‘Nepal will not be part of any US military alliance by being party to MCC Compact’

KATHMANDU: While Nepal is set to ratify the United States grant Millennium Challenge Corporation (MCC) from parliament, an 11-point ‘interpretative declaration’ would be attached to the agreement that clarifies Nepal’s position on specific clauses where applicable.

The four ruling parties on Sunday morning agreed to ratify the MCC with what they said “interpretative declaration”.

This was realized after the ruling Maoist Center and the CPN-Unified Socialist became flexible to ratify MCC to avert a situation wherein the ruling alliance would collapse due to MCC.

Second-tier leaders of the ruling alliance prepared the draft of the interpretative declaration that was approved by top leaders at the meeting of the coalition held on Sunday.

Discussions on MCC are underway in the parliament Sunday afternoon. Following the end of discussions, the Council of Ministers is to approve the ‘interpretative declaration’ and take it to the Parliament for final ratification.

The 11 points in the ‘interpretative declaration’ are as follows:

1. With reference to the Compact, Nepal declares that by being a Party to the Compact, Nepal shall not be bound by any of the United States’ strategic, military, or security alliance, including the Indo-Pacific Strategy.
2. With reference to Section 2.7, Section 5.2(b)(iii), Section 5.2 (b)(iv) of the Compact, Nepal understands that these sections are intended to apply only for the use of the MCC Funding and that the provisions do not and shall not obligate Nepal to comply with current or future United States’ laws or policies for any purpose other than the use of the MCC Funding.
3. With reference to Section 3.2 (b) of the Compact, Nepal declares that the conduct of activities of the Millennium Challenge Account Nepal Development Board (the “MCA Nepal”) will be regulated by the laws of Nepal and the Compact.
4. With reference to Section 3.2 (1) of the Compact, Nepal declares that MCC shall not have ownership over the Intellectual Property and that Nepal shall own and can fully enjoy all the Intellectual Property created under the Compact program.
5. With reference to Section 3.5 of the Compact, Nepal declares that Implementation Letters shall be implemented within the scope of the Compact.
6. With reference to Section 3.8 (a) of the Compact, Nepal declares that the audits of all activities and funds of MCA-Nepal shall also be conducted by the Office of the Auditor-General in accordance with the prevailing laws of Nepal.
7. With reference to Section 5.1 (a) of the Compact, Nepal declares that Nepal has the right to terminate the Compact or MCC Funding by giving thirty (30) days’ prior written notice if the Compact or the activities/program under the Compact violate Nepal’s laws or policies.
8. With reference to Section 5.5 of the Compact, Nepal declares that provisions under the Compact which survive after the expiration, suspension or termination Compact will be relevant illustratively to the use of MCC Funding which remains outstanding including for evaluation of the projects under the Compact, audits and settlement of taxes.
9. With reference to Section 7.1 of the Compact, Nepal declares that the Constitution of Nepal shall prevail over the Compact and further declares that the Compact and the programs/projects under the Compact shall be implemented by complying with the laws of Nepal and in accordance with the Compact.
10. With reference to Section 8.1 of the Compact, Nepal declares that the Electricity Transmission Project including all movable and immovable assets including lands associated with the Project shall be owned by Government of Nepal or entities of the Government of Nepal.
11. With reference to the letter received by Nepal from the Millennium Challenge Corporation on 8 September 2022, Nepal understands the responses in that said letter of Millennium Challenge Corporation shall aid in the interpretation and implementation of the Compact.