Mark, following on from my note a few minutes ago I refer to point 2(b) in 
Janine's note below. Edmund.

---------------------- Forwarded by Edmund Cooper/LON/ECT on 07/14/99 03:56 
PM ---------------------------


Janine Juggins
07/13/99 07:53 PM
To: David Port/LON/ECT@ECT
cc: Edmund Cooper/LON/ECT@ECT, Stephen H Douglas/HOU/ECT@ECT, Louise 
Kitchen/LON/ECT@ECT 
Subject: Business process language

1. On line payee tax representation issues

The final generic payee tax representation language is being sent through by 
Slaughter & May (tonight) and will be incorporated into the Generic Financial 
GTC. 

As we discussed earlier the approach taken will require two additional fields 
in our Financial Confirmations. Since we are continuing to prepare these 
written Financial confirmations the normal back office procedures will apply 
to their issuance, and thus this requirement should not have any direct 
impact on the on line systems. It does however introduce a requirement to 
make a change to the confirmation templates which needs to be in place ready 
for the first on line transactions in September. I believe there are 
different templates in use for the different Financial businesses.

I suggest that the two new fields required in the Financial Confirmations are 
included under the section outlining the general terms of the swap.These will 
take the form of:

Counterparty Payor Jurisdiction: <<Insert country of incorporation of the 
Counterparty>>

Counterparty Payee Jurisdiction(s): 1. <<Insert country in which the trading 
office through which the Counterparty transacts is located>>
          2. <<If different to 1, insert country in which the office through 
which the Counterparty will make payment is located>>

Once new customers are established (and also for existing customer base - 
would this be a good way of approaching dealing with the existing customer 
base with the aim of eliminating Annex A which are different only because of 
the tax reps ?) perhaps a good way of maintaining this data would be to set 
it up on a spreadsheet [or the counterparty database ?] [direct link from the 
New Customer Registration Form]. Thus the decision on which countries to 
insert would only need to be made once on setting up a new counterparty. For 
example the spreadsheet could look like this:

Counterparty Description   Counterparty Payor Jurisdiction  Counterparty 
Payee Jurisdiction 1     Counterparty Payee Juris 2

Morgan Stanley Singapore Pte Ltd  Singapore    Singapore   
Morgan Stanley London branch   US     UK
Morgan Stanley Paris branch   US     France

There will also need to be a clear statement on the Financial Confirmation 
that it is the Counterparty's responsibility to notify Enron where the 
Counterparty Payor or Payee Jurisdiction information is incorrect. This is 
particularly important for the tax representations as Enron is using its 
judgement to identify the relevant countries but this may not always be 
correct (sometimes the place of management of the business is the relevant 
factor and Enron is not in a position to know this). This actually is no 
different to the situation we have today when it is Enron which determines 
which variety of the Annex A gets sent out.

2. New Customer Registration Form

a) Please add an additional question under Legal Information required:

Country from which payment is to be made if different:    
_____________________

b) The following has not yet been agreed by Steve Douglas but I wanted to 
raise the subject to get comments on the issue of European counterparties 
trading financials directly with US Enron entities.

Statement to be added under the heading of Tax Information Required (US new 
customer registration form only):

 Please submit to [ECTRC] IRS Form W9 and IRS Form 1001, or IRS Form W8 and 
IRS Form 4224 (as applicable), indicating the authority under which payments 
to be made to you are not subject to US Federal Income Tax withholding.

Since this statement is not required for ECTRI European counterparties this 
leads to a New Counterparty Registration Form for US counterparties and a 
separate New Counterparty Registration Form for European counterparties - is 
this an issue ? 

Also is it the intention to give to European counterparties the ability to 
trade financial products which would be contracted for by US Enron entities 
eg Pulp Financials and Plastics etc - in this case, it would make commercial 
sense to send the European counterparty the correct IRS Forms in order to 
eliminate this as an obstacle to the registration process [I have also asked 
Edmund to confirm whether we would want to avoid European counterparties 
contracting financials directly with US Enron entities for European financial 
regulatory reasons].

3. Business Process

You asked for some language to include in the Business Process to describe 
this procedure. Here's my suggestion:

" Tax Representations 
The responses to the 3 Legal Information Requirements set out on the New 
Customer Registration Form [will link directly to the Counterparty Payor 
Jurisdiction and the Counterparty Payee Jurisdiction fields on the relevant 
Financial confirmation] or [should be entered into the counterparty database] 
or [should be entered into the spreadsheet for maintaing tax representation 
data]. The response to question 1 is the Counterparty Payor Jurisdiction, the 
responses to questions 2 and 3 (if any) are the Counterparty Payee 
Jurisdiction(s).

Tax Department should review the New Customer Registration forms periodically 
[frequency ? daily ? weekly ? currently we do this every time a new 
counterparty is set up, but we do not want to introduce unnecessary delays to 
the registration process when there is a window of time to make an adjustment 
to the database/other medium feeding into the confirms before the first trade 
has been done] to identify obvious inconsistencies in the responses [the onus 
is on the customer to identify errors, but we should probably act in good 
faith in assisting to identify obvious errors]."

Sorry this is so long

Regards
Janine