Secretary General: the Secretary General of ICSID;
Court: an arbitral tribunal established under Article 3.20 and Article 3.26.
3.02. Scope
1. This Chapter applies to measures adopted or maintained by a Party relating to:
a) investors of another Party;
b) investments of investors of another Party carried out in the territory of the Party; and
c) with respect to Articles 3.07 and 3.14 all investments in the territory of the Party.
2. This Chapter does not apply to:
a) measures adopted or maintained by a Party in the area of financial services;
b) measures taken by a Party to restrict the participation of investments of investors of another Party in its territory, for reasons of national security or public order; and
c) disputes or claims arising prior to the entry into force of this Agreement, or related to events occurring prior to its effectiveness, even if their effects remain even after this.
3. The obligations of the Parties established under this Section shall apply to a State enterprise or other person when executing a regulatory, administrative or other governmental authority delegated by that Party.
4. No provision of this Chapter shall be construed to prevent a Party from providing services or performing functions related to law enforcement, social rehabilitation services, pension or unemployment insurance or social security services, social welfare, Public education, health and child protection.
5. In the case of any inconsistency between this Chapter and another Chapter, the other Chapter shall prevail to the extent of inconsistency.
3.03. Minimum Level of Treatment
1. Each Party shall accord to investments of investors of another Party treatment consistent with customary international law, including fair and equitable treatment, as well as full protection and security within its territory.
2. For greater certainty, paragraph 1 prescribes that the minimum level of treatment of foreigners under customary international law is the minimum level of treatment to be accorded to investments of investors of another Party. The concepts of "fair and equitable treatment" and "full protection and security" do not require additional treatment or beyond that required by that level, and do not create additional substantive rights. The obligation in paragraph 1 to grant:
a) "fair and equitable treatment" includes 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) "full protection and security" requires each Party to provide the level of police protection required by customary international law.
3. The determination that another provision of this Agreement or other international agreement has violated does not establish that this Article has been violated.
4. The Parties confirm their common understanding that customary international law referred to in Articles 3.03 and Annex 3.11 results from a general and consistent practice of States followed by them in the sense of a legal obligation. With respect to Article 3.03, the minimum standard of treatment of aliens in customary international law refers to all principles of customary international law which protect the rights and economic interests of aliens.
3.04. National Treatment
Each Party shall accord to the investor of another Party and to the investment of an investor of another Party treatment no less favorable than that it accords in similar circumstances to its own investors and investments of such investors with respect to the establishment, acquisition, Expansion, administration, conduct, operation, sale or other disposition of the investments.
3.05. Most-favored-nation Treatment
1. Each Party shall accord to the investor of another Party and to the investment of an investor of another Party treatment no less favorable than that accorded in similar circumstances to the investor and to the investment of an investor of any other Party or of a country Not Party, with respect to the establishment, acquisition, expansion, administration, conduct, operation, sale or other disposition of the investments.
2. Most-favored-nation treatment to be accorded in similar circumstances does not extend to dispute settlement mechanisms, such as those contained in Section B of this Chapter, which are provided for in international investment treaties or agreements.
3.06. Treatment In Case of Losses
Each Party shall accord to the investor of another Party and to the investment of an investor of another Party non-discriminatory treatment with respect to the measures that it adopts or maintains in relation to losses suffered by investments in its territory due to armed conflicts or civil strife.
3.07. Performance Requirements
1. No Party may impose or enforce the following requirements or commitments in relation to the establishment, acquisition, expansion, administration, conduct, operation, sale or any other disposition of an investment of an investor of a Party or of a non-Party in its territory to:
a) export a particular type, level or percentage of goods or services;
b) reach a certain degree or percentage of national content;
c) acquire, use or give preference to goods produced in its territory, or acquire goods from producers in its territory;
d) relate in any way the volume or value of imports with the volume or value of exports, or with the amount of the foreign exchange inflows associated with such investment;
e) restrict sales in its territory of the goods or services that such investment produces or lends, relating in any way such sales to the volume or value of their exports or to profits generated in foreign currency;
f) transfer to a person in its territory, technology, production process or other reserved knowledge, except:
(i) where the requirement is imposed by a court or administrative court or competent authority to remedy an alleged breach of competition law or to act in a manner that is not inconsistent with other provisions of this Agreement; 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 within the scope of application and consistent with Article 39 of the TRIPS Agreement.
g) act as the exclusive supplier of the goods it produces or services that it provides for a specific, regional or global market.
2. The measure requiring an investment to employ a technology to meet generally applicable health, environment or safety requirements shall not be considered incompatible with paragraph 1 (f). To provide greater certainty, Articles 3.04 and 3.05 apply to said measure.
3. Neither Party may condition the receipt of an advantage or continue to receive it in connection with the establishment, acquisition, expansion, administration, conduct, operation, sale or any other disposition of an investment in its territory by Of an investor of a Party or of a non-Party, to the fulfillment of any of the following requirements:
a) to acquire, use or give preference to goods produced in its territory or to purchase goods from producers in its territory;
b) reach a certain degree or percentage of national content;
c) relate in any way the volume or value of imports with the volume or value of exports, or the amount of the foreign exchange inputs associated with such investment; or
d) to restrict sales in its territory of the goods or services that such investment produces or lends, relating in any way such sales to the volume or value of its exports or to profits generated in foreign currency.
4. Nothing in paragraph 3 shall be construed as an impediment for a Party in its territory to impose, in relation to an investment of an investor of another Party or of a non-Party, legally established requirements of: geographical location of Productive units, generation of employment or training of labor, or carrying out activities in the field of research and development.
5. Whenever such measures are not applied arbitrarily or unreasonably, 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 interpreted In order 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) the preservation of living or non-living natural resources.
6. Paragraphs 1 (a), (b) and (c) and 3 (a) and (b) shall not apply to qualification requirements for goods or services in respect of export promotion and external aid programs.
7. Paragraphs 1 (b), (c), (f) and (g) and 3 (a) and (b) shall not apply to public procurement.
8. Paragraphs 3 (a) and (b) shall not apply to requirements imposed by an importing Party with respect to the contents of the goods necessary to qualify for preferential tariffs or quotas.
9. This Article does not exclude the application of any commitment, obligation or requirement between private parties where a Party has not imposed or required the commitment, obligation or requirement.
10. For greater certainty, paragraphs 1 and 3 do not apply to any requirement other than those referred to in those paragraphs.
3.08. Senior Corporate Management and Boards of Directors
1. No Party may require an enterprise of that Party to designate natural persons of any particular nationality to hold senior management positions.
2. A Party may require that a majority of the members of the administrative bodies or of any committee of such bodies of an enterprise of that Party which is an investment of an investor of another Party be of a particular nationality, Resident in the territory of the Party, provided that the requirement does not significantly impair the ability of the investor to exercise control of its investment.
3.09. Reservations and Exceptions
1. Articles 3.04, 3.05, 3.07 and 3.08 do not apply to:
a) any existing non-conforming measure maintained by a Party in:
(i) central level government, as established by that Party in its Schedule to Annex I (Non-Conforming Measures), or
(ii) a local level government;
(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a); or
(c) an amendment to any non-conforming measure referred to in subparagraph (a) provided that such amendment does not diminish the conformity of the measure, as it was in force immediately before the amendment, with Articles 3.04, 3.05, 3.07 or 3.08.
2. Articles 3.04, 3.05, 3.07 and 3.08 do not apply to any measure that a Party adopts or maintains in relation to sectors, subsectors or activities, as indicated in its Schedule to Annex II (Future Measures).
3. No Party shall, in accordance with any measure taken after the date of entry into force of this Treaty and included in its Schedule to Annex II (Future Measures), require an investor of another Party, by reason of his or her nationality, Which sells or otherwise disposes of an existing investment at the time the measure becomes effective.
4. Articles 3.04, 3.05 and 3.08 do not apply to:
a) public procurement; or
b) subsidies or grants awarded by a Party, including government-supported loans, guarantees and insurance.
5. With a view to achieving a progressively higher level of liberalization and after prior instruction by the Council, the Parties undertake to conduct future negotiations aimed at eliminating the remaining non-conforming measures listed in accordance with paragraph 1 of this Article.
3.10. Transfers
1. Each Party shall permit all transfers related to the investment of an investor of another Party in its territory to be made freely and without delay. These transfers include:
a) profits, dividends, interest, capital gains, royalty payments, administrative expenses, technical assistance and other charges, profits in kind and other amounts derived from the investment;
b) products derived from the sale or liquidation, total or partial, of the investment;
c) payments made under a contract to which an investor is party or its investment, including payments made under a loan agreement;
d) payments made in accordance with Articles 3.06 and 3.11; and
e) payments arising from the application of the provisions relating to the dispute settlement mechanism contained in Section B of this Chapter.
2. For the purposes of this Chapter, a transfer shall be deemed to have been made without delay when it has been effected within the period normally required for the completion of the transfer formalities.
3. No Party may require its investors to transfer their income, profits, or profits or other amounts derived from, or attributable to, investments carried out in the territory of another Party, nor shall they sanction them if they do not transfer.
4. Each Party shall permit transfers to be made in freely usable currency at the prevailing market rate of exchange on the date of transfer.
5. Notwithstanding paragraphs 1 and 4, each Party may prevent the transfer, through the equitable, non-discriminatory and good faith application of measures relating to:
a) bankruptcy, insolvency or protection of the rights of creditors;
b) issuance, trading or operations of securities, futures, options or derivatives;
c) financial reporting or record keeping of transfers where necessary to collaborate with law enforcement or financial regulatory authorities;
d) criminal offenses; or
e) guarantee of compliance with orders or rulings in judicial or administrative proceedings.
6. Notwithstanding the provisions of this Article, each Party may establish temporary controls on foreign exchange transactions, provided that the balance of payments of the Party concerned presents a serious imbalance or exceptional or serious difficulties, and implements a program In accordance with internationally accepted criteria.
3.11. Expropriation and Compensation
1. No Party may nationalize or expropriate, directly or indirectly, an investment of an investor of a Party in its territory, or adopt any measure equivalent to the expropriation or nationalization of such investment, unless it is:
a) because of public purpose in accordance with the provisions of Annex 3.11;
b) on a non-discriminatory basis;
c) in accordance with the principle of due process and Article 3.03; Y
d) through compensation under paragraphs 2 to 4.
2. The compensation shall be equivalent to the fair market value of the expropriated investment immediately before the expropriation measure has been carried out (date of expropriation), and shall not reflect any change in value, because the intention to expropriate Has known in advance 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 the fair market value.
3. The payment of compensation will be made without delay, will be fully liquidable and freely transferable.
4. The amount paid shall not be less than the equivalent amount that would have been paid in a freely usable currency in the international financial market on the date of expropriation and this currency would have been converted to the market price in force in the Date of valuation, plus interest that would have generated at a bank or commercial rate up to the date of the day of payment.
5. This Article does not apply to the issuance of compulsory licenses granted in relation to intellectual property rights under the TRIPS Agreement, or to the revocation, limitation or creation of intellectual property rights; To the extent that such issuance, revocation, limitation or creation is consistent with the Parties' multilateral international obligations in this regard.
6. This Article shall be interpreted in accordance with Annex 3.11.
3.12. Special Formalities and Information Requirements
1. Nothing in Article 3.04 shall be construed to prevent a Party from adopting or maintaining a measure which prescribes special formalities connected with the establishment of investments by investors of another Party, such as investments being constituted in accordance with Legislation of the Party, provided that such formalities do not substantially impair the protection afforded by a Party under this Chapter.
2. Notwithstanding Articles 3.04 and 3.05, each Party may require in its territory an investor of another Party to provide routine information regarding its investment solely for information or statistical purposes. The Party shall protect information that is confidential, from any disclosure that would adversely affect the competitive position of the investor or the investor.
3.13. Denial of Benefits
A Party may, upon prior notice and consultation with another Party, deny the benefits of this Chapter to an investor of that Party who is a company of the same and to the investments of such an investor if investors of a non-Party own majority or control The company and it has no substantial business activities in the territory of the Party according to whose law is constituted or organized.
3.14. Measures Relating to the Environment
Nothing in this Chapter shall be construed as an impediment for a Party to adopt, maintain or enforce any measure otherwise compatible with this Chapter which it deems appropriate to ensure that investment activities in its territory are carried out taking into account Environmental concerns.
3.15. Promotion of Investments and Exchange of Information
1. In order to significantly increase the mutual participation of investments, Parties may promote and support the development of documents to promote investment opportunities and the design of mechanisms for their dissemination. Likewise, Parties may create, maintain and improve financial mechanisms to make viable the investments of one Party in the territory of another Party.
2. The Parties shall make available information on opportunities for:
a) investment in its territory, which may be developed by investors of another Party;
b) strategic alliances between investors of the Parties, through research and the combination of interests and opportunities for partnership; and
c) investment in specific economic sectors of interest to Parties and their investors, at the express request of any Party.
3. In order to be kept up to date and informed, Parties should exchange information on:
a) legislation that directly or indirectly affects foreign investment including, inter alia, exchange rate and fiscal regimes;
b) the behavior of foreign investment in their respective territories; and
c) the investment opportunities referred to in paragraph 2 of this Article, including the dissemination of available financial instruments that contribute to the increase of investment in the territory of the Parties.
Section B. Investor-State Dispute Settlement
3.16. Consultation and Negotiation
In the case of an investment dispute, the plaintiff and the respondent must first seek settlement of the dispute through consultation and negotiation, which may include the use of non-binding third party proceedings such as conciliation and mediation.
3.17. Submission of a Claim to Arbitration
1. In the event that a disputing party considers that a dispute concerning an investment through consultation and negotiation can not be resolved:
a) the claimant, on his own account, may submit to arbitration a claim under this Section alleging that the defendant has breached an obligation under Section A and that the claimant has suffered loss or damage in By virtue of said violation or as a result thereof; and
b) the claimant, on behalf of an enterprise of the defendant that is a legal person owned by the plaintiff or under its direct or indirect control, may, in accordance with this Section, submit to arbitration a claim alleging that the defendant Has breached an obligation under Section A and that the company has suffered losses or damages by virtue of or as a result of said breach.
2. At least ninety (90) days before a claim for arbitration under this Section is submitted, the claimant shall deliver to the defendant a written notice of his intention to submit the claim to arbitration ("notice of intent"). The notification shall specify:
a) the name and address of the claimant and, in the case where the claim is submitted on behalf of an undertaking, the name, address and place of incorporation of the undertaking;
b) for each claim, the provision of this Treaty allegedly violated and any other applicable provision;
c) the issues of fact and law on which each complaint is based; and
d) the reparation requested and the approximate amount of damages claimed.
3. Whenever six (6) months have elapsed since the events giving rise to the claim, the claimant may submit the claim referred to in paragraph 1:
a) in accordance with the ICSID Convention and the Rules of Procedure for ICSID Arbitral Proceedings, provided that both the defendant and the Claimant's Party are parties to the ICSID Convention;
b) in accordance with the Additional Facility Rules of ICSID, provided that the defendant or the Claimant's Party is a party to the ICSID Convention; or
c) in accordance with the UNCITRAL Arbitration Rules.
4. A claim shall be deemed to be submitted to arbitration under this Section when the notice or request for arbitration ("notice of arbitration") of the claimant:
a) referred to in paragraph 1 of Article 36 of the ICSID Convention is received by the Secretary-General;
b) referred to in Article 2 of Annex C to the ICSID Supplementary Mechanism Rules be received by the Secretary-General; or
c) referred to in Article 3 of the UNCITRAL Arbitration Rules, together with the writ of claim referred to in Article 18 of the UNCITRAL Arbitration Rules, is received by the defendant.
A claim raised for the first time after such notice of arbitration has been submitted shall be deemed to have been submitted to arbitration under this Section on the date of its receipt under applicable arbitration rules.
5. The arbitration rules applicable in accordance with paragraph 3, and which are in force on the date of the claim or claims that have been submitted to arbitration under this Section, will govern the arbitration except to the extent that they are modified by this Treaty.
6. The claimant shall deliver together with the notice of arbitration:
a) the name of the arbitrator appointed by the claimant; or
b) the plaintiff's written consent for the Secretary-General to appoint such arbitrator.
3.18. Consent of Each Party to Arbitration
1. Each Party consents to submit a claim to arbitration under this Section and in accordance with this Agreement.
2. The consent referred to in paragraph 1 and the submission of the claim to arbitration under this Section shall comply with the requirements indicated in:
a) Chapter II of the ICSID Convention (Jurisdiction of the Center) and the Additional Facility Rules of ICSID requiring the written consent of the parties to the dispute;
b) Article II of the New York Convention requiring a "written agreement"; and
c) Article I of the Inter-American Convention that requires an "agreement".
3.19. Conditions and Limitations on the Consent of the Parties
1. No claim may be submitted to arbitration under this Section, if more than three (3) years have elapsed from the date on which the claimant had or should have been aware of the alleged violation pursuant to Article 3.17.1 and knowledge that the claimant (for claims under Article 3.17.1 (a)), or the company (for claims under Article 3.17.1 (b)) suffered loss or damage.