Decision ID: 002898

In October 2003 the 1992 Fund Executive Committee considered a proposal by the Spanish delegation that the 1992 Fund should make advance payments to the Spanish Government and to the Governments of other affected States that wished to receive such payments, the amounts to be estimated by the Director on the basis of the assessment of the damage. It was noted that the proposal envisaged that the advanced payments would be ‘on account’ and that States would be required to provide the necessary guarantees so that if it should transpire that a State had been advanced more than it was entitled to, the State would return the overpayment. It was further noted that under the proposal, final settlements and the sums due to each of the affected parties would be based on the Fund’s assessments in accordance with the admissibility criteria. It was finally noted that under the Spanish delegation’s proposal a sufficient percentage of the Fund’s available resources should be retained to enable the Fund to honour payments to those affected parties who made claims direct to the Fund. A number of delegations either supported the proposal or felt that it deserved further consideration, although some expressed serious reservations, since it involved making payments to the Spanish Government in excess of the agreed level of 15%, which deviated from the requirement that all claimants should be treated equally and could give the appearance of the Fund acting as a bank. The Chairman stated that in the light of the debate on the proposal, and in view of the great importance of the issue and the enormous ramifications involved, he proposed that the 1992 Fund’s supreme body, the Assembly, should consider the matter on the basis of a revised document on the proposal that he had prepared with the help of a number of delegations. The Committee endorsed the Chairman’s proposal.

Date: 30.09.2003
Category: Compensation payments
Subjects: Payments against bank guarantees, Payments against Government guarantees