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The Yugoslav Counsellor of State for Foreign Affairs to the United States Counselor of Embassy for Economic Affairs

E. No. 2384 Beograd, July 23, 1953 Dear Sir,

With reference to discussions regarding tax relief in connection with off-shore procurement by or on behalf of the Government of the United States of America in the Federal People's Republic of Yugoslavia, I have the honour to propose to you, on behalf of the Yugoslav Government, the following agreement:

"Discussions have recently been held between the Government of the Federal People's Republic of Yugoslavia and the Government of the United States of America on the subject of Yugoslav taxation of expenditures by or on behalf of the United States for individual and collective self-defense, including the OSP program and any foreign aid programs of the United States of America. These discussions have resulted in the following agreement:

"The Government of the Federal People's Republic of Yugoslavia agrees with the principle that tax relief should be accorded to any such expenditures for facilities, equipment, materials or services.

"The Government of the Federal People's Republic of Yugoslavia therefore agrees that tax relief will be granted to all such expenditures and will apply to:

"a. import and export duties or taxes and co-efficients on all imported articles or components used in the production of articles, whether they are or are not retained in Yugoslavia or are exported;