed by each member in such manner as it may determine. Each governor and each alternate