The Federal Law On the Ratification of the Agreement on the New Development Bank has been drafted by the Ministry of Foreign Affairs and the Ministry of Finance in accordance with Article 14 of the Federal Law On the International Treaties of the Russian Federation.
The Agreement on the New Development Bank (hereinafter referred to as the Agreement) was signed in Fortaleza, Brazil, on 15 July 2014, at the sixth BRICS summit.
The Agreement stipulates the establishment of a multilateral financial institution, the New Development Bank, to finance infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.
Under the draft Agreement, the BRICS countries as the Bank’s founders will be entitled to special rights, which the other Bank members will not have. For example, the Bank’s President shall be elected from one of the founding members on a rotational basis, and all key decisions of the Bank’s governing bodies shall be taken by a majority vote of the founding members.
Membership shall be open to members of the United Nations, including emerging economies and industrialised nations.
The initial authorised capital of the Bank shall be US$100 billion and the initial subscribed capital shall be US$50 billion. Shares having an aggregate par value of US$10 billion shall be paid-in shares, and shares having an aggregate par value of US$40 billion shall be callable shares. The initial subscribed capital shall be equally distributed amongst the founding members.
The Bank shall have a Board of Governors, a Board of Directors and a President.
The voting power of each member shall be equal to the number of its subscribed shares in the capital stock of the Bank. Decisions of the Board of Governors on the key issues of the Bank’s operation shall be taken by a special majority (the majority vote of the founding members). These issues include the admission of new members, changes in the authorised and subscribed capital stock of the Bank, suspension of membership, termination of the Bank’s operation and distribution of its assets.
The Bank will have its headquarters in Shanghai, China.
Under Subclause A of Clause 1 of Article 15 of Federal Law No. 101-FZ On the International Treaties of the Russian Federation, dated 15 July 1995, the Agreement is subject to ratification as it includes procedures that differ from those stipulated in Russian law.
The ratification of the Agreement will promote Russia’s cooperation with its BRICS partners and the financing of infrastructure and sustainable development projects in BRICS and other emerging economies and developing countries.
The draft law was discussed and approved at a Government meeting on 29 January 2015.