The listing of a sector or matter in the Annex does not nec- essarily signify that domestic laws have entirely reserved it for na- tionals. And, pursuant to Article II(2), any additional restrictions or limitations that a Party may adopt with respect to listed sectors or matters may not compel the divestiture of existing covered in- vestments. Finally, listing a sector or matter in the Annex exempts a Party only from the obligation to accord national or MFN treatment. Both Parties are obligated to accord to covered investments in all sec- tors—even those listed in the Annex—all other rights conferred by the Treaty. Protocol Paragraph 1 of the Protocol clarifies that Honduras may restrict transfers under Article V(4)(a) through the application of portions of its labor laws designed to protect the rights of creditors so long as those laws are applied in an equitable, non-discriminatory, and good faith manner. In paragraph 2, Honduras clarified that, notwithstanding its ex- ception to its national treatment obligation with respect to ‘‘prop- erties on cays, reefs, rocks, shoals or sandbanks or on islands or on any property located within 40 km of the coastline or land bor- ders of Honduras,’’ in considering applications by U.S. nationals or companies to possess or acquire real property within urban zones of these areas, Honduras will not reject or unduly delay such deci- sions on the basis of nationality. As described under Article XIV, paragraph 3 states that, with re- spect to Article XIV, ‘‘obligations with respect to the maintenance or restoration of international peace or security’’ means obligations under the Charter of the United Nations. Paragraph 4 clarifies that nothing in Article XIV(1) authorizes ei- ther Party to take measures in the territory of the other Party with respect to the maintenance or restoration of international peace or security, or the protection of its own essential security interests. The other U.S. Government agencies that participated in negoti- ating the Treaty join me in recommending that it be transmitted to the Senate at an early date. Respectfully submitted. M ADELEINE A LBRIGHT .
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