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ACTION EUR-12
INFO OCT-01 ISO-00 JUSE-00 SSO-00 NSCE-00 INRE-00 SS-15
NSC-05 AID-05 CEA-01 CIAE-00 COME-00 EB-07 EA-07
FRB-03 INR-07 IO-11 NEA-10 NSAE-00 OPIC-03 SP-02
TRSE-00 CIEP-01 LAB-04 SIL-01 OMB-01 L-03 EURE-00
OIC-02 /101 W
--------------------- 032984
O 111834Z FEB 76
FM USMISSION OECD PARIS
TO SECSTATE WASH DC IMMEDIATE 0586
LIMITED OFFICIAL USE SECTION 01 OF 04 OECD PARIS 04268
PASS: EB FOR BOEKER, L FOR FELDMAN, TREASURY FOR LANGE'
COMMERCE FOR ARRILL, JUSTICE FOR DAVIDOW, CIEP FOR
GRANFIELD
E.O.11652: N/A
TAGS: EINV, EFIN, OECD
SUBJECT: COMMITTEE ON INTERNATIONAL INVESTMENT AND MULTI-
NATIONAL ENTERPRISES (CIME) - CONSULTATIONS AND
MNE GUIDELINES
REF: OECD DOCUMENTS IME/WP/76.8, IME/WP/76.10, AND TV/CS
1. FOLLOWING ARE TEXTS OF NEW CIME DOCUMENTS
(IME/WP/76.8, IME/WP/76.10, AND TV/CS):
TEXT OF IME/WP/76.8 FOLLOWS:
INTERGOVERNMENTAL CONSULTATION PROCEDURES
ON THE IMPLEMENTATION OF THE GUIDELINES
(NOTE BY THE SECRETARIAT)
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IN THE LAST IME COMMITTEE MEETING THE CHAIRMAN PUT
FORWARD A COMPROMISE AS REGARDS THE POSSIBILITY FOR ENTER-
PRISES TO EXPRESS THEIR VIEWS DURING THE PROCEDURE. THIS
PROPOSAL STILL STANDS.
HOWEVER, THE DRAFTING GROUP WAS INSTRUCTED TO CON-
SIDER WHETHER IN ADDITION TO GOVERNMENTS OTHERS COULD
RAISE QUESTIONS TO THE COMMITTEE.
THE ANNEXED TEXT MAY FACILITATE THE DISCUSSION.
COMMENTS:
PARAGRAPH 1: PURE DRAFTING CHANGES.
PARAGRAPHS 2, 3 AND 4 ARE BASED ON THE ASSUMPTION THAT
THE COMMITTEE SHOULD NOT DEAL WITH THE APPLICATION OF
THE GUIDELINES AND PASS NO JUDGEMENT ON THE BEHAVIOUR OF
SPECIFIC ENTERPRISES.
THE TEXT OF PARAGRAPH 2 HOWEVER AIMS AT GIVING COMPETENCE
TO THE COMMITTEE FOR GIVING AN INTERPRETATION OF THE
GUIDELIN ES AS DISTINCT FROM APPLICATION OR IMPLEMENTA-
TION. IT FURTHER PERMITS NOT ONLY A MEMBER COUNTRY BUT
EQUALLY A MULTINATIONAL ENTERPRISE TO RAISE A QUESTION
OF INTERPRETATION UNDER CERTAIN STRICT CONDITIONS.
PARAGRAPH 3 LAYS DOWN ELEMENTS OF PROCEDURE IN CASE
PARAGRAPH 2 SHOULD BE APPROVED.
PARAGRAPH 6 CORRESPONDS TO A SUGGESTION MADE BY THE U.K.
DELEGATION.
ANNEX
INTERGOVERNMENTAL CONSULTATION PROCEDURES
ON THE IMPLEMENTATION OF THE GUIDELINES
1. THE (COMMITTEE) SHALL PERIODICALLY OR AT THE REQUEST
OF A MEMBER COUNTRY HOLD AN EXCHANGE OF VIEWS ON MATTERS
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RELATED TO THE GUIDELINES AND THE EXPERIENCE GATHERED
IN THEIR IMPLEMENTATION. THE (COMMITTEE) SHALL ALSO
PERIODICALLY INVITE BIAC AND TUAC TO EXPRESS THEIR
VIEWS ON THESE SUBJECTS.
2. UPON REQUEST OF A MEMBER COUNTRY, THE (COMMITTEE)
SHALL, ACTING BY MAJORITY, GIVE AN INTERPRETATION OF
THE GUIDELINES.
THE (COMMITTEE) MAY EQUALLY GIVE AN INTERPRETATION
OF THE GUIDELINES UPON A WRITTEN APPLICATION SUBMITTED
TO IT BY A MULTINATIONAL ENTERPRISE SHOWING TO THE SATIS-
FACTION OF THE (COMMITTEE) A LEGITIMATE INTEREST, THE
REASONS WHY AND THE CIRCUMSTANCES UNDER WHICH IT RAISES
THE QUESTION.
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ACTION EUR-12
INFO OCT-01 ISO-00 JUSE-00 SSO-00 NSCE-00 SS-15 NSC-05
AID-05 CEA-01 CIAE-00 COME-00 EB-07 EA-07 FRB-03
INR-07 IO-11 NEA-10 NSAE-00 OPIC-03 SP-02 TRSE-00
CIEP-01 LAB-04 SIL-01 OMB-01 L-03 EURE-00 INRE-00
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FM USMISSION OECD PARIS
TO SECSTATE WASH DC IMMEDIATE 0587
LIMITED OFFICIAL USE SECTION 02 OF 04 OECD PARIS 04268
3. IN CONSIDERING EACH REQUEST THE COMMITTEE SHALL
DETERMINE THE PROCEDURE TO BE FOLLOWED INCLUDING THE
DESIRABILITY OF INVITING ENTERPRISES TO EXPRESS THEIR
VIEWS. (THE COMMITTEE MAY REQUEST THE ADVICE OF A PANEL
OF INDEPENDENT EXPERTS' APPOINTED BY THE SECRETARY-
GENERAL.) (THE COMMITTEE MAY CALL UPON AN INDEPENDENT
PANEL SELECTED BY THE SECRETARY-GENERAL TO
CARRY OUT A ROLE OF FACT-FINDING AND ULTIMATELY TO
ADVISE THE COMMITTEE ON ISSUES RAISED IN CONNECTION WITH
SUCH REQUEST,) (IT BEING UNDERSTOOD THAT THE COMMITTEE
WOULD NOT BE BOUND BY THE ADVICE OF THE PANEL.)
4. THE (COMMITTEE) SHALL IN ALL EVENTS ABSTAIN FROM
PASSING CONCLUSIONS ON THE BEHAVIOUR OF SPECIFIC ENTER-
PRISES.
5. FORMER PARAGRAPH 4 UNCHANGED: MEMBER COUNTRIES MAY
REQUEST THAT CONSULTATIONS BE HELD IN THE (COMMITTEE) ON
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ANY PROBLEM ARISING FROM THE FACT THAT MULTINATIONAL
ENTERPRISES ARE MADE SUBJECT TO CONFLICTING REQUIREMENTS.
GOVERNMENTS CONCERNED WILL CO-OPERATE IN GOOD FAITH TO
RESOLVE SUCH PROBLEMS, EITHER WITHIN THE (COMMITTEE) OR
THROUGH OTHER MUTUALLY ACCEPTABLE ARRANGEMENTS.
6. EACH (THREE) YEARS THE (COMMITTEE) SHALL REPORT TO
THE COUNCIL ON ALL MATTERS RELATED TO THE GUIDELINES AS
WELL AS THEIR IMPLEMENTATION, AND THE VIEWS THEREON
EXPRESSED BY INTERESTED PARTIES AND THEIR ORGANISATIONS.
END TEXT
TEXT OF IME/WP/76.10 FOLLOWS:
THE PACKAGE
(NOTE BY THE SECRETARIAT)
AT THE LAST IME COMMITTEE MEETING THE SECRETARIAT
WAS INVITED TO DRAFT AN OVERALL INSTRUMENT BY WHICH THE
COUNCIL ADOPTS THE GUIDELINES AS WELL AS THE INSTRU-
MENTS ON NATIONAL TREATMENT AND ON INCENTIVES AND DIS-
INCENTIVES IN ONE PACKAGE.
THE ANNEXED DRAFT HAS BEEN DRAWN UP IN THE CLASSI-
CAL LEGAL FORM, TO BE CHANGED SUBSEQUENTLY INTO MORE
PROSAIC WORDING, REPLACING THE CLASSICAL REPETITION OF
"THAT" BY WORDS SUCH AS "DESIROUS," "DETERMINED,"
"RESOLVED," ETC. ONCE THERE IS AGREEMENT ON THE LEGAL
FORM, THE STRUCTURE AND THE SUBSTANCE.
THE PAPER IS MEANT OF COURSE TO BE DISCUSSED AT THE
MARCH MEETING OF THE IME COMMITTEE BUT, IN ORDER TO SAVE
TIME, IT IS BEING CIRCULATED NOW, I.E. BEFORE THE FORTH-
COMING MEETING OF THE DRAFTING GROUP (16TH AND 17TH
FEBRUARY) IN CASE DELEGATIONS WOULD LIKE TO PRESENT THEIR
FIRST REACTIONS ON THAT OCCASION, GIVING THE SECRETARIAT
A FIRST ORIENTATION OF THE MERITS OF THIS CONCEPT.
DRAFT OF A
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DECLARATION (AGREEMENT AND DECISION) APPROVED
(CONCLUDED AND TAKEN) BY THE COUNCIL AT ITS
MEETING ON
THE GOVERNMENTS OF OECD MEMBERS:
DECLARE (CONSIDERING):
1. THAT INTERNATIONAL INVESTMENT HAS ASSUMED INCREASED
IMPORTANCE IN THE WORLD ECONOMY AS WELL AS IN THE
DEVELOPMENT OF THEIR COUNTRIES, CONTRIBUTING TO THEIR
ECONOMIC DEVELOPMENT BY PROMOTING THE EFFICIENT USE
OF THEIR RESOURCES;
2. THAT AN IMPORTANT PART OF SUCH INVESTMENT IS REALISED
THROUGH MULTINATIONAL ENTERPRISES;
3. THAT MEMBER GOVERNMENTS CAN - IN CONFORMITY WITH THE
OECD CONVENTION, AND IN PARTICULAR ARTICLE 2 THERE-
OF - BEST FURTHER THIS INVESTMENT PROCESS BY
ENDEAVOURING JOINTLY TO SOLVE OR MINIMISE THE PROB-
LEMS WHICH MAY ARISE FROM INTERNATIONAL INVESTMENT,
IN PARTICULAR BY MULTINATIONAL ENTERPRISES;
4. THAT MULTINATIONAL ENTERPRISES ENJOY A GREATER AREA
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ACTION EUR-12
INFO OCT-01 ISO-00 JUSE-00 SSO-00 NSCE-00 SS-15 NSC-05
AID-05 CEA-01 CIAE-00 COME-00 EB-07 EA-07 FRB-03
INR-07 IO-11 NEA-10 NSAE-00 OPIC-03 SP-02 TRSE-00
CIEP-01 LAB-04 SIL-01 OMB-01 L-03 EURE-00 INRE-00
OIC-02 /101 W
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FM USMISSION OECD PARIS
TO SECSTATE WASH DC IMMEDIATE 0588
LIMITED OFFICIAL USE SECTION 03 OF 04 OECD PARIS 04268
OF FREEDOM THAN ENTERPRISES EXERCISING THEIR ACTI-
VITIES WITHIN ONE JURISDICTION ONLY, IN PARTICULAR
AS REGARDS THE GEOGRAPHICAL DISTRIBUTION OF THEIR
FUNCTIONS, SUCH AS PRODUCTION, EXPORTATION AND
RESEARCH, THE DISTRIBUTION OF REWARDS AMONG THEIR
SUBSIDIARIES AND THEIR RESPONSIVENESS TO GOVERNMENT
POLICIES, INCLUDING SOCIAL POLICIES, AIMED AT
INCREASING LOCAL BENEFITS;
5. THAT THE EXISTENCE AND USE OF THAT FACULTY SOMETIMES
GIVE RISE TO ANXIETIES AND CONTROVERSIES IN BOTH
HOME AND HOST COUNTRIES;
6. THAT, ALTHOUGH MULTINATIONAL ENTERPRISES ARE SUBJECT
TO AND MUST RESPECT FULLY THE APPLICABLE LAW IN THE
COUNTRIES WHERE THEY OPERATE, THE USE OF THEIR AREA
OF FREEDOM EXCEEDS THE SCOPE OF NATIONAL LEGISLA-
TION;
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7. THAT, ALTHOUGH SOLUTIONS MIGHT ULTIMATELY BE FOUND
TO SOME PROBLEMS THROUGH THE HARMONISATION OF
NATIONAL LEGISLATION OR BY INTERNATIONAL AGREEMENT,
THIS WOULD NOT APPEAR TO BE FEASIBLE FOR THE TIME
BEING;
8. THAT, THEREFORE, MEMBER GOVERNMENTS OF OECD,
RESOLVED TO INTENSIFY THEIR CO-OPERATION AND CON-
SULTATION ON ISSUES RELATING TO INTERNATIONAL
INVESTMENT AND MULTINATIONAL ENTERPRISES, HAVE DRAWN
UP THE FOLLOWING THREE INTER-RELATED INSTRUMENTS,
ANNEXED TO THIS DECLARATION, WHICH, ALTHOUGH EACH
DEALS WITH A DIFFERENT ASPECT OF THE MATTER, ARE
AIMED AT CONSTITUTING TOGETHER A FIRST STEP UNDER-
TAKEN WITHIN THE OECD TO SOLVING THE AFOREMENTIONED
PROBLEMS:
ANNEX L: GUIDELINES FOR MULTINATIONAL ENTERPRISES WHICH
PRESENT' IN THE INTRODUCTION, THE GENERAL ORIENTA-
TION OF MEMBER COUNTRIES TOWARD MULTINATIONAL ENTER-
PRISES, INCLUDING GOVERNMENTS' MOST BASIC RESPONSI-
BILITIES TO THESE ENTERPRISES, AND ESTABLISH STAN-
DARDS WHICH SHOULD GUIDE THEIR BUSINESS CONDUCT;
ANNEX II: A DECLARATION AND DECISION ON NATIONAL TREAT-
MENT IN WHICH MEMBER GOVERNMENTS ENDORSE THE PRIN-
CIPLE THAT THEY WILL EXTEND TO ENTERPRISES OWNED OR
CONTROLLED BY NATIONALS OF OTHER MEMBER COUNTRIES
TREATMENT NO LESS FAVOURABLE THAN THAT ACCORDED TO
DOMESTIC ENTERPRISES AND AGREE TO CONSULT ONE ANOTHER
ON THE IMPLEMENTATION OF THIS PRINCIPLE;
ANNEX III: A DECLARATION AND DECISION ON OFFICIAL
INCENTIVES AND DISINCENTIVES IN WHICH MEMBER
COUNTRIES AGREE TO CONSULT ON MEASURES THAT
ENCOURAGE OR DISCOURAGE INTERNATIONAL INVESTMENT
FLOWS WITH THE AIM, STATED IN THE INSTRUMENT, OF
MINIMISING POTENTIAL HARM TO THE INTERESTS OF OTHER
MEMBER COUNTRIES.
AGREE HEREBY
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(1) TO RECOMMEND JOINTLY TO MULTINATIONAL ENTERPRISES
OPERATING IN THEIR TERRITORIES THE OBSERVANCE OF THE
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ACTION EUR-12
INFO OCT-01 ISO-00 JUSE-00 SSO-00 NSCE-00 SS-15 NSC-05
AID-05 CEA-01 CIAE-00 COME-00 EB-07 EA-07 FRB-03
INR-07 IO-11 NEA-10 NSAE-00 OPIC-03 SP-02 TRSE-00
CIEP-01 LAB-04 SIL-01 OMB-01 L-03 EURE-00 INRE-00
OIC-02 /101 W
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FM USMISSION OECD PARIS
TO SECSTATE WASH DC IMMEDIATE 0589
LIMITED OFFICIAL USE SECTION 04 OF 04 OECD PARIS 04268
GUIDELINES, ATTACHED AS ANNEX I TO THIS DECLARATION,
IN THE LIGHT OF THE INTRODUCTORY STATEMENT PRECEDING
THESE GUIDELINES;
(2) TO ADOPT THE INSTRUMENTS AS SET FORTH IN ANNEXES II
AND III TO THIS DECLARATION;
(3) TO CONSULT ONE ANOTHER ON MATTERS RELATED TO THE
GUIDELINES AS WELL AS THEIR IMPLEMENTATION AND
INTERPRETATION, TAKING INTO ACCOUNT THE VIEWS
EXPRESSED BY INTERESTED PARTIES AND THEIR ORGANISA-
TIONS, IN CONFORMITY WITH THE PROCEDURES LAID DOWN
IN ANNEX IV TO THIS DECLARATION.
DECIDE:
TO CHARGE THE COMMITTEE ON INTERNATIONAL INVESTMENT
AND MULTINATIONAL ENTERPRISES
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(A) TO FULFIL THE TASK PURSUANT TO THE PROCEDURES
LAID DOWN IN ANNEX IV; AND
(NEW MANDATE)
END TEXT
TEXT OF TV/CS FOLLOWS:
COMMITTEE ON INTERNATIONAL INVESTMENT
AND MULTINATIONAL ENTERPRISES
ON THE PROPOSAL OF THE GERMAN DELEGATION, THE MEET-
ING OF THE DRAFTING GROUP WILL BE FOLLOWED (IN THE AFTER-
NOON OF TUESDAY, 17TH FEBRUARY, OR IN THE MORNING OF
WEDNESDAY, 18TH FEBRUARY) BY AN INFORMAL EXCHANGE OF
VIEWS AMONGST MEMBERS OF THE GROUP TO DISCUSS THE PRE-
PARATION OF THE SO-CALLED "LIMA CONFERENCE."
END TEXT
TURNER
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