(v) The leasing of real property appropriate for the conduct of business;

(vi) The acquisition, maintenance and protection of copyrights, patents, trademarks, trade secrets, trade names, licenses and other approvals of products and manufacturing processes, and other industrial property rights; and,

(vii) The borrowing of funds at market terms and conditions from local financial institutions, as well as the purchase and issuance of equity shares in the local financial markets, and, in accordance with national regulations and practices, the purchase of foreign exchange for the operation of the enterprise.

(b) This Treaty shall also apply to investments by nationals or companies of either Party, made prior to the entering into force of this Treaty and accepted in accordance with the respective prevailing legislation of either Party.

Paragraph 3 is renumbered as paragraphs 3(a) and 3(b) and changed to read as follows:

3.(a) Notwithstanding the preceding provisions of this Article, each Party reserves the right to maintain limited exceptions to the standard of national treatment otherwise required concerning investments or associated activities if exceptions fall within one of the sectors listed in the Annex to this Treaty. Both Parties hereby agree to maintain the number of such exceptions to a minimum. In addition, each Party shall notify the other Party of any specific measures which constitute exceptions to the standard of national treatment provided herein. In no event, however, shall the treatment to be accorded pursuant to any exception-be less favorable than that accorded in like situations to investments and associated activities of nationals or companies of any third country. Moreover, no exception, within the sectors contained in the Annex, introduced after the date of entry into force of this Treaty shall apply to investments of nationals or companies of the other Party existing in that sector at the time the exception becomes effective.

(b) Each Party retains the discretion to approve investments according to national plans and priorities on a nondiscriminatory basis consistent with paragraphs (1) and (3)(a) of this Article.paragraphs (1) and (3)(a) of this Article.

Paragraph 5(a) is changed to read as follows:

5.(a) Subject to the laws relating to the entry and sojourn of aliens, nationals of either Party shall be permitted to enter and reside in the territory of the other Party for the purpose of establishing, developing, directing, administering or advising on the operations of an investment to which they or the companies that employ them have committed or are in the process of committing a substantial amount of capital or other resources. Paragraph 6 is deleted and paragraphs 7, 8, and 9 are renumbered as paragraphs 6, 7, and 8, respectively.Paragraph 6 is deleted and paragraphs 7, 8, and 9 are renumbered as paragraphs 6, 7, and 8, respectively.

Paragraph 8 (formerly paragraph 9) is changed to read as follows:

8. Each Party and its subdivisions shall make public all laws, regulations, administrative practices and procedures, and adjudicatory decisions that pertain to affect investments in its territory of the other Party.

III.

Paragraph 1 is changed to read as follows:

1. No investment or any part of an investment of a national or company of either Party shall be expropriated or nationalized by the other Party or by a subdivision thereof-or subjected to any other measure, direct or indirect, if the effect of such other measure, or a series of such other measures, would be tantamount to expropriation or nationalization (all expropriations, all nationalizations and all such other measures hereinafter referred to as "expropriation")-unless the expropriation

(a) Is done for a public purpose;

(b) Is accomplished under due process of law;

(c) Is not discriminatory;

(d) Is accompanied by prompt and adequate compensation, freely realizable; and

(e) Does not violate any specific contractual engagement.

Compensation shall be equivalent to the fair market value of the expropriated investment on the date of expropriation. The calculation of such compensation shall not reflect any reduction in such fair market value due to either prior public notice or announcement of the expropriatory action, or the occurrence of the events that constituted or resulted in the expropriatory action. Such compensation shall include payments for delay as may be considered appropriate under international law, and shall be freely transferable at the prevailing rate of exchange for current transactions on the date of the expropriatory action.

Paragraph 2 is changed to read as follows:

2. If either Party or a subdivision thereof expropriates the investment duly incorporated, constituted or otherwise duly organized in its territory, and if nationals or companies of the other Party, directly or indirectly, own, hold or have other rights with respect to the equity of such company, then the Party within whose territory the expropriation occurs shall ensure that such nationals or companies of the other Party receive compensation in accordance with the provisions of the preceding paragraph.

Paragraph 3 is changed to read as follows:

3. Except as otherwise provided in an agreement between the Parties, or between a Party and a national or company of the other Party, a national or company of either Party that asserts that all or part of its investment in the territory of the other Party has been expropriated shall have a right to prompt review by the appropriate judicial or administrative authorities of such other party to determine whether any such expropriation has occurred and, if so, whether any such expropriation, and any compensation thereof, conforms to the principles of international law.

Article VI

Paragraph 1 is changed to read as follows:

1. The Parties shall, upon the written request of either of them, promptly hold consultations to discuss the interpretation or application of this Treaty or to resolve any disputes in connection therewith.

Article VII

Paragraph 4 is changed to read as follows:

4. In any proceeding, judicial, arbitral or otherwise, concerning a legal investment dispute between it and a national or company of the other Party, a Party shall not assert, as a defense, counterclaim, right of set-off or otherwise, that the national or company concerned has received or will receive, pursuant to an insurance contract, indemnification or other compensation for all or part of its alleged damages from any third party whatsoever, whether public or private, including such other Party and its subdivisions, agencies and instrumentalities. Notwithstanding the foregoing, a national or company of the other Party shall not be entitled to compensation for more than the value of its affected assets, taking into account all sources of compensation within the territory of the Party liable for the compensation.

Article VIII

Paragraph 3(g) is changed to read as follows:

(9) Each Party shall bear the costs of its own arbitrator and counsel in the arbitral proceeding. Expenses, incurred by the Chairman and other costs of the proceedings shall be paid for equally by the Parties. The Tribunal may, however, at its discretion, direct that a higher proportion of the costs be paid by one of the Parties. Such a decision shall be binding.

Article X

Paragraph 1 is changed to read as follows:

1. This Treaty shall not preclude the application by either Party or any subdivision thereof of any and all measures necessary for the maintenance of public order and morals, the fulfillment of its existing international obligations, the protection of its own security interests, or such measures deemed appropriate by the Parties to fulfill future international obligations.

Article XI

The paragraph is changed to read as follows:

With respect to its tax policies, each Party should strive to accord fairness and equity in the treatment of investments of nationals or companies of the Party. Nevertheless, all matters relating to the taxation of nationals or companies of a Party, or their investments in the territories of the other Party or a subdivision thereof shall be excluded from this Treaty, except with regard to measures covered by Article III and the specific provisions of Article V.

PROTOCOL

The Protocol is changed to read as follows:

On signing the Treaty concer ning the Reciprocal Enc ouragement and Protection of Investments, the Arab Republic of Egypt and the United States of America, have, in addition, agreed on the following provisions which should be regarded as an integral part of this Treaty:

1. Each Party reserves the right to deny t he benefits of this Treat y to any company of either Party, or its af filiates or subsidiari es, if nationals of any third country control such company, affiliate or subsidiary; pr ovided that, whenever one Party concludes that the benefits of this Treaty should not be extended fo r this reason, it shall promptly consult with the other Party to seek a mutually satisfactory resolution of this matter.

2. "Control" means to have a substantial sh are of ownership rights and the ability to exercise decisive influence. Differences as to the existence of control shall be resolved according to the provisions of Article VIII.

3. (a) The treatment accorded by the Unit ed States to nationals or companies of Egypt under the provisions of Article II(l) and (2) shall in any State of the United States or other territory, po ssession, or political or administrative subdivision of the United States be the treatm ent accorded therein to residents of or companies incorporated, constituted or otherwise duly organized in other States of the United States or territories, possessions, or politic al or administrative subdivisions of the United States. (b) The treatment accorded by Egypt to nat ionals and companies of the United States with respect to the establishment and acquisi tion of investments in limited sensitive geographic areas designated for exclusive Egyptian investment shall be no less favorable then the treatment it accords to investments of nationa ls and companies of any third country. Egypt reserves the right to modify the areas covered, provided that such areas will be kept to a minimum and will not substantially impair the investment opportunities of United Stat es nationals and companies.

4. The provisions of Article II, paragraph 3, relating to most favored nation treatment, shall not apply to advantages accorded by either Party to nationals or companies of a third country by virtue of a specific se curity or regional arrangement, including regional customs unions or free trade areas. Further, these provisions do not apply to the ownership of real estate. The provisions of Article II paragraph 1, relating to most favored nation treatment, shall not be construed to oblige one Party to extend to nationals or companies of the other the benefit of any treatment, preference or privilege which may be extended by the former Party by virtue of a customs union or in the field of housing. Mo reover, with regard to right s to engage in mining on the public domain, each Party retains the right to accord to nationals or companies of the other Party treatment wh ich is like or similar to that accorded by the other Party to nationals or companies of the first Party.

5. It is understood that this Treaty does not derogate from the rights of either Party regarding the establishment of qualifications as for the practice of professions, including law and accountancy. These qualificat ions may confine the practice of such professions to nationals or companies of. a Party, provided that they are applied on a nondiscriminatory basis; and prov ided, further, that such nationality requirements do not derogate from the right of nationals and co mpanies of either Party, pursuant to Article II (5)(b) to engage professional and technical pers onnel of their choice to render professional and techni cal services necessary for the internal planning and operation of the investment.

6 This Treaty, and in particular, the provis ions of Article II, paragraph 5(b) shall be subject to the provis ions of Article X.

7. With respect to Articl e II (6), performance requirem ents are conditions imposed which would require an investor to export a minimum percentage of final product or to source some inputs locally.

8. With regard to Article III, paragraph l(d) the term "prompt" does not necessarily mean instantaneous. The intent is that the Party diligently and expeditiously carry out any necessary formalities.

9. With regard to Article III, paragraph 1, the phrase "events that constituted or resulted in the expropriatory action" refers to conduct attributable to the expropriatory Party and not to conduct of the national or company. The inclusion of paragraph (e) in Article III, paragraph 1, is without prejudi ce to the measure of compensation due in the event of expropriation.

10. The Parties recognize that restrictions on transfers abroad of sales or liquidation proceeds of an investment will adversely affect future capital inflow s, contrary to the spirit of this Treaty and the interests of the Party imposing those restrictions. Nevertheless, the Parties recognize that it is possible that the Arab Republic of Egypt may find its foreign exchange reserves at a ve ry low level. In these circumstances, the Arab Republic of Egypt ma y temporarily delay transfers required under Article V, Paragraph l(f), but only: (i) in a manner not less favorable than that accorded to comparable transfers to investor s of third countries; (ii) to the extent and for the time period n to restore its reserves to a mini mally acceptable level, but in no case for period of time longer than that permitted by the provisions of Law 43 in force on the date of signature of this Treat y; and (iii) after providing the investor an opportunity to invest the sales or liquidation proceeds in a manner which will pr eserve their real value free of exchange risk until transfer occurs.

11. Concerning Article VII (3 )(a)(ii), it is understood that the Parties to the dispute may Previously agree to submission of the dispute to the jurisdiction of domestic courts and tribunals. The Parties will main tain a nondiscriminatory policy regarding the inclusion and implementation of such provisions in any investment contract.

12. With regard to the Anne x, the exceptions noted by the Arab Republic of Egypt under "commercial activity" do not include integrated operations which combine production and sales activities for their products.

13. Recognizing that internat ional financial markets and inst itutions further stimulate the process of economic development th rough the international transmission of investment and associated technology, each Party undertakes to maintain a favorable environment for investment by na tionals or companies of the other Party in the insurance and banking sectors. Therefore, each Party accords to investments by nationals or companies of the other Party in investm ent banks, merchant-banks and reinsurance companies whose activities are confined to transactions in foreign currencies treatment no less favorable t han that accorded under existing laws and regulations to investments by its own nationals and compani es or to investments by nationals or companies of any third country, whichever is the more favorable. Both Parties agree to hold future discussions concerning the expansion of investment possibilities in these sectors by nationals or companies of either Pa rty in the territory of the other Party.

DONE in duplicate at Cairo this 11th day of March 1986 in the English and Arabic languages, both texts being equally authentic.

For the Government of the United States of America: NICHOLAS A. VELIOTES Ambassador.

For the Government of t he Arab Republic of Egypt: Sultan ABOU ALI, Minister of Economy and Trade