Title

Agreement on cooperation and facilitation of investment between the Federative Republic of Brazil and the Republic of Chile

Preamble

The Federative Republic of Brazil

And

The Republic of Chile

Hereinafter referred to as the "Parties" or individually as "party",

Desiring to strengthen and deepen the bonds of friendship and spirit of cooperation between the parties;

Interested in encouraging and supporting the bilateral investment, opening new integration initiatives between the two countries;

Recognizing the essential role of investment in the promotion of sustainable development, economic growth, poverty reduction, creating jobs, expanding productive capacity and human development;

Bearing in mind that the deepening of the relationship between the parties in the field of investment will comprehensive and mutual benefits;

With the aim of achieving a sustained expansion of the bilateral investment in the interest of the parties and improve the investment climate through the exchange of information, the promotion and cooperation, and identification and removal of barriers to the investment;

Stressing the importance of fostering an amicable and transparent environment for bilateral investments;

Recognizing the right of the Parties to adopt regulations relating to investments in its territory, to achieve legitimate public policy objectives;

Desiring to promote contacts between the private sector and the Governments of the Parties; and

Interested in establishing a mechanism for technical dialogue and government initiatives that contribute to a significant increase mutual investment;

Have agreed as follows:

Body

Part I. Definitions and Scope of Application

Article 1. Definitions

1. For the purposes of this Agreement:

1.1 "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights Related to Trade, contained in Annex 1C to the Agreement Establishing the World Trade Organization.

1.2 "State Enterprise" means an enterprise owned or controlled, in whole or in part, by a majority, for the purpose of exercising business activities.

1.3 "Receiving State" means the host State Party in whose territory the investment.

1.4 "investment" means a direct investment, i.e. any assets owned or controlled directly or indirectly by an investor of a Party or acquired, established in accordance with the law of the other party in the territory of that other party to exercise ownership, control or significant influence over the management of the production of goods or the provision of services in the territory of the host State, including in particular, though not exclusively:

(a) An enterprise;

(b) Actions, capital or other forms of participation in the capital or assets of a company;

(c) Bonds, debentures (obligations), loans and other debt instruments of an enterprise, regardless of original maturity date, but does not include, in the case of Brazil, a debt instrument or a loan to a State enterprise that has no substantial business activities in market conditions, and in the case of Chile, a debt instrument issued by a State enterprise; or a loan to a state enterprise;

(d) Contractual rights, including turnkey or construction, management, production of participation in the granting of earnings and other similar contracts;

(e) Licences, authorizations, permits and similar rights conferred pursuant to domestic legislation of the host State;

(f) Intellectual Property Rights as defined or referred to in the TRIPS Agreement;

(g) Property rights, tangible or intangible, movable or immovable property and any other property rights, such as mortgage, lien, usufruct and similar rights.

1.4.1 For greater certainty, "investment" does not include:

(a) Public debt operations;

(b) An order or judgment in judicial or administrative proceedings;

(c) Investment Portfolio Investments; and

(d) Monetary claims arising solely from commercial contracts for the sale of goods or services by an investor in the territory of a party to a national or an enterprise in the territory of the other party, or the granting of credit in connection with a commercial transaction.

1.5 "investor" means a national or permanent resident, or enterprise of a Party that has made an investment in the territory of the other party.

1.6 "enterprise" means any entity constituted or organized under the applicable law, whether or not for profit and whether private or government owned, including any corporation, foundation firm sole proprietorship, joint venture entities), and without legal personality.

1.7 "enterprise of a party" means an enterprise constituted or organized under the law of a party, that substantial business activities in the territory of the same party.

1.8 "national" means a natural person who has the nationality of a Party according to its law.

1.9 "measure" means any law, regulation, procedural requirement or practice.

1.10 "returns" mean securities obtained by an investment and in particular, though not exclusively, includes profits, royalties, interest, dividends, capital gains.

1.11 "territory" means:

(a) With regard to Chile, the Land, Sea and Air Space under its sovereignty, and the exclusive economic zone and the continental shelf over which it exercises sovereign rights and jurisdiction in accordance with international law and its domestic law; and

(b) With respect to Brazil, the Territory, including its land and air space, the exclusive economic zone, the territorial sea, continental shelf, soil or subsoil, within which it exercises sovereign rights or jurisdiction in accordance with international law and its domestic law.

1.12 12 "free currency" means the free use of currency, as determined in accordance with the Articles of Agreement of the International Monetary Fund.

Article 2. Objective

The objective of this Agreement is to facilitate and promote mutual investment by establishing a framework of their treatment to investors and investments, governance and institutional mechanisms for cooperation and the avoidance and settlement of disputes.

Article 3. Scope

1. To this Agreement shall apply to investors and investments made before or after its Entry into Force.

2. For greater certainty,

(a) A requirement by a party that a service provider of the other party post a bond or other form of financial security as a condition of providing a service into its territory does not of itself make this Agreement applies to the cross-border supply of the service. This Agreement applies to that party treatment accorded to the financial security, bond or deposit to the extent that such bond or financial security is an investment;

(b) This Agreement shall not restrict in any way the rights and benefits which the legislation in force in the territory of a Party or international law, including the Agreement on Trade-Related Investment Measures (TRIMs) of the World Trade Organization, by an investor of the other party; and

(c) Nothing in this Agreement shall not preclude the adoption and implementation of new requirements or restrictions to their investors and investments, provided they are not that do not conform with this Agreement.

3. This Agreement shall not apply to subsidies or grants provided by a party, including loans, guarantees and insurance, by the State, without prejudice to the matter to be discussed in the joint committee established under article 18 (Joint Committee for the administration of the Agreement).

Part II. Treatment Accorded to Their Investors and Investments

Article 4. Admission

Each Party shall admit in its territory investments by investors of the other party that are undertaken in accordance with its domestic law.

Article 5. National Treatment

1. Subject to its laws and regulations in force when the investment was made, each Party shall accord to investors of the other party treatment no less favourable than that accorded in like circumstances to its own investors with respect to the expansion, administration, management, operation and sale or other disposition of investments in its territory.

2. Subject to its laws and regulations in force when the investment was made, each Party shall accord to investments of investors of the other party treatment no less favourable than that accorded to investments in like circumstances of its own investors with respect to the expansion, administration, management, operation and sale or other disposition of investments in its territory.

3. For greater certainty that the treatment accorded in "like circumstances", depends on all the circumstances, including the relevant treatment distinguish investors or investments on the basis of legitimate objectives of public interest.

4. For greater certainty, this article shall not be construed as to oblige the parties to compensate for disadvantages inherent competitive which result from the character of foreign investors and their investments.

Article 6. Most Favoured Nation Treatment

1. Subject to its laws and regulations in force when the investment was made, each Party shall accord to investors of the other party treatment no less favourable than that accorded in like circumstances to investors of a non-party with respect to the expansion, administration, management, operation and sale or other disposition of investments in its territory.

2. Subject to its laws and regulations in force when the investment was made, each Party shall accord to investments of investors of the other party treatment no less favourable than that accorded to investments in like circumstances, in its territory of an investor of a State that is not a party, as regards the expansion, administration, management, operation and sale or other disposition of investments in its territory.

3. This article shall not be interpreted as:

(a) An obligation of a party to an investor of the other Contracting Party, or to their investments, the benefit of any treatment, preference or privilege resulting from:

(i) Provisions concerning the settlement of investment disputes contained in an international agreement on investment, including an agreement that contains a chapter of investments; or

(ii) Any agreement, including international trade agreements such as to create a regional economic integration organization, free trade area, customs union or common market to which a Party is a member before the Entry into Force of the Agreement.

(b) The possibility of invoking, in any dispute settlement mechanism treatment standards contained in an investment agreement or an international agreement that contains a chapter of investments which a Party of this Agreement either party before the Entry into Force of the Agreement.

4. For greater certainty, this Agreement does not apply to the disciplines relating to trade in services under any international agreement in force or signed prior to the Entry into Force of this Agreement relating to: aviation; fisheries; and maritime matters; and any salvage including Customs Union, Economic and Monetary Union, Union agreement resulting in such unions or similar institutions.

Article 7. Expropriation

1. No Party shall expropriate or nationalize the investments of an investor of the other Party, unless it is:

(a) For reasons of public interest or public purpose;

(b) In a non-discriminatory manner;

(c) Through the payment of compensation in accordance with paragraphs 2 to 3; and

(d) In accordance with the principle of due process of law.

2. The compensation shall:

(a) Be paid without delay

(b) Be equivalent to the fair market value of the expropriated investment at the time immediately before the expropriation took place;

(c) Not reflect any change in value occurring because the intended expropriation had become known earlier date specified in subparagraph (b); and

(d) Be freely transferable and payable in accordance with article 11 (transfers).

3. The compensation referred to in paragraph 1 (c) shall be no less than the fair market value on the date specified in subparagraph (b) of paragraph 2, plus interest set criteria, according to market accrued since the date referred to in subparagraph (b) of paragraph 2 until the date of payment.

4. This article does not apply to the Issuance of Licenses Complusory in relation to Intellectual Property Rights, limitation or revocation, or creation of such rights to the extent that such issuance, revocation, limitation or creation is consistent with the TRIPS Agreement. For greater certainty, the term "revocation" intellectual property rights referred to in this paragraph includes the cancellation or invalidation of those rights and the term "limitation" of intellectual property rights includes the exceptions to those rights.

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

Article 8. Treatment In Case of Strife

1. With respect to measures such as restitution, indemnification, compensation or other settlement, each Party shall accord to investors of the other party that have suffered loss in their investments in the territory of that party, due to armed conflict or civil strife, such as war, revolution, insurrection, riot or treatment no less favourable than that accorded to its own investors investors or of any country that is not a Party, whichever is more favourable to the investor concerned.

2. Without prejudice to paragraph 1, each Party shall provide the investor of the other party restitution, compensation or both, as appropriate, in accordance with article 7 (2) (3) (expropriation), in the event that investments of investors of the other party suffer losses in its territory, in any situation referred to in paragraph 1, resulting from:

(a) The requisitioning of its investment or part thereof by the authorities or forces of the host State; or

(b) The destruction of its investment or part thereof by the authorities or forces of the host State.

Article 9. Transparency

1. Each Party shall ensure that its laws and regulations relating to any matter covered by this Agreement are promptly published and where possible in electronic form.

2. To the extent possible, each Party shall:

(a) Make public in advance the measures referred to in paragraph 1 that it proposes to adopt; and

(b) Provide interested persons and the other party a reasonable opportunity to comment on such proposed measures.

3. Each Party shall establish or maintain appropriate mechanisms to respond to inquiries from interested persons regarding its regulations relating to the subject matter of this Agreement in accordance with its laws and regulations on transparency. The implementation of the obligation to establish appropriate mechanisms shall take into account the budgetary constraints and in the case of small administrative agencies.

Article 10. Domestic Regulation

Each Party shall ensure that all measures affecting investment are administered in a reasonable, objective and impartial, in accordance with its legal system.

Article 11. Transfers

1. Each Party shall permit the following transfers relating to an investment of an investor of the other party, be made freely and without delay into and out of its territory:

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

(b) Directly related to the investment returns;

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

(d) Payments made under a contract which is part of the investor or investment including the payments made pursuant to a loan agreement;

(e) Any loan repayments of including on the same interest, directly related to the investment; and

(f) Payments made pursuant to article 7 (expropriation) and article 8 (treatment in case of strife). When the compensation to be paid in bonds of public debt, the investor may transfer the value of the proceeds of the sale of such bonds in the market, in accordance with this article.

2. Each Party shall permit transfers relating to an investment in a currency of free use, at the rate of exchange prevailing on the date of transfer.

3. Without prejudice to paragraph (1), a Party may prevent a transfer through the equitable and non-discriminatory and in good faith to its laws relating to:

(a) Winding-up proceedings, insolvency or bankruptcy or the protection of the rights of creditors;

(b) Compliance with orders or awards rendered judgements in judicial, administrative or arbitral. This subparagraph for greater certainty, includes the enforcement of judgments, orders or of arbitral awards in adjudicatory proceedings or administrative nature, tax or labour;

(c) Criminal offences; or

(d) Financial reports or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities.

4. Each Party may adopt or maintain measures that are not inconsistent with its obligations under this article, provided they are non-discriminatory and in conformity with the Articles of Agreement of the International Monetary Fund.

(a) In the event of serious imbalances balance of payments or external financial difficulties or threat thereof; or

(b) Where, in special circumstances, capital movements of cause or threaten to cause serious difficulties for macroeconomic management, in particular for monetary or exchange rate policies.

Article 12. Taxation

2. Nothing in this Agreement shall apply to Taxation Measures.

3. For greater certainty, no provision of this Agreement;

(a) Shall affect the rights and obligations of the Parties under any tax convention in force between the parties; or

(b) Shall be construed so as to prevent the adoption or enforcement of any measure aimed at ensuring the equitable or effective imposition or collection of taxes in accordance with the legislation of the Parties.

Article 13. Prudential Measures

1. Nothing in this Agreement shall be construed so as to prevent either party adopts or maintains prudential measures such as:

(a) The protection of investors, depositors, participants in the financial market, holder of policies, beneficiaries of policies, or persons to whom a fiduciary duty is a financial institution;

(b) The maintenance of security, soundness, soundness, responsibility or integrity of financial institutions; and

(c) To ensure the integrity and stability of the financial system of a party.

2. Where such measures do not conform to the provisions of this Agreement shall not be used as a means of avoiding the commitments or obligations undertaken by the parties under this Agreement.

Article 14. Security Exceptions

Nothing in this Agreement shall be construed as:

(a) To require a party to furnish any information the disclosure of which it considers contrary to its essential security interests;

(b) Prevent a Party from taking any action which it considers necessary for the protection of its essential security interests including those relating to:

(i) Fissionable and fusionable materials or the materials from which they are derived;

(ii) The traffic in arms, ammunition and war materiel, and other goods and materials or relating to the supply of services intended directly or indirectly for the purpose of supplying or provisioning a military establishment;

(iii) Measures taken in time of war or other emergency or in international relations;

1. (C) prevent a Party from taking action in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.

Article 15. Social Responsibility Policies

1. The Parties recognise the importance of promoting enterprises operating within its territory or subject to its jurisdiction to implement policies and sustainability of social responsibility and to promote the development of the host country.

2. Investors and their investment shall develop their best efforts to comply with the "OECD Guidelines for Multinational Enterprises of the Organisation for Economic Cooperation and Development, in particular:

(a) To contribute to the achievement of economic, social and environmental matters with a view to achieving sustainable development;

(b) Respect internationally recognized human rights of persons involved in the activities of the enterprise;

(c) Encourage the creation of local capacities through close cooperation with the local community;

(d) Promote the training of human capital, in particular through the creation of employment opportunities and training for employees;

(e) Refrain from seeking or accepting exemptions not covered under the legal or regulatory relating to human rights, the environment, health, safety, labour, the tax system, the financial incentives, or other matters;

(f) Support and defend the principles of good corporate governance and develop and implement good practices of corporate governance;

(g) Develop and implement autodisciplinarias practices and effective management systems that foster mutual trust between enterprises and companies in which they exercise their activity;

(h) Promote awareness and compliance by employees of the policies of company through appropriate dissemination, including through training programmes;

(i) To refrain from taking discriminatory measures or disciplinary workers to develop, in good faith, reports to the direction or, where appropriate, to the competent public authorities about practices contrary to law or policies of the enterprise;

(j) Further to the extent possible, that its trading partners, including suppliers and contractors implement the principles of business conduct consistent with the principles set out in this Article; and

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