ARTICLE 3

General Definitions

Paragraph 1 defines the principal terms used in the Convention. Unless the context otherwise requires, a term defined in this paragraph has a uniform meaning throughout the Convention. A number of important terms are, however, defined in other Articles. For example, the terms ''resident'' and ''permanent establishment'' are defined in Articles 4 (Residence) and 5 (Permanent Establishment), respectively, and the terms “'dividends,” “interest,” and ''royalties'' are defined in Articles 10 (Dividends), 11 (Interest) and 12 (Royalties), respectively.

The term ''United States'' is defined to mean the United States of America and, when used in a geographical sense, includes the States and the District of Columbia, the U.S. territorial waters and any area beyond the territorial waters which, in accordance with international law and the laws of the United States, is an area within which the rights of the United States with respect

to the natural resources of the seabed and subsoil may be exercised. Puerto Rico, the Virgin Islands, Guam and any other U.S. possession or territory are not within the definition of the United States.

The term ''Barbados'' means the island of Barbados, including the territorial waters of Barbados and any area outside such territorial waters which in accordance with international law and the laws of Barbados is an area within which the rights of Barbados with respect to the natural resources of the seabed and subsoil may be exercised.

The term ''person'' is defined to include an individual, an estate, a trust, a company, a partnership and any other body of persons. The term "company" means any body corporate or any entity which is treated as a body corporate for tax purposes.

The terms "enterprise of a Contracting State'' and ''enterprise of the other Contracting State'' mean an enterprise earned on by a resident, as defined by Article 4, of the United States or Barbados, as the context requires.

The term ''competent authority'' is defined to mean, in the case of the United States, the Secretary of the Treasury or his delegate. In the case of Barbados, the term means the Minister of Finance and Planning or his authorized representative.

A ''national'' of the United States is defined as a citizen of the United States as well as any company, association or other entity deriving its status as such from the laws of the United States, or of any political subdivision. A ''national'' of Barbados is defined as a citizen of Barbados and any company, association, or other entity deriving its status as such from the laws of Barbados. The term ''national'' is used in Articles 19 (Government Service), 24 (NonDiscrimination) and 25 (Mutual Agreement Procedure).

The term international traffic'' means any transport by a ship or aircraft except where such transport is solely between places in the other Contracting State. Thus, for example, coastal shipping along the Atlantic coast of the United States is not international traffic. However, if a ship operated by a resident of Barbados transports goods from Canada to the United States, leaving some of the goods in New York and the remainder in Norfolk, the entire transport would be international traffic. The definition of international traffic is relevant for purposes of Article 8 (Shipping and Air Transport).

Paragraph 2 provides that in the case of a term not defined in the Convention the domestic tax law of the Contracting State applying to the Convention shall control, unless the context in which the term is used requires a definition independent of domestic tax law or the competent authorities reach agreement on a meaning pursuant to Article 25 (Mutual Agreement Procedure). The term “context” refers to the purpose and background of the provisions in which the term appears.

Pursuant to the provisions of Article 25, the competent authorities of the Contracting States may resolve by mutual agreement any difficulties or doubts as to the interpretation or application of the Convention, including the meaning of a term. An agreement by the competent

authorities with respect to the meaning of a term used in the Convention would supersede conflicting meanings in the domestic laws of the Contracting States.