(Japanese Note)

　Phnom Penh, July 20, 1993

　Royal Highness,

　I have the honour to refer to the recent discussions held between the representatives of the Government of Japan and of the Supreme National Council of Cambodia concerning Japanese economic cooperation to be extended with a view to strengthening friendly and cooperative relations between the two countries, and to propose on behalf of the Government of Japan the following arrangements:

1. For the purpose of contributing to the execution of the Project for the Rehabilitation of the National Road Route 6A (hereinafter referred to as "the Project") by the Supreme National Council of Cambodia, the Government of Japan will extend to the Supreme National Council of Cambodia, in accordance with the relevant laws and regulations of Japan, a grant up to one billion four hundred and eighteen million yen (1,418,000,000) (hereinafter referred to as "the Grant").

2. The Grant will be made available during the period between the date of coming into force of the present arrangements and March 31, 1994, unless the period is extended by mutual agreement between the authorities concerned of the Government of Japan and the Supreme National Council of Cambodia.

3.(1) The Grant will be used by the Supreme National Council of Cambodia properly and exclusively for the purchase of the products of Japan or Cambodia and the services of Japanese or Cambodian nationals listed below: (The term nationals whenever used in the present arrangements means Japanese physical persons or Japanese juridical persons controlled by Japanese physical persons in the case of Japanese nationals, and Cambodian physical or juridical persons in the case of Cambodian nationals.)

(a) products and services necessary for the rehabilitation of the National Road Route 6A (hereinafter referred to as "the Road"); and

(b) services necessary for the transportation of the products referred to in (a) above to ports in Cambodia and those for internal transportation therein.

(2) Notwithstanding the provisions of sub-paragraph (1) above, when the Government of Japan and the Supreme National Council of Cambodia deem it necessary, the Grant may be used for the purchase of the products of the kind mentioned in (a) of sub-paragraph (1) above, which are products of countries other than Japan or Cambodia and the services of the kind mentioned in (a) and (b) of sub-paragraph (1) above, which are services of nationals of countries other than Japan or Cambodia.

4. The Supreme National Council of Cambodia or its designated authority will enter into contracts in Japanese yen with Japanese nationals for the purchase of the products and services referred to in paragraph 3. Such contracts shall be verified by the Government of Japan to be eligible for the Grant.

5.(1) The Government of Japan will execute the Grant by making payments in Japanese yen to cover the obligations incurred by the Supreme National Council of Cambodia or its designated authority under the contracts verified in accordance with the provisions of paragraph 4 (hereinafter referred to as "the Verified Contracts") to an account to be opened in the name of the Supreme National Council of Cambodia in an authorized foreign exchange bank of Japan designated by the Supreme National Council of Cambodia or its designated authority (hereinafter referred to as "the Bank").

(2) The payments referred to in sub-paragraph (1) above will be made when payment requests are presented by the Bank to the Government of Japan under an authorization to pay issued by the Supreme National Council of Cambodia or its designated authority.

(3) The sole purpose of the account referred to in sub-paragraph (1) above is to receive the payments in Japanese yen by the Government of Japan and to pay to the Japanese nationals who are parties to the Verified Contracts. The procedural details concerning the credit to and debit from the account will be agreed upon through consultation between the Bank and the Supreme National Council of Cambodia or its designated authority.

6.(1) The Supreme National Council of Cambodia will take necessary measures:

(a) to secure a lot of land necessary for the execution of the Project and to clear the site;

(b) to provide facilities for distribution of electricity, water supply and drainage and other incidental facilities outside the site;

(c) to ensure prompt unloading and customs clearance at ports of disembarkation in Cambodia and internal transportation therein of the products purchased under the Grant;

(d) to exempt Japanese nationals from customs duties, internal taxes and other fiscal levies which may be imposed in Cambodia with respect to the supply of the products and services under the Verified Contracts;

(e) to accord Japanese nationals whose services may be required in connection with the supply of the products and services under the Verified Contracts such facilities as may be necessary for their entry into Cambodia and stay therein for the performance of their work;

(f) to ensure that products purchased under the Grant be maintained and used properly and effectively for the execution of the Project; and

(g) to bear all the expenses, other than those covered by the Grant, necessary for the execution of the Project.

(2) With regard to the shipping and marine insurance of products purchased under the Grant, the Supreme National Council of Cambodia will refrain from imposing any restrictions that may hinder fair and free competition among the shipping and marine insurance companies.

(3) The products purchased under the Grant shall not be re-exported from Cambodia.

7. The Government of Japan and the Supreme National Council of Cambodia will consult with each other in respect of any matter that may arise from or in connection with the present　arrangements.

　I have further the honour to propose that this Note and Your Royal Highness' in reply confirming on behalf of the Supreme National Council of Cambodia the foregoing arrangements shall be regarded as constituting an agreement between the Government of Japan and the Supreme National Council of Cambodia which will enter into force on the date of Your Royal Highness' reply.

　I avail myself of this opportunity to renew to Your Royal Highness the assurance of my highest consideration.

　(Signed) Yukio Imagawa

　Ambassador Extraordinary and Plenipotentiary of Japan to Cambodia

　H.R.H. Norodom Sirivudh

　Minister of Foreign Affairs and International Cooperation of Cambodia

(Cambodian Note)

　Phnom Penh, July 20, 1993

　Excellency,

　I have the honour to acknowledge the receipt of Your Excellency's Note of today's date, which reads as follows:

"(Japanese Note)"

　I have further the honour to confirm on behalf of the Supreme National Council of Cambodia the foregoing arrangements and to agree that Your Excellency's Note and this Note shall be regarded as constituting an agreement between the Government of Japan and the Supreme National Council of Cambodia which will enter into force on the date of this reply.

　I avail myself of this opportunity to renew to Your Excellency the assurance of my highest consideration.

　(Signed) Norodom Sirivudh

　Minister of Foreign Affairs and International Cooperation of Cambodia

　His Excellency

　Mr. Yukio Imagawa

　Ambassador Extraordinary and Plenipotentiary of Japan to Cambodia