- 13 -
persons competent to express their meaning and to choose apt
words in which to embody the purposes of the high contracting
parties." Rocca v. Thompson, 223 U.S. 317, 332 (1912).
Consequently, "The clear import of treaty language controls
unless 'application of the words of the treaty according to their
obvious meaning effects a result inconsistent with the intent or
expectations of its signatories.'" Sumitomo Shoji Am., Inc. v.
Avagliano, 457 U.S. 176, 180 (1982) (quoting Maximov v. United
States, 373 U.S. 49, 54 (1963)).
In the instant case, we conclude that the clear import of
the language of the U.S.-U.K. Convention favors petitioners’
position. The treatment of the ACT shareholder credit was an
important issue resolved by the U.S.-U.K. Convention. See S.
Exec. Rept. 95-18, at 2 (1978), 1980-1 C.B. 411, 412 ("Of
particular significance are the new provisions contained in the
proposed treaty (1) which provide for a refund by the U.K. to
U.S. portfolio and direct shareholders receiving dividends from
British corporations of Advance Corporation Tax (ACT) paid by the
distributing corporation (Article 10) and allow a U.S. foreign
tax credit for the one-half of the ACT which is not refunded to
U.S. direct corporate investors (Article 23)"). As the corporate
offset is an important facet of the ACT regime, we believe that,
had the high contracting parties intended for the shareholder
credit to be linked to the corporate offset, Article 23(1)(c)
Page: Previous 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 NextLast modified: May 25, 2011