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' -COMPTROLLER4 GENERAL, OF THE UNITED STATES
.., ... W ASH IN G TO N , D .C. 1054'
13125087 February 28, 1979
1 '0
The H1oniorable Erneat F, -Hollings % ,
Chairm'in, Subcommittee on State, Justte,
Comm,%rce and The Jwdicigzx
United Statec Senate
Committee on APProPriutions-
D e a r M r ', C h a irm a n : t * .
This s in response to your' request for a opibion on tl'eala ty
of a propqued contract between the Department of State ( -ent
and the Amtierican Institute in Taiwan (Ins tt r ,) absent thq enaerme t
of legislati,,on now under consideration, 0100 7 . #'
On Pecember 15, 1078, ii a joint'communiqueby the,G6vrnments
of the Untt.d States and the People's P1.epubltc of China (PfW l), the
United StatIs announced that commencihg January 1, 1079, thi,'United
States wouli recognize the GoVernment of the PAC-as the solq% legal
GQ'ernment\of China, and wou!d terminate diplomatic relatiorla with the
Republic of 9!hina. The President has deciared that in the future, lthe
American people will maintain commerciali, cultural and otheit relations
with the people of Taiwan-without official govrnment represdltation and
without diplomatic relations, using where appropriate an unc'fficial
instrumentality in corporate form, Presidential Memorandu114 of
December30, 1978, 44 Fed. Reg, 1075, January 4, 1979 (President's
Memorandum).
This declaration embodies the President's belie that'it is in the
national interest to maintain these unofficial relations with the pijople
in Taiwan, H, Doe, 90-45, 96th Cong., 1st Sess, 1, and his recognition
that this wnique situation necessitates an unusual means of implementation.
To that end, the Institute has been incorporated with thi, specific intent
of performing functions in Taiwan, on behalf of the American people,
that wvere formerly performed by the United States Government. The
contract at issue is the means selected by the Dopartrnent for imple-
menting this aspect of the President's foreign policy.
Th purpose of the contract, as set forth in Article I thereof, is to
(e]arry out, on an unofficial basis, programs, '
transactions, and other relations with or relating to the
people on Taiwan, and perform and enforce existing ,
international and otlier agreements and arrangements
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