Ext 6207/45 'Persian taxation of oil products supplied to the Allied Forces in Persia' [‎5v] (10/12)

3) That if a Persian claim resulted from our action, and
the arrears of taxation had to be paid before the completion
. of - our troop withdrawal and the expiry of the Treaty, it would
entail a heavy gold liability, ,
• j-
l. The arguments for going ahead at once are:-
1) That until we have expressed our view to the Persian
(rovernment, the Company remain exposed to-an accusation from
the Persian Government, that-by omitting'to collect these taxes
they have broken Persian law and have* infringed their
concessionary obligation at all times to have regard to the
rights, privileges, and interests of the Persian Government,
Only by making some sort of declaration to the Persian Government
can we supply the Company with a line of defence which they
could quote if the Persian Government made trouble for them.
What we have in mind is that at some future date an ill disposed
• Government might wish to take the opportunity offered by the.
Company's weak position in this matter to cancel or alter their
concession, ...
2) That if we do not now make a declaration of our views
to the Persian Government the company may well expect us to
give them a guarantee that we shall indemnify them if the Persian
Government ever make this claim on them.
* 5* If after further consideration, and, if necessary,
conulstations with the Company, you consider that the balance
of advantage lies in approaching the Persian Government, I should
be glad if you would now do so on the following lines:-. 6
6, You should inform them that since august, 1%1, petrol,
oil and lubricants have been supplied to the British, Soviet and
United States Forces in Persia by the iinglo-Iranian Oil Company
Limited, ^ It is understood that these products when supplied .to
the .public are liable to certain taxes"levied by the Imperial
Government, It is the opinion of His Majesty’s Government in
the United Kingdom that, in view of the principle of international
law that one Government should not levy taxation directly upon'
another Government, and of the fact .that these products have been
bought directly for the use of the allied Forces, and in connexion
with the purpose for which they were stationed ? .in Persia, this
taxation is not properly leviable on these supplies. You should
state that His Majesty's Government have consulted the Soviet and :
United States Governments and-understand that these Governments
take the same view in respect of petroleum products supplied to
the Soviet and United States Forces in Persia. You should’add
thatj in view of these considerations, the three Governments have
not m fact paid taxes on the petroleum products supplied to their
Forces and that His Majesty'^s Government's object in making this
statement now is to place the views of the three Governments on
record, lest any misunderstanding as to the position should arise
at some future date.