Presidential Determination Concerning Libya and Delegation of Authority to the Secretary of the Treasury; Report of the Secretary of the Treasury to the Congress

AGENCY:

Departmental Offices, Treasury.

ACTION:

Notice.

DATES:

Presidential Determination 2004-48 was issued September 20, 2004. The report of the Secretary of the Treasury to the Congress was issued October 6, 2004.

SUMMARY:

On September 20, 2004, the President issued Presidential Determination 2004-48. In Presidential Determination 2004-48, the President determined that a waiver of the application of section 901(j)(1) of the Internal Revenue Code with respect to Libya is in the national interest of the United States and will expand trade and investment opportunities for U.S. companies in Libya and declared that he intended to grant such a waiver with respect to Libya. The President authorized and directed the Secretary of the Treasury to report to Congress in accordance with section 901(j)(5)(B) the President's intention to grant the waiver and the reason for the determination. The Secretary of the Treasury issued the required report to the Congress on October 6, 2004.

SUPPLEMENTARY INFORMATION:

The text of Presidential Determination 2004-48 and the text of the report of the Secretary of the Treasury are printed below.

Text of Presidential Determination No. 2004-48

The White House, Washington, September 20, 2004.

Presidential Determination, No. 2004-48.

Memorandum for the Secretary of the Treasury.

Subject: Intention to Grant Waiver of the Application of Section 901(j) of the Internal Revenue Code with Respect to Libya.

By virtue of the authority vested in me by the Constitution and the laws of the United States, including section 901(j)(5) of the Internal Revenue Code (the “Code”) and section 301 of title 3, United States Code:

(a) I hereby determine that the waiver of the application of section 901(j)(1) of the Code with respect to Libya is in the national interest of the United States and will expand trade and investment opportunities for U.S. companies in Libya;

(b) I intend to grant such a waiver with respect to Libya; and

(c) I authorize and direct you to report to the Congress in accordance with section 901(j)(5)(B) of the Code my intention to grant the waiver and the reason for this determination and to arrange for publication of this determination in the Federal Register.

George W. Bush.

Text of the Report of the Secretary of the Treasury (Issued October 6, 2004)

Report to the Congress Pursuant to Section 901(j)(5)(B) of the Internal Revenue Code

Section 901 of the Internal Revenue Code generally permits a U.S. taxpayer to take a credit against U.S. income tax for taxes paid to a foreign country. The foreign tax credit is subject to various limitations and restrictions under section 901.

Section 901(j)(1) imposes restrictions on the foreign tax credit in the case of income and taxes attributable to certain countries, including Libya. Section 901(j)(1) generally provides that taxes paid on income from countries described in section 901(j)(2)(A) cannot be taken into account in computing a U.S. taxpayer's foreign tax credit and that the income from such countries is subject to specific tax rules.

Section 901(j)(5) authorizes the President to waive the restrictions of section 901(j)(1) if the President determines that a waiver of the application of such paragraph is in the national interest of the United States and will expand trade and investment opportunities for U.S. companies in such country. Not less than 30 days before the date on which a waiver is granted, the President must report to Congress the intention to grant such a waiver.

The President has determined that a waiver of the application of section 901(j)(1) with respect to Libya is in the national interest of the United States and will expand trade and investment opportunities for U.S. companies in Libya. The President therefore stated his intention to grant such a waiver with respect to Libya. The President also authorized and directed the Secretary of the Treasury to report to Congress the President's intention to grant the waiver.

The granting of such a waiver is in the national interest of the United States. In light of recent actions taken by the Government of Libya, including commitments and actions to eliminate its weapons of mass destruction programs and its Missile Technology Control Regime (MTCR)-class missiles, it is in the national interest of the United States to uphold the President's commitment to respond in good faith by strengthening economic ties between the United States and Libya as one facet in the gradual normalization of U.S.-Libyan relations. The restrictions imposed by section 901(j) currently inhibit the development of such economic ties, and waiver of the restrictions of section 901(j)(1) will contribute to better and stronger commercial relations between the United States and Libya.

The granting of such a waiver will also expand trade and investment opportunities for U.S. companies in Libya. Upon grant of the waiver, U.S. companies will be better able to compete with companies based in other countries in selling goods and providing services to Libyan companies and consumers. With the restrictions of section 901(j) of the Code removed, U.S. companies will be in a better position to create U.S. jobs through exports to and investments in Libya.