Foreign Relations of the United States Diplomatic Papers, 1941, The British Commonwealth; The Near East and Africa, Volume III

881.512/155

The Chargé at Tangier (Childs) to the Secretary of State

No. 258

Tangier, July 14, 1941.
[Received August 7.]

Sir: I have the honor to inform the Department that, as a result of the seizure by the Spanish of the Customs at Tangier reported in my No. 191 of May 9, 1941,¹⁸ the various tariffs and charges in force in the Spanish Zone over and above the treaty duties, on imported products, are now also applied in Tangier. These taxes and charges are: a social relief tax (auxilio social), consumption taxes and stamp taxes.

Social Relief Tax

On all imported products, a levy of five percent ad valorem is made for the benefit of the local Spanish relief organization known as “Auxilio Social”.

On the complaint of several American ressortissants in respect of an attempt to levy this irregular charge on goods imported by them, and acting under my instructions, Mr. Shillock¹⁹ of the Legation staff visited the Spanish Chief of Customs shortly after its introduction and verbally protested this levy as being contrary to the provisions of the Moroccan treaties, and at the same time explained to him the position in the premises of the United States. The Chief of Customs stated that he was not competent to make any deviation from instructions which he had received from his superiors, but he informed Mr. Shillock that he would bring the question to the attention of the Director General of Customs who happened to be visiting Tangier the next day, and that the Legation would be informed of the result of his consultation with that authority. No further news, however, has been received by the Legation on the subject, notwithstanding reminder telephone calls to the Chief of Customs.

At the time of the visit the Chief of Customs was informed by Mr. Shillock that in view of the American treaty position, American nationals and protégés would be instructed to pay the social relief tax under protest, if such levy was demanded upon goods imported by them, and inform the Legation of the amounts improperly collected from them. Accordingly, American ressortissants were advised to adopt this procedure, should they find themselves unable to obtain clearance of their goods without payment of the charge in question. Copy and translation of a note of protest addressed by an American ressortissant to the Chief of Customs in this connection is annexed hereto. (Enclosure No. 1.¹⁸)

Consumption Taxes

The consumption taxes introduced in the Spanish Zone are now levied by the Spanish Customs Administration in Tangier, in lieu of the taxes of the same character which were in force under the International Administration of Tangier prior to the Spanish occupation of the Customs house in this city.

Annexed hereto will be found a comparative table (Enclosure No. 2²⁰) showing the respective schedules of the two groups of consumption taxes above mentioned. It will be noted that, in general, the Spanish Zone consumption taxes (now levied in Tangier) are considerably heavier than those which were previously levied in virtue of legislation of the former International Administration of the Tangier Zone.

Legal position in regard to these taxes

Tangier Zone

With the exception of the taxes on the articles indicated by an asterisk on the enclosed list (perfumery, beer, glucose, saccharine, molasses, spices, chocolate), all the consumption taxes listed in the enclosed comparative table which were levied by the authorities of the Tangier Zone, are applicable to American nationals and protégés in as much as these taxes had received the assent of the Department given on the formal application of the French Resident General, as the Sultan’s Minister for Foreign Affairs.

The consumption taxes in the Tangier Zone to which we did not give our assent, were imposed by dahir of May 15, 1925 which was embodied in the Tangier Statute (Article 33 of the Convention signed at Paris, December 18, 1923) and, as reported in Mr. Blake’s despatch No. 17 of September 5, 1925,²¹ an application for the Department’s assent to the consumption taxes in question was made by the Mendoub at Tangier.

The Department’s instruction No. 364 of December 1, 1925 (881.512/48)²² replying to that despatch, reads as follows:

“Pending the settlement of the position which this Government may deem it proper to take with reference to the Statute of Tangier, it is not in a position to assent to the imposition in the Tangier Zone of any taxes upon American nationals or protégés through the action of the legislative body at Tangier, and upon request of the Mendoub. If it should be necessary for American nationals or protégés to pay any of these taxes in order to carry on their proper business in Tangier, you will, in accordance with the suggestions made in your despatch under acknowledgment, instruct American citizens to pay these taxes under protest and report the amounts thus paid to the Consulate General.[”]

No subsequent application through the proper diplomatic channel, (i. e. through the Sultan’s Minister for Foreign Affairs) has been made for the Department’s assent to these particular consumption taxes, and they have thus remained legally inapplicable to American nationals and ressortissants. Few if any among the latter appear, at the time, to have been engaged in trade in the commodities in question, since no protests relative to the payment of the taxes have been filed at the Legation.

Spanish Zone

The question of the levy upon American nationals and protégés of consumption taxes in the Spanish Zone first came under discussion in the year 1923, as a result of the imposition in that Zone of taxes on sugar, tea and coffee, by dahir of February 27, 1922.

The Spanish Ambassador in Washington²³ requested the Department’s assent to the levy of these taxes upon American ressortissants. The assent was given subject to the refund of taxes levied, prior to the Ambassador’s request, on a shipment of sugar to Tetuán imported by an American ressortissants.²⁴ The refund was effected and the Legation was then instructed to notify American nationals and protégés that their refusal to pay the taxes in question would thereafter not be sustained. Validation was thus given to the Spanish Zone dahir of February 27, 1922 which provided for the levy of consumption taxes on the following articles and at the following rates:

Articles	Taxation unit		Rate pesetas	Present day rates as indicated in annexed comparative table Pesetas
Sugar	100	kilos	10	30
Coffee:
raw	“	“	20	60
toasted or ground	“	“	25	70
Tea:
green	“	“	50	75
black	“	“	60	150

These particular taxes, at the rates established by the above mentioned dahir of February 27, 1922, are the only consumption taxes levied by the authorities of the Spanish Zone which have been made applicable to American nationals and ressortissants.

In February 1930 the Spanish Ambassador in Washington again approached the Department with a view to obtaining its assent to the enforcement upon American nationals and protégés of some thirteen decrees of the Spanish Zone, but the Department refused to give consideration to any such request until the American Government had consented to accord formal recognition to the Spanish position in Morocco (Mr. Castle’s note to the Spanish Ambassador of November 28, 1931,²⁵ forming enclosure to the Department’s instruction to the Legation at Tangier, No. 667 of November 28, 1931 (file 881.512/101)²⁶ (See also the Legations despatch No. 995 of November 30, 1934.)²⁶

It follows therefore that none of the Spanish Zone consumption taxes, as they appear in the enclosed comparative table, are legally applicable to American nationals and ressortissants. This observation extends equally to the consumption taxes on sugar, tea and coffee, in as much as the present rates of these articles exceed those established by the dahir of February 27, 1922, a renewal of the Department’s assent being requisite in respect of any increase in Moroccan taxes previously assented to on the basis of their original tariffs.

There remains one other point to be dealt with in connection with the Spanish Zone consumption taxes. It relates to the difference between the rate of the tax on imported alcohol (170 pesetas per hectoliter) and that on alcohol manufactured in the Zone (130 pesetas per hectoliter). As a result of this discrimination in favor of a domestic product, the consumption tax becomes in effect a protective import duty, which violates the treaty principle of “economic liberty without any inequality”. An analogous discrimination was protested by the Department in the case of a Gate Tax law of the former International Administration of Tangier which exempted from the tax certain building materials manufactured in the Tangier Zone. (See Department’s instruction No. 472 [742] of May 24, 1933—file No. 881.512/112.²⁶)

Stamp Tax

Translation of a schedule of stamp taxes applicable to certain classes of imported goods and levied by the Customs at the time of importation, is annexed hereto. (Enclosure No. 3.²⁶) Incidentally the Spanish Customs administration was unable to comply with the Legation’s request for a copy of this stamp tax schedule; but the Chief of Customs was kind enough to lend the Legation a fly-soiled typewritten sheet, faded almost beyond legibility, which was the sole copy to be found in the Customs offices.

These stamp taxes on imported goods are likewise in fact additional import duties not provided for in the Moroccan treaties.

No such stamp taxes on imported merchandise existed in Tangier under the former International Administration.

Importers state that they would be indifferent to the payment of the small increase in the legal customs duty rates as represented by the stamp tax, but they seriously object to the costly loss of time and expense in labor incurred by the process of affixing the stamps upon every bottle or packet, required to be effected within the precincts of the Customs house, as part of the clearance procedure. To obviate this inconvenience, some importers have suggested that they be allowed to purchase the stamps and send them to their shippers to be affixed on the containers at the time of the packing of the goods, but this proposal has been rejected by the Customs officials.

Representations

As previously set forth, none of the Spanish Zone taxation measures dealt with in this despatch are legally applicable to American nationals and ressortissants in as much as they have not received the assent of the American Government. However, it seems very unlikely that on these grounds representations, whether made informally by the Legation to the Spanish authorities in Morocco, or officially by the American Ambassador to the Spanish Foreign Office, would have any but academic value at the present time.

I have therefore addressed to Colonel Carvajal, Civil Governor of Tangier and representative here of the Spanish High Commissioner at Tetuán, a note setting forth the treaty position in regard to the various Spanish Zone taxes above reviewed. A copy of this note is attached hereto as Enclosure No. 4.

A copy of this despatch is being forwarded to the Embassy at Madrid for use by the Ambassador, should the Department consider it advisable to take up the question formally with the Spanish Foreign Office. In such event it may be of interest to recall that the Foreign Office in a note addressed to Ambassador Laughlin under date of January 22, 1930,²⁷ recognized that the levy of taxation, such as that under reference, upon American nationals and ressortissants without the Department’s previous assent was illegal, and it admitted that claims for refund of such illegal levies were valid and beyond discussion.

Respectfully yours,

J. Rives Childs

[Enclosure]

The American Chargé at Tangier (Childs) to the Representative of the Spanish High Commissioner at Tangier (Carvajal)

Tangier, July 14, 1941.

Dear Colonel Carvajal: After the direction of the Tangier Customs House had been taken over by officers of the Spanish Zone Administration, my attention was called to the fact that a “Social Relief Tax” of five per cent ad valorem was being levied on imported goods by the new Customs Authorities.

In as much as there is no provision in the Moroccan treaties for such a charge, it is not legally applicable to American nationals and protégés, in the absence of the specific assent of the Government of the United States. Consequently, I directed Mr. Shillock of this Legation to visit the local Chief of Customs and to explain to him that, for the reasons above indicated, the Legation was constrained to protest the said tax in so far as concerned American nationals and ressortissants. The Chief of Customs informed Mr. Shillock that he would bring the matter to the attention of the Director General of Customs of the Spanish Zone, and that the Legation would eventually be advised of that authority’s consideration of the question. However no communication on the subject has yet reached the Legation.

In the meantime, we have had under examination the position in regard to the Spanish Zone consumption taxes now being levied by the Tangier Customs House, in lieu of taxes of the same nature which had been established under the International Regime. Most of the latter taxes had received the assent of the American Government, as required by the treaty position, whereas the Spanish Zone taxes have not, and these are therefore not legally applicable to American nationals ressortissants.

Identical conditions extend likewise to the Stamp Taxes of the Spanish Zone collected on certain classes of imported articles.

In view of the foregoing considerations, I am obliged to formulate the fullest reservations in regard to the levy upon American nationals and protégés of all the taxes herein above referred to.

For your information I may add that the Spanish Government has recognized the treaty position above set forth in regard to the introduction of Moroccan taxation not provided for in the treaties, as appears from a Note dated January 22, 1930 addressed by the Spanish Foreign Office to the American Ambassador in Madrid, which admitted the validity of claims for the refund to American nationals and protégés of consumption taxes levied on them in the absence of the American Government’s prior assent.

In view of the foregoing, it is hoped that appropriate measures will be taken to exempt American nationals and ressortissants from the application to them of the taxes under reference.

Sincerely yours,

J. Rives Childs

18. Not printed.
19. John Christopher Shillock.
18. Not printed.
20. Not printed.
21. Foreign Relations, 1925, vol. ii, p. 600.
22. Ibid., p. 601.
23. Juan Francisco Cárdenas.
24. See instruction No. 260, May 8, 1923, to the Diplomatic Agent and Consul General at Tangier, Foreign Relations, 1923, vol. ii, p. 587.
25. Foreign Relations, 1931, vol. ii, p. 753.
26. Not printed.
26. Not printed.
26. Not printed.
26. Not printed.
27. Foreign Relations, 1930, vol. iii, p. 608.