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47. U.S. diplomatic note concerning exemption to Greater London (Central Zone) Congestion Charging Order 2001




No. 060

The Embassy of the United States of America presents its compliments to the Protocol Division of the Foreign and Commonwealth Office (ECO) and has the honor to address again the issue of Transport for London's Congestion Charging Scheme which is the subject of the FCO's Notes Nos. A519/02 and A028/03, the Embassy's Notes Nos. 042/2002 and 075/2002, and subsequent informal exchanges between the two governments. The Embassy also makes reference to: (1) the Vienna Convention on Diplomatic Relations of 1961 (VCDR); (2) the Vienna Convention on Consular Relations of 1963 (VCCR); (3) the 1951 Consular Convention between the United Kingdom and the United States (Bilateral Convention); (4) the NATO Status of Forces Agreement (SOFA); (5) the Army Act 1955; and (6) the Visiting Forces and International Headquarters (Application of Law) Order, 1999, Schedule 6. Because it has been the subject of some of the informal discussions between the Embassy and the FCO, the Embassy also refers the FCO to the legal opinion on this subject prepared by Professor Christopher Greenwood, CMG, QC, a copy of which has been previously furnished to the FCO.

As the FCO is aware, the Embassy takes the view that Transport for London's Congestion Charge is a tax that, under international law, should not be imposed on the United States Government, its diplomatic and consular agents, or its military force.

With respect to U.S. diplomatic personnel, Article 34 of the Vienna Convention on Diplomatic Relations (VCDR) provides that, subject to specific exceptions, "a diplomatic agent shall be exempt from all dues and taxes, personal or real, national, regional or municipal." The specific exception the FCO has relied upon in discussions with the United States on the Congestion Charge is Article 34(e), which recognizes a State's right to impose, and a diplomat's duty to pay, "charges levied for specific services rendered."

This reliance is misplaced because no specific service is rendered in exchange for payment; the revenue raised is used to provide services to those other than those paying the charge; and the charge bears no reasonable relationship to the cost of the service supposedly rendered to the payer. Like the tax on petrol from which diplomats and diplomatic missions are exempt, the Congestion Charge is a tax imposed to discourage driving and to encourage the use of public transport.

Even if there were some ambiguity as to the nature of the Congestion Charge as a tax, that ambiguity should be resolved in favor of the exemption the Embassy asserts. As the leading commentator on the VCDR has written, "The wording of the basic exemption contained in Article 34 is very wide. Although there are several specific exceptions to

the exemption, it is probable that in cases of ambiguity, national revenue authorities and courts should in construing them lean in favour of the general exemption" (Denza, Diplomatic Law (2nd ed.,1998), p. 297).

Furthermore. the Congestion Charge is in tension with other duties owed to foreign missions and diplomats. Article 25 of the VCDR obliges a receiving State to

"accord full facilities for the performance of the functions" of a diplomatic mission.

Because the Embassy is in the area targeted by the congestion tax, the imposition of the Congestion Charge on official Embassy vehicles and the private vehicles which members of the Mission use for employment purposes interferes with performance of the Embassy's functions.

Similarly, Article 26 of the VCDR requires a receiving State to ensure freedom of movement and travel within its territory for diplomats. The imposition of the Congestion Charge, by conditioning access to the Chancery and other official destinations within the Congestion Zone, runs contrary to this principle.

Moreover, because the enforcement mechanisms under the Congestion Charging Scheme include the clamping of vehicles for which the Charge has not been paid, the use of these mechanisms against the Embassy's diplomatic vehicles is also inconsistent with Articles 22 and 31 of the VCDR. Article 22(3) guarantees that "the means of transport of the mission shall be immune from search, requisition, attachment or execution," and Article 31(1) recognizes a diplomat's "immunity from the criminal jurisdiction of the receiving State." As then Minister of State. Foreign and Commonwealth Office, Baroness Young, explained to Parliament in a related context in 1986, "[B]ecause diplomats have immunity from criminal jurisdiction and clamping is a penal measure both in intent and in effect, it in fact contravenes the Vienna Convention." 1986 BYIL 552.

The Embassy would further direct the FCO's attention to FCO Note No. A028/03, in which it stated: "Transport for London have made clear that diplomatic missions could

only be exempted from the scheme if the Greater London Authority was under a clear legal obligation to grant such exemption." For all the reasons given above, the Embassy believes the existence of such a clear legal obligation is unquestionable.

Indeed, the Embassy has learned that since the date of that Note, Transport for London has apparently reached the same conclusion. In a letter of December 24, 2004, to the Swiss Embassy in London, the Enforcement Manager for Transport for London expressly acknowledged that diplomatic vehicles were exempt from the Congestion Charge. This acknowledgment does not indicate that it is based on any special aspect of the diplomatic relationship between the United Kingdom and Switzerland and the Embassy is aware of no basis for exempting the missions of other States from the Congestion Charging Scheme but denying that exemption to the United States.

Analogous arguments must prevail with respect to U.S. official consular vehicles and the privately owned vehicles of U.S. consulate personnel. Like Article 34 of the VCDR, Article 49 of the VCCR (read in conjunction with Article 71) recognizes the exemption of consular officers and employees, and family members in their households, who are not either British nationals or permanently resident in the UK, "from all dues and taxes, personal or real, national, regional or municipal," with a few limited exceptions. Again like the VCDR, the VCCR includes an exception to the exemption for "charges levied for specific services rendered." Article 49(1)(e). For all the reasons given with respect to the VCDR, however. this exception does not extend to the Congestion Charge.

The Bilateral Convention also precludes application of this tax. Article 12(2) provides that "no tax or other similar charge of any kind (national, state, provincial, municipal, or other) shall... be collected from the sending State . . . in respect of the ownership, possession, or use of movable property . . . ." The imposition of the Congestion Charge obviously imposes a tax on the use of vehicles for official U.S. Government purposes.

The Embassy believes it is equally inappropriate to impose the Congestion Charge on the United States Force stationed in the United Kingdom under the North Atlantic Treaty. The NATO Status of Forces Agreement (SOFA) does not provide any basis upon which a tax of this nature may be imposed upon the U.S. Force and it has been the consistent practice of all NATO partner States not to impose taxes on the force of a sending State unless specifically authorized by that agreement.

Furthermore, Article XI, Paragraph 2 (c), of the SOFA states that "Service vehicles of a force or civilian component shall be exempt from any tax payable in respect of the use of vehicles on the roads." In other words, the SOFA specifically provides that this type of tax may not be imposed upon the U.S. Force.

In addition, Article IX, Paragraph 6, of the SOFA states that "The receiving State shall give the most favorable consideration to requests for the grant to members of a force or of a civilian component of traveling facilities and concessions with regard to fares." The imposition of the Congestion Charge, especially on official vehicles, is an obstruction to travel. As some exemptions and discounts have been given to various

categories of vehicles operating in the Congestion Zone, the US. Force's request for an exemption is clearly not being given the most favorable consideration.

Imposition of the Congestion Charge on the U.S. Force would also appear to be inconsistent with UK domestic law. Under section 184 of the Army Act 1955, "duties or tolls . . . for passing over any road or bridge in the United Kingdom . . . shall not be payable in respect of (a) members of the regular forces on duty; (b) vehicles in military service." Section 184 has been extended to visiting forces by the Visiting Forces and International Headquarters (Application of Law) Order, 1999, Schedule 6, wherein it is stated that the reference to "regular forces" shall include members of a visiting force or international headquarters. There is a similar extension to vehicles in the service of such visiting forces. Although Transport for London acknowledges that certain tactical military vehicles are exempt from the charge, there is no apparent basis in law for a distinction between types of military vehicles or between the military vehicles of the United States and those of the United Kingdom.

Thus, the Embassy has concluded that the Congestion Charge is a tax that cannot be lawfully imposed on the U.S. Government, its diplomatic and consular personnel, or its military force. Although to date the Embassy and its diplomatic personnel have been paying the Congestion Charge, the Embassy must inform the FCO that the Embassy and its staff will cease this practice as of July 12, 2005. The U.S. Force has not paid this tax on the use of its official vehicles in the past and will not in the future.

The Embassy asks that the FCO confirm to Transport for London that the U.S. Government, its diplomatic and consular personnel, and its military force are exempt

from the Congestion Charging Scheme and that no penalties or enforcement measures for failure to comply with that Scheme can be imposed upon them.

The Embassy of the United States of America avails itself of this opportunity to renew to the Protocol Division of the Foreign and Commonwealth Office the assurances of its highest consideration.

Embassy of the United States of America London, July II, 2005

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