CAB129-45 — Page 498

Page 498. imprisoned in Japan may not be exercised except on the decision of the Govern- ment or Governments which imposed the sentence in each instance, and on the recommendation of Japan. In the case of the persons sentenced by the International Military Tribunal for the Far East, such power may not be exercised except on the decision of a majority of the Governments represented on the Tribunal, and on the recommendation of Japan.

(NOTE.-United Kingdom reserves the first sentence of Article 21 of United Kingdom draft and on the use of the word "pardon.")

ARTICLE 13

(a) Japan declares its readiness promptly to enter into negotiations for the conclusion with each of the Allied Powers of treaties or agreements to place on a stable and friendly basis the commercial, maritime and trading relations between them.

(b) Pending the coming into force of the relevant treaty or agreement, Japan will, during a period of five years from the coming into force of the present Treaty, accord to each of the Allied Powers and its nationals (including juridical persons), on condition of herself in fact receiving in respect of the same matter national or most-favoured-nation treatment, as the case may be, from the Allied Power

concerned:

(i) most-favoured-nation treatment with respect to customs duties, charges, imports and export restrictions, and all other regulations imposed on or in connection with the importation or exportation of goods; (ii) national or most-favoured-nation treatment, whichever is the more favour- able, with respect to imported products, vessels, property, interests, business, financial, commercial and professional activities in Japan; and with respect to shipping and navigation (including/excluding) coastal and inland navigation: such treatment shall include all matters pertaining to taxation and the levying of taxes, access to the Courts, the conclusion of contracts, the acquisition, ownership and disposal of pro- perty of all kinds, the creation of and participation in juridical persons constituted under Japanese law, and the treatment of any such juridical persons in which Allied nationals have a participation.

(c) Allied nationals (including juridical persons) shall be granted equitable treatment (which shall not be less than national treatment) in respect of any measures involving the expropriation of their property, rights or interests in Japan. There shall be no such expropriation without the payment of adequate and effective compensation.

(d) In the application of this Article, a discriminatory measure shall not be considered to derogate from the grant of national or most-favoured-nation treat- 'ment, as the case may be, if such measure is based on an exception customarily provided for in the commercial treaties of the party applying it, or on the need to safeguard that party's external financial position, balance of payments or essential security interests, and provided such measure is proportionate to the circumstances and not applied in an arbitrary or unreasonable manner.

(e) Where an Allied Power has responsibility for the international relations of non-metropolitan or overseas territories, or consists of a federal state, lack of reci- procity afforded to Japan in one or more of such territories or in one or more of the constituent States of the federation shall not constitute a ground for the refusal by Japan of the treatment provided for by paragraph (b) of this Article to the other territories (including the metropolitan territory itself), or to the other states, or to persons, vessels, or juridical persons resident, registered, or constituted in such other territories or states as the case may be, or to the federal government. Similarly, lack of reciprocity on the part of the metropolitan territory or federal government shall not of itself be a ground for the refusal of the said treatment to the other territories or constituent states, or to persons, vessels or juridical persons resident, registered or constituted in such other territories or states, as the case may be.

(f) Japan's obligations under paragraph (b) of this Article shall not be affected by the

the exercise of any Allied rights under Article 15 of the present Treaty; nor shall

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