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December 04, 1958

Note: The Philippines deposited its instrument of ratification with the Government of Great Britain, July 29, 1959. The Agreement entered into force, January 1, 1959, and with respect to the Philippines, July 29, 1959.

Reference: This Agreement Is also published hi III DFA TS No. 3, p. 105.

CHAPTER I
GENERAL OBJECTIVES
ARTICLE 1

The objectives of this Agreement are to assure supplies of sugar to importing countries and markets for sugar to exporting countries at equitable and stable prices and, by these and other means, to facilitate steady increases in the consumption of sugar and corresponding increases in the supply of sugar, to contribute to the improvement of the living conditions of consumers throughout the -world and to assist in the maintenance of the purchasing power in world markets of producing countries or areas and especially of those whose economies are largely dependent upon the production or export of sugar by providing adequate returns to producers and making it possible to maintain fair standards of labour conditions and wages; and, in general, to further international cooperation in connexion with world sugar problems.

CHAPTER II
DEFINITIONS
ARTICLE 2

For the purposes of this Agreement

(1) "Ton" means a metric ton of 1,000 kilogrammes.

(2) "Quota year" means calendar year, that is, the period from 1 January to 31 December, both inclusive.

(3) "Sugar" means sugar in any of its recognized commercial forms derived from sugar cane or sugar beet, including edible and fancy molasses, syrups and any other form of liquid sugar used for human consumption, except final molasses and low-grade types of non-centrifugal sugar produced by primitive methods. Sugar destined for uses other than human consumption as food is excluded, to the extent and under such conditions as the Council may determine.

Amounts of sugar specified in this Agreement are in terms of raw value, net weight, excluding the container. Except as provided in Article 16, the raw value of any amount of sugar means its equivalent in terms of raw sugar testing 96 sugar degrees by the polariscope.

(4) "Net imports" means total imports of sugar after deducting total exports of sugar.

(5) "Net exports" means total exports of sugar (excluding sugar supplied as ships' stores for ships victualling at domestic ports) after deducting total imports of sugar.

(6) "Free market" means the total of net imports of the world market except those excluded under any provisions of this Agreement.

(7) "Importing country" means one of the countries listed in Article 33.

(8) "Exporting country" means one of the countries listed in Article 34.

(9) "Basic export tonnages" means the quantities of sugar specified in Article 14(1).

(10) "Initial export quota" means the quantity of sugar allotted for any quota year under Article 18 to each country listed in Article 14(1).

(11) "Export quota in effect" means the initial export quota as modified by such adjustments as may be made from time to time.

(12) "Stocks of sugar," for the purposes of Article 13, means either: —

(i) all sugar in the country concerned either in factories, refineries, warehouses or in the course of internal transportation for destination within the country ? but excluding bonded foreign sugar ("which term shall be regarded as also covering sugar "en admission temporaire") and excluding sugar in factories, refineries and warehouses or in the course of internal transportation for destinations within the country, which is solely for distribution for internal consumption and on which such excise or other consumption duties as exist in the country concerned have been paid; or

(ii) all sugar in the country concerned either in factories, refineries, warehouses, or in the course of internal transportation for destinations within the country, but excluding bonded foreign sugar (which term shall be regarded as also covering sugar "en admission temporaire") and excluding sugar in factories, refineries and warehouses or in the course of internal transportation for destinations within the country which is solely for distribution for internal consumption: according to the notification made to the Council by each Participating Government under Article 13.

(13) "Price" and "prevailing price" have the meanings specified in Article 20.

(14) "The Council" means the International Sugar Council established under Article 27.

(15) "The Executive Committee" means the Committee established under Article 37.

(16) "Special Vote" has the meaning specified in paragraph (2) of Article 36.

CHAPTER III
GENERAL UNDERTAKINGS BY PARTICIPATING GOVERNMENTS
1. SUBSIDIES
ARTICLE 3

(1) The Participating Governments recognize that subsidies on sugar may so operate as to impair the maintenance of equitable and stable prices in the free market and so endanger the proper functioning of this Agreement.

(2) If any Participating Government grants or maintains any subsidy, including any form of income or price support, which operates directly or indirectly to increase exports of sugar from, or to reduce imports of sugar into its territory, it shall, during each quota year, notify the Council in writing of the and nature of the subsidisation, of the estimated effect of the subsidisation on the quantity exported from or imported into its territory and of the circumstances making the subsidisation necessary. The notification referred to in this paragraph shall be given at the request of the Council, which request shall be-made at least once each quota year in such form and at such time as may be provided in the rules of procedure of the Council.

(3) In any case in which a Participating Government considers that serious prejudice to its interests under this Agreement is caused or threatened by such subsidisation, the Participating Government granting the subsidy shall, upon request, discuss with the other Participating Government or Governments concerned, or with the Council, the possibility of limiting the subsidisation. In any case in which the matter is brought before the Council, the Council may examine the case with the Governments concerned and make such recommendations as it deems appropriate.

2. PROGRAMMES OF ECONOMIC ADJUSTMENT
ARTICLE 4

Each Participating Government agrees to adopt such measures as it believes will be adequate to fulfil its obligations under this Agreement with a view to the achievement of the general objectives set forth in Article 1 and as will ensure as much progress as practicable within the duration of this Agreement towards the solution of the commodity problem involved.

3. PROMOTION OF INCREASED CONSUMPTION OF SUGAR
ARTICLE 5

With the object of making sugar more freely available to consumers, each Participating Government agrees to take such action as it deems appropriate to reduce disproportionate burdens on sugar, including those resulting from— (i) private and public controls, including monopoly; (ii) fiscal and tax policies.

4. MAINTENANCE OF FAIR LABOUR STANDARDS
ARTICLE 6

The Participating Governments declare that, in order to avoid the depression of living standards and the introduction of unfair competitive conditions in world trade, they will seek the maintenance of fair labour standards in the sugar industry.

CHAPTER IV
SPECIAL OBLIGATIONS OF THE PARTICIPATING GOVERNMENTS OF COUNTRIES WHICH IMPORT SUGAR
ARTICLE 7

(1)—(i) To prevent non-participating countries from gaining advantage at the expense of participating countries, the Government of each participating country agrees that it will not permit the import for any purpose from non-participating countries as a group during any quota year of a total quantity of sugar large than was imported from those countries as a group during any one of the three calendar years 1951, 1952, 1953; provided that the said total quantity shall not include imports purchased by a participating country from non-participating countries during any period when by virtue of paragraph (3) of Article 21, quotas and limitations on exports are inoperative, and provided further that the Government of the participating country has notified the.Council in advance that such purchases may be made.

(ii) The years referred to in sub-paragraph (i) of this paragraph may be varied by a determination of the Council on the application of any Participating Government "which considers that there are special reasons for such variation.
(2)—(i) If any Participating Government considers that the obligation it has assumed under paragraph (1) of this Article is operating in such a way that its country's re-export trade in refined sugar or trade in sugar-containing products is suffering damage therefrom, or is in imminent danger of being damaged, it may request the Council to take action to safeguard the trade in question, and the Council shall forthwith consider any such request and shall take such action, which may include the modification of the aforesaid obligation, as it deems necessary for that purpose. If the Council fails to deal with a request made to it under this sub-paragraph within 15 days of its receipt the Government making the request shall be deemed to have been released from its obligation under paragraph (1) of this Article to the extent necessary to safeguard the said trade.

(ii) If in a particular transaction in the usual course of trade the delay resulting from the procedure provided for in sub-paragraph (i) of this paragraph might result in damage to a country's re-export trade in refined sugar or trade in sugar-containing products, the Government concerned shall be released from the obligation in paragraph (1) of this Article in respect of that particular transaction.

(3)—(i) If any Participating Government considers that it cannot carry out the obligations in paragraph (1) of this Article, it agrees to furnish the Council with all relevant facts and to inform the Council of the measures which it would propose to take in that quota year and the Council shall, within fifteen days, take a decision as to whether or not the obligation laid down in paragraph (1) of this Article should be modified for that quota year in respect of such Government. However, if the Council is unable to reach a decision, the Government concerned shall be released from its obligations under paragraph (1) of this Article to such extent as may be necessary to permit it to carry out in that quota year measures it has proposed to the Council.

(ii) If the Government of any participating exporting country considers that the interests of its country are being damaged by the operation of paragraph (1) of this Article, it may furnish the Council with all relevant facts and inform the Council of the measures which it would wish to have taken by the Government of the other participating country concerned, and the Council may, in agreement with the latter Government, modify the obligation laid down in paragraph (1).

(4) The Government of each participating country which imports sugar agrees that as soon as practicable after its ratification of, acceptance of, or accession to this Agreement, it will notify the Council of the maximum quantities which could be imported from non-participating countries under paragraph (1) of this Article.

(5) In order to enable the Council to make the redistributions provided for in Article 19(1) (ii), the Government of each participating country which imports sugar agrees to notify the Council, within a period fixed by the Council which shall not exceed eight months from the beginning of the quota year, of the quantity of sugar which it expects will be imported from non-participating countries in that quota year; provided that the Council may vary the aforesaid period in the case of any such country.

(6) The Government of each participating importing country agrees that in any quota year the total exports, if any, of sugar from its country, excluding sugar supplied as ships' stores for ships victualling at domestic ports, shall not exceed the total imports of sugar into that country in that quota year.

CHAPTER V
SPECIAL OBLIGATIONS OF GOVERNMENTS OF PARTICIPATING EXPORTING COUNTRIES
ARTICLE 8

(1) The Government of each participating exporting country agrees that exports from its country to the free market will be so regulated that net exports to that market will not exceed the. quantities which such country may export each quota year in accordance with the export quotas established for it under the provisions of this Agreement. Subject to such tolerances as the Council may prescribe, any amount by which total net exports of an exporting country in any quota year exceeds its export quota in effect at the end of that year shall be charged to the export quota in effect of that country for the next following quota year.

(2) The Council may, if it deems necessary because of exceptional circumstances, limit the proportion of their quotas which participating exporting countries having basic tonnages in excess of 75,000 tons may export during any part of a quota year, provided that no such limitations shall prevent the participating exporting countries from exporting, during the first eight months of any quota year, 80 per cent, of their initial export quotas and provided further that the Council may at any time modify or remove any such limitation which it may have imposed.

ARTICLE 9

The Government of each participating exporting country agrees that it will take all practicable action to ensure that the demands of participating countries which import sugar are met at all times. To this end, if the Council should determine that the state of demand is such that, notwithstanding the provisions of this Agreement, participating countries which import sugar are threatened with difficulties in meeting their requirements, it shall recommend to participating exporting countries measures designed to give effective priority to those requirements. The Government of each participating exporting country agrees that, on equal terms of sale, priority in the supply of available sugar, in accordance ¦with the recommendations of the Council, will be given to participating countries which import sugar.

ARTICLE 10

The Government of each participating exporting country agrees to adjust the production of sugar in its country during the term of this Agreement and in so far as practicable in each quota year of such term, by regulating the manufacture of sugar or, when this is not possible, the acreage or plantings, so that the production shall result in such amount of sugar as may be needed to provide for domestic consumption, exports permitted under this Agreement and stocks specified in Article 13.

ARTICLE 11

(1) The Government of each participating exporting country agrees to notify the Council, as soon as possible, but not later than 15 May whether or not it expects that its country's export quota in effect at the time of notification will be used and, if not, of such part of its country's export quota in effect as it expects will not be used, and on receipt of such advice, the Council shall take action in accordance with Article 19 (l)(i).

(2) In addition to the notification provided for in paragraph (1) above, the Government of each participating export country agrees to notify the Council, as soon as possible after 15 May, but not later than 30 September, whether or not it expects that its country's export quota in effect at the time of that notification will be used and, if not, of such part of its country's export quota in effect as it expects will not be used, and on receipt of such advice, the Council shall take action in accordance with Article 19 (l)(i).

ARTICLE 12

(1) If the actual net exports to the free market of any participating exporting country in a quota year fall short of its export quota in effect at the time of notification by its Government in accordance with paragraph (1) of Article 11, less such part, if any, of that quota as the Government has notified under paragraph (1) of Article 11 that it expected would not be used, and less any net reduction in its export quota in effect made subsequently by the Council under Article 21, the difference shall be deducted from that country's export quota in effect in the following quota year to the extent that such difference exceeds 50 per cent, of the amount notified under paragraph (1) of Article 11.

(2) Without prejudice to the provisions in paragraph (l) of this Article, if the actual net exports to the free market of any participating exporting country in a quota year fall short of its export quota in effect at the time of notification by its Government in accordance with paragraph (2) of Article II, less any reduction in its export quota in effect made subsequently by the Council under Article 21, an allowance of 50 per cent, of the amount notified in accordance with paragraph (2) of Article 11 shall be made against the deduction of that shortfall from that country's export quota in the following quota year.

(3) If no notification is given under Article 11, the whole of any shortfall of total net exports during the quota year below the export quota in effect at the end of that quota year shall be charged to the export quota of that country in the following quota year.

(4) The Council may modify the amounts to be deducted under this Article if it is satisfied by an explanation from the participating country concerned that its exports fell short by reason of force majeure.

(5) The Government of each participating exporting country undertakes to notify the Council before 1 April in any quota year of its total net exports in the previous quota year.

CHAPTER VI
STOCKS
ARTICLE 13

(1) The Governments of participating exporting countries undertake so to regulate production in their countries that the stocks in their respective countries shall not exceed for each country on a fixed date each year immediately preceding the start of the new crop, such date to be agreed with the Council, an amount equal to 20 per cent of its annual production.

(2) Nevertheless, the Council may, if it considers that such action is justified by special circumstances, authorise the holding of stocks in any country in excess of 20 per cent of its production.

(3) The Government of each participating country listed in Article 14 dl) agrees:—

(i) that stocks equal to an amount of not less than 12 per cent, of its country's basic export tonnage shall be held in its country at a fixed date "each year immediately preceding the start of the new crop, such date to be agreed with the Council, unless drought) flood or other
adverse, conditions prevent the holding of such stocks; and

(ii) that such stocks shall be earmarked to fill increased requirements of the free market and used for no other purpose without the consent of the Council, and shall be immediately available for export to that market when called for by the Council.

(4) The Council may increase to 15 per cent or reduce to 10 per cent the amount of minimum stocks to be carried in each quota year under paragraph

(3) of this Article. If any Participating Government considers that, owing to special circumstances, the amount of the minimum stocks required to be held in its country under paragraphs (3) or (4) of this Article should be less, it may state its case to the Council. If the Council finds the contentions of the Government concerned well founded, it may vary the amount of minimum stocks to be held in the country concerned.

(5) The Government of each participating country in which stocks are held under the provisions of paragraph (3) as they may be modified by the provisions of paragraph (4) of this Article, agrees that unless otherwise authorized by the Council, stocks held under those provisions shall be used neither for meeting priorities under Article C, nor for meeting increases in quotas in effect under Article 21 while such quotas are lower than its country's basic export tonnage, unless the stocks, so used can be replaced before the beginning of its country s crop in the ensuing quota year.

(6) The Government of each participating exporting country agrees that, so far as possible, it will not permit the disposal of stocks held under this Article, following its withdrawal from this Agreement or following the expiration of this Agreement, in such a manner as to create undue disturbance in the free market for sugar.

(7) At the time of deposit of its instrument of ratification, acceptance or accession, each Government shall notify the Government of the United Kingdom of Great Britain and Northern Ireland for transmission to the Council, which of the two definitions of "stocks of sugar" in Article 2 it accepts as applicable to its country.

CHAPTER VII
REGULATIONS OF EXPORTS
ARTICLE 14

A. Basic export tonnages
(1) — (i) For the first three quota years during which this Agreement is in force the exporting countries or areas named below shall have the following basic export tonnages for the free market:—

In thousands of tons

(2)—(a) The export quotas of the Czechoslovak Republic, Hungary and the People's Republic of Poland do not include their exports of sugar to the USSR and these exports are outside this Agreement.

(b) The USSR export quota is calculated without taking into account imports of sugar from the Czechoslovak Republic, Hungary and the People's Republic of Poland in excess of 50,000 tons.

(3) Costa Rica, Ecuador, Guatemala, Nicaragua and Panama) to which no basic export tonnages have been alloted under this Article, may each export to the free market up to 5,000 tons raw value a year.

(4) This Agreement does not ignore, and does not have the purpose of nullifying. Indonesia's aspiration as a Sovereign State for its rehabilitation to its historical position as a sugar exporting country to the extent that may be practicable within the possibilities of the free market.

B. Special reserve

(5) A special reserve is established for each of the first three quota years of this Agreement and is allocated as follows:—

In thousands of tons

Notwithstanding that these allocations are not basic export tonnages, the provision of the Agreement other than those of Article 19 shall apply to them as if they were basic export tonnages.

C. Priorities on shortfalls and on increased free market requirements

(6) In determining export quotas in effect the following priorities shall be applied in accordance with the provisions of paragraph (7) of this Article:—

(a) The first 50,000 tons will be allotted to Cuba.

(b) The next 25,000 tons will be allotted to Poland.

(c) The next 25,000 tons will be allotted to Czechoslovakia.

(d) The next 10,000 tons will be allotted to Hungary.

(7)—(i) In redistributions resulting from the provisions of Articles 19 (1) (i) and (19) (2), the Council shall give effect to the priorities listed in paragraph (6) of this Article.

(ii) In distributions resulting from the provisions of Articles 18, 19 (1) (ii) and 21, the Council shall not give effect to the said priorities until the exporting countries listed in paragraph (1) of this Article have been offered export quotas equal to the total of their basic export tonnages, subject to any reductions applied under Articles 12 and 21 and thereafter shall give effect to the said priorities only in so far as the said priorities have not already been brought into effect in accordance with sub-paragraph (i) of this paragraph. (ii) Reductions resulting from the application of the provisions of Article 21 shall be applied pro rat a to the basic export tonnages until the export quotas in effect have been reduced to the total of the basic export tonnages plus the total of the priorities allotted due to increases in free market requirements for that year, after which the priorities shall be deducted in the reverse order and thereafter reductions shall be applied again pro rata to basic export tonnages.

ARTICLE 15

This Agreement does not apply to movements of sugar between the Belgo-Luxembourg Economic Union (including the Belgian Congo), France, the Federal Republic of Germany, Italy and the Kingdom of the Netherlands up to a net amount of 150,000 tons of sugar per year.

ARTICLE 16

(1) The Government of the United Kingdom of Great Britain and Northern Ireland (on behalf of the British West Indies and British Guiana) Mauritius and Fiji), the Government of the Commonwealth of Australia and the Government of the Union of South Africa undertake that net exports of sugar by the exporting territories covered by the Commonwealth Sugar Agreement of 1951 (excluding local movements of sugar between adjoining Commonwealth territories, or islands, in such quantities as can be authenticated by custom) shall not together exceed the following total quantities:—

(i) In the calendar year 1959 2,500,000 English long tons (2,540,835
tons) tel quel;

(ii) In the calendar years 1960 and 1961 2,575,000 English long tons (2,617,060 tons) tel quel per year.

In addition to providing for the export of the quantities set out above, the Governments above-mentioned agree that except by reason of drought, flood or other adverse conditions stocks to a total of not less than 50,000 English long tons (50,817 tons) tel quel shall be held in the exporting territories as a group covered by the Commonwealth Sugar Agreement at all times in each calendar year unless and until they have been released with the consent of the Council, and that those stocks shall be immediately available for export to the free market when called for by the Council.

(2) These limitations have the effect of leaving available to the free market a share in the sugar markets of Commonwealth countries. The Governments aforementioned would, however, regard themselves as released from their obligation thus to limit exports of Commonwealth sugar if a Government or Governments of a participating exporting country or of participating countries having a basic export tonnage or tonnages under Article 14 (1) should enter into a special trading arrangement with an importing country of the Commonwealth which would guarantee the exporting country a specified portion of the market of that Commonwealth country.

(3) The Government of the United Kingdom of Great Britain and Northern Ireland, with the concurrence of the Government of the Commonwealth of Australia and the Government of the Union of South Africa, undertakes to provide the Council sixty days in advance of the beginning of each quota year with an estimate of total net exports from the exporting territories covered by the Commonwealth Sugar Agreement in such year and to inform the Council promptly of any changes in such estimate during that year. The information supplied to the Council by the United Kingdom pursuant to this undertaking shall be held to discharge fully the obligations in Articles 11 and 12 so far as the aforementioned territories are concerned.

(4) The provisions of paragraphs (3) and (4) of Article 13 shall not apply to the exporting territories covered by the Commonwealth Sugar Agreement.

(5) Nothing in this Article shall be held to prevent any participating country exporting to the free market from exporting sugar to any country within the British Commonwealth nor, within the quantitative limits set out above, to prevent any Commonwealth country from exporting sugar to the free market.

ARTICLE 17

Exports of sugar to the United States of America for consumption therein shall not be considered exports to the free market and shall not be charged against the export quotas established under this Agreement.

ARTICLE 18

(1) Before the beginning of each quota year the Council shall make an estimate of the net import requirements of the free market during such year for sugar from exporting countries listed in Article 14 (l). In the preparation of this estimate, there shall be taken into account among other factors the total amount of sugar which the Council is notified could be imported from non-participating countries under the provisions of Article 7(4).

(2) At least thirty days before the beginning of each quota year the Council shall consider the estimate prepared in accordance with paragraph (1) of this Article. After considering that estimate and all other factors affecting the supply and demand for sugar on the free market the Council shall forthwith assign a provisional initial quota for the free market for such year to each of the exporting countries listed in Article 14 (1) pro rata to their basic export tonnages, subject to the provisions of Article 14 C, and to such charges and deductions as may be required under Article 8(1) and Article 12, provided that if at the time of fixing provisional initial export quotas the prevailing price is not less than 3.15 cents the total of the provisional initial export quotas shall, unless the Council otherwise decides by Special Vote, be not less than 90 per cent of the basic export tonnages, the distribution among exporting countries being made in the same manner provided in this paragraph.

(3) Prior to 1 April in each quota year, the Council shall make a further estimate of free market requirements in the manner provided in paragraph (1) of this Article.. After considering that estimate and all other factors affecting the supply and demand for sugar on the fcee market, the Council shall, not later than 1 April and in the manner provided in paragraph 2 of this Article, make a final determination of initial export quotas. Thereafter, any references to initial export quotas in other Articles of this Agreement shall be deemed to be references to the initial export quotas as finally determined.

(4) As soon as the final determination of initial export quotas has been made, export quotas in effect shall immediately be adjusted as if the provisional initial export quotas had been the same as those finally determined, due account thus being taken of any variations in those provisional quotas made by the Council under other Articles of this Agreement prior to the final determination. Adjustment of export quotas in effect in accordance with this paragraph shall be without prejudice to such powers or duties to vary quotas in effect as are possessed by the Council under other Articles of this Agreement.

(5) At the time of the adjustment of export quotas in effect in accordance with paragraph (-4) of this Article, the Council shall also review the supplies of sugar available for the free market for that quota year and shall consider the variation of export quotas in effect of particular countries by the exercise of its powers under Article 19(2) of this Agreement.

(6) The Council shall have power by Special Vote to set aside in any quota year up to 40,000 tons of the net import requirements of the free market as a reserve from which it may allot additional export quotas to meet proved cases of special hardship.

ARTICLE 19

(1) The Council shall cause export quotas in effect for participating countries listed in Article 14(1) to be adjusted, subject to the provisions of Article 14C, as follows :—

(i) Within 10 days after the Government of any exporting country has given notice pursuant to Article 11 that a part of the initial export quota or export quota in effect will not be used to reduce accordingly the export quota in effect of such country and to increase the export quotas in effect of other exporting countries by redistributing an amount of sugar equal to the part of the quota so renounced pro rata to their basic export tonnages. The Council shall forthwith notify Governments of exporting countries of such increases, and those Governments shall, within 10 days of receipt of such notification, inform the Council whether or not they are in a position to use the increase in quota allotted to them. On receipt of such information, a subsequent redistribution of the quantity involved shall be made, and Governments of exporting countries concerned shall be notified forthwith by the Council of the increases made in their countries' export quotas in effect.

(ii) From time to time to take into account variations in the estimates of the quantities of sugar which the Council is notified will be imported from non-participating countries under Article 7; provided, however, that such quantities need not be redistributed until they reach a total of 5,000 tons. Redistributions under this sub-paragraph shall be made on the same basis and in the same manner as is provided in paragraph (l)(i) of this Article.

(2) Notwithstanding the provisions of Article 11, if the Council, after consultation with the Government of any participating exporting country, determines that such country will be unable to use all or part of its export quota in effect, the Council may increase pro rata the export quotas of other participating exporting countries on the same basis and in the same manner as is provided for in paragraph (l)(i) of this Article; provided, however, that such action by the Council shall not deprive the country concerned of its right to fill its export quota which was in effect before the Council made its determination.

CHAPTER. VIII
STABILISATION OF PRICES
ARTICLE 20

(1) For the purposes of this Agreement any reference to the price of sugar shall be deemed to be to the spot price in United States currency per pound avoirdupois free alongside steamer Cuban port} as established by the New York Coffee and Sugar Exchange in relation to sugar covered by Contract No. 4, or any alternative price which may be established under paragraph (2) of this Article: and where any reference is made to the prevailing price being above or below any stated figure, that condition shall be deemed to be fulfilled if the average price over a period of seventeen consecutive market days has been above or below the stated figure, as the case may be, privided that the spot price on the first day of the period and on not less than twelve days within the period has also been above or below the stated figure, as the case may be.

(2) In the event of the price referred to in paragraph (1) of this Article not being available at a material period, the Council shall use such other criteria as it sees fit.

(3) Any of the prices laid down in Articles 18 and 21 may be modified by the Council by a Special Vote.

ARTICLE 21

(1) The Council shall .have discretion to increase or reduce quotas to meet market conditions, provided that:—

(i) when the prevailing price is not less than 3.25 cents and not more than 3.45 cents no increase shall be made so as to bring into effect quotas greater in total than the basic export tonnages plus 5 per cent, or the initial export quotas, whichever are the greater, and no decrease shall be made so as to bring into effect quotas which are less in total than either the initial export quotas less 5 per cent or the basic export tonnages less 10 per centf whichever are the greater;

(ii) when the prevailing price exceeds 3.45 cents the quotas in effect shall be not less than the initial export quotas or the basic export tonnages, whichever are the greater;

(iii) When the prevailing price exceeds 3.75 cents the Council shall meet within seven days to consider the market situation and to take such action in regard to quotas as may be appropriate for the purpose of achieving the general objectives of this Agreement. In the absence of agreement by the Council on the action to be taken the quotas in effect shall forthwith be increased by 21/2 per cent. If, after action decided by the Council has been taken or the quotas have been increased by 21/2 per cent, the prevailing price continues to be, above 3.75 cents, the Council shall meet again within seven days in order to give further consideration to the market situation;

(iv) when, after quotas in effect have been raised in pursuance of sub-paragraph (iii) of this paragraph, the prevailing price falls below 3.75 cents, quotas in effect shall be restored to the level at which they were before the above-mentioned increase;

(v) if the prevailing price is below 3.25 cents the export-quotas in effect shall at once be reduced by 21/2 per cent, and the Council shall meet within seven days to decide whether any further reduction shall be made; and if no agreement is reached at such meeting the percentage of the reduction shall be raised to 5 per cent, provided that reductions shall not be made so as to reduce the quotas below 90 per cent of the basic export tonnages unless the prevailing price is below 3.15 cents in which case further reduction may be made within the limits prescribed by Article 23; and

(vi) if the prevailing price has been risen above 3.25 cents and the export quotas in effect are below 90 per cent of the bask export tonnages, the export quotas in effect shall be increased at once by 21/2 per cent, and the Council shall meet within seven days to decide whether a further increase shall be made; and if no agreement is reached at such meeting the percentage of the increase shall be raised to 5 per cent, or such lesser amount as is required to restore the quotas to 90 per cent.

(2) In considering changes in quotas under this Article the Council shall take into account all factors affecting the supply and demand for sugar on the free market.

(3) If the prevailing price exceeds 4.00 cents all quotas and limitations on exports under any of the Articles of this Agreement shall for the time being become inoperative, provided that if subsequently the prevailing price falls below 3.90 cents the quotas and limitations previously in effect shall be restored, subject to the power of the Council to vary quotas under paragraph (1) of this Article.

(4) If the Council is satisfied that a new situation has arisen which endangers the attainment of the general objectives of the Agreement it may, by Special Vote, suspend temporarily for such period as it may think necessary the limits imposed under the preceding paragraphs of this Article upon its discretion to increase quotas; and during the period of such suspension the Council shall have full discretion to increase quotas as it may think necessary and to cancel such increases when they are no longer required.

(5) All changes in quotas made under this Article shall be pro rata to the basic export tonnages, subject to the provisions of Article 14 C; and any references to percentages of quotas shall be construed as percentages of the basic export tonnages.

(6) Notwithstanding the provisions of paragraph (1) of this Article, if the export quota of any country has been reduced under Article 19(1) (i) such reduction shall be deemed to form part of the reductions made in the same quota year under the terms of paragraph (1) of this Article.

(7) The Council shall notify Participating Governments of each change made under this Article in the export quotas in effect.

(8) If any reduction made under the preceding paragraphs of this Article cannot be fully applied to the export quota in effect of any exporting country because, at the time the reduction is made, that country has already exported all or part of the amount of such reduction, a corresponding amount shall be deducted from the export quota in effect of that country in the following quota year.

ARTICLE 22

(1) During the first quota year of this Agreement, the Council shall consider, and make recommendations to interested participating Governments concerning the negotiation of arrangements for multilateral options drawn up in accordance with the provisions of this Article.

(2) Such arrangements shall be designed to secure that, if the prevailing price moves beyond the highest or lowest price of the range set out in Article 21, the Participating Governments concerned will have the right to exercise options for sale or purchase, as the case may be, in respect of such quantities of sugar as may be prescribed in the arrangements.

(3) The options shall be exercisable in accordance with such limits as to time and frequency, or otherwise, as may be prescribed in the arrangement.

(4) The arrangements shall take into account the traditional pattern of the trade in sugar.

(5) The Council may establish such Committees as it deems desirable to assist it in the examination of these questions and to formulate the reconv-mendations provided for in paragraph (1) above.

CHAPTER IX
GENERAL LIMITATION OF REDUCTIONS IN EXPORT QUOTAS
ARTICLE 23

(1) Except in respect of penalties imposed under Article 12 and reductions made under Article 19(1) (i), the export quota in effect of any participating exporting country listed in Article 14 (1) shall not be reduced below 80 per cent of its basic export tonnage and all other provisions of this Agreement shall be construed accordingly; provided, however, that the export quota in effect of any participating exporting country having a basic export tonnage under Article 14 (1) of less than 50,000 tons shall not be reduced below 90 per cent of its basic export tonnage.

(2) A reduction of quotas under Article 21 shall not be made within the last forty-five calendar days of the quota year.

CHAPTER X
SUGAR MIXTURES
ARTICLE 24

Should the Council at any time be satisfied that as the result of a material increase in the exportation or use of sugar mixtures, those products are taking the place of sugar to such an extent as to prevent full effect being given to the purpose of this Agreement it may resolve that such products or any of them shall be deemed to be sugar, in respect of their sugar content, for the purposes of the Agreement; provided that the Council shall, for the purpose of calculating the amount of sugar to be charged to the export quota of any participating country, exclude the sugar equivalent of any quantity of such products which has normally been exported from that country prior to the coming into force of this Agreement.

CHAPTER XI
MONETARY DIFFICULTIES
ARTICLE 25

(1) If, during the term of this Agreement the Government of a participating importing country considers that it is necessary for it to forestall the imminent threat of, or to stop or to correct a serious decline in its monetary reserves, it may request the Council to modify particular obligations of this Agreement.

(2) The Council shall consult fully with the International Monetary Fund on questions raised by such request and shall accept all findings of statistical and other facts made by the Fund relating to foreign exchanges, monetary-reserves and balance of payments, and shall accept the determination of the Fund as to whether the Country involved has experienced or is imminently threatened with a serious deterioration in its monetary reserves. If the country in question is not a member of the International Monetary Fund and requests that the Council should not consult the Fund, the issues involved shall be examined by the Council without such consultation.

(3) In either event, the Council shall discuss the matter with the Government of the importing country. If the Council decides that the representations are well founded and that the country is being prevented from obtaining a sufficient amount of sugar to meet its consumption requirements consistently with the terms of this Agreement, the Council may modify the obligations of such Government or of the Government of any exporting, country under this Agreement in such manner and for such time as the Council deems necessary to permit such importing country to secure a more adequate supply of sugar with its available resources.

CHAPTER XII
STUDIES BY THE COUNCIL
ARTICLE 26

(1) The Council shall consider and make recommendations to the Governments of participating countries concerning ways and means of securing appropriate expansion in the consumption of sugar, and may undertake studies of such matters as:

(i) the effects of (a) taxation and restrictive measures and (b) economic, climatic and other conditions on the consumption of sugar in the various countries;

(ii) means of promoting consumption, particularly in countries where consumption per caput is low;

(iii) the possibility of co-operative publicity programmes with similar agencies concerned with the expansion of consumption of other foodstuffs;

(iv) progress of research into new uses of sugar, its by-products, and the plants from which it is derived.

Furthermore, the Council is authorised to make and arrange for other studies, including studies of the various forms of special assistance to the sugar industry, for the purpose of assembling comprehensive information and for the formulation of proposals which the Council deems relevant to the attainment of the general objectives set forth in Article 1 or relevant to the solution of the commodity problem involved. Any such studies shall relate to as wide a range of countries as practicable and shall take into consideration the general social and economic conditions of the countries concerned.

(3) The studies undertaken pursuant to paragraphs (l) and (2) of this Article shall be carried out in accordance with such terms as may be laid down by the Council, and in consultation with the Participating Governments.

(4) The Governments concerned agree to inform the Council of the results of their consideration of the recommendations and proposals referred to in this Article.

(5) The Council, in furtherance of Resolution No. 1 of the United Nations Sugar Conference of 1956, the purposes of this Article and the general objectives of this Agreement set forth in Article 1, shall appoint a Committee to assist it in carrying out its functions under this Article, especially those which relate to sub-paragraphs (ii) and (iv) of paragraph (l), including in particular the compilation of results of research, wherever conducted, into the consumption and new uses of sugar and its by-products and the dissemination of those results.

CHAPTER XIII
ADMINISTRATION
ARTICLE 27

(1) The International Sugar Council established under the International Sugar Agreement, 1953, as amended by the Protocol of 1956, shall continue in being for the purpose of administering the present Agreement, with the membership, powers and functions set out in this Agreement.

(2) Each Participating Government shall be a voting member of the Council and shall have the right to be represented on the Council by one delegate and may designate alternate delegates. A delegate or alternate delegates may be accompanied at meetings of the Council by such advisers as each Participating Government deems necessary.

(3) The Council shall elect a non-voting Chairman who shall hold office for one quota year and shall serve without pay. He shall be selected alternately from among the delegations of the importing and exporting participating countries.

(4) The Council shall elect a Vice-Chairman who shall hold office for one quota year and shall serve without pay. He shall be selected alternately from among the delegations of the exporting and importing participating countries.

(5) The Council shall have in the territory of each Participating Government, with effect from 1 January 1959 and to the extent consistent with its laws, such legal capacity as may be necessary in discharging its functions under this Agreement.

ARTICLE 28

(1) The Council shall adopt rules of procedure which shall be consistent with the terms of this Agreement, and shall keep such records as are required to enable it to discharge its functions under this Agreement and such other records as it considers desirable. In the case of inconsistency between the rules of procedure so adopted and the terms of this Agreement, the Agreement shall prevail.

(2) The Council may, by a Special Vote, delegate to the Executive Committee set up under Article 37 the exercise of any of its powers and functions other than those requiring a decision by Special Vote under this Agreement. The Council may, at any time, revoke such a delegation by a majority of the votes cast.

(3) The Council may appoint such permanent or temporary Committees as it considers advisable in order to assist it in performing its functions under this Agreement.

(4) The Council shall develop, prepare and publish such reports, studies, charts, analyses and other data as it may deem desirable and helpful.

(5) The Participating Governments undertake to make available and supply all such statistics and information as are necessary to the Council or the Executive Committee to enable it to discharge its functions under this Agreement.

(6) The Council shall publish at least once a year a report of its activities and of the operation o£ this Agreement.

(7) The Council shall perform such other functions as are necessary to carry out the terms of this Agreement.

ARTICLE 29

The Council shall appoint an Executive Director, who shall be its chief administrative officer. In accordance with rules established by the Council, the Executive Director shall appoint such staff as may be required for the work of the Council and its Committees. It shall be a condition of employment of the Executive Director and of the staff that they do not hold or shall cease to hold financial interest in the sugar industry or in the trade in sugar and that they shall not seek or receive instructions regarding their duties under this Agreement from any Government or from any other Authority external to the Council.

ARTICLE 30

(1) The Council shall select its seat. Its meeting shall be held at its seat, unless the Council decides to hold a particular meeting elsewhere.

(2) The Council shall meet at least twice a year. It may be convened at any other time by its Chairman.

(3) The Chairman shall convene a session of the Council if so requested by

(i) Five Participating Governments, or

(ii) Any Participating Government or Governments holding not less than 10 per cent of the total votes, or

(iii) The Executive Committee.

ARTICLE 31

The presence of delegates holding 75 per cent of the total votes of the Participating Governments shall be necessary to constitute a quorum at any meeting of the Council, but if no such quorum is present on the day fixed for a meeting of the Council which had been called pursuant to Article 30, such meeting shall be held seven days later and the presence of delegates holding 50 per cent of the total votes of the Participating Governments shall then constitute a quorum.

ARTICLE 32

The Council may make decisions, without holding a meeting, by correspondence between the Chairman and the Participating Governments provided that no Participating Government makes objection to this procedure. Any decision so taken shall be communicated to all the Participating Governments as soon as possible and shall be set forth in the minutes of the next meeting of the Council.

ARTICLE 33

The votes to be exercised by the respective delegations of importing countries on the Council shall be as follows:

ARTICLE 34

The votes to be exercised by the respective delegations of exporting countries on the Council shall be as follows:

ARTICLE 35

Whenever the membership of this Agreement changes or when any country is suspended from voting or recovers its votes under any provision of this Agreement, the Council shall redistribute the votes within each group (importing countries and exporting countries) proportionally to the number of votes held each member of the group, provided that no country shall have less than 10 or more than 245 votes and that there shall be no fractional votes, and provided further that the votes of countries having 245 votes under Articles 33 or 34 shall not be reduced, having regard to the substantial number of votes relinquished by each of those countries when accepting the number of votes attributed to them in Articles 33 or 34.

ARTICLE 36

(1) Except where otherwise specifically provided for in this Agreement, decisions of the Council shall be by a majority of the votes cast by the exporting countries and a majority of the votes cast by the importing countries provided that the latter majority shall consist of votes cast by not less than one-third in number of the importing countries present and voting.

(2) When a Special Vote is required, decisions of the Council shall be by at least two-thirds of the votes cast, which shall include a majority of the votes cast by the exporting countries and a majority of the votes cast by the importing countries; provided that the latter majority shall consist of votes cast by not less than one-third in number of the importing countries present and voting.

(3) Notwithstanding the provisions of paragraphs (1) and (2) of this Article, at any session of the council convened in accordance with Article 30

(3) (i) or Article 30 (3) (ii) to deal with any question relating to Article 21, decisions of the Council on action taken by the Executive Committee under the said Articles shall be by a simple majority of the votes cast by the participating countries present and voting taken as a whole.

(4) The Government of any participating exporting country may authorise the voting delegate of any other exporting country and the Government of any participating importing country may authorise the voting delegate of any other importing country to represent its interest and to exercise its votes at any meeting or meetings of the Council. Evidence o£ such authorisation satisfactory to the Council shall be submitted to the Council.

(5) Each Participating Government undertakes to accept as binding all decisions of the Council under the provisions of this Agreement.

ARTICLE 37

(1) The Council shall establish an Executive Committee, which shall be composed of representatives of the Governments of seven participating exporting countries which shall be selected for a quota year by a majority of the votes held by the exporting countries and of representatives of the Governments of seven participating importing countries which shall be selected for a quota year by a majority of the votes held by the importing countries.

(2) The Executive Committee shall excercise such powers and functions of the Council as are delegated to it by the Council.

(3) The Executive Director of the Council shall be ex officio Chairman of the Executive Committee but shall have no vote. The Committee may elect a Vice-Chairman and shall establish its Rules of Procedure subject to the approval of the Council.

(4) Each member of the Committee shall have one vote. In the Executive Committee, decisions shall be by a majority of the votes cast by the exporting countries and a majority of the votes cast by the importing countries.

(5) Any Participating Government shall have the right of appeal to the Council under such conditions as may be prescribed by the Council, against any decision of the Executive Committee. In so far as the decision of the Council does not accord with the decision of the Executive Committee the latter shall be modified as o£ the date on which the Council makes its decision.

CHAPTER XIV
FINANCE
ARTICLE 38

(1) Expenses of delegations to the Council, representatives on the Executive Committee and on any other Committee established in accordance with this Agreement shall be met by their respective Governments. The other expenses necessary for the Administration of this Agreement, including remuneration which the Council pays, shall be met by annual contributions by the Participating Governments. The contribution of each Participating Government for each quota year shall be proportionate to the number of votes held by it when the budget for that quota year is adopted.

(2) At its first session under this Agreement the Council shall approve its budget for the first quota year and assess the contributions to be paid by each Participating Government.

(3) The Council shall, each quota year, approve its budget for the following quota year and assess the contribution to be paid by each Participating Government for such quota year.

(4) The initial contribution of any Participating Government acceding to this Agreement under Article 41 shall be assessed by the Council on the basis of the number of votes to be held by it and the period remaining in the current quota year, but the assessments made upon other Participating Governments for the current quota year shall not be altered-

(5) Contributions shall become payable at the beginning of the quota year in respect of which the contribution is assessed and in the currency of the country where the seat of the Council is situated. Any Participating Government failing to pay its contribution by the end of the quota year in respect of which such contribution has been assessed shall be suspended of its voting rights until its contribution is paid, but, except by Special Vote of the Council, shall not be deprived of any of its other rights nor relieved of any of its obligations under this Agreement.

(6) To the extent consistent with the laws of the country where the seat of the Council is situated, the Government of that country shall grant exemption from taxation with effect from 1 January 1959 on the assets, income and other property of the Council and on remuneration paid by the Council to its employees.

(7) The Council shall, each quota year, publish an audited statement of its receipts and expenditures during the previous quota year.

(8) The Council shall, prior to its dissolution, provide for the settlement of its liabilities and the disposal of its records and assets.

CHAPTER XV
CO-OPERATION WITH OTHER ORGANISATIONS
ARTICLE 39

(1) The Council, in exercising its functions under this Agreement, may make arrangements for consultation and co-operation with appropriate organisations and institutions and may also make such provisions as it deems fit for representatives of those bodies to attend meetings of the Council,

(2) If the Council finds that any terms of this Agreement are materially inconsistent with such requirements as may be laid down by the United Nations or through its appropriate organs and specialised agencies regarding inter-governmental, commodity agreements, the inconsistency shall be deemed to be a circumstance affecting adversely the operation of this Agreement and the procedure prescribed in Article 43 shall be applicable.

CHAPTER XVI
DISPUTES AND COMPLAINTS
ARTICLE 40

(1) Any dispute concerning the interpretation or application of this Agreement, which is not settled by negotiation, shall, at the request of any Participating Government party to the dispute, be referred to the Council for decision.

(2) In any case where a dispute has been referred to the Council under paragraph (1) of this Article, a majority of Participating Governments or Participating Governments holding not less than one-third of the total votes may require the Council, after full discussion, to seek the opinion of the advisory panel referred to in paragraph (3) of this Article on the issues in dispute before giving its decision.

(3)—(i) Unless the Council unanimously agrees otherwise, the panel shall consist of—

(a) two persons, one having wide experience in matters of the kind in dispute and the other having legal standing and experience, nominated by the exporting countries;

(b) two such persons nominated by the importing countries; and

(c) a chairman selected unanimously by the four persons nominated under {a) and (b), or if they fail to agree, by the Chairman o£ the Council.

(ii) Persons from countries whose Governments are parties to this Agree ment, shall be eligible to serve on the advisory panel.

(iii) Persons appointed to the advisory panel shall act jn their personal capacities and without instructions from any Government.

(iv) The expenses of the advisory panel shall be paid by the Council.

(4) The opinion of the advisory panel and the reasons therefor shall be submitted to the Council which, after considering all the relevant information,
shall decide the dispute.

(5) Any complaint that any Participating Government has failed to fulfil its obligations under this Agreement shall, at the request of the Participating Government making the complaint, be referred to the Council which shall make a decision on the matter.

(6) No Participating Government shall be found to have committed a breach of this Agreement except by a majority of the votes held by the exporting countries and a majprity of the votes held by the importing countries. Any finding that a Participating Government is in breach of the Agreement shall specify the nature of the breach.

(7) If the Council finds that a Participating Government has committed a breach of this Agreement, it may by a majority of the votes held by the exporting countries and a majority of the votes held by the importing countries suspend the Government concerned of its voting rights until it fulfils its obligations or expel that Government from this Agreement.

CHAPTER XVII
SIGNATURE, ACCEPTANCE, ACCESSION AND ENTRY INTO FORCE
ARTICLE 41

(1) This Agreement shall be open for signature from 1 December to 24 December 1958 by the Governments represented by delegates at the Conference at which this Agreement was negotiated.

(2) This Agreement shall be subject to ratification or acceptance by the signatory Governments in accordance with their respective constitutional procedures, and the instruments of ratification of acceptance shall be deposited with the Government of the United Kingdom of Great Britain and Northern Ireland.

(3) This Agreement shall be open for accession by any Government referred to in Article 33 or 34 and such accession shall be effected by deposit of an instrument of accession with the Government oi the United Kingdom of Great Britain and Northern Ireland.

(4) The Council may approve accession to this Agreement by the Government of any Member of the United Nations and by any Government invited to the United Nations Sugar Conference 1958, but which is not referred to in Article 33 or 34, provided that the conditions of such accession shall first be agreed upon with the Council by the Government desiring to effect it. Conditions agreed by the Council in accordance with this paragraph shall be consistent with the provisions of this Agreement, and where the Council agrees a basic export tonnage in respect of a Government of an exporting country not named in Article 14, it shall do so by Special Vote. Where any Government desiring to accede to this Agreement requests amendment of the Agreements as a condition of accession, the accession shall not be approved unless and until the Council has recommended such amendment and it has taken effect in accordance with Article 43.

(5) Subject to the provisions of paragraph 6 (i) of this Article, the effective date of a Government's participation in his Agreement shall be the date on which the instrument of ratification, acceptance or accession is deposited with the Government of the United Kingdom of Great Britain and Northern Ireland.

(6)—(i) This Agreement shall enter into force on 1 January 1959 between those Governments which have by that date deposited instruments of ratification, acceptance or accession, provided that such Governments hold 60 per cent of the votes of importing countries and 70 per cent, of the votes of exporting countries in accordance with the distribution established in Articles 33 and 34. Instruments of ratification, acceptance or accession deposited thereafter shall take effect on the date of their deposit.

(ii) For the purposes of entry into force of this Agreement in accordance with sub-paragraph (i) above> a notification containing an undertaking to seek ratification, acceptance or accession in accordance with constitutional procedures as rapidly as possible and if possible before 1 June 1959 received by the Government of the United Kingdom of Great Britain and Northern Ireland on or before 1 January 1959 shall be regarded as equal in effect to an instrument of ratification, acceptance or accession.

(iii) Any notification given in accordance with sub-paragraph (ii) of this paragraph may indicate that the Government concerned will, from 1 January 1959, apply this Agreement provisionally. In the absence of such an indication, the notifying Government shall be regarded as a non-voting observer, provided, however, that such a Government may cease to be an observer if it indicates, before 1 June 1959, that it will apply this Agreement provisionally.

(iv) If any Government giving a notification in accordance with sub-paragraph (ii) of this paragraph fails to deposit an instrument of ratification, acceptance or accession by 1 June 1959, it shall thereupon cease to be entitled to the status of provisional participant or observer, as the case may be. If, however, the Council is satisfied that the Government concerned has not deposited its instrument owing to difficulties in completing its constitutional proc-esses, the Council may extend the period beyond 1 June 1959 to such other date as it may determine.

(v) The obligations under this Agreement of Governments which have deposited instruments of ratification, acceptance or accession by 1 June 1959 or such later date as is determined by the Council in accordance with sub-paragraph (iv) of this paragraph shall apply as from 1 January 1959 for the first quota year, except to the extent that any Government is required by existing legislation to take action inconsistent with this Agreement by reason of it not being in force either fully or provisionally for that Government at that time.

(vi) If at the end of the period of five months mentioned in sub-paragraph (ii), or at the end of any extension of that period, the percentage of votes of importing countries or of exporting countries which have ratified, accepted or acceded to this Agreement is less than the percentage provided for in subparagraph (i), the Governments which have ratified, accepted or acceded to this Agreement may agree to put it into force among themselves.

(7) Where, for the purposes of the operation of this Agreement, reference is made to Governments or countries listed, named or included in particular Articles, any country the Government of which has acceded to this Agreement on conditions agreed with the Council in accordance with paragraph (4) of this Article shall be deemed to be listed, named or included in those Articles accordingly.

(8) The Government of the United Kingdom of Great Britain and Northern Ireland will notify all signatory Governments o£ each signature, ratification, acceptance of, or accession to this Agreement and shall inform all signatory and acceding Governments of any reservation attached thereto.

CHAPTER XVIII
DURATION, AMENDMENT, SUSPENSION, WITHDRAWAL, RESERVATIONS AND TRANSITIONAL MEASURES
ARTICLE 42

(1) The duration of this Agreement shall be five years from 1 January 1959. The Agreement shall not be subject to denunciation.

(2) Without prejudice to Articles 43 and 44, the Council shall in the third year of this Agreement examine the entire working of the Agreement, specially in regard to quotas and prices, shall take into account any amendment to the Agreement which in connexion with this examination any Participating Government may propose, and shall propose amendments or make such other arrangements as are necessary to provide for the amendments of this Agreement in respect of its operation during the fourth and fifth years.

(3) Not less than three months before the last day of the third quota year of this Agreement the Council shall submit or arrange for the submission of a report on the matters referred to in paragraph (2) of this Article to Participating Governments.

(4) Any Participating Government may within a period of not more than two months after the receipt of the report referred to in paragraph (3) of this Article withdraw from this Agreement by giving notice of withdrawal to the Government of the United Kingdom of Great Britain and Northern Ireland. Such withdrawal shall take effect on the last day of the third quota year.

(5)—(i) If, after the two months referred to in paragraph (4) of this Article, any Government which has not withdrawn from this Agreement under that paragraph considers that the number of Governments which have withdrawn under the said paragraph, or the importance o£ those Governments for the purposes of this Agreement, is such as to impair the operation of this Agreement, such Government may, within thirty days following the expiration of the said period, request the Chairman of the Council to call a special meeting of the Council at which the Governments party to this Agreement shall consider whether or not they will remain party to it.

(ii) Any special meeting called pursuant to a request made under sub-paragraph (i) shall be held within one month of the receipt by the Chairman of such request and Governments represented at such meeting may withdraw from the Agreement by giving notice of withdrawal to the Government of the United Kingdom of Great Britain and Northern Ireland within thirty days from the date on which the meeting was held. Any such notice of withdrawal shall become effective thirty days from the date of its receipt by that Government.

(iii) Governments not represented at a special meeting held pursuant to sub-paragraphs (i) and (ii) may not withdraw from this Agreement under the provisions of those sub-paragraphs.

ARTICLE 43

(1) If circumstances arise which, in the opinion of the Council, affect or threaten to affect adversely the operation of this Agreement, the Council may, by a Special Vote, recommend an amendment of this Agreement to the Participating Governments.

(2) The Council shall fix the time within which each Participating Government shall notify the Government of the United Kingdom of Great Britain and Northern Ireland whether or not it accepts an amendment recommended under paragraph (1) of this Article.

(3) If, within the time fixed under paragraph (2) of this Article, all Participating Governments accept an amendment it shall take effect immediately on the receipt by the Government of the United Kingdom of Great Britain and Northern Ireland of the last acceptance.

(4) If, within the time fixed under paragraph (2) of this Article, an amendment is not accepted by the Governments of exporting countries which hold 75 per cent, of the votes of the exporting countries and by the Governments of importing countries which hold 75 per cent of the votes of the importing countries it shall not take effect.

(5) If, by the end of the time fixed under paragraph (2) of this Article, an amendment is accepted by the Governments of exporting countries which hold 75 per cent of the votes of the exporting countries and by the Governments of importing countries which hold 75 per cent of the votes of the importing countries but not by the Governments of all the exporting countries and the Governments of 'all the importing countries:

(i) the amendment shall become effective for the Participating Governments which have signified their acceptance under paragraph (2) of
this Article at the beginning of the quota year next following the end of the time fixed under that paragraph;

(ii) the Council shall determine forthwith whether the amendment is of such a nature that the Participating Governments which do not accept it shall be suspended from this Agreement from the date upon which it becomes effective under sub-paragraph (i) and shall inform all Participating Governments accordingly. If the Council determines that the amendment is of such a nature, Participating Governments which have not accepted that amendment shall inform the Council by the date on which the amendment is to become effective under sub-paragraph (i) whether it is still unacceptable and those Participating Governments which do so shall automatically be suspended from this Agreement; provided that if any such Participating Government satisfies the Council that it has been prevented from accepting the amendment by the time the amendment becomes effective under sub-paragraph (i) by reason of constitutional difficulties beyond its control, the Council may postpone suspension until such difficulties have been overcome and the Participating Government has notified its decision to the Council.

(6) The Council shall establish rules with respect to the reinstatement of a Participating Government suspended under paragraph (5) (ii) of this Article and any other rules required for carrying out the provisions of this Article.

ARTICLE 44

(1) If any Participating Government considers its interests to be seriously prejudiced by the failure of any Government referred to in Articles 33 or 34 to ratify, accept, or accede to this Agreement or by reservations approved by the Council in accordance with Article 45 of this Agreement, it shall so notify the Government of the United Kingdom of Great Britain and Northern Ireland. Immediately on the receipt of such notification, the Government of the United Kingdom of Great Britain and Northern Ireland shall inform the Council, which shall, either at its first meeting thereafter, or at any subsequent meeting held not later than one month after receipt of the notification, consider the matter. If after a period of two months following the notification to the Government of the United Kingdom, the Participating Government still considers its interests to be seriously prejudiced, it may withdraw from this Agreement by giving notice of withdrawal to the Government of the United Kingdom within a period of thirty days thereafter.

(2) If any Participating Government demonstrates that, notwithstanding the provisions of this Agreement, its operation has resulted in an acute shortage of supplies or in prices on the free market not being stabilised within the range provided for in its Agreement, and the Council fails to take action to remedy such situation, the Government concerned may give notice of withdrawal from this Agreement.

(3) If, during the period of this Agreement, by action of a non-participating country, or by action of any participating country inconsistent with this Agreement such adverse changes occur in the relation between supply and demand of the free market as are held by any Participating Government seriously to prejudice its interests such Participating Government may state its case to the Council. If the Council declares the case to be well-founded the Government concerned may give notice of withdrawal from this Agreement.

(4) If any Participating Government considers that its interests will be seriously prejudiced by reason of the effects of the basic export tonnage to be allotted to a non-participating exporting country not named in Article 14 seeking to accede to this Agreement pursuant to Article 41 (4) such Government may state its case to the Council which shall take a decision upon it. If the Government concerned considers that, notwithstanding the decision by the Council, its interests continue to be seriously prejudiced, it may give notice of withdrawal from this Agreement.

(5) The Council shall take a decision within thirty days on any matters submitted to it in accordance with paragraphs (2), (3) and (4) of this Article; and if the Council fails to do so within that time the Government which has submitted the matter to the Council may give notice of withdrawal from this Agreement.

(6) Any Participating Government may, if it becomes involved in hostilities, apply to the Council for the suspension of some or all of its obligations under this Agreement. If the application is denied, such Government may give notice of withdrawal from this Agreement.

(7) If any Participating Government avails itself of the provisions of Article 16 (2), so as to be released from its obligations under that Article, any other Participating Government may at any time during the ensuing three months give notice of withdrawal after explaining its reasons to the Council:

(8) In addition to the situations envisaged elsewhere in this Agreement, when a Participating Government demonstrates that circumstances beyond its control prevent it from fulfilling its obligations under this Agreement it may give notice of withdrawal from this Agreement subject to a decision of the Council that such withdrawal is justified.

(9) If any Participating Government considers that a withdrawal from this Agreement notified in accordance with the provisions of this Article by any other Participating Government, in respect of either its metropolitan territory or all or any of the non-metropolitan territories for whose international relations it is responsible, is of such importance as to impair the operation of this Agreement, that Government may also give notice of withdrawal from this Agreement at any ritne during the ensuing three months.

(10) Notice of withdrawal under this Article shall be given to the Government of the United Kingdom of Great Britain and Northern Ireland and shall become effective thirty days from the date of its receipt by that Government.

ARTICLE 45

(1) Any Government which was, on 31 December 1958, party to the International Sugar Agreement 1953, or to that Agreement as amended by the Protocol of 1956, with one or more reservations shall be entitled on signature, ratification, acceptance or accession to this Agreement to make an identical reservation or reservations.

(2) Any Government represented at the United Nations Sugar Conference 1958 may make one or more reservations in similar terms to those referred to in paragaph (1) of this Article and in the same manner. Any dispute arising under this paragraph shall be settled in accordance with the procedure contained in Article 40.

(3) Any other reservation to this Agreement whether made on signature, ratification, acceptance or accession, shall require the consent of the Council.

(4) Where any reservation or reservations are made in accordance with this Article which require the consent of the Council, the Council shall consider the matter as soon as may be practicable after the deposit of the instrument of ratification, acceptance or accession, as the case may be, of the Government concerned. The instrument shall be regarded as provisionally effective until such time as the Council has considered the matter and, if that Government is unable to obtain the consent of the Council to the reservation or to that reservation as modified, or is unwilling to withdraw the reservation, the instrument shall cease to have effect.

(5) The powers of the Council specified in this Article shall be exercised by Special Vote.

(6) Nothing in this Article shall prevent any Participating Government withdrawing, either in whole or in part, any reservation made by it.

ARTICLE 46

(1) Where in accordance with the International Sugar Agreement 1953 as amended by the Protocol of 1956 the consequences of anything done, to be done or omitted to be done in a quota year would, for the purposes of the operation of that Agreement, have taken effect in a subsequent quota year, those consequences shall have the same effect during the first quota year of this Agreement as if the provisions of the 1953 Agreement as amended by the Protocol of 1956 continued in effect for this purpose.

(2) Notwithstanding the provisions of paragraphs (1) and (2) of Article 18 and of paragraph (1) of this Article, the provisional initial export quotas for the quota year 1959 shall be assigned by the Council during the month of January 1959.

ARTICLE 47

The Government of the United Kingdom of Great Britain and Northern Ireland shall promptly inform all signatory and acceding Governments of each notification and notice of withdrawal received under Articles 42. 43. 44 and 48.

CHAPTER XIX
TERRITORIAL APPLICATION
ARTICLE 48

(1) Any Government may at the time of signature, ratification, acceptance of, or accession to this Agreement or at any time thereafter, declare by notification given to the Government of the United Kingdom of Great Britain and Northern Ireland that the Agreement shall extend to all or any of the non-metropolitan territories for whose international relations it is responsible and the Agreement shall from the date of the receipt of the notification extend to all the territories named therein.

(2) Within thirty days following a request by the Council, each Government shall furnish to the Council a list, expressed in geographical terms, of the territory or territories to which, at that time, this Agreement applies either by virtue of ratification, acceptance or accession in accordance with Article 41 or of notification made under paragraph (1) of this Article by that Government.

(3) Any Participating Government may, by giving notice of withdrawal to the Government of the United Kingdom of Great Britain and Northern Ireland in accordance with the provisions for withdrawal in Articles 42, 43 and 44, withdraw from this Agreement separately in respect of all or any of the non-metropolitan territories for whose international relations it is responsible.

(4) In the case of withdrawal by a Participating Government in respect of all or any of the non-metropolitan territories for whose international relations it is responsible, and in case of changes in territorial application, metropolitan or non-metropolitan, of any Participating Country as reported to the Council by any Participating Government under paragraph (2) of this Article, the Council, at the request of any Participating Government, shall examine whether it is pertinent to make changes in the status, quotas, rights and obligations of the Government concerned, and if it is found that such is the case, shall decide by Special Vote the changes to be made therein. If the Participating Government concerned considers its interests to be prejudiced by the decision of the Council, it may withdraw from this Agreement by giving notice of withdrawal to the Government of the United Kingdom of Great Britain and Northern Ireland within thirty days after the council has reached its decision.

In witness whereof the undersigned, having been duly authorized by their respective Governments, have signed this Agreement on the dates appearing opposite their signature.

The texts of this Agreement in the Chinese, English, French, Russian and Spanish languages are equally authentic, the originals having been deposited with the Government of the United Kingdom of Great Britain and Northern Ireland, which shall transmit certified copies thereof to each signatory and acceding Governments.

^*** The Kingdom of the Netherlands undertakes not to export over the years 1959, 1960 and 1961, taken as a whole, a greater amount of sugar than it imports during the same period.