Privileges and Immunities of the Asian Infrastructure Investment Bank Order: SOR/2018-35
Canada Gazette, Part II: Volume 152, Number 6
March 7, 2018
ASIAN INFRASTRUCTURE INVESTMENT BANK AGREEMENT ACT
P.C. 2018-197 March 6, 2018
Her Excellency the Governor General in Council, on the recommendation of the Minister of Finance, pursuant to section 4 of the Asian Infrastructure Investment Bank Agreement Act footnote a, makes the annexed Privileges and Immunities of the Asian Infrastructure Investment Bank Order.
Privileges and Immunities of the Asian Infrastructure Investment Bank Order
Privileges and Immunities
Chapter IX of the Agreement
1 The following privileges and immunities, as set out in Chapter IX of the Agreement, are granted to the Bank:
- (a) the full juridical personality and full legal capacity, as set out in Article 45 of the Agreement;
- (b) the immunity from every form of legal process, as set out in Article 46 of the Agreement;
- (c) the immunity of its property and assets and the inviolability of its archives and documents, as set out in Article 47 of the Agreement;
- (d) the freedom from restrictions, regulations, controls and moratoria of all property and assets to the extent set out in Article 48 of the Agreement;
- (e) the same treatment accorded to its official communications as is accorded to the official communications of any other member, as set out in Article 49 of the Agreement;
- (f) the immunities and privileges of its officers and employees, as set out in Article 50 of the Agreement; and
- (g) the exemption from taxation, as set out in Article 51 of the Agreement.
Coming into Force
2 This Order comes into force on the day on which it is registered.
REGULATORY IMPACT ANALYSIS STATEMENT
(This statement is not part of the Order.)
This Order facilitates Canada’s membership in the Asian Infrastructure Investment Bank (AIIB), by granting the AIIB privileges and immunities under Canadian law as required by the AIIB Articles of Agreement.
Launched in January 2016 and based in Beijing, China, the AIIB is a multilateral development bank focused on economic development through addressing the infrastructure gap in Asia. With total capital of US$100 billion, the AIIB’s priorities include sustainable infrastructure, cross-country connectivity and the mobilization of private capital.
The AIIB has 57 founding members, including Australia, China, France, Germany, Italy, South Korea and the United Kingdom. Canada applied for membership at the AIIB in a second round of applications and was accepted by its Board of Governors in March 2017. As of December 2017, the AIIB had a total of 84 members and prospective members.
Budget 2017 announced Canada’s intention to join the AIIB through the purchase of 0.995% of shares worth US$199 million. The AIIB will help sustain growth in Asia and represents an opportunity for Canada to further engage in multilateral development efforts that support inclusive economic growth in Asia. The AIIB Articles of Agreement were tabled in the House of Commons on May 3, 2017, for 21 sitting days, as required by the Policy on Tabling of Treaties in Parliament. No comments were received.
The Asian Infrastructure Investment Bank Agreement Act (the Act) came into force on December 14, 2017, upon royal assent of the Budget Implementation Act, 2017, No. 2. The Act provides the Governor in Council and the Minister of Finance with the necessary authorities to join the AIIB on behalf of the Government of Canada and to fulfil the requirements set out in the AIIB Articles of Agreement. These include granting the AIIB certain privileges and immunities under Canadian domestic law.
This Order would give the privileges and immunities of the Asian Infrastructure Investment Bank (AIIB) force of law in Canada and allow Canada to satisfy a condition of membership in the AIIB as set out in the Articles of Agreement.
The Order grants the AIIB
- the status of legal personality in Canada such that the AIIB could enter into contracts, initiate legal proceedings and purchase/dispose of property;
- the position of protection from legal proceedings;
- the immunity and freedom from restrictions of all of its property and assets;
- the same treatment accorded to its official communications as is accorded to the official communications of the Government of Canada;
- the immunities and privileges of its officers and employees in relation to legal process and travel facilities; and
- the exemption from direct taxes of the AIIB’s assets, property and income.
These immunities and privileges are consistent with privileges and immunities conferred by Canada on other multilateral development banks such as the World Bank and the European Bank for Reconstruction and Development. Granting the privileges and immunities is a condition of membership and is required to ensure multilateral development banks can effectively operate on a global scale.
As per Article 51 of the AIIB Articles of Agreement, the Minister of Finance will reserve the right to permit Canada and its political subdivisions (e.g. provinces) the ability to tax Canadians working at the AIIB in a manner that is consistent with Canada’s domestic laws, including Canada’s Income Tax Act.
The “One-for-One” Rule does not apply, as there is no change in administrative costs to business.
Small business lens
The small business lens does not apply, as there are no costs on small business.
The AIIB Articles of Agreement require that Canada, as an intended member of the AIIB, take necessary steps to implement the privileges and immunities domestically. Failure to do so could result in Canada being unable to secure membership.
For more information, please contact
International Trade and Finance Branch
Department of Finance Canada