By its own terms, and with repeal by section 101 (c) of this bill of the temporary exemption for section 5(b) [of the Trading With the Enemy Act], the provisions of the National Emergencies Act are applicable to any exercise of authorities pursuant to any declaration of national emergency. . . .

Section 203-Grant of authorities

Section 203 (a) of the bill defines the international emergency economic authorities available to the President in the circumstances specified in section 202. This grant of authorities basically parallels section 5(b) of the Trading With the Enemy Act. Paragraph (1)(A) authorizes the President to regulate transactions in foreign exchange, banking transactions involving any interest of any foreign country or a national thereof, and the importing or exporting of currency or securities, and to regulate or freeze any property in which any foreign country or a national thereof has any interest.

Section 203(b) of the bill states that the authority granted to the Presi dent by this section does not include the authority to regulate or prohibit, and should not be used with the effect of regulating or prohibiting, personal communications which do not involve the transfer of anything of value, or uncompensated transfers of anything of value except if the President determines that such transfers would seriously impair his ability to deal with the emergency, are in response to coercion against the recipient or donor, or would endanger U.S. Armed Forces.

Section 204-Consultation and reports

Section 204 of the bill (a) requires that the President consult with Congress whenever possible before exercising any of the authorities of this title, and continue to consult regularly with Congress so long as such authorities are being exercised; (b) requires that the President transmit to Congress, immediately upon beginning to exercise any of the authorities of this title, a report (1) defining the circumstances which necessitate the exercise of authority; (2) stating why those circumstances constitute a national emergency within the meaning of section 202 (a) of the bill; (3) specifying the authorities to be exercised and the actions to be taken; (4) justifying the necessity for such actions; and (5) designating the foreign countries toward which such actions are directed; (c) requires that the President update the report every 6 months; and (d) states that these requirements are supplemental to the reporting requirements of the National Emergencies Act. . . .

Section 208-Savings provision

Section 208 of the bill provides that, notwithstanding the termination of a national emergency under the National Emergencies Act, the President may continue to block any assets of a foreign country that were blocked on the date of the termination of the national emergency, if he determines that the continued blocking of those assets is necessary because of U.S. claims against the country involved, unless Congress specifies in a concurrent resolution terminating a national emergency that the assets may not continue to be blocked. Under subsection (a) (2) of section 208, notwithstanding the termination of a

currently existing U.S. trade embargo of another country under section 101 (b) of the bill, assets of that country which are blocked on the date of the termination of the trade embargo may continue to be blocked for the same reason. The President is required to report to Congress every 6 months on the reasons for continuing to block the assets of a foreign country under this section.

Holding the assets of a foreign country is generally the most effective means of achieving settlement of U.S. claims. The need to continue to block assets has prompted Presidents to continue a legal state of emergency in effect long after the factual state of emergency has passed. It is the intent of the committee by this section to enable the timely termination of states of emergency, and a return to government under normal law, without prejudicing the ability of U.S. citizens to recover claims against foreign countries.

H. Rept. No. 95-459, 95th Cong., 1st Sess., 14, 16, 17.

For further information concerning Title I of the Act, see post, Ch. 14, § 8, pp. 980-981.

Transactions Incidental to Authorized Travel

Cambodia, Cuba, North Korea, North Viet-Nam, and South Viet-Nam

On March 21, 1977, the Office of Foreign Assets Control of the Department of the Treasury issued amendments, which were effective immediately, to the Foreign Assets Control Regulations (31 CFR Part 500) authorizing persons to visit Cambodia, Cuba, North Korea, North Viet-Nam, or South Viet-Nam to pay for their transportation and maintenance expenditures such as meals, hotel bills, taxis, and the like while in those countries. Section 500.563, which deals with North Korea, North Viet-Nam, South Viet-Nam, and Cambodia, and section 515.560, which deals with Cuba, authorize a visitor to the named countries to buy a maximum of $100 worth of goods at foreign market value for personal use and not for resale. This allowance may be used only once every six months. Goods purchased may only be brought back by the traveler in his baggage. The new General License contained in these sections does not authorize any other transactions with nationals of those countries.

Journalists, researchers, news and documentary filmmakers, and others who visit those countries for like purposes are authorized to acquire films, magazines, books, and similar publications which are directly related to their professional activities, i.e., for their own or their employer's use, and cannot be resold.

In addition, parallel authorizations were issued permitting American-owned or American-controlled foreign firms to pay for travel expenditures made by their foreign national employees in the named countries.

42 Fed. Reg. 16621 (1977).

$6

Debt Rescheduling

U.S.-Zaire

Bilateral Agreements

The United States entered into a debt rescheduling agreement with the Republic of Zaire on June 17, 1977 (TIAS 8731; entered into force on August 30, 1977). On October 27, 1977, Joseph A. B. Winder, Acting Deputy Assistant Secretary for International Finance and Development, sent Arthur W. Rovine, Assistant Legal Adviser for Treaty Affairs, a memorandum for transmission to Congress containing background information concerning this agreement.

Excerpts from Mr. Winder's memorandum follow:

Explanation of Agreement

The agreement reschedules approximately $46 million owed to or guaranteed by four United States Government agencies. The amounts being rescheduled by agencies are as follows:

$31.9 million-Export-Import Bank

7.1 million-Department of Defense

3.8 million-Agency for International Development

1.3 million-Department of Agriculture (for CCC [Commodity Credit Corporation])

1.9 million-Department of Agriculture (for P.L.-480)

$46.0 million-Total

Of the $46 million, 85 percent (i.e., $39 million) will be rescheduled over 10 years, including a grace period of 3 years. The remaining 15 percent (i.e., $7 million) is to be paid in two annual installments in 1977 and 1978. The interest rate will be 3.5 percent on debt owed to the Agency for International Development and on debt owed on P.L.-480 agreements, and 8.375 percent on debt owed or guaranteed to the Export-Import Bank, the Department of Defense, and the Commodity Credit Corporation.

Background Information on Negotiations

The renegotiation of Zaire's debt took place within the "Paris Club" in meetings on April 26-27, and June 16-17, 1976. Negotiations followed an agreement between Zaire and the International Monetary Fund on a standby arrangement for a drawing of the first credit tranche, and a commitment by Zaire to implement a stabilization program as set forth in its letter of intent to the IMF. IMF analysis of Zaire's economic situation indicated clearly that a rescheduling of her external debt was an essential element in Zaire's economic recovery. The IMF view was shared by all creditors, and at the time negotiations started Zaire was in technical default on at least $300 million on debt owed to government and private creditors. (Zaire concluded another standby agreement with the IMF in April 1977.)

Creditor countries participating in the Paris Club negotiations were Belgium, Canada, France, Germany, Italy, Japan, the Nether

lands, Sweden, Switzerland, the United Kingdom and the United States. An ad referendum Paris Club agreement reached on June 17, 1976, provided for the rescheduling of arrearages on principal and interest on debt (with a maturity of more than one year) maturing between January 1, 1975, and June 30, 1976, as well as the rescheduling of principal maturing between July 1, 1976, and December 31, 1976. While there was recognition that Zaire was likely to face critical balance of payments constraints in the period after 1976, the creditor countries did not finalize the terms for rescheduling beyond December 31, 1976.

Multilateral creditor club agreements are traditionally followed by bilateral agreements between individual creditor countries and the debtor country for the purpose of implementing the overall multilateral understanding. This United States Agreement with Zaire is intended to implement the June 17, 1976, Paris Club accord.

Legal Authority

The inherent powers of the President with respect to the conduct of foreign relations under the Constitution provide the legal basis for United States participation in creditor club negotiations.

Legal authority for concluding the agreement is based on Section 12 U.S.C. S 635 (a), 22 U.S.C. S 2395 (g), 7 U.S.C. S 1701 and S 1706, and 7 U.S.C. S 1707(a). See also Opinion of the Attorney General Regarding the Rescheduling of the Indonesian Debt to the United States, 42 Op. A.G. No. 39, December 24, 1970, and 22 U.S.C. S 2751 et. seq.

Pursuant to the provisions of section 4 of the Foreign Disaster Assistance Act of 1974, the Chairman of the House Committee on International Relations and the Chairman of the Senate Committee on Foreign Relations were notified prior to United States participation in Paris Club negotiations on Zaire, and were kept up-to-date on the conduct of these negotiations. The text of the Agreement was also transmitted to the Speaker of the House and the Chairman of the Senate Foreign Relations Committee on June 30, 1977.

Dept. of State File L/T.

87

Intellectual Property

Patents

Patent Cooperation Treaty

On November 9, 1977, Lutrelle F. Parker, Acting Commissioner of Patents and Trademarks of the U.S. Department of Commerce, announced that the Patent Cooperation Treaty (PCT) with annexed Regulations done at Washington on June 19, 1970, will come into force on January 24, 1978. Acting Commissioner Parker indicated that with the ratification of the PCT by the United Kingdom on October 24, 1977, the necessary number of nations have ratified the Treaty and that it will come into force three months from that date. He described the

PCT as "the most important Treaty on patents that the United States has joined in nearly 100 years."

Under its terms the treaty enters into force three months after eight states have deposited their instruments of ratification or accession, provided that at least four of those states have major patent activity. As of November 9, 1977, the states with major patent activity which had ratified the PCT in addition to the United Kingdom were Switzerland, the Federal Republic of Germany, and the United States. In addition, Cameroon, Central African Empire, Chad, Congo, Gabon, Madagascar, Malawi, Senegal, and Togo have ratified it.

The date from which international applications may be filed is expected to be July of 1978 though the exact date will be set by the Assembly of the PCT.

The Patent and Trademark Office in the U.S. Department of Commerce will act under the PCT as a receiving office and an international searching authority for the purpose of processing international applications and providing international search reports. By filing an international application, U.S. patent applicants will be able to effect a simultaneous filing in as many PCT member countries as they designate. Such applicants will then have at least an additional eight months in which to furnish translations and pay the national fees for the countries designated. Furthermore, prior to the time for paying national fees and furnishing translations, the applicants will receive an international search report to aid them in evaluating whether to continue to seek protection in the designated countries.

U.S. Dept. of Commerce PAT 77-8 (Nov. 9, 1977). The text of the PCT may be found in S. Ex. S, 92d Cong., 1st Sess., Sept. 12, 1972.

For further information concerning the PCT, see the 1973 Digest, Ch. 10, § 7, pp. 392-394 and the 1975 Digest, Ch. 10, § 7, pp. 646–647.

On December 14, 1977, President Carter proclaimed that the PCT would be "observed and fulfilled with good faith on and after January 24, 1978, by the United States" subject to three declarations. An excerpt from the portion of the proclamation concerning the three declarations follows:

The Senate of the United States of America by its resolution of October 30, 1973, two-thirds of the Senators present concurring therein, gave its advice and consent to ratification of the Treaty, with annexed Regulations, subject to the following three declarations:

(1) Under article 64(1) (a), the United States shall not be bound by the provisions of Chapter II of the Treaty;

(2) Under article 64(3)(a), as far as the United States is concerned, international publication of international applications is not required; and