Title
AGREEMENT BETWEEN THE ARGENTINE REPUBLIC AND JAPAN FOR THE PROMOTION AND PROTECTION OF INVESTMENT
Preamble
The Argentine Republic and Japan (hereinafter referred to as ''the Contracting Parties"),
Desiring to further promote investment in order to strengthen the economic relationship between the Contracting Parties;
Intending to further create stable, equitable, favourable and transparent conditions for greater investment by investors of a Contracting Party in the Area of the other Contracting Party based on the principies of equality and mutual benefit;
Recognising that these objectives can be achieved without relaxing health, safety and environmental measures of general application;
Recognising the importance of the cooperative relationship between labour and management in promoting investment between both Contracting Parties; and
With the aim of encouraging sustainable development of the Contracting Parties;
Have agreed as follows:
Body
Chapter I. Investment
Article 1. Definitions
For the purposes of this Agreement:
(a) The term "investment" means every kind of asset owned or controlled, directly or indirectly, by an investor, that has the characteristics of an investment. (1) Forms that an investment may take include:
(i) An enterprise and a branch of an enterprise;
(ii) Shares, stocks or other forms of equity participation in an enterprise;
(iii) Bonds, debentures, loans and other forms of debt, including rights derived therefrom (2) but do not include, regardless of original maturity, a sovereign debt of a Contracting Party or a debt of a state enterprise;
(iv) Rights under contracts, including turnkey, construction, management, production or revenue-sharing contracts;
(v) Claims to money and to any performance under contract having a financial value;
(vi) Intellectual property rights as referred to in the TRIPS Agreement
(vii) Licences, authorisations, permits and similar rights conferred pursuant to the laws and regulations of the host Contracting Party (3);
(viii) Any other tangible and intangible, movable and immovable property, and any related property rights, such as leases, mortgages, liens and pledges;
An investment includes the amounts yielded by an investment, in particular, profit, interest, capital gains, dividends, royalties and fees. A change in the form in which assets are invested does not affect their character as an investment. For greater certainty, this provision shall apply only where the assets still fall within the definition contained in this subparagraph;
(b) The term "investment agreement" means a written contract (4) between an authority at the central level of government (5) of a Contracting Party and an investor of the other Contracting Party or its investment that is an enterprise in the Area of the former Contracting Party, on which the investor or its investment relies in establishing or acquiring an investment in the former Contracting Party;
(c) The term "investor of a Contracting Party" means:
(i) A natural person having the nationality of that Contracting Party in accordance with its laws and regulations; or
(ii) an enterprise of that Contracting Party, that seeks to make, is making or has made investments in the Area of the other Contracting Party; (6)
(d) The term "enterprise" means any legal person or any other entity duly constituted or organised under the applicable laws and regulations, whether or not for profit, and whether private or government owned or controlled, including any corporation, trust, partnership, sole proprietorship, joint venture, association, organisation or company;
(e) The term "enterprise of a Contracting Party" means an enterprise duly constituted or organised under the applicable laws and regulations of a Contracting Party;
(f) The term "investment activities" means establishment, acquisition, expansion, operation, management, maintenance, use, enjoyment and sale or other disposal of investments;
(g) The term "Area" means:
(i) With respect to Japan, its territory, and the exclusive economic zone and the continental shelf with respect to which Japan exercises sovereign rights or jurisdiction in accordance with international law; and
(ii) With respect to the Argentine Republic, the territory subject to the sovereignty of the Argentine Republic, and the exclusive economic zone and the continental shelf with respect to which the Argentine Republic exercises sovereign rights or jurisdiction in accordance with its domestic law, including its constitutional provisions, as well as international law;
(h) The term "existing" means being in effect on the date of entry into force of this Agreement;
(i) The term "freely usable currency" means freely usable currency as defined under the Articles of Agreement of the International Monetary Fund;
(j) The term "WTO Agreement" means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh, 15 April 1994;
(k) The term "GATS" means the General Agreement on Trade in Services in Annex 1 B to the WTO Agreement;
(l) The term "GATT 1994" means the General Agreement on Tariffs and Trade 1994 in Annex 1A to the WTO Agreement;
(m) The term "TRIPS Agreement" means the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex 1 C to the WTO Agreement;
(n) The term "claimant" means an investor of a Contracting Party that is a party to an investment dispute with the other Contracting Party;
(o) The term "respondent" means the Contracting Party that is a party to an investment dispute;
(p) The term "disputing party" means either the claimant or the respondent;
(q) The term "disputing parties" means the claimant and the respondent;
(r) The term "non-disputing Party" means the Contracting Party that is not a party to an investment dispute;
(s) The term "ICSID" means the International Centre for Settlement of Investment Disputes;
(t) The term "ICSID Convention" means the Convention on the Settlement of Investment Disputes between States and Nationals of other States, done at Washington, 18 March 1965;
(u) The term "New York Convention" means the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, 10 June 1958;
(v) The term "UNCITRAL Arbitration Rules" means the Arbitration Rules of the United Nations Commission on International Trade Law;
(w) The term "PCA" means the Permanent Court of Arbitration at The Hague; and
(x) The term "Secretary-General" means, unless otherwise provided in this Agreement, the Secretary-General of the PCA.
Article 2. National Treatment
1. Each Contracting Party shall accord in its Area to investors of the other Contracting Party, and to their investments in the Area of the former Contracting Party, treatment no less favourable than the treatment it accords in like circumstances to its own investors, and to their investments in its own Area, with respect to investment activities.
2. Paragraph 1 shall not be construed to prevent a Contracting Party from adopting or maintaining a measure that prescribes special formalities in connection with investment activities of investors of the other Contracting Party in its Area, provided that such special formalities do not impair the substance of the rights of such investors under this Agreement.
3. For greater certainty, whether treatment is accorded in "like circumstances" under this Article depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investments or investors on the basis of legitimate public welfare objectives.
Article 3. Most-favoured-nation Treatment
1. Each Contracting Party shall accord in its Area to investors of the other Contracting Party, and to their investments in the Area of the former Contracting Party, treatment no less favourable than the treatment it accords in like circumstances to investors of a non-Contracting Party, and to their investments in the Area of the former Contracting Party, with respect to investment activities.
2. For greater certainty, whether treatment is accorded in "like circumstances" under this Article depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investments or investors on the basis of legitimate public welfare objectives.
3. For greater certainty, the treatment referred to in this Article does not encompass international dispute settlement procedures or mechanisms under any international agreement.
4. The provisions of this Article shall not impose an obligation on either Contracting Party to grant investors of the other Contracting Party and their investments any benefits, advantages or privileges arising :from free trade areas, customs unions, common markets, economic unions or other similar integration agreements or tax agreements to which the former Contracting Party is or may become a party, or free zones (7).
5. The provisions of this Article shall not impose an obligation on either Contracting Party to grant investors of the other Contraction Party and their investments more favourable treatment accorded by the former Contracting Party under international agreements signed by it prior to the entry into force of this Agreement.
Article 4. Minimum Standard of Treatment
1. Each Contracting Party shall accord to investments of investors of the other Contracting Party in the Area of the former Contracting Party treatment in accordance with customary international law, including fair and equitable treatment and full protection and security. For greater certainty, a change of the regulation of a Contracting Party does not constitute by itself a breach of the preceding sentence.
2. For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens as the standard of treatment to be afforded to investments of investors of the other Contracting Party. The concepts of "fair and equitable treatment" and "full protection and security" do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights. For the purpose of paragraph 1:
(a) "fair and equitable treatment" includes the obligation not to deny justice in criminal, civil or administrative adjudicatory 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 Contracting Party to provide the level of police protection required under customary international law.
3. A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article.
4. For greater certainty, the mere fact that a Contracting Party takes or fails to take an action that may be inconsistent with an investor 's expectations does not constitute a breach of the fair and equitable treatment or the full protection and security standards referred to in this Article, even if there is a loss or damage to the investment of investors of the other Contracting Party as a result.
Article 5. Access to the Courts of Justice
Each Contracting Party shall in its Area accord to investors of the other Contracting Party treatment no less favourable than the treatment which it accords in like circumstances to its own investors or investors of a non-Contracting Party with respect to access to the courts of justice and administrative tribunals and agencies in all degrees of jurisdiction, both in pursuit and in defence of such investors' rights.
Article 6. Relation to the Wto Agreement
Nothing in this Agreement shall be construed so as to derogate from the rights and obligations of the Contracting Parties under the WTO Agreement.
Article 7. Non-conforming Measures
1. Articles 2 and 3 shall not apply to:
(a) Any existing non-conforming measure that is maintained by the central government of a Contracting Party with respect to sectors, sub-sectors or matters as set out in the Schedule of each Contracting Party in Annex I;
(b) Any existing non-conforming measure that is maintained by a local government of a Contracting Party;
(c) The continuation or prompt renewal of any non-conforming measure referred to in subparagraphs (a) and (b); or
(d) An amendment or modification to any non-conforming measure referred to in subparagraphs (a) and (b), provided that the amendment or modification does not decrease the conformity of the measure, as it existed immediately before the amendment or modification, with Articles 2 and 3.
2. Each Contracting Party shall, on the date on which this Agreement enters into force, notify the other Contracting Party of existing non-conforming measures referred to in subparagraph l(a). Such notification shall include the following elements for each entry with respect to existing non-conforming measure:
(a) "Sector" refers to the sector for which the entry is made;
(b) "Sub-Sector", where referenced, refers to the specific sub-sector for which the entry is made;
(c) "Industry Classification", where referenced, and only for transparency purposes, refers to the activity covered by the non-conforming measure, according to domestic or international industry classification codes;
(d) "Obligations Concerned" specifies the obligations imposed by Article 2 or 3 that, pursuant to subparagraph 1(a), do not apply to the listed measure(s);
(e) "Measures" identifies the laws, regulations or other measures for which the entry is made. A measure cited in the "Measures" element:
(i) Means the measure as amended, continued or renewed as of the date of entry into force of this Agreement; and
(ii) Includes any subordinate measure adopted or maintained under the authority of and consistent with the measure; and
(f) "Description" sets out the non-conforming measure or provides a general non-binding description ofthe measure for which the entry is made.
3. Articles 2 and 3 shall not apply to any measure that a Contracting Party adopts or maintains with respect to sectors, sub-sectors or activities set out in its Schedule in Annex ll.
4. Neither Contracting Party shall, under any measure adopted after the date of entry into force of this Agreement and covered by its Schedule in Annex II, require an investor of the other Contracting Party, by reason of its nationality, to sell or otherwise dispose of an investment that exists at the time when the measure becomes effective.
5. In cases where a Contracting Party makes an amendment or a modification to any existing non-conforming measure referred to in subparagraph l(a) or where a Contracting Party adopts any new or more restrictive measure with respect to sectors, sub-sectors or activities set out in its Schedule in Annex II after the date of entry into force of this Agreement, the Contracting Party shall, prior to the implementation of the amendment or modification or of the new or more restrictive measure, or in exceptional circumstances, as soon as possible thereafter, notify the other Contracting Party of detailed information on such amendment or modification, or such measure.
6. Each Contracting Party shall endeavour, where appropriate, to reduce or eliminate the non-conforming measures referred to in subparagraph 1(a) or specified in its Schedules in Annex II respectively.
7. Articles 2 and 3 shall not apply to any measure covered by the exceptions to, or derogations from, obligations under Articles 3 and 4 of the TRIPS Agreement, as specifically provided in Articles 3 through 5 of the TRIPS Agreement.
8. Articles 2 and 3 shall not apply to any measure that a Contracting Party adopts or maintains with respect to:
(a) Government procurement (8); or
(b) Subsidies or grants provided by the Contracting Party, including government supported loans, guarantees and insurance.
Article 8. Transparency
1. Each Contracting Party shall promptly publish, or otherwise make publicly available, its laws, regulations, administrative procedures, administrative rulings and, where possible, judicial decisions, of general application as well as international agreements which pertain to or affect the implementation and operation of this Agreement.
2. Each Contracting Party shall, upon request by the other Contracting Party, promptly respond to specific questions and provide that other Contracting Party with information on matters set out in paragraph 1.
3. Paragraphs 1 and 2 shall not be construed so as to oblige either Contracting Party to disclose confidential information, the disclosure of which would impede law enforcement or otherwise be contrary to the public interest, or which would prejudice privacy or legitimate commercial interests.
Article 9. Measures Against Corruption
Each Contracting Party shall ensure that measures and efforts are undertaken to prevent and combat corruption regarding matters covered by this Agreement in accordance with its laws and regulations.
Article 10. Entry, Sojourn and Residence of Investors
Each Contracting Party shall, in accordance with its laws and regulations, give sympathetic consideration to applications for entry, sojourn and residence of:
(a) A natural person having the nationality of the other Contracting Party; and
(b) Any personnel employed by, and an executive, a manager and members of the board of directors of, an enterprise of the other Contracting Party, who wish to enter the territory of the former Contracting Party and remain therein for the purpose of investment activities.
Article 11. Expropriation and Compensation
1. Neither Contracting Party shall expropriate or nationalise an investment of an investor of the other Contracting Party in the Area of the former Contracting Party, either directly or indirectly through measures equivalent to expropriation or nationalisation (hereinafter referred to as "expropriation") except:
(a) For a public purpose;
(b) In a non-discriminatory manner;
(c) Upon payment of prompt, adequate and effective compensation in accordance with paragraphs 4 through 7; and
(d) In accordance with due process of law.
2. Paragraph 1 addresses two situations. The first is direct expropriation, in which an investment is nationalised or otherwise directly expropriated through formal transfer of title or outright seizure. The second is indirect expropriation, in which an action or a series of actions by a Contracting Party has an effect equivalent to direct expropriation without formal transfer of title or outright seizure.
3.
(a) The determination of whether an action or a series of actions by a Contracting Party, in a specific fact situation, constitutes an indirect expropriation, requires a case-by-case, fact-based inquiry that considers, among other factors:
(i) The economic impact of the government action, although the fact that an action or a series of actions by a Contracting Party has an adverse effect on the economic value of an investment, standing alone, does not establish that an indirect expropriation has occurred;
(ii) The extent to which the government action interferes with distinct, reasonable investment-backed expectations;(9) and
(iii) The character of the government action.
(b) Non-discriminatory regulatory actions by a Contracting Party that are designed and applied to protect legitimate public welfare objectives, such as public health, (10) safety and the environment, do not constitute indirect expropriations, except in rare circumstances.
4. The compensation shall be equivalent to the fair market value of the expropriated investments at the time when the expropriation was publicly announced or when the expropriation occurred, whichever is earlier. The fair market value shall not reflect any chage in value occurring because the expropriation had become publicly known earlier.
5. The compensation shall be paid without undue delay, shall include interest at a commercially reasonable rate accrued from the date of expropriation until the date of payment and shall be effectively realisable and freely transferable.
6. If payment is made in a freely usable currency, the compensation paid shall include interest, ata commercially reasonable rate for that currency, accrued from the date of expropriation until the date of payment.
7. If a Contracting Party elects to pay in a currency other than a freely usable currency, the compensation paid shall be no less than the sum of the following converted into the currency of payment at the market rate of exchange prevailing on the date of payment:
(a) The fair market value on the date of expropriation, converted into a freely usable currency at the market rate of exchange prevailing on that date; and
(b) Interest, at a commercially reasonable rate for that freely usable currency, accrued from the date of expropriation until the date of payment.
8. This Article shall not apply to the issuance of compulsory licences granted in relation to intellectual property rights in accordance with the TRIPS Agreement, or to the revocation, limitation or creation of intellectual property rights, to the extent that such issuance, revocation, limitation or creation is consistent with the TRIPS Agreement.
Article 12. Treatment In Case of Armed Conflict, Civil Strife, State Ofnational Emergency or Any other Similar Event
1. Notwithstanding subparagraph 8(b) of Article 7, each Contracting Party shall accord to investors of the other Contracting Party and to their investments non discriminatory treatment with respect to measures it adopts or maintains relating to losses suffered by investments in the Area of the former Contracting Party owing to armed conflict, civil strife, state of national emergency or any other similar event.
2. Paragraph 1 shall not apply to existing measures relating to subsidies or grants that would be inconsistent with Article 2 but for subparagraph 8(b) of Article 7.
3. Any payment made pursuant to paragraph 1 shall be effectively realisable, freely transferable and freely convertible at the market exchange rate into freely usable currencies.
4. Neither Contracting Party shall be derogated from its obligation under paragraph 1 by reason of its measures taken pursuant to Article 16.
Article 13. Subrogation
If a Contracting Party or its designated agency makes a payment to an investor of that Contracting Party under a guarantee, a contract of insurance or another form of indemnity that it has entered into with respect to an investment of such investor in the Area of the other Contracting Party, the latter Contracting Party shall recognise the subrogation or transfer of any rights the investor would have possessed under this Agreement with respect to such investment but for the subrogation, and the investor shall be precluded from pursuing these rights to the extent of the subrogation.
Article 14. Transfers
1. Each Contracting Party shall permit that all transfers relating to investments of an investor of the other Contracting Party in the Area of the former Contracting Party may be freely made into and out of its Area without undue delay. Such transfers shall include, in particular, though not exclusively:
(a) The initial capital and additional amounts to maintain or increase investments;
(b) Profits, interest, capital gains, dividends, royalties, fees or other current incomes accruing from investments;
(c) Payments made under a contract including loan payments in connection with investments;
(d) Proceeds of the total or partial sale or liquidation of investments;
(e) Earnings and remuneration of personnel from abroad who work in connection with investments in the Area of the former Contracting Party;
(f) Payments made in accordance with Articles 11 and 12; and