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116th Congress     }                               {       Exec. Rept.
                                 SENATE
 1st Session       }                               {          116-4

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



 
                   PROTOCOL AMENDING TAX CONVENTION 
                            WITH LUXEMBOURG

                                _______
                                

                  July 10, 2019.--Ordered to be printed

                                _______
                                

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

                                 REPORT

                    [To accompany Treaty Doc. 111-8]

    The Committee on Foreign Relations, to which was referred 
the Protocol Amending the Convention between the Government of 
the United States of America and the Government of the Grand 
Duchy of Luxembourg for the Avoidance of Double Taxation and 
the Prevention of Fiscal Evasion with Respect to Taxes on 
Income and Capital, signed on May 20, 2009 at Luxembourg and a 
related agreement effected by the exchange of notes also signed 
on May 20, 2009 (the ``Protocol'') (Treaty Doc. 111-8), having 
considered the same, reports favorably thereon with one 
declaration, as indicated in the resolution of advice and 
consent, and recommends that the Senate give its advice and 
consent to ratification thereof, as set forth in this report 
and the accompanying resolution of advice and consent.

                                CONTENTS

                                                                   Page

  I. Purpose..........................................................1
 II. Background.......................................................2
III. Major Provisions.................................................2
 IV. Entry Into Force.................................................2
  V. Implementing Legislation.........................................3
 VI. Committee Action.................................................3
VII. Committee Comments...............................................3
VIII.Text of Resolution of Advice and Consent to Ratification.........4

 IX. Annex 1.--Technical Explanation..................................5

                               I. Purpose

    The purpose of the Protocol, along with the underlying 
treaty, is to promote and facilitate trade and investment 
between the United States and Luxembourg, and to bring the 
existing treaty with Luxembourg into conformity with current 
U.S. tax treaty policy. Principally, the Protocol would amend 
the existing tax treaty with Luxembourg (the ``Treaty'') in 
order to bring the exchange of tax information provisions into 
conformity with current U.S. tax policy.

                            II.  Background

    The United States has a tax treaty with Luxembourg that is 
currently in force, which was concluded in 1996. The Protocol 
was negotiated to modernize our relationship with Luxembourg in 
the area of tax information exchange and to update the 1996 
treaty to better reflect current U.S. and Luxembourg domestic 
tax policy.

                         III. Major Provisions

    A detailed article-by-article analysis of the Protocol may 
be found in the Technical Explanation Published by the 
Department of the Treasury on June 7, 2011, which is included 
in Annex 1 of this report. In addition, the staff of the Joint 
Committee on Taxation prepared an analysis of the Protocol, 
JCX-30-11 (May 20, 2011), which was of great assistance to the 
committee in reviewing the Protocol. A summary of the key 
provisions of the Protocol is set forth below.
    The Protocol is intended to bring the existing Luxembourg 
treaty into conformity with current U.S. tax treaty policy 
regarding exchange of information. Through amendments to 
Article 28 of the Luxembourg Convention, the Protocol replaces 
the existing Convention's tax information exchange provisions 
with updated rules that are consistent with current U.S. tax 
treaty practice. See 2006 U.S. Model Income Tax Convention 
Article 26. The Protocol allows the tax authorities of each 
country to exchange information relevant to carrying out the 
provisions of the Convention or the domestic tax laws of either 
country, including information that would otherwise be 
protected by the bank secrecy laws of either country.
    It also enables the United States to obtain information 
(including from financial institutions) from Luxembourg whether 
or not Luxembourg needs the information for its own tax 
purposes, including information that would otherwise be 
protected by the bank secrecy laws of either country. The 
proposed related agreement sets forth understandings between 
the parties regarding the updated provisions on tax information 
exchange, including that: (1) the United States and Luxembourg 
will ensure that their competent authorities have the authority 
to obtain and provide upon request information held by 
financial institutions and information regarding ownership of 
certain entities; and (2) information shall be exchanged 
without regard to whether the conduct being investigated would 
be a crime under the laws of the requested State.

                          IV. Entry Into Force

    The proposed Protocol will enter into force between the 
United States and Luxembourg on the date of the later note in 
an exchange of diplomatic notes in which the Parties notify 
each other that their respective applicable procedures for 
ratification have been satisfied. The various provisions of 
this Protocol shall have effect as described in paragraph 2 of 
Article II of the Protocol.

                      V. Implementing Legislation

    As is the case generally with income tax treaties, the 
Protocol is self-executing and does not require implementing 
legislation for the United States.

                          VI. Committee Action

    The committee has held three public hearings on the 
Protocol. The transcript for the committee hearing held in the 
112th Congress on June 7, 2011, can be found in Annex 2, pages 
19-66 of Exec. Rept. 112-1. The committee heard testimony from 
Manal Corwin, Deputy Assistant Secretary, International Tax 
Affairs, Department of the Treasury, Washington, D.C. and 
Thomas A. Barthold, Chief of Staff, Joint Committee on 
Taxation, Washington, D.C.
    The transcript for the committee hearing held in the 113th 
Congress on February 26, 2014 can be found in Annex 2, pages 
21-95, in Exec. Rept. 113-7. The committee heard testimony from 
Thomas A. Barthold, Chief of Staff, Joint Committee on 
Taxation; Robert B. Stack, Deputy Assistant Secretary for 
International Tax Affairs, Department of the Treasury; William 
A. Reinsch, President, National Foreign Trade Council, 
Washington, D.C.; Paul Nolan, Vice President, Tax, McCormick 
and Company, Inc., Sparks, MD; and Nancy McLernon, President 
and CEO, Organization for International Investment, Washington, 
D.C.
    The transcript for the committee hearing held in the 114th 
Congress on October 29, 2015 can be found in Annex 2, pages 23-
69, in Exec. Rept. 114-1. The committee heard testimony from 
Robert B. Stack, Deputy Assistant Secretary for International 
Tax Affairs at the Department of the Treasury, Washington, 
D.C., and from Thomas A. Barthold, Chief of Staff, Joint 
Committee on Taxation, Washington, D.C.
    In addition, in the 116th Congress, the committee hosted a 
staff briefing from Department of the Treasury and Department 
of State officials with Senate Foreign Relations, Finance and 
Joint Tax Committee staff on June 11, 2019
    The committee has considered the Protocol and reported it 
favorably in three prior congresses; in the 112th Congress on 
July 26, 2011; in the 113th Congress on April 1, 2014; and in 
the 114th Congress on November 10, 2015.
    On June 25, 2019, the committee considered the Protocol and 
ordered it favorably reported, with a quorum present and 
without objection. The Protocol and the resolution of consent 
to ratification considered by the committee are the same, with 
no changes other than dates, to those considered under the 
prior three congresses.

                        VII. Committee Comments

    The Committee on Foreign Relations believes that the 
Protocol will stimulate increased trade and investment, 
strengthen provisions regarding the exchange of tax 
information, and promote closer co-operation between the United 
States and Luxembourg. The committee therefore urges the Senate 
to act promptly to give advice and consent to ratification of 
the Protocol, as set forth in this report and the accompanying 
resolution of advice and consent.

                       A. EXCHANGE OF INFORMATION

    The Protocol would replace the existing Convention's tax 
information exchange provisions with updated rules that are 
consistent with current U.S. tax treaty practice. The Protocol 
would allow the tax authorities of each country to exchange 
information relevant to carrying out the provisions of the 
Convention or the domestic tax laws of either country, 
including information that would otherwise be protected by the 
bank secrecy laws of either country. It would also enable the 
United States to obtain information (including from financial 
institutions) from Luxembourg whether or not Luxembourg needs 
the information for its own tax purposes.
    The committee takes note of Paragraph 3 of the Exchange of 
Notes, which sets forth information that should be provided to 
the requested State by the requesting State when making a 
request for information. It is the committee's understanding 
based upon the testimony and Technical Explanation provided by 
the Department of the Treasury that while this paragraph 
contains important procedural requirements that are intended to 
ensure that ``fishing expeditions'' do not occur, the 
provisions of this paragraph will be interpreted by the United 
States and Luxembourg in order not to frustrate effective 
exchange of information. In particular, the committee 
understands that with respect to the requirement set forth in 
subparagraph 3(a) of the Exchange of Notes that a request must 
include the identity of the person under examination or 
investigation, the requesting state is not required in all 
instances to provide the name of the person, but will be 
permitted to provide other information sufficient to identify 
the person.

                 B. DECLARATION ON THE SELF-EXECUTING 
                         NATURE OF THE PROTOCOL

    The committee has included one declaration in the 
recommended resolution of advice and consent. The declaration 
states that the Protocol is self-executing, as is the case 
generally with income tax treaties. Prior to the 110th 
Congress, the committee generally included such statements in 
the committee's report, but in light of the Supreme Court 
decision in Medellin v. Texas, 128 S. Ct. 1346 (2008), the 
committee determined that a clear statement in the Resolution 
is warranted. A further discussion of the committee's views on 
this matter can be found in Section VIII of Executive Report 
110-12.

                VIII. Text of Resolution of Advice and 
                        Consent to Ratification

    Resolved (two-thirds of the Senators present concurring 
therein),

SECTION 1. SENATE ADVICE AND CONSENT SUBJECT TO A DECLARATION

    The Senate advises and consents to the ratification of the 
Protocol Amending the Convention between the Government of the 
United States of America and the Government of the Grand Duchy 
of Luxembourg for the Avoidance of Double Taxation and the 
Prevention of Fiscal Evasion with Respect to Taxes on Income 
and Capital, signed on May 20, 2009, at Luxembourg (the 
Protocol) and the related agreement effected by exchange of 
notes also signed on May 20, 2009 (Treaty Doc. 111-8), subject 
to the declaration of section 2.

SECTION 2. DECLARATION

    The advice and consent of the Senate under section 1 is 
subject to the following declaration:
          The Convention is self-executing.

                  IX. Annex 1.--Technical Explanation


DEPARTMENT OF THE TREASURY TECHNICAL EXPLANATION OF THE PROTOCOL SIGNED 
   AT LUXEMBOURG ON MAY 20, 2010 AMENDING THE CONVENTION BETWEEN THE 
 GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF THE 
GRAND DUCHY OF LUXEMBOURG FOR THE AVOIDANCE OF DOUBLE TAXATION AND THE 
  PREVENTION OF FISCAL EVASION WITH RESPECT TO TAXES ON INCOME AND ON 
             CAPITAL, SIGNED AT LUXEMBOURG ON APRIL 3, 1996

    This is a Technical Explanation of the Protocol signed at 
Luxembourg on May 20, 2010 (the ``Protocol''), and the related 
Exchange of Notes (``Exchange of Notes'') amending the 
Convention between the Government of the United States of 
America and the Government of the Grand Duchy of Luxembourg for 
the avoidance of double taxation and the prevention of fiscal 
evasion with respect to taxes on income, signed at Luxembourg 
on April 3, 1996 (the ``existing Convention'').
    Negotiations took into account the U.S. Department of the 
Treasury's current tax treaty policy and the Treasury 
Department's Model Income Tax Convention, published on November 
15, 2006 (the ``U.S. Model''). Negotiations also took into 
account the Model Tax Convention on Income and on Capital, 
published by the Organization for Economic Cooperation and 
Development (the ``OECD Model''), and recent tax treaties 
concluded by both countries.
    This Technical Explanation is an official guide to the 
Protocol and Exchange of Notes. It explains policies behind 
particular provisions, as well as understandings reached during 
the negotiations with respect to the interpretation and 
application of the Protocol.
    References to the existing Convention are intended to put 
various provisions of the Protocol into context. This Technical 
Explanation does not, however, provide a complete comparison 
between the provisions of the existing Convention and the 
amendments made by the Protocol and Exchange of Notes. This 
Technical Explanation is not intended to provide a complete 
guide to the Convention as amended by the Protocol and Exchange 
of Notes. To the extent that the Convention has not been 
amended by the Protocol and Exchange of Notes, the technical 
explanation of the Convention remains the official explanation. 
References in this technical explanation to ``he'' or ``his'' 
should be read to mean ``he or she'' or ``his or her.''

                               ARTICLE I

    Article I of the Protocol replaces Article 28 (Exchange of 
Information) of the existing Convention. This Article provides 
for the exchange of information and administrative assistance 
between the competent authorities of the Contracting States.

Paragraph 1 of Article 28

    The obligation to obtain and provide information to the 
other Contracting State is set out in new paragraph 1. The 
information to be exchanged is that which is foreseeably 
relevant for carrying out the provisions of the Convention or 
the domestic laws of the United States or Luxembourg concerning 
taxes of every kind applied at the national level, to the 
extent that the taxation thereunder is not contrary to the 
Convention. This language incorporates the standard of the OECD 
Model, which is intended to provide for exchange of information 
in tax matters to the widest possible extent and, at the same 
time, to clarify that Contracting States are not at liberty to 
engage in ``fishing expeditions'' or to request information 
that is unlikely to be relevant to the tax affairs of a given 
taxpayer.
    This standard is to be interpreted consistently with 26 
U.S.C. section 7602, which authorizes the IRS to examine ``any 
books, papers, records, or other data which may be relevant or 
material.'' (emphasis added). In United States v. Arthur Young 
& Co., 465 U.S. 805, 814 (1984), the Supreme Court stated that 
the language ``may be'' reflects Congress's express intention 
to allow the IRS to obtain ``items of even potential relevance 
to an ongoing investigation, without reference to 
admissibility.'' (emphasis in original). However, the standard 
would not support a request in which a Contracting State simply 
asked for information regarding all bank accounts maintained by 
residents of that Contracting State in the other Contracting 
State.
    Exchange of information with respect to each State's 
domestic tax law is authorized to the extent that taxation 
under domestic tax law is not contrary to the Convention. Thus, 
for example, information may be exchanged with respect to a 
covered tax, even if the transaction to which the information 
relates is a purely domestic transaction in the requesting 
Contracting State and, therefore, the exchange is not made to 
carry out the Convention. An example of such a case is provided 
in the OECD Commentary: a company resident in one Contracting 
State and a company resident in the other Contracting State 
transact business between themselves through a third-country 
resident company. Neither Contracting State has a treaty with 
the third state. To enforce their internal laws with respect to 
transactions of their residents with the third-country company 
(since there is no relevant treaty in force), the Contracting 
States may exchange information regarding the prices that their 
residents paid in their transactions with the third-country 
resident.
    The taxes covered for purposes of this Article constitute a 
broader category of taxes than those referred to in Article 2 
(Taxes Covered). Exchange of information is authorized with 
respect to taxes of every kind imposed by a Contracting State 
at the national level. Accordingly, information may be 
exchanged with respect to U.S. estate and gift taxes, excise 
taxes or, with respect to Luxembourg, value added taxes.
    Information exchange is not restricted by Article 1 
(General Scope). Accordingly, information may be requested and 
provided under this Article with respect to persons who are not 
residents of either Contracting State. For example, if a third-
country resident has a permanent establishment in Luxembourg, 
which engages in transactions with a U.S. enterprise, the 
United States could request information with respect to that 
permanent establishment, even though the third-country resident 
is not a resident of either Contracting State. Similarly, if a 
third-country resident maintains a bank account in Luxembourg, 
and the Internal Revenue Service has reason to believe that 
funds in that account should have been reported for U.S. tax 
purposes but have not been so reported, information can be 
requested from Luxembourg with respect to that person's 
account, even though that person is not the taxpayer under 
examination.
    Although the term ``United States'' does not encompass U.S. 
possessions for most purposes of the Convention, Section 7651 
of the Code authorizes the Internal Revenue Service to utilize 
the provisions of the Internal Revenue Code to obtain 
information from the U.S. possessions pursuant to a proper 
request made under Article 26. If necessary to obtain requested 
information, the Internal Revenue Service could issue and 
enforce an administrative summons to the taxpayer, a tax 
authority (or a government agency in a U.S. possession), or a 
third party located in a U.S. possession.
    Paragraph 3 of the Exchange of Notes lists the information 
that should be provided to the requested State by the 
requesting State when making a request for information under 
Article 28 to demonstrate the foreseeable relevance of the 
information. While this paragraph contains important procedural 
requirements that are intended to ensure that ``fishing 
expeditions'' do not occur, the provisions of this paragraph 
must be interpreted liberally in order not to frustrate 
effective exchange of information.
    Subparagraph 3(a) of the Exchange of Notes provides that a 
request must include the identity of the person under 
examination or investigation. In a typical case, the identity 
of the person under examination or investigation would include 
a name, and to the extent known, an address, account number, or 
similar identifying information. There can, however, be 
circumstances in which there is information sufficient to 
identify the person under examination or investigation even 
though the requesting State cannot provide a name. For example, 
this requirement may be satisfied by supplying an account 
number or similar identifying information.
    Subparagraph 3(b) of the Exchange of Notes provides that a 
request for information must contain a statement of the 
information sought, including its nature and the form in which 
the requesting State wishes to receive the information from the 
requested State. Subparagraph 3(c) of the Exchange of Notes 
provides that a request for information must contain a 
statement of the tax purpose for which the information is 
sought. Subparagraph 3(d) of the Exchange of Notes provides 
that a request must also include the grounds for believing that 
the information requested is held in the requested State or is 
in the possession or control of a person within the 
jurisdiction of the requested State. Subparagraph 3(e) of the 
Exchange of Notes provides that, to the extent known, the name 
and address of any person believed to be in possession of the 
requested information must also be provided. Subparagraph 3(f) 
provides that a requesting State must also provide a statement 
that the request is in conformity with the laws of the 
requesting State, that if the requested information was within 
the jurisdiction of the requesting State it would be able to 
obtain the information, and that it is in conformity with the 
Convention. Subparagraph 3(g) of the Exchange of notes provides 
that the requesting State has pursued all means available in 
its own territory to obtain the information except those that 
would give rise to disproportionate difficulties.

Paragraph 2 of Article 28

    New paragraph 2 provides assurances that any information 
exchanged will be treated as secret, subject to the same 
disclosure constraints as information obtained under the laws 
of the requesting State. Information received may be disclosed 
only to persons, including courts and administrative bodies, 
involved in the assessment, collection, or administration of, 
the enforcement or prosecution in respect of, or the 
determination of appeals in relation to, the taxes referred to 
in paragraph 1. The information must be used by these persons 
in connection with the specified functions. Information may 
also be disclosed to legislative bodies, such as the tax-
writing committees of Congress and the Government 
Accountability Office, engaged in the oversight of the 
preceding activities. Information received by these bodies must 
be for use in the performance of their role in overseeing the 
administration of U.S. tax laws. Information received may be 
disclosed in public court proceedings or in judicial decisions.

Paragraph 3 of Article 28

    New paragraph 3 provides that the obligations undertaken in 
paragraph 1 and 2 to exchange information do not require a 
Contracting State to carry out administrative measures that are 
at variance with the laws and administrative practice of either 
State. Nor is a Contracting State required to supply 
information not obtainable under the laws or in the normal 
course of the administration of either State, or to disclose 
trade secrets or other information, the disclosure of which 
would be contrary to public policy.
    Thus, a requesting State may be denied information from the 
other State if the information would be obtained pursuant to 
procedures or measures that are broader than those available in 
the requesting State. However, the statute of limitations of 
the Contracting State making the request for information should 
govern a request for information. Thus, the Contracting State 
of which the request is made should attempt to obtain the 
information even if its own statute of limitations has passed. 
In many cases, relevant information will still exist in the 
business records of the taxpayer or a third party, even though 
it is no longer required to be kept for domestic tax purposes.
    While paragraph 3 states conditions under which a 
Contracting State is not obligated to comply with a request 
from the other Contracting State for information, the requested 
State is not precluded from providing such information, and 
may, at its discretion, do so subject to the limitations of its 
internal law.

Paragraph 4 of Article 28

    New paragraph 4 provides that when information is requested 
by a Contracting State in accordance with this Article, the 
other Contracting State is obligated to obtain the requested 
information as if the tax in question were the tax of the 
requested State, even if that State has no direct tax interest 
in the case to which the request relates. In the absence of 
such new paragraph 4, some taxpayers have argued that paragraph 
3(a) prevents a Contracting State from requesting information 
from a bank or fiduciary that the Contracting State does not 
need for its own tax purposes. This paragraph clarifies that 
paragraph 3 does not impose such a restriction and that a 
Contracting State is not limited to providing only the 
information that it already has in its own files.
    Paragraph 1 of the Exchange of Notes also provides that the 
requested State shall exchange such information regardless of 
whether the conduct being investigated would constitute a crime 
under the laws of the requested State if it had occurred in the 
territory of the requested State.

Paragraph 5 of Article 28

    New paragraph 5 provides that a Contracting State may not 
decline to provide information solely because that information 
is held by financial institutions, nominees or persons acting 
in an agency or fiduciary capacity. Thus, paragraph 5 would 
effectively prevent a Contracting State from relying on 
paragraph 3 to argue that its domestic bank secrecy laws (or 
similar legislation relating to disclosure of financial 
information by financial institutions or intermediaries) 
override its obligation to provide information under paragraph 
1. This paragraph also requires the disclosure of information 
regarding the beneficial owner of an interest in a person, such 
as the identity of a beneficial owner of bearer shares.
    Paragraph 2(a) of the Exchange of Notes provides that each 
Contracting State shall ensure that its competent authority has 
the authority to obtain and exchange upon request information 
held by financial institutions, nominees, or persons acting in 
an agency or fiduciary capacity, including nominees and 
trustees. Paragraph 2(b) of the Exchange of Notes provides that 
each Contracting State shall also ensure that its competent 
authority has the authority to obtain and provide upon request 
information regarding the ownership of companies, partnerships, 
trusts, foundations, and other persons, including information 
regarding settlers, trustees, and beneficiaries. A Contracting 
State is not obligated to provide information that is neither 
held by its authorities (which for this purpose includes 
government agencies, political subdivisions and local 
authorities) nor in the possession or control of persons who 
are within it territorial jurisdiction, nor is it obligated to 
provide ownership information with respect to publicly traded 
companies or public collective investment funds or schemes 
unless such information can be obtained without giving rise to 
disproportionate difficulties.

Paragraph 6 of Article 28

    New paragraph 6 provides that the requesting State may 
specify the form in which information is to be provided (e.g., 
depositions of witnesses and authenticated copies of original 
documents). The intention is to ensure that the information may 
be introduced as evidence in the judicial proceedings of the 
requesting State. The requested State should, if possible, 
provide the information in the form requested to the same 
extent that it can obtain information in that form under its 
own laws and administrative practices with respect to its own 
taxes.

Paragraph 7 of Article 28

    New paragraph 7 provides for assistance in collection of 
taxes to the extent necessary to ensure that treaty benefits 
are enjoyed only by persons entitled to those benefits under 
the terms of the Convention. Under paragraph 7, a Contracting 
State will endeavor to collect on behalf of the other State 
only those amounts necessary to ensure that any exemption or 
reduced rate of tax at source granted under the Convention by 
that other State is not enjoyed by persons not entitled to 
those benefits. For example, if the payer of a U.S.-source 
portfolio dividend receives a Form W-8BEN or other appropriate 
documentation from the payee, the withholding agent is 
permitted to withhold at the portfolio dividend rate of 15 
percent. If, however, the addressee is merely acting as a 
nominee on behalf of a third country resident, paragraph 7 
would obligate Luxembourg to withhold and remit to the United 
States the additional tax that should have been collected by 
the U.S. withholding agent.
    This paragraph also makes clear that the Contracting State 
asked to collect the tax is not obligated, in the process of 
providing collection assistance, to carry out administrative 
measures that would be contrary to its sovereignty, security or 
public policy.

Treaty effective dates and termination in relation to exchange of 
        information

    Article II of the Protocol sets forth rules governing the 
effective dates of the provisions of Article I of the Protocol. 
Once the Protocol is in force, the competent authority may seek 
information under the Convention, as amended by the Protocol, 
with respect to a year beginning on or after January 1, 2009. 
With respect to earlier years, the provisions of Article 28 of 
the Convention prior to amendment by the Protocol and Exchange 
of Notes shall apply.
    A tax administration may also seek information with respect 
to a year for which a treaty was in force after the treaty has 
been terminated. In such a case the ability of the other tax 
administration to act is limited. The treaty no longer provides 
authority for the tax administrations to exchange confidential 
information. They may only exchange information pursuant to 
domestic law or other international agreement or arrangement.

                               ARTICLE II

    Article II of the Protocol contains the rules for bringing 
the Protocol into force and giving effect to its provisions.

Paragraph 1

    Paragraph 1 provides that the Protocol is subject to 
ratification in accordance with the applicable procedures of 
the United States and Luxembourg. Further, the Contracting 
Stats shall notify each other by written notification, through 
diplomatic channels, when their respective applicable 
procedures have been satisfied. In the United States, the 
process leading to ratification and entry into force is as 
follows: Once a protocol or treaty has been signed by 
authorized representatives of the two Contracting States, the 
Department of State sends the protocol or treaty to the 
President, who formally transmits it to the Senate for its 
advice and consent to ratification, which requires approval by 
two-thirds of the Senators present and voting.
    Prior to this vote, however, it generally has been the 
practice of the Senate Committee on Foreign Relations to hold 
hearings on the protocol or treaty and make a recommendation 
regarding its approval to the full Senate. Both Government and 
private sector witnesses may testify at these hearings. After 
the Senate gives its advice and consent to ratification of the 
protocol or treaty, an instrument of ratification is drafted 
for the President's signature. The President's signature 
completes the process in the United States.

Paragraph 2

    Paragraph 2 provides that the Protocol will enter into 
force on the date of the later of the notifications referred to 
in paragraph 1. Once the Protocol is in force, the competent 
authority may seek information under Article 26 as amended by 
the Protocol with respect to a year beginning on or after 
January 1, 2009.

                                  [all]