The Japanese tax authorities determined, however, that the exemption clause
did not apply to the subsidiaries because they had moved their factories to China's Guangdong Province, just outside the territory, in the 1980s, they said.
And it objected to how France chose to apply the Directive's "exemption clause
", which enables liability to be waived on grounds of "development risks".
The text takes up the wording of the current Treaty on links between the EU and NATO, though it initiates a solidarity and mutual defence clause on the basis of Article 5 of the Atlantic Alliance Treaty, which would thus be "communitised" to some extent with an inclusive exemption clause
for neutral or non-NATO countries.
And, unlike the United Kingdom and Denmark, Sweden does not have an exemption clause
enabling it to stay out of the Single Currency while meeting the convergence criteria.
The UK, which is not part of ERM II and has an exemption clause
, does not share this interpretation.- long-term interest rates: long-term interest rate cannot exceed by more than two per cent the average rate of the three Member States with the best performance in terms of price stability.The UK and Denmark are the only two Member States which have an exemption clause
allowing them to opt-out of membership of the Single Currency even if they meet the criteria.
An accession clause for the Community would not activate Community jurisdiction, as many Member States fear, but it "assumes it".Exemption clause.An exemption clause
would provide legal security and would prove more effective than identification, for each aspect of the Convention, of possible contradictions with Community law, the Commission believes.
With regard to the main area of contention, the issue of taxing MEPs' income, the United Kingdom, Denmark, Sweden and Finland still demand the right to benefit from an exemption clause
for their own European MEPs if a Community-wide taxation system is introduced.
Several countries are now taking the cue from the United Kingdom by seeking an exemption clause
as regards the tax system for their MEPs (examples, are Denmark, Sweden and Finland).
Denmark and the United Kingdom are the only two Member States to have an exemption clause
enabling them to opt out of the single currency even if they meet all the convergence criteria.
Like the United Kingdom, Denmark has an exemption clause
giving it the option of not joining the single currency even if it meets all the criteria.
The United Kingdom, which does not participate in the second EMS and which benefits from an exemption clause
, does not share this interpretation of how exchange rate stability is judged.- the long- and medium-term interest rates shall not exceed by more than 2% those of the three best performing Member States in terms of price stability.--Sweden.In the 1998 convergence report the Commission assessment was that Sweden already fulfilled three of the convergence criteria (on price stability, the Government budgetary position and the convergence of interest rates) but that it did not fulfil the exchange rate criterion..
That was the exemption clause
that created a world of possibilities for dubiety in the execution of the contract.