we are required in such circumstances to refrain from acting on the basis of the prevailing factual situation.

In the case of East Timor, the policy judgment has been made by this Administration, as stated by Deputy Assistant Secretary [Robert B.] Oakley last March, that our interests would not be served by seeking to reopen the question of Indonesian annexation of East Timor. Instead, we have directed our efforts to urging Indonesia to institute a humane administration in East Timor and to accept an impartial inspection of its administration by the International Committee of the Red Cross. It is believed that these measures represent the most effective way we can promote the human rights of the inhabitants of East Timor in the present circumstances.

Human Rights in East Timor, Hearings before the Subcommittee on International Organizations of the Committee on International Relations of the House of Representatives, 95th Cong., 1st Sess. (June 28-29, 1977), 46-48. For the remainder of Mr. Aldrich's testimony, see post, Ch. 14, § 9, pp. 991–992.

$2

Continuity and Succession of States

State Succession to Debts

In his November 11, 1977, statement on the Report of the International Law Commission on the Work of Its Twenty-Ninth Session, Robert Rosenstock, U.S. Representative to the Sixth Committee (Legal) at the United Nations, urged that the state debt to be covered by the proposed draft convention of the Commission on succession of states in respect of matters other than treaties embrace the normal range of state debt, including the debt of individuals and corporations, and not be confined to that fraction of state debt which runs between states or between states and international organizations. Mr. Rosenstock made these comments while discussing the following text of article 18, entitled "State debt," of the proposed draft convention:

For the purposes of the articles in the present part, "state debt” means any [international] financial obligation which, at the date of the succession of states, is chargeable to the state.

Report of the International Law Commission on the Work of Its TwentyNinth Sess. (the "Report"), May 9-July 29, 1977, GAOR: Thirty-second sess., Supp. No. 10 (A/32/10), 1977, p. 137.

Portions of Mr. Rosenstock's comments follow:

*

[By] including the word "international" in brackets in article 18, the Commission has posed a question whose answer, we believe, is quite clear.

The question is: shall the state debt to be covered by the proposed draft convention on state succession embrace the normal range of state debt-whether that debt be to foreign states, international organizations, to individuals or to corporations or shall that debt be confined to that fraction of state debt which runs between states or between states and international organizations?

There is no interference in the internal affairs of states if state debt is defined to include state debt to individuals, including nationals of the predecessor state. State succession by definition is hardly an internal affair; it necessarily concerns more than the predecessor state. Moreover, international law, in point of fact, simply is not confined to the rights of states; it also concerns the rights of individuals. That elemental truth is demonstrated by the texts of hundreds of treaties, by the content of thousands of cases, and by the proceedings of this Organization on numerous issues including apartheid.

State practice contains cases of succession of states to thousands of debts whose creditors were alien individuals or corporations. This large body of state practice cannot be ignored in any effort at codification in order to meet the ideological outlook of a minority of the world community which is antipathetic to some forms of economic activity, and which wishes to depreciate the rights of individuals under international law. Even those forming that minority have entered into a series of lump-sum claims agreements since the Second World War which provide that they will negotiate settlement of outstanding defaulted bonds, which are privately owned, with the bondholders. Accordingly, having regard to universal state practice, we see no basis for excluding state debt to private parties from the scope of this draft convention.

If the Commission were to confine state debt in this draft to "international" debt, it would be saying to governments, especially perhaps those of developing countries: your ability to borrow internationally from private creditors has been put into question. It would be saying to private creditors: hesitate to loan to foreign governments, because, in case of state succession, the foundations of your loan will be thrown into question.

Article 11 of the draft provides that debts owed to the predecessor state-whoever the debtor is-shall pass to the successor state. Similarly, debts owed by the predecessor state should be dealt with, whoever the creditor is.

Article 20 of the draft raises essentially the same issue. This time, the purpose of the brackets apparently is to exclude from coverage the rights of creditors other than states or international organizations. For the reasons we have just indicated, there is no good basis, in fact or in law, for depreciating the status of creditors other than states or international organizations, or for treating them in a fashion less favorable than states and international organizations. The brackets should be removed.

To turn to article 22, if the draft is to contain an article in this part on newly independent states-and this clearly is the general view with which the United States is prepared to go along then my government strongly prefers the text which is found in footnote

403 of the Commission's report, for the reasons set out in paragraph 68 of the commentary on this article. . . . It notes that this alternative text received support from some members of the Commission and hopes that governments will give it their fullest consideration.

Press Release USUN-112 (77), Nov. 11, 1977, pp. 11-14A.

The texts of arts. 11, 20 and 21 of the proposed convention, as adopted so far by the Commission, are reproduced below from pp. 132, 135, and 136 of the Report:

[Article 11

Passing of debts owed to the State

Subject to the provisions of the articles of the present Part and unless otherwise agreed or decided, debts owed (créances dues) to the predecessor State by virtue of its sovereignty over, or its activity in, the territory to which the succession of States relates shall pass to the successor State.]

Article 20

Effects of the passing of State debts with regard to creditors

1. The succession of States does not as such affect the rights and obligations of creditors.

2. An agreement between predecessor and successor States or, as the case may be between successor States concerning the passing of State debts of the predecessor State cannot be invoked by the predecessor or the successor State or States, as the case may be, against a third State or international organization which is a creditor [or against a third State which represents a creditor] unless :

(a) the agreement has been accepted by that third State or international organization; or

(b) the consequences of that agreement are in accordance with the other applicable rules of the articles in the present Part.

Article 22

Newly independent States

When the successor State is a newly independent State :

1. No State debt of the predecessor State shall pass to the newly independent State, unless an agreement between the newly independent State and the predecessor State provides otherwise in view of the link between the State debt of the predecessor State connected with its activity in the territory to which the succession of States relates and the property, rights and interests which pass to the newly independent State.

2. The provisions of the agreement referred to in the preceding paragraph should not infringe the principle of the permanent sovereignty of every people over its wealth and natural resources, nor should their implementation endanger the fundamental economic equilibria of the newly independent State. The text of art. 22 set forth in footnote 403 of the Commission's commentary is reproduced below from p. 224 of the Report:

Article 22

Newly independent States

1. No debt contracted by the predecessor State on behalf or for the account of a territory which had become a newly independent State shall pass to the newly independent State unless the debt related to property, rights and interests of which the newly independent State is beneficiary and unless that passage of debt is in equitable proportion to the benefits that the newly inde

pendent State has derived or derives from the property, rights and interests in question.

2. Any agreement concluded between the predecessor and the newly independent State for the implementation of the principles contained in the preceding paragraph shall pay due regard to the newly independent State's permanent sovereignty over its natural weaith and resources in accordance with international law.

Par. 68 of the Commission's commentary on art. 22 is reproduced below from pp. 224-225 of the Report:

(68) Certain members of the Commission were unable to support the text of article 22 and expressed reservations and doubts thereon, and one member expressed reservations on certain paragraphs of the commentary to this article as well. One member proposed an alternative text for the article (A/CN.4/ L.257) which received a measure of support from some members. The view was expressed that it was preferable, as a matter of principle, to admit the possibility that a State debt of the predecessor State might pass to the successor State in some way other than by an agreement between the two States, even though in State practice such passage was normally effected by agreement. Such a passing other than by agreement would still, it was said, be severely limited in much the same manner as that spelled out in paragraph 1 of the adopted text concerning the conditions for the conclusion of an agreément, and would indeed provide an incentive for the conclusion of agreements between predecessor and successor States. Concerning the question of permanent sovereignty over natural resources, preference was expressed for the terminology found in the International Covenants on Economic, Social and Cultural Rights and on Civil and Political Rights. It was further believed that the text of article 22 as adopted could have the effect of discouraging loans to the remaining colonial territories. Another view expressed was that article 22 should have stated a certain number of legal rules: the basic principle of the non-passage of State debts of the predecessor State to the successor State and an exception to that rule based on equity, however limited. The provisions of present paragraph 2 would then provide the procedures to be applied in the case of difficulties, namely by agreement. According to that point of view, the article's major defects were that it did not allow for the slightest exception to the basic rule and that it mixed questions of principle with questions relating to the settlement of disputes, according a predominant place to the latter. [Footnotes omitted.]

For further information concerning the International Covenants on Economic, Social and Cultural Rights and on Civil and Political Rights, see post, ch. 3, § 6, pp. 170-171.

Stephen M. Schwebel, Deputy Legal Adviser of the Dept. of State, was the U.S. member of the International Law Commission at its 29th session.

For further information concerning art. 22 of the proposed draft convention on state succession, see post, Ch. 2, § 4G, pp. 54-56. For other portions of Mr. Rosenstock's statement, see post, Ch. 2, § 4G, pp. 53-54 and Ch. 9, § 1, pp. 672-674.

§3

Djibouti

Diplomatic Relations and Recognition

Recognition of States

On June 27, 1977, President Carter sent a letter to Hassan Gouled Aptidon, President of the Republic of Djibouti, extending recognition to the Republic. The following is the text of President Carter's letter:

The American people join me in sending best wishes to you and to the people of the Republic of Djibouti. I am pleased to inform you that as Djibouti attains independence the United States Gov

ernment extends its recognition. It is our intention, with your agreement, that diplomatic relations be established between our countries on this date.

We believe that a friendly and productive relationship will develop between the United States and Djibouti, and that our mutual concern for human dignity, economic well-being and individual freedom will find expression in close cooperation and friendship.

The Government and people of the United States fully share your aspirations for the progress and welfare of the people of Djibouti and look forward to working with your country in our common effort to secure peace and prosperity for all mankind.

I am confident that the years to come will witness a strengthening of our friendship.

Dept. of State File No. P77 0178-1972.

On June 27, 1977, the U.S. Consulate General to the former French Territory of Afars and Issas became the U.S. Embassy, Republic of Djibouti. Walter S. Clarke became Chargé d'Affaires.

Dept. of State File No. P77 0177-279.

Comoro Islands

On August 15, 1977, the United States recognized the Republic of the Comoros, and the United States and the Comorian Republic issued the following communique establishing relations between the two governments:

The Government of the United States of America and the Government of the Republic of the Comoros guided by the desires of their peoples to establish and develop relations of friendship and cooperation based on the principles of the United Nations Charter and the Universal Declaration of Human Rights have decided to establish diplomatic relations as of August 15, 1977.

76 Dept. of State Bulletin 382 (1977).

On August 16, 1977, U.S. Chargé d'Affaires ad interim in Antananarivo, Madagascar, Robert S. Barrett IV, personally delivered at Moroni, Comoro Islands, the following letter dated July 21, 1977, from President Carter to Comorian Chief of State Ali Soilih:

The American people join me in sending best wishes to you and to the people of the Republic of the Comoro Islands. I am pleased to inform you that the United States extends recognition to the Republic of the Comoro Islands. It is our hope, with your agreement, that diplomatic relations will soon be established between our two countries.

We have followed with interest the process of reorganization recently undergone by the Government of the Comoro Islands to adapt the administration to the needs and resources of the country and to pave the way for meaningful economic development and