Exchange of Notes Concerning the details for the Implementation of the 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] Exchange of Notes Concerning the details for the Implementation of the 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."

I have the honour to refer to the First Protocol (hereinafter referred to as "the Protocol") 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 signed today (hereinafter referred to as "the Agreement"). The Government of Japan proposes that the Governments of the two countries agree, under the provisions of Article VII of the Protocol, as follows:

1. The annual schedule (hereinafter referred to as the "Schedule") mentioned in Article I of the Protocol shall be fixed for the year of which the beginning and ending dates shall be agreed upon by the two Governments.

(a) The Schedule for each year, except for the first year, shall be fixed prior to the beginning of the year to which the Schedule is applied. For this purpose, the Schedule for the year concerned shall be presented to the Government of Japan for consultation at least sixty days prior to the beginning of the said year.

(b) The Schedule for the first year shall be fixed within sixty days from the date of the entry into force of the Agreement. For this purpose, the Schedule for the first year shall be presented to the Government of Japan as soon as possible.

3. The Schedule shall specify the products of Japan and the services of the Japanese people to be procured by the Republic of Korea in the year concerned.

1. The contracts mentioned in Article III, paragraph 1 of the Protocol shall be concluded in terms of Japanese yen through normal commercial procedure.

2. The responsibility for the performance of the Contracts mentioned in Article III, paragraph 2 of the Protocol (hereinafter referred to as the "Contract") shall rest solely with the Mission mentioned in Article V, paragraph 1 of the Protocol (hereinafter referred to as the "Mission"), and with the persons authorized by the Government of the Republic of Korea, or the Japanese nationals or juridical persons mentioned in Article III, paragraph 1 of the Protocol, who are parties thereto.

3. For the purposes of Article III, paragraph 3 of the Protocol, the Commercial Arbitration Commission means, in the event that either party to a Contract submits a case for arbitration, a commercial arbitration organ of the country where the other party resides.

1. The Government of the Republic of Korea shall designate a bank or banks to conduct the business relating to the implementation of the Protocol from among those Japanese banks which are approved as authorized foreign exchange banks under the laws of Japan and controlled by the Japanese nationals.

2. The Mission or an Agency authorized by the Government of the Republic of Korea (hereinafter referred to as the "Agency") shall make arrangements with the designated bank or banks mentioned in paragraph 1 above, and open a Special Account or Accounts with such bank or banks in the name of the Government of the Republic of Korea, authorizing such bank or banks, among others, to receive payments from the Government of Japan, and shall notify the Government of Japan of the contents of such arrangements. The Special Accounts shall not bear interest.

3. The Mission or Agency shall forward to the Government of Japan a payment request, well in advance of the date on which the payment under the terms of the Contract falls due, stating the amount of such payment, of the designated banks mentioned in paragraph 2 above the name of the bank where payment is to be made (hereinafter referred to as the "Bank"), and the date on which the Mission or Agency has to make the payment to the contracting parties concerned.

4. Upon receipt of the payment request, the Government of Japan shall pay the requested amount to the Bank prior to the date on which the Mission or Agency has to make the payment to the contracting parties concerned.

5. The Government of Japan shall also make the payment for the supply as may be agreed upon by the two Governments in accordance with the provisions of Article III, paragraph 4 of the Protocol in the same way as provided for in paragraph 4 above.

6. The amount of payment made by the Government of Japan in accordance with the provisions of paragraphs 4 and 5 above shall be credited to the Special Account, and no other funds shall be credited to the Special Account. The Special Account shall be debited only for the purposes mentioned in paragraphs 3 and 5 above.

7. In case the whole or part of the funds credited to the Special Account has not been drawn by the Mission because of cancellation of Contracts or for any other reason, the unpaid amount shall be applied for the purposes mentioned in paragraphs 3 and 5 above after consultation between the two Governments.

8. In case the whole or part of the amounts paid out of the Special Account has been refunded to the Mission or Agency, the amounts so refunded shall be credited to the Special Account, notwithstanding the provisions of paragraph 6 above. The amounts so refunded shall be applied for the purposes mentioned in paragraphs 3 and 5 above after consultation between the two Governments.

9. For the purposes of Article IV, paragraph 2 of the Protocol, "upon making a payment" means "at the time when a payment is made by the Government of Japan to the Bank".

10. In determining the amounts of the products and services by which Japan is deemed to have supplied the Republic of Korea pursuant to the provisions of Article IV, paragraph 2 of the Protocol, the equivalent amount in United States dollar converted from the amount paid in the Japanese yen shall be the basis of calculation. The rate of exchange to be applied in the above calculation shall be at the par value of the Japanese yen to the United States dollar, officially fixed by the Government of Japan and agreed to by the International Monetary Fund, which is prevailing on the following dates:

(a) In the case of payment for a Contract, the date of the verification thereof by the Government of Japan;

(b) In other cases, the date to be agreed upon between the two Governments in each case; however, if there is no agreement on the date, the date on which the payment request is received by the Government of Japan shall be applied.

The Government of the Republic of Korea shall inform the Government of Japan from time to time of the names of the Chief of the Mission and other members of the Mission authorized to act on behalf of the Mission in connection with the Contracts. The Government of Japan shall have the aforesaid names published in the Official Gazette of Japan. The authority of the Chief and other members of the Mission shall be deemed to continue until such time as notice to the contrary is published in the said Gazette.

I have further the honour to propose that this Note and Your Excellency's reply confirming your Government's acceptance of the above proposal shall be considered as constituting an agreement between the two Governments on details for the implementation of the Protocol under Article VII thereof, with the understanding that other procedural details of the Protocol will be agreed upon between the appropriate authorities of the two Governments.

I avail myself of this opportunity to renew to Your Excellency, Monsieur le Ministre, the assurances of my highest consideration.

I have the honour to acknowledge the receipt of Your Excellency's Note of today's date, which reads as follows:

I have the honour to agree, on behalf of my Government, to the proposal embodied in the Note under acknowledgement and further to agree that the same and this reply shall be considered as constituting an agreement between the two Governments on the details for the implementation of the First Protocol of the Agreement on the Settlement of [the] Problem Concerning Property and Claims and on the Economic Co-operation between the Republic of Korea and Japan

I avail myself of this opportunity to renew to Your Excellency, Monsieur le Ministre, the assurances of my highest consideration.