Article 17 of the proposed Convention contains significant anti-treaty-shopping rules…

its benefits unavailable to persons engaged in treaty-shopping.

Rules necessary for administration, including rules for the resolution of disputes under the Convention and for exchange of information, are contained in Articles 26 and 27.

The Convention would permit the General Accounting Office and the tax-writing committees of Congress to obtain access to certain tax information exchanged under the Convention for use in their oversight of the administration of U.S. tax laws.

This Convention is subject to ratification. In accordance with the provisions of Article 29, it will enter into force when the Governments notify each other through diplomatic channels that their constitutional requirements for entry into force have been met. It will have effect for payments made or credit on or after the first day of January following entry into force with respect to taxes withheld by the source country; with respect to other taxes, the Convention will take effect for taxable periods beginning on or after the first day of January following the date on which the Convention enters into force.

The proposed convention will remain in force indefinitely unless terminated by one of the Contracting States, pursuant to Article 30. At any time after five years from the date on which the Convention enters into force, either Contracting State may terminate the Convention as of the end of a calendar year by giving notice of the termination through diplomatic channels at least six months prior to the end of that calendar year.

A Protocol accompanies and forms an integral part of the Convention.

The Department of the Treasury and the Department of State cooperated in the negotiation of the Convention. It has the full approval of both Departments.

Respectfully submitted,

MADELINE ALBRIGHT.

LETTER OF TRANSMITTAL

THE WHITE HOUSE, June 29, 1999.

To the Senate of the United States:

I transmit herewith for Senate advice and consent to ratification the Convention Between the Government of the United States of America and the Government of the Republic of Venezuela for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income and Capital, together with a Protocol, signed at Caracas on January 25, 1999.

Also transmitted is the report of the Department of State concerning the Convention.

This Convention, which is similar to tax treaties between the United States and other developing nations, provides maximum rates of tax to be applied to various types of income and protection from double taxation of income. The Convention also provides for resolution of disputes and sets forth rules making its benefits unavailable to residents that are engaged in treaty shopping.

I recommend that the Senate give early and favorable consideration to this Convention and that the Senate give its advice and consent to ratification.

WILLIAM J. CLINTON.

CONVENTION BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF VENEZUELA FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE PREVENTION OF FISCAL EVASION

WITH RESPECT TO TAXES ON INCOME AND CAPITAL

The Government of the United States of America and the Government of the Republic of Venezuela, desiring to conclude a convention for the avoidance of double taxation and the prevention of fiscal evasion with respect to taxes on income and capital, have agreed as follows: