Title
AGREEMENT BETWEEN THE GOVERNMENT OF NEW ZEALAND AND THE GOVERNMENT OF THE UNITED ARAB EMIRATES ON THE PROMOTION AND PROTECTION OF INVESTMENTS
Preamble
The Government of New Zealand
and the Government of the United Arab Emirates (hereinafter referred to as "the Parties" and each a "Party"),
RECOGNISING the growing importance of foreign investments in creating, maintaining, and enhancing sustainable economic growth and prosperity for both Parties;
ACKNOWLEDGING each Party's right to protect its security, safety, and environment within its territory;
RECOGNISING that this Agreement shall not apply to the pre-establishment phase of the investment; and
RECOGNISING that these objectives can be achieved without relaxing health, safety, and environmental measures of general application;
Have agreed as follows:
Body
Section A. DEFINITIONS
For the purposes of this Agreement:
covered investment means, with respect to a Party, an investment:
(a) in its territory;
(b) by an investor of the other Party; and
(c) existing on the date of entry into force of this Agreement, or made, acquired or expanded thereafter;
enterprise means any legal person or any other entity duly constituted or organised under the applicable law, whether or not for profit, and whether privately or governmentally owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, organisation or company;
enterprise of a Party means an enterprise that is constituted or organised under the law of a Party and carries out business activities in the territory of that Party;
existing measures means measures that are in effect on the date of the entry into force of this Agreement;
freely usable currency means "freely usable currency" as defined under the Articles of Agreement of the International Monetary Fund, done at Bretton Woods on 22 July 1944;
investment means every kind of asset, made in accordance with the law of the Party in whose territory the investment is made, that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, such as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include:
(a) an enterprise;
(b) shares, stock, and other forms of equity participation in an enterprise;
(c) bonds, debentures, other forms of debt (1), and loans (2);
(d) futures, options, and other derivatives;
(e) rights under a contract, including turnkey, construction, management, production, or revenue-sharing contracts;
(f) claims to money or to any performance under contract having a financial value;
(g) intellectual property rights and goodwill;
(h) concessions, licenses, authorisations, permits, and similar rights conferred by law, excluding those for the exploration and exploitation of natural resources; and
(i) any other movable and immovable property and any related property rights, such as leases, mortgages, liens, and pledges.
For greater certainty, investment shall not include the following:
(a) claims to money that arise solely from commercial contracts for the sale of goods or services by a natural person or enterprise in the territory of a Party to a natural person or enterprise in the territory of the other Party;
(b) the extension of credit, including bank loans, in connection with a commercial transaction, such as trade financing; and
(c) an order or judgement entered in a judicial or administrative action or an arbitral proceeding.
investor of a Party means a Party, or a national or an enterprise of a Party, that has made an investment in the territory of the other Party;
local government, in the case of the United Arab Emirates, means the government of each Emirate constituting the United Arab Emirates and, in the case of New Zealand, does not apply;
measures include laws, regulations, rules, procedures, decisions or administrative actions;
national means:
(a) for New Zealand, a national or permanent resident of New Zealand in accordance with its laws; and
(b) for the United Arab Emirates, a national of the United Arab Emirates in accordance with its laws and regulations.
services supplied in the exercise of governmental authority means any service which is supplied neither on a commercial basis nor in competition with one or more services suppliers;
territory means:
(a) for New Zealand, the territory of New Zealand and the exclusive economic zone, seabed and subsoil over which it exercises sovereign rights with respect to natural resources in accordance with international law, but does not include Tokelau.
(b) for the United Arab Emirates, the territory of the United Arab Emirates which is under its sovereignty, as well as the areas outside the territorial waters, the airspace, and the submarine areas over which the United Arab Emirates exercises, in accordance with international law and the law of the United Arab Emirates, sovereign rights or jurisdiction in connection with the exploration or the exploitation of natural resources.
WTO Agreement means the Marrakesh Agreement establishing the World Trade Organization, done at Marrakesh, April 15, 1994; and
CEPA means the UAE-New Zealand Comprehensive Economic Partnership Agreement.
Section B. INVESTMENT PROMOTION AND PROTECTION
Article 1. Scope and Coverage
1. This Agreement shall apply to measures adopted or maintained by a Party relating to:
(a) investors of the other Party; and
(b) covered investments.
2. This Agreement shall not apply to:
(a) government procurement;
(b) subsidies or grants provided by a Party;
(c) services supplied in the exercise of governmental authority by the relevant body or authority of a Party within the territory of that Party;
(d) any measure regarding taxation, including measures taken to enforce taxation obligations; and
(e) measures adopted or maintained by a Party within the scope of CEPA Chapter 9 (Trade in Services).
3. For greater certainty, this Agreement does not bind either Party in relation to any act or fact that took place, or any situation that ceased to exist, before the date of entry into force of this Agreement.
Article 2. Treatment of Investors and Investments
1. Each Party should, in its territory, endeavour to encourage the creation of favorable conditions for investments by investors of the other Party and admit such investments subject to, and in accordance with, its applicable law.
2. Each Party shall, in its territory, accord to covered investments of the other Party and to the other Party?s investors with respect to their covered investments, fair and equitable treatment and full protection and security, in accordance with paragraphs 3 through 6 and applicable customary international law principles.
3. A Party breaches the obligation of fair and equitable treatment referenced in paragraph 2 if a measure or series of measures constitutes:
(a) denial of justice in criminal, civil, or administrative proceedings;
(b) fundamental breach of due process in judicial and administrative proceedings;
(c) manifest arbitrariness; or
(d) targeted discrimination on manifestly wrongful grounds, such as gender, race, or religious belief.
4. For greater certainty, "full protection and security" does not require, in any case, treatment in addition to or beyond that which is required by applicable customary international law regarding the treatment of aliens.
5. For greater certainty, a breach of another provision of this Agreement, or of any other international agreement, does not constitute a breach of this Article.
6. For greater certainty, the mere fact that a Party takes or fails to take an action that may be inconsistent with an investor?s expectations does not constitute a breach of this Article, even if there is loss or damage to the investor or the covered investment as a result.
Article 3. National Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the management, maintenance, use, enjoyment, or disposal of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favourable than that it accords, in like circumstances, to investments in its territory of its own investors with respect to the management, maintenance, use, enjoyment, or disposal of investments.
3. The standard of national treatment as provided for in paragraphs 1 and 2 of this Article means, with respect to a local government (3), treatment no less favourable than the most favourable treatment accorded in like circumstances by that local government to investors, and to investments of investors, of the Party of which it forms a part.
4. 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 policy objectives.
Article 4. Most-Favoured-Nation Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to investors of any non-Party with respect to the management, maintenance, use, enjoyment, or disposal of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favourable than that it accords, in like circumstances, to investments in its territory of investors of any non-Party with respect to the management, maintenance, use, enjoyment, or disposal of investments.
3. For greater certainty, the treatment referred to in this Article does not encompass definitions provided for in other international treaties or any investor-state dispute settlement procedures or mechanisms.
4. For greater certainty, substantive obligations in other international investment treaties and other trade agreements do not in themselves constitute "treatment" and thus cannot give rise to a breach of this Article, absent measures adopted or maintained by a Party pursuant to those obligations.
5. Nothing in this Agreement shall be construed to oblige a Party to extend to the investors of the other Party, or to their covered investments, the benefits of any treatment resulting from:
(a) any bilateral or multilateral international agreement for the promotion and protection of investments which was signed prior to the date of entry into force of this Agreement;
(b) any existing or future customs union, free trade area agreement, common market, economic union, or similar international agreements to which either Party is a party or may become a party; or
(c) any existing or future bilateral or multilateral agreement concerning intellectual property. (4)
6. 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 policy objectives.
Article 5. Losses and Compensation
1. Each Party shall accord to investors of the other Party that have suffered loss or damage relating to their covered investments in the territory of the former Party due to war or other armed conflicts, revolution, a state of national emergency, revolt, insurrection, riot, or other such similar activity in the territory of that former Party, treatment, as regards restitution, indemnification, compensation or any other settlement, that is no less favourable than that which it accords to its own investors or investors of a non-Party.
2. Without prejudice to paragraph 1, if an investor suffers a loss in the territory of the other Party resulting from:
(a) requisitioning of its covered investment or part thereof by the Party's forces or authorities; or
(b) destruction of its covered investment or part thereof by the Party's forces or authorities, which was not caused in combat action or was not required by the necessity of the situation, the other Party shall provide the investor with restitution or adequate compensation for such loss.
3. Any payment under this Article shall be effectively realisable, freely transferable, and freely convertible at the market exchange rate into freely usable currencies.
Article 6. Expropriation and Compensation (5)
1. A Party shall not expropriate or nationalise a covered investment either directly or indirectly through measures having an effect equivalent to expropriation or nationalisation (hereinafter referred to as "expropriation"), except:
(a) for a public purpose;
(b) when made in accordance with the due process of law of the Party;
(c) in a non-discriminatory manner; and
(d) when accompanied by compensation, in accordance with paragraph 2.
2. The compensation shall:
(a) be paid without delay and in a freely usable currency;
(b) be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place;
(c) not reflect any change in value occurring because the intended expropriation had become known earlier;
(d) be fully realisable and freely transferable; and
(e) include interest, at a commercially reasonable rate for that currency, accrued from the date of expropriation until the date of payment of compensation.
3. The investors affected shall have a right, under the law of the Party making the expropriation, to prompt review, by a judicial or other independent authority of that Party, of the legality of the expropriation and of the valuation of their investment, in accordance with the principles set out in this Article.
Article 7. Transfers (6)
1. Each Party shall permit all transfers relating to a covered investment to be made freely and without delay into and out of its territory. Such transfers include:
(a) contributions to capital, including the initial contribution and additional amounts to maintain or increase the covered investment;
(b) profits, dividends, interest, capital gains, royalties, management fees, technical assistance fees, other fees, and other current incomes accruing from covered investments;
(c) proceeds from the sale or liquidation of all or any part of the covered investment;
(d) payments made under a contract entered into by the investor, or the covered investment, including payments made pursuant to a loan agreement;
(e) payments made in accordance with Articles 5 and 6; and
(f) payments arising out of a dispute.
2. Each Party shall permit transfers relating to a covered investment to be made in a freely usable currency at the market rate of exchange prevailing at the time of transfer.
3. Notwithstanding paragraphs 1 and 2, a Party may prevent or delay a transfer through the equitable, non-discriminatory, and good faith application of its law relating to:
(a) the payment of taxes and dues;
(a) bankruptcy, insolvency, or the protection of the rights of a creditor;
(b) issuing, trading, or dealing in securities, futures, options, or derivatives;
(c) criminal or penal offenses;
(d) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities; or
(e) ensuring compliance with an order or judgment in judicial or administrative proceedings.
Article 8. Subrogation
1. If a Party, or its designated agency, makes a payment to an investor of that Party under a guarantee, a contract of insurance, or other form of indemnity against non-commercial risks it has entered into in respect of a covered investment in the territory of the other Party, the other Party shall recognise:
(a) the assignment, to the former Party or its designated agency, of any right or claim of the investor in respect of such investment that formed the basis of such payment; and
(b) the right of the former Party or its designated agency to exercise by virtue of subrogation such right or claim to the same extent as the original right or claim of the investor.
2. For greater certainty, the Party or its designated agency shall be entitled in all circumstances to:
(a) the same treatment in respect of the rights and claims acquired by it by virtue of the assignment referred to in paragraph 1; and
(b) the same payments due pursuant to those rights and claims, as the investor referred to in paragraph 1 was entitled to receive by virtue of this Agreement in respect of the covered investment.
3. If a Party or a designated agency has made a payment to its investor and has taken over the rights and claims of the investor under paragraph 1, that investor shall not, unless authorized in writing by the Party or its designated agency, act on behalf of the Party or its designated agency making the payment, pursue those rights and claims against the other Party.
Article 9. Performance Requirements
1. A Party shall not, in connection with the management, maintenance, use, enjoyment, or disposal of a covered investment, impose or enforce requirements, or enforce a commitment or undertaking:
(a) to export a given level or percentage of a good or service;
(b) to achieve a given level or percentage of domestic content;
(c) to purchase, use, or accord a preference to a good produced, or service provided, in its territory or to purchase a good or service from a person in its territory;
(d) to relate the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with that investment;
(e) to restrict sales of goods in its territory that such investments produce by relating such sales to the volume or value of its exports or foreign exchange earnings;
(f) to transfer a particular technology, a production process, or other proprietary knowledge to a person in its territory; or
(g) to supply exclusively from the territory of the Party the goods that such investments produce to a specific regional market or to the world market.
2. No Party shall condition the receipt or continued receipt of an advantage, in connection with the management, maintenance, use, enjoyment, or disposal of an investment in its territory of an investor of the other Party, on compliance with any of the following requirements:
(a) to achieve a given level or percentage of domestic content;
(b) to purchase, use or accord a preference to a good produced or service provided in its territory, or to purchase a good or service from a person in its territory;
(c) to relate the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with that investment; or
(d) to restrict sales of goods in its territory that such investments produce by relating such sales to the volume or value of its exports or foreign exchange earnings.
3. Nothing in Paragraph 2 shall be construed to prevent a Party from conditioning the receipt or continued receipt of an advantage, in connection with an investment in its territory of an investor of the other Party, on compliance with a requirement to locate production, supply a service, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory.
4. (a) Paragraph 1(f) shall not apply: