The Persian text, without any translation, was only handed to me by
the Under Secretary of Foreign Affairs, Mr. Djevad Amery, on
Saturday, June 22, 1940, and the Interpreter of the Legation has
ever since then been busy translating it. I have therefore not yet
had a chance to study it closely or to compare it with the draft
which the Department asked me to submit to the Iranian Government in
1938.
. . . . . . . . . . . . . .
I have since then had a number of conferences with the Under
Secretary of Foreign Affairs—who had been especially delegated by
the Prime Minister to negotiate this agreement—and with the Minister
of Commerce, Mr. Sadeq Vassighi, and the Chief of Economic Studies
of the Ministry of Commerce, Mr. Ali Mohamed Oveicy. At first they
were inclined to depart very widely from the draft treaty, but when
I told them that it would be useless to submit a practically
[Page 675]
new treaty to the
Department, and when I recommended that they study carefully the
Trade Agreement between the United States and Turkey78—which the Department had sent me with its
instruction No. 428 of April 7, 193979—they produced the draft which is forwarded
herewith.
A cursory examination of the text would seem to indicate that the
Iranian authorities tried to follow the agreement with Turkey as
much as possible. But even so a number of apparently unnecessary
changes have been introduced, and article 14 is entirely new.
[Enclosure—Translation]
Iranian Draft of Proposed Trade Agreement
Between Iran and the United States
His Imperial Majesty the Shahinshah of Iran and His Excellency
the President of the United States of America, being desirous of
maintaining the principle of reciprocity as the basis of
commercial relations in order to strengthen the traditional
bonds of friendship between the two countries, and of promoting
the trade between the two countries by granting reciprocal
concessions and facilities, have decided to conclude a Trade
Agreement, and for this purpose have appointed their
Plenipotentiaries as follows:
His Imperial Majesty the Shahinshah of Iran:
His Excellency the President of the United States of America:
Who, after communicating to each other their respective full
powers, have agreed upon the following Articles:
Article 1
Natural or manufactured products of Iran as described in Schedule
I annexed to this Agreement, and natural or manufactured
products of the United States of America as described in
Schedule II annexed to this Agreement shall not, on their
importation into either country, pay customs duties in excess of
those set forth in the said two Schedules.
Also no other duties, fees, taxes or exactions imposed on or in
connection with imports, shall be collected on said articles in
excess of those in force on the day of the signature of this
Agreement.
The two Schedules I and II are considered as part of this
Agreement, and all the contents thereof shall have the same
force and effect as those in the text of this Agreement.
[Page 676]
Article 2
The provisions of Article 1 of this Agreement shall not prevent
the Government of either party from imposing at any time on the
importation of any product of the other party a charge
equivalent to an internal tax imposed in respect of a like
domestic product, and/or an internal tax on a commodity from
which the imported product has been manufactured or produced in
whole or in part.
Also either Government is free to increase the duties, charges or
other impositions mentioned in Article 1 at any time that it may
deem advisable. But in this case such increase shall not be
applied to the imports of the other party until two months after
the date of approval, and the other party may act in accordance
with Article 13.
Article 3
Natural or manufactured products of the Empire of Iran or the
United States of America shall not, after importation into the
other contracting country, pay any internal taxes, fees or
charges other or higher than those payable on like products of
national or foreign origin.
Article 4
No prohibitions, import or customs quotas, import licenses, or
any other form of quantitative regulation, whether or not
operated by means of any agency of centralized control, shall be
imposed by Iran on the importation or sale of any natural or
manufactured products of the United States as described in
Schedule II, and/or by the United States of America on the
importation or sale of any natural or manufactured products of
Iran as described in Schedule I, other than what is in force and
customary in accordance with current laws and regulations on the
day of the signature of this Agreement.
The foregoing provision shall not apply to quantitative
restrictions in whatever form imposed by the United States of
America or Iran on the importation or sale of any natural or
manufactured products of the other country, with a view to
supporting governmental measures operating to ensure the
following purposes:
- 1.
- Regulating or controlling production.
- 2.
- Adjusting prices of like domestic articles, and/or
regulating market supply.
- 3.
- Increasing the labor costs of production of such
articles in the interior of the country.
Whenever the Government of either country decides to establish or
change any restriction authorized by this paragraph, it shall
give notice thereof in writing to the other Government thirty
days before such decision is put into effect, and the other
Government may within
[Page 677]
this period state in writing its views in the matter or act in
accordance with Article 13.
Article 5
With due regard to the provisions of Article 5 of this Agreement,
either of the two Governments may impose prohibitions or
quantitative, restrictions upon the importation of natural or
manufactured products of the other country, as well as upon the
exportation of natural or manufactured products destined for the
other country, provided this prohibition or restriction is
general and applies also to imports of like products of other
foreign countries, or exports of like products of that country
to the territory of other countries.
If the Government of either country applies quantitative
restrictions to the importation of any product in which the
other country has an interest and allocates the share of each
importing country of the quantity of imports, there shall be
allocated to the other contracting country a share of the total
quantity of importations of the said article proportionate with
that country’s share of the total imports of such article prior
to the establishment of restrictions during a definite
period.
Article 6
In the event that either Government shall establish or maintain,
either directly or indirectly, any form of control of the means
of international payment, it must, with respect to the transfer
of all payments in connection with articles imported from the
other country and also in the case of the rate of foreign
exchange, the charges and dues on exchange transactions, and the
rules and regulations relating to said transactions,
unconditionally accord a treatment no less favorable than that
accorded in the case of the imports of articles from other
countries (except the countries with which they have
compensation agreements).
Article 7
With respect to customs duties or charges of any kind imposed on
or in connection with imports or exports and also with respect
to the method of levying such duties or charges, (with respect
to) all rules, laws and regulations in connection with
importation or exportation, the sale or taxation or method of
using imported goods, and also with respect to the application
of administrative laws and regulations and administrative or
judicial decisions pertaining to the classification of articles
for customs purposes or to the determination of rates of duty,
and also with respect to advancing the rates of duties or
charges collected in the other country, under an established and
uniform practise, from imports of either country, or regulations
imposing new requirements with respect to such imports, and any
other customs formalities,
[Page 678]
both Governments agree to accord to the
imports of each other unconditional most-favored-nation
treatment.
Article 8
1. Except as (otherwise) provided in the second paragraph of this
Article, the provisions of this Agreement relating to the
treatment to be accorded by the Iranian Government and the
United States, respectively, to the commerce of the other
country, shall not apply to the Virgin Islands, American Samoa,
the Island of Guam, or to the Panama Canal Zone.
2. Taking into consideration the reservations specified in the
second and third paragraphs of this Article, the provisions of
this Agreement regarding most-favored-nation treatment shall
apply to products of all territories under the sovereignty or
authority of Iran or the United States of America, imported from
or exported by either country to any territory under the
sovereignty or authority of the other country.
It is understood, however, that the provisions of this paragraph
do not apply to the Panama Canal Zone.
3. The advantages accorded or which may hereafter be accorded by
Iran or the United States of America to adjacent countries in
order to facilitate frontier traffic, and advantages resulting
from a customs union to which either Iran or the United States
of America may be a party so long as the right to enjoy such
advantages is not extended to any other country, shall be
excepted from the operation of this Agreement.
4. The advantages now accorded or which may hereafter be accorded
by the United States of America, its territories or possessions,
or the Panama Canal Zone to one another or to the Republic of
Cuba are excepted from the operation of this Agreement. The
provisions of this paragraph shall continue in the future to
apply in respect of advantages now or hereafter accorded by the
United States of America, its territories or possessions or the
Panama Canal Zone to one another, irrespective of any change
that may take place in the political organization (sic) of any of the territories and
possessions of the United States of America.
Article 9
Taking into consideration the point that under no circumstances
shall there be any discrimination under any title, by either
country against the country in favor of any third country, the
provisions of this Agreement shall not extend to the following
prohibitions or restrictions:
- 1.
- Prohibitions or restrictions imposed on moral or
humanitarian grounds;
- 2.
- Prohibitions or restrictions relating to prison-made
goods;
- 3.
- Prohibitions or restrictions relating to the
protection of human, animal or plant life or
health;
- 4.
- Prohibitions or restrictions relating to the
enforcement of police affairs or fiscal laws;
- 5.
- Prohibitions or restrictions relating to public
security.
None of the provisions of this Agreement shall prevent the
adoption of measures prohibiting or restricting the exportation
of gold and silver, or prevent such measures as either
Government may, with a view to protecting its interests, take
with respect to the control of the export or sale of arms,
ammunition, or implements of war, and in exceptional
circumstances, all military supplies, and it is agreed, further,
that none of the provisions of this Agreement shall be construed
to prevent the adoption of measures to ensure and enforce
neutrality.
Article 10
On condition of observing the provisions of Article 13 of this
Agreement, the Government of Iran and (the Government of) the
United States of America reserve the right to cancel or modify
the concession granted on any article under this Agreement, or
to limit the quantity of imports of such article if, as a result
of the extension of such concession to a third country, they
find that such third country obtains the major benefit of such
concession and in consequence thereof an unduly large increase
in importations of the needed article takes place.
Article 11
Whenever the rate of exchange between the currencies of Iran and
the United States of America varies unduly from the rate
obtaining on the day of the signature of this Agreement, the
Government of either country, if it considers the change in rate
so important as to prejudice the industry or commerce of the
country, shall be free to propose negotiations for the
modification of this Agreement or to terminate this Agreement on
thirty days’ written notice.
Article 12
In the event that Iran or the United States adopts any measure
which, even though it does not conflict with the terms of this
Agreement, is considered by the Government of the other country
to nullify or impair the effectiveness of this Agreement, the
Government which has adopted such measures shall consider such
proposals and protests as the other Government may make in this
matter in such a manner as to effect a mutually satisfactory
adjustment.
Article 13
Whenever the Government of either country has protests or
proposals to make concerning any measures taken by the
Government
[Page 680]
of the
other country as a result of Articles 2, 4 (paragraph 4), 5, 7,
9, 10 and 12 of this Agreement, it will state its views in
writing to the other party, and the other party shall receive
them in a friendly spirit and give most careful consideration
and special attention to the matter. If within thirty days after
the receipt of such representations, an agreement is not reached
between the two Governments, the protesting Government shall be
free, within fifteen days after the expiration of the aforesaid
period of thirty days, to terminate this Agreement on giving
thirty days’ notice.
Article 14
Inasmuch as the main object of concluding this Agreement is the
extension of commerce between the two countries with a view to
attaining a balance of trade, both Governments fully agree that
each shall, within the limits of the laws and regulations in
force in their respective countries, afford facilities to the
imports of the other contracting country with all the means and
powers in its hands, in such a manner that consequently the
volume of trade between the two countries may steadily
increase.
Article 15
The present Agreement shall come into full force on the thirtieth
day following the issuance of a Decree by His Imperial Majesty
the Shahinshah of Iran and His Excellency the President of the
United States of America for its enforcement, and should these
two proclamations be issued on two different days, on the
thirtieth day following the date of the later proclamation, and
shall remain in force for a term of three years thereafter.
The Government of each country must notify the Government of the
other country of the date of its proclamation. Unless at least
six months before the expiration of the above-mentioned term of
three years either Government shall have given to the other
Government notice of its intention to terminate this Agreement
upon the expiration of the aforesaid term, this Agreement shall
remain in force for six months after any date on which either
Government shall have given notice to the other Government.
In witness whereof the Plenipotentiaries of both Governments have
signed and sealed this Agreement.
Done at the city of . . . . . . . on . . . . . . . . . . . . in
duplicate in the Persian and English languages, both equal and
authentic.
For His Imperial Majesty the Shahinshah of Iran:
For His Excellency the President of the United States of
America:
