The United States-based Millennium Challenge Corporation (MCC) sent its responses to the questions of the Nepal government clarifying that Nepal’s constitution prevailed over the MCC agreement.

The US Embassy in Kathmandu made available the contents of the US responses sent to Minister of Finance Janardan Sharma. The embassy has also sent a copy of the response letter to Prime Minister Sher Bahadur Deuba.

Vice-president of Department of Compact Operations, Fatema Z Sumar, wrote to Sharma saying the MCC remained committed to having an open and transparent dialogue with the people of Nepal and saw this exchange as a positive step towards ratification of the MCC Nepal Compact.

She said the MCC Nepal compact was a continuation of US-Nepal mutual friendship and emphasised the government of Nepal’s commitment to democratic principles and building a better future for all Nepalis. “Grants, assistance, gifts, etc. do not generally come with conditions between the donor and recipient countries”, she stated.

The US side responded to each question of the Nepal government stating there was no connection between Nepal MCC compact and military alliance or defence strategy. Nepal was selected for the project on the basis of its scorecard that focused on just and democratic governance, investing in people and economic freedom.

Stating that all the projects were selected by Nepal, the US said the constitution of Nepal wins over the MCC agreement.

However, they responded that the agreement could not be amended at this time.

The status of international agreement means implementation of the agreement will proceed in accordance with the laws of Nepal, except in the rare instance where local law conflicts with a specific provision of the compact.

In such a case, compact provisions will be implemented according to mutually agreed terms and the constitution of Nepal. Nepal’s Ministry of Law, Justice and Parliamentary Affairs concluded that the agreement should be ratified by the Parliament.

The US side clarified that MCC Nepal compact did not affect or limit Nepal’s sovereign right to sign assistance or investment agreements with any other country. Both US and Nepal have the ability to terminate the agreement with 30 days’ notice.

The US stated that immunity for MCC employees was the standard in a diplomatic relationship and that immunity from court jurisdictions applies only to claims and losses arising out of activities or omission under the compact.