EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF THE REPUBLIC OF CHINA AND THE GOVERNMENT OF JAPAN CONCERNING THE LOAN AGREEMENT OF JAPANESE YEN

"The World and Japan" Database (Project Leader: TANAKA Akihiko)

Database of Japanese Politics and International Relations

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

[Title] EXCHANGE OF NOTES BETWEEN THE GOVERNMENT OF THE REPUBLIC OF CHINA AND THE GOVERNMENT OF JAPAN CONCERNING THE LOAN AGREEMENT OF JAPANESE YEN

[Place] Taipei

[Date] August 9, 1971

[Source] Zhong Wai Tiao Yue Ji Bian Ming Guo Wu Shih Sih Nian Jhih Liou Shih Yi Nian (Treaties Between The Republic Of China And Foreign States), P.313-317

[Notes]

[Full text]

I. Note from Mr. Osamu Itagaki, Ambassador of Japan, to Mr. W. H. Fei, Vice-Chairman, Council for International Economic Cooperation and Development.

Taipei, August 9, 1971

Excellency,

I have the honour to confirm the following understanding recently reached between the representatives of the Government of Japan and the Government of the Republic of China on Japenese financial assistance to be extended to the Republic of China with a view to contributing to the economic development and the improvement of welfare in the Republic of China.

1. A loan (hereinafter referred to as "the Loan") in Japanese yen up to the amount of eight billion eighty-two million yen (¥;8,082,000,000) will be made available to the Government of the Republic of China by the Export-Import Bank of Japan together with private banks (hereinafter referred to as "the Banks"), in accordance with the relevant laws and regulations of Japan, for financing the following projects:

(a) Improvement of Telecommunication Facilities

(Up to the amount of ¥5,400,000,000)

(b) Modification of Boilers and Transportation of Bagasse Project

(Up to the amount of ¥882,000,000)

(Up to the amount of ¥1,800,000,000)

2. The Loan will be made available by loan agreements to be concluded between the Government of the Republic of China and the Banks. The terms and conditions of the Loan as well as procedures for its utilization will be governed by the said loan agreements, which will contain, inter alia, the following principles:

(a) The repayment period will be fifteen (15) years including three (3) years' grace.

(b) The interest rate will be five and a half (5.5) per cent per annum.

(c) The closing date of the Loan will be December thirty-first, 1976 for the project mentioned in 1 (a) above and December thirty-first, 1973 for the projects mentioned in 1 (b) and 1 (c) above.

3. The Loan will be made available to cover payments to be made to Japanese suppliers by Chinese importers under such contracts as may be entered into in Japanese yen between them for the purchase of Japan and related services of Japanese nationals required for the implementation of the above-mentioned projects.

4. With regard to the shipping and marine insurance of goods purchased under the Loan, the Government of the Republic of China shall not impose any restriction that may hinder a fair and free competition of the shipping and marine insurance companies of the two countries.

5. The Government of the Republic of China shall exempt the Banks from any Chinese fiscal levy or tax on and/or in connection with the Loan and interest accruing therefrom.

6. The two Governments will consult with each other in respect of any matter that may arise from or in connection with the foregoing understanding.

I should be grateful if Your Excellency would confirm the foregoing understanding on behalf of the Government of the Republic of China.

I avail myself of this opportunity to extend to Your Excellency the assurance of my highest consideration.

(Signed)

Osamit Itagaki

Ambassador of Japan

His Excellency

Mr. W.H. Fei

Vice Chairman

Council for International Economic

Cooperation and Development

Republic of China

II. Note from Mr. W.H. Fei, Vice Chairman, Council for International Economic Cooperation and Development, to Mr. Osamu Itagaki, Ambassador of Japan.

Taipei, August 9, 1971

Excellency,

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

"I have the honour to confirm the following understanding recently reached between the representatives of the Government of Japan and the Government of the Republic of China on Japanese financial assistance to be extended to the Republic of China with a view to contributing to the economic development and the improvement of welfare in the Republic of China.

"1. A loan (hereinafter referred to as "the Loan") in Japanese yen up to the amount of eight billion eighty-two million yen (¥8,082,000,000) will be made available to the Government of the Republic of China by the Export-Import Bank of Japan together with private banks (hereinafter referred to as "the Banks"), in accordance with the relevant laws and regulations of Japan, for financing the following projects:

"(a) Improvement of Telecommunication Facilities

(Up to the amount of ¥5,400,000.000)

"(b) Modification of Boilers and Transportation of Bagasse Project

(Up to the amount of ¥882,000,000)

"(c) Ion Exchange Membrane Salt Manufacturing Plant Project

(Up to the amount of ¥1,800,000,000)

"2. The Loan will be made available by loan agreements to be concluded between the Government of the Republic of China and the Banks. The terms and conditions of the Loan as well as procedures for its utilization will be governed by the said loan agreements, which will contain, inter alia, the following principles:

"(a) The repayment period will be fifteen (15) years including three (3) years' grace.

"(b) The interest rate will be five and a half (5.5) per cent per annum.

"(c) The closing date of the Loan will be December thirty-first, 1976 for the project mentioned in 1 (a) above and December thirty-first, 1973 for the projects mentioned in 1 (b) and 1 (c) above.

"3. The Loan will be made available to cover payments to be made to Japanese suppliers by Chinese importers under such contracts as may be entered into in Japanese yen between them for the purchase of products of Japan and related services of Japanese nationals required for the implementation of the above-mentioned projects.

"4. With regard to the shipping and marine insurance of goods purchased under the Loan, the Government of the Republic of China shall not impose any restriction that may hinder a fair and free competition of the shipping and marine insurance companies of the two countries.

"5. The Government of the Republic of China shall exempt the Banks from any Chinese fiscal levy or tax on and/or in conection with the Loan and interest accruing therefrom.

"6. The two Governments will consult with each other in respect of any matter that may arise from or in connection with the foregoing understanding.

"I should be grateful if Your Excellency would confirm the foregoing understanding on behalf of the Government of the Republic of China."

I have further the honour to confirm the foregoing understanding on behalf of the Government of the Republic of China.