The Hague, December 14, 1954.

Dear Mr. Ambassador,

1. Receipt is acknowledged of your letter of today regarding the establishment of a SHAPE Air Defense Technical Center. We can assure you that the Netherlands Government are happy to act as host nation for the Center and are fully in agreement with the plan for establishing and operating this Center for the benefit of SHAPE and the NATO nations. The Netherlands Government have noted with approval the contract which your Government under the authority of the Mutual Security Act are considering entering into with the National Defense Research Council - Central National Council for Applied Scientific Research in the Netherlands (RVO-TNO).

2. Our Government are likewise of the opinion that it is essential for the operation of the Center that certain special arrangements be made for it. In reply to the specific questions raised in your letter and in confirmation of the oral assurances which have been given by our officials to your representatives, we are pleased to give the following undertakings:

3. As to the establishment and operation of the NATO security system, our Government, in accordance with NATO precedents and without charge to the United States or the Center, will in particular do the following:

a. Assume responsibility for establishing and maintaining security measures at the Center and at the facilities of subcontractors within the Netherlands. These security measures will extend to the protection of buildings and other property and to the grading, handling, transmission, storage and distribution of documents and material and to all other matters relating to the security protection of information. The standards for these security measures will be at least as high as those required by the security regulations of NATO.

b. Assume responsibility for verifying the security status of all personnel employed at or assigned to the Center or employed by subcontractors engaged in the performance of work for the Center within the Netherlands. This will include security clearances for all such personnel who are Netherlands nationals. The standards for these clearances shall be at least as high as those required by the Netherlands Government for the assignment of its nationals to the NATO International Staff.

c. Before subcontracts involving classified information are placed with subcontractors outside the Netherlands, assure that arrangements are in effect by which the government of the country in which the subcontractor is located will be responsible for the establishment and maintenance of security measures in connection with these facilities and personnel of the subcontractor substantially corresponding to those required for the Netherlands Government under sub-paragraphs a and b above.

4. In accordance with NATO precedents, our Government will provide such classified communication facilities and services as may be necessary for the receipt and despatch of classified information for the Center. Such communication facilities shall, of course, be operated in accordance with the NATO security regulations.

5. Our Government will provide attributes of international status for the Center in order that it may function properly and effectively as an adjunct of SHAPE. Therefore, in addition to the arrangements for the status of personnel set forth in the letter of the Minister of Defense of 14 December 1954 to General Gruenther the following provisions for the status of the Center as such will be made by our Government in anticipation of the implementation of Ambassador Hughes' declaration of November 10, 1954 to the NATO Council and also in anticipation of the transfer of the Center to SHAPE or some designated subsidiary body of the NATO Council, whenever NATO may so desire:

a. All property, both movable and immovable, furnished to or acquired by or on behalf of the Center, including such property owned, acquired or held by RVO-TNO on behalf of the Center, shall be:

(i) exempt from all direct taxes; the Center will not, however, claim exemption from rates, taxes or dues which are no more than charges for public utility services;

(ii) exempt from all customs duties, export taxes and quantitative restrictions on imports and exports in respect of articles imported or exported by or for the Center. However, articles imported under such exemption shall not be disposed of by way of either sale or gift in the Netherlands, except under conditions approved by the Netherlands Government;

(iii) immune from search, requisition, confiscation or expropriation.

b. All documents and records belonging to or held by or on behalf of or for the use of the Center shall be inviolable wherever located.

c. No censorship shall be applied to correspondence or other communications despatched or received in connection with the operation of the Center. The Center shall have the right to use codes and to dispatch correspondence by courier or in sealed bags which shall have the same immunities and privileges as diplomatic couriers and bags.

6. In consideration of the fact that your Government are prepared in accordance with the agreed draft contract with RVO-TNO to provide in appropriate cases for housing allowances for personnel, our Government are prepared to assure, if necessary, by allocations from the defense housing program, that adequate housing shall be made available for the foreign personnel of the Center.

7. Our Government are prepared on the request of your Government to perform, without cost to the United States, the audit of all expenditures made by RVO-TNO under the contract with your Government, and to certify vouchers for payment by your Government in the same manner that such audit and certification are carried out in connection with defense contracts of our Government.

8. With respect to patents

a. Our Government will take appropriate steps in accordance with NATO security regulations to safeguard the security of applications for Netherlands patents where the subject matter of such applications is classified, and the invention has been developed under the contract between your Government and RVO-TNO;

b. Our Government undertake that they will cooperate in and facilitate the implementation of the patent provisions of the contract between the United States and RVO-TNO or of any subcontract made thereunder.

9. Public lands will be made available by the Netherlands Government to the extent necessary for the operation of the Center, without cost to the United States Government.

10. As regards the exemption from taxes of United States expenditures under the contract between your Government and RVO-TNO and as regards the protection of the United States from liability, we are happy to give assurance that Articles 11 and 13 of the Memorandum of Understanding between our two Governments relating to Offshore Procurement, which entered into force July 30th, 1954, shall be fully applicable, as well as paragraphs 5, 6, 8, 9, 10 and 15 of the same Memorandum.

11. The United States, for the purpose of discharging its obligations under the contract, will be free to use any guilders owned by the United States.

12. The Center may hold currency of any kind and operate accounts in any currency, and the Netherlands authorities, if so required for effective operations of the Center, will facilitate transfers of funds held by the Center from one to another country, and the conversion of any currency held by the Center into any other currency.