GRANT NUMBER E2180 Financing Agreement (Forum Fisheries Agency: Pacific Islands Regional Oceanscape Program - Second Phase for Economic Resilience Project) between INTERNATIONAL DEVELOPMENT ASSOCIATION and PACIFIC ISLANDS FORUM FISHERIES AGENCY GRANT NUMBER E2180 FINANCING AGREEMENT AGREEMENT dated as of the Signature Date between INTERNATIONAL DEVELOPMENT ASSOCIATION (“Association”). and PACIFIC ISLANDS FORUM FISHERIES AGENCY (“Recipient”). The Association and the Recipient hereby agree as follows: ARTICLE I — GENERAL CONDITIONS; DEFINITIONS 1.01. The General Conditions (as defined in the Appendix to this Agreement) apply to and form part of this Agreement. 1.02. Unless the context requires otherwise, the capitalized terms used in this Agreement have the meanings ascribed to them in the General Conditions or in the Appendix to this Agreement. ARTICLE II — FINANCING 2.01. The Association agrees to extend to the Recipient a grant, which is deemed as Concessional Financing for purposes of the General Conditions, in an amount equivalent to six million eight hundred thousand Special Drawing Rights (SDR 6,800,000) (“Grant”), to assist in financing the project described in Schedule 1 to this Agreement (“Project”). 2.02. The Recipient may withdraw the proceeds of the Grant in accordance with Section III of Schedule 2 to this Agreement. 2.03. The Maximum Commitment Charge Rate is one-half of one percent (1/2 of 1%) per annum on the Unwithdrawn Grant Balance. 2.04. The Payment Dates are July 1 and January 1 in each year. 2.05. The Payment Currency is Dollar. ARTICLE III — PROJECT 3.01. The Recipient declares its commitment to the objectives of the Project and the Program. To this end, the Recipient shall carry out the Project in accordance with -2- the provisions of Article V of the General Conditions and Schedule 2 to this Agreement. ARTICLE IV — REMEDIES OF THE ASSOCIATION 4.01. The Additional Event of Suspension consists of the following, namely, that the FFA Treaty has been amended, suspended, abrogated, repealed or waived so as to effect materially and adversely the ability of the Recipient to perform any of its obligations under this Agreement. ARTICLE V — EFFECTIVENESS; TERMINATION 5.01. The Effectiveness Deadline is the date ninety (90) days after the Signature Date. ARTICLE VI — REPRESENTATIVE; ADDRESSES 6.01. The Recipient’s Representative is its Director General. 6.02. For purposes of Section 11.01 of the General Conditions: (a) The Association’s Address is: International Development Association 1818 H Street, N.W. Washington, D.C. 20433 United States of America; and (b) the Association’s Electronic Address is: Telex: Facsimile: E-mail: 248423 (MCI) 1-202-477-6391 cdpngpacific@worldbank.org 6.03. For purposes of Section 11.01 of the General Conditions: (a) the Recipient’s address is: Pacific Islands Forum Fisheries Agency No. 1 FFA Road West Kola’a Ridge P.O. Box 629 Honiara Solomon Islands; and -3- (b) the Recipient’s Electronic Address is: E-mail: manu.tupou-roosen@ffa.int AGREED as of the Signature Date. INTERNATIONAL DEVELOPMENT ASSOCIATION By _________________________________/s1/ Authorized Representative Stephen N. Ndegwa Name: ___________________________/n1/ Country Director, PNG & Pacific Islands Title: _____________________________/t1/ 08-Aug-2023 Date: ____________________________/d1/ PACIFIC ISLANDS FORUM FISHERIES AGENCY By ________________________________/s2/ Authorized Representative Dr. Manu Tupou-Roosen Name: __________________________/n2/ Director-General Title: ___________________________ /t2/ 08-Aug-2023 Date: __________________________/d2/ -4- SCHEDULE 1 Project Description The objective of the Project is to strengthen regional capacity for management and sustainable development of the oceanic fisheries sector in Selected Pacific Island Countries. The Project constitutes the second phase of the Program and consists of the following parts: Part 1: Consolidating Oceanic Fisheries Management 1.1. Identifying, Quantifying and Reducing Risks of Illegal, Unreported and Unregulated Fishing in Oceanic Fisheries Carrying out activities to identify, quantify and reduce the risks of illegal, unreported and unregulated (IUU) fishing in oceanic fisheries, including, inter alia: (a) (i) establishing systematic fisheries boarding inspection procedures through in-country training on boarding inspection; (ii) developing standard operating procedures; (iii) developing communication and training material on regional information management for boarding officers; and (iv) providing boarding equipment and safety equipment kits; (b) (i) providing technical assistance for enhancing functions of the Recipient’s regional fisheries surveillance center; and (ii) facilitating regional planning meetings to improve coordination on fisheries surveillance operations and effective implementation of the Niue Treaty Subsidiary Agreement; and (c) (i) developing monitoring and reporting metrics to quantify IUU fishing in oceanic fisheries; (ii) carrying out training and workshops for improving regional data capture and sharing to inform monitoring, control and surveillance (MCS) initiatives; (iii) carrying out regional training on IUU fishing metrics; and (iv) developing an IUU fishing information dashboard. 1.2. Enhancing Fisheries Management Capacity of Targeted FFA Members Carrying out activities to enhance the MCS capacity of Targeted FFA Members including, inter alia: -5- (a) (i) supporting regional capacity building through recognized certificate programs for eligible fisheries administration staff; (ii) providing training and technical assistance to eligible national legal officers and law graduates to manage complex fisheries litigation and prosecutions in a manner consistent with international law and best practice; (iii) providing hands-on training to eligible national fisheries administration staff on both national and international fisheries law at the FFA headquarters; and (iv) strengthening national policy and institutions through reviews of legislative compliance with UNCLOS and providing technical assistance for strengthening legislative compliance with UNCLOS; and (b) (i) providing technical assistance and safety equipment to strengthen national observer programs; (ii) developing a centralized regional asset tracking platform linked to the Recipient’s regional fisheries surveillance center; and (iii) studying the installation of personal safety surveillance cameras and asset tracking systems. Part 2: Harnessing Economic Benefits of Oceanic Fisheries to the Regional Economy 2.1. Modelling and Forecasting Economic and Social Benefits of Fisheries Development Supporting capacity building of fisheries administrations in Targeted FFA Members to: (a) undertake and interpret economic, financial, and investment analysis to inform national sectoral policy development; (b) develop strategies and long-term programs to improve the investment climate for the fisheries sector; (c) produce improved regular strategic reports on the economics of tuna fishery and related investment trends; and (d) increase understanding of the role of tuna fisheries for food security at national level and identify investments and policy development necessary to increase the contribution of tuna fisheries to national food security and nutrition. 2.2. Improving Investment Climate and Negotiation Capacity Providing recognized certificate training to eligible fisheries administration staff in Targeted FFA Members to participate in international fisheries negotiations courses, and supporting training opportunities at the FFA, regional organizations or other national administrations. Part 3: Strengthening FFA’s Operating Environment 3.1. Low carbon transition for FFA’s Infrastructure Supporting the finalization of design options and assessment for low carbon -6- infrastructure investments for FFA headquarters. 3.2. Strengthening FFA’s Cybersecurity, Cloud Business Continuity, and Business Planning and Accounting (a) Supporting the improvement of cloud business continuity with improved online and offsite information and communication technology protections systems; (b) enhancing data encryption and key management systems in line with diagnostic reports; (c) providing support to improve and understand proof of value for user identity management approach for electronic devices; (d) carrying out the cyber safety culture training program and assisting Targeted FFA Members to develop more resilient information and communication technology policies and infrastructure through a cybersecurity awareness program; (e) upgrading the FFA conference center systems and equipment; and (f) supporting the position of an accounting advisor to support the Recipient with cohesive business planning, budgeting and work planning, and financial performance monitoring and reporting. 3.3: Engaging Citizens on the Regional Importance of Fisheries (a) Providing training to eligible national communications staff; (b) strengthening targeted FFA Members’ institutional capacity for media engagement and outreach; (c) building cloud-based regional communications platforms and training of eligible FFA and targeted FFA Members’ staff; (d) conducting a Pacific communications conference to bring together communication officers from across national fisheries administrations, and promoting knowledge sharing and capacity building of media professionals; and (e) supporting a strategic communications officer position within the FFA. Part 4: Project Management Supporting the strengthening of capacity of the Recipient’s Project Management Unit to implement and manage the Project, including staffing and operation of said unit to conduct monitoring and evaluation, environmental and social risk management, and financial and procurement management. -7- SCHEDULE 2 Project Execution Section I. Implementation Arrangements A. Institutional Arrangements. Project Steering Committee 1. The Recipient shall maintain throughout the Project implementation period, a Project Steering Committee, co-chaired by its Deputy Director General and Director of Fisheries Development, to be responsible for providing general oversight and policy direction and reviewing progress and the results of periodic monitoring and evaluation of the Project. Project Management Unit 2. The Recipient shall maintain throughout the Project implementation period a Project Management Unit (“PMU”), with terms of reference and resources, including qualified and experienced staff, in adequate numbers, all satisfactory to the Association, to be responsible for, inter alia, overseeing the day-to-day implementation of the Project, including environmental and social aspects, procurement and financial management, and monitoring and evaluation. 3. Without limitation upon the generality of the foregoing, the Recipient shall maintain, throughout the Project implementation period, the following key staff within the PMU, each of whose terms of reference, qualifications and experience shall be satisfactory to the Association: (i) Project coordinator; (ii) procurement officer; and (iii) Project finance and administrative officer. B. Project Operations Manual. 1. The Recipient shall, by not later than one (1) month after the Effective Date, prepare, and thereafter adopt a Project Operations Manual (“POM”), in form and substance acceptable to the Association, setting forth detailed arrangements and procedures for: (a) institutional coordination and day-to-day execution of the Project; (b) disbursement and financial management; (c) procurement processing procedures including the decision-making process; (d) environmental and social risks management; (e) monitoring and evaluation, reporting and communication; (f) Personal Data collection and processing in accordance with good international practice; (g) obtaining consent from the Targeted FFA Members (as relevant) for any in-country activities; (h) monitoring the use, maintenance and intended purposes of the equipment provided under Parts 1.1 and 1.2 of the Project to ensure it is being used for the purposes of the Project and not to facilitate any fisheries -8- enforcement activities; (i) ensuring that the terms of reference for training and capacity building support for fisheries enforcement activities require the training to include some instruction or content on state obligations under UNCLOS, in particular obligations under Article 73 of UNCLOS; and (j) such other administrative, financial, technical and organizational arrangements and procedures as shall be required for the Project. 2. The Recipient shall carry out the Project in accordance with the Project Operations Manual; and except as the Association shall otherwise agree in writing, the Recipient shall not assign, amend, abrogate, or waive, or permit to be assigned, amended, abrogated, or waived, the Project Operations Manual, or any provision thereof. 3. In the event of a conflict between the provisions of the Project Operations Manual and those of this Agreement, the provisions of this Agreement shall prevail. C. Monitoring, Control and Surveillance. 1. The Recipient shall: (a) ensure that all technical assistance and training related to fisheries monitoring, control and surveillance and related enforcement activities carried out under the Project is compatible with Article 73 of UNCLOS, and that the terms of reference for such technical assistance and training require inclusion of some instruction or content on state obligations under UNCLOS, in particular obligations under Article 73 of UNCLOS; and (b) take steps to ensure that any goods financed out of the proceeds of the Grant that are provided to Targeted FFA Members under Parts 1.1 and 1.2 of the Project are utilized in a manner compatible with Article 73 of UNCLOS. D. Environmental and Social Standards. 1. The Recipient shall ensure that the Project is carried out in accordance with the Environmental and Social Standards, in a manner acceptable to the Association. 2. Without limitation upon paragraph 1 above, the Recipient shall ensure that the Project is implemented in accordance with the Environmental and Social Commitment Plan (“ESCP”), in a manner acceptable to the Association. To this end, the Recipient shall ensure that: (a) the measures and actions specified in the ESCP are implemented with due diligence and efficiency, as provided in the ESCP; -9- (b) sufficient funds are available to cover the costs of implementing the ESCP; (c) policies and procedures are maintained, and qualified and experienced staff in adequate numbers are retained to implement the ESCP, as provided in the ESCP; and (d) the ESCP, or any provision thereof, is not amended, repealed, suspended or waived, except as the Association shall otherwise agree in writing, as specified in the ESCP, and ensure that the revised ESCP is disclosed promptly thereafter. 3. In case of any inconsistencies between the ESCP and the provisions of this Agreement, the provisions of this Agreement shall prevail. 4. The Recipient shall ensure that: (a) all measures necessary are taken to collect, compile, and furnish to the Association through regular reports, with the frequency specified in the ESCP, and promptly in a separate report or reports, if so requested by the Association, information on the status of compliance with the ESCP and the environmental and social instruments referred to therein, all such reports in form and substance acceptable to the Association, setting out, inter alia: (i) the status of implementation of the ESCP; (ii) conditions, if any, which interfere or threaten to interfere with the implementation of the ESCP; and (iii) corrective and preventive measures taken or required to be taken to address such conditions; and (b) the Association is promptly notified of any incident or accident related to or having an impact on the Project which has, or is likely to have, a significant adverse effect on the environment, the affected communities, the public or workers, in accordance with the ESCP, the environmental and social instruments referenced therein and the Environmental and Social Standards. 5. The Recipient shall establish, publicize, maintain, and operate an accessible grievance mechanism, to receive and facilitate resolution of concerns and grievances of Project-affected people, and take all measures necessary and appropriate to resolve, or facilitate the resolution of, such concerns and grievances, in a manner acceptable to the Association. 6. The Recipient shall ensure that all bidding documents and contracts for civil works under the Project include the obligation of contractors, subcontractors and supervising entities to: (a) comply with the relevant aspects of ESCP and the environmental and social instruments referred to therein; and (b) adopt and enforce codes of conduct that should be provided to and signed by all workers, detailing -10- measures to address environmental, social, health and safety risks, and the risks of sexual exploitation and abuse, sexual harassment and violence against children, all as applicable to such civil works commissioned or carried out pursuant to said contracts. E. Annual Work Plans and Budgets. 1. The Recipient shall prepare and furnish to the Association by not later than: (a) three (3) months after the Effective Date (or such other date as the Association may agree to in writing); and (b) February 1 of each year for each subsequent year during the Project implementation period (or such other date as the Association may agree to in writing), for the Association’s no-objection, an annual work plan and budget containing all Project activities and expenditures proposed to be included in the Project (including Operating Costs, FFA IT and Utility Fee, and Training) during the Recipient’s following fiscal year, including a specification of the source or sources of financing for all said expenditures during said following fiscal year, the environmental and social risk mitigation measures taken or planned to be taken in accordance with the provisions of Section I.D of this Schedule during said following fiscal year, and the updated Procurement Plan for said following fiscal year. 2. The Recipient shall implement the Project in accordance with each annual work plan and budget accepted by the Association (“Annual Work Plan and Budget”) for the Recipient’s relevant fiscal year; provided, however, that in the event of any conflict between the Annual Work Plan and Budget and the provisions of this Agreement, the provisions of this Agreement shall prevail. 3. The Recipient shall not make or permit to be made any change to the Annual Work Plan and Budget without the Association’s prior no-objection in writing. Section II. Project Monitoring, Reporting and Evaluation 1. Project Reports (a) The Recipient shall furnish to the Association each Project Report not later than one month after the end of each calendar semester, covering the calendar semester. (b) Except as may otherwise be explicitly required or permitted under this Agreement or as may be explicitly requested by the Association, in sharing -11- any information, report or document related to the activities described in Schedule 1 of this Agreement, the Recipient shall ensure that such information, report or document does not include Personal Data. 2. Mid-term Review The Recipient shall: (a) not later than thirty (30) months after the Effective Date (or such other date as the Association may agree), carry out a mid-term review of the Project and prepare and furnish to the Association a mid-term report, of such scope and in such detail as the Association shall reasonably request, documenting progress achieved in the carrying out of the Project during the period preceding the date of such report, taking into account the monitoring and evaluation activities performed pursuant to paragraph 1 of this Section II.A, and setting out the measures recommended to ensure the continued efficient carrying out of the Project and the achievement of its objective during the period following such date; and (b) review with the Association such mid-term report, on or about the date one (1) month after its delivery to the Association, and thereafter take all measures required to ensure the continued efficient implementation of the Project and the achievement of its objective, based on the conclusions and recommendations of the mid-term report and the Association’s views on the matter. Section III. Withdrawal of the Proceeds of the Grant A. General 1. Without limitation upon the provisions of Article II of the General Conditions and in accordance with the Disbursement and Financial Information Letter, the Recipient may withdraw the proceeds of the Grant to: (a) finance Eligible Expenditures; and (b) repay the Preparation Advance; in the amount allocated and, if applicable, up to the percentage set forth against each Category of the following table: Category Amount of the Grant Percentage of Expenditures to Allocated (expressed in be Financed SDR) (Inclusive of Taxes) (1) Goods, works, 6,420,000 100% non-consulting services, consulting services, Operating Costs and Training for the Project -12- (2) Refund of 380,000 Amount payable pursuant to Preparation Advance Section 2.07 (a) of the General Conditions TOTAL AMOUNT 6,800,000 B. Withdrawal Conditions; Withdrawal Period 1. Notwithstanding the provisions of Part A above, no withdrawal shall be made for payments made prior to the Signature Date. 2. The Closing Date is July 31, 2028. Section IV. Other Undertakings 1. The Recipient shall ensure that the collection, use and processing (including transfers to third parties) of any Personal Data collected under this Project shall be done in accordance with the requirements and procedures set forth in the Project Operations Manual, and ensure legitimate, appropriate, and proportionate treatment of such data. -13- APPENDIX Section I. Definitions 1. “Annual Work Plan and Budget” means each annual work plan, together with the related budget and updated Procurement Plan, for the Project accepted by the Association pursuant to the provisions of Section I.E of Schedule 2 to this Agreement; as said plan and budget may be modified from time to time with the prior written no-objection of the Association. 2. “Anti-Corruption Guidelines” means, for purposes of paragraph 5 of the Appendix to the General Conditions, the “Guidelines on Preventing and Combating Fraud and Corruption in Projects Financed by IBRD Loans and IDA Credits and Grants”, dated October 15, 2006 and revised in January 2011 and as of July 1, 2016. 3. “Category” means a category set forth in the table in Section III.A.1 of Schedule 2 to this Agreement. 4. “Environmental and Social Commitment Plan” or “ESCP” means the environmental and social commitment plan for the Project, dated June 20, 2023, as the same may be amended from time to time in accordance with the provisions thereof, which sets out the material measures and actions that the Recipient shall carry out or cause to be carried out to address the potential environmental and social risks and impacts of the Project, including the timeframes of the actions and measures, institutional, staffing, training, monitoring and reporting arrangements, and any environmental and social instruments to be prepared thereunder. 5. “Environmental and Social Standards” or “ESSs” means, collectively: (i) “Environmental and Social Standard 1: Assessment and Management of Environmental and Social Risks and Impacts”; (ii) “Environmental and Social Standard 2: Labor and Working Conditions”; (iii) “Environmental and Social Standard 3: Resource Efficiency and Pollution Prevention and Management”; (iv) “Environmental and Social Standard 4: Community Health and Safety”; (v) “Environmental and Social Standard 5: Land Acquisition, Restrictions on Land Use and Involuntary Resettlement”; (vi) “Environmental and Social Standard 6: Biodiversity Conservation and Sustainable Management of Living Natural Resources”; (vii) “Environmental and Social Standard 7: Indigenous Peoples/Sub- Saharan African Historically Underserved Traditional Local Communities”; (viii) “Environmental and Social Standard 8: Cultural Heritage”; (ix) “Environmental and Social Standard 9: Financial Intermediaries”; and (x) “Environmental and Social Standard 10: Stakeholder Engagement and Information Disclosure”; effective on October 1, 2018, as published by the Association. 6. “FFA” means Pacific Islands Forum Fisheries Agency, the Recipient, which is a legal entity established pursuant to the FFA Treaty and mandated to provide -14- technical advice and support to its members in the management of their fisheries resources. 7. “FFA IT and Utility Fee” means the utilities- and information technology-related expenses that are charged based on the number of staff and consultants hired for the purposes of the Project who are based at the FFA headquarters, as per the formula defined in the POM and as agreed to by the Association based on the Annual Work Plans and Budgets. 8. “FFA Treaty” means the South Pacific Forum Fisheries Agency Convention of 1979, as amended to date. 9. “General Conditions” means the “International Development Association General Conditions for IDA Financing, Investment Project Financing”, dated December 14, 2018 (revised on August 1, 2020, April 1, 2021, and January 1, 2022), with the modifications set forth in Section II of this Appendix. 10. “Niue Treaty Subsidiary Agreement” means the multilateral treaty between some members of the Recipient that delivers a framework for the parties to participate in regional cooperative surveillance and enforcement activities. 11. “Operating Costs” means reasonable incremental expenditures of the Project incurred by the Recipient on account of Project implementation, monitoring, evaluation, coordination and supervision, as approved by the Association based on Annual Work Plans and Budgets acceptable to the Association, which would not have been incurred but for the Project, including: (i) operation, maintenance and rental of vehicles, routine repairs, and spare parts; (ii) equipment and computer maintenance, including hardware and software; (iii) communication costs and shipment costs (whenever these costs are not included in the cost of goods); (iv) office supplies (that are not included in the FFA IT and Utility Fee); (v) rent for office facilities; (vi) FFA IT and Utility Fee; (vii) insurances; (viii) consumables; (ix) travel, lodging and per diem costs for FFA staff and Project consultants carrying out Project activities; (x) meeting expenses; (xi) bank fees and charges: (xii) mass media and printing, photocopying, and translation expenses; and (xiii) publication and advertising expenses. 12. “Personal Data” means any information relating to an identified or identifiable individual. An identifiable individual is one who can be identified by reasonable means, directly or indirectly, by reference to an attribute or combination of attributes within the data, or combination of the data with other available information. Attributes that can be used to identify an identifiable individual include, but are not limited to, name, identification number, location data, online identifier, metadata, and factors specific to the physical, physiological, genetic, mental, economic, cultural, or social identity of an individual. -15- 13. “Preparation Advance” means the advance referred to in Section 2.07 (a) of the General Conditions, granted by the Association to the Recipient pursuant to the letter agreement signed on behalf of the Association on February 24, 2022, and on behalf of the Recipient on March 8, 2022. 14. “Procurement Regulations” means, for purposes of paragraph 85 of the Appendix to the General Conditions, the “World Bank Procurement Regulations for IPF Borrowers”, dated November 2020. 15. “Program” means the Pacific Islands Regional Oceanscape Program, which is a regional fisheries development program comprising a series of projects, including the Project, that are designed with a common overall objective, complementary component design and results framework and implemented over a multi-year period by the Recipient and selected FFA members. 16. “Project Operations Manual” or its acronym “POM” means the manual referred to in Section I.B of Schedule 2 to this Agreement. 17. “Project Management Unit” or its acronym “PMU” has the meaning ascribed to them in Section I.A.2 of Schedule 2 to this Agreement. 18. “Project Steering Committee” means the Recipient’s committee referred to in Section I.A.1 of Schedule 2 to this Agreement. 19. “Selected Pacific Island Countries” means, any one or all of (as the context may require): Federated States of Micronesia, Independent State of Papua New Guinea, Independent State of Samoa, Kingdom of Tonga, Nauru, Palau, Republic of Fiji, Republic of Kiribati, Republic of the Marshall Islands, Republic of Vanuatu, Solomon Islands, and Tuvalu. 20. “Signature Date” means the later of the two dates on which the Recipient and the Association signed this Agreement and such definition applied to all references to “the date of the Financing Agreement” in the General Conditions. 21. “Targeted FFA Members” means the Selected Pacific Island Countries. 22. “Training” means reasonable costs of training and workshop activities under the Project, based on the Annual Work Plan and Budget, including preparation and reproduction of training materials, rental of facilities, reasonable transportation costs, per diem of trainers and trainees (if applicable), and any other expenses directly related to course preparation and implementation. 23. “UNCLOS” or “United Nations Convention on the Law of the Sea” means the international treaty which came into force on November 16, 1994, and provides a regulatory framework for the use of the world’s seas and oceans, inter alia, to -16- ensure the conservation and equitable usage of resources and the marine environment and to ensure the protection and preservation of the living resources of the sea. Section II. Modifications to the General Conditions The General Conditions are hereby modified as follows: 1. Section 2.06 is modified to read as follows: “Section 2.06. Financing Taxes The use of any proceeds of the Grant to pay for Taxes levied by, or in the territory of, the Member Country on or in respect of Eligible Expenditures, or on their importation, manufacture, procurement or supply, if permitted by the Legal Agreements, is subject to the Association’s policy of requiring economy and efficiency in the use of the proceeds of its credits and grants. To that end, if the Association at any time determines that the amount of any such Tax is excessive, or that such Tax is discriminatory or otherwise unreasonable, the Association may, by notice to the Recipient, adjust the percentage of such Eligible Expenditures to be financed out of the proceeds of the Grant.” 2. Paragraphs (b) and (c) of Section 3.18 are modified to read as follows: “(b) All Financing Payments shall be paid without restrictions of any kind imposed by, or in the territory of, the Member Country, and without deduction for, and free from, any Taxes levied by, or in the territory of, the Member Country. (c) The Legal Agreements shall be free from any Taxes levied by, or in the territory of the Member Country, or in connection with their execution, delivery or registration.” 3. In Section 5.11, paragraph (a) is modified to read as follows: “Section 5.11. Visits “(a) The Recipient shall take all action necessary or useful to ensure that the Member Country affords all reasonable opportunity for representatives of the Association to visit any part of their territories for purposes related to the Grant or the Project.” 4. Section 6.01 is deleted in its entirety and the remaining section in Article VI is renumbered accordingly. 5. Section 8.02 is modified as follows: -17- (a) Paragraph (j) on Membership is modified to read as follows: (j) Membership. The Member Country or any member of the Recipient: (i) has been suspended from membership in or ceased to be a member of the World Bank; or (ii) has ceased to be a member of the International Monetary Fund.” (b) Paragraph (m) is renumbered as paragraph (n), and a new paragraph (m) is added to read as follows: “(m) Interference. The Member Country: (i) has taken or permitted to be taken any action which would prevent or interfere with the execution of the Project or the performance by the Recipient of its obligations under the Financing Agreement; or (ii) has failed to afford a reasonable opportunity for representatives of the Association to visit any part of its territory for purposes relating to Grant or the Project.” 6. The Appendix (Definitions) is modified as follows: (a) Paragraph 77 (Member Country) is modified to read as follows: “77. “Member Country” means the member of the World Bank in whose territory the Project is carried out or any such member’s political or administrative subdivisions. If such activity is carried out in the territory of more than one such member, “Member Country” refers separately to each such member.” (b) Paragraph 92 (Recipient) is modified to read as follows: “92. “Recipient” means the party to the Financing Agreement to which the Grant is extended.”