(i) Direct expropriation occurs when an investment is nationalized or expropriated directly, through a formal transfer of ownership or outright seizure;
(ii) indirect expropriation results from a measure or series of measures taken by a Party that have an effect equivalent to a direct expropriation by substantially or permanently depriving the investor of basic property rights associated with its investment, including the right to use, enjoy and dispose of its investment without a formal transfer of ownership or final seizure, to such an extent as to deprive the investor of benefits that may be legitimately expected or to deprive its investment of any utility.
b) whether a Party's action or series of actions constitutes an indirect expropriation shall be investigated on a case-by-case basis, including the following factors
i) the economic effects of the measure or set of measures in question, it being understood that the fact that the measure or set of measures taken by a Party has an adverse effect on the economic value of an investment is not sufficient in itself to justify the measure or set of measures (s) only to establish that there has been an indirect expropriation ;
ii) the duration of the measurement or series of measurements;
iii) the extent to which the measure or series of measures in question undermines the legitimate expectations of the investor;
iv) the character of the measure or set of measures, including its purpose and whether the measure is disproportionate to the public interest goal
c) Consistent with the right of States to regulate and the principles of customary international law relating to State police powers, bona fide and non-discriminatory legislative and regulatory measures taken by a Party to protect or enhance legitimate public welfare objectives such as public health, safety environment and labor, or which result in legitimate general taxation or alteration of the value of the national currency or any type of action commonly accepted as falling within the police power of the States, do not constitute an indirect expropriation under this Article and therefore would not be subject to any requirement of compensation.
d) In considering a claim of breach of this Article by an investor, the arbitral tribunal established under Section VI shall take into account whether that investor has pursued a remedy in the domestic courts of the Host Party prior to bringing a claim under this Agreement.
Article 11. Compensation for Losses
11.1 Investors of one Party whose investments have suffered damage in the territory of the other Party as a result of armed conflict, revolution, national emergency, revolt, insurrection, riot, natural disasters or other similar events, shall be accorded by the latter Party non-discriminatory treatment at least equal to that accorded in similar circumstances to its own investors or to investors of a third State with respect to restitution, compensation, indemnification or other relief, whichever is more favorable.
11.2 Without prejudice to the provisions of paragraph 1 of this Article, investors of a Party that, in any of the situations referred to in that paragraph, suffer losses in the territory of the other Party resulting from :
the requisition of their property by the authorities of the latter Party, or
the destruction of their property by the authorities of the latter Party, without such requisition or destruction being caused by combat action or required by the necessity of the situation,
shall be fairly and equitably compensated for losses incurred during the requisition or resulting from the destruction of their property.
Article 12. Officers and Boards of Directors
12.1 Without prejudice to any special provisions regarding the admission of foreign investors and investments in strategic sectors, no Party may require an investor to appoint as managers of its investment persons of a particular nationality.
12.2 For investments in strategic sectors, a Party may require that a majority of the members of the board of directors, or a committee of the board of directors, of an investment be of a particular nationality, or resident in its territory, provided that such a requirement does not materially impair the investor's ability to control its investment.
12.3 Notwithstanding paragraph 12.1, a Party may require an investor of the other Party, taking into account the size and nature of its investment, to have incremental increases in the number of managerial, executive or specialized positions held by nationals of the Host Party and to institute training programs and establish monitoring programs to that effect.
Article 13. Subrogation
13.1 If a Party or its designated agency (hereinafter referred to as the "insurer") makes a payment to its own investors under a guarantee or insurance against non-commercial risks in respect of investments made in the territory of the other Party, the latter Party shall recognize the subrogation of the insurer in all rights and claims arising out of such investment, and shall recognize that the insurer shall be entitled to exercise such rights and to enforce such claims in the same manner as the original investor.
13.2 This subrogation will allow the insurer to be the direct beneficiary of an indemnity payment or other compensation to which the investor may have been entitled.
13.3 The subrogation rights or claims shall not exceed the original rights or claims of the investor.
Article 14. Transfers
14.1 Each Party shall permit transfers relating to an investment to be made freely. Such transfers shall include:
(i) the initial capital contribution or any increase in capital related to the maintenance or expansion of such investments;
(ii) income directly related to the investment;
(iii) proceeds from the sale or liquidation of the investment or part thereof;
(iv) loan repayments, including interest thereon, directly related to the investment;
(v) the allowances provided for in Articles 10 and 11 of this Agreement; vi) wages and other remuneration accruing to nationals of a Party authorized to work in the territory of the other Party in connection with an investment; and
vii) payments arising from the settlement of investor/state disputes.
14.2 Transfers referred to in paragraph 14.1 of this Article shall be made, without undue delay, in a freely convertible currency at the market rate of exchange prevailing in the Host Party on the date of transfer.
14.3 The transfer must be carried out in compliance with the formalities provided for by the legal and regulatory provisions applicable in each Party with respect to exchange control, in force on the date of the transfer.
14.4 For greater certainty, nothing in this Agreement shall be construed to prevent a Party from requiring, prior to transfers relating to an investment, investors to meet their tax obligations with respect to that investment.
14.5 Notwithstanding the provisions of paragraphs 14.1 and 14.2 of this Article, a Party may delay or prevent a transfer through the fair, non- discriminatory and good faith application of its laws or international obligations regarding:
a) bankruptcy, insolvency or protection of creditorsâ rights ;
b) issuing, trading or dealing in securities;
c) criminal or penal offences;
d) compliance with tax and labor laws;
e)the fight against money laundering and terrorist financing ;
f) financial reports or records of currency transfers when necessary to assist in the enforcement of law or financial regulation;
g) the enforcement of orders or judgments in judicial or administrative proceedings; and
h) the respect of the social security and pension systems of the workers.
Article 15. Measures to Safeguard the Balance of Payments and Maintain the Stability of the Financial System
15.1 Each Party may, on a non-discriminatory basis and in accordance with the rights and obligations of the Members of the International Monetary Fund under the Articles of Agreement of the International Monetary Fund, adopt or maintain measures to restrict the free transfer of foreign capital and the payment of transactions in the following cases
a) when its balance of payments is in serious financial difficulty or in danger of being so; and
b) in exceptional circumstances where capital movements cause or threaten to cause serious difficulties for macroeconomic management, in particular in terms of monetary or exchange rate policy.
15.2 The measures cited in paragraph 15.1 of this section shall:
a) not exceed those necessary to meet the circumstances referred to in paragraph 15.1 of this section;
b) be applied for a limited time and removed as soon as conditions permit; and
c) be notified immediately to the other Party.
Article 16. Transparency
16.1 Each Party shall ensure, to the extent practicable, that its laws, regulations and administrative rulings of general application respecting matters covered by this Agreement are published as soon as practicable and are accessible, where practicable, by electronic means, so as to enable interested persons and the other Party to become acquainted with them.
16.2 Each Party shall provide to the other Party, upon request, information on any measure that may materially affect the investments of investors of the latter Party.
16.3 The Host Party shall have the right to request information from an investor or its home state regarding its corporate governance record and practices as an investor, including in its home state. The Host Party shall protect confidential business information received in this regard.
16.4 No investor may have recourse to the dispute settlement mechanism provided for in Section VI for any matter arising under this Article.
Article 17. Maintaining Public Health, Labor, Environmental and Safety Standards
17.1 The Parties recognize that it is not appropriate to relax domestic public health, labor, environmental or safety measures to encourage investment. Accordingly, no Party should waive or otherwise derogate from, or offer flexibilities to waive or otherwise derogate from, such measures to encourage the establishment, acquisition, expansion or retention in its territory of an investment by an investor.
17.2 The Parties shall cooperate on matters relating to the protection of public health and the environment and shall hold expert consultations on these matters.
Section III. OBLIGATIONS AND RESPONSIBILITIES OF INVESTORS AND INVESTMENTS
Article 18. Compliance with Domestic Laws and International Obligations
18.1 Investments shall be governed by the laws and regulations of the Host Party and investors and their investments shall comply with such laws and regulations throughout their existence in the Host Party.
18.2 Investors and investments after admission shall comply with the measures of the Host Party that prescribe the formalities for the establishment of an investment and accept the jurisdiction of that Party with respect to the investment.
18.3 An investor shall provide the Host Party with any information it requires concerning its investment for the purpose of making decisions related to such investment or for statistical purposes only. The Host Party shall protect any confidential business information from disclosure that would prejudice the competitive position of the investor or the investment.
18.4 Any processing of investors' personal data for the purpose of making investment-related decisions, compiling statistics, or resolving disputes shall be carried out in accordance with the national legislation of the Host Party and/or the relevant international conventions of which both Parties are members.
18.5 An investor shall not commit fraud or provide false information regarding its investment. A material breach of this paragraph by an investor shall constitute a violation of the domestic law of the Host Party relating to the establishment of its investment.
18.6 Investors and their investments must comply with the Host Party's tax laws, including the timely fulfillment of their tax and social security obligations.
18.7 Investors shall manage and operate their investments in a manner consistent with international environmental, labor and human_ rights obligations to which both Parties are party.
Article 19. Fight Against Corruption, Money Laundering and Terrorist Financing
19.1 Prior to or after the establishment of an investment in the territory of the Host Party, investors and their investments shall not offer, promise or give any undue pecuniary or other advantage, directly or through intermediaries, to a public official of the Host Party or to a member of his family, any of its associates or any other person closely related to it, for its benefit or for the benefit of a third party, to act or refrain from acting in the performance of its official duties, with a view to obtaining any preference with respect to a proposed investment or to licenses, permits, contracts or any other rights related to an investment.
19.2 Within the framework of their activities, investors and their investments admitted to the territory of the Host Party shall apply the principles recognized by the international community with regard to the fight against money laundering and the financing of terrorism.
19.3 A violation of paragraphs 19.1 and 19.2 of this Article by an investor or investment shall constitute a violation of the domestic law of the Host Party relating to the establishment and operation of an investment.
19.4 Where an investor or its investment has violated this Article, neither the investor nor the investment shall have the right to initiate a dispute settlement process under any provision of this Agreement. The Host Party may raise this issue as an objection to jurisdiction in any dispute arising under this Agreement or in any proceeding under Section VI relating to dispute settlement between an investor and the Host Party.
Article 20. Social and Environmental Responsibility
20.1 Investors and their investments will strive to contribute to the sustainable development of the Host Party and the local community through responsible practices.
20.2 Investors of a Party in the territory of the other Party shall endeavor to contribute to human capital formation, job creation and technology transfer.
20.3 Investors of a Party in the territory of the other Party shall endeavor to apply the International Labor Organization's Tripartite Declaration of Principles concerning Multinational Enterprises and Social Policy and the OECD Guidelines for Multinational Enterprises, as well as specific or sectoral standards of responsible conduct promoted by the Parties.
20.4 Investors will be expected to manage or operate their investments in compliance with international obligations regarding human and labor rights, responsible business conduct, health and environmental protection, and consistent with climate change mitigation and adaptation objectives.
20.5 A tribunal established under Section VI of this Agreement shall, in determining the amount of compensation, take into account the failure of the Investor to comply with its commitments referred to in paragraph 20.4 of this section.
Section IV. EXCEPTIONS
Article 21. General Exceptions
Nothing in this Agreement shall be construed to require a Party to pay compensation as a result of taking action in good faith, on a non- discriminatory basis and of general application to:
a) face a situation whose effects result from a force majeure or an unforeseen external event;
b) protect public morals or public order;
c) to protect human or animal life and to preserve plants;
d) ensure the provision of essential social services, such as health, education or water supply;
e) protect and conserve theenvironment, including exhaustible natural resources, both biological and non-biological;
e) protect monuments of national artistic, cultural, historical or archaeological value ; and
f) ensure compliance with laws and regulations that are not inconsistent 22.1 with the provisions of this Agreement.
Article 22. Security Exceptions
22.1 Nothing in this Agreement shall be construed to limit a Party from adopting or maintaining measures that it considers necessary to :
(a) protect its essential security interests in defense and national security investments;
(b) protect its interests in time of war or other emergency in international relations; or
(c) comply with its obligations regarding the maintenance of international peace and security or the application of economic sanctions, in accordance with the provisions of the United Nations Charter.
22.2 Nothing in this Agreement shall require a Party to provide or permit access to any information that it considers contrary to its national security interests.
22.3 Measures taken by a Party under paragraphs 23.1 and 23.2 of this Article or a decision based on national security or public policy laws that may at any time prohibit or restrict an investment in its territory by an investor of the other Party shall not be subject to the dispute settlement mechanism between an investor and the Host Party provided for in Section VI of this Agreement.
Article 23. Prudential Measures
23.1 Nothing in this Agreement shall be construed to require a Party to pay compensation if it adopts or maintains reasonable measures for prudential reasons to ensure
a) the protection of investors, depositors, financial market participants, insurance policyholders, claimants or persons to whom a financial institution owes a fiduciary duty;
b) maintaining the safety, soundness, solvency, integrity or financial responsibility of financial institutions; and
c) the preservation of the integrity and stability of a Party's financial system.
23.2 This Agreement does not apply to non-discriminatory measures of general application taken by governmental bodies for reasons relating to monetary, credit or exchange rate policies. Nothing in this paragraph shall be construed to affect the obligations of a Party under Article 14 (Transfers).
Article 24. Tax Measures
24.1 Nothing in this Agreement shall be construed to require a Party to extend to an investor of the other Party, with respect to its investments, any treatment, preference or privilege under any existing or future double taxation convention to which either Party is a member or may hereafter accede.
24.2 This Agreement does not alter the rights and obligations of the Parties under any tax treaty. In the event of any inconsistency between this Agreement and a tax treaty between the Parties, such treaty shall prevail to the extent of the inconsistency. For greater certainty, only the competent tax authorities of both Parties shall have the authority to determine whether there is an inconsistency between this Agreement and such convention.
24.3 Nothing in this Agreement shall be construed to prevent the adoption or enforcement of any measure designed to secure the equitable or effective imposition or collection of taxes in accordance with the respective laws and regulations of the Parties, provided, however, that such measure shall not be applied in a discriminatory, arbitrary or unjustifiable manner or constitute a disguised restriction.
24.4 Any dispute concerning the application of the provisions of this Article may be brought only before the competent tax authorities of both Parties or before the domestic courts of the Host Party and shall not be covered by the provisions of Section VI relating to the settlement of disputes between an investor and the Host Party.
Article 25. Denial of Agreement Benefits
25.1 The benefits of this Agreement shall be denied at any time, including after the initiation of an arbitration proceeding under Section VI, to any investor of the other Party that is a juridical person of that other Party and to the investments of such investor if:
a) investors of a third Party, or of the rejecting Party, own or control that legal entity;
b) the investment or investor was created or restructured for the primary purpose of accessing the dispute resolution mechanisms of this Agreement.
25.2 The benefits of this Agreement shall be denied at any time, including after the commencement of an arbitration proceeding under Section VI, to any investor from a third Party with which the Host Party does not maintain diplomatic relations or against which it maintains economic sanctions.
Section V. INSTITUTIONAL GOVERNANCE
Article 26. Joint Committee
26.1 To facilitate the implementation of this Agreement, the Parties agree to establish a Joint Committee composed of representatives of both Parties.
26.2 The Joint Committee shall allow the Parties to consult on matters related to this Agreement that are referred to it by a Party.
26.3 The Joint Committee shall meet alternately in Rabat and in ............ at the request of either Party on the basis of an agenda drawn up by the Party requesting the Joint Committee meeting.
26.4 The Joint Committee meeting shall be held within 60 days of receipt of the request, unless the Parties agree otherwise.
26.5 The Joint Committee is responsible for:
a) monitor the implementation and execution of this Agreement and review any issues that may affect the proper functioning of this Agreement;
b) to exchange information on the legal framework and investment opportunities in the territory of both Parties and to formulate proposals for the promotion of investment;
c) consult, as appropriate, with any entity concerned by a specific issue(s) being considered by the Joint Committee;
d) amicably resolve problems and disputes between the Parties concerning the interpretation or application of this Agreement or problems and disputes between an investor and the Host Party concerning an alleged breach of one or more obligations of this Agreement;
e) provide advice and interpretations on the provisions of the Agreement;
f) propose, as appropriate, procedures to supplement the applicable arbitration procedures set forth in Section VI of this Agreement and adopt, as appropriate, a code of conduct for arbitrators or amend it as necessary; and
g) consider the need or desirability of recommending amendments to this Agreement to the Parties based on experience and trends in international investment agreements.
26.6 The Parties may establish ad hoc working groups, which shall meet with the Joint Committee or separately.
26.7 The private sector may be invited to participate in the ad hoc working groups upon invitation by the Joint Committee.
26.8 Decisions and recommendations of the Joint Committee shall be made by consensus.
26.9 The Joint Committee shall establish its own rules and procedures.
Article 27. National Focal Point
27.1 Each Party shall designate a National Focal Point as a point of contact to support the other Party's investor in its territory.
27.2 The functions of the National Focal Point are :
(a) to welcome and accompany the investors during the implementation of their investments in the Host Party;
(b) Provide timely and useful information on regulatory issues on investment in general or on specific projects;
(c) interact with the National Focal Point of the other Party in accordance with this Agreement;
(d) assess and recommend, where appropriate, solutions to problems and complaints raised by the Government and investors of the other Party;
(e) facilitate dispute resolution in coordination with appropriate government authorities and in partnership with relevant private organizations; and
(f) Implement the recommendations of the Joint Committee and report its activities and actions as appropriate.
27.3 The National Focal Point shall respond in a timely manner to notifications and requests made by the Government and investors of the other Party.
27.4 The National Focal Point must have the means and resources to fulfill its functions.
Section VI. DISPUTE RESOLUTION BETWEEN AN INVESTOR AND THE HOST PARTY
Article 28. Purpose and Scope of Application
28.1 Without prejudice to the rights and obligations of the Parties under Section VII (Settlement of Disputes between the Parties), this Section establishes a mechanism for the settlement of investment disputes.
28.2 This Section shall apply to disputes raised by an investor in connection with its investment if and only if:
- the Respondent has failed to comply with an obligation under Section IT of this Agreement; and
- the investor in question has suffered loss or damage by reason of or as a result of such failure.
28.3 If an investor or its investment has breached any of its obligations under this Agreement, neither the investor nor the investment shall have the right to initiate any dispute resolution process established under this Agreement. The Host Party may raise this issue as an objection to jurisdiction in any dispute arising under this Section.
28.4 Where an investor or its investment has failed to comply with its obligations under Article 18 (Compliance with Domestic Laws and International Obligations) or has violated Article 19 (Anti-Corruption, Anti-Money Laundering and Anti-Terrorist Financing), the Host Party may file a counterclaim in any court established pursuant to this Section.
28.3 If an investor or its investment has breached any of its obligations under this Agreement, neither the investor nor the investment shall have the right to initiate any dispute resolution process established under this Agreement. The Host Party may raise this issue as an objection to jurisdiction in any dispute arising under this Section.