Withdrawals; Refund

Article II. Withdrawals; Refund

Section 2.01 Grant Account; Withdrawals Generally; Currency of Withdrawals

(a) The Commonwealth shall make available the amount of the Grant through the Grant Account in Australian Dollars.

(b) The Republic of Indonesia may from time to time request Withdrawals of amounts of the Grant from the Grant Account in accordance with the Grant Agreement.

(c) Each Withdrawal of an amount of the Grant from the Grant Account shall be made in such Currency or Currencies as the Republic of Indonesia shall reasonably request to meet payments for Eligible Expenses. The amount of each Withdrawal from the Grant Account shall be calculated as the equivalent in terms of the cost to the Commonwealth in Australian Dollars (determined as of the date of withdrawal) of purchasing the Currency or Currencies so requested.

Section 2.02 Special Commitment by the Commonwealth

(a) At the Republic of Indonesia's request and on such terms and conditions as the Republic of Indonesia and the Commonwealth shall agree, the Commonwealth may enter into special commitments in writing to pay amounts for Eligible Expenses notwithstanding any subsequent suspension or cancellation by the Commonwealth or the Republic of Indonesia ("Special Commitment").

Section 2.03 Applications for Withdrawal or for Special Commitment

(a) When the Republic of Indonesia wishes to request a Withdrawal from the Grant Account or to request the Commonwealth to enter into a Special Commitment, the Republic of Indonesia shall deliver to the Commonwealth a written application in such form and substance as the Commonwealth shall reasonably request. Applications for a Withdrawal or Special Commitment, including the documentation required pursuant to this Article, shall be made promptly in relation to Eligible Expenses.

(b) The Republic of Indonesia must furnish to the Commonwealth evidence satisfactory to the Commonwealth of the authority of the person or persons authorised to sign applications under this Section and the authenticated specimen signature of each such person.

(c) The Republic of Indonesia must furnish to the Commonwealth such documents and other evidence in support of each such application as the Commonwealth shall reasonably request, whether before or after the Commonwealth has made the Withdrawal requested in the application.

(d) Each such application and accompanying documents and other evidence must be sufficient in form and substance to satisfy the Commonwealth that the Republic of Indonesia is entitled to receive from the Grant Account the amount applied for and that the Withdrawal from the Grant Account will be used only for the purposes specified in the Grant Agreement.

(e) The Commonwealth shall pay the amount of a Withdrawal only to, or on the order of, the Republic of Indonesia.

Section 2.04 Special Accounts

(a) The Republic of Indonesia may open and maintain one or more Special Accounts into which the Commonwealth may, at the request of the Republic of Indonesia, deposit amounts withdrawn from the Grant Account as advances for the purposes of the Initiative. All designated Special Accounts shall be opened in Bank Indonesia.

(b) Deposits into, and payments out of, any such Special Account shall be made in accordance with the Grant Agreement and such additional instructions as the Commonwealth may specify from time to time by notice to the Republic of Indonesia. In accordance with the terms of the Grant Agreement, the Commonwealth may cease making deposits into any such account upon notice to the Republic of Indonesia. In such case, the Commonwealth shall notify the Republic of Indonesia of the procedures to be used for subsequent Withdrawals from the Grant Account.

Section 2.05 Eligible Expenses

(a) The Republic of Indonesia shall ensure that the proceeds of the Grant are used exclusively to finance expenses which, except as otherwise provided in the Grant Agreement, satisfy the following requirements (“Eligible Expenses”):

(i) the payment is for the financing of the reasonable cost of goods, works or services required for the Initiative, to be financed out of the proceeds of the Grant and procured, all in accordance with the Grant Agreement;

(ii) the payment is not prohibited by a decision of the United Nations Security Council taken under Chapter VII of the Charter of the United Nations; and

(iii) the payment is made on or after the Effective Date, and except as the Commonwealth may otherwise agree, is for expenses incurred prior to the Closing Date.

Section 2.06 Financing Taxes levied in relation to Eligible Expenses

(a) A proportion of a Withdrawal may be used to pay for reasonable Taxes levied by, or in the territory of, the Republic of Indonesia on or in respect of Eligible Expenses, or on their importation, manufacture, procurement or supply, if permitted by the Grant Agreement. To that end, if the Commonwealth at any time determines that the amount of any such Tax is excessive, or that such Tax is discriminatory or otherwise unreasonable, the Commonwealth may, by notice to the Republic of Indonesia, adjust the percentage of such Eligible Expenses to be financed out of the proceeds of the Grant specified in the Grant Agreement, as required to ensure that all Taxes paid from the proceeds of the Grant are reasonable and acceptable to the Commonwealth.

Section 2.07 Exemption from other taxes

(a) The execution, delivery or registration of all Grant Agreements shall, subject to paragraph (b) of this Section, be exempt from any deduction for, and free from any Taxes levied by, or in the territory of the Republic of Indonesia.

(b) The exemption and relief from Taxes provided for in paragraph (a) of this Section shall be in accordance with the applicable tax laws and regulations of the Republic of Indonesia in force from time to time.

(c) Notwithstanding paragraphs (a) and (b) of this Section, and except for the Taxes specified in Section 2.06, the Republic of Indonesia shall be solely responsible for, and shall indemnify and keep indemnified the Commonwealth from, the payment of any Taxes levied in connection with the execution, delivery or registration of this Agreement or any Grant Agreement. The payment of any such Taxes by the Republic of Indonesia shall not constitute an Eligible Expense under this Agreement or any Grant Agreement.

Section 2.08 Undertaking to Prevent Financing of Terrorism

(a) Both Parties are firmly committed to the international fight against terrorism, and, in particular, the financing of terrorism consistent with United Nations Security Council (UNSC) regulations relating to terrorism, including UNSC Resolutions 1373 (2001), 1267 (1999) and related resolutions.

(b) Both Parties reaffirm their commitment to the principles of the International Convention for the Suppression of the Financing of Terrorism (New York, 9 December 1999)

(c) The Parties shall cooperate to ensure that no Grants are used, directly or indirectly, to provide support to individuals or entities associated with terrorism.

(d) If during the term of the Grant Agreement either Party discovers a link between a Grant or an Implementation Contract and any organisation or individual associated with terrorism, it shall promptly inform the other Party.

Section 2.09 Reallocation

(a) Notwithstanding any allocation of an amount of the Grant to a category of expenses under the Grant Agreement, if the Commonwealth reasonably determines at any time that (a) Notwithstanding any allocation of an amount of the Grant to a category of expenses under the Grant Agreement, if the Commonwealth reasonably determines at any time that

(i) reallocate any other amount of the Grant which in the opinion of the Commonwealth is not needed for the purpose for which it has been allocated under the Grant Agreement, to the extent required to meet the estimated shortfall; and

(ii) if such reallocation will not fully meet the estimated shortfall, reduce the percentage of such expenses to be financed out of the proceeds of the Grant, in order that further Withdrawals for such expenses may continue until all such expenses have been made.

Section 2.10 Refund of Unspent Proceeds of Grant

(a) When the Republic of Indonesia gives the Commonwealth the final Initiative Report for the Initiative, the Republic of Indonesia shall notify the Commonwealth of the balance of the designated Special Accounts referred to in Section 2.04. If there are any unspent proceeds of the Grant in a Special Account, the Republic of Indonesia shall refund the unspent proceeds to the Commonwealth within 30 days of the date of the notice, unless the Commonwealth otherwise agrees in writing.