Scope of Application [Return to the top of the page]

DEFINITION OF INVESTMENT

The term “investment” means every kind of investment in the territory of one Party owned or controlled by nationals or companies of the other Party, such as equity, debt, and service and investment contracts. This general definition is illustrated by a non exhaustive list of five groups of specific rights, including:

• traditional property rights;
• rights in companies;
• monetary claims and titles to performance directly related to an investment;
• intellectual property rights; and,
• any right conferred by law or contract, and any licenses and permits pursuant to law. (Article I (1) (a)).

DEFINITION OF INVESTOR

Nationals

“National” of a Party means a natural person who is a national of a Party under its applicable law. (Article I (1) (c)).

Companies

“Company” of a Party means any kind of corporation, company, association, state enterprise, or other organization, legally constituted under the laws and regulations of a Party or a political subdivision thereof, whether or not organized for pecuniary gain, and whether privately or governmentally owned. (Article I (1) (b)).

Application in Time (Entry into Force and Duration: Applicability to Investments made Prior to Entry into Force)

Date of signature: November 14, 1991
Entry into force: October 20, 1994
Duration: Ten years.
After that period, the Agreement will remain in force unless either Contracting Party notifies in writing the other Party of its intention to terminate it.
The Agreement applies to investments existing at the time of entry into force, as well as to investments made or acquired thereafter.

Admission [Return to the top of the page]

There is no separate clause on Admission. The issue is dealt with in the treatment provisions. See Section on Treatment.

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. Investment shall at all times be accorded fair and equitable treatment, ... and shall in no case be accorded treatment less than that required by international law. (Article II (2) (a)).

Full Protection and Security

Yes. Investment shall enjoy full protection and security. (Article II (2) (a)).

Non-Discrimination

Yes. Neither Party shall in any way impair by arbitrary or discriminatory measures the management, operation, maintenance, use, enjoyment, acquisition, expansion, or disposal of investments. However, for the purposes of dispute resolution under Articles VII and VIII, a measure may be arbitrary or discriminatory notwithstanding the opportunity to review such measure in the courts or administrative tribunals of a Party. (Article II (2) (b)).

National Treatment

Yes. Article II on treatment requires the better of either national treatment or most-favored-nation treatment with respect to both pre-establishment and post-establishment investments. (Article II).

Each Party shall permit and treat investment, and activities associated therewith, on a basis no less favorable than that accorded in like situations to investment or associated activities of its own nationals or companies, or of nationals or companies of any third country, whichever is the more favorable, subject to the right of each Party to make or maintain exceptions falling within one of the sectors or matters listed in the Protocol of the Treaty. Each Party agrees to notify the other Party, before or on the date of entry into force of this Treaty, of all such laws and regulations of which it is aware concerning the sectors or matters listed in the Protocol. (Article II (1)).

Moreover, each Party agrees to notify the other of any future exception with respect to the sectors or matters listed in the Protocol, and to limit such exceptions to a minimum. Any future exception by either Party shall not apply to investment existing in that sector or matter at the time the exception becomes effective. The treatment accorded pursuant to any exceptions shall, unless specified otherwise in the Protocol, be not less favorable than that accorded in like situations to investments and associated activities of nationals or companies of any third country. (Article II (1)).

The treatment accorded by the United States to investments and associated activities of Argentine nationals and companies under the provisions of Article II shall in any State, Territory or possession of the United States of America be no less favorable than the treatment accorded therein to investments and associated activities of nationals of the USA resident in, and companies legally constituted under the laws and regulations of, other States, Territories or possessions of the United States of America. (Article II (8)).

Most-Favored Nation Treatment

Yes. Article II on treatment requires the better of either national treatment or most-favored-nation treatment with respect to both pre-establishment and post-establishment investments. (Article II).

Each Party shall permit and treat investment, and activities associated therewith, on a basis no less favorable than that accorded in like situations to investment or associated activities of its own nationals or companies, or of nationals or companies of any third country, whichever is the more favorable, subject to the right of each Party to make or maintain exceptions falling within one of the sectors or matters listed in the Protocol of the Treaty. Each Party agrees to notify the other Party, before or on the date of entry into force of this Treaty, of all such laws and regulations of which it is aware concerning the sectors or matters listed in the Protocol. (Article II (1)).

Moreover, each Party agrees to notify the other of any future exception with respect to the sectors or matters listed in the Protocol, and to limit such exceptions to a minimum. Any future exception by either Party shall not apply to investment existing in that sector or matter at the time the exception becomes effective. The treatment accorded pursuant to any exceptions shall, unless specified otherwise in the Protocol, be not less favorable than that accorded in like situations to investments and associated activities of nationals or companies of any third country. (Article II (1)).

EXCEPTIONS

MFN provisions shall not apply to advantages accorded by either Party to nationals or companies of any third country by virtue of that Party's binding obligations that derive from full membership in a regional customs union or free trade area, whether such an arrangement is designated as a customs union, free trade area, common market or otherwise. (Article II (9)).

With reference to Article II (1), the United States reserves the right to make or maintain limited exceptions to national treatment in the following sectors:

• air transportation;
• ocean and coastal shipping;
• banking;
• insurance;
• energy and power production;
• custom house brokers;
• ownership and operation of broadcast or common carrier radio and television stations;
• ownership of shares in the Communications Satellite Corporation;
• the provision of common carrier telephone and telegraph services;
• the provision of submarine cable services; and
• use of land and natural resources. (Paragraph 2 of the Protocol).

With reference to Article II (1), the United States reserves the right to make or maintain limited exceptions to national treatment with respect to certain programs involving government grants, loans, and insurance. (Paragraph 3 of the Protocol).

With reference to Article II (1)), the United States reserves the right to make or maintain limited exceptions to national and most-favored-nation treatment in the following sectors, with respect to which treatment will be based on reciprocity:

• mining on the public domain;
• maritime services and maritime-related services; and,
• primary dealership in United States government securities. (Paragraph 4 of the Protocol).

With reference to Article II (1), Argentina reserves the right to make or maintain limited exceptions to national treatment in the following sectors:

• real estate in the Border Areas;
• air transportation;
• shipbuilding;
• nuclear energy centers;
• uranium mining;
• insurance;
• mining; and
• fishing. (Paragraph 5 of the Protocol).

This Treaty shall not preclude the application by either Party of measures necessary for the maintenance of public order, the fulfillment of its obligations with respect to the maintenance or restoration of international peace or security, or the protection of its own essential security interests. (Article XI).

The Parties understand that, with respect to rights reserved in Article XI, "obligations with respect to the maintenance or restoration of international peace or security" means obligations under the Charter of the United Nations. (Paragraph 6 of the Protocol).

OTHER ASPECTS

Performance Requirements

Notwithstanding Article II (5) and in accordance with the terms of this paragraph, the Government of the Argentine Republic may maintain, but not intensify, existing performance requirements in the automotive industry. The Government of the Argentine Republic shall exert best efforts to eliminate all such requirements within the shortest possible period, and shall ensure their elimination within eight years of the date of the entry into force of this Treaty. The Government of the Argentine Republic shall further ensure that such performance requirements are applied in a manner which does not place existing investments at a competitive disadvantage against new entrants in this industry. The Parties shall consult at the request of either on any matter concerning the implementation of these undertakings. For the purposes of this paragraph, "existing" means extant at the time of signature of this Treaty. (Paragraph 9 of the Protocol).

The Parties note with satisfaction that Argentina is engaged in a process of privatization of various industries, including public utilities. They agree that they will undertake their best efforts, including through consultations, to avoid any misinterpretation regarding the scope of Article II (5) that would adversely affect this privatization process. (Paragraph 11 of the Protocol).

Others

Neither Party shall impose performance requirements as a condition of establishment, expansion or maintenance of investments, which require or enforce commitments to export goods produced, or which specify that goods or services must be purchased locally, or which impose any other similar requirements. (Article II (5)).

Subject to the laws relating to the entry and sojourn of aliens, nationals of either Party shall be permitted to enter and to remain in the territory of the other Party for the purpose of establishing, developing, administering or advising on the operation of an investment to which they, or a company of the first Party that employs them, have committed or are in the process of committing a substantial amount of capital or other resources. (Article II (3)).

Companies legally constituted under the applicable laws or regulations of one Party, and which are investments, shall be permitted to engage top managerial personnel of their choice, regardless of nationality. (Article II (4)).

Nationals or companies of either Party whose investments suffer losses in the territory of the other Party owing to war or other armed conflict, revolution, state of national emergency, insurrection, civil disturbance or other similar events shall be accorded treatment by such other Party no less favorable than that accorded to its own nationals or companies or to nationals or companies of any third country, whichever is the more favorable treatment, as regards any measures it adopts in relation to such losses. (Article IV (3)).

Each Party shall observe any obligation it may have entered into with regard to investments. (Article II (2) (c)).

This Treaty shall not derogate from:

1. laws and regulations, administrative practices or procedures, or administrative or adjudicatory decisions of either Party;
2. international legal obligations; or
3. obligations assumed by either Party, including those contained in an investment agreement or an investment authorization, that entitle investments or associated activities to treatment more favorable than that accorded by this Treaty in like situations. (Article X).

Each Party shall provide effective means of asserting claims and enforcing rights with respect to investments, investment agreements, and investment authorizations. (Article II (6)).

The terms of this Treaty shall supersede the terms of the Treaty of Friendship, Commerce, and Navigation entered into force December 20, 1854. (Paragraph 7 of the Protocol).

This Treaty shall not preclude either Party from prescribing laws and regulations in connection with the admission of investments made in its territory by nationals or companies of the other Party or with the conduct of associated activities, provided, however, that such laws and regulations shall not impair the substance of any of the rights set forth in this Treaty. (Article III).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Each Party shall permit all transfers related to an investment to be made freely and without delay into and out of its territory. Such transfers include:

1. returns;
2. compensation pursuant to Article IV;
3. payments arising out of an investment dispute;
4. payments made under a contract, including amortization or principal and accrued interest payments made pursuant to a loan agreement directly related to an investment;
5. proceeds from the sale or liquidation of all or any part of an investment; and
6. additional contributions to capital for the maintenance or development of an investment. (Article V (1)).

The Parties note that Argentina has had and may have in the future a debt-equity conversion program under which nationals or companies of the United States may choose to invest in Argentina through the purchase of debt at a discount. The Parties agree that the rights provided in Article V (1), with respect to the transfer of returns and of proceeds from the sale or liquidation of all or any part of an investment, remain or may be, as such rights would apply to that part of an investment financed through a debt-equity conversion, modified by the terms of any debt-equity conversion agreement between a national or company of the United States and Argentina, or any agency or instrumentality thereof.

The transfer of returns and of proceeds from the sale or liquidation of all or any part of an investment shall in no case be on terms less favorable than those accorded, in like circumstances, to nationals or companies of Argentina or any third country, whichever is more favorable. (Paragraph 10 of the Protocol).

Repayment of Loans

Yes. (Article V (1) (d)).

Proceeds of the Total or Partial Liquidation of an Investment

Yes. (Article V (1) (e), Paragraph 10 of the Protocol).  

Licenses and Other Fees

---

Other Categories of Payment

Yes. (Article V (1) (b), (c), (f)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Except as provided in Article IV (1), transfers shall be made in a freely usable currency at the prevailing market rate of exchange on the date of transfer with respect to spot transactions in the currency to be transferred. The free transfer shall take place in accordance with the procedures established by each Party; such procedures shall not impair the rights set forth in this Treaty. (Article V (2)). Notwithstanding the provisions of the paragraphs 1 and 2 of Article V, either Party may maintain laws and regulations:

1. requiring reports of currency transfers; and
2. imposing income taxes by such means as a withholding tax applicable to dividends or other transfers.

Furthermore, either Party may protect the rights of creditors, or ensure the satisfaction of judgments in adjudicatory proceedings, through the equitable, non-discriminatory and good faith application of its law. (Article V (3)).

Exchange Rates

Transfers shall be made in a freely usable currency at the prevailing market rate of exchange on the date of transfer with respect to spot transactions in the currency to be transferred. (Article V (2)).

Time of Transfer

Each Party shall permit all transfers related to an investment to be made freely and without delay into and out of its territory. (Article V (1)).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

Expropriation or nationalization (directly or indirectly through measures tantamount to expropriation or nationalization) (Article IV (1)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. (Article IV (1)).

Due Process of Law and Judicial Review

Yes. (Article IV (1) (2)).

Other

Expropriation has to be made in accordance with the general principles of treatment provided for in Article II (2). See supra. (Article IV (1)).

Compensation Standard; Form and Time of Payment

“Prompt, adequate and effective compensation”

Compensation shall:

• be equivalent to the fair market value of the expropriated investment immediately before the expropriatory action was taken or became known, whichever is earlier;
• include interests at a commercially reasonable rate from the date of expropriation;
• be made without delay;
• be fully realizable and freely transferable at the prevailing market rate of exchange on the date of expropriation. (Article IV (1)).

Settlement of Disputes between Contracting Parties
[Return to the top of the page]

PRE-ARBITRATION NEGOTIATIONS

Parties agree to consult promptly, on the request of either, to resolve any disputes in connection with the Treaty, or to discuss any matter relating to the interpretation or application of the Treaty. (Article VI)).
Any dispute which is not resolved through consultation or other diplomatic channels shall be submitted, upon request of either Party, to an arbitral tribunal. (Article VIII (1)).

ARBITRATION

Constitution of the Tribunal

• Within two months of receipt of a request, each Party shall appoint an arbitrator. The two arbitrators shall select a third arbitrator as Chairman, who is a national of a third State.
• The UNCITRAL Rules for appointing members of three member panels shall apply mutatis mutandis to the appointment of the arbitral panel, except that the appointing authority shall be the Secretary General of the Permanent Court of Arbitration.
• Expenses incurred by the Chairman, the other arbitrators, and other costs of the proceedings shall be paid for equally by the Parties. (Article VIII (2) (4)).

Procedural Rules of the Tribunal

Decisions of the tribunal shall be binding on both Parties.
In the absence of agreement by the Parties to the contrary, the arbitration rules of the UNCITRAL, except to the extent modified by the Parties or by the arbitrators, shall govern.
Unless otherwise agreed, all submissions shall be made and all hearings shall be completed within six months of the date of selection of the third arbitrator, and the Tribunal shall render its decision within two months of the date of the final submissions or the date of the closing of the hearings, whichever is later. (Article VIII (1) (3)).

Applicable Law

Disputes shall be decided “in accordance with the applicable rules of international law.” (Article VIII (1)).

Settlement of Disputes between a Contracting Party and an Investor [Return to the top of the page]

DEFINITION

An investment dispute is a dispute between a Party and a national or company of the other Party arising out of or relating to:

1. an investment agreement between that Party and such national or company;
2. an investment authorization granted by that Party’s foreign investment authority to such national or company; or,
3. an alleged breach of any right conferred or created by the Treaty with respect to an investment. (Article VII (1)).

PREARBITRAL CONSULTATIONS AND DISPUTE SETTLEMENT MECHANISMS

Parties to the dispute should seek resolution through consultation and negotiation.

If the dispute cannot be settled amicably, the national or company may choose to submit the dispute for resolution:

1. to the courts or administrative tribunals of the Party that is a party to the dispute; or
2. in accordance with any applicable, previously agreed dispute settlement procedures; or
3. to binding arbitration in accordance with Article VII (3). (Article VII (2)).

ARBITRAL SETTLEMENT OF DISPUTES

Conditions

Provided that the national or company has not submitted the dispute for resolution under Article VII (2) a) or b) and six months have elapsed from the date on which the dispute arose, the national or company may choose to consent in writing to the submission of the dispute for settlement by binding arbitration. (Article VII (3)).

Consent

Consent set out explicitly in Article VII (4).

Forms of Arbitration

The submission of the dispute for settlement by binding arbitration may be made:

1. to ICSID, provided that the Party is a party to the ICSID Convention; or
2. to the Additional Facility of the Centre, if the Centre is not available; or
3. in accordance with UNCITRAL Arbitration Rules; or
4. to any other arbitration institution, or in accordance with other arbitration rules, as may be mutually agreed between the parties to the dispute. (Article VII (3)).

Applicable Law

No reference.