Title
AGREEMENT BETWEEN THE KINGDOM OF MOROCCO AND …………………………………… FOR THE RECIPROCAL PROMOTION AND PROTECTION OF INVESTMENTS
Preamble
The Kingdom of Morocco and
..............................
hereinafter referred to as the "Parties" or individually as a "Party", Desiring to strengthen and improve the ties of friendship and develop economic cooperation between the Parties;
Recognizing the differences in the level of development and size of their economies;
Desiring to strengthen their economic and investment relations, in accordance with the objective of sustainable development in its economic, social and environmental dimensions and without compromising the right of the Parties to adopt general measures relating, inter alia, to the protection of public health, the environment, safety and workers' rights, in accordance with the standards provided for in the international agreements to which both Parties have acceded;
Recognizing the essential role of investment in promoting sustainable development, economic growth, technology transfer, poverty reduction, job creation, and human development;
Desiring to encourage investments that are made with the objective of establishing a lasting economic relationship between the investor and the Host Party and that will afford the investor the opportunity to exercise significant influence in the management of the investment;
Recognizing that the encouragement of sustainable and inclusive investment is essential for the development of the Parties' economies and that the encouragement of such investment requires cooperative efforts on the part of iinvestors and governments of both Parties;
Understanding that the reciprocal promotion and protection of investments in accordance with the provisions of this Agreement will stimulate private initiatives and strengthen contacts between the private sector of both Parties;
Emphasizing the importance of responsible business conduct, the promotion of transparency principles and the fight against corruption;
Seeking to create a mechanism for dialogue and government initiatives that can contribute to a significant increase in mutual investment;
Convinced that investments by investors of one Party in the territory of the other Party shall be made in accordance with the laws and regulations of that other Party.
Reaffirming their respective commitments under the Agreement Establishing the World Trade Organization ;
Accepting, in good faith, that the Agreement for the Reciprocal Promotion and Protection of Investments, hereinafter referred to as "Agreement", is as follows
Body
Section I. OBJECTIVES, SCOPE OF THE AGREEMENT AND DEFINITIONS
Article 1. OBJECTIVES
1.1 The objectives of this Agreement are to promote investment that contributes to sustainable development in the Host Party, to foster technology transfer and job creation, and to strengthen contacts between the private sector of both Parties.
1.2 The objectives of this Agreement shall be achieved without prejudice to the rights of the Parties to regulate in the public interest.
Article 2. SCOPE OF APPLICATION
2.1 This Agreement shall apply to investments made in foreign currency by investors of one Party in the territory of the other Party before or after its entry into force, in accordance with the laws and regulations in force in the latter Party.
2.2 This Agreement covers measures adopted by a Party after its entry into force that affect investors of the other Party or investments of investors of that other Party.
2.3 This Agreement shall not apply to disputes that may arise prior to its entry into force.
2.4 Subject to the other provisions of this Agreement, this Agreement does not apply to any law, decision or action taken in relation to taxation, including actions taken to enforce tax obligations.
2.5 The provisions of this Agreement shall not prevent a Party from adopting or implementing new restrictive measures with respect to investors and their investments, provided that such measures are consistent with this Agreement.
2.6 Investments made with funds or assets related to activities of illicit origin are not covered by this Agreement.
2.7 Investors of a Party may enter into special commitments with the other Party. Investments made pursuant to such special commitments shall not be governed by this Agreement.
Article 3. DEFINITIONS
For the purposes of this Agreement :
3.1 Host Party means the Party in whose territory the investment is located.
3.2 Home Party means the home state in whose territory the investor has its principal place of business and from which it exercises effective control over the investment in the territory of the Host Party. For purposes of this Agreement, the investor shall inform the Host Party of its home state.
3.3 Investment means assets invested in good faith by an investor of a Party in the territory of the other Party, which contribute to the sustainable development of the latter Party and which involve a certain period of time, a commitment of capital or other similar resources, an expectation of profit, and an assumption of risk.
The investment includes:
a) shares, securities and all other forms of participation in the capital of a company;
b) movable or immovable property and other property rights related to the investment such as mortgages, liens, pledges, encumbrances or similar rights and obligations
c) concessions, licenses, authorizations, permits and similar rights granted by law or by contract, including concessions for the search, exploration, extraction or exploitation of natural resources;
d) debt securities of, or loans to, an enterprise that are directly related to the investment, where the enterprise is an affiliate of the investor; and
e) intellectual property rights provided that they are recognized by the laws of the Host Party and are an integral part of an investment. Such intellectual property rights shall be consistent with those provided for in the Agreement on Trade-Related Aspects of Intellectual Property (TRIPS) and the laws of the Host Party. For greater certainty, provisions relating to intellectual property rights are not covered by Section VI on dispute settlement between an investor and the host Party.
Investments must:
- be made in good faith and in accordance with the host Party's applicable laws and regulations and its investment policies. For greater certainty, this Agreement does not cover investments made by investors of a Party in the territory of the other Party in violation of the laws and regulations in force in the latter Party;
- have a significant physical presence in the Host Party; - constitute all or part of a business or commercial operation; - be made by an investor as defined in this Agreement.
For the purposes of this Agreement and for greater certainty, investment does not include:
i) debt obligations issued by or loans to a Party or a government business enterprise;
ii) portfolio investments,including portfolio companies ;
iii) receivables arising solely from commercial contracts for the sale of goods and services;
iv) receivables or loans with a maturity of less than three years; v) loans granted under a commercial contract such as trade financing;
vi) an order or judgment obtained in an administrative or judicial proceeding;
vii) pre-investment expenses incurred by the investor prior to the actual implementation of its investment in the territory of the Host Party;
viii) the value of a brand, market share or similar intangible rights; ix) bank letters of credit; and
x) any other claims other than those set forth in the definition of investment in this Agreement.
No change in the legal form in which the assets have been invested or reinvested shall affect their character as an investment within the meaning of this Agreement, provided that such change is made in accordance with the laws and regulations in force in the Host Party.
3.4 Investor means a natural or juridical person of a Party, other than a branch or representative office, that makes a bona fide investment in the territory of the other Party:
A/: The term "natural person" means a national who is a national of a Party in accordance with its laws and regulations.
This Agreement does not cover investments of natural persons who are nationals of both Parties, unless such persons, at the time of making the investment in the Host Party, have their principal residence and center of interest in the other Party.
B/: the term "legal person" means:
(a) a juridical person that is incorporated or organized in accordance with the laws and regulations of a Party and that has its registered office, central administration or principal place of business in the territory of that Party and conducts in the territory of that Party substantial economic activities within the scope of this Agreement; or
(b) a legal person that is incorporated or organized under the laws and regulations of a Party and that is owned or controlled directly or indirectly by a natural person of that Party or by a legal person as described in paragraph (a) above.
The concept of "substantial economic activity" requires a case-by-case examination of all circumstances, including, but not limited to
i) the amount of investment brought into the country; ii) the number of jobs created ;
iii) its effect on the local community; and
iv) the length of time the company has been operational.
For greater certainty, a legal person that has its registered office in the territory of one of the Parties, its activity must have a real and continuous link with the economy of that Party.
For greater certainty, legal persons that are incorporated or organized in accordance with the laws of a Party and that conduct business in the territory of that Party shall not be considered an investor for purposes of this Agreement if such legal persons are owned or controlled by natural or legal persons that are nationals of a third state or the Host Party.
3.5 Public company means any company whose capital is held directly or indirectly, exclusively or jointly by public bodies in a proportion of more than 50%.
3.6 Measures include any legislation, regulation or administrative decision made by a Party directly related to an investment in the territory of that Party and affecting that investment.
3.7 Confidential Information means any confidential business information or information that is privileged or protected from disclosure under the law of a Party.
3.8 Party to the dispute means the investor filing a complaint under Section VI or the responding Party.
3.9 Respondent means the Party against whom a Complaint is filed under Section VI.
3.10 Claimant means an investor of a Party that files a claim against the other Party under Section VI.
3.11 Washington Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of Other States, done at Washington on 18 March 1965.
3.12 ICSID means the International Centre for Settlement of Investment Disputes established under the Washington Convention.
3.13 ICSID Additional Facility Rules means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Centre for Settlement of Investment Disputes.
3.14 New York Convention means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on June 10, 1958.
3.15 UNCITRAL Arbitration Rules means the arbitration rules of the United Nations Commission on International Trade Law.
3.16 "Without delay" means the period of time normally required for the completion of the necessary formalities for the payment of benefits or for the transfer of payments. In no case shall the period exceed three months.
3.17 Income means amounts net of taxes earned by an investment such as profits, interest, dividends, royalties or other legal income.
3.18 Territory means :
a) for the Kingdom of Morocco: the territory of the Kingdom of Morocco, including any maritime area beyond the territorial waters of the Kingdom of Morocco which has been or may hereafter be designated, in accordance with international law and its national legislation, as an area within which the rights of the Kingdom of Morocco with respect to the seabed and subsoil and to natural resources may be exercised.
3.19 Freely convertible currency means the currency widely used to make payments for international transactions and commonly traded in major international foreign exchange markets.
Section II. OBLIGATIONS OF THE PARTIES
Article 4. Admission of Investments
4.1 Each Party shall admit investments of investors of the other Party in accordance with its applicable laws and regulations, its economic development policies and its foreign investment regime.
4.2 Any extension, modification or substantial transformation of an_ initial investment, made in accordance with the laws and regulations in force in the Host Party, shall be considered a new investment.
Article 5. Investment Promotion
5.1 Each Party shall, to the extent practicable and in accordance with its applicable laws and regulations and its investment promotion policies, encourage and create favorable conditions for investors of the other Party to make investments in its territory.
5.2 Subject to its applicable laws and regulations and policies relating to the entry of foreign nationals, each Party shall grant the necessary facilities and permissions for the entry, stay and work of the investor of the other Party and any person having a permanent or temporary relationship with the investment such as directors, experts and technicians.
5.3 Each Party shall encourage its nationals to invest in the territory of the other Party and shall create favorable conditions for doing so.
5.4 The Parties shall consult periodically within the framework of the Joint Committee provided for in Article 26 of this Agreement on investment opportunities in their territories in various sectors of the economy in order to determine which reciprocal investments could be most beneficial to both Parties and to grant appropriate facilities, incentives and other inducements to the extent and under the conditions that the Parties shall periodically determine by mutual agreement.
Article 6. General Treatment and Protection of Investments
6.1 Investments made by investors of one Party in the territory of the other Party in accordance with its laws and regulations shall, in accordance with the provisions of this Article, be accorded fair and equitable treatment by the latter Party and full protection and security that should not be less than that accorded to its own investors and their investments or to investors of a third State and their investments. It is understood that :
a) A party violates the obligation to provide fair and equitable treatment under paragraph 1 when a measure or series of measures, constituting :
(i) a denial of justice in criminal,civil or administrative proceedings; or
ii) a fundamental violation of the rights of the defence; or
iii) targeted discrimination on patently unjustified grounds, such as gender, race or religious belief; or
iv) grossly abusive treatment, such as harassment, coercion and pressure.
(b) the full protection and security set out in paragraph 1 refers only to the Party's obligations with respect to the physical security of investors and their investments in its territory and not to any other obligations.
6.2 For greater certainty, a change in the law of a Party does not in itself constitute a violation of section 6.1.
6.3 Nothing in this Article shall be construed to prevent a Party from taking any measure considered necessary to protect public order, public health or the environment, provided that such measures are not applied in a discriminatory, abusive or unjustified manner.
6.4 It shall not be a violation of this Article for a Party to take or fail to take any action that adversely affects the expectations of an investor.
6.5 It shall not be a violation of this Article that an investment incentive has not been granted, renewed or continued, or has been modified by a Party.
6.6 The income from the investment, if reinvested in accordance with the applicable laws and regulations of the Host Party, shall enjoy the same protection as the original investment.
6.7 A finding that a breach of any other provision of this Agreement or any other international agreement entered into by a Party does not constitute a breach of this Article.
6.8 The treatment provided in this Article shall apply to the management, maintenance, use, enjoyment, sale or liquidation in the territory of a Party of investments made by investors of the other Party
Article 7. National Treatment
7.1 Without prejudice to its laws and regulations, each Party shall grant, within its territory :
a)investors of the other Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the management, maintenance, use, enjoyment, sale or liquidation of their investments.
b)to investments of investors of the other Party treatment no less favorable than that it accords, in like circumstances, to investments of its own investors with respect to the management, maintenance, use, enjoyment, sale or liquidation of investments.
7.2 It remains understood that the "in similar circumstances" language referred to in paragraph 7.1 above requires, on a case-by-case basis, a review that addresses the following:
- the objective and nature of the measure concerned by the investment;
- the actual and potential impact of the investment on the population and the environment and on local, regional or national development;
- the location of the investment and the sector in which the investment is made and the goods or services consumed or produced by the investment;
- the public or private origin of the investment.
For greater clarity, the "under similar circumstances" review will not be limited to any one of the items listed in Section 7.2.
Article 8. Most Favored Nation Treatment
8.1 Without prejudice to its laws and regulations, each Party shall grant in its territory :
a) investors of the other Party treatment no less favorable than that it accords, in like circumstances, to investors of a third State with respect to the management, maintenance, use, enjoyment, sale or liquidation of their investments.
b) to investments of investors of the other Party treatment no less favorable than that it accords, in like circumstances, to investments of investors of a third State, with respect to the management, maintenance, use, enjoyment, sale, or liquidation of investments.
8.2 The provisions of Article 7.2 of this Agreement apply with respect to the definition of "in like circumstancesâ in this Article.
8.3 For greater certainty, treatment under this Article does not include treatment accorded to investors of a non-Party and their investments under investment dispute settlement provisions in other international agreements, including agreements containing an investment chapter, between a Party and a non-Party.
8.4 Substantive obligations contained in other international investment treaties and other trade agreements do not in themselves constitute "treatment", and thus cannot give rise to a violation of this Article, absent measures adopted or maintained by a Party under those obligations.
Article 9. Exceptions to National and Most-Favored-Nation Treatment
9.1 The provisions of Articles 7 and 8 of this Agreement shall not be construed to require a Party to extend to investors of the other Party the benefits of any treatment, preference or privilege arising from :
a)an existing or future free trade agreement, customs union, common market, monetary union or similar international agreement to which a Party is or may become a party or any other form of regional cooperation to which a Party is or may become a party;
b) Bilateral or multilateral international investment agreements to which a Party is a party and which were signed or are in force prior to the entry into force of this Agreement ;
c) any national legislation relating wholly or partly to taxation;
d) subsidies (grants, loans, insurance and guarantees) provided by a Party exclusively to its own investors in connection with national development activities and programs;
e) contracts entered into by a Party or a government enterprise.
9.2 For purposes of clarification, the "treatment" referred to in Article 7 of this Agreement does not preclude different treatment of investors of a Party based on objective regulatory distinctions justified by legitimate development policies.
Article 10. Expropriation
10.1. No Party may nationalize or expropriate an investment of an investor of the other Party either directly or indirectly through measures having an effect equivalent to nationalization or expropriation (hereinafter expropriation), except :
(i) for public utility reasons; (ii) on a non-discriminatory basis; (iii) in accordance with due process of law; and
(iv) upon payment of compensation in accordance with subsections 10.2 to 10.4.
For greater certainty, this subsection shall be construed in accordance with subsection 10.8 of this section.
10.2. The compensation referred to in Section 10.1 shall be equivalent to the fair market value of the expropriated investment immediately prior to the date of its expropriation or the announcement of the expropriation (date of expropriation) and shall not take into account any change in value resulting from the fact that the proposed expropriation was already known. The criteria for assessing the fair market value of the investment include going concern value, asset value, including the declared tax value of tangible property, and where applicable any other relevant criteria for determining fair market value.
10.3 The assessment of fair and equitable compensation must be based on a fair balance between the public interest and the interest of the investor affected by the expropriation measure while taking into consideration all the circumstances of the expropriation, namely: the present and past use of the investment, the conditions of acquisition, the purpose of the expropriation, the profits generated by the investment and the duration of this investment.
10.4 The compensation shall be paid without undue delay in accordance with the regulations in force in the host Party. Compensation shall be paid in freely convertible currency at the market rate of exchange prevailing on the date of payment. It shall be freely transferable in accordance with the Article on Transfers.
10.5 In the event of delay in payment of the indemnity, it shall accrue simple interest until the date of payment, calculated at a reasonable commercial rate for that currency.
10.6 The investor affected by the expropriation may request, under the laws and regulations of the host Party that took the expropriation measure, a review by a judicial authority of the host Party of the legality of the administrative procedure of the expropriation and the valuation of the amount of compensation in accordance with the provisions of this Article.
10.7 This Article shall not apply to the issuance of compulsory licenses for intellectual property rights, or to the cancellation, limitation or creation of intellectual property rights, provided that the issuance, cancellation, limitation or creation is in accordance with international agreements on intellectual property.
10.8 The parties confirm their common understanding that: a) Expropriation can be direct or indirect: