CONVENTION ON THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

THE GOVERNMENTS OF THE REPUBLIC OF AUSTRIA, THE KINGDOM OF BELGIUM, CANADA, THE KINGDOM OF DENMARK, THE FRENCH REPUBLIC, THE FEDERAL REPUBLIC OF GERMANY, THE KINGDOM OF GREECE, THE REPUBLIC OF ICELAND, IRELAND, THE ITALIAN REPUBLIC, THE GRAND DUCHY OF LUXEMBOURG, THE KINGDOM OF THE NETHERLANDS, THE KINGDOM OF NORWAY, THE PORTUGUESE REPUBLIC, SPAIN, THE KINGDOM OF SWEDEN, THE SWISS CONFEDERATION, THE TURKISH REPUBLIC, THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND, AND THE UNITED STATES OF AMERICA;

CONSIDERING THAT ECONOMIC STRENGTH AND PROSPERITY ARE ESSENTIAL FOR THE ATTAINMENT OF THE PURPOSES OF THE UNITED NATIONS, THE PRESERVATION OF INDIVIDUAL LIBERTY AND THE INCREASE OF GENERAL WELL-BEING;

BELIEVING THAT THEY CAN FURTHER THESE AIMS MOST EFFECTIVELY BY STRENGTHENING THE TRADITION OF CO-OPERATION WHICH HAS EVOLVED AMONG THEM;

RECOGNISING THAT THE ECONOMIC RECOVERY AND PROGRESS OF EUROPE TO WHICH THEIR PARTICIPATION IN THE ORGANISATION FOR EUROPEAN ECONOMIC CO-OPERATION HAS MADE A MAJOR CONTRIBUTION, HAVE OPENED NEW PERSPECTIVES FOR STRENGTHENING THAT TRADITION AND APPLYING IT TO NEW TASKS AND BROADER OBJECTIVES;

CONVINCED THAT BROADER CO-OPERATION WILL MAKE A VITAL CONTRIBUTION TO PEACEFUL AND HARMONIOUS RELATIONS AMONG THE PEOPLES OF THE WORLD;

RECOGNISING THE INCREASING INTERDEPENDENCE OF THEIR ECONOMIES;

DETERMINED BY CONSULTATION AND CO-OPERATION TO USE MORE EFFECTIVELY THEIR CAPACITIES AND POTENTIALITIES SO AS TO PROMOTE THE HIGHEST SUSTAINABLE GROWTH OF THEIR ECONOMIES AND IMPROVE THE ECONOMIC AND SOCIAL WELL-BEING OF THEIR PEOPLES;

BELIEVING THAT THE ECONOMICALLY MORE ADVANCED NATIONS SHOULD CO-OPERATE IN ASSISTING TO THE BEST OF THEIR ABILITY THE COUNTRIES IN PROCESS OF ECONOMIC DEVELOPMENT;

RECOGNISING THAT THE FURTHER EXPANSION OF WORLD TRADE IS ONE OF THE MOST IMPORTANT FACTORS FAVOURING THE ECONOMIC DEVELOPMENT OF COUNTRIES AND THE IMPROVEMENT OF INTERNATIONAL ECONOMIC RELATIONS; AND

DETERMINED TO PURSUE THESE PURPOSES IN A MANNER CONSISTENT WITH THEIR OBLIGATIONS IN OTHER INTERNATIONAL ORGANISATIONS OR INSTITUTIONS IN WHICH THEY PARTICIPATE OR UNDER AGREEMENTS TO WHICH THEY ARE A PARTY;

HAVE THEREFORE AGREED ON THE FOLLOWING PROVISIONS FOR THE RECONSTITUTION OF THE ORGANISATION FOR EUROPEAN ECONOMIC CO-OPERATION AS THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT:

ARTICLE 1

THE AIMS OF THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (HEREINAFTER CALLED THE "ORGANISATION") SHALL BE TO PROMOTE POLICIES DESIGNED:

(A) TO ACHIEVE THE HIGHEST SUSTAINABLE ECONOMIC GROWTH AND EMPLOYMENT AND A RISING STANDARD OF LIVING IN MEMBER COUNTRIES, WHILE MAINTAINING FINANCIAL STABILITY, AND THUS TO CONTRIBUTE TO THE DEVELOPMENT OF THE WORLD ECONOMY;

(B) TO CONTRIBUTE TO SOUND ECONOMIC EXPANSION IN MEMBER AS WELL AS NON-MEMBER COUNTRIES IN THE PROCESS OF ECONOMIC DEVELOPMENT; AND

(C) TO CONTRIBUTE TO THE EXPANSION OF WORLD TRADE ON A MULTILATERAL, NON-DISCRIMINATORY BASIS IN ACCORDANCE WITH INTERNATIONAL OBLIGATIONS.

ARTICLE 2

IN THE PURSUIT OF THESE AIMS, THE MEMBERS AGREE THAT THEY WILL, BOTH INDIVISUALLY AND JOINTLY:

(A) PROMOTE THE EFFICIENT USE OF THEIR ECONOMIC RESOURCES;

(B) IN THE SCIENTIFIC AND TECHNOLOGICAL FIELD, PROMOTE THE DEVELOPMENT OF THEIR RESOURCES, ENCOURAGE RESEARCH AND PROMOTE VOCATIONAL TRAINING;

(C) PURSUE POLICIES DESIGNED TO ACHIEVE ECONOMIC GROWTH AND INTERNAL AND EXTERNAL FINANCIAL STABILITY AND TO AVOID DEVELOPMENTS WHICH MIGHT ENDANGER THEIR ECONOMIES OR THOSE OF OTHER COUNTRIES;

(D) PURSUE THEIR EFFORTS TO REDUCE OR ABOLISH OBSTACLES TO THE EXCHANGE OF GOODS AND SERVICES AND CURRENT PAYMENTS AND MAINTAIN AND EXTEND THE LIBERALISATION OF CAPITAL MOVEMENTS; AND

(E) CONTRIBUTE TO THE ECONOMIC DEVELOPMENT OF BOTH MEMBER AND NON-MEMBER COUNTRIES IN THE PROCESS OF ECONOMIC DEVELOPMENT BY APPROPRIATE MEANS AND, IN PARTICULAR, BY THE FLOW OF CAPITAL TO THOSE COUNTRIES, HAVING REGARD TO THE IMPORTANCE TO THEIR ECONOMIES OF RECEIVING TECHNICAL ASSISTANCE AND OF SECURING EXPANDING EXPORT MARKETS.

ARTICLE 3

WITH A VIEW TO ACHIEVING THE AIMS SET OUT IN ARTICLE 1 AND TO FULFILLING THE UNDERTAKINGS CONTAINED IN ARTICLE 2, THE MEMBERS AGREE THAT THEY WILL:

(A) KEEP EACH OTHER INFORMED AND FURNISH THE ORGANISATION WITH THE INFORMATION NECESSARY FOR THE ACCOMPLISHMENT OF ITS TASKS;

(B) CONSULT TOGETHER ON A CONTINUING BASIS, CARRY OUT STUDIES AND PARTICIPATE IN AGREED PROJECTS; AND

(C) CO-OPERATE CLOSELY AND WHERE APPROPRIATE TAKE CO-ORDINATED ACTION.

ARTICLE 4

THE CONTRACTING PARTIES TO THIS CONVENTION SHALL BE MEMBERS OF THE ORGANISATION.

ARTICLE 5

IN ORDER TO ACHIEVE ITS AIMS, THE ORGANISATION MAY:

(A) TAKE DECISIONS WHICH, EXCEPT AS OTHERWISE PROVIDED, SHALL BE BINDING ON ALL THE MEMBERS;

(B) MAKE RECOMMENDATIONS TO MEMBERS; AND

(C) ENTER INTO AGREEMENTS WITH MEMBERS, NON-MEMBER STATES AND INTERNATIONAL ORGANISATIONS.

ARTICLE 6

1.  UNLESS THE ORGANISATION OTHERWISE AGREES UNANIMOUSLY FOR SPECIAL CASES, DECISIONS SHALL BE TAKEN AND RECOMMENDATIONS SHALL BE MADE BY MUTUAL AGREEMENT OF ALL THE MEMBERS.

2.  EACH MEMBER SHALL HAVE ONE VOTE.  IF A MEMBER ABSTAINS FROM VOTING ON A DECISION OR RECOMMENDATION, SUCH ABSTENTION SHALL NOT INVALIDATE THE DECISION OR RECOMMENDATION, WHICH SHALL BE APPLICABLE TO THE OTHER MEMBERS BUT NOT TO THE ABSTAINING MEMBER.

3.  NO DECISION SHALL BE BINDING ON ANY MEMBER UNTIL IT HAS COMPLIED WITH THE REQUIREMENTS OF ITS OWN CONSTITUTIONAL PROCEDURES.  THE OTHER MEMBERS MAY AGREE THAT SUCH A DECISION SHALL APPLY PROVISIONALLY TO THEM.

ARTICLE 7

A COUNCIL COMPOSED OF ALL THE MEMBERS SHALL BE THE BODY FROM WHICH ALL ACTS OF THE ORGANISATION DERIVE.  THE COUNCIL MAY MEET IN SESSIONS OF MINISTERS OR OF PERMANENT REPRESENTATIVES.

ARTICLE 8

THE COUNCIL SHALL DESIGNATE EACH YEAR A CHAIRMAN, WHO SHALL PRESIDE AT ITS MINISTERIAL SESSIONS, AND TWO VICE-CHAIRMEN.  THE CHAIRMAN MAY BE DESIGNATED TO SERVE ONE ADDITIONAL CONSECUTIVE TERM.

ARTICLE 9

THE COUNCIL MAY ESTABLISH AN EXECUTIVE COMMITTEE AND SUCH SUBSIDIARY BODIES AS MAY BE REQUIRED FOR THE ACHIEVEMENT OF THE AIMS OF THE ORGANISATION.

ARTICLE 10

1.  A SECRETARY-GENERAL RESPONSIBLE TO THE COUNCIL SHALL BE APPOINTED BY THE COUNCIL FOR A TERM OF FIVE YEARS.  HE SHALL BE ASSISTED BY ONE OR MORE DEPUTY SECRETARIES-GENERAL OR ASSISTANT SECRETARIES-GENERAL APPOINTED BY THE COUNCIL ON THE RECOMMENDATION OF THE SECRETARY-GENERAL.

2.  THE SECRETARY-GENERAL SHALL SERVE AS CHAIRMAN OF THE COUNCIL MEETING AT SESSIONS OF PERMANENT REPRESENTATIVES.  HE SHALL ASSIST THE COUNCIL IN ALL APPROPRIATE WAYS AND MAY SUBMIT PROPOSALS TO THE COUNCIL OR TO ANY OTHER BODY OF THE ORGANISATION.

ARTICLE 11

1.  THE SECRETARY-GENERAL SHALL APPOINT SUCH STAFF AS THE ORGANISATION MAY REQUIRE IN ACCORDANCE WITH PLANS OF ORGANISATION APPROVED BY THE COUNCIL.  STAFF REGULATIONS SHALL BE SUBJECT TO APPROVAL BY THE COUNCIL.

2.  HAVING REGARD TO THE INTERNATIONAL CHARACTER OF THE ORGANISATION, THE SECRETARY-GENERAL, THE DEPUTY OR ASSISTANT SECRETARIES-GENERAL AND THE STAFF SHALL NEITHER SEEK NOR RECEIVE INSTRUCTIONS FROM ANY OF THE MEMBERS OR FROM ANY GOVERNMENT OR AUTHORITY EXTERNAL TO THE ORGANISATION.

ARTICLE 12

UPON SUCH TERMS AND CONDITIONS AS THE COUNCIL MAY DETERMINE, THE ORGANISATION MAY:

(A) ADDRESS COMMUNICATIONS TO NON-MEMBER STATES OR ORGANISATIONS;

(B) ESTABLISH AND MAINTAIN RELATIONS WITH NON-MEMBER STATES OR ORGANISATIONS; AND

(C) INVITE NON-MEMBER GOVERNMENTS OR ORGANISATIONS TO PARTICIPATE IN ACTIVITIES OF THE ORGANISATION.

ARTICLE 13

REPRESENTATION IN THE ORGANISATION OF THE EUROPEAN COMMUNITIES ESTABLISHED BY THE TREATIES OF PARIS AND ROME OF 18TH APRIL, 1951, AND 25TH MARCH, 1957, SHALL BE AS DEFINED IN SUPPLEMENTARY PROTOCOL NO.1 TO THIS CONVENTION.

ARTICLE 14

1.  THIS CONVENTION SHALL BE RATIFIED OR ACCEPTED BY THE SIGNATORIES IN ACCORDANCE WITH THEIR RESPECTIVE CONSTITUTIONAL REQUIREMENTS.

2.  INSTRUMENTS OF RATIFICATION OR ACCEPTANCE SHALL BE DEPOSITED WITH THE GOVERNMENT OF THE FRENCH REPUBLIC, HEREBY DESIGNATED AS DEPOSITARY GOVERNMENT.

3.  THIS CONVENTION SHALL COME INTO FORCE:

(A) BEFORE 30TH SEPTEMBER, 1961, UPON THE DEPOSIT OF INSTRUMENTS OF RATIFICATION OR ACCEPTANCE BY ALL THE SIGNATORIES; OR

(B) ON 30TH SEPTEMBER, 1961, IF BY THAT DATE FIFTEEN SIGNATORIES OR MORE HAVE DEPOSITED SUCH INSTRUMENTS AS REGARDS THOSE SIGNATORIES; AND THEREAFTER AS REGARDS ANY OTHER SIGNATORY UPON THE DEPOSIT OF ITS INSTRUMENT OF RATIFICATION OR ACCEPTANCE;

(C) AFTER 30TH SEPTEMBER, 1961, BUT NOT LATER THAN TWO YEARS FROM THE SIGNATURE OF THIS CONVENTION, UPON THE DEPOSIT OF SUCH INSTRUMENTS BY FIFTEEN SIGNATORIES, AS REGARDS THOSE SIGNATORIES; AND THEREAFTER AS REGARDS ANY OTHER SIGNATORY UPON THE DEPOSIT OF ITS INSTRUMENT OF RATIFICATION OR ACCEPTANCE.

4.  ANY SIGNATORY WHICH HAS NOT DEPOSITED ITS INSTRUMENT OF RATIFICATION OR ACCEPTANCE WHEN THE CONVENTION COMES INTO FORCE MAY TAKE PART IN THE ACTIVITIES OF THE ORGANISATION UPON CONDITIONS TO BE DETERMINED BY AGREEMENT BETWEEN THE ORGANISATION AND SUCH SIGNATORY.

ARTICLE 15

WHEN THIS CONVENTION COMES INTO FORCE THE RECONSTITUTION OF THE ORGANISATION FOR EUROPEAN ECONOMIC CO-OPERATION SHALL TAKE EFFECT, AND ITS AIMS, ORGANS, POWERS AND NAME SHALL THEREUPON BE AS PROVIDED HEREIN.  THE LEGAL PERSONALITY POSSESSED BY THE ORGANISATION FOR EUROPEAN ECONOMIC CO-OPERATION SHALL CONTINUE IN THE ORGANISATION, BUT DECISIONS, RECOMMENDATIONS AND RESOLUTIONS OF THE ORGANISATION FOR EUROPEAN ECONOMIC CO-OPERATION SHALL REQUIRE APPROVAL OF THE COUNCIL TO BE EFFECTIVE AFTER THE COMING INTO FORCE OF THIS CONVENTION.

ARTICLE 16

THE COUNCIL MAY DECIDE TO INVITE ANY GOVERNMENT PREPARED TO ASSUME THE OBLIGATIONS OF MEMBERSHIP TO ACCEDE TO THIS CONVENTION.  SUCH DECISIONS SHALL BE UNANIMOUS, PROVIDED THAT FOR ANY PARTICULAR CASE THE COUNCIL MAY UNANIMOUSLY DECIDE TO PERMIT ABSTENTION, IN WHICH CASE, NOTWITHSTANDING THE PROVISIONS OF ARTICLE 6, THE DECISION SHALL BE APPLICABLE TO ALL THE MEMBERS.  ACCESSION SHALL TAKE EFFECT UPON THE DEPOSIT OF AN INSTRUMENT OF ACCESSION WITH THE DEPOSITARY GOVERNMENT.

ARTICLE 17

ANY CONTRACTING PARTY MAY TERMINATE THE APPLICATION OF THIS CONVENTION TO ITSELF BY GIVING TWELVE MONTHS' NOTICE TO THAT EFFECT TO THE DEPOSITARY GOVERNMENT.

ARTICLE 18

THE HEADQUARTERS OF THE ORGANISATION SHALL BE IN PARIS, UNLESS THE COUNCIL AGREES OTHERWISE.

ARTICLE 19

THE LEGAL CAPACITY OF THE ORGANISATION AND THE PRIVILEGES, EXEMPTIONS, AND IMMUNITIES OF THE ORGANISATION, ITS OFFICIALS AND REPRESENTATIVES TO IT OF THE MEMBERS SHALL BE AS PROVIDED IN SUPPLEMENTARY PROTOCOL NO.2 TO THIS CONVENTION.

ARTICLE 20

1.  EACH YEAR, IN ACCORDANCE WITH FINANCIAL REGULATIONS ADOPTED BY THE COUNCIL, THE SECRETARY-GENERAL SHALL PRESENT TO THE COUNCIL FOR APPROVAL AN ANNUAL BUDGET, ACCOUNTS, AND SUCH SUBSIDIARY BUDGETS AS THE COUNCIL SHALL REQUEST.

2.  GENERAL EXPENSES OF THE ORGANISATION, AS AGREED BY THE COUNCIL, SHALL BE APPORTIONED IN ACCORDANCE WITH A SCALE TO BE DECIDED UPON BY THE COUNCIL.  OTHER EXPENDITURE SHALL BE FINANCED ON SUCH BASIS AS THE COUNCIL MAY DECIDE.

ARTICLE 21

UPON THE RECEIPT OF ANY INSTRUMENT OF RATIFICATION, ACCEPTANCE OR ACCESSION, OR OF ANY NOTICE OF TERMINATION, THE DEPOSITARY GOVERNMENT SHALL GIVE NOTICE THEREOF TO ALL THE CONTRACTING PARTIES AND TO THE SECRETARY-GENERAL OF THE ORGANISATION.

IN WITNESS WHEREOF, THE UNDERSIGNED PLENIPOTENTIARIES, DULY EMPOWERED, HAVE APPENDED THEIR SIGNATURES TO THIS CONVENTION.

DONE IN PARIS, THIS FOURTEENTH DAY OF DECEMBER, NINETEEN HUNDRED AND SIXTY, IN THE ENGLISH AND FRENCH LANGUAGES, BOTH TEXTS BEING EQUALLY AUTHENTIC, IN A SINGLE COPY WHICH SHALL BE DEPOSITED WITH THE DEPOSITARY GOVERNMENT, BY WHOM CERTIFIED COPIES WILL BE COMMUNICATED TO ALL THE SIGNATORIES.

SUPPLEMENTARY PROTOCOL NO.1 TO THE CONVENTION ON THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

THE SIGNATORIES OF THE CONVENTION ON THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT;

HAVE AGREED AS FOLLOWS:

1.  REPRESENTATION IN THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT OF THE EUROPEAN COMMUNITIES ESTABLISHED BY THE TREATIES OF PARIS AND ROME OF 18TH APRIL, 1951, AND 25TH MARCH, 1957, SHALL BE DETERMINED IN ACCORDANCE WITH THE INSTITUTIONAL PROVISIONS OF THOSE TREATIES.

2.  THE COMMISSIONS OF THE EUROPEAN ECONOMIC COMMUNITY AND OF THE EUROPEAN ATOMIC ENERGY COMMUNITY AS WELL AS THE HIGH AUTHORITY OF THE EUROPEAN COAL AND STEEL COMMUNITY SHALL TAKE PART IN THE WORK OF THAT ORGANISATION.

IN WITNESS WHEREOF, THE UNDERSIGNED PLENIPOTENTIARIES, DULY EMPOWERED, HAVE APPENDED THEIR SIGNATURES TO THIS PROTOCOL.

DONE IN PARIS, THIS FOURTEENTH DAY OF DECEMBER, NINETEEN HUNDRED AND SIXTY, IN THE ENGLISH AND FRENCH LANGUAGES, BOTH TEXTS BEING EQUALLY AUTHENTIC, IN A SINGLE COPY WHICH SHALL BE DEPOSITED WITH THE GOVERNMENT OF THE FRENCH REPUBLIC, BY WHOM CERTIFIED COPIES WILL BE COMMUNICATED TO ALL THE SIGNATORIES.

SUPPLEMENTARY PROTOCOL NO.2 TO THE CONVENTION ON THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT

THE SIGNATORIES OF THE CONVENTION ON THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (HEREINAFTER CALLED THE "ORGANISATION");

HAVE AGREED AS FOLLOWS:

THE ORGANISATION SHALL HAVE LEGAL CAPACITY AND THE ORGANISATION, ITS OFFICIALS, AND REPRESENTATIVES TO IT OF THE MEMBERS SHALL BE ENTITLED TO PRIVILEGES, EXEMPTIONS, AND IMMUNITIES AS FOLLOWS:

(A) IN THE TERRITORY OF THE CONTRACTING PARTIES TO THE CONVENTION FOR EUROPEAN ECONOMIC CO-OPERATION OF 16TH APRIL, 1948, THE LEGAL CAPACITY, PRIVILEGES, EXEMPTIONS, AND IMMUNITIES PROVIDED FOR IN SUPPLEMENTARY PROTOCOL NO.1 TO THAT CONVENTION;

(B) IN CANADA, THE LEGAL CAPACITY, PRIVILEGES, EXEMPTIONS, AND IMMUNITIES PROVIDED FOR IN ANY AGREEMENT OR ARRANGEMENT ON LEGAL CAPACITY, PRIVILEGES, EXEMPTIONS, AND IMMUNITIES ENTERED INTO BETWEEN THE GOVERNMENT OF CANADA AND THE ORGANISATION;

(C) IN THE UNITED STATES, THE LEGAL CAPACITY, PRIVILEGES, EXEMPTIONS, AND IMMUNITIES UNDER THE INTERNATIONAL ORGANISATIONS IMMUNITIES ACT PROVIDED FOR IN EXECUTIVE ORDER NO.10133 OF 27TH JUNE, 1950; AND

(D) ELSEWHERE, THE LEGAL CAPACITY, PRIVILEGES, EXEMPTIONS, AND IMMUNITIES PROVIDED FOR IN ANY AGREEMENT OR ARRANGEMENT ON LEGAL CAPACITY, PRIVILEGES, EXEMPTIONS, AND IMMUNITIES ENTERED INTO BETWEEN THE GOVERNMENT CONCERNED AND THE ORGANISATION.

IN WITNESS WHEREOF, THE UNDERSIGNED PLENIPOTENTIARIES, DULY EMPOWERED, HAVE APPENDED THEIR SIGNATURES TO THIS PROTOCOL.

DONE IN PARIS, THIS FOURTEENTH DAY OF DECEMBER, NINETEEN HUNDRED AND SIXTY, IN THE ENGLISH AND FRENCH LANGUAGES, BOTH TEXTS BEING EQUALLY AUTHENTIC, IN A SINGLE COPY WHICH SHALL BE DEPOSITED WITH THE GOVERNMENT OF THE FRENCH REPUBLIC, BY WHOM CERTIFIED COPIES WILL BE COMMUNICATED TO ALL THE SIGNATORIES.

MEMORANDUM OF UNDERSTANDING BETWEEN THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT AND THE GOVERNMENT OF JAPAN CONCERNING THE ASSUMPTION BY THE GOVERNMENT OF JAPAN OF THE OBLIGATIONS OF MEMBERSHIP OF THE ORGANISATION

THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT (HEREINAFTER CALLED THE "ORGANISATION"); AND THE GOVERNMENT OF JAPAN;

CONSIDERING THAT ON 26TH JULY, 1963, THE COUNCIL OF THE ORGANISATION HAS INVITED THE GOVERNMENT OF JAPAN TO ACCEDE TO THE CONVENTION ON THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT OF 14TH DECEMBER, 1960 (HEREINAFTER CALLED THE "CONVENTION"), AND TO THE SUPPLEMENTARY PROTOCOLS NO.1 AND NO.2 TO THE CONVENTION, SIGNED ON THE SAME DATE (HEREINAFTER CALLED THE "PROTOCOLS");

HAVING REGARD TO ARTICLE 16 OF THE CONVENTION, WHICH PROVIDES THAT AN INVITATION TO ACCEDE TO THE CONVENTION MAY BE EXTENDED TO GOVERNMENTS PREPARED TO ASSUME THE OBLIGATIONS OF MEMBERSHIP OF THE ORGANISATION;

CONSIDERING THAT THE PROCEDURE OF PARLIAMENTARY APPROVAL OF THE ACCESSION OF THE GOVERNMENT OF JAPAN TO THE CONVENTION AND PROTOCOLS HAS NOT BEEN COMPLETED;

HAVING REGARD TO THE STATEMENT BY THE GOVERNMENT OF JAPAN CONCERNING THE ACTS OF THE ORGANISATION, ATTACHED HERETO AS ANNEX A;

HAVING REGARD TO THE STATEMENT BY THE GOVERNMENT OF JAPAN CONCERNING THE LIBERALISATION OF CURRENT INVISIBLE OPERATIONS AND CAPITAL MOVEMENTS, ATTACHED HERETO AS ANNEX B;

HAVING REGARD TO THE EXAMINATION BY THE COMMITTEE FOR INVISIBLE TRANSACTIONS AND THE MARITIME TRANSPORT COMMITTEE OF THE PROPOSED ACCESSION OF JAPAN TO THE CODES OF LIBERALISATION OF THE ORGANISATION;

HAVE AGREED AS FOLLOWS:

ARTICLE 1

THE DEPOSIT BY THE GOVERNMENT OF JAPAN OF THE INSTRUMENT OF ACCESSION TO THE CONVENTION SHALL INVOLVE THE ASSUMPTION BY JAPAN OF THE OBLIGATIONS OF MEMBERSHIP OF THE ORGANISATION, INCLUDING THE VIEWS AND AIMS RESULTING FROM THE REPORT OF THE PREPARATORY COMMITTEE OF THE ORGANISATION OF DECEMBER 1960, AND THE ACCESSION TO THE ACTS OF THE ORGANISATION WHICH WILL BE IN FORCE AT THAT TIME, EXCEPT AS OTHERWISE PROVIDED IN THE PRESENT MEMORANDUM.

ARTICLE 2

A.  THE COUNCIL OF THE ORGANISATION AGREES THAT THE ACTS ENUMERATED IN PARAGRAPHS 2 AND 3 OF ANNEX A HERETO SHALL NOT BE APPLICABLE TO JAPAN.

B.  THE GOVERNMENT OF JAPAN MAY, WITHIN A PERIOD OF SIX MONTHS AFTER THE DATE OF SIGNATURE OF THE PRESENT MEMORANDUM, INFORM THE COUNCIL OF THE ORGANISATION THAT IT WISHES TO ACCEDE TO ANY OF THE ACTS ENUMERATED IN PARAGRAPH 3 OF ANNEX A HERETO.

ARTICLE 3

THE COUNCIL OF THE ORGANISATION AGREES TO THE RESERVATIONS BY THE GOVERNMENT OF JAPAN WITH REGARD TO ITEMS COVERED BY THE CODE OF LIBERALISATION OF CURRENT INVISIBLE OPERATIONS AND BY THE CODE OF LIBERALISATION OF CAPITAL MOVEMENTS, AS ENUMERATED IN PART II OF ANNEX B, TAKING INTO ACCOUNT THE STATEMENTS OF INTENTION OF THE GOVERNMENT OF JAPAN SET FORTH IN THE SAID ANNEX.

ARTICLE 4

IN THE EVENT THAT THE GOVERNMENT OF JAPAN SHOULD WISH TO ABSTAIN FROM OR TO LODGE A RESERVATION TO ANY ACT OF THE ORGANISATION OR TO ANY ITEM OF THE CODES OF LIBERALISATION WHICH IT FAILED BY OVERSIGHT TO MENTION IN PARAGRAPH 2 OR 3 OF ANNEX A, OR IN PART II OF ANNEX B HERETO, THE GOVERNMENT OF JAPAN MAY BRING THE MATTER TO THE COUNCIL OF THE ORGANISATION FOR DECISION WITHIN A PERIOD OF SIX MONTHS AFTER THE DATE OF DEPOSIT OF THE INSTRUMENT OF ACCESSION.

ARTICLE 5

THE SECRETARY-GENERAL OF THE ORGANISATION SHALL INFORM THE GOVERNMENT OF JAPAN PROMPTLY OF ANY ACTS ADOPTED BY THE ORGANISATION BETWEEN THE DATE OF SIGNATURE OF THE PRESENT MEMORANDUM AND THE DATE OF DEPOSIT OF THE INSTRUMENT OF ACCESSION, AND THE GOVERNMENT OF JAPAN SHALL NOTIFY THE ORGANISATION AS SOON AS POSSIBLE, WITHIN 30 DAYS, WHETHER OR NOT IT IS WILLING TO ACCEDE TO THE ACT CONCERNED.  IF THE GOVERNMENT OF JAPAN IS UNWILLING TO ACCEDE TO A PARTICULAR ACT OR IF IT PROPOSES AMENDMENTS OR RESERVATIONS THERETO, THE MATTER SHALL BE SUBMITTED TO THE COUNCIL.  HOWEVER, THE GOVERNMENT OF JAPAN SHALL NOT BE BOUND BY ANY ACT REFERRED TO IN THIS ARTICLE UNLESS IT HAS SIGNIFIED ITS READINESS TO ACCEDE TO SUCH ACT.

IN WITNESS WHEREOF, THE UNDERSIGNED REPRESENTATIVES, BEING DULY AUTHORISED TO THAT EFFECT, HAVE SIGNED THE PRESENT MEMORANDUM.

DONE IN PARIS, THIS TWENTY-SIXTH DAY OF JULY, NINETEEN HUNDRED AND SIXTY THREE, IN TWO COPIES, IN THE ENGLISH AND FRENCH LANGUAGES, BOTH TEXTS BEING EQUALLY AUTHENTIC.

FOR THE GOVERNMENT OF JAPAN:

FOR THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT:

ANNEX A STATEMENT BY THE GOVERNMENT OF JAPAN CONCERNING THE ACTS OF THE ORGANISATION

1.  THE GOVERNMENT OF JAPAN, HAVING CONSIDERED THE ACTS ADOPTED BY THE ORGANISATION PRIOR TO THE DATE OF THE PRESENT STATEMENT, DECLARES ITS INTENTION TO ACCEDE TO SUCH ACTS, EXCEPT AS OTHERWISE SPECIFIED IN PARAGRAPHS 2, 3 (A) AND 3 (B) BELOW.

2.  IT IS PROPOSED THAT THE FOLLOWING ACTS OF THE ORGANISATION SHALL NOT BE APPLICABLE TO JAPAN:

TITLE  CODE NO.  PAGE *

RESOLUTION OF THE COUNCIL ON THE SITUATION OF THE BUTTER MARKET.  C(61)74  152

RESOLUTION OF THE COUNCIL ON THE ESTABLISHMENT OF A MEDITERRANEAN CENTRE FOR POST-GRADUATE EDUCATION IN AGRICULTURE.  C/M(61)11(FINAL) ITEM 101  156

RESOLUTION OF THE COUNCIL CONCERNING THE REPORT BY THE SECRETARIAT ON THE SITUATION OF THE DAIRY PRODUCTS MARKET.  C/M(61)21(FINAL) ITEM 181  160

RESOLUTION OF THE COUNCIL APPROVING THE RECOMMENDATIONS OF THE OIL COMMITTEE'S REPORT, C(58)137, ON OIL STOCKS AND STORAGE CAPACITY.  C/M(58)21(FINAL) ITEM 195  215

RECOMMENDATION OF THE COUNCIL CONCERNING THE APPORTIONMENT OF OIL SUPPLIES IN AN EMERGENCY.  C(60)83(FINAL)  226

RESOLUTION OF THE COUNCIL CONCERNING THE APPORTIONMENT OF OIL SUPPLIES IN AN EMERGENCY.  C/M(60)20 ITEM 177  227

DECISION OF THE COUNCIL CONCERNING OCCASIONAL AND SEASONAL SUPPLIES OF ELECTRIC POWER BETWEEN INTERCONNECTED COUNTRIES.  C(56)183, AMENDED BY C(60)217(FINAL)  236

DECISION OF THE COUNCIL GOVERNING THE EMPLOYMENT OF NATIONALS OF MEMBER COUNTRIES.  C(56)258  281

RECOMMENDATION OF THE COUNCIL ON THE MOVEMENT AND EMPLOYMENT OF FOREIGN MANPOWER.  C(55)295(FINAL), C(57)37(FINAL), C(57)79, C(58)196(FINAL), C(59)272(FINAL), C(59)273(FINAL), C(60)65(FINAL), AND C(60)113(FINAL)  304

DECISION OF THE COUNCIL CONCERNING THE CONTINUATION DURING 1961 OF THE JOINT PUBLICITY CAMPAIGN IN THE UNITED STATES FOR THE DEVELOPMENT OF AMERICAN TOURISM IN EUROPE.  C(60)118(FINAL)  386

DECISION OF THE COUNCIL CONCERNING THE CONTINUATION DURING 1962 OF THE JOINT PUBLICITY CAMPAIGN IN THE UNITED STATES FOR THE DEVELOPMENT OF AMERICAN TOURISM IN EUROPE.  C(61)124(FINAL)  400

DECISION OF THE COUNCIL CONCERNING THE CONTINUATION DURING 1963 OF THE JOINT PUBLICITY CAMPAIGN IN THE UNITED STATES FOR THE DEVELOPMENT OF AMERICAN TOURISM IN EUROPE.  C(62)209(FINAL)

* THESE NUMBERS REFER TO THE APPROPRIATE PAGES OF DOCUMENT OECD/C(61)41 (ACTS OF THE ORGANISATION FOR EUROPEAN ECONOMIC CO-OPERATION REMAINING IN FORCE AFTER ITS RECONSTITUTION).

3 A.  THE GOVERNMENT OF JAPAN HAS NOT COMPLETED THE EXAMINATION OF THE FOLLOWING ACTS, BUT IT IS PREPARED TO INFORM THE COUNCIL WITHIN A PERIOD OF SIX MONTHS FROM THE DATE OF THE PRESENT STATEMENT WHETHER OR NOT IT INTENDS TO ACCEDE TO THEM:

TITLE  CODE NO.  PAGE *

RECOMMENDATION OF THE COUNCIL CONCERNING FACILITIES TO BE GRANTED IN THE MATTER OF VISAS AND PASSPORTS.  C(55)149(FINAL)  351

RECOMMENDATION OF THE COUNCIL ON THE TEMPORARY IMPORTATION INTO MEMBER COUNTRIES OF MOTOR VEHICLES FOR PRIVATE USE.  C(58)42(FINAL)  373

RECOMMENDATION OF THE COUNCIL CONCERNING STANDARDS OF EMPLOYMENT SERVICE ORGANISATION (EMPLOYMENT MARKET INFORMATION).  C(58)197(FINAL)  287

RESOLUTION OF THE COUNCIL CONCERNING THE ADMINISTRATIVE AND TECHNICAL REGULATIONS HAMPERING TRADE: APPLICATION AND SUPERVISION OF NATIONAL SAFETY REGULATIONS FOR WELDED GAS CYLINDERS.  C/M(60)25(FINAL) ITEM 239  13

RECOMMENDATION OF THE COUNCIL CONCERNING ACTION IN THE FIELD OF ENERGY AND THE ESTABLISHMENT OF AN ENERGY ADVISORY COMMISSION AND AN ENERGY COMMITTEE.  C(59)172  218

RECOMMENDATION OF THE COUNCIL CONCERNING ACTION ON THE REPORT OF THE ENERGY ADVISORY COMMISSION.  C(61)36  238

RESOLUTION OF THE COUNCIL CONCERNING THE SECOND INTERIM REPORT ON THE INCREASE.  IN OIL STOCKS AND STOCKPILING CAPACITY.  C/M(61)16(FINAL) ITEM 136  248

RECOMMENDATION OF THE COUNCIL CONCERNING THE PRODUCTION OF HEAVY EQUIPMENT FOR POWER STATIONS.  C(52)137, AMENDED BY C(55)139(FINAL)  253

RECOMMENDATION OF THE COUNCIL CONCERNING THE EFFECTS ON PUBLIC HEALTH OF THE USE OF THE VARIOUS FORMS OF ENERGY.  OECD/C(61)97

RECOMMENDATION OF THE COUNCIL ON PROCEDURE FOR THE REGISTRATION OF PHARMACEUTICAL SPECIALITIES.  C(63)45(FINAL)

RECOMMENDATION OF THE COUNCIL ON PROCEDURE FOR LABELLING PHARMACEUTICAL SPECIALITIES.  C(63)57

DECISION OF THE COUNCIL CONCERNING THE SCALE OF CONTRIBUTIONS FOR THE FINANCING OF PART I (GENERAL EXPENDITURE) OF THE BUDGET FOR THE FINANCIAL YEAR 1ST JANUARY, 1963 - 31ST DECEMBER, 1963. **  ** IT IS PROPOSED THAT THE EVENTUAL CONTRIBUTION OF THE GOVERNMENT OF JAPAN TO THE 1963 BUDGET SHALL BE DETERMINED BY COMMON ACCORD AFTER THE DATE OF THE PRESENT STATEMENT.  C(62)210

* THESE NUMBERS REFER TO THE APPROPRIATE PAGES OF DOCUMENT OECD/C(61)41 (ACTS OF THE ORGANISATION FOR EUROPEAN ECONOMIC CO-OPERATION REMAINING IN FORCE AFTER ITS RECONSTITUTION).

3 B.  AS TO THE ACTS OF THE ORGANISATION CONCERNING THE EUROPEAN MONETARY AGREEMENT AND THE EUROPEAN NUCLEAR ENERGY AGENCY, THEIR EVENTUAL APPLICATION TO JAPAN WILL BE CONSIDERED IF THE GOVERNMENT OF JAPAN SHOULD PROPOSE TO THE COUNCIL TO BE ADMITTED AS A MEMBER OF THE EUROPEAN MONETARY AGREEMENT OR AS A MEMBER OR ASSOCIATE MEMBER OF THE EUROPEAN NUCLEAR ENERGY AGENCY AS THE CASE MAY BE.

4.  THE GOVERNMENT OF JAPAN WISHES TO MAKE THE FOLLOWING REMARKS REGARDING SOME OF THE ACTS TO WHICH IT PROPOSES TO ACCEDE:

TITLE  CODE NO.  PAGE *

RESOLUTION OF THE COUNCIL CONCERNING THE ANNUAL ECONOMIC REVIEW FOR 1963 - 1964.  C/M(63)7, PART I (FINAL) ITEM 82

REMARKS.  THE GOVERNMENT OF JAPAN AGREES TO THE TEXT OF THE DIRECTIVES BUT POINTS OUT THAT JAPAN MAY NOT HAVE THE REQUISITE STATISTICAL SERVICE FOR SUPPLYING ALL OF THE INFORMATION REQUESTED.  THE GOVERNMENT OF JAPAN WILL, HOWEVER, ENDEAVOUR TO PROVIDE DETAILED ESTIMATES AND INDICATIONS AS SOON AS POSSIBLE.

RECOMMENDATION OF THE COUNCIL RELATING TO LABOUR FORCE SAMPLE SURVEYS.  C(52)227(FINAL)  265

REMARKS.  THE GOVERNMENT OF JAPAN AGREES GENERALLY WITH THIS RECOMMENDATION BUT POINTS OUT THAT IN VIEW OF SOME DIFFERENCES IN THE BASES EMPLOYED BY ITS SURVEY AND STATISTICAL SERVICES, IT MAY NOT BE POSSIBLE TO SUPPLY ALL THE INFORMATION REQUESTED UNDER THE TERMS SPECIFIED IN THE RECOMMENDATION.

RECOMMENDATION OF THE COUNCIL CONCERNING THE SIMPLIFICATION OF FORMALITIES REQUIRED IN THE MATTER OF PASSPORTS FOR CROSSING FRONTIERS.  C(56)131(FINAL)  357

REMARKS.  THE GOVERNMENT OF JAPAN AGREES WITH THE SPIRIT OF THE RECOMMENDATION BUT WISHES TO STATE THAT IN VIEW OF THE EXISTING JAPANESE LAWS AND REGULATIONS ON PASSPORTS AND VISAS, FURTHER STUDY BY THE COMPETENT AUTHORITIES IS REQUIRED BEFORE MEASURES LEADING TO EVENTUAL COMPLIANCE WITH THE RECOMMENDATION ARE INITIATED.

RECOMMENDATION OF THE COUNCIL CONCERNING THE STANDARDIZATION OF REGISTRATION PAPERS ISSUED BY MEMBER COUNTRIES FOR MOTOR VEHICLES.  C(60)40(FINAL)  383

REMARKS.  THE GOVERNMENT OF JAPAN AGREES WITH THE RECOMMENDATION BUT WISHES TO STATE THAT AT PRESENT SPECIAL REGISTRATION PAPERS ARE NOT ISSUED IN JAPAN.  IN CONSIDERING THE ESTABLISHMENT OF A SYSTEM OF REGISTRATION PAPERS, THE GOVERNMENT OF JAPAN WILL BE INSPIRED BY THE PROVISIONS OF THIS RECOMMENDATION.

RECOMMENDATION OF THE COUNCIL CONCERNING THE AVOIDANCE OF DOUBLE TAXATION.  C(59)147(FINAL), AMENDED BY C(60)157(FINAL)  415

REMARKS.  THE GOVERNMENT OF JAPAN WISHES TO ACCEDE TO THIS ACT ON THE UNDERSTANDING THAT ITS ACCEPTANCE DOES NOT CONSTITUTE ACCEPTANCE OF EVERY ARTICLE OF THE MODEL CONVENTION ANNEXED TO THIS ACT.  HOWEVER, THE GOVERNMENT OF JAPAN IS PREPARED TO PROVIDE THE ORGANISATION WITH THE TEXT OF ANY NEW OR REVISED DOUBLE TAXATION AGREEMENT BETWEEN JAPAN AND ANOTHER MEMBER COUNTRY AND TO NOTIFY THE ORGANISATION OF THE REASONS FOR NOT ADOPTING SOME OF THE PROVISIONS OF THE SAID CONVENTION.

* THESE NUMBERS REFER TO THE APPROPRIATE PAGES OF DOCUMENT OECD/C(61)41 (ACTS OF THE ORGANISATION FOR EUROPEAN ECONOMIC CO-OPERATION REMAINING IN FORCE AFTER ITS RECONSTITUTION).

ANNEX B STATEMENT BY THE GOVERNMENT OF JAPAN CONCERNING THE LIBERALISATION OF CURRENT INVISIBLE OPERATIONS AND OF CAPITAL MOVEMENTS IN JAPAN

PART I

1.  IT IS THE INTENTION OF THE GOVERNMENT OF JAPAN THAT UPON ITS ACCESSION TO THE CONVENTION ON THE ORGANISATION FOR ECONOMIC CO-OPERATION AND DEVELOPMENT, JAPAN WILL ADHERE TO THE CODE OF LIBERALISATION OF CURRENT INVISIBLE OPERATIONS AND TO THE CODE OF LIBERALISATION OF CAPITAL MOVEMENTS.  THE GOVERNMENT OF JAPAN ENDORSES THE OBJECTIVES OF THESE CODES, HAS GIVEN CAREFUL CONSIDERATION TO THEIR PROVISIONS AND IS PREPARED TO ACCEPT ANY OBLIGATIONS AND COMMITMENTS ARISING THEREFROM.

2.  THE GOVERNMENT OF JAPAN NOTES THAT LIBERALISATION OF CURRENT INVISIBLE OPERATIONS AND OF CAPITAL MOVEMENTS IN ACCORDANCE WITH PARAGRAPH (A) OF ARTICLE 2 RESPECTIVELY OF THE TWO CODES MEANS THAT RESIDENTS OF DIFFERENT MEMBER STATES SHALL BE FREE TO CONCLUDE TRANSACTIONS AND TO EXECUTE TRANSFERS BETWEEN THEM AS SPECIFIED IN THE ANNEX A RESPECTIVELY OF THE TWO CODES.

3.  THE GOVERNMENT OF JAPAN WISHES TO STATE THAT, WITH REGARD TO THE TRANSACTIONS AND TRANSFERS WHICH HAVE BEEN LIBERALISED, IT SHALL NOT INTERFERE WITH THE FREE CHOICE OF THE PARTIES THERETO; PROVIDED, HOWEVER, THAT IT MAY TAKE STEPS FOR THE PURPOSE OF VERIFYING THE AUTHENTICITY OF SUCH TRANSACTIONS AND TRANSFERS OR OF PREVENTING EVASION OF THE LAWS AND REGULATIONS, AS PROVIDED FOR IN PARAGRAPH (A) OF ARTICLE 5 RESPECTIVELY OF THE TWO CODES.  WITH REGARD TO THE FORM AND TIMING OF SUCH VERIFICATIONS AND MEASURES, IT IS THE INTENTION OF THE GOVERNMENT OF JAPAN TO ADOPT PRACTICES CONSISTENT WITH THE PROVISIONS OF PARAGRAPH (B) OF ARTICLE 5 RESPECTIVELY OF THE TWO CODES.

4.  THE GOVERNMENT OF JAPAN FURTHER WISHES TO STATE THAT, PURSUANT TO ARTICLE 11 RESPECTIVELY OF THE TWO CODES, IT IS PREPARED TO SUBMIT TO THE ORGANISATION INFORMATION WITH REGARD TO THE MEASURES AND PRACTICES CONCERNING THE ENFORCEMENT OF THE TWO CODES IN JAPAN.  RELEVANT INFORMATION ON SUCH MEASURES AND PRACTICES WILL BE MADE AVAILABLE TO ALL INTERESTED PERSONS.

PART II

5.  THE GOVERNMENT OF JAPAN WILL ENSURE THAT UPON ITS ACCESSION TO THE CONVENTION ALL BUT TEN ITEMS IN THE CODE OF LIBERALISATION OF CURRENT INVISIBLE OPERATIONS AND NINE ITEMS IN THE CODE OF LIBERALISATION OF CAPITAL MOVEMENTS ARE FULLY LIBERALISED IN ACCORDANCE WITH PARAGRAPH 3 OF PART I ABOVE.  ON SEVENTEEN OF THESE NINETEEN ITEMS, THE GOVERNMENT OF JAPAN PROPOSES TO LODGE RESERVATIONS IN ACCORDANCE WITH PARAGRAPH (B) OF ARTICLE 2 OF THE TWO CODES.  THE TEXTS OF THESE RESERVATIONS ARE SET OUT IN ANNEXES I AND II TO THE PRESENT STATEMENT.

6.  THE NINETEEN ITEMS CONCERNED ARE:

CODE OF LIBERALISATION OF CURRENT INVISIBLE OPERATIONS (SEE ANNEX I).

A/3 TECHNICAL ASSISTANCE (LIMITED RESERVATION).

A/5 AUTHORS' ROYALTIES, PATENTS, ETC. (LIMITED RESERVATION).

C/1 MARITIME FREIGHTS.

D/5 RE-INSURANCE AND RETROCESSION (LIMITED RESERVATION).

D/6 INSURANCE BUSINESS OPERATIONS ABROAD (FULL RESERVATION ON TWO PARAGRAPHS).

E/1 PRINTED FILMS (TEMPORARY FULL RESERVATION ON ONE PARAGRAPH).

F/1 PROFITS (LIMITED RESERVATION).

F/2 DIVIDENDS (LIMITED RESERVATION).

G/1 TOURISM (TEMPORARY FULL RESERVATION TO BE FOLLOWED BY LIMITED RESERVATION).

G/5 IMMIGRANTS' REMITTANCES (LIMITED RESERVATION).

CODE OF LIBERALISATION OF CAPITAL MOVEMENTS (SEE ANNEX II).

I/1 DIRECT INVESTMENT (NO RESERVATION).

II/1 LIQUIDATION OF DIRECT INVESTMENT (LIMITED RESERVATION).

III/2 PERSONAL CAPITAL OF FOREIGN NATIONALS CHANGING THEIR COUNTRY OF RESIDENCE (LIMITED RESERVATION).

III/6 GIFTS BETWEEN RELATIVES (LIMITED RESERVATION).

IV/1 USE OF BLOCKED FUNDS (LIMITED RESERVATION).

VI/7 PURCHASE BY RESIDENTS OF FOREIGN MEMBER STATES, OF DOMESTIC SECURITIES ON DOMESTIC MARKETS (LIMITED RESERVATION).

VI/8 SALE BY RESIDENTS OF FOREIGN MEMBER STATES, OF DOMESTIC SECURITIES ON DOMESTIC MARKETS (LIMITED RESERVATION).

VII/1 COMMERCIAL CREDITS (LESS THAN ONE YEAR) (LIMITED RESERVATION).

VII/2 COMMERCIAL CREDITS (ONE TO FIVE YEARS) (FULL RESERVATION).

PART III

7.  THE GOVERNMENT OF JAPAN WILL CONTINUE TO TAKE FURTHER MEASURES OF LIBERALISATION IN ACCORDANCE WITH THE SPIRIT OF THE CODES.  ITS SPECIFIC INTENTIONS REGARDING CERTAIN OF THE RESTRICTED ITEMS ARE SET OUT BELOW.

(1) I/1 - DIRECT INVESTMENT

8.  THE GOVERNMENT OF JAPAN WILL IN FUTURE DEAL WITH ALL APPLICATIONS FOR INWARD AND OUTWARD DIRECT INVESTMENTS IN THE SPIRIT OF THE ITEM IN QUESTION AND WILL DISAPPROVE APPLICATIONS ONLY IN EXCEPTIONAL CASES WHERE SERIOUS DETRIMENTAL EFFECTS TO THE ECONOMY ARE TO BE FEARED.

9.  CONCERNING INWARD INVESTMENTS CONSIDERATION WILL BE GIVEN IN PARTICULAR TO THE FOLLOWING FACTORS:

A.  CO-ORDINATION OF INDUSTRIAL DEVELOPMENT WITH SPECIAL REGARD TO SMALL AND MEDIUM ENTERPRISES;

B.  MAINTENANCE OF FULL EMPLOYMENT;

C.  INTERNAL AND EXTERNAL FINANCIAL EQUILIBRIUM.

REGARDING OUTWARD DIRECT INVESTMENTS THE CHIEF CONSIDERATION OF THE GOVERNMENT OF JAPAN WILL BE THE BALANCE OF PAYMENTS POSITION, WITHOUT PREJUDICE TO EXCEPTIONAL CASES IN WHICH DETRIMENTAL EFFECTS FOR THE JAPANESE ECONOMY ARE TO BE FEARED.

10.  THE GOVERNMENT OF JAPAN WILL STUDY FORTHWITH CONCRETE MEASURES TO FACILITATE AND EXPEDITE AUTHORISATION PROCEDURES.

(2) VI/7 - PURCHASE OF DOMESTIC SECURITIES BY NON-RESIDENTS

11.  THE GOVERNMENT OF JAPAN IS PREPARED TO AUTHORISE THE PURCHASE OF STOCKS BY NON-RESIDENTS BEYOND THE LIMITS OF AUTOMATIC APPROVAL (SEE THE REMARK TO THE RESERVATION ON THE ITEM VI/7 IN ANNEX II TO THE PRESENT STATEMENT) UNLESS SUCH PURCHASE HAS A VERY ADVERSE EFFECT ON THE DOMESTIC ECONOMY AND BALANCE OF PAYMENTS.

12.  IN FACT, THE ACTUAL HOLDING OF STOCKS BY NON-RESIDENTS HAS REMAINED SUBSTANTIALLY BELOW THESE LIMITS.  IT IS THE BELIEF OF THE GOVERNMENT OF JAPAN THAT THESE LIMITS OF AUTOMATIC APPROVAL CONSTITUTE NO OBSTACLE TO THE PURCHASE OF STOCKS BY NON-RESIDENTS.

13.  IF IT BECOMES APPARENT IN THE FUTURE THAT THESE LIMITS ARE A REAL OBSTACLE AS THE RESULT OF THE INCREASE OF EQUITY INVESTMENT BY NON-RESIDENTS, THE GOVERNMENT OF JAPAN WILL CONSIDER THE EASING OF THESE LIMITS WITH DUE REGARD TO THE IMPACT ON JAPAN'S FINANCE AND ECONOMY, IN PARTICULAR THE STABILITY OF THE JAPANESE SECURITY MARKETS AND POSSIBLE HOT MONEY MOVEMENTS.

(3) A/3 - TECHNICAL ASSISTANCE  A/5 - AUTHORS' ROYALTIES, PATENTS, ETC.

14.  SINCE TECHNICAL ASSISTANCE LARGELY CONTRIBUTES TO THE DEVELOPMENT OF THE ECONOMY, IT IS THE POLICY OF THE GOVERNMENT OF JAPAN TO AUTHORISE CONTRACTS AS SIMPLY AND AS SPEEDILY AS POSSIBLE.  THE GOVERNMENT OF JAPAN MOREOVER ENVISAGES AS THE ULTIMATE GOAL COMPLETE LIBERALISATION, TAKING INTO CONSIDERATION PROBLEMS SPECIAL TO JAPAN, VIZ, THE WIDESPREAD EXISTENCE OF EXCESSIVE COMPETITION AND THE ACTUAL SITUATION OF SMALL AND MEDIUM ENTERPRISES.

15.  HOWEVER, WHILE THE ABOVE DIFFICULTIES REMAIN, CASES MIGHT ARISE REQUIRING MINIMUM MEASURES OF ADJUSTMENT THEREON.  THE OBJECT OF THE SCREENING SYSTEM IS TO PROVIDE FOR SUCH EXCEPTIONAL ADJUSTMENTS.  THE GOVERNMENT OF JAPAN, THEREFORE, WILL STUDY FORTHWITH A SUBSTANTIAL REDUCTION IN THE PERIOD REQUIRED FOR EXAMINATION.  FOR THE TIME BEING IT HAS ON 1ST AND 10TH JULY 1963 INTRODUCED NEW REGULATIONS UNDER WHICH CONTRACTS RELATING TO TECHNICAL ASSISTANCE, PARENTS, ETC, ARE AUTOMATICALLY AUTHORISED, PROVIDED THEY DO NOT COVER A PERIOD OF MORE THAN ONE YEAR AND PAYMENTS THEREUNDER DO NOT EXCEED THE EQUIVALENT OF 30,000 U/A.

(4) "YEN BASIS" INVESTMENT

F/1 - PROFITS

F/2 - DIVIDENDS

II/1 - LIQUIDATION OF DIRECT INVESTMENT

VI/8 - SALE BY RESIDENTS OF FOREIGN MEMBER STATES, OF DOMESTIC SECURITIES ON DOMESTIC MARKETS.

16.  UNTIL 1ST JULY 1963 NON-RESIDENTS WERE FREE TO MAKE SO-CALLED "YEN BASIS" INVESTMENTS WITHOUT ANY REFERENCE TO THE AUTHORITIES.  THEY ENJOYED THIS FREEDOM ON THE CLEAR UNDERSTANDING THAT THEY WOULD NOT BE ENTITLED SUBSEQUENTLY TO TRANSFER EITHER INCOME OR LIQUIDATION PROCEEDS.  INFORMATION ON THE ACTUAL SITUATION AND ON THE TOTAL VOLUME OF SUCH INVESTMENT IS NOT AT PRESENT AVAILABLE.

17.  SINCE 1ST JULY 1963 ALL NON-RESIDENT INVESTMENTS ARE SUBJECT TO APPROVAL AND THE SYSTEM OF "YEN BASIS" INVESTMENTS CAME TO AN END.

18.  IT IS THE INTENTION OF THE GOVERNMENT OF JAPAN, AFTER INVESTIGATION OF THE ACTUAL POSITION OF EXISTING "YEN BASIS" INVESTMENTS AND GIVING DUE CONSIDERATION TO EQUILIBRIUM OF TREATMENT WITH AUTHORISED INVESTMENTS, TO CONSIDER MEASURES TO APPROVE "YEN BASIS" INVESTMENTS AFTER SCREENING THEM AND TO MAKE ARRANGEMENTS FOR THE TRANSFER OF PROFITS AND LIQUIDATION PROCEEDS WITHIN THE MEANS OF THE BALANCE OF PAYMENTS.

(5) MARITIME TRANSPORT

19.  THE JAPANESE GOVERNMENT SUBSCRIBES FULLY TO THE FUNDAMENTAL PRINCIPLE OF THE ORGANISATION THAT SHIPPING SHALL CIRCULATE FREELY IN INTERNATIONAL TRADE IN FREE AND FAIR COMPETITION AND ACCEPTS NOTE 1 AS THE BASIS FOR ITS FUTURE SHIPPING POLICY.

20.  IN THE PAST, HOWEVER, SHIPPING CONTRACTS HAVE BEEN SUBJECT TO LICENSING.  SINCE 20.4.1963, ALL CONTRACTS OF A DURATION NOT EXCEEDING ONE YEAR ARE ENTIRELY FREE.  IN ORDER TO ELIMINATE COMPLETELY THE REMAINING LICENSING SYSTEM OVER CONTRACTS OF MORE THAN ONE YEAR, A NUMBER OF ADJUSTMENTS WILL BE NECESSARY.  THE JAPANESE GOVERNMENT UNDERTAKES TO TAKE THE NECESSARY STEPS BEFORE THE ACCESSION WITH REGARD TO CONTRACTS LONGER THAN ONE YEAR COVERING ALL COMMODITIES BUT OIL AND PETROLEUM PRODUCTS, COAL AND IRON ORE.  FOR THESE THREE COMMODITIES A SOMEWHAT LONGER TRANSITION PERIOD IS CONSIDERED NECESSARY, WHICH SHALL IN ANY CASE NOT EXCEED ONE YEAR FROM THE DATE OF ACCESSION FOR COAL AND IRON ORE, AND TWO YEARS FROM THE DATE OF ACCESSION FOR OIL AND PETROLEUM PRODUCTS CARRIED BY TANKERS.

21.  EVEN WITHIN THIS TRANSITION PERIOD, THE JAPANESE GOVERNMENT IS WILLING TO RE-EXAMINE ITS POSITION WHENEVER POSSIBLE AND IS PREPARED TO PURSUE ITS EFFORTS TO REALISE EARLIER LIBERALISATION FOR ANY OF THESE THREE COMMODITIES.

(6) OTHER SPECIFIC ITEMS

22.  THE GOVERNMENT OF JAPAN INTENDS TO TAKE CERTAIN OTHER LIBERALISATION MEASURES, NOTABLY WITH REGARD TO THE ITEMS E/1, PRINTED FILMS, AND G/1, TOURISM.  THE GENERAL NATURE OF THESE MEASURES IS INDICATED BRIEFLY IN THE REMARKS AGAINST THE PROPOSED RESERVATIONS, SET OUT IN ANNEX I TO THE PRESENT STATEMENT, WHICH CONTAIN DEFINITE TIME LIMITS.

ANNEX I RESERVATIONS TO THE CODE OF LIBERALISATION OF CURRENT INVISIBLE OPERATIONS TO BE LODGED BY JAPAN

REF. NO. OPERATIONS  REMARKS

A/3 ..... TECHNICAL ASSISTANCE (ASSISTANCE RELATING TO THE PRODUCTION AND DISTRIBUTION OF GOODS AND SERVICES AT ALL STAGES, GIVEN OVER A PERIOD LIMITED ACCORDING TO THE SPECIFIC PURPOSE OF SUCH ASSISTANCE, AND INCLUDING E.G. ADVICE OR VISITS BY EXPERTS, PREPARATION OF PLANS AND BLUEPRINTS, SUPERVISION OF MANUFACTURE, MARKET RESEARCH, TRAINING OF PERSONNEL).  THE RESERVATION APPLIES ONLY TO CONTRACTS: (I) WITH A DURATION OF MORE THAN ONE YEAR; OR (II) INVOLVING INDIVIDUALLY PAYMENTS EXCEEDING THE EQUIVALENT OF 30,000 U/A.

A/5 ..... AUTHORS' ROYALTIES. PATENTS, DESIGNS, TRADE MARKS AND INVENTIONS (THE ASSIGNMENT AND LICENSING OF PATENT RIGHTS, DESIGNS, TRADE MARKS AND INVENTIONS, WHETHER OR NOT LEGALLY PROTECTED, AND TRANSFERS ARISING OUT OF SUCH ASSIGNMENT OR LICENSING).  THE RESERVATION APPLIES ONLY TO CONTRACTS RELATING TO PATENTS, DESIGNS, TRADE MARKS OR INVENTIONS: (I) WITH A DURATION OF MORE THAN ONE YEAR; OR (II) INVOLVING INDIVIDUALLY PAYMENTS EXCEEDING THE EQUIVALENT OF 30,000 U/A.

D/5 ..... TRANSACTIONS AND TRANSFERS IN CONNECTION WITH RE-INSURANCE AND RETROCESSION.  THE RESERVATION APPLIES ONLY TO RE-INSURANCE AND RETROCESSION OF 60% OF THE COMPULSORY THIRD PARTY LIABILITY RISKS IN CONNECTION WITH MOTOR CAR INSURANCE.

D/6 ..... INSURANCE BUSINESS OPERATIONS ABROAD. ANNEX I TO ANNEX A, PART III, PARAGRAPHS 5 (B), AND 6.

E/1 ..... PRINTED FILMS, COMMERCIAL, DOCUMENTARY, EDUCATIONAL, ETC. (RENTALS, DUES, SUBSCRIPTIONS, REPRODUCTION AND SYNCHRONISATION FEES, ETC. ). ANNEX IV TO ANNEX A, PARAGRAPH 1 (A).  THE RESERVATION APPLIES ONLY UNTIL 30TH JUNE, 1964.

F/1 ..... PROFITS FROM BUSINESS ACTIVITY.  THE RESERVATION APPLIES ONLY TO THE TRANSFER OF PROFITS FROM INVESTMENTS WHICH HAVE NOT BEEN VALIDATED UNDER THE LAW CONCERNING FOREIGN INVESTMENT OF 1950.

F/2 ..... DIVIDENDS AND SHARES IN PROFITS.  THE RESERVATION APPLIES ONLY TO DIVIDENDS AND SHARES IN PROFITS FROM INVESTMENTS WHICH HAVE NOT BEEN VALIDATED UNDER THE LAW CONCERNING FOREIGN INVESTMENT OF 1950.

G/1 ..... TOURISM.  THE RESERVATION APPLIES ONLY UNTIL 30TH JUNE, 1964. AS FROM 1ST JULY, 1964, THE RESERVATION WILL APPLY ONLY TO THE AUTOMATIC ALLOCATION OF AMOUNTS IN EXCESS OF THE EQUIVALENT OF 500 U/A PER PERSON PER JOURNEY PER YEAR.

G/5 ..... IMMIGRANTS' REMITTANCES.  THE RESERVATION APPLIES ONLY TO REMITTANCES IN EXCESS OF MAINTENANCE OF RELATIVES. THE DEFINITION OF THE TERM < RELATIVE > IS SUBJECT TO THE DISCRETION OF THE JAPANESE AUTHORITIES.

ANNEX II RESERVATIONS TO THE CODE OF LIBERALISATION OF CAPITAL MOVEMENTS TO BE LODGED BY JAPAN

REF. NO. TRANSACTIONS AND TRANSFERS  REMARKS

II/1 .... LIQUIDATION OF NON-RESIDENT OWNED DIRECT INVESTMENT AND TRANSFER OF THE PROCEEDS.  THE RESERVATION APPLIES ONLY TO THE TRANSFER OF LIQUIDATION PROCEEDS OF INVESTMENTS WHICH HAVE NOT BEEN VALIDATED UNDER THE LAW CONCERNING FOREIGN INVESTMENT OF 1950.

III/2 ... PERSONAL CAPITAL OF FOREIGN NATIONALS CHANGING THEIR COUNTRY OF RESIDENCE.  THE RESERVATION APPLIES ONLY TO TRANSFERS IN EXCESS OF THE EQUIVALENT OF 5,000 UNITS OF ACCOUNT PER FAMILY.

III/6 ... GIFTS BETWEEN RELATIVES.  THE RESERVATION APPLIES ONLY TO THE TRANSFER OF GIFTS IN OTHER THAN HARDSHIP CASES.

IV/1 .... USE OF BLOCKED FUNDS IN MEMBER STATES BY THEIR NON-RESIDENT OWNERS.  THE RESERVATION APPLIES ONLY TO THE USE OF BLOCKED FUNDS FOR INVESTMENT IN LISTED DOMESTIC SECURITIES (SUB-PARAGRAPH (II) OF THE REMARK).

VI/7 .... PURCHASE BY RESIDENTS OF FOREIGN MEMBER STATES, OF DOMESTIC SECURITIES ON DOMESTIC MARKETS.  THE RESERVATION APPLIES ONLY TO PURCHASES OF SECURITIES IN EXCESS OF: (I) 10 OR 15% (ACCORDING TO THE TYPE OF BUSINESS) OF THE TOTAL EQUITY CAPITAL OF ANY ONE CONCERN; (II) 5% OF THE TOTAL EQUITY CAPITAL OF ANY ONE CONCERN BY A SINGLE HOLDER.

VI/8 .... SALE BY RESIDENTS OF FOREIGN MEMBER STATES, OF DOMESTIC SECURITIES ON DOMESTIC MARKETS.  THE RESERVATION APPLIES ONLY TO THE TRANSFER OF SALES PROCEEDS OF DOMESTIC SECURITIES, THE PURCHASE OF WHICH HAS NOT BEEN VALIDATED UNDER THE LAW CONCERNING FOREIGN INVESTMENT OF 1950.

VII/1 ... COMMERCIAL CREDITS, IN CONFORMITY WITH NORMAL COMMERCIAL PRACTICE, WITH A CURRENCY OF LESS THAN ONE YEAR WHICH ARE RELATED TO A COMMERCIAL TRANSACTION IN WHICH A RESIDENT PARTICIPATES.  THE RESERVATION APPLIES ONLY TO CREDITS RELATED TO IMPORTS WITH A CURRENCY OF MORE THAN FOUR MONTHS AFTER CUSTOMS CLEARANCE AND TO CREDITS RELATED TO EXPORTS WITH A CURRENCY OF MORE THAN SIX MONTHS AFTER LOADING.

VII/2 ... COMMERCIAL CREDITS, IN CONFORMITY WITH NORMAL COMMERCIAL PRACTICE, WITH A CURRENCY OF BETWEEN ONE AND FIVE YEARS WHICH ARE RELATED TO A COMMERCIAL TRANSACTION IN WHICH A RESIDENT PARTICIPATES.