(United Nations' Note)


					New York, 22 December 2004

Excellency,

	I have the honour to refer to the recent discussions held between the representatives of the Government of Japan (hereinafter referred to as "the Government") and of the United Nations concerning the contribution by the Government of personnel, equipment and services in support of the United Nations Mission of Support in East Timor established by the United Nations Security Council Resolution 1410 dated May 17, 2002 (hereinafter referred to as "UNMISET").  As a result of these discussions, the Government and the United Nations (hereinafter referred to as the "Parties") have reached the following understanding for the provision of personnel, equipment and services in support of UNMISET:

Definitions

1.	For the purpose of the present understanding, the definitions listed in Annex D shall apply.

Documents constituting this Note

2.	The Annexes to this Note form an integral part of the present understanding. 

Purpose

3.	The purpose of the present understanding is to establish the administrative, logistics and financial terms and conditions to govern the contribution of personnel, equipment and services provided by the Government in support of UNMISET.

Application

4.	The present understanding shall be applied in conjunction with the United Nations Guidelines to troop-contributors for UNMISET and in accordance with the relevant laws and regulations of both Parties. Both Parties confirm that the implementation of the present understanding is consistent with the laws and regulations of each Party.

Contribution of the Government

5.1	The Government shall contribute to UNMISET the personnel listed in Annex A.  Any personnel above the level indicated in this Note shall not be subject to payment or other kind of support by the United Nations.

5.2	The Government shall contribute to UNMISET the major equipment listed in Annex B.  The Government shall ensure that the major equipment and related minor equipment meet the performance standards as approved by the General Assembly for the duration of the deployment of such equipment to UNMISET.  Any equipment above the level indicated in this Note shall not be subject to payment or other kind of support by the United Nations.

5.3	The Government shall contribute to UNMISET the self-sustainment equipment and services listed in Annex C.  The Government shall ensure that the self-sustainment equipment and services meet the performance standards as approved by the General Assembly for the duration of the deployment of such equipment and services to UNMISET.  Any equipment and services above the level indicated in this Note shall not be subject to payment or other kind of support by the United Nations.

Payment and support from the United Nations

6.1	The United Nations shall make payment to the Government in respect of the personnel provided under the present understanding at the rates listed in paragraph 2 of Annex A.

6.2	The United Nations shall make payment to the Government for the major equipment provided under the present understanding at the rates listed in Annex B.  The payment for the major equipment shall be reduced in the event that such equipment does not meet the required performance standards as approved by the General Assembly or in the event that the equipment is reduced.

6.3	The United Nations shall make payment to the Government for the self-sustainment equipment and services provided under the present understanding at the rates listed in Annex C.  The payment for the self-sustainment equipment and services shall be reduced in the event that such equipment and services do not meet the required performance standards as approved by the General Assembly or in the event that the equipment and services are reduced.

6.4	Payment for the personnel shall continue at full rates until the date of departure of the personnel from the mission area. 

6.5	Payment for the major equipment shall be at full rates until the date of cessation of operations by the Government or termination of the mission and thereafter be calculated at 50 per cent of the rates set out in Annex B until the equipment departure date from the mission area.  

6.6	Payment for the self-sustainment equipment and services shall be at full rates until the date of cessation of operations by the Government or termination of the mission and thereafter be reduced to 50 per cent of the rates set out in Annex C calculated upon the remaining actual deployed personnel strengths until all the personnel have departed the mission area.

6.7	When the United Nations negotiates a contract with a carrier for the repatriation of equipment and the carrier exceeds a 14-day grace period after the expected arrival date, the Government shall be paid by the United Nations at the dry provision rate as approved by the General Assembly from the expected arrival date until the actual arrival date.

General conditions

7.	The Parties agree that the contribution of the Government as well as the payment or other kind of support from the United Nations shall be governed by the general conditions set out in the relevant Annexes.

Specific conditions

8.1	Environmental condition factor is set at 1.0% of the payment rates under the present understanding.

8.2	Intensified operational condition factor is set at 1.0% of the payment rates under the present understanding.

8.3	Hostile action/forced abandonment factor is set at 0% of half of the maintenance rate under the present understanding.

8.4	The Parties confirm that the distance between the airport/port of exit in the country of the Government and the airport/port of entry in the mission area is estimated at 5,649 kilometers.  Incremental transportation factor is set at 1.5% of the payment rates under the present understanding.

8.5	The following locations are the agreed airports/ports of entry and exit for the purpose of transportation arrangements for the movement of personnel and equipment: 

	(a)	Personnel 

		The airport/port of entry and exit of the personnel in the country of the Government shall be decided by the Parties for each rotation.

		The airport/port of entry and exit of the personnel in the mission area is Dili.

		The personnel may be returned to another location nominated by the Government, however, the maximum cost to the United Nations will be the cost to the agreed airport/port of entry in the country of the Government.  Where a rotation uplifts the personnel from a different airport/port of exit, this airport/port shall become the agreed airport/port of exit for these personnel.

	(b) 	Equipment

		The originating location of the equipment in the country of the Government is Hokkaido. 

		The port of embarkation and disembarkation of the equipment in the country of the Government is Yokohama.

		The port of embarkation and disembarkation of the equipment in the mission area is Dili.
	

Claims by third parties

9.	The United Nations shall be responsible for dealing with any claims by third parties where the loss of or damage to their property, or death or personal injury, was caused by the personnel or equipment provided by the Government in the performance of services or any other activity or operation under the present understanding. However, if the loss, damage, death or injury arose from gross negligence or wilful misconduct of the personnel provided by the Government, the Government shall be liable for such claims.

Recovery

10.	The Government shall reimburse the United Nations for loss of or damage to United Nations-owned equipment and property caused by the personnel or equipment provided by the Government, if such loss or damage (a) occurred outside the performance of services or any other activity or operation under the present understanding, or (b) arose or resulted from gross negligence or wilful misconduct of the personnel provided by the Government.

Supplementary arrangements

11.	The Parties may conclude written supplementary arrangements to the present understanding.

Settlement of disputes

12.1	The Parties shall promptly consult, upon request of either Party, in accordance with the procedures set out below, to resolve disputes which may arise from or in connection with the present understanding.
     

	(a)	The procedures for disputes which may arise from or in connection with the implementation of the present understanding shall be comprised of two levels of dispute resolution.

		(i) 	Unless otherwise decided by the Parties, a designated official of the Government and the Chief Administrative Officer (CAO) of UNMISET or his/her 	representative shall, at the request of either Party, 	attempt to reach a settlement of the dispute arising from or in connection with the implementation of the 	present understanding through amicable consultations; and 

		(ii)	If such consultation stipulated in (i) above cannot resolve the dispute, a designated official of the Government and the Under-Secretary-General, Department of Peacekeeping Operations of the United Nations, or his/her representative shall, at the request of either Party, attempt to reach a settlement of the dispute through amicable consultations. 

	(b)	If disputes arise from or in connection with the interpretation of the present understanding, a designated official of the Government and the Under-Secretary-General, Department of Peacekeeping Operations of the United Nations, or his/her representative shall, at the request of either Party, attempt to reach a settlement of the dispute through amicable consultations.

12.2	Disputes that have not been resolved as provided in paragraph 12.1 above may be submitted to a mutually-agreed conciliator or mediator appointed by the President of the International Court of Justice.  Any dispute which has failed to be settled by such conciliation or mediation may be submitted to arbitration at the request of either Party. Each Party shall appoint one arbitrator, and the two arbitrators so appointed shall appoint a third, who shall be the Chairman.  If within thirty days from the date on which the request for arbitration was made either Party has not appointed an arbitrator or if within thirty days of the appointment of two arbitrators the third arbitrator has not been appointed, either Party may request the President of the International Court of Justice to appoint an arbitrator.  The procedures for the arbitration shall be fixed by the arbitrators, and each Party shall bear its own expenses.  The arbitral award shall contain a statement of reasons on which it is based, shall be binding on the Parties, and shall be implemented by the Parties in accordance with their respective laws and regulations.  The arbitrators shall have no authority to award interest or punitive damages.

Period for Payment

13.	The financial obligations of the United Nations with respect to payments for the personnel, major equipment and self-sustainment equipment and services start from the date of arrival of personnel or equipment in the mission area, and will remain in effect until the date of departure of the personnel and equipment from the mission area as per the agreed withdrawal plan or the date of effective departure where the delay is attributable to the United Nations.

Termination

14.	The Parties shall consult with each other on the timing and modalities for termination of the present understanding.

15.	In the event that changes in laws or regulations of Japan, including changes in budgetary appropriation, subsequent to the signature of the present understanding, prevent the Government from implementing any provision of the present understanding, the Government shall promptly so notify the United Nations and either Party may terminate the present understanding, unless the Parties agree otherwise.

Amendments

16.	Either Party may initiate a review of the level of contribution subject to payment by the United Nations or of the level of national support to ensure compatibility with the operational requirements of UNMISET and of the Government.  

17.	The present understanding may only be amended by an exchange of notes between the Parties. 

Headings of the paragraphs

18.	The heading of the paragraphs of this Note are inserted for convenience of reference only and shall not affect the interpretation of this Note.

	The United Nations has the further honour to propose that, if the above understanding is acceptable to the Government, the present Note and Your Excellency's Note in reply shall be regarded as constituting an agreement between the United Nations and the Government, which shall enter into force on the date of Your Excellency's Note in reply.


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




				       (Signed)   	Jane Holl Lute
					Assistant Secretary-General
					Peacekeeping Operations
					Department of Peacekeeping 
					Operations United Nations





His Excellency
Mr. Kenzo Oshima
Ambassador Extraordinary
and Plenipotentiary of Japan
to the United Nations

Annex D

DEFINITIONS

1.	Consumables, means supplies of a general nature, consumed on a routine basis.  Consumables include combat supplies, general and technical stores, defence stores, ammunition/explosives and other basic commodities in support of major equipment as well as in support of minor equipment and personnel.

2.	Contingent, means all formed units, personnel and equipment of the Government deployed to the mission area under the present understanding.

3.	Contingent-owned equipment, means major equipment, and minor equipment and consumables, deployed and operated by the Government's contingent in the performance of UNMISET's operations.

4.	Dry provision, means a payment system for contingent-owned equipment where the Government provides equipment to UNMISET and the United Nations assumes responsibility for maintaining the equipment.  The Government is paid for the non-availability of its military resources for its national interest of deployed major and minor equipment.

5.	Environmental conditions factor, means a factor applicable to the payment rates for major equipment and for self-sustainment equipment and services to take into account the increased costs borne by the Government for extreme mountainous, climatic and terrain conditions.  This factor is only applicable under conditions of significant anticipated additional costs to the Government. 

6.	Force Commander, means the officer, appointed by the Secretary-General, responsible for all military operations within the Mission. 

7.	Forced abandonment, means actions resulting from a decision approved by the Force Commander or his authorized representative or a provision in the rules of engagement which results in the loss of custody and control of equipment and supplies.


8.	Generic Fair Market Value (GFMV), means equipment valuation for payment purpose.  It is computed as the average initial purchase price plus any major capital improvements, adjusted for inflation and discounted for any prior usage, or the replacement value, whichever is less. The generic fair market value includes all issue items associated with the equipment in the performance of its operational role.

9.	Head of Mission, means the Special Representative appointed by the Secretary-General with the consent of the Security Council responsible for all United Nations activities within the Mission.

10.	Hostile action, means an incident from the action(s) of one or more belligerents, which has a direct and significant negative impact on the personnel and/or equipment of the Government.  Different activities may be characterized as a single hostile action when these activities can be related to each other on common ground.

11.	Hostile action/forced abandonment factor, means a factor applied to each category of self-sustainment rates and to the spares element (or half of the estimated maintenance rate) of the wet provision rate to compensate the Government for loss and damage. 

12.	Incremental transportation factor, means a factor to cover the incremental costs of transportation of spare parts and consumables under the wet provision system. 

13.	Intensified operational condition factor, means a factor applicable to the payment rates for major equipment and for self-sustainment equipment and services to compensate the Government for increased costs resulting from the scope of the task assigned, the length of logistics chains, non-availability of commercial repair and support facilities, and other operational hazards and conditions.  

14.	Letter of Assist, means a numbered contractual document issued by the United Nations to the Government, authorizing it to provide special goods or services to the mission: the United Nations agrees either to purchase the goods or services or authorizes the Government to supply them subject to payment by the United Nations.

15.	Loss or damage, means a total or partial elimination of equipment and/or consumables:


16.	Maintenance rate, means the payment rate to compensate the Government for maintenance costs comprising spare parts, contracted repair, and third and fourth line maintenance that is required to keep major equipment items operational to the specified standards, and return the equipment to operational condition upon return from the mission area.  The costs of personnel involved in first and second line maintenance is excluded from the rate, as they are paid separately.  The rate includes an incremental transportation rate to cover general transportation costs of spare parts.  This rate forms part of the wet provision rate.

Note:	First-line maintenance: 	Maintenance done by
		contingent/unit;

	Second-line maintenance:	Maintenance done at the
			level of the force or
		formation;

	Third-line maintenance:	Maintenance done by local, national or international industrial facilities, often under contract; and

	Forth-line maintenance:	Complete overhaul.

17.	Major equipment, means major items directly related to the unit mission as mutually determined by the Parties.  Major equipment is accounted for either by category or individually.  Separate payment rates apply for each category of items of major equipment.  These rates include payment for minor equipment and consumables in support of the item of major equipment.

18.	Minor equipment, means equipment in support of contingents, such as catering, accommodation, non-specialist communication and engineering, and other mission-related activities.  Specific accounting of minor equipment is not required.  Minor equipment is divided into two categories: items designed to support major equipment; and items that directly or indirectly support personnel.  For personnel related minor equipment, rates of payment for self-sustainment apply.

19.	No-fault incident, means an incident resulting from an accidental occurrence or negligent conduct, but not including acts attributable to wilful misconduct or gross negligence, on the part of an operator/custodian of equipment.


20.	Self-sustainment, means a logistics support concept for troop contingent in UNMISET whereby the Government provides some specific or all logistics support to the contingent on a payable basis.

21.	Wet provision, means payment system for contingent-owned equipment where the Government provides equipment to UNMISET and assumes responsibility for maintaining the equipment.  The Government is entitled to payment for providing this support.

(Japanese Note)


					New York, 22 December 2004

Madam,

	I have the honour to acknowledge the receipt of your Note of today's date concerning the contribution by the 
Government of Japan of personnel, equipment and services in support of the United Nations Mission of Support in East Timor established by the United Nations Security Council Resolution 1410 dated May 17, 2002, which reads as follows:

"(United Nations' Note)"


	I have further the honour to confirm the foregoing understanding on behalf of the Government of Japan, and to agree that your Note and this Note in reply shall be regarded as constituting an agreement between the Government of Japan and the United Nations, which shall enter into force on the date of this Note in reply.

	I avail myself of this opportunity to renew to you the assurance of my high consideration.





				        (Signed)	Kenzo Oshima
					Ambassador Extraordinary
					and Plenipotentiary of Japan
					to the United Nations








Ms. Jane Holl Lute
Assistant Secretary-General
Peacekeeping Operations
Department of Peacekeeping 
Operations United Nations