MUTUAL LOGISTICS SUPPORT AGREEMENT (MLSA)
MUTUAL LOGISTICS SUPPORT AGREEMENT (RP-US-01) BETWEEN THE DEPARTMENT OF DEFENSE OF THE UNITED STATES OF AMERICA AND THE DEPARTMENT OF NATIONAL DEFENSE OF THE REPUBLIC OF THE PHILIPPINES
The Department of Defense of the United States of America and the Department of National Defense of the Republic of the Philippines, hereinafter referred to as the Parties, desiring to further the interoperability, readiness, and effectiveness of their respective military forces through increased logistic cooperation in accordance with the RP-US Mutual Defense Treaty, RP-US Visiting Forces Agreement or the RP-US Military Assistance Agreement, have resolved to conclude this Mutual Logistics Support Agreement, hereinafter referred to as the Agreement.
This Agreement is entered into for the purpose of establishing basic terms, conditions, and procedures to facilitate the reciprocal provision of logistic support, supplies, and services as said terms are defined in Article IV of this Agreement.
II. APPLICABLE TREATIES AND LAWS
This Agreement and any Implementing Arrangements executed hereunder shall be implemented, applied and interpreted by the Parties in accordance with the provisions of the Mutual Defense Treaty, the Visiting Forces Agreement or the Military Assistance Agreement and their respective constitutions, national laws and regulations.
1. This Agreement is designed to enable reciprocal logistic support between the Parties whereby one Party may request logistics support, supplies and services which the other may provide for the duration of an approved activity, as follows:
a. During combined exercises and training, operations and other deployments undertaken under the Mutual Defense Treaty, the Visiting Forces Agreement or the Military Assistance Agreement as agreed upon between the Parties.
b. During other cooperative efforts, such as humanitarian assistance, disaster relief and rescue operations, and maritime anti-pollution operations, within Philippine territory, or outside Philippine territory in cases where either Party, or both, have decided to participate.
2. This Agreement applies to the reciprocal provision of logistic support, supplies, and services between the military forces of one Party by the other Party in return for either cash payment or the reciprocal provision of logistic support, supplies, and services to the military forces of the other Party.
3. All obligations of the Parties under this Agreement and any implementing Arrangements are subject to the availability of appropriations for such purposes.
4. The following items are not eligible for transfer under this Agreement and are specifically excluded from its coverage:
a. weapon systems
b. major end items of equipment (except for the lease or loan of general purpose vehicles and other nonlethal items of military equipment which are not designated as significant military equipment on the U.S. Munitions List); and
c. initial quantities of replacement and spare parts associated with the initial quantity of major items of organizational equipment covered in tables of allowances and distribution, tables of organization and equipment, and equivalents documents.
5. Also excluded from transfer by either Party under this Agreement are any items the transfer of which is prohibited by its laws or regulations. The following items are currently excluded from transfer by the United States laws and regulations:
a. guided missiles
b. naval mines and torpedoes
c. nuclear ammunition and included items such as warhead, warhead sections, projectiles, demolition munitions, and training ammunition
d. cartridge and air crew escape propulsion system (AEPS) components
e. chaff and chaff dispensers
f. guidance kits for bombs or other ammunition
g. chemical ammunition (other than riot-control agents); or
h. source, by-product or special nuclear materials, or any other material, article, data or thing of value the transfer of which is subject to the Atomic Energy Act of 1954 (Title 42, United States Code, Section 2011, et.seq.).
1. As used in this Agreement and in any Implementing Arrangement, which provide specific procedures, the following definitions apply:
a. Logistic supplies, support, and services which may be provided as approved by the Parties under this Agreement are defined and subject to the following:
(1) Supplies – Food, water, petroleum, oils, lubricants, clothing, ammunition, spare parts and components, provided during an approved activity.
(2) Support and Services – Billeting, transportation (including airlift), communication services, medical services, operation support (and construction and use of temporary structures incident to operations support), training services, repair and maintenance services, calibration services, storage services, and port services during an approved activity. Storage units and ports shall at all times remain under the control and supervision of the host state.
(3) Logistic supplies, support, and services include the temporary use of general purpose vehicles and other nonlethal items of military equipment which are not designated as significant military equipment on the U.S. Munitions List, during an approved activity. No United States military base, facility, or permanent structure shall be constructed, established, or allowed under this Agreement.
b. Implementing Arrangement. A written supplementary agreement which contains additional details, terms and conditions related to a specific acquisition and/or transfer of logistic support, supplies and services.
c. Order. A written request in an agreed format and signed by a Point of Contact (POC), for the provision of specific logistic support, supplies, and services pursuant to this Agreement and any applicable Implementing Arrangement.
d. Invoice. A document from the Supplying Party which requests reimbursement or payment for specific logistic support, supplies, and services rendered pursuant to this Agreement and any applicable Implementing Arrangement.
e. Transfer. Selling (whether for payment currency, replacement-in-kind, or exchange of supplies or services of equal value), loaning, or otherwise temporarily providing logistic support, supplies, and services under the terms of this Agreement and any applicable Implementing Arrangement.
f. Replacement-in-kind (RIK). Payment for a transfer conducted under this Agreement in which it is agreed that the Receiving Party will replace logistic support, supplies, and services that it receives with logistic support, supplies, and services of an identical, or substantially identical, nature under agreed conditions.
g. Equal Value Exchange. A transfer conducted under this Agreement in which it is agreed that the Receiving Party will replace logistic support, supplies and services that it receives with logistic support, supplies and services of an equal monetary value.
h. United States Munitions List. U.S. Defense articles and defense services which are designated by the U.S. President under the Arms Export Control Act as subject to export controls. The U.S. Munitions List is published in Part 121 of Title 22 of the U.S. Code of Federal Regulations.
i. Receiving Party. The Party ordering and receiving support.
j. Supplying Party. The Party providing support.
k. Point of Contact (POC). Authorized offices, agencies, and/or individuals for coordinated placement and acceptance of orders, as well as receipt and collection of payments.
V. TERMS AND CONDITIONS
1. Each party shall exert its best efforts, consistent with national priorities, to satisfy requests from the other Party under this Agreement for logistic support, supplies, and services. When an Implementing Arrangement contains a stricter standard for satisfying such requests, it shall apply over this paragraph.
2. Orders may be placed or accepted only by the Points of Contact (POCs), or designees, identified by the Parties in Annexes B through M of this Agreement. When military forces of the Republic of the Philippines require logistic support, supplies, or services outside the USPACOM Area of Responsibility (AOR), they may place orders directly with the cognizant POC or may seek the assistance of HQ USPACOM, or a USPACOM Component Command, to place an order with a non-USPACOM POC.
3. An Implementing Arrangement under this Agreement may be negotiated on behalf of the U.S. Department of Defense by Headquarters, U.S. Pacific Command (USPACOM), the Headquarters of other United States Unified Commands, or their designated subordinate commands. Implementing Arrangements maybe negotiated on behalf of the Department of National Defense, Republic of the Philippines by General Headquarters, Armed Forces of the Philippines or its individual major service headquarters and subject to the approval of appropriate Philippine authority. Implementing Arrangements must identify POCs and their specific authorizations or limitations.
4. Prior to submitting a written order, the Ordering Party should initially contact the Supplying Party’s POC by telephone, fax, or e-mail to ascertain availability, price, and desired method of repayment for required material or services. Orders must include all the data elements in Annex A, as well as any other terms and details necessary to carry out the transfer. Instructions and a standard order form are attached at Annex N. The number of this Agreement, RP-US-01, should be annotated on all orders and related correspondence.
5. The Receiving Party is responsible for:
a. Arranging pickup and transportation of supplies acquired under this Agreement. This does not preclude the Supplying Party from assisting with loading supplies acquired under this Agreement onto the transportation conveyance. The Supplying Party will notify the Receiving Party when and where supplies are available to be picked up.
b. Obtaining the applicable customs clearance and arranging other official actions required by national customs and regulations.
6. The individual picking up the supplies or receiving the services on behalf of the Receiving Party will sign the standard order form (Annex N) in the appropriate block as evidence of receipt. If the standard order form is not available at the Supplying Party’s point of issue, the individual collecting the supplies will sign the receipt document provided by the Supplying Party as a substitute. The number of this Agreement, RP-US-01, will be entered on the receipt document. The Supplying Party will forward the signed receipt document to the activity authorized to accept Orders under this Agreement where the signed receipt document will be attached to the original order form by the Receiving Party.
7. Logistics support, supplies, and services received through this Agreement will not be retransferred, either temporarily or permanently, to any person other than a member of the forces of the Receiving Party without the prior written consent of the Supplying Party.
1. For transfers of logistic support, supplies, and services under this Agreement, the Parties shall agree for payment either by cash (“reimbursable transaction”), by replacement-in-kind, or by an equal-value exchange (“exchange transaction”). The Receiving Party shall pay the Supplying Party as provided in either paragraph 1a , or paragraph 1b of this Article, as agreed.
a. Reimbursable Transaction. The Supplying Party shall submit invoices to the Receiving Party after delivery or performance of the logistic support, supplies, and services. Both parties shall provide for the payment of all transactions and each Party shall bill the other Party no less frequently than every 3 months. Invoices shall be accompanied by necessary support documentation and will be paid within 60 days of the date prepared. In pricing a reimbursable transaction, the Parties agree to the following reciprocal fixing principles:
(1) In the case of specific acquisition by the Supplying Party from its contractors on behalf of a Receiving Party, the price shall be no less favorable than the price charged the armed forces by the contractor of the Supplying Party for identical items or services, less any amounts excluded by Article VII of this Agreement. The price charged may take into account differentials due to delivery schedules, points of delivery, and other similar considerations.
(2) In the case of transfer from the Supplying Party’s own resources, the Supplying Party shall charge the same price its charges its own forces for identical logistic support, supplies, and services, as of the date delivery or performance occurs, less amounts excluded by Article VII of this Agreement. In any case where a price has not been established or charges are not made for one’s own forces, the Parties shall agree on a price in advance, excluding charges that are precluded under these reciprocal pricing principles. However, in the case of items, the price will be no less than the Supplying Party’s acquisition cost.
b. Exchange Transaction. Exchange transactions may be by replacement-in-kind or equal-value-exchange. Both parties shall maintain records of all transactions. The Receiving Party shall pay by transferring to the Supplying Party logistic support, supplies, and services that are agreed between the Parties to be in kind or of equal monetary value to the logistic support, supplies, and services delivered or performed by the Supplying Party. If the Receiving Party does not complete the exchange within the terms of a replacement schedule agreed to or in effect at the time of the original transaction, which may not exceed one (1) year from the date of the original transaction, the transaction shall be deemed reimbursable and governed by paragraph 1a above, except that the price shall be established using actual or estimated prices in effect on the date payment would otherwise have been due.
c. Establishment of Price or Value. The following reciprocal pricing principles shall apply: The price established for inventory stock materiel will be the Supplying Party’s stock list price. The price for new procurement will be the same price paid to the contractor or vendor by the Supplying Party. The price for in-shop repair or technical assistance services rendered will be based on the Supplying Party’s standard price or, if not applicable, a price equal to only the direct costs associated with providing the services, for example, supply stock list prices and actual labor charges. The price for services rendered in a temporary duty status will be based on the individual’s actual per diem and transportation costs, plus payroll costs for civilian labor. Prices charged will exclude all taxes and duties which the Receiving Party is exempted from paying under other agreements which the Parties have concluded. Upon request, the Parties agree to provide information sufficient to verify that these reciprocal pricing principles have been followed and that prices do not include waived or excluded costs.
d. Means of Payment. The following means of payment shall be acceptable.
(1) Payment-in-cash. Payment will be made in the currency of the Supplying Party or as otherwise agreed in the order.
(2) Replacement-in-kind. When replacement-in-kind is used as the method of payment, the Receiving Party will replace or return supplies in the same condition and conforming to the same configuration as the supplies provided by the Supplying Party or, if so agreed, a later configuration within one year of receipt. The Receiving Party is responsible for negotiating return transportation and delivery to the location designated by the Supplying Party at the time of request. If the Receiving Party does not replace or return supplies within one (1) year, payment must be in cash.
(3) Equal-Value exchange. To the extent possible, when equal-value-exchange is the desired method of payment, prior to the provision of the requested support, both Parties will agree on the goods and services that will be accepted for payment and their value. If the Receiving Party does not provide the agreed goods or services to the Supplying Party within one (1) year of the original transaction, the method of payment will convert to payment in cash.
2. When a definitive price for the order is not agreed in advance, the order, pending agreement on final price, shall set forth a maximum liability for the Party ordering the logistic support, supplies, and services. The Parties shall then promptly enter into negotiation to establish the final price.
3. The POCs for payments and collections for each Party are identified in the annexes to this Agreement.
4. The cost of logistic support, supplies, and services that are available for a lower price under any other RP-US Agreement will be used under this Agreement.
VII. DOCUMENTATION FOR CUSTOMS DUTIES AND TAXES
1. The provision of any tax and customs relief agreements applicable to the acquisition of materials, services, supplies and equipment by the Receiving Party shall apply to logistic support, supplies, and services transferred under this Agreement. The Parties shall cooperate to provide proper documentation to maximize tax and customs relief. The Supplying Party shall inform the Receiving Party whether the price charged for logistic support, supplies, or services include taxes or customs duties which the Supplying Party cannot recover. The price paid by the Receiving Party shall not include taxes or customs duties that can be recovered by the Supplying Party.
2. Nothing in this Agreement shall be interpreted as a grant of exemption from customs duties and taxes, except those granted under applicable customs and tax relief agreements or applicable laws of the Respective Parties.
VIII. INTERPRETATION, AMENDMENTS, AND SECURITY OF INFORMATION
1. Any disagreements regarding the interpretation or application of this Agreement, any Implementing Arrangements, or transactions executed hereunder shall be resolved through direct consultation between the Parties or through diplomatic channels and shall not be referred to any international tribunal or third party for settlement.
2. Either Party may, at any time, request amendment of this Agreement by giving the other Party ninety (90) days advance written notice. In the event such a request is made, the two parties shall promptly enter into negotiations. This Agreement may only be amended by written agreement between the two Parties. Any such amendment shall enter into force in accordance with Article IX of this Agreement. The replacement of POCs as listed under Annexes B through M, may be done by the Parties without formal amendment of this Agreement.
3. It is the intent of the Parties that activities under this Agreement and any Implementing Arrangements be carried out at the unclassified level. Unless specifically authorized by separate agreement or arrangement, no classified information shall be provided or generated under this Agreement or any Implementing Arrangements.
IX. EFFECTIVE DATE AND TERMINATION
1. This Agreement, of which Annexes A-N form an integral part, shall be applied provisionally upon signature and shall enter into force on the date of the later written notification by the Government of the Parties through diplomatic channels indicating completion of their respective internal requirements for its entry into force.
2. This Agreement shall remain in force for a period of five (5) years. It shall be subject to review by the Parties at least one (1) year before termination, to consider the possibility of extending it under mutually acceptable terms.
3. Notwithstanding this, the Parties may, at any time, terminate this Agreement by means of a written notice to the other Party, through diplomatic channels. Termination shall take effect three (3) months following the date of notification.
4. Notwithstanding termination of this Agreement, all reimbursement obligations incurred pursuant to its terms shall remain binding on the responsible Party until satisfied.
IN WITNESS WHEREOF, the undersigned, being duly authorized by their respective governments, have signed this Agreement.
DONE at Camp General Emilio Aguinaldo, Quezon City, Philippines on November 21, 2002, in duplicate, in the English language, both texts being equally authentic.
FOR THE DEPARTMENT OF DEFENSE OF THE UNITED STATES OF AMERICA
MATHIAS R. VELASCO
Colonel, US Army
CDRPACOM Representative, Philippines
FOR THE DEPARTMENT OF NATIONAL DEFENSE OF THE REPUBLIC OF THE PHILIPPINES
Chief of Staff, AFP
ERNESTO H. DE LEON
Commodore, Armed Forces of the Philippines
Deputy Chief of Staff for Plans, J5
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