The Millennium Challenge Corporation (MCC) Compact has been ratified by the House along with the interpretative declaration Sunday night.
Speaker Agni Sapkota announced the MCC Compact ratified on the basis of voice vote stating that the number of lawmakers saying yes for ratification of the MCC Compact was greater than those saying no.
Finance Minister Janardan Sharma presented the MCC Compact for ratification after answering the questions raised by lawmakers about the interpretative declaration on the MCC Compact.
The interpretative declaration that the Cabinet decided to attach on the MCC Compact includes 12 points including one declaring that the Constitution of Nepal would prevail over the Compact and other associated agreements.
The Cabinet meeting held at the hall of the business advisory committee inside the Parliament House in New Baneshwore Sunday evening decided to include the interpretative declaration on the MCC Compact before presenting it to the House for decision.
The interpretative declaration also declares that Nepal would not be part of any American strategy, military or security alliance including the Indo-Pacific Strategy for being party to the Compact.
The ruling coalition earlier on Sunday decided to ratify the MCC Compact with interpretative declaration after a meeting of the ruling coalition held at Baluwatar.
The ruling coalition agreed to ratify the MCC Compact with interpretative declaration after Prime Minister (PM) Sher Bahadur Deuba threatened to break the coalition and form a new alliance with CPN-UML if the coalition partners don't agree for ratification.
The meeting of former standing committee members of CPN (Maoist Center), the party has yet to form the new standing committee after the recent general convention, held at the residence of Chairman Pushpa Kamal Dahal in Khumaltar earlier on Sunday took the decision to ratify the MCC Compact with interpretative declaration to pave the way for the coalition to ratify the MCC Compact that was tabled in the House for ratification last Sunday.
The ruling parties explored the way of addressing the questions raised about the MCC Compact through the international practice of interpretative declaration after the ruling coalition looked set to unravel due to the differences over the MCC Compact.
Top leaders of Maoist Center and CPN (Unified Socialist) had held discussion about the MCC Compact even on Saturday. The second-generation leaders of the two parties then convinced the party leadership to ratify the MCC Compact with interpretative declaration.
The proposal to ratify the MCC Compact with interpretative declaration was proposed first by Nepali Congress (NC) General Secretary Gagan Thapa some time back. Thapa had pointed that the suspicions raised about MCC would be addressed if the questions asked earlier by the Finance Ministry and the answers given to those questions by the MCC Office were also listed together.
12 points in the interpretative declaration:
- Nepal declares that being a party to the Compact, Nepal shall not be a part of any United States' strategy, military or security alliance including the Indo-Pacific Strategy.
- Nepal declares that the Constitution of Nepal, being the fundamental law of land, shall prevail over the Compact and other associated agreements.
- With reference to Section 2.7, Section 5.1 (b) (iii), Section 5,1 (b) iv) of the Compact, Nepal understands that these sections are intended to apply only for the use of the MCC Funding and Program Assets and that the provisions do not and shall not obligate Nepal to comply with the current or future United States' laws or policies for any purpose other than the use of the MCC Funding.
- With reference to Section 3.2 (b) of the Compact, Nepal declares that the conduct of activities of Millennium Challenge Account Nepal Development Board (the MCA-Nepal) shall be governed by the laws of Nepal and regulated by the provisions of the Compact.
- With reference to Section 3.2 (f) of the Compact, Nepal declares that MCC shall not have ownership over the Intellectual Property and that Nepal shall own and fully enjoy all the Intellectual Property created under the Compact program.
- With reference to Section 3.5 of the Compact, Nepal declares that Implementation Letters under the Compact shall be implemented within the scope of the Compact.
- With reference to Section 3.8 (a) of the Compact, Nepal declares that, in addition, the audits of all the activites and funds of MCA Nepal shall be conducted by Office of the Auditor General in accordance with prevailing laws of Nepal.
- With reference to Section 5.1 (a) of the Compact, Nepal declares that in addition to Nepal's right to terminate the Compact without cause by giving thirty (30) days' prior notice, Nepal has the right to terminate the Compact by giving thirty (30) days' prior notice in case the activities/program under the Comapct violate Nepal's laws or policies.
- With reference to Section 5.5 of the Compact, Nepal declares that provisions under the Compact which survive after the expiration, suspension or termination of the Compact shall only relate to the Compact program and the use of MCC Funding including for evaluation of the projects under the Compact, audits and settlement of taxes.
- With reference to Section 7.1 of the Compact, the programs under the Compact shall be implemented by complying with the Compact and in accordance with the domestic laws of Nepal.
- With reference to Section 8.1 of the Compact, Nepal declares that the Electricity Transmission Project including all movable and immovable assets and land associated with the project shall be owned by the Government of Nepal or entities of the Government of Nepal.
- With reference to the letter dated September 8, 2021 perceived by Nepal from the Millennium Challenge Corporation, Nepal understands that the responses in the said letter shall aid in the interpretation and the implementation of the Compact.
