(m) an order or judgment in a judicial or administrative proceeding.
A modification in the manner in which assets have been invested or reinvested does not affect their investment status under this Agreement, provided that such modification falls within the definitions of this Article and is made in accordance with the domestic law of the Party into whose territory the investment has been admitted;
investor of a Party: a Party or a State enterprise, or a national or an enterprise of such Party, who intends (2) to make, is making or has made an investment in the territory of the other Party; provided, however, that a natural person who has dual nationality shall be considered exclusively a national of the State of his dominant and effective nationality;
investor of a non-Party: an investor that is not an investor of a Party that intends (3) to make, is making, or has made an investment in the territory of a Party;
freely usable currency: the freely usable currency as determined in accordance with the Articles of Agreement of the International Monetary Fund;
disputing party: the plaintiff or the defendant; disputing parties: the plaintiff and the defendant;
Non-disputing Party: the Party that is not a party to a dispute relating to an investment under Section C;
UNCITRAL Arbitration Rules: the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL), adopted by the United Nations General Assembly on December 15, 1976;
ICSID Additional Facility Rules: the Additional Facility Rules for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes;
Secretary-General: the Secretary-General of ICSID; and
tribunal: an arbitral tribunal established in accordance with article 11.20, 11.23 or 11.29.
Article 11.2. Scope of Application
1. This Chapter applies to measures adopted or maintained by a Party relating to:
(a) investors of the other Party in all matters relating to their investment;
(b) investments of investors of the other Party made in the territory of the Party; and
(c) with respect to Articles 11.7 and 11.16, to all investments in the territory of the Party.
2. This Chapter covers both investments existing at the date of entry into force of this Agreement and investments made or acquired thereafter.
3. This Chapter does not apply to:
(a) measures adopted or maintained by a Party with respect to financial services;
(b) measures adopted by a Party to restrict the participation of investments of investors of the other Party in its territory, for reasons of national security or public order;
(c) disputes or claims initiated prior to the entry into force of this Agreement relating to acts or events occurring prior to its entry into force, even if their effects remain after the entry into force of this Agreement;
(d) services supplied in the exercise of governmental authority within the territory of the respective Party, such as, but not limited to, the enforcement of laws relating to social rehabilitation services, income security or insurance, social security or insurance, social welfare, public education, public training, health and child care; and
(e) to the economic activities reserved to each Party, as indicated in Annex Il.
4. In the event of any inconsistency between this Chapter and another Chapter, the other Chapter shall prevail to the extent of the inconsistency.
5. A Party's requirement that a service supplier of the other Party post a bond or other form of financial security as a condition for the cross-border supply of a service in its territory does not, by itself, make this Chapter applicable to that cross-border supply of a service. This Chapter applies to measures adopted or maintained by the Party relating to the posted bond or financial security, to the extent that such bond or financial security is an investment of an investor of the other Party.
Section B. Investment
Article 11.3. Minimum Standard of Treatment
1. Each Party shall accord to investments of investors of the other Party treatment in accordance with customary international law, including fair and equitable treatment and full protection and security within its territory.
2. For greater certainty, paragraph 1 prescribes that the customary international law minimum standard of treatment of aliens is the minimum standard of treatment to be accorded to investments of investors of the other Party. The concepts of "fair and equitable treatment" and "full protection and security" do not require treatment in addition to or beyond that required by that standard, and do not create additional substantive rights. The obligation in paragraph 1 to provide:
(a) "fair and equitable treatment" includes, but is not limited to, the obligation not to deny justice in criminal, civil or administrative proceedings, in accordance with the principle of due process embodied in the principal legal systems of the world; and
(b) The term "full protection and security" requires a Party to provide the level of police protection that is required by customary international law.
3. A determination that another provision of this Agreement or of another international agreement has been violated does not establish that this Article has been violated.
4. With respect to this Article, the customary international law minimum standard of treatment of aliens refers to all principles of customary international law that protect the rights and economic interests of aliens.
Article 11.4. National Treatment
1. Each Party shall accord to an investor of the other Party and to an investment of an investor of the other Party treatment no less favorable than that it accords, in like circumstances, to its own investors and to investments of such investors with respect to the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of investments in its territory.
2. A Party may comply with paragraph 1 by granting to investments and investors of the other Party formally identical treatment or formally different treatment to that it accords to its own like investments and investors.
3. Formally identical treatment or formally different treatment shall be considered less favorable if it modifies the conditions of competition in favor of investments or investors of the Party, as compared to like investments or investors of the other Party.
4. Treatment accorded by a Party under paragraph 1 means, with respect to a regional level government, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that regional level government to investors and investments of investors of the Party of which it is a Party.
Article 11.5. Most-Favored-Nation Treatment
1. Each Party shall accord to an investor of the other Party and to an investment of an investor of the other Party treatment no less favorable than that it accords, in like circumstances, to an investor and to an investment of an investor of any non- Party with respect to the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of investments in its territory.
2. The most-favored-nation treatment to be accorded in similar circumstances does not extend to dispute settlement mechanisms, such as those contained in Section C, that are provided for in other international investment treaties or agreements.
3. If a Party has granted special treatment to investors or their investments from a non-Party under existing or future bilateral investment treaties, tax treaties, or agreements establishing free trade areas, customs unions, common markets, economic or monetary unions or other similar institutions of economic integration, that Party shall not be obliged to grant the treatment in question to investors or investments of investors of the other Party.
Article 11.6. Treatment In the Event of Loss
1. Each Party shall accord to the investor of the other Party, and to the investment of an investor of the other Party, non-discriminatory treatment with respect to measures it adopts or maintains with respect to losses suffered by investments in its territory due to armed conflict or civil strife.
2. Paragraph 1 does not apply to existing measures relating to grants or donations that would be inconsistent with Article 11.4, except for Article 11.9.4(b).
Article 11.7. Performance Requirements
1. No Party may impose or compel compliance with the following requirements or commitments, in connection with the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of an investment of an investor of the other Party or of a non-Party in its territory for:
(a) export a certain type, level or percentage of goods or services;
(b) to reach a certain degree or percentage of domestic content;
(c) to purchase, use or grant preference to goods produced in its territory, or to purchase goods from producers or services from service providers in its territory;
(d) relate in any way the volume or value of imports to the volume or value of exports, or to the amount of foreign exchange inflows associated with such investment;
(e) restrict sales in its territory of the goods or services that such investment produces or renders, by relating such sales in any way to the volume or value of its exports or to foreign exchange earnings it generates;
(f) transfer to a person in its territory, technology, productive process or other reserved knowledge, except:
(i) where the requirement is imposed by a judicial or administrative tribunal or competent authority to remedy an alleged violation of national competition law or to act in a manner not inconsistent with other provisions of this Agreement; (4) or
(ii) where a Party authorizes the use of an intellectual property right in accordance with Article 31 of the TRIPS Agreement or measures requiring the disclosure of proprietary information that is within the scope of application, and consistent with Article 39 of the TRIPS Agreement (5);
(g) act as the exclusive supplier of the goods it produces or services it provides for a specific regional or global market.
2. A measure that requires an investment to employ a technology to meet generally applicable health, environmental or safety requirements shall not be considered inconsistent with paragraph 1(f). For greater certainty, Articles 11.4 and 11.5 apply to such a measure.
3. No Party may condition the receipt or continued receipt of an advantage, in connection with the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of an investment in its territory by an investor of the other Party or of a non-Party, on compliance with any of the following requirements:
(a) to purchase, use or grant preference to goods produced in its territory or to purchase goods from producers in its territory;
(b) toreach a certain degree or percentage of domestic content;
(c) relate in any way the volume or value of imports to the volume or value of exports, or to the amount of foreign exchange inflows associated with such investment; or
(d) restrict sales in its territory of the goods or services that such investment produces or renders, by relating such sales in any way to the volume or value of its exports or to foreign exchange earnings it generates.
4. Nothing in paragraph 3 shall be construed to prevent a Party, in its territory, from imposing, in connection with an investment of an investor of the other Party or of a non-Party, legally established requirements of geographic location of production units, provision of a service, generation of employment or training of labor, construction or expansion of particular facilities, or conduct of research and development activities in its territory.
5. Provided that such measures are not applied in an arbitrary or unjustified manner, or do not constitute a disguised restriction on international trade or investment, nothing in paragraphs 1(b), (c) and (f) and 3(a) and (b) shall be construed to prevent a Party from adopting or maintaining measures, including those of an environmental nature, necessary to:
(a) ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;
(b) protect human, animal or plant life or health; or
(c) preservation of natural resources, living or non-living.
6. Paragraphs 1(a), (b) and (c), and 3(a) and (b), shall not apply to requirements for qualification of goods or services with respect to export promotion and foreign aid programs.
7. Paragraphs 1(b), (c), (f) and (g), and 3(a) and (b), shall not apply to procurement.
8. Paragraphs 3(a) and (b) shall not apply to requirements imposed by an importing Party with respect to the content of goods necessary to qualify for preferential duties or quotas.
9. This Article does not preclude the application of any commitment, obligation or requirement between private parties, where a Party did not impose or require the commitment, obligation or requirement.
10. For greater certainty, paragraphs 1 and 3 do not apply to any requirements other than those set forth in those paragraphs.
Article 11.8. Senior Management and Boards of Directors
1. No Party may require an enterprise of that Party, which is an investment of an investor of the other Party, to appoint natural persons of any particular nationality to senior management positions.
2. A Party may require that a majority of the members of the management bodies or of any committee of such bodies of an enterprise of that Party that is an investment of an investor of the other Party be of a particular nationality, or be resident in the territory of the Party, provided that the requirement does not significantly impair the ability of the investor to exercise control over its investment.
Article 11.9. Reservations and Exceptions
1. Articles 11.4, 11.5, 11.7 and 11.8 do not apply to:
(a) any existing non-conforming measure maintained by a Party in:
(i) government at the central level, as established by that Party in its Schedule to Annex I;
(ii) a government at the regional level, as established by that Party in its Schedule to Annex I; or
(iii) government at the local level;
(b) the continuation or prompt renewal of any nonconforming measure referred to in subsection (a); or
(c) the modification of any nonconforming measure referred to in subparagraph (a) provided that such modification does not diminish the conformity of the measure, as in effect immediately before the modification, with Articles 11.4, 11.5, 11.7, or 11.8.
2. Articles 11.4, 11.5, 11.7 and 11.8 do not apply to any measures that a Party adopts or maintains, in relation to sectors, subsectors or activities, as indicated in its Schedule to Annex Il.
3. No Party may require, pursuant to any measure adopted after the date of entry into force of this Agreement and included in its Schedule to Annex Il, an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective. 4. Articles 11.4, 11.5 and 11.8 do not apply to:
(a) public procurement; or
(b) subsidies or grants provided by a Party, including government- supported loans, guarantees and insurance.
5. Parties are not required to list governance measures at the local level.
Article 11.10. Transfers
1. Each Party shall permit all transfers related to the investment of an investor of the other Party in its territory to be made freely and without delay to and from its territory. Such transfers include:
(a) earnings, dividends, interest, capital gains, royalty payments, management fees, technical assistance and other charges, earnings in kind and other amounts derived from the investment;
(b) proceeds from the sale or liquidation, in whole or in part, of the investment;
(c) payments made pursuant to a contract to which an investor or its investment is a party, including payments made pursuant to a loan agreement;
(d) payments made pursuant to Article 11.11; and
(e) payments arising from the application of the provisions relating to the dispute resolution mechanism contained in Section C.
2. For the purposes of this Chapter, a transfer is considered to have been made without delay when it has been made within the time normally required for the completion of the transfer formalities.
3. Neither Party may require its investors to make transfers of their income, profits, or earnings or other amounts derived from, or attributable to, investments made in the territory of the other Party, nor shall it penalize them for failure to make such transfers.
4. Each Party shall allow transfers to be made in freely usable currency, at the prevailing market exchange rate on the date of transfer.
5. Notwithstanding the provisions of paragraphs 1 and 4, each Party may prevent the implementation of transfers, through the equitable, non-discriminatory and good faith application of measures relating to:
(a) bankruptcy, insolvency or protection of creditorsâ rights;
(b) issuance, trading or operations of securities, futures, options or derivatives;
(c) financial reporting or record keeping of transfers when necessary to cooperate with law enforcement or financial regulatory authorities;
(d) criminal, administrative or judicial infractions;
(e) guarantee of compliance with orders or rulings in judicial or administrative proceedings;
(f) establishment of the necessary instruments or mechanisms to ensure the payment of income taxes, such as the withholding of the amount related to dividends or other concepts, in accordance with national legislation; or
(g) social security, public pensions or mandatory savings programs.
Article 11.11. Expropriation and Compensation
1. Neither Party may nationalize or expropriate, directly or indirectly, an investment of an investor of the other Party in its territory, or take any action tantamount to expropriation or nationalization of such investment, unless: it is:
(a) for a public purpose in accordance with the provisions of Annex 11.11;
(6) on a non-discriminatory basis;
(c) in accordance with the principle of legality and Article 11.3; and
(d) by way of compensation in accordance with paragraphs 2 to 4.
2. Compensation will be equal to the fair market value of the expropriated investment immediately before the expropriation took place ("date of expropriation"), and will not reflect any change in value due to the fact that the intention to expropriate was known prior to the date of expropriation. The valuation criteria will include the declared tax value of tangible assets, as well as other criteria that are appropriate to determine fair market value.
3. The payment of compensation shall be made without delay, shall be fully payable and freely transferable.
4. The amount paid shall not be less than the equivalent amount of compensation that would have been paid in a currency of free use in the international financial market on the date of expropriation, and this currency would have been converted at the market rate in effect on the valuation date, plus the interest it would have generated at a bank or commercial rate up to the date of the payment date.
5. This Article does not apply to the issuance of compulsory licenses granted in connection with intellectual property rights, or to the revocation, limitation or creation of intellectual property rights; to the extent that such issuance, revocation, limitation or creation is consistent with Chapter XVI (Intellectual Property).
6. This Article shall be interpreted in accordance with Annex 11.11.
Article 11.12. Special Formalities and Information Requirements
1. Nothing in Article 11.4 shall be construed to prevent a Party from adopting or maintaining a measure prescribing special formalities in connection with the establishment of investments by investors of the other Party, such as that the investments be constituted in accordance with the domestic law of the Party, provided that such formalities do not substantially impair the protection afforded by that Party under this Chapter.
2. Notwithstanding Articles 11.4 and 11.5, each Party may require, in its territory, an investor of the other Party to provide routine non-confidential information concerning its investment solely for information or statistical purposes. A Party may only request confidential information if its domestic law so permits and shall protect such information from any disclosure that could adversely affect the competitive position of the investment or the investor.
Article 11.13. Denial of Benefits
Subject to prior notification and consultations, a Party may deny the benefits of this Chapter to:
(a) an investor of the other Party and its investments, if the investor is an enterprise owned or controlled by persons of a non-Party and such enterprise does not maintain substantive business operations in the territory of the other Party; or
(b) an investor of the other Party and its investments, if the investor is an enterprise owned or controlled by persons of the denying Party and such enterprise does not maintain substantive business operations in the territory of the other Party.
Article 11.14. Subrogation
1. If a Party or a designated agency of a Party makes a payment to any of its investors under a guarantee, insurance contract or other form of indemnification it has provided with respect to an investment of an investor of that Party, the other Party shall recognize the subrogation or transfer of any right or title with respect to such investment. The subrogated or transferred right or claim shall not be greater than the original right or claim of the investor.
2. Where a Party or a designated agency of a Party has made a payment to an investor of that Party and has acquired the investor's rights and claims, that investor shall not exercise such rights and claims against the other Party unless it has been authorized to act on behalf of the Party or the designated agency of the Party that has made the payment.
Article 11.15. Extraterritorial Inapplicability of a Party's Law
1. The Parties, in relation to investments of their investors constituted and organized under the domestic law of the other Party, may not exercise jurisdiction or take any action that has the effect of extraterritorially applying their domestic law or hindering trade between the Parties, or between a Party and a non-Party.
2. If any of the Parties fails to comply with the provisions of paragraph 1, the Party where the investment has been constituted may, at its discretion, adopt such measures and take such actions as it deems necessary to terminate the legislation or measure in question and the obstacles to trade resulting therefrom.
Article 11.16. Environmental Measures
1. Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining or enforcing any measure, otherwise consistent with this Chapter, that it considers appropriate to ensure that investment activities in its territory are carried out taking into account environmental concerns.
2. The Parties recognize that it is inappropriate to encourage investment through the mitigation of domestic health, safety or environmental measures. Accordingly, neither Party shall eliminate or undertake to waive the application of such measures to an investor's investment as a means of inducing the establishment, acquisition, expansion or retention of the investment in its territory. If a Party considers that the other Party has so encouraged an investment, it may request consultations with that Party.
Article 11.17. Investment Promotion and Information Exchange
1. With the intention of significantly increasing the reciprocal participation of investments, the Parties may promote and support the elaboration of documents promoting investment opportunities and the design of mechanisms for their dissemination. Likewise, the Parties may create, maintain and improve financial mechanisms that make viable investments of one Party in the territory of the other Party.
2. The Parties shall make available information on opportunities for:
(a) investment in its territory, which may be developed by investors of the other Party;
(b) strategic alliances between investors of the Parties, by investigating and matching interests and partnership opportunities; and
(c) investment in specific economic sectors of interest to the other Party and its investors, in accordance with the express request made by this Party.
3. In order to keep each other informed and up to date : the Parties shall shall exchange information with respect to:
(a) national legislation that directly or indirectly affects foreign investment, including, among others, foreign exchange and tax regimes;
(b) the performance of foreign investment in their respective territories; and
(c) investment opportunities referred to in paragraph 2, including the dissemination of available financial instruments that assist in increasing investment in the territory of the Parties.