"Aliens in Colombia will enjoy the same civil rights as Colombian citizens. Notwithstanding, for reasons of public order, the law may impose special conditions on or nullify the exercise of specific civil rights by aliens.
Similarly, aliens will enjoy, in the territory of the Republic, guarantees granted to citizens, except for the limitations established by the Constitution or the law".
This concept has been developed by the Constitutional Court in its jurisprudence.
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4. The provisions of this Agreement shall not apply to tax matters.
Explanation
It is policy of Colombia to treat tax matters in double taxation treaties.
Article V. FREE TRANSFERS
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4. With respect to the obligations under this Article, Colombia maintains its central bank and governmental powers and attributions to adopt measures in conformity with applicable law, including Law 9 of 1991 and Law 31 of 1992, or other regulations, in order to ensure currency stability and normality in internal and external payments, granting for these purposes powers to regulate the amount of credit and money supply, execution credit operations and foreign exchange, as well as to issuing regulations on monetary, credit, financial and foreign exchange.
These measures include, among others, the establishment of requirements restricting or limiting payments and transfers (capital movement) to or from each Contracting Party, as well as operations related thereto, such as, establishing that deposits, investments or credits for or from the foreign market be bound to maintaining mandatory reserves or deposits. In applying such measures in accordance with the present article, Colombia shall not discriminate between the other Contracting Party and a non-Contracting Party with respect to operations of the same kind.
5. Notwithstanding the provisions of this Article, each Contracting Party, in circumstances of serious difficulties in its balance of payments, or threats thereof, may exercise equitably, on a non-discriminatory manner and in good faith, powers granted under its law to restrict or delay transfers.
Explanation
The Central Bank has constitutional powers, set out, among others, in articles 371 and 372 of the Colombian Constitution. These powers are prescribed and safeguarded by these clauses which have been fully recognized by the Constitutional Court.
Article VI. EXPROPIATION AND COMPENSATION
1. Investments of investors of a Contracting Party in the territory of the other Contracting Party will not be subject of nationalization, direct or indirect expropriation, or any measures having similar effects (hereinafter "expropriation") except for reasons of public purpose or social interest, in accordance with due process of law, in a non-discriminatory manner, in good faith and accompanied by a prompt, adequate and effective compensation.
Explanation
Article 58 of the Colombian Constitution protects private property. However, it recognizes the right of expropriating for public purposes or social interest as defined by the legislator. This position has been confirmed by the Constitutional Court in its jurisprudence.
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6. The Contracting Parties may establish monopolies and reserve strategic activities depriving investors from developing certain economic activities, provided that it is for public purposes or social interest. The investor shall receive a prompt, adequate and effective compensation, considering the conditions prescribed in the present article.
Explanation
In accordance with articles 336 and 365 of the Colombian Constitution the State may establish monopolies to obtain proceeds for public or social interest, or to reserve itself certain strategic activities or public services due to reasons of sovereignty or social interest. In any of such cases, authorization from Congress through the passing of a law and previous compensation, to those whom under such a law are deprived of exercising a lawful activity, are required.
Article IX. SETTLEMENT OF DISPUTES BETWEEN ONE CONTRACTING PARTY AND AN INVESTOR OF THE OTHER CONTRACTING PARTY
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1. With regard to acts of a governmental authority, in order to submit a claim to arbitration under this article or to a local court or administrative tribunal, local administrative remedies shall be exhausted, should it be required by the law of the Contracting Party. Such procedure shall in no case exceed six months from the date of its initiation by the investor and shall not prevent the investor from requesting consultations as referred to in paragraph 3 of the present Article.
Explanation
The exhaustion of non-judicial administrative local remedies does not imply the exhaustion of judicial local remedies.
The objective of this provision is providing transparency to the procedure that the investor is required to exhaust in accordance with domestic law, which is equally applied to nationals and aliens, prior to the submission of the dispute to international arbitration.
The basis of this provision consists of:
a. Internal legal order:
In accordance with the Colombian legal order (Art. 35 CCA) the exhaustion of non- judicial administrative local remedies is compulsory before referring a dispute to local courts. As established in the jurisprudence, this procedure should be understood as a chance granted to governmental authorities of reviewing its own measures so as to enable governmental authorities to review, modify, clarify and even revoke the initial measures, thereby permitting amending its mistakes and reinstating those rights of the party affected.
b. Benefits for investors:
The exhaustion of local administrative remedies does not create any damage, unlike the perception that may exist with regard to exhausting judicial local remedies because:
a. Economy: For the investor the exhaustion of local administrative remedies constitutes an chance that its requests be considered without the major costs that may be generated by a court or arbitral tribunal.
b. Celerity: This procedure is done in less than five months.
c. Due process of law: The decisions resulting from the exhaustion of administrative local remedies are not res judicata, and therefore the investor may, once the administrative local remedies are exhausted, submit the dispute to any local courts or arbitration as provided in this Agreement.