Слике страница
PDF
ePub

to, such nationals and companies in connection with the planning and operation of their enterprises, and enterprises in which they have a financial interest, within such territories.

2. Nationals of either Party shall not be barred from practicing the professions within the territories of the other Party merely by reason of their alienage; but they shall be permitted to engage in professional activities therein upon compliance with the requirements regarding qualifications, residence and competence that are applicable to nationals of such other Party.

3. Nationals and companies of either Party shall be accorded national treatment and most-favored-nation treatment with respect to engaging in scientific, educational, religious and philanthropic activities within the territories of the other Party, and shall be accorded the right to form associations for that purpose under the laws of such other Party.

The four questions posed by the Equal Employment Opportunity Commission, and the Department of State's views, by a reply from Deputy Legal Adviser Lee R. Marks, October 17, 1978, read:

1. Does the treaty permit subsidiaries of Japanese companies which are organized under the laws of a State of the United States to fill all its top management positions with Japanese nationals admitted as treaty traders? Would it be inconsistent with the terms of the treaty to rule that even top management positions are subject to Title VII of the Civil Rights Act of 1964 prohibiting discrimination on the basis of race, sex or national origin?

Article VIII(1) of the FCN Treaty gives nationals and companies of each party the right to employ, in the territory of the other, "accountants and other technical experts, executive personnel, attorneys, agents and other specialists of their choice." This provision was intended to ensure that U.S. companies operating in Japan could hire U.S. personnel for critical positions, and vice versa. The phrase "of their choice" should be interpreted to give effect to this intention, and we therefore believe that article VIII(1) permits U.S. subsidiaries of Japanese companies to fill all of their "executive personnel" positions with Japanese nationals admitted to this country as treaty traders. We express no opinion on what positions would, in a particular case, qualify as "executive personnel."

We do not believe the phrase "of their choice" should be read as insulating the employment practices of foreign companies from all local laws. For example, the Treaty does not in our view confer any right to hire in violation of child labor laws, nor does it require the Department to issue a treaty trader visa to persons otherwise ineligible to enter the United States under the Immigration and Nationality Act. Similarly, we do not believe that it confers any right to discriminate against a particular sex, religious, or minority group.* The right granted by the Japanese FCN Treaty to Japanese enterprises operating in the United States is simply the right to fill certain positions with Japanese nationals; American companies operating in Japan enjoy the equivalent right.

2. Is the situation different if the company doing business in the United States is not incorporated in the United States?

Article VIII is addressed to "nationals and companies of either Party... within the territories of the other Party." Article XXIII defines "companies" as "corporations, partnerships, companies and other associations, whether or not with limited liability and whether or not for pecuniary profit." In determining the scope of article VIII, we see no grounds for distinguishing between subsidiaries incorporated in the United States owned and controlled by a Japanese company and those operating as unincorporated branches of a Japanese company, nor do we see any policy reason for making the applicability of article VIII dependent on a choice of organizational form.

3. What criteria are used by the Department of State in determining what positions are within the scope of the treaty when it issues nonimmigrant visgs to treaty traders?

The criteria derive from section 101 (a) (15) (E) (i) of the Immigration and Nationality Act of 1952, as amended, and 22 C.F.R. 41.40 et seq. In addition to the statute and regulations (which do not define "executive personnel"), consular officers have access to the Advisory Opinions of the State Department's Visa Office (special guidance to U.S. consular officers upon request); the Administrative Decisions Under the Immigration and Nationality Laws of the United States by the Board of Immigration Appeals of the INS; and judicial decisions rendered upon appeals from the rulings of the INS.

The Department of State, through its consular officers in American embassies and under limited circumstances its Visa Office in the United States, and the Immigration and Naturalization Service in the case of change of visa requests, determines on an individual basis whether an applicant is entitled to a nonimmigrant visa as a treaty trader. In making this determination, both the qualifications of the applicant and proposed position of employment are examined.

In granting a nonimmigrant treaty trader visa, the Department (or INS) thus makes an administrative determination that a visa applicant will fill an "executive personnel" position, but this determination is made for the limited purpose of administering the visa laws. We do not believe that the determination should preclude judicial review of the scope of the term "executive personnel" for other purposes, including the application of Title VII.

4. Is any supervision exercised to determine if persons admitted as treaty traders do in fact operate in the type of position for which they were admitted? What sanctions are imposed if violations are found?

Under the terms of their visas, treaty traders must file annual reports with the INS [Immigration and Naturalization Service] to show that they are maintaining their treaty trader status. If, on the basis of information furnished in an annual report, the INS determines after investigation that an alien no longer qualifies as a treaty trader, the INS is authorized to order the alien to leave the country, and, if necessary, to deport the alien (8 U.S.C. 1251 (a) (9); 8 CFR 241.2 and 241.9). During the course of a nonimmigrant's stay in the United States, the INS also has authority to monitor the alien's

employment to insure that it complies with the terms of the alien's visa. Private parties may trigger such an INS investigation by lodging a complaint with the district INS office.

* Both the Japanese and United States Governments have subscribed to a number of international declarations calling on multinational enterprises to respect human rights and avoid discrimination. See point 7 of the 1976 OECD Guidelines for Multinational Enterprises and the ILO Tripartite Declaration of Principles Concerning Multinational Enterprises and Social Policy. These are not binding, but they reinforce our view that article VIII should not be read as conferring a license to discriminate.

Dept. of State File No. P79 0005-0552.

For the OECD Guidelines for Multinational Enterprises, annexed to the OECD Declaration on International Investment and Multinational Enterprises, adopted June 21, 1976, see the 1976 Digest, pp. 520-524, and International Legal Materials, Vol. XV, No. 4, July (1976), pp. 969-977.

The Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy, adopted by the Governing Body of the International Labor Office, Nov. 16, 1977, is reproduced with preface and annex in International Legal Materials, Vol. XVII, No. 2, Mar. 1978, pp. 422-431, and was also circulated as Annex II to U.N. Commission on Transnational Corporations, Intergovernmental Working Group of the Whole on the Code of Conduct, 3d sess., N.Y., Feb. 6-10, 1978, Transnational Corporations: Texts Relevant to an Annotated Outline Suggested by the Chairman of the Intergovernmental Working Group on the Code of Conduct, Report of the Secretariat, U.N. Doc. E/C.10/AC.2/3, Jan. 26, 1978.

Social Security

Totalization Agreements

On February 28, 1978, President Carter transmitted to the Congress the Agreement between the United States and Italy on the Matter of Social Security, signed May 23, 1973, the Administrative Protocol for the Agreement, signed November 22, 1977 (together with a procèsverbal setting forth certain interpretive understandings), and an exchange of notes of January 17 and 20, 1978, clarifying the interpretation of article 1, paragraph (k) of the Agreement (TIAS 9058; 29 UST 4263; entered into force Nov. 1, 1978). The Agreement, fulfilling a commitment undertaken in article VII of the Agreement Supplementing the 1948 Treaty of Friendship, Commerce, and Navigation between the United States of America and the Italian Republic, signed September 26, 1951 (TIAS 4685; 12 UST 131; entered into force March 2, 1961), provides for totalization between the American and Italian social security systems for the purpose of establishing entitlement to and the amount of old age, survivors, disability, or

derivative benefits, based on a combination of an individual's periods of coverage under both systems.

Cong. Rec., Vol. 124, No. 26 (daily ed., Feb. 28, 1978), pp. S2514, H1586; Weekly Comp. of Pres. Docs., Vol. 14, No. 9, Mar. 6, 1978, pp. 429–430.

The Agreement was submitted to the Congress as a result of statutory authorization for such international agreements, contained in sec. 317 of the Social Security Amendments of 1977, P.L. 95-216, approved Dec. 20, 1977 (91 Stat. 1509, 1538; 42 U.S.C. 433 (Supp. I, 1977)), which read:

INTERNATIONAL AGREEMENTS WITH RESPECT TO SOCIAL
SECURITY BENEFITS

Sec. 317. (a) Title II of the Social Security Act is amended by adding at the end thereof the following new section:

"INTERNATIONAL AGREEMENTS

"Purpose of Agreement

"Sec. 233. (a) The President is authorized (subject to the succeeding provisions of this section) to enter into agreements establishing totalization arrangements between the social security system established by this title and the social security system of any foreign country, for the purposes of establishing entitlement to and the amount of old-age, survivors, disability, or derivative benefits based on a combination of an individual's periods of coverage under the social security system established by this title and the social security system of such foreign country.

"Definitions

"(b) For the purposes of this section

"(1) the term 'social security system' means, with respect to a foreign country, a social insurance or pension system which is of general application in the country and under which periodic benefits, or the actuarial equivilent thereof, are paid on account of old age, death, or disability; and

"(2) the term 'period of coverage' means a period of payment of contributions or a period of earnings based on wages for employment or on selfemployment income, or any similar period recognized as equivalent thereto under this title or under the social security system of a country which is a party to an agreement entered into under this section.

"Crediting Periods of Coverage; Conditions of Payment of Benefits "(c) (1) Any agreement establishing a totalization arrangement pursuant to this section shall provide

"(A) that in the case of an individual who has at least 6 quarters of coverage as defined in section 213 of this Act and periods of coverage under the social security system of a foreign country which is a party to such agreement, periods of coverage of such individual under such social security system of such foreign country may be combined with periods of coverage under this title and otherwise considered for the purposes of establishing entitlement to and the amount of old-age, survivors, and disability insurance benefits under this title;

"(B) (i) that employment or self-employment, or any service which is recognized as equivalent to employment or self-employment under this title or the social security system of a foreign country which is a party to such agreement, shall, on or after the effective date of such agreement, result in a period of coverage under the system established under this title or under the system established under the laws of such foreign country, but not under both, and (ii) the methods and conditions for determining under which system employment, self-employment, or other service shall result in a period of coverage; and

"(C) that where an individual's periods of coverage are combined, the benefit amount payable under this title shall be based on the proportion of such individual's periods of coverage which was completed under this title. “(2) Any such agreement may provide that

“(A) an individual who is entitled to cash benefits under this title shall, notwithstanding the provisions of section 202(t), receive such benefits while he resides in a foreign country which is a party to such agreement; and

"(B) the benefit paid by the United States to an individual who legally resides in the United States shall, if less when added to the benefit paid by such foreign country than the benefit amount which would be payable to an entitled individual based on the first figure in (or deemed to be in) column IV of the table in section 215 (a) in the case of an individual becoming eligible for such benefit before January 1, 1979, or based on a primary insurance amount determined under section 215 (a) (1) (C) (i) (I) in the case of an individual becoming eligible for such benefit on or after that date, be increased so that the total of the two benefits is equal to the benefit amount which would be so payable.

"(3) Section 226 shall not apply in the case of any individual to whom it would not be applicable but for this section or any agreement or regulation under this section.

"(4) Any such agreement may contain other provisions which are not inconsistent with the other provisions of this title and which the President deems appropriate to carry out the purposes of this section.

"Regulations

"(d) The Secretary of Health, Education, and Welfare shall make rules and regulations and establish procedures which are reasonable and necessary to implement and administer any agreement which has been entered into in accordance with this section.

"Reports to Congress; Effective Date of Agreements

"(e) (1) Any agreement to establish a totalization arrangement entered into pursuant to this section shall be transmitted by the President to the Congress together with a report on the estimated number of individuals who will be affected by the agreement and the effect of the agreement on the estimated income and expenditures of the programs established by this Act.

"(2) Such an agreement shall become effective on any date, provided in the agreement, which occurs after the expiration of the period (following the date on which the agreement is transmitted in accordance with paragraph (1) during which each House of the Congress has been in session on each of 90 days; except that such agreement shall not become effective if, during such period, either House of the Congress adopts a resolution of disapproval of the agreement."

(b) (1) Section 1401 of the Internal Revenue Code of 1954 is amended by adding at the end thereof the following new subsection:

"(c) RELIEF FROM TAXES IN CASES COVERED BY CERTAIN INTERNATIONAL AGREEMENTS.-During any period in which there is in effect an agreement entered into pursuant to section 233 of the Social Security Act with any foreign country, the self-employment income of an individual shall be exempt from the taxes imposed by this section to the extent that such self-employment income is subject under such agreement to taxes or contributions for similar purposes under the social security system of such foreign country.” (2) Sections 3101 and 3111 of such Code are each amended by adding at the end thereof the following subsection:

"(c) RELIEF FROM TAXES IN CASES COVERED BY CERTAIN INTERNATIONAL AGREEMENTS.-During any period in which there is in effect an agreement entered into pursuant to section 233 of the Social Security Act with any foreign country, wages received by or paid to an individual shall be exempt from the taxes imposed by this section to the extent that such wages are subject under such agreement to taxes or contributions for similar purposes under the social security system of such foreign country."

(3) Section 6051(a) of such Code is amended by adding at the end thereof the following new sentence: "The amounts required to be shown by paragraph (5) shall not include wages which are exempted pursuant to sections 3101 (c) and 3111 (c) from the taxes imposed by sections 3101 and 3111."

(4) Notwithstanding any other provision of law, taxes paid by any individual to any foreign country with respect to any period of employment or self-employ

« ПретходнаНастави »