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Agreement on creation of the Payment union of the State Parties of the Commonwealth of Independent States

of October 21, 1994

The State Parties of the Commonwealth of Independent States which are hereinafter referred to as with the Parties

including creation of the Payment union and effective payment system necessary condition of normal functioning of Economic union,

creating conditions for free movement of goods and services,

aiming at ensuring balance of trade and economic relations,

promoting growth of economic potential of national economies on the basis of mutually advantageous cooperation and other economic bonds,

considering close historical and cultural and ethnic connection of the people,

creating conditions for step-by-step creation of optimum system of settlement,

agreed as follows.

Article 1.

Create the Payment union by voluntary merging of the Parties for the purpose of ensuring uninterruptedness of calculations in the mode of use of mutual convertibility of national currencies and forming on this basis of payment system.

Creation of the Payment union of the Party is considered as step-by-step process and start its realization by the conclusion of bilateral and multilateral agreements.

At the subsequent stage of the Party can perform actions for creation of multilateral settlement system in collective currency.

Article 2.

Forming of the Payment union is based on the following principles:

recognition of national currency sovereignty and role of the Central (national) Banks of the Parties as emission centers and bodies of monetary and currency control in the territory of each of the Parties;

non-admission in the territory of each of the Parties of any restrictions on acceptance and use of national currencies as the means of payment on trading and uncommercial activities provided in contracts;

establishment of the rules of the state foreign trade and currency control promoting development in the territory of each of the Parties of the full-fledged (liquid) foreign exchange market in transactions of purchase and sale of national currency for national currencies of other Parties and for other currencies;

ensuring the guaranteed converting of national currency in currencies of other Parties on socially important payments: transfers of pensions, the alimony, public welfare payments, payments and compensations, including payments for indemnification, caused to workers by the mutilation, occupational disease or other damage of health connected with execution by them of labor obligations, the amounts paid based on sentences, decisions, determinations and resolutions of judicial and investigating authorities, payments, connected with the death of citizens, monetary compensations to the victims of political repressions, members of their families and heirs and expense recovery to judicial, investigating, arbitral, notarial and other law enforcement agencies;

provision to authorized commercial banks of the right to perfrom calculations for the external economic transactions, to grant the loans to correspondent banks and other nonresidents - participants of the external economic transactions;

non-admission of administrative restrictions regarding determination of payment currency in case of the conclusion of contracts between business entities of the Parties;

provision to nonresidents of possibility of ownership of national currency and its uses for payment of goods and services, payments of uncommercial nature within the Parties.

Article 3.

The payment system created on the basis of the Payment union services calculations: on goods turnover in interstate and entrepreneurial spheres; to uncommercial transactions; to services of transport, communication and other industries; to the public, bank, commercial credits; to exchange (conversion) currency transactions; on purchase (sale) of cash through bank systems of the Parties.

Members of payment service provider are:

the governments of the Parties according to the bilateral and multilateral agreements signed between them;

the Central (national) Banks providing functioning of payment system, rapprochement of regulations and rules of currency control;

the commercial banks authorized by the Central (national) Banks on implementation of foreign currency transactions;

The interstate bank which is specialized institute of the Payment union and perfroms calculations between the Central (national) Banks on the basis of multilateral clearing carries out transactions in the foreign exchange markets of the Parties, conducts databank for directory providing the Central (national) and other Banks of the Parties, performs other functions for the benefit of the Payment union;

business entities - the legal entities and entrepreneurs performing the activities without formation of legal entity;

physical persons - residents of the Parties when implementing uncommercial transactions.

Article 4.

As payment currency members of payment service provider at their choice can use national currencies of the Parties or other currencies.

International settlements are perfromed through correspondent accounts of the Central (national) and authorized commercial and other banks.

Members of payment service provider can place freely money in national currency of other Party in its domestic money market according to the procedure determined by the legislation of this Party.

The parties will adhere to the mode of the single currency rate for all types of the external economic transactions.

Members of payment service provider will apply the exchange rate determined by the demand and supply in the foreign exchange markets of the Parties.

The parties will aim to perform agreed measures on maintenance of exchange rate stability of national currencies.

For the purpose of regulation of the exchange rates the Central (national) Banks create and use stabilization funds in freely convertible currencies and precious metals.

The parties will provide the admission on the domestic foreign exchange market of nonresident banks, and also Interstate bank according to the national legal system.

Exchange of national currencies of the Parties to physical persons is performed by commercial banks and other bank institutions on the exchange rate developing in the foreign exchange market.

The parties will provide liberalization of the mode of exchange for national currency of other Parties of remaining balance of means on accounts of nonresidents in national currency.

The Central (national) banks do not bear responsibility on settlement of the arising obligations of commercial banks of the Parties.

Article 5.

For the purpose of assistance of multilateral cooperation to the organization in the field of currency and payment and credit relations, rapprochement and enhancement of the currency rules mentioning multilateral settlement credit relations of the Parties, developments of forms and methods of coordination of monetary and monetarist policies of the Party will create Interstate Currency committee.

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