Department does not know what further legal action will be taken by the appellants in this matter. Dept. of State File No. P77 0029-1933. The text of the referenced enclosed memorandum follows: Claims Against the Government of Czechoslovakia Representatives of the Governments of the United States and Czechoslovakia held negotiations in Prague during the period September 1973 to July 1974 regarding the settlement of certain outstanding claims and financial issues between the two Governments. As a result, representatives of the two Governments initialed an ad referendum settlement agreement on July 5, 1974. The agreement was subject to the formal approval of the two Governments. In general, the agreement provided for (1) the payment by the Government of Czechoslovakia to the Government of the United States of $29.5 million, in installments, in settlement of all legally valid claims of nationals of the United States against the Government of Czechoslovakia for the nationalization or other taking of property between January 1, 1945, and the date the agreement enters into force, and (2) the withdrawal by the Government of the United States of its objection to the release of 18,400 kilograms of gold to the Government of Czechoslovakia which is being held in the custody of the Tripartite Commission for the Restitution of Monetary Gold. Člaims of nationals of the United States against the Government of Czechoslovakia for the nationalization or other taking of property from January 1, 1945, to August 8, 1958, have been adjudicated by the Foreign Claims Settlement Commission of the United States and paid in part by the Department of the Treasury under Title IV of the International Claims Settlement Act of 1949, as amended (22 U.S.C. 1642-1642p). Claims of persons who were not nationals of the United States on the date the property was nationalized or taken are excluded under the Act and the agreement. The time for filing claims under the Act expired on September 15, 1959. Claims of nationals of the United States arising after August 8, 1958, have not been adjudicated by the Foreign Claims Settlement Commission. In the circumstances, persons owning property which was taken after August 8, 1958, and who were nationals of the United States on the date of loss would have unadjudicated claims against the Government of Czechoslovakia. The Department is precluded from taking any action to formalize the ad referendum claims settlement agreement with the Government of Czechoslovakia. It cannot do so because the Congress added an amendment to the Trade Act of 1974 requiring the Department to renegotiate the agreement and obtain more favorable payment provisions. The amendment provides as follows: (a) The arrangement initialed on July 5, 1974, with respect to the settlement of the claims of citizens and nationals of the United States against the Government of Czechoslovakia shall be renegotiated and shall be submitted to the Congress as part of any agreement entered into under this title with Czechoslovakia. 257-179 O-79-46 (b) The United States shall not release any gold belonging to Czechoslovakia and controlled directly or indirectly by the United States pursuant to the provisions of the Paris Reparations Agreement of January 24, 1946, or otherwise, until such agreement has been approved by the Congress. Subsequent to the enactment of the above-mentioned legislation, a lawsuit was filed in the United States District Court for the District of Columbia asking the Court, among other things, to compel the sale of the gold and distribute the proceeds to persons who have received awards rendered by the Foreign Claims Settlement Commission of the United States under Title IV of the International Claims Settlement Act of 1949, as amended. The case was dismissed by the Court and is now on appeal. Until these legal and legislative matters are cleared up and a formal agreement is concluded between the Governments of the United States and Czechoslovakia, no action can be taken in connection with the adjudication or payment of any claim against the Government of Czechoslovakia. At the appropriate time, the Foreign Claims Settlement Commission of the United States will be given jurisdiction to adjudicate claims of nationals of the United States against the Government of Czechoslovakia for the nationalization or other taking of property after August 8, 1958. At such time, it is suggested that persons who believe they have valid claims communicate with the Foreign Claims Settlement Commission of the United States, 1111 20th Street, N.W.. Washington, D.C. 20579, requesting appropriate claims forms. Dept. of State File L/C. For further information concerning the referenced lawsuit, Logan v. Secretary of State, 553 F.2d 107 (1976), see the 1976 Digest, Ch. 9, § 1, pp. 439–441. 84 Agreements for the Protection of Foreign Model Agreement On February 8, 1977, Elizabeth Burton, Agreements Officer and Corporate Secretary of the Overseas Private Investment Corporation (OPIC), caused to be published for the purpose of receiving public comment the text of the model agreement OPIC utilizes for the purpose of instituting investment incentive programs pursuant to section 237 of the Foreign Assistance Act of 1961, as amended. These OPIC investment incentive programs include insurance, guaranties, and reinsurance in countries which have indicated their receptivity to such programs. The model procedural agreement provides for (a) host government recognition of the subrogation of the U.S. Government if OPIC should pay a claim under the Agreement; (b) third party international arbitration in case of a dispute between the two governments arising under certain conditions specified in the Agreement; and (c) approval by the host government of any project to be the subject of OPIC coverage. The text of the model OPIC agreement follows: INVESTMENT INCENTIVE AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF Excellency: (Country) I have the honor to refer to conversations which have recently taken place between representatives of our two governments relating to investments in which promote the development of the economic resources and pro(Country) ductive capacities of -- and to investment insurance (including rein(Country) surance) and investment guaranties which are backed in whole or in part by the credit or public monies of the United States of America and are administered either directly by the Overseas Private Investment Corporation ("OPIC"), an independent government corporation organized under the laws of the United States of America, or pursuant to arrangements between OPIC and commercial insurance, reinsurance and other companies. I also have the honor to confirm the following understandings reached as a result of those conversations: Article 1 As used herein, the term "Coverage" shall refer to any investment insurance or guaranty which is issued in accordance with this Agreement by OPIC, by any successor agency of the United States of America or by any other entity or group of entities, pursuant to arrangements with OPIC or any successor agency, all of whom are hereinafter deemed included in the term "Issuer" to the extent of their interest as insurer or reinsurer in any Coverage, whether as a party or successor to a contract providing Coverage or as an agent for the administration of Coverage. Article 2 The procedure set forth in this Agreement shall apply only with respect to Coverage of investments relating to projects or activities approved by the Government of In the case of construction or service contracts en (Country) tered into with the Government of (Country) or any agency or political subdivision thereof, the project or activity shall be deemed to have been approved by the Government of for purposes of this Agreement. (Country) Article 3 (a) If the Issuer makes payment to any investor under Coverage, the Government of shall, subject to the provisions of Article 4 hereof, recog (Country) nize the transfer to the Issuer of any currency, credits, assets, or investment on account of which payment under such Coverage is made as well as the succession of the Issuer to any right, title, claim, privilege, or cause of action existing, or which may arise, in connection therewith. (b) The Issuer shall assert no greater rights than those of the transferring investor with respect to any interests transferred or succeeded to under this paragraph. Nothing in this Agreement shall limit the right of the Government of the United States of America to assert a claim under international law in its sovereign capacity, as distinct from any rights it may have as Issuer. (c) The issuance of Coverage outside of with respect to invest ment in a project in (Country) shall not subject the Issuer to regulation under the laws of (Country) (Country) Article 4 To the extent that the laws of partially or wholly invalidate or (Country) prohibit the acquisition from a covered investor of any interest in any property within the territory of ------ by the Issuer, the Government of (Country) (Country) shall permit such investor and the Issuer to make appropriate arrangements pursuant to which such interests are transferred to an entity permitted to own such interests under the laws of (Country) Article 5 including credits thereof, ac Amounts in the lawful currency of (Country) quired by the Issuer by virtue of such Coverage shall be accorded treatment by the Government of no less favorable as to use and conversion than (Country) the treatment to which such funds would be entitled in the hands of the covered investor. Such amounts and credits may be transferred by the Issuer to any person or entity and upon such transfer shall be freely available for use by such person or entity in the territory of --- (Country) Article 6 (a) Any dispute between the Government of the United States of America and the Government of regarding the interpretation of this Agree (Country) ment or which, in the opinion of one of the Governments, involves a question of public international law arising out of any project or investment for which Coverage has been issued shall be resolved, insofar as possible, through negotiations between the two Governments. If at the end of three months following the request for negotiations the two Governments have not resolved the dispute by agreement, the dispute, including the question of whether such dispute presents a question of public international law, shall be submitted, at the initiative of either government, to an arbitral tribunal for resolution in accordance with Paragraph 6(b). (b) The arbitral tribunal for resolution of disputes pursuant to Paragraph 6(a) shall be established and function as follows: (i) Each Government shall appoint one arbitrator; these two arbitrators shall designate a President by common agreement who shall be a citizen of a third state and be appointed by the two Governments. The arbitrators shall be appointed within two months and the President within three months of the date of receipt of either Government's request for arbitration. If the appointments are not made within the foregoing time limits, either Government may, in the absence of any other agreement, request the President of the International Court of Justice to make the necessary appointment or appointments, and both Governments agree to accept such appointment or appointments. (ii) The arbitral tribunal shall base its decision on the applicable principles and rules of public international law. The arbitral tribunal shall decide by majority vote. Its decision shall be final and binding. (iii) Each of the Governments shall pay the expense of its arbitrator and of its representation in the proceedings before the arbitral tribunal; the expenses of the President and the other costs shall be paid in equal parts by the two Governments. The arbitral tribunal may adopt regulations concerning the costs, consistent with the foregoing. (iv) In all other matters, the arbitral tribunal shall regulate its own procedures. Article 7 This Agreement shall continue in force until six months from the date of receipt of a note by which one Government informs the other of an intent no longer to be a party to the Agreement. In such event, the provisions of the Agreement with respect to Coverage issued while the Agreement was in force shall remain in force for the duration of such Coverage, but in no case longer than twenty years after the denunciation of the Agreement. Upon receipt of a note from Your Excellency indicating that the foregoing provisions are acceptable to the Government of the Government of 111) (Country) the United States of America will consider that this note and your reply thereto constitute an Agreement between our two Governments on this subject, to enter into force on the date of the note by which the Government of com (Country) municates to the Government of the United States of America that this exchange of notes has been approved pursuant to its constitutional procedures. Accept, Excellency, the renewed assurances of my highest consideration. /8/----42 Fed. Reg. 8034-8035 (1977). 85 National Legal Provision for Protection of The Overseas Private Investment Corporation Country Eligibility On September 20, 1977, the Board of Directors of the Overseas Private Investment Corporation (OPIC) adopted a general policy and guideline, entitled Country Eligibility for OPIC Programs, designed to focus the Corporation's efforts on those countries whose per capita gross national product is less than $450 as evaluated in terms of the value of the dollar in 1973. In announcing the new policy, OPIC's Acting President, Rutherford M. Poats, indicated that OPIC would concentrate primarily on encouraging expansion of mutually beneficial U.S. private investment on a broad range of developmental investment in such countries. OPIC's principal means of encouraging investment are its political risk insurance and financing services for U.S. companies. The Board also decided to restrict but not terminate OPIC programs in developing countries with incomes averaging greater than one thousand dollars on a per capita basis. In countries with average per capita income in excess of one thousand dollars, OPIC will insure or finance private U.S. investment projects satisfying OPIC's other policy tests if such projects are sponsored by U.S. small businesses or cooperatives, are for minerals exploration or development, or involve energy development in countries not members of the Organization of Petroleum Exporting Countries (OPEC). In addition, the Board will consider, on a case-by-case basis, other projects in such countries if there are "exceptionally significant developmental benefits." At the time of the Board's decision, the restriction on OPIC programs in countries with per capita gross national product averages over one thousand dollars applied to Argentina, Barbados, Brazil, Brunei, Cyprus, French Guiana, French Polynesia, Gabon, Greece, Guadeloupe, Iran, Israel, Jamaica, Malta, Martinique, Netherlands |