(212) 326-8332
October 31, 1997
IDS Certificate Company
Attention: Bruce A. Kohn
IDS Tower 10
Minneapolis, MN 55440-0010
Re: American Express Investors Certificates
Gentlemen:
You have asked us to render our opinions to you concerning certain
aspects and consequences of the acquisition and holding of an American Express
Investors Certificate (a "Certificate") issued by IDS Certificate Company, a
domestic corporation (the "Company"), to, and held by, an individual who is a
nonresident alien individual as to the United States (an "NRA") under the
Federal tax laws of the United States.
1. Authorities Examined
In rendering the opinions set forth below, in addition to the Documents
(as such term is defined in Section 2 below), we have examined and relied upon
provisions of the Internal Revenue Code of 1986, as amended (hereinafter
"I.R.C." or the "Code"); final, temporary and proposed regulations (hereinafter
"Treasury Regulations") promulgated under the Code by the U.S. Department of the
Treasury; administrative pronouncements issued by the U.S. Internal Revenue
Service; judicial decisions rendered by U.S. Federal courts of competent
jurisdiction; and such other sources and authorities that we have deemed
relevant in reaching the conclusions expressed herein.
2. Document Examined
In rendering the opinions set forth below, in addition to the sources
and authorities described above, we have examined and relied upon such
instruments and other writings (which may have included, without limitation,
materials existing exclusively in electronic or machine-readable form) that we
have deemed relevant in reaching the conclusions expressed herein (hereinafter
singly a "Document" and collectively the "Documents"), including without
limitation the following:
2.1. The Certificate of Officers of the Company, dated as of October 30,
1997, furnished to us by Bruce A. Kohn, Vice President and General
Counsel of the Company, a copy of which is annexed hereto as Exhibit
A.,
2.2. Two versions of the April, 1997 prospectus issued to prospective
purchasers of Certificates (collectively, "Prospectuses"), copies of
which are annexed hereto as Exhibit B.
3. Opinions
Based upon the foregoing, and subject to the assumptions, exclusions
and limitations set forth below, we are of the opinion that:
(a) Interest paid on a Certificate to an NRA will constitute
"portfolio interest", within the meaning of Section 871(h) of
the Code, and will be exempt from the U.S. Federal withholding
tax otherwise imposed by Section 1441 of the Code.
(b) An NRA who dies while a holder of a Certificate will not be
subject to the U.S. Federal estate tax with respect to the
value of that Certificate, pursuant to Section 2105(b) of the
Code.
(c) An NRA who is the grantor of a trust that holds a Certificate
will be treated as the holder of such Certificate for U.S.
Federal tax purposes if such NRA has the exclusive power at
all relevant times to revoke such trust and to thereupon
revest absolutely in himself title to all property held by
such trust.
4. Assumptions
In rendering the opinions set forth above, we have assumed (and we have
made no independent investigation or inquiry whatsoever to confirm, and we
expressly disclaim any intent, undertaking or obligation to make any such
investigation or inquiry to confirm) that:
4.1. Each of the Documents is a genuine original of such Document
or a true copy or facsimile thereof, and any such true copy or
facsimile correctly reflects the contents of the corresponding
original.
4.2. Each of the executed Documents has been duly authorized,
executed and delivered by each party thereto.
4.3. The signatures, seals, endorsements and initials on all
executed Documents are genuine, and where any such signature,
seal, endorsement or initials purport to have been affixed in
a corporate, governmental, fiduciary or other representative
capacity, the person who affixed such signature, seal,
endorsement or initials to such Document or Documents had full
power and authority to do so.
4.4. The representations made to us by officers, employees and
agents of the Company and its affiliates, whether orally or in
writing, with respect to the subject matter of the opinions
set forth above are true, correct and complete in all material
respects as of the date they were made and at all times
thereafter through and including the date hereof.
4.5. The statements of fact contained in the Documents are true,
correct and complete in all material respects as of the date
they were made and at all times thereafter through and
including the date hereof.
4.6. Each Certificate constitutes and will constitute debt
for all U.S. Federal tax purposes.
4.7. No NRA owns (or is treated as owning under Section
871(h)(3)(C) of the Code) ten percent or more of the total
combined voting power of all classes of stock of the Company
entitled to vote.
4.8. No NRA will be (or will be deemed to be) engaged in the
conduct of a trade or business within the United States
(within the meaning of Section 864 of the Code) at any time
during which such NRA holds a Certificate.
4.9. With respect to any given Certificate that is the subject of
the opinions set forth above, the certification requirements
described in Section 871(h)(2) (B)(ii) of the Code and
Treasury Regulations promulgated thereunder have been and will
be satisfied.
5. Exclusions
Anything in the foregoing to the contrary notwithstanding, we expressly
decline to opine upon, and expressly disclaim any intent, undertaking or
obligation to opine upon, and hereby expressly exclude from the scope of the
opinions set forth above, the following matters:
5.1. Any and all matters arising under the laws of any State of
the United States or the District of Columbia or any
political subdivision thereof.
5.2. Any and all matters arising under the laws of any country
other than the United States. For this purpose, the
dependencies, protectorates, territories and possessions of
the United States shall be deemed to be countries other than
the United States.
6. Limitations
6.1. The opinions set forth above are furnished only as to facts
and circumstances existing at the date hereof and actually
known or represented to us on such date. If any such facts and
circumstances should change, or if a determination is made
hereafter that any such facts or circumstances were untrue or
inaccurate on such date, any such change or determination
could adversely affect or render inapplicable the opinions set
forth above.
6.2. The opinions set forth above are furnished in express reliance
on the assumptions set forth in Section 4 hereof. If a
determination is made hereafter that any such assumption was
untrue or inaccurate as of the date hereof, any such
determination could adversely affect or render inapplicable
the opinions set forth above.
6.3. Each of the sources and authorities described in Section 1
hereof is subject to repeal, revocation or modification
without notice, possibly with retroactive effect; any such
repeal, revocation or modification could adversely affect or
render inapplicable the opinions set forth above. The opinions
set forth above apply only to the subject matter thereof as at
the date hereof.
6.4. The opinions set forth above are furnished solely for your
benefit and may not be used, relied upon, referred to or
quoted by any other person without our prior specific written
consent thereto. There are no express or implied third-party
beneficiaries in or of the opinions set forth above.
6.5. The contents of Section 3 hereof, subject to and as modified
by the remaining contents hereof, constitute the entirety of
the opinions furnished by us to you with respect to the
Prospectuses and subject matter thereof. From and after the
date hereof, this original writing supersedes any and all (a)
prior opinions furnished by us to you on the subject matter
hereof, (b) prior drafts or versions hereof, and(c) prior or
contemporaneous communications between ourselves and you
relating to the subject matter hereof.
6.6. This opinion may be executed in one or more counterparts, each
of which shall be deemed to be an original and all of which
together shall constitute one and the same document.
We hereby consent to the filing of this opinion with the Securities and
Exchange Commission as an exhibit to the Registration Statement or an amendment
thereof relating to the Certificates and the Prospectuses (or either of them),
as well as to the references to us in the Prospectus Supplement dated October
31, 1997 to the Prospectuses or either of them.
Very truly yours,
Jones, Day, Reavis & Pogue
Certificate of Officer of IDS Certificate Company
The undersigned, being the Vice President and General Counsel of IDS
Certificate Company (hereinafter the "Company"), for the express purpose of
inducing Jones, Day, Reavis & Pogue to render its opinions of even date herewith
in connection with the matters described therein, and on the understanding and
with the intent that Jones, Day, Reavis & Pogue will rely hereon in rendering
the said opinions, does hereby certify, on behalf of the Company, that the
following representations of fact (which are not intended to be conclusions of
law) are true, correct and complete in all material respects as of all relevant
times through and including the effective date hereof:
1. The undersigned is the duly appointed and serving Vice President and
General Counsel of the Company on the date hereof.
2. The undersigned has full power and authority to make the
representations of fact contained herein for, in the name of and on
behalf of the Company.
3. The undersigned has information relating to the matters contained in
the representations of fact set forth below by reason of (a) personal
knowledge, (b) personal review of relevant documents, and (c) due
inquiry of other officers and other persons having such personal
knowledge or having made such personal review or due inquiry; and all
such information so obtained by the undersigned is true, correct and
complete in all material respects, and is adequate to confirm the
truth, completeness and accuracy of the representations of fact
contained herein.
4. Each American Express Investors Certificate is issued by the Company
(a "Certificate") is issued in registered form, within the meaning of
Section 871(h)(2)(B)(i) of the Internal Revenue Code of 1986, as
amended (the "Code") and the Treasury Regulations promulgated
thereunder.
5. Whenever the interest rate payable with respect to a Certificate is
reset by the Company by reason of a renewal or extension thereof, such
new interest rate is not determined in whole or in part by reference
to (a) any receipts, sales, cash flows, income, profits, gains of the
Company or of any person related to the Company (within the meaning of
Section 871(h)(4)(B) of the Code); (b) any change in value of any
property of the Company or of any such related person; or (c) any
dividend, partnership distribution or similar payment made by the
Company or by any such related party.
IN WITNESS WHEREOF, the undersigned has executed this certificate for,
on behalf of and in the name of the Company as of the effective date hereof set
forth below.
Bruce A. Kohn
Vice President and General Counsel
IDS Certificate Company
October 30, 1997