DOKUMEN 1
Naskah Resmi Dokumen
Sha'ban, 1412H (February, 1992) ARTICLES OF AGREEMENT OF THE ISLAMIC CORPORATION FOR THE INSURANCE OF INVESTMENT AND EXPORT CREDIT. LD133/A:01/RI/MH C:2212/RI (ACER PC) J I II TABLE OF CONTENTS Preamble Establishment, Definitions, Status, Office, Objective and Purposes, Membership 1 - Establishment 2 - Definitions 3 - Status 4 - Office of the Corporation 5 - Objective and Purposes 6 - Membership Financial Resources Page: 1 2 2 2 4 4 4 5 6 1 - Resources of the Corporation 6 2 - Authorized Capital 6 3 - Subscription and Allocation of Shares 6 4 - Payment of Subscription 8 5 - Refunds 9 6 - Conditions Relating to Capital Stock 9 10- Obligations and Rights of Capital 10 III Operations of the Corporation 10 1 - Use of Resources 10 2 - Rules Relating to Operations 10 3 - Export Credits Eligible for Insurance 11 4 - Investments Eligible for Insurance 11 5 - Eligibility to Receive the Corporation's Services 12 6 - Covered Risks 13 7 - Insurance and Reinsurance Contracts 15 8 - Limits of Insurance 15 9 - Fees and Contributions 16 10- Payment of Claims 16 11- Subrogation 17 12- Cooperation with National,Regional and International Insurance & Reinsurance Entities 17 IV Financial Provisions 18 1 - Financial Management 18 2 - Accounts 18 3 - Funds 18 4 - Reserves & Allocation of Net Income 19 5 - Budget 20 6 - Determination of Exchange Rates and Convertibility 20 7 - Use and Conversion of Currencies 20 .... v ii Organization and Management 21 1 - Structure of the Corporation 21 2 - Board of Governors: Composition 21 3 - Board of Governors: Powers 21 4 - Board of Governors: Procedure 22 5 - Board of Directors:Composition 23 6 - Board of Directors: Powers 23 7 - Board of Directors: Procedure 24 8 - Voting 24 9 - The President 25 10- International Character of the Corporation and Prohibition of Political Activity 26 11- Channel of Communication & Depositories 26 12- Statements and Reports. 26 VI Withdrawal and Suspension of Members, Temporary Suspension and Termination of Operations of the Corporation. 27 VII Immunities, Exemptions and Privileges 32 ' . 1 - Immunities of the Corporation 32 2 - Immunity of Assets 32 3 - Legal Process 32 4 - Implementation 33 5 - Waiver.of Immunities, Exemptions and 33 Privileges. 1 - Withdrawal 27 2 - Suspension of Membership 28 3 - Settlement of Accounts on Cessation of Membership. 28 4 - Temporary Suspension of Operations 30 5 - Termination of Operations 30 6 - Liability of Members and Payment of Claims. 30 7 - Distribution of Assets 31 iii VIII Amendments, Interpretation, Arbitration 33
1. - Amendments 33 2 - Languages, Interpretation and Application 34 3 - Arbitration 35 4 - Approval Deemed Given 35 IX Final Provisions 36 1 - Signature and Deposit 36 2 - Ratification or Acceptance and 36 Effect Thereof. 3 - Entry Into Force 36 4 - Commencement of Operations 37 LD133/A:01/RI/MH 4 March, 1992. ARTICLES OF AGREEMENT OF THE ISLAMIC CORPORATION FOR THE INSURANCE OF INVESTMENT AND EXPORT CREDIT. THE STATES PARTIES TO THIS AGREEMENT AND THE ISLAMIC DEVELOPMENT BANK; CONSIDERING that one of the objectives of the Organization of Islamic Conference, as expressed in the Organization's Charter, is the development and fostering of cooperation among member countries in the economic and social fields; DESIROUS of strengthening economic relations among member countries of the Organization of Islamic Conference on the basis of Islamic principles and ideals; SEEKING to promote the flow of capital and to enlarge the scope of trade relations among Islamic countries in order to reinforce and promote their efforts at development; HAVING REGARD: to Article 15 of the Agreement for the Promotion, Protection and Guarantee of Investment among member countries of the Organization of Islamic Conference, which provides that the Organization shall, through the Islamic Development Bank, establish an Islamic Institution for Investment Guarantee to undertake, in conformity with Sharia, the provision of insurance for investments in the territories of signatory parties of the said Agreement; to the recommendation of the Standing Committee for Commercial and Economic Cooperation ( COMCEC) of the Organization of Islamic Conference in its Fifth Session held in Istanbul, Republic of Turkey, in Safar 1410H for creating the mechanism for carrying out, in accordance with Shariah, the insurance of export credit in order to protect trade transactions between Islamic countries against commercial and non-commercial risks; HAVE AGREED AS FOLLOWS: - CHAPTER-I ESTABLISHMENT, DEFINITIONS, STATUS, OFFICE, OBJECTIVE AND PURPOSES, MEMBERSHIP. Article 1 ESTABLISHMENT There is hereby established in accordance with the provisions of this Agreement a subsidiary Corporation of the Islamic Development Bank called "The Islamic Corporation for the Insurance of Investment and Export Credit" (hereinafter called "The Corporation"). Article 2 DEFINITIONS In this Agreement, unless the fallowing words and meanings: the context terms shall otherwise have the requires, following "Organization" "Bank" "Member State(s)" "Member(s)" "Export Credit" "Host Country" the Organization of Islamic Conference. the Islamic Development Bank a Member State of the Organization that has become a party to this Agreement. the Bank and Member State(s). A credit relating to export transactions. a Member State in whose territories an investment that has been insured or reinsured, or is considered for insurance or reinsurance by the Corpora- tion is to be located; as well as a Member State into whose territories goods financed by a credit that has been insured or reinsured, or is considered for insurance or reinsurance by the Corporation, are to be imported. - "Investment Insurance" "Export Credit Insurance" "Insurance Contract(s)" "Reinsurance Contract(s) "Policyholder(s)" "Policyholder's Country" "The Board of Governors" "Board of Directors" 3 the insurance cover provided by the Corporation for the investments referred to in Article 17 hereof against the risks stipulated in Article 19 ( 2) hereof or the risks approved for coverage by the Board of Directors in accordance with Article 19 ( 3) hereof. The insurance cover provided by the Corporation for txport Credits against the risks stipulated in Articles 19(1) and 19(2) hereof or the risks approved for coverage by the Board of Directors in accordance with Article 19 ( 3) hereof. includes Investment Insurance contracts as well as Export Credit Insurance contracts. includes reinsurance covers provided by the Corporation in respect of Insurance Contracts as well as reinsurance contracts entered into by the Corporation for ceding risks insured or reinsured by the Corporation. the natural or juridical person or persons who conclude Insurance Contracts with the Corporation in accordance with the provisions of this Agreement. a Member State to whose legislations the Policyholder is subject. The Board of Governors of the Corporation. The Board of Directors of the Corporation. - "The President" "Islamic Dinar" 4 The President of the Corporation. the unit of account of the Corporation the value of which shall be equivalent to one Special Drawing Right of the International Monetary Fund. Article 3 STATUS Without prejudice to the provisions of Article 1 hereof, the Corporation shall be an international institution with full juridical personality, and in particular, the capacity to: 1 - contract, 2 - acquire and dispose of movable and irrunovable property; and 3 - institute legal proceedings. Article 4 OFFICE OF THE CORPORATION 1 - The principal Office of the Corporation shall be located in the city of Jeddah, Kingdom of Saudi Arabia. 2 - The Corporation may establish agencies or branch offices elsewhere. Article 5 OBJECTIVE AND PURPOSES 1 - The objective of the Corporation shall be to enlarge the scope of trade transactions and the flow of investments among Member States. 2 - To serve its objective, the Corporation shall provide, in accordance with the principles of Shariah, Export Credit Insurance or reinsurance in respect of the goods which satisfy the conditions specified in Article 16 hereof, by paying the Policyholder a reasonable indemnity in respect of losses resulting from the risks specified in Articles 19(1) and 19(2) hereof, or the risks specified by the Board of Directors in accordance with Article 19(3) hereof. ; , ! • - 3 - At a suitable time after its establishment the Corporation shall, in accordance with the principles of Shariah, provide Investment Insurance, as well as reinsurance, in respect of investments by Members in a Member State against the risks specified in Article 19 ( 2) hereof, or the risks specified by the Board of Directors in accordance with Article 19(3) hereof. 4 - The Corporation shall exercise such powers as it may deem necessary or appropriate for achieving its objectives. The Corporation shall be guided in all its decisions by the provisions of this Article. Article 6 MEMBERSHIP 1 - The founder Members shall be the Bank and those Member States of the Organization listed in Annexure "A" hereto which, on or before the date specified in Article 61 hereof shall have slgned this Agreement and shall have fulfilled all other conditions of membership. 2 - Any other state which is a member of the Organization may apply and be admitted as a Member after the entry into force of this Agreement upon such terms and conditions as may be decided by the vote of the majority of the total number of Governors representing a majority of the total voting power of the Members. 3 - A state that is a member of the Organization may authorize any entity or agency to sign this Agreement on its behalf and to represent it in all matters relating to this Agreement with the exception of the matters referred to in Article 62 hereof. 6 CHAPTER-II FINANCIAL RESOURCES Article 7 RESOURCES OF THE CORPORATION The resources of the Corporation shall consist of: a - subscriptions to the capital stock of the Corporation, b - insurance and reinsurance contributions donated by Policyholders to the Corporation to the extent required by the Corporation to meet claims, c - sums and other assets to which the Corporation shall become entitled to as subrogee after payment of claims, and d - the return on the investment of the resources of the Corporation. Article 8 AUTHORIZED CAPITAL 1 - The authorized capital stock of the Corporation shall be One Hundred Million (100,000,000) Islamic Dinars divided into One Hundred Thousand (100,000) Shares having a par value of One Thousand (1000) Islamic Dinars each, which shall be available for subscription by Members in accordance with the provisions of Article 9 hereof. 2 - The authorized capital stock may be increased by the · •. Board of Governors, at such time and upon such terms and conditions as it may deem suitable, by a vote of two-thirds of the total number of Governors, representing not less than three-fourths of the voting power of the Members. Article 9 SUBSCRIPTION AND ALLOCATION OF SHARES. 1 - The Bank shall subscribe to fifty thousand ( 50, 000) shares in the capital stock of the Corporation to be paid in accordance with Article 10(1) hereof. - 7 2 - Each Member State shall subscribe to the capital stock of the Corporation, and the minimum number of shares to be subscribed by a Member State shall be ( 250) two hundred and fifty shares. 3 - Each Member State shall declare the number of shares it shall subscribe to the capital stock before the expiry of the date specified in paragraph ( 1) of Article 61 hereof. 4 - Without prejudice to paragraph (2) of this Article, a state admitted to membership in accordance with paragraph (2) of Article 6 hereof, shall subscribe to that number of shares of the unsubscribed portion of the capital stock of the Corporation as determined by the Board of Governors. 5 - If the Board of Governors determines that an increase in the capital stock is warranted, each Member shall have a reasonable opportunity to subscribe, upon sଛch terms and conditions as the Board of Governors shall determine, to a proportion of the increase of stock equivalent to the proportion which its stock heretofore subscribed bears to the total subscribed capital stock immediately prior to such increase; provided, however, that the foregoing provision shall not apply in respect of any increase or any portion of an increase in the capital stock intended solely to give effect to the determination of the Board of Governors under paragraphs (4) and (6) of this Article. No Member shall be obliged to subscribe to any part of an increase of the capital stock. 6 - The Board of Governors may, at the request of a Member, by a vote of a majority of the total number of Governors representing a majority of the total voting power of the Members, increase the subscription of such Member to the capital stock of the Corporation on such terms and conditions as the Board may determine. 7 - Shares of stock subscribed by founder Members shall be issued at par. Each other Member shall subscribe to such number of shares of capital stock on such terms and conditions as may be determined by the Board of Governors, but in no event at an issue price of less than par. 8 Article 10 PAYMENT OF SUBSCRIPTION 1 - Payment of the amount subscribed by the Bank to the capital stock of the Corporation shall be made in a convertible currency acceptable to the Corporation ·within thirty ( 30) days after the date on which this Agreement comes into force. 2 - Payment of the value of shares subscribed by founder Member States shall be made as follows: a - Fifty per cent ( 50%) of the value of each share shall be paid in cash in a convertible currency acceptable to the Corporation in two equal instalments the first of which shall be paid within thirty (30) days after the date of deposit on behalf of the particular Member State of the instrument of ratification or acceptance; and the second instalment shall be paid within a period not exceeding twelve months after the payment of the first instalment. b - The remainder of the unpaid subscriptions shall be subject to call by the Corporation, in freely convertible currency acceptable to the Corporation, as and when required to meet its obligations. c - Calls on any portion of the unpaid subscriptions shall be uniform on all shares. d - If the amount received by the Corporation on a call shall be insufficient to meet the obligations which have necessitated the call, the Corporation may make further successive calls on unpaid subscriptions until the aggregate amount received by it shall be sufficient to meet such obligations. 3 - The Corporation shall determine the place for any payment under this Article. Until so determined, payment of the portion of the value of shares referred to in paragraph 2(a) hereof shall be made to such place as the Bank may determine. 9 Article 11 REFUNDS 1 - The Corporation shall, as soon as practicable, return to Member States amounts paid on calls on subscribed capital if and to the extent that: (a) ( b) ( c) the call shall have been made to pay a claim resulting from an Insurance or Reinsurance Contract which the assets of the Policyholders' Fund could not meet and thereafter the Corporation shall have recovered, in whole or in part, in a freely convertible currency, the amount of such claim; or the call shall have been made because of a default in payment by a Member State and thereafter such Member State shall have made good such default in whole or in part; or the Board of Governors, by the vote of not less than two-thirds of the total voting power, determines that the financial position of the Corporation permits all or part of such amounts to be returned. 2 - Any refund effected under this Article to a Member State shall be made in a freely convertible currency in the proportion of the payments made by that Member State to the total amount paid pursuant to calls made prior to such refund. 3 - The equivalent of amounts refunded under this Article to a Member State shall become part of the callable capital obligations of the Member State under Article 10(2)(b). Article 12 CONDITIONS RELATING TO CAPITAL STOCK 1 - Shares of stock shall not be pledged or encumbered in any manner whatsoever and they shall not be transferable except to the Corporation in accordance with Chapter VI. 2 - The liability of a Member in accordance with the provisions of this Agreement shall be limited to the unpaid portion of its capital subscription. - 3 - No Member, by reason only of its membership, shall be liable for the obligations of the Corporation towards third parties. Article 13 OBLIGATIONS AND RIGHTS OF THE CAPITAL 1 - Establishment expenses shall be paid out of the capital by way of a loan to be repaid from the surplus accruing to the Policyholders' Fund. 2 - The capital shall not be entitled to a share in any surplus accruing to the Policyholders' Fund. 3 - Any deficit in the Policyholders' Fund shall be covered from the capital by way of a loan to be repaid from the surplus accruing to the Policyholders' Fund. CHAPTER-III OPERATIONS OF THE CORPORATION Article 14 USE OF RESOURCES The resources and facilities of the Corporation shall be used exclusively to achieve the objective and purposes of the Corporation provided for in Article 5 hereof. Article 15 RULES RELATING TO OPERATIONS. 1 - In carrying out its operations, the Corporation shall: a - endeavor to achieve mutual cooperation of Policyholders through their collective sharing of the losses which any one Policyholder may suffer on the materialization of the risk or risks insured or reinsured by the Corporation. b - distribute to Policyholders the surplus that may accrue from the insurance and reinsurance operations on such basis as may be determined by the Board of Governors. 11 c - pay due regard to maintaining a sound financial position in accordance with established business practices. 2 - Unless the context otherwise requires, all the provisions of this Agreement which apply to insurance transactions shall apply to reinsurance transactions carried out by the Corporation. Article 16 EXPORT CREDITS ELIGIBLE FOR INSURANCE All Export Credits pertaining to goods exported from a Member State to another Member State shall be eligible for insurance provided that: 1 - The goods, the subject of the credit, shall have been produced, manufactured in whole or in part, assembled or reprocessed in one or more Member States provided that a reasonable value added will accrue to the Member State from which such goods are exported. The Board of Directors shall, from time to time, issue regulations determining the types and specifications of goods in respect of which the Corporation may insure Export Credi ts and the minimum value added that must accrue to the Member State in which such goods have been produced, manufactured, reprocessed or assembled. 2 - The duration of the credit shall not exceed five years unless the Board of Directors shall decide otherwise. Article 17 INVESTMENTS ELIGIBLE FOR INSURANCE 1 - Investments eligible for insurance shall comprise all investments by Members or nationals of Member States in Member States including direct investments in enterprises, their branches and agencies; investments in the share capital of enterprises including principal amounts · of loans made or guaranteed by holders of equity in the enterprise concerned; and all other forms of direct investments which shall be considered eligible for insurance by the Board of Directors. - 2 - Except for reinsurance transactions, insurance shall be restricted to investments the implementation of which begins subsequent to the registration of the application for insurance by the Corporation. Such investments may include: ( a) the transfer of foreign exchange made to modernize, expand or develop existing investments, (b) the use of earnings from existing investments which could otherwise be transferred outside the Host Country. 3 - Private, public and mixed investments operating on commercial basis shall be eligible for insurance by the Corporation. Article 18 ELIGIBILITY TO RECEIVE THE CORPORATION'S SERVICES. 1 - The following shall be eligible to receive the services of the Corporation: (i) the Bank, (ii) any natural person, who is a national of a Member State other than the Host Country, and (iii) any juridical person the majority of whose stocks or shares are owned by one or more Members or by a national or nationals of one or more Member States and whose principal office is located in a Member State. 2 - Subject to the provisions of Articles 16 and 17 hereof and notwithstanding the foregoing, a juridical person may, by a resolution of the Board of Directors, be accepted as a party to an Insurance or Reinsurance ' } Contract even if its principal office is located in a non-Member State, provided that such juridical person is owned, by not less than fifty per cent, by one or more Members or by a national or nationals of one or more Member States or by juridical persons who would, under the provisions of paragraph (1) of this Article, be eligible parties to an Insurance or Reinsurance Contract.· 3 - The Board of Directors may extend eligibility for insurance to a natural person who is a national of the Host Country or a juridical person which is incorporated in the Host Country or the majority of whose capital is owned by its nationals, provided that: - 13 a - the request for insurance shall be jointly made by the Host Country and the applicant for insurance, b - the assets that are to be insured are, or will be, transferred from outside the Host Country. 4 - Where the applicant for insurance has more than one nationality, the nationality of a Member State shall prevail over the nationality of a on-Member, and the nationality of the Host Country shall prevail over the nationality of any other Member State. Article 19 COVERED RISKS 1 - The Corporation may cover eligible Export Credits against a loss resulting from one of the following types of commercial risks: a - the insolvency or bankruptcy of the buyer, b - repudiation or termination by the buyer of the purchase contract or his refusal or failure to take deli very of the goods despite the seller's fulfilment of all his obligations towards the buyer, c - refusal of the buyer to pay the purchase price to the seller or his failure to do so despite the seller's fulfilment of all his obligations towards the buyer. 2 - The Corporation may cover eligible Export Credits, as well as eligible investments against losses resulting from one or more of the non-commercial risks specified below: a - Currency Transfer any introduction attributable to the government of the Host Country or the Policyholder's Country of restrictions on the transfer outside the ·Host Country or the Policyholder's Country of the particular local currency into a freely convertible currency or another currency acceptable to the Policyholder, including the refusal or failure of the government of the Host Country or the Policyholder's Country to act .. within a reasonable period of time on an application by such Policyholder for such transfer; as well as the imposition by the public authorities of the Host Country or the Policyholder's Country, at the time of transfer, of a rate of exchange which is discriminatory agଛinst the Policyholder. b - Expropriation and Similar Measures any legislative action or administrative action or omission by the government of t he Host Country or the Policyholder's Country, either directly or through an agency, which has the effect of depriving the Policyholder of his ownership or control of his investment or of the goods sold under an Export Credit, or of a substantial benefit relating to the particular investment or the particular goods, with the exception of non-discriminatory measures of general application which governments normal
1. - Amendments 33 2 - Languages, Interpretation and Application 34 3 - Arbitration 35 4 - Approval Deemed Given 35 IX Final Provisions 36 1 - Signature and Deposit 36 2 - Ratification or Acceptance and 36 Effect Thereof. 3 - Entry Into Force 36 4 - Commencement of Operations 37 LD133/A:01/RI/MH 4 March, 1992. ARTICLES OF AGREEMENT OF THE ISLAMIC CORPORATION FOR THE INSURANCE OF INVESTMENT AND EXPORT CREDIT. THE STATES PARTIES TO THIS AGREEMENT AND THE ISLAMIC DEVELOPMENT BANK; CONSIDERING that one of the objectives of the Organization of Islamic Conference, as expressed in the Organization's Charter, is the development and fostering of cooperation among member countries in the economic and social fields; DESIROUS of strengthening economic relations among member countries of the Organization of Islamic Conference on the basis of Islamic principles and ideals; SEEKING to promote the flow of capital and to enlarge the scope of trade relations among Islamic countries in order to reinforce and promote their efforts at development; HAVING REGARD: to Article 15 of the Agreement for the Promotion, Protection and Guarantee of Investment among member countries of the Organization of Islamic Conference, which provides that the Organization shall, through the Islamic Development Bank, establish an Islamic Institution for Investment Guarantee to undertake, in conformity with Sharia, the provision of insurance for investments in the territories of signatory parties of the said Agreement; to the recommendation of the Standing Committee for Commercial and Economic Cooperation ( COMCEC) of the Organization of Islamic Conference in its Fifth Session held in Istanbul, Republic of Turkey, in Safar 1410H for creating the mechanism for carrying out, in accordance with Shariah, the insurance of export credit in order to protect trade transactions between Islamic countries against commercial and non-commercial risks; HAVE AGREED AS FOLLOWS: - CHAPTER-I ESTABLISHMENT, DEFINITIONS, STATUS, OFFICE, OBJECTIVE AND PURPOSES, MEMBERSHIP. Article 1 ESTABLISHMENT There is hereby established in accordance with the provisions of this Agreement a subsidiary Corporation of the Islamic Development Bank called "The Islamic Corporation for the Insurance of Investment and Export Credit" (hereinafter called "The Corporation"). Article 2 DEFINITIONS In this Agreement, unless the fallowing words and meanings: the context terms shall otherwise have the requires, following "Organization" "Bank" "Member State(s)" "Member(s)" "Export Credit" "Host Country" the Organization of Islamic Conference. the Islamic Development Bank a Member State of the Organization that has become a party to this Agreement. the Bank and Member State(s). A credit relating to export transactions. a Member State in whose territories an investment that has been insured or reinsured, or is considered for insurance or reinsurance by the Corpora- tion is to be located; as well as a Member State into whose territories goods financed by a credit that has been insured or reinsured, or is considered for insurance or reinsurance by the Corporation, are to be imported. - "Investment Insurance" "Export Credit Insurance" "Insurance Contract(s)" "Reinsurance Contract(s) "Policyholder(s)" "Policyholder's Country" "The Board of Governors" "Board of Directors" 3 the insurance cover provided by the Corporation for the investments referred to in Article 17 hereof against the risks stipulated in Article 19 ( 2) hereof or the risks approved for coverage by the Board of Directors in accordance with Article 19 ( 3) hereof. The insurance cover provided by the Corporation for txport Credits against the risks stipulated in Articles 19(1) and 19(2) hereof or the risks approved for coverage by the Board of Directors in accordance with Article 19 ( 3) hereof. includes Investment Insurance contracts as well as Export Credit Insurance contracts. includes reinsurance covers provided by the Corporation in respect of Insurance Contracts as well as reinsurance contracts entered into by the Corporation for ceding risks insured or reinsured by the Corporation. the natural or juridical person or persons who conclude Insurance Contracts with the Corporation in accordance with the provisions of this Agreement. a Member State to whose legislations the Policyholder is subject. The Board of Governors of the Corporation. The Board of Directors of the Corporation. - "The President" "Islamic Dinar" 4 The President of the Corporation. the unit of account of the Corporation the value of which shall be equivalent to one Special Drawing Right of the International Monetary Fund. Article 3 STATUS Without prejudice to the provisions of Article 1 hereof, the Corporation shall be an international institution with full juridical personality, and in particular, the capacity to: 1 - contract, 2 - acquire and dispose of movable and irrunovable property; and 3 - institute legal proceedings. Article 4 OFFICE OF THE CORPORATION 1 - The principal Office of the Corporation shall be located in the city of Jeddah, Kingdom of Saudi Arabia. 2 - The Corporation may establish agencies or branch offices elsewhere. Article 5 OBJECTIVE AND PURPOSES 1 - The objective of the Corporation shall be to enlarge the scope of trade transactions and the flow of investments among Member States. 2 - To serve its objective, the Corporation shall provide, in accordance with the principles of Shariah, Export Credit Insurance or reinsurance in respect of the goods which satisfy the conditions specified in Article 16 hereof, by paying the Policyholder a reasonable indemnity in respect of losses resulting from the risks specified in Articles 19(1) and 19(2) hereof, or the risks specified by the Board of Directors in accordance with Article 19(3) hereof. ; , ! • - 3 - At a suitable time after its establishment the Corporation shall, in accordance with the principles of Shariah, provide Investment Insurance, as well as reinsurance, in respect of investments by Members in a Member State against the risks specified in Article 19 ( 2) hereof, or the risks specified by the Board of Directors in accordance with Article 19(3) hereof. 4 - The Corporation shall exercise such powers as it may deem necessary or appropriate for achieving its objectives. The Corporation shall be guided in all its decisions by the provisions of this Article. Article 6 MEMBERSHIP 1 - The founder Members shall be the Bank and those Member States of the Organization listed in Annexure "A" hereto which, on or before the date specified in Article 61 hereof shall have slgned this Agreement and shall have fulfilled all other conditions of membership. 2 - Any other state which is a member of the Organization may apply and be admitted as a Member after the entry into force of this Agreement upon such terms and conditions as may be decided by the vote of the majority of the total number of Governors representing a majority of the total voting power of the Members. 3 - A state that is a member of the Organization may authorize any entity or agency to sign this Agreement on its behalf and to represent it in all matters relating to this Agreement with the exception of the matters referred to in Article 62 hereof. 6 CHAPTER-II FINANCIAL RESOURCES Article 7 RESOURCES OF THE CORPORATION The resources of the Corporation shall consist of: a - subscriptions to the capital stock of the Corporation, b - insurance and reinsurance contributions donated by Policyholders to the Corporation to the extent required by the Corporation to meet claims, c - sums and other assets to which the Corporation shall become entitled to as subrogee after payment of claims, and d - the return on the investment of the resources of the Corporation. Article 8 AUTHORIZED CAPITAL 1 - The authorized capital stock of the Corporation shall be One Hundred Million (100,000,000) Islamic Dinars divided into One Hundred Thousand (100,000) Shares having a par value of One Thousand (1000) Islamic Dinars each, which shall be available for subscription by Members in accordance with the provisions of Article 9 hereof. 2 - The authorized capital stock may be increased by the · •. Board of Governors, at such time and upon such terms and conditions as it may deem suitable, by a vote of two-thirds of the total number of Governors, representing not less than three-fourths of the voting power of the Members. Article 9 SUBSCRIPTION AND ALLOCATION OF SHARES. 1 - The Bank shall subscribe to fifty thousand ( 50, 000) shares in the capital stock of the Corporation to be paid in accordance with Article 10(1) hereof. - 7 2 - Each Member State shall subscribe to the capital stock of the Corporation, and the minimum number of shares to be subscribed by a Member State shall be ( 250) two hundred and fifty shares. 3 - Each Member State shall declare the number of shares it shall subscribe to the capital stock before the expiry of the date specified in paragraph ( 1) of Article 61 hereof. 4 - Without prejudice to paragraph (2) of this Article, a state admitted to membership in accordance with paragraph (2) of Article 6 hereof, shall subscribe to that number of shares of the unsubscribed portion of the capital stock of the Corporation as determined by the Board of Governors. 5 - If the Board of Governors determines that an increase in the capital stock is warranted, each Member shall have a reasonable opportunity to subscribe, upon sଛch terms and conditions as the Board of Governors shall determine, to a proportion of the increase of stock equivalent to the proportion which its stock heretofore subscribed bears to the total subscribed capital stock immediately prior to such increase; provided, however, that the foregoing provision shall not apply in respect of any increase or any portion of an increase in the capital stock intended solely to give effect to the determination of the Board of Governors under paragraphs (4) and (6) of this Article. No Member shall be obliged to subscribe to any part of an increase of the capital stock. 6 - The Board of Governors may, at the request of a Member, by a vote of a majority of the total number of Governors representing a majority of the total voting power of the Members, increase the subscription of such Member to the capital stock of the Corporation on such terms and conditions as the Board may determine. 7 - Shares of stock subscribed by founder Members shall be issued at par. Each other Member shall subscribe to such number of shares of capital stock on such terms and conditions as may be determined by the Board of Governors, but in no event at an issue price of less than par. 8 Article 10 PAYMENT OF SUBSCRIPTION 1 - Payment of the amount subscribed by the Bank to the capital stock of the Corporation shall be made in a convertible currency acceptable to the Corporation ·within thirty ( 30) days after the date on which this Agreement comes into force. 2 - Payment of the value of shares subscribed by founder Member States shall be made as follows: a - Fifty per cent ( 50%) of the value of each share shall be paid in cash in a convertible currency acceptable to the Corporation in two equal instalments the first of which shall be paid within thirty (30) days after the date of deposit on behalf of the particular Member State of the instrument of ratification or acceptance; and the second instalment shall be paid within a period not exceeding twelve months after the payment of the first instalment. b - The remainder of the unpaid subscriptions shall be subject to call by the Corporation, in freely convertible currency acceptable to the Corporation, as and when required to meet its obligations. c - Calls on any portion of the unpaid subscriptions shall be uniform on all shares. d - If the amount received by the Corporation on a call shall be insufficient to meet the obligations which have necessitated the call, the Corporation may make further successive calls on unpaid subscriptions until the aggregate amount received by it shall be sufficient to meet such obligations. 3 - The Corporation shall determine the place for any payment under this Article. Until so determined, payment of the portion of the value of shares referred to in paragraph 2(a) hereof shall be made to such place as the Bank may determine. 9 Article 11 REFUNDS 1 - The Corporation shall, as soon as practicable, return to Member States amounts paid on calls on subscribed capital if and to the extent that: (a) ( b) ( c) the call shall have been made to pay a claim resulting from an Insurance or Reinsurance Contract which the assets of the Policyholders' Fund could not meet and thereafter the Corporation shall have recovered, in whole or in part, in a freely convertible currency, the amount of such claim; or the call shall have been made because of a default in payment by a Member State and thereafter such Member State shall have made good such default in whole or in part; or the Board of Governors, by the vote of not less than two-thirds of the total voting power, determines that the financial position of the Corporation permits all or part of such amounts to be returned. 2 - Any refund effected under this Article to a Member State shall be made in a freely convertible currency in the proportion of the payments made by that Member State to the total amount paid pursuant to calls made prior to such refund. 3 - The equivalent of amounts refunded under this Article to a Member State shall become part of the callable capital obligations of the Member State under Article 10(2)(b). Article 12 CONDITIONS RELATING TO CAPITAL STOCK 1 - Shares of stock shall not be pledged or encumbered in any manner whatsoever and they shall not be transferable except to the Corporation in accordance with Chapter VI. 2 - The liability of a Member in accordance with the provisions of this Agreement shall be limited to the unpaid portion of its capital subscription. - 3 - No Member, by reason only of its membership, shall be liable for the obligations of the Corporation towards third parties. Article 13 OBLIGATIONS AND RIGHTS OF THE CAPITAL 1 - Establishment expenses shall be paid out of the capital by way of a loan to be repaid from the surplus accruing to the Policyholders' Fund. 2 - The capital shall not be entitled to a share in any surplus accruing to the Policyholders' Fund. 3 - Any deficit in the Policyholders' Fund shall be covered from the capital by way of a loan to be repaid from the surplus accruing to the Policyholders' Fund. CHAPTER-III OPERATIONS OF THE CORPORATION Article 14 USE OF RESOURCES The resources and facilities of the Corporation shall be used exclusively to achieve the objective and purposes of the Corporation provided for in Article 5 hereof. Article 15 RULES RELATING TO OPERATIONS. 1 - In carrying out its operations, the Corporation shall: a - endeavor to achieve mutual cooperation of Policyholders through their collective sharing of the losses which any one Policyholder may suffer on the materialization of the risk or risks insured or reinsured by the Corporation. b - distribute to Policyholders the surplus that may accrue from the insurance and reinsurance operations on such basis as may be determined by the Board of Governors. 11 c - pay due regard to maintaining a sound financial position in accordance with established business practices. 2 - Unless the context otherwise requires, all the provisions of this Agreement which apply to insurance transactions shall apply to reinsurance transactions carried out by the Corporation. Article 16 EXPORT CREDITS ELIGIBLE FOR INSURANCE All Export Credits pertaining to goods exported from a Member State to another Member State shall be eligible for insurance provided that: 1 - The goods, the subject of the credit, shall have been produced, manufactured in whole or in part, assembled or reprocessed in one or more Member States provided that a reasonable value added will accrue to the Member State from which such goods are exported. The Board of Directors shall, from time to time, issue regulations determining the types and specifications of goods in respect of which the Corporation may insure Export Credi ts and the minimum value added that must accrue to the Member State in which such goods have been produced, manufactured, reprocessed or assembled. 2 - The duration of the credit shall not exceed five years unless the Board of Directors shall decide otherwise. Article 17 INVESTMENTS ELIGIBLE FOR INSURANCE 1 - Investments eligible for insurance shall comprise all investments by Members or nationals of Member States in Member States including direct investments in enterprises, their branches and agencies; investments in the share capital of enterprises including principal amounts · of loans made or guaranteed by holders of equity in the enterprise concerned; and all other forms of direct investments which shall be considered eligible for insurance by the Board of Directors. - 2 - Except for reinsurance transactions, insurance shall be restricted to investments the implementation of which begins subsequent to the registration of the application for insurance by the Corporation. Such investments may include: ( a) the transfer of foreign exchange made to modernize, expand or develop existing investments, (b) the use of earnings from existing investments which could otherwise be transferred outside the Host Country. 3 - Private, public and mixed investments operating on commercial basis shall be eligible for insurance by the Corporation. Article 18 ELIGIBILITY TO RECEIVE THE CORPORATION'S SERVICES. 1 - The following shall be eligible to receive the services of the Corporation: (i) the Bank, (ii) any natural person, who is a national of a Member State other than the Host Country, and (iii) any juridical person the majority of whose stocks or shares are owned by one or more Members or by a national or nationals of one or more Member States and whose principal office is located in a Member State. 2 - Subject to the provisions of Articles 16 and 17 hereof and notwithstanding the foregoing, a juridical person may, by a resolution of the Board of Directors, be accepted as a party to an Insurance or Reinsurance ' } Contract even if its principal office is located in a non-Member State, provided that such juridical person is owned, by not less than fifty per cent, by one or more Members or by a national or nationals of one or more Member States or by juridical persons who would, under the provisions of paragraph (1) of this Article, be eligible parties to an Insurance or Reinsurance Contract.· 3 - The Board of Directors may extend eligibility for insurance to a natural person who is a national of the Host Country or a juridical person which is incorporated in the Host Country or the majority of whose capital is owned by its nationals, provided that: - 13 a - the request for insurance shall be jointly made by the Host Country and the applicant for insurance, b - the assets that are to be insured are, or will be, transferred from outside the Host Country. 4 - Where the applicant for insurance has more than one nationality, the nationality of a Member State shall prevail over the nationality of a on-Member, and the nationality of the Host Country shall prevail over the nationality of any other Member State. Article 19 COVERED RISKS 1 - The Corporation may cover eligible Export Credits against a loss resulting from one of the following types of commercial risks: a - the insolvency or bankruptcy of the buyer, b - repudiation or termination by the buyer of the purchase contract or his refusal or failure to take deli very of the goods despite the seller's fulfilment of all his obligations towards the buyer, c - refusal of the buyer to pay the purchase price to the seller or his failure to do so despite the seller's fulfilment of all his obligations towards the buyer. 2 - The Corporation may cover eligible Export Credits, as well as eligible investments against losses resulting from one or more of the non-commercial risks specified below: a - Currency Transfer any introduction attributable to the government of the Host Country or the Policyholder's Country of restrictions on the transfer outside the ·Host Country or the Policyholder's Country of the particular local currency into a freely convertible currency or another currency acceptable to the Policyholder, including the refusal or failure of the government of the Host Country or the Policyholder's Country to act .. within a reasonable period of time on an application by such Policyholder for such transfer; as well as the imposition by the public authorities of the Host Country or the Policyholder's Country, at the time of transfer, of a rate of exchange which is discriminatory agଛinst the Policyholder. b - Expropriation and Similar Measures any legislative action or administrative action or omission by the government of t he Host Country or the Policyholder's Country, either directly or through an agency, which has the effect of depriving the Policyholder of his ownership or control of his investment or of the goods sold under an Export Credit, or of a substantial benefit relating to the particular investment or the particular goods, with the exception of non-discriminatory measures of general application which governments normal