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The Financial Express

Global climate fund seeks legal immunity, tax waiver from Bangladesh

To set up regional office in Dhaka


| Updated: May 23, 2018 16:00:32


Internet photo used for illustrative purpose only Internet photo used for illustrative purpose only

A global climate fund supporting the efforts of developing countries seeks enjoying immunity from legal process and other privileges from Bangladesh, officials said.

The board of the Green Climate Fund (GCF) recently forwarded a draft of an agreement to Bangladesh for signing.

The government is scrutinising the document, the officials said.

Bangladesh, being one of the worst victims of climate change impacts, has started getting funding from the billion-dollar fund meant for climate-resilient development.

The Economic Relations Division (ERD), the national designated authority of GCF in Bangladesh, recently sought opinion on the draft agreement from the ministries such as home, foreign, finance, environment, and the National Board of Revenue (NBR).

"While exercising their functions and during the journey to and from the People's Republic of Bangladesh, [the board] shall enjoy immunity from personal arrest or detention and from seizure of personal baggage," the draft said about the privileges the members and alternative members of the board and executive director of GCF seek.

The draft also proposed that the observers and other persons invited by the GCF enjoy "immunity from legal process of every kind".

"The fund shall enjoy immunity from every form of legal process, except in case arising out of or in connection with the exercise of its powers to borrow money ... ," said the article 4 (1) of the draft agreement.

The article 4 (2) of the draft agreement also said no action shall be brought against the fund by Bangladesh, or by any agency or instrumentality or by any entity or person directly or indirectly acting for or deriving claims from the country.

"Property and assets or the fund, shall, wheresoever, located and by whomsoever held, be immune from all forms of seizure, attachment or execution before the delivery of final judgement against the fund," the article 4 (3) of the agreement noted.

The draft also noted that the Fund, its assets, property, income and its operations and transactions shall be exempt from all taxation and customs duties. The fund shall also be exempt from any obligation for the payment, withholding or collection of any tax or duty.

"No tax shall be levied on or in respect of salaries and emoluments paid by the fund to members and alternative members of the board, their advisers, the executive director, officers or employees of the fund, including experts performing missions for the fund," it added.

According to the draft, any dispute, controversy or claim arising out of, or in relation to the agreement shall be settled by arbitration in accordance with the Permanent Court of Arbitration (PCA) Rules 2012. The arbitration shall be held in The Hague or Netherlands where the PCA situates.

Contacted over telephone, ERD deputy secretary Sirajun Noor Chowdhury told the FE that the move is there to establish a GCF regional office in Dhaka.

He said once a regional centre was established officials will be given training, carry out research on climate change impacts based on local aspects, giving the scope for getting higher amount of funding.

Mr Chowdhury also said that the GCF may not get all the immunities and privileges as sought in the agreement.

"But it may be given the immunities and privileges accorded to multilateral agencies like the World Bank and International Monetary Fund," he added.

The degree of immunities and privileges will be decided after getting opinions from the ministries and divisions.

Asked whether the GCF got similar immunities and privileges in other countries to which it so far signed such agreement, Mr Chowdhury said that Bangladesh has no access to the documents the GCF signed with other countries.

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