Title
COOPERATION AND INVESTMENT FACILITATION AGREEMENT BETWEEN THE FEDERATIVE REPUBLIC OF BRAZIL AND THE CO-OPERATIVE REPUBLIC OF GUYANA
Preamble
PREAMBLE
The Federative Republic of Brazil and the Co-operative Republic of Guyana (hereinafter designated as the "Parties" or individually as "Party"),
Wishing to strengthen and to enhance the bonds of friendship and the spirit of continuous cooperation between the Parties;
Seeking to create and maintain favourable conditions for the investments of investors of a Party in the territory of the other Party;
Seeking to stimulate, streamline and support bilateral investments, thus opening new integration and market opportunities between the Parties;
Recognizing the essential role of investment in promoting sustainable development;
Considering that the establishment of a strategic partnership between the Parties in the area of investment will bring wide-ranging and mutual benefits;
Recognizing the importance of fostering a transparent and friendly environment for investments by investors of the Parties;
Reaffirming their regulatory autonomy and policy space;
Wishing to encourage and strengthen contacts between investors and the Governments of the two Parties; and
Seeking to create a mechanism for technical dialogue and foster government initiatives that may contribute to a significant increase in mutual investment;
Agree, in good faith, to the following Cooperation and Investment Facilitation Agreement, hereinafter referred to as "Agreement", as follows:
Body
Part I. Scope of the Agreement and Definitions
Article 1. Objective
The objective of this Agreement is to promote cooperation between the Parties in order to facilitate and encourage mutual investment, through the establishment of an institutional framework for the management of an agenda for increased investment cooperation and facilitation, rules on the treatment of investments and investors, regulatory measures and dispute prevention, among other instruments mutually agreed on by the Parties.
Article 2. Scope and Coverage
1. This Agreement shall apply to all investments made before or after its entry into force by investors of either Party in accordance with laws and regulations of the other Party in the territory of the latter, but the provisions of this Agreement shall not apply to any dispute or claim, which arose before its entry into force. This will not prevent the Parties from discussing amicably the policy issues regarding the aforementioned disputes or claims that have already been concluded in the Joint Committee established under Article 18 of this Agreement.
2. This Agreement shall not limit the rights and benefits which an investor of a Party enjoys under national or international law in the territory of the other Party.
3. For greater certainty, the Parties reaffirm that this Agreement shall apply without prejudice to the rights and obligations derived from the Agreements of the World Trade Organization.
4. This Agreement shall not prevent the adoption and implementation of new legalrequirements or restrictions in relation to investors and/ or their investments, as long as they are consistent with this Agreement.
5. This Agreement shall not apply to the issuance of compulsory licences granted in relation to intellectual property rights in accordance with the Trade-Related Aspects of Intellectual Property Rights Agreement of the World Trade Organization (TRIPS Agreement) and its Protocol, or to the revocation, limitation or creation of intellectual property rights, to the extent that the issuance, revocation , limitation or creation is consistent with the TRIPS Agreement.
Article 3. Definitions
1. For the purpose of this Agreement:
1.1 Enterprise means:
a) Any entity constituted or organized under applicable law of any of the Parties, carrying out substantial business activities in the territories of the Parties, whether or not for profit, whether privately owned or State -owned, including any corporation, trust, partnership, sole proprietorship or a joint venture;
b) A branch of any such entity established in the territory of a Party in accordance with its law and carrying out business activities there. For greater certainty, the inclusion of a "branch" in the definition of "enterprise" is without prejudice to a Party's ability to treat a branch under its laws and regulations, including specific provisions of the financial sector, as an entity that has no independent legal existence and is not separately organized.
1.2 Host State means the Party where the investment is made.
1.3 Investment means any kind of asset invested by investors of one Party, established or acquired in the territory of the latter Party, that allows, directly or indirectly, the investor to exercise control of the shareholding, or with a significant degree of influence over the management bf the production of goods or provision of services in the territory of the other Party, in accordance with the laws and regulations of each Party, including but not limited to:
a) Shares, stocks, participations and other equity types in an enterprise;
b Movable or immovable property and other property rights such as mortgages, liens, pledges, encumbrances or similar rights and obligations;
c) The rights of exploration, exploitation and use conferred by a license, permit or concession granted and governed by the legislation of the host Party and/or by a contract;
d) Intracompany loans and instruments of debt between a company and its subsidiary;
e) Intellectual property rights as defined or referenced to in the WTO TRIPS Agreement.
For the purposes of this Agreement and for greater certainty, "Investment" does not include:
i) An order or judgment issued as a result of a lawsuit or an administrative process;
ii) Debt securities issued by a Party or loans granted from a Party to the other Party, bonds, debentures, loans or other debt instruments of a State-owned enterprise of a Party that is considered to be public debt under the legislation of that Party;
iii) Portfolio investments, i.e. those that do not allow the investor to exert a significant degree of influence in the management of the enterprise or in another enterprise;
iv) Claims to money that arise solely from commercial contracts for the sale of goods or services by an investor in the territory of a Party to a national or an enterprise in the territory of another Party, or the extension of credit in connection with a commercial transaction, or any other claims to money that do not involve the kind of interests set out in sub-paragraphs (a)-(e) above; and
v) Claims deriving from any expenses or other financial obligations incurred by the investor prior to the establishment of the investment, including in order to comply with the regulations for the admission of foreign capital or other specific limits or conditions, according to the legislation on the admission of investments of the Host Party.
1.4 Investor means:
a) Any natural person of a Party that makes an investment in the territory of the other Party; or
b) Any enterprise, as defined in 1.1, constituted and organized in accordance with the law of a Party, other than a branch, in the territory of that Party and that makes an investment in the territory of the other Party.
1.5 Measure means any measure adopted by a Party, whether in the form of law, regulation, rule, procedure, decision, administrative ruling, or any other form.
1.6 National means a natural person that has the nationality of a Party, according to its laws and regulations.
1.7 Territory means the territory, including its land and aerial spaces, the exclusive economic zone, territorial sea, seabed and subsoil within which the Party exercises its sovereign rights or jurisdiction, in accordance with international law and its internal legislation.
Part II. Regulatory Measures and Risk Mitigation
Article 4. Treatment
1. Based on the applicable rules of international law as recognized by each of the Parties and their respective national law, no Party shall subject investors of the other Party and their investments to measures which constitute:
i) Denial of access to justice in any judicial or administrative proceedings;
ii) Breach of due process;
iii) Targeted discrimination, such as gender, race, religious or political beliefs;
iv) Manifestly abusive treatment, such as coercion, duress and harassment; or
v) Discrimination against investments of investors of the other Party in ensuring the enforcement of the law and the provision of public security.
2. Nothing in this Agreement shall be construed as to prevent a Party from adopting or maintaining affirmative action measures towards vulnerable groups.
3. In line with the principles of this Agreement, each Party shall ensure that all measures that affect investment are administered in a reasonable, objective and impartial manner, in accordance with their respective laws and regulations.
4. For greater certainty, the standards of fair and equitable treatment and full protection and security shall not be used or raised by either Party to this Agreement as a ground for any dispute settlement procedure in relation to the application or the interpretation of this Agreement.
Article 5. National Treatment
1. Without prejudice to the measures in force under its legislation on the date of entry into force of this Agreement, each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
2. Without prejudice to the measures in force under its legislation on the date of entry into force of this Agreement, each Party shall accord to investments of investors of the other Party treatment no less favourable than that it accords, in like circumstances, to investments in its territory of its own investors with respect to the establishment, acquisition, expansion, management, conduct, .operation, and sale or other disposition of investments.
3. Nothing in this Agreement shall be construed as to prevent a Party from amending any measure referred to in paragraphs 1 and 2 of this Article, to the extent that the amendment does not make the measure more discriminatory than it was immediately before the amendment.
4. For greater certainty, whether treatment is accorded in 'like circumstances' depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public interest objectives.
5. For greater certainty, this Article shall not be construed to require any Party to compensate for any inherent competitive disadvantages which result from the foreign character of the investor or investments.
Article 6. Most-favoured-nation Treatment
1. Each Party shall accord to investors of the other Party treatment no less favourable than that it accords, in like circumstances, to investors of any third party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to investments of investors of the other Party treatment no less favourable than that it accords, in like circumstances, to investments in its territory of investors of any third party with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
3. This Article shall not be construed to require a Party to grant to an investor ofanother Party or their investments the benefit of any treatment, preference or privilege arising from:
i) Provisions relating to investment dispute settlement contained in an investment agreement or an investment chapter of any commercial agreement; or
ii) Any agreement for regional economic integration, customs union or common market, of which a Party is a member.
4. For greater certainty, whether treatment is accorded in 'like circumstances' depends on the totality of the circumstances, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public welfare objectives.
Article 7. Direct Expropriation
1. In determining the amount for compensation in case of expropriation, the competent authority of each Party shall follow the provisions of this Article.
2. Each Party shall not nationalize or expropriate investments of investors of the other Party, except:
a) For a public purpose or necessity or when justified as a social interest;
b) In a non-discriminatory manner;
c) On payment of effective compensation (1), according to paragraphs 2 to 4; and
d) In accordance with due process of law.
3. The compensation shall:
a) Be paid without undue delay;
b) Be equivalent to the fair market value of the expropriated investment, immediately before the expropriating measure was adopted ("expropriation date");
c) Not reflect any change in the market value due to the knowledge of the intention to expropriate, before the expropriation date; and
d) Be fully payable and transferable, in accordance to Article 10 of this Agreement.
4. The compensation to be paid shall not be lower than the fair market value on the expropriation date, plus interest that may accrue from the expropriation date until the date of full payment at a rate determined by market criteria, according to the legislation of the host State.
5. The Investor affected by the expropriation shall have a right, under the law of the Party making the expropriation, to prompt review, by a judicial or other independent authority of that Party, of the expropriation case and the valuation of the expropriated investment in accordance with this Agreement and the relevant investment legislation of that Party.
6. For avoidance of doubt, this Article only provides for direct expropriation, where an investment is nationalized or otherwise directly expropriated through formal transfer of title or ownership rights, and does not cover indirect expropriation.
(1) For the avoidance of doubt, where any of the Parties is the expropriating Party , compensation for the expropriation of property may be provided in the form of debt bonds, in accordance with its laws and regulations, and nothing in this Agreement shall give rise to the interpretation that such form of compensation is inconsistent with this Agreement.
Article 8. Compensation for Losses
The investors of a Party whose investments in the territory of the other Party suffer losses due to war or other armed conflict, revolution, state of emergency, insurrection, riot or any other similar events, shall enjoy, with regard to restitution, indemnity or other form of compensation, the same treatment as the latter Party accords to its own investors or the treatment accorded to investors of a third party, whichever is more favourable to the affected investor.
Article 9. Transparency
1. Each Party shall ensure that its laws, regulations, procedures and general administrative resolutions related to any matter covered by this Agreement, in particular regarding access and treatment of investments, qualification, licensing and certification, are published in an official gazette and, when possible, in electronic format, as to allow interested persons of the other Party to become acquainted with them.
2. Each Party shall, as provided for in its laws and regulations:
i) Publish any such investment-related measure that it proposes to adopt; and
ii) Provide interested persons and the other Party a reasonable opportunity to comment on such proposed measures.
3. Whenever possible, each Party shall disseminate this Agreement to their respective public and private financial institutions, responsible for the technical evaluation of risks and the approval of loans, credits, guarantees and related insurances for investment in the territory of the other Party.
Article 10. Transfers
1. Each Party shall allow that the transfer of funds related to an investment be made freely and without undue delay, to and from their territory. The transfers shall be made in a freely convertible currency at the applicable prevailing exchange market rate on the date of the transfer in the territory of the Party accepting the investment, subject to applicable taxes unless otherwise agreed. Such transfers include:
a) The initial capital contribution or any addition thereto in relation to the maintenance or expansion of the investment;
b) Income directly related to the investment, such as profits, interests, capital gains, dividends or "royalties";
c) The proceeds of sale or total or partial liquidation of the investment;
d) The repayments of any loan, including interests thereon, relating directly to the investment;
e) The amount of a compensation in accordance with the provisions of this Agreement.
2. Without prejudice to paragraph 1, a Party may, in an equitable and nondiscriminatory manner and in good faith, prevent a transfer if such transfer is prevented under its laws relating to:
a) Bankruptcy, insolvency or the protection of the rights of creditors;
b) Criminal infractions;
c) Financial reports or maintenance of transfers' registers when necessary to cooperate with law enforcement or with financial regulators; or
d) The guarantee for the enforcement of decisions in judicial or administrative proceedings.
3. Nothing in this Agreement shall be construed as to prevent a Party from adopting or maintaining temporary restrictive measures in respect of payments or transfers for current account transactions in the event of serious difficulties in the balance of payments and external financial difficulties or threat thereof.
4. Nothing in this Agreement shall be construed as to prevent a Party from adopting or maintaining temporary restrictive measures in respect of payments or transfers related to capital movements:
a) In the case of serious difficulties in the balance of payments or external financial difficulties or threat thereof; or
b) Where, in exceptional circumstances, payments or transfers from capital movements generate or threaten to generate serious difficulties for macroeconomic management .
5. The adoption of temporary restrictive measures to transfers if there are serious difficulties in the balance of payments in the cases described in paragraphs 3 and 4, must be nondiscriminatory and in accordance with the Articles of the Agreement of the International Monetary Fund and other international agreements governing the transfer of funds, to which both Parties are signatories.
Article 11. Tax Measures
1. Subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on investors of the other Party or their investments, nothing in this Agreement shall apply to tax measures.
2. For greater certainty, nothing in this Agreement shall:
a) Affect the rights and obligations of the Parties arising out of any agreement to avoid double taxation, current or future, of which a Party to this Agreement is a party or becomes a party; or
b) Shall be construed so as to avoid the adoption or enforcement of any measure aimed at ensuring the equitable or effective imposition or collection of taxes, according to the legislation of the Parties.
Article 12. Prudential Measures
1. Nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining prudential measures, such as:
a) The protection of investors, depositors, financial market participants, policyholders, policy-claimants, or persons to whom a fiduciary duty is owed by a financial institution;
b) The maintenance of the safety, soundness, integrity or financial responsibility of financial institutions; and
c) Ensuring the integrity and stability of a Party's financial system.
2. Where such measures do not conform to the provisions of this Agreement, they shall not be used as a means of circumventing the commitments or obligations of the Party under this Agreement.
Article 13. Security Exceptions
1. Nothing in this Agreement shall be construed to prevent a Party from adopting or maintaining measures aimed at preserving its national security or public order, or to apply the provisions of their criminal laws or comply with its obligations regarding the maintenance of international peace and security in accordance with the provisions of the United Nations Charter and other relevant international agreements to which the Parties are members.
Article 14. Compliance with Domestic Legislation
1. The Parties reaffirm and recognize that:
a) Investors and their investments shall comply with all laws, regulations, administrative guidelines and policies of a Party concerning the establishment, acquisition, management, operation and disposition of investments.
b) Investors and their investments shall not, either prior to or after the establishment of an investment, offer, promise, or give any undue pecuniary advantage, gratification or gift whatsoever, whether directly or indirectly, to a public servant or official of a Party as an inducement or reward for doing or forbearing to do any official act or obtain or maintain other improper advantage nor shall be complicit in inciting, aiding, abetting, or conspiring to commit such acts.
c) An investor shall, thoroughly and accurately, provide such information as the Parties may require, under the applicable legislation, concerning the investment in question and the corporate history and practices of the investor, for purposes of decision making in relation to that investment or solely for statistical purposes.
Article 15. Corporate Social Responsibility
1. Investors and their investment shall strive to achieve the highest possible level of contribution to the sustainable development of the Host State and the local community, through the adoption of a high degree of socially responsible practices, based on the voluntary principles and standards set out in this Article.
2. The investors and their investment shall endeavour to comply with the following voluntary principles and standards for a responsible business conduct and consistent with the laws adopted by the Host State receiving the investment:
a) Contribute to the economic, social and environmental progress, aiming at achieving sustainable development;
b) Respect the internationally recognized human rights of those involved in the enterprises' activities;
c) Encourage local capacity building through close cooperation with the local community;
d) Encourage the creation of human capital, especially by creating employment opportunities and offering professional training to workers;
e) Refrain from seeking or accepting exemptions that are not established in the legal or regulatory framework relating to human rights, environment, health, security, work, tax system, financial incentives, or other issues;
f) Support and advocate for good corporate governance principles, and develop and apply good practices of corporate governance;
g) Develop and implement effective self-regulatory practices and management systems that foster a relationship of mutual trust between the enterprises and the societies in which its operations are conducted;
h) Promote the knowledge of and the adherence to the corporate policy by workers, through appropriate dissemination of this policy, including programmes for professional training;
i) Refrain from discriminatory or disciplinary action against employees who submit grave reports to the board or, whenever appropriate, to the competent public authorities, about practices that violate the law or corporate policy;
j) Encourage, whenever possible, business associates, including service providers and outsources, to apply the principles of business conduct consistent with the principles provided for in this Article; and
k) Refrain from any undue interference in local political activities.
Article 16. Investment Measures and Combating Corruption and Illegality
1. Each Party shall maintain measures to prevent and fight corruption, money laundering and terrorism financing with regard to matters covered by this Agreement, in accordance with its laws and regulations.
2. Nothing in this Agreement shall require any Party to protect investments made with capital or assets of illicit origin or investments in the establishment or operation of which illegal acts have been demonstrated to occur and for which national legislation provides asset forfeiture.