Title

AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA  AND THE GOVERNMENT OF ______________ON THE PROMOTION AND PROTECTION OF INVESTMENTS

Preamble

The government of the People's Republic of China and the government of (hereinafter referred to as the Contracting Parties),

Desiring to intensify the cooperation of both States on the basis of equality and mutual benefits;

Intending to create favorable conditions for investment by investors of one Contracting Party in the territory of the other Contracting Party;

Recognizing that the reciprocal encouragement, promotion and protection of such investment will be conducive to stimulating business initiative of the investors and will increase prosperity in both States;

Desiring to establish a framework of rules conducive to increasing investment flows between the Parties and to ensure the protection and sccurity of investments of the other Party within each Party's territory;

Desiring to achieve these objectives in a manner consistenc with the protection of health, safety, and the environment, and the promotion of internationally recognized labour rights;

Emphasising the importance of corporate social responsibility;

Have agreed as follows:

Body

Section I. Definitions and Application

Article 1. Definitions

For the purpose of this Agreement, the term

1. "Investor of a Contracting Party" means:

(a) a natural person having the nationality of, or permanent residence in, a Contracting Party in accordance with its applicable law [provided, however, that a natural person who is a dual national shall be deemed to be exclusively a national of the state of his on her dominant and effective nationality]; or

(b) a legal entity constituted or otherwise organized under the law of a Contracting Party, and engaged in substantive business operations in the territory of that Party;

having an investment in the territory of the other Contracting Party (1);

2. "legal entity" means any entity constituted or organized under the applicable law, whether or not for profit, and whether privately owned or governmentally owned, including any corporation, trust, partnership, sole proprietorship, joint venture or other association;

3. "investment" means any assets owned or controlled, directly or indirectly, by investors of a Contracting Party in accordance with the laws and regulations of the other Contracting Party, including but not limited to:

i. a legal entity;

ii. shares, stocks or other forms of equity participation in an enterprise, and rights derived therefrom;

iii, bonds, debentures, loans and other forms of debt, and rights derived therefrom;

iv. rights under contracts, including turnkey, construction, management, production or revenue-sharing;

v. contracts;

vi. claims to money and claims to performances

vii. intellectual property rights;

viii. rights conferred pursuant to law or contract such as concessions, licenses, authorisations, and permits;

ix. any other tangible and intangible, movable and immovable property, and any related property rights, such as leases, mortgages, liens and pledges

In order to qualify as an investment under this Agreement, an asset must have the characteristics of an investment, such as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk,

Any change in the form in which assets are invested does not affect their character as investments provided that such change is in accordance with the laws and regulations of the Contracting Party in whose territory the investment has been made.

4. "returns" means the amounts yielded from investments, including profits, dividends, interests, capital gains, royalties, fees and other legitimate income.

5. "territory" means:

(a) in respect of the People's Republic of China, the territory of the People's Republic of China including the territorial sea and air space above it, as well as any area beyond its territorial sea within which the People’s Republic of China has sovereign rights of explorations and exploitations of resources of the seabed and its subsoil and superjacent water resources in accordance with Chinese law and international law; (2)

(b) in respect of [Country,] [].

Until such time as China enacts its domestic law on the treatment of permanent residents of foreign countries, this Agreement does not impose obligations on a Party with respect to the permanent residents of the other Party except for the obligations in Articles [...]

Article 2. Scope of Application

1. This Agreement applies to measures adopted or maintained by a Party, after the entry into force of this Agreement, relating to investors of the other Party or their investments. The Section III [Dispute Settlement] does not apply to disputes arising out of events that have occurred before the entry into force of this Agreement.

2. This Agreement applies to investments made prior to or after its entry into force in accordance with the laws and regulations of the Contracting Party concerned.

3. This Agreement shall apply to the territory of a Party, as defined in Article 1 Paragraph 5.

Section II. Standards of Treatment

Article 3. General Standard of Treatment

1. Each Contracting Party shall at all times accord to investments of investors of the other Contracting Party treatment in accordance with generally accepted principles of international law, including fair and equitable treatment and full protection and security. 

2. For greater certainty, the concepts of "fair and equitable treatment" and full protection and security" do not require treatment in addition to or beyond accepted principle of international law. A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article.

Article 4. Most Favoured Nation Treatment

1. Each Contracting Party shall accord to investors of the other Contracting Party and their investment, treatment no less favourable than that it accards, in like circumstances, to investors of any third State and their investments with respect to the admission, expansion, operation, management, maintenance, use, enjoyment or disposal of investments. (3)

2. Treatment referred to in paragraph [1] shall not be construed as to oblige one Contracting Party to extend to the investors of the other Contracting Party the benefit of any treatment, preference or privilege by virtue of:

(a) any customs union, free trade zone, economic union and any incernational agreement resulting in such unions, or similar institutions;

(b) any arrangements for facilitating small scale frontier trade in boarder areas.

3. For greater certainty, treatment referred to in paragraph [1] does not encompass dispute resolution mechanisms provided for in this Agreement or other international agreements.

Article 5. National Treatment

1. Without prejudice to its laws and regulations at the time the investment is made, each Contracting Party shall accord to investors of the other Contracting Party and their investments, treatment no less favourable than that it accords, in like circumstances, to its own investors and their investments with respect to the operation, management, maintenance, use, enjoyment or disposal of investments.

2. National treatment also applies to admission of investments as set out in Annex [A].

Article 6. Admission of Investments

1. Subject to this Agreement and any other applicable treaty obligations, each Contracting Party shall admit of investments made by investors of the other Contracting Party pursuant to its applicable laws and regulations.

2. Subject to its laws and regulations, one Contracting Party shall provide assistance in and facilities for obtaining visas and working permits to nationals of the other Contracting Party engaging in activities associated with investments made in the territory of that Contracting Party.

Article 7. Expropriation

1. Neither Contracting Party may expropriate or nationalize an investment either directly or indirectly through measures tantamount to expropriation or nationalization ("expropriation), except:

(a) for a public purpose;

(b) on a non-discriminatory basis;

(c) in accordance with due process of law; and

(d) on payment of compensation in accordance with paragraph 2 below.

2. Compensation shall:

(a) be equivalent to the fair market value of the expropriated investment immediately before the expropriation occurred. The fair market value shall not reflect any change in value because the intended expropriation had become publicly known earlier;

(b) include interest at a commercially reasonable rate, from the date of expropriation until the date of actual payment;

(c) be paid wichout delay; and

(d) be fully realizable and freely transferable.

3. Except in rare circumstances, non-discriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, and the environment, do not constitute indirect expropriations.

Article 8. Compensation for Losses

Investors of one Contracting Party whose investments in the territory of the other Contracting Party suffer losses owing to war, a state of national emergency, insurrection, riot or other similar events in the territory of the latter Contracting Party, shall be accorded by the latter Contracting Party treatment, as regards restitution, indemnification, compensation and other settlements no less favorable than that accorded to the investors of its own or any third State, whichever is more favorable to the investor concerned.

Article 9. Transfer

1. Without prejudice to any applicable formalities pursuant to its laws and regulations, each contracting Party shall guarantee to an investor of the other Contracting Party that all payments related to an investment in its territory may be freely transferred into and out of its territory without delay. Such transfers shall include, but not be limited to:

(a) amounts necessary for establishing, maintaining, or expanding investment;

(b) profits, interests, dividends, capital gains, royalties and other fees in connection with intellectual and industrial property rights;

(c) payments made under a contract including those pursuant to a loan agreement;

(d) proceeds from the total or partial sale or liquidation of the investment;

(e) earnings and remuneration of nationals of the other Contracting Party who work in connectionwith an investment;

(f) any compensation owned to an investor by virtue of Article 7 and 8; and

(g) payments pursuant to the settlement ofa dispute under Section III.

2. The formalities referred to in paragraph 1 above:

(a) shall in no case be move restrictive than those required at the time of entry into force of this  Agreement;

(b) shall in no case impose new restrictions than those imposed at the time of entry into force of this Agreement; and

(c) shall not be used as a means of avoiding the Contracting Party's commitments and obligations under this Article.

3. Neither Contracting Party shall prevent transfers from being made without delay in freely convertible currencies as classified by the International Monetary Fund at the market exchange rate prevailing on the date of transfer unless otherwise provided in this Article.

4. A Contracting Party may prevent a transfer through the equitable, non-discriminatory and good faith application of its laws relating to:

(a) bankruptcy, insolvency or the protection of the rights of creditors;

(b) issuing, trading or dealing in securities;

(c) criminal or administrative offenses;

(d) reports of transfers of currency or other monetary instruments; or

(e) ensuring the satisfaction of judgments in adjudicatory proceedings.

5. In case of a serious balance of payments difficulty or of a threat thereof, each Contracting Party may temporarily restrict transfers provided that such a Contracting Party implement measures or a programme in accordance with international standards. These restrictions should be imposed on an equitable, non-discriminatory and in good faith basis.

Article 10. Subrogation

If one Contracting Party or its designed agency makes a payment to its investors under a guarantee or a contract of insurance against non-commercial risks it has accorded in respect of an investment made in the territory of the other Contracting Party, the latter Contracting Party shall recognize:

(a) the assignment, whether under the law or pursuant to a legal transaction in the former Contracting Party, of any rights or claims by the investors to the former Contracting Party or to its designated agency, as well as,

(b) that the former Contracting Party or its designated agency is entitled by virtue of subrogation to exercise the rights and enforce the claims of that investor and assume the obligations related to the investment to the same extent as the investor.

Article 11. Non-Derogation

1. This Treaty shall not derogate from any of the following that entitle an investor of a Party or a covered investment to treatment more favourable than that accorded by this Agreement:

(1) laws or regulations, administrative practices or procedures, or administrative or adjudicatory decisions of a Party;

(2) international legal obligations of a Party; or

(3) obligations assumed by a Party, including those contained in an investment authorization or an investment agreement.

2. For the purpose this Agreement:

(1) "investment authorization" means an authorization that the relevant foreign investment authority of a Party grants to a covered investment or an investor of the other Party.

(2) "investment agreement" means a written agreement between a national authority of a Party and a covered investment or an investor of the other Party, on which the covered investment or the investor relies in establishing or acquiring a covered investment other than the written agreement itself, that grants rights to the covered investment or investor:

a) with respect to natural resources that a national authority controls, such as for their exploration, extraction, refining, transportation, distribution, or sale:

b) to supply services to the public on behalf of the Party, such as power generation or distribution, water treatment or distribution, ar telecommunications; or

c) to undertake infrastructure projects, such as the construction of roads, bridges, canals, dams, or pipelines, that are not for the exclusive or predominant use and benefit of the government.

Article 12. Exceptions

1. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination between investments or between investors, or a disguised restriction on international investment, nothing in this Agreement shall be construed to prevent a Party from adopting or enforcing measures necessary:

(1) to protect public morals or to maintain public order;

(2) to protect human, animal or plant life or health;

(3) to secure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;

(4) for the protection of national treasures of artistic, historic or archaeological value; or

(5) for the protection of the environment

2. Nothing in this Agreement shall be construed:

1) to require any Party to furnish any information, the disclosure of which it considers contrary to its essential security interests; or

2) to prevent any Party from taking any action which it considers necessary for the protection of its essential security interests:

a) relating to investment in defence and security sector[s];

b) relating to fissionable and fusionable materials or the materials from which they are derived;

c) taken in time of war or other emergency in international relations; or

3) to prevent any Party from taking any action in pursuance of its obligations for the maintenance of international peace and security, including under the United Nations Charter.

3. The provisions of this Agreement shall not apply to a Party's laws and measures specifically designed to preserve and promote linguistic and cultural diversity, cultural and audiovisual policy, as well as rights and obligations of the Parties under international agreements and national laws and measures relating to copyright and related rights.

4. Notwithstanding any other provisions of this Agreement, a Party shall not be prevented from taking measures for prudential reasons, including for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by a financial service supplier, to ensure the integrity and stability of the financial system, or to enhance market competition, including ownership control and limitation.

Where such measures do not conform with the provisions of the Agreement, they shall not be used as a means of avoiding the Party's commitments or obligations under the Agreement.

5. Taxation

a) Nothing in this Agreement shall affect the imposition, enforcement or collection of direct or indirect taxes Imposed by a Party.

b) Nothing in this Agreement shall create any right to any benefit under an agreement for the avoidance of double taxation concluded by a Party.

c) Any dispute as to whether paragraphs a) and b) apply, may only be brought before the Competent Tax Authorities of the Parties or the national courts or appeal organs of a Party, and shall not be covered by Section III [State-Investor Dispute Settlement] of this Agreement.

d) If the Competent Tax Authority of one of the Parties, after the procedure set forth in paragraph c), does not agree that paragraph a) above apply, but takes the position that the case should be considered under Article [Expropriation], then the dispute shall be covered by Section III [State-Investor Dispute Settlement] of this Agreement.

Article 13. Corporate Social Responsibility

The Parties agree to encourage investors to conduct their investment activities in a socially responsible manner, by complying with the OECD Guidelines for Multinational Enterprises and participating in the United Nations Global Compact

Section III. Settlement of Investor-State Disputes

Article 14. Application

This Section shall apply to disputes between a Contracting Party and an investor of the other Contracting Party arising from an alleged breach of an obligation set forth in Section II entailing loss or damage.

Article 15. Consultation and Notice of Intent

1. The disputing parties should first attempt to settle a claim through consultation or negotiation.

2. With a view to settling the claim amicably, the disputing investor shall deliver to the disputing Contracting Party written notice of its intention to submit a claim to arbitration at least six months before the claim is submitted. Such notice shall specify:

(a) the name and domicile of the disputing investor and, where a claim is made by an investor for loss or damage to an enterprise, the name and domicile of the enterprise;

(b) the provisions of Section II alleged to have been breached and other relevant provisions;

(c) the issues and the factual and legal basis of the claim; and

(d) the relief sought and [where possible] the approximate amount of damages claimed.

Article 16. Submission to Arbitration

1. Subject to Annex B, an investor of a Contracting Party may submit to arbitration a claim that the other Contracting Party has breached an obligation set forth in Section II, and that the investor has incurred loss or damage by reason of, or arising out of, that breach.

2. A disputing investor may submit the claim to arbitration under:

(a) the ICSID Convention, provided that both the disputing Contracting Party and the Contracting Party of the investor are parties to the ICSID Convention;

(b) the ICSID Additional Facility Rules, provided that either the disputing Contracting Party or the Contracting Party of the investor, but not both, is a party to the ICSID Convention;

(c) the UNCITRAL Arbicration Rules; or