Having regard to the Convention on the Organization for Economic Cooperation and Development of December 14, 1960, and, in particular, to Articles 2(d), 3 and 5(a) thereof;

Having regard to the resolution of the Council of January 21, 1975, establishing a Committee on International Investment and Multinational Enterprises and, in particular, to paragraph 2 thereof [C(74)247(Final)];

Taking note of the Declaration by the Governments of OECD member countries of June 21, 1976, in which they jointly recommend to multinational enterprises the observance of guidelines for multinational enterprises;

Recognizing the desirability of setting forth procedures by which consultations may take place on matters related to these guidelines;

On the proposal of the Committee on International Investment and Multinational Enterprises;

DECIDES:

1. The Committee on International Investment and Multinational Enterprises (hereinafter called the “Committee”) shall periodically or at the request of a member country hold an exchange of views on matters related to the guidelines and the experience gained in their application. The Committee shall periodically report to the Council on these matters.

2. The Committee shall periodically invite the Business and Industry Advisory Committee to OECD (BIAC) and the Trade Union Advisory Committee to OECD (TUAC) to express their views on matters related to the guidelines and shall take account of such views in its reports to the Council.

3. On the proposal of a member country the Committee may decide whether individual enterprises should be given the opportunity, if they so wish, to express their views concerning the application of the guidelines. The Committee shall not reach conclusions on the conduct of individual enterprises.

4. Member countries may request that consultations be held in the Committee on any problem arising from the fact that multinational enterprises are made subject to conflicting requirements. Governments concerned will cooperate in good faith with a view to resolving such problems, either within the Committee or through other mutually acceptable arrangements.

5. This Decision shall be reviewed within a period of three years. The Committee shall make proposals for this purpose as appropriate.

The Council,

DECISION OF THE COUNCIL ON NATIONAL TREATMENT

Having regard to the Convention on the Organization for Economic Cooperation and Development of December 14, 1960, and, in particular, Articles 2(c), 2(d), 3 and 5(a) thereof;

Having regard to the resolution of the Council of January 21, 1975, establishing a Committee on International Investment and Multinational Enterprises and, in particular, paragraph 2 thereof [C(74)247 (Final)];

Taking note of the Declaration by the Governments of OECD member countries of June 21, 1976, on national treatment;

Considering that it is appropriate to establish within the Organization suitable procedures for reviewing laws, regulations and administrative practices (hereinafter referred to as "measures") which depart from "National Treatment;"

On the proposal of the Committee on International Investment and Multinational Enterprises;

DECIDES:

1. Measures taken by a member country constituting exceptions to "National Treatment" (including measures restricting new investment by "Foreign-Controlled

Enterprises" already established in their territory) which are in effect on the date of this Decision shall be notified to the Organization within 60 days after the date of this Decision.

2. Measures taken by a member country constituting new exceptions to "National Treatment" (including measures restricting new investment by "Foreign-Controlled Enterprises" already established in their territory) taken after the date of this Decision shall be notified to the Organization within 30 days of their introduction together with the specific reasons therefor and the proposed duration thereof.

3. Measures introduced by a territorial subdivision of a member country, pursuant to its independent powers, which constitute exceptions to "National Treatment," shall be notified to the Organization by the member country concerned, insofar as it has knowledge thereof, within 30 days of the responsible officials of the member country obtaining such knowledge.

4. The Committee on International Investment and Multinational Enterprises (hereinafter called the "Committee") shall periodically review the application of "National Treatment" (including exceptions thereto) with a view to extending such application of "National Treatment." The Committee shall make proposals as and when necessary in this connection.

5. The Committee shall act as a forum for consultations, at the request of a member country, in respect of any matter related to this instrument and its implementation, including exceptions to "National Treatment" and their application.

6. Member countries shall provide to the Committee, upon its request, all relevant information concerning measures pertaining to the application of "National Treatment" and exceptions thereto.

7. This Decision shall be reviewed within a period of three years. The Committee shall make proposals for this purpose as appropriate.

The Council,

DECISION OF THE COUNCIL OF INTERNATIONAL
INVESTMENT INCENTIVES AND DISINCENTIVES

Having regard to the Convention on the Organization for Economic Cooperation and Development of December 14, 1960, and, in particular, Articles 2(c), 2(d), 2(e), 3 and 5(a) thereof;

Having regard to the resolution of the Council of January 21, 1975, establishing a Committee on International Investment and Multinational Enterprises and, in particular, paragraph 2 thereof [C(74)247 (Final)];

Taking note of the Declaration by the Governments of OECD member countries of June 21, 1976, on international investment incentives and disincentives;

On the proposal of the Committee on International Investment and Multinational Enterprises;

DECIDES:

1. Consultations will take place in the framework of the Committee on International Investment and Multinational Enterprises at the request of a member country which considers that its interests may be adversely affected by the impact on its flow of international direct investments of measures taken by another member country specifically designed to provide incentives or disincentives for international direct investment. Having full regard to the national economic objectives of the measures and without prejudice to policies designed to redress regional imbalances, the purpose of the consultations will be to examine the possibility of reducing such effects to a minimum.

2. Member countries shall supply, under the consultation procedures, all permissible information relating to any measures being the subject of the consultation.

3. This Decision shall be reviewed within a period of three years. The Committee on International Investment and Multinational Enterprises shall make proposals for this purpose as appropriate.

'The Turkish Government was not in a position to participate in this Declaration. [Footnote in original.]

2For the purposes of the guideline on disclosure of information the term "geographical area" means groups of countries or individual countries as each enterprise determines it appropriate in its particular circumstances. While no single method of grouping is appropriate for all enterprises, or for all purposes, the factors to be considered by an enterprise would include the significance of operations carried out in individual countries or areas as well as the effects on its competitiveness, geographic proximity, economic affinity, similarities in business environments and the nature, scale and degree of interrelationship of the enterprises' operations in the various countries. [Footnote in original.]

3Bona fide negotiations may include labor disputes as part of the process of negotiation. Whether or not labor disputes are so included will be determined by the law and prevailing employment practices of particular countries. [Footnote in original.]

"Turkey abstained on the three decisions.

OECD Press Release, PRESS/A(76)20. For the full text of Secretary Kissinger's statement to the OECD Council see Dept. of State Bulletin, Vol. LXXV, No. 1934, July 19, 1976, pp. 73-83. A letter dated Aug. 19, 1976, from Secretary Kissinger, Secretary of the Treasury William E. Simon, and Secretary of Commerce Elliot L. Richardson, sent to more than 800 chief executives of major U.S. corporations, commended the Guidelines to all enterprises in the United States. See Dept. of State Bulletin, Vol. LXXV, No. 1944, Sept. 27, 1976, pp. 403-404.

Reporting Requirements

Effective January 1, 1976, the Bureau of Economic Analysis of the Department of Commerce amended the reporting requirements of 15 Code of Federal Regulations Part 803, pertaining to certain foreign business enterprises owned by U.S. persons and U.S. business enterprises owned by foreign persons. The reporting requirements were changed, by notice dated June 2, 1976, to require quarterly, rather than annual, reports for U.S. direct investment abroad in insurance subsidiaries and branches owned by foreign persons. Changes were also made in quarterly reporting on incorporated motion picture subsidiaries and branches, and a new report form was instituted to solicit information that will permit assigning an industry code to a U.S. reporter and its foreign parent. The data called for are collected under the authority of the Bretton Woods Agreements Act (22 U.S.C. 286-286k-1).

For the announcement of June 2, 1976, and 15 CFR Part 803, as revised, see Fed. Reg., Vol. 41, No. 113, June 10, 1976, pp. 23606-23609.

International Investment Survey Act of 1976

On October 11, 1976, the President approved the International Investment Survey Act of 1976 (P.L. 94-472; 90 Stat. 2059; 22 U.S.C. 3101 et seq.), to supplement the authority of the President to collect regular and periodic information on international investment. The

Act empowers the President and his designees to establish and maintain a regular information collection program with respect to foreign investment in the United States and U.S. investment abroad. It authorizes the appropriation of $1 million for the purpose for the fiscal year ending September 30, 1978, and a like amount for the fiscal year ending September 30, 1979.

Under section 2(a) of the Act, Congress finds and declares that—

(1) the United States Government is presently authorized to collect limited amounts of information on United States investment abroad and foreign investment in the United States;

(2) international investment has increased rapidly within recent years;

(3) such investment significantly affects the economies of the United States and other nations;

(4) international efforts to obtain information on the activities of multinational enterprises and other international investors have accelerated recently;

(5) the potential consequences of international investment cannot be evaluated accurately because the United States Government lacks sufficient information on such investment and its actual or possible effects on the national security, commerce, employment, inflation, general welfare, and foreign policy of the United States; (6) accurate and comprehensive information on international investment is needed by the Congress to develop an informed United States policy on such investment; and

(7) existing estimates of international investment, collected under existing legal authority, are limited in scope and are based on outdated statistical bases, reports, and information which are insufficient for policy formulation and decisionmaking.

The report of the Committee on International Relations, House of Representatives (H. Rept. 94-1490), recommending enactment of the legislation summarized its provisions as follows:

S. 2839, as reported, which may be cited by its short title as the "International Investment Survey Act of 1976," requires the President to set up a regular and comprehensive data collection program to obtain current information on international investment questions, to publish such data on a regular and periodic basis, and to conduct "benchmark surveys" of foreign direct investment in the United States, of U.S. direct investment abroad, and of foreign portfolio investment in the United States at least once every 5 years. The President is also directed, not later than 5 years after enactment, to conduct a "benchmark survey" of U.S. portfolio investment abroad on a one-time basis and at his discretion thereafter. The President shall also conduct a study of the feasibility of establishing a system to monitor foreign direct investment in the United States in agricultural, rural, and urban real property, including the feasibility of establishing a nationwide multipurpose land data system, and he shall report his findings to Congress no later than 2 years after enactment of this bill.

The President or his designees are authorized to compel designated persons to keep records and to report relevant informa

tion to agencies administering the program. Civil, criminal, and injunctive procedures are provided for in support of the purposes of the legislation.

Information collected pursuant to the legislation shall not be divulged publicly in any way that might identify the company or individual making such report and such protection is extended to "customers" of those reporting under the bill.

Additional views by Congressman Jonathan B. Bingham, included in the report, state, in part:

While I support the provisions of S. 2839, I am concerned and disappointed that the legislation fails to provide for disclosure of multinational corporate investment data on a company-bycompany and country-by-country basis. . . .

I continue to believe that information of the kind identified by S. 2839 for collection and analysis must be available to policymakers in more than just aggregate terms. Aggregate data alone is inadequate and can even be misleading in view of the size and dominance of a few large multinational firms in particular areas of trade and investment. With respect especially to such firms, some of which have budgets and resources greater than those of some of the major governments of the world, policymakers must have more detailed information identified at the level of individual firms in order fully to appreciate both the beneficial and possible undesirable effects such firms and their operations may have on the public.

It is especially unfortunate that the present legislation does not call for company-by-company disclosure of information on the investments and business activities of multinational firms in view of the fact that the United States has recently joined in an international declaration which clearly endorses and envisages such disclosure. I refer to the June 21, 1976, declaration of the member governments of the Organization for Economic Cooperation and Development (OECD). . . .

For the OECD declaration of June 21, 1976, see ante. this chapter, p. 519. For section-by-section analysis of the International Investment Survey Act of 1976, see H. Rept. 94-1490 and S. Rept. 94-834, 94th Cong., 2d Sess.

Securities Transactions

Straub v. Vaisman & Co., Inc., 540 F.2d 591 (1976), was an action by foreign nationals who purchased stock abroad in an American corporation on the strength of recommendations by an American securities broker and its representative. They alleged violations of the antifraud provisions of the Securities Act of 1933 (15 U.S.C. 77a et seq.) and the Securities Exchange Act of 1934 (15 U.S.C. 78a et seq.). The U.S. District Court for the District of New Jersey entered judgment for the plaintiffs and awarded attorney fees. The defend