CHAPTER I

CONCEPT OF TREATY

A. IMPORTANCE OF TREATIES

Treaties are important in international relations because they are

one of the primary sources of international law. There are three
formal sources of obligations under international law: treaties (also
known as international conventions or agreements), custom, and
general principles of law. A treaty is an agreement, usually written,
between states. A custom is a rule created by the practice of states
coupled with a belief that the rule is obligatory among states. A
general principle of law is a rule found in most domestic legal
systems of the world.

While all of these sources are important, much of international law

is now codified in treaties. It can be argued that most inter-state
interactions are now governed more by treaties than by custom or
general principles of law.

A treaty is preferred as a source of law due to its benefits. Unlike

custom, treaties can provide for specific rules and standards. As
international relations become more complex, more specific and
detailed rules become necessary. A treaty is also the way states
intentionally create law which binds them. It is a product of a
deliberate effort and the process is controlled by states. The law on
treaties is also clearer compared to the rules governing custom when
it comes to interpreting rules, determining breaches, and amending
the rules.

1
2 TREATRTREATIES: GUIDANCE ON PRACTICES AND PROCEDURES

A treaty is a contract between states when they become parties to

it. Once a state becomes a party, under the principle of pacta sunt
servanda,1 it is bound to comply with its treaty obligations in good
faith. Even if governments and administrations change, the state
itself remains bound by all its treaty obligations. Thus, it is
important that government officials tasked with treaty-making are
aware of all the important rules.

B. DEFINITION AND COVERAGE OF TREATIES

The term “treaty” is defined in the Vienna Convention on the Law

of Treaties2 (VCLT) as “an international agreement concluded
between States in written form and governed by international law,
whether embodied in a single instrument or in two or more related
instruments and whatever its particular designation.”3

Under this definition, a treaty has the following elements:

1. An agreement concluded between states

To be a treaty, an agreement has to have an international or inter-

state character. A treaty is between states, governments, or their
agencies or instrumentalities acting on behalf of states.

While a treaty may be concluded by heads of states or governments,

their ministries, or other state agencies on behalf of states, a treaty
is not a contract between such representatives alone. The represent-
atives act on behalf of states. That is why it is important that such
representatives be properly authorized by the states.

1
Latin for “agreements must be kept”. Article 26 of the Vienna Convention on
the Law of Treaties (VCLT) which is titled “Pacta sunt servanda” provides:
“Every treaty in force is binding upon the parties to it and must be performed by
them in good faith.”
2
Adopted on 22 May 1969 and entered into force on 27 January 1980.
3
VCLT, Art. 2(1)(a).
CONCEPT OF TREATY 3

An agreement or contract between international or multinational

companies, or between a state and such company, is not a treaty.
An agreement between a state-owned corporation and another
state, or a cooperation agreement between a city government and a
foreign counterpart, is also not a treaty. This is true even when such
an agreement provides that it shall be interpreted in whole or in part
by reference to rules of international law.

While the VCLT limits treaties as between states, states may also
enter into treaties with international organizations; but such treaties
are governed by another set of rules, the Vienna Convention on the
Law of Treaties between States and International Organizations or
between International Organizations.

2. In written form

This does not mean that treaties may not be made orally. This only
means that treaties must be in written form in order to be governed
by the VCLT. International law recognizes oral treaties, and the
VCLT states that the fact that it does not govern treaties not in
written form does not affect the legal force of such agreements.4

The treaty need not be embodied in a single instrument but can be

in two or more related instruments, notably an exchange of
diplomatic notes.

3. Governed by international law

This refers to the element of intent to create obligations under

international law. If there is no such intention, the instrument is not
a treaty.

If an agreement is governed by domestic law or any law other than

international law, then it is not a treaty.

4
VCLT, Art. 3.
4 TREATRTREATIES: GUIDANCE ON PRACTICES AND PROCEDURES

The sources of international law are generally considered to consist

of the following:5

a. International conventions or treaties;

b. Customary international law; and
c. General principles of law of civilized nations.

If an instrument between states is governed by any law apart from

these sources, then it is not a treaty.

As noted earlier, in international law, treaties are governed by the

VCLT. In national or domestic law, treaties are governed by the
Philippine Constitution.

Under Philippine law, what is considered a treaty in the context of

international law is one generically called “international
agreement.” The latter is defined as a contract or understanding,
regardless of nomenclature, entered into between the Philippines
and another government in written form and governed by
international law, whether embodied in a single instrument or in
two or more related instruments.6

A treaty in the context of Philippine law is narrowly defined as an

international agreement entered into by the Philippines which
require legislative concurrence after executive ratification. This
term may include compacts like conventions, declarations,
covenants, and acts.7 Thus, treaties are only one type of international
agreements under Philippine law. As discussed further below, there
are other types of international agreements recognized under
Philippine law.

5
Article 38, Statute of the International Court of Justice.
6
Exec. Order No. 459, s.1997, § 2(b).
7
Id.
CONCEPT OF TREATY 5

C. NATURE OF TREATIES UNDER INTERNATIONAL LAW AND

INTERNATIONAL AGREEMENTS UNDER PHILIPPINE LAW

As international law and Philippine law are two distinct legal

systems, the nature of treaties and international agreements must
be understood in the context of both systems. In particular,
terminologies must be clarified.

1. Treaty/Memorandum of Agreement vs. Memorandum of

Understanding

Under both international law and Philippine practice, a distinction

is made between a treaty or the less formal Memorandum of
Agreement (MOA), on the one hand, and a Memorandum of
Understanding (MOU), on the other hand, on the basis of whether
or not the contracting states intended the instrument to be legally
binding.8

A treaty or MOA is legally binding, which means that a party to the

agreement may compel the other party to comply with its terms in
case of a breach, including a possible recourse to a third-party
compliance mechanism.9 An MOU, on the other hand, is not
legally binding, and the parties intend to carry out its terms on a
“best-effort basis.”10

Aside from binding effect, there is also a difference as to specificity.

A treaty/MOA often describes the specific responsibilities of, and

8
It must be noted however that whether or not an instrument is an MOA or MOU
is determined by its content and not by its title.
9
J. Eduardo Malaya & Maria Antonina Mendoza-Oblena, Philippine Treaty and
Practice, 85 Phil. L.J. 505, 510 (2011).
10
Id.
6 TREATRTREATIES: GUIDANCE ON PRACTICES AND PROCEDURES

actions to be taken by, each of the parties toward the accomplish-

ment of their goals,11 while an MOU largely contains general
principles of cooperation, and describes broad concepts of mutual
understanding, goals, and plans shared by the parties. Thus, “the
objective of the participants to a MOU is to record their mutual
understanding as to how they will conduct themselves, rather than
to create international legal rights and obligations.”12

Furthermore, states have evolved different sets of terminologies for

treaty/MOA and MOU,13 notably the use of the word “agree” in
treaty/MOA and “decide, accept or approve” in MOU. “Parties”
and “Article” in treaty/MOA are referred to as “Participants” and
“Paragraphs” in MOUs.14

Nonetheless, there can be legally enforceable provisions in an MOU

such as confidentiality clause, protection of intellectual property
clause, and final clauses (entry into force, amendment, etc.).

Though non-legally binding, the MOU format can be useful for

reasons of confidentiality and the ease and convenience in
concluding them. It is also often used for agreements dealing with
sensitive matters (e.g., defense and national security) and delicate
commercial information (such as those accompanying air services
agreements).15

Nonetheless, both treaty/MOA and MOU must be complied with

in good faith.

11
Id. citing OTLA Memorandum dated December 17, 2007 - Treaty MOA and
MOU Terminologies.
12
Id.
13
ANTHONY AUST, MODERN TREATY LAW AND PRACTICE, pp. 31-32
14
See Annex F - DFA Office of Treaties and Legal Affairs Office Memorandum
dated December 17, 2007 for Listing of the Terminologies used in
Treaties/MOAs and MOUs).
15
Malaya and Mendoza-Oblena, supra note 9.
CONCEPT OF TREATY 7

In addition to MOA, a treaty is at times titled a Convention or

simply an agreement. On the other hand, an MOU can be in the
form of a Letter of Intent, Memorandum of Cooperation,
Implementing Arrangements and Administrative Arrangements,
and those characterized as political documents, notably
Declaration, Joint Communique and Joint Statement.

Furthermore, an agreement titled as an MOU can be a treaty. In

one case,16 the International Court of Justice (ICJ) concluded that
a “MOU is a valid treaty that entered into force upon signature and
is binding on the Parties under international law.” In this case, the
Kenyan Minister for Foreign Affairs and the Somali Minister for
National Planning and International Cooperation signed an MOU
between their two governments. However, it can be said that in this
case, the ICJ considered the MOU as a treaty because it had the
elements of a treaty. Further, the inclusion of a provision addressing
the entry into force of the MOU indicates the intent to be legally
bound by its terms. One of the parties also registered it as a treaty
with the United Nations. Thus, an instrument should not be swiftly
dismissed as not being a treaty simply because it is called an MOU.

2. Exchange of Notes

The VCLT provides that a treaty may be “embodied in a single

instrument or in two or more related instruments.”17 An exchange
of diplomatic notes is a treaty embodied in two related instruments.

The VCLT further provides18 that the consent of States to be bound

by a treaty constituted by instruments exchanged between them is
expressed by that exchange when:

16
Maritime Delimitation in the Indian Ocean (Somalia v. Kenya), Preliminary
Objections, Judgment, ICJ. Reports (2017), p. 3.
17
VCLT, Art. 2 (1) (a). 18.
18
VCLT, Art. 13.
8 TREATRTREATIES: GUIDANCE ON PRACTICES AND PROCEDURES

• the instruments provide that their exchange shall have

that effect; or
• it is otherwise established that those States were agreed
that the exchange of instruments should have that effect.

Based on international law and Philippine practice, in an exchange

of notes, a country transmits to another country an initiating Note
that contains the elements of a proposed agreement. If the proposed
terms are acceptable, the recipient country may transmit a reply
Note conveying its consent to be bound by those terms. The
agreement takes effect on the date of the reply Note.19

The Philippine Supreme Court described an exchange of notes in

the following manner:

An “exchange of notes” is a record of a routine

agreement that has many similarities with the private
law contract. The agreement consists of the exchange
of two documents, each of the parties being in the
possession of the one signed by the representative of the
other. Under the usual procedure, the accepting State
repeats the text of the offering State to record its assent.
The signatories of the letters may be government
Ministers, diplomats or departmental heads.20

An agreement constituted by an exchange of notes may or may not

be legally binding depending upon the intent of the parties.

In one case,21 the ICJ ruled that a so-called exchange of notes was
not a treaty because it did not follow the practice usually observed
when an international agreement is concluded through an exchange

19
Malaya and Mendoza-Oblena, supra note 9 at 511.
20
Abaya v. Ebdane, Jr., G.R. No. 167919 (February 14, 2007), 544 PHIL 645-693.
21
Obligation to Negotiate Access to the Pacific Ocean (Bolivia vs. Chile),
Judgement of October 1, 2018.
CONCEPT OF TREATY 9

of related instruments. It explained that according to that practice,

a state proposes in a note to another state that an agreement be
concluded following a certain text, and the latter state answers with
a note that reproduces an identical text and indicates its acceptance
of that text. Further, it did not meet the condition that the
instruments should provide that their exchange shall have a legally
binding effect.

If the notes are to be legally binding, the initiating Note will have
the following lines, in addition to the use of treaty/MOA
terminologies in its body:

I have the honor to propose the following: xxx

If the foregoing proposals are acceptable to the

Government of xxx, I have the honor to propose that
this Note and your reply in that sense shall constitute
an Agreement between our two Governments, which
shall enter into force on the date of your Excellency’s
reply.22

On the other hand, a non-legally binding exchange of notes will

have the following formulation:

As a result of these discussions, it is the understanding

of the Government of xxx that the following
arrangements will apply:

If the foregoing proposals are acceptable to

the Government of xxx, I have the honor to
propose that this Note and your reply in
that sense shall constitute an Agreement
between our two Governments, which

22
Malaya and Mendoza-Oblena, supra note 9, at 512.
10 TREATRTREATIES: GUIDANCE ON PRACTICES AND PROCEDURES

comes into effect on the date of your

Excellency’s reply.23

D. NATURE OF INTERNATIONAL AGREEMENTS UNDER

PHILIPPINE LAW

For purposes of determining the domestic requirements for the

entry into force of international agreements, Philippine law makes
a distinction between treaties and executive agreements.

1. Treaty vs. Executive Agreement

A treaty, according to Philippine law, is an international agreement

entered into by the Philippines which requires legislative
concurrence after executive ratification.24 This term may include
compacts, conventions, covenants, and acts. On the other hand, an
executive agreement is similar to treaties except that they do not
require legislative concurrence to enter into force.25

The Philippine Supreme Court, in the Commissioner of Customs v.

Eastern Sea Trading case, has distinguished an executive agreement
from a treaty in this manner:

International agreements involving political issues or

changes of national policy and those involving
international arrangements of a permanent character
usually take the form of treaties. But international
agreements embodying adjustments of detail carrying out
well-established national policies and traditions and
those involving arrangements of a more or less

23
Id.
24
Exec. Order No. 459, s. 1997, supra note 6.
25
Exec. Order No. 459, s.1997, § 2(c).
CONCEPT OF TREATY 11

temporary nature usually take the form of executive

agreements.26

Thus, an international agreement which would conflict with

existing law and would require an amendment of said law should
be in the form of a treaty, which requires Senate concurrence. Those
that are not in conformity with established constitutional or
national policy (e.g., policy of freedom from nuclear weapons,
archipelagic doctrine) also require concurrence. An agreement that
would need the enactment of a law for its implementation will
require concurrence. An agreement with provisions that criminalize
certain conduct will also require Senate concurrence.

It may be noted that the Senate’s concurrence makes the treaty

“legally effective and binding by transformation. It then has the
force and effect of a statute enacted by Congress.”27 Further,
following ratification by the Senate, no further action, legislative or
otherwise, is necessary. Thereafter, the whole of government –
including the judiciary – is duty-bound to abide by the treaty,
consistent with the maxim pacta sunt servanda.

On the other hand, agreements “embodying adjustments of detail

carrying out well established national policies and traditions and
those involving arrangements of a more or less temporary nature”
have been entered into as executive agreements.

The above distinction will have implications on the domestic

requirements for entry into force. This subject will be further
discussed in Chapters II and III.

26
Commissioner of Customs v. Eastern Sea Trading, G.R. No. L-14279, October 31,
1961.
27
David v. Senate Electoral Tribunal, G.R. No. 221538, September 20, 2016. See
MERLIN MAGALLONA, FUNDAMENTALS OF PUBLIC INTERNATIONAL
LAW, p. 543.
12 TREATRTREATIES: GUIDANCE ON PRACTICES AND PROCEDURES

The above distinction has been observed by the Executive Branch

through the years, and the practice became codified in Executive
Order No. 459, series of 1997.28

Under Executive Order No. 459, the Department of Foreign Affairs

(DFA) shall determine whether an agreement is an executive
agreement or a treaty.29

Following the decisions of the Supreme Court, notably the

Commissioner of Customs ruling, the following agreements, among
others, were classified as treaties and required Senate concurrence,
with the year of entry into force (for the Philippines if multilateral)
indicated:30

• Convention on the Immunities and Privileges of the

United Nations, 1948;
• Convention on the Privileges and Immunities of the
Specialized Agencies of the United Nations, 1950;
• Mutual Defense Treaty with the U.S., 1952;
• U.N. Convention on the Law of the Sea, 1994;
• World Trade Organization, 1995;
• PH-U.S. Agreement regarding the Treatment of United
States Forces Visiting the Philippines, 1998;
• PH-Australia Agreement concerning the Status of Visiting
Forces of Each State in the Territory of the Other State,
2012;
• PH-Japan Economic Partnership Agreement, 2008;
• PH-EU Partnership and Cooperation Agreement, 2018;

28
Malaya and Mendoza-Oblena, supra note 9 at 512.
29
Exec. Order No. 459, s.1997, § 9; see also Miriam Defensor-Santiago, Procedure
for Senate Concurrence to Treaties 2 (2007) and Office of the President
Memorandum Circular No. 89 dated December 19, 1988 providing for the
Procedure for the Determination of International Agreements as Executive
Agreements.
30
DFA Office of Treaties and Legal Affairs Office Order No. 01-2007 dated May
22, 2007.
CONCEPT OF TREATY 13

• Rome Statute of the International Criminal Court, 2011

(withdrew from in 2019);
• Paris Agreement on Climate Change, 2017;
• Various agreements on the avoidance of double taxation;
• Various treaties on extradition;
• Various agreements on the transfer of sentenced persons;
and
• Maritime delimitation agreement with Indonesia, 2019.

On the other hand, the following categories of agreements have

been classified as executive agreements and would merely require
presidential ratification:31

• cultural agreement;
• air services agreement;
• scientific and technological cooperation agreement;
• labor promotion and protection agreement;
• economic cooperation agreement;
• trade cooperation/facilitation agreements, such as those
among ASEAN countries;
• investment promotion and protection agreement;
• tourism cooperation agreement;
• maritime agreement;
• agreement on gainful employment of spouses of members
of diplomatic and consular missions;
• waiver of visa requirement agreement;
• environment cooperation agreements;
• defense cooperation agreement;
• mutual logistics support agreement;
• nuclear energy agreements, nuclear safety agreement;
• international claims; and
• cooperation on postal matters.

31
Malaya and Mendoza-Oblena, supra note 9 at 514.
14 TREATRTREATIES: GUIDANCE ON PRACTICES AND PROCEDURES

Nonetheless, an executive agreement is a “treaty” under inter-

national law. International law does not make a distinction as to
the manner by which an agreement may have been approved or
confirmed domestically. While domestic law may call an
instrument an executive agreement, it is still a treaty under the
VCLT if it complies with the elements provided under Art. 2(1)(a)
thereof.

A summary of Philippine jurisprudence on treaties and executive

agreements is found in Annex K.

E. AGREEMENTS UNDER DOMESTIC LAW

There are four broad categories of agreements entered into by the

Philippines and other states which are governed by domestic law,
namely: foreign loans, grants, donations, and commercial contracts.

1. Foreign Loan Agreements

The President is authorized by the Constitution to contract or

guarantee foreign loans, with the prior concurrence of the Monetary
Board.32

32
CONST. Art. VII, § 20.
CONCEPT OF TREATY 15

Foreign loans are generally entered into by the Department of

Finance (DOF). Other departments may conclude them only with
the endorsement from the DOF, pursuant to Office of the President
Memorandum Circular No. 16.33 As the Constitution prescribes a
distinct negotiation and approval process, foreign loan agreements
do not undergo the usual treaty ratification procedure.

If concluded with a lender state, the contractual arrangements of

loan often provide that these shall be governed by the law of the
lender state.

2. Grant/Official Development Assistance

The Official Development Assistance Act of 199634 governs the

procedure for the conclusion of foreign grants and official
development assistance (ODA). An ODA is a loan or combined
loan and grant which meets all of the following criteria:35

a) It must be administered with the objective of promoting

sustainable social and economic development and
welfare of the Philippines;
b) It must be contracted with governments of foreign
countries with whom the Philippines has diplomatic,
trade relations or bilateral agreements or which are
members of the United Nations, their agencies and
international or multilateral lending institutions;
c) There are no available comparable financial instruments
in the capital market; and

33
Office of the President Memorandum Circular No. 16 dated April 11, 2017 on
the Request for Authorization to Negotiate and Sign International Agreements
and Agreements Covering Borrowings, Guarantees, and Foreign Grants.
34
Republic Act. No. 8182 (Official Development Assistance Act of 1996) .
35
Republic Act. No. 8182, § 2; Bangko Sentral ng Pilipinas, Foreign Exchange
Regulations, June, 2017.
16 TREATRTREATIES: GUIDANCE ON PRACTICES AND PROCEDURES

d) It must contain a grant element of at least twenty -five

percent (25%). Grant element means the reduction
enjoyed by the borrower whenever the debt service
payments which shall include both principal and interest
and expressed at their present values discounted at ten
percent (10%) are less than the face value of the loan or
combined loan and grant. The grant element of a loan or
combined loan and grant is computed at the ratio of (i)
the difference between the face value of the loan or loan
and grant and the debt service payments to (ii) the face
value of the loan or loan and grant.

The General Appropriations Act, in its general provisions, states

that:

“Departments, bureaus, and offices of the National

Government ... may accept donations, grants, bequests or gifts,
in cash or in kind, from various sources, domestic or foreign
sources, for purposes relevant to their functions. In case of
grants, in cash or in kind, from the government of foreign
countries, their agencies or instrumentalities or multilateral
institutions or organizations, acceptance thereof shall be
subject to the prior clearance and approval by the President or
his authorized representative based on the recommendation of
the Secretary of Finance.”36

The approval process of foreign loans and grants is further discussed

in Chapter II, B.2. of this book.

3. Donations

As stated earlier, the General Appropriations Act authorizes

departments, bureaus, and offices of the National Government to
accept donations, bequests, or gifts, in cash or in kind, from various

36
2018 General Appropriations Act, § 5, General Provisions.
CONCEPT OF TREATY 17

sources, domestic or foreign, for purposes relevant to their

functions. However,

“donations, in cash or in kind, from foreign governments shall

require prior clearance and approval by the President or his
authorized representative based on the recommendation of the
Secretary of Foreign Affairs.”37

The requirement of presidential approval does not apply to

donations from multilateral agencies of which the Philippines is a
member, such as the Association of Southeast Asian Nations
(ASEAN) or the United Nations (UN).38

4. Other Commercial or Private Contracts

An agreement between the Government or any of its

subdivisions/agencies and a foreign private entity which is not a
subject of international law is generally a commercial or ordinary
contract. A state can also enter into a contract with another state
under domestic law, such as when it leases land or purchases
commodities in bulk, and even pursuant to a treaty. Agreements of
this nature are not within the realm of the VCLT39 and are not
governed by international law.40

In Gonzales v. Hechanova,41 the Supreme Court stated that the

government may not enter into contracts with Vietnam and Burma
(now Myanmar) for the purchase and importation of rice, involving
altogether 67,000 tons, as executive agreements, as these were

37
2018 General Appropriations Act, § 5, General Provisions.
38
Paragraph D (3) DFA Office of Treaties and Legal Affairs Office, Order No. 01-
2017, dated November 23, 2017.
39
AUST, supra note 13, at p. 26.
40
See China National Machinery and Equipment Corp. (Group) v. Santamaria, G.R. No.
185572, February 7, 2012.
41
G.R. No. 21897, Oct. 22, 1963.
18 TREATRTREATIES: GUIDANCE ON PRACTICES AND PROCEDURES

inconsistent with a statute which explicitly prohibits the

importation of rice and corn by any government agency. It also
noted that:

The Court is not satisfied that the status of said

contracts as alleged executive agreements has been
sufficiently established. The parties to said contracts
do not appear to have regarded the same as
executive agreements.