is of sufficient importance to warrant the expropriation of the land surface of the mining claim. If the owner of the surface rights to land covering a mineral deposit, and the owner of the said deposit cannot reach an agreement concerning the transfer of the surface rights to the owner of the mineral deposit, in accordance with the provisions of Decree No. 593 of May 16, 1913, the Government may, if the circumstances warrant, expropriate such surface rights as a public utility, and determine the compensation to be paid to the land owner. Special provisions for the expropriation of land surface are contained in Chapter V.

OTHER ENCOURAGEMENT TO MINERAL DEVELOPMENT

Chapter II of the proposed law provides that the Cuban Government shall bestow periodically awards upon persons who introduce improvements in mining and metallurgy and those who otherwise contribute to the development of the mining industry in Cuba. This chapter also provides that all departments of the Cuban Government shall make available technical information to miners; that the armed forces of the nation shall provide assistance and guarantees that may be necessary to miners in developing their properties; and that aid also shall be furnished by the Government in the construction of roads and bridges required for the transportation of minerals.

The Government also is required, in accordance with Chapter IV, to render other assistance, such as the preparation of geological maps, in which the technical services of every qualified department are to be utilized.

Of special interest

TAXES

are the provisions of Chapters III and VII relating to the payment of taxes and exemptions therefrom.

For a period of 15 years all machinery, tools, apparatus and construction material to be used in the exploration and exploitation of mineral deposits are exempt from the payment of import duties and all other taxes, whether national, provincial or municipal. A similar exemption is provided for chemicals or other substances to be used in the mining of minerals, and on all machinery, equipment, instruments, chemicals and other substances and materials to be used in connection with the smelting and refining of minerals in Cuba. For a period of 12 years all fuel, except gasoline, that may be imported for any purpose connected with the mining industry, is exempt from import duties and other taxes.

All companies now established or that may be established for the purpose of mining and metallurgical activities are exempt, for a period of 15 years, from all national, provincial and municipal taxes except the profits tax (now 10 percent) and the taxes specially described in the proposed law; (including the annual fee of 20 cents a hectare). During the 15-year period, however, mining companies already established are required to pay only a tax of 6 percent on profits, and Article XV contains a guarantee that the Cuban Government, the provinces or municipalities for a period of 25 years, will neither increase existing taxes, including new taxes prescribed in the proposed law, nor create new taxes. This guarantee is given to those who have already invested, or may hereafter invest capital in the development of mining and metallurgical industries in Cuba.

Chapter VII provides a production tax applicable to "metalliferous deposits and veins, coal, asphalt, bitumens, graphite, copperas, sulphur, precious stones, iron, and bauxite", the tax being 2 percent of the gross proceeds at the mine or quarry, the value to be determined where non-treated ores are offered for sale, and after deducting the cost of transportadion to the treating plant and the cost of treatment. The following minerals are subject to special taxes, in lieu of the 2 percent tax:

Each ton of 2,240 pounds of Hematite ore containing more than 50 percent of metallic iron is subject to a tax of fifteen hundredths of one cent for each percent of iron. Such ore containing less than 50 percent of metallic iron is subject to a tax of one-tenth of a cent for each percent of iron.

Every ton of 2,240 pounds of Limonite ore (largely found in Camaguey and Oriente Provinces) is subject to a tax of five hundredths of a cent for each percent of metallic iron contained therein. Every ton of 2,240 pounds of manganese ore containing more than 50 percent metallic manganese is subject to a tax of one-fourth of one cent for each percent of metallic manganese. Ore containing less than 50 percent but more than 40 percent manganese is subject to a tax of one-fifth of a cent for each percent of metallic manganese; and that containing less than 40 percent of manganese is subject to a tax of one-tenth of a cent for each percent of manganese.

Every ton of 2,240 pounds of copper ore containing over 15 percent metallic copper is subject to a tax of two cents for each percent of copper; that containing less than 15 percent but more than 8 percent copper, is subject to a tax of one cent for each percent of copper; and ore containing less than 8 percent of copper is subject to a tax of one-half cent for each percent of metallic copper. Chrome ore containing more than 48 percent of chromium sesquioxide is subject to a tax of one-third of a cent for each percent of metallic chromium, while ore containing less than 48 percent and not less than 38 percent is subject to a tax of one-fifth of a cent for each percent of chromium, and ore having less than 38 percent of chromium is subject to a tax of fifteen hundredths of a cent for each percent of chromium.

Every ton of 2,000 pounds of asphalt having a value at the mine pit of more than ten pesos (U. S. dollars) is subject to a tax of twenty cents, and asphalt valued at less than ten pesos a ton is subject to a tax of eight cents a ton.

Article XXIII provides that the foregoing taxes shall be paid by the mineral producer either before or after production, but before it is sold. Where value is the basis of the tax, the value shall be the average price quoted during the five days prior to sale of the ore, although the price at which it is actually sold may be taken as the basis should the producer so desire. In the case of exported ores, payment of the tax may be covered by a bond guaranteeing payment thereof, until part or total payment for the ore has been received by the producer. Where analysis is the basis of the tax the producer's analysis shall be accepted unless such analysis is proved to be incorrect by an official Cuban laboratory.

It should be noted that all minerals exempt from the 2 percent tax, that are smelted or treated in Cuba, are also exempt from the foregoing taxes. Furthermore, all gold extracted from mines in Cuba, "as long as the State does not regulate its purchase at the World's market price", may be exported free of tax the same as all other

metals, although it is subject to the 2 percent production tax. Under the provisions of Decree Law 800 of January 8, 1935, the exportation of gold bars, ingots or in any other unmanufactured form, and money, is prohibited except upon payment of a tax of 15 percent. This is held to have prevented the exploitation of gold deposits in Cuba.

Article XXV of the proposed law provides that one-third of the taxes derived from the exploitation tax on mining shall be placed in a fund for the development of that industry, the remainder being covered into the general treasury revenues.

SUPERIOR MINING COUNCIL

Chapter VI provides for a Superior Mining Council, the directing head of which shall be appointed from nominees of the mining industry, with authority to set upon requests for a reduction in requirements regarding the working of mineral claims and disputes concerning the classification of mineral deposits.

Chapter VIII makes it compulsory to employ engineers in connection with all transactions with the Government concerning mineral development and in all mining operations and the treatment of minerals in which more than 100 laborers are employed. In both cases preference is to be given to mining engineers authorized to practice their profession in Cuba.

Part of the proceeds of the fund for the development of mining may be contributed to the school of Mining Engineering of the University of Habana.

CONCLUSION

It will be noted that the preamble to the proposed law states that its provisions are not applicable to petroleum, inasmuch as exploitation of such deposits has been made the subject of special legislation, viz., the Combustible Minerals Law of May 9, 1938.

LIBRARY

DIVISION OF COMMERCIAL LAWS

BOOKS RECEIVED

United States Reborts, Vol. 302, October Term, 1937. Congressional Directory, 75th Congress, 3rd Session, May 1938.

Reviews and Journals: Nations Business, August 1938; Export Trade and Shipper; The Guaranty Survey, August 1938; Revista De Derecho, 1938; American Bar Association Journal, September 1938; North Dakota Insurance Report for 1937; Seguros Publicacion Mensual, August 1938; American Import and Export Bulletin, September 1938; The Journal of Comparative Legislation and International Law, 3rd Series, Vol. XX, Part III; Journal of the American Judicature Society, August 1938; The Spectator, September 1938; The American Agency Bulletin, September 1938.

NEW

YUGOSLAV

PETROLEUM

DECREE

By Henry P. Crawford, Division of Commercial Laws

The new Yugoslav "Decree Relative to Liquid Fuels" was published July 1, 1938. In its introductory clauses the decree covers (1) prospecting for and exploiting liquid, solid and gaseous bitumens within Yugoslavia; (2) the manufacture of liquid fuel; and (3) the importation, exportation, or sale of liquid fuel.

STATE OWNERSHIP

Mineral oils, resins and gases, whether found in the earth or on its surface, are the property of the State. The right to prospect for, to exploit or to manufacture liquid fuel from all kinds of bitumens and fossil coal may be granted only in accordance with the provisions of the present decree. The State alone has the exclusive right to prospect for and to exploit liquid and gaseous bitumens. These operations may be undertaken by the Autonomous State Monopolies Administration in the name of the State on any location provided the latter is not covered by a concession granted under previous legislation or by the provisions of the present decree. As an exception to the foregoing, the Council of Ministers may, at the request of the Minister of Forests and Mines, and upon the previous consent of the Minister of War and Marine and of the Minister of Finance, grant a concession to companies required to submit public accounts, such as corporations which have their situs in Yugoslavia and have their shares inscribed in the name of the bearer. (Articles 2-3.)

SPECIFIC OBLIGATIONS IMPOSED BY THE STATE

Any person or corporation applying for a permit or concession must accept the following obligations: (1) to register the company in the Commercial Register; (2) to insure within 6 months the investment of sufficient capital; (3) that if possible, the capital required will be raised in the domestic market; (4) that the State will be given a fixed quantity of the total annual production; (5) that the State Commissioner will be permitted to supervise the activities of the corporation and to be present at all meetings of the board of directors; (6) that the Autonomous State Monopolies Administration, in those instances when it participates in the financing of the corporation, will be presented on the board of directors; (7) that the product will not be exported without previous authorization; (8) that all mining fees will be paid regularly; and (9) that throughout the entire period covered by the charter, all equipment will be kept in good working condition.

In order to insure the fulfilment of the above obligations, the applicant must deposit a sum equal to 5 percent of the investments proposed. This will be returned to the concessionaire upon fulfilment of the conditions, otherwise he forfeits his deposit. (Article 6.)

Based upon the report of Robert P. Joyce, Third Secretary of Legation, Belgrade, July 14, 1938.

PROCESSING PLANTS

Under the provisions of the new decree, any concessionaire may erect his own installation for refining mineral oils and the processing of bitumens or fossil coal, but he must first enter into an agreement with the Autonomous State Monopolies Administration (1) as to the time, place and amount of capital he proposes to invest; (2) that he will form a corporation for the purpose; (3) that he will undertake all safety measures prescribed by competent authorities for protection against air raids; (4) that at all times he will maintain a reserve equal to at least one-fourth of his annual production, partly in raw and partly in processed material as may be required of him; (5) that he will prepare a regular laboratory; (6) that he will bear all charges connected with the proceedings for obtaining permits for construction work; and (7) that he will comply with all existing provisions regarding control measures for the collection of State fees. (Article 11.) Moreover, the processing of bitumens and fossil coal into liquid fuel or the refining of crude oil, as well as the entire trade in liquid fuel, is under the permanent supervision of the government control officials. The State Monopolies Administration has the power to issue instructions to all concerns engaged in this processing, as to the requirements of the country or in the interest of national defense. In this connection, the State Monopolies Administration will do everything possible to avoid damages to the concerns affected. (Article 19.)

EXPROPRIATION

One of the principal objects of the present enactment is to supply the country with liquid fuel, especially for purposes of national defense. On these grounds, expropriation is permitted by the State of private property of independent or private enterprises engaged in the production of liquid fuel, and of private immovable property for the erection of installations for processing liquid fuel, as well as for the erection of all accessory appurtenances, such as water, conduits, piping, highways, bridges, and others.

The procedure to ascertain the amount and conditions of the expropriation, especially to determine the compensation to owners, will be undertaken according to methods and procedure applicable in other cases of expropriation of private property in that region of the country in which the expropriated property is situated. Apparently a difference of method of procedure and of computation of compensation might be noted in different parts of the country. (Article 20.)

GENERAL TAXATION

For purposes of furthering the production of liquid fuel from domestic raw materials, the Minister of Finance is authorized to lower the existing State and local taxes on liquid fuel produced within the country. He may also provide for special production premiums. In any event, no State or local taxes will be collected on stocks of liquid fuel kept by the producers and importers in storage until such time as these stocks are released for trade. The Minister of Finance will also prescribe the percentage of evaporation allowed for stocks of this nature. (Article 21.)