Common use of Measures to Safeguard the Balance of Payments Clause in Contracts

Measures to Safeguard the Balance of Payments. 1. In the event of serious balance of payments and external financial difficulties or threat thereof, a Party may adopt or maintain restrictions on investments, including payments or transfers related to such investments. It is recognised that particular pressures on the balance of payments of a Party in the process of economic development may necessitate the use of restrictions to ensure, inter alia, the maintenance of a level of financial reserves adequate for the implementation of its programme of economic development. 2. The restrictions referred to in Paragraph 1 shall: (a) be consistent with the Articles of Agreement of the IMF; (b) not discriminate among the Parties; (c) avoid unnecessary damage to the commercial, economic and financial interests of any other Party; (d) not exceed those necessary to deal with the circumstances described in Paragraph 1; (e) be temporary and be phased out progressively as the situation specified in Paragraph 1 improves; and (f) be applied such that any other Party is treated no less favourably than any third country. 3. Any restrictions adopted or maintained by a Party under Paragraph 1 or any changes therein, shall be promptly notified to the other Parties.