Title
ECONOMIC AND TRADE EXPANSION AGREEMENT BETWEEN THE REPUBLIC OF PERU AND THE FEDERATIVE REPUBLIC OF BRAZIL
Preamble
The Republic of Peru
And
The Federative Republic of Brazil, hereinafter referred to as the "Parties" or individually as the "Party":
ANIMATED for the purpose of strengthening the bonds of friendship and solidarity among their peoples;
PERSUADED that trade between the Parties, regulated in the area of trade in goods by Economic Complementation Agreement No. 58, and expanded in terms of investment, trade in services and public procurement by this trade promotion agreement, constitutes one of the main means for both Parties to accelerate their process of economic and social development;
DECIDED to promote bilateral trade and investment by opening up new integration initiatives between the Parties;
RECOGNIZING the fundamental role of regional economic integration in the liberalization of trade and investment and in the promotion of sustainable development, economic growth, poverty reduction, job creation, expansion of productive capacity And human development;
DESIRING to establish a common framework of principles and standards for their bilateral trade in services with a view to expanding such trade in conditions of transparency and as a means of promoting economic growth;
RECOGNIZING the importance of promoting a transparent, agile and friendly environment for trade and investment between the Parties;
ENSURING a predictable legal framework for trade and investment;
REAFFIRMING the autonomy and regulatory space of the Parties;
AGREE:
Body
To conclude this Agreement of Economic Economic Development between the Republic of Peru and the Federative Republic of Brazil, under the Treaty of Montevideo 1980 and Resolution No. 2 of the Council of Ministers of LAFTA.
Chapter 1. Initial Provisions and General Definitions
Article 1.1. General Definitions
For the purposes of this Agreement, unless otherwise specified in another Chapter:
Agreement means the Commercial Economic Deepening Agreement between the Republic of Peru and the Federative Republic of Brazil;
WTO Agreement means the Marrakesh Agreement Establishing the World Trade Organization, dated 15 April 1994;
GATS means the General Agreement on Trade in Services contained in Annex 1B to the WTO Agreement;
ALADI means the Latin American Integration Association;
Days means calendar days;
Commission means the Administrative Commission established by Article 6.1 (Administrative Commission);
Measure includes any law, regulation, procedure, requirement or administrative practice;
National means:
(A) for Peru, a natural person who has Peruvian nationality by birth, naturalization or option in accordance with Articles 52 and 53 of the Political Constitution of Peru and other relevant national legislation, or is a permanent resident of Peru; and
(B) for Brazil, a natural person who has Brazilian nationality by birth, naturalization or option in accordance with Article 12 of the Constitution of the Federative Republic of Brazil and other relevant national legislation, or is a permanent resident of Brazil;
WTO stands for World Trade Organization;
Person means a natural person or legal entity;
Person of a Party means a national or a legal person of a Party;
Legal entity means any legal entity duly constituted or otherwise organized under applicable law, whether or not for profit and whether privately or publicly owned, including a capital company,Trust company, partnership, joint venture, individual company or association;
Territory means:
(A) for Peru, the mainland, islands, maritime areas and the air space that covers them, under the sovereignty or rights of sovereignty and jurisdiction of Peru, in accordance with the provisions of the Political Constitution of Peru and other national legislation and international law; and
(B) for Brazil, the territory, including its land and air spaces, the exclusive economic zone, the territorial sea, continental shelf, soil and subsoil, within which Brazil exercises its sovereign or jurisdictional rights, in accordance with the International law and its internal legislation.
Article 1.2. Relationship with other Agreements
1. The Parties reaffirm existing rights and obligations between them in international agreements to which both Parties are parties.
2. If any provision of the WTO Agreement that the Parties have incorporated into this Agreement is amended and accepted by both Parties in the WTO, such amendment shall automatically be deemed to be incorporated into this Agreement.
3. In the event of any inconsistency between this Agreement and other agreements to which both Parties are parties, the Parties shall consult each other to seek a mutually satisfactory solution, taking into account the general principles and rules of international law.
Chapter 2. Investment
Section A. Scope and Definitions
Article 2.1. Purpose
The purpose of this Chapter is to facilitate and promote mutual investment by establishing a framework for treatment of investors and their investments and institutional governance of cooperation, as well as mechanisms for the prevention and settlement of disputes.
Article 2.2. Scope of Application
1. In the event of inconsistency between the provisions of treatment provided for in Article 2.5 (National Treatment) and Article 2.6 (Most Favored Nation Treatment) that affect the provision of services; And the treatment provisions and schedule of specific commitments (Annex I) to the mode of supply of commercial presence services contained in Chapter 3 (Services), the former shall prevail to the extent of incompatibility.
2. This Chapter shall apply to all investments made before or after the entry into force of this Agreement.
For the greater certainty, the provisions of this Chapter do not bind any Party in relation to any act or fact that took place, or any situation that ceased to exist before the entry into force of this Agreement. This does not prevent the Parties from discussing matters of mutual interest in the Joint Committee established under Article 2.15 (Joint Committee).
3. This Chapter shall apply without prejudice to the rights and benefits that an investor of one Party has under national or international law in the territory of the other Party.
4. For greater certainty, the Parties reaffirm that this Chapter will be applied without prejudice to the rights and obligations under the WTO Agreement.
5. The provisions of Article 2.5 (National Treatment) and 2.6 (Most Favored Nation Treatment) do not apply to subsidies or grants awarded by a State Party or enterprise, including government-backed loans, guarantees, and insurance.
If a Party or state enterprise grants a subsidy or grant to an investor or an investor of an investor of a non-Party and does not grant them to an investor or an investment of an investor of the other Party, the measure may be the subject of consultation between Parties within the framework of the Joint Committee.
Article 2.3. Definitions
1. For the purposes of this Chapter:
(A) "Enterprise" means any entity incorporated or organized under applicable law, whether or not for profit and whether owned or controlled by government, including any corporation, foundation, sole proprietorship, joint venture or Another entity without legal personality;
(B) The enterprise of a Party means a business incorporated or organized under the law of a Party, which carries out substantial business activities in the territory of the latter Party;
(C) Host State means the Party where an investment is being made or made;
(D) Profit means the securities obtained by an investment and in particular, but not exclusively, includes profits, interest, capital gains, dividends and royalties;
(E) Investor means a national or business of one Party, which is making or has made an investment in the territory of the other Party;
(F) investment means a direct investment, that is, any asset owned or controlled, directly or indirectly, by an investor of one Party, established or acquired in accordance with the legal system of the other Party, in the territory of that other Party which allows control or a significant degree of influence over the management of the production of goods or the provision of services in the territory of the Host State, including in particular but not exclusively:
(i) an enterprise;
(ii) shares, capital and other types of interests in a company;
(iii) movable or immovable property and rights relating to property, such as mortgage, encumbrance, pledge, usufruct and similar rights;
(iv) concessions conferred by law or under contract, including concessions for search, including exploration, extraction or exploitation of natural resources;
(v) debt instruments or loans of a company:
(A) when the company is an affiliate of the investor, and
(B) when the original maturity date of the debt or loan instrument is at least three years,
But does not include bonds, debentures, loans or other debt instruments of a State enterprise of a Party which this Party treats as public debt.
For greater certainty, investment does not include:
(i) an order or judgment filed in a judicial or administrative action;
(ii) debt securities issued by a Party or loans granted by one Party to the other Party;
(iii) portfolio investments, which do not allow the investor a significant degree of influence in the management of the company; and
(iv) pecuniary claims arising exclusively from commercial contracts for the sale of goods or services by a national or an enterprise in the territory of one Party to a national or an enterprise in the territory of the other Party, or the granting of Credit in connection with a commercial transaction or any other pecuniary claim, which does not involve the interest rates set forth in subsections (i) to (v) above.
(G) Person of a Party means a national or business of a Party.
Section B. Treatment Provisions and Regulatory Measures
Article 2.4. Admission
Each Party shall admit and encourage the investments of investors of the other Party, in accordance with its laws and regulations pursuant to this Chapter.
Article 2.5. National Treatment
1. Subject to its laws and regulations in effect at the date of entry into force of this Agreement, each Party shall accord to investors of the other Party treatment no less favorable than that it accords to its own investors in similar circumstances, In relation to the establishment, acquisition, expansion, administration, conduction, operation and sale or other disposition of the investments in its territory.
2. Subject to its laws and regulations in effect at the date of entry into force of this Agreement, each Party shall accord to investments of investors of the other Party treatment no less favorable than that it accords, under similar circumstances, to investments Of its own investors, in relation to the establishment, acquisition, expansion, administration, conduction, operation and sale or other disposition of the investments in its territory.
3. For greater certainty, that treatment be granted in "like circumstances", depends on the totality of the circumstances, even that the relevant treatment distinguishes between investors or investments based on legitimate objectives of public interest.
4. The provisions of this Article shall not prevent the adoption and application of new measures affecting investors and their investments, provided they are not discriminatory in accordance with the provisions of paragraphs 1 and 2 of this Article.
5. For greater certainty, this Article shall not be construed to compel Parties to compensate for intrinsic competitive disadvantages resulting from the foreign character of the investors and their investments.
6. The Parties reserve the right to adopt or maintain any future measures inconsistent with this Article:
(A) with respect to the design, distribution, retailing or display of handicrafts that are identified as national handicrafts of each Party;
(B) related to artisanal fishing;
(C) with respect to the enforcement of laws and the provision of social rehabilitation services;
(D) with respect to the provision of the following services, to the extent that they are social services that are established or maintained for reasons of public interest: insurance and security of income, social security services, social welfare, public education, public training, Health and child care.
(E) granting differential treatment to socially or economically disadvantaged minorities and to ethnic groups. For purposes of this Chapter, minorities include peasant communities; Ethnic groups means indigenous and native communities. Peasant communities are legal entities integrated on the basis of ancestral, social, economic and cultural ties. They are autonomous in their organization, in the communal work and in the use and free disposition of their lands, as well as in the economic and administrative within the framework of the law;
(F) related to the acquisition or lease of rural property, as defined in the legislation of each Party.
(G) to grant to a person of the other Party the same treatment accorded by this Party to the national of the first Party in the audiovisual, editorial and musical sector.
7. This Article does not apply to government procurement procedures, which are understood as the process by which a government obtains goods or services, or any combination thereof, for governmental purposes and not for commercial sale or resale or for their use in the production or supply of goods or services intended for commercial sale or resale. For greater certainty, this Chapter applies with respect to the investment resulting from such public procurement procedure.
Article 2.6. Most-favored-nation Treatment
1. Subject to its laws and regulations in effect at the date of entry into force of this Agreement, and with respect to the provisions contemplated in this Chapter, each Party shall accord to investors of the other Party treatment no less favorable than that accorded by it In similar circumstances, to investors of a non-Party in connection with the establishment, acquisition, expansion, administration, conduct, operation and sale or other disposition of investments in its territory.
2. Subject to its laws and regulations in effect at the date of entry into force of this Agreement, and with respect to the provisions contemplated in this Chapter, each Party shall accord to investments of investors of the other Party treatment no less favorable than In similar circumstances, to investments in its territory by an investor of a State which is not a Party in connection with the establishment, acquisition, expansion, administration, conduct, operation and sale or other disposition of investments in its territory.
3. For greater certainty, the treatment referred to in this Article does not include investor-state dispute resolution mechanisms or procedures or any other dispute resolution mechanism for investments that are stipulated in international commercial or investment agreements.
4. The Parties reserve the right to adopt or maintain any measure giving different treatment to countries in accordance with a bilateral or multilateral treaty in force or subscribed prior to the date of entry into force of this Agreement, including agreements Such as those establishing a regional economic integration organization, a free trade area, a customs union or a common market of which a Party is a member.
5. The Parties reserve the right to adopt or maintain any future measures inconsistent with this Article:
(A) granting differential treatment to countries in accordance with any bilateral or multilateral international treaty in force or subscribed after the date of entry into force of this Agreement in respect of aviation; fishing; Or maritime affairs, including rescue. For greater certainty, maritime affairs include transport by lakes and rivers;
(B) which is related to artisanal fishing;
(C) To grant preferential treatment to persons from other countries under any existing bilateral or multilateral international agreements on cultural industries, including audiovisual cooperation agreements.
For the purposes of this sub-paragraph, the term "cultural industries" means:
(i) Publication, distribution or sale of books, magazines, periodicals or printed or electronic journals, excluding the isolated activity of printing and typographic composition of any of the above activities;
(ii) Production, distribution, sale or display of film or video recordings;
(iii) Production, distribution, sale or display of music recordings in audio or video;
(iv) Production and presentation of performing arts;
(v) Production and display of visual arts;
(vi) Production, distribution or sale of printed or machine-readable music;
(vii) Design, production, distribution and sale of handicrafts; or
(viii) Broadcasters for the general public, as well as all activities related to radio, television and cable transmission, satellite programming services and transmission networks.
For greater certainty, Articles 2.5 (National Treatment) and 2.6 (Most Favored Nation Treatment) do not apply to government support programs for the promotion of cultural activities;
(D) grant to a person of a third party the same treatment accorded by that Party to its national in the audiovisual, publishing and musical sector.
(E) with respect to the enforcement of laws and the provision of social rehabilitation services;
(F) with respect to the provision of the following services, to the extent that they are social services established or maintained for reasons of public interest: income security and insurance, social security services, social welfare, public education, public training, health and child care.
6. This Article does not apply to government procurement, which is understood as the process by which a government obtains goods or services, or any combination of them, for governmental purposes and not for commercial sale or resale or for their use In the production or supply of goods or services intended for commercial sale or resale. For greater certainty, this Chapter applies with respect to the investment resulting from such public procurement procedure.
Article 2.7. Expropriation
1. The Parties may not nationalize or expropriate the investments covered by this Chapter, unless it is:
(A) in the case of Brazil, by necessity or public utility or social interest; In the case of Peru, for national security or public need;
(B) in a non-discriminatory manner;
(C) by payment of an effective compensation in accordance with paragraphs 2, 3 and 4; and
(D) In accordance with due process of law.
2. The compensation shall:
(A) be paid without undue delay, in accordance with the law of the Host State;
(B) be equivalent to the fair market value of the expropriated investment immediately before the expropriation has taken place, hereinafter expropriation date;
(C) not reflect a change in market value due to knowledge of the intention to expropriate, prior to the date of expropriation; and
(D) be transferable in accordance with Article 2.10 (Transfers).
3. If the fair market value is denominated in a freely usable currency, the payment of an indemnity may not be less than the fair market value at the date of expropriation plus the interest determined according to market criteria 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 indemnity to be paid shall not be less than the fair market value at the date of expropriation, plus interest determined according to market criteria for said Currency from the date of expropriation to the date of payment.
5. The Parties shall exchange information on their respective national laws on expropriation.
6. For greater certainty, this Article only provides for direct expropriation, where an investment is nationalized or otherwise expropriated directly through the formal transfer of title or right of dominion.
Article 2.8. Compensation for Losses
In respect of measures such as restitution, compensation, compensation and other settlement, each Party shall accord to investors of the other Party who have suffered losses in their investments in the territory of that Party due to armed conflict or civil strife, treatment not Less favorable than that accorded to its own investors or investors from any country that is not a Party, whichever is more favorable to the affected investor.
Article 2.9. Transparency
1. In accordance with the provisions of this Chapter, each Party shall ensure that all measures affecting the investment are administered in a reasonable, objective and impartial manner, in accordance with its legal system.
2. Each Party shall ensure that its laws, regulations, procedures and administrative rulings of general application relating to any matter covered by this Chapter, be published as soon as possible and made available, as far as possible, in electronic format, so as to enable the persons concerned and the other Party to be aware of them.
3. Each Party shall, as far as possible, provide reasonable opportunities to interested parties to comment on the measures they intend to adopt.
Article 2.10. Transfers
1. The Parties shall permit the transfer of funds relating to an investment to be made freely and without delay to and from their territory. These transfers include:
(A) the initial capital contribution or any addition thereof in connection with the maintenance or expansion of this type of investment;
(B) profits directly related to the investment;
(C) the proceeds from the total or partial sale or liquidation of the investment;
(D) payments made under a contract to which the investor or the investor is party, including payments under a loan agreement; and
(E) payments made in accordance with Article 2.7 (Expropriation) and Article 2.8 (Compensation for Losses). When the compensation is paid in bonds of the public debt, the investor may transfer the value of the proceeds from the sale of said bonds in the market, in accordance with this Article.
2. Each Party shall permit transfers relating to an investment to be made in freely usable currency at the exchange rate prevailing in the market on the date of transfer.
3. Without prejudice to paragraphs 1 and 2, a Party may avoid a transfer through the equitable, non-discriminatory and good faith application of its laws relating to:
(A) bankruptcy, insolvency or protection of the rights of creditors;
(B) criminal offenses;
(C) financial reporting or record keeping of transfers where necessary to assist compliance with the law or with regulatory financial authorities; or
(D) the guarantee for compliance with judgments or awards rendered in judicial or administrative proceedings.