811.20 Defense(M)Colombia/554: Telegram
The Acting Secretary of State to the Ambassador in Colombia (Lane)
292. Your 326, February 20 and 348, February 25. Both the BEW and the Department feel that the draft text of the proposed note is generally acceptable. In fact, it seems necessary to suggest clarification and amendment of only three paragraphs—3, 5, and 10.
It is suggested that numbered paragraph 3 be amended to make it [Page 32] clear that pending any agreement regarding minimum price, we should have the right to negotiate for commodities at the market, or possibly at the market subject to adjustment retroactively when the minimum price is fixed. The proposal is to avoid delays in procurement while price negotiations are in progress.
As regards numbered paragraph 5, our general attitude is that permanent improvements may properly go to the Colombian Government at the end of the war emergency or of our procurement program on such terms and conditions as may be present or hereafter agreed upon with respect to each program provided it is clear that in the interim we will have unrestricted control and use to the extent necessary for our procurement program. As to equipment and non-permanent improvements, it is felt that we should retain ownership without restriction or tax with the understanding that it may or may not be made available to the Colombian Government at cost or on some other basis. It is suggested that numbered paragraph 5 be clarified along this line and provision regarding re-export inserted.
It is suggested that numbered paragraph 10 be dropped since the feeling here is that it is impolitic to request the exemption provided in the first sentence and in its absence there is no need for the second.64
It is assumed that U.S. Government procurement agencies are not liable for the payment of corporate income taxes nor for the filing of income tax returns.
Subject to the insertion of the changes suggested above and to our assumption that U.S. procurement agencies are not subject to income tax, the text is approved and you may effect the exchange of notes.
- This provision exempted the United States Government and its agents from certain taxes.↩