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APPENDIX S
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APPENDIX S

FINANCIAL LIABILITIES OUTSTANDING AT THE

DATE OF INDEPENDENCE

Draft Exchange of Notes between the Representative of the United Kingdom authorised to sign the Treaty of Establishment and Archbishop Makarios and Dr. Kutchuk

A..-Draft Note to Archbishop Makarios and Dr. Kutchuk

Your Excellencies,

I have the honour, with reference to the discussions leading to the Exchange of Notes between us of to­day's date on financial matters, to confirm our understanding that there are certain financial matters to be settled outside the terms of those Notes and accordingly to set out the following arrangements agreed between us in connexion with those matters:-

(a) The Government of the United Kingdom shall pay to the Government of the Republic all sums which may be owing immediately before to­day's date to the Government of the Colony in respect of works and services carried out, and of disbursements made, before to­day's date by the Government of the Colony, for and on behalf of the Government of the United Kingdom on a repayment basis, including

(i) pensions and other like allowances;

(ii) the agreed share of the Government of the United Kingdom in the cost of the Flight Information Centre, Nicosia, (being half of the salaries and other expenses of the centre), including the agreed part of the cost of supplementary air traffic controllers temporarily introduced during July, 1958,

(iii) payments made towards the maintenance of destitute persons in Egypt and the evacuation of certain persons from Egypt;

(iv) expenditure incurred on the construction of the following: Episkopi by­pass: Akhna by­pass: Dhekelia­Pergamos road: and certain road works in the vicinity of Ormidhia;

(v) payments made in respect of the requisitioning or acquisition (compulsorily or otherwise) by the Government of the Colony of property for and on behalf of the Government of the United Kingdom;

(vi) payments for the construction and maintenance of camps in the Paphos district.

(b) The Government of the Republic shall pay to the Government of the United Kingdom

(i) all sums which may be owing immediately before to­day's date by the Government of the Colony in respect of works and services carried out, and of disbursements made before to­day's date by the Government of the United Kingdom, for and on behalf of the Government of the Colony on a repayment basis.

(ii) monies repayable to the Government of the United Kingdom or authorised Service Organisations of the United Kingdom, according to the law or administrative practice of the Government of the Colony obtaining immediately before to­day's date, in respect of any refund or drawback of customs duties paid on goods or stores imported before to­day's date.

(c) The Government of the United Kingdom shall, in respect of any property requisitioned before to­day's date by the Government of the Colony for the use of the Government of the United Kingdom, discharge, or reimburse to the Government of the Republic payments made to discharge, any liability towards a third party which may be outstanding immediately before to­day's date, according to the law or administrative practice in force immediately before to­day's date.

(d) (i) The Government of the United Kingdom shall pay to the Government of the Republic, and the Government of the Republic shall pay to the Government of the United Kingdom, all sums which in each case the former Government has collected for and on behalf of the latter.

(ii) The Government of the United Kingdom shall pay to the Government of the Republic, and the Government of the Republic shall pay to the Government of the United Kingdom, all sums which in each case the former Government owes at to­day's date to the latter Government in respect of postal transactions.

(e) There shall be a final accounting in respect of colonial development and welfare schemes for the purpose of ensuring that the amount of the grant or loan issued by the Government of the United Kingdom in respect of each scheme is equal to the amount of expenditure actually incurred on and under the terms of that scheme before to­day's date; and any sums which may be found due as a result of such accounting shall be paid by the one Government to the other, as the case may require.

(f) In this Note:-

(i) the words " Government of the United Kingdom " mean the Government of the United Kingdom of Great Britain and Northern Ireland;

(ii) the words " Government of the Colony " and " Government of the Republic " mean respectively the Government of the Colony of Cyprus and the Government of the Republic of Cyprus;

(iii) reference to " the Government of the United Kingdom " shall be construed as including reference to the Government of any territory for whose international relations the Government of the United Kingdom is at to­day's date responsible,

(iv) reference to any Government shall be construed as including references to any department of that Government or to any public authority of the country or territory of that Government.

2. I have the honour to suggest that if the arrangements set out above are acceptable to the Government of the Republic, this Note, together with your reply to that effect, shall be regarded as constituting an agreement in this matter between the Government of the United Kingdom and the Government of the Republic which shall enter into force on to­day's date.

B.-Draft Reply by Archbishop Makarios and Dr. Kutchuk Your Excellency,

We have the honour to acknowledge receipt of your Note of to­day's date

[text as above]

2. The arrangements set out in that Note are acceptable to the Government of the Republic of Cyprus and we have the honour therefore to confirm that your Note, together with this reply, shall constitute an agreement

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