Part IV Exchange Controls, Exchange Rates, and Sanctions, 15 Exchange Control under the International Monetary Fund Agreement

Subject(s):

Exchange controls and the International Monetary Fund Agreement — Exchange control — Monetary obligations — International Monetary Fund (IMF)

This chapter evaluates the exchange control under the International Monetary Fund (IMF). In the member States of the IMF, the rule of positive law laid down in Article VIII(2) of the Articles of Agreement of the IMF applies. Article VIII(2)(a) requires that: ‘No member of the Fund shall without the approval of the Fund, impose restrictions on the making of payments and transfers for current international transactions’. Article VIII(2)(b) then seeks to provide a measure of international protection for member countries which impose systems of exchange control which conform to the terms of the Fund Agreement. It should be possible to infer that all members of the Fund have incorporated Article VIII(2)(b) into their domestic law in such manner as may be required to ensure that their courts give effect to that provision in any relevant proceedings. In the United Kingdom, this obligation was fulfilled by the Bretton Woods Agreements Order in Council.