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Scope of Application [Return to the top of the page] DEFINITION OF INVESTMENT The term “investment” of a national or company means every kind of investment owned or controlled directly or indirectly by that national or company. This general definition includes, but is not limited to, rights in companies, contractual rights, tangible property (real estate) and intangible property (rights such as leases, mortgages, liens and pledges); intellectual property rights; and rights conferred pursuant to law, such as licenses and permits. (Article I(d)). DEFINITION OF INVESTOR Nationals “National” of a Party means a natural person who is a national of that Party under its applicable law. (Article I (c)). Companies “Company” means any entity constituted or organized under applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, and includes a corporation, trust, partnership, sole proprietorship, branch, joint venture, association, or other organization. (Article I (a)). Application in Time (Entry into Force and Duration: Applicability to Investments made Prior to Entry into Force) Date
of signature: April 17, 1998 Admission [Return to the top of the page] There is not 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. Each Party shall at all times accord to covered investments fair and equitable treatment and full protection and security, and shall in no case accord treatment less favorable than that required by international law. (Article II (3) (a)). Full Protection and Security Yes. Each Party shall at all times accord to covered investments fair and equitable treatment and full protection and security, and shall in no case accord treatment less favorable than that required by international law. (Article II (3) (a)). Non-Discrimination Yes. Neither Party shall in any way impair by unreasonable and discriminatory measures the management, conduct, operation, and sale or other disposition of covered investments. (Article II (3) (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). With respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of covered investments, each Party shall accord treatment no less favorable than that it accords, in like situations, to investments in its territory of its own nationals or companies (hereinafter "national treatment") or to investments in its territory of nationals or companies of a third country (hereinafter "most favored nation treatment"), whichever is most favorable (hereinafter "national and most favored nation treatment"). Each Party shall ensure that its state enterprises, in the provision of their goods or services, accord national and most favored nation treatment to covered investments. (Article II (1)). With respect to the treatment accorded by a State, Territory or possession of the United States of America, national treatment means treatment no less favorable than the treatment accorded thereby, in like situations, to investments of nationals of the United States of America resident in, and companies legally constituted under the laws and regulations of, other States, Territories or possessions of the United States of America. (Article XV (1) (b)). With respect to Article XV, paragraph 1(b), the Government of the United States confirms that its federal system of government contains substantial protections against burdens on commerce, including investment, by a State of the United States with respect to investors of other States of the United States. (Article 4 of the Protocol). With respect to the leasing of minerals and pipeline rights of way on government lands:
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). With respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of covered investments, each Party shall accord treatment no less favorable than that it accords, in like situations, to investments in its territory of its own nationals or companies (hereinafter "national treatment") or to investments in its territory of nationals or companies of a third country (hereinafter "most favored nation treatment"), whichever is most favorable (hereinafter "national and most favored nation treatment"). Each Party shall ensure that its state enterprises, in the provision of their goods or services, accord national and most favored nation treatment to covered investments. (Article II (1)). EXCEPTIONS The Government of the United States of America may adopt or maintain exceptions to the obligation to accord national treatment to covered investments in the sectors or with respect to the matters specified below:
Most favored nation treatment shall be accorded in the sectors and matters indicated above. (Article 1 of the Annex). The Government of the United States of America may adopt or maintain exceptions to the obligation to accord national and most favored nation treatment to covered investments in the sectors or with respect to the matters specified below:
The Government of the United States of America may adopt or maintain exceptions to the obligation to accord national and most favored nation treatment to covered investments, provided that the exceptions do not result in treatment under this Treaty less favorable than the treatment that the Government of the United States of America has undertaken to accord in the North American Free Trade Agreement with respect to another party to that Agreement, in the sector or with respect to the matter specified below: insurance. (Article 3 of the Annex). The Government of the Republic of Bolivia may adopt or maintain exceptions to the obligation to accord national treatment to covered investments in the sectors or with respect to the matters specified below:
Most favored nation treatment shall be accorded in the sectors and matters indicated above. (Article 4 of the Annex). The Government of the Republic of Bolivia may adopt or maintain exceptions to the obligation to accord national and most favored nation treatment to covered investments in the sectors or with respect to the matters specified below:
A Party may adopt or maintain exceptions to the obligations of paragraph 1 in the sectors or with respect to the matters specified in the Annex to this Treaty. In adopting such an exception, a Party may not require the divestment, in whole or in part, of covered investments existing at the time the exception becomes effective. (Article II (2) (a)). The obligations of paragraph 1 do not apply to procedures provided in multilateral agreements concluded under the auspices of the World Intellectual Property Organization relating to the acquisition or maintenance of intellectual property rights. (Article II (2) (b)). This Treaty shall not preclude a Party from applying measures necessary for 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 XIV (1)). Each Party reserves the right to deny to a company of the other Party the benefits of this Treaty if nationals of a third country own or control the company and:
OTHER ASPECTS Performance Requirements Neither Party shall mandate or enforce, as a condition for the establishment, acquisition, expansion, management, conduct or operation of a covered investment, any requirement (including any commitment or undertaking in connection with the receipt of a governmental permission or authorization):
Such requirements do not include conditions for the receipt or continued receipt of an advantage. (Article VI). The Parties confirm their mutual understanding that advantages given to national suppliers in government procurement programs are not precluded by Article VI. (Article 1 of the Protocol). Others Subject to its laws relating to the entry and sojourn of aliens, each Party shall permit to enter and to remain in its territory nationals 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 other Party that employs them, have committed or are in the process of committing a substantial amount of capital or other resources. (Article VII (1) (a)). Neither Party shall, in granting entry under paragraph l (a), require a labor certification test or other procedures of similar effect, or apply any numerical restriction. (Article VII (1) (b)). The Government of the Republic of Bolivia confirms that pursuant to the Treaty, Article 3 of the Bolivian Labor Law shall not apply to top managerial personnel. (Article 2 of the Protocol). Each Party shall accord national and most favored nation treatment to covered investments as regards any measure relating to losses that investments suffer in its territory owing to war or other armed conflict, revolution, state of national emergency, insurrection, civil disturbance, or similar events. (Article IV (1)). This Treaty shall not derogate from any of the following that entitle covered investments to treatment more favorable than that accorded by this Treaty:
This Treaty shall not preclude a Party from prescribing special formalities in connection with covered investments, such as a requirement that such investments be legally constituted under the laws and regulations of that Party, or a requirement that transfers of currency or other monetary instruments be reported, provided that such formalities shall not impair the substance of any of the rights set forth in this Treaty. (Article XIV (2)). Each Party shall provide effective means of asserting claims and enforcing rights with respect to covered investments. (Article II (4)). A Party's obligations under this Treaty shall apply to a state enterprise in the exercise of any regulatory, administrative or other governmental authority delegated to it by that Party. (Article XV (2)). Transfers [Return to the top of the page] TYPES OF PAYMENT Returns Yes. Each Party shall permit all transfers relating to a covered investment to be made freely and without delay into and out of its territory. Such transfers include:
Each Party shall permit returns in kind to be made as authorized or specified in an investment authorization, investment agreement, or other written agreement between the Party and a covered investment or a national or company of the other Party. (Article V (3)). Repayment of Loans Yes. (Article V(1) (d)). Proceeds of the Total or Partial Liquidation of an Investment Yes. (Article V(1) (b)). Licenses and Other Fees --- Other Categories of Payment Yes. (Article V(1) (a), (c), (d) (e)). CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER Currency Each Party shall permit transfers to be made in a freely usable currency at the market rate of exchange prevailing on the date of transfer. (Article V (2)). Exchange Rates Each Party shall permit transfers to be made in a freely usable currency at the market rate of exchange prevailing on the date of transfer. (Article V (2)). Time of Transfer Each Party shall permit all transfers relating to a covered investment to be made freely and without delay into and out of its territory. (Article V (1)). Notwithstanding paragraphs 1 through 3, a Party may prevent a transfer through the equitable, non discriminatory and good faith application of its laws relating to:
Expropriation [Return to the top of the page] DEFINITION Covered Expropriatory Measures Expropriation, nationalization, directly or indirectly through measures tantamount to expropriation or nationalization. (Article III(1)). CONDITIONS Public Purpose and Non-Discrimination Yes. (Article III(1)). Due Process of Law and Judicial Review Yes. (Article III(1)). Other The expropriation shall be carried out in accordance with the general principles relating to treatment contained in Article II(3)). (Article III(1)). See supra. Compensation Standard; Form and Time of Payment “Prompt, adequate and effective compensation” Compensation shall be paid without delay; be equivalent to the fair market value of the expropriated investment immediately before the expropriatory action was taken ("the date of expropriation"); and be fully realizable and freely transferable. The fair market value shall not reflect any change in value occurring because the expropriatory action had become known before the date of expropriation. (Article III (2)). If the fair market value is denominated in a freely usable currency, the compensation paid shall be no less than the fair market value on the date of expropriation, plus interest at a commercially reasonable rate for that currency, accrued from the date of expropriation until the date of payment. (Article III (3)). If the fair market value is denominated in a currency that is not freely usable, the compensation paid converted into the currency of payment at the market rate of exchange prevailing on the date of payment shall be no less than:
Settlement of Disputes
between Contracting Parties PRE-ARBITRATION NEGOTIATIONS Any disagreement between the Parties concerning the interpretation or application of the Treaty, that is not resolved through consultations or other diplomatic channels shall be submitted upon the request of either Party to an arbitral tribunal for binding decision in accordance with the applicable rules of international law. 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 shall be a national of a third state. The UNCITRAL Arbitration Rules applicable to appointing members of three member panels shall apply mutatis mutandis to the appointment of the arbitral panel except that the appointing authority referenced in those rules shall be the Secretary General of the Centre [ICSID]. (Article X (2)). Expenses incurred by the Chairman and other arbitrators, and other costs of the proceedings, shall be paid for equally by the Parties. However, the arbitral panel may, at its discretion, direct that a higher proportion of the costs be paid by one of the Parties. (Article X (4)). Procedural Rules of the Tribunal Decisions of the tribunal shall be binding on both Parties in accordance with the applicable rules of international law. (Article X (1)). In the absence of an agreement by the Parties to the contrary, the UNCITRAL Arbitration Rules shall govern, except to the extent these rules are
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 arbitral panel 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 X (3)). Applicable Law Disputes shall be decided in accordance with the applicable rules of international law. (Article X (1)). Settlement of Disputes between a Contracting Party and an Investor [Return to the top of the page] DEFINITION For purposes of this Treaty, an investment dispute is a dispute between a Party and a national or company of the other Party arising out of or relating to an investment authorization, an investment agreement or an alleged breach of any right conferred, created or recognized by this Treaty with respect to a covered investment. (Article IX (1)). PREARBITRAL CONSULTATIONS AND DISPUTE SETTLEMENT MECHANISMS Apart from the general provisions on consultation in Article VIII, there is no specific requirement for consultation in the case of disputes between a Party and an investor. A national or company that is a party to an investment dispute may submit the dispute for resolution under one of the following alternatives:
ARBITRAL SETTLEMENT OF DISPUTES Conditions Provided that the national or company concerned has not submitted the dispute for resolution under paragraph 2 (a) or (b), and that three months have elapsed from the date on which the dispute arose, the national or company concerned may submit the dispute for settlement by binding arbitration. (Article IX (3) (a)). Consent Consent set out explicitly in Article IX (4). Forms of Arbitration The dispute may be submitted to binding arbitration to:
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