The IILM is an initiative of central banks, monetary authorities and multilateral organisation seeking to address a significant need for short-term liability management instruments in reserve currencies for Shari’a-compliant financial institutions across the world. Its founding members entered into the IILM’s Articles of Agreement in October 2010. The IILM’s shareholders are a subset of its founding members.

None of the IILM, its shareholders or its subsidiaries are restricted entities under applicable sanctions regimes. Accordingly, no restricted entity holds any economic interest in IILM.

Recognising the significance of this to the IILM’s potential counterparties and holders of its instruments, the IILM and its subsidiaries will not issue shares to, or accept share subscription payments from, any restricted entity.

In addition, the IILM and its subsidiaries have not entered into any financial transactions with, acquired assets from or invested in any restricted entity.

In the course of its activities, the IILM will enter into financial transactions with various persons and will apply the proceeds of the issuance of its instruments to acquire assets from or invest in governments and others.

In accordance with the commitment described above, the IILM and its subsidiaries will not apply the proceeds of the issuance of their instruments in a manner that would:

• cause the IILM or its subsidiaries to violate applicable sanctions regimes,
• be the cause of holders of the IILM’s instruments or others participating in the IILM’s issuance programme to violate applicable sanctions regimes or
• result directly in the imposition of adverse economic measures on such persons under and as a result of sanctions regimes.

This means, for instance, that the IILM and its subsidiaries will not acquire assets, make investments, issue instruments, appoint dealers or accept financial support if doing so would cause any of them to violate any applicable sanctions regime.

These limitations will be reflected in the legal documentation for the IILM’s issuance programme, which will include detailed investment criteria.

In order to give its counterparties and stakeholders transparent comfort on the matters above, the IILM will give representations and covenants to the effect of the foregoing when appropriate in legal documentation.

The IILM will establish and maintain an internal control programme to monitor compliance with applicable sanctions regimes.

The IILM will periodically consider this policy and its scope and modify it if circumstances warrant. Any modifications to this policy will be subject to the Governing Board’s approval, in writing and made available to stakeholders.