2002 ISDA Master Agreement
A Jolly Contrarian owner’s manual™
Payer Tax Representations in a Nutshell™
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Payer Tax Representations in all its glory
|3(e) Payer Tax Representation
. Each representation specified in the Schedule
as being made by it for the purpose of this Section 3(e)
is accurate and true.
Schedule 2(a) Payer Tax Representations. For the purpose of Section 3(e), Party A and Party B each makes the following representation:
It is not required by any applicable law, as modified by the practice of any relevant governmental revenue authority, of any Relevant Jurisdiction to make any deduction or withholding for or on account of any Tax from any payment (other than interest under Section 9(h) of this Agreement) to be made by it to the other party under this Agreement. In making this representation, it may rely on (i) the accuracy of any representations made by the other party pursuant to Section 3(f) of this Agreement, (ii) the satisfaction of the agreement contained in Section 4(a)(i) or 4(a)(iii) of this Agreement and the accuracy and effectiveness of any document provided by the other party pursuant to Section 4(a)(i) or 4(a)(iii) of this Agreement and (iii) the satisfaction of the agreement of the other party contained in Section 4(d) of this Agreement, except that it will not be a breach of this representation where reliance is placed on clause (ii) above and the other party does not deliver a form or document under Section 4(a)(iii) by reason of material prejudice to its legal or commercial position.
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No change between Section 3(e) of the 1992 ISDA and Section 3(e) of the 2002 ISDA. To be fair, what’s there to change?
Only cosmetic changes between the 1992 and the 2002 version in the schedule, as per the comparison in the panel.
You’ll find the usual form of the Payer Tax Representations in Part 2(a) of the Schedule. They aren’t usually amended.
Section 3(e) is the operational part of the ISDA that triggers this representation, which ISDA’s crack drafting squad™ included in the preprint template Schedule rather than in the preprinted ISDA Master Agreement proper, perhaps nervous that the negotiation community might want to futz around with it.
Well, in nearly thirty years, they haven’t: ones intentions about tax when one makes a payment, rather than when one receives it, is a topic that even a seasoned negotiator — one accustomed to finding controversy where others would not, after all — will struggle to get animated about.
Thus this handsome slug of text, unmolested, sits in nigh-on every ISDA Master Agreement, just one of those things that passes unremarked in the world of financial derivatives.
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