institution of such action, as the case may be, and the subsequent maintenance or institution of such action by the contracting party shall be subject to any limitations which

the CONTRACTING PARTIES may prescribe for the purpose of ensuring compliance with the provisions of paragraph 1 of this Article; Provided that the CONTRACTING PARTIES shall not require that prior approval be obtained for individual transactions.

(b) If at any time the CONTRACTING PARTIES find that import restrictions are being applied by a contracting party in a discriminatory manner inconsistent with the exceptions provided for under paragraph 1 of this Article, the contracting party shall, within sixty days, remove the discrimination or modify it as specified by the CONTRACTING PARTIES; Provided that any action under paragraph 1 of this Article, to the extent that it has been approved by the CONTRACTING PARTIES under sub-paragraph (a) of this paragraph or to the extent that it has been approved by them at the request of a contracting party under a procedure analogous to that of paragraph 4(c) of Article XII, shall not be open to challenge under this sub-paragraph or under paragraph 4(d) of Article XII on the ground that it is inconsistent with the provisions of Article XIII.

(c) Not later than March 1, 1950, and in each year thereafter s long as any contracting parties are taking action under paragraph 1 of this Article, the CONTRACTING PARTIES shall report on the action still taken by contracting parties under that paragraph. On or about March 1, 1952, and in each year thereafter so long as any contracting parties are taking action under paragraph 1 of this Article, and at such times thereafter as they may decide, the CONTRACTING PARTIES shall review the question whether there then exists such a substantial and widespread

disequilibrium in international trade and payments as to justify resort to paragraph 1 of this Article by contracting parties. If it appears at any date prior to March 1, 1952, that there has been a substantial and general improvement in international trade and payments, the CONTRACTING PARTIES may review the situation at that date. If, as a result of any such review, the CONTRACTING PARTIES determine that no such disequilibrium exists, the provisions of paragraph 1 of this Article shall be suspended, and all actions authorized thereunder shall cease six months

after such determination.

4. The provisions of Article XIII shall not preclude restrictions in accordance with Article XII which either

5.

(a) are applied against imports from other countries, but not as among themselves, by a group of territories having a common quota in the International Monetary Fund, on condition that such restrictions are in all

other respects consistent with the provisions of Article XIII, or

(b) assist, in the period up to December 31, 1951, by

measures not involving substantial departure from the provisions of Article XIII, another country whose economy has been disrupted by war.

The provisions of this Agreement shall not preclude: (a) restrictions with equivalent effect to exchange res

trictions authorized under Section 3 (b) of Article

VII of the Articles of Agreement of the International
Monetary Fund; or

(b) restrictions under the preferential arrangements pro-
vided for in Annex ▲ of this Agreement, subject to the
conditions set forth therein.

6. (a) The provisions of Article XIII shall not enter into force in respect of import restrictions applied by any contracting party pursuant to Article XII in order to safeguard its external financial position and balance of payments, and the provisions of paragraph 1 of Article XI and Article XIII shall not enter into force in respect of export restrictions applied by any contracting party for the same reason, until January 1, 1949; Provided that this period may with the concurrence of the CONTRACTING PARTIES, be extended for such further periods as they may specify in respect of any contracting party whose supply of convertible currencies is inadequate to enable it to apply the above-mentioned provisions.

(b) If a measure taken by a contracting party in the circumstances referred to in sub-paragraph (a) of this paragraph affects the commerce of another contracting party to such an extent as to cause the latter to consider the need of having recourse to the provisions of Article XII, the contracting party having taken that measure shall, if the affected contracting party so requests, enter into immediate consultation with a view to arrangements enabling the affected contracting party to avoid having such recourse, and, if special circumstances are put forward to Justify such action, shall temporarily suspend application of the measure for a period of fifteen days.

1.

Article XV

Exchange Arrangements

The CONTRACTING PARTIES shall seek co-operation with

the International Monetary Fund to the end that the

CONTRACTING PARTIES and the Fund may pursue a co-ordinated

policy with regard to exchange questions within the jurisdiction

of the Fund and questions of quantitative restrictions and

other trade measures within the jurisdiction of the

CONTRACTING PARTIES.

2. In all cases in which the CONTRACTING PARTIES are called upon to consider or deal with problems concerning monetary reserves, balances of payments or foreign exchange arrangements, they shall consult fully with the International Monetary Fund. In such consultation, the CONTRACTING PARTIES shall accept all findings of statistical and other facts presented by the Fund relating to foreign exchange, monetary reserves and balances of payments, and shall accept the determination of the Fund as to whether action by acontracting party in exchange matters is in accordance with the Articles of Agreement of the International Monetary Fund, or with the terms of a special exchange agreement between that contracting party and the CONTRACTING PARTIES. The CONTRACTING PARTIES, in reaching their final decision in cases involving the criteria set forth in paragraph 2 (a) of Article XII, shall accept the determination of the Fund as to what constitutes a serious decline in the contracting party's monetary reserves, a very low level of its monetary reserves or a reasonable rate of increase in its monetary reserves, and as to the financial aspects of other matters covered in consultation in such cases.

79125 0-48—vol. 1- 4

3.

The CONTRACTING PARTIES shall seek agreement with the Fund regarding procedures for consultation under paragraph 2

of this Article.

4.

Contracting parties shall not, by exchange action, frustrate the intent of the provisions of this Agreement, nor, by trade action, the intent of the provisions of the Articles of Agreement of the International Monetary Fund.

5.

If the CONTRACTING PARTIES consider, at any time, that exchange restrictions on payments and transfers in connection with imports are being applied by a contracting party in a manner inconsistent with the exceptions provided for in this Agreement for quantitative restrictions, they shall report thereon to the Fund.

6. Any contracting party which is not a member of the
Fund shall, within a time to be determined by the CONTRACTING
PARTIES after consultation with the Fund, become a member of
the Fund, or, failing that, enter into a special exchange
agreement with the CONTRACTING PARTIES, A contracting party
which ceases to be a member of the Fund shall forthwith enter
into a special exchange agreement with the CONTRACTING PARTIES.
Any special exchange agreement entered into by a contracting
party under this paragraph shall thereupon become part of its
obligations under this Agreement.

7. (a) A special exchange agreement between a contracting
party and the CONTRACTING PARTIES under paragraph 6 of this
Article shall provide to the satisfaction of the CONTRACTING
PARTIES that the objectives of this Agreement will not be
frustrated as a result of action in exchange matters by the
contracting party in question.