U.S. Department of State

WHEREAS the Parties signed the Memorandum of Understanding Between the Government of the United States of America and the Government of the People's Republic of China at Washington on September 28, 1995 (hereinafter the "1995 MOU"); and

WHEREAS the Parties signed the Memorandum of Understanding Between the Government of the United States of America and the Government of the People's Republic of China Concerning the Provision of Properties in Washington, D.C., Beijing, and Guangzhou at Beijing on November 1, 2000 (hereinafter the "2000 MOU"); and

WHEREAS the U.S. Side acquired use of the site of its new embassy complex (hereinafter the "Liang Ma He Site") by the Agreement Between the Government of the United States of America and the Government of the People's Republic of China Concerning the Use of the Property Located at the Liang Ma He Diplomatic Zone in Beijing, signed at Washington on October 19, 2001 (hereinafter the "Liang Ma He Property Agreement"); and

WHEREAS the Chinese Side acquired use of the site of its new embassy complex (hereinafter the "ICC Site") by the Agreement Between the Government of the United States of America and the Government of the People's Republic of China Concerning the Use of the Property Located at the International Chancery Center in Washington, D.C., signed at Washington on October 19, 2001 (hereinafter the "ICC Property Agreement"); and

WHEREAS the U.S. Side intends to construct its new embassy complex (hereinafter the "U.S. Project") on the Liang Ma He Site and the Chinese Side intends to construct its new embassy complex (hereinafter the "Chinese Project") on the ICC Site; and

WHEREAS the Parties enter into this Agreement further to their privileges and immunities enjoyed and their obligations undertaken in accordance with the Vienna Convention on Diplomatic Relations (hereinafter the "VCDR"),

The Parties hereby agree, in accordance with the principles of reciprocity and mutual benefit, on the following conditions for the construction of the U.S. Project and the Chinese Project:

1. Definitions and Applicability

1.1 For the purposes of this Agreement, the Party (the U.S. Side or the Chinese Side) engaging in construction shall be referred to as the "Construction Party," and the country (the United States of America or the People's Republic of China) in which such construction is being conducted shall be referred to as the "Host Country."

1.2 This Agreement shall apply to all Host Country and Construction Party activities in connection with the U.S. Project and the Chinese Project.

2. Planning Data and Design Data

2.1 The Parties have provided each other with available and applicable planning data and design data. For the purposes of this Agreement, "planning data" refers to all information on technical aspects necessary for Construction Party planning, including but not limited to information on utilities, easements, and surveys. "Design data" refers to Host Country regulations and requirements that affect Construction Party design.

2.2 Should the Construction Party require additional design and planning data, the Host Country shall provide available data promptly upon written request by the Construction Party.

2.3 The Construction Party shall have the right to develop, at its own cost and at any time (including before the time of the site turnover pursuant to Article 15.1 of this Agreement), its own technical information about the construction site, including but not limited to topographic, hydrological, environmental, boundary, or utility surveys or a detailed subsurface geotechnical exploration program.

3. Temporary and Permanent Utilities and Services

3.1 The Host Country shall, at its own cost, ensure the availability of the size and type of utilities and services that the Construction Party determines that it requires to meet the needs of its new embassy complex site and adjunct sites (provided that its required telecommunications are technically available and feasible on the part of the Host Country). A listing of the U.S. Side's temporary and permanent requirements is attached as Appendix A. The types of temporary and permanent requirements of the Chinese Side are the same as those of the U.S. Side. Specific requirements and technical parameters shall be provided to the U.S. Side upon completion of the Chinese Side's design project and shall serve as an integral part of this Agreement.

3.2 The Host Country shall, at its own cost, ensure the availability, reliability, and good working condition of the service mains for all utilities and services. These service mains shall be installed at or close to the boundary line of the Construction Party project site but shall not extend within the boundary line.

3.3 Temporary utilities and services for the new embassy complex site and adjunct sites shall be made available within 30 days after the signing of this Agreement.

3.4 The Construction Party shall, at its own cost, be responsible for the connections between the service mains and its own interface points. The location and design of Construction Party connections and interface points shall be coordinated through negotiations between the Parties.

3.5 Either Party may inspect the utility installations at the interface point; however, the Host Country shall not enter the Construction Party site to conduct any inspections.

3.6 Usage fees for utilities and services shall be paid by the Construction Party at the prevailing published rates no higher than those charged to other diplomatic missions.

3.7 There shall be no restrictions imposed by the Host Country on Construction Party selection of qualified Host Country providers of utilities and services.

3.8 At the Construction Party's request, the Host Country shall remove (or reroute) at its cost all functioning underground lines for utilities and services from the Construction Party project site. This work shall be completed before the time of the site turnover pursuant to Article 15.1 of this Agreement.

4.1 The Parties shall have the right to set up and operate a concrete batch station on the construction site or on the temporary site (limited only to their respective construction sites and adjacent temporary sites).

5. Planning and Design Review and Approval

5.1 The Parties shall proceed with planning and design review and approval procedures for their respective projects by following the procedures and requirements listed below. The explanations and drawings specified below refer to architectural explanations and drawings.

5.2 For first stage approval, at the Preliminary Design stage, the Parties shall submit the following documents:

5.2.1 A written explanation, in English and Chinese, which explains the general plan for the building(s), the architectural treatment, and the design philosophy of the proposed design. This shall include an explanation in writing that the following elements all conform to applicable planning criteria: building areas, automobile/bicycle parking spaces, green space, property boundary setbacks, site coverage, shadow analysis, and building height. Particular attention should be given to explaining the historic or indigenous architectural and planning references from which the proposed design is derived;

5.2.2 A general site plan (1:400) showing proposed building footprint, property boundary setbacks, site access points, green space; and anticipated landscaping, buffering and screening.

5.2.6 A three-dimensional representation showing the completed project. This representation shall be either perspective renderings or model photographs clearly showing how the project will be developed on site; and

5.2.7 Elevations of each side of the proposed buildings, including fa�ade treatments and any special features (1:400).

5.3 For final approval, the parties shall, as soon as possible after first stage approval, submit design development documents including an update of the material submitted in Article 5.2 of this Agreement in addition to the following materials:

5.3.1 A landscaping plan (1:400), including a list of all plant species to be used at the site and their locations;

5.3.2 A listing of all exterior finishing materials and samples of significant exterior materials that comprise the proposed buildings and special features, including paving types;

5.3.3 A 1:400 model of the site and buildings; and

5.3.4 A description of the project's transportation management plan. The transportation management plan shall include the estimated number of people who will access the site on a daily basis, and their planned method of transportation to and from the site.

5.4 All fees associated with obtaining the required construction permits shall be waived by the Host Country or included in the flat fee to be paid under Article 16.7 of this Agreement.

5.5 The Host Country must approve or disapprove (with a detailed statement of reasons) all submissions within 60 calendar days from the date of receipt of the submission.

7.5 The Construction Party shall have the right to seek any temporary easements for use during construction in accordance with applicable law. The Host Country shall facilitate the Construction Party's efforts in this regard.

7.6 The Host Country shall facilitate the acquisition of permits required for temporary facilities wherever located (including but not limited to fences, warehouses, construction office, and worker temporary housing) in support of the Construction Party project.

8. Temporary Housing

9. Diplomatic Status of Sites and Archives

10. Personnel and Companies

10.1 The Construction Party shall have the right to select project-related personnel and companies of its own choosing and of any nationality (including from the Host Country, the Construction Party or third countries) to perform all work in connection with its project.

10.2 The Host Country shall not require that any work be performed by or in partnership or joint venture with companies, organizations, or individuals from the Host Country, except for the work to be performed by the Diplomatic Services Bureau referred to in Article 16.7 of this Agreement.

10.3 Construction Party payments to companies registered in the Host Country shall be made in accordance with Host Country laws and regulations. If the company is not registered in the Host Country, the Host Country shall not require that payments be made in the territory or currency of the Host Country.

10.4 Construction Party project-related personnel who hold the nationality of the country to which the Construction Party belongs or third country nationality shall be restricted to project-related work and shall leave the Host Country upon conclusion of the project. However, a limited number of Construction Party personnel as mentioned above shall be permitted to remain in the Host Country after occupancy for the sole purpose of correcting any construction defects and establishing maintenance and operation procedures.

10.5 The Host Country shall issue renewable two-year multiple-entry visas (with duration of stay to be determined in accordance with Host Country law) to Construction Party nationals who are qualified.

The U.S. Side's construction personnel of U.S. nationality will be issued service visas. The Chinese Side's construction personnel of Chinese nationality will be issued A-2 visas. The U.S. Side's construction personnel of third country nationality will be issued ordinary visas. The Chinese Side's construction personnel of third country nationality will be issued visas that are appropriate to their status.

The Chinese Side's visa applications for construction personnel of Chinese nationality shall be processed at the U.S. Embassy in China, and the U.S. Side's visa applications for construction personnel of U.S. nationality shall be processed at the Chinese Embassy in the United States. Visa applications for personnel of third country nationality shall be processed, as much as possible, at the Chinese Embassy in the United States or U.S. Embassy in China. Should there be a need to process these applications in a third country, prior notes shall be served to the Ministry of Foreign Affairs of China or the U.S. Department of State, and the Parties will provide necessary assistance.

10.6 Construction Party personnel who are of Construction Party nationality, and whose stay in the Host Country is more than 30 calendar days, shall be attached to the Construction Party diplomatic mission as administrative and technical staff of the mission for the duration of their functions. These personnel shall enjoy the privileges and immunities afforded to administrative and technical staff as specified in the VCDR; but this does not apply to any obligation to compensate Host Country nationals for their personal injuries arising from acts performed outside the course of official duties.

11. Shipments

11.1 The Construction Party shall have the right to import and export all project-related materials and equipment (including but not limited to vehicles) and shall be exempt from all customs duties, taxes, and related charges other than charges for storage, cartage, and similar services, in accordance with Article 36 of the VCDR.

11.2 Pursuant to Article 27 of the VCDR, the Construction Party shall have the right to import and export project-related articles in the diplomatic bag, with such articles being limited only to a minority of project-related articles. The diplomatic bag shall be sealed and shall bear visible marks of its character. The amount, size, and weight of project-related diplomatic bag shipments should be reasonable. Shipping containers shall not be used as diplomatic bags for project-related shipments.

11.3 Upon the arrival of the diplomatic bag at the Host Country port of entry, Host Country customs authorities shall complete release procedures expeditiously within 24 hours of receipt of written application from the Construction Party. The Construction Party should, in compliance with Host Country requirements, serve prior notice no less than 24 hours before arrival.

11.4 The diplomatic bag shall not be opened or detained at any time. The Construction Party shall have the right to have the diplomatic bag accompanied by diplomatic couriers at all times, including during the customs clearance process.

11.5 The majority of project-related construction materials and equipment (including but not limited to vehicles, construction or inspection equipment) should be shipped as special dedicated project materials of the embassy. On the premise that the Construction Party abides by Host Country laws and regulations, the Construction Party may transport its shipments directly to customs-specified supervised areas to await customs clearance, and may watch such shipments during the entire time from unloading until their release. If necessary, the Construction Party may have access to its shipments pursuant to relevant Host Country regulations. Based on the principle of reciprocity, the Host Country shall provide assistance to achieve this.

11.9 The Host Country shall provide facilitation and allow smooth delivery of all materials that the Construction Party ships to project-related sites of the Construction Party.

11.10 The Parties agreed that shipping and labeling of all hazardous materials shall conform to international standards and requirements.

11.11 Wooden products and wooden packing materials (including sea freight and air freight as the diplomatic bag and all articles that are shipped as special dedicated project materials) shipped by the Construction Party to the Host Country shall conform to Host Country quarantine requirements. Competent authorities of the Parties shall furnish phytosanitary certificates or quarantine treatment certificates. Other animal and plant products shipped to the Host Country for Construction Party's own use should also conform to Host Country quarantine requirements. The competent authorities on the Chinese Side are the Chinese exit-entry inspection and quarantine authorities, and the competent authority on the U.S. Side is the Animal and Plant Health Inspection Service (APHIS).

12. Local Acquisition

12.1 If necessary, the Host Country shall facilitate the acquisition and delivery of locally manufactured items, materials, equipment (including vehicles), and services necessary for the new construction. The acceptability of the locally manufactured items, materials, equipment, and services provided and the quality of the completed work shall be determined solely by the Construction Party.

12.2 The Construction Party shall not be required to obtain locally manufactured items, materials, equipment (including vehicles), and services through the Host Country or an entity designated by the Host Country.

13. Vehicles

13.1 The Construction Party may employ as many construction vehicles (e.g., trucks, pickups, and tractor-trailers) as it deems necessary for its project. This includes but is not limited to construction vehicles owned by companies registered in the Host Country. The number of passenger vehicles (e.g., sedans, minivans, and SUVs) to be imported for the project duty-free shall not exceed 70 at any time during construction.

13.2 Construction vehicles to be used in the project may be imported as embassy diplomatic cargo or locally obtained pursuant to local laws.

13.3 Construction Party vehicles with diplomatic license plates/plaques shall be considered a constituent part of the means of transport of the Construction Party's diplomatic mission under the VCDR and shall be inviolable.

13.4 Construction Party vehicles shall be properly insured (including for third party liability) and registered in accordance with Host Country laws and regulations.

13.4.1 In the United States, the Chinese Side's passenger vehicles, vans, and small buses shall be registered through the Office of Foreign Missions (hereinafter referred to as "OFM"). The Chinese Side's commercial/heavy duty vehicles shall be registered with state or local authorities, but OFM shall issue a diplomatic plaque indicating their diplomatic status.

13.4.2 In China, the U.S. Side's project-related vehicles (excluding those owned by U.S. or third country companies registered in China) may be processed in the name of the embassy in accordance with existing regulations and practices in China and shall be issued diplomatic license plates.

13.4.3 Operator licenses for passenger vehicles (as defined by Host Country laws and regulations) used by Construction Party personnel shall be certified by the Construction Party diplomatic mission in the Host Country and shall be transferred into local operator licenses in the Host Country through existing procedures. This procedure does not apply to operator licenses for personnel who work for companies registered in the Host Country.

13.4.4 Operator licenses for commercial/heavy-duty vehicles, small buses, and vans used by Construction Party personnel shall be issued in accordance with existing Host Country laws and procedures.

13.5 Without prejudice to applicable privileges and immunities, Construction Party vehicle operators shall abide by local traffic regulations.

14. Site Access and Work Hours

14.1 The Construction Party shall have 24-hour right of entry seven days a week to its project-related sites, provided, however, that it abides by Host Country regulations on vehicle use. The Host Country shall facilitate appropriate requests for waivers of such regulations, if necessary.

14.2 Construction Party work hours shall be determined by local regulations. The Host Country shall facilitate appropriate requests for waivers of such regulations, if necessary.

15. Project Coordination

Article III of the ICC Property Agreement and Article 4, paragraph 3(b) of the 2000 MOU are hereby replaced in their entirety with the following: "In full satisfaction of its payment obligations, China shall make a payment to the U.S. of $1,986,464 within 15 days after the signature of this Agreement."

16. Taxes and Fees

16.1 The Parties hereby confirm that the tax arrangement reflected in the U.S. Side's diplomatic note number 02-74 dated April 4, 2002 (attached as Appendix C-1), and the Chinese Side's diplomatic note number CE 109/02 dated April 15, 2002 (attached as Appendix C-2), applies to the U.S. Project and the Chinese Project.

16.2 In China, services and labor under contracts relating to the U.S. project shall be exempt from payment of the business tax. The U.S. Side and U.S. and third country project-related companies shall independently enter into contracts at the business tax-excluded price.

17.1 To the extent practicable and consistent with Host Country law, the relevant principles and arrangements in this Agreement shall serve as a guideline for the conditions of construction applying to similar future diplomatic and consular construction projects undertaken by one Party in the territory of the other Party. The Parties shall hold separate discussions to enter into agreements with respect to these projects.

18. Applicable Law and Dispute Resolution

18.1 This Agreement shall, to the extent it amplifies or modifies the terms of the Liang Ma He Property Agreement, the ICC Property Agreement, the 2000 MOU, the 1995 MOU, and the 1991 Agreement, take precedence over such terms.

18.2 If any issue is not addressed in this Agreement, the Parties shall refer to the Liang Ma He Property Agreement, the ICC Property Agreement, the 2000 MOU, the 1995 MOU, the 1991 Agreement, and relevant diplomatic notes. Any issue not addressed in these documents shall be addressed through mutual consultation between the Parties.

20.1 This Agreement is done in duplicate in the English and Chinese languages, each text being equally authentic.

IN WITNESS WHEREOF, this Agreement is concluded on November 17, 2003, in Washington.