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Commission reserved its position on this article, pointing out that it considered it unnecessary that the draft should affirm the principle of the sover ignty of the successor state over its natural resources, since that principle derives from statehood itself and not from the law of succession of states. Article 11 provides that debts owed to the predecessor state by virtue of its sovereignty over, or activity in, the territory to which the succession of states relates shall pass to the successor state.

MOST - FAVORED-NATION CLAUSE

A most-favored-nation clause is a treaty provision in which the granting state binds itself to accord to a beneficiary state treatment on a specific subject on terms no less favorable than the terms accorded to any third state. In 1973 the Commission had adopted seven articles concerning definition and scope. In 1975 the Commission provisionally adopted 14 more articles relating primarily to the application of such clauses. The Commission, while recognizing the fundamental importance of the role of the most-favored-nation clause in the area of international trade, has determined that it will not confine its study to this area. Instead, it is extending its study to as many fields as possible so that the scope and effect of the clause as a legal institution can be clarified. The articles that it is drafting are designed to be supplementary to the 1969 Vienna Convention on the Law of Treaties.

TREATIES BETWEEN STATES AND INTERNATIONAL ORGANIZATIONS OR BETWEEN INTERNATIONAL ORGANIZATIONS

In its work on treaties involving international organizations, the Commission is trying, to the extent possible, to extend to such organizations the provisions of the 1969 Vienna Convention on the Law of Treaties. During 1975 it provisionally adopted a number of articles on such aspects as adoption of treaties, means of establishing consent to be bound by a treaty, and the act of formal confirmation. No agreement was reached, however, on such questions as (i) the possible conflict between an international organization and its member states in making or objecting to reservations in respect of a treaty to which both the organization and the member states are parties, and (2) whether there should be separate rules to govern treaties to which only organizations are parties and those to which both states and organizations are parties.

GENERAL ASSEMBLY ACTION

At 28 meetings between September 24 and December 4 the Sixth Committee of the 30th General Assembly considered two agenda items related to the Commission's work--"report of the International Law Commission" and "succession of states in respect of treaties." Over half of the member states took part in the debate and two resolutions were approved.

On November 26 Argentina introduced a draft resolution on the report of the Commission that was sponsored by 20 members, including the United States. The Committee approved the draft by consensus the same day. In the resolution's most important paragraphs the Assembly (1) approved the program of work planned by the Commission for 1976; (2) recommended that the Commission (a) complete at its next session the first reading of draft articles on the most-favored-nation clause, (b) continue "on a high priority basis" its work on state responsibility, in order to complete at the earliest possible time a first set of draft articles on the responsibility of states for internationally wrongful acts and to take up the separate topic of international liability for injurious consequences arising out of acts not prohibited by international law, and (c) proceed "on a priority basis" with preparing draft articles on the succession of states in respect of matters other than treaties; and (3) expressed confidence that the Commission would review the progress of its work and adopt the methods of work best suited to the speedy realization of the tasks entrusted to it.

The General Assembly adopted the resolution by consensus on December 15.

The agenda item on "succession of states in respect of treaties" concerned a 39-article draft convention that the International Law Commission had completed in 1974 and submitted to the 29th General Assembly. The Assembly, in turn, had adopted a resolution inviting member states to comment on the draft articles and on the procedures by which and the form in which work on the draft articles should be completed.

The United States was one of only 16 states to submit written comments during 1975. Its view, submitted on May 5, was that some of the articles needed further clarification, but that the most appropriate forum for this clarification would be a diplomatic conference convened "at an early date." These views were reiterated during the Sixth Committee's debate in the fall.

On December 3, by a vote of 70 (U.S.) to 1, with 28 abstentions, the Sixth Committee approved a resolution that had been introduced by the United Kingdom and amended by Mali and others. In the resolution's final form the Assembly requested written comments on the draft articles from states that had not yet submitted them and decided to convene a conference of plenipotentiaries in 1977 to consider the draft articles and to embody the results of its work in an international convention and such other instruments as it might deem appropriate.

The General Assembly adopted the resolution in plenary session on December 15 by a vote of 95 (U.S.) to 0, with 28 abstentions.

INTERNATIONAL TRADE LAW

The UN Commission on International Trade Law (UNCITRAL) was established by the General Assembly in 1966 to promote the progressive harmonization and unification of the law of international trade. The Commission is composed of 36 states elected by the Assembly for a term of 6 years.

Much of UNCITRAL's basic work is carried out by working groups, varying in size from 7 to 21 members, which meet between sessions of the full Commission to consider in detail topics on the agenda. The United States is a member of all of the working groups. The Commission also works closely with consultative groups of private experts, convened by the Secretary General, and with other UN and nongovernmental organizations engaged in work on topics of concern to it.

UNCITRAL's eighth session, which took place in Geneva, April 1-17, 1975, considered the following topics:

international sale of goods, international payments, international legislation on shipping, international commercial arbitration, multinational enterprises, and liability for damage caused by products involved in international trade. The U.S. Representative was Richard D. Kearney.

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Members in 1975 were Argentina, Australia, Austria, Barbados, Belgium, Brazil, Bulgaria, Chile, Cyprus, Czechoslovakia, Egypt, France, Gabon, Federal Republic of Germany, Ghana, Greece, Guyana, Hungary, India, Japan, Kenya, Mexico, Nepal, Nigeria, Norway, Philippines, Poland, Sierra Leone, Singapore, Somalia, Syria, Tanzania, U.S.S.R., United Kingdom, United States, and Zaire.

INTERNATIONAL SALE OF GOODS

The Commission's Working Group on this subject submitted a progress report on its revision of the Uniform Law on the International Sale of Goods, which deals with the obligations of buyers and sellers arising from international sales contracts. The purpose of the revision is to reach agreement on widely acceptable rules that can be understood by businessmen engaged in international trade.

The Working Group reported that it had reached tentative agreement on a text of 83 articles to be embodied in a new convention on international sale of goods. The articles followed as closely as possible the formulations in the 1974 Convention on the Limitation Period in the International Sale of Goods whenever there were articles on similar topics in the two texts. The Commission called on the Working Group to complete its work on the sales convention expeditiously.

INTERNATIONAL PAYMENTS

The Commission's Working Group on International Negotiable Instruments reported that it had continued its work on drafting a uniform law on international bills of exchange and promissory notes. The proposed law, to be incorporated in a convention, will establish uniform rules applicable to a new international negotiable instrument for optional use in international payments. In particular, the Working Group reported that it had reached conclusions on the following topics: the requirement to give notice when an instrument has been dishonored by nonacceptance or nonpayment and the conditions of such notice; the sum that is due to the holder and to a party secondarily liable; means by which a party may discharge his liability on an instrument; and the question of limitation of legal proceedings and prescription of rights arising in the context of an international instrument. UNCITRAL requested the Working Group to complete its work as soon as possible.

UNCITRAL also reviewed the 1974 revision of the "Uniform Customs and Practice for Documentary Credits," which had been prepared by the International Chamber of Commerce to allow for developments in transport technology and changes in commercial practice since the establishment of a previous text in 1962. The Commission commended the use of the new text in international transactions involving the establishment of a documentary credit.

"Security interests in goods"2/ appeared on the Commission's agenda for the first time since 1970, when it had requested the Secretary General to make a study of the rules in this area under the principal legal systems. The Secretary General's report, before the Commission in 1975, summarized a comparative law study prepared by a consultant and suggested that an important need in international commerce might be filled if a security interest, which would be enforceable by a foreign creditor against the debtor and third parties in the country where the goods were situated, were made available, through uniform rules, to merchants and trade and financing institutions. The Commission deferred any decision whether to take up the subject pending the submission of further information concerning the law in additional countries, particularly in Eastern Europe, and of a feasibility study on the possible scope and content of uniform rules on the subject.

INTERNATIONAL LEGISLATION ON SHIPPING

UNCITRAL noted with appreciation that its working Group on International Legislation on Shipping had completed its work by proposing a draft Convention on the Carriage of Goods by Sea to replace the 1924 Hague Rules and the (unratified) Brussels Protocol of 1968. The draft convention sets out rules relating to bills of lading, provides limits of liability of the carrier in the event of loss or damage to the goods, and defines the period of the carrier's responsibility for the cargo. It also covers liability of the shipper. The Commission decided to examine the draft in detail at its next session.

INTERNATIONAL COMMERCIAL ARBITRATION

. The Commission examined a preliminary draft set of arbitration rules for optional use in ad hoc arbitration relating to international trade that had been prepared by the Secretariat in cooperation with a special consultant and a group of arbitration experts. The aim of the 32 draft rules is to facilitate settlement through arbitration of disputes arising from international trade transactions.

The debate focused on the major issues dealt with in the individual articles as well as on the basic concepts underlying the draft. The Commission decided to ask the Secretary General to prepare a revised draft of

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A mechanism that provides the seller with a lien on property until full payment is made.

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