United States for purposes of the import and tax laws and regulations of the United States and such laws and regulations shall be administered so that there shall be no discrimination between hard minerals recovered from the deep seabed and comparable hard minerals recovered within the United States. PENALTIES; RIGHTS OF ACTION SEC. 12. (a) Any person subject to the jurisdiction of the United States may be enjoined from directly or indirectly violating this Act or any regulations prescribed thereunder, interfering with development pursuant to any license issued under this Act or by any reciprocating state, or removing without authority of the licensee any hard minerals from any block subject to such a license. Any such person who directly or indirectly commits such violation, interference, or removal, shall be liable to any person injured thereby for actual damages. Any such willful violation, interference, or removal by such person shall be a misdemeanor punishable by up to six months' imprisonment, a fine of $2,000, or both. (b) The United States district courts shall have original jurisdiction to enforce subsection (a) and to revoke licenses under section 8(b), and such actions may be initiated in any judicial district where the defendant resides or may be found. Any regulation prescribed by the Secretary under this Act, any issuance, denial, or condition of a license under this Act by the Secretary, any consent or refusal of consent by the Secretary to the transfer of such license, and any determination of the Secretary allowing or disallowing reimbursement under section 10, shall be subject to judicial review on petition of any interested person in accordance with chapter 158 of title 28 of the United States Code. ENACTMENT DATE; SEPARABILITY SEC. 13. This Act shall take effect on the date of its enactment. If any provision of this Act or any application thereof is held invalid, the validity of the remainder of the Act or of any other application shall not be affected thereby. Hon. LEONOR K. SULLIVAN, COMPTROLLER GENERAL OF THE UNITED STATES, Chairman, Committee on Merchant Marine and Fisheries, House of Representatives. DEAR MADAM CHAIRMAN: Reference is made to your letter of February 1, 1973, in which you request our comments on H.R. 9, a bill, which if enacted, would be cited as the "Deep Seabed Hard Mineral Resources Act." H.R. 9 would provide the Secretary of the Interior with authority to promote the conservation and orderly development of the hard mineral resources of the deep seabed, pending adoption of an international regime therefor. The bill provides that the Secretary shall issue licenses for the development of specified surface and subsurface blocks of the deep seabed, and that the license fee shall be $5,000. Section 9 of the bill provides that a fund be established for assistance, as Congress may hereafter direct, to developing reciprocating States, which are defined as those designated by the President, taking into consideration per capita gross national product and other appropriate criteria. This fund would be composed of a percentage of all license fees for development of surface and subsurface blocks collected by the United States and a percentage of all income tax revenues derived by the United States which are attributable to recovery of hard minerals from the deep seabed. We are generally opposed to the establishment of this type of fund because the activities of the fund would not be subject to direct congressional control through the annual reviews and affirmative action on planned programs and financing requirements that attend the appropriation process. We suggest that if H.R. 9 be favorably considered, it be amended to provide for direct appropriations by the Congress on a fiscal year basis for assistance to developing reciprocating States. If it is decided to retain the fund in the bill, we believe that it should be subject to annual congressional review in the same manner as appropriation requests. We also suggest that the bill specify the types of assistance that the funds can be used for, and provide a more specific definition of developing States. Section 10 (a) provides that licenses issued by the United States for development of the deep seabed may be made subject to any subsequent international agreement. The section further provides that the United States shall fully reimburse a licensee for any loss of investment or increased cost incurred within 40 years after issuance of the license due to requirements or limitations more burdensome than those of the proposed act, which are imposed by any such international agreement. We recognize there may be a need for a provision of this type in order to encourage development; however, it could subject the Government to unlimited liability. We therefore suggest that consideration be given to amending the bill to place limits on the Government's liability under this section. H.R. 9 would also authorize the Secretary of the Interior to issue licenses for the development of blocks of the deep seabed. The licenses would be subject to revocation if the licensees failed to make specified annual expenditures for the development of their licensed blocks. The bill contains no provisions to (1) require licensees to maintain complete and accurate records of their development expenses and (2) authorize the Secretary and the Comptroller General, or their authorized representatives, to have access for the purposes of audit to the licensees' books and records pertinent to their operations. We suggest that the bill be amended to incorporate such provisions. Language somewhat as follows could be used for this purpose. (a) Each recipient of a license under this Act shall keep such records as the Secretary shall describe, including records which fully disclose the expenditures for development required by section 7, and such other records as will facilitate an effective audit of such expenditures. (b) The Secretary and the Comptroller General of the United States, or any of their duly authorized representatives, shall have access for the purpose of audit and examination to any books, documents, papers and records of the licensees that are pertinent to the expenditures required under section 7. Section 5 of the bill provides for a fee of $5,000 by the applicant for a license. Also, section 7 provides for specific amounts of money to be expended for development. Since monetary values change with the passage of time, it may be desirable to state these amounts as minimums, subject to revision by the Secretary as he deems necessary. Chairman, Committee on Merchant Marine and Fisheries, DEAR MADAM CHAIRMAN: You have requested comments on H.R. 9, a bill "To provide the Secretary of the Interior with authority to promote the conservation and orderly development of the hard mineral resources of the deep seabed, pending adoption of an international regime therefor." On March 1, 1973, the Legal Adviser of the Department of State testified on behalf of the Executive Branch, including the Department of Justice, on H.R. 9, before the Oceanography Subcommittee of the House Merchant Marine and Fisheries Committee. The Legal Adviser was accompanied by Leigh S. Ratiner, Director for Ocean Resources, Department of the Interior, who elaborated further on the views of the Executive Department. The Department of Justice has no additional comments to make on that legislation at this time. The Office of Management and Budget has advised that there is no objection to the submission of this report from the standpoint of the Administration's program. Sincerely, MIKE MCKEVITT, Office of Legislative Affairs, Mrs. LEONOR K. SULLIVAN, DEPARTMENT OF STATE, Washington, D.C., March 6, 1973. Chairman, House Merchant Marine and Fisheries Committee, DEAR MADAM CHAIRMAN: Your letter of February 1, 1973 requests the Department of State's views on H.R. 9, the "Deep Seabed Hard Mineral Resource Act". In a letter to the Chairman of the Committee on Merchant Marine and Fisheries on May 19, 1972, the Chairman of the Interagency Law of the Sea Task Force indicated that the Executive Branch was not prepared at that time to state a position on H.R. 13904 which was identical to H.R. 9. In his May 19th letter, the Chairman of the Task Force noted the connection of H.R. 13904 with the Law of the Sea preparatory negotiations in the United Nations Seabed Committee, and said that we would report again on our views in the light of developments at the summer session of the Seabed Committee and the 27th General Assembly. Pursuant to your request of February 1, 1973 and the commitment we made on May 19, 1972, this letter provides Executive Branch views on H.R. 9 supplemented with an appendix on technical and other matters. By far the most important development at the 27th General Assembly regarding the Law of the Sea was the unanimous adoption of a Law of the Sea Conference Resolution. This resolution establishes a precise schedule for the Law of the Sea Conference and preparatory negotiations. Prparatory work in the UN Seabed Committee will be intensified in 1973, with provision for a five week session beginning in early March in New York and an eight week session beginning in early July in Geneva. The Resolution provides for convening a brief organizational session of the Law of the Sea Conference in New York iin November/December 1973, and for convening a second session of the Conference, for the purpose of dealing with substantive matters, in Santiago, Chile in April/May 1974. There is also provision for such subsequent sessions of the Conference if necessary, as may be decided by the Conference with the approval of the General Assembly. In this connection, it should be noted that in the preamble of the Conference Resolution the General Assembly expresses "the expectation that the conference may be concluded in 1974 and, if necessary, as may be decided by the conference with the approval of the General Assembly, at a subsequent session or subsequent sessions no later than 1975." The Resolution also provides for the General Assembly to review at its 28th session next fall the progress of preparatory work and, if necessary, to take measures to facilitate completion of the substantive work for the Conference and any other action it may deem appropriate. As a strictly legal matter, such a clause is unnecessary since the General Assembly has this authority in any event. Its inclusion made it easier to accommodate concerns about proceeding to a Conference in the absence of adequate preparation. Moreover, we and others have made it clear that we will wish to seek an adjustment in the schedule in order to ensure that there are more than eight weeks of work in 1974. The present hope of a large majority of States is that the kind of schedule outlined in the Conference Resolution can be met. This conclusion is necessarily based upon the expectation of important accomplishments in the preparatory work of the Seabed Committee in 1973. As significant as the content of the Conference Resolution was the fact that it was adopted unanimously. All groups involved in its negotiation expressed great sensitivity to the concerns of other States, and great efforts were devoted to arriving at a resolution which could command not merely a majority or a 2/3 majority, but general support. This augurs well for the future of Law of the Sea negotiations, since a successful Law of the Sea Conference will necessarily require a similar attitude of mutual respect and accommodation. Although not directly relevant to the legislation before us, there were other developments in the General Assembly this year that were less auspicious but which, nevertheless, merit reporting. A deep division of opinion dveloped regarding a request by certain land-locked and shelf-locked states for a study of the implications for the international seabed area of various proposed limits of national jurisdiction. It had been our hope that this issue could be resolved by negotiation and accommodation, but unfortunately, such an accommodation did not in fact occur until after a number of close votes and intense debate. The ultimate result was the adoption of a revision of the land-locked/shelflocked study resolution, as well as a companion resolution introduced by Peru calling for an analysis of the effect of different limits on coastal States. The U.S. has consistently supported reasonable requests for studies and information on Law of the Sea subjects, and in accordance with this policy we supported both the land-locked/shelf-locked proposal and the Peruvian proposal, One other significant development at this General Assembly, fortunately in keeping with the spirit that dominated the negotiation of the Conference Resolution, was the fact that no new resolution calling for a moratorium on deep seabed activities was introduced. While it would not be accurate to interpret this as an indication that States supporting the earlier moratorium resolution have changed their opinion, we believe that the avoidance of a renewed and divisive debate on this subject was related to the general attempts to ensure the best possible atmosphere as we enter the final stage of preparatory work this year. Needless to say, our own opposition to the moratorium remains unchanged. Turning to H.R. 9, the considerations expressed in our letter of May 19, 1972 on H.R. 13904 (identical to S.2801) remain applicable, and generally set forth the factors affecting our approach to H.R. 9. In the time that has elapsed, however, we have been able to give further consideration to the matter in the light of international and domestic developments. We are accordingly in a position now to stage a more definitive view on H.R. 9 and interim mining activities. First, we adhere to the policy on this subject contained in the President's Oceans Policy Statement of May 23, 1970. We continue to believe that it is necessary to achieve timely widespread international agreement on outstanding Law of the Sea issues in order to save over two-thirds of the earth's surface from national conflict and rivalry, protect it from pollution, and put it to use for the benefit of all. It remains vital to all our national interests involved in the Law of the Sea Conference that the world agree on a treaty that will properly accommodate the many and varied uses of ocean space including the seabeds. At the same time we believe that it is neither necessary nor desirable to try to halt exploration and exploitation of the seabeds beyond a depth of 200 meters during the negotiation process, provided that such activities are subject to the international regime to be agreed upon, which should include due protection of the integrity of investments made in the interim period. Second, we believe that there is reason to expect that the schedule for the Law of the Sea Conference outlined in the Conference Resolution just passed by the General Assembly will be adhered to. As previously indicated, the preamble of the Conference Resolution expressly states the expectation that the Conference will complete its work in 1974 or at the very latest in 1975. Third, we believe that with the Law of the Sea negotiations moving into a critical stage, it is necessary for States to be very careful to avoid actions that can have an adverse effect on the negotiating atmosphere. It is apparent that H.R. 13904 (now H.R. 9), independent of the particular content or merits of the Bill, has become a symbol to many countries of defiance of the multilateral negotiating process. Regardless of our views on the intent and effect of the legislation, it may be argued by others that the legislation is similar to unilateral claims that we oppose and that are contrary to our security, navigation and resource interests, and moreover preempts the Law of the Sea Conference on this issue. It is well known that we have urged legislative restraint on other countries during the multilateral negotiating process even when they felt important interests were involved; we believe we should do the same so long as there are reasonable prospects for a timely and successful conference. Fourth, we wish to insure that technology to mine the seabeds will be developed and that the United States will be able to look to seabed mineral resources as a new source of metals which would otherwise have to be imported with an attendant impact on our balance of payments and other interests. Fifth, we also believe that a secure and stable investment climate must surround seabed mining activity under any new legal regime. Sixth, we want to assure that all seabed mineral resource development will be compatible with sound environmental practices. The adoption of the Conference Resolution indicates that we should distinguish between two different time periods. The first is the period between the present time and the conclusion of the Conference in 1974 or at the latest 1975. The second is the period between the end of the Conference and the entry into force of a treaty. With respect to the second time period, we believe it may be desirable for the Law of the Sea Conference to provide at its conclusion for immediate provisional entry into force of some aspects of the international seabed regime. There is excellent precedent for this in the Chicago Civil Aviation Convention of 1944, which is one of the most widely ratified treaties in the world. This approach can accommodate the fears of many states that the establishment of an interim regime might still not lead to the establishment of a permanent regime, since in fact what we would be doing would be to bring certain parts of the permanent regime and machinery into operation earlier on a provisional basis. It is our intention to make clear in the international negotiations the advantages of, and the need for, the entry into force of a viable provisional international regulatory system for the deep seabeds as part of the general Law of the Sea treaty settlement in a way that ensures that the provisional system will be part of, and not a substitute for, the permanent system. We will spare no efforts to ensure that a successful Law of the Sea Conference can be concluded on schedule. However, this does not mean that we intend to focus our efforts exclusively on the Law of the Sea negotiations. Prudence dictates that we also begin at once to formulate a legislative approach on a contingency basis for two reasons. First, it could conceivably become clear during the negotiations that we have no reasonable basis for expecting a timely and successful Law of the Sea Conference. Second, we can prepare for provisional entry into force of some aspects of the international seabed regime once it is signed. While the approach in H.R. 9 does not appear to us to be satisfactory, we intend to continue the useful discussions we have been having with industry representatives and members of the public on this issue with a view to formulating such an approach within the Administration. Similarly, we have had interesting discussions of this problem with other nations. In this connection, it must be borne in mind that economic as well as political factors make it necessary that we understand and take into account the interests and views of other countries on this subject. United States companies will not be alone on the deep seabeds, nor will the United States be the only country affected by their activities. Thus, we also intend to continue our consultations with other interested States on this subject, and in particular with those States whose nationals may in the foreseeable future be in competition with our own companies. In this process, we will try to be guided by the need to avoid taking any definitive steps which would make the U.N. negotiations more difficult for ourselves or other nations, as well as the need to provide the essential elements of the financial security which industry considers necessary. Let me be quite clear about the timing of this course of action. First, we will commence work on alternative approaches immediately, and will concentrate on the period between signature and entry into force of the treaty; second, we will want to make a continuing assessment of the negotiations to determine if a timely and successful Conference will occur; and third, we will not ask Congress to pass alternative legislation for the period before the conclusion of the Conference if a timely and successful Conference is predictable. Let me also be clear as to what we mean by a "timely and successful" Conference. We would not regard a Conference as timely unless the schedule referred to in the preamble of the Conference Resolution is adhered to: in other words, a Convention, including arrangements regarding the provisional application of the international seabeds regime, would be opened for signature in 1974 or, at the latest, in 1975. In practical terms, this means not later than the summer of 1975, since many delegates would have to be present when the U.N. General Assembly convenes in September. Similarly, we could no longer regard the likely outcome of a Conference as successful should it become apparent that other States are not prepared to accommodate basic United States interests in a final Law of the Sea settlement. In our statement of August 10, 1972, before the U.N. Seabed Committee, we reiterated what those interests are. Three paragraphs from that statemen+ follow: "The views of my delegation on non-resource uses have been clearly stated on a number of occasions. It is our candid assessment that there is no possibility for agreement on a breadth of the territorial sea other than 12 nautical |