United States-France Convention on Taxation and Fiscal Evasion Message to the Senate Transmitting the Convention.

To the Senate of the United States:

I transmit herewith, for Senate advice and consent to ratification, the Convention between the United States of America and the French Republic for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Estates, Inheritances and Gifts, signed at Washington, November 24, 1978. For the information of the Senate, I also transmit the report of the Department of State with respect to the Convention.

The Convention would replace the estate tax convention between the United States and France which entered into force on October 17, 1949.

The Convention is the second such convention negotiated since the Foreign Investors Tax Act of 1966. The first such convention was signed with the Netherlands and entered into force in 1971. Others are under negotiation.

A principal feature of this Convention is a rule under which a citizen of one State residing in the other State is not considered domiciled in that other State for purposes of its estate or inheritance tax jurisdiction unless he has lived there for five of the prior seven years. This provision is beneficial to U.S. businessmen living in France.

Another provision exempts, reciprocally, stock and debt obligations of portfolio investors domiciled in the other State. This provision benefits especially French portfolio investors in the United States.

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

JIMMY CARTER

The White House,

February 9, 1979.