First Protocol, Agreement on the Settlement of Problems Concerning Property and Claims and on Economic Co-operation between Japan and the Republic of Korea.

National Graduate Institute for Policy Studies (GRIPS); Institute for Advanced Studies on Asia (IASA), The University of Tokyo

[Title] First Protocol, Agreement on the Settlement of Problems Concerning Property and Claims and on Economic Co-operation between Japan and the Republic of Korea.

[Notes] Quote from the United Nations Treaty Collection: "Translation by the Government of Japan. The Secretariat also received an English translation of this agreement from the Government of Republic of Korea which on certain points differs from that provided by the Government of Japan. At the request of the Government of Republic of Korea, these differences have been shown by printing in italics the pertinent word of phrase in the translation of the Government of Japan and providing in square brackets the corresponding expression in the translation by the Government of the Republic of Korea."

At the time of the signing of the Agreement on the Settlement of [the] Problem Concerning Property and Claims and on the Economic Co-operation between Japan and the Republic of Korea (hereinafter referred to as "the Agreement"), the undersigned, being duly authorized by their respective Governments, have agreed on the following provisions, which shall be deemed to be an integral part of the Agreement, concerning the implementation of the provisions of Article I, paragraph 1 (a) of the Agreement.

An annual schedule specifying the products and services to be supplied by Japan (hereinafter referred to as "the Schedule") shall be prepared by the Government of the Republic of Korea, and shall be fixed through consultation between the Governments of the Contracting Parties.

1. The products to be supplied by Japan shall be capital goods and such other products to be agreed upon by the two Governments.

2. The supply of the products of Japan and the services of the Japanese people shall be carried out in such a manner as will not substantially [remarkably] prejudice the normal trade between Japan and the Republic of Korea or impose additional foreign exchange burden on Japan.

1. The Mission mentioned in Article V, paragraph 1or any person who is authorized by the Government of the Republic of Korea shall conclude contracts directly with any Japanese national or any juridical person controlled by Japanese nationals for the acquisition of products and services in accordance with the Schedule.

2. The contracts (including modifications thereof) mentioned in paragraph 1 shall conform with: (i) the provisions of Article I, paragraph 1 (a) of the Agreement and of the present Protocol; (ii) the provisions of such arrangements as may be made by the two Governments for the implementation of the provisions of Article I, paragraph 1 (a) of the Agreement and of the present Protocol; and (iii) the Schedule then applicable. These contracts shall be forwarded to the Government of Japan for verification as to the conformity of the same with the above-mentioned criteria. Such verification shall as a rule be effected within fourteen days. In case such verification is not affected within the stipulated period, such contract shall be referred to the Joint Committee mentioned in Article I, paragraph 2 of the Agreement, and shall be acted upon in accordance with the recommendations of the Joint Committee. Such recommendations shall be made within a period of thirty days following the receipt of the contract by the Joint Committee. A contract verified in the manner provided in the present paragraph shall hereinafter be referred to as a "Contract".

3. Every Contract shall contain a provision to the effect that disputes arising out of or in connection with such Contract shall, at the request of either party thereto, be referred for settlement to an arbitration board of commerce in accordance with such arrangement as may be made between the two Governments. The two Governments shall take necessary measures to make final and enforceable all arbitration awards duly rendered.

4. Notwithstanding the provisions of paragraph 1, in case the supply of the products and services is deemed impossible under a Contract, they may be supplied by agreement between the two Governments without Contract.

1. The Government of Japan shall, through procedures to be determined under the provisions of Article VII, make payments to cover the obligations incurred under Contracts by the Mission mentioned in Article V, paragraph 1 or by any person authorized by the Government of the Republic of Korea as well as the expenses for the supply of products and services referred to in paragraph 4 of the preceding Article. Those payments shall be made in Japanese yen.

2. By and upon making a payment on the basis of the provisions of paragraph 1, Japan shall be deemed to have supplied the Republic of Korea with the products and services thus paid for, in accordance with the provisions of Article I, paragraph 1 (a) of the Agreement.

1. The Government of the Republic of Korea shall establish its mission (hereinafter referred to as "the Mission") in Japan.

2. The Mission shall be charged with the implementation of the provisions of Article I, paragraph 1 (a) of the Agreement and of the present Protocol, and its functions shall include the following:

(a) Presentation to the Government of Japan of a Schedule prepared by the Government of the Republic of Korea;

(b) Conclusion and implementation of the contracts for the Government of the Republic of Korea; and

(c) Forwarding to the Government of Japan to obtain verification of the contracts mentioned in (b) above and of the contracts concluded by the persons who are authorized by the Government of the Republic of Korea.

3. Such office or offices of the Mission in Japan as are necessary for the effective performance of its functions and are used exclusively for that purpose shall be established at Tokyo and/or other places to be agreed upon between the two Governments.

4. The premises of the office or offices, including the archives, of the Mission shall be inviolable. The Mission may use cipher. The real estate which is owned by the Mission and used directly for the performance of its functions shall be exempt from the Tax on Acquisition of Real Property and the Fixed Assets Tax. The income of the Mission which may be derived from the performance of its functions shall be exempt from taxation in Japan. The property imported for the official use of the Mission shall be exempt from customs duties and any other charges imposed on or in connection with importation.

5. The Mission shall be accorded such administrative assistance by the Government of Japan as other foreign missions usually enjoy and as may be required for the effective performance of its functions.

6. The Chief and two senior officials of the Mission as well as the chiefs of such offices as may be established in pursuance of paragraph 3, who are nationals of the Republic of Korea, shall be accorded diplomatic privileges and immunities generally recognized under international law and usage. If it is deemed necessary for the effective performance of the functions of the Mission, the number of such senior officials may be increased by agreement between the two Governments.

7. Other members of the staff of the Mission who are nationals of the Republic of Korea and who are not ordinarily resident in Japan shall be exempt from taxation in Japan upon emoluments which they may receive in the discharge of their duties, and, in accordance with the laws and regulations of Japan, from customs duties and any other charges imposed on or in connection with importation of property for their personal use.

8. In the event that any dispute arising out of or in connection with a Contract has not been settled by arbitration or that the arbitration award rendered has not been complied with, the matter may be taken, as a last resort, to the appropriate court located in the area where the Contract concerned has been concluded. In such a case and solely for the purpose of whatever judicial proceedings may be necessary, the person holding the position of Chief of the Legal Section of the Mission may sue or be sued with regard to the contracts mentioned in paragraph 2 (6), and accordingly he may be served with process and other pleadings at his office in the Mission. However, he shall be exempt from the obligation to deposit bonds for the costs of legal proceedings. While the Mission enjoys inviolability and immunity as provided for in paragraphs 4 and 6, the final decision rendered by the appropriate judicial body in such a case will be accepted by the Mission as binding upon it.

9. In the enforcement of any final court decision, the land and buildings, as well as the movable property therein, owned by the Mission and used for the performance of its functions shall in no case be subject to execution.

1. The two Governments shall take necessary measures for the smooth and effective supply of the products and services.

2. Japanese nationals who may be needed in the Republic of Korea in connection with the supply of the products and services shall be accorded necessary facilities for their entry into, departure from, and stay in the Republic of Korea for the performance of their work.

3. Japanese nationals and juridical persons shall be exempt from taxation in the Republic of Korea with respect to their income derived from the supply of the products and services.

4. The products supplied by Japan shall not be re-exported from the territory of the Republic of Korea.

5. With respect to the transportation and insurance of the products to be supplied by Japan, the Government of either Contracting Party shall not take discriminatory measures, directly or indirectly, against the nationals and juridical persons of the other Contracting Party, which may hamper fair and free competition.

6. The provisions of the present Article shall be applicable to the procurement of products and services by loans as provided for in Article I, paragraph 1 (b) of the Agreement.

Procedure and other details for the implementation of the present Protocol shall be agreed upon through consultation between the two Governments.

DONE in duplicate at Tokyo, in the Japanese and Korean languages, both being equally authentic, this twenty-second day of June of the year one thousand nine hundred and sixty-five.