of Belgium as above set forth, shall be deemed to be transferred to the Government of Belgium upon the last day of such periods. Risk of loss with respect to articles to be transferred to the Government of Belgium shall pass in accordance with the customary practice of the United States Government with respect to transfers under the Act of Congress of March 11, 1941, unless otherwise provided by mutual agreement. B. The amount which the Government of Belgium shall pay to the United States of America for articles transferred under the provisions of Article III of this Agreement shall be the total purchase price, as determined by the President of the United States of America, and said total purchase price shall be the price of the articles as determined under paragraph 2 hereof plus the additional costs (incidental to delivery at shipside) set forth in paragraph 3 hereof. 1. In the determination of the price under paragraph 2 the following definitions shall apply: (a) The term "contract price" means the contract price f. o. b. point of origin paid by the United States Government to the con tractor. (b) The term "current sale price" with respect to any articles means the market price as of the date of transfer to the Government of Belgium of articles of similar quality and in similar quantity as determined by the President. 2. The price of the articles shall be determined as follows: (a) If the articles transferred to the Government of Belgium are provided out of articles delivered to a United States Government agency pursuant to an order or contract determined by the President to have been placed for some purpose other than that of filling a requisition or request filed by the Government of Belgium, the price shall be the current sale price. (b) If the articles transferred to the Government of Belgium have been the subject of a contract or order placed by a United States Government agency for the purpose of filling a requisition or request filed by the Government of Belgium and have been made available by the supplier for shipment prior to the day on which the President shall have determined that such articles are no longer necessary to the prosecution of the war, the price shall be the current sale price or the contract price less 5 per cent thereof, whichever is lower. (c) If the articles transferred to the Government of Belgium have been the subject of a contract or order placed by a United States Government agency for the purpose of filling a requisition or request filed by the Government of Belgium and have been made available by the supplier for shipment on or after the day on which the President shall have determined that such articles are no longer necessary to the prosecution of the war, the price shall be the contract price. (d) For the purpose of subparagraphs (b) and (c) above, the articles shall be deemed to have been made available for shipment by the supplier on the date of issuance of the United States Government Bill of Lading (inland) under which the articles were shipped. 3. The additional costs to be added to the price to arrive at the total purchase price shall be the costs incurred by the United States of America for inland transportation, storage and other charges incidental to delivery of the articles at shipside. The United States of America will inform the Government of Belgium from time to time of the amount of such costs incurred and the bases on which they have been determined. C. Payment of the total purchase price for all articles transferred under the provisions of Article III of this Agreement, shall be made by the Government of Belgium on or before July 1, 1975. 1. Payment of the total purchase price of any article so transferred shall be made in equal annual installments, the first of which shall become due and payable on July 1, 1946, or on the first of July next following the day on which such article shall have been transferred, whichever is later. 2. Nothing herein shall be construed to prevent the Government of Belgium from anticipating the payment of any of such installments or any part thereof. 3. If by agreement of the United States of America and the Government of Belgium it is determined that, because of extraordinary and adverse economic conditions arising during the course of payment, the payment of a due installment would not be in the joint interest of the United States of America and the Government of Belgium, payment may be postponed for an agreed upon period. D. Interest on the unpaid balances of the total purchase price determined under Section B above for any article so transferred, shall be paid by the Government of Belgium at the fixed rate of two and three-eighths per cent per annum, accruing from the first day of July, 1946 or from the first day of July next following the day on which such article shall have been transferred, whichever is later. Interest shall be payable annually, the first payment to be made on the first day of July next following the first day of July on which such interest began to accrue. E. The Government of Belgium shall pay to the United States of America the cost of the services listed in this schedule to the extent that such services shall be rendered to the Government of Belgium following the determination by the President that such services are no longer necessary to the prosecution of the war. The cost of suc services, so rendered, shall be determined by the President of the United States of America and shall be paid by the Government of Belgium in accordance with the same terms as provided for the pay ment of the total purchase price of the articles provided hereunder, as set forth in Section C above. Interest shall be paid on the unpaid balances of the cost of such services in accordance with the terms of Section D hereof. F. The total purchase price value of all the articles and services in this Schedule 1 shall not exceed $325,200,000. Such articles and services and their estimated cost to the Government of the United States of America are as follows: MEMORANDUM OF INTERPRETATION with respect to the AGREEMENT between the The Government of the United States of America directs the attention of the Government of Belgium to the proposed agreement under Section 3 (c) of the Lend-Lease Act and in particular to Article IV thereof. Under Article IV this Government will review, from time to time, and particularly at the conclusion of hostilities in Europe, as determined by the President, articles and services set forth in the Schedule annexed to the Agreement in order to determine whether the delivery of such articles or services should be withheld in the national interest of the United States. The reservation made by this Government in Article IV to withhold delivery of articles and services "whenever the President determines that such action is in the national interest" constitutes a broad power to cancel or revoke procurement programs or contracts. It is not possible to predict with precision what occasions or circumstances may arise in the future which may require this Government to withhold delivery. Actual delivery will always be subject to the development of the military situation, and the changing demands of strategy, as well as to economic and financial factors which affect the national interest of this Government. The Government of the United States of America expects that all articles and services transferred to the Government of Belgium on or before February 28, 1945, pursuant to the exchange of notes between the Foreign Economic Administration and the Belgian Ambassador to the United States on October 20 and October 25, 1944, [1] will be paid for in United States dollars in accordance with the terms of those notes and any articles and services requisitioned in accordance with the provisions of those notes but transferred after February 28, 1945 will be regarded, if appropriate, as deliveries under the Schedule annexed to the Agreement. The Government of the United States of America further wishes to point out that, in view of the existing economic and governmental relationships and arrangements between the Government of Belgium and the Grand Duchy of Luxembourg, and the fact that the Government of Belgium and the Grand Duchy of Luxembourg are employing their resources together in the prosecution of the war against the common enemy, it is understood that some of the articles, or an appropriate portion thereof, delivered under this Agreement are required for use or consumption within the Grand Duchy of Luxembourg, and that the Government of Belgium and the Grand Duchy of Luxembourg will make such arrangements between them as may be needed to effectuate such use or consumption within the Grand Duchy of Luxembourg. The Government of the United States of America therefore consents to the transfer by the Government of Belgium of such articles, or an appropriate portion thereof, to the Grand Duchy of Luxembourg. It is further understood that the Government of Belgium will be obligated to pay currently for civilian supplies furnished by the combined military authorities under "Plan A" or "Plan A" as modified. Payment will be made in accordance with the arrangements to be made with the governments which have furnished the supplies, and in United States dollars to the extent determined under such arrangements. It is, of course, understood that in the implementation of the provisions of any lend-lease agreement with the Government of Belgium, the Government of the United States of America will act in accordance with its Constitutional procedures. DEPARTMENT OF STATE, Washington, April 17, 1945 [Not printed.] 80923-46- 2 ER STETTINIUS, Jr The Belgian Ambassador to the Secretary of State AMBASSADE DE BELGIQUE SIR: WASHINGTON, April 17, 1945. Several questions of interpretation have arisen with respect to the language of the Agreement between our two Governments under Section 3 (c) of the Lend Lease Act. I believe it will be helpful to indicate the understanding which my Government now has with respect to these questions and I would appreciate an expression from you as to whether or not these understandings are correct. 1. It is the understanding of my Government that the Agreement does not apply to arms and munitions, and that arms and munitions now or hereafter provided to my Government will be supplied, on a straight lend lease basis, under the Agreement of June 16, 1942 between our two Governments on the principles applying to mutual aid. 2. We understand that in general it is not the intention of the United States Government to exercise its right under Article V of the Agreement between our two Governments dated June 16, 1942 to recapture any articles for which the Government of Belgium has paid or is to pay the United States Government. If however, the United States Government should exercise this right with respect to any such articles, appropriate arrangements will be made for repayment to the Government of Belgium. 3. With reference to the last paragraph of Article III of the Agreement under Section 3 (c) of the Lend Lease Act, it is the understanding of my Government that no articles or services will be transferred or rendered to my Government under that Article unless they have been requisitioned by my Government. 4. In the first paragraph of Article IV of the Agreement under Section 3 (c) of the Lend Lease Act, it is stated that changes may be made from time to time in the items set forth in the Schedule annexed thereto, by mutual agreement between the United States of America and the Government of Belgium. It is our understanding that this language means that not only the items but also the values expressed for each item in the Schedule and the total value expressed for the whole Schedule, may be modified by mutual agreement. 5. With regard generally to the provisions of the Agreement under Section 3 (c) of the Lend Lease Act with reference to risk of loss and transfer, as expressed in Section A of the Schedule annexed to the Agreement, it is my understanding that a suitable opportunity will be given to representatives of my Government, in accordance with the general procedures of your Government, to inspect articles proposed to be transferred before their transfer. |