to the principal according to para. (3) but shall be discharged by payment in Deutsche Mark. The debtor shall effect payment within six months after such request. (8) Where small amounts are involved, the parties concerned may, in special cases, agree upon different terms of repayment with the approval of the competent German authorities. (9) Creditors and debtors may, in accordance with the Foreign Exchange Regulations in force in the Federal Republic of Germany and Berlin (West), agree upon payment of the claim or part thereof in Deutsche Mark. (10) The competent German authorities reserve, in cases of hardship, the right of giving favourable consideration to applications by the parties concerned for the approval of different terms of repayment. (11) Foreign creditors of claims listed in Article 2, para. (2) (b), may ask for payment in Deutsche Mark of the interest due up to 31st December, 1952, without the reduction proposed in paragraph (2) of this Article, provided they accept such payment as discharge of their claim. (12) If necessary, the principles laid down in Annex II to the Agreement on German External Debts may be adopted to supplement these rules for the settlement of claims arising out of bonds and interest coupons covered by this settlement proposal. Section E.-Arrears of Income from Investments (Article 3) ARTICLE 35 Payments shall be made in Deutsche Mark pursuant to the foreign exchange regulations in force in the Federal Republic of Germany and Berlin (West). Section F.-Other Monetary Claims (Article 4) These claims shall be settled pursuant to the provisions for the category of claims to which they either belong or, by their character, are most similar. In cases of doubt, the same practice shall apply as in the Payment Agreements. SUB-ANNEX TO ANNEX IV [Note: The text reproduced hereunder is the text of Annex A to Appendix 6 to the Report of the Conference on German External Debts.] Joint Statement by the German and Swiss Delegations concerning the Negotiations on the Settlement of the Swiss Franc Land Charges. (Schweizer Frankengrundschulden) Discussions were held at Freiburg i.B. on 10th-11th June, 1952, in implementation of the statement made on 20th March, 1952, by the creditor and debtor representatives-for the attention of the London Debt Conference. These negotiations could not, however, be brought to a conclusion. The London Conference was informed of this by a statement on 11th June, 1952. Owing to various circumstances it has so far proved impossible to continue the negotiations. The parties will, however, resume the discussions, in consultation with the "Vertrauensstelle," at the earliest possible date. The German Delegation will inform the London Conference of their results in good time before the signing of the general Governmental Agreement on the settlement of German External Debts. The Swiss side refers again to the exposé on the Swiss Franc land charges which was submitted to the Conference subsequent to the statements made by the Swiss Delegation in the Second Plenary Meeting on 29th February, 1952, and distributed under Ref. No. GD/V/Negotiating Committee D/Doc. 3 of 13th March, 1952. The Swiss side reserves the right, therefore, of making a further statement, dependent upon the results of the bilateral negotiations. On the other hand, the German side is of the opinion that the Swiss Franc land charges fall under the terms of reference of the London Conference for the Settlement of German External Debts and that they are to be settled in accordance with the principles laid down by Negotiating Committee D. Both sides agree that a Court of Arbitration, which is to be set up within the scope of the settlement of the debts dealt with in Negotiating Committee D, shall not be competent to deal with the Swiss Franc land charges but that the cases arising shall be submitted to the "Vertrauensstelle" set up pursuant to the German-Swiss Agreements. (Signed) PAUL LEVERKUEHN London, 25th July, 1952. (Signed) KOENIG Agreed Recommendations for the Treatment of Payments made to the Konversionskasse [Note: The text reproduced hereunder is the text of Appendix 7 to the Report of the Conference on German External Debts.] I. The German Delegation was of the opinion that the German debtor was definitively discharged of his debt to the extent of his payments into the Konversionskasse. The creditor representatives, on the other hand, were of the opinion that as a rule such payments into the Konversionskasse would not be recognised as discharging the German debtors under the laws of their respective countries. In their desire to put an end to fruitless legal discussions, both sides agreed to seek a practical solution which would permit settlement of the claims of the creditors without unnecessary formalities. Accordingly, the German Delegation and the foreign creditor representatives while reserving their respective legal positions, have agreed as follows:(1) The German debtor undertakes to settle the creditor's claim in accordance with the new settlement terms, regardless of the payments made to the Konversionskasse, to the extent that the creditor— (a) has not in fact received from the Konversionskasse the payment corresponding to that made by the debtor to it, or (b) refused to accept a payment or performance from the Konversionskasse based on a payment made by the debtor, on the ground that he (the creditor) was unwilling to recognise such payment or performance as discharging the debt. In the case of securities subject to the validation law for German Foreign Currency Bonds, the arrangement set out above shall apply only to such Bonds and Coupons as shall have been validated pursuant to the provisions of such law and of any agreement entered into with the country of issue respecting the application of such law, or with respect to the declaratory decrees (Feststellungsbescheide) which the creditor shall receive pursuant to the said law. (2) The amounts so paid by the debtors shall be reimbursed to them out of German public funds. (3) Payments made by the debtor into the Konversionskasse which do not fall within the provisions of sub-paragraph (1) shall be considered as discharging the debt to the extent of such payments. II. Subject to the general provisions contained in paragraph I above:(a) the Federal Government agrees to assume liability for full payment in the due currencies to the foreign creditors of the sums paid into the Konversionskasse by debtors in the Saar, in respect of which the foreign creditors have not received foreign exchange payments or been otherwise satisfied; (b) the Federal Government agrees to assume liability for payment in the due currencies to the foreign creditors of 60 per cent. of the sums paid into the Konversionskasse by debtors in Austria, France, Belgium and Luxemburg in respect of which the foreign creditors ['] satisfied; and (c) the Federal Government will negotiate with the foreign creditors' representatives before the end of December 1952 as regards the implementation of these undertakings. 1 By a note dated Aug. 4, 1953, the British Government invited attention to the fact that an omission occurred in the transcription by which, before the penultimate word "satisfied," the words "have not received foreign exchange payments or been otherwise" should be inserted in order to have the English language version correspond with the French and German versions. ANNEX VI [Note: The text reproduced hereunder is the text of Appendix 8 to the Report of the Conference on German External Debts.] Agreed Recommendations for the Utilisation of Blocked Deutsche Mark Accounts The following detailed arrangements have been agreed upon for the utilisation of blocked Deutsche Mark accounts: 66 (1) The foreign creditor of an "original credit account" in German currency shall be permitted to utilise it within the framework of the regulations in force in the German Federal Republic and Berlin (West) at the date on which this settlement comes into effect, including the right to assign such accounts to another person outside Germany. (2) The foreign creditor of an "acquired credit account in German currency shall continue to be permitted to assign his account to another person outside Germany. The foreign creditor of such account shall continue to be permitted to utilise his account mainly for long-term investments in the German economy. (3) The competent German authorities shall draw up and issue the regulations necessary to prevent the illegal disposal of accounts in German currency and to preclude any other abuses detrimental to the German economy and to the creditors as a whole. Utilisations permitted by a general licence at the time this settlement comes into force may, in order to ensure proper control, be made dependent upon the issue of a special licence without thereby restricting the general possibilities of utilisation. (4) The competent German authorities will endeavour to provide facilities for the utilisation of blocked Deutsche Mark accounts to such an extent as the foreign exchange situation shall permit. They will aim at simplifying the licence procedure as much as possible. (5) The German Government shall set up an Advisory Committee composed of an equal number of representatives of the main creditor countries, on the one hand, and of representatives of the German Federal Republic, on the other, for the discussion of general matters in connection with the utilisation of blocked Deutsche Mark accounts. (146) ANNEX VII Agreement on Goldmark Liabilities and Reichsmark Liabilities with a Gold Clause, having a specific foreign character The negotiations provided for in Article V, paragraph 3, of Appendix 4 and in Article 6 of Appendix 6 to the Final Report of the London Debt Conference and referred to in the joint letter from Sir Otto Niemeyer and Herr Hermann J. Abs to the Tripartite Commission on German Debts, the purpose of which was to define the criteria constituting the specific foreign character of Goldmark liabilities and of Reichsmark liabilities with a gold clause or a gold option, took place in London from 21st October to 21st November, 1952, between the German Delegation for External Debts and delegation of British, American, Swiss and Netherlands creditor representatives. a We are glad to be able to inform you that these negotiations resulted on 21st November, 1952, in an understanding which was recorded in an Agreement signed to-day. The Chairman of the two Delegations, in signing this Agreement, exchanged four letters dated 21st November, 1952, designed to clarify various questions in connexion with the Agreement, as follows: 1. Exchange of letters concerning the transfer of amounts due for payment on Goldmark claims with a specific foreign character. 2. Exchange of letters concerning the interpretation of the provision on a "trusteeship contract" 3. Exchange of letters concerning a question of interpretation in connexion with the 40th Executory Ordinance to the Currency Conversion Law. 4. Exchange of letters concerning a reservation by the creditors with respect to the conversion of claims against secondary debtors and the possibility of the withdrawal of this reservation. We have the honour to submit to you one copy of the text of the Agreement in the German and English languages and of the four exchanges of letters, also in the German and English languages, with the request that you should approve them as soon as possible. We should be grateful if the |