[GA] Resolution on International Financial Practices

[Naio90]

​ THE GLOBAL ASSEMBLY​ (EST 2010)​

RESOLUTION PROPOSAL FORM​ SECRETARY GENERAL​ HEADQUARTERS​ # SERIAL NUMBER​ Mr. Gregory Figueroa​ London, United Kingdom​ ARG​

​ [ASSEMBLY MEMBER]: Juen Arguello​ [DATE]: 26/04/2013​ [SUBJECT]: Resolution for the Regulation of International Finances​ ​ [DRAFT]:​ ​ Resolution on International Financial Practices​ ​ ​ The subscribing nations:​ ​ ​ Noting the increased financial activity and its level of intensity around the world;​ ​ Highlighting the positive impact and the opportunities presented by the international financial market to developing nations;​ ​ Remarking the importance of transparency and rule of law in such an economically relevant practice;​ ​ Considering the expansion that further regulation and assimilation of a code of fair practices will bring to the global economy;​ ​ Seeking to support sustainable and long term financial growth.​ ​ ​ Decide to​ ​ 1. Adopt the International Financial Reporting and Practice Standards (IFRPS) with retroactive effect to january 1st 2013. (Annex I)​ ​ 2. Further monitor the global financial situation.​ ​ ​ ​ Annex I:​ ​ ​ ​ International Financial​ Reporting and Practice Standards​ ​ ​ Section I: Definitions​ ​ Art. 1 - The present code regulates all governmental, private and hybrid Financial Institutions, and imposes restrictions, procedures and guidelines to the international financial market, aiming to maintain the integrity of the financial system and protecting and safeguarding its interactors.​ ​ Art. 2 - Financial institutions and banking institutions, are defined as corporations which provide services related to the financial markets. These can be divided into three categories:​ ​ a. Depository institutions – deposit-taking institutions that accept and manage deposits and make loans, including banks, building societies, credit unions and trust companies;​ b. Contractual institutions – insurance companies and pension funds;​ c. Investment institutions – investment banks, underwriters, brokerage firms.​ ​ Art. 3 - The contracting parties are defined as the public, private and hybrid institutions, legally constituted and registered in a Nation member of the General Assembly, the willingly seeks out and subscribes a written contract with a Financial or Banking Institution.​ ​ ​ Section II: The Contract​ ​ Art. 4 - In order for a financial service regulated by the present code to be of legally constituent nature it has to be voluntarily validated by the subscription of a written contract by the involved Parties.​ ​ Art. 5 - The written contract mentioned in Article 4 has to include the terms, conditions and guidelines of the transaction, as well as legible signature of representatives from both involved Parties.​ ​ Art. 6 - The Financial institution is free to set its conditions and terms without any limitation or restriction beyond its willingness.​ ​ Art. 7 - The contracting Party is free to accept or reject the conditions and terms proposed by the Financial institution without any limitation or restriction beyond its willingness.​ ​ Art. 8 - By subscribing the written contract, both the Financial institution and the contracting Party are legally obliged to comply with the set condition and terms without exception.​ ​ ​ Section III: Methods of transfer, payment and recovery of funds.​ ​ Art. 9 - The method of repayment has to be defined in the written contract.​ ​ Art. 10 - Valid methods of repayment are:​ ​ a. Manual transfers executed by the contracting Party - I.e Contracting Party creates a transfer request in his name and the Financial institution accepts it.​ b. Manual transfers executed by the Financial institution - I.e Financial institution creates a transfer request in the name of contracting Party and accepts it.​ ​ Art. 11 - Valid methods of payment are:​ ​ a. Transfer executed by the Financial institution.​ ​ ​ Section IV: Breaching of Contract​ ​ Art. 12 - The failure to comply with any of the conditions and terms of the written contract will be interpreted as a breach of the contract.​ ​ Art. 13 - In case of a breach of contract by the contracting Party, the Financial institution is entitled to execute the effects corresponding to the consequences of such action at its discretion.​ ​ Art. 14 - In case of a breach of contract by the Financial institution, the contracting Party is entitled to pursue legal actions against the Financial institution.​ ​ Art. 15 - In case of controversy regarding the written contract, the legal system of the Financial institutions legal registry nation will be applied, unless a different legal system is mentioned in the written contract.​ ​ ​ Section V: Funds recovery in case of breach of contract​ ​ Art. 16 - In case of the Financial institution executing its rights of reclaiming funds according to Article 13, it is entitled to employ national and international mechanisms to enforce the recovery of the funds. This is extensive to all interests mentioned in the written contract.​ ​ Art. 17 - Valid recovery mechanisms are:​ ​ a. Manual transfers executed by the contracting Party - I.e Contracting Party creates a transfer request in his name and the Financial institution accepts it.​ b. Manual transfers executed by the Financial institution - I.e Financial institution creates a transfer request in the name of contracting Party and accepts it.​ ​ c. Seizure of assets owned by the contracting Party;​ ​ Art. 18 - Financial institutions are entitled to pursue legal actions against contracting Parties that fail to comply with the written contract. Such actions may include international sanctions, embargos and other ways of enforcement.​ ​ ​ Section VI: International Settlements​ ​ Art. 19 - In case all national legal instruments have been exhausted, referred to Article 15, both the Financial institution and the contracting Party, represented by their registry nations, can refer to the International Court of Justice to reach a settlement.​ Art. 20 - Only internationally active and present governmental, private and hybrid institutions or nations are within the scope of the present code. Government and boards with no "presence" and possibility of interaction with the international community are unattainable by the present code.​ ​ Art. 21 - An active and present governmental, private and hybrid institution or nation is defined by the existance of a known and appropiate interlocutor.​ ​ Section VII: International financial institutions registry​ ​ Art. 22 - In order to provide further transparency and order to the international financial market, a registry of prominent international financial institutions will be drafted.​ ​ Art. 23 - The conditions to be included in said registry are:​ ​ a. Minimum active operational existence of the Financial institution of 1 year.​ b. Financial institution has to have a permanent, public and active way of communication.​ c. Financial institution backed by a GA member Nation that will act as its legal representation in case of controversy.​ d. No history of un-justified breaching of previous contracts.​ e. Special Financial institutions may be included, disregarding sub point c., if international consensus is reached.​ ​ Art. 24 - The International financial institutions registry will be of public nature and available for consultations at all times.​ ​ ​ ​

 

[Retroliser]

Hakim Usta, the envoy who had been dispatched to express the Turkish position on Italy's resolution regarding minority languages, was, due to the experience he had gained, sent to represent Ottoman Turkey again at The Global Assembly. Finding himself to be the first delegate in attendance, he took his seat and waited patiently for others to arrive.

(Hakim Usta, the Turkish delegate to The Global Assembly)​

 

[Ellie]

The French delegate would arrive, acknowledging the other delegates, and take his seat.

 

[Dutchy]

Dutch Ambassador to the Global Assembly Stefanus van der Laar would arrive and take his place.

 

[Logan]

An Italian Delegate would take his place, sitting down.

 

[Naio90]

Argentine representative and introductor of the draft Resolution would enter the hall and after taking his seat acknowledge the Chairman that he would like to make an opening statement once all or most of the Representatives were present.

 

[Wow41]

A Japanese delegation would arrive and would take his seat

 

[HeadlessSeeker]

The Vietnamese Rep would attend taking their seat.

 

[Deleted member 5]

The Taiwanese Rep would attend taking his seat.

 

[NagandEmerald]

The German representative to the General Assembly would take his seat, with the rest of his delegation following suite. Upon taking out his seat, he pulled out his phone and began looking through newsfeeds regarding the poor weather, and how likely it was he was going to get caught up in traffic after the meeting.

 

[Moe]

The Brazilian representative to the GA, Luis Lima, arrives and takes a seat. He takes out a laptop, eager to her Rep. Arguello speak.

 

[Naio90]

With the Assembly meeting hall getting more and more filled with representatives from the various member nations, the argentine ambassador, Juan Arguello, would ask for the floor to to its opening speech:

"Mr. Secretary General, Representatives from the various nations, ladies and gentlemen.

Thank you very much for being here today to discuss this draft Resolution regarding international financial practices. We think that in todays interconnected and interdependent world, where direct and indirect financial transactions between nations and international institutions are more and more frequent, it is time to set forth a code of guidelines and procedures to regulate its practice with the ultimate goal to safeguard both, the lending institutions, as well as the sides making use of the offered services.

If applied well, and that is our goal with the presented Document, this would have the potential to further regulate the international financial market, providing more security and trasparency and so contribute to global growth and prosperity.

Therefore, my esteemed colleagues, I asked you to review the presented draft and to make comments and suggestions in order to approved and make it a legally valid code as soon as possible.

Finally, I would find it interesting to hear the opinion, in the quality of observers, of leading non-governmental international financial organizations such as First Choice International."

 

[Wow41]

First I would like to present myself to the Geral assembly since it's the first time since the government change that happend in last months. I am Mr. Koro Bessho the new Permanent Representative of Japan to the General Assembly. We are pleased to finally meet Mr. Secretary General and the representatives from the various nations.

First of all I want to thank you for your speech Mr. Juan Arguello. After reading the draft regarding the resolution for international financial practices thoroughly multiple times Japan would accept and support the draft. We do not have anything to add or change in the draft since everything has already been added on the draft.

I want to thank you again Mr. Juan Arguello for the draft proposal and the other representatives from the various nations for taking the time to come here and discuss this draft that has been proposed by Mr. Juan Arguello

After finishing the speech Mr. Koro Bessho would go back to his seat.

 

[HeadlessSeeker]

"I have a couple of questions about the proposal. It mentions that in the event of a contract breach that a manual retrieval of funds can take place, and that legal action can be taken. What is to be done in a situation where the account in question for a manual recovery is unreachable, or being actively denied? Would one move directly to legal action? Are all legal actions to be handled by the The International Court of Justice?"

 

[Naio90]

"If art. 15 (In case of controversy regarding the written contract, the legal system of the Financial institutions legal registry nation will be applied, unless a different legal system is mentioned in the written contract.), doesnt apply, the case can be directly presented to the ICJ.

As for "unreacheble" nations, it is really hard to give a positive answer as there are no technical ways to recover the money without the use of the force. The option is to "reach" the breaching nation after a new, active, Government is elected and work with it.

Ultimately, all manual recoveries will have to be done before a nation reaches the status of formally unreachable."

 

[Retroliser]

Hakim glanced at the other delegates before taking a deep breath and standing to signal his desire to speak.

"Mr. Secretary General, fellow delegates, ladies and gentlemen," He began calmly and solemnly. "It is indeed excellent to see nations utilising the international bodies we rarely think about for the purpose of dialogue. Mr. Juan Arguello, and Argentina, deserve our praise for taking the time to consider an issue that affects us all. However, I am afraid that is where my positive feedback ends, for there are a number of serious issues with this proposal that I wish to highlight.

The first problem is whether it is appropriate for the delegate for Argentina to be tabling a resolution regarding contract law in a body that, in the words of its own charter, exists to; promote human rights, equality, tolerance, justice and peace. After reading the draft resolution, and its articles, it is clear to me that it is, in effect, a copy of the bare basics of contract law, which is already being practiced by civil courts across the globe. It, therefore, begs the question of why this resolution was tabled at all, when matters referring to loans are a competency that belong under a sovereign nation's jurisdiction, not that of an international body.

Before you all begin to air your thoughts, I already have an inkling regarding the motives of Argentina. Loans, along with any other form of contract, can only exist in an environment where both parties are certain that they will abide by the obligations they have agreed on paper. If there is a chance that you do not trust your counterpart, as a lender, then you can always demand security in exchange for the loan. As such, in the event that the borrower does renege on their obligations, the lender is not left out of pocket. Demanding collateral for a loan is common practice, a practice that has been omitted by the gentleman representing Argentina. I am certain that he has forgotten that a lender can demand such a thing in exchange for the loan, which not only provides security for the lender, but also provides an incentive for the borrower to remain loyal to the terms they agreed to.

Suffice to say, I believe that Argentina is attempting to institute a mechanism for dispute resolution... ONCE a dispute has arisen. Would it not be wiser to consider using measures, like the one I've described, to prevent a dispute from occurring at all?"

 

[Dutchy]

Stefanus van der Laar, the Dutch representative to the Global Assembly turned on his microphone, his eyes scanning the room as he spoke,"Secratary General, fellow delegates, I have to agree with my honourable colleague from the Ottoman Sultanate. I praise the Argentinian delegation for tabling this resolution, however I cannot support it. This is a law which would be much more suited to be adopted at a national level. The Global Assembly is not a platform on which financial conflicts are to be brought, except in the most dire of situations. While I do seek increased stability of the global financial markets, I do not believe this is the right way, at least not at this time."

"I call upon the Argentinian representative and his government to proceed at lobbying such legislation around the world, but at a national level or within an international monetary organisation mandated to solve such financial disputes."

 

[Naio90]

"I thank the representatives from Japan, Turkey and the Netherlands for their comments.

First of all, let me be remark that under any circumstance, nations cannot be compared to individuals or persons subject to a nations justice system. A person acts and functions very differently to a sovereign nation.

With that said, international transactions are a reality. As we speak customers and lendors negotiate deals and contracts, its not something that happens rarely. And being a reality, we have to recognize that there is not a single guideline, law or set of procedures in how this practice works, that helps to keep legality and trasparency.

Where does a small emerging nation look for when it needs assistance in negotiating a contract? Is it fair for this nation to be 100% dependent on what a lending nation says and puts on the contract? How does this nation knows what mechanisms it can appeal to in order to defend its interests in the real of legality and validity?

Contracts, as you call them, are and will continue to be signed. What Argentina propsoes here is to define a set of rules on how these contracts shall operate. These contracts will be signed obviously if both Parties think that it will be uphelp and honored in the first place. The code is a mere set of procedures on how this good-faithed contract will be honored.

If there is no trust to begin with, either the customer will not contact the lender, or the lender will refuse to give out a credit, so easy it is.

Finally, civil courts are limited to a nations jurisdiction, and they work fine when all invovled parties are subject to the same pwoer. But in the case of nations or transnational organizations, they are not subject to each others rules. This means that there needs to be a transversal tool that reaches both sides equally.

If there are no rules, nothing and no one protects small clients or good-faithed lendors from shady moves. It is imperative to have something to work on, somethign written down and that shines equal light on both sides. If we fail to do so, we will leave the gates open for loan sharks and organized crime to take over a opportunity for global growth.

Argentina was for a long time on the loosing end of the financial market, always subjugated to high interest rates and hard to comply terms, sometimes even unfair ones. We do not want for this to continue, all nations deserve the right to be treated equally and following the same universal rules."

 

[NagandEmerald]

"With all due respect," Harald began, standing to the microphone as he did, "sovereign nations' laws are usually made by and for the people, especially in democratic countries whose first and foremost responsibility is the protection of their citizens. We shouldn't necessarily have to establish a code of rules when the majority of nations here in the Global Assembly already have consumer-protection laws that not only apply to the average consumer, but to other sovereign nations. I feel that the Ottoman delegation's claims and questions are more than justified enough to warrant a lack of a signature from my hand, let alone the hand of the His Imperial & Royal Majesty."

 

[Naio90]

"I esteem my question has not been answered. Who or what protect a nation defaulting on its debt? Or protecting it from plainly getting bombed back to the stone age for not paying what it is agreed to pay?

If there are no specific law, then it is easy for any infractor to just argue that and ignore any GA meeting, given it was never stated, as the turkish representative stated, as one of it faculties. Continuing this promotes a unfair and unprotective system."