SENIOR INTERDEPARTMENTAL GROUP ON INTERNATIONAL ECONOMIC POLICY

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP85-01156R000200260018-9
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 19
• Document Creation Date: December 21, 2016
• Document Release Date: December 8, 2008
• Sequence Number: 18
• Publication Date: July 27, 1984
• Content Type: MEMO

EXECUTIVE SECRETARIAT
ROUTING SLIP
ACTION
INFO
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Approved For Release 2008/12/08: CIA-RDP85-01156R000200260018-9
 MEMORANDUM FOR
OFFICE OF THE SECRETARY OF THE TREASURY
WASHINGTON. D.C. 20220
THE
VICE PRESIDENT
THE
SECRETARY
OF STATE
THE
SECRETARY
OF DEFENSE
THE
ATTORNEY
GENERAL
THE
SECRETARY
OF AGRICULTURE
THE
SECRETARY
OF COMMERCE
THE
DIRECTOR,
OFFICE OF MANAGEMENT AND BUDGET
L-DIRECTOR OF CENTRAL INTELLIGENCE
UNITED STATES TRADE REPRESENTATIVE
ASSISTANT TO THE PRESIDENT FOR NATIONAL SECURITY
AFFAIRS
ASSISTANT TO THE PRESIDENT & DEPUTY TO THE CHIEF
OF STAFF
ASSISTANT TO THE PRESIDENT FOR CABINET AFFAIRS
CHAIRMAN, COUNCIL OF ECONOMIC ADVISORS
ASSISTANT TO THE PRESIDENT FOR POLICY DEVELOPMENT
SUBJECT Senior Interdepartmental Group on
International Economic Policy
Attached is the revised working group report to the SIG-IEP on
extraterritoriality. A meeting of the SIG-IEP will be scheduled
Executive Secretary and
Executive Assistant to the Secretary
 United States Department of State
MEMORANDUM FOR MR. CHRISTOPHER HICKS
DEPARTMENT OF THE TREASURY
The Department has agreed with the Department of Justice on
several minor textual changes in the July 3 report of the Under
Secretaries group on conflicting requirements (extraterritorial
application of U.S. law). These are reflected in the attached
revised report, dated July 12, and in a bracketed and
underlined version of that report which shows the changes
made. We request that the these documents be provided the
SIG-IEP participants in advance of the rescheduled session on
extraterritoriality.
Charles Hil
1. Revised Report to the SIG/IEP
2. Revised Report to the SIG/IEP - Changes Indicated
 Approved For Release 2008/12/08: CIA-RDP85-01156R000200260018-9
Working Group
Report to the SIG/IEP
July 12, 1984
CONFLICTING REQUIREMENTS ('EXTRATERRITORIALITY')
MANAGING THE PROBLEM
ISSUE
What additional steps should be taken to manage the problem
of conflicting requirements ('extraterritoriality') and to
respond to the demand for prior notice to and consultation with
countries potentially affected by a proposed extraterritorial
action?
BACKGROUND
A number of strong U.S. policy, regulatory and law
enforcement interests have led to the application of U.S. law
to persons and conduct abroad. These actions at times have
clashed with the interests of other governments and produced
political, economic and legal disputes. These governments have
objected to what they see as U.S. intrusions into their
sovereignty and U.S. efforts to control companies or activities
in their territory in accordance with U.S. interests, policies
and laws, regardless of their own, and are increasingly
resorting to blocking laws to defend their interests as they
perceive them.
Such clashes can have significant adverse impact on a range
of U.S. interests. For example, U.S. subpoenas for financial
records located in foreign bank secrecy jurisdictions are an
important component of an aggressive enforcement strategy in
such areas as the President's war on organized crime and
narcotics trafficking; however, they sometimes produce not
only adverse diplomatic and political reactions, but may also
increase the obstacles foreign governments raise to our law
enforcement needs over the long term. Re-export controls are
vital to the integrity of a basic export control system;
however, if imposed or changed retroactively or in situations
exceeding the basic allied consensus, they can lead foreign
companies interested in export to treat U.S. companies as the
least preferred sources, as with the European effort to engineer
U.S. engines and avionics out of Airbus Industry products.
Applying U.S. sanctions and controls to foreign subsidiaries of
U.S. firms may be important to the policy objective in question;
however, this may adversely affect the investment and trade
opportunities of American companies abroad. Moreover, unfair
burdens can be imposed on the firms and individuals caught
between conflicting requirements of two governments.
 Approved For Release 2008/12/08: CIA-RDP85-01156R000200260018-9
The U. S. has been actively engaged in bilateral
discussions, principally with Canada and the United Kingdom,
and multilateral discussions in the O.E.C.D., on the overall
issue of extraterritoriality or conflicts of jurisdiction. In
March, we signed a memorandum of understanding with Canada
concerning notice and consultation on antitrust matters. We
have been actively working to resolve extraterritorial evidence
problems with the Swiss. While these governments have been
seeking primarily to curtail the unilateral legal reach of the
U.S. to persons and conduct in their territories, we have been
seeking from them greater understanding of, and accommodation
to, the legitimate U.S. interests which those U.S. legal
requirements serve. For example, we have been seeking mutual
law enforcement assistance agreements to provide an alternative
to unilateral legal action in gathering evidence from abroad.
We have also been actively exploring the request of the U.K.
and Canada that procedures for prior notice and consultation be
established for significant U.S. 'extraterritorial' actions.
In May, the O.E.C.D. Member countries, at the ministerial
level, endorsed a very general set of considerations and
'practical approaches' (full text attached) regarding
conflicting requirements, including blocking actions, which we
had worked out in extensive prior negotiations. The general
considerations are the following:
'In contemplating new legislation, action under
existing legislation or other exercise of jurisdiction
which may conflict with the legal-requirements or
established policies of another Member Country and lead to
conflicting requirements being imposed on multinational
corporations, the Member countries concerned should:
have regard to relevant principles of international
law;
endeavor to avoid or minimise such conflicts and the
problems to which they give rise by following an
approach of moderation and restraint, respecting and
accommodating the interests of other Member
countriesl);
take fully into account the sovereignty and legitimate
economic, law enforcement and other interests of other
Member countries; and
1/ 'applying the principle of comity, as it is understood in
some Member countries, includes following an approach of this
nature in exercising one's jurisdiction.'
 Approved For Release 2008/12/08: CIA-RDP85-01156R000200260018-9
- 3 -
bear in mind the importance of permitting the
observance of contractual obligations and the possible
adverse impact of measures having a retroactive effect.
'Member countries should endeavor to promote
co-operation as an alternative to unilateral action to
avoid or minimise conflicting requirements and problems
arising therefrom. Member countries should on request
consult one another and endeavor to arrive at mutually
acceptable solutions to such problems.'
The 'practical approaches' agreed in the O.E.C.D. are, in
essence, to develop bilateral notice and consultation
arrangements, consider requests for bilateral-or multilateral
notice and consultation outside such arrangements, give notice
as soon as practicable of proposed new laws or regulations with
significant potential for conflicts over 'extraterritoriality',
to bear in mind the value of early notice of other potentially
significant extraterritorial actions, and to give prompt and
full consideration to proposals which may be made by other
Member countries in any such consultations that would lessen or
eliminate conflicts.
This set of general considerations and approaches, which
successfully defused the 'extraterritoriality' issue for the
May Ministerial and June Summit, was made possible by the
advanced stage which had been reached in the Executive Branch
consideration of how to manage the 'extraterritoriality'
problem, in particular a draft report of the Undersecretaries'
Working Group. That draft set out an essentially agreed
discussion of the problem and an action proposal for internal
Executive Branch coordination and for notification of and
consultation with foreign governments.
At present, the broadest outlines of the Working Group's
draft action proposal regarding foreign governments have been
agreed in the O.E.C.D.; talks are continuing with the United
Kingdom and Canada on such issues as the extra-territorial
application of export controls and anti-trust laws, as well as
subpoenas for off-shore documents. However, the action
proposals regarding foreign government notice and consultation
and internal Executive Branch coordination remain to be
completed and confirmed.
PROPOSAL
I. INTERNAL COORDINATION
A. Where U.S. actions which impinge upon foreign
jurisdictions are contemplated, international law and comity
call for us to consider the potentially conflicting sovereign
~c. /~~cc,ptn~ctc-tiw, dti?aL aCA,hSal.~c~ter l~,tlaNlLtrt,t_.
~ ff
 interests, laws or-policies of those jurisdictions in deciding
whether and how to act. This is also required by our need to
have foreign cooperation on export, law enforcement, and other
international matters and to avoid unnecessay harm to our
bil teral relations. It is Executive Branch policy to do
so.!/
B. As a general matter, each Executive Branch agency with
regulatory or law enforcement responsibilities which proposes
to take actions with extraterritorial impact has primary
responsibility to assure proper consideration of such foreign
interests, laws or policies.
C. An agency which proposes to take an action which is
directed at conduct abroad and which it has reason to believe
has significant potential for raising concerns over
extraterritoriality on the part of a foreign state2/ will
notify and coordinate with the Secretary of State or his
designee, subject to the constraints imposed by the relevant
legal and operating requirements.4/
2/ This statement of policy, and the following provisions
regarding internal coordination and notification of and
consultation with foreign governments are intended solely for
the guidance of the departments and agencies of the United
States Government with regulatory or law enforcement
responsibilities. They are not intended to, do not, and may
not be relied upon to create any substantive or procedural
rights enforceable by law by any party in any civil or criminal
proceeding.
3/ As a general rule, this category would not include such
matters as: action taken under established working arrangements
with the competent authorities of foreign governments, whether
in law enforcement generally, or under specific arrangements
such as tax or customs agreements; routine license denials
under clearly established foreign assets or re-export control
guidelines where no factors indicate special foreign government
concern; actions taken by officers stationed abroad within
established country-team arrangements with the foreign
government concerned; and actions relating to the requirements
for doing business in the United States, such as quality or
labelling requirements for goods to be sold here. It would
include significant statements of official U.S. views on
extraterritoriality or conflicting requirements, the
requirements of international law or comity in such matters, or
foreign government interests or positions regarding them.
4/ Operating requirements would generally preclude notice of
actions which are both high volume and (continued next page)
 Approved For Release 2008/12/08: CIA-RDP85-01156R000200260018-9
The coordination is intended to assist the agency in
considering the foreign interests, laws or policies,
alternatives to unilateral action, and means to minimize
difficulties.
D. Coordinatiooo procedures should ensure against undue
operational burdens!/ or delays, duplication of existing
arrangements and the introduction of improper considerations
into the administration of the responsibilities of the
respective agencies. The normal minimum time for
notification should be five working days in advance of the
proposed action.
E. Agencies will notify the Secretary of State or his
designee, or the Chief of the U.S. Diplomatic Mission, of
investigative activity proposed to be carried out by U.S.
officials or agents in a foreign jurisdiction for which the
consent of the foreign government has not yet been obtained.
F. Such coordination will not affect the legal
responsibilities and authorities of the notifying agencies.
II. NOTIFICATION OF FOREIGN GOVERNMENTS
A. The United States will implement the understanding on
notice and consultation regarding U.S. actions which impose
conflicting requirements on multinational enterprises, reached
(continued) of largely de mnimis potential for creating
extraterritoriality problemi, such as export license
pre-clearance inquiries or tax inquiries mailed to a person
abroad. Meaningful coordination may be limited or precluded,
in certain cases, by: grand jury, tax information and other
legal secrecy requirements; concern for human life or safety;
time constraints and the need to avoid disclosures which might
prejudice litigation, investigation, or sensitive sources and
methods.
5/ For operational reasons, the Department of Justice would
not set up procedures to identify for coordination of civil or
criminal law enforcement matters handled outside of Department
of Justice Washington headquarters, but would identify for
coordination matters handled or considered in Washington, such
as the Export Administration Act, including its antiboycott
provisions, munitions control, IEEPA, Trading with the Enemy
Act, neutrality laws, anti-trust (under existing procedures),
and the enforcement of off-shore subpoenas for documents in
jurisdictions likely to object to such actions.
 Approved For Release 2008/12/08: CIA-RDP85-01156R000200260018-9
- 6 -
within the O.E.C.D., and will apply the same general
considerations and practical approaches to other U.S. actions
which have significant potential for raising concerns in
friendly nations regarding conflicting requirements or
extraterritoriality.
B. The United States, accordingly, is prepared to:
1. Develop mutually beneficial, practical and
appropriately safeguarded bilateral arrangements, formal or
informal, for notification to and consultation with other
friendly governments.
2. Give prompt and sympathetic consideration to
requests for notification and bilateral consultation on an
ad hoc basis by a country which considers that its
interests may be affected by a United States measure with
extraterritorial effect.
3. Inform the other concerned O.E.C.D. countries as
soon as practicable of new legislation or regulations
proposed by the administration which have significant
potential for conflict with the legal requirements or
established policies of those countries and for giving rise
to conflicting requirements being imposed on persons or
firms in their territory.
4. Give prompt and sympathetic consideration to
requests by friendly countries for consultations under
multilateral arrangements in appropriate cases.
5. Give prompt and full consideration to proposals
which may be made by other countries in bilateral or
multilateral consultations that would lessen or eliminate
conflicts.
C. Under arrangements for notification or consultation
through the Department of state regarding action of another
agency, the consent of that other agency will be required.
D. Where appropriate# notice and consultation arrangements
would be negotiated in the context of efforts to secure
enhanced cooperation with foreign governments in meeting U.S.
objectives. In particular, it is the policy of the United
States to seek mutual assistance arrangements in law enforcement
and to further that policy through the inclusion of bilateral
arrangements for notice and consultation.
 PRFSS/A(14)21
Paris, 11th May, 1984
CDtft IQUE
1. The Council of the Organisation for Economic Co-operation and
Development meeting on 17th-18th May at Ministerial level, agreed upon
policies required to strengthen the international trading and financial
system, and to extend economic recovery into durable employment-creating*
growth.. . . .
36. Noting the growing importance and scope of problems arising from the
Imposition by Member countries of conflicting requirements on multinational
enterprises, Ministers agreed to strengthen bilateral and multilateral
co-operation In this area in order to avoid or limit the scope of such
conflicts. Accordingly they endorsed a set of general considerations and
practical approaches to these problems as set out in paragraphs 23-33 of the
Review Report. Ministers also noted the concern over the impact of unitary
taxation on international Investment and the importance of achieving an early
resolution of the problem.
 I
A,
Ae ort on the 1981 Review of the 1976 OECD Declaration
'Pd Decisions on International Investment and Multinational Enterprises
2. CONTL3CrING RnQUIRn'i?S IMPOSED ON 14ATIN1TIONAI ENTinRIS3S
23. Issues arising from conflicting requirements imposed by Member
countries on multinationaj enterprises were considered by the drafters of
the 1976 Declaration and Decisions. Of particular relevance are paragraph 11
of the Introduction to the Guidelines for Multinational Enterprises and
paragraph S of the Revised Decision of the Council on Intergovernmental
Consultations procedures on the Guidelines. In this context, paragraph 7 of
the Introduction to the Guidelines for M 1tinational Enterprises is also
recalled.
24. Concerns arise in particular when a country's legislation or legal
requirements with extraterritorial reach conflict with legislation or policies
in other countries and affect, for instance. the operations of entities of
multinational enterprises located in these countries. The Importance and
scope of such problems has tended to grow in recent rearso this trend
reflectin , inter alga, the increasing interdependence of OECD economies.
Conduct abroad has an increasing impact on national economies and an the
possibilities-for avoidance of national laws. Some countries have attempted
to control or counteract such developments through the adoption. modification
or application of laws and regulations having an extraterritorial reach,
whereas some of the countries affected have adopted blocking legislation or
have taken blocking actions.
2S. All in all, the risk of conflicting requirements being imposed on
multinational enterprises by Member countries is viewed to be increasing, the
effects of this on the investment climate tending to become more significant.
 Approved For Release 2008/12/08: CIA-RDP85-01156R000200260018-9
This is y the CPC has come to the conclusion that bilateral and
multil ral co-operation should be strengthened in that area. to avoid such
andfsafe or ins alimit n internationaal,enin the vironmenteffaavvtourablentortheidevelopmentgof
trade and investment.
26. For these reasons, the CDg has agreed to the general considerations
and the practical approaches set out in paragraphs 27 to 30 below, which
Member countries should take into account whenever they consider the adoption.
modification or application of laws or regulations which may lead to
conflicting requirements being imposed on multinational enterprises.
a) General Considerations
27. In contemplating new legislation, action under existing legislation or
other exercise of jurisdiction which my conflict with the legal requirements
or established policies of another Member country and lead to conflicting
requirements being imposed on multinational enterprises. the Member countries
concerned should:
i) Have regard to relevant principles of international law;
ii) Shdeavour to avoid or minimise such conflicts and the problems to
which they give rise by following an approach of moderation and
restraint, respecting and accommodating the interests of other
Member countries (21);
iii) Take fully into account the sovereignty and legitimate economic,
law enforcement and other interests of other Member countries;
iv) Bear in mind the importance of permitting the observance of
contractual obligations and the possible adverse impact of
measures having a retroactive effect.
28. Member countries should endeavour to prompote co-operation as an
alternative to unilateral action to avoid or minimise conflicting requirements
and problems arising therefrom. Member countries should on request consult
one another and endeavour to arrive at mutually acceptable solutions to such
problems.
b) Practical Approaches
29. Recalling paragraph 5 of the Revised Decision of the Council on
Intergovernmental Consultation procedures on the Guidelines for Multinational
Enterprises, Member countries also recognised that in the majority of
circumstances, effective co-operation may best be pursued on a bilateral
basis. On the other hand, there may be cases where the multilateral approach
could be more effective.
 Approved For Release 2008/12/08: CIA-RDP85-01156R000200260018-9
X11?
Member countries should therefore be prepared to:
I)_ Develop mutually beneficial. practical and appropriately
safeguarded bilateral arrangements, formal or informal. for
notification to and consultation with other Member countries;
JJ)1WVt prompt and sympathetic consideration to re"sts for
notification and bilateral consultation on an ad hoc basis made
by any Member country which considers that its interests may be
affected by any measure of the type referred to ender
paragraph 27 above, taken by another Member country with which it
does not have such bilateral arrangements;
iii) Inform the other concerned Member countries as soon as
practicable of new legislation or regulations proposed by their
Governments for adoption which have significant potential for
conflict with the legal requirements or established policies of
other Member countries and for giving rise to conflicting
requirements being imposed on multinational enterprises;
iv) Give prompt and sympathetic consideration to requests by other
Member countries for consultation in the CINE or through other
mutually acceptable arrangements. Such consultations would be
facilitated by notification at the earliest stage practicable;
v) Give prompt and full consideration to proposals which my be made
by other Member countries in any such consultations that would
lessen or eliminate conflicts.
c) Future Work
31. The CD2 will continue to serve as a forum for consideration of the
question of conflicting requirements, includings as appropriate, the national
and international legal principles involved.
32. Member countries should be prepared to assist the CIM in its periodic
reviews of the experience with the practical approaches described In
paragraph 30 above.
33. the Committee shall periodically invite the Business and Industry
Advisory Committee to the OECD (EIAC) and the Trade Union Advisory Committee
to the OEM (fl11C) to express their views on matters relating to conflicting
34. In view of the importance attached to the foregoing considerations, it
is proposed that Ministers. in endorsing the conclusions and recommendations
of the present Report make specific mention of the general principles and
practical approaches described in paragraphs 27 to 30 above. It is also
proposed that the Council Decision on the Guidelines for Multinational
fl terprises. already referring to the subject of conflicting requirements
imposed on multinational enterprises. be amended to reflect some of these
results.
 Approved For Release 2008/12/08: CIA-RDP85-01156Rgg0002002pp60018-9
ReportrtontherSIG/IEP
July 12, 1984
CONFLICTING REQUIREMEGNTS ('EXTRATERRITORIALITY')
MANAGIN THE PROBLEM
ISSUE
What additional steps should be taken to manage the problem
of conflicting requirements ('extraterritoriality') and to -Ta respon to the demand for pr or notice to and consultation with
countries potentially affected by a proposed extraterritorial
action?
BACKGROUND
A number of strong U.S. policy, regulatory and law
enforcement interests have led to the application of U.S. law
to persons and conduct abroad. These actions at times have
clashed with the interests of other governments and produced
political, economic and legal disputes. These governments have
objected to what they see as U.S. intrusions into their
sovereignty and U.S. efforts to control companies or activities
in their territory in accordance with U.S. interests, policies
and laws, regardless of their own, and are increasingly
resorting to blocking laws to defend their interests as they
perceive them.
Such clashes can have significant adverse impact on a range
of U.S. interests. For example, U.S. subpoenas for financial
records located in foreign bank secrecy jurisdictions are an
important component of an aggressive enforcement strategy in
such areas as the President's war on organized crime and
narcotics trafficking; however, they sometimes produce not
only adverse diplomatic and political reactions, but may also
increase the obstacles foreign governments raise to our law
enforcement needs over the long term. Re-export controls are
vital to the integrity of a basic export control system;
however, if imposed or changed retroactively or in situations
exceeding the basic allied consensus, they can lead foreign
companies interested in export to treat U.S. companies as the
least preferred sources, as with the European effort to engineer
U.S. engines and avionics out of Airbus Industry products.
Applying U.S. sanctions and controls to foreign subsidiaries of
U.S. firms may be important to the policy objective in question;
however# this may adversely affect the investment and trade
opportunities of American companies abroad. Moreover, unfair
burdens can be imposed on the firms and individuals caught
between conflicting requirements of two governments.
 Approved For Release 2008/12/08: CIA-RDP85-01156R000200260018-9
- 2 -
The U. S. has been actively engaged in bilateral
discussions, principally with Canada and the United Kingdom,
and multilateral discussions in the O.E.C.D., on the overall
issue of extraterritoriality or conflicts of jurisdiction. In
March we signed a memorandum of understandin with Canada
concern ng notice and consultation on antitrust matters. We
have been actively working to resolve extraterritorial evidence
problems with the Swiss. While these governments have been
seeking primarily to curtail the unilateral legal reach of the
U.S. to persons and conduct in their territories, we have been
seeking from them greater understanding of, and accommodation
to, the legitimate U.S. interests which those U.S. legal
requirements serve. For example, we have been seeking mutual
law enforcement assistance agreements to provide an alternative
to unilateral legal action in gathering evidence from abroad.
We have also been actively exploring the request of the U.K.
and Canada that procedures for prior notice and consultation be
established for significant U.S. 'extraterritorial' actions.
In May, the O.E.C.D. Member countries, at the ministerial
level, endorsed a very general set of considerations and
'practical approaches' (full text attached) regarding
[extraterritoriality] conflicting requirements, including
blocking actions, which we had worked out in extensive prior
negotiations. The general considerations are the following:
'In contemplating new legislation, action under
existing legislation or other exercise of jurisdiction
which may conflict with the legal requirements or
established policies of another Member Country and lead to
conflicting requirements being imposed on multinational
corporations, the Member countries concerned should:
have regard to relevant principles of international
law;
endeavor to avoid or minimise such conflicts and the
problems to which they give rise by following an
approach of moderation and restraint, respecting and
accommodating the interests of other Member
countriesl';
take fully into account the sovereignty and legitimate
economic, law enforcement and other interests of other
Member countries; and
j/ 'applying the principle of comity, as it is understood in
some Member countries, includes following an approach of this
nature in exercising one's jurisdiction.'
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 Approved For Release 2008/12/08: CIA-RDP85-01156R000200260018-9
3 -
bear in mind the importance of permitting the
observance of contractual obligations and the possible
adverse impact of measures having a retroactive effect.
'Member countries should endeavor to promote
co-operation as an alternative to unilateral action to
avoid or minimise conflicting requirements and problems
arising therefrom. Member countries should on request
consult one another and endeavor to arrive at mutually
acceptable solutions to such problems.'
The 'practical approaches' agreed in the O.E.C.D. are, in
essence, to develop bilateral notice and consultation
arrangements, consider requests for bilateral or multilateral
notice and consultation outside such arrangements, give notice
as soon as practicable of proposed new laws or regulations with
significant potential for conflicts over 'extraterritoriality',
to bear in mind the value of early notice of other potentially
significant extraterritorial actions, and to give prompt and
full consideration to proposals which may be made by other
Menber countries in any such consultations that would lessen or
eliminate conflicts.
This set of general considerations and approaches, which
successfully defused the 'extraterritoriality' issue for the
May Ministerial and June Summit, was made possible by the
advanced stage which had been reached in the Executive Branch
consideration of how to manage the 'extraterritoriality'
problem, in particular a draft report of the Undersecretaries'
Working Group. That draft set out an essentially agreed
discussion of the problem and an action proposal for internal
Executive Branch coordination and for notification of and
consultation with foreign governments.
At present, the broadest outlines of the Working Group's
draft action proposal regarding foreign governments have been
agreed in the O.E.C.D.; talks are continuing with the United
Kingdom and Canada on such issues as the extra-territorial
application of export controls and anti-trust laws, (and] as
well as subpoenas for off-shore documents. Bowever, the action
proposals regarding foreign government notice and consultation
and internal Executive Branch coordination remain to be
completed and confirmed.
PROPOSAL
I. INTERNAL COORDINATION
A. Where U.S. actions which impinge upon foreign
jurisdictions are contemplated, international law and comity
call for us to consider the potentially conflicting sovereign
 Approved For Release 2008/12/08: CIA-RDP85-01156R000200260018-9
4 -
interests, laws or policies of those jurisdictions in deciding
aveh oreignhcoo eration onThis eilslaweenford by our need to
9 P export, Enforcement, and other
international matters and to avoid unnecessay harm to our
bilateral relations. It is Executive Branch policy to do
so.?/
B. As a general matter, each Executive Branch agency with
regulatory or law enforcement responsibilities which proposes
to take actions with extraterritorial impact has primary
responsibility to assure proper consideration of such foreign
interests, laws or policies.
C. An agency which proposes to take an action which is
directed at conduct abroad and which it has reason to believe
has significant potential for raising [extraterritorial)
conceps over extraterritorial it on the part of a foreign
state_ will notify and coon inate with the Secretary of
State or his designee, subject to the constraints imposed by
the relevant legal and operating requirements.!/
V This statement of policy, and the following provisions
regarding internal coordination and notification of and
consultation with foreign governments are intended solely for
the guidance of the departments and agencies of the United
States Government with regulatory or law enforcement
responsibilities. They are not intended to, do not, and may
not be relied upon to create any substantive or procedural
rights enforceable by law by any party in any civil or criminal
proceeding.
3/ As a general rule, this category would not include such
matters as: action taken under established working arrangements
with the competent authorities of foreign governments, whether
in law enforcement generally, or under specific arrangements
such as tax or customs agreements; routine license denials
under clearly established foreign assets or re-export control
guidelines where no factors indicate special foreign government
concern; actions taken by officers stationed abroad within
established country-team arrangements with the foreign
government concerned; and actions relating to the requirements
for doing business in the United States, such as quality or
labelling requirements for goods to be sold here. It would
include significant statements of official U.S. views on
extraterritoriality or conflicting requirements, the
requirements of international law or comity in such matters, or
foreign government interests or positions regarding them.
4/ Operating requirements would generally preclude notice of
actions which are both high volume and (continued next page)
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The coordination is intended to assist the agency in
considering the foreign interests, laws or policies,
alternatives to unilateral action, and means to minimize
difficulties.
D. CoordinatiO procedures should ensure against undue
operational burdensi/ or delays, duplication of existing
arrangements and the introduction of improper considerations
into the administration of the responsibilities of the
respective agencies. The normal minimum time for
notification should be five working days in advance of the
proposed action.
E. Agencies will notify the Secretary of State or his
designee, or the Chief of the U.S. Diplomatic Mission, of
investigative activity proposed to be carried out by U.S.
officials or agents in a foreign jurisdiction for which the
consent of the foreign government has not yet been obtained.
F. Such coordination will not affect the legal
responsibilities and authorities of the notifying agencies.
II. NOTIFICATION OF FOREIGN GOVERNMENTS
A. The United States will implement the understanding on
notice and consultation regarding U.S. actions which impose
conflicting requirements on multinational enterprises, reached
(continued) of largely de minimispotential for creating
extraterritoriality problems, such as export license
pre-clearance inquiries or tax inquiries mailed to a person
abroad. Meaningful coordination may be limited or precluded,
in certain cases, by: grand jury, tax information and other
legal secrecy requirements; concern for human life or safety;
time constraints and the need to avoid disclosures which might
prejudice litigation, investigation, or sensitive sources and
methods.
5/ For operational reasons, the Department of Justice would
not set up procedures to identify for coordination of civil or
criminal law enforcement matters handled outside of Department
of Justice [in] Washington headquarters, but would identify for
coordination matters handled or considered in Washington, such
as the Export Administration Act, including its antiboycott
provisions, munitions control, IEEPA, Trading with the Enemy
Act, neutrality laws, anti-trust (under existing procedures),
and the enforcement of off-shore subpoenas for documents in
jurisdictions likely to object to such actions.
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within the O.E.C.D., and will apply the same general
considerations and practical approaches to other U.S. actions
which have significant potential for raising
[extraterritoriality] concerns in friendly nations regarding
conflicting requirements or extraterritoriality.
B. The United States, accordingly, is prepared to:
1. Develop mutually beneficial, practical and
appropriately safeguarded bilateral arrangements, formal or
informal, for notification to and consultation with other
friendly governments.
2. Give prompt and sympathetic consideration to
requests for notification and bilateral consultation on an
ad hoc basis by a country which considers that its
interests may be affected by a United States measure with
extraterritorial effect.
3. Inform the other concerned O.E.C.D. countries as
soon as practicable of new legislation or regulations
proposed by the Administration which have significant
potential for conflict with the legal requirements or
established policies of those countries and for giving rise
to conflicting requirements being imposed on persons or
firms in their territory.
4. Give prompt and sympathetic consideration to
requests by friendly countries for consultations under
multilateral arrangements in appropriate cases.
5. Give prompt and full consideration to proposals
which may be made by other countries in bilateral or
multilateral consultations that would lessen or eliminate
conflicts.
C. Under arrangements for notification or consultation
through the Department of State regarding action of another
agency, the consent of that other agency will be required.
D. Where appropriate, notice and consultation arrangements
would be negotiated in the context of efforts to secure
enhanced cooperation with foreign governments in meeting U.S.
objectives. In particular, it is the policy of the United
States to seek mutual assistance arrangements in law enforcement
and to further that policy through the inclusion of bilateral
arrangements for notice and consultation.