
From the U.S. Code Online via GPO Access
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[Laws in effect as of January 2, 2001]
[Document not affected by Public Laws enacted between
  January 2, 2001 and January 28, 2002]
[CITE: 22USC286l]

 
               TITLE 22--FOREIGN RELATIONS AND INTERCOURSE
 
           CHAPTER 7--INTERNATIONAL BUREAUS, CONGRESSES, ETC.
 
 SUBCHAPTER XV--INTERNATIONAL MONETARY FUND AND BANK FOR RECONSTRUCTION 
                             AND DEVELOPMENT
 
Sec. 286l. British loan; authorization to Secretary of the 
        Treasury to carry out agreement
        
    The Secretary of the Treasury, in consultation with the National 
Advisory Council on International Monetary and Financial Problems, is 
authorized to carry out the agreement dated December 6, 1945, between 
the United States and the United Kingdom which was transmitted by the 
President to the Congress on January 30, 1946, and the action of the 
Secretary of the Treasury in signing the agreement dated March 6, 1957, 
amending said agreement is approved.

(July 15, 1946, ch. 577, Sec. 1, 60 Stat. 535; Pub. L. 85-21, Apr. 20, 
1957, 71 Stat. 17.)

                       References in Text

    Agreement dated December 6, 1945, between the United States and the 
United Kingdom, referred to in text, is set out as a note below.

                          Codification

    Section was not enacted as a part of act July 31, 1945, ch. 339, 59 
Stat. 512, known as the Bretton Woods Agreements Act, which comprises 
this subchapter.


                               Amendments

    1957--Pub. L. 85-21 inserted ``, and the action of the Secretary of 
the Treasury in signing the agreement dated March 6, 1957, amending said 
agreement is approved''.

                         Delegation of Functions

    Functions of National Advisory Council on International Monetary and 
Financial Problems delegated to National Advisory Council on 
International Monetary and Financial Policies, see section 2(a) of Ex. 
Ord. No. 11269, Feb. 14, 1966, 31 F.R. 2813, set out as a note under 
section 286b of this title.


                                Purposes

    In defining the purposes of act July 15, 1946, sections 286l and 
286m of this title, Congress stated that:
    ``Whereas in the Bretton Woods Agreements Act [this subchapter] the 
Congress has declared it to be the policy of the United States `to seek 
to bring about further agreement and cooperation among nations and 
international bodies, as soon as possible, on ways and means which will 
best reduce obstacles to and restrictions upon international trade, 
eliminate unfair trade practices, promote mutually advantageous 
commercial relations, and otherwise facilitate the expansion and 
balanced growth of international trade and promote the stability of 
international economic relations'; and
    ``Whereas in further implementation of the purposes of the Bretton 
Woods Agreements, the Governments of the United States and the United 
Kingdom have negotiated an agreement dated December 6, 1945, designed to 
expedite the achievement of stable and orderly exchange arrangements, 
the prompt elimination of exchange restrictions and discriminations, and 
other objectives of the above-mentioned policy declared by the 
Congress.''


Financial Agreement Between the Governments of the United States and the 
                             United Kingdom

    It is hereby agreed between the Government of the United States of 
America and the Government of the United Kingdom of Great Britain and 
Northern Ireland as follows:
    1. Effective date of the agreement: The effective date of this 
Agreement shall be the date on which the Government of the United States 
notifies the Government of the United Kingdom that the Congress of the 
United States has made available the funds necessary to extend to the 
Government of the United Kingdom the line of credit in accordance with 
the provisions of this Agreement.
    2. Line of credit: The Government of the United States will extend 
to the Government of the United Kingdom a line of credit of 
$3,750,000,000 which may be drawn upon at any time between the effective 
date of this Agreement and December 31, 1951, inclusive.
    3. Purpose of the line of credit: The purpose of the line of credit 
is to facilitate purchases by the United Kingdom of goods and services 
in the United States, to assist the United Kingdom to meet transitional 
post-war deficits in its current balance of payments, to help the United 
Kingdom to maintain adequate reserves of gold and dollars, and to assist 
the Government of the United Kingdom to assume the obligations of 
multilateral trade, as defined in this and other agreements.
    4. Amortization and interest:
    (i) The amount of the line of credit drawn by December 31, 1951, 
shall be repaid in 50 annual installments beginning on December 31, 
1951, with interest at the rate of 2 percent per annum. Interest for the 
year 1951 shall be computed on the amount outstanding on December 31, 
1951, and for each year thereafter, interest shall be computed on the 
amount outstanding on January 1 of each such year.
    Forty-nine annual installments of principal repayments and interest 
shall be equal, calculated at the rate of $31,823,000 for each 
$1,000,000,000 of the line of credit drawn by December 31, 1951, and the 
fiftieth installment shall be at the rate of $31,840,736.65 for each 
such $1,000,000,000. Each installment shall consist of the full amount 
of the interest due and the remainder of the installment shall be the 
principal to be repaid in that year. Payments required by this section 
are subject to the provisions of section 5.
    (ii) The Government of the United Kingdom may accelerate repayment 
of the amount drawn under this line of credit.
    5. Deferment of annual installments.
    (i) In any calendar year after December 31, 1956, in which the 
Government of the United Kingdom advises the Government of the United 
States that it finds that a deferment is necessary in view of the 
present and prospective conditions of international exchange and the 
level of its gold and foreign exchange reserves, the Government of the 
United Kingdom may defer the payment of the annual installment for that 
year of principal repayment and interest specified under Section 4. Not 
more than seven (7) annual installments may be so deferred. The first of 
any such deferred installments shall be paid on December 31, 2001, and 
the others shall be paid annually thereafter, in order.
    (ii) In addition, the installment of interest in respect of the year 
1956 is hereby deferred, in lieu of any right of waiver hitherto 
existing. This installment shall be paid on December 31 of the year 
following that in which the last of all other installments, including 
installments deferred under the preceding paragraph, is due.
    (iii) Deferred installments shall bear interest at the rate of 2 
percent per annum, payable annually on December 31 of each year 
following that in which deferment occurs.
    (iv) Payment of deferred installments may be accelerated, in whole 
or in part, at the option of the Government of the United Kingdom. 
[Amended Mar. 6, 1957, eff. Apr. 25, 1957.]
    6. Relation of this line of credit to other obligations. The 
Government of the United Kingdom undertakes not to defer an installment 
under Section 5 of this Agreement in any year, unless it also defers the 
installment due in that year under the Financial Agreement between the 
Government of Canada and the Government of the United Kingdom, dated 
March 6, 1946. [Amended Mar. 6, 1957, eff. Apr. 25, 1957.]
    7. Sterling area exchange arrangements: The Government of the United 
Kingdom will complete arrangements as early as practicable and in any 
case not later than one year after the effective date of this Agreement, 
unless in exceptional cases a later date is agreed upon after 
consultation, under which immediately after the completion of such 
arrangements the sterling receipts from current transactions of all 
sterling area countries (apart from any receipts arising out of military 
expenditure by the Government of the United Kingdom prior to December 
31, 1948, to the extent to which they are treated by agreement with the 
countries concerned on the same basis as the balances accumulated during 
the war) will be freely available for current transactions in any 
currency area without discrimination; with the result that any 
discrimination arising from the so-called sterling area dollar pool will 
be entirely removed and that each member of the sterling area will have 
its current sterling and dollar receipts at its free disposition for 
current transactions anywhere.
    8. Other exchange arrangements:
    (i) Government of the United Kingdom agrees that after the effective 
date of this Agreement it will not apply exchange controls in such a 
manner as to restrict (a) payments or transfers in respect of products 
of the United States permitted to be imported into the United Kingdom or 
other current transactions between the two countries or (b) the use of 
sterling balances to the credit of residents of the United States 
arising out of current transactions. Nothing in this paragraph (i) shall 
affect the provisions of Article VII of the Articles of Agreement of the 
International Monetary Fund when those Articles have come into force.
    (ii) The Governments of the United States and the United Kingdom 
agree that not later than one year after the effective date of this 
Agreement, unless in exceptional cases a later date is agreed upon after 
consultation, they will impose no restrictions on payments and transfers 
for current transactions. The obligations of this paragraph (ii) shall 
not apply:
    (a) to balances of third countries and their nationals accumulated 
before this paragraph (ii) becomes effective; or
    (b) to restrictions imposed in conformity with the Articles of 
Agreement of the International Monetary Fund, provided that the 
Governments of the United Kingdom and the United States will not 
continue to invoke the provisions of Article XIV, Section 2 of those 
Articles after this paragraph (ii) becomes effective, unless in 
exceptional cases after consultation they agree otherwise; or
    (c) to restrictions imposed in connection with measures designed to 
uncover and dispose of assets of Germany and Japan.
    (iii) This section and section 9, which are in anticipation of more 
comprehensive arrangements by multilateral agreement, shall operate 
until December 31, 1951.
    9. Import arrangements: If either the Government of the United 
States or the Government of the United Kingdom imposes or maintains 
quantitative import restrictions, such restrictions shall be 
administered on a basis which does not discriminate against imports from 
the other country in respect of any product; provided that this 
undertaking shall not apply in cases in which (a) its application would 
have the effect of preventing the country imposing such restrictions 
from utilizing, for the purchase of needed imports, inconvertible 
currencies accumulated up to December 31, 1946, or (b) there may be 
special necessity for the country imposing such restrictions to assist, 
by measures not involving a substantial departure from the general rule 
of non-discrimination, a country whose economy has been disrupted by 
war, or (c) either government imposes quantitative restrictions having 
equivalent effect to any exchange restrictions which that government is 
authorized to impose in conformity with Article VII of the Articles of 
Agreement of the International Monetary Fund. The provisions of this 
section shall become effective as soon as practicable but not later than 
December 31, 1946.
    10. Accumulated sterling balances:
    (i) The Government of the United Kingdom intends to make agreements 
with the countries concerned, varying according to the circumstances of 
each case, for an early settlement covering the sterling balances 
accumulated by sterling area and other countries prior to such 
settlement (together with any future receipts arising out of military 
expenditure by the Government of the United Kingdom to the extent to 
which they are treated on the same basis by agreement with the countries 
concerned). The settlements with the sterling area countries will be on 
the basis of dividing these accumulated balances into three categories 
(a) balances to be released at once and convertible into any currency 
for current transactions, (b) balances to be similarly released by 
installments over a period of years beginning in 1951, and (c) balances 
to be adjusted as a contribution to the settlement of war and postwar 
indebtedness and in recognition of the benefits which the countries 
concerned might be expected to gain from such a settlement. The 
Government of the United Kingdom will make every endeavor to secure the 
early completion of these arrangements.
    (ii) In consideration of the fact that an important purpose of the 
present line of credit is to promote the development of multilateral 
trade and facilitate its early resumption on a non-discriminatory basis, 
the Government of the United Kingdom agrees that any sterling balances 
released or otherwise available for current payments will, not later 
than one year after the effective date of this Agreement unless in 
special cases a later date is agreed upon after consultation, be freely 
available for current transactions in any currency area without 
discrimination.
    11. Definitions:
    For the purposes of this Agreement:
    (i) The term ``current transactions'' shall have the meaning 
prescribed in Article XIX (i) of the Articles of Agreement of the 
International Monetary Fund.
    (ii) The term ``sterling area'' means the United Kingdom and the 
other territories declared by the Defence (Finance) Definition of the 
Sterling Area) (No. 2) Order, 1944, to be included in the sterling area, 
namely ``the following territories excluding Canada and Newfoundland, 
that is to say--
    (a) any Dominion,
    (b) any other part of His Majesty's dominions,
    (c) any territory in respect of which a mandate on behalf of the 
League of Nations has been accepted by His Majesty and is being 
exercised by His Majesty's Government in the United Kingdom or in any 
Dominion,
    (d) any British protectorate or protected State,
    (e) Egypt, the Anglo-Egyptian Sudan and Iraq.
    (f) Iceland and the Faroe Islands.''
    12. Consultation on Agreement: Either government shall be entitled 
to approach the other for a reconsideration of any of the provisions of 
this Agreement, if in its opinion the prevailing conditions of 
international exchange justify such reconsideration, with a view to 
agreeing upon modifications for presentation to their respective 
legislatures.
    Signed in duplicate at Washington, District of Columbia this 6th day 
of December, 1945.
    For the Government of the United States of America:
                                                   Fred M. Vinson,      
                                           Secretary of the Treasury    
                                        of the United States of America.
    For the Government of the United Kingdom of Great Britain and 
Northern Ireland:
                                                                Halifax.
