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United States Department of State / Foreign relations of the United States diplomatic papers, 1937. The British Commonwealth, Europe, Near East and Africa
(1937)

Italy,   pp. 435-506 PDF (27.1 MB)


Page 442


FOREIGN RELATIONS, 1937, VOLUME II
provisions which should be inserted between the third and fourth
paragraphs of our redraft of Article VIII:
  "If either High Contracting Party establishes or maintains, directly
or indirectly, any form of control of the means of international pay-
ment, it- shall, in the administration of such control:
      (a) Impose no prohibition, restriction, or delay, on the transfer
    of payment for imports of articles the growth, produce, or manu-
    facture of the other High Contracting Party, or on the transfer
    of payments necessary for and incidental to the importation of
    such articles;
      (b) With respect to rates of exchange, and taxes or surcharges
    on exchange transactions, in connection with payments for or
    payments necessary and incidental to the importation of articles
    the growth, produce, or manufacture of the other High Contract-
    ing Party, accord unconditionally treatment no less favorable than
    that accorded in connection with the importation of any article
    the growth, produce, or manufacture of any third country; and
      (c) With respect to all rules and formalities relating to ex-
    change transactions in connection with payments for or payments
    necessary and incidental to the importation of articles the growth,
    produce, or manufacture of the other High Contracting Party,
    accord unconditionally treatment no less favorable than is ac-
    corded in connection with the importation of the like article the
    growth, produce, or manufacture of any third country.
  With respect to non-commercial transactions each High Contracting
Party shall apply every form of control of foreign exchange in a
non-discriminatory manner as between the nationals of the other High
Contracting Party and the nationals of any third country."
  It will be noted that the last paragraph of Article VIII relating to
consultation would apply in respect of the foregoing exchange provi-
sions.
  Inasmuch as prohibitions and restrictions on the transfer of pay-
ments are employed by some countries as a means of limiting imports,
recent deliberations have led us to the conclusion that in order to render
the most favored nation and the quota provisions in our trade agree-
ments and treaties effective, and to discourage the accumulation of
blocked commercial debts which usually lead to the diversion of trade
through clearing and payments agreements, it is necessary to revise
substantially our policy relating to exchange control.
  Accordingly, we have formulated a policy which, broadly speaking,
is that we shall endeavor to have other countries agree (a) to act
favorably and promptly upon all applications for exchange to pay for
imports of American goods which are admitted into the other country
and (b) to accord unconditional most favored nation treatment in
respect of exchange rates and fiscal charges affecting payments for im-
ports from the United States. As a standard expression of that policy
442


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