Islamic Development Bank Ordinance, 1978

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THE ISLAMIC DEVELOPMENT BANK ORDINANCE, 1978 
 
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CONTENTS 
1.  Short title, extent and commencement 
2.  Definitions 
3.  Financial provisions 
4.  State Bank to be depository of the Bank  
5.  Certain provisions of the Agreement to have force of law 
6.  Power to make rules 
  
 
 

 
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THE ISLAMIC DEVELOPMENT BANK ORDINANCE, 1978. 
ORDINANCE NO. VI OF 1978 
[22nd February, 1978] 
An Ordinance to implement the international agreement for the establishment and operation of the 
Islamic Development Bank and for matters connected therewith. 
 WHEREAS Pakistan is a signatory to the Agreement establishing the Islamic Development 
Bank and thereby became a member of the said Bank;  
 AND WHEREAS it is expedient to make provision for the implementation of the international 
agreement for the establishment and operation of the aforesaid Bank and for carrying out the 
obligations of Pakistan as a member of the said Bank and for matters connected therewith;  
 And WHEREAS the President is satisfied that circumstances exist which render it necessary 
to take immediate action; 
 Now, therefore, in pursuance of the Proclamation of the fifth day of July, 1977, read with the 
Laws (Continuance in Force) Order, 1977, (C.M.L.A. Order No. 1 of 1977), and in exercise of all 
powers enabling him in that behalf, the President is pleased to make and promulgate the following 
Ordinance:- 
 1. Short title, extent and commencement .—(1) This Ordinance may be called the Islamic 
Development Bank Ordinance, 1978.  
 (2) It extends to the whole of Pakistan.  
 (3) It shall come into force at once and shall be deemed to have taken effect on the twenty-third 
day of April, 1975. 
 2. Definitions. In this Ordinance, unless there is anything repugnant in the subject or context,— 
(a)  “Agreement” means the Agreement for the establishment and operation of the 
international body known as the Islamic Development Bank;  
(b)  “Article” means Article of the Agreement; and . 
(c)  “Bank” means the Islamic Development Bank established under the Agreement. 
 3. Financial provisions .___(1) There shall be paid out of the Federal Consolidated Fund all 
such sums as may, from time to time, be required for the purpose of paying—  
(a)  the subscription payable by the Federal Government to the Bank under 
paragraphs 1, 2, 3, 4 and 5 of Article 5; and  
(b)  any other sums payable by the Federal Government to the Bank under the 
Agreement.  
 
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 (2) Any sums received, by or on behalf of the Federal Government from the Bank shall be paid 
into the Federal Consolidated Fund. 
 4. State Bank to be depository of the Bank. The State Bank of Pakistan shall be the depository 
of the Pakistan currency holdings and other assets of the Bank located in Pakistan.  
 5. Certain provisions of the Agreement to have force of law.___(1) Notwithstanding anything 
to the contrary contained in any other law, the provisions of the Agreement set out in the Schedule 
shall have the force of law in Pakistan: 
 Provided that nothing in Article 59 of the Agreement shall be construed as— 
(a)  entitling the Bank to import into Pakistan goods free of any duty of customs 
without any restriction on their sub-sequent sale therein, or  
(b)  conferring on the Bank an exemption from duties or taxes which form part of 
the prices of goods sold or which are in fact no more than charges for services 
rendered. 
 (2) The Federal Government may, by notification in the official Gazette, amend the Schedule 
in conformity with any amendments, which may hereafter be duly made and adopted, of the provisions 
of the Agreement set out therein.  
 6. Power to make rules. The Federal Government may, by notification in the official Gazette, 
make rules for carrying out the purposes of this Ordinance. 
THE SCHEDULE 
(See section 5) 
Provisions of the Agreement which shall have the force of law 
CHAPTER VII 
STATUS, IMMUNITIES, EXEMPTIONS AND PRIVILEGES 
ARTICLE 50 
Purpose of Chapter 
 To enable the Bank effectively to fulfil its purpose and carry out the functions entrusted to it, 
the status, immunities, exemptions and privileges set forth in this Chapter shall be accorded to the 
Bank in the territory of each member. 
ARTICLE 51 
Legal Status 
 The Bank shall be an independent international institution possessing full juridical personality 
and, in particular, full capacity— 
(i)  to contract; 
 
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(ii)  to acquire and dispose of immovable and movable property; and  
(iii)  to institute legal proceedings. 
ARTICLE 52 
Immunity from Judicial Proceedings 
 1. The Bank shall enjoy immunity from every legal process except in cases arising out of or in 
connection with the exercise of its powers to raise money, or to buy and sell or under write the sale of 
securities, in which cases actions may be brought against the Bank in a court of competent jurisdiction 
in the territory of a country in which the Bank has its principal or a branch office, or has appointed, an 
agent for the purpose of accepting service or notice of process, or has issued or guaranteed securities.  
 2. Notwithstanding the provisions of paragraph 1 of this Article, no action shall be brought 
against the Bank by any member, or by any agency or instrumentality of a member, or by an entity or 
person directly or indirectly acting for or deriving claims from a member. Members shall have recourse 
to such special procedures for the settlement of controversies between the Bank and its members as 
may be prescribed in this Agreement, in the Bye -laws and Regulations of the Bank, or in contracts 
entered into with the Bank.  
 3. Property and assets of the Bank shall, whosesoever located and by whomsoever held, be 
immune from all forms of seizure, attachment or execution before the delivery of final judgment 
against the Bank. 
ARTICLE 53 
Immunity of Assets 
 Property and assets of the Bank, whosesoever located and by whomsoever held, shall be 
immune from search, requisition, confiscation, expropriation or any other form of taking or foreclosure 
by administrative or legislative action. 
ARTICLE 54 
Immunity of Archives 
 The archives of the Bank and, in general, all documents belonging to it, or held by it, shall be 
inviolable wherever located. 
ARTICLE 56 
Freedom of Assets from Restrictions 
 To the extent necessary to carry out the purpose and functions of the Bank  effectively, and 
subject to the provisions of this Agreement, all property and assets of the Bank shall be free from 
restriction, regulations, controls and moratoria of any nature. 
ARTICLE 57 
Privilege for Communications 
 
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 The official communications of the Bank shall be accorded by each member treatment which 
is not less favourable than that accorded by it to any other international organisation. 
ARTICLE 58 
Immunities and Privileges of Bank Personnel 
 All Governors, Alternates, Executive Directors, the Pre sident, officers and employees of the 
Bank— 
(i)  shall be immune from legal process with respect to acts performed by them in 
their official capacity;  
(ii)  where they arc not local citizens or nationals, shall be accorded the same 
immunities from immigra tion restrictions, alien registration requirements and 
national service obligations, and the same facilities as regards exchange 
regulations, as are accorded by members to the representatives, officials and 
employees of comparable rank of other members; and  
(iii)  shall be granted the same treatment in respect of travelling facilities as accorded 
by members to representatives, officials and employees of comparable rank of 
other members. 
ARTICLE 59 
Exemption from Taxation 
 1. The Bank, its assets, properly, income and its operations and transactions shall be exempt 
from all taxation and from all customs duties. The Bank shall be also exempt from any obligation for 
the payment, withholding or collection of any tax or duty.  
 2. No tax shall be levied on or in respect of salaries and emoluments paid by the Bank to the 
President, the Executive Directors, officers or employees of the Bank.  
 3. No tax shall be levied on any security issued by the Bank, including any dividend ther eon, 
by whomsoever held- 
(i)  which discriminates against such security solely because it is issued by the 
Bank; or 
(ii)  if the sole jurisdictional basis for such taxation is the place or currency in which 
it is issued, made payable or paid, or the location of any office or place of 
business maintained by the Bank. 
 4. No tax of any kind shall be levied on any security guaranteed by the Bank, including any 
dividend thereon, by whomsoever held—  
(i)  which discriminates against such security solely because it is guaranteed by the 
Bank; or  
 
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(ii)  if the sole jurisdictional basis for such taxation is the location and of any office 
or place of business maintained by the Bank. 
ARTICLE 61 
Waiver of Immunities, Exemptions and Privileges 
 The Bank, at its dis cretion, may waive any of the privileges, immunities and exemptions 
conferred under this Chapter in any case or instance, in such manner and upon such conditions as it 
may determine to be appropriate in its best interest.