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There was no change to Article IV(f)(6) in the proposed
amended MCA.
On August 2, 1982, two more ruling requests were submitted
to the IRS. Again, the computation of EGPC's taxes was not
mentioned.
Negotiations of the amending agreement continued for over a
year. During this period, there were no discussions of Article
IV(f)(6). In December 1982, Amoco Egypt and EGPC initialed a
"Memo of Understanding", which described the agreed changes to
the MCA and reflected that no change would be made to Article
IV(f)(6). Shortly thereafter, Amoco Egypt and EGPC initialed an
amended MCA that retained Article IV(f)(6) without change.
In August 1983, a law was enacted authorizing the Minister
of Petroleum to enter into the amended MCA. The promulgation law
provided that the provisions of the amended MCA had the force of
law and would be in effect by way of exception to the provisions
of any contradictory legislation. Article IV(f)(6) was not
changed in the final amended MCA signed by the parties in August
1983.
Petitioner's Knowledge as to EGPC's Credit Practice
In March 1980, Amoco Egypt wrote Amoco in the United States,
regarding the implementation of a two-tier pricing system,
stating in part: "Since taxes paid by EGPC on behalf of
contractors are creditable against EGPC's other tax liabilities
there also should be no difference in EGPC's total tax bill."
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