items of radio equipment. All such arrangements remained subject to final approval by the two governments.

Press Briefing Paper, July 16, 1976, Dept. of State File EA/P.

On Decembeer 29, 1976, a memorandum of understanding and a a memorandum of agreement regarding the Chiang Mai Seismic Research Station in Thailand were signed by representatives of the Government of the United States and the Government of Thailand. The memoranda effectuated the turnover to the Royal Thai Government of the American-built and operated center.

The memorandum of understanding provides for turning over to the Royal Thai Navy Hydrographics Department the buildings and fixed installations constituting the station, and making available to that Department the instruments, equipment, and supplies necessary for the operation of the station. The U.S. Air Force agreed, subject to the availability of funds, to pay all reasonable costs of operation, including the training of Thai personnel to the station and the maintenance and repair of its equipment. In return all data produced by the station is to be shared with the United States, and U.S. personnel are to have access to the station to provide quality control, technical assistance, and training. The term of the agreement is three years, with either party able to terminate after three years upon one year's written notice.

The memorandum of agreement, which contains five annexes, provides for details of the purpose, turnover, and operations of the station, as well as precise arrangements for the training of Thai personnel and paying of reasonable costs by the United States, including the salaries of Thai civilian (but not Thai military) personnel at the station.

Dept. of State File L/T.

Turkey

The United States and Turkey, on March 26, 1976, signed an Agreement Relative to Defense Cooperation Pursuant to Article III of the North Atlantic Treaty in Order to Resist Armed Attack in the North Atlantic Treaty Area. The agreement was negotiated with the understanding that it would be subject to congressional approval; it expressly provides that it shall not enter into force until the parties exchange notes indicating approval of the agreement in accordance with their respective legal procedures. President Ford transmitted the agreement to the U.S. Congress on June 16, 1976, requesting that it approve and authorize appropriations to implement the agreement and a related exchange of notes. He transmitted draft legislation in

the form of a Joint Resolution of the Congress for the purpose. In his message of transmittal, the President described the new agreement in the following terms:

The new agreement is consistent with, but not identical to, the preceding Defense Cooperation Agreement of 1969. Founded on mutual respect for the sovereignty of the parties, the agreement (Articles I and III) authorizes U.S. participation in defense measures related to the parties' obligations arising out of the North Atlantic Treaty. It is understood that when the agreement enters into force pursuant to Article XXI, activities will resume which were suspended by the Government of Turkey in July 1975, when the Turkish Government requested negotiation of a new defense cooperation agreement. [See the 1975 Digest, p. 830.]

The agreement provides a mutually acceptable framework for this important security cooperation. The installations authorized by the agreement will be Turkish Armed Forces installations under Turkish command (Articles IV and V). Article V clearly provides for U.S. command and control authority over all U.S. armed forces personnel, other members of the U.S. national element at each installation, and U.S. equipment and support facilities.

The installations shall be operated jointly. In order to facilitate this objective, the United States is committed to a program of technical training of Turkish personnel.

Other provisions of the agreement deal with traditional operational and administrative matters, including: operation and maintenance of the installations; ceilings on levels of U.S. personnel and equipment; import, export and in-country supply procedures; status of forces and property questions.

Article XIX specifies the amounts of defense support which the United States plans to provide Turkey during the first four years the agreement remains in force. We have provided such support to this important NATO ally for many years to help Turkey meet its heavy NATO obligations. The article provides that during the first four years the agreement remains in force, the United States will furnish $1,000,000,000 in grants, credits and loan guaranties, to be distributed equally over these four years in accordance with annual plans to be developed by the Governments. It further provides that during the first year of the defense support program, $75 million in grants will be made available, with a total of not less than $200 million in grants to be provided over the four-year life of the program. The Article also sets forth our preparedness to make cash sales to Turkey of defense articles and services over the life of the agreement.

The related exchange of notes details defense articles we are prepared to sell to the Republic of Turkey at prices consistent with U.S. law. It further provides for Turkish access to the U.S. Defense Communications Satellite System, and for bilateral consultations regarding cooperation in modernizing Turkish defense communications.

The defense support specified in Article XIX and in the related exchange of notes will be provided in accordance with contractual obligations existing and to be entered into by the Governments, and with the general practices applicable to all other recipient countries. The accompanying draft legislation accordingly provides that the generally applicable provisions of our foreign assistance and military sales Acts will govern this defense support, and that it will be exempted from the provisions of section 620(x) of the Foreign Assistance Act as amended. The draft legislation further provides that it fulfills the requirements of section 36(b) of the Foreign Military Sales Act as amended and section 7307 of Title 10 of the United States Code with respect to the transfer of materiel pursuant to the related exchange of notes.

The agreement will have a duration of four years, and will be extended for subsequent four-year periods in the absence of notice of termination by one of the parties. As the four-year defense support program comes to an end, the agreement provides for consultation on the development of a future program as required in accordance with the respective legal procedures of the two Governments. Article XXI stipulates the procedures under which the agreement can be terminated by either party, and provides for a one-year period following termination during which the agreement will be considered to remain in force for the purposes of an orderly withdrawal.

This agreement restores a bilateral relationship that has been important to Western security for more than two decades. I believe it will promote U.S. interests and objectives on the vital southeastern flank of NATO and provide a framework for bilateral cooperation designed solely to reinforce NATO and our common security concerns. To the extent that the agreement restores trust and confidence between the United States and Turkey, it also enhances the prospects for a constructive dialogue on other regional problems of mutual concern.

For the text of the U.S.-Turkey agreement and related notes, the President's message to Congress and draft of proposed legislation with section-by-section analysis, see H. Doc. 94-531, 94th Cong., 2d Sess. For the full text of the President's message, see also Dept. of State Bulletin, Vol. LXXV, No. 1933, July 12, 1976, pp. 60-62. Under Secretary of State for Political Affairs Philip C. Habib testified in support of the agreement at hearings before the Senate Foreign Relations Committee on Sept. 15, 1976, on S. J. Res. 204 to authorize the President to implement the agreement. Text released by the Dept. of State Sept. 15, 1976. No action on S. J. Res. 204 was taken by the 94th Cong. The draft legislation was resubmitted on Jan. 18, 1977 (H. Doc. 95-57, 95th Cong., 1st Sess.).

Political Contributions and Fees

Section 604(b) of the International Security Assistance and Arms Export Control Act of 1976 (P.L. 94-329; 90 Stat. 767), approved June 30, 1976, added a new section 39 to the Arms Export Control Act entitled "Fees of Military Sales Agents and Other Payments." It directs the Secretary of State to require, by regulation, adequate and

timely reporting on political contributions, gifts, commissions, and fees paid, or offered or agreed to be paid, by any person in connection with:

(a) sales of defense articles or defense services under section 22 of the Arms Export Control Act; or

(b) commercial sales of defense articles or defense services licensed or approved under section 38 of the Arms Export Control Act; to or for the armed forces of a foreign country or international organization in order to solicit, promote or otherwise secure the conclusion of such sales. It also provided that such regulations shall specify the amounts and kinds of payments, offers and agreements to be reported, and the form and timing of reports, and shall require reports on the names of sales agents and other persons receiving such payments. The Secretary of State was also authorized to require by regulation such recordkeeping as he determined necessary.

On September 16, 1976, Carlyle E. Maw, Under Secretary of State for Security Assistance, announced that the Department of State had adopted regulations so mandated. The regulations, effective December 1, 1976, amended the International Traffic in Arms Regulations (ITAR), 22 CFR Subchapter M (Parts 121-128), by adding a new Part 130 on political contributions and fees or commissions in connection with the sale of defense articles or services, to or for the use of a foreign country or international organization under the Foreign Military Sales program (§ 22 of the Arms Export Control Act, 22 U.S.C. 2762), as well as commercial sales for which licensing or other approval of exports is required under the ITAR (§ 38 of the Arms Export Control Act, 22 U.S.C. 2778).

The regulations set forth the obligation to furnish information to the Office of Munitions Control, Department of State, and specify the information to be furnished by the applicant or supplier to the Department, the information to be furnished by the vendor to the applicant or supplier, the information to be supplied by the recipient of the fee or commission, and the treatment to be accorded information designated "confidential business information."

See Fed. Reg., Vol. 41, No. 183, Sept. 20, 1976, pp. 40608-40611. Proposed regulations on the subject had previously appeared at Fed. Reg., Vol. 41, No. 154, Aug. 9, 1976, pp. 33446-33449, and the Dept. of State had conducted a public meeting on Sept. 14, 1976, to allow opportunity for public comment.

Chapter 15

PRIVATE INTERNATIONAL LAW

81

Conflict of Laws

A nonresident alien appealed in In re Grand Jury Proceedings, 532 F.2d 404 (1976), to the U.S. Court of Appeals for the Fifth Circuit from an order of commitment for civil contempt for refusing to answer questions before a grand jury. The Court of Appeals held, on May 13, 1976, that the nonresident alien could be subpoenaed while present in the United States to testify before a grand jury investigating possible tax law violations, even though the very act of testifying might subject him to criminal prosecution in the country of his residence for violating that country's bank secrecy laws. It stated:

.. The Fifth Amendment simply is not pertinent to the situation where a foreign state makes the act of testifying a criminal offense.

Regarding appellant's contention that as a matter of international comity the Court should refuse to enforce the subpoena, the Court said:

The first and most important factor to be considered is the relative interest of the states involved. In this case, the United States seeks to obtain information concerning the violation of its tax laws. In contradistinction, the Cayman Islands seeks to protect the right of privacy that is incorporated into its bank secrecy laws. Unfortunately, the Cayman Government position appears to be that any testimony concerning the bank will violate its laws. Therefore, either the United States or the Cayman interest must give way.

Under our system of jurisprudence the grand jury's function in investigating possible criminal violations is vital. . . . To the degree that the ability to obtain evidence is crucial to all criminal justice proceedings, the need for broad authority in the grand jury is greatest. The Supreme Court has stated "the grand jury's authority to subpoena witnesses is not only historic but essential to its task." Branzburg v. Hays, 408 U.S. 665, 668 (1973). Courts have repeatedly allowed the grand jury wide discretion in seeking evidence . . . . To defer to the law of the Cayman Islands and refuse to require Mr. Field to testify would significantly restrict the essential means that the grand jury has of evaluating whether to bring an indictment.