Title

AGREEMENT BETWEEN THE GOVERNMENT OF ROMANIA AND THE GOVERNMENT OF THE REPUBLIC OF CUBA ON THE PROMOTION AND RECIPROCAL PROTECTION OF INVESTMENTS

Preamble

The Government of Romania and the Government of the Republic of Cuba herein referred to as the "Contracting Parties",

Desiring to intensify economic cooperation to the mutual benefit of both States,

Intending to create and maintain favourable conditions for investments by investors of one Contracting Party in the territory of the other Contracting Party,

Recognizing the need to promote and protect foreign investments with the aim to foster the economic prosperity of both States,

Have agreed as follows:

Body

Article 1. Definitions

For the purpose of this Agreement:

1) The term "investor refers with regard to either Contracting Party to:

a) natural persons who, according to the law of that Contracting Party, are considered to be its citizens;

b) juridical persons, including companies, corporations,business associations and other organizations, which are constituted or otherwise duly organized under the law of that Contracting Party and have their seat, together with real economic activities in the territory of that same Contracting Party.

2) The term "investments" shall mean every kind of assets invested by investors of one Contracting Party in the territory 7 of the other Contracting Party, in accordance with the laws and regulations of the latter, and include particularly, but not exclusively:

a) movable and immovable property as well as any other rights in rem, such as servitudes, mortgages. Hens, pledges;

b) shares, parts or any other kinds of participation in companies;

c) claims to money or to any rights to any performance having an economic value;

d) intellectual property rights, such as copyrights, patents, industrial designs or models, trade or service marks, trade names, know-how and goodwill, as well as other similar rights recognized by the laws of the Contracting Parties;

e) concessions under public law, including concessions to search for, extraction or exploitation of natural resources as well as all other rights given by law, by contract or by decision of the authority in accordance with the law.

Any alteration of the form in which assets are invested or reinvested shall not affect their character as investment.

3) The term "returns" means the amounts yielded by an investment and in particular, though not exclusively, includes profits, dividends, interests, capital gains, royalties, management and technical assistance or other fees, irrespective of the form in which the return is paid.

4) The term "territory" means:

- In respect of Romania: the territory of Romania, including the territorial sea and the economic exclusive zone over which Romania exercises, in accordance with internal and international law, sovereignty, sovereign rights and jurisdiction.

- In respect of the Republic of Cuba: in addition to the areas within the land boundaries, the maritime areas are also included. These include the marine and submarine areas over which the Cuban State has sovereignty or, in accordance with international law, exercises sovereign rights and jurisidiction.

Article 2. Promotion, Admission

1) Each Contracting Party shall in its territory promote as far as possible investments made by investors of the other Contracting Party and admit such investments in accordance with its laws and regulations.

2) When a Contracting Party shall have admitted an investment in its territory, it shall, in accordance with its laws and regulations, grant the necessary permits in connection with such an investment, including authorizations for engaging top managerial and technical personnel of their choice.

Article 3. Protection, Treatment

1) Each Contracting Party shall protect within its territory investments made in accordance with its laws and regulations by investors of the other Contracting Party and shall not impair by unreasonable or discriminatory measures the management, maintenance, use, enjoyment, extension, sale or liquidation of such investments. In particular, each Contracting Party or its competent authorities shall issue the necessary authorizations mentioned in Article 2, paragraph 2), of this Agreement.

2) Each Contracting Party shall ensure fair and equitable treatment within its territory to investments of the investors of the other Contracting Party. This treatment shall not be less favourable than that granted by each Contracting Party to investments made within its territory by investors of any third state, if this latter treatment is more favourable.

3) The most favoured nation treatment shall not be construed so as to oblige a Contracting Party to extend to the investors and investments of the other Contracting Party the advantages resulting from any existing or future customs or economic union, a free trade area or regional economic organization, to which either of the Contracting Parties is or becomes a member. Nor shall such treatment relate to any advantage which either Contracting Party accords to investors of a third state by virtue of a double taxation agreement or other agreements on a reciprocal basis regarding tax matters.

Article 4. Free Transfer

1) Each Contracting Party in whose territory investments have been made by investors of the other Contracting Party shall grant those investors the free transfer of the payments relating to these investments, particularly of:

a) returns according to Article 1, paragraph 3) of this Agreement;

b) amounts relating to loans incurred, or other contractual obligations undertaken, for the investment; and

c) proceeds accruing from the total or partial sale, alienation or liquidation of an investment.

2) Notwithstanding the provisions of paragraph 1) of the present Article, either Contracting Party may, in exceptional financial or economic circumstances, impose such exchange restrictions in accordance with its laws and regulations.

3) Unless otherwise agreed with the investor transfers shall be made in freely convertible currency, pursuant to the laws and regulations in force of the Contracting Party in whose territory the investment was made, at the official exchange rate applicable on the date of transfer.

Article 5. Dispossession, Compensation

1) Neither of the Contracting Parties shall take, either directly or indirectly, measures of expropriation, nationalization or any other measures having the same nature or the same effect against investments of investors of the other Contracting Party, unless the measures are taken in the public interest as established by law, on a non-discriminatory basis, and under due process of law, and provided that provisions be made for effective and adequate compensation. Such compensation shall amount to the market value of the expropriated investment, the day before the day of expropriation or before the impending expropriation became public knowledge.

The compensation shall be paid without undue delay, in the freely convertible currency in which the investment was made, it shall include the interest applied by the Central Bank, from the day of expropriation until the day of payment and shall be freely transferable from the territory of one Contracting Party in the territory of the other Contracting Party.

2) The investors of one Contracting Party whose investments have suffered losses due to a war or any other armed conflict, state of emergency or rebellion, which took place in the territory of the other Contracting Party shall benefit, from the part, of this latter, of a treatment in accordance with Article 3, paragraph (2) of this Agreement. They shall, in all events, be entitled to compensation.

Article 6. Existing Investments

The present Agreement shall also apply to investments in the territory of a Contracting Party made in accordance with its laws and regulations by investors of the other Contracting Party prior to the entry into force of this Agreement. However, the Agreement shall not apply to disputes that have arisen before its entry into force.

Article 7. Other Obligations

1) If the legislation of either Contracting Party entitles the investments of the investors of the other Contracting Party to treatment more favourable than is provided for by this Agreement, such legislation shall to the extent that it is more favourable, prevail over this Agreement.

2) Each Contracting Party shall observe any other obligation it has assumed with regard to investments made in its territory by investors of the other Contracting Party.

Article 8. Subrogation

If either Contracting Parts or its designated agency makes a payment to one of its investors under any financial guaramee against non-commercial risks it has granted in regard of an investment in the territory of the other Contracting Party, the latter shall recognize, by virtue of the principle of subrogation, the assignment of any right or title of that investor to the first Contracting Party or its designated agency. The other Contracting Party shall be entitled to set off taxes aid other public charges due and payable by the investor.

Article 9. Settlement of Disputes between a Contracting Party and an Investor of the other Contracting Party

1) For the purpose of solving disputes with respect to investments between a Contracting Party and an investor of the other Contracting Party, consultations will take place between the parties concerned with a view to solving the case, as far as possible, amicably.

2) If these consultations do not result in a solution within six months from the date of request for settlement, the investor may submit the dispute, at his choice, for settlement to:

a) the competent court of the Contracting Party in the territory of which the investment has been made; or

b) an ad hoc arbitral tribunal which, unless otherwise agreed upon by the parties to the dispute, shall be established imder the arbitration rules of the United Nations Commission on International Trade Law (UNCITRAL).

3) Each Contracting Party hereby consents to the submission of an investment dispute to international conciliation or arbitration.

4) The Contracting Party which is a party to the dispute shall, at no time whatsoever during the procedures involving investment disputes, assert as a defence its immunity or the fact that the investor has received compensation under an insurance contract covering the whole or part of the incurred damage or loss.

Article 10. Settlement of Disputes between the Contracting Parties

1) Disputes between the Contracting Parties regarding the interpretation or application of the provisions of this Agreement shall be settled through the diplomatic channels.

2) If both Contracting Parties cannot reach an agreement within twelve months after the beginning of the dispute between themselves, the dispute shall, upon request of either Contracting Party, be submitted to an arbitral tribunal of three members. Each Contracting Party shall appoint one arbitrator, and these two arbitrators shall nominate a chairman who shall be a citizen of a third State.

3) If one of the Contracting Parties has not appointed its arbitrator and has not followed the invitation of the other Contracting Party to make that appointment within two months, the arbitrator shall be appointed upon the request of that Contracting Party by the President of the International Court of Justice.

4) If both arbitrators cannot reach an agreement as concerns the choice of the chairman within two months-after their appointment, the latter shall be appointed upon the request of either Contracting Party by the President of the International Court of Justice.

5) If, in the cases specified under paragraphs 3) and 4) of this Article, the President of the International Court of Justice is prevented from carrying out the said function or if he is a citizen of either Contracting Party, the appointment shall be made by the Vice-President, and if the latter is prevented or if he is a citizen of either Contracting Party, the appointment shall be made by the most senior Judge of the Court who is not a citizen of either Contracting Party.

6) Subject to other provisions made by the Contracting Parties, the tribunal shall determine its procedure.

7) Each Contracting Party shall bear the cost of the arbitrator it has appointed and of its representation in the arbitral proceedings. The cost of the chairman and the remaining costs shall be borne in equal parts by the Contracting Parties.

8) The decisions of the tribunal are final and binding for each Contracting Party.

Article 11. Final Provisions

1) This Agreement shall enter into force thirty days after the date on which the Contracting Parties shall have notified each other that their legal requirements for the entry into force of this Agreement have been fulfilled. It shall reman in force for an initial period of ten years. Unless official notice of denunciation is given six months before the expiration of this period, the Agreement shall be considered as renewed on the same terms for further periods of ten years.

2) In case of official notice of denunciation of the present Agreement, the provisions of the Articles 1 to 10 shall continue to be effective for a further period of ten years for investments made before official notice was given.

Conclusion

IN WITNESS THEREOF the Undersigned, being duly authorized by their respective Governments, have signed this Agreement.

Done at Bucharest, on January 26th, 19996, in two originals, in Romanian, Spanish and English languages each text being equally authentic. In case of difference of interpretation, the English text shall prevail.

For the Government of Romania

For the Government of the Republic of Cuba