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    Order

    4
    The Permanent Court of International Justice,

    Composed as above,

    After deliberation,

    Having regard to Articles 48, 54 and to 60 of the Statute of the Court,

    Whereas by a Special Agreement dated October 30th, 1924, ratified on March 21st, 1928, and duly notified to the Registrar of the Court on March 29th, 1928, the President of the French Republic and the Swiss Federal Council, "whereas France and Switzerland have been unable to agree in regard to the interpretation to be placed on Article 435, paragraph 2,

    5
    of the Treaty of Versailles, with its Annexes, and as it has proved to be impossible to effect the agreement provided for therein by direct negotiations, have decided to resort to arbitration in order to obtain this interpretation and for the settlement of all the questions involved in the execution of paragraph 2 of Article 435 of the Treaty of Versailles" ;

    Whereas, under Article 1, paragraph 1, of the aforesaid Special Agreement, "it shall rest with the Permanent Court of International Justice to decide whether, as between France and Switzerland, Article 435, paragraph 2, of the Treaty of Versailles, with its Annexes, has abrogated or has for its object the abrogation of the provisions of the Protocol of the Conference of Paris of November 3rd, 1815, of the Treaty of Paris of November 20th, 1815, of the Treaty of Turin of March 16th, 1816, and of the Manifesto of the Sardinian Court of Accounts of September 9th, 1829, regarding the customs and economic régime of the free zones of Upper Savoy and the Pays de Gex, having regard to all facts anterior to the Treaty of Versailles, such as the establishment of the Federal customs in 1849, which are considered relevant by the Court" ;

    Whereas, under paragraph 2 of the same article of the Special Agreement, "the High Contracting Parties agree that the Court, as soon as it has concluded its deliberation on this question, and before pronouncing any decision, shall accord to the two Parties a reasonable time to settle between themselves the new régime to be applied in those districts, under such conditions as they may consider expedient, as provided in Article 435, paragraph 2, of the said Treaty" ;

    Whereas, under Article 2, paragraph 1, of the Special Agreement, "failing the conclusion and ratification of a convention between the two Parties within the time specified, the Court shall, by means of a single judgment rendered in accordance with Article 58 of the Court’s Statute, pronounce its decision in regard to the question formulated in Article 1 and settle for a period to be fixed by it and having regard to present conditions, all the questions involved in the execution of paragraph 2 of Article 435 of the Treaty of Versailles" ;

    6
    Whereas, according to the terms of the notes interpreting the Special Agreement exchanged on October 30th, 1924, between the French Minister for Foreign Affairs and the Swiss Minister in France, "no objection shall be raised on either side to the communication by the Court to the Agents of the two Parties, unofficially and in each other’s presence, of any indications which may appear desirable as to the result of the deliberation upon the question formulated in Article 1... of the Arbitration Convention" ;

    Whereas, by the recitals of an Order made on August 19th, 1929, the Permanent Court of International Justice informed the Parties of the result of its deliberation upon the question formulated in Article 1, paragraph 1, of the Special Agreement and granted them a period expiring on May 1st, 1930, to settle between themselves the new régime to be applied in the districts referred to in Article 435, paragraph 2, of the Treaty of Versailles ;

    Whereas the Court, having been notified by a letter from the Swiss Federal Council, dated March 20th, 1930, that it did not seem possible to arrive at a settlement of the case within the time thus granted, and the French Government, for its part, having announced on April 29th, 1930, that it had proved impossible to conclude an agreement between the two Governments, the procedure provided for in Articles 2 and 4 of the Special Agreement has had to take its course ;

    Whereas, by an Order made on May 3rd, 1930, the President of the Permanent Court of International Justice decided to grant the Government of the French Republic and the Government of the Swiss Confederation a period of time expiring on Thursday, July 31st, 1930, for the production by the Parties of all documents, proposals and observations which they might see fit to submit to the Court for the purposes of the settlement by it of all the questions involved by the execution of paragraph 2 of Article 435 of the Treaty of Versailles, and a further period of time expiring on Tuesday, September 30th, 1930, to enable each Party to reply in writing to the documents, proposals and observations submitted by the other Party ;

    Whereas the Government of the French Republic has not filed any submissions in this phase of the proceedings ;,

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    As on the other hand, in the "Documents, Proposal and Observations submitted on behalf of the Swiss Government", the Court is asked :

    "By a single judgment rendered in conformity with Article 58 of the Court’s Statute :

    1. To pronounce its decision on the question formulated in Article 1, paragraph 1, of the Special Agreement of October 30th, 1924, and to adjudge

    (a) that, as between Switzerland and France, Article 435, paragraph 2, of the Treaty of Versailles, with its annexes, has not abrogated the provisions of the Protocol of the Conference of Paris of November 3rd, 1815, of the Treaty of Paris of November 20th, 1815, of the Treaty of Turin of March 16th, 1816, and of the Manifesto of the Sardinian Court of Accounts of September 9th, 1829, regarding the customs and economic régime of the free zones of Upper Savoy and the District of Gex ;

    (b) that furthermore, as between Switzerland and France, Article 435, paragraph 2, of the Treaty of Versailles, with its annexes, is not intended necessarily to lead to the abrogation of the aforesaid provisions, in the sense that it does not compel Switzerland to accept, as the only possible basis for the future settlement, the abolition of the free zones.

    2. To settle in accordance with the proposal submitted by the Swiss Government and having regard to the terms of the second paragraph of Article 2 of the Special Agreement of October 30th, 1924, all the questions involved by the execution of paragraph 2 of Article 435 of the Treaty of Versailles" ;

    Whereas, by a letter dated October 11th, 1930, addressed to the Registrar of the Court and duly communicated to the Agent of the French Government, the Agent of the Swiss Government has filed "alternative submissions" to the following effect :

    "May it please the Court, if the Court does not deem it possible to render de plano the judgment contemplated by Article 2 of the Special Agreement :

    I.

    To declare the French proposal incompatible with the rights of Switzerland and to disregard it ;

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    II.

    To order an expert enquiry.

    (1) To organize this enquiry on lines similar to those laid down in the Order made by the Court on September 13th, 1928, in the case of the Chorzow Factory.

    (2) To put the following question to the experts :

    ‘Taking it for granted that the French customs cordon will be placed on the line indicated in the Swiss proposal, does that proposal regulate the relations between Switzerland and the French regions concerned in a manner calculated to satisfy the legitimate interests of the inhabitants as those interests were before 1923?’"

    Whereas, at the sitting on October 23rd, 1930, after a statement by the President that, owing to the inability of three members to attend, the Court could not sit as composed in 1929 when it dealt with the first phase of the case, the Agents of the two Parties made the following declarations, which were duly placed on record :

    The Agent of the Government of the French Republic :

    "On behalf of the French Government, I declare that this Government agrees to the continuation of the proceedings in view of the fact that, according to its view, the solution of the question now to be argued is independent of the solution to be given to the question argued in the first phase of the proceedings" ;

    The Agent of the Swiss Federal Government :

    "The Swiss Government agrees to the proceedings being continued purely and simply as though the composition of the Court had not altered since the summer of 1929.

    The Swiss Government for the rest maintains the view set forth in its Observations and in its Reply, more especially as regards the interdependence existing between the first judicial phase of the case and the present phase. It holds, moreover, that the question argued in the first phase of the proceedings has been decided" ;

    Having regard to the "Observations and Proposal submitted on behalf of the French Government", the "Documents, Proposal and Observations submitted on behalf of the Swiss Government", the "Reply submitted on behalf of the Government of

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    the French Republic to the Documents, Proposal and Observations submitted on behalf of the Swiss Government" and the "Reply of the Swiss Government to the Observations, Proposal and Documents submitted on behalf of the Government of the French Republic", as also to the documents annexed to the foregoing, duly filed by the Parties on July 31st and September 30th, 1930 ;

    Having regard also to the documents filed by the Parties in the course of the oral proceedings ;

    Having duly heard the oral arguments presented by Me Paul-Boncour and M. Logoz, and the replies made by Me Paul-Boncour, M. Basdevant and M. Logoz on October 23rd, 24th, 25th, 27th, 28th, 29th and 31st, and November 1st, 3rd and 4th, 1930 ; having also heard the statements of M. Basdevant and M. Logoz concerning the interpretation to be placed on Article 2, paragraph 2, of the Special Agreement, made by them at the request of the Court on November 24th, 1930,

    Makes the following Order :

    Whereas under Article 2, paragraph 1, of the Special Agreement, it rests with the Court, by means of a single judgment delivered in conformity with Article 58 of the Statute, to pronounce its decision on the question formulated in Article 1 of the aforesaid Special Agreement and to settle, for a period to be fixed by it and having regard to present conditions, all the questions involved by the execution of paragraph 2 of Article 435 of the Treaty of Versailles ;

    Whereas in its deliberation on the questions formulated in Article 1, paragraph 1, of the Special Agreement, the Court came to the conclusion that, as between France and Switzerland, Article 435, paragraph 2, of the Treaty of Versailles, with its annexes, had not abrogated the provisions of the Protocol of the Conference of Paris of November 3rd, 1815, of the Treaty of Paris of November 20th, 1815, of the Treaty of Turin of March 16th, 1816, and of the Manifesto of the Sardinian Court of Accounts of September 9th, 1829, regarding the customs and economic régime of the free zones of Upper Savoy and the District of Gex, and also that it was not intended necessarily to lead to the abrogation of these

    10
    provisions ; whereas the conclusions of this deliberation, based on the interpretation of Article 435, paragraph 2, of the Treaty of Versailles, with its annexes, and on the existence of a right on the part of Switzerland to the free zones in virtue of the aforesaid provisions, have been confirmed by the Court as at present composed and must be regarded as established for the purposes of the continuation of the proceedings ; as, in the course of the present phase of the case, the French Government has not argued that the old provisions have lapsed as a result of the change in conditions ;

    Whereas, accordingly, the conclusions of the Court’s deliberation must serve as a basis for the settlement contemplated by paragraph 1 of Article 2 of the Special Agreement ; as, moreover, even assuming that it were not incompatible with the Court’s Statute for the Parties to give the Court power to prescribe a settlement disregarding rights recognized by it and taking into account considerations of pure expediency only, such power, which would be of an absolutely exceptional character, could only be derived from a clear and explicit provision to that effect, which is not to be found in the Special Agreement ; as, on the other hand, it is hardly conceivable that a single judgment should contain, in the first place the interpretation of Article 435, paragraph 2, of the Treaty of Versailles, with its annexes, as between France and Switzerland, and then a settlement of the questions involved by the execution of that same clause, in so far as the same States are concerned, which settlement, nevertheless, would disregard or conflict with the interpretation given by the Court ; as it is likewise impossible to suppose that the Parties would have desired to be informed, before the negotiations referred to in Article 1, paragraph 2, of the Special Agreement, in regard to the points of law indicated in the first paragraph of that article, if, in the event of the failure of the negotiations, the Court was free to give its judgment on a basis other than that communicated to the Parties at the conclusion of its deliberation ; and as, furthermore, the whole of the procedure contemplated by Article 1 of the Special Agreement and the interpretative notes annexed thereto would cease to have any object if, for the purposes of the settlement of all the questions involved by the execution of Article 435, para-

    11
    graph 2, of the Treaty of Versailles, the interpretation given by the Court of this clause in the recitals of its Order of 1929 might be disregarded ;
    Whereas, as the Court has already stated in the recitals of its Order of August 19th, 1929, it follows from the indications afforded by the Preamble to the Special Agreement and by the history of the negotiations which have taken place between the Parties with a view to concluding the agreement provided for by Article 435, paragraph 2, of the Treaty of Versailles— which negotiations were adduced before the Court in the first phase of the proceedings—that the real difference of opinion which had prevented an agreement between the Parties related to the question whether the régime of the zones might be abolished without the consent of Switzerland, i.e. whether Switzerland has a right to the free zones ; as it was precisely this difference of opinion which was submitted to the Court, and as it is from this standpoint that the Special Agreement must be construed ;

    Whereas, though it is certain that the Parties, being free to dispose of their rights, might have embodied, in the negotiations contemplated in Article 1, paragraph 2, of the Special Agreement, and might also in any future negotiations embody in their agreement any provisions they might desire and, accordingly, even abolish the régime of the free zones, it in no way follows that the Court enjoys the same freedom ; as this freedom, being contrary to the proper function of the Court, could in any case only be enjoyed by it if such freedom resulted from a clear and explicit provision, which is not to be found in the Special Agreement ; as the argument according to which the settlement to be prescribed by the Court would take the place of the negotiations between the two States and, consequently, the Court would enjoy the same freedom as those States in effecting the settlement, amounts in reality to assuming as demonstrated the very thing which has to be demonstrated ;

    Whereas, though the settlement to be prescribed by the Court with regard to all the questions involved by the execution of paragraph 2 of Article 435 of the Treaty of Versailles, must respect the rights which Switzerland derives from the provisions of the treaties of 1815 and other supplementary

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    instruments relating to the free zones, this settlement must also respect the sovereignty of France over the territories in question ; as this sovereignty is complete and unimpaired in so far as it is not limited by the aforesaid treaties ; as no obligation going beyond these treaties can be imposed on France without her consent ;

    Whereas it is in the light of the foregoing considerations that the question of the so-called "control cordon" (cordon de surveillance) must be envisaged ; as France’s right to have a police cordon at the political frontier of the zones has hardly been questioned by the Swiss Government ; as, on the other hand, the latter disputes the right of France to collect duties and taxes at this frontier, even if these charges are not duties on the importation or exportation of goods, but are duties and taxes which are also levied on the same articles produced or manufactured in France ; as such a restriction does not necessarily follow from the obligation contracted by France under the provisions of the treaties of 1815 and the other supplementary instruments relating to the free zones, and as, in case of doubt, a limitation of sovereignty must be construed restrictively ; as, though it is certain that France cannot rely on her own legislation to limit the scope of her international obligations, it is equally certain that French fiscal legislation applies in the territory of the free zones as in any other part of French territory ; as a reservation must be made as regards the case of abuses of a right, an abuse which however cannot be presumed by the Court ;

    Whereas it follows from this principle that the Court cannot envisage the adoption in its judgment of provisions modifying the territorial delimitation of the zones, unless the French Government consents thereto ; as the same applies to Article 3 of the Swiss draft, in so far as it would limit to a greater degree than is done in the treaties the powers of French administration in the free zones, or impose on France the establishment of customs offices at the Geneva-Cornavin station, or provide that imports from Switzerland into the free zones would be exempt, not only from all customs duties but also from any taxes whatsoever ; as, in so far as concerns the last observation, the same is true with regard to Articles 4, 5 and 10 of the said draft ; as similar observations hold good also

    13
    with regard to Articles 11, 12 and 13, the provisions of which, wholly or in part, go beyond the law in force and cannot therefore become binding between the two States except in virtue of an agreement concluded between them.

    Whereas, by acquiescing in Article 435 of the Treaty of Versailles, by means of its note of 5 May 1919, the Swiss Federal Council, whilst declaring that it did not agree to the suppression of the free zones, showed itself ready to regulate in a manner more appropriate to present economic conditions the terms of the exchange of goods between the regions concerned ; as it is in this connection that the Swiss Government, in Articles 4 to 8 of its draft and in the annex, proposes, subject to certain limitations and reservations, to grant to the natural and manufactured products of the free zones freedom from import duty into Switzerland ; as, practically speaking, it is therefore in this domain that a settlement may be sought which, without disregarding the rights of the two Parties, would bring the zones régime more into harmony with present conditions ;

    Whereas Article 2, paragraph 2, of the Special Agreement contains the following :

    "Should the judgment contemplate the import of goods free or at reduced rates through the Federal Customs barrier or through. the French Customs barrier, regulations for such importation shall only be made with the consent of the two Parties" ;

    Whereas this clause clearly contemplated the consent of both Parties and not only the consent of the Party across whose customs line importation free of duty or at reduced rates is to take place ; as in the presence of a provision perfectly clear in this respect, the Court can only apply such provision as it stands, even if the results following therefrom may in some particular hypothesis seem unsatisfactory ;

    Whereas, on the other hand, the clause above quoted does not clearly show whether the consent of the Parties is to be

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    previous or subsequent to the judgment ; for though the words "should the judgment contemplate the import..." would seem to envisage a consent subsequent to the judgment, the words : cette importation ne pourra être réglée qu’avec l’assentiment des deux Parties, would seem to envisage regulations to be prescribed by the Court in its judgment, and, therefore, after having obtained the consent of the two Parties, the verb régler in the second paragraph of this article having probably the same meaning as is to be attributed to it in the first paragraph ;

    Whereas it is hardly possible to suppose that the Parties intended to adopt a clause which would be incompatible with the Court’s function ; as, accordingly, if it is possible to construe paragraph 2 of Article 2 of the Special Agreement in such a way as to enable the Court to fulfil its task, whilst respecting the fundamental conception on which that paragraph is based, such a construction is the one which must be preferred ;

    Whereas it is certainly incompatible with the character of the judgments rendered by the Court and with the binding force attached to them by Articles 59 and 63, paragraph 2, of its Statute, for the Court to render a judgment which either of the Parties may render inoperative ; as on the other hand there seems nothing to prevent the Court from embodying in its judgment an agreement previously concluded between the Parties ; as a "judgment by consent", though not expressly provided for by the Statute, is in accordance with the spirit of that instrument ;

    Whereas, at the present time, no agreement between the Parties exists with regard to importation free of duty or at reduced rates across the Federal customs line ; as the Agent for the Swiss Government declared at the hearing on November 24th, 1930, that he consented to any provision which the Court might adopt in this respect, but as the same does not hold good as regards the Agent for the French Government ;

    Whereas, in these conditions, if the Court were now to render its judgment in accordance with the terms of Article 2, paragraph 1, of the Special Agreement, it would have to confine itself to answering the legal questions relating to the

    15
    execution of Article 435, paragraph 2, of the Treaty of Versailles ; as such a solution would not seem desirable having regard to the important position occupied by exemptions from import duty in the Swiss draft ; and as, accordingly, it appears that the Parties should be invited to endeavour to come to an agreement, within a specified time, regarding importations free of duty or at reduced rates across the Federal customs line ; as this seems all the more expedient since the negotiations provided for by Article 1, paragraph 2, of the Special Agreement never dealt with this matter, owing, in all probability, to a fundamental difference of opinion regarding the actual basis on which the Court was to effect the settlement contemplated by Article 2, paragraph 1, of the Special Agreement, a difference in regard to which the Court now makes known its opinion in the recitals of the present Order ;

    Whereas fresh negotiations between the Parties seem to the Court highly desirable from other points of view also, since, as has already been stated, only an agreement between the Parties would make it possible to settle the various points referred to in the Swiss Government’s proposal, the settlement of which points would, in the opinion of that Government, be calculated to bring the zones régime more in harmony with present conditions ; as, moreover, practical considerations and considerations of expediency might suggest to the Parties a settlement covering the whole problem even though departing from strict law ; and although the Court, being a Court of justice, cannot disregard rights recognized by it, and base its decision on considerations of pure expediency, nevertheless there is nothing to prevent it, having regard to the advantages which a solution of this kind might present, to offer the Parties, who alone can bring it about, a further opportunity for achieving this end ;

    Whereas, although it is therefore desirable that the Parties should be granted further time for negotiations, the Court should not thereby be prevented from fulfilling its task and giving judgment on the points of law, should the negotiations fail ; as, in fact, if such a meaning were attributed to paragraph 2 of Article 2 of the Special Agreement and the dispute were left unsettled, through the failure to agree in regard to importations free of duty or at reduced rates, this would be

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    contrary to the intention of the Parties, which doubtless was to have the dispute settled; as, in fact, paragraph 2 of Article 2 of the Special Agreement only envisages importations free of duty or at reduced rates as a possibility in connection with the settlement contemplated by the first paragraph of that article.

    Whereas the Parties do not seem to be in agreement with regard to the "present conditions" of which they should take account in their negotiations ; as it will be well to eliminate this difference of opinion and to let them know the result of the deliberation of the Court on this point ;

    Whereas, as between France and Switzerland, both Article 435, paragraph 2, of the Treaty of Versailles and the note of the Swiss Government of May 5th, 1919, envisage a future agreement intended to adapt the régime in force to the new conditions ; as it is only natural to assume that this adaptation must take account of conditions existing at the time of the conclusion of such agreement ; as an agreement only taking account of conditions existing at a previous period would not be in accordance with the real intention of the Parties ; as however it is to be observed that France cannot adduce as against Switzerland changes which may be found to have occurred in the economic conditions of the zones following upon, and as a result of, the transfer of the customs cordon to the political frontier in November 1923—which transfer, as appears from the recitals of the Order of August 19th, 1929, was not in accordance with law ; as therefore the "present conditions" are the conditions which exist, or will exist at the time of the negotiations to be undertaken between the Parties, with the exception that changes which may have occurred since November 1923 and which may be the consequence of the transfer of the French customs barrier to the political frontier, cannot be adduced.

    Whereas the two Parties do not seem to be in agreement as to the so-called zone of Saint-Gingolph, of which the boundaries

    17
    were fixed by the Manifesto of the Sardinian Court of Accounts of September 9th, 1829 as, in recitals of its Order of August 19th, 1929, the Court, while declaring that the said Manifesto has not been abrogated, reserved the question as to the legal nature of this instrument ; as it seems desirable, in order to facilitate the above negotiations, that the Court should also indicate its opinion on this question ;

    Whereas, by the terms of Article 3 of the Treaty of Turin of March 16th, 1816, the line of the Sardinian customs was to pass "... along the lake to Meillerie, to join up with and continue along the existing frontier at the post nearest to Saint-Gingolph" ; as these expressions employed in the Treaty, being wanting in precision, gave rise to claims on the part of the Canton of Valais ; as this Canton, invoking the provisions of Article 3 of the said Treaty, demanded that the customs post established in the village of Saint-Gingolph should be suppressed, and that the customs line should be withdrawn from this part of the frontier so as to constitute on this side a new zone comprising the territory of the said commune ; as it was after this claim that His Majesty the King of Sardinia, though of opinion that this claim did not appear to him to be well founded exactly in law, stated that he was willing to assent to it ; as this assent given by His Majesty the King of Sardinia, without any reservation, terminated an international dispute relating to the interpretation of the Treaty of Turin ; as, accordingly, the effect of the Manifesto of the Royal Sardinian Court of Accounts, published in execution of the sovereign’s orders, laid down, in a manner binding upon the Kingdom of Sardinia, what the law was to be between the Parties ; as the agreement thus interpreted by the Manifesto confers on the creation of the zone of Saint-Gingolph the character of a treaty stipulation which France is bound to respect, as she has succeeded Sardinia in the sovereignty over that territory.

    Whereas, with regard to the time to be granted, a period of about eight months does not seem excessive ; as this time

    18
    may moreover be extended by the President at the request of the two Parties,

    The Court

    (1) Accords to the Government of the French Republic and to the Government of the Swiss Confederation a period expiring on July 31st, 1931, which may be extended at the request of both Parties, to settle between themselves the matter of importations free of duty or at reduced rates across the Federal customs line and also any other point concerning the régime of the territories referred to in Article 435, paragraph 2, of the Treaty of Versailles with which they may see fit to deal ;

    (2) Declares that at the expiration of the period granted or of any prolongation thereof, the Court will deliver judgment at the request of either Party, the President being empowered to grant the two Governments the necessary periods of time for the presentation beforehand of any written or oral observations.

    Done in French and English, the French text being authoritative, at the Peace Palace, The Hague, this sixth day of December, nineteen hundred and thirty, in three copies, one of which shall be placed in the archives of the Court and the others delivered to the Agents of the Government of the French Republic and’ of the Swiss Federal Government respectively.

    MM. Nyholm, Altamira and Sir Cecil Hurst, Judges, MM. Yovanovitch and Negulesco, Deputy-Judges, and M. Eugène Dreyfus, Judge ad hoc, whilst concurring in the operative

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    part of the present Order and in the recitals which relate thereto, declare themselves unable to concur in the other recitals of the Order in so far as they have indicated their dissent therefrom in the following joint dissenting opinion.

    Mr. Kellogg, Judge, while agreeing with the present Order, desires to add on certain points the observations which follow hereafter.

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