1. Subject to the requirement that such measures are not applied by a Contracting Party in a manner which would constitute a means of arbitrary or unjustifiable discrimination against, or a disguised restriction on investors of the other Contracting Party and their investments in the Area of the former Contracting Party, nothing in this Agreement shall be construed so as to prevent the former Contracting Party from adopting or enforcing measures:
(a) necessary to protect human, animal or plant life or health;
(b) necessary to protect public morals or to maintain public order, provided that the public order exception may only be invoked where a genuine and sufficiently serious threat is posed to one of the fundamental interests of society;
(c) necessary to secure compliance with the laws or regulations which are not inconsistent with the provisions of this Agreement including those relating to:
(i) the prevention of deceptive and fraudulent practices or to deal with the effects of a default on contract;
(ii) the protection of the privacy of the individual in relation to the processing and dissemination of personal data and the protection of confidentiality of personal records and accounts; or
(iii) safety; or
(d) imposed for the protection of national treasures of artistic, historic or archaeological value.
2. Subject to paragraph 3 of Article 12, nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or enforcing measures:
(a) which it considers necessary for the protection of its essential security interests, including measures:
(i) taken in time of war, armed conflict, or other emergency in that Contracting Party or in international relations; or
(ii) relating to the implementation of national policies or international agreements respecting the non-proliferation of weapons; or
(b) in pursuance of its obligations under the United Nations Charter for the maintenance of international peace and security.
3. Nothing in this Agreement shall be construed to require a Contracting Party to furnish or allow access to any information the disclosure of which it determines to be contrary to its essential security interests.
4. In cases where a Contracting Party takes any measure, pursuant to paragraph 2, that does not conform with the obligations of the provisions of this Agreement, that Contracting Party shall not use such measure as a means of avoiding its obligations.
Article 19. Temporary Safeguard Measures
1. A Contracting Party may adopt or maintain measures not conforming with its obligations under Article 3 relating to cross-border capital transactions and Article 14:
(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.
2. Measures referred to in paragraph 1:
(a) shall be consistent with the Articles of Agreement of the International Monetary Fund, so long as the Contracting Party taking the measures is a party to the said Articles;
(b) shall not exceed those necessary to deal with the circumstances set out in paragraph 1;
(c) shall be temporary and shall be eliminated as soon as conditions permit;
(d) shall be promptly notified to the other Contracting Party; and
(e) shall avoid unnecessary damages to the commercial, economic and financial interests of the other Contracting Party.
3. Nothing in this Agreement shall be regarded as altering the rights enjoyed and obligations undertaken by a Contracting Party as a party to the Articles of Agreement of the International Monetary Fund.
Article 20. Prudential Measures
1. Notwithstanding any other provisions of this Agreement, a Contracting Party shall not be prevented from taking measures relating to financial services for prudential reasons, including measures for the protection of investors, depositors, policy holders or persons to whom a fiduciary duty is owed by an enterprise supplying financial services, or to ensure the integrity and stability of its financial system.
2. Where the measures taken by a Contracting Party pursuant to paragraph 1 do not conform with this Agreement, they shall not be used as a means of avoiding the obligations of the Contracting Party under this Agreement.
Article 21. Intellectual Property Rights
1. The Contracting Parties shall grant and ensure the adequate and effective protection of intellectual property rights, and promote efficiency and transparency in intellectual property protection system. For this purpose, the Contracting Parties shall promptly consult with each other at the request of either Contracting Party. Depending on the results of the consultation, each Contracting Party shall, in accordance with its applicable laws and regulations, take appropriate measures to remove the factors which are recognised as having adverse effects to the investments of investors of the other Contracting Party.
2. Nothing in this Agreement shall affect the rights and obligations of the Contracting Parties under multilateral agreements in respect of protection of intellectual property rights to which the Contracting Parties are parties.
3. Nothing in this Agreement shall be construed so as to oblige either Contracting Party to extend to investors of the other Contracting Party and to their investments treatment accorded to investors of a non-Contracting Party and to their investments by virtue of multilateral agreements in respect of protection of intellectual property rights, to which the former Contracting Party is a party.
Article 22. Taxation
1. Nothing in this Agreement shall apply to taxation measures except as expressly provided for in paragraphs 3 and 4.
2. Nothing in this Agreement shall affect the rights and obligations of either Contracting Party under any tax convention. In the event of any inconsistency between this Agreement and any such convention, that convention shall prevail to the extent of the inconsistency.
3. Articles 5, 6, 8 and 11 shall apply to taxation measures.
4. Articles 15, 16 and 23 shall apply to disputes regarding taxation measures to the extent covered by paragraph 3.
Article 23. Consultations
Either Contracting Party may propose to the other Contracting Party that consultations be held to discuss any investment-related matters including the implementation and operation of this Agreement. The other Contracting Party shall accord sympathetic consideration to the proposal and shall afford adequate opportunity for such consultations.
Article 24. Health, Safety and Environmental Measures and Labour Standards
Each Contracting Party shall refrain from encouraging investment by investors of the other Contracting Party and of a non-Contracting Party by relaxing its health, safety or environmental measures, or by lowering its labour standards. To this effect, each Contracting Party should not waive or otherwise derogate from such measures or standards as an encouragement for the establishment, acquisition or expansion of investments in its Area by investors of the other Contracting Party and of a non- Contracting Party.
Article 25. Denial of Benefits
1. A Contracting Party may deny the benefits of this Agreement to an investor of the other Contracting Party that is an enterprise of the other Contracting Party and to its investments if the enterprise is owned or controlled by an investor of a non-Contracting Party and the denying Contracting Party:
(a) does not maintain diplomatic relations with the non-Contracting Party; or
(b) adopts or maintains measures with respect to the non-Contracting Party that prohibit transactions with the enterprise or that would be violated or circumvented if the benefits of this Agreement were accorded to the enterprise or to its investments.
2. A Contracting Party may deny the benefits of this Agreement to an investor of the other Contracting Party that is an enterprise of the other Contracting Party and to its investments if the enterprise is owned or controlled by an investor of a non-Contracting Party and the enterprise has no substantial business activities in the Area of the other Contracting Party.
Article 26. Review
1. Upon the request of either Contracting Party, the Contracting Parties shall undertake a review of this Agreement, with a view to further protecting and promoting investment between the Contracting Parties, for example, by adding the provisions of prohibition of performance requirements such as those with regard to transfer of technology or a licence contract.
2. If, after the entry into force of this Agreement, the Kingdom of Bahrain enters into any multilateral or bilateral international agreement prohibiting performance requirements which are not prohibited in this Agreement, the Contracting Parties shall also conduct such a review with a view to adding the equivalent provisions to this Agreement.
Article 27. Headings
The headings of the Articles of this Agreement are inserted for convenience of reference only and shall not affect the interpretation of this Agreement.
Article 28. Final Provisions
1. This Agreement shall enter into force on the thirtieth day after the date of exchange of diplomatic notes informing each other that their respective legal procedures necessary for the entry into force of this Agreement have been completed. It shall remain in force for a period of ten years after its entry into force and shall continue in force unless terminated as provided for in paragraph 3.
2. This Agreement shall also apply to all investments of investors of either Contracting Party acquired in the Area of the other Contracting Party in accordance with the applicable laws and regulations of that other Contracting Party prior to the entry into force of this Agreement.
3. A Contracting Party may, by giving one year's advance notice in writing to the other Contracting Party, terminate this Agreement at the end of the initial ten year period or at any time thereafter.
4. In respect of investments acquired prior to the date of termination of this Agreement, the provisions of this Agreement shall continue to be effective for a period of fifteen years from the date of termination of this Agreement.
5. This Agreement shall not apply to claims arising out of events which occurred prior to its entry into force.
Conclusion
IN WITNESS WHEREOF, the undersigned, being duly authorised by their respective Governments, have signed this Agreement.
DONE in duplicate at Manama, on this 23rd day of June, 2022 in the Japanese, Arabic and English languages, all the three texts being equally authentic. In case of any divergence of interpretation, the English text shall prevail.
FOR THE GOVERNMENT OF JAPAN:
Honda Taro
FOR THE GOVERNMENT OF THE KINGDOM OF BAHRAIN:
Yusuf Abdulla Humood