Article 3 of the Protocol adds a new Article 12A to the Convention, which provides…

certain alternative conditions are satisfied, a person (other than an individual) which is a resident of a

Contracting State and derives dividends, interest, or royalties from the other Contracting State shall not be entitled under the Dividends, Interest, and Royalties Articles of the Convention to relief from taxation in the other Contracting State unless (in the language of the English text of the Protocol) more than 50 percent of the "beneficial interest" in such person is owned by one or more individual residents of one of the Contracting States, one of the Contracting States or its political subdivisions or local authorities, or citizens of the United States (hereinafter "listed persons").

The delegations agreed that the French and Dutch language texts of the new Article 12A incorporate the meaning of the English language term "beneficial interest." Specifically, for the condition in the preceding paragraph to be satisfied, more than 50 percent of the rights to income and other economic rights in the person claiming treaty benefits must be owned by one or more of the listed persons. In the case of a trust claiming treaty benefits, for example, more than 50 percent of the interests held by beneficiaries of the trust must be held by listed persons for the condition to be satisfied; the identities of the legal owners of the trust are irrelevant for this purpose.

If this is in accord with your understanding, I would appreciate a confirmation from you to this effect.

Accept, Excellency, the renewed assurances of my highest consideration.

For the Secretary of State: William Bodde, Jr.

EMBASSY OF BELGIUM

3330 GARFIELD STREET, N.W. WASHINGTON, D.C. 20008

December 31, 1987.

His Excellency George P. Shultz, Secretary of State, Washington.

Excellency: I have the honour to acknowledge the receipt of Your Excellency's note of today's date which reads as follows:

“Excellency: I have the honour to refer to the Supplementary Protocol Modifying and Supplementing the Convention between the Government of the United States of America and the Government of the Kingdom of Belgium for the Avoidance of Double Taxation and the Prevention of

Fiscal Evasion, signed at Brussels on July 9, 1970. The Protocol has been signed at Washington on this date. During the course of the discussions regarding the Protocol, one question arose with respect to which it was deemed appropriate to exchange Notes recording the agreement reached by the delegations from our two countries.