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December 29, 1965

Note: The Agreement entered Into force, December 29, 1965.

No. 175

The Department of Foreign Affairs presents its compliments to the Embassy of the United States of America and has the honor to acknowledge the receipt of the Embassy's note No. 521 dated December 28, 1965 which reads as follows;

"The Embassy of the United States of America presents its compliments to the Department of Foreign Affairs and has the honor to refer to recent discussions between officials of the two governments regarding procedures to govern the sale of privately owned motor vehicles by tax-exempt personnel at the United States bases to non-tax-exempt persons in the Philippines.

"During these discussions the two governments recognized that it is the right and responsibility of the Philippine Government to collect from the buyer those taxes which may be due at the time the sales in question take place, and that United States base officials should cooperate by requiring base personnel to deliver the automobiles sold to the buyers in the presence of Philippine customs officials to afford the Philippine Government a proper opportunity to collect the taxes. With this in mind it was agreed that the Philippine Government would establish and maintain outside but near Clark Air Base, Subic Bay Naval Base, and Sangley Point Naval Base a Bureau of Customs Office/Facility for these purposes. Agreement was also reached on the following procedures for the sales in question:

"1, All aspects of the sale (except only the delivery of. the vehicle as described below) including full payment will be accomplished by the buyer and seller on the base and in accordance with procedures promulgated by appropriate military authorities. The sale will be final for all purposes upon payment of the consideration stated in the Bill of Sale, Upon completion of the sales transaction a copy of the Bill of Sale will be forwarded to the office of the PMLO.

"2. After necessary processing of the vehicle by base authorities, the seller and buyer will proceed immediately with the vehicle to the Bureau of Customs Office/Facility located outside but near the base for the purpose of turning the vehicle over to the buyer in the presence of the Customs authorities. The Deputy Collector of Customs or his duly authorized representative located at the Customs Office/Facility will immediately acknowledge in writing and with signature on the reverse side of three copies of the Bill of Sale that the seller has delivered the vehicle to the buyer in his presence. There will be no fee charged for this signed acknowledgement.

"3. One copy of the Bill of Sale bearing the Customs Official's acknowledgement will be delivered to the PMLO who will review the certified copy of the Bill of Sale to determine the authenticity of the customs acknowledgement.

"During the discussions in question, the United States military officials concerned pointed out that a period of time would be required for revision, printing, distribution and promulgation of military base regulations governing sales of automobiles. The Embassy would, therefore, appreciate receiving at the Department's earliest convenience confirmation of the Philippine Government's understanding of the agreed procedures As set forth in this note as well as confirmation that arrangements have been completed for the establishment of a Bureau of Customs Office/Facility outside each of the three bases."

The Department is pleased to confirm to the Embassy that the procedures set forth in the above-quoted note have been substantially agreed upon by the Government of the Republic of the Philippines after a series of discussions between officials of the two Governments. The Department is likewise pleased to inform the Embassy that arrangements have been completed for the establishment of a Bureau of Customs Office/Facility outside each of the three bases and that the respective addresses of these offices/facilities will be communicated to the Embassy at a later date.

The Department avails itself of this opportunity to renew to the Embassy the assurances of its highest consideration.

Manila, December 29, 1965.