34 TIAS 5929; 16 UST 1942. The U.S. Governor of the IBRD, Secretary of the Treasury Henry H. Fowler, was authorized to agree to this amendment by Public Law 89-126, approved Aug. 14, 1965 (79 Stat. 519). The Board of Governors of the IBRD adopted the amendment, Aug. 25, 1965, and the Executive Directors of the IBRD approved its adoption by a resolution of Dec. 16, 1965. For the Articles of Agreement of the IBRD, see A Decade of American Foreign Policy: Basic Documents, 1941-1949, pp. 251-273. For the significance of this amendment to the International Finance Corporation, see post, doc. II-89.

35 Department of State Bulletin, Dec. 6, 1965, pp. 923–925.

tion on the Unification of Certain Rules Relating to International Transportation by Air."

The Warsaw Convention was signed in 1929 and entered into force for the United States in 1934. The principal effect of the convention is to limit the liability of air carriers for personal injury or death of passengers in international air transportation to approximately $8,300 per passenger in most cases. The convention was amended by a protocol signed at The Hague in 1955 which raised the limits of liability to approximately $16,600 per passenger, but the United States has never ratified this protocol."

Today's action was taken under article 39 of the convention, which provides that any member country may denounce the convention upon 6 months' notice. The notification carries out a decision, made known

38 49 Stat. 3000.

27 "On May 26-27, 1965, the Committee on Foreign Relations of the U.S. Senate held hearings on the Hague Protocol to the Warsaw Convention at which the limitation of airline liability for death and injury in international air transportation was considered. On June 29, 1965, the Committee recommended that the Senate advise and consent to ratification of the Hague Protocol, Executive Report No. 3, 89th Congress, 1st session (June 29, 1965)..

"On August 20, 1965, Thomas C. Mann, Under Secretary of State for Economic Affairs, appeared before the Senate Committee on Foreign Relations. He indicated in his statement that the Executive Branch was considering withdrawing the Hague Protocol [Executive H, 86th Cong., 1st sess.] and denouncing the Warsaw Convention unless the air carriers voluntarily agreed to provide, or Congress enacted legislation requiring them to provide, substantial complementary insurance for death or injury of passengers in international air transportation." (Note in International Legal Materials: Current Documents, vol. V, No. 1, Jan. 1966 (Washington: American Society of International Law, 1966), p. 122.)

Specifically, the Administration recommended ratification of the Hague Protocol, provided it was accompanied by a law requiring American airlines with international routes to carry $50,000 insurance for each passenger. The Foreign Relations Committee endorsed the protocol, with this proviso.

Mr. Mann told the Senators, however, that opposition from the airlines had brought efforts to secure passage of the compulsory supplemental insurance bill to a "dead end," and declared there was no prospect of obtaining the legislation from either the House or Senate Commerce Committees.

Under the circumstances, the Foreign Relations Committee agreed that the Hague Protocol should be left on the Senate calendar to die. (See The New York Times, Aug. 21, 1965.)

previously, that the United States would give notice of denunciation of the Warsaw Convention on November 15, unless by that time satisfactory provisional arrangements for the protection of international air passengers had been worked out among the principal international air carriers. A plan for a provisional arrangement whereby the international carriers serving the United States would waive their limits of liability up to $50,000 per passenger was recently proposed by the International Air Transport Association. However, the IATA proposal would have applied only to transportation to and from the United States covered by the Hague Protocol. Since the United States has not ratified the Hague Protocol, the IATA proposal would thus have been inapplicable to the great majority of United States travelers. In addition, it was felt that a ceiling of only $50,000 on recovery by victims of air disasters would not justify continued adherence by the United States to the Warsaw Convention.

The United States would be prepared to withdraw the notice of denunciation deposited today if prior to its effective date of May 15, 1966, there is a reasonable prospect of an international agreement on limits of liability in international air transportation in the area of $100,000 per passenger or on uniform rules but without any limit of liability, and if, pending the effectiveness of such international agreement, there is a provisional arrangement among the principal international airlines waiving the limits of liability up to $75,000 per passenger.

As stated in the note delivered today by the American Embassy in Warsaw to the Polish Government, the United States wishes to make clear that the action to denounce the Warsaw Convention is taken solely because of the convention's low limits of liability for injury or death to passengers, and in no way represents a departure from the longstanding commitment of the United States to the tradition of international cooperation in matters relating to civil aviation.

In this connection, the United States notes that the Council of the

In a statement by Robert J. McCloskey, Director of the Office of News, Department of State, at a news conference, Oct. 20, 1965.

Nov. 3, 1965.

International Civil Aviation Organization has called an international conference in Montreal beginning on February 1, 1966, to consider revision of the limits of liability for passengers under the Warsaw Convention. The United States welcomes the recognition by ICAO of the need to reconsider the question of compensation to victims of international air disasters. The United States will participate fully in the Montreal conference and hopes that it will be possible to arrive at an international consensus on this important question.

TEXT OF NOTICE OF DENUNCIATION

EXCELLENCY: I have the honor, under instructions from my Government, to give formal notification to the Government of the Polish People's Republic of the denunciation by the Government of the United States of America, for itself, its territories, and all other areas under its sovereignty or authority, of the Convention for the Unification of Certain Rules relating to International Transportation by Air and the Additional Protocol relating thereto signed at Warsaw on October 12, 1929. This notification is given in accordance with the provisions of Article 39 of the Convention.

The United States of America wishes to state that it gives this notification solely because of the low limits of liability for death or personal injury provided in the Warsaw Convention, even as those limits would be increased by the Protocol to amend the Convention done at The Hague on September 28, 1955.

My Government would appreciate it if the Government of the Polish People's Republic would inform the Government of each of the High Contracting Parties to the Convention of this notification and the reason therefor. My Government would also appreciate it if the Government of the Polish People's Republic would inform the Governments of the High Contracting Parties that the United States of America wishes to make clear its continued desire to maintain its tradition of international cooperation in matters relating to civil aviation. To this end, the United States of America stands ready to participate in the negotiation of a revision of the Warsaw

should be encouraged to implement these plans by loans for capital expenditures, operating agencies, technical assistance, or other means compatible with the Chicago Convention, before applying to ICAO for joint international financing under the Convention. The Council is also directed to follow and analyze pertinent developments in operational research, systems analysis, and cost/ benefit methodology for possible use by countries in planning air navigation facilities and services.

The United States supported a Colombian proposal directing the ICAO Council to study the technical aspects of outer space activities that affect international air navigation. (It was understood that legal questions raised by space activities would continue to be left to the United Nations.) Since the technical work of ICAO has been directed mainly to international commercial air transport and, since international general aviation has now become a significant proportion of total operations, the Assembly directed the Council to examine the ICAO Standards and Recommended Practices to determine their suitability for all international civil aviation.

As a result of a U.S. initiative, the Assembly also adopted a resolution directing the Council to study on a worldwide or regional basis the development of international air passenger travel. The Council, in carrying out its continuing functions in the economic field, is also to prepare long- and medium-term forecasts of future trends and developments in civil aviation of both a general and specific kind.

The Assembly voted down an amendment to the Chicago Convention proposed by 31 African states which would have provided for the suspension or exclusion from the Organization of any country that practices a policy of apartheid. Instead, the Assembly adopted a resolution, introduced by the same group, that condemned the apartheid policies of South Africa and

urged it to comply with the Convention.“

Included among the 27 governments elected to the ICAO Council to serve for the next 3 years were the following new members: Costa Rica, Czechoslovakia, Kenya, and Sweden.

INTERNATIONAL DEVELOPMENT ASSOCIATION

Document II-88

Report of the National Advisory Council on International Monetary and Financial Problems, Submitted May 26, 1966 (Excerpt)“

Activities of

the International
Development Association
During the Period
January 1-June 30, 1965

In the first half of 1965, the IDA authorized development credits to

"The U.S. took the position that political matters should not be raised in technical bodies like ICAO, any action expelling a member must be authorized by its constitution, and that it is undesirable for the provisions governing organizations like ICAO to provide for expulsion on the basis of disapproval of political policies." (Report of the U.S. delegation to the Fifteenth Session of the Assembly of the International Civil Aviation Organization, Montreal, Canada, June 22-July 16, 1965, submitted to the Secretary of State by the Chairman of the delegation, Charles S. Murphy, Chairman of the Civil Aeronautics Board, Aug. 10, 1965, p. 37.) The U.S. delegation voted against the amendment to exclude from ICAO any country that practices a policy of apartheid, July 14, 1965, and it abstained in the vote on the resolution condemning the apartheid policies of South Africa, July 16, 1965.

"H. Doc. 449, 89th Cong., May 31, 1966, pp. 16-18.

taling $85 million for constructive projects in six member countries. Since the IDA extended its first development credit in May 1961, it has approved through June 30, 1965, a total of 77 credits amounting to over $1 billion to 29 countries in Africa, Asia, the Middle East, Europe, and the Western Hemisphere for purposes in the main similar to those of loans by the International Bank. These credits have a maturity of 50 years, bear no interest, and are repayable in foreign exchange. However, a service charge of threequarters of 1 percent per annum, payable on amounts withdrawn and outstanding, is made to meet IDA's administrative expenses. The favorable terms are intended to impose a lesser burden than conventional loans on the already difficult debtservicing situation of borrowing countries.

IDA DEVELOPMENT CREDITS AND

DISBURSEMENTS

The IDA in the first half of 1965 approved seven credits totaling $85.2 million, compared to authorized credits of over $200 million in the preceding half-year period. The seven credits were for road projects ($28.2 million) in Honduras, Kenya, Nigeria, and Somalia; for agriculture ($27 million) in Pakistan; for education ($20 million) in Nigeria, and for private industry ($10 million) in Turkey (see table 9). In Somalia, additional funds totaling $7.2 million were provided through joint financing by the European Development Fund of the European Economic Community, and by the United Nations Special Fund.

As indicated in table 10, through the end of June 1965, the IDA authorized 77 credits totaling $1,085.5 million for economic development projects in 29 member countries. Transportation, agriculture and forestry, and industry received the bulk of the financing (74 percent), and Asia and the Middle East continued to be the largest recipients of IDA funds. Although the purposes of IDA financing are for the most part the same as those of the International Bank, IDA credits for the construction and equipping of

of the industrial (Part I) member countries are payable in gold or freely convertible currencies. With respect to the remaining subscriptions of the 76 Part II countries, 10 percent is payable in gold or freely convertible currencies and the balance in the currency of the respective member countries, which may be used by the IDA only with their consent.

At the request of the Board of Governors in 1962, the Executive Directors considered the adequacy of IDA resources and recommended that additional usable funds totaling $750 million be provided through supplementary contributions by Part I members. The recommendations of the Executive Directors were subsequently approved by the Board of Governors and formalities were completed for the first general replenishment of IDA's funds. Accordingly, agreed payments totaling $750 million, including the initial subcriptions of Belgium and Luxembourg, are to be made in three annual installments beginning in November 1965. (In addition to the agreed $750 million, the Government of Kuwait subsequently agreed to provide $3.4 million as part of the same arrangement.) The annual payments by the United States, amounting to $104 million each, are to be made in the form of a letter of credit.

At the end of June 1965, convertible funds available to the IDA totaled approximately $1.6 billion, including the initial and supplementary subscriptions of member countries, and the transfer of $50 million from the World Bank."

48 For details, see American Foreign Policy: Current Documents, 1964, pp. 226233.

47 After the close of the period under review, the Executive Directors of the International Bank recommended to the Board of Governors that $75 million of fiscal 1965 net income be transferred to the IDA as a second grant. [Footnote in source text.]