ITER: GOJ RESPONSE TO DEMARCHE ON FINALIZATION

UNCLAS TOKYO 000502

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EAP/J FOR WINSHIP
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E.O. 12958: N/A
TAGS: PREL ENRG ITER TRGY KSCA JA
SUBJECT: ITER: GOJ RESPONSE TO DEMARCHE ON FINALIZATION

REF: STATE 13967


1. (U) This is an action request. Please see paragraph seven.


2. (SBU) On January 30, EST M/C and ESToff met with Ministry
of Foreign Affairs (MOFA) International Science Cooperation
Office Director Kozo Honsei and Ministry of Education,
Culture, Sports, Science and Technology (MEXT) Fusion Energy
Office Director Shuichiro Itakura and others and delivered
reftel demarche.


3. (SBU) Honsei began by thanking EST M/C for the U.S.
position and explained that the GOJ has discussed the P&I
issue at length in the interagency since the Jeju meeting.
He said that the Ministry of Finance (MOF) and certain
offices within MOFA were concerned that the U.S. position
could lead to the possibility of unequal treatment for the
other partners, as without a statement in writing, there is
the possibility that there may be no guarantee of immunities
and reciprocity. Without such a document, Honsei said that
it would be difficult to convince MOF that problems would not
arise in the future with direct and indirect taxes, for
example. He also related that it would be hard to convince
the Diet of the same if there is a separate agreement for
only the United States.


4. (SBU) Honsei told EST M/C that even after the extensive
interagency discussions, there still is no clear or unified
GOJ position on the U.S. approach. He passed a list of
questions provided by MOF (see para 6) that he said was
important to answer in order to persuade the ministry to come
on board. EST M/C told Honsei that we would try to get
responses to the questions as soon as possible.


5. (SBU) In response to the U.S. point that the Barcelona
meeting may not take place if no agreement is reached, Honsei
replied that the GOJ has already decided to participate in
that meeting. However, Honsei explained that Tokyo may need
to set some conditions for the meeting because Washington has
rejected the Japanese request to make a commitment in
writing. He then rhetorically asked how we could better
coordinate to meet our respective requirements for moving
forward with the final ITER agreement. Honsei then suggested
that using the record of discussion from the Barcelona
meeting may be a possible compromise solution. He explained
that if the United States were to make a statement
guaranteeing P&I and reciprocity during the meeting and that
this was recorded in the record of discussions document,
Honsei would be able to use it as proof of the U.S.
commitment during the Diet ratification process. He
stressed that it was important to remove any doubts that the
Diet may have and that simply stating the U.S. would rely on
the IOIA was not enough. A MOFA lawyer added that even
though the Ministry recognizes that the U.S. record on P&I
commitments is good, it remains theoretically possible that
Congress could make amendments to the IOIA and that this
could change the United States' commitment to P&I in ITER
sometime in the future. Both officials stressed again that
it was important for Japan to have some type of "recorded"
commitment from the United States. Honsei finished by saying
that it was just as important for Japan to successfully
conclude the agreement as soon as possible as it was for any
of the other six partners.


6. (SBU) MOF Questions

-- According to the IOIA, the government of the U.S. levies
income tax on the U.S. nationals who work for international
organizations in the United States. Does the U.S. government
levy income tax also on the U.S. nationals who work for
international organizations abroad?

-- If the answer to the question above is yes, does the tax
reimbursement agreement which the U.S. intends to conclude
with the ITER organization cover the entire U.S. national
staff that will be directly employed by the ITER organization
regardless of where they will be posted?

-- Is it U.S. general policy to conclude a tax reimbursement
agreement with the international organization in which the
U.S. participates? Approximately how many international
organizations have concluded tax reimbursement agreements
with the USG? Please provide some names of such
international organizations which have concluded such
agreements with the United States.
-- Our understanding is that the U.S. has concluded a tax
reimbursement agreement with the IAEA. Are there any other
agreements regarding privileges and immunities between the
United States and the IAEA including ones based on Article
15c of the statute of IAEA?

End questions.


7. (SBU) Action requested: Please provide responses to
Japanese MOF questions and advise whether the Japanese
proposal to have language in the record of discussion
document may be a way forward, and if so, what language the
U.S. would be prepared to offer.
SCHIEFFER