TREATIES AND OTHER INTERNATIONAL ACTS SERIES 14-618

________________________________________________________________________

DEFENSE

Facilities and Areas and the Status of

United States Armed Forces

Agreement Between the

UNITED STATES OF AMERICA

and the REPUBLIC OF KOREA for

Special Measures relating to Article V of the

Agreement under Article IV of the 

Mutual Defense Treaty 

Signed at Seoul February 2, 2014

with

Implementation Arrangement

and 

Exchanges of Notes and Correcting Notes
 NOTE BY THE DEPARTMENT OF STATE

 Pursuant to Public Law 89—497, approved July 8, 1966

(80 Stat. 271; 1 U.S.C. 113)—

“. . .the Treaties and Other International Acts Series issued

under the authority of the Secretary of State shall be competent

evidence . . . of the treaties, international agreements other than

treaties, and proclamations by the President of such treaties and

international agreements other than treaties, as the case may be, 

therein contained, in all the courts of law and equity and of maritime

jurisdiction, and in all the tribunals and public offices of the

United States, and of the several States, without any further proof

or authentication thereof.”
 REPUBLIC OF KOREA

 Defense: Facilities and Areas and the

 Status of United States Armed Forces

 

Agreement for special measures relating to Article V 

 of the agreement under Article IV of the 

Mutual Defense Treaty.

 Signed at Seoul February 2, 2014;

 Entered into force June 18, 2014.

 With implementation arrangement and

 exchanges of notes and correcting notes.

 

 
AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND THE

REPUBLIC OF KOREA CONCERNING SPECIAL MEASURES RELATING

TO ARTICLE V OF THE AGREEMENT UNDER ARTICLE IV OF THE

MUTUAL DEFENSE TREATY BETWEEN THE UNITED STATES OF

AMERICA AND THE REPUBLIC OF KOREA REGARDING FACILITIES

AND AREAS AND THE STATUS. OF UNITED STATES ARMED FORCES IN

1 HE REPUBLIC OF KOREA
The United States of America and the Republic of Korea (hereinafter referred

to as "the Parties") have agreed to take the following special measures relating to

Article V of the Agreement under Article IV of the Mutual Defense "Freaty between

the United States of America and the Republic of Korea Regarding Facilities and

Areas and the Status of United States Armed Forces in the Republic of Korea

(hereinafter referred to as "the Status of Forces Agreement"), signed at Seoul on July

9, 1966., as amended.. which sets forth the principles on the sharing of expendituresincident to the maintenance of the United States Armed Forces in, the Republic of

Korea, in recognition of the goal of a: strong and mutual commitment to: the United

Slates of America - Republic of Korea alliance.

Article I

The. Republic of Korea Shall bear, for the duration of this Agreement, as a

special measure relating to Article V . of the Status a Forces. Agreement, a part of the

expenditures associated with the stationing, of the United States Armed Forces in the

Republic of Korea. The contribution of the Republic of Korea shall be categorized

into Labor Cost Sharing; Logistics. Cost Sharing. and Republic. of Korea Funded.

Construction (ROKFC). Implementation of this Agreement shall be: in accordance

with .a separate implementation arrangement between the concerned authorities of the

Parties.

The Parties shall put- in utmost efforts to enhance accountability and

transparency for implementation of this Agreement. In this regard, the Exchange of

Notes on System Improvements shall be adopted and enter into force at the same date

as this Agreement.
Article II

This Agreement shall determine the contribution of the Republic of Korea for

2014 through 2018. The contribution of the Republic of Korea for 2014 is 920 billion

Korean Won. The 2015 through 2018 contributions shall be determined by increasing

the contribution of the previous year by the inflation rate (Consumer Price Index)

published by Statistics Korea using the 2013 rate for the 2015 contribution, the 2014

rate for 2016, the 2015 rate for 2017, and the 2016 rate for 2018. Further,: the inflation

rate used for any given year shall not exceed four percent.

Article III

The Labor Cost Sharing contributions shall consist of cash support and the

Logistics Cost Sharing contributions shall consist of in-kind support. Republic of

Korea Funded Construction shall consist of cash contributions and in-kind

contributions.. In this regard. the Exchange of Notes on ROKFC Implementation

Principles,shall be adopted and enter into force on the same date as this Agreement. If

unexecuted in-kind contributions remain at the end of the year; those contributions

shall roll over to the next year. The concerned authorities of the Parties shall put in

their utmost efforts to minimize unexecuted contributions.

Each. year's Labor Cost Sharing payments shall be made: in three equal

payments on or before April 1, June 1, and August 1 of that year. ROKFC cash

contributions, shall be paid on March I of each program year.
Article IV

All materials, supplies, equipment, and services provided as part of the in- ••

kind contribution shall be exempt from Republic of Korea taxes, or provided on an

after-tax basis. Such materials, supplies, equipment, and services procured by the

Government of the Republic of Korea shall be exempt from individual consumption

taxes and value added taxes. In the case of value Added taxes, the zero rate shall be

applied. if taxes are levied against any such materials, supplies, equipment, or

services, payment of such taxes shall not be made from cost-sharing funding.

Article V

This Agreerrierit sh#J1 entpr into force upon the date of the exchange of written

notifications by the Parties that their respective domestic legal procedures necessary

for the entry into force of this Agreement have been completed, and shall remain in

force until December 31, 2018.

The termination of this Agreement shall not, affect the carrying out of any

Logistics. Cost Sharing contributions or Republic. of Korea Funded. Construction:

projects which are selected every year in accordance with the agreed procedures under

this Agreement, and not fully executed as of the date of termination of this

Agreement
Article VI

The Parties may consult on all matters, regarding this Agreement through the

Joint Committee provided for in Paragraph I of Article XXVIII of the Status of Forces

Agreement, or through the Joint Cost-Sharing Committee, which is composed of

representatives appointed by the Parties.

Article VII

This. Agreement may be, revised and amended by: written agreement of the

Parties. Such amendments shall enter into force pursuant to the process provided in

Article V.

IN WITNESS WHEREOF, the undersigned, duly authorized for the purpose,

have signed this Agreement.

DONE at S e"I this 2114 day of Ft,imet417 20 19- in duplicate, in

the English and Korean lartgua.ges, both texts being equally authentic.

fORTEIEUNIITD STATES OF AMERICA FOR THE REPUBLIC OF KOREA
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Implementation Arrangement for the Special Measures Agreement
Implementation Arrangement for the Special Measures Agreement

This arrangement shall be used to implement the Agreement between the United States of

America and the Republic of Korea concerning Special Measures Relating to Article V of the

Agreement under Article IV of the Mutual Defense Treaty between the United States of America

and the Republic of Korea regarding Facilities and Areas and the Status of United States of

America Armed Forces in the Republic of Korea (hereinafter referred to as "SMA"), signed on

February 2, 2014, and the Exchange of Notes on System Improvements and the Exchange of

Notes on ROKFC Implementation Principles under the Agreement concerning Special Measures

relating to Article V of the Agreement under Article IV of the Mutual Defense Treaty between

the United States of America and the Republic of Korea regarding Facilities and Areas and the

Status of United States Armed Forces in the Republic of Korea both exchanged on February 26,

2014 (hereinafter referred to as "Exchange of Notes on System Improvements" and "Exchange

of Notes on ROKFC Implementation Principles," respectively).

1. The Republic of Korea (ROK) Ministry of National Defense (MND) and U.S. Forces Korea

(USFK) shall comprehensively review and assess the USFK allocation requirements for the three

cost-sharing categories (Labor Cost Sharing, Logistics Cost Sharing (LCS), and ROK Funded

Construction (ROKFC)), based on relevant documents and materials, through the Joint Cost

Sharing Committee.

a. FOr the comprehensive review and assessment on the amount of allocations, USFK shall

provide relevant materials no later than two (2) weeks prior to the Joint Cost Sharing Committee

session. At this time, USFK shall provide ROK MND detailed materials that can serve as a basis

for the allocations. Relevant materials for Labor Cost Sharing include the number of employees

to be supported by SMA funds, estimated cost of these employees, and explanation of known

adjustments to the number of employees and pay. Relevant materials for ROKFC include the

draft project list and brief project descriptions. Relevant materials for LCS include the individual

project list.

b. In accordance with this procedure, USFK shall provide ROK MND the 2014 allocation

for each cost-sharing category within 45 days of the SMA entering into force. As for the

allocations for each category from 2015 to 2018, USFK shall provide ROK MND the estimated

amount of allocations for the three cost sharing categories by March 15 of the year before the

year of execution. The final amount of allocations shall be provided by August 31 of the year

before the year of execution taking into full consideration the aforementioned joint review and

assessment. When the amount of allocation for each cost-sharing category is being determined,

the allocation for Labor Cost Sharing shall be reviewed and assessed first.

2. The ROK SMA contribution shall be paid in Korean Won and distributed among the following

categories:

a. Labor Cost Sharing.

Labor Cost Sharing contributions shall be paid in cash. Taking into consideration that a

significant portion of SMA contribution is provided for labor cost sharing, USFK shall continue
to endeavor to enhance the welfare and well-being of its Korean National workforce and shall

not terminate employment unless there is just cause or unless such employment is inconsistent

with the military requirements of the U.S. Aimed Forces. When military requirements make

reductions necessary, USFK shall endeavor to minimize employee terminations to the extent

possible. Contributions provided by the ROK shall be used solely for salaries and benefits of the

USFK Korean National employees in the ROK. USFK shall provide an annual execution report

for the previous year to the Programming and Budgeting Bureau of ROK MND (Director

General of Programming and Budgeting Bureau) not later than March 1 for the previous year.

The annual execution report shall include details such as the number of employees that received

support from the SMA program, payment distribution by organization and pay category,

distribution of employees by position, number of employees for each pay grade, and explanation

of adjustments in the number of employees and pay. The total amount of the ROK contribution

shall be no more than seventy-five (75) percent of the labor costs for USFK's Korean National

work force.

b. Republic of Korea Funded Construction (ROKFC)

The ROKFC program is a cash and in-kind program. As stated in Principle 6 of the Exchange of

Notes on ROKFC Implementation Principles, design and construction oversight, which average

twelve (12) percent of the total project costs, are paid by the ROK in cash. Other ROKFC

contributions shall be provided in-kind, in principle.

In accordance with Principle 9 of the Exchange of Notes on ROKFC Implementation, additional

cash contributions for ROKFC shall be made available in exceptional cases where ROK MND

and USFK agree through consultation that specific military facilities require U.S. construction

award and implementation due to military needs and requirements and there is no sufficient cash

reserve available for that purpose. ROK MND and USFK agree that the funds cannot be used to

construct, expand, repair, or manage recreation facilities, such as clubs, golf courses, theaters,

and bowling alleys.

Projects shall be initially selected and prioritized by the USFK Commander. ROK MND and

USFK shall review and discuss ROKFC projects through the Joint Coordinating Group (JCG).

USFK shall submit a draft construction projects list, initial project design list, and brief project

descriptions to ROK MND by November 30 two years prior to the year of execution through a

session of the JCG. USFK shall submit its final draft construction project list to ROK MND by

August 31 of the year before the year of execution. Concerns may be elevated to the Joint Cost

Sharing Committee no later than October 1 of the year before the year of execution. If

unresolved, those concerns may be elevated to the Minister of National Defense and the USFK

Commander for resolution no later than November 1 of the year before the year of execution.

Based on, and incorporating the aforementioned consultation and coordination, USFK shall

submit its final construction project list to ROK MND by November 30 of the year before the

year of execution. Projects shall be planned, reviewed, and executed in accordance with the

Exchange of Notes on System Improvements and the designated principles of in-kind funding

implementation as memorialized in the Exchange of Notes on ROKFC Implementation

Principles, dated February 26, 2014. ROK MND and USFK each shall appoint an appropriate

senior level official to co-chair the Joint Coordinating Group. The cash contributions provided by
the ROK shall be used by the United States of America to supervise and execute design and

construction of projects in the ROK for the use of the U.S. Armed Forces.

Korean materials shall be used to the maximum extent practicable, provided they meet applicable

U.S. and Korean standards.

USFK shall provide an information copy of the draft project list within seven days of the USFK

Commander approval. The final list shall be provided upon approval by U.S. authorities. Copies

of all construction contracts and contract modifications awarded in the in-kind ROKFC program

and quarterly execution reports shall be provided to the USFK Assistant Chief of Staff, Engineer.

Copies of all construction contracts and contract modifications awarded with the cash ROKFC

contribution and quarterly execution reports shall be provided to ROK MND (Director General

of the Military Installations Planning Bureau). Quarterly execution reports shall be in accordance

with the form developed by ROK MND and USFK.

Environmental issues are important. USFK and ROK MND shall make strong efforts to use the

ROKFC contribution in constructing new facilities that take into account environmental

protection.

Facilities constructed under the ROKFC program shall be granted to the United States under

Article H of the Status of Forces Agreement. The facilities shall be considered as being

"provided by the Republic of Korea" for purposes of the Agreed Minutes to Article IV of the

Status of Forces Agreement and shall be returned to the Republic of Korea when they are no

longer needed for the purposes of the Status of Forces Agreement.

Implementation of the ROKFC in-kind program shall be in accordance with a separate in-kind

construction implementing agreement between the ROK MND and USFK.

c. Logistics Cost-Sharing (LCS)

The LCS contributions are provided in-kind.

Under the LCS program, the ROK MND Logistics Management Bureau shall furnish

equipment, supplies, and services in categories such as: Single Ammunition Logistics SystemKorea (SALS-K); Munitions Activities Gained through Negotiations under U.S. and ROK

Memorandum of Understanding (MAGNUM); petroleum, oils, and lubricants distribution and

storage; transportation; repair and maintenance services; certain agreed rents excluding family

housing; a portion of base operations support; war reserve materiel maintenance; vehicle,

equipment, and materiel purchases; and facility sustainment services. Projects and

implementation details on the aforementioned categories shall be in accordance with a separate

LCS implementing agreement between ROK MND and USFK. All projects to be executed in the

year of execution shall be confirmed by USFK and thereafter be approved by ROK MND no

later than December 15 of the year before the year of execution. ROK MND acknowledges there

may be changes to the original project list based on unforeseen events during the execution year.
USFK shall order the equipment, supplies, and services based on contracts USFK solicits and

negotiates. USFK makes contract source selection decisions, prepares contract documents, and

submits to ROK MND for final approval. USFK shall issue the Inspection Report to the

contractor after agreed-upon periods for each project. The contractor shall provide USFK the

invoice, and USFK shall provide ROK MND the Inspection Report and the copy of the invoice.

ROK MND shall exercise a carryover process of funds into the subsequent calendar year for

work or products that are on a contract but cannot be delivered by December 31 of the program

year. ROK MND and USFK shall agree upon a definition for the term "Korean contractor," and

amend the LCS Implementing Agreement accordingly. The standing consultative mechanism

shall share information on projects under the LCS program in planning or execution phase, and

conduct joint review on the contract award and payment process. The standing consultative

mechanism shall put in efforts to resolve hardships faced by Korean contractors and to improve

procedures streamlining the administrative process. Implementation details of the standing

consultative mechanism shall be in accordance with a separate implementing agreement between

ROK MND and USFK.

3. The Joint Cost Sharing Committee, co-chaired by the Director General, International Policy

Bureau, ROK MND, and the Assistant Chief of Staff, J-5, USFK, shall meet at the request of

either party.

4. The successor command to USFK is provisionally named U.S. Korea Command (KORCOM).

Upon activation of KORCOM, all references herein to USFK shall expressly apply to

KORCOM.

5. To enhance information sharing, the format of materials USFK provides to ROK MND shall

be determined through mutual agreement by the Joint Cost Sharing Committee.

6. This Implementation Arrangement shall enter into force following signature by both Parties

and upon exchange of written notification by the Republic of Korea and the United States of

America that the SMA has been approved in accordance with their respective domestic legal

procedures and shall remain in force for the duration of the SMA.

DONE at Seoul, Korea, this 18th day of June, 2014, in duplicate originals in the English and

Korean languages, both texts being equally authentic.

FOR United States Forces Korea FOR Ministry of National Defense

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241 4A1

-T-isaeAm- Eitut404 -

(2\
No. 040

The Embassy of the United States of America presents its compliments to the Ministry

of Foreign Affairs of the Republic of Korea and has the honor to refer to recent

discussions between representatives of our two governments regarding the Agreement

between the Republic of Korea and the United States of America Concerning Special

Measures Relating to Article V of the Agreement under Article IV of the Mutual

Defense Treaty between the Republic of Korea and the United States of America

regarding Facilities and. Areas and the Status of United States Armed Forces in the

Republic of Korea signed on February 2, 2014 (hereinafter referred to as "the SMA"),

and proposes that the in,lcind construction contributions shall be implemented in

accordance with the following principles:

(1) The Republic of Korea Funded Construction remains under the SMA.

(2) The United States of America, after consultation with the Republic of Korea,

selects and prioritizes construction projects based on military needs.

(3) The Republic of Korea awards construction contracts, and implements construction

projects in accordance with the corresponding timeline as identified and developed

during project design.

(4) The United States is responsible for project design..

DIPLOMATIC NOTE
(5) The United States provides design specifications and a list of acceptable

contractors to the Republic of Korea Contractors shall be Republic of Korea

companies selected from the United States Army Corps of Engineers Far East

District's Pre-Qualified contractor list

(6). Design and Construction oversight, which averages twelve (12) percent of the total

project costs, is paid by the Republic of Korea in cash.

(7) Any bid savings shall be used for future projects.

(8) The United States and the Republic of Korea shall establish proper procedures to

prevent unexecuted contributions. In the unlikely event that unexecuted contributions

exist at the end of the year, those contributions shall roll over to the next year.

(9) An annual review, system shall be established to ensure in-kind procedures are

working. For the project or projects where it is determined in-kind procedures are not

worldng, the Republic of Korea and the United States shall consult in an effort to

resolve the problem, and take proper actions to complete the project or projects

including providing cash to the United States. In this regard, the Republic of Korea

Ministry -of National Defense and U.S. Forces Korea may enter: into implementation

arrangements.

If the foregoing, is acceptable to the Republic of Korea, the Embassy has the honor to

propose that this note, together with the Ministry's reply, shall constitute an agreement
The Embassy of the United States of A

Seoul, February • 26, 2014.

between the two governments, which shall enter into force at the same time as 'the

SMA.

The Embassy of the United States of . America avails itself of this opportunity to renew

to the Ministry of Foreign Affairs of the Republic of Korea the assurances of its

highest consideration.







No.041

The Embassy of the United States of America presents its compliments to the

Ministry of Foreign Affairs of the Republic of Korea and has the honor to refer to the

latter's Note No. OZT-556 of February 26, 2014, the content of which, states as

follows:

"The Ministry of Foreign Affairs of the Republic of Korea presents its compliments

to the Embassy of the United States of America and has the honor to refer to recent

discussions between representatives of our two governments regarding the Agreement

between the Republic of K-orea and the United States of America. Concerning Special

Measures Relating to Article V of the Agreement under Article IV of the Mutual

Defense Treaty between the Republic of Korea and the United States of America

regarding Facilities and Areas and the Status of United States Armed. Forces in the

Republic of Korea signed on February 2, 2014 (hereinafter referred to as "the SMA"),

and, in order to enhance accountability and transparency for implementation of the

SiviA, proposes the following vstem improvements:

1. Reinforce Coordination on the Allocations for Cost-Sharing Categories and

the Review of Requirements

1-1. The Republic of Korea Ministry of National Defense (R.OK MND) and U.S.

Forces Korea (USFK) shall comprehensively review and assess the USFK allocation

requirements for the three cost-sharing categories (i.e., Labor Cost Sharing, Logistics

DIPLOMATIC NOTE
Cost Sharing (LCS), and Republic of Korea Funded Construction (ROKFC)), based

on relevant documents and materials, through the Joint Cost-Sharing Committee.

When necessary, the discussion may be elevated to the Minister of National Defense

and the USFK Commander for further deliberation.

1-2. USFK. shall complete estimation of the amount of allocations for the three • categories by March 15 of the year before the year of execution. USFK. shall take into

full corisideration the aforementioned joint review and assessment when submitting its

final amount of allocations to ROK. MND by August 31 of the year before the year of

execution.

2. Establish. an Effective Consultation Mechanism for ROKFC

2-1. ROK MND and USFK shall establish through consultation each year's ROKFC

program.

- ROKFC projects shall be initially selected and prioritized by I./SFK.

- ROK /AND- and USFK shall review and discuss ROKFC,projects through the Joint

Coordinating Group (jCG). ROK MND and USFK each shall appoint an

appropriate senior level official to co-chair the JCG. Details concerning the

operations of the JCG shall be included in the Implementing Agreement for

ROKFC In-Khzd Projects.

- USFK. shall submit a draft construction projects list, initial project design list, and

brief project descriptions to ROK MND by November 30 two years prior to the

year of execution through a session of the JCG.
- ROK MND and USFK should hold a ROKFC coordination meeting twice every

month.

- USFK shall submit its final draft construction projects list to ROK MND by

August 31 of the year before the year of execution.

- Concerns may be elevated to the Joint Cost-Sharing Committee no later than

October 1 of the year before the year of execution. If unresolved, those concerns

may be elevated to the Minister of National Defense and the USFK Commander

for resolution no later than November I of the year before the year Of exeoution.

- Based on, and incorporating the aforementioned consultation and coordination,

USFK shall submit its final construction projects list to ROK MND by

November 30 of the year before the year of execution.

- When and if a situation Occurs that was not envisioned at the tune of establishing

the final construction projects list, USFK may substitute an emergent

requirement into the final eOnstruction projects list to the niinimura extent

necessary based solely on military needs through andy until August 31 of the

year of 'execution.

2-2. ROK MND and USER. shall review comprehensively the previous, present, and

.future years' ROKFC program through a session of the JCG at least once a year In

preparation for this meeting, U$FK. shall provide ROK. MND with a forecast for

future ROKFC projects.
3.Improve the Working Methods and Procedures for the Logistics Cost Sharing

(LCS) Program

3-1. ROK MND and. USFK shall agree upon a definition for the term "Korean

contractor," taking into full consideration the concerns of the ROK Government

regarding Korean entities, as well as relevant laws and regulations, and amend the

LCS Implementing Agreement accordingly.

3-2. ROK MND and USFK shall establish a standing consultative mechanism to

reinforce mutual efforts to improve methods and procedures to streamline

administtative processes for all Korean contractors, including small and medium sized

enterprises; improvemethods of tracking and monitoring contract award and payment;

improve program information sharing; and improve measures to promptly resolve

difficulties faced by Korean contractors under the LCS program.

4.Enhance Transparency Reg:1041g Labor :Cost: Skating

4-1. USFK shall continue to endeavor to enhance the welfare and well-being of its

Korean National workforce. In this regard, the review and assessment ,of. SMA

allocation by the joint Cost-Sharing Committee shall start with Labor Cost Sharing.

4-2. USFK shall provide ROK MND, with detailed information concerning

implementation of the Labor Cost Sharing program, in addition to the SMA

Comprehensive Annual Execution Report presented at the Korea-U.S. Integrated

Defense Dialogue (KIDD).
5. Enhance Information Sharing

5-1. ROK MND may share the result of the Joint Cost-Sharing Committee's

discussion about allocations for the three categories with the Republic of Korea

National Assembly.

5-2. ROK MND and USFK shall prepare the. SMA Comprehensive Annual Execution

Report on the contritmtions across the three categories each is respectively responsible

for executing during the previous year, and submit it to the KIDD co-chairs by April

of the year after the year of execution.

5-3. USFK shall provide ROK MND with_' detailed status report of tmexecuted

ROKFC cash contributions twice each calendar year.

5-4. ROK MND may share the information from the aforementioned reports and other

periodic execution reports with the Republic of Korea National Assembly in a manner

that would not compromise ,militaty . scurity.

If the foregoing proposal is acceptable to the United States- of America, -the Ministry

has the honor to propose that this note, together with the Embassy's note in reply,

shall constitute an agreement between the two governments, which shall enter into

force on the same date as the SMA.
The Ministry of Foreign Affairs of the Republic of Korea avails itself of the

opportunity to renew to the Embassy of the United States of America the assurances

of its highest consideration.

Seoul, February 26, 2014"

The 'Embassy of the United States of America has the honor to confirm and inform

the Ministry of Foreign Affaiis Of the Republic of Korea that the proposals as set forth

in the Ministry's note No OZT-556 of February 26, 2014, as herein quoted, are

acceptable to the Governirtent of the United States of America and that theMinistry's

said note and this note shall constitute an agreement between the Government of the

-United States of AmeriCa and the Government of the Republie of Korea which shall

enter into fOree on this date,

The Embassy of the United States of America takes this opportunity to renew to tile

Ministry of Foreign Affairs of the Republic of Korea the assurances of its highest

consideration.

The Etribassy of the United . States of

Se.otili February 26, 2014