The Consul at Beirut ( Keeley ) to the Secretary of State

No. 153

Sir: I have the honor to transmit herewith a copy and translation of a personal note dated March 4, 1931,62 from Mr. Périer, the Chief of the Diplomatic Bureau of the High Commission, in response to my inquiry as to the present status of the question of customs immunities for American institutions in Syria which has been pending for some years and which has more recently been the subject of discussions at Paris between our Embassy and the French Foreign Office. [Page 275] In this connection, reference is made to Ambassador Edge’s telegram to the Department, No. 79 of February 20th, 5:00 p.m.,63 which was repeated to this office.

During the interview to which Mr. Périer refers in his note he informed me unofficially that according to instructions already received from Paris the French government has accepted the American point of view with regard to unlimited customs exemption for articles imported for our institutions here under the Poincaré-Herrick agreement, but that there is yet to be overcome the difficulty of drawing up suitable regulations for giving effect to this agreement in a manner which will safeguard the interests of the mandated states without proving too irksome to the institutions concerned. He said that the Bureau of Control proposed by Mr. Knabenshue, for the maintenance of which all institutions which enjoy customs exemption were to pay a tax of 1% on their importations, was found unacceptable as many of the institutions, including Italian institutions, are satisfied with the restrictions imposed by the government and would be opposed to any arrangement which would cause them to pay anything for the privilege they enjoy. He thought that the question therefore resolved itself into one as to how to control, without limiting, importations for American institutions and he suggested that this might be done by requiring each institution yearly in advance to give the authorities some indication as to the extent of its work and an estimate of the type and quantity of goods to be imported so that the Customs Authorities might have some basis upon which to judge whether or not the actual importations were in reality necessary for the installation, maintenance or operation of the institutions. He added that the matter would be handled in a liberal spirit and that any differences that might arise could be adjusted by negotiations between the Consulate General and the High Commission.

During our talk, automobiles were mentioned. Whereupon he said that the High Commission had always taken the stand that automobiles could not be imported by these institutions free of duty, and he was of the opinion that the acceptance of the American Government’s interpretation of the Poincaré-Herrick agreement could not be taken to include automobiles. I remarked that the agreement (M. Poincaré’s letter to Mr. Herrick dated November 2, 192363a) provides that American religious, educational and philanthropic institutions, of a non-commercial character, in Syria and the Lebanon, are entitled to customs immunity, unlimited either in respect to the kind or class of articles or to the quantity imported, provided such articles are necessary for the installation, maintenance or development of those institutions, and [Page 276] that if one or more automobiles were necessary in order for an institution properly to carry on its work I was inclined to believe that my government would not consent to an exception in this respect. He replied that an auto-ambulance for a hospital might be admitted but not ordinary automobiles. I reiterated my argument and expressed the hope that the decision as to whether this or any other kind of article might be imported free of duty would be based on a determination as to whether the article in question is in fact necessary for the installation, maintenance or operation of the institution. He promised to discuss the matter further after hearing from Paris and before promulgating any new regulations on the subject.

A phase of this question which it appears has not yet been fully decided is that of the amount of goods that may be imported free of duty for the personal use of the members of institutions which themselves enjoy unlimited customs franchise. The issue has recently again been raised by the customs in Latakia refusing to grant any immunity in this respect as regards goods imported for the personal use of members of our medical mission there. After discussing the matter informally with the High Commission it was decided that the individuals in question should pay the duty under protest pending a solution of the general question. This temporary expedient has previously been resorted to during the past few years in the case of certain individuals while others appear to have been granted exemption without question on small shipments destined for their personal use. As regards the personnel of the American University, however, I am informed that none of them has ever been granted any exemption whatsoever on goods imported for their personal use, the official attitude of the University during the discussions of the past years apparently being that unlimited exemption for the institution was the important issue, and it was not deemed advisable to jeopardize this issue, for which very good arguments existed, by placing any emphasis on the lesser issue for which much less justification was felt to exist. The University still takes the attitude officially that while it would be glad to have its members enjoy any exemption that may properly be granted them it feels that as they are well paid in comparison to natives of the country and are already, as teachers, exempted from tax on their incomes, it seems hardly equitable that they should enjoy customs exemption. However, the University does not wish voluntarily to relinquish any right that may be guaranteed its American personnel as a result of our Convention with France accepting the Mandate.

The Chief of the Diplomatic Bureau expressed the opinion that the amount of 2000 Syrian gold piasters (about $77.20), as the value of goods that might be imported free of duty per person per annum, [Page 277] which had previously been suggested by the High Commission and tentatively approved by Mr. Knabenshue might serve as the basis of further study in connection with the regulations that must be drawn up to give effect to this part of the Poincaré-Herrick agreement.

I suggested to Mr. Périer that members of our institutions who have not been enjoying customs immunity during the years that this matter has been under discussion would appear now to be entitled to a refund of the amount of duty which they may have paid on any goods imported within the limit to be determined. He replied that while this might be true in principle it would scarcely be practicable and he felt that the limited exemption to which they may be found entitled could feasibly be granted them only from a more recent date. The practical difficulties involved in determining the correct amounts of the refunds to which members of our institutions may be entitled cannot be gainsaid, but it seems to me that these difficulties might be largely overcome and the principle maintained if it were agreed that exemption within a specified limit has been the privilege of the members of our institutions from July 13, 1924, the date of the exchange of ratifications of our Convention with France accepting the Mandate, and that refunds will be made to anyone who can present a customs receipt for duty paid on goods imported within this limit for his or her personal use during this period. I have suggested to the University of Missions that the duty on any importations for the personal use of their members be paid under protest and that copies of the invoices and customs receipts be kept for possible future use should it finally be determined that they are entitled to a refund of all or any part of the duty so paid. I have also suggested that each institution attempt to draw up a memorandum of the amounts of duty paid by the various members of their establishments since July 13, 1924, for the Consulate General’s information and possible use.

As the discussions in this matter have recently been carried on at Paris, the High Commission apparently feels that they should be continued there, and I presume therefore that the Department will furnish our Embassy at Paris with its views on these matters. In order that this office may know what progress is being made and what its attitude on these controversial points should be, it is hoped that the Department and the Embassy will likewise continue to keep this office informed and to furnish it such instructions for its guidance as may be necessary.

In the meantime, effect is being given to the part of the agreement respecting the institutions themselves and steps are being taken to refund duties heretofore paid by such institutions on importations in excess of the exemptions previously allowed by the authorities under their old interpretation of the Poincaré-Herrick agreement. I [Page 278] am informed by the President of the American University of Beirut, which is the only American institution in Syria now exceeding the limit on importations previously fixed by the High Commission and observed by other foreign institutions, that no restriction is now being made on the University’s importations (aside from those for the personal use of the members of its staff) and that the authorities have granted the University every facility in this respect as well as in connection with importations for the new medical buildings, the materials and equipment for which are exempt under a decree of the High Commission of general application.

Respectfully yours,

J. H. Keeley, Jr.