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Investment Agreements in the Western Hemisphere: A Compendium

Trade and Integration Agreements


IV. Transfers | A. Types of payment

North American Free Trade Agreement (NAFTA)

Each Party shall permit all transfers relating to an investment of an investor of another Party in the territory of the Party to be made freely and without delay. Such transfers include:
a) profits, dividends, interest, capital gains, royalty payments, management fees, technical assistance and other fees, returns in kind and other amounts derived from the investment;
b) proceeds from the sale of all or any part of the investment or from the partial or complete liquidation of the investment;
c) payments made under a contract entered into by an investor, or its investment, including payments made pursuant to a loan agreement;
d) payments made pursuant to Article 1110; and
e) payments arising under Section B. (Article 1109(1)).

No Party may require its investors to transfer, or penalize its investors that fail to transfer, the income, earnings, profits or other amounts derived from, or attributable to, investments in the territory of another Party. (Article 1109(3)). Article 1109(3) shall not be construed to prevent a Party from imposing any measure through the equitable, non-discriminatory and good faith application of its laws relating to the matters set out in subparagraphs (a) through (e) of paragraph 4. (Article 1109(5)).

Notwithstanding Article 1109(1), a Party may restrict transfers of returns in kind in circumstances where it could otherwise restrict such transfers under this Agreement, including as set out in paragraph 4. (Article 1109(6)).

Free Trade Agreement of the Group of Three among Mexico, Colombia, and Venezuela (Group of Three)

Each Party shall permit all transfers relating to an investment of an investor of another Party in the territory of the Party to be made freely and without delay. Such transfers include:
a) profits, dividends, interest, capital gains, royalty payments, management fees, technical assistance, returns in kind, and other amounts derived from the investment;
b) proceeds from the sale or liquidation of the investment, in whole or in part;
c) payments made under a contract entered into by an investor or its investment;
d) payments derived from compensation for expropriation; and
e) payments derived from implementation of the provisions relating to the system for settling disputes. (Article 17-07(1)).

Each Party may maintain laws and regulations that impose income and additional taxes by such means as the withholding of taxes on dividends and other transfers, provided such measures are not discriminatory. (Article 17-07(5)).

Common Market of the South (MERCOSUR)

Members:
Each Contracting Party shall grant investors of the other Contracting Party the free transfer of investments and returns, in particular, but not exclusively:

a) capital and additional necessary for the maintenance and development of investments;
b) benefits, profits, salaries, interests, dividends and other current incomes;
c) funds for the reimbursement of loans;
d) bonuses and honoraria and other types of payments related to intellectual or industrial property rights (Article 1(d)) or concessions (such as for natural resources, Article 1(e));
e) proceeds of the total or partial liquidation of an investment;
f) compensation, indemnization and other payments as provided in Article 4;
g) remunerations of nationals of another Contracting Party that have obtained the authorization to work with respect to an investment made in that country. (Article 5(1) of the Colonia Protocol).

Non-Members:
Each Member Party shall grant investors of third States the free transfer of investments and returns, in particular, but not exclusively:

a) capital and additional necessary for the maintenance and development of investments;
b) benefits, profits, salaries, interests, dividends and other current incomes;
c) funds for the reimbursement of loans;
d) bonuses and honoraria and other types of payments related to intellectual or industrial property rights (Article 2(A)(1)(d)) or concessions (such as for natural resources, Article 2(A)(1)(e));
e) proceeds of the total or partial liquidation of an investment;
f) compensation, indemnization and other payments as provided in Article 2(D);
g) remunerations of nationals of a third State that have obtained the authorization to work with respect to an investment made in that country. (Article 2(E)(1) of the Buenos Aires Protocol).

Andean Pact

The owners of a direct foreign investment, as well as subregional investors, shall have the right to transfer abroad, in freely convertible currency, as provided in the legislation of each Member Country, the proven net earnings deriving from their direct foreign investment. The national competent entity may likewise register in freely convertible currency the investment of distributed excess earnings. (Article 4).

Foreign investors and subregional investors shall have the right to repatriate the sums obtained when they sell, within the recipient country, their stock, participation or rights, or when the capital of the company is reduced or it is liquidated, upon the prior payment of any corresponding taxes. (Article 5).

Caribbean Community and the Caribbean Common Market (CARICOM)


 
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