DEVELOPMENT CO-OPERATION AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND PAPUA NEW GUINEA

(Port Moresby, Papua New Guinea, 7 May 1990)

ENTRY INTO FORCE: 7 MAY 1990

PREAMBLE

THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF PAPUA NEW GUINEA;

COMMITTED to maintaining their friendly co-operation;

DESIROUS of enhancing mutual relations in the field of development assistance on a lasting and long term basis;

ACKNOWLEDGING the mutual benefit from previous arrangements between the two countries which had contributed to the economic and social development of Papua New Guinea;

DESIROUS of concluding an Agreement relating to economic and technical cooperation between both countries;

HAVE AGREED as follows:

Article I

Objectives and Principles

1. To assist the Government of Papua New Guinea in national development and in its efforts to achieve economic and social progress through its own resources and other measures of self-help, the Government of the United States of America is furnishing such economic, technical and related assistance hereunder as may be requested by the Government of Papua New Guinea and approved by representatives of the agency designated by the Government of the United States of America to administer its responsibilities hereunder, or as may be requested and approved by other representatives designated by the Government of the United States of America and the Government of Papua New Guinea.

2. Such assistance shall be made available in accordance with written arrangements agreed upon between the above-mentioned representatives.

3. Co-operation between the two countries shall: 

(a) be mutually beneficial and based on full participation by both countries having regard to the capacity and resources of both Governments, and on mutual respect;

(b) take due account of both Governments' policies and priorities on development co-operation.

4. Both Governments shall endeavour to co-ordinate their activities under the provisions of this Agreement with the activities of other donor governments and international development assistance institutions.

5. The furnishing of assistance under this Agreement shall be subject to the applicable laws and regulations of the Government of the United States of America.
Article II

Development Assistance Levels, Disclosure and Review

1. To promote the economic and social progress of Papua New Guinea, the Government of Papua New Guinea will contribute fully within the limits of its resources and general economic condition to its development program and to programs and operations related there including those conducted pursuant to this Agreement, and will give full information to the people of Papua New Guinea concerning programs and operations hereunder.

2. The Government of Papua New Guinea will take appropriate steps to ensure the effective use of assistance furnished pursuant to this Agreement and will afford every opportunity and facility to representatives of the Government of the United States of America to observe and review programs and operations conducted under this Agreement and will furnish whatever information they may need to determine the nature and scope of operation planned or carried out and to evaluate results.

3. Both Governments agree to hold consultations, and may undertake periodic development reviews to ensure the effective implementation of development co-operation arrangements, jointly or separately.

Article III

Implementing Agency

1. The Government of Papua New Guinea will receive a special Mission, currently named the United States Agency for International Development (USAID), and its personnel to discharge the responsibilities of the Government of the United States of America hereunder and will consider this Mission and its personnel as part of the Diplomatic Mission of the Government of the United States of America in Papua New Guinea for the purpose of receiving the privileges and immunities accorded to that Mission and its personnel of comparable rank.
 
2. The special Mission shall enjoy the same inviolability of premises as is extended to the Diplomatic Mission of the Government of the United States of America.

Article IV

Exemption from Duties, Levies and Taxes on United States Institutions, Personnel and Technical Material

In order to assure the maximum benefits to the people of Papua New Guinea from the assistance to be furnished hereunder:

1. Property or funds used or to be used, in connection with this Agreement, by the Government of the United States of America, or by any contractor financed by that Government shall be exempt from any taxes on ownership or use and any other taxes, investment or deposit requirements and currency controls in Papua New Guinea. 

(a) The import, export, acquisition, use or disposition of any such property or funds in connection with this Agreement shall be exempt from any tariffs, customs duties, import and export taxes, taxes on purchases or disposition and any other taxes or similar charges in Papua New Guinea;

(b) However, upon completion of the work to be performed by any contractor financed by the Government of the United States of America with any materials and equipment imported into Papua New Guinea, such contractor shall be liable to pay the existing rates of duties on all materials, equipment or other property not utilized, unless such materials and equipment are re-exported.

2. All persons, except citizens or permanent residents of Papua New Guinea, who are present therein to perform work pursuant to this Agreement, shall be exempt from income and social security taxes levied under the laws of Papua New Guinea and from taxes on the purchase, ownership, use or disposition of personal moveable property (including automobiles) intended for their own use, except if an automobile is sold or transferred to a person not entitled to duty-free privileges, the duty and other taxes shall be paid on it in accordance with the law or regulations in force in Papua New Guinea.

(a) Such persons and members of their families shall receive the same treatment with respect to the payment of customs, import, export and all other duties and fees on personal moveable property (including automobiles) imported into Papua New Guinea for their own use, as is accorded by the Government of Papua New Guinea to Diplomatic Personnel of the United States Embassy in Papua New Guinea;

(b) Except that with respect to persons engaged under a contract financed by the Government of the United States of America, the personal or house-hold effects of such persons shall only be exempt from import duties and taxes at the time of a person's first arrival in Papua New Guinea and for a period of six months thereafter, and that not more than one automobile may be imported into Papua New Guinea every five years without the written permission of the Government of Papua New Guinea.

Article V

Currency Conversion

Funds used for purposes of furnishing assistance hereunder shall be convertible into currency of Papua New Guinea at the rate providing the largest number of units of such currency for the United States dollar which, at the time conversion is made, is not unlawful in Papua New Guinea.

Article Vi

Entry into Force, Amendment and Duration

1. This Agreement shall enter into force on the date on which it is signed by the two Governments, and shall remain in force until six months after the date of the communication by which either Government gives written notification to the other of its intention to terminate it. In such event, the provisions of this Agreement shall remain in full force and effect with respect to assistance furnished pursuant to this Agreement before such termination.

2. All or any part of the program of assistance provided hereunder, except as may otherwise be provided in arrangements agreed upon pursuant to Article I hereof, may be terminated by either Government if that Government determines that because of changed conditions the continuation of such assistance is unnecessary or undesirable. The termination of such assistance under this provision may include the termination of deliveries of any commodities hereunder not yet delivered.

3. The two Governments or their designated representatives shall, upon request of either of them, consult regarding any matter on the application, operation or amendment of this Agreement.

Done in duplicate at Port Moresby, Papua New Guinea this 07 day of May, 1990.

SIGNATORIES:

FOR THE GOVERNMENT OF THE UNITED STATES OF AMERICA

[Signed]

Robert W. Farrand
Ambassador
	FOR THE GOVERNMENT OF PAPUA NEW GUINEA

[Signed]

Michael T. Somare
Minister for Foreign Affairs