Papers relating to the foreign relations of the United States, 1928, Volume III
711.542/17
The Minister in Switzerland (Wilson) to the Secretary of State
[Received March 29.]
Sir: I have the honor to refer to the Department’s instruction No. 518 of September 29, 1926,9 in which was enclosed the draft of a Treaty of Friendship, Commerce and Consular Rights for submission to the Government of Switzerland, through the Legation. This draft was promptly delivered to M. Motta, Chief of the Federal Political Department, by Mr. Gibson.
I am now in receipt of a note from M. Motta, dated March 14, 1928, of which a copy and translation are enclosed, referring to this draft and submitting a counterdraft. As indicated in my despatch No. 335 of March 8, 1928, the Swiss Government desires to conclude, in lieu of a Treaty of Friendship, Commerce and Consular Rights, two treaties, one a treaty of Friendship, Juridical Protection and Consular Rights, the other a Treaty of Commerce.
To this end M. Motta enclosed the Swiss draft of a Treaty of Friendship, Juridical Protection and Consular Rights, containing some 17 articles and a final protocol. This is likewise transmitted herewith, together with a translation thereof made by Mr. Moffat, Secretary of this Legation, which, although carefully prepared by [Page 898] him, may be found too literal and in places not sufficiently technical in its terminology. While in brief the Swiss Government states that this draft is largely inspired by the American draft, a cursory examination will show that it is less liberal in its scope.
Until my return from my present assignment at Geneva I fear that it will be impossible for me to give this draft as thorough an examination as I should like. As soon as I return, however, I shall promptly forward to the Department a despatch containing my comments and criticisms thereon.
With regard to the Swiss draft of the second Treaty they desire to conclude, namely, the Treaty of Commerce, I learn confidentially that this is being delayed by a difference of opinion between the Political Department and the Department of Public Economy on certain of its provisions. This will likewise be forwarded as soon as received.
I have [etc.]
The Chief of the Swiss Federal Political Department (Motta) to the American Minister (Wilson)
ad No. 247
Mr. Minister: In his note of October 26, 1926,12 His Excellency Mr. Gibson was good enough to hand to me the draft of a treaty of friendship, commerce and consular rights between Switzerland and the United States of America, with a view to replacing therewith the treaty concluded between the two countries on November 25, 1850,13 certain stipulations of which have become somewhat antiquated. Together with the other interested departments we have examined this draft with deep attention.
First of all we have reached the conclusion that the American-Swiss treaty of 1850, which in this respect is like a great many other agreements of a similar nature concluded at about the same time, possesses a drawback which it would be advantageous to remove while we are engaged in its revision. For it combines in an arbitrary manner stipulations dealing with two entirely different subjects. Inasmuch as the reasons which might cause two states to modify their reciprocal undertakings as regards their commercial relations, or as regards the status of their nationals residing on the territory of the other, are the outgrowth of situations which are not necessarily related, it seems more reasonable to draw up a separate agreement covering each [Page 899] of these two subjects; this custom incidentally is growing more and more widespread.
We, therefore, believe that we should propose the replacement of the treaty of friendship, commerce and consular rights of November 25, 1850, by two separate treaties, namely: a treaty of friendship, juridical protection and consular rights and a treaty of commerce.
Believing that in this intermediate question the United States Government will readily accept the viewpoint of the Federal Council, we have, synchronously with the Federal Department of Public Economy which is preparing on its own a draft of a treaty of commerce, drawn up a draft of a treaty of friendship, juridical protection, and consular rights, based upon the most-favored-nation clause, which we have the honor to transmit to Your Excellency herewith.
The enclosed document is to a large degree inspired by the draft of the treaty of friendship, commerce and consular rights which was drawn up by the Department of State, although for reasons of technical convenience it seemed desirable to modify in a small degree the arrangement among articles of the provisions dealt with in the draft.
The first article, which deals with the conditions of emigration, of sojourn, and of residence of the nationals of one of the states upon the territory of the other, results from a combination of the first sentence and the fifth paragraph of the first article of the American draft.
Article 2 is devoted to provisions regarding freedom of conscience and of worship and professional activity and corresponds to the first paragraph of the first article and to the fifth article of the American draft.
Article 3 deals with taxation and reproduces almost word for word the second paragraph of the first article of the American draft.
Article 4 defines the rights which the nationals of each party shall enjoy on the territory of the other and the protection to which they are entitled on the part of the authorities. It is based upon the same principles as those contained in article 1, paragraphs 3 and 4, and in article 3 of the American draft.
Article 5 covers exemption from military service, as does article 6 of the American draft; but it treats this subject in a more liberal way, and one which seems more in conformity with the practice hitherto observed in the relations between Switzerland and the United States.
Article 6 may be seen to correspond to article 4 of the American draft, dealing with the rights of inheritance of the nationals of one of the two states on the territory of the other. We have provisionally reserved approval of the wording of this article inasmuch as it should [Page 900] take into account, in order fully to attain its purpose, the legislation of the two states, and inasmuch as the study of American laws which the Federal authorities have undertaken with this in view has not yet been finished.
The provisions dealing with the regulation of companies, with the recognition in one of the states of corporations organized on the territory of the other, and with the right of nationals of one of the states to form a company on the territory of the other, which are treated in articles 9 and 10 of the American draft, envisage only such types of corporations as are recognized in American legislation—types which do not correspond to those recognized in Swiss legislation—with the result that their application within the framework of Swiss law would give rise to ambiguities. In drawing up articles 7 and 8 of our counter draft, we were guided by the same general principles as were contained in the American draft, but have striven to express them in a more general fashion, taking into account the divergent conceptions to be found under Swiss laws and under American laws.
Articles 9 to 15 of our counter draft deal with consular prerogatives. These have been examined particularly carefully, inasmuch as Switzerland has not yet concluded a convention containing detailed provisions on this subject. The clauses contained in the counter draft take into account the general tendency which has been manifest for some time toward a reduction of those exemptions from the common law which have been accorded to government agents who do not possess, as do diplomatic agents, a truly representative character. It is thus that the so-called personal immunity of consuls, which consists of the immunity of a consular agent from arrest before trial except for misdemeanors of a certain gravity, would only be accorded to such principal consular officers as are citizens of the appointing state. Thus consuls general, consuls, vice consuls, and consular agents would be required, although without threat of reprisal, to appear, when the case arose, as witnesses before the law courts of the country of their residence, although they may have the privilege of asking for the postponement of their testimony to a later date for reasons connected with the urgent need of their office. This principle has been sanctioned in recent consular conventions concluded between foreign states. It would of course be understood—and our counter draft contains in this respect a clause, which is not to be found in the American draft—that the principal officers and officials of the consular service would be, irrespective of rank or nationality, immune from the jurisdiction of [Page 901] the law courts of the state of their residence for all acts carried out in their official capacity and within the limit of their functions. They could likewise refuse to deposit or to produce documents which might be in their possession, on the ground of professional or state secrecy.
With regard to the principles to be applied in the matter of immunity from taxation, it would be difficult for the Federal Council, in view of the sovereignty of the Cantons in the matter of taxes, to agree to as broad a formula as is to be found in article 16 of the American draft. At the utmost it could attempt to sanction in a treaty the régime generally enforced in Switzerland at the present moment.
In conformity with the practice constantly observed by Switzerland during these past few years, the draft treaty of friendship, juridical protection, and consular rights between Switzerland and the United States of America contains an arbitration clause in article 16 of the counter draft.
Inasmuch as this treaty is intended to remain in force for a minimum duration of ten years, it has seemed necessary to define the interpretation which the contracting parties mean to give to the most-favored-nation clause in its relation to the juridical protection of their nationals by means of a final protocol bearing upon two points which, while admittedly secondary, might give rise to divergency of opinion.
We would be grateful to Your Excellency to submit the enclosed draft to the Government of the United States and to inform us when possible if it appears susceptible of serving as a basis for an agreement.
Accept [etc.]
Swiss Draft Counter Proposal of a Treaty of Friendship, Juridical Protection and Consular Rights
The Swiss Federal Council
and
The President of the United States of America
desirous of strengthening the bonds which happily prevail between Switzerland and the United States of America and of promoting friendly intercourse between the two countries, have resolved to conclude a Treaty of Friendship, Juridical Protection and Consular [Page 902] Rights, and for that purpose have appointed as their plenipotentiaries to wit:
The Swiss Federal Council:
. . . . . . .
The President of the United States of America:
. . . . . . .
who, having exchanged their respective full powers, found to be in good and due form, have agreed upon the following articles:
Article I
The nationals of each of the Contracting Parties shall be permitted to enter, travel, sojourn and reside in the territory of the other. Nothing contained in this treaty, however, shall be construed to affect existing statutes and regulations of either of the Contracting Parties in relation to the immigration, sojourn, or residence of aliens, or to prejudice the right of either of the Contracting Parties to enact such statutes or issue such regulations.
Article II
The nationals of either Contracting Party within the territory of the other shall enjoy liberty of conscience and freedom of worship, and may, upon conforming to the laws and regulations in force, engage in any kind of scientific, religious, philanthropic, professional, manufacturing or commercial work, in short in any legitimate occupation with the exception of holding public office, engaging in the notarial or legal professions, of peddling and hawking. The conditions imposed by law, however, on admission to the scientific professions, as well as the laws and regulations in relation to immigration, sojourn, and residence, are excepted. Insofar as the foregoing rights and privileges are concerned, the nationals of each Contracting Party shall be treated upon the same terms as nationals of the state of residence or as nationals of the most favored nation.
Article III
The nationals of either Contracting Party within the territory of the other, upon conforming to the laws and regulations in force, shall not be subjected to the payment of any internal charges or taxes, of whatsoever nature, other or higher than those that are or may be exacted of its nationals. The provisions of law relating to peddling and hawking, and the taxes imposed for sojourn or residence permits, however, are excepted.
[Page 903]Article IV
The nationals of each Contracting Party shall receive within the territory of the other, upon submitting to conditions imposed upon its nationals, constant protection and security for their persons and property.
The nationals of each of the Contracting Parties, upon conforming to the local laws, shall enjoy freedom of access to the courts of justice in all degrees of jurisdiction and to other competent authorities, as well for the prosecution as for the defense of their rights.
Upon conforming to the laws and regulations in force, the nationals of either Contracting Party within the territory of the other shall enjoy the right to own, erect, lease, and occupy appropriate buildings, and to purchase or lease lands for residential, manufacturing, commercial, scientific, religious, philanthropic or mortuary purposes, upon the same terms as nationals of the state of residence or as nationals of the most favored nation. It shall not be allowable to make a domiciliary visit to, or search of any such premises, provided they are being subjected to legitimate usage, except under the conditions and in conformity with the forms prescribed by the laws and regulations for nationals.
The nationals of either Contracting Party may not, within the territory of the other, be deprived of their property or, even temporarily, of the use of their property without due process of law, and without advance payment of just compensation. They shall be treated in this respect upon the same terms as nationals.
Article V
The nationals of either Contracting Party shall be exempted, within the territory of the other, from all forms of military service, and from all contributions, whether in money or in kind, imposed in lieu of personal service. They shall be released from participation in all forced loans.
The nationals of either Contracting Party shall only be liable to such military prestation and requisitions, alike in times of peace and war, as are levied on the nationals of the most favored nation, in the same degree and on the same basis as the latter, and shall in all cases receive therefor just compensation.
The nationals of either Contracting Party shall likewise be exempted from any judicial, administrative, or municipal employment or duties.
Article VI
(The wording of this article, which should correspond to article IV of the American proposed treaty, is for the moment withheld.)
[Page 904]Article VII
Commercial, manufacturing, agricultural, or financial companies, including transportation and insurance companies, which have been duly organized in accordance with and under the laws of either Contracting Party, and maintain a central office within the territory thereof, shall have their juridical status recognized in the other country, provided that they pursue no aims contrary to its laws or to public morals, and they may, subject to observing the formalities required of them by the laws and regulations in force, establish themselves within its territory, acquire and make use of rights, and fulfill their economic functions. They shall enjoy free and easy access to the courts of law and equity, on conforming to the laws and regulations in force, as well for the prosecution as for the defence of their rights, in all the degrees of jurisdiction established by law.
Such companies shall enjoy in all respects the treatment granted to companies organized upon the territory of the most favored nation; in particular, they shall not be liable to any internal charges or taxes, irrespective of size or nature, other or higher than those which are or may be exacted of the latter.
Subsidiaries, branch establishments, agencies and other offices on the territory of either one of the Parties, of companies and associations duly organized within the territory of the other Party shall only be taxed on the capital actually invested in the said subsidiaries, branch establishments, agencies and other offices or on the profits or income earned by them in the country, and the said profits and income may be used to determine the taxable capital, if the latter cannot be proved.
Article VIII
The nationals of either of the Contracting Parties shall enjoy, within the territory of the other Party, upon the same terms as the nationals of the most favored nation, and upon conforming to the laws and regulations in force, the right of organizing commercial, manufacturing, agricultural or financial companies, and of participating in such companies as are already in being, and of holding executive or official positions therein.
Article IX
Each of the Contracting Parties shall have the right to appoint consuls general, consuls, vice-consuls, and consular agents, who may reside in those of its cities and places which are open to consular representatives of other countries.
Consuls general, consuls, vice-consuls, and consular agents shall, upon the presentation of their commissions, be received and recognized according to the rules and formalities existing in the country [Page 905] of their residence. The requisite exequatur for the free exercise of their functions shall be furnished them free of charge, and, on the exhibition of the said exequatur, the competent authorities of their consular district shall at once take the necessary steps to enable them to enter upon their duties and to enjoy the rights, privileges, and immunities to which they are entitled.
Consuls general, consuls and vice-consuls may, subject to the approbation of the government they serve, appoint consular agents in cities and places of their respective consular districts. These consular agents shall be furnished with a document by the Consul who shall have appointed them and under whose orders they shall be placed. From the moment of the delivery of an exequatur, or other document issued in lieu thereof, they shall enjoy the same privileges and immunities as principal consular officers. Principal consular officers and members of the consular service shall enjoy reciprocally all the rights, immunities, and exemptions which are enjoyed by principal consular officers and members of the consular service of the same grade of the most favored nation.
Article X
Principal consular officers and members of the consular service shall not be amenable to the tribunals of the state of their residence by reason of acts committed in their official capacity and within the limits of their functions.
In the event that such exemption is invoked before an authority of the state of their residence, the latter shall refrain from handing down a ruling, inasmuch as all difficulties of this nature should be settled through diplomatic channels.
Principal consular officers, nationals of the state by which they are appointed, shall be exempt from provisional arrest except when charged with the commission of serious misdemeanors. In the event of arrest or charges, the Government of the state of residence shall inform the diplomatic agent who is the superior of the principal consular officer.
Consuls General, consuls, vice-consuls, and consular agents, not nationals of the state of their residence shall comply with invitations that may be addressed to them by the tribunals of the state of their residence without threat of penal action in case of non-appearance, to appear as witnesses; they may, nevertheless, if the case arises, claim as a legitimate reason for the postponement to a later, but not distant, date, obstacles arising from the urgent needs of their office.
Consuls General, consuls, vice-consuls and consular agents may likewise refuse to hand over or to produce documents in their possession alleging professional or state secrecy; in the event that the judicial authority opposes this excuse or this refusal as unjustified, [Page 906] it must refrain from all coercive measures against the official, inasmuch as all difficulties of this nature should be settled through diplomatic channels.
With the exception of the above-mentioned privileges and immunities, principal consular officers and members of the consular service shall be amenable to the jurisdiction of the tribunals of the state of their residence, alike in civil and criminal matters, under the same terms as nationals.
Article XI
Consular officers of career, including chief clerks, nationals of the state by which they are appointed, shall reciprocally be exempt from all military requisitions, affecting their personal or real property, and from all direct taxes, except taxes levied on account of the ownership of immovable property and assessments.
The above mentioned officials may not, however, claim any exemption from taxation for income derived from personal property invested in manufacturing or commercial enterprise of the state of their residence.
Honorary consuls shall be exempt from the payment of all taxes on income derived from the exercise of their functions.
Article XII
There may be placed over the outer door of a consular office the arms of the state with this inscription: Consulate General, Consulate, Vice-Consulate or Consular Agency of … The national flag may be hoisted on consular offices on public holidays, and under other customary circumstances, on the understanding that these external insignia shall never be construed as constituting a right of asylum.
Article XIII
Consular archives shall be inviolable, and the authorities of the country where they are located shall not under any pretext make any examination or seizure of papers, documents, or registers belonging to the archives.
Such papers, documents, and registers shall always be kept entirely distinct from the books, papers, and personal documents which belong to the consular officials or which bear upon the business or manufacture in which they might be engaged.
If a principal consular officer summoned by a judicial or administrative authority to divest himself of or to produce papers, documents, or registers classified in his archives refuses to comply, the judicial or administrative authority may not use any coercive measure against him, inasmuch as all difficulties of this nature should be settled through diplomatic channels.
[Page 907]Article XIV
Upon the incapacity, absence or death of a principal consular officer, consular employees whose official character may have previously been made known to the government of the state of their residence, may be legally permitted, in so far as is envisaged by the regulations of each of the Contracting Parties, to exercise temporarily consular functions.
While so acting, interim agents shall enjoy all the privileges, immunities and exemptions granted to the incumbent whom they are replacing.
Article XV
Consuls general, consuls, vice-consuls, and consular agents may protect the nationals of the state which has appointed them and, by virtue of international law and usage, defend the rights and interests of such nationals. To this end they may address the authorities of their district to object to any violation of treaties existing between the two countries and to any abuse of which their nationals may have ground for complaint. Failure upon the part of these authorities to grant redress shall only justify a direct application to the government of the country of their residence in the absence of a diplomatic representative.
Article XVI
Any differences that might arise as to the interpretation or the application of this treaty and which have not been settled through diplomatic channels within a reasonable period, shall be submitted at the instance of either Party, to a court of arbitration, composed, unless otherwise agreed upon, of five members, each of the Contracting Parties appointing one arbitrator of their own choice, and selecting by common agreement the other three, and the Presiding Judge from among the latter.
In the event that the Court of Arbitration has not been organized within four months following the notice of a claim for arbitration, the procedure envisaged in article IV of The Hague Convention of October 18, 1907 for the Pacific Settlement of International Disputes,14 becomes obligatory.
In the event of disagreement on the question of whether the dispute relates to the interpretation or the application of the Treaty, this preliminary question shall be submitted to arbitration under the same conditions as disputes envisaged in paragraphs 1 and 2 of this Article.
[Page 908]Article XVII
The present Treaty shall be ratified as soon as possible and the ratifications thereof shall be exchanged at. …
The treaty is concluded for a period of ten years from the date of the exchange of ratifications. If it has not been denounced one year before the expiration of the aforesaid period, it shall remain in force until one year from such a time as either of the Contracting Parties shall have notified to the other an intention of terminating it.
In witness whereof, the above named Plenipotentiaries have signed the present Treaty.
Done in duplicate, in the French and English languages, at . . . . . this . . . . . day of . . . . . 192 . .
Final Protocol
At the moment of signing the Treaty of Friendship, Juridical Protection and Consular Rights, concluded this day between Switzerland and the United States of America, the undersigned, duly authorized thereto, declare that it is understood that neither Contracting Party shall invoke the most favored nation clause contained in the said Treaty to claim, either the benefit of special considerations that a third state shall have obtained by virtue of an award in arbitration or international judicial settlement, or special treatment in the domain of taxation that shall have been prescribed in favor of the nationals of a third state by virtue of an agreement to avoid double taxation.