Title
Agreement between the Government of the Republic of Peru and the Government of the Republic of Colombia on reciprocal promotion and protection of investments
Preamble
The Republic of Peru and Colombia, hereinafter the "Parties",
Recognizing that the promotion and protection of investments of investors of a Party in the territory of the other party contribute to stimulate business activity as may be mutually supportive and develop economic cooperation between the parties and to promote sustainable development,
Recognizing the regulatory capacity of the States,
Have agreed as follows:
Body
Section A. Substantive Obligations
Article 1. Scope and Coverage (1)
1. This agreement shall apply to measures adopted or maintained by a Party relating to:
(a) The investors of another party;
(b) Covered investments; and
As regards articles 6 (performance requirements) and 9 (measures on health, safety and environment), all investments in the territory of the Party
2. The obligations of a party under this section shall apply to a State enterprise or other person when it exercises this any regulatory authority, administrative or other governmental authority delegated to it by that Party, such as the authority to expropriate, licensing, approve or commercial transactions; impose quotas or other charges and fees;
3. For greater certainty, the provisions of this Agreement do not bind a party in relation to any act or fact that took place or any situation that ceased to exist before the date of Entry into Force of this agreement for that Party
4. Nothing in this Agreement shall be construed to impose an obligation on a party to privatise any investment that owns or controls, or to prevent a party from designating a monopoly, provided that if a Party update or maintains a measure to privatize such investment or a measure to designate a monopoly, this Agreement shall apply to the measure;
5. Nothing in this Agreement shall require any party to protect investments made with capital or assets derived from illegal activities, and shall not be interpreted in a sense to forgive a Party to adopt or keep measures to preserve the public order, to keep or restore the international peace and security or the protection of its own security essential interests
6. The requirement by a party that a service provider of the other party constitute a security or other form of financial security as a condition of providing a trans-frontier service, does not in itself "which this Agreement applies to measures adopted or maintained by the Party relating to the cross-border supply of the service. This Agreement shall apply to measures adopted or maintained by the Party relating to the bond or financial security to the extent that such bond or financial security is a covered investment.
(1) For greater certainty, this agreement is subject to and will be interpreted according to Annexes A to G, according to the references, that will be done in each article of this Agreement
Article 2. National Treatment
1. Each Party shall accord to investors of the other party treatment no less favourable than that accorded in like circumstances to its own investors with respect to the establishment, expansion and acquisition, management, leadership "operation and sale or other disposition of investments in its territory,
2. Each party shall accord to covered investments favourable treatment no less that it accords, in like circumstances, to its own investments of investors with respect to the establishment, expansion and acquisition, administration, management, operation and sale or other disposition of the investments in its territory.
Article 3. Most Favoured Nation Treatment
1. Each Party shall accord to investors of the other party treatment no less favourable than that accorded in like circumstances to investors of a non-party with respect to the establishment, expansion and acquisition, administration, management, operation and sale or other disposition of investments in its territory.
2. Each party shall accord to covered investments treatment no less favourable than that it accords, in like circumstances, to investments from investors of a country that is not a party with respect to the establishment, expansion and acquisition, administration, management, operation and sale or other disposition of investments in its territory.
3. For greater certainty, treatment with regard to the establishment, expansion and acquisition, administration, management, operation and sale of investments or other disposition referred to in paragraphs 1 and 2 does not include dispute settlement mechanisms as listed in sections B (STA investment - State dispute settlement and (c) Settlement of Disputes State - State), that are provided for in international trade treaties or agreements.
Article 4. Minimum Standard of Treatment (2)
1. Each Party shall accord to a covered investment into in accordance with customary international law, including Fair and Equitable Treatment and full protection and security.
2. For greater certainty, paragraph 1 prescribes that the minimum standard of treatment of aliens as the Customary International Law minimum standard of treatment that may be provided to covered investments. The concepts of Fair and Equitable Treatment and full protection and security do not require an additional treatment or a treatment beyond those required by that standards and does not create significant additional rights. The obligation to provide in paragraph 1:
(a) "Fair and Equitable Treatment includes the obligation not to deny justice in criminal, civil or administrative proceedings, in accordance with the principle of due process embodied in the principal legal systems of the world; and
(b) "Full Protection and Security" requires each party to provide the level of police protection that is required by the International Law.
3. A determination that there has been a breach of another provision of this Agreement or another international agreement separately, does not establish that there has been a violation of this article.
(2) For greater certainty, article 4 will be interpreted in accordance with Annex A
Article 5. Senior Executive Boards and Temporary Entry
1. No party may require that a company of such delivery, that is a natural person covered investment to appoint a particular nationality to fulfil senior positions.
2. A Party may require that a majority of the members of the Boards or any committee, of an enterprise from which it is Party that is a covered investment, be of a particular nationality or resident in the territory of the Party provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.
3. Subject to its laws, regulations and policies relating to the entry of aliens, each Party shall grant temporary entry to nationals of the other party that are:
(a) Investors; or
(b) Employed by an investor of the other party who seek to render services to an investment of that investor in the territory of the delivery, in charge of management and / or executive or requiring with specialized knowledge.
Article 6. Performance Requirements
1. No Party may, in relation to the establishment, expansion and acquisition, administration, management, operation and sale or other disposition of an investment of an investor of a party or of a non-party in its territory impose or enforce any requirement or enforce any obligation or commitment (3):
(a) To export a given level or percentage of goods or services;
(b) To achieve a given level or percentage of the national content;
(c) To purchase, to use or grant preference to the goods produced in its territory or to purchase goods from persons in its territory;
(d) To link in any way the volume or value of the imports to the volume or value of the exports, or with the amount of inflows associated with that investment;
(e) To restrict the sell in their territory of the goods and services that the investment produces or provides, linking investment or in any way the volume or value of its exports or foreign exchange generating jointly;
(f) To transfer a particular technology, a production process or other knowledge of their property to any person in its territory except when the requirement is imposed or the obligation or the commitment is required by a court or administrative authority or other competent authority, to remedy a violation of competition laws or to act not contrary to other provisions of this Agreement
(g) to supply exclusively from the territory of a party the merchandise that it produces or the services that provide for a specific regional market or to the world market.
2. A measure that requires an investment to use technology to meet the general regulations applicable to health, safety or environment, shall not be considered inconsistent with paragraph 1(f)
3. Paragraph 1 (f) does not apply when a Party authorizes use of an intellectual property right in accordance with article 31 (4) of the TRIPS Agreement or to measures requiring the disclosure of proprietary information that fall within the scope of and are consistent with article 39 of the TRIPS Agreement.
4. For greater certainty, nothing in paragraph 1 shall be construed to prevent a Party concerning the establishment, acquisition, expansion, administration, management, operation or sale or other disposition of a covered investment or an investment of an investor of a country that is not a party in its territory, impose or enforce any requirement or enforce a commitment or obligation to train workers in its territory.
5. Neither party may condition the receipt of an advantage or continued receipt of an advantage in connection with the establishment, acquisition, expansion, administration, management, operation and sale or other disposition of an investment in its territory by an investor of a party or of a country that is not a party to comply with any of the following requirements:
(a) To achieve a given level or percentage of domestic content;
(b) To purchase, use or grant preferences to goods produced in its territory or to purchase goods from persons in its territory;
(c) To link, in any way, the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment; or
(d) To restrict the sales in its territory of goods or services that such investment produces or provides, relating in any way those sales to the volume or value of its exports or profits generated in foreign currencies
6. Nothing in paragraph 5 shall be construed as preventing a Party to condition the receipt of an advantage or keep receiving an advantage in connection with an investment in its territory by an investor of a party or of a country that is not a party, to the compliance with a requirement to locate production, provides services, train or employ workers, construct or extend particular facilities or carry out research and development in its territory.
7. Paragraphs 1 and 5 shall not apply to any requirement other than the commitment, obligation or requirements set out in those paragraphs.
8. Provisions of:
(a) Paragraphs (1)(a), (b) and (c), and (5) (a) and (b) do not apply to the qualification requirements for goods or services with regard to advocacy programmes to exports and foreign aid programs.
(b) Paragraph (5)(a) and (b) do not apply to requirements imposed by an importing party relating to the content of goods necessary to qualify for preferential tariffs or fees.
9. Provided that such measures are not applied in an arbitrary or unjustifiable and provided that such measures do not constitute a disguised restriction on international trade or investment, nothing in paragraphs 1 (b), (c) and (f), and 2 (a) and (b) shall be construed to prevent a party to undertakes to maintain environmental measures including those of environmental nature:
(i) Necessary to secure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;
(ii) Necessary to protect human life or health, animal or plant; or
(iii) Relating to the preservation of non-renewable natural resources whether living or not.
10. Paragraphs 1 (b), (c), (f) and (g), and (2)(a) and (b) do not apply to government procurement.
11. This article does not preclude enforcement of any commitment, obligation or requirement between private entities, when a party did not impose or require the commitment, obligation or requirement.
(3) For greater certainty, a condition for the receipt or continued receipt of an advantage under paragraph 5 does not constitute an "obligation or compromise" for the purposes of paragraph 1
(4)The reference to article 31 includes the Footnote 7 of article 31.
Article 7. Non-conforming Measures (5)
1. Articles 2 (National Treatment), 3 (most-favoured-nation treatment), 5 (high executive boards, board of directors and temporary entry) and 6 (performance requirements) shall not apply to:
(a) Any Non-Conforming Measure existing or maintained by a Party in:
(i) The national level of Government as set out by that party in its schedule in Annex I, or
(ii) A local level of the Government (6);
(b) The continuation or prompt renewal of any Non-Conforming Measure referred to in subparagraph (a); or
(c) Any modification of any Non-Conforming Measure referred to in the Non-Conforming Measure subparagraph (a) provided that such modification does not decrease the conformity level of the measure, as it was in force immediately before the amendment with articles 2 (National treatment ); 3 (most-favoured-nation treatment), 5 (senior management and boards of directors and entry and temporary) and 6 (performance requirements).
2. Articles 2 (National Treatment), 3 (most-favoured nation), 5 (senior management and boards and temporary entry) and 6 ( performance requirements) shall not apply to any measure that adopts or maintains a Party with respect to the guiding subsectors or activities as set out in its schedule to Annex II.
3. With regard to intellectual property rights, a Party may derogate from articles 2 (National Treatment) and 3 (Most Favoured Nation Treatment) in a manner that is consistent with the WTO Agreement.
4. Neither party may require under any measure adopted after the date of entry into force of this Agreement and covered by its Annex II, to an investor of the other party, by reason of their nationality, to sell or otherwise dispose of an existing investment when it enter into force
5. The provisions of articles 2 (National Treatment), 3 (Most Favored Nation Treatment) and 5 (senior management, boards of directors and temporary entry) shall not apply to subsidies or grants provided by a party, including loans, guarantees and insurance, supported by the government, or governemnt procurement.
6. Nothing in this Agreement shall be construed to prevent a party including its public entities, provides or lead exclusively in its territory activities or services forming part of a retirement plan or delivery of public social security system established by law. Annex B lays down the understanding of the Parties on certain activities or services referred to in this paragraph.
7. Dissenting listed measures relating to financial subjects are related only to investment in financial services. For greater certainty, this Agreement shall in no way restrict the ability of each party to adopt or maintain measures with respect to the supply of financial services under the modes of supply detailed in subparagraphs 2 (a), (b) and (d) of article 1 of the GATS,
(5) for greater clarity, paragraph 1 and 2 of this article will be interpreted in accordance with article 39 (Andean Community relationship).
(6) for greater clarity, in the case of Colombia the "departmentos" are party of the local level of government; and, in the case of Peru the "regiones" form part of a local level of government.
Article 8. General Exceptions
1. Subject to the requirement that the following measures are not applied in a manner that constitutes arbitrary discrimination between or among injustifiable investments or investors, or a disguised restriction on international trade or investment, nothing in this Agreement shall be interpreted as a means of avoiding a Party to adopt or enforce the necessary measures:
(a) To protect the life or health of humans, animals or plants;
(b) In order to ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement; or
(c) To conserve alive natural resources and non-living exhaustible.
2. Nothing in this Agreement shall be construed as a means of avoiding a party adopting or maintaining reasonable measures for prudential reasons, such as;
(a) The protection of investors, depositors, savers, financial market participants, the insured, applicants or holders of policy, or persons to whom a fiduciary duty is owed by a financial them;
(b) The maintenance of security, soundness, soundness, integrity, or financial responsibility of financial institutions; and
(c) To ensure the integrity and stability of the financial system of a party.
3. Nothing in this Agreement shall apply to the non-discriminatory measures of general application taken by any public entity in pursuit of monetary and credit policies or exchange rate policies. This paragraph shall not affect a Party obligations under article (or performance requirements) or Article 12 (transfers), without prejudice of Annex D (transfers)
4. Nothing in this Agreement shall be construed as a way.
a) To require the parties to facilitate or allow access to any information which disclosure would be contrary to its essential security interests;
b) To avoid actions that it considers necessary for the protection of its essential security interests:
(i) Relating to the traffic of weapons, ammunitions and implements of war and the traffic and transactions of other goods, materials, technology and services undertaken directly or indirectly for the purpose of being supplied to a military establishment or security,
(ii) Issued in time of war or other emergency or in international relations, o
(iii) related to the implementation of national policies or international agreements on the Non-Proliferation of Nuclear Weapons or other nuclear explosive devices; or
c) To block the parties to adopt measures in compliance with their obligations under the Charter of the United Nations for the maintenance of peace and international securities.
5. Nothing in this Agreement shall be construed as requiring a party to facilitate or allow access to information wich disclosure will impede the enforcement of the law or would be contrary to the Law of the party that protects the confidential information, personal privacy or the confidentiality of financial affairs and the accounts of the individual customers of financial institutions
6. Any measure adopted by a Party in accordance with a decision, extended or modified by the World Trade Organization pursuant to Articles IX.3 or IX of the WTO Agreement shall also be considered in accordance with this agreement. An investor asserts that act in accordance with section B (investor - State dispute settlement) of this Agreement may not claim that such a conforming measure is contrary to this Agreement.
7. If a Party experiences serious difficulties in their balance of payments and external financial or a threat of these, or has the risk of them, may adopt or keep restrictive measures in relation to the payments and movement of capital, including those associated with the investment;.
8. The Parties shall endeavor to avoid the application of restrictive measures mentioned in paragraph 7.
9. The restrictive measures adopted or maintained under this article shall not been discriminatories and of a limited duration and they should not be beyond what is necessary to remedy the balance of payment's situation and the external financing. They shall be in accordance with the conditions established in the Agreements of the WTO and consistent with the agreement or constitutive convention of the International Monetary Fund, as appropriate
10. The Party that maintained or have adopted restrictives measures, or any modification of these, will report to the other Party without delay and will present, when it is possible, a calendar for their removal.
11. The Party that applies restrictive measures will initiate without delay under the framework of the commission constituted pursuant article 37 (Commission). During these consultations the balance of payments situation of the Party will be evaluated and the restrictions adopted or kept under paragraph 7, taking into account, other factors, such as:
(a) The nature and the scope of the scope of the external financial difficulties and balance of payments;
(b) The external economic and trading environment of the Party subject to consultations;
(c) Other possible alternative corrective measures which may be applied.
12. The conformity of any restrictive measure with paragraphs 9 and 10 will be examined during the consultations. It shall accept all fact findings of statistics related to the statistics or different order that the International Monetary Fund submit on exchange issues, monetary reserves and balance of payments and the conclusions shall be based on the assessment made by the Fund of the external financial situation and the balance of payments of a party subject to consultations
Article 9. Measures on Health, Safety and Environmental
1. The Parties recognize that it is inappropriate to encourage investment by relaxing on health, safety or environmental national measures. Consequently, a Party shall not fail to apply or relax, or shall not offer to waive or relax such measures as an encouragement of the establishment, expansion or retention in its territory of an investment of an investor. If a party considers that the other party has offered such type of incentive, it may request consultations with the other Party in accordance with article 35 (consultations).
2. Nothing in this Agreement shall be construed as preventing a party to adopt or maintain any measure otherwise consistent with this Agreement that it considers appropriate to ensure that investment activity in its territory is undertaken, taking into account environmental concerns.
Article 10. Treatment In Case of Dispute
1. Without prejudice to provisions under article 7.5 (Non-conforming measures) , each Party shall accord to investors of the other party and to covered investments, non-discriminatory treatment with respect to any measures it adopts or maintains relating to losses suffered by investments in its territory as a result of armed conflict or civil strifes.
2. Paragraph 1 does not apply to existing measures relating to subsidies or grants that would be inconsistent with the provisions of article 2 (National Treatment), with the exception of article 7.5 (Non-conforming measures)
Article 11. Expropriation and Compensation (7)
1. Neither party will nationalize or expropriate a covered investment, either directly or indirectly, through equivalent measures to expropriation or nationalization (expropriation), except:
In the case of Colombia, for public purpose or social interest,
In the case of Peru, by public need or national security,
In accordance with due process of law and article 4 (minimum standard of treatment), in a non-discriminatory manner and on payment of a prompt, effective and adequate compensation.
2. The compensation shall be paid without delay and shall be fully realized and freely transferable. Such compensation will be equivalent to the value of the expropriated investment immediately before the expropriation takes place (date of expropriation), and shall not reflect any change in value occurring because the intended expropriation had become known earlier.
3. If the fair market value is denominated in a free use of currency, the compensation referred to in paragraph 1 shall be no less than the fair market value on the date of expropriation, plus interest at a reasonable comercially rate 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 of free use, the compensation referred to in paragraph 1 - converted into the currency of payment at the market rate of exchange prevailing on the date of payment - shall be no less than:
(a) The fear market value on the date of expropriation, in a currency of free use, at the market exchange rate prevailing on that date; plus
(b) Interests at a reasonable commercial rate for this currency of free use, accrued from the date of expropriation until the date of payment.
5. The investor affected shall have a right under the law of the executing Party of the expropriation, to prompt review of their case by a judicial or other independent authority of that Party, and a valuation of its investment in accordance with the principles set out in this article,
6 The provisions of this article shall not apply to the issuance of Compulsory Licenses granted in relation to intellectual property rights, limitation, revocation or creation of Intellectual Property Rights in the extent that such issuance, revocation, limitation or creation is consistent with the TRIPS Agreement.
(7) For further certainty, Article 11.1 will be interpreted according to the provisions in Annex C (Expropriation) related to the explanation of the indirect expropriation.
Article 12. Transfers (8)
1. Each Party shall permit all transfers relating to a covered investment to be made freely and without delay into and within its territory. Such transfers include:
(a) Contributions of capital;
(b) Profits, dividends, interests, capital gains, payment of royalties, fees, management technical assistance and other fees; returns and other amounts derived from the investment;
(c) Products derived from the sale or liquidation of all or part of the covered investment;
(d) Payments made under a contract entered into by the investor or investment covered the including a loan agreement:
(e) Payments made pursuant to paragraph 1 of articles 10 (treatment in case of disputes) and 11 (Expropriation and Compensation); and
(f) Payments arising out of the application of section B (investor - State dispute settlement).
2. Each Party shall permit transfers relating to a covered investment to be made in a currency of free use at the rate of exchange prevailing on the market in the date of transfer
3. Without prejudice to paragraphs 1 and 2, a Party may prevent a transfer through an equitable, non-discriminatory and in good faith application to its laws relating to:
(a) Bankruptcy or insolvency or the protection of the rights of creditors;
(b) Issuance, trade or operations of securities and futures, options or derivatives;
(c) Criminal offences;
(d) Financial reports or maintenance of transfer records when necessary to assist law enforcement or with the regulated financial authorities; and
(e) Ensuring compliance with orders or awards rendered in judicial or administrative proceedings.
4. Without prejudice to the prescribed under paragraphs 1 and 2, a Party may prevent or limit transfers by a financial institution to or for the benefit of an affiliate of related to such person or institution through the fair implementation, non-discriminatory and in good faith of measures relating to maintenance of security, integrity, responsibility or financial soundness of financial institutions.
5. Without prejudice to paragraph 1, a party may restrict transfers in kind in circumstances where it could restrict transfers under the WTO Agreement and as set out in paragraph 3.
(8) For further certainty, Article 12 will be subject to Annex D (Transfers).