[Senate Executive Report 106-10]
[From the U.S. Government Publishing Office]



106th Congress                                               Exec. Rpt.
                                 SENATE
 1st Session                                                  106-10

======================================================================



 
           PROTOCOL AMENDING THE TAX CONVENTION WITH GERMANY

                                _______
                                

                November 3, 1999.--Ordered to be printed

                                _______


          Mr. Helms, from the Committee on Foreign Relations,
                        submitted the following

                              R E P O R T

                   [To accompany Treaty Doc. 106-13]

    The Committee on Foreign Relations, to which was referred 
the Protocol Amending the Convention between the United States 
of America and the Federal Republic of Germany for the 
Avoidance of Double Taxation with Respect to Taxes on Estates, 
Inheritances, and Gifts, signed at Bonn on December 3, 1980, 
signed at Washington on December 14, 1998, having considered 
the same, reports favorably thereon, with one declaration and 
one proviso, and recommends that the Senate give its advice and 
consent to ratification thereof, as set forth in this report 
and the accompanying resolution of ratification.

                                CONTENTS

                                                                   Page

  I. Purpose..........................................................1
 II. Background.......................................................2
III. Summary..........................................................2
 IV. Entry Into Force.................................................3
  V. Committee Action.................................................3
 VI. Committee Comments...............................................3
VII. Budget Impact....................................................5
VIII.Explanation of Proposed Protocol.................................5

 IX. Text of the Resolution of Ratification..........................10

                               I. Purpose

    One of the principal purposes of the existing treaty is to 
reduce or eliminate double taxation on estate, gift, and 
inheritance taxes. A general principle of the existing treaty 
is that the country in which a donor or decedent was domiciled 
may tax the estate or gifts of that individual on a worldwide 
basis but must credit tax paid to the other country with 
respect to certain types of property located in such other 
country. One of the principal purposes of the proposed protocol 
is to expand the United States' jurisdiction to tax its 
citizens and certain former citizens and long-term residents. 
The proposed protocol also would provide a pro rata unified 
credit to the estate of a German domiciliary and a U.S. estate 
tax marital deduction for estates of limited value if the 
surviving spouse is not a U.S. citizen.

                             II. Background

    The proposed protocol was signed on December 14, 1998. The 
proposed protocol amends the current estate, gift, and 
inheritance tax treaty between the United States and Germany 
that was signed in 1980.
    The proposed protocol was transmitted to the Senate for 
advice and consent to its ratification on September 21, 1999 
(see Treaty Doc. 106-13). The Committee on Foreign Relations 
held a public hearing on the proposed protocol on October 27, 
1999.

                              III. Summary


In general

    An estate, gift, and inheritance tax treaty currently is in 
force between the United States and Germany. In the case of the 
United States, the treaty applies to the U.S. estate, gift, and 
generation-skipping transfer taxes. These taxes apply to the 
transfer of property by a decedent's estate or a donor, at 
death, during life, or by a generation-skipping transfer. 
Generation-skipping transfers generally involve transfers that 
skip a generation, as would be the case of a transfer by a 
donor to the donor's grandchild. In the case of Germany, the 
treaty applies to the inheritance and gift taxes. Generally, 
these taxes apply to similar transfers, but are imposed on the 
recipient of property from an estate or donor, rather than on 
the transferor.

Proposed modifications to the estate, gift, and inheritance tax treaty

    The proposed protocol would make several modifications to 
the U.S.-Germany estate, gift, and inheritance tax treaty. 
First, the proposed protocol would modify certain tiebreaker 
rules in the treaty, that determine which country has the right 
to tax on a worldwide basis when a decedent or donor is treated 
as domiciled in both the United States and Germany at the time 
of death or at the time of making a gift. In this regard, the 
proposed protocol would extend from five to ten years the 
period of time during which a citizen of one country can be 
domiciled in the other country without becoming subject to the 
primary taxing jurisdiction of the other country.
    Second, the proposed protocol would modify certain 
exemptions granted to transfers between spouses. The existing 
treaty provides that interspousal transfers of property are 
granted a 50-percent exemption. The proposed protocol would 
provide that the United States need not provide this exemption 
if the decedent or donor was a U.S. citizen, or was a former 
U.S. citizen or long-term resident whose loss of such status 
had as one of its principal purposes the avoidance of tax.
    Third, the proposed protocol would provide a pro rata 
unified credit to the estate of an individual domiciled in 
Germany (who is not a U.S. citizen) for purposes of computing 
the U.S. estate tax. Under this provision, such an individual 
domiciled in Germany is entitled to a credit against U.S. 
estate tax based on the extent to which the assets of the 
estate are situated in the United States.
    Fourth, the proposed protocol would provide a limited U.S. 
estate tax marital deduction when the surviving spouse is not a 
U.S. citizen. This provision would apply in the case of certain 
estates of limited value.
    Finally, the proposed protocol would expand the saving 
clause of the treaty by expanding the types of persons who may 
be taxed by the United States. This provision would allow the 
United States to apply its estate and gift tax rules to former 
U.S. citizens and long-term residents whose loss of such status 
had as one of its principal purposes the avoidance of tax.

                          IV. Entry Into Force

    The proposed protocol generally would enter into force upon 
the exchange of instruments of ratification and would take 
effect with respect to deaths occurring and gifts made after 
that date. A special effective date rule applies with respect 
to the pro rata unified credit and the limited U.S. estate tax 
marital deduction (Article 3 of the proposed protocol), as well 
as the expansion of the saving clause (Article 4 of the 
proposed protocol). Such provisions take effect with respect to 
deaths occurring and gifts made after November 10, 1988, 
provided that any return or claim for refund asserting the 
benefits of the proposed protocol are filed within one year of 
entry into force of the protocol or within the otherwise 
applicable period for filing such claims under domestic law.

                          V. Committee Action

    The Committee on Foreign Relations held a public hearing on 
the proposed protocol with Germany (Treaty Doc. 106-13), as 
well as on other proposed treaties and protocols, on October 
27, 1999. The hearing was chaired by Senator Hagel. The 
Committee considered these proposed treaties and protocols on 
November 3, 1999, and ordered the proposed protocol with 
Germany favorably reported by a voice vote, with the 
recommendation that the Senate give its advice and consent to 
ratification of the proposed treaty, subject to a declaration 
and a proviso.

                         VI. Committee Comments

    On balance, the Committee on Foreign Relations believes 
that the proposed protocol with Germany is in the interest of 
the United States and urges that the Senate act promptly to 
give advice and consent to ratification. The Committee has 
taken note of certain issues raised by the proposed protocol, 
and believes that the following comments may be useful to the 
Treasury Department officials in providing guidance on these 
matters should they arise in the course of future treaty 
negotiations.

                         A. RECIPROCAL BENEFITS

Pro rata unified credit for German residents

    In the Technical and Miscellaneous Revenue Act of 1988 
(``TAMRA''), Congress passed Code section 2102(c)(3), which 
permits a ``pro rata'' unified credit for nonresidents to the 
extent provided by treaty. The pro rata portion of the unified 
credit is based upon the ratio that the decedent's gross estate 
situated in the United States at the time of his death bears to 
his worldwide gross estate. Paragraph 5 of Article 3 of the 
proposed protocol provides such a pro rata unified credit to 
German residents who are not U.S. citizens.\1\
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    \1\ The saving clause of the proposed protocol preserves the 
ability of the United States to reduce to $13,000 the pro rata unified 
credit allowable under the proposed protocol with respect to former 
U.S. citizens and long-term residents whose loss of status had as a 
principal purpose the avoidance of tax, for a period of ten years 
following the loss of such status.
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    Under the proposed protocol, however, U.S. citizens and 
residents who are subject to situs-based taxation in Germany 
would not have the benefit of a provision similar to the pro 
rata unified credit. For example, under the proposed protocol, 
a German citizen or resident who has U.S.-situated property 
which passes to a German resident beneficiary would receive the 
benefit of the pro rata unified credit, whereas a U.S. citizen 
or resident who has German-situated property which passes to a 
U.S. resident beneficiary would not be entitled to a benefit 
similar to a pro rata unified credit.

Estate tax marital deduction for German residents

    To determine the taxable estate of a decedent for U.S. 
estate tax purposes, a deduction generally is allowed for the 
value of any property that passes to his or her surviving 
spouse. TAMRA, however, eliminated this marital deduction where 
the surviving spouse is not a U.S. citizen (except for 
transfers to a ``qualified domestic trust'' (``QDOT'') or where 
the surviving spouse becomes a U.S. citizen). Several countries 
have sought U.S. treaty relief from this TAMRA provision, 
including some countries with pre-TAMRA U.S. estate tax 
treaties that have provisions relating to the marital 
deduction. The proposed protocol contains an agreement by the 
United States to provide such relief.
    Paragraph 6 of Article 3 of the proposed protocol provides 
a limited marital deduction against the U.S. estate tax on 
property passing to a noncitizen spouse if the decedent and the 
surviving spouse meet certain requirements regarding 
citizenship and residency. In addition, the deduction is 
available only if the executor of the decedent's estate 
irrevocably waives the benefits of any estate tax marital 
deduction that may otherwise be allowed.
    The deduction allowed under the proposed protocol equals 
the lesser of (1) the value of the qualifying property or (2) 
the decedent's unified credit applicable exclusion amount 
(within the meaning of U.S. law determined without regard to 
any gift previously made by the decedent). This provision is 
similar to the approach taken in recent proposed legislation to 
grant a limited marital transfer credit to employees of 
``qualified international organizations.'' \2\ The deduction 
amount under the proposed protocol generally is sufficient to 
resolve a principal area of concern--the reduction of the 
estate tax burden on transfers of personal residences and 
retirement annuities.
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    \2\ See, for example, H.R. 2760, 106th Cong., 1st Sess., introduced 
by Rep. Amo Houghton on August 5, 1999.
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    The proposed protocol does not, however, provide a similar 
marital deduction against the German inheritance and gift tax 
on property passing to a spouse who is neither a citizen nor 
resident of Germany.\3\ Thus, under the proposed protocol, a 
German citizen or resident who has U.S.-situated property that 
passes to a German resident spouse would receive the benefit of 
the limited marital deduction, whereas a U.S. citizen or 
resident who has German-situated property which passes to a 
U.S. resident spouse would not be entitled to a similar marital 
deduction.
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    \3\ Under German inheritance and gift tax law, when neither the 
decedent nor the surviving spouse who receives German-situated property 
reside in Germany, there is no marital exemption for the transfer of 
such property to the surviving spouse.
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Committee conclusions

    The Committee recognizes that changes to the U.S. estate 
tax marital deduction as a result of TAMRA in 1988 prompted 
negotiations with Germany regarding the marital deduction 
provision in the proposed protocol. Furthermore, the 
willingness of the United States to enter into the proposed 
protocol was an important factor in Germany's ratification of 
the U.S.- Germany income tax treaty, which was signed in August 
1989. The Committee also recognizes that the U.S. estate, gift, 
and generation-skipping transfer taxes and the German 
inheritance and gift taxes are not identical, and the credits, 
exclusions, and deductions under the U.S. regime and the 
exemptions under the German regime are dissimilar.
    Nonetheless, the Committee expects that, in future treaty 
negotiations, the Treasury Department will seek appropriate 
benefits for U.S. citizens and residents even when the tax 
systems are different between the United States and the other 
country.\4\ Moreover, the Committee wishes to stress that the 
granting of such relief to German citizens and residents under 
the proposed protocol without obtaining similar benefits for 
U.S. citizens and residents should not be viewed as precedent 
in future treaty negotiations with other countries that seek 
similar relief.
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    \4\ Benefits similar to the pro rata unified credit and marital 
deduction were provided to Canadian residents in the protocol to the 
income tax treaty between the United States and Canada in 1995. An 
issue was raised at that time regarding the fact that it was the first 
time the United States entered into a tax treaty covering estate taxes 
with a country that does not impose an estate or inheritance tax.
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                           VII. Budget Impact

    The Committee has been informed by the staff of the Joint 
Committee on Taxation that the proposed treaty is estimated to 
cause a negligible change in fiscal year Federal budget 
receipts during the 1999-2008 period.

                 VIII. Explanation of Proposed Protocol

    A detailed, article-by-article explanation of the proposed 
protocol to the estate, gift, and inheritance tax treaty 
between the United States and Germany is set forth below.

Article 1

    The proposed protocol would modify certain tiebreaker rules 
in the treaty which determine an individual's country of 
domicile where an individual is treated as domiciled in both 
countries. Under these rules, an individual is deemed to be 
domiciled in the country in which he or she has a permanent 
home. If the individual has a permanent home in both countries 
(or in neither country), then the individual's domicile is 
deemed to be the country in which his or her personal and 
economic relations were closest (i.e., the individual's 
``center of vital interests''). If the individual's center of 
vital interests cannot be determined, then the individual's 
domicile is deemed to be the country in which he or she has an 
habitual abode. If the individual has an habitual abode in both 
countries (or in neither country), then the individual's 
domicile is deemed to be the country of which he or she is a 
citizen. If the individual is a citizen of both countries (or 
of neither country), then the competent authorities of the 
countries will settle the issue of domicile by mutual 
agreement.
    The existing treaty contains an exception to the tiebreaker 
rules described above. This exception applies where an 
individual was: (1) a citizen of one, but not the other, 
country; (2) domiciled in both countries according to the 
domestic laws of those countries; and (3) domiciled in the 
country of which he or she was not a citizen for not more than 
five years. When these conditions are met, the individual is 
deemed to be domiciled in the country in which he or she was a 
citizen for purposes of the treaty. This exception to the 
tiebreaker rules is based on the notion that a country should 
not tax the worldwide estate, gifts, or inheritances with 
respect to an individual domiciled therein if that individual 
has not been present in the country for a significant period of 
time.
    The proposed protocol would amend the exception to the 
tiebreaker rules to extend from five to ten years the period 
during which an individual who otherwise meets the exception 
described above may be domiciled in the country of which he was 
not a citizen without being treated as domiciled in that 
country for purposes of the treaty. Thus, a U.S. citizen who is 
domiciled in both the United States and Germany under the laws 
of each country and who is domiciled in Germany for not more 
than 10 years would be deemed to be domiciled only in the 
United States (i.e., his or her country of citizenship) for 
purposes of the treaty.

Article 2

    The proposed protocol would modify certain exemptions 
granted for transfers between spouses under the treaty. Under 
the existing treaty, a country in which a decedent or donor was 
not domiciled may tax certain assets situated in that country 
(e.g., immovable property, business property of a permanent 
establishment in that country, assets pertaining to a fixed 
base in that country for the purpose of performing independent 
personal services, and certain interests in partnerships). That 
country is required to provide certain deductions and 
exemptions with respect to the taxation of such property. For 
example, under the treaty, a country exercising its rights to 
impose a situs-based tax on such property is required to grant 
a 50-percent marital exclusion for interspousal transfers of 
certain types of non-community property from individuals 
domiciled in or citizens of the other country. Under this rule, 
interspousal transfers of such property may be included in the 
taxable base of the country where the property is located, but 
only to the extent that the value of such property exceeds 50 
percent of the value of all property that may be taxed in that 
country.
    The proposed protocol would provide that the 50-percent 
exemption described above would not apply if the decedent or 
donor was a U.S. citizen domiciled in Germany, or was a former 
U.S. citizen or long-term resident of the United States whose 
loss of such status had as one of its principal purposes the 
avoidance of tax. Thus, the United States would not be 
obligated to provide the marital exclusion benefits described 
above to the estate of or a gift made by such a person. 
According to the Treasury Department's Technical Explanation 
(the ``Technical Explanation''), for example, a U.S. citizen 
who is domiciled in Germany under German law could, for 
purposes of the treaty, be deemed to have his domicile in 
Germany under the tiebreaker rules described above. In such a 
case, under the proposed protocol, the United States would not 
be required to provide the 50-percent marital exclusion with 
respect to interspousal transfers from that U.S. citizen to a 
spouse who is not a U.S. citizen.

Article 3

            Pro rata unified credit

U.S. internal law

    In general, under U.S. domestic law, U.S. citizens and 
residents are allowed a unified credit of $211,300 in 1999 
against their cumulative lifetime U.S. estate and gift tax 
liability. The unified credit increases through 2006. The 
unified credit effectively exempts from the U.S. estate and 
gift tax transfers in the amount of $650,000 in 1999, $675,000 
in 2000 and 2001, $700,000 in 2002 and 2003, $850,000 in 2004, 
$950,000 in 2005, and $1,000,000 in 2006 and thereafter (also 
referred to as the ``applicable exclusion amount'').
    In general, the estate of a nonresident who is not a U.S. 
citizen is subject to U.S. estate tax only on his or her assets 
situated in the United States. Under Code section 2102(c)(1), 
the unified credit against the estate tax allowed to such 
nonresidents is $13,000.

Proposed treaty modification

    The proposed protocol would provide a pro rata unified 
credit to the estate of an individual domiciled in Germany (who 
is not a U.S. citizen) for purposes of computing the U.S. 
estate tax. The unified credit for such persons would be the 
greater of (1) a pro rata portion of the unified credit which 
is allowed to U.S. citizens and residents, or (2) the unified 
credit allowed to the estate of a nonresident who is not a U.S. 
citizen under U.S. law (i.e., $13,000). The pro rata portion 
would be based upon the ratio that the German resident's gross 
estate situated in the United States at the time of his death 
bears to his worldwide gross estate. The Technical Explanation 
states that, for example, if a non-U.S. citizen domiciled in 
Germany died in 1999 and half of his entire gross estate (by 
value) were situated in the United States, the U.S. estate 
would be entitled to a pro rata unified credit of $105,650. 
This credit must be reduced for any gift tax unified credit 
previously allowed for any gift made by the decedent. Allowance 
of the pro rata unified credit is conditioned upon the taxpayer 
providing sufficient documentation to verify the amount of the 
credit.
            U.S. estate tax marital deduction
    Where a surviving spouse is not a U.S. citizen, the 
proposed protocol would allow an estate to elect a limited U.S. 
estate tax marital deduction for property that would qualify 
for the marital deduction if the surviving spouse had been a 
U.S. citizen, provided that the following conditions are met: 
(1) at the time of the decedent's death, the decedent was 
domiciled in either Germany or the United States; (2) the 
decedent's surviving spouse was at the time of the decedent's 
death domiciled in either Germany or the United States; (3) if 
both the decedent and the decedent's surviving spouse were 
domiciled in the United States at the time of the decedent's 
death, one or both was a citizen of Germany; and (4) the 
executor of the decedent's estate irrevocably waives the 
benefits of any other estate tax marital deduction that would 
be allowed under the Code.
    The marital deduction would equal the lesser of (1) the 
value of the qualifying property, or (2) the decedent's unified 
credit applicable exclusion amount (within the meaning of U.S. 
law determined without regard to any gift previously made by 
decedent). The Technical Explanation states that qualifying 
property must pass to the surviving spouse (within the meaning 
of U.S. domestic law) and be property that would have qualified 
for the estate tax marital deduction under U.S. domestic law if 
the surviving spouse had been a U.S. citizen and all applicable 
elections specified by U.S. domestic law had properly been 
made. As described above, the applicable exclusion amount for 
decedents dying in 1999 is $650,000.
    The Technical Explanation provides an example of the 
operation of the new pro rata unified credit and the marital 
deduction that would be added by the proposed protocol. For 
example, assume husband (H) and wife (W) are both citizens and 
residents of Germany. H dies in the year 2000, when the unified 
credit is $220,550 and the applicable exclusion amount is 
$675,000. H has U.S. real property worth $2,000,000, all of 
which he bequeaths to W. The remainder of H's estate consists 
of $3,000,000 of property situated in Germany. Under the 
existing treaty, H's U.S. gross estate equals $1,000,000 (the 
amount by which $2,000,000 of U.S. real property bequeathed to 
W exceeds 50 percent of the total value of U.S. property 
taxable in the United States under the treaty, or $1,000,000). 
H's worldwide gross estate equals $4,000,000 ($1,000,000 plus 
$3,000,000 of property situated in Germany).
    Under the proposed protocol, H's $1,000,000 U.S. gross 
estate would be reduced by a $675,000 marital deduction (i.e., 
the lesser of the applicable exclusion amount ($675,000) or the 
value of qualifying property transferred to the spouse 
($2,000,000 in this case). This would result in a $325,000 U.S. 
taxable estate. The tentative tax on the taxable estate would 
be $96,300. However, under the proposed protocol, H's estate 
would also be entitled to a new pro rata unified credit of 
$55,138 (i.e., $220,500 (the full unified credit for 1999) 
times $1,000,000/$4,000,000 (the U.S. gross estate over the 
worldwide gross estate)). Thus, under the proposed protocol, 
the total U.S. estate tax liability would be $96,300 minus 
$55,138, or $41,162.

Article 4

    The proposed protocol would amend the saving clause of the 
existing treaty. Under the existing treaty, the United States 
retains the right to tax under U.S. law the estates or gifts of 
U.S. citizens. A ``citizen'' for this purpose includes a former 
U.S. citizen whose loss of citizenship had as one of its 
principal purposes the avoidance of U.S. tax, but only for a 
period of 10 years after such loss of citizenship.
    The proposed protocol would expand the saving clause to 
cover, in the case of the United States, two additional classes 
of individuals. First, under the proposed protocol, the United 
States generally would retain the right to tax under U.S. law 
the estates or gifts of individuals who, at the time of the 
transfer, were domiciled (within the meaning of Article 4 
(Fiscal Domicile) of the treaty) in the United States. Second, 
under the proposed protocol, the United States generally would 
retain the right to tax under U.S. law the estates or gifts of 
individuals who, at the time of the transfer, were former long-
term residents of the United States whose loss of such status 
had as one of its principal purposes the avoidance of tax, but 
only for ten years following the loss of such status.
    In addition, the proposed protocol would permit Germany to 
retain the right to tax in accordance with German law an heir, 
donee, or another beneficiary who was domiciled (within the 
meaning of Article 4 (Fiscal Domicile) of the treaty) in 
Germany at the time of the death of the decedent or the making 
of the gift.
    The existing treaty provides exceptions to the saving 
clause that preserve certain obligations of the countries under 
the treaty. The proposed protocol would add to these exceptions 
from the saving clause the pro rata unified credit and the U.S. 
estate tax marital deduction that would be added under the 
proposed protocol. However, these additional exceptions from 
the saving clause would not apply to the estates of former U.S. 
citizens and long-term residents whose loss of status had as a 
principal purpose the avoidance of tax, for a period of ten 
years following the loss of such status.

Article 5

    The proposed protocol provides that it is subject to 
ratification in accordance with the applicable procedures in 
the United States and Germany, and that instruments of 
ratification will be exchanged as soon as possible. The 
proposed protocol generally would enter into force upon the 
exchange of instruments of ratification and would have effect 
with respect to deaths occurring and gifts made after that 
date.
    A special effective date rule applies with respect to the 
pro rata unified credit and the limited U.S. estate tax marital 
deduction (Article 3 of the proposed protocol), as well as the 
expansion of the saving clause (Article 4 of the proposed 
protocol). The proposed protocol provides that such provisions 
would have effect with respect to deaths occurring and gifts 
made after November 10, 1988,\5\ notwithstanding any limitation 
imposed under the law of a country on the assessment, 
reassessment, or refund with respect to a person's or estate's 
return, and provided that any return or claim for refund 
asserting the benefits of the proposed protocol are filed 
within one year of the date on which the proposed protocol 
enters into force or within the otherwise applicable period for 
filing such claims under domestic law.
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    \5\ November 10, 1988, is the effective date of TAMRA. In TAMRA, 
Congress passed several significant estate and gift tax changes 
affecting alien individuals. First, the marital deduction generally was 
disallowed on transfers to non-U.S. citizen spouses. Second, the 
special tax rates and credits applicable to the estates of nonresident 
aliens prior to TAMRA were repealed. Third, section 2102(c)(3) was 
passed, which permits a pro rata unified credit for nonresidents to the 
extent provided by treaty.
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               IX. Text of the Resolution of Ratification

    Resolved, (two-thirds of the Senators present concurring 
therein), That the Senate advise and consent to the 
ratification of the Protocol Amending the Convention between 
the United States of America and the Federal Republic of 
Germany for the Avoidance of Double Taxation with Respect to 
Taxes on Estates, Inheritances, and Gifts signed at Bonn on 
December 3, 1980, signed at Washington on December 14, 1998 
(Treaty Doc. 106-13), subject to the declaration of subsection 
(a) and the proviso of subsection (b).
    (a) Declaration.--The Senate's advice and consent is 
subject to the following declaration, which shall be binding on 
the President:
          (1) Treaty interpretation.--The Senate affirms the 
        applicability to all treaties of the constitutionally 
        based principles of treaty interpretation set forth in 
        Condition (1) of the resolution of ratification of the 
        INF Treaty, approved by the Senate on May 27, 1988, and 
        Condition (8) of the resolution of ratification of the 
        Document Agreed Among the States Parties to the Treaty 
        on Conventional Armed Forces in Europe, approved by the 
        Senate on May 14, 1997.
    (b) Proviso.--The resolution of ratification is subject to 
the following proviso, which shall be binding on the President:
          (1) Supremacy of constitution.--Nothing in the 
        Protocol requires or authorizes legislation or other 
        action by the United States of America that is 
        prohibited by the Constitution of the United States as 
        interpreted by the United States.

                                  
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