Thus the per se rule applied to territorial divisions of markets and restraints on resale is inapplicable to this case. The Court is not confronted with the unambiguous and brazen attempt to divide markets and limit customers evidenced in Topco. The pre-existing customer clause is novel and far removed from those types of agreements and business practices with which courts have had the requisite experience to declare them to have a presumptively pernicious effect on competition. The fact is that no court has ever been called upon to consider this particular clause or any resembling it-at least no such case has been called to this Court's attention by counsel nor has independent research by the Court unearthed any. The Court perforce must analyze the alleged provision under what has been the prevailing mode of analysis for three quarters of a century: the rule of reason.64 The Rule of Reason In sum, based upon a careful word-by-word reading and study of the entire trial record, the Court's contemporaneous trial notes, which include an appraisal of the credibility of the witnesses and their demeanor, the reasonable inferences to be drawn from undisputed or clearly established facts, and upon the totality of the testimonial and documentary evidence, the Court concludes that the pre-existing customer clause was a reasonable provision that tended to "promote competition" and did not "destroy competition." The clause, as conceived, intended and implemented, was procompetitive rather than anticompetitive. It was not an unreasonable restraint of trade. * 10 "Tax-paid cost" referred to the per-barrel operating cost including royalties, taxes and other payments to the producing country. 13 The LPA was not intended to guarantee the parties a particular profit. The preamble to the agreement recognized that the parties "might suffer serious financial consequences which would not be fully alleviated by the limited mutual self-help provisions of this agreement." 15 The parity resolution arose in response to the declining position of the American dollar upon which oil prices were based. 21 Hunt's refusal was grounded on a combination of factors: (1) concern that BP would attach ships carrying Sarir crude upon arrival at ports of destination; (2) concern that marketing BP's share of the oil would violate the LPA; and (3) belief that such marketing was ethically wrong since it cast Hunt as an abettor in the nationalization of BP, an act Hunt considered illegal. 64 An additional factor cuts against the plaintiffs' description of the pre-existing customer clause as a resale restriction that warrants per se treatment. Under the LPA, the non-Persian Gulf producers were supplied crude oil at tax-paid cost; such provision of cost-crude to a company not owning an equity interest in the supplying concession is unknown outside of the LPA. Furthermore, there was no restriction on the plaintiffs' ability to buy Persian Gulf crude at prevailing market rates, and there was no restriction placed upon the resale of oil purchased on the market. Under such circumstances, a per se rule is inappropriate.. ... 465 F. Supp. 195, 201–207, 210-212, 214–215, 218, 221–223. Tax Treaties and Agreements United States-Morocco On May 2, 1978, President Carter transmitted to the Senate for its advice and consent to ratification the Convention between the Government of the United States and the Kingdom of Morocco for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with Respect to Taxes on Income, signed at Rabat on August 1, 1977. The Convention followed generally the form and context of similar conventions recently concluded by the United States with some modifications of customary provisions to accommodate the special need of Morocco as a developing country to minimize any revenue loss. The accompanying report on the Convention from Secretary of State Vance to the President, dated April 25, 1978, read in part: The Convention with Morocco is the first such convention concluded by the United States directly with a developing country in Africa. It is similar in its essential respects to other treaties entered into by the United States in recent years and to the Model Draft Treaty developed by the Fiscal Committee of the Organization for Economic Cooperation and Development with some modifications to accommodate the special needs of Morocco as a developing country. The Convention provides rules with respect to the taxation of business income, rentals of real property, dividends, interest, royalties, and personal service income, a guarantee of nondiscrimination and provisions for administrative cooperation, which for the most part are common to other U.S. income tax treaties. The Convention provides reciprocal maximum rates of tax at source of 15 percent on dividends to portfolio investors, 10 percent on dividends to parent companies, 15 percent on interest (except interest paid to the other Government or one of its instrumentalities, which is exempt from tax at source), and 10 percent on royalties, including film rentals. As a developing country, Morocco wanted a broad definition of royalties which would also include fees for technical services and equipment rentals. The Treaty provides that Morocco may impose the 10 percent tax on fees for technical studies performed for and paid for by the Government, but not in other cases. Equipment rentals may only be taxed to the extent that profit is attributable to maintaining substantial equipment for rental in the country for more than six months. One unusual feature of the Moroccan Convention is that it provides a foreign tax credit for compulsory investment in Moroccan equipment bonds subject to certain conditions. However when the bonds are redeemed, the taxpayer must increase his taxable income accordingly. The Convention does not contain the usual provision whereby Morocco would be asked to collect the additional U.S. withholding tax if residents of third countries who are not entitled to Treaty benefits use a Moroccan address and therefore get the reduced Treaty rates on dividends, interest and royalties. The Moroccans regarded this as a U.S. problem and could not agree to commit their limited administrative resources to collecting tax on behalf of the United States when the United States cannot agree in other situations to collect tax on behalf of Morocco. The Convention and exchange of notes will enter into force on the exchange of instruments of ratification and will apply to withholding taxes on the first day of the following month and to other taxes for taxable years beginning on or after January 1, 1978. The Convention will remain in effect indefinitely unless terminated by either state by diplomatic notice given prior to June 30th of any year beginning with the fifth year following the year of ratification. In that event, it will cease to apply with respect to income of years beginning on or after the January 1 next following termination. S. Ex. H, 95th Cong., 2d sess. (1978). During the discussions which led to conclusion of the Convention, the Moroccan delegation emphasized that the Moroccan Government, for the purpose of promoting private investment, would exempt certain profits and interest payments from taxation. The delegation expressed its hope that the United States Government would accordingly grant U.S. citizens and residents a "tax-sparing” credit against the U.S. tax. The U.S. delegation, led by the Dept. of the Treasury, indicated that the Senate had been reluctant to approve such a provision in other tax conventions, but promised to resume discussions on this point, should the Senate approve a similar provision with respect to another country. An exchange of notes, also dated Aug. 1, 1977, which accompanied the Tax Convention, confirmed the U.S. commitment in this regard. Extension of Authorities Under the Trading By a memorandum to the Secretaries of State and of the Treasury, dated September 8, 1978, President Carter announced his determination that the extension for one year from September 14, 1978, of the exercise of certain authorities under the Trading With the Enemy Act with respect to certain countries was in the national interest of the United States. The extension, made pursuant to the authority contained in section 101 (b) of Public Law 95-223, approved December 28, 1977 (91 Stat. 1625; 50 U.S.C. App. 5 note), affected countries currently subject to the operation of: (1) the Foreign Assets Control Regulations, 31 CFR Part 500; (2) the Transaction Control Regulations, 31 CFR Part 505; (3) the Cuban Assets Control Regulations, 31 CFR Part 515; and (4) the Foreign Funds Control Regulations, 31 CFR Part 520. Fed. Reg., Vol. 43, No. 177, Sept. 12, 1978, p. 40449; Weekly Comp. of Pres. Docs., Vol. 14, No. 36, Sept. 11, 1978, p. 1504. In identical letters, dated the same day, to the Speaker of the House and the President of the Senate (the Vice President), informing them of his determination, the President said in part: The Foreign Assets Control Regulations, 31 CFR Part 500, prohibit persons subject to the jurisdiction of the United States from engaging in unlicensed commercial or financial transactions with North Korea, Vietnam, Cambodia or nationals of these countries. The Regulations prohibit importation or dealing in merchandise of these countries or transactions in blocked assets of these countries or their nationals absent a license from the Office of Foreign Assets Control, Department of the Treasury. Current commercial or financial transactions with the People's Republic of China are authorized as long as strategic goods are not involved. However, Chinese assets remain subject to the statute and the Regulations. The Transaction Control Regulations, 31 CFR Part 505, are Treasury Regulations which prohibit U.S. persons from engaging in unlicensed sales of strategic goods located abroad to almost all Communist countries. The Cuban Assets Control Regulations, 31 CFR Part 515, are parallel to the Foreign Assets Control Regulations in content. However, foreign subsidiaries of U.S. firms may engage in certain nonstrategic types of trade with Cuba under Treasury license. The Foreign Funds Control Regulations, 31 CFR Part 520, continue to block the property of Czechoslovakia and the German Democratic Republic pending a claims settlement program with those countries for the illegal expropriation of private American property following World War II. The Regulations also continue to block such assets of Estonia, Latvia, and Lithuania as a reflection of the U.S. policy of nonrecognition of the forcible incorporation of those countries into the U.S.Š.R. I have determined that these four regulatory programs should be extended because the results attendant upon the lapse of these authorities would be unacceptable in light of present U.S. foreign policy objectives. Their extension would be in the national interest of the United States for the following reasons: (1) Current trade and financial embargoes against Cuba, North Korea, Vietnam, and Cambodia should be continued until appropriate political changes occur with respect to our relations with those countries. (2) The Transaction Control Regulations are needed to support controls to which we have agreed with our allies with respect to the export of strategic goods to Communist countries. (3) Freezing of Chinese, Vietnamese, and Cuban assets and controls over the remaining World War II assets of the German Democratic Republic and Czechoslovakia should continue until American claims against these countries are settled. Controls over the remaining World War II assets of the Baltic States should continue as a reflection of the U.S. policy of nonrecognition of the forcible incorporation of these countries into the U.S.S.R. In light of these considerations, pursuant to Public Law 95-223, I have extended the exercise of these authorities for another year, until September 14, 1979. Ibid., pp. 1504-1505. Sec. 101 of P.L. 95-223 provided in part: REMOVAL OF NATIONAL EMERGENCY POWERS UNDER THE Sec. 101. (a) Section 5(b) (1) of the Trading With the Enemy Act is amended by striking out "or during any other period of national emergency declared by the President" in the text preceding subparagraph (A). (b) Notwithstanding the amendment made by subsection (a), the authorities conferred upon the President by section 5(b) of the Trading With the Enemy Act, which were being exercised with respect to a country on July 1, 1977, as a result of a national emergency declared by the President before such date, may continue to be exercised with respect to such country, except that, unless extended, the exercise of such authorities shall terminate (subject to the savings provisions of the second sentence of section 101 (a) of the National Emergencies Act) at the end of the two-year period beginning on the date of enactment of the National Emergencies Act. The President may extend the exercise of such authorities for one-year periods upon a determination for each such extension that the exercise of such authorities with respect to such country for another year is in the national interest of the United States. (c) The termination and extension provisions of subsection (b) of this section supersede the provisions of section 101 (a) and of title II of the National Emergencies Act to the extent that the provisions of subsection (b) of this section are inconsistent with those provisions. See further, the 1977 Digest, pp. 780-783 and 980-981, and the 1976 Digest, pp. 743-745. Foreign Assets Control Regulations Payment of Interest On November 1, 1978, Stanley L. Sommerfield, Acting Director of the Office of Foreign Assets Control in the Department of the Treasury, invited comment (on or before December 14, 1978) on proposed amendments to the Foreign Assets Control Regulations (to be added as 31 CFR 500.205 and 500.611), the purpose of which, respectively, was (1) to require any person holding certain types of blocked property for a designated country or national thereof to hold it in an interest-bearing account (after the effective date of the proposed amendment) and (2) to require such persons subject to the regulation to report to the Treasury on the nature of the blocked accounts which it affected. Fed. Reg., Vol. 43, No. 220, Nov. 14, 1978, pp. 53016-53020. The final regulations, some of which were "changed significantly from the proposed version" as a result |