of governments recognized de jure by the United States is specified in 8 U.S.C. 1101(a) (15) (A). No provision is made for representatives of unrecognized governments; presumably, such persons would have to enter under category B (an alien visiting the United States temporarily for business). In addition, they may not be entitled to diplomatic immunity. For example, a special act of Congress was passed to extend immunity to the members of the PRC Liaison Office.11

DEALING WITH DE FACTO RECOGNIZED COUNTRIES

On a theoretical level, it could be argued that there are no general statutory prohibitions against dealing with unrecognized countries because such prohibitions are unnecessary. In the absence of de jure recognition, all dealings not specifically allowed are prohibited.

This has not been the approach used by Congress. Thus, special authorization was needed to stop trade with the PRC in 1950.42 When the embargo was finally dismantled in the early 1970's, trade resumed without any new authorization. An examination of congressional enactments leads to two conclusions. First, Congress regards governments firmly in control but not recognized de jure as having a definite existence and a certain degree of legitimate authority. Second, Congress permits dealings with de facto recognized countries.

45

For example, in assigning higher rates of customs duties to products of "Communist countries," the statute refers to "China (any part of which may be under Communist domination or control)" 43—obviously contemplating trade with the PRC, although at a higher tariff. Other statutes do not refer to the PRC specifically, but probably are now being used in handling PRC-related activities. These include providing funds for cultural exchanges and guards for visiting foreign dignitaries 15 and the granting of permission to the "embassy or legation" of foreign governments to operate a lower-power radio station.46 In addition, the Foreign Claims Settlement Commission is authorized to handle claims of American nationals included in any claim settlement agreement signed after 1954 between the United States and a "foreign government." 47 If an agreement is concluded concerning claims arising out of American properties expropriated in China and Chinese assets frozen in the United States, it is highly likely that the commission will administer this agreement, whether or not the PRC is recognized de jure by the United States.

By examining the subject matter of some statutes, it can be seen that Congress intended to apply them as broadly as possible, including to countries not recognized de jure. For example, there should be control over the transfer of dangerous or harmful substances such as plant pests 48 or narcotics, whatever their foreign origin or destina

49

41 22 U.S.C. 288 (1) authorizes the President to extend to members of the Liaison Office "the same privileges and immunities subject to corresponding conditions and obligations as are enjoyed by diplomatic missions accredited to the United States and by members thereof."

42 President Truman proclaimed a national emergency, 50 U.S.C. App. 9, and thereby activated the Trading with the Enemy Act, 50 U.S.C. App. 9 sec. 5.

43 19 U.S.C. 1202(e).

44 22 U.S.C. 2452.

45 22 U.S.C. 2666.

48 47 U.S.C. 305 (d).

47 22 U.S.C. 1623 (a).

48 7 U.S.C. 150.

49 21 U.S.C. 953. Other examples are: 7 U.S.C. 136 (o) (a) (pesticides); 7 U.S.C. 154 (uninspected nursery stock).

tion. The United States should be protected against certain harmful actions taken abroad, such as trademark infringement 50 or nationalization of American property without compensation,51 whether or not they occur in de jure recognized countries. Similarly, statutes which produce beneficial results for the United States irrespective of the nature of the foreign party, such as the establishment of rules concerning the refunding of certain taxes paid on goods that are to be exported,52 or which facilitate the operation of American activities abroad, such as issuance of subpoenas to persons in foreign countries,5 should be interpreted to apply to both de jure and de facto recognized countries. Finally, some items deal with matters that are fairly universal in nature, such as providing relief to the needy or controlling smuggling.55

54

A second category of congressional enactments calls for a degree of acknowledgment by the United States of the authority and competence of the foreign government, and consequently may conflict with an executive policy not to extend de jure recognition. Many of these laws concern minor routine matters, often involving private rights, such as authorizations to accept a foreign governmental agency's certification of tonnage measurement of vessels.56 Similarly, some laws requiring reciprocal treatment by a foreign government also concern routine matters, such as protection of plant varieties 57 or commercial privileges for ships.58 This group of statutes does not appear to have any substantial political implications that would be affected by the lack of de jure recognition, although they would be affected if the foreign authorities lacked sufficient control and competence to be considered a government.

A number of statutes affecting American governmental activities, however, have greater political significance and imply a broader acceptance of the legitimacy of a foreign government. Several laws authorize the United States government or various government-related agencies to enter into agreements with foreign governments and persons on major matters such as textile quotas,59 a commercial communications satellite link, and the supply of nuclear materials.61 Other laws having significant political import include the registration of prospectuses and securities issued by a foreign government,62 ac

50 15 U.S.C. 1124.

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517 U.S.C. 1158(c). Other examples are: 15 U.S.C. 72 (dumping); 22 U.S.C. 1978 (violation of various fishing rules); 19 U.S.C. 1338 (discriminatory duties, fees, and other commercial regulations); 46 U.S.C. 141 (discriminatory treatment of American shipping). 527 U.S.C. 617. Other examples are: 7 U.S.C. 1116 (setting of sugar import quotas); 7 U.S.C. 516 (restrictions on export of tobacco seed); 19 U.S.C. 1336 (e) (2) (setting methods for calculating cost of production of foreign goods).

53 28 U.S.C. 1783. See also: 42 U.S.C. 1651 (compensation for employees injured in American military bases in foreign countries).

54 7 U.S.C. 1330,1340.

55 19 U.S.C. 1703, 1704. Other examples are: 49 U.S.C. 781 (b) (3) conterfeiting); 35 U.S.C. 102(a) (barring patents for inventions already described or published in a foreign country).

56 46 U.S.C. 81. Other examples are: 21 U.S.C. 143 (certificate of milk inspection); 7 U.S.C. 1561 (certificate of seed control); 12 U.S.C. 358 and 31 U.S.C. 473 (authorizing the Federal Reserve Bank and the Treasury to set up depositories abroad).

BY 7 U.S.C. 2403.

58 46 U.S.C. 142. Other examples are: 46 U.S.C. 362 (certificate of ship inspection); 17 U.S.C. 1(e), 9(b) and 35 U.S.C. 119 (extension of patent and copyright protection); 16 U.S.C. 1052 (b) (5) (use of the National Aquarium).

59 7 U.S.C. 1854.

60 47 U.S.C. 721.

61 42 U.S.C. 2074 (a). Other examples are: 42 U.S.C. 1862, 1870 (setting up scientific exchanges); 7 U.S.C. 57 (a) (system of cotton classification); 19 U.S.C. 135(a) (1) (A) (promote trade).

82 15 U.S.C. 77 (g), (j).

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ceptance of letters rogatory and requests for assistance from foreign courts, 63 serving process in a foreign country in the manner prescribed by the law of the foreign country, and training foreign military personnel. In addition, some statutes requiring reciprocal treatment also have important political implications. These include granting privileges to non-diplomatic or consular representatives of a foreign government or to foreign officials in transit, and providing routine port and airport services for foreign military vessels.7

If the above group of statutes is applied equally to all countries, it might be that the extent of dealings with and acknowledgement of the authority of a de facto recognized country would contravene the executive policy not to extend de jure recognition. Consequently, some or all of these statutes might be interpreted to apply more restrictively to de facto recognized countries. Be that as it may, for purposes of this study the point is that these statutes are not impediments to full United States-Taiwan relations. That is, if Taiwan has sufficient attributes to be considered a "government," and if the executive policy is to withhold de jure recognition but still maintain extensive dealings with Taiwan, then nothing in these statutes prevents their being fully applied to Taiwan. (Two very different and difficult questions outside the scope of this study are: In the interwined areas of foreign affairs and foreign commerce, could Congress order certain programs to be applied to a de facto recognized country in spite of an executive policy to the contrary? Conversely, could the executive branch. carry out certain actions with respect to such a country in contravention of an express congressional enactment?)

"FRIENDLY COUNTRY"

The term "friendly country" appears in a number of important statutory schemes involving economic and military aid. These programs include military sales and assistance,68 the Overseas Private Investment Corporation,69 sale of American agricultural surplus on credit terms or for foreign currency by the Commodity Credit Corporation,70 loans to small farmers of predominantly rural countries,"1 and expenditures of funds received pursuant to the Agricultural Trade Development and Assistance Act of 1954.7

63 28 U.S.C. 1781, 1782.

64 Rule 4 (1), Federal Rules of Civil Procedure.

72

65 10 U.S.C. 7046. Other examples are: 46 U.S.C. 764 (allowing suit in admiralty in United States courts on rights of action granted by the laws of a foreign state for a wrongful death on the high seas); Rule 6, Rules of the Supreme Court (allowing attorneys "qualified to practice in the courts of any foreign state" to be specially admitted to the bar in the United States); 10 U.S.C. 4681 (authorization to sell war surplus materials abroad) 10 U.S.C. 2675 (authorization to lease military bases from foreign governments). 66 8 U.S.C. 1101 (a) (15) (A), 1182 (d) (8).

67 10 U.S.C. 7227. Other examples are: 8 U.S.C. 1201 (c) (determining the length of time for which non-immigrant visas remain valid); 47 U.S.C. 305 (d) (allowing foreign embassies and legations to operate radio stations); 46 U.S.C. 785 (permitting aliens to sue in admiralty); 28 U.S.C. 2502 (permitting aliens to sue the United States in certain cases); 25 U.S.C. 883 (establishing a system for excluding from gross income certain foreign earnings for aircrafts and ships).

68 22 U.S.C. 2311, 2751.

22 U.S.C. 2191.

70 7 U.S.C. 1701. Up until the mid-1960s. Taiwan had received considerable economic aid under this and related programs. Such aid has since ceased.

71 22 U.S.C. 2175.

72 22 U.S.C. 1922. Other examples are: 22 U.S.C. 2102 (health research and training); 22 U.S.C. 2219 (family planning); 50 U.S.C. App. 1878 (e) (loan of military vessels); 10 U.S.C. 7227, 31 U.S.C. 529 (1) (routine disbursement of funds and services to military forces of a friendly country); 39 U.S.C. 407 (postal agreements).

As can be seen by the nature of these programs and by use of the term "friendly," Congress did not intend "unfriendly countries" to receive these special benefits and services. Although "friendliness" is nowhere defined, there have been several ways of indicating unfriendliness. Up until now, the refusal to extend de jure recognition reflected a state of bad relations. Consequently, the "friendly country" programs generally did not apply to countries not recognized de jure.

A second indication of unfriendliness is the severance of diplomatic relations. A number of congressional enactments impose sanctions upon countries with which the United States has severed diplomatic relations. The Foreign Assistance Act, which affects both economic and military aid, includes the blanket provision in section 2370(t):

No assistance shall be furnished under this chapter or any other Act, and no sales shall be made under the Agricultural Trade Development and Assistance Act of 1954, in or to any country which has severed or hereafter severs diplomatic relations with the United States or with which the United States has severed or hereafter severs diplomatic relations." (Emphasis added.)

Consequently, countries with which diplomatic relations have been severed should not qualify for the "friendly country" programs.

As discussed earlier, however, Taiwan presents a novel situation. The lack of de jure recognition would not indicate a state of unfriendly relations. Thus, it may be possible to treat Taiwan as a "friendly de facto recognized country," especially if the Executive and Congress issue statements supporting the maintenance of "friendly" ties. Severance of diplomatic relations presents a more difficult problem because of the PRC's explicit demand for severance coupled with the clear statutory language regarding the consequences of severance. The simplest solution is not to characterize any reduction in the level of diplomatic dealings with Taiwan as a "severance of diplomatic relations." If for political reasons the United States must sever diplomatic relations, then new legislation would be necessary to remove the disabilities imposed by section 2370 (t) and other related statutes.

In this regard, the use of the "Japanese formula" (in the narrow sense of having no direct intergovernmental ties, but instead having intergovernmental relations handled by a ostensibly private corporation) is likely to be interpreted as severing diplomatic relations, since no officers of the United States acting in their official capacities would continue to carry out diplomatic functions. Moreover, if all diplomatic and consular personnel are withdrawn from Taiwan, amending legislation will be necessary to enable some designated persons to act as notaries and take testimony of witnesses or authenticate documents abroad, as well as to facilitate the temporary detachment of foreign service officers and other persons to the "private" corporation handling United States government business in Taiwan.

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One other important restriction is that a number of statutes impose barriers to dealing with "Communist countries." The Export-Im

78 See also 7 U.S.C. 1703 (j) (sale of agricultural surplus); 16 U.S.C. 1052 (b) (5) (encourage use of the National Aquarium by nationals of states with which the United States maintains diplomatic relations). 74 17 U.S.C. 29.

75 18 U.S.C. 3492, 3493; 22 U.S.C. 1203.

port Bank may not take part in transactions involving sales to or products from a "Communist country," unless the President determines that the transaction is "in the national interest." 76 The Foreign Assistance Act bars assistance to countries that are "dominated or controlled by the international Communist movement," as well as to "any Communist country" unless the President finds that such assistance is "vital to the security of the United States." " Similarly, Communist countries are not eligible for purchase of surplus agricultural products on credit or for foreign currencies," cannot be designated a beneficiary developing country for purposes of the generalized system of preferences, and are charged a higher tariff rate.80

Because of the state of its economic development, Taiwan now does not qualify for purchase of surplus agricultural products or for designation as a beneficiary developing country. However, if after withdrawal of recognition Taiwan is regarded as a subdivision of the PRC, then amending legislation or waivers by the President will be needed to enable the other programs to continue.

IV. SPECIFIC PROGRAMS AND PROBLEMS

This section focuses on several specific programs and problems in United States-Taiwan relations which are particularly important or troublesome. These subjects are highly complex, and can be discussed only in general outline here.

ECONOMIC RELATIONS

Export-Import Bank.-The Export-Import Bank was established "to aid in financing and to facilitate exports and imports." 81 The bank gives direct loans to foreign buyers of American products, and provides guarantees and credit to participating commercial banks making loans to foreign buyers and American exporters. On a smaller scale, it operates the Foreign Credit Insurance Corporation, a banking consortium that extends insurance against failure of a foreign party to repay money loaned by an American party, and also offers a discount loan program whereby an American exporter holding the note of a foreign buyer can get immediate payment.

Nothing in the language of the establishing act prohibits the Export-Import Bank from dealing with a country not recognized de jure by the United States, or with which there are no diplomatic relations. The sanctions imposed on countries severing diplomatic relations do not apply to activities of the bank. 82 Whether Taiwan is a "country" is not a problem since the act permits dealing with "any foreign country or the agencies or nationals thereof." 88 (Emphasis added.)

83

Several problems do arise, however, if after withdrawal of recognition Taiwan is treated as part of the PRC. As stated earlier, the bank

76 12 U.S.C. 635 (b) (2).

7722 U.S.C. 2370(b), (f). For purposes of sec. (f), the PRC is specifically listed as a "Communist country."

78 7 U.S.C. 1703 (d) excludes Communist countries from being "friendly," but does not define which non-Communist countries are friendly.

79 19 U.S.C. 2462 (b).

80 19 U.S.C. 1202 (e).

81 12 U.S.C. 635.

82 22 U.S.C. 2398.

83 12 U.S.C. 635 (a) (1).