FROM THE OFFICE OF PUBLIC AFFAIRS

At our last plenary session in Berlin in late December, all parties accepted the German capped settlement offer of DM ten billion. We then turned to achieving agreement on how the funds would be allocated and administered, and other issues, so that the German Foundation could be established under German law and payments begin to flow to Holocaust victims in all countries.

There has been a great deal of activity by all parties in the last five weeks. Yesterday and today, we again met in plenary. We have achieved agreement of some of the outstanding issues and narrowed the differences on others. Key members of the German Parliament have been constructively involved throughout this process. The Parliament will have to approve detailed legislation creating the Foundation and instructing its operations, as well as appropriate the German government's share of the settlement amount.

One issue we resolved was whether the payments made to those making claims on the Foundation should be offset by payments they may already have received under prior German government compensation programs, or in the form of government benefits such as Social Security. All parties now agree there will be no offsets, except for payments victims have already received directly from the companies for which they performed slave and forced labor.

As to "Aryanization" property claims--that is the confiscation of victims' property --it was agreed to establish a separate stand-alone allocation for bank claims, within the capped amount, and to create a mechanism to adjudicate such claims.

As you know, there is general agreement on a comprehensive Foundation and once it is operating, the U.S. government intends, in all cases brought against German companies in U.S. courts arising out of the Nazi era, to file a Statement of Interest stating that the Foundation should be regarded as the exclusive remedy for such claims. One of the most difficult tasks we faced was to define the kinds of claims the Foundation would handle broadly enough to equal the scope of our government's commitment to file its statements of interest. We made significant progress toward resolving this issue and now believe the Foundation is likely to broadly cover World War II era wrongs and thus allow German companies the legal peace they seek in the United States.

Allocation of the ten billion DM is a major issue for all participants. The governments of Poland, Czechoslovakia, Ukraine, Russia and Belarus have presented a joint proposal on allocation. The German government has presented its ideas. After thorough discussion, all agreed to make further efforts to bridge the remaining differences.

The insurance issue is extremely complicated because it is being dealt with concurrently by these negotiations and those of the Internaitonal Commission on Holocaust Era Insurance Claims, headed by former Secretary of State Lawrence Eagleburger, which is in intensive and ongoing negotiating on possible agreements for claims payments and humanitarian funds.

As you know, the initial draft of the legislation proposed for submission to the Bundestag by the German cabinet contained provisions about which a number of victims' representatives, as well as my government, expressed grave concern because they did not accurately reflect the results of our prior negotiations. At our meeting yesterday, we had a very productive discussion of these concerns. I am very gratified that the German government has reaffirmed its intention to revisit these provisions in light of our discussion. I believe the German government fully recognizes the importance of submitting draft legislation that the victim groups represented here can support as faithful to our negotiations, and that it recognizes the importance of creating a structure and a process that, once passed into law, can allow the legal peace German industry seeks.

I want to thank all those who have labored in this process for so long. I also wish to thank the parliamentary representatives, representing all the German parties, who have been here following this process on behalf of their colleagues. This is a very complicated negotiation, involving many nations, claimants with diverse interests, and a complex mix of private initiative and government support. All of the participants are now deep into the details of the issues remaining. Many have submitted their positions and delegates have been comparing and contrasting points with the aim of narrowing differences. There are still outstanding issues, but if we approach them with the spirit of cooperation and sense of urgency which have been evident yesterday and today, I believe we can resolve them. We have scheduled the next plenary session for February 17-18 in Berlin. With hard work and good will on all sides, it could be the last.