Title

AGREEMENT BETWEEN THE FEDERATIVE REPUBLIC OF BRAZIL AND THE FEDERAL DEMOCRATIC REPUBLIC OF ETHIOPIA ON INVESTMENT COOPERATION AND FACILITATION

Preamble

The Federative Republic of Brazil and the Federal Democratic Republic of Ethiopia

(Hereinafter jointly referred to as the "Contracting Parties" and separately as "Contracting Party"),

Wishing to strengthen and to enhance the bonds of friendship and the spirit of continuous cooperation between the Contracting Parties;

Seeking to create and maintain favourable conditions for the investments of investors of a Contracting Party in the territory of the other Contracting Party;

Seeking to stimulate, streamline and support bilateral investments, thus opening new integration opportunities between the Contracting Parties;

Recognizing the essential role of investment in promoting sustainable development, economic growth, poverty reduction, job creation, expansion of productive capacity and human development;

Considering that the establishment of a strategic partnership between the Contracting Parties in the area of investment will bring wide-ranging and mutual benefits;

Recognizing the importance of fostering a transparent and friendly environment for investments by investors of the Contracting Parties;

Reassuring their regulatory autonomy and policy space;

Wishing to encourage and strengthen contacts between the private sectors and the Governments of the two countries; and

Seeking to create a mechanism for technical dialogue and foster government initiatives that may contribute to a significant increase in mutual investment;

Agree, in good faith, to conclude the following Agreement on Investment Cooperation and Facilitation, hereinafter referred to as "the Agreement":

Body

Section I. Scope of the Agreement and Definitions

Article 1. Definitions

1. For the purpose of this Agreement:

1.1 'Enterprise" means: any entity constituted or organized under applicable law, for profit, whether privately owned or State-owned, including any corporation, trust, partnership, sole proprietorship, joint venture;

1.2 "Host State" means the Contracting Party where the investment is made.

1.3 "Investment" means a direct investment of an investor of one Contracting Party, established or acquired in accordance with the laws and regulations of the other Contracting Party, that, directly or indirectly, allows the investor to exert control or significant degree of influence over the management of the production of goods or provision of services in the territory of the other Contracting Party, including but not limited to:

a) An enterprise;

b) Shares, stocks, participations and other equity types in an enterprise;

c) Movable or immovable property and other property rights such as mortgages, liens, pledges, encumbrances or similar rights and obligations;

d) Concessions, licenses or authorizations granted by the Host State to the investor of the other Contracting Party;

e) Loans and debt instruments to a company;

f) Intellectual property rights such as trademarks, trade names, trade secrets, copyrights, know-how, goodwill associated with an investment, industrial designs and technical processes to the extent they are recognized under the law of the Host State and international agreements to which the Contracting Parties are parties.

1.3.1 For the purposes of this Agreement and for greater certainty, "Investment" does not include:

a) An order or judgment issued as a result of a law suit or an administrative process;

b) Debt securities issued by a Contracting Party or loans granted from a Contracting Party to the other Contracting Party, bonds, debentures, loans or other debt instruments of a State-owned enterprise of a Contracting Party that constitutes public debt under the legislation of that Contracting Party;

c) Portfolio investments, i.e., those that do not allow the investor to exert a significant degree of influence in the management of the company; and

d) Claims to money that arise solely from commercial contracts for the sale of goods or services by an investor in the territory of a Contracting Party to a national or an enterprise in the territory of another Contracting Party, or the extension of credit in connection with a commercial transaction, or any other claims to money that do not involve the kind of interests set out in sub-paragraphs (a)-(f) of Article 1.3.

1.4 "Investor" means:

a) Any natural person who is a national or a permanent resident of a Contracting Party, according to its laws, that makes an investment in the territory of the other Contracting Party;

b) Any legal person established and organized in accordance with the laws of a Contracting Party, that has its domicile and substantial business activities in the territory of that Contracting Party and that invests in the territory of the other Party; and

c) Any legal person established in accordance with the laws of a third party and whose property or effective control belongs, directly or indirectly, to investors of one of the Contracting Parties, according to sub-paragraphs (a)-(b) above.

1.5 "Returns" means the values obtained by an investment, including profits, interests, capital gains, dividends or "royalties".

1.6 "Measure" means any measure adopted by a Contracting Party, whether in the form of law, regulation, rule, procedure, decision, administrative ruling, or any other form.

1.7 "Territory" means:

a) In respect of the Federal Democratic Republic of Ethiopia: the territory of the Federal Democratic Republic of Ethiopia over which it exercises sovereignty, sovereign rights and jurisdiction in accordance with international law.

b) In respect of the Federative Republic of Brazil the territory, including its land and aerial spaces, the exclusive economic zone, territorial sea, seabed and subsoil within which Brazil exercises its sovereign rights or jurisdiction, in accordance with international law and its internal legislation.

Article 2. Objective

The objective of this Agreement is to promote cooperation between the Contracting Parties in order to facilitate and encourage mutual investment, through the establishment of an institutional framework for the management of an agenda for further investment cooperation and facilitation, as well as through mechanisms for risk mitigation and prevention of disputes, among other instruments mutually agreed on by the Contracting Parties.

Article 3. Scope and Coverage

1. This Agreement shall apply to all investments made before or after its entry into force.

2. This Agreement shall not limit the rights and benefits, which an investor of a Contracting Party enjoys under national or international law in the territory of the other Contracting Party.

3. This Agreement shall not prevent the adoption and implementation of new legal requirements or restrictions to investors and their investments, as long as they are consistent with this Agreement.

4. This Agreement applies only to investments once admitted in accordance with domestic laws, regulations and policies.

5. The provisions of this Agreement shall apply to future investments made by investors of one Contracting Party in the territory of the other Contracting Party, and also to the investments existing in accordance with the laws of the Contracting Parties on the date this Agreement came into force; but shall not apply to claims arising out of events which occurred, or to any claims which had been settled, or to any government measures which were taken, prior to its entry into force.

6. This Agreement does not apply to government measures relating to taxation in accordance with Article 11 — (Tax Measures)

Section II. Regulatory Measures and Risk Mitigation

Article 4. Admission and Treatment

1. Each Contracting Party shall admit and encourage investments of investors of the other Contracting Party, according to their respective laws and regulations.

2. Each Contracting Party shall grant to investments and investors of the other Contracting Party treatment according to the due process of law.

3. In line with the principles of this Agreement, each Contracting Party shall ensure that all measures that affect investment are administered in a reasonable, objective and impartial manner, in accordance with their respective laws and regulations.

Article 5. National Treatment

1. Without prejudice to the measures in force under its legislation on the date of entry into force of this Agreement, each Contracting Party shall accord to investors of another Contracting Party and their investments treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the expansion, management, conduct, operation, and sale or other disposition of investments in its territory.

2. For greater certainty, whether treatment is accorded in 'like circumstances' depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public welfare objectives.

3. Notwithstanding any other provision of this Agreement, the provisions of this Article shall not apply to concessions, advantages, exemptions or other measures that may result from:

a) A bilateral investment treaty or free trade Agreement that entered into force prior to this Agreement; or

b) Any multilateral or regional Agreement relating to investment or economic integration in which a Contracting Party is participating or may participate.

4. For greater certainty, this Article shall not be construed to require any Contracting Party to compensate for any inherent competitive disadvantages, which result from the foreign character of the investor or investments.

Article 6. Most-favoured Nation Treatment

1. Each Contracting Party shall accord to investors of another Contracting Party and their investments treatment no less favourable than that it accords, in like circumstances, to investors of any third State with respect to the expansion, management, conduct, operation, and sale or other disposition of investments in its territory.

2. This Article shall not be construed to require a Contracting Party to grant to an investor of another Contracting Party or their investments the benefit of any treatment, preference or privilege arising from:

a) Provisions relating to investment dispute settlement contained in an investment agreement or an investment chapter of a commercial agreement; or

b) Any existing or future customs, economic or monetary union, a common market or a free trade area or similar economic integration agreement to which either of the Contracting Parties is or may become a party;

c) A bilateral investment treaty or free trade agreement that entered into force prior to this agreement; or

3. For greater certainty, whether treatment is accorded in 'like circumstances' depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public welfare objectives.

Article 7. Expropriation

1. Each Contracting Party shall not directly nationalize or expropriate investments of investors of the other Contracting Party, except:

a) For a public purpose or necessity or when justified by a social interest;

b) In a non-discriminatory manner;

c) On payment of effective compensation, according to paragraphs 2 to 4; and

d) In accordance with due process of law.

2. The compensation shall:

a) Be paid without undue delay;

b) Be equivalent to the fair market value of the expropriated investment, immediately before the expropriating measure has taken place ("expropriation date");

c) Not reflect any change in the market value due to the knowledge of the intention to expropriate, before the expropriation date; and

d) Be completely payable and transferable, according to Article 10 - Transfers;

3. The compensation to be paid shall not be less than fair market value on the expropriation date, plus interests at commercial rate from the date of expropriation until the date of payment, according to the legislation of the Host State.

4. The Contracting Parties shall cooperate to improve the mutual knowledge of their respective national legislations regarding investment expropriation.

5. For greater certainty, this Article only provides for direct expropriation, where an investment is nationalized or otherwise directly expropriated through formal transfer of title or ownership rights.

Article 8. Compensation for Losses

1. The investors of a Contracting Party whose investments in the territory of the other Contracting Party suffer losses due to war or other armed conflict, revolution, state of emergency, insurrection, riot or any other similar events, shall enjoy, with regard to restitution, indemnity, compensation, or other form of settlement, the same treatment as the latter Contracting Party accords to its own investors or the treatment accorded to investors of a third party, whichever is more favourable to the affected investor.

2. Each Contracting Party shall provide the investor restitution, compensation, or both, as appropriate, in accordance with Article 6 of this Agreement, in the event that investments suffer losses in its territory in any situation referred to in paragraph 1 resulting from:

a) Requisitioning of its investment or part thereof by the forces or authorities of the latter Contracting Party; or

b) Destruction of its investment or any part thereof by the forces or authorities of the latter Contracting Party.

Article 9. Transparency

1. Each Contracting Party shall ensure that its laws, regulations, procedures and general administrative resolutions related to any matter covered by this Agreement, in particular regarding qualification, licensing and certification, are published without undue delay and, when possible, in electronic format, as to allow interested persons of the other Contracting Party to be aware of such information. 2. Each Contracting Party shall endeavour to allow reasonable opportunity to those stakeholders interested in expressing their opinions on investment-related measures that the Contracting Party intends to adopt. 3. Whenever possible, each Contracting Party shall make available this Agreement to their respective public and private financial agents, responsible for the technical evaluation of risks and the approval of loans, credits, guarantees and related insurances for investment in the territory of the other Contracting Party.

Article 10. Transfers

1. Each Contracting Party shall allow that the transfer of funds related to an investment be made freely and without undue delay, to and from their territory. Such transfers include:

a) The initial capital contribution or any addition thereof in relation to the maintenance or expansion of such investment;

b) Returns directly related to the investment;

c) The proceeds of sale or total or partial liquidation of the investment;

d) The repayments of any loan, including interests thereon, relating directly to the investment;

e) The amount of compensation.

2. Without prejudice to paragraph 1, a Contracting Party may, in an equitable and non-discriminatory manner and in good faith, prevent a transfer if such transfer is prevented under its laws relating to:

a) Bankruptcy, insolvency or the protection of the rights of creditors;

b) Criminal or penal offences and the recovery of the proceeds of crime;

c) Financial reports or maintenance of transfers' registers when necessary to cooperate with law enforcement or with financial regulators;

d) The guarantee for the enforcement of decisions in judicial or administrative proceedings;

e) The formalities required to register and satisfy the Central Bank and other relevant authorities of a Contracting Party.

3. Nothing in this Agreement shall affect the right of a Contracting Party to adopt regulatory measures concerning the balance of payments in a balance of payments crisis, nor will it affect the rights and obligations of the Contracting Parties as members of the International Monetary Fund contained in the Agreement of the International Monetary Fund, in particular exchange measures which are in conformity with the Agreement of the International Monetary Fund.

4. The adoption of temporary restrictive measures for transfers in case of the existence of serious balance of payments difficulties must be non-discriminatory and in accordance with the Articles of the Agreement of the International Monetary Fund.

Article 11. Tax Measures

1. No provision of this Agreement shall be interpreted as an obligation of one Contracting Party to give to an investor from the other Contracting Party, concerning his or her investments, the benefit of any treatment, preference or privilege arising out of any Agreement to avoid double taxation, current or future, of which a Contracting Party to this Agreement is a party or becomes a party.

2. No provision of this Agreement shall be interpreted in a manner that prevents the adoption or implementation of any measure aimed at ensuring the equitable or effective imposition or collection of taxes, according to the Contracting Parties' respective laws and regulations, so long as such a measure is not applied as to constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction.

Article 12. Prudential Measures

1. Nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or maintaining prudential measures, such as:

a) The protection of investors, depositors, financial market participants, policy-holders, policy-claimants, or persons to whom a fiduciary duty is owed by a financial institution;

b) The maintenance of the safety, soundness, integrity or financial responsibility of financial institutions; and

c) Ensuring the integrity and stability of a Contracting Party's financial system.

2. Where such measures do not conform to the provisions of this Agreement, they shall not be used as a means of circumventing the commitments or obligations of the Contracting Party under this Agreement.

Article 13. Security Measures

Nothing in this Agreement shall be construed to prevent a Contracting Party from:

1. Adopting or maintaining measures aimed at preserving its national security or public order, or to apply the provisions of their criminal laws or comply with its obligations regarding the maintenance of international peace and security in accordance with the provisions of the United Nations Charter.

2. Measures adopted by a Contracting Party under paragraph 1 of this Article or the decision based on national security laws or public order that at any time prohibit or restrict the realization of an investment in its territory by an investor of another Contracting Party shall not be subject to the dispute settlement mechanism under this Agreement.

Article 14. Corporate Social Responsibility

1. Investors and their investment shall strive to achieve the highest possible level of contribution to the sustainable development of the Host State and the local community, through the adoption of a high degree of socially responsible practices, based on the principles and standards set out in this Article and the OECD Guidelines for Multinational Enterprises (MNEs) as may be applicable on the State Parties.

2. Investors and their investment shall endeavour to comply with the following principles and standards for a responsible business conduct and consistent with the laws adopted by the Host State:

a) Contribute to the economic, social and environmental progress, aiming at achieving sustainable development;

b) Respect the internationally recognized human rights of those involved in the investors' activities;

c) Encourage local capacity building through close cooperation with the local community;

d) Encourage the creation of human capital, especially by creating employment opportunities and offering professional training to workers;

e) Refrain from seeking or accepting exemptions that are not established in the legal or regulatory framework relating to human rights, environment, health, security, work, tax system, financial incentives, or other issues;

f) Support and advocate for good corporate governance principles, and develop and apply good practices of corporate governance;

g) Develop and implement effective self-regulatory practices and management systems that foster a relationship of mutual trust between the investment and the societies in which its operations are conducted;

h) Promote the knowledge of and the adherence to, by workers, the corporate policy, through appropriate dissemination of this policy, including programs for professional training;

i) Refrain from discriminatory or disciplinary action against employees who submit grave reports to the board or, whenever appropriate, to the competent public authorities, about practices that violate the law or corporate policy;

j) Encourage, whenever possible, business associates, including service providers and outsources, to apply the principles of business conduct consistent with the principles provided for in this Article; and

k) Refrain from any undue interference in local political activities.

Article 15. Investment Measures and Combating Corruption and Illegality

1. Each Contracting Party shall adopt measures and make efforts to prevent and fight corruption, money laundering and terrorism financing with regard to matters covered by this Agreement, in accordance with its laws and regulations.

2. Nothing in this Agreement shall require any Contracting Party to protect investments made with capital or assets of illicit origin or investments in the establishment or operation of which illegal acts have been demonstrated to occur and for which national legislation provides asset forfeiture.

Article 16. Provisions on Investment and Environment, Labor Affairs and Health

1. Nothing in this Agreement shall be construed to prevent a Contracting Party from adopting, maintaining or enforcing any measure it deems appropriate to ensure that investment activity in its territory is undertaken in a manner according to labor, environmental and health legislations of that Contracting Party, provided that this measure is not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction.

2. The Contracting Parties recognize that it is inappropriate to encourage investment by lowering the standards of their labor and environmental legislation or measures of health. Therefore, each Contracting Party guarantees it shall not amend or repeal, nor offer the amendment or repeal of such legislation to encourage the establishment, maintenance or expansion of an investment in its territory, to the extent that such amendment or repeal involves decreasing their labor, environmental or health standards. If a Contracting Party considers that another Contracting Party has offered such an encouragement, the Contracting Parties will address the issue through consultations.

Section III. Institutional Governance and Dispute Prevention

Article 17. Joint Committee for the Administration of the Agreement

1. For the purpose of this Agreement, the Contracting Parties hereby establish a Joint Committee for the administration of this Agreement (hereinafter referred as "Joint Committee").

2. This Joint Committee shall be composed of government representatives of both Contracting Parties designated by their respective Governments.

3. The Joint Committee shall meet at such times, in such places and through such means as the Contracting Parties may agree. Meetings shall be held at least once a year, with alternating chairmanships between the Contracting Parties.

4. The Joint Committee shall have the following functions and responsibilities:

a) Supervise the implementation and execution of this Agreement;

b) Discuss and divulge opportunities for the expansion of mutual investment;

c) Coordinate the implementation of the mutually agreed cooperation and facilitation agendas;

d) Consult with the private sector and civil society, when applicable, on their views on specific issues related to the work of the Joint Committee;

e) Seek to resolve any issues or disputes concerning investments of investors of a Contracting Party in an amicable manner; and