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Section VIII.—Social and State insurance in ceded territory (Art. 312)

Article 312.

Without prejudice to the provisions contained in other Articles of the present Treaty, the German Government undertakes to transfer to any Power to which German territory in Europe is ceded, and to any Power administering former German territory as a mandatory under Article 22 of Part I (League of Nations), such portion of the reserves accumulated by the Government of the German Empire or of German States, or by public or private organisations under their control, as is attributable to the carrying on of Social or State Insurance in such territory.

The Powers to which these funds are transferred must apply them to the performance of the obligations arising from such insurances.

The conditions of the transfer will be determined by special conventions to be concluded between the German Government and the Governments concerned.

In case these special conventions are not concluded in accordance with the above paragraph within three months after the coming into force of the present Treaty, the conditions of transfer shall in each case be referred to a Commission of five members, one of whom shall be appointed by the German Government, one by the other interested Government and three by the Governing Body of the International Labour Office from the nationals of other States. This Commission shall by majority vote within three months after appointment adopt recommendations for submission to the Council of the League of Nations, and the decisions of the [Page 641]Council shall forthwith be accepted as final by Germany arid the other Government concerned.

Note to X, 312

The transfer of social insurance funds created difficulties which called for final reference to the Council of the League of Nations, according to the procedure of the last paragraph of this article, on three occasions.

The resolution of the Council of July 17, 1921 (League of Nations Official Journal, 1922, pp. 789, 831) disposed of the question of the transfer of funds by Germany in respect to territory ceded to Poland.

The two other cases coming before the Council were dealt with in a resolution of June 21, 1921 (ibid., Minutes of the 13th Session of the Council, pp. 22, 176) relating to transfers under article 77 of funds relating to Alsace-Lorraine and resolutions of December 9, 1924 and June 9, 1925 (League of Nations, Official Journal, 1925, pp. 127, 200–2, 576, 478, 862, 946–8) relating to the transfers in respect to Upper Silesia. Both of these questions were submitted to the Arbitral Tribunal of Interpretation by an agreement of August 28, 1925 between the Reparation Commission and the German Government.

The tribunal by its award of March 24, 1926 included the transfer of social insurance funds relating to Alsace-Lorraine to be made by Germany to France in the annuities prescribed by the Experts’ (Dawes) Plan.

The Upper Silesia fund was transferred to the extent of 30,000,000 German marks by article 207 of the German-Polish convention of May 15, 1922. The League Council’s recommendation of December 9, 1924 was for a further payment of 26,000,000 gold marks in six annual instalments, of which 6,000,000 was payable February 1, 1925. This payment was not effected because Germany had not been authorized to make it by the Agent-General for Reparation Payments. The Council of the League on June 9, 1925 approved a report in which it recommended that the Reparation Commission and the German Government submit the question to the Arbitral Tribunal of Interpretation. Its award of March 24, 1926 was to the effect that, as between the Reparation Commission and Germany and as between the German and Polish Governments, “the annuities prescribed by the Experts’ Plan comprise—

“2. The transfers to be made by Germany to Poland in pursuance of Article 312 of the Treaty of Versailles in respect of social insurance [Page 642]funds relating to Upper Silesia, the amounts of which transfers (others than that of the miners’ superannuation fund which still remains to be settled) were determined by a decision of the Council of the League of Nations dated the 9th December, 1924.”

As Poland was not one of the recipients under the Experts’ Plan, the amount was not paid. Subsequently in the Chorzów case before the Permanent Court of International Justice, Poland attempted unsuccessfully to offset the amount against the indemnity which it was to pay for the nitrate works.

For agreement of April 10, 1922 between Germany and Denmark carrying out this article as respects North Slesvig, see 10 League of Nations Treaty Series, p. 281 (English).

The application of this article was determined for the Free City of Danzig and Poland by their agreement with Germany signed at Berlin, January 24, 1927 (70 League of Nations Treaty Series, p. 453).