TIAS 8086 4

ment of the United States of America will consider that this note
and your reply thereto constitute an agreement between the two Gov-.
ernments on this subject, the agreement to enter into force on the
date of your note in reply.”

I have the honour to state, on behalf of the Government of Thailand,
that the understandings between Your Excellency’s Government and
mine as stated in the note above referred to are correct and hereby
confirmed.

Accept, Excellency, the assurances of my highest consideration.

T. DevakuL

(M. R. Thuaithep Devakul)
Charge @Affaires ad interim
His Excellency
Joun Fosrer Duuizs,
Secretary of State,
Washington, D.C.

U.S, GOVERNMENT PRINTING OFFICE: 1988


4

risk guaranty which would supplement the specilic risk guaranty
authority providing United States Government investment guar
anties against loss of an investment from any risk including normal
business risks other than fraud or misconduct for which the investor
is responsible and other than normal insurable risks such as fire and
theft.

“Flowever, the Government of the United States of America shall
assert no claim against the host country resulting from a payment
by the former for an extended risk guaranty invoked by reason of
normal business loss except to the extent the private investor had
unsatisfied claims against the Government of Thailand for goods
delivered or services rendered to or for the account of the Govern-
ment of Thailand. Neither the issuance of investment guaranties
against loss due to war, revolution or insurrection nor the payment
of compensation thereunder would give rise to a claim by the Gov-
ernment of the United States of America against the Government
of Thailand.

“Tp the interest of facilitating and increasing further participa-
tion of United States private investors in the economic development
of Thailand, the Government of the United States of America is
prepared to issue such investment guaranties for appropriate in-
vestments in activities approved by your Government.

“Jn this connection, I have the honour to propose:

(a) that the undertakings between our respective Governments
contaitfed in the above-mentioned Agreement of August 27 and
September i, 1954, shall also apply to the present Agreement:

(b) that the present Agreement, upon entering into force. shall
terminate the Agreement effected by the exchange of notes of Au-
gust 27, 1957; and

(c) that subparagraph (c) of the unnumbered third para-
graph of the exchange of notes of August 27 and September 1.
1954, shall not be applicable to claims resulting from payments
under guaranties other than payments for loss from inconvertibility.
expropriation or confiscation.

“Nothing in the subrogation and transfer contemplated in_the
Agreement effected by the exchange of notes of August 27 and Sep-
tember 1, 1954, as amended by this note and Your Excellency’s reply
agreeing thereto, shall give the Government of the United States
of America greater rights against the assets of an enterprise in
which a guarantied investment has been made or greater claims in
connection with such an investment than the rights and claims of
the subrogating investor. .

“The enclosed copy of Title III, Part I of the Foreign Assistance
‘Act of 1961, as amended, shall be substituted for the copy of Section
413(b) (4) of the Mutual Security Act of 1954, as amended, hereto-
fore enclosed with the exchange of notes of August 27, 1957. The

TIAS 5940


THAILAND

Investment Guaranties

Agreement amending the agreement of August 27 and September 1,
1954, and terminating the amending agreement of August 27,
1957.

Effected by exchange of notes

Signed at Bangkok December 22, 1965;

Entered into force December 22, 1965.

With Memorandum of Understanding.

The American Ambassador to the Thai Minister for Foreign Affairs

No, 521 Banoxon, December 22, 1965

ExcELLency,

I have the honour to refer to the Agreement, effected by the ex-
change of notes of August 27 and September 1, 1954,[*] as amended
by the Agreement effected by the exchange of notes of August 27,
1957,[?] between our two Governments relating to investment guaran-
ties which may be issued by the Government of the United States of
America for investments in activities in Thailand. After the conclu-
sion of these Agreements, legislation has been enacted by the United
States as well as by Thailand enlarging the scope of international in-
vestments and facilitating foreign investment in industrial activities.
In the United States the Foreign Assistance Act of 1961, as amended
in 1962, 1963, and 1964, Part I, Title ITI,[°] modifies and augments
the coverage to be provided investors by investment guaranties that
may be issued by the Government of the United States of America.
In Thailand, the Promotion of Industrial Investment Act B.E. 2503
(1962), gives yet further advantages to foreign investors in a wide
variety -of industries, which are geared towards progressive economic
development of the country.

The above-mentioned United States legislation has broadened the
specific risk investment guaranty authority to provide for investment
guaranties against loss due to revolution or insurrection, as well as
loss due to war already covered by the above-mentioned Agreement
of August 27, 1957. Also authorized is an extended risk guaranty
which would supplement the specific risk guaranty authority provid-
ing United States Government investment guaranties against loss of

*‘ TIAS 3086 ; 5 UST (pt. 3) 2258.
* TIAS 3902; 8 UST 1453.
* 75 Stat. 429 ; 76 Stat. 256; 77 Stat. 381; 22 U.S.C. § 2181.

60-420-—66 qa) TIAS 5940


TMEATIES AND OTHER INTERNATIONAL ACTS SERIES 5940

INVESTMENT GUARANTIES

Agreement Between the
UnitTep STATES OF AMERICA
and THAILAND

Amending the Agreement of August 27 and
September 1, 1954, and terminating the
Amending Agreement of August 27, 1957

Effected by Exchange of Notes
Signed at Bangkok December 22, 1965

with

Memorandum of Understanding



3

Upon receipt of a note from Your Excellency indicating that the
foregoing is acceptable to the Government of Thailand and that such
undertakings shall apply, the Government of the United States of
America will consider that this note and your reply thereto constitute
an Agreement between our two Governments on this subject, the
Agreement to enter into force on the date of your note in reply.

Accept, Excellency, the renewed assurances of my highest
consideration,

Granam Marre

His Excellency
Tuanat Kuoman,
Minister for Foreign Affairs,
Bangkok.

The Thai Minister for Foreign Affairs to the American Ambassador

Ministry oF Forrion Arrairs
Saranrom Patace
No. 0608/40847 224 December, B.E. 2608.
[1965]

ExcEt.ency,
I have the honour to acknowledge the receipt of Your Excel-
lency’s Note No. 521 of to-day’s date, which reads as follows: *

“I have the honour to refer to the Agreement, effected by the ex-
change of notes of August 27 and September 1, 1954, as amended
by the Agreement effected by the exchange of notes of August 27,
1957, between our two Governments relating to investment guaran-
ties which may be issued by the Government of the United States
of America for investments in activities in Thailand. After the
conclusion of these Agreements, legislation has been enacted by the
United States as well as by Thailand enlarging the scope of inter-
national investments and facilitating foreign investment in indus-
trial activities. In the United States the Foreign Assistance Act
of 1961, as amended in 1962, 1963 and 1964, Part I, Title ITI, modi-
fies and sugments the coverage to be provided investors by invest-
Ment guaranties that may be issued by the Government of the
United States of America. In Thailand, the Promotion of Indus-
trial Investment Act B.E. 2505 (1962), gives yet further advantages
to foreign investors in a wide variety of industries, which are geared
towards progressive economic development of the country.

“The above-mentioned United States legislation has broadened
the specific risk investment guaranty authority to provide for in-
vestment guaranties against loss due to revolution or insurrection,
as well as loss due to war already covered by the above-mentioned
Agreement of August 27, 1957. Also authorized is an extended

TIAS 5040


1 01s

,ATIES AND OTHER INTERNATIONAL ACTS SERIES 3086

GUARANTY OF
PRIVATE INVESTMENTS

Agreement between the
Unrtep States oF AMERICA
and THAILAND

@ Effected by Exchange of Notes
Signed at Washington August 27 and
September 1, 1954

e e Entered into force September 1, 1954



6

prior to notification from the United States Government of the trans-
fer or assignment to it or its becoming subrogee of any such claims
of such United States investor.

2. Subparagraph (c) of the unnumbered fifth paragraph of the
exchange of notes of December 22, 1965, shall not be considered to be
an extension of the application of subparagraph (c) of the unnum-
bered third paragraph of the exchange of notes of August 27 and
September 1, 1954, beyond that covered by that Agreement.

3. The expression “confiscation” used in subparagraph (c) of the
unnumbered fifth paragraph of the exchange of notes of December 22,
1965, does not refer to confiscation carried out in accordance with in-
ternational standards as a penalty imposed upon an offender for viola-
tion of internal or international law.

Done in duplicate at Bangkok on the 22nd December, 1965.

For the Government of the For the Government of
United States of America: Thailand:
Gravam Martin Tu. Kuoman
(Graham Martin) (Thanat Khoman)
Ambassador Minister of Foreign Affairs
TIAS 5940

Ua. SOFENAMENT PRINTING OFFICE:IN68


5

Promotion of Industrial Investment Act B.E. 2505 (1962) together
with its annexure is also enclosed. .

“Upon receipt of a note from Your Excellency indicating that the
foregoing is acceptable to the Government of Thailand and that
such undertakings shall apply, the Government of the United States
of America will consider that this note and your reply thereto con-
stitute an Agreement between our two Governments on this subject,
the Agreement to enter into force on the date of your note in reply.”

_ Lhave the honour to state in reply that the proposals contained
in the Note referred to above are acceptable to His Majesty’s Govern-
ment who therefore agree that the present Note and Your Excellency’s
Note under reply constitute an agreement between our two Govern-
ments on this subject.

Accept, Excellency, the renewed assurance of my highest
consideration.

Tu. Kuosan
Minister of Foreign Affairs.

His Excellency ©
Monsieur Grauam Martin,
Ambassador Extraordinary and
Plenipotentiary of the
United States of America,
Bangkok.

MEMORANDUM OF UNDERSTANDING

With reference to the exchange of notes of December 22, 1965, con-
cluded by the Government of the United States of America and the
Government of Thailand relating to investment guaranties which may
be issued by the Government of the United States of America for in-
vestments in activities in Thailand, the Parties confirm their under-
standing as follows:

1. The Government of the United States of America will promptly
notify the Government of Thailand of payment of any claims by the
Government of the United States of America as a result of the guaran-
ties given by the United States of America, and of the transfer or
assignment to the United States Government of any assets or rights
of a United States citizen asa result thereof. In addition, it is under-
stood that the Government of Thailand will not be required to make
any payments to the United States Government in the event and to
the extent that the Government of Thailand has made payment to any
United States investor as a result of Joss under a guarantied risk

TIAS 510


2

an investment from any risk including normal business risks other
than fraud or misconduct for which the investor is responsible and
other than normal insurable risks such as fire and theft.

However, the Government of the United States of America shall
assert no claim against the host country resulting from 2 payment
by the former for an extended risk guaranty invoked by reason of
normal business loss except to the extent the private investor had un-
satisfied claims against the Government of Thailand for goods de-
livered or services rendered to or for the account of the Government
of Thailand. Neither the issuance of investment guaranties against
loss due to war, revolution or insurrection nor the payment of com-
pensation thereunder would give rise to a claim by the Government of
the United States of America agninst the Government of Thailand.

In the interest of facilitating and increasing further participation
of United States private investors in the economic development of
Thailand, the Government of the United States of America is pre-
pared to issue such investment guaranties for appropriate investments
in activities approved by your Government.

In this connection, I have the honour to propose:

(a) that the undertakings between our respective Governments
contained in the above-mentioned Agreement of August 27 and Sep-
tember 1, 1954, shall also apply to the present Agreement;

(b) . that the present Agreement, upon entering into force, shall
terminate the Agreement effected by the exchange of notes of August
27, 1957; and

(c) that subparagraph (c) of the unnumbered third paragraph
of the exchange of notes of August 27 and September 1, 1954, shall not
be applicable to claims resulting from payments under guaranties
other than payments for loss from inconvertibility, expropriation or
confiscation.

Nothing in the subrogation and transfer contemplated in the Agree-
ment effected by the exchange of notes of August 27 and September 1,
1954, as amended by this note and Your Excellency’s reply agreeing
thereto, shall give the Government of the United States of America
greater rights against the assets of an enterprise in which a guarantied
investment has been made or greater claims in connection with such
an investment than the rights and claims of the subrogating investor.

The enclosed copy of Title IIT, Part I of the Foreign Assistance Act
of 1961, as amended,[*] shall be substituted for the copy of Section
413(b) (4) of the Mutual Security Act of 1954,[?] as amended, here-
tofore enclosed with the exchange of notes of August 27, 1957. The
Promotion of Industrial Investment Act B.E, 2505 (1962) together
with its annexure is also enclosed.{*]

* Not printed.
* 68 Stat. 847 ; 22 U.S.C. § 1933(b) (4).

TEAS 5040


3 TIAS 8086

“The Governments of Thailand and of the United States of America
will, upon the request of either of them, consult respecting projects
in Thailand proposed by nationals of the United States of America
with regard to which guaranties under the aforesaid Section 413 (b)
(4), have been made or are under consideration. With respect to
such guaranties extending to projects which are approved by the Gov-
ernment of Thailand in accordance with the provisions of the aforesaid
Section, the Government of Thailand agrees:

a. That if the Government of the United States of America makes
payment in United States dollars to any person under any such
guaranty, the Government of Thailand will recognize the trans-
fer to the United States of America of any right, title or interest
of such person in assets, currency, credits, or other property on
account of which such payment was made and the subrogation
of the United States of America to any claim or cause of action
of such person arising in connection therewith. The Govern-
ment of Thailand shall also recognize any transfer to the Gov-
ernment of the United States of America pursuant to such guar-
anty of any compensation for loss covered by such guaranties
received from any source other than the Government of the
United States of America;

b. That Baht amounts acquired by the Government of the United
States of America pursuant to such guaranties shall be accorded
treatment not less favorable than that accorded to private funds
arising from transactions of United States nationals which are
comparable to the transactions covered by such guaranties, and
that such Baht amounts will be freely available to the Govern-
ment of the United States of America for administrative
expenditures;

c. That any claim against the Government of Thailand to which
the Government of the United States of America may be sub-
rogated as the result of any payment under such u guaranty
shall be the subject of direct negotiations between the two Gov-
ernments. If, within a reasonable period, they are unable to
settle the claim by agreement, it shall be referred for final and
binding determination to a sole arbitrator selected by mutual
agreement. If the Governments are unable, within a period of
three months, to agree upon such selection, the arbitrator shall
be one who may be designated by the President of the Interna-
tional Court of Justice at the request of either Government.

Upon receipt of a note from you indicating that the foregoing
provisions are acceptable to the Government of Thailand, the Govern-


TIAS 8086 2

comparable to the transactions covered by such guaranties, and
that such Baht amounts will be freely available to the Gov-
ernment of the United States of America for administrative
expenditures;

c. That any claim against the Government of Thailand to which
the Government of the United States of America may be sub-
rogated as the result of any payment under such a guaranty, shall
be the subject of direct negotiations between the two Govern-
ments. If, within a reasonable period, they are unable to settle
the claim by agreement, it shall be referred for final and bind-
ing determination to a sole arbitrator selected by mutual agree-
ment. If the Governments are unable, within a period of three
months, to agree upon such selection, the arbitrator shall be one
who may be designated by the President of the International
Court of Justice at the request of either Government.

Upon receipt of a note from you indicating that the foregoing pro-
visions are acceptable to the Government of Thailand, the Govern-
ment of the United States of America will consider that this note and
your reply thereto constitute an agreement between the two Govern-
ments on this subject, the agreement to enter into force on the date of
your note in reply.

Accept, Sir, the renewed assurances of my high consideration.

For the Secretary of State:
Watrer S. Roserrson
The. Honorable
M. R. Tauarrner DevaKuL,
Chargé @Affaires ad interim
of Thailand.

The Thai Chargé d’ Affaires ad interim to the Secretary of State

Tue Roya Tsar Empassy
Wasuineron 8, D. C.
No. 2576/2497 September 1, 1964.
EXcELLENCY,

I have the honour to refer to Your Excellency’s note dated August
27, 1954, which reads as follows:

“I refer to conversations which have recently taken place between
representatives of our two Governments, relating to guaranties au-
thorized by Section 413 (b) (4) of the Mutual Security Act-of -1954,--

Talso confirm the understandings reached as a result of these conversa-
tions as follows: :


The Secretary of State to the Thai Chargé @ Affaires ad interim

Department OF STATE
‘WasHINGTON
August 27 1954
Sm:

I refer to conversations which have recently taken place between
representatives of our two Governments, relating to guaranties
authorized by Section 413 (b) (4) of the Mutual Security Act of
1954. [*] I also confirm the understandings reached as a result of
these conversations as follows:

The Governments of Thailand and of the United States of America
will, upon the request of either of them, consult respecting projects
in Thailand proposed by nationals of the United States of America
with regard to which guaranties under the aforesaid Section 413 (b)
(4), have been made or are under consideration. With respect to such
guaranties extending to projects which are approved by the Govern-
ment of Thailand in accordance with the provisions of the aforesaid
Jection, the Government of Thailand agrees:

a. That if the Government of the United States of America makes
payment in United States dollars to any person under any such
guaranty, the Government of Thailand will recognize the trans-
fer to the United States of America of any right, title or interest
of such person in assets, currency, credits, or other property on
account of which such payment was made and the subrogation
of the United States of America to any claim or cause of action
of such person arising in connection therewith. The Govern-
ment of Thailand shall also recognize any transfer to the Govern-
ment of the United States of America pursuant to such guaranty
of any compensation for loss covered by such guaranties received
from any source other than the Government of the United States
of America ; _

b. That Baht amounts acquired by the Government of the United
States of America pursuant to such guaranties shall be accorded
treatment not less favorable than that accorded to private funds
arising from transactions of United States nationals which are

268 .Stat. 847 ; 22 U.S.C. § 1933 (b).
64366—55 (1)