Financial arrangements under the Common Fund for Commodities

The Common Fund for Commodities (CFC) includes special arrangements for the LDCs with regard to their financial contributions to the Fund. Membership is based on contributions in the form of shares. Members are required to have a minimum of 100 shares. LDCs are granted special terms, as specified in Schedule B of the Agreement Establishing the CFC, in the payment of shares exceeding 100:

(a) 30 per cent to be paid in 3 equal installments over a period of three years;

(b) The subsequent 30 per cent to be paid in installments as and when decided by the Fund’s Executive Board;

(c) The remaining 40 per cent is to be paid in the form of deposits of irrevocable, non-negotiable, non-interest bearing promissory notes, as and when decided by the Board.

Additionally, LDCs are not suspended from membership for failure to fulfill their financial obligations.

The Fund includes two types of accounts: i) the resources of the First Account are to finance commodity stocking; and, ii) those of the Second Account to finance measures in the field of commodities other than stocking. Contributions to the Second account are voluntary and members may allocate part of their subscription to it.


Utilization by LDCs:

Contributions beyond 30% of the shares exceeding 100 are reported by the CFC as outstanding contributions. As of 31 December 2017, 23 LDCs had outstanding contributions under the First Account totaling US$1.3 million. The 38 LDCs that are members of the CFC  (excluding former LDCs) had paid US$14.14 million in cash and delivered US$8.56 million as promissory notes.

Contributions by LDCs to the Second Account amounted to US$2.45 million in cash and US$2.39 million in promissory notes.

Resources:

  1. Agreement establishing the Common Fund for Commodities
  2. Common Fund for Commodities: Annual Report 2017