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

DEFINITION OF INVESTMENT

The term “investment” means any kind of asset defined in accordance with the laws and regulations of the Contracting Party in whose territory the investment is being made. This general definition is illustrated by a non exhaustive list of specific rights, including: traditional property rights;

• rights in companies;

• monetary claims and titles to performance;

• intellectual property rights; and

• concessions and similar rights conferred by law or under contract, to undertake any economic and commercial activity, including any rights to search for, cultivate, extract or exploit natural resources. (Article 1 (1)).

DEFINITION OF INVESTOR

Nationals

The term “national” means the natural persons who possess the nationality of a Contracting Party in accordance with its laws. (Article 1 (4)).

Companies

The term “enterprise” means all legal persons including all civil and commercial enterprises and other associations that engage in economic activities covered by the Treaty and that are effectively controlled, directly or indirectly, by nationals of one of the Contracting Parties. (Article 1 (3)).

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

Date of signature: January 12, 1996
Entry into force:
The Agreement enters into force when both Contracting Parties have notified each other that their respective internal legal procedures have been fulfilled (30 days after the date of the latter notification).
Duration: 15 years.
Thereafter it will be extended indefinitely, unless one of the Contracting Parties notifies the other Party with no less than twelve months advance notice of its intention to terminate it.

Admission [Return to the top of the page]

Each of the Contracting Parties shall promote within its territory investments of nationals or companies of the other Contracting Party and shall admit them in accordance with its laws and regulations. (Article 2 (1)).

Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

Yes. Each Contracting Party shall ensure fair and equitable treatment, in accordance with the rules and principles of international law, to investments of nationals and companies of the other Contracting Party made in accordance with this Agreement. (Article 3 (1)).

Full Protection and Security

Yes. Investments made by nationals or companies of a Contracting Party in the territory of the other Contracting Party, in accordance with the laws and regulations of the latter, shall enjoy the full protection and legal security of this Agreement. (Article 2 (2)).

Non-Discrimination

Yes. Each Contracting Party shall not impair, with arbitrary or discriminatory measures, the free management, utilization, use, enjoyment or disposal of investments by nationals or companies of this Contracting Party. (Article 3 (1)).

National Treatment

Yes. Each Contracting Party shall grant to investments made by nationals or companies of the other Contracting Party treatment no less favorable than that it grants to investments of its own national or companies or those of a third State, when the latter is more favorable to nationals or companies of the other Contracting Party. (Article 3 (2)).

Most-Favored Nation Treatment

Yes. Each Contracting Party shall grant to investments made by nationals or companies of the other Contracting Party treatment no less favorable than that it grants to investments of its own national or companies or those of a third State, when the latter is more favorable to nationals or companies of the other Contracting Party. (Article 3 (2)).

EXCEPTIONS

Treatment referred to in Article 3 shall extend the privileges that one of the Contracting Parties grants to nationals or companies of third State by virtue of a customs or economic union, common market or free trade area or international agreements signed with third State. (Article 3 (3)).

Treatment referred to in Article 3 shall extend the benefits and advantages that one of the Contracting Parties grants to national or companies of third States as a result of a double taxation agreement or other agreements on tax matters. (Article 3 (4)).

Nothing in this Agreement shall prevent a Contracting Party from adopting measures for reasons of internal and external national security or public order, as long as they are not discriminatory or contrary to international law.

OTHER ASPECTS

Performance Requirements

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Others

If the provisions in the legislation of a Contracting Party, or if future obligations between the two Contracting Parties, result in general or special provisions granting to investments of nationals or companies of the first Contracting Party a more favorable treatment, these provisions shall prevail if they are more favorable. (Article 9 (1)).

Nationals or companies of either Contracting Party who suffer losses due to a war or any other armed conflict, revolution, state of national emergency, "état de siège," insurrection or other similar events in the territory of the other Contracting Party shall be treated by this Contracting Party, in respect of restitution, compensation or other settlement, no less favorably than its own nationals or companies. (Article 6).

Transfers [Return to the top of the page]

TYPES OF PAYMENT

Returns

Yes. Neither Contracting Party shall restrict to nationals and companies of the other Contracting Party the free transfer of payments related to an investment, in particular but not exclusively:

1. the capital of an investment and the reinvestments made in accordance with the laws and regulations of the host State;
2. returns;
3. amortization of loans as defined in Article 1 (1) (c), as well as its interests;
4. proceeds of the sale or the total or partial liquidation of the investment;
5. indemnifications and compensations as defined in Articles 5 and 6. (Article 4 (1)).

Repayment of Loans

Yes. (Article 4 (1) c)).

Proceeds of the Total or Partial Liquidation of an Investment

Yes. (Article 4 (1) (d)).

Licenses and Other Fees

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Other Categories of Payment

Yes. (Article 4 (1) (a), (b)).

CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

Currency

Transfers shall be made in a freely convertible currency without restrictions or delay. (Article 4 (2)).

Exchange Rates

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Time of Transfer

Transfers shall be made without delay. (Article 4 (2)).

Expropriation [Return to the top of the page]

DEFINITION

Covered Expropriatory Measures

Expropriation, nationalization, or measures which are equivalent to expropriation or nationalization. (Article 5(1)).

CONDITIONS

Public Purpose and Non-Discrimination

Yes. “National interest or public necessity” (Article 5(1)). Non-discrimination is not repeated in the context of expropriation.

Due Process of Law and Judicial Review

Not mentioned.

Other

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Compensation Standard; Form and Time of Payment

“Duly compensated”.

Compensation shall:

• correspond to the value of the expropriated or nationalized investment immediately before the expropriation, nationalization, or equivalent measure became publicly known;
• shall be paid out without delay;
• carry interests up to the effective date of payment, based on the usual bank interest;
• be realizable and freely transferable. (Article 5(1)(2)).

Settlement of Disputes between Contracting Parties
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PRE-ARBITRATION NEGOTIATIONS

The disputes arising between the Contracting Parties regarding the interpretation or the application of the provisions contained in this Agreement shall be settled, wherever possible, by the respective governments through diplomatic channels. (Article 11 (1)).

If it cannot be settled through these channels within six months, the dispute shall, at the request of either Contracting Party, be submitted to an arbitral tribunal. (Article 11 (2)).

ARBITRATION

Constitution of the Tribunal

The arbitral tribunal shall be constituted ad-hoc:

• Each Contracting Party shall appoint a member and the two members shall agree on selecting a national of a third State named by the governments of both Contracting Parties to serve as Chairman of the panel. The members shall be appointed within two months and the Chairman within three months.
• If no agreement occurs within these time frames, each Contracting Party may invite the President of the International Court of Justice to make the necessary appointments. (There are also additional provisions to cover cases when the President is a national of either Contracting Party or is otherwise prevented from fulfilling this function).
• Regarding costs, each Party is required to bear the expenses of its own member of the tribunal and of its representation in the proceedings, while the costs related to the Chairman are to be paid for equally by the Contracting Parties. (Article 11 (3) (4) (5)).

Procedural Rules of the Tribunal

Decisions of the tribunal shall be taken by a majority of votes. The arbitral tribunal shall determine its own procedure. (Article 11 (5)).

Applicable Law

No reference.

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

DEFINITION

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PREARBITRAL CONSULTATIONS AND DISPUTE SETTLEMENT MECHANISMS

Disputes between a national or a company of a Contracting Party and the other Contracting Party with respect to compliance with the provisions of this Agreement shall be, to the extent possible, settled amicably between the parties to the dispute. (Article 10 (1)).

If it was not possible to settle the dispute within a period of six months, it may be submitted, to the election of the national or company:

1. to the competent tribunals of the host party, in which territory the investment was made; or
2. to international arbitration. (Article 10 (2)).

Election by the investor of either one of these procedures shall be definitive. (Article 10 (3)).

ARBITRAL SETTLEMENT OF DISPUTES

Conditions

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Consent

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Forms of Arbitration

The dispute shall be submitted to arbitration under:

• ICSID, or
• Additional Facility Rules of ICSID;
• if ICSID is not available, to UNCITRAL rules. (Article 10 (2)).

Applicable Law

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