3. For greater certainty, dealings with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of investments, referred to in 1 and 2 above, does not dispute settlement procedures established in international treaties, including trade or investment agreements.
Article 15.5. Minimum Level of Treatment (2)
1. Each Party shall accord to covered investments treatment consistent with customary international law, including fair and equitable treatment, as well as full protection and within its territory.
2. For greater certainty, paragraph 1 prescribes that the minimum standard of treatment of aliens under customary international law is the minimum standard of treatment that may be afforded to covered investments. The concepts of "fair and equitable treatment"(3) and "full protection and security" (4) not require additional treatment or treatment beyond that required by that standard and do not create additional substantive rights. The obligation in paragraph 1 to provide.
(a) "fair and equitable treatment" includes the obligation not to deny justice in criminal, civil or administrative 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 that is required customary international law.
3. A determination that another provision of this Agreement or of a separate international agreement has been violated does not establish that this Article has been violated.
4. For greater certainty, the fact that a measure violates domestic law does not, by itself, imply that there has been a violation of this Article. In determining whether the measure violates this Article, account shall be taken of whether a Party has acted inconsistently with the obligations set out in paragraph 1.
5. For greater certainty, the mere fact that a subsidy or grant is not provided, renewed or maintained, or has been modified or reduced by a Party, does not constitute a violation of this Article, even if as a result there is a loss or damage to the covered investment.
Article 15.6. Senior Management and Boards of Directors
1. No Party may require an enterprise of that Party, other than a covered investment, to appoint natural persons of a particular nationality to senior management positions.
2 A Party may require that a majority of the members of the board of directors, or any committee thereof, of an enterprise of that Party that is a covered investment be of a particular nationality or resident in the territory of the Patee, provided that the requirement does not significantly impair the ability of the Patee investor exercise control over its investment.
Article 15.7. Performance Requirements
1, No Party may, in connection with the establishment, acquisition, expansion, management, conduct, operation, sale or other disposition of an investment of an investor of a Party or of a non-Party to its territory, impose or enforce any requirement or enforce any obligation or commitment to (5):
(a) export a certain level or percentage of goods or services;
(b) to a certain degree or percentage of domestic content;
(c) to purchase, use or give preference to goods produced in its territory, or to purchase goods from persons in its territory;
(d) relate in any way the volume or value of imports to the volume or value 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 provides, by relating such sales in any way to the volume or value of its exports or to foreign exchange earnings it generates;
(f) transferring a particular technology, production process or other proprietary knowledge to a person in its , except where the requirement is imposed or the obligation or undertaking is enforced by a judicial or administrative tribunal or a competition authority, to remedy a practice that has been determined after judicial or administrative proceedings, or to remedy a practice that has been determined after judicial or administrative proceedings as anti-competitive according to the Party's competition laws (6); or
(g) The Party shall provide exclusively to the territory of a Party the goods that the investment produces or the services that it provides for a specific regional or world market.
2. A measure that requires an investment to use a technology to comply with general regulations applicable to health, safety, or the environment, shall not be considered inconsistent with subparagraph 1 (f).
3. Subparagraph 1(f) does not apply where a Party authorizes the use of an intellectual property right in accordance with Article 31 of the WTO TRIPS Agreement (7) or to measures requiring the disclosure of proprietary information that fall within the scope of, and are consistent with, Article 39 of the WTO TRIPS Agreement (8).
4. For greater certainty, nothing in paragraph 1 shall be construed to prevent a Party, in connection with the establishment, acquisition, expansion, management, conduct, operation or sale or other disposition of a covered investment or an investment of an investor of non-Party in its territory, from imposing or enforcing a requirement or enforcing an obligation or commitment to train workers in its territory.
5. No Party may condition the receipt of an advantage, or the continued receipt of an advantage, in connection with the establishment, acquisition, expansion, management, conduct, operation, sale or disposal of 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 reach a certain degree or percentage of domestic content;
(b) to purchase, use or grant preferences to goods produced in its territory or to purchase goods from persons in its territory;
(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 manner whatsoever to the volume or value of its exports or to earnings it generates in foreign exchange.
6. Nothing in 5 shall preclude a Party from conditioning the receipt of an advantage or the 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 a requirement that it locate production, provide services, train or employ workers, construct or expand particular facilities, or carry out research and development, in its territory.
7. Paragraphs 1 and 5 shall not apply to any requirement other than the commitment, obligation or requirements set forth in those paragraphs.
8. The provisions of the:
(a) subparagraphs | (a), (b) and (c), and 5 (a) and (b) shall not apply to requirements for qualification of goods or services with respect to export promotion programs and. foreign aid programs; and.
(b) subparagraphs S(a) and (b) shall not apply to requirements imposed by an importing Party with respect to the content of goods necessary to qualify for preferential duties or quotas.
9. Provided that such measures are not applied in an arbitrary or unjustified manner and provided that such measures do not constitute a disguised restriction on international trade or investment, nothing in subparagraphs 1(b), (c) and (fl and 5(a) and (b) shall be construed to prevent a Party from adopting or maintaining measures, including measures of an environmental nature:
(a) necessary to ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;
(b) necessary to protect human, animal or plant life or health; or (c) related to the preservation of living or non-living non-renewable natural resources. 10. Subparagraphs 1 (b), (c), (D and (g), and 5 (a) and (b) do not apply to public procurement.
11. This Article does not preclude the application of any commitment, obligation or requirement between private parties, where a Party did not impose or require the commitment, obligation or requirement.
Article 15.8. Nonconforming Measures
1. Articles 15.3, 15.4, 15.6 and 15.7 do not apply to:
(a) any non-conforming measure existing or maintained by a Party in:
(i) the central level of government, as stipulated by that Party in its Schedule to Annex I; or
(ii) a local level of government;(9)
(b) the continuation or prompt renewal of any disproportionate measure referred to in subparagraph (a); or
(c) the modification of any non-conforming measure referred to in subparagraph (a) above.
(a) provided that such modification does not diminish the degree of confidence of the measure, in effect immediately prior to the modification, with articles 15.3, 15.4, 15.6 and 15.7.
2. Articles 15.3, 15.4, 15.6 and 15.7 shall not apply to any measure that a Party adopts or maintains, in relation to sectors, subsectors or activities, as indicated in its Schedule to Annex II.
3. Articles 15.3 and 15.4 do not apply to any measure adopted under the exceptions under Articles 3, 4 and 5 of the WTO TRIPS Agreement.
4. Neither Party may require, pursuant to any measure adopted after the date of entry into force of this Agreement and included in its Schedule to Annex II, an investor of the other Party, by reason of its nationality, to sell or otherwise dispose of an investment existing at the time the measure becomes effective.
5. The provisions of Articles 15.3, 15.4 and 15.6 shall not apply to:
(a) subsidies or grants provided by a Party, including government-backed loans, guarantees and insurance; or
(b) public procurement.
Article 15.9. Measures Relating to the Environment, Health, Human Rights and Fundamental Freedoms Labor and other Regulatory Objectives
Nothing in this Chapter shall be to prevent a Party from adopting, maintaining or enforcing any measure, consistent with this Chapter, that is appropriate ensure that investments in its territory are made taking into account public policies and legislation relating environmental, health, labor or other regulatory objectives.
Article 15.10. Treatment In Case of Dispute
1. Without prejudice to subparagraph 5(a) of Article 15.8, each Pass shall accord investors of the other Party and Cuban investments non-discriminatory treatment with respect to any measures it adopts or maintains with respect to losses suffered by investments in its territory as a result of armed conflict or civil strife.
2. Paragraph 1 shall not apply to existing measures related to subsidies or grants that may be inconsistent with the provisions of Article 15.3, with the exception of subparagraph S(a) of Article 15.8.
Article 15.11. Expropriation and Compensation (10)
1. Neither Party shall nationalize or expropriate a covered investment, either directly or indirectly, through measures tantamount to expropriation or nationalization (hereinafter "expropriation"), unless it is:
(a) for reasons public utility or public interest, in the case of Costa Rica; and
(b) for reasons of public utility or social and national interest, in the case of Ecuador,
in accordance with due process, in a non-discriminatory manner and through the payment of prompt, adequate and effective compensation.
2. The compensation shall be paid promptly and shall be fully liquidable and freely transferable. Such compensation shall be equal to the fair market value of the expropriated investment immediately before the expropriation took place (hereinafter "date of expropriation"), and shall not reflect any change in value because the intention to expropriate was known in advance the date of expropriation.
3. If the fair market value is denominated in a freely usable currency, the compensation referred to in paragraph 1 shall not be less than the fair value at the date of expropriation plus interest at a reasonable rate for that currency, accrued from the date of expropriation until the date of payment.
4. If the fair market value is denominated in a currency that is not freely usable, the compensation to in paragraph 1 (converted at the of payment, at the exchange rate prevailing on the date of payment) shall not be less than the fair market value:
(a) the fair value on the date of expropriation, converted into a freely usable currency at the market exchange rate prevailing on that date, irias;
(b) interest at a commercially reasonable rate on such freely usable currency, accrued from the date of expropriation to the date of payment.
5. The affected investor shall be entitled, under the national law of the Party executing the expropriation, to a review of his case by a judicial or other independent authority of that Party, and to the valuation of his investment in accordance with the principles set forth in this Article.
6. The provisions of this Article shall not apply to the issuance of compulsory licenses granted in connection with intellectual property rights, or to the revocation, limitation or creation of intellectual property rights to extent that such issuance, revocation, limitation or creation is consistent with Chapter 8 (Intellectual Property).
7. For greater certainty, a Party's not to issue, renew or maintain a subsidy or grant, or a decision to modify or reduce a subsidy or grant,
(a) in the absence of any specific commitment under law or contract to issue, renew or maintain such grant or donation; or
(b) in accordance with any terms or conditions attached to the issuance, renewal, modification, reduction and maintenance of such grant or donation,
by itself, does not constitute an expropriation.
Article 15.12. Transfers
1. Each Party shall permit all transfers related to a covered investment to be made freely and. without delay, into and out of its . Such transfers include:
(a) capital contributions;
(b) earnings, dividends, interest, capital gains, royalty payments, management fees, technical assistance and other charges, returns in kind and other amounts derived from the investment;
(c) proceeds from the total or sale or liquidation of the covered investment;
(d) payments made in reliance on a contract entered into by the investor, or the covered investment, including a loan agreement; and
(e) payments made pursuant to paragraph 1 of articles 15.1 and 15.11. 2. Each Party shall permit transfers of profits in kind related to a covered investment to be executed as authorized or specified in a written agreement between the Party and a covered investment or an investor of another Party, where required under domestic law.
3. Each Party shall permit transfers related to a covered investment to be made in freely usable currency at the market rate of exchange prevailing on the date of the transfer.
4. No Party may require its investors to make transfers of their income, earnings, profits 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.
5. Notwithstanding paragraphs 1, 2 and 3, a Party may prevent or delay a transfer in cash or in kind through the equitable, non-discriminatory and good faith application of its laws relating to:
(a) bankruptcy, insolvency or protection of creditors' rights (11);
(b) issuance, trading or operations of securities, futures, options or derivatives;
(c) criminal offenses;
(d) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities; and
(e) guarantee compliance with awards or judgments issued in judicial or administrative proceedings.
Article 15.13. Denial of Benefits
A Party may deny the benefits of this Agreement to:
(a) an investor of the other Party that is an enterprise of that other Party and the investments of such investor if a person of a non-Party owns or is contiguous to the enterprise and the latter does not carry on substantial business activities in the territory of the other Party; or
(b) an investor of the other Party that is an enterprise of that other Party and to the investments of such an investor if an investor of denying Party owns or controls the enterprise and the enterprise does not carry on substantial business activities in the other Party's territory.
Article 15.14. Special Formalities and Information Requirements
1. Nothing in Article 15.3 shall be construed to prevent a Party from adopting or maintaining a measure prescribing special formalities in connection with a covered investment, such as a requirement that investors be residents of the Party or that covered investments be constituted in accordance with the Party's laws or regulations, provided that such formalities do not significantly impair the protection afforded by a Party to investors of the other Party and to covered investments in accordance this Agreement.
2. Notwithstanding Articles 15.3 and 15.4, a Party may require an investor of the other Party or its covered investment to provide information concerning that investment solely for informational or statistical purposes. A Party may request information of a confidential nature only if its domestic law so permits. In such a case, that Party shall protect the information that is confidential from any disclosure that could adversely affect the competitive position of the investor or the covered investment. Nothing in this paragraph shall be construed to prevent a Party from obtaining or disclosing information relating to the equitable and good faith application of its domestic law.
Article 15.15. Subrogation
1. If a Party or a designated agency of the Party makes a payment to any of its investors under a guarantee, insurance contract or any other form of compensation provided in of an investment of an investor of that Party, the other Party shall recognize the subrogation or tt-transfer of any right or claim of such investment. The subrogated or transferred right or claim shall not be greater than the original right or claim of the investor.
2. Where a Party or a designated agency of the Party has made a payment to an investor of that Party and has assumed the investor's rights and claims, such investor may not, unless it has been authorized to act on behalf of the Party or the designated agency of the Party that made the payment, assert those rights and claims against the other Party.
Article 15.16. Responsible Business Conduct
1, The Parties recognize the importance of promoting that companies operating in their territory or subject to their jurisdiction strive to adopt a high degree of sustainable and socially responsible policies and practices, and thereby contribute to the sustainable development, investment and. gender equity of the host country.
2. The Parties recognize the importance that companies operating in their territory or subject to their jurisdiction strive to apply due diligence in identifying and managing adverse impacts in areas such as the environment, human rights and labor conditions; in their operations, supply chains and other business relationships.
3. Each Party shall endeavor to encourage enterprises operating within its territory or subject to its jurisdiction to voluntarily incorporate internationally recognized standards of responsible business conduct into their internal policies, as well as other international instruments that may be adopted by the Parties on this matter in the future.
4. The Parties agree to exchange information, as well as best practices, on the issues addressed in this article.
Article 15.17. Investment Promotion
The Parties reaffirm the importance of promoting investment promotion activities carried out through the investment promotion agencies of each Party.
Section B. Definitions
Article 15.18. Definitions
For the Purposes of this Chapter:
company means a company as defined in Article 1.6 (Definitions of General Application) and a branch of a company;
enterprise of a Party means an enterprise incorporated or organized under the domestic law of a Party, and a branch office located in the territory of a Party and carrying on substantial business activities in that territory;
investment means every asset that is owned or controlled, directly or indirectly, by an investor that has the characteristics of an investment, including a certain duration and other characteristics such as the commitment of capital or other resources, the expectation of obtaining gains or profits, or the assumption of risk.
The forms that an investment may take include:
(a) a company;
(b) shares, capital and other forms of participation in the equity of a company. company;
(c) debt instruments of a company (12) (13) when the company is a subsidiary of the investor; or
(i) when the original maturity date of the debt instrument is at least three years,
(ii) but does not include an obligation of a Party or a State enterprise, regardless of the original maturity date;
(d) a loan to a company (14) (15):
(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 Party or a State enterprise, regardless of the original expiration date;
(e) futures, options and derivative instruments;
(f) turnkey, management, construction, concession, revenue sharing and other similar contracts;
(g) intellectual property rights;
(h) licenses, authorizations, petwisos and similar rights granted in accordance national legislation (16); and
(i) other tangible or intangible, movable or immovable property rights and rights related to property, such as leases, mortgages, liens and pledges,
but investment does not include:
(j) an order or judgment entered in a judicial or administrative action;
(k) loans granted by one Party to the other Party;
(l) public debt operations and debt of public institutions;
(m) pecuniary claims arising exclusively from:
(i) commercial contracts for the sale of goods or services by a national or company in the territory of a Party to a national or company in the territory of the other Party; or
(ii) the extension of credit in connection with a commercial transaction, such as financing, other than a loan covered by the provisions of subparagraph (d); or
(n) any other pecuniary claim, which does not carry the interest rates set forth in subparagraphs (a) through (i),
a modification in the manner in which the assets have been invested or reinvested does not affect its status as an investment under this Agreement, provided that such modification falls within the definitions of this Article and is made in accordance with the domestic law of the Party in whose the investment has been admitted;