Papers Relating to the Foreign Relations of the United States, 1930, Volume II

793.003/444½

Draft Agreement of October 28, 1930⁷²

October 28, 1930

(Without Commitment)

The United States Government having declared its willingness that January 1, 1930, should be regarded as the date upon which the process of gradual abolition of the extraterritorial rights of nationals of the United States of America in China shall in principle have commenced, the Chinese Government will, with a view to enabling nationals of the United States of America during the period of transition to familiarize themselves with Chinese laws and judicial procedure, immediately communicate to the United States Government all Chinese codes actually promulgated and enforced, together with authorized translations thereof.

The United States Government will forthwith take steps toward applying as far as practicable in the United States Courts in China all such Chinese laws, ordinances and regulations not including, however, Chinese laws of procedure, whether civil or criminal, as shall have been promulgated and enforced and communicated with translations to the American Legation in China.

The following agreement for the transfer of jurisdiction over nationals of the United States of America in China from the United States to the Chinese Courts shall come into effect upon the exchange of ratifications which shall take place one year after the Chinese Government shall have promulgated and actually put into operation all the principal codes in conformity with modern concepts of jurisprudence and shall have communicated texts thereof, together with authorized translations thereof, to the American Legation in China; and when the National Government shall have demonstrated its ability to give effect throughout China to the terms of this agreement.

Article One. Transfer of Jurisdiction.

Except in criminal cases other than minor offenses indicated below and as otherwise provided by this agreement, nationals of the United States of America in China will as from the date of the exchange of ratifications of this agreement be subject to the jurisdiction of the modern Chinese law courts, with rights of appeal and in all other respects in accordance with the modern Chinese codes of law and procedure. They shall not, however, be subject to the jurisdiction of the police courts, except in the case of minor offenses not punishable by detention or imprisonment or fines exceeding $10, nor to the jurisdiction of the magistrates courts, nor to that of military courts or courts or tribunals of any kind other than the regular modern law courts of China. From the inception of all such civil proceedings until the conclusion thereof, including the hearing of all cases in court, as well as preliminary investigations or examinations of whatever nature, the assistance of duly qualified American or other foreign or Chinese lawyers and interpreters will be permitted, it being understood that no technical difficulties will be placed in the way of such representation on the part of any foreign lawyer resident in China and in good standing selected by the parties to the action; it being further understood that the lawyer concerned shall have all the rights and privileges accorded to a Chinese lawyer in similar circumstances.

Hearings shall be in the Chinese language, but the Court shall take measures to ensure that such English and Chinese translations are made during hearings and later, as may be necessary for an understanding of the proceedings by all parties to the case, and their representatives.

Nationals of the United States of America parties to a suit or persons authorized by them, shall, upon payment of the usual official fees for such copy, have the right to obtain, in both Chinese and/or English, certified copies of the evidence and judgment in such suit.

Article Two. Establishment of Special Chambers in the High and District Courts.

In the district courts in Harbin, Mukden, Peiping, Tientsin, Tsingtau, Shanghai, Nanking, Hankow, Chungking, Canton, Foochow and Yunnanfu, and in the high courts having appellate jurisdiction over such district courts, with the exception of the Supreme Court, special chambers shall be established for dealing with civil cases in which a national of the United States of America is the defendant. (Note: The territorial jurisdiction of such courts in respect to nationals of the United States of America shall be determined, in accordance with the practicability of access, by agreement between the United States and the Chinese Governments.) All civil cases involving nationals of the United States of America as defendants, wherever resident, except when they may be taken to the Supreme Court on final appeal, or when a national of the United States of America concerned may elect, in writing, to submit himself to the jurisdiction of the local (modern) court having jurisdiction over purely Chinese cases of a similar nature, shall be tried only before these special chambers, which will also hear cases in which nationals of the United States of America are involved as plaintiffs or complainants originating within the ordinary jurisdiction of the courts to which the special chambers are attached.

The chief judge of a special chamber shall be the President of the Court to which the chamber belongs. Other judges of the special chamber as well as its procurators shall be selected from among legal scholars with thorough training and lengthy practical experience and with a broad knowledge of the general concepts of western legal codes and procedure. Their names, ranks and salaries shall be made known to the public and they shall not be removed from office without cause being publicly shown. To each special chamber there shall be attached legal advisers who shall be selected by the Chinese Government from a list of foreign jurists nominated by the Hague Permanent Court of International Justice and appointed in accordance with the conditions of service and salary recommended by the said Court. Such legal advisers shall remain in office for a specified term unless dismissed for cause publicly shown and shall otherwise receive the consideration and respect due the dignity of their office. It is understood that a legal adviser need not permanently reside at the place in which the special chamber of the district court to which he is assigned is established and furthermore that there shall be a thoroughly flexible and practicable system of administration of assignments in order to ensure efficiency and economy in the employment of the said legal advisers. As far as may be practicable a legal adviser of American nationality shall officiate at the trial of cases involving nationals of the United States of America as defendants.

In cases in which nationals of the United States of America are plaintiffs or complainants or defendants, the legal advisers shall observe the working of the special chambers of the district courts and high courts in question and shall have access to the files of the proceedings. The legal advisers may present their views to the judges, who shall give due consideration to the views thus expressed by the legal advisers. It shall be the duty of the legal advisers to forward to the Minister of Justice such reports as they may consider necessary, and copies of these reports in cases concerning nationals of the United States of America shall simultaneously and immediately be forwarded by the legal advisers to the American Legation in China, The legal advisers shall be authorized to receive complaints to which the administration of justice may give rise, with a view to bringing such complaints to the notice of the Minister of Justice in order to ensure the strict observance of the provisions of Chinese law. Similarly the legal advisers shall be authorized to receive any other complaints, including such as may be caused by domiciliary visits, requisitions or arrests, et cetera. In all cases in which nationals of the United States of America are involved as defendants, a legal adviser shall sit as one of the judges hearing the cases in both the district and high courts, and the concurrence of the legal adviser to any judgment or order shall be necessary for its validity.

The special chambers above referred to shall be established and the legal advisers shall be appointed and installed in office before the exchange of ratifications of this agreement.

Article 3. Guarantees in Regard to Taxation and the Operation of Courts.

With regard to the transfer of jurisdiction over nationals of the United States of America in China from the United States to the Chinese courts, the Chinese Government declares as follows:

(a) That nationals of the United States of America shall be liable for the payments of such non-discriminatory Chinese taxation only as is actually paid by all nationals of China and is authorized under the legally enacted and duly promulgated laws, ordinances and regulations of the Central, Provincial and Municipal Governments of China, the texts and the translations of which shall first have been communicated to the American Legation in China;

(b) That nationals of the United States of America shall be protected against all illegal taxation and irregular exactions and against all exactions sought to be enforced without due process of law;

(c) That municipal taxation shall be enforced against nationals of the United States of America only in accordance with duly authorized municipal regulations sanctioned by the Central Government of China and that the proceeds of such municipal taxation shall only be expended on relevant purposes within the municipal areas in question and that nationals of the United States of America shall be protected against unfair or oppressive taxation or methods of assessing or levying such taxation;

(d) That tax agreements entered into with nationals of the United States of America in their several capacities as merchants, firms, partnerships or companies will be duly respected;

(e) That the Chinese courts shall ensure to the persons and property of nationals of the United States of America due protection in accordance with international law and the general practice of nations; and

(f) That the Chinese courts assuming jurisdiction over nationals of the United States of America shall be kept strictly immune from administrative or other interference by any military or non-judicial authority.

Article 4. Rights of Evocation.

The United States Government through American diplomatic or consular officers in China, whenever in their discretion they deem it proper so to do in the interest of justice or as a result of a violation of any of the provisions of this agreement, express or implied, may by means of a written requisition addressed to the competent Chinese authorities including the judge or judges of the Court concerned, evoke any case pending in any Chinese court in which a national of the United States of America is defendant. A case so evoked shall be transferred forthwith to the competent American authorities for adjudication and Chinese jurisdiction in the case will cease. The Chinese authorities shall lend any assistance requested by the American authorities in dealing with evoked cases. In evoked cases the rights and liabilities of the parties shall be determined by Chinese laws so far as they have been regularly promulgated and enforced and communicated to the American Legation in China.

Article 5. Arrest, Detention and Trial.

Nationals of the United States of America may not be arrested, detained or imprisoned except when taken in the act of a misdemeanor or crime, in which case, if act is punishable by a fine of more than $10.00 or by detention or imprisonment, the person so taken shall, within twenty-four hours after arrest, be handed over to the nearest American consular or other American judicial authority for appropriate action.

Article 6. Reservation of Personal Status Matters.

Nationals of the United States of America in China shall not be amenable to Chinese jurisdiction in any matters of personal status, among which are included all questions relating to marriage, conjugal rights, divorce, judicial separation, dower, paternity, affiliation, adoption, capacity, majority, guardianship, trusteeship and interdiction, and in all matters relating to succession to personalty whether by will or on intestacy, and to the distribution and winding up of estates and family law in general.

Article 7. Arbitration.

The Chinese courts will recognize agreements entered into by nationals of the United States of America between one another and with other foreign nationals and with nationals of China for the settlement of civil or commercial controversies by arbitration and will enforce awards made in pursuance thereof unless contrary to public order or good morals.

Article 8. Titles to Real Property.

The Chinese Government agrees that titles to real property held by nationals of the United States of America in China shall be regarded as indefeasible and shall remain undisturbed by the provisions of this agreement. All legal Chinese land transfer fees leviable under regular Chinese legislation as provided in Article 3 shall, where properly payable under such legislation, be paid by nationals of the United States of America on account of land transactions in the future. But no demands shall be made by the Chinese authorities for the payment of such land transfer fees on transfers of land to or from nationals of the United States of America in the past and titles to land held by nationals of the United States of America shall not be called in question on account of non-payment of such transfer fees in the past. Title to property held by nationals of the United States of America shall likewise not be questioned other than when fraud is proved as a result of due process of law.

Article 9. Reservation of Settlements and Concessions.

It is understood that this agreement shall not apply in areas where, on the basis of agreements between China and any other Power or Powers, Chinese administrative jurisdiction does not apply. It is, furthermore, understood that this agreement shall not apply within a radius of fifty li from the present customs house at Shanghai.

Article 10. Immunity of Nationals of the United States of America and their Property and Shipping from any and all Illegal Searches, Expropriations and Requisitions.

The public buildings and private residences of nationals of the United States of America in China and their warehouses and business premises and factories, together with all their accessories, articles and properties shall be respected and shall not be subjected to any requisition, search or inspection, and the books and correspondence relating to their commercial transactions shall not be examined except as specifically provided for in non-discriminatory legislation legally enacted and duly promulgated, and as a result of due legal process. In no event shall premises occupied by nationals of the United States of America be forcibly entered except upon a warrant formally issued by a modern law court specifically citing, by title and section, the law under which action is authorized; and the section of the Chinese code relating to domiciliary searches by procurators without court processes shall not apply to such premises. Nationals of the United States of America in China shall not be subjected directly or indirectly to any form of military service or to any tax or levy imposed as a substitute for military service or to military requisitions or contributions of any kind, nor shall they be compelled to subscribe directly or indirectly to any public loan or to any other form of forced levy.

The property of nationals of the United States of America in China may not be expropriated, nor may the use of it be denied to its owners even temporarily except for reasons of public interest recognized by law as such in the form of a court order emanating from one of the modern courts in which special chambers have been established in accordance with Article 2 of this agreement. No expropriations shall be made without previous public notice and in return for fair compensation to be paid in advance. The use of the property of nationals of the United States of America may not be denied to them even temporarily except in return for fair compensation to be paid in advance.

American commercial vessels in Chinese ports or coastal waters or rivers shall not be subject to any form of commandeering or requisition; nor shall such vessels be inspected, searched, boarded or subjected to any kind of restraint by Chinese military or other armed authority except by agreement with the captain of the vessel. They may not be boarded by Chinese police nor may any person subject to the jurisdiction of the Chinese courts be arrested on board any such vessel except upon a warrant formally issued by a modern law court specifically citing by title and section the law under which such action is authorized. In the absence of such warrant, Chinese police may only board a vessel by agreement with the captain. American commercial vessels shall not be compelled to carry Chinese troops, whether armed or unarmed, or Chinese military supplies. In general treatment accorded to American commercial vessels in Chinese ports or coastal waters or rivers shall be in conformity with that accorded under recognized international practice by maritime nations to vessels of other countries in their ports or territorial waters. Nothing in this article shall be interpreted, however, as altering the present authority of the Chinese Maritime Customs with regard to American vessels.

Article 11. Treatment to be Accorded American Business Organizations.

American companies, firms, partnerships and corporations incorporated or organized in accordance with American law operating in China shall be entitled to all the rights and privileges enjoyed by nationals of the United States of America under this agreement, including the rights enjoyed in Chinese courts, whether as plaintiffs, complainants or defendants. It is understood that such American companies, firms, partnerships, or corporations and their branches, agencies or representatives shall not be subject to discriminatory treatment and American legal persons shall only be taxed in proportion to the amount of capital actually employed in China or in respect of the profits and revenues which they have actually earned in China.

Article 12. Understanding Regarding Pending Cases.

It is understood that after the transfer of civil jurisdiction over nationals of the United States of America in China from the United States’ courts to Chinese courts, as provided for in this agreement, suits terminated under the former American juridical system shall not be reopened; that judgments previously rendered by former United States’ courts shall be executed in any part of China by the Chinese judicial authorities; that suits pending in the United States’ courts at the time of the exchange of ratifications of this agreement shall continue until the execution of judgment in the said courts, the jurisdiction of which shall remain in full force for this purpose; and that the Chinese authorities will lend any assistance requested by the American authorities in this connection.

Article 13. Rights of Residence and Trade.

It is understood that as from the date of exchange of ratifications of this agreement nationals of the United States of America shall enjoy the right without restriction to reside, travel, trade and own property throughout China.

Article 14. Non-discriminatory Treatment for Nationals of the United States of America.

In all matters for which this agreement provides, nationals of the United States of America shall enjoy all exemptions from Chinese jurisdiction which may be enjoyed by the nationals of any other country and shall be subjected to no discriminatory treatment in regard to taxation, judicial, or any other matters concerned, as compared with nationals of China or the nationals of any other country.

Article 15. Provisions of Existing Treaties to Remain in Force.

Except as modified in this agreement, the existing treaties between the United States and China shall remain in force.

Article 16.

In the present agreement the expression “nationals of the United States” shall be deemed to include citizens of the possessions of the United States of America.

Article 17. Ratification and Duration.

This agreement shall come into force upon exchange of ratifications and shall thereupon be mutually and reciprocally binding for a period of ten years, at the end of which period the agreement may, in response to the demand of either party made six months prior to the expiration of the period, be revised by negotiation between the parties thereto. Should neither party demand such revision of the agreement, it shall continue in full force for an additional period of five years, at the expiration of which term the same privileges of revision by mutual consent after demand and negotiations shall apply, and likewise at the expiration of every successive term of five years.

After a period of not less than five years from the date of ratification of this agreement, in which period the workings of the special courts trying civil cases involving nationals of the United States of America have been carefully observed, especially in reference to the demonstrated freedom of the courts from administrative interference by the military and/or other non-judicial authorities, the matter of the extension of Chinese jurisdiction over nationals of the United States of America in other than civil cases shall receive further consideration, the action to be taken in this regard to be determined in the light of experience of the actual working out of the present provisions regarding civil cases.

72. Handed to the Chinese Minister by the Chief of the Division of Far Eastern Affairs on October 28, 1930.