The Permanent Representative of the United States, Ambassador John Scali, in a letter on March 11, 1974 informing the Secretary-General of the United States' intention to make the donation said that the United States fully recognizes the United Nations' unique responsibility for Namibia and considers the fund a necessary and appropriate effort to aid some of the territory's people. He also said the United States believes the United Nations Funds for Namibia should be supported solely by voluntary contributions and not funded from the regular United Nations budget. Therefore, the United States does not plan to make further contributions to the fund until it ceases to receive allocations from the regular United Nations budget. The Ambassador further said that the United States makes its pledge subject to the condition that its contribution shall not exceed one-third of the total voluntary contributions to the fund.

Mr. DIGGS. Would you give us an update on the U.N. Council for Namibia and our position there with respect to participation?

Mr. KAISER. Yes, sir. The Council for Namibia was originally established as the Council for South-West Africa back in 1967. At that time the United States, along with I believe some 30 countries, had abstained from the resolution creating it. We had taken exception or found some difficulty with some of the functions that were given to the Council. The Council was assigned such functions as to make laws for the territory until the Legislative Assembly could be elected, establish a constituent assembly to write a constitution, to maintain law and order, and to proceed to Namibia where it was to be based to take over administration of the territory from the South African Government, and the resolution specified that the functions were to be discharged in the territory.

We felt that these functions were impractical and beyond the United Nations means to achieve. Therefore, we also declined to serve on the Council.

We have reviewed this question of Council membership and have every intention as a matter of fact, expectation of reviewing this matter again.

Mr. DIGGS. There is some speculation that the new Labor Government in the United Kingdom might join the Council.

What effect would that have on our position? Might we reconsider nonparticipation if the Labor Government decided that the United Kingdom should become a member?

Mr. KAISER. I believe, sir, that regardless of whether the British Government or any other government joins, or does not join, we will reconsider our postion. Obviously, should another government, such as the British Government, join the Council, we would certainly weigh that factor.

Mr. DIGGS. Well, are you saying that our Government does not consider the Council broadbased enough?

Is that the idea? And that, if the United Kingdom joined, particularly if they finally accepted the advisory opinion-they have not gone that far, I know-this would be encouraging? Is that why we are waiting?

Are we waiting for a broader base? We do not want to take the first step to broaden the base? Is that your understanding on that?

Mr. KAISER. No; sir, that is not my understanding. We have more difficulty, I believe, with the terms of reference for the Council. Now, these terms of reference, of course, could be changed. I am not in a position now to state precisely how the terms of reference or even membership would have to be changed that would lead us to take a

firm position. I wanted, however, to highlight the difficulties we have had with the terms of reference as well as the membership.

Mr. DIGGS. Give us an update about the discouragement of U.S. investment in Namibia.

Exactly what are we doing now with respect to that?

Mr. KAISER. I would have to recall, of course, Mr. Chairman, the fact that the Department of State addressed letters to all known American firms who were present in Namibia, drawing attention to our policy. This was done, I believe, in August 1970. Since then, there have been few written communications so far as I can recall. Certainly there have been many more conversations with representatives from American firms who come to the Office of Southern African Affairs to inquire about economic opportunities that might be available in Namibia. In those instances we acquaint them directly with what our policy is.

Mr. DIGGS. Are you saying that, unless someone comes and asks, that you react, to someone inquiring about it?

Mr. KAISER. In part, yes, sir, but also we have had occasions where word would come to us indirectly of a firm that might be interested even though they had not approached us directly, and in such cases we would write the firm to be sure that they were aware of the policy. In addition, I suppose I ought to mention that our policy toward Namibia is also contained in the State Department's Background Notes on Namibia. There it is very explicit, and this is for public distribution.9

Mr. DIGGS. I am sure you will recall the case of George Hauser last year who was not permitted by Pan American to board a plane to Windhoek, notwithstanding the fact that he had U.N. travel documents.

We were rather disturbed about the Department's, as we see it, narrow view of the appropriating resolution by holding that the Council's only authority was to go to the Namibian Government and that, since it cannot do that, it has no authority to issue a travel document or to do anything else of that nature.

Is that still the position of the Department?

Mr. KAISER. Mr. Chairman, I understand we honor the Council's authority to issue travel documents, but apparently what was really at question was the issuance of a visa by the Council. That was the point of departure.

Mr. DIGGS. Well, in order to fully understand then what the Department's position was, I would request some documentation of the rationale involved in the George Hauser case.

Mr. KAISER. Yes, sir.

Mr. DIGGS. Because the position would appear on the surface to be, as I pointed out, rather narrow.

[The information requested follows:]

GEORGE HAUSER'S EFFORTS TO TRAVEL TO NAMIBIA IN 1972

In 1972, Mr. George Hauser attempted to travel to Namibia on the basis of a visa issued by the Council for Namibia. We understand that Pan American Airlines declined to carry him from Kinshasa to Johannesburg because it did not regard him as properly documented and was concerned that it might be subject to a penalty by the South African Government.

"Background Notes" on Namibia appears in appendix at p. 262.

The United States position on the legal status of Namibia is well establis the United Nations has direct responsibility for the Territory; South Afri presence there is illegal; and South Africa is obliged to withdraw. South At has no right to exclude persons from Namibia, and the United States is preps to intercede with the South African Government on behalf of American citiz who request assistance in entering the Territory whether or not they have! issued visas by the South African authorities.

Since we support the entry of American citizens into the Territory, regard of visas they may possess, we consider the issue of the Council for Nami authority to issue visas to lack practical importance. For your informs however, we view the Council as a subsidiary organ of the United Nations fr which it has received authority pursuant to General Assembly resolutions us Article 22 of the Charter. Pursuant to such resolutions the Council is author inter alia to locate in and administer Namibia and to issue travel documents residents of Namibia. It is not, however, authorized to issue visas. Furtherm the Council does not constitute a state, a government, a government-in-exis an interim government. It has not been recognized as a government by any c nation and its competence is not to be deduced from principles of general in national law concerning the authority of such entities.

Mr. DIGGS. What further steps have been taken since our hear a year ago on U.S. business involvement to follow up on the vote the Security Resolution 310?

As you recall, Security Resolution 310 called for all compar operating in Namibia to be obliged to observe the standards for e ployment of the Universal Declaration of Human Rights.

Mr. KAISER. Mr. Chairman, we continue to send letters to U firms as we learn of their contemplated or actual investment in Nam bia, drawing attention to our official policy on investment and to cl support for Resolution 310. Also, there are many occasions whe persons from the Office of Southern African Affairs are invited participate in seminars or other kinds of meetings which address them selves to the problems in the southern African area. Very often the problem raised has to do with the role of American business in souther Africa and U.S. policies.

This has come up, for example, in various meetings that I personall have attended: For example, meetings sponsored by the United Meth odist Church and the Lutheran Church. There are others, too.

On these occasions we address ourselves to this very question. A least one-third of the participants or audiences at the meetings I hav attended, for example, have consisted of American business executives This is one way in which we try to spread the word on just what b U.S. policy.

Mr. DIGGS. Now, the Securities Commission representative h indicated, that SEC receives advice from you, and I would like to know how you advise the Commission with respect to prospectuse for share issues that are based wholly or in part on these purported rights that have been granted in Namibia.

What I am really looking for here is, in essence, a memorandum. which I assume would be a legal memorandum from your Department' standpoint, as to the basis upon which you advise the Securities Comi mission about these matters. I assume that a matter like this is not! done in an informal telephone call.

MI. KAISER. No, sir. You are quite right, although telephone calls do take place also. But there are also written documents that would go from the Department of State to the SEC, and there is such on record. Mr. DIGGS. Well, if it is on the record, would you provide it? Mr. KAISER. Be happy to do so, sir.

Mr. DIGGS. All right.

[The information referred to follows:]

MR. WILLIAM TAFT LESH,

Foreign Liaison Office,

Securities and Exchange Commission,

Washington, D.C.

DEPARTMENT OF STATE, Washington, D.C., April 14, 1972.

DEAR MR. LESH: With reference to your telephone conversations with Mr. Haught of this office, I am pleased to furnish you with a statement of the United States' position on American investment in South West Africa (Namibia).

On May 20, 1970, the United States announced the following policy:

(1) The United States will officially discourage investment by U.S. nationals in South West Africa;

(2) U.S. nationals who invest in South West Africa on the basis of rights acquired through the South African Government since adoption of UN General Assembly Resolution 2145 (October 27, 1966) will not receive United States Government assistance in protection of such investment against claims of a future lawful government of South West Africa;

(3) Export-Import Bank credit guarantees and other facilities will not be made available for trade with South West Africa.

These actions apply solely to South West Africa. The second of the three points does not apply to investments made prior to announcement of the policy nor to subsequent investments based on rights acquired through the South African Government prior to October 27, 1966.

I hope this information will be useful to you. Please do not hesitate to call if I can be of further assistance.

Sincerely yours,

OLIVER S. CROSBY, Director, Southern African Affairs.

Mr. DIGGS. What is the Department's position on allowing credits to U.S. taxes for U.S. firms doing business in Namibia?

Mr. KAISER. For us the tax credit issue is at present basically an issue of statutory interpretation. While the U.S. Government regards South Africa as illegally occupying the territory of Namibia, and considers the official actions of the South African Government concerning Namibia to be invalid, the Treasury Department has determined that these factors are not relevant in determining whether payments to the South African Government are creditable under section 901 of the Internal Revenue Code. In the Treasury view the current law provides for a credit in the event of any payment of taxes upon income to a governing power without regard to its legality.

We do not consider the grant or the tax credit to imply any recognition by the U.S. Government of the legality for the taxing power, in this case the South African Government.

Mr. DIGGS. Do you think the Department would oppose an amendment to the Internal Revenue Code to disallow such credits? Would that not really be consistent with your pronouncement?

Mr. KAISER. I don't think we could comment upon proposed legislation until we have the opportunity to review it, sir.

Mr. DIGGS. Could you give us some more details about our Government's support of the Fund for Namibia? You mentioned the $50,000 for example. Could you elaborate upon that general subject of U.S. support for the Fund for Namibia in more details other than just the money?

Mr. KAISER. At the last session of the General Assembly there was a Resolution 3112 which invited governments and private organizations to contribute to the United Nations Fund for Namibia. The General Assembly then decided to allocate $100,000 from the regular U.N. budget for the Fund.

The United States voted for that resolution. That would be other than the $50,000 contribution that was just announced on March 21, I think it was, to the Fund.

Mr. DIGGS. What is our position on the application of bilateral treaties with South Africa to Namibia? What about GATT and the most-favored-nation treatment?

Mr. KAISER. Mr. Chairman, I understand that there has been written correspondence with the committee on this subject, and we would be prepared to answer any further written questions on this and address ourselves in written form to this question.

Mr. DIGGS. All right. Would you do that?

[The information requested follows:]

The position of the United States concerning bilateral treaties with South Africa affecting Namibia reflects the conclusions of the International Court of Justice in its 1971 Advisory Opinion, which the United States accepted, and Security Council Resolution 301 which the U.S. supported. Resolution 301 (1971), which restates the World Court's conclusions, calls upon all states (subject to certain exceptions set forth in the Advisory Opinion) among other things, to abstain from entering into treaty relations with South Africa in all cases in which the Government of South Africa purports to act on behalf of or concerning Namibia; to abstain from invoking or applying those treaties or provisions of treaties concluded by South Africa on behalf of or concerning Namibia involving active intergovernmental co-operation and to review their bilateral treaties for consistency with the Court's conclusions.

Since 1971 the United States has not entered into bilateral treaty relations with South Africa in cases where it purports to act on behalf of or concerning Namibia. We have reviewed existing bilateral treaties and identified five which might raise questions regarding application in Namibia:

Visa Agreements, as amended, March 31, 1958 (TIAS 4076 and 3544); Agreement Relating to Air Transport Services of May 23, 1947, as amended (TIAS 1639 and 6512); Convention for the Avoidance of Double Taxation of December 13, 1946, as amended (TIAS 2510); Extradition Treaty of December 18, 1947 (TIAŚ 2243); and Parcel Post Convention signed April 17 and June 20, 1919 (41 Stat. 1956).

None of these have been applied with regard to Namibia since 1971. The issuance of visas by the U.S. Government is governed by U.S. legislation and accordingly, the Visa Agreements need not be applied concerning Namibia. The Air Transport Services Agreement is not applied in Namibia. The granting of tax credits is governed by U.S. statute and we do not regard the Double Taxation Convention as applicable to Namibia. It is unlikely that the Extradition Convention would ever be applied with regard to Namibia. We do not, however, exclude the remote theoretical possibility that it might be applied in a case where all relevant facts indicated that refusal to extradite a person for prosecution would be clearly detrimental to the inhabitants of the territory and thus within the exception provided by paragraph 125 of the Advisory Opinion cited in Resolution 301. The Parcel Post Convention is unnecessary for the exchange of parcels with Namibia and consequently need not be invoked or applied with respect to the territory.

While there are other bilateral treaties and agreements in force with South Africa, many are specifically inapplicable to Namibia and others have been and are expected to remain inapplicable.

The position of the United States regarding the relationship of GATT and MFN treatment to Namibia remains that reflected in former Assistant Secretary Abshire's letter to you dated December 13, 1972, a copy of which is attached.

Hon. CHARLES C. DIGGS, Jr.,

Chairman, Subcommittee on Africa,

Committee on Foreign Affairs,

House of Representatives,

Washington, D.C.

DECEMBER 13, 1972.

DEAR MR. CHAIRMAN: I am responding to the statement in your letter of August 14 that South Africa has no legal right to obtain Most Favored Nation treatment for exports originating in Namibia and your question as to what action