ARTICLE 1

Personal Scope

1. This Agreement shall apply to persons who are residents of one or both of the Contracting States, except as otherwise provided in the Agreement.

2. The Agreement shall not restrict in any manner, any exclusion, exemption, deduction, credit, or other allowance now or hereafter accorded:

a) by the laws of either Contracting State; or b) by any other agreement between the Contracting States.

3. Notwithstanding any provision of the Agreement except paragraph 4, a Contracting State may tax its residents (as determined under Article 4 (Resident)), and, in the case of the United States, by reason of citizenship may tax its citizens, as if the Agreement had not come into effect. For this purpose, the term "citizen" shall include a former citizen whose loss of citizenship had as one of its principal purposes the avoidance of tax, but only for a period of 10 years following such loss.

4. The provisions of paragraph 3 shall not affect:

a) the benefits conferred by a Contracting State under paragraph 2 of Article 9 (Associated Enterprises), under paragraph 2 of Article 18 (Pensions and Annuities), and under Article 23 (Relief from Double Taxation), 24 (Non-Discrimination), and 25 (Mutual Agreement Procedure); and

b) the benefits conferred by a Contracting State under Articles 19 (Government Service), 20 (Students, Apprentices, and Teachers), and 27 (Members of Diplomatic Missions and Consular Posts), upon individuals who are neither citizens of, nor have immigrant status in, that State.

5. Notwithstanding the provisions of subparagraph 2(b):

a) Notwithstanding any other agreement to which the Contracting States may be parties, a dispute concerning whether a measure is within the scope of this Agreement shall be considered only by the competent authorities of the Contracting States, as defined in subparagraph 1(h) of Article 3 (General Definitions) of this Agreement, and the procedures under this Agreement exclusively shall apply to the dispute.

b) Unless the competent authorities determine that a taxation measure is not within the scope of this Agreement, the nondiscrimination obligations of this Agreement exclusively shall apply with respect to that measure, except for such national treatment or most-favored-nation obligations as may apply to trade in goods under the General Agreement on Tariffs and Trade. No national treatment or most-favored-nation obligation under any other agreement shall apply with respect to that measure.

c) For the purpose of this paragraph, a "measure" is a law, regulation, rule, procedure, decision, administrative action, or any other form of measure.