Montreal Protocol

Montreal Protocol in the United States

Article 10: Financial Mechanism

1. The Parties shall establish a mechanism for the purposes of providing
financial and technical cooperation, including the transfer of
technologies, to Parties operating under paragraph 1 of Article 5 of this
Protocol to enable their compliance with the control measures set out in
Articles 2A to 2E, and any control measures in Articles 2F to 2H that are
decided pursuant to paragraph 1 bis of Article 5 of the Protocol. The
mechanism, contributions to which shall be additional to other financial
transfers to Parties operating under that paragraph, shall meet all agreed
incremental costs of such Parties in order to enable their compliance with
the control measures of the Protocol. An indicative list of the categories
of incremental costs shall be decided by the meeting of the Parties.

2. The mechanism established under paragraph 1 shall include a Multilateral
Fund. It may also include other means of multilateral, regional and
bilateral cooperation.

3. The Multilateral Fund shall:

(a) Meet, on a grant or concessional basis as appropriate, and according
to criteria to be decided upon by the Parties, the agreed incremental
costs;
(b) Finance clearing-house functions to:
(i) Assist Parties operating under paragraph 1 of Article 5, through
country specific studies and other technical co-operation, to
identify their needs for cooperation;
(ii) Facilitate technical co-operation to meet these identified
needs;
(iii) Distribute, as provided for in Article 9, information and
relevant materials, and hold workshops, training sessions, and other
related activities, for the benefit of Parties that are developing
countries; and
(iv) Facilitate and monitor other multilateral, regional and
bilateral co-operation available to Parties that are developing
countries.
(c) Finance the secretarial services of the Multilateral Fund and related
support costs.

4. The Multilateral Fund shall operate under the authority of the Parties
who shall decide on its overall policies.

5. The Parties shall establish an Executive Committee to develop and
monitor the implementation of specific operational policies, guidelines and
administrative arrangements, including the disbursement of resources, for
the purpose of achieving the objectives of the Multilateral Fund. The
Executive Committee shall discharge its tasks and responsibilities,
specified in its terms of reference as agreed by the Parties, with the
cooperation and assistance of the International Bank for Reconstruction and
Development (World Bank), the United Nations Environment Programme, the
United Nations Development Programme or other appropriate agencies
depending on their respective areas of expertise. The members of the
Executive Committee, which shall be selected on the basis of balanced
representation of the Parties operating under paragraph 1 of Article 5 and
of the Parties not so operating, shall be endorsed by the Parties.

6. The Multilateral Fund shall be financed by contributions from Parties
not operating under paragraph 1 of Article 5 in convertible currency or, in
certain circumstances, in kind and/or in national currency, on the basis of
the United Nations scale of assessments. Contributions by other Parties
shall be encouraged. Bilateral and, in particular cases agreed by a
decision of the Parties, regional co-operation may, up to a percentage and
consistent with any criteria to be specified by decision of the Parties, be
considered as a contribution to the Multilateral Fund, provided that such
cooperation, as a minimum:

(a) Strictly relates to compliance with the provisions of this Protocol;
(b) Provides additional resources; and
(c) Meets agreed incremental costs.

7. The Parties shall decide upon the programme budget of the Multilateral
Fund for each fiscal period and upon the percentage of contributions of the
individual Parties thereto.
8. Resources under the Multilateral Fund shall be disbursed with the
concurrence of the beneficiary Party.

9. Decisions by the Parties under this Article shall be taken by consensus
whenever possible. If all efforts at consensus have been exhausted and no
agreement reached, decisions shall be adopted by a two-thirds majority of
the Parties present and voting, representing a majority of the Parties
operating under paragraph 1 of Article 5 present and voting and a majority
of the Parties not so operating present and voting.

10. The financial mechanism set out in this Article is without prejudice to
any other future arrangements that may be developed with respect to other
environmental issues.

Article 10A: Transfer of Technology

Each Party shall take every practicable step, consistent with the
programmes supported by the financial mechanism, to ensure:

(a) That the best available, environmentally safe substitutes and related
technologies are expeditiously transferred to Parties operating under
paragraph 1 of Article 5, and
(b) That such transfers referred to in subparagraph (a) occur under fair
and most favourable conditions.


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