Protocol to the CACM Agreement on Investment and Trade Services (2007)
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Title

PROTOCOL TO THE TREATY ON INVESTMENT AND TRADE IN SERVICES BETWEEN THE REPUBLICS OF COSTA RICA, EL SALVADOR, GUATEMALA, HONDURAS AND NICARAGUA

Preamble

The Governments of the Republics of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua,

CONSIDERING:

That the Central American Presidents signed the Treaty on Investment and Trade in Services between the Republics of Costa Rica, El Salvador, Guatemala, Honduras, and Nicaragua, on March 24, two thousand two;

That the deepening of economic integration among the Central American countries is the most effective means of promoting the future economic and social development of the region and of each one of them, in order to raise the welfare of its peoples;

That new commitments related to investment and trade in services make it necessary to update the instruments related to this subject within the framework of the Central American Economic Integration Subsystem,

Then:

Decide to amend the Treaty on Investment and Trade in Services between the Republics of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua signed on March 24, 2000 by means of this Protocol:

Body

Article 1.

The Treaty on Investment and Trade in Services between the Republics of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua signed on 24 March 2002 in the articles listed in Annex A to this Protocol is hereby amended.

Article 2.

For more certainty, Annex B to this Protocol contains the amended text of the Treaty on Investment and Trade in Services between the Republics of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua.

Article 3.

This Protocol shall have indefinite duration and shall come into force for the first two (2) depositor States, thirty (30) days after the date of deposit with the General Secretariat of the Central American Integration System (SG-SICA)

The second instrument of ratification, and for the other depositor States, eight (8) days after the date of deposit of its respective instrument.

Conclusion

In witness whereof, the undersigned, duly authorized by their respective Governments, have signed this Protocol in the City of Belize, Belize, on the twenty-second day of February in the year two thousand and seven.

For the Republic of Costa Rica

Amparo Pacheco Oreamuno Deputy Minister of Foreign Trade

For the Republic of El Salvador

Yolanda Mayora de Gavidia Minister of Economy

For the Republic of Guatemala

Enrique Lacs Palomo Deputy Minister of Integration and Foreign Trade

For the Republic of Honduras

Miriam Elizabeth Azcona Bocock Secretary of State in the Offices of Industry and Commerce

For the Republic of Nicaragua

Horacio Brenes Icabalceta Minister of Development, Industry and Commerce

Attachments

Annex A

The following amendments are made to the Treaty on Investment and Trade in Services between the Republics of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, which are listed below:

CHAPTER 1:

Articles: 1.01 and 1.03 are modified.

Article 1.04 is eliminated.

CHAPTER 2:

Article 2.01 is amended.

CHAPTER 3:

Articles: 3.01, 3.02, 3.03, 3.05, 3.06, 3.07, 3.08, 3.09, 3.10, 3.11, 3.14, 3.16, 3.17, 3.20, 3.22, 3.23, 3.24, 3.25, 3.28, 3.29, 3.33, 3.34, 3.35, 3.37 and the following are modified.

Annexes: 3.11 and 3.39 (2).

Articles 3.13, 3.15, 3.18, 3.19, 3.21, 3.26, 3.27, 3.30, 3.31, 3.32, 3.36, 3.38, 3.39, 3.40 and Annex 3.22 are eliminated.

Articles: 3.21, 3.22 and 3.28 are added.

CHAPTER 4:

Articles: 4.01, 4.02, 4.03, 4.04, 4.06, 4.08, 4.09, 4.12, 4.13, 4.14 and 4.15 and Annex 4.13 are amended.

Articles 4.07, 4.10, 4.11 and 4.16 are deleted.

Articles: 4.06, 4.08, 4.11, 4.12, 4.13 and Annex 4.10 are added.

CHAPTER 5:

Articles: 5.02 and 5.03 are modified.

Articles: 5.01, 5.04, 5.05, 5.06, 5.07, 5.08, 5.09, 5.10 and 5.11 and Annexes: 5.02 and 5.04 are deleted.

Articles: 5.03, 5.04, 5.05, 5.06, 5.07, 5.08, 5.09, 5.10, 5.11, 5.12, 5.13, 5.14, 5.15, 5.16 and 5.17 are added and Annexes: 5 and 5.04.

CHAPTER 6:

Articles: 6.01, 6.02, 6.03, 6.05, 6.06, 6.07, 6.09, 6.10, 6.11, 6.12, 6.13, 6.14, 6.15, 6.16, 6.19 and 6.20 are amended.

Articles 6.04, 6.17, 6.18, and Annex 6.10 are eliminated.

Articles: 6.05, 6.11, 6.12, 6.13 and 6.17 and Annexes: 6.06, 6.18, 6.19.2 and 6.19.3 are added.

CHAPTER 7:

Articles: 7.01, 7.04, 7.05, 7.06 and 7.07 and Appendix 7.04 (A)(2) are amended.

CHAPTER 8:

Articles 8.02, 8.03, 8.04, 8.05 and 8.06 are amended.

Appendix 8.06 is added.

CHAPTER 9:

Articles: 9.01, 9.03 and 9.04 are modified.

Article 9.02 and Annexes: 9.02 and 9.03 are deleted.

Article 9.02 and Annex 9.03.2 are added.

CHAPTER 10:

Articles: 10.01, 10.05 and 10.06 are modified.

Article 10.08 is deleted.

CHAPTER 11:

Articles: 11.07 and 11.09 are amended.

Articles: 11.01, 11.02 and 11.08 are deleted.

The following Articles are added: 11.01 and 11.02.

Annex B

This Annex incorporates the new text version of the Treaty on Investment and Trade in Services between the Republics of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua:

PREAMBLE

The Governments of the Republics of Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua,

Decided to:

Achieve a better balance in your business relationships;

To promote a more extensive and secure market for investments and the exchange of services in their territories;

To increase the competitiveness of the services sector, a sine qua non requirement for the facilitation of trade in goods and the flow of capital and technologies, making a decisive contribution to consolidating the systematic competitiveness of the Parties;

Establish a legal system with clear, transparent and mutually beneficial rules for the promotion and protection of investments, as well as for trade in services;

Respect their respective rights and obligations under the Marrakesh Agreement establishing the World Trade Organization (WTO Agreement), as well as other bilateral and multilateral integration and cooperation instruments;

Create job opportunities and improve living standards in their respective countries; and

Encourage the dynamic participation of the various economic agents, in particular the business sector, in efforts to deepen their economic relations;

Subscribe to this Treaty on Investment and Trade in Services

Chapter 1. Initial Provisions

1.01. Objectives

1. The main objectives of this Treaty are:

(A) to establish a legal framework for the liberalization of trade in services and for investment between the Parties, consistent with the General Treaty on Central American Economic Integration, the General Agreement on Trade in Services (GATS) forming part of the Agreement On the WTO, as well as other bilateral and multilateral integration and cooperation instruments.

Such a framework shall promote the interests of the Parties, on the basis of reciprocal advantages and the achievement of an overall balance of rights and obligations between the Parties;

(B) to stimulate the expansion and diversification of trade in services and investment between the Parties;

(C) to facilitate the provision of services between the Parties;

(D) promote, protect and substantially increase investments in each Party; and

(E) to establish effective procedures for the implementation and enforcement of this Agreement, for their joint administration and for the settlement of disputes between a Party and an investor of another Party.

2. The Parties shall interpret and apply the provisions of this Treaty in the light of the objectives set out in paragraph 1 and in accordance with the applicable rules of international law.

1.02. Observance of the Treaty

Each Party shall, in accordance with its constitutional rules, ensure compliance with the provisions of this Treaty in its respective territory.

1.03. Relationship with other Treaties

1. The Parties confirm the rights and obligations in force between them in accordance with the treaties to which they are parties. 2

2. The Parties recognize that this Agreement is confined to the Subsystem of Central American Economic Integration and coexists with other international instruments subscribed or in force between the Parties that regulate the matters that are the object of this Treaty, without such coexistence implying the modification or substitution thereof.

3 For the sake of certainty, nothing in this dispute shall be dealt with by the Parties in the framework of the Central American Economic Integration Subsystem.

Chapter 2. DEFINITIONS OF GENERAL APPLICATION

2.01. Definitions of General Application

For the purposes of this Agreement, unless otherwise specified, the following definitions shall apply:

Agreement on the WTO: the Marrakesh Agreement Establishing the World Trade Organization, dated 15 April 1994;

GATS: the General Agreement on Trade in Services, which form part of the WTO Agreement;

TRIPS Agreement: the Agreement on Trade-Related Aspects of Intellectual Property Rights, which form part of the WTO Agreement;

Public procurement: the process by which a government acquires the use of or acquires goods or services, or any combination thereof, for governmental purposes and not for commercial sale or resale or for use in the production or supply of Goods or services for commercial sale or resale;

Council: the Council of Ministers of Economic Integration created by Article 37 of the Guatemala Protocol;

Days: calendar days;

Enterprise: any legal entity incorporated or organized under the applicable law of a Party, whether or not for profit and whether private or governmental, including foundations, partnerships, trusts, holdings, sole proprietorships, joint ventures or other associations;

Undertaking of a Party: a company incorporated or organized in accordance with the law of a Party;

State enterprise: a company owned or controlled by a Party, by means of domain rights;

Existing: in force on the date of entry into force of this Agreement; Measure: includes any law, regulation, procedure, requirement or practice; Goods: any material, material, product or part;

National: a natural or natural person who has the nationality of a Party in accordance with its legislation and its permanent residents, who shall enjoy the benefits, rights and obligations which this Treaty grants to nationals, only with respect to the application of the Treaty;

Party: any State in respect of which this Treaty has entered into force;

Person: a national or a company;

SG-SICA: General Secretariat of the Central American Integration System; And territory: the territory of each of the Parties.

Chapter 3. Investment

Section A. Investment

3.01. Definitions

For the purposes of this Chapter, the following definitions shall apply:

Center: the International Center for Settlement of Investment Disputes ("ICSID") established by the ICSID Convention;

Inter-American Convention: The Inter-American Convention on International Commercial Arbitration, held in Panama on January 30, 1975;

ICSID Convention: The Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington, D.C., on March 18, 1965;

New York Convention: The United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, held at New York on 10 June 1958;

Defendant: the Party that is party to a dispute relating to an investment;

Applicant: the investor of a Party that is party to a dispute relating to investments with another Party;

Enterprise: an "enterprise", as defined in Article 2.01 (Definitions of general application), and the branch of an enterprise;

Protected information: confidential business information or privileged information or otherwise protected from disclosure in accordance with the Party's law;

Investment: any asset owned or controlled by an investor, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of profit or profit or assuming risk. The forms that an investment can take include:

a) an undertaking;

b) shares, capital and other forms of equity participation in a company;

c) bonds, bonds, other debt instruments and loans; (1) (2)

(1) Some forms of debt, such as bonds, bonds and long-term notes, are more likely to have the characteristics of an investment, while other forms of debt are less likely to have these characteristics.
(2) For the purposes of this Agreement, claims for payment that are immediately due and which are the result of the sale of goods or services are not investments.

d) futures, options and other derivatives;

e) turnkey contracts for construction, management, production, concession, revenue sharing and other similar contracts;

f) intellectual property rights;

g) licenses, authorizations, permits and similar rights granted in accordance with domestic legislation; (3) (4)

(3) The fact that a type of license, authorization, permit or similar instrument (including a concession, to the extent that it has the nature of such an instrument), has the characteristics of an investment depends on factors such as nature and The extent of the rights of the holder in accordance with the Party's law. Among licenses, authorizations, permits or similar instruments that do not have the characteristics of an investment are those that do not generate rights protected under domestic law. For greater certainty, the foregoing is without prejudice that an asset associated with such license, authorization, permit or similar instrument has the characteristics of an investment.
(4) The term "investment" does not include an order or judgment within a judicial or administrative process.

h) other tangible or intangible, movable or immovable property rights and related property rights, such as leases, mortgages, liens and pledges;

An investor of a Party: a Party or a State enterprise, or a person of that Party, who performs physical acts for the purpose of making an investment or, if applicable, an investment in the territory of another Party. The intention to carry out an investment may be manifested, inter alia, through legal acts tending to materialize the investment, or being in the process of compromising the economic resources necessary to realize it; However, a natural or 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 who is not an investor of a Party that intends to carry out, makes or has made an investment;

Freely usable currency: the currency of free use 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 not party to a dispute relating to an investment;

UNCITRAL Arbitration Rules: The Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL), adopted by the General Assembly of the United Nations on 15 December 1976;

Rules of the ICSID Supplementary Mechanism: the Supplementary Mechanism Regulation for Procedural Administration by the Secretariat of the International Center for Settlement of Investment Disputes;

Page 1 Next page
  • Article   1 1
  • Article   2 1
  • Article   3 1
  • Annex A 1
  • Annex B 1
  • Chapter   1 Initial Provisions 1
  • 1.01 Objectives 1
  • 1.02 Observance of the Treaty 1
  • 1.03 Relationship with other Treaties 1
  • Chapter   2 DEFINITIONS OF GENERAL APPLICATION 1
  • 2.01 Definitions of General Application 1
  • Chapter   3 Investment 1
  • Section   A Investment 1
  • 3.01 Definitions 1
  • 3.02 Scope 2
  • 3.03 Minimum Level of Treatment 2
  • 3.04 National Treatment 2
  • 3.05 Most-favored-nation Treatment 2
  • 3.06 Treatment In Case of Losses 2
  • 3.07 Performance Requirements 2
  • 3.08 Senior Corporate Management and Boards of Directors 2
  • 3.09 Reservations and Exceptions 2
  • 3.10 Transfers 2
  • 3.11 Expropriation and Compensation 2
  • 3.12 Special Formalities and Information Requirements 2
  • 3.13 Denial of Benefits 2
  • 3.14 Measures Relating to the Environment 2
  • 3.15 Promotion of Investments and Exchange of Information 2
  • Section   B Investor-State Dispute Settlement 2
  • 3.16 Consultation and Negotiation 2
  • 3.17 Submission of a Claim to Arbitration 2
  • 3.18 Consent of Each Party to Arbitration 2
  • 3.19 Conditions and Limitations on the Consent of the Parties 2
  • 3.20 Selection of Arbitrators 3
  • 3.21 Conduct of Arbitration 3
  • 3.22 Transparency of Arbitration Proceedings 3
  • 3.23 Applicable Law 3
  • 3.24 Interpretation of Annexes 3
  • 3.25 Expert Reports 3
  • 3.26 Accumulation of Procedures 3
  • 3.27 Reports 3
  • 3.28 Delivery of Documents 3
  • Annex 3.11  3
  • Annex 3.28  3
  • Chapter   4 Cross-border Trade In Services 3
  • 4.01 Definitions 3
  • 4.02 Scope of Application 3
  • 4.03 Most-favoured Nation Treatment 4
  • 4.04 National Treatment 4
  • 4.05 Local Presence 4
  • 4.06 Market Access 4
  • 4.07 Reservations and Exceptions 4
  • 4.08 Transparency In the Development and Application of Regulations 4
  • 4.09 Future Liberalization 4
  • 4.10 Committee on Investment and Cross-Border Trade In Services 4
  • 4.11 National Regulations 4
  • 4.12 Mutual Recognition 4
  • 4.13 Transfer and Payments 4
  • 4.14 Denial of Benefits 4
  • 4.15 Professional Services 4
  • 4.16 Ground Transportation Services 4
  • 4.17 Technical Cooperation 4
  • Annex 4.10  Committee on Investment and Cross-Border Trade in Services 4
  • Annex 4.15  Professional Services 4
  • Chapter   5 Telecommunications  (7) 4
  • 5.01 Definitions 4
  • 5.02 Scope of Application 4
  • 5.03 Access to and Use of Public Telecommunications Services 5
  • 5.04 Obligations Related to Providers of Public Telecommunications Services  (8) 5
  • 5.05 Additional Obligations Concerning Major Suppliers of Public Telecommunication Services  (10) 5
  • 5.06 Underwater Cable Systems 5
  • 5.07 Conditions for the Provision of Information Services 5
  • 5.08 Independent Regulatory Bodies and Government-owned Telecommunications Providers  (15) 5
  • 5.09 Universal Service 5
  • 5.10 Licenses and other Authorizations 5
  • 5.11 Allocation and Use of Scarce Resources 5
  • 5.12 Compliance 5
  • 5.13 Settlement of Internal Disputes on Telecommunications 5
  • 5.14 Transparency 5
  • 5.15 Flexibility In the Choice of Technologies 5
  • 5.16 Abstention 5
  • 5.17 Relationship with other Chapters 5
  • Chapter   6 Financial Services 5
  • 6.01 Definitions 5
  • 6.02 Scope of Application and Extent of Obligations 6
  • 6.03 National Treatment 6
  • 6.04 Most-favored-nation Treatment 6
  • 6.05 Market Access for Financial Institutions 6
  • 6.06 Cross-border Trade 6
  • 6.07 Self-regulatory Bodies 6
  • 6.08 Recognition and Harmonization 6
  • 6.09 Exceptions 6
  • 6.10 Transparency 6
  • 6.11 Payment and Compensation Systems 6
  • 6.12 Domestic Regulation 6
  • 6.13 Expedited Availability of Insurance Services 6
  • 6.14 Senior Management and Boards of Directors 6
  • 6.15 General Inquiries 6
  • 6.16 New Financial Services and Data Processing  (16) 6
  • 6.17 Treatment of Certain Types of Information 6
  • 6.18 Financial Services Committee 6
  • 6.19 Reservations and Exceptions 6
  • 6.20 Future Liberalization 6
  • 6.21 Disputes between an Investor and a Party 7
  • 6.22 Disputes between the Parties 7
  • Annex 6.18  Financial Services Committee 7
  • Annex 6.19.2  Specific Commitments 7
  • Section   A Costa Rica 7
  • Section   B El Salvador 7
  • Section   C Guatemala 7
  • Section   D Honduras 7
  • Section   E Nicaragua 7
  • Annex 6.19.3  Additional Information Relating to Financial Services Measures 7
  • Section   A Costa Rica 7
  • Section   B El Salvador 7
  • Section   C Honduras 7
  • Section   D Nicaragua 7
  • Chapter   7 Temporary Entry of Business Persons 7
  • 7.01 Definitions 7
  • 7.02 General Principles 7
  • 7.03 General Obligations 7
  • 7.04 Temporary Entry Authorization 7
  • 7.05 Provision of Information 7
  • 7.06 Dispute Settlement 7
  • 7.07 Relationship with other Chapters 8
  • Annex 7.04  Temporary Entry of Business Persons 8
  • Section   A Business Visitors 8
  • Section   B Merchants and Investors 8
  • Section   C Transfers of Personnel Within a Company 8
  • Annex 7.04(1)  Specific Provisions for the Temporary Entry of Business People 8
  • Appendix 7.04(A)(1)  Business visitors 8
  • Appendix 7.04(A)(2)  Existing Migration Measures 8
  • Chapter   8 Exceptions 8
  • 8.01 Definitions 8
  • 8.02 General Exceptions 8
  • 8.03 National Security 8
  • 8.04 Balance of Payments 8
  • 8.05 Exceptions to the Disclosure of Information 8
  • 8.06 Taxation 8
  • Annex 8.06  Competent Authorities 8
  • Chapter   9 Administration of the Treaty 8
  • 9.01 Administration 8
  • 9.02 Functions of the Council 8
  • 9.03 Committees 9
  • 9.04 Functions of the Committees 9
  • Annex 9.03.2  9
  • Chapter   10 Transparency 9
  • 10.01 Definitions 9
  • 10.02 Information Center 9
  • 10.03 Publication 9
  • 10.04 Provision of Information 9
  • 10.05 Guarantees of Hearing, Legality and Due Process 9
  • 10.06 Administrative Procedures for the Adoption of Measures of General Application 9
  • 10.07 Review and Challenge 9
  • Chapter   11 Final Provisions 9
  • 11.01 Amendments 9
  • 11.02 Amendments to the WTO Agreement 9
  • 11.03 Reservations 9
  • 11.04 Duration 9
  • 11.05 Denunciation 9
  • 11.06 Deposit 9
  • 11.07 Annexes, Appendices and Footnotes 9
  • 11.08 Replacement 9
  • Annex I  Non-conforming Measures 9
  • Explanatory Note 9
  • Annex I  Schedule of Costa Rica 9
  • Annex I  Schedule of El Salvador 11
  • Annex I  Schedule of Guatemala 12
  • Annex I  Schedule of Honduras 13
  • Annex I  Schedule of Nicaragua 14
  • Annex II  Future Measures 16
  • Explanatory Note 16
  • Annex II  Schedule of Costa Rica 16
  • Annex II  Schedule of El Salvador 16
  • Annex II  Schedule of Guatemala 16
  • Annex II  Schedule of Honduras 16
  • Annex II  Schedule of Nicaragua 16