Article XVII provides the rules for the entry into force of the second protocol. The

Protocol is subject to ratification by both contracting States. It will enter into force 30 days after the exchange of instruments of ratification, and its provisions will take effect in accordance with the provisions of Article 31 (Entry Into Force) of the Convention.

A special rule in Article XVIII relating to the applicable source rules for U.S. foreign tax credit purposes is described in the explanation of Article 26 (Relief from Double Taxation).

EXCHANGE OF NOTES (PROTOCOL 2)

Two paragraphs in the Exchange of Notes were not described above in connection with Articles of the Protocol.

Paragraph 8 relates to Article 10 (Grants) of the Convention. It clarifies that the failure by Israel to include a grant in the basis of stock or assets for income tax purposes is understood not to mean that the grant is "taxed by Israel".

Paragraph 16 makes clear that a reference in the Convention to the currency of one of the Contracting States is to be understood to be a reference to the currency as it is named at the time the relevant rule of the Convention is being applied. Thus, the references in Articles 18 (public Entertainers) and 24 (Students and Trainees) to Israeli pounds, are understood today to be a reference to Israeli shekels.