Executive Order 11224—Designation of Certain Foreign Countries as Economically Less Developed Countries for Purposes of the Interest Equalization Tax

WHEREAS the Senate and House of Representatives have been duly notified of my intention to terminate the designation of the Bahamas, Bermuda, Ireland, Kuwait, and Portugal as economically less developed countries for purposes of the tax imposed by section 4911 of the Internal Revenue Code;

NOW, THEREFORE, by virtue of the authority vested in me by section 4916(b) of the Internal Revenue Code of 1954, as added by section 2 of the Interest Equalization Tax Act, approved September 2, 1964 (Public Law 88-563), by section 301 of title 3 of the United States Code, and as President of the United States, it is hereby ordered as follows:

Section 1. Economically less developed countries. For purposes of the tax imposed by section 4911 of the Internal Revenue Code, the following areas are designated as economically less developed countries:

(a) All foreign countries (including Trust Territories) in existence on or after the effective date of this order, other than Australia, Austria, Belgium, Canada, Denmark, Federal Republic of Germany, France, Ireland, Italy, Japan, Kuwait, Liechtenstein, Luxembourg, Monaco, Netherlands, New Zealand, Norway, Portugal, San Marino, Spain, Sweden, Switzerland, Union of South Africa, United Kingdom, and any foreign country within the Sino-Soviet bloc, as defined in section 2:

(b) Each territory, department, province, and possession (other than the Bahamas, Bermuda, and Hong Kong), of any foreign country in existence on or after the effective date of this order, other than a foreign country within the Sino-Soviet bloc, as defined in section 2, if the territory, department, province, or possession is overseas from the foreign country of which it is a territory, department, province,

(c) The Commonwealth of Puerto Rico and all possessions of the United States.

Sec. 2. Definition of the term "foreign country within the SinoSoviet bloc." For purposes of this order, the term "foreign country within the Sino-Soviet bloc" shall mean Albania, Bulgaria, any part of China which is dominated or controlled by International Communism, Cuba, Czechoslovakia, Estonia, Hungary, any part of Korea which is dominated or controlled by International Communism, Latvia, Lithuania, Outer Mongolia, Poland (including any area under its provisional administration), Rumania, Soviet Zone of Germany and the Soviet Sector of Berlin, Tibet, Union of Soviet Socialist Republics and the Kurile Islands, Southern Sakhalin, and areas in East Prussia which are under the provisional administration of the Union of Soviet Socialist Republics, and any part of Viet Nam which is dominated or controlled by International Communism.

Sec. 3. Prior acquisitions and commitments, Notwithstanding the provisions of sections 1 and 2 of this order, any area which had the status of an economically less developed country under section 4916(b) of the Internal Revenue Code prior to the effective date of this order shall be deemed to be an economically less developed country for purposes of section 4916 with respect to an acquisition of stock or a debt obligation—

(a) If such acquisition was made prior to the effective date of this order;

(b) If such acquisition is made pursuant to an obligation to acquire which, prior to April 6,1965, was unconditional or was subject only to conditions contained in a formal contract under which partial performance had occurred; or

(c) If, with respect to such acquisition, the acquiring United States person (or, in a case where two or more United States persons are making acquisitions as part of a single transaction, a majority in interest of such persons) had taken every action prior to April 6,1965, to signify approval of the acquisition under the procedures ordinarily employed by such person (or persons) in similar transactions and had sent or deposited for delivery to the foreign person from whom the acquisition was made written evidence of such approval in the form of a commitment letter, memorandum of terms, draft purchase contract, or other document setting forth, or referring to a document sent by the foreign person from whom the acquisition was made which set forth, the principal terms of such acquisition, subject only to the execution of formal documents evidencing the acquisition and to customary closing conditions.

Sec. 4. Rules and regulations, The Secretary of the Treasury or his delegate is authorized to prescribe from time to time regulations, rulings, directions, and instructions to carry out the purposes of this order.

Sec. 5. Effective date. This order shall become effective upon its filing for publication in the Federal Register.

Sec. 6. Inapplicability of Executive Order 11071. Executive Order No. 11071, dated December 27,1962, is hereby superseded to the extent that such order applies to section 4916 of the Internal Revenue Code.

LYNDON B. JOHNSON

The White House,

May 13, 1965.