Multilateral Settlement of Accounts

a system of mutual payments used in foreign trade, credits, investments, and nontrade payments that involve three or more parties.

Various forms of multilateral settlement of accounts are employed in the international payment practices of both capitalist and socialist countries. The leading such form in the capitalist countries under present-day conditions is settlement in freely convertible currencies. Multilateral clearing based on the principle of the transferability of sums held on account by the participants in the settlement is one distinctive form of multilateral settlement. The system of “transfer accounts” in pounds sterling, which operated in Great Britain between 1947 and 1958, provides an example of such clearing. Another form of multilateral clearing practiced by the capitalist countries is the “currency club” examples include the Hague Currency Club and the Paris Currency Club. Participants in this form settle their accounts in partially convertible currencies.

Multilateral settlement of accounts is also used extensively among the socialist countries. Since 1964, accounts among the countries that belong to the Council for Mutual Economic Assistance have been settled in transfer rubles under a system of multilateral settlement of accounts operated through the International Bank of Economic Cooperation.