Title

Signed at Seoul July, 2010

AGREEMENT BETWEEN

Preamble

THE GOVERNMENT OF THE REPUBLIC OF KOREA AND THE GOVERNMENT OF THE REPUBLIC OF COLOMBIA FOR THE PROMOTION AND PROTECTION OF INVESTMENTS

PREAMBLE

The Government of the Republic of Korea and the Government of the Republic of Colombia (hereinafter referred to as the "Contracting Parties' 1 or the "Parties"),

Desiring to intensify the economic cooperation to the mutual benefit of both Contracting Parties,

Intending to create and maintain favourable conditions for the investments of 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 Contracting Parties;

Desiring to achieve these objectives in a manner consistent with the protection of health, safety, and the environment and the promotion of consumer protection and internationally recognized labour rights,

Have agreed as follows:

Body

Article 1. Definitions

For the purposes of this Agreement:

1. Investment

1. 1 The term "investment" means every kind of asset in the territory of one Contracting Party, owned or controlled directly or indirectly, by an investor of the other Contracting Party, provided that the investment has been made in accordance with the laws and regulations of the former Contracting Party, including, though not exclusively:

a. an enterprise (being a legal person or any other entity constituted or organized under the applicable law of the host Contracting Party, whether or not for profit, and whether private or government owned or controlled, and includes a corporation, trust, partnership, sole proprietorship, branch, joint venture, association or organization);

b. any other tangible, intangible, movable and immovable property, as well as any other rights in rem, including property rights;

c. shares, stocks, parts and any other kind of economic participation in corporations;

d. bonds, debentures, loans and other forms of debt;

e. claims to money or to any performance having an economic value;

f. intellectual property rights, including, among others, copyrights and related

Rights, and industrial property rights such as patents, technical processes,

Manufacturers' brands and trademarks, trade names, industrial designs, trade secrets, know-how and goodwill;

g. concessions granted by law, administrative act or contract, including

Concessions to explore, grow, extract or exploit natural resources;

h. all operations of foreign loan, as established by the law of each Contracting Party, related to an investment;

i. turn-key, construction, management, production, revenue-sharing and any

Other similar contracts;

1. 2 Investment does not include:

a. public debt operations;

b. claims to money arising solely from:

i. Commercial contracts for the sale of goods and services by a national or legal entity in the territory of a Contracting Party to a national or a legal entity in the territory of the other Contracting Party; or

ii. Credits granted in relation with a commercial transaction;

1. 3 In accordance with paragraph 1 of this Article, the minimum characteristics of an

Investment shall be:

a. The commitment of capital or other resources;

b. The expectation of gain or profit; and

c. The assumption of risk for the investor.

Market share, market access, expected gains, and opportunities for profit-making

Are not, by themselves, investments.

2. Returns

The term "returns" means the amounts yielded by investments and, in particular, though not exclusively, includes profit, interest, capital gains, dividends, royalties and all kinds of fees.

3. nvestor

3. 1 The term "investor" means any natural or juridical persons of one Contracting

Party who invests in the territory of the other Contracting Party:

a. the term "natural persons" means natural persons having the nationality of the former Contracting Party in accordance with its laws, provided, however, that a natural person who is a dual national shall be deemed to be exclusively a national of the State of his or her dominant and effective nationality; and

b. the term "juridical persons" means any entity such as companies, institutions, public companies whether private or government owned or controlled, foundations, partnerships, firms, establishments, organizations, corporations or associations incorporated or constituted in accordance with the laws and regulations of the former Contracting Party and having substantial business in the territory of the same Contracting Party.

4. Territory

The term "territory' 1 comprises, in addition to the land territory, the maritime space and the airspace under the sovereignty of each Contracting Party, the maritime

And sub-maritime areas over which they exercise sovereign rights and jurisdiction, in accordance with respective laws and international law.

5. Freely Usable Currency

The term "freely usable currency" means currencies that the International Monetary Fund determines, from time to time, as freely usable currencies in accordance with the Articles of Agreement of the International Monetary Fund and Amendments thereafter.

6. Sub-national Government

The term "sub-national government* 1 means with respect to Korea, local governments. For Korea, local level of government means a local government as defined in the Local Autonomy Act. For Colombia, as a unitary Republic, the term sub-national government does not apply.1)

Article 2. Promotion and Protection of Investment

1. Each Contracting Party shall encourage and create favourable conditions for investors of the other Contracting Party to make investments in its territory and shall admit such investments in accordance with its laws and regulations.

2. Each Contracting Party shall accord to investments of an investor of the other Contracting Party treatment in accordance with customary international law, including fair and equitable treatment and full protection and security.

3. For greater certainty, paragraph 2 prescribes the customary international law minimum standard of treatment of aliens as the minimum standard of treatment to be afforded to investments of an investor of the other Contracting Party. The concepts of "fair and equitable treatment* 1 and "full protection and security" do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights. The obligation in paragraph 2 to provide:

a. "fair and equitable treatment" includes the obligation not to deny justice in criminal, civil, or administrative adjudicatory 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 under customary international law.

4. A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article.

5. Neither Contracting Party shall take any unreasonable or discriminatory measures against the management, maintenance, use, enjoyment and disposal of the investments by the investors of the other Contracting Party, nor impose unreasonable or discriminatory measures on investments by investors of the other Contracting Party concerning local content, export performance requirements or particular technology transfer.2)

6. The requirement established in paragraph 5 concerning unreasonable or discriminatory measures on technology transfer does not apply:

a. when a Party authorizes use of an intellectual property right in accordance with Articles 31 and 39 of the TRIPS Agreement; or

b. when the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal, or competition authority to remedy a practice determined after judicial or administrative process to be anti competitive under the Party' s competition laws.3)

7. Paragraph 5 shall not apply to procurement nor will it apply to the requirements imposed by an importing Party relating to the content of goods necessary to qualify for preferential tariffs or preferential quotas. Nor will it apply to the qualification requirements for goods or services with respect to export promotion and foreign aid programs. Furthermore, provided that such measures are not applied in an arbitrary or unjustifiable manner, and provided that such measures do not constitute a disguised restriction on international trade or investment, paragraph 5 shall not be construed to prevent a Party from adopting or maintaining measures, including environmental measures:

a. necessary to secure compliance with laws and regulations that are not inconsistent

With this Agreement,

b. necessary to protect human, animal, or plant life or health,

c. related to the conservation of living or non-living exhaustible natural resources.

Article 3. Treatment of Investment

1. Each Contracting Party shall accord in its territory to investments made in accordance

With its laws and regulations by investors of the other Contracting Party as regards the management, maintenance, use, enjoyment or disposal of their investments, treatment no less favourable than that which it accords in like circumstances to investments of its own investors (hereinafter referred to as "national treatment") or to investments of investors of any third State (hereinafter referred to as "most-favoured-nation treatment"),

Whichever is more favourable.

2. Each Contracting Party shall in its territory accord, to investors of the other

Contracting Party, as regards the management, maintenance, use, enjoyment or disposal of their investments established in the territory of the host Contracting Party in accordance with its laws, treatment no less favourable than that which it accords in like circumstances to its own investors (national treatment) or to investors of any third State

(most-favoured-nation treatment), whichever is more favourable.

3. The standard of national treatment as provided for in paragraphs 1 and 2 means, with respect to a sub-national government, treatment no less favorable than the most favorable treatment accorded in like circumstances by that sub-national government to investors, and to investments of investors, of the Party of which it forms a part.

4. The national treatment and most-favoured-nation treatment as provided for in

Paragraph 1 and 2 do not apply to

a. government procurement; or

b. subsidies or grants provided by a Party, including government-supported loans, guarantees, and insurance; or

c. taxation measures.

5. The most-favoured-nation treatment as provided for in paragraphs 1 and 2 shall not relate to privileges which either Contracting Party accords to investors of third States on account of its present or future membership of, or association with a customs or economic union, a common market or a free trade area or similar international agreement.

6. The most-favoured-nation treatment to be granted in like circumstances referred to in this Agreement does not encompass mechanisms for the settlement of investment disputes, such as those contained in Articles 11 and 12 of this Agreement, which are provided for in treaties or international investment agreements.

Article 4. Compensation for Losses

1. Investors of one Contracting Party whose investments suffer losses owing to war or other armed conflict, a state of national emergency, revolt, insurrection, riot or other similar situation in the territory of the other Contracting Party, shall be accorded by the latter Contracting Party, as regards restitution, indemnification, compensation or other forms of settlement, treatment no less favourable than that which the latter Contracting Party accords to its own investors or to investors of any third State.

2. Without prejudice to paragraph 1 of this Article, investors of one Contracting Party who, in any situations referred to in that paragraph, suffer losses in the territory of the other Contracting Party resulting from:

a. requisitioning of their investment by the latter Contracting Party's forces or authorities; or

b. destruction of their property by the latter Contracting Party's forces or authorities which was not caused in combat action or was not required by the necessity of the situation,

Shall be accorded restitution, compensation, or both, as appropriate, for such loss. Any compensation shall be prompt, adequate, and effective in accordance to Article 5, mutatis mutandis.

Article 5. Expropriation

1. No Party may expropriate or nationalize an investment either directly or indirectly through measures equivalent to expropriation or nationalization (hereinafter "expropriation' 1), except:

a. for a public purpose5)

b. in a non-discriminatory manner and in good faith;

c. on payment of prompt, adequate, and effective compensation; and

d. in accordance with due process of law.

2. The Parties confirm their shared understanding that:

a. An action or a series of actions by a Party cannot constitute an expropriation unless it interferes with a tangible or intangible property right in an investment.

b. Paragraph 1 addresses two situations. The first is direct expropriation, where an investment is nationalized or otherwise directly expropriated through formal transfer of title or outright seizure.

c. The second situation addressed by Paragraph 1 is indirect expropriation, where an action or a series of actions by a Party has an effect equivalent to direct expropriation without formal transfer of title or outright seizure.

d. The determination of whether an action or a series of actions by a Party, in a specific fact situation, constitutes an indirect expropriation, requires a case-by-case, fact-based inquiry that considers all relevant factors relating to the investment, including:

i. the economic impact of the government action, although the fact that an action or a series of actions by a Party has an adverse effect on the economic value of an investment, standing alone, does not establish that an indirect expropriation has occurred;

ii. the extent to which the government action interferes with distinct, reasonable investment-backed expectations6); and

iii. the character of the government action, including its objectives and context. Relevant considerations could include whether the investor bears a disproportionate burden that exceeds what the investor or investment should be expected to endure for the public interest;

e. Except in rare circumstances, such as, for example, when an action or a series of actions is extremely severe or disproportionate in light of its purpose or effect, non-discriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, the environment, and real estate price stabilization (through, for example, measures to improve the housing conditions for low-income households), do not constitute indirect expropriation.7)

3. The compensation shall amount to the market value of the investment immediately before the expropriatory measures were adopted or immediately before the imminent measures were of public knowledge, whichever is earlier, (hereinafter the "date of value"). For the sake of clarity, the date of value shall be applied to assess the compensation to be paid regardless of whether the criteria specified in paragraph 1 of this Article have been met.

4. Such compensation shall include interest at a commercially reasonable rate from the date of expropriation until the date of payment, and shall be made without undue delay. It shall be effectively realizable and freely transferable and shall be freely convertible into the currency of the Contracting Party of the investors concerned, and into freely usable currencies as defined in the Articles of Agreement of the International Monetary Fund, at the market exchange rate prevailing on the date of expropriation.

5. The legality of the measure and the amount of the compensation, including a valuation of the investments, may be challenged before the judicial authorities or other independent authority of the Contracting Party adopting it.

6. This article does not apply to the issuance of compulsory licenses granted in relation to intellectual property rights in accordance with the TRIPS Agreement, or to the revocation, limitation, or creation of intellectual property rights.

Article 6. Transfers

1. Each Contracting Party shall guarantee to an investor of the other Contracting Party the free transfer of all payments relating to an investment into and out of its territory. Such transfers shall include, among others:

a. the initial capital and additional amounts to maintain or increase an investment;

b. returns as defined in Article 1;

c. payments made under a contract including a loan agreement related to an investment

d. payments arising out of the settlement of a dispute;

e. proceeds from the sale or liquidation of all or any part of an investment

f. payments made pursuant to Article 4 and 5; and

g. Salaries and remunerations received by the employees hired overseas in connection with an investment.

2. All transfers under this Agreement shall be made in a freely usable currency, without undue restriction or delay, at the market exchange rate prevailing on the date of the transfer.

3. Notwithstanding the provisions of this Article, a Contracting Party may condition or prevent a transfer through the equitable, non-discriminatory and good faith application of its laws relating to:

a. Bankruptcy proceedings, company restructuring or insolvency;

b. Compliance with judicial, arbitral or confirmed administrative verdicts and awards; or

c. Compliance with labour or tax obligations;

4. A Contracting Party may adopt or maintain measures inconsistent with Article 6.1 and 6.2

a. in the event of serious balance-of-payments and external financial difficulties or threat thereof; or

b. in cases where, in exceptional circumstances, movements of capital cause or threaten to cause serious difficulties for macroeconomic management, in particular, monetary and exchange rate policies.

5. Measures referred to in paragraph 4 of this Article:

a. shall be consistent with the Articles of Agreement of the International Monetary Fund;

b. shall be non-discriminatory;

c. shall not exceed those necessary to deal with the circumstances set out in

Paragraph 4 of this Article;

d. shall be temporary and shall be eliminated as soon as conditions permit; and

e. shall be promptly notified to the other Contracting Party.

Article 7. Subrogation

If a Contracting Party or its designated agency makes a payment under an indemnity, guarantee or contract of insurance of non commercial risks given in respect of an

Investment of an investor in the territory of the other Contracting Party, the other Contracting Party shall recognize:

a. the assignment of any right or claim of such investor to the former Contracting

Party or its designated agency, and

b. the right of the former Contracting Party or its designated agency to exercise by virtue of subrogation any such right and claim to the same extent as its predecessor in title.

Article 8. Investment and Environment

Nothing in this Agreement shall be construed to prevent a Party from adopting, maintaining, or enforcing any measure that it considers appropriate to ensure that an investment activity in its territory is undertaken in accordance with the environmental law of the Party, provided that such measures are proportional to the objectives sought.

Article 9. Transparency

1. Each Contracting Party shall promptly publish, or otherwise make publicly available, its laws, regulations, procedures and administrative rulings and judicial decisions of general application as well as international agreements which may affect the operation of this agreement.

2. Each Contracting Party shall promptly respond to specific questions and provide, upon request, information to the other Contracting Party on matters referred to in paragraph 1.

3. Nothing in this Agreement shall prevent either Contracting Party from requiring an investor of the other Contracting Party, or its investment, to provide routine information concerning that investment solely for informative or statistical purposes. Nothing in this Agreement requires a Contracting Party to furnish or allow access to:

a. information relating to the financial affairs and accounts of individual customers of particular investors or investment, or

b. any confidential or proprietary information, including information concerning particular investors or investments, the disclosure of which would impede law enforcement or be contrary to its laws protecting confidentiality or prejudice legitimate commercial interests of a particular enterprise.