Title
BILATERAL INVESTMENT TREATY BETWEEN THE REPUBLIC OF COLOMBIA AND ______________
Preamble
Preamble
The Government of the Republic of Colombia and the Government of __________________, hereinafter “the Contracting Parties”;
Desiring to intensify economic cooperation for the mutual benefit of both Parties;
Convinced that the pursuit for sustainable development is a joint responsibility for Governments andInvestors, and that both of them are responsible for its achievement;
Seeking to promote and protect foreign investments that favour the prosperity and the sustainabledevelopment of both Parties; whilst
Reaffirming the right of each Contracting Party to regulate the investments made in its Territory toprotect legitimate public welfare objectives such as human rights, health, public order and safety,labour rights and environment;
Have agreed as follows:
Body
Subsection [AA]. SECTION -SCOPE AND DEFINITIONS
Article [##]. Scope of Application
1. This Agreement is applicable to existing Investments at the time of its entry into force, as wellto investments made thereafter in the Territory of a Host Party by investors of the otherContracting Party, in accordance to the law of the Host Party.
2. This Agreement does not bind any Contracting Party in relation to any act or fact that took place, or disputes that may have arisen or have been settled, before the entry into force of this Agreement.
3. Nothing in this Agreement shall bind either Contracting Party to protect investments made with capital or assets derived from, or used in activities deemed illegal pursuant to the Contracting Parties’ laws and regulations.
4. This Agreement shall not apply to any Measure related to taxation.
5. This Agreement shall not apply to public debt operations.
6. This Agreement shall not apply to Measures adopted by any Contracting Party, in accordance with its law, with respect to the financial sector for prudential reasons, including those Measures aimed at protecting investors, depositors, insurance takers, trustees, or in general financial consumers, or to safeguard the integrity and stability of the financial system.
7. This Agreement shall not preclude any right or obligation of any Contracting Party under the Articles of Agreement of the International Monetary Fund.
Article [##]. Definitions
For the purposes of the present Agreement:
Claimant Investor means a Covered Investor acting as claimant during Consultations, or in a judicialor arbitral proceeding commenced pursuant to SECTION [DD]-INVESTOR-STATE DISPUTESETTLEMENT.
Consultations means the first stage of Investor State Dispute Settlement as established by Article [##]-Consultations between the Covered Investor and a Contracting Party and presentation of Notices.
Council means the Bilateral Investment Council as established by Article [##]-Establishment of theBilateral Investment Council.
Covered Investment means, an investment:
a. made in the Territory of a Contracting Party;
b. made, managed and operated in accordance with the law of the Host Party;
c. directly or indirectly owned or effectively controlled by an investor of the other Party; and
d. existing on the date of entry into force of this Agreement, or made or acquired thereafter.
Covered Investor means a National or an Enterprise of a Contracting Party, or a Contracting Party,who owns or effectively controls a Covered Investment in the Territory of the other Contracting Party.
In order to determine the existence of the effective control of an Investment, the following criteriashall be satisfied:
a. The holding of majority ownership or voting rights that allow for a decisive position in, orthe right to select or exercise substantial influence over the selection of, the entity’s managingbodies;
b. The ability to effectively decide and implement the key decisions of the business activity ofan enterprise; and
c. Participation in the day-to-day management of the entity.
Disputing Party means either the Covered Investor or Contracting Party who are either claimant orrespondent in Consultations, or in judicial or arbitral proceeding commenced pursuant to SectionSECTION [DD]-INVESTOR-STATE DISPUTE SETTLEMENT.
Economic Declarations means any official document that reflects financial information declared by the Covered Investor regarding the Covered Investment, in particular those listed in ANNEX 7 Economic Declarations Required by the Contracting Parties.
Enterprise means an entity, whether or not for profit, whether privately or governmentally owned orcontrolled, including corporations, trusts, partnerships, sole proprietorships, joint ventures or anyother kind of association; that has been constituted or organised pursuant to the law of a ContractingParty and has its main seat of operations and substantial business activities in the Territory of suchContracting Party. In order to determine the existence of substantial business activities, the followingcriteria must all be taken into account:
a. The nature and scope of business conducted by the Enterprise, including the amount and typeof clients and contracts, the amount of sales, turnover declared in tax returns, payment of taxes, years of establishment in the Contracting Party;
b. The activities developed in the Home Party’s Territory are similar to those developed by the entity operating in the Host Party’s Territory, or are directly related to the active holding of shares in subsidiaries operating in the Host Party’s Territory;
c. The Enterprise’s employee structure in the Home Party’s Territory (number of employees, share of employees in respect to global operations of the Enterprise who work in the Home Party’s Territory; permanent staff);
d. The continuous physical presence of the Enterprise in the Home Party’s Territory (ownership or rental of premises, costs related to the maintenance of physical location, phone, fax and mailing information offered to clients and third parties for contact with the Enterprise).
Home Party means the Contracting Party from which the Covered Investor is a National in the case of natural persons, or where a Covered Investor that is an Enterprise has been constituted or organised, has its main seat of operations and has substantial business activities.
Host Party means the Contracting Party in whose Territory the Covered Investment is carried out.
ICSID means the International Centre for Settlement of Investment Disputes.
ICSID Convention means the Convention on the Settlement of Investment Disputes between States and Nationals of other States, done at Washington on 18 March 1965.
Investment means:
1. An asset owned or effectively controlled by a Covered Investor that meets the following characteristics:
a. the commitment of capital or other resources;
b. the expectation of gain or profit;
c. an intention to maintain a long term presence in the Host Party; and
d. the assumption of risk for the investor;
and takes one of the forms listed in sub-paragraph 2.
2. Forms that an investment may take are:
a. an enterprise;
b. shares, stocks and other forms of equity participation in an enterprise;
c. bonds, debentures and other debt instruments of an enterprise;
d. a loan to an enterprise;
e. an interest arising from the capital or any other resource made for the development of an economic activity within the Host Party, such as those derived from a contract that entails the presence of the Covered Investor’s property in the Host Party’s Territory, including turnkey or construction contracts, or concessions;
f. intellectual property rights as protected by the Host Party’s legislation; and
g. other forms as identified by the Contracting Parties.
3. Investment does not include claims to money that arise solely from:
a. commercial transactions for the sale of goods or services by natural persons or enterprises in the Territory of one Contracting Party to a natural person or enterprise in the Territory of the other Contracting Party;
b. loans or credits given in connection to a commercial transaction;
c. any order, judgment or arbitral award related to sub-paragraph 3.a and 3.b.
4. Returns that are reinvested shall be treated as investments. Any alteration of the form in whichassets are invested or reinvested does not affect their qualification as Investment provided they comply with the characteristics set forth in sub-paragraph 1 and adopt the forms established in sub-paragraph 2.
National means natural persons who, pursuant to the law of a Contracting Party are considered to be its nationals; and
a. are not Nationals of both Contracting Parties;
b. have acquired the nationality of the Home Party before the Investment was made;
c. have not lost the nationality of the Home Party after the Investment was made.
Measure means any law, regulation, procedure, requirement, act or omission attributable to a Contracting Party pursuant to international law, but does not include draft forms of laws, regulations, procedures or requirements.
Non-Disputing Party means Colombia, when ___________ is a Disputing Party or ___________ when Colombia is a Disputing Party.
Non-Judicial Local Administrative Proceedings has the meaning given to the term in ANNEX 5 Non-Judicial local Administrative Remedies.
Notice of Denial of Benefits means the notice through which a Contracting Party communicates the affected investor and its Home Party the application of Article [##]-Denial of Benefits.
Notice of Dispute means the written notice sent by the Claimant Investor to the Respondent State prior the commencement of Consultations in the terms of Article [##]-Consultations between the Covered Investor and a Contracting Party and presentation of Notices.
Notice of Intent means the written notice sent by the Claimant Investor to the Respondent State when no agreement has been reached through Consultations, prior to the commencement of Judicial or Arbitration Proceedings, in the terms of Article [##]-Consultations between the Covered Investor and a Contracting Party and presentation of Notices.
Respondent State means the Contracting Party acting as Respondent during Consultations, or in a judicial or arbitral proceeding commenced pursuant to SECTION [DD]-INVESTOR-STATE DISPUTE SETTLEMENT.
Returns means the amount yielded by an investment during a specific period of time, in particular, though not exclusively profits, dividends, royalties and interests.
Secretary General means the Secretary General of ICSID; in non-ICSID arbitrations it shall mean the equivalent authority mutatis mutandis.
Territory means:
a. With respect to the Republic of Colombia, its continental and insular territory, including the archipelago of San Andrés, Providencia and Santa Catalina, the Island of Malpelo, and all of the other islands, islets, keys, headlands and shoals that belong to it, and the territorial water and airspace, which are under its sovereignty, as well as the airspace and any maritime and submarine areas outside the territorial water, including their water, sea bed and, sub soil, or any other elements over which it exercises sovereign or jurisdictional rights, in accordance with its Political Constitution, domestic law and applicable international law;
b. With respect to ____________.
Third Party Funding means any funding provided either by natural or legal persons who are not a Disputing Party, and have entered into an agreement with the Claimant Investor in order to finance the cost of the investor-State proceedings, either partially or in whole, by whichever means such as donations, grants, loans, or in return for remuneration contingent on the outcome of the dispute. Third Party Funding does not include cases where the Claimant Investor undergoes insolvency proceedings in the Host Party and the Home Party.
Tribunal means a tribunal established pursuant to SECTION [DD]-INVESTOR-STATE DISPUTE SETTLEMENT.
TRIPS Agreement Means the Agreement on Trade Related Aspects of Intellectual Property which forms Annex 1C of the Marrakesh Agreement Establishing the World Trade Organization and is administered by said organization.
Section [BB]. STANDARDS OF TREATMENT TO COVERED INVESTORS AND INVESTMENTS
Article [##]. Admission of Investments
Each Contracting Party shall admit Investments by investors of the other Contracting Party in their Territory in accordance with its laws and regulations.
Article [##]. National Treatment
1. Each Contracting Party shall grant Covered Investors of the other Contracting Party a treatment no less favourable than that given to its own investors, in like circumstances, with respect to expansion of productive capacity, management and direction, operation, sale and any other forms of disposal of Investments in its Territory.
2. Each Contracting Party shall grant Covered Investments of the other Contracting Party a treatment no less favourable than that given to Investments of its own investors, in like circumstances, with respect to expansion of productive capacity, management and direction, operation, sale and any other forms of disposal of investments in its Territory.
3. The treatment granted by a Contracting Party under paragraphs 1 and 2 means, with respect to a sub-national government, a treatment no less favourable than the most favourable treatment granted, in like circumstances, by that sub-national government to investors, and Investments of investors, of the Contracting Party of which it forms part.
Article [##]. Most-Favoured Nation Treatment
1. Each Contracting Party shall grant to Covered Investors of the other Contracting Party treatment no less favourable than that granted, in like circumstances, to Investors of a non-Party with respect to the expansion of productive capacity, management and direction, operation and sale or other forms of disposal of investments in its Territory.
2. Each Contracting Party shall grant to Covered Investments of the other Contracting Party treatment no less favourable than that granted, in like circumstances, to Investments of investors of a non-Party with respect to the expansion of productive capacity, management and direction, operation and sale or other forms of disposal of Investments in its Territory.
3. The treatment granted by a Contracting Party under paragraphs 1 and 2 means, with respect to a sub-national government, a treatment no less favourable than the most favourable treatment granted, in like circumstances, by that sub-national government to investors, and Investments of investors, of a non-Party.
4. Treatment referred to in paragraphs 1, 2 and 3 does not encompass: definitions, substantive standards of treatment, substantive or procedural obligations, or dispute settlement mechanisms.
Article [##]. General Provision on National Treatment and Most-Favoured Nation Treatment
1. The provisions of this Section referred to as National Treatment and Most-Favourable Nation Treatment shall not be construed so as to bind a Contracting Party to extend to Covered Investors and Investments any benefit, treatment, preference or privilege resulting from any existing or future:
a. Free trade area;
b. Customs union;
c. Common market;
d. Economic union; or
e. Any other kind of economic or regional organisation or international agreement intended at facilitating border trade and investment, which a Contracting Party is or becomes party to.
2. The provisions of this Section referred to as National Treatment and Most Favoured Nation Treatment are not intended to protect Covered Investors and Investments from any Measure that results in differential treatment.
3. The provisions of this Section referred to as National Treatment and Most Favoured Nation Treatment are intended to protect Covered Investors and Investments from nationality-based discriminatory treatment that has a concrete effect on the competition relationship that the Covered Investor or Investment has with other investors and Investments from the Host Party, or third States which enjoy differential treatment based on their nationality.
Article [##]. Fair and Equitable Treatment
1. Each Contracting Party shall grant Covered Investors and Investments of the other Contracting Party a fair and equitable treatment.
2. The fair and equitable treatment granted to Covered Investors and Investments refers solely to the prohibition against:
a. denial of justice in criminal, civil or administrative proceedings;
b. fundamental breach of due process in judicial or administrative proceedings;
c. manifest arbitrariness;
d. targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief; or
e. abusive treatment of investors, such as coercion, duress and harassment.
The Council may review the content of this Article, upon request of a Contracting Party.
3. A determination that there has been a breach of another provision of this Agreement, or any other international obligation owed by the Host Party to the Covered Investor or Investment does not imply that fair and equitable treatment has been breached.
Article [##]. Physical Protection and Security
1. Each Contracting Party shall grant Covered Investors and Investments of the other Contracting Party physical protection and security in accordance with the minimum standard of treatment of customary international law.
2. A Claimant Investor must prove the contents of customary international law, including its elements of State practice and opinio iuris.
3. Physical protection and security does not imply, in any case, greater policing efforts beyond those granted to the inhabitants of the Host Party.
Article [##]. Freedom of Transfers
1. Each Contracting Party, subject to the fulfilment of all requirements under its laws and regulations, and without unjustified delay, shall allow Covered Investors to effect, in a freely convertible currency, transfers of:
a. The principal amount and additional sums necessary for maintaining, increasing and developing their Investment;
b. Returns;
c. Payments pursuant to foreign loans;
d. Funds yielded from settlement of disputes under Section SECTION [DD]-INVESTOR-STATE DISPUTE SETTLEMENT and compensations for expropriations conducted under the conditions established in Article [##]-Compensation arising from an Expropriation;
e. Proceeds from the sale of all or part of the Covered Investment, or from the partial or complete liquidation of the Covered Investment; and
f. Salaries and remunerations received by employees hired overseas in connection with the Covered Investment.
2. Transfers shall be made in conformity with the current market exchange rate at the day of such transfer, in accordance with the law and regulations of the Host Party.
3. Notwithstanding the provisions of this Article, a Contracting Party may condition or prevent a transfer in order to enforce, in a non-arbitrary or discriminatory manner, its laws and regulations concerning compliance and execution of judicial, arbitral or administrative decisions, in particular, though not exclusively related to:
a. Bankruptcy, company restructuring or insolvency proceedings; or
b. Compliance with labour, environmental, human rights and tax obligations.
4. For prudential reasons, a Contracting Party may adopt or maintain Measures not conforming to the obligations under this Article:
a. In the event of serious balance-of-payments and external financial difficulties or threat thereof; or
b. In cases where, in special circumstances, movements of capital cause or threaten to cause serious difficulties for macroeconomic management, in particular, monetary and exchange rate policies; or
c. Aimed at protecting financial investors, depositors, insurance takers, trustees or in general financial consumers, or to safeguard the integrity and stability of the financial system.
5. Measures referred to in paragraph 4 shall:
a. Be consistent with the Articles of Agreement of the International Monetary Fund;
b. Not be excessive, considering the necessity of managing the circumstances set out in paragraph 4; and
c. Be temporary; and shall be reversed as soon as conditions permit.
Article [##]. Expropriation
1. Covered Investments shall not be subject to nationalisations or expropriations, either directly or indirectly (hereinafter, “expropriation”) except when such expropriation is:
a. Adopted for reasons of public purpose or social interest;
b. Made in accordance with due process of law; and
c. Made in a non-discriminatory manner.
In the case of a direct expropriation, such expropriation shall be accompanied by a prompt, adequate and effective compensation under the terms of Article Article [##]-Compensation arising from an Expropriation.
2. Indirect expropriation results from a discriminatory and arbitrary Measure or series of Measures adopted by a Contracting Party that have an equivalent effect to a direct expropriation, without the formal transfer of title or an outright seizure. The determination of the existence of an indirect expropriation requires a case-by-case, fact-based inquiry.
Such determination shall consider:
a. The scope of the Measure, or series of Measures, in question;
b. The character of the Measure, or series of Measures, in particular whether it is adopted for reasons of public purpose or social interest, made in accordance with due process of law and in a non-discriminatory manner; and