- Researchers who conduct research or analysis, including market analysis, independently or for a company established in the territory of another Party.
- Trade show and promotional staff attending trade conventions.
Sales
- Sales representatives and sales agents who take orders or negotiate contracts for goods and services for an enterprise established in the territory of another Party, but do not deliver the goods or provide the services.
- Buyers making purchases for an enterprise established in the territory of another Party.
Distribution
- Customs brokers providing advisory services for the purpose of facilitating the import or export of goods.
- Transport operators that carry out transport operations of goods or passengers to the territory of a Party from the territory of another Party, or carry out loading and unloading operations of goods or passengers from the territory of a Party to the territory of another Party, without carrying out loading or unloading operations, in the territory of the Party to which entry is requested, of goods that are in that territory or of passengers boarding therein.
After-sales services
- Installation, repair, maintenance, and supervisory personnel who have the technical expertise essential to fulfill the seller's contractual obligation and who provide services, or train workers to provide such services, under a warranty or other service contract related to the sale of commercial or industrial equipment or machinery, including computer software purchased from a company established outside the territory of the Party from which temporary entry is sought, during the term of the warranty or service contract.
General Services
- Management and supervisory personnel involved in business operations for an enterprise established in the territory of another Party.
- Public relations and advertising personnel who advise clients or attend or participate in conventions.
- Tourism personnel (tour and travel agents, tour guides or tour operators) attending or participating in conventions.
- Translators or interpreters providing services as employees of an enterprise established in the territory of another Party.
- Tour bus operators entering the territory of a Party:
a) with a group of passengers on a tourist bus trip that started in the territory of another Party and is to return to it;
b) that is to pick up a group of passengers on a tourist bus trip that terminates, and takes place, for the most part in the territory of another Party; or
c) with a group of passengers on a tourist bus trip whose destination Is in the territory of another Party, to which temporary entry is requested and who return without passengers or with the group for transportation to the territory of another Party.
Appendix 2 to Annex 13-04. Migratory Measures in Force
For the purposes of Annex 13-04, the migration measures in effect shall be:
a) for the case of El Salvador: the Migration Law, Legislative Decree No. 2772 of December 19, 1958;
b) for the case of Guatemala: the Migration Law, Decree No. 95-98 of the Congress of the Republic;
c) in the case of Honduras: the Population and Migration Policy Law, Decree No. 34 of September 25, 1970 and Agreement No. 8 on Migration Procedures and Facilities for Foreign Investors and Traders of August 19, 1988; and
d) for the case of Mexico: the General Population Law, 1974, as amended, and its Regulations.
Chapter XIV. INVESTMENT
Section A. Investment
Article 14-01. Definitions.
For the purposes of this chapter, the following definitions shall apply:
ICSID: the International Centre for Settlement of Investment Disputes;
Inter-American Convention: the Inter-American Convention on International Commercial Arbitration, concluded in Panama on January 30, 1975;
ICSID Convention: the Convention on the Settlement of Investment Disputes between States and Nationals of other States, done at Washington, D.C., on March 18, 1965;
New York Convention: the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, concluded in New York on June 10, 1958;
claim: a claim brought by a disputing investor against a Party, the basis of which is an alleged violation of the provisions contained in this Chapter;
company: a "company" as defined in Article 2 -01, and the branch of a company;
enterprise of a Party: an enterprise incorporated or organized under the laws of a Party and a branch of an enterprise located in the territory of a Party and carrying on business therein;
investment:
a) a company;
b) shares of a company;
c) debt instruments of a company:
i) when the company Is a subsidiary of the investor; or
ii) when the original maturity date of the debt instrument is at least three years, but does not include a debt instrument of a government enterprise, regardless of the original maturity date;
d) a loan to a company;
i) when the company Is a subsidiary of the investor; or
ii) when the original maturity date of the loan is at least three years, but does not include a loan to a state enterprise, regardless of the original maturity date;
e) an interest in a company, which allows the owner to participate in the company's revenues or profits;
f) an interest in an enterprise that entitles the owner to share in the equity of that enterprise in a liquidation, provided that it does not arise from an obligation or loan excluded under c) or d);
g) real estate or other property, tangible or intangible, acquired or used for the purpose of economic benefit or for other business purposes; and
h) the participation resulting from the capital or other resources destined for the development of an economic activity in the territory of another Party, among them, according to:
i) contracts involving the presence of an investor's property in the territory of another Party, including concessions, construction and turnkey contracts; or
ii) contracts where the remuneration depends substantially on the production, revenues or profits of a company;
i) a debt instrument of the State;
j) pecuniary claims arising exclusively from:
i) commercial contracts for the sale of goods or services by a national or enterprise in the territory of a Party to an enterprise in the territory of another Party; or
ii) the granting of credit in connection with a commercial transaction, such as trade financing, other than a loan covered by the provisions of subparagraph d); or
k) any other pecuniary claim that does not involve the interest rates set forth in subparagraphs a) through I);
investment of an investor of a Party: an investment owned or controlled directly or indirectly by an investor of a Party in the territory of another Party;
investor of a Party: a Party or an enterprise of that Party, a national or an enterprise of that Party, that carries out the material acts of making an investment or, as the case may be, makes or has made an investment in the territory of another Party;
investor from a non-Party: an investor that is not an investor of a Party that intends to make, is making, or has made an investment; disputing investor: an investor making a claim under Section B;
disputing Party: the Party against which a claim is made under Section B;
disputing party: the disputing investor or the disputing Party;
disputing parties: the disputing investor and the disputing Party;
UNCITRAL Arbitration Rules: the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL), adopted by the United Nations General Assembly on December 15, 1976;
Secretary-General: the Secretary-General of ICSID;
transfers: international remittances and payments; tribunal: an arbitral tribunal established pursuant to Article 14-22; and
consolidation court: an arbitral tribunal established in accordance with article 14-29.
Article 14-02. Scope of Application and Extent of Obligations.
1. This Chapter applies to measures adopted or maintained by a Party relating to:
a) investors of another Party, in all matters relating to their investment;
b) investments of investors of another Party made in the territory of the Party; and
c) with respect to Article 14-07, all investments in the territory of the Party.
2. This chapter does not apply to:
a) the economic activities reserved to each Party, as indicated in Annex III;
b) measures adopted or maintained by a Party with respect to financial services;
c) measures adopted by a Party to restrict the participation of investments of investors of another Party in its territory, for reasons of national security or public order; and
d) disputes or claims arising prior to the entry into force of this treaty, or relating to events occurring prior to its entry into force, even if their effects remain after its entry into force.
3. This chapter applies throughout the territory of the Parties and at any level or order of government, notwithstanding any incompatible measures that may exist in their respective legislations.
4. Nothing in this Chapter shall be construed to prevent a Party from providing services or carrying out functions related to law enforcement, social rehabilitation services, pension or unemployment insurance or social security services, social welfare, public education, health and child protection.
Article 14-03. Minimum Standard of Treatment.
Each Party shall accord to investors of another Party and to their investments, treatment in accordance with international law, including fair and equitable treatment, as well as protection and legal certainty within its territory.
Article 14-04. National Treatment.
Each Party shall accord to an investor of a Party and to an investment of an investor of a Party treatment no less favorable than that it accords, in like circumstances, to its own investors and to investments of such investors with respect to the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of investments.
Article 14-05. Most Favored Nation Treatment.
1. Each Party shall accord to an investor of a Party and to an investment of an investor of a Party treatment no less favorable than that it accords, in like circumstances, to an investor and to an investment of an investor of a Party or of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of investments.
2. If a Party has accorded special treatment to an investor of a non-Party or to an investment of an investor of a non-Party under agreements establishing provisions for the avoidance of double taxation, free trade areas, customs unions, common markets, economic or monetary unions and similar institutions, such Party shall not be required to accord the treatment in question to the investor of a Party or to the investment of an investor of a Party.
Article 14-06. Treatment In Case of Loss.
Each Party shall accord to an investor of a Party, with respect to investments that suffer losses in its territory due to armed conflict or civil strife, acts of God or force majeure, non-discriminatory treatment with respect to any measures it adopts or maintains in connection with such losses.
Article 14-07. Performance Requirements.
1. No Party may impose or compel compliance with the following requirements or commitments, in connection with the establishment, acquisition, expansion, management, conduct or operation of an investment of an investor of a Party or of a non-Party in its territory to:
a) export a certain type, level or percentage of goods or services;
b) to reach a certain degree or percentage of domestic content;
c) to acquire, use or give preference to goods produced or services rendered in its territory, or to acquire goods from producers or services from service providers in its territory;
d) relate in any way the volume or value of imports to the volume or value of exports, or to the amount of foreign exchange inflows associated with such investment;
e) restrict sales in its territory of the goods or services that such investment produces or renders, by relating such sales in any way to the volume or value of its exports or to foreign exchange earnings It generates;
f) transfer to a person in its territory, technology, production process or other proprietary knowledge, except where the requirement is imposed by a judicial or administrative tribunal or competent authority, to remedy an alleged violation of competition laws or to act in a manner not inconsistent with other provisions of this treaty; or
g) act as the exclusive supplier of the goods it produces or services it provides for a specific regional or global market.
This paragraph does not apply to any requirements other than those stated in this paragraph.
2. A measure that requires an investment to use a technology to comply with generally applicable health, environmental or safety requirements shall not be considered inconsistent with paragraph 1(f). For greater certainty, Articles 14-04 and 14-05 apply to such a measure.
3. No Party may condition the receipt or continued receipt of an advantage, in connection with an investment in its territory by an investor of a Party or of a non-Party, on compliance with any of the following requirements:
a) to purchase, use or give preference to goods produced in its territory or to purchase goods from producers in its territory;
b) to reach a certain degree or percentage of domestic content;
c) relate in any way the volume or value of imports to the volume or value of exports, or to the amount of foreign exchange inflows associated with such investment; or
d) restrict sales in its territory of the goods or services that such investment produces or renders, by relating such sales in any way to the volume or value of its exports or to foreign exchange earnings It generates.
This paragraph does not apply to any requirements other than those stated in this paragraph.
4. Nothing in paragraph 3 shall be construed to prevent a Party from imposing, in connection with an investment of an investor of a Party or an investor of a non-Party in its territory, legally established requirements relating to the geographic location of productive units, the generation of employment or training of labor, or the conduct of research and development activities.
5. In the event that, in the judgment of a Party, the imposition by another Party of any other requirement not provided for in paragraph 1 adversely affects the flow of trade, or constitutes a significant barrier to investment, the matter shall be considered by the Committee on Cross-Border Trade in Services and Investment referred to in Article 10-10 of this Agreement.
6. If the Committee considers that the requirement in question negatively affects the flow of trade, it shall recommend to the Commission the suspension of the respective practice.
7. This article does not apply to any commitment, obligation or requirement between private parties.
Article 14-08. Senior Corporate Management and Boards of Directors.
1. No Party may require an enterprise of that Party to appoint individuals of any particular nationality to senior management positions, notwithstanding the provisions of its legislation.
2. A Party may require that a majority of the members of the management bodies or of any committee of such bodies of an enterprise of that Party that is an investment of an investor of the other Party be of a particular nationality, or be resident in the territory of the Party, provided that the requirement does not significantly impair the ability of the investor to exercise control over its investment.
Article 14-09. Reservations and Exceptions.
1. Articles 14-04, 14-05, 14-07 and 14-08 do not apply to:
a) any existing inconsistent measure maintained by a Party, regardless of the level or order of government, as set out in its Schedule to Annex I or Annex III;
b) the continuation or prompt renewal of any incompatible measure referred to in subparagraph a); or
c) the amendment to any incompatible measure referred to in subparagraph a), provided that such amendment does not diminish the degree of compatibility of the measure, as in effect prior to the amendment, with articles 14-04, 14-05, 14-07 and 14-08.
2. The treatment accorded by a Party pursuant to Article 14-05 does not apply to the treaties or sectors set out in its list in Annex IV.
3. Articles 14-04, 14-05 and 14-08 do not apply to:
a) purchases made by a Party or by a State enterprise; or
b) subsidies or contributions, including government loans, guarantees and insurance granted by a Party or by a state enterprise, except as provided in Article 14-06.
4. The provisions contained in: a) Paragraphs a), b) and c) of paragraph 1 and paragraphs a) and b) of paragraph 3 of Article 14-07 shall not apply with respect to the requirements for qualification of goods and services with respect to export promotion and foreign aid programs;
b) paragraphs 1(b), (c), (f) and (g) and 3(a) and (b) of Article 14-07 do not apply to purchases made by a Party or by a State enterprise; and
c) Article 14-07, paragraph 3(a) and (b), do not apply to requirements imposed by an importing Party relating to the necessary content of goods to qualify for preferential tariffs or quotas.
Article 14-10. Transfers.
1. Each Party shall permit in its territory all transfers related to the investment of an investor of another Party to be made freely and without delay. Such transfers include:
a) earnings, dividends, interest, capital gains, royalty payments, management fees, technical assistance and other charges, profits in kind and other amounts derived from the investment;
b) proceeds from the sale or liquidation, in whole or in part, of the investment;
c) payments made under a contract to which an investor or its investment is a party, including payments made under a loan agreement;
d) payments derived from expropriation indemnities; and
e) payments arising from the application of the provisions relating to the dispute resolution mechanism contained in section B.
2. For the purposes of this chapter, a transfer is considered to have been made without delay when it has been made within the period normally required for the completion of the transfer formalities.
3. No Party may require its investors to make transfers of their income, profits, or earnings or other amounts derived from, or attributable to, investments made in the territory of another Party, nor shall it penalize them for failure to make such transfers.
4. Each Party shall allow transfers to be made in freely convertible currencies at the prevailing market exchange rate on the date of transfer.
5. Notwithstanding the provisions of paragraphs 1 and 4, each Party may prevent transfers through the equitable, non-discriminatory and good faith application of measures:
a) to protect the rights of creditors;
b) relating to ensuring compliance with laws and regulations:
i) for the issuance, transmission and trading of securities, futures and derivatives; or
ii) relating to reports or records of transfers; or
c) related to criminal offenses or resolutions in administrative or judicial proceedings.
6. Notwithstanding the provisions of this article, each Party may establish temporary controls on foreign exchange operations, provided that the balance of payments of the Party in question presents a serious imbalance and implements a program in accordance with internationally accepted criteria.
Article 14-11. Expropriation and Compensation.
1. No Party may nationalize or expropriate, directly or indirectly, an investment of an investor of a Party in its territory, or take any action tantamount to expropriation or nationalization of such investment, unless it is:
a) for reasons of public utility in accordance with the provisions of Annex 14-11;
b) on a non-discriminatory basis;
c) in accordance with the principle of legality; and
d) by way of indemnification in accordance with paragraphs 2 to 4.
2. Compensation will be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place (date of expropriation), and will not reflect any change in value due to the fact that the intention to expropriate was known prior to the date of expropriation. The valuation criteria will include the declared tax value of tangible assets, as well as other criteria that are appropriate to determine the fair market value.
3. Payment of compensation shall be made without delay and shall be fully payable.
4. The amount paid shall not be less than the equivalent amount of compensation that would have been paid in a freely convertible currency in the international financial market on the date of expropriation, and this currency would have been converted at the market rate in effect on the valuation date, plus the interest it would have generated at a bank or commercial rate up to the date of the payment date.