The member states of the Gulf Cooperation Council;

The United Arab Emirates,

The Kingdom of Bahrain,

The Kingdom of Saudi Arabia,

The Sultanate of Oman,

The State of Qatar,

The State of Kuwait,

And based on the objectives of the Basic Law of the Gulf Cooperation Council, which calls for closer ties and stronger links between the member states and emphasizes the importance of developing existing cooperative relations among them in various fields, and in affirmation of the foundations and principles established by the Gulf Cooperation Council.

In line with the Economic Agreement of the Gulf Cooperation Council aimed at enhancing the economies of the member states in light of global economic developments and to strengthen their competitive capabilities.

And based on the decision of the Supreme Council in its thirty-seventh session (Manama, December 6-7, 2016) regarding the approval to establish and build a linking system for the payment systems of the member states, and to authorize the monetary institutions and central banks of the member states to own and manage the project through the establishment of an independent company owned and funded by the monetary institutions and central banks of the member states,

It has been agreed as follows:

The purpose of this Agreement is as follows: 

• 1. To establish a system that connects the payment and settlement systems among the Council member states to execute payment transfers and settlement operations and payment orders between them.

• 2. To enhance the safety and efficiency of the shared Gulf payment systems to mitigate any potential risks to them, thereby maintaining financial stability in the participating Council member states and serving their interests. 

• 3. To establish the supervisory and regulatory powers of the central banks over the payment systems among the Council member states and to work on their development.

• ‌4. To enhance and develop the clearing processes through the mechanisms and procedures agreed upon by the central banks.

• ‌5. To establish a regional infrastructure and maintain its integrity to serve as the foundation for the shared payment systems among the Council member states, through the following: 

  • A- Providing a real-time cross-border settlement system for the Council member states.

  • B- Supporting transactions in the local currencies of the Council member states and financial settlement operations between the central banks.

  • C- Enhancing integration among financial markets and ensuring the swift completion of cash transfers, standardizing their format, and ensuring their protection, as well as supporting bilateral and multilateral trade relations.

‏1. The Law provides for the settlement and clearing of payments in the currencies of the Council countries, as well as in currencies that the Governors' Committee deems appropriate to include from time to time, and the Law supports operations with the funds of central banks after obtaining guarantees as determined by the Governors' Committee.

‌2. Central banks that may be affected by any act that violates the provisions of this Agreement may find alternative solutions to ensure ‎the settlement of transactions.

3. The participation of the Council countries in the Law is optional according to the readiness of each country and is not linked to the contribution to the establishment of any Gulf payment company.

In order to achieve the objectives of this Agreement, the Committee of Governors shall have the necessary powers to achieve the objectives of this Agreement, and in particular, it shall have the following:

• ‏1. Establishing the regulatory and supervisory frameworks and governance frameworks related to the Law.

• ‏2. Approving the conditions, rules, and controls necessary for the appointment and licensing of the system operator, and for the operation and management of the system, including business continuity.

• ‏3. Approving the financial and accounting controls related to the system.

• 4. Approving the fees and tariffs related to the system.

• 5. Defining and establishing the policies and regulatory and operational rules for settlement and clearing operations.

• 6. Approving the policies and rules necessary to determine the finality and enforceability of payment, settlement, and clearing operations. 

• 7. Establishing regulatory, supervisory, and executive committees and defining their jurisdictions, tasks, and responsibilities.

• ‏8. Approving the rules, conditions, and controls related to participation in the system.

• ‏9. Working on developing the rules and regulations related to Gulf payment systems.

• 10. Approving the linkage of the system to similar regional and international systems.

• 11. Establishing a working system for the Committee of Governors and its governance.

• 12. Approving the conditions, rules, and controls necessary related to the prohibition, suspension, and default of participants in the system.

In order to achieve the objectives of this Agreement, the central banks shall have the following tasks and powers:

• 1. Establishing, owning, and appointing companies to manage and operate the system in accordance with the regulations approved by the Governors' Committee.

• 2. Participating in the system in accordance with the approved terms, rules, and regulations.

• 3. Working to develop payment systems in a manner that keeps pace with the latest means and practices, and ensuring the operation and continuity of the system and related services in accordance with the approved terms, rules, and regulations.

• 4. Ensuring the transfer and settlement of transactions executed through the system in accordance with the approved terms, rules, and regulations, including finding alternative methods to ensure this in the event of operator failure or service non-provision, in accordance with the relevant rules and procedures necessary to achieve this.

• 5. Approving the exchange rate between the currencies of the Council's countries and other currencies for transactions in the system.

• 6. Managing liquidity and financial guarantees in a manner that serves the operation of the system and ensures its continuity in accordance with the terms, rules, and regulations approved by the Governors' Committee.

• 7. Establishing the necessary mechanisms to provide appropriate protection for cross-border transaction settlements, including the establishment of a fund to guarantee these settlements.

• 8. Executing accepted payment orders specific to the participant in accordance with the terms, rules, and regulations approved by the Governors' Committee.

• 9. Defining the conditions for local participants in the system.

• 10. Notifying the operator directly in the event of any participant's default in accordance with the conditions, rules, and regulations related to default approved by the Governors' Committee.

• 11. Developing the necessary strategies to mitigate risks in their various forms in accordance with the best international practices.

• 12. Developing various services related to the system.

• 13. Any other tasks or powers delegated by the Governors' Committee.

1. All defense, settlement, and clearing operations accepted through the law are considered valid, final, and irrevocable for any reason.

2. The clearing arrangements are deemed effective, binding, and enforceable, and are exempt from the provisions of the bankruptcy laws in the Council countries. 

1. The following provisions shall apply to companies established under paragraph 1 of Article 5: 

• A- The assets and properties of the aforementioned companies in the Council countries shall not be subject to nationalization, confiscation, or seizure, and they shall not be subject to guardianship or attachment except in execution of a final judicial ruling issued by a competent judicial authority in any of the Council countries. 

• B. The assets of the aforementioned companies and their financial operations shall be exempt from any currency transfer restrictions that may be imposed by any of the Council countries. 

• ‌C- The assets, funds, revenues, and operations of the aforementioned companies authorized under this Agreement and their basic regulations shall be exempt from taxes and fees of any kind in all Council countries and from any legally imposed deductions in any of these countries, except for fees due for any services received by the companies from any public facility.

2. Members of the boards of companies established under the provisions of paragraph 1 of Article 5 of this Agreement, and their employees shall be exempt from any taxes or fees on salaries or bonuses they receive from these companies, and they shall be granted special facilities for travel and residence in the country of headquarters and other Council countries to enable them to perform their duties, all in accordance with the laws and regulations in force in each country.

All information exchanged between the parties participating in the Law is inherently confidential and may not be declared or used except for the purposes of operating the Law. The parties to this Agreement, the participants in the Law, and its operator are obligated to maintain the confidentiality of the information even after their withdrawal from this Agreement or the termination of their appointment as operators of the Law or the suspension or termination of their membership or participation in the Law.

• 1. Notwithstanding the above, information related to the Law and pertaining to one of the central banks may be declared after obtaining written approval from the relevant central bank of this information and through it. 

• 2. Any information obtained from the Law may be declared if the declaration is in compliance with the provisions of the Law or based on a request from a competent judicial authority.

The States of the Council that are parties to this Agreement shall work to settle any dispute arising between them regarding this Agreement amicably. If it is not possible to resolve the dispute as mentioned above, they may, by mutual agreement, refer the dispute to arbitration in accordance with the arbitration rules they agree upon. If they do not agree on arbitration, the dispute shall be referred to the Economic Judicial Authority of the Gulf Cooperation Council.