THE FOREIGN SERVICE

OF THE

UNITED STATES OF AMERICA

No. 436

The Hague, March 24, 1960.

Excellency:

I have the honor to refer to recent discussions between representatives of our two Governments concerning a Weapons Production Program, the purpose of which is to increase the capacity of North Atlantic Treaty Organization countries, jointly and severally, to produce, maintain, repair, and overhaul equipment and materials needed for their mutual defense.

As a result of these discussions, the following understandings were reached:

1. The Government of the United States of America will furnish under the Weapons Production Program to the Government of the Kingdom of the Netherlands such equipment, materials, services, and information as may be mutually arranged in accordance with paragraph 8 hereof, to assist in the production, maintenance, repair, and overhaul of equipment and materials needed for the common defense.

2. The assistance furnished by the Government of the United States of America under this program will be made available in accordance with the terms and conditions of the Mutual Defense Assistance Agreement between the United States of America and the Netherlands signed on January 27, 1950 and agreements amendatory and supplementary thereto.

3. The Weapons Production Program shall be carried on through mutually agreed projects, which may include projects carried on solely by the Netherlands as well as joint projects of coordinated production. Such joint projects may include those in which NATO countries carry out the project work through the North Atlantic Treaty Organization, including subsidiary bodies of the North Atlantic Council. Accordingly, assistance furnished by the Government of the United States of America under this agreement may, at the request of the Government of the Kingdom of the Netherlands, be furnished to the North Atlantic Treaty Organization or such a subsidiary body. The undertakings of the Government of the Kingdom of the Netherlands set forth in this agreement will extend to all joint projects in which the Netherlands participates as well as to projects carried out exclusively by the Government of the Kingdom of the Netherlands.

4.

a. The Government of the Kingdom of the Netherlands, in connection with assistance intended to create or expand facilities under this program, will:

(1) Maintain or cause to be maintained those facilities which the Government of the United States of America has assisted to establish or expand so that they will be in a condition properly to produce, maintain, repair, and overhaul equipment and materials, when they may be required. Pending such time, such additional facilities and equipment furnished by the Government of the United States of America may be used for other agreed purposes, provided that such use will not interfere with the ready availability of such facilities for use for the purpose for which they were established or expanded.

(2) Furnish all of the land, buildings, equipment, materials, and services required for such additional facilities, except for the equipment, materials, services, and information to be furnished either by the Government of the United States of America or by other governments participating in joint projects, and take whatever measures are required to establish or expand such facilities in good operating order.

(3) Use its best efforts to maintain of cause to be maintained in usable condition a total capacity of facilities for the production or fabrication, for military purposes, of equipment and materials of the same type as those which may be produced or fabricated in a facility established or expanded with the assistance of the Government of the United States of America, which shall not be less than the aggregate of the capacity of such facilities already existing, those already programmed for construction in the Netherlands under public or private ownership on the date of the conclusion of the project arrangements for such a corresponding facility, and those established or expanded with United States assistance.

(4) Maintain or cause to be maintained in usable condition a total capacity of facilities for the maintenance, repair, or overhaul of military equipment or materiel of the same type as those established or expanded with the assistance of the Government of the United States of America, which shall not be less than the aggregate of the capacity of such facilities already existing, those already programmed for construction in the Netherlands under public ownership on the date of the conclusion of the project arrangement for such a corresponding facility, and those established or expanded with United States assistance.

b. The undertakings in this paragraph with respect to the maintenance of facilities are subject to the understanding that should changed conditions make continued compliance with these undertakings either unnecessary as a matter of defense, or impracticable, the Government of the Kingdom of the Netherlands may, after consultation with the Government of the United States of America, modify those undertakings to accord with these changed conditions.

5. The Government of the Kingdom of the Netherlands also will:

a. Sell the products and services resulting from this program to other NATO nations at fair and reasonable prices, and shall not discriminate among such nations in terms of the price charged for, or the quality of, such products or services, the time within which such products and services are delivered and performed, or in any other manner, provided, however, that the defense requirements of the Netherlands and other countries participating in the production may be satisfied first.

b. Sell the products and services resulting from this program to non-NATO nations only in such cases as may be mutually agreed upon.

c. Exclude as an element of the price of the products and services sold any charge which is attributable in any way to the initial cost of equipment, materials, or services furnished by the Government of the United States of America.

d. Permit the importation and exportation free from customs duties, taxes, or other similar charges of equipment and materials sent to the Netherlands for production, maintenance, repair, or overhaul in any facility expanded or established with United States assistance, and permit the exportation free from customs duties, taxes, or other similar charges of the products and services of such facilities sold to other nations in accordance with the provisions of this note.

6. Agreement of our two Governments shall be a prerequisite to the sale or transfer to any other nation by the Netherlands of the following:

a. Items produced under this program to which the Government of the United States of America has contributed, either directly, or indirectly, classified information essential to their manufacture, use or maintenance;

b. Any classified information of United States origin furnished in connection with the production, maintenance, repair, overhaul, or use of items produced under this program.