ARTICLE IV-UNIT OF ACCOUNT
(a) The accounts of the Asian Clearing Union shall be kept in "Asian Monetary Units" (viz. ACU dollar and ACU euro) which may be referred to in the abbreviated form as "AMUs".
(b) The Asian Monetary Units shall, with effect from 01.01.2009 , and until such time as it is changed by the Board of Directors in terms of sub-clause (c) of the Article, be denominated as ' ACU dollar' and 'ACU euro' which shall be equivalent in value to one US dollar and one Euro, respectively.
(c) The Board of Directors may change the denomination and/or the value of the Asian Monetary Units at any time by a unanimous vote of all the Directors.
(d) In the event of a change in the denomination and/or the value of the Asian Monetary Units by the Board of Directors, the outstanding net debtor and creditor positions as of the date of this change including accrued interest shall be settled on the basis of the denomination and the value of the Asian Monetary Units preceding such change.
ARTICLE V-CLEARING OF INDIVIDUAL
PAYMENTS AND TRANSFERS
SECTION 1- Rules for individual payments and transfers
(a) The Board of Directors, after consultation with participants, shall prescribe by appropriate rules consistent with this Agreement the procedures to effect the financial settlement of eligible payments and transfers through the clearing facility. In particular, these rules and regulations shall specify the procedures to be followed by persons, commercial banks, and central banks or monetary authorities. The Board shall prescribe the information to be supplied to the Secretary General for the operation of the clearing facility.
(b) Each participant, in so far as its monetary and exchange system permits, shall take all steps necessary to put into effect in its territories the procedures prescribed by the Board of Directors and to supply the information required by the Board for the operation of the clearing facility.
SECTION 2- Eligible payments and transfers
(a) The payments that are eligible to be made through the clearing facility are payments:
(i) from a resident in the territory of one participant to a resident in the territory of another participant;
(ii) related to import and export of goods and services, as well as payments mutually agreed between two or more participants;
(iii) permitted by the country in which the payer resides; and
(iv) not declared ineligible under (b) or (c) below.
(b) The Board of Directors may declare specified payments to be ineligible to be channeled through
the clearing facility and may terminate such ineligibility.
(c) A participant, at the time it signs this Agreement, may declare that payments for specified transactions
are ineligible to be made by and to residents in its territories through the clearing facility. The participant
shall consult with the Board of Directors with a view to the relaxation and eventual removal of this ineligibility
as soon as circumstances permit.
SECTION 3- Duty to complete payment
Each participant undertakes that all eligible payments made through the clearing facility to residents in its territory will be accepted and completed.
SECTION 4- Use of the clearing facility
(a) A participant shall make mandatory for residents to make payments related to import and export of goods and services, as well as payments mutually agreed between two or more participants through the clearing facility.
(b) However, if there are some legitimate cases that require going through non-clearing facility, each central bank may allow as specific cases of exceptions.
(c) In order to promote the use of the clearing facility, participants may adopt measures designed to provide incentives to make payments for individual transactions through the clearing facility. Thus, for this purpose, participants may allow the conversion of their currencies into Asian Monetary Units (ACU dollar and ACU euro) or into those of other participants in respect of payment receipts at rates which are more favorable than those for dealings outside the clearing facility.
SECTION 5- Instruments of payment
The Board of Directors shall specify in its rules and regulations the types of instrument of payment that may be used and how each is to be used to make payment through the facility. Only instruments of payment denominated in Asian Monetary Units (ACU dollar and ACU euro) may be used to make payment through the clearing facility. A participant, after consultation with the Board may prohibit the use of particular instruments of payment by its residents for making payments through the clearing facility, but shall notify the Secretary General of such prohibition who shall notify all other participants.
ARTICLE VI-SETTLEMENT OF BALANCES
SECTION 1- Periodical settlement
(a) Settlement shall be made of net positions and accrued interest at the end of each two monthly settlement period. Settlements shall be made in accordance with section 3 of this article.
(b) The Board of Directors may change the length of the settlement period by a decision taken by a unanimous vote of all of the Directors.
SECTION 2- Interest
(a) Interest shall be paid by net debtors and transferred to net creditors on daily balances outstanding between settlement dates. The accrued interest shall be included in the calculation of the net amounts to be paid and received at the end of each settlement period and shall be notified at the end of each settlement period along with the net position of each participant.
(b) The Board of Directors shall determine, from time to time, the rate of interest, which shall be the same for both net creditor and net debtor positions, on the basis of the return on balances held on similar availability in major financial centers.
SECTION 3- Notifications and payments
(a) The Secretary General shall notify each participant of its net position, including accrued interest, and of the amounts it shall pay to, or receive from, other participants at the end of each settlement period.
(b) Each debtor participant, within four working-days of the receipt from the Secretary General of the notice of the amounts to be paid, shall make the payments in international reserve assets specified by the Board of Directors for the purpose. Payments may also be made in the currency of the creditor subject to its specific consent.
ARTICLE VII-MAINTENANCE OF VALUE AND
NON-SETTLEMENT OF BALANCES
SECTION 1- Value of payments and transfers
The value of any instrument of payment or transfer of a currency for the purpose of the amount to be settled through the clearing facility shall be the amount in the respective Asian Monetary Unit (ACU dollar or ACU euro), as well as in the case of a transfer of currency, be equivalent in the respective Asian Monetary Unit (ACU dollar or ACU euro) determined as of the date the transfer is considered to be made under the rules prescribed by the Board of Directors. The values of payments and transfers made and received with respect to participants and the resulting positions of participants shall be recorded by the Secretary General in the respective Asian Monetary Units (ACU dollar and ACU euro).
SECTION 2- Delayed payments
If a participant fails to make any payment notified to it by the Secretary General under article VI within the time required, interest shall be payable by the participant on the amount due at such rate as may be determined by the Board of Directors.
SECTION 3- Default
(a) In the event the payment referred to in Section 2 above remains unpaid after fifteen days from the date on which it was due in terms of Article VI Section 3(b), the participant shall be deemed to have defaulted and the Secretary General shall immediately notify the Directors and all participants. Thereafter no payments with respect to residents in the territory of the defaulting participant can be made through the clearing facility until the default has been fully discharged and the participant restored to full participation in accordance with (c) below.
(b) Unless the defaulting participant, within seven days of the date of default agrees with the participants to which it is obliged to make any payments due under article VI on arrangements to make the payments, with interest, its participation in the Asian Clearing Union shall be suspended.
(c) After the default has been fully discharged, the Board of Directors may restore the defaulting participant to full participation in the Asian Clearing Union subject to any special terms and conditions that the Board may deem appropriate, or may require the defaulting participant to withdraw from participation. If the defaulting participant does not agree to continue participation on the terms and conditions specified by the Board within thirty days of the decision of the Board on this matter, it shall be deemed to have withdrawn. The special terms and conditions may be revoked at any time by the Board.
(d) In addition, the Board of Directors shall consider, in consultation with participants, other means by which the amount of the default may be recovered, and participants shall take such further measures as the Board deems appropriate in order to recover the amount of the default in the shortest possible time.
ARTICLE VIIA-CURRENCY SWAP ARRANGEMENT
The Board of Directors may provide for a currency swap arrangement among the participants and specify in the rules the eligibility criteria, the terms including the rate of interest and the period for which the facility should be extended, the manner in which the participants should contribute and such other relevant conditions and procedures as are considered necessary.