The Air Force further suggested and the committee agrees that as a technical matter of reference and for purposes of legal precision, that a new flush sentence be inserted at the end of subsection (a) between lines 22 and 23 on page 2 of the bill, as follows: In this subsection, "force", "civilian component", and With the committee amendment, subsection (b) restates the existing language of the law. As originally introduced, the bill would have made a change to permit reimbursement or payment for claims for damage, injury, or death arising indirectly from activities of the U.S. Armed Forces or its members while engaged in combat. The Air Force in its report pointed out the change originally proposed to section (b) would have no practical effect because under the international agreements which the legislation is designed to implement, payment of war damage claims is barred. Normally, war damage claims are made the subject of a treaty subsequent to the termination of hostilities or are asserted in international law by diplomatic negotiations between the sovereigns concerned. The Air Force therefore stated that it did not favor this change. The committee agrees that the law should not be changed in this regard. Therefore the committee has recommended that the words "or indirectly" be restored to the subsection as stated in the bill. As was noted in the analysis of amendments, the addition of the words "or indirectly" conforms the language of subsection (b) in the bill to existing law in accordance with the Air Force recommendation. As has been noted, the committee has recommended that the bill be amended to add the language of subsections (c) and (d) of section 2734a in a form identical to the language approved by the House in the passage of H.R. 13669 on November 6, 1967. In its report on that bill (H. Rept. No. 872, 90th Cong. first sess.) this committee noted that these provisions authorize the use of Coast Guard funds for the reimbursement or payment of claims involving the Coast Guard when it is operating as a service in the Department of Transportation. In its report on an earlier bill, H.R. 201, the Department of Transportation stated that under existing provisions of law, there is no authority for the payment of claims arising under international agreements which involve the Coast Guard. The Department of Transportation further stated that the amendments providing for such payment are desirable and therefore it supported the enactment of these amendments. In commenting on the same provision, the Air Force observed that section 2734a now authorizes the Secretary of Defense to make reimbursements or payment without provision for Coast Guard claims even though the Coast Guard is an "armed force" and covered under international agreements. As a result, since the Coast Guard operates in some foreign countries as a service in the Department of Transportation and claims caused by its personnel have been settled by foreign governments in accordance with those agreements, funding problems have been encountered in paying the bills relating to the H.R. 1154 Coast Guard which have been submitted to the military departments representing the Department of Defense. As is noted in the Air Force departmental report, the United States has a treaty obligation to reimburse these governments for the agreed pro rata share of claims covered under the agreements. At the hearing on H.R. 203, the representative of the Air Force stated that the House approved language as to subsections (c) and (d) is satisfactory to the Air Force and that Department would not object to the language of the bill being amended to conform it to the language approved by the committee and the House in connection with H.R. 13669. As has been noted, new subsection (d) was recommended by the Air Force in behalf of the Department of Defense and provides for a crossservicing provision which is similar to that presentely contained in section 2734(f) of title 10. The effect of the language is to expand the single service responsibility which may be exercised by one of the military departments in all foreign countries where the international claims agreements are in effect so as to include the Coast Guard when requested by the Secretary of Transportation. New subsection (d) provides that upon the request of the Secretary of Transportation, or his designee, any payments made relating to claims arising from the activities of the Coast Guard and covered by subsection (a) of section 2734a may be reimbursed or paid to the foreign country concerned by the authorized representative of the Department of Defense out of the appropriation for claims of the Department of Defense, subject to reimbursement from the Department of Transportation. The committee agrees that this is a logical addition and further notes that it is an amendment which is consistent with the language added in subsection (c). The clarifications and additions made to section 2734a by the amended bill are consistent with its basic purpose. The committee recommends that the amended bill be considered favorably. DEPARTMENTAL REPORT DEPARTMENT OF THE AIR FORCE, Hon. EMANUEL CELLER, Chairman, Committee on the Judiciary, July 1, 1967. DEAR MR. CHAIRMAN: Reference is made to your request to the Secretary of Defense for the views of the Department of Defense with respect to H.R. 203, 90th Congress, a bill to amend section 2734a of title 10, United States Code, to provide for settlement, under international agreements, of certain claims incident to the noncombat activities of armed forces, and for other purposes. The Secretary of Defense has delegated to the Department of the Air Force the responsibility for expressing the views of the Department of Defense. The purpose of this bill is to amend 10 U.S.C. 2734a (the so-called International Agreement Claims Act) to (1) clarify payment authority with respect to certain government-to-government claims, and permit reimbursement to a foreign country for all third-party claims settled or adjudicated on the basis of "legal responsibility"; (2) authorize the H.R. 1154 payment of claims for damage, loss, personal injury, or death that arise indirectly out of certain military combat operations; and (3) authorize the use of Coast Guard funds to reimburse or pay a foreign country for international agreement claims arising from operations of the Coast Guard while it is in the service of the Department of the Treasury. The proposed amendment to section 2734a (a) would make that subsection consistent with the NATO Status of Forces type agreement with respect to the reimbursement or payment to a foreign country by the United States for certain claims that are settled or adjudicated under such agreements. Under these agreements, the receiving state investigates, settles, adjudicates, and makes final awards direct to the claimants in two categories of cases: where the claim arises out of (1) acts or omissions of members of the armed forces or civilian component of the sending state done in the performance of official duty, and (2) other acts, omissions, or occurrences for which a force or civilian component is otherwise legally responsible under local law. The agreements require that reimbursement be made in both situations by the sending state on a pro rata basis, usually 75 percent. Section 2734a attempts to implement these agreements, but does not completely provide for reimbursement of the foreign governments in the second category mentioned above. Provision for settlement of such claims was included in the agreement to permit paymnent of claims adjudicated under the law of the receiving state. Thus the laws of many foreign countries impose liability on the owner of property, particularly automobiles and aircraft, regardless of whether the damage was caused by an act or omission on the part of the owner's agent, officer, or employee, acting in the performance of official duty. The "legally responsible" provisions of the agreements also cover payment of claims where absolute liability is imposed by virtue of the inherently dangerous nature of the activity or of the property, such as explosives and high octane gasoline. In one NATO country where the law provides for transportation of military explosives by licensed independent contractors, the United States is presently unable to give assurances that its permanent domestic legislation is sufficiently broad to implement its treaty obligations to reimburse its pro rata share of such claims. Although the United States would be legally responsible for damages under the law of the receiving state, it would not be possible in most of such cases to trace the cause of an explosion to an act or omission of a member of the armed force or civilian component acting in the performance of official duty. The proposed amendment to section 2734a (a) would implement the claims obligations of the United States under the NATO Status of Forces Agreement and similar bilateral agreements. The provision on lines 9-11, page 2 of the bill, could be interpreted as unduly limiting the reimbursement of claims for which a force or component is legally responsible, and should be amended by striking out "caused by members of a United States force or civilian component in the territory of the receiving state" and inserting ", personal injury, or death" in place thereof. The present law provides only for the reimbursement of payment for claims "adjudicated" by the foreign country under its laws and regulations, and adjudication in this context means action by the H.R. 1154 local courts. The agreements, however, also authorize settlement by administrative action and this method has been generally followed. This discrepancy in describing the method of settlement would be eliminated by the amendment. The proposed amendment would also clarify the authority in clause (2) of section 2734a (a) to pay a foreign country the agreed pro rata share of a claim for damage to its property that is not specifically waived under the applicable agreement. The agreements provide that, unless the contracting parties agree otherwise, settlements are to be made by a sole arbitrator. Thus, adjudication is not mandatory under the agreements, and in practice all settlements have been made by negotiation between the parties concerned. On the other hand, the present law, as stated, provides only for settlement by adjudication. It is not necessary to provide specifically in the bill for reimbursement or payment of the cost of settlement or arbitration as part of the claim, since the amount awarded or adjudged, and authorized arbitration expenses and fees, are covered by the phrase "in accordance with the agreement". The compensation awarded by arbitration or agreement between the parties is waived or shared by the parties as provided in the agreement. Arbitration fees are fixed by agreement between the parties concerned and include necessary expenses incidental to the performance of those duties. These expenses are defrayed in equal proportion between the parties. Furthermore, some foreign governments have attempted to force the United States to pay a share of their "administrative" settlement costs of third-party claims based on the current statutory "cost" language, notwithstanding the fact that the current agreements provide only for a pro rata sharing of the costs incurred in satisfying claims and judgments. The history of the NATO SOFA negotiations shows that the original proposal relating to reimbursement for claims and "sundry" costs was rejected by the United States and the pro rata formulas adopted in lieu thereof. In order to eliminate doubt as to the applicability of the terms used in H.R. 203 to the provisions of all international agreements providing for the reimbursement of claims arising from the acts of all civilian employees and duly authorized agents within the scope of their employment, it is recommended that line 9, page 1, be amended to read: "of members of its force, its civilian employees, or duly authorized agents done in the". As a technical matter of reference and for purposes of legal precision, it is suggested that the following new flush sentence be inserted at the end of subsection (a) between lines 22 and 23 on page 2 of the bill: "In this subsection, 'force', 'civilian component', and 'receiving tate' have the same meaning as they have in the respective international agreements under which reimbursement or payment to a foreign government is authorized by this subsection." In view of the foregoing, it is clear that section 2734a (a) does not fully implement the international agreements to which the United States is a party. The proposed amendment to 10 U.S.C. 2734a (a) would cause this section to conform to the international agreements. Accordingly, the proposed amendment to subsection (a) is favored if modified as suggested. H.R. 203 would also amend subsection (b) of 10 U.S.C. 2734a to authorize payment of claims for damage, injury, or death that arise H.R. 1154 indirectly out of acts of the U.S. Armed Forces in combat. At present, claims are barred which arise directly or indirectly from action (1) against an anemy by the Armed Forces in combat, (2) by an enemy, or (3) otherwise dictated by military necessity in connection with hostilities. If the proposed amendment is enacted, it would have no practical effect because under the international agreements which the legislation is designed to implement, payment of war damage claims is barred. Normally, war damage claims are made the subject of a treaty subsequent to the termination of hostilities or are asserted in international law by diplomatic negotiations between the sovereigns concerned. Under these circumstances, the proposed amendment to subsection (b) is not favored. The proposed revision of subsection (c) of section 2734a would authorize the use of Coast Guard funds for the reimbursement or payment of foreign claims involving the Coast Guard when it is operating as a service in the Department of the Treasury. (Public Law 89-670 transferred the Coast Guard from the Department of the Treasury to the Department of Transportation, and accordingly "Transportation" should be substituted for "the Treasury" on page 2, line 4, and page 3, lines 8-9, of the bill.) The law presently authorizes only the Secretary of Defense to make reimbursement or payment, although the Coast Guard is an "armed force" and covered under international agreements. The Coast Guard operates in some foreign countries as a service in the Department of Transportation, and claims caused by its personnel have been settled by some governments and included in bills submitted to the military departments as the Department of Defense representative. This has created a funding problem since the United States has a treaty obligation to reimburse those governments for the agreed pro rata share of claims covered under the agreements. Accordingly, the Department of Defense favors this amendment with the indicated technical modification. In commenting favorably on a similar proposal (H.R. 201, 90th Cong.), we stated that: "In order to maintain a single point of contact with the host country, however, it is believed desirable to provide a cross-servicing provision, similar to that in 10 U.S.C. 2734(f), to authorize singleservice responsibility to one of the military departments in all of the foreign countries where international claims agreements are in effect. Accordingly, it is suggested that the bill be amended to provide for the addition of a new subsection (d) to section 2734a to read substantially as follows: "(d) Upon the request of the Secretary of Transportation, or his designee, a claim arising from the activities of the Coast Guard and covered by subsection (a) may be reimbursed or paid to the foreign country concerned by the authorized representative of the Department of Defense out of the appropriation for claims of the Department of Defense, subject to reimbursement from the Department of Trnasportation.'" In order to be consistent, it is also suggested that 10 U.S.C. 2734b be amended to conform to the provisions of international agreements. Subsection (a) of that section does not include the "legally responsible" criteria and it also applies only to a civilian employee or member of H.R. 1154 |