Exchange of Notes Concerning the Implementation of the Provisions of Article I, Paragraph 1 (b) 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.

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

[Title] Exchange of Notes Concerning the Implementation of the Provisions of Article I, Paragraph 1 (b) 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.

[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 propose, regarding the implementation of the provisions of Article I, paragraph 1 (b) 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") signed today, that the two Governments agree as follows:

1. Loans provided for in Article I, paragraph 1 (b) of the Agreement shall be extended under a loan agreement and project agreements separately prepared for each project which shall be concluded between the Government of the Republic of Korea and the Overseas Economic Co-operation Fund.

2. The two Governments understand that the loan agreement and project agreements referred to in paragraph 1 shall contain the following conditions:

(a) Advancement of the loans shall be made in reasonably even distribution for each year;

(b) The repayment period of principal shall be twenty years, including seven year grace period which will start six months from the date of coming into effect of each project agreement, and the rate of interest shall be 3.5 percent per annum;

(c) The repayment of principal shall be made in fourteen consecutive equal annual installments, and the payment of interest shall be made every six months from the date of the effectuation of the loan on the unpaid balance of principal then outstanding;

(d) The amount of loan shall be calculated on the basis of the equivalent amount in United States dollar converted from the amount of the credit in the Japanese yen. The rate of exchange to be applied in the above conversion 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 date of coming into effect of each project agreement;

(e) The repayment of principal and the payment of interest shall be made in convertible Japanese yen.

3. Depending on the fiscal situations of the two countries and the financial conditions of the Overseas Economic Co-operation Fund, the period of repayment mentioned in paragraph 2 (6) above may be extended by mutual agreement.

4. The Overseas Economic Co-operation Fund shall be exempt from taxes and other charges of the Republic of Korea imposed on or in connection with the loans and the interests accruing therefrom.

5. The two Governments shall consult each year to fix the projects for which loans are extended and the annual implementation schedules thereof which the Government of the Republic of Korea will propose.

I have further the honour to propose that this Note and Your Excellency's reply confirming the acceptance of the above-mentioned proposal by your Government shall be considered as constituting an agreement between the Governments of Japan and the Republic of Korea on the implementation of the provisions of Article I, paragraph 1 (b) of the Agreement.

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 Your Excellency's Note above, and further to agree that Your Excellency's Note and this reply shall be considered as constituting an agreement between the Governments of the two countries concerning the implementation of the provisions of Article I, paragraph 1 (b) 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.