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A G R E E M E N T

BETWEEN THE REPUBLIC OF AUSTRIA AND

Preamble

THE REPUBLIC OF GUATEMALA FOR

THE PROMOTION AND PROTECTION OF INVESTMENTS

The Republic of Austria and the Republic of Guatemala hereinafter referred to as "Contracting Parties",

Desiring to create favourable conditions for greater economic co-operation between the Contracting Parties,

Recognising that the promotion and protection of investments may strengthen the readiness for such investments and hereby make an important contribution to the development of economic relations,

Reaffirming their commitment to the observance of internationally recognised labour standards,

Have agreed as follows:

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Chapter ONE. General Provisions

Article 1. Definitions

For the purpose of this Agreement

1. "investor of a Contracting Party means:

A natural person having the nationality of a Contracting Party in accordance with its applicable law or an enterprise constituted or organised under the applicable law of a Contracting Party making or having made an investment in the other Contracting Party's territory.

2. "investment by an investor of a Contracting Party" means every kind of asset in the territory of one Contracting Party, owned or controlled, directly or indirectly, by an investor of the other Contracting Party, including:

a) an enterprise;

b) shares, stocks and other forms of equity participation in an enterprise as referred to in subparagraph a), and rights derived therefrom;

c) bonds, debentures, loans and other forms of debt and rights derived therefrom;

d) any right whether conferred by law or contract, including turnkey contracts, concessions, licenses, authorisations or permits to undertake an economic activity;

e) claims to money and claims to performance pursuant to a contract having an economic value;

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f) intellectual property rights as defined in the multilateral agreements concluded under the auspices of the World Intellectual Property Organisation, including industrial property rights, copyright, trademarks, patents, industrial designs and technical processes, know-how, trade secrets, trade names and goodwill;

g) any other tangible or intangible, movable or immovable property, or any other rights in rem such as leases, mortgages, liens, pledges or usufructs.

Commercial transactions designed exclusively for the sale of goods or services and credits to finance commercial transactions with a duration of less than three years, other credits with a duration of less than three years as well as credits granted to the State or to a State enterprise are not considered an investment.

However, this shall not apply to credits or loans provided by an investor of a Contracting Party to an enterprise of the other Contracting Party which is owned or controlled by that investor.

3. "enterprise means a legal person or any entity constituted or organised under the applicable law of a Contracting Party, whether or not for profit, and whether private or government owned or controlled, including a corporation, trust, partnership, sole proprietorship, branch, joint venture or association or organisation.

4. "returns" means the amounts yielded by an investment and, in particular, profits, interests, capital gains, dividends, royalties, license fees and other fees.

5. "without delay means such period as is normally required for the completion of necessary formalities for the payments of compensation or for the transfer of payments. This period shall commence for payments of compensation on the

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Day of expropriation and for transfers of payments on the day on which the request for transfer has been submitted.

6. "territory" means with respect to each Contracting Party the land territory, internal waters, maritime and airspace under its sovereignty, including the exclusive economic zone and the continental shelf where the Contracting Party exercises, in conformity with international law, sovereign rights and jurisdiction.

Article 2. Promotion and Admission of Investments

1. Each Contracting Party shall, according to its laws and regulations, promote and admit investments by investors of the other Contracting Party.

2. The legal extension, alteration or transformation of an investment is to be considered a new investment. Any alteration of the form in which assets are invested or reinvested shall not affect their character as an investment provided that such alteration is in accordance with the laws and regulations of the Contracting Party in whose territory the investment was made.

Article 3. Treatment of Investments

1. Each Contracting Party shall accord to investments by investors of the other Contracting Party fair and equitable treatment and full protection and security.

2. A Contracting Party shall not impair by unreasonable or discriminatory measures the management, operation, maintenance, use, enjoyment, sale and liquidation of an investment by investors of the other Contracting Party.

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3. Each Contracting Party shall accord to investors of the other Contracting Party and to their investments treatment no less favourable than that it accords to its own investors and their investments or to investors of any third country and their investments with respect to the management, operation, maintenance, use, enjoyment, sale and liquidation of an investment, whichever is more favourable to the investor.

4. No provision of this Agreement shall be construed as to oblige a Contracting Party to extend to the investors of the other Contracting Party and to their investments the present or future benefit of any treatment, preference or privilege resulting from:

a) any membership in a free trade area, customs union, common market, economic community or any multilateral agreement on investment;

b) any international agreement, international arrangement or domestic legislation regarding taxation.

Article 4. Transparency

1. Each Contracting Party shall promptly publish, or otherwise make publicly available, its laws, regulations, procedures as well as international agreements which may affect the operation of the Agreement.

2. Each Contracting Party shall promptly respond to specific questions and provide, upon request, information to the other Contracting Party on matters referred to in paragraph 1.

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3. No Contracting Party shall be required to furnish or allow access to information concerning particular investors or investments the disclosure of which would impede law enforcement or would be contrary to its laws and regulations protecting confidentiality.

Article 5. Expropriation and Compensation

1. A Contracting Party shall not expropriate or nationalise directly or indirectly an

Investment of an investor of the other Contracting Party or take any measures

Having equivalent effect (hereinafter referred to as "expropriation) except:

a) on a purpose which is in the public interest,

b) on a non-discriminatory basis,

c) in accordance with due process of law, and

d) accompanied by payment of prompt, adequate and effective compensation in accordance with paragraphs 2 and 3 below.

2. Compensation shall:

a) be paid without delay. In the event that the payment of compensation is delayed, such compensation shall be paid in an amount which would put the investor in a position no less favourable than the position in which he would have been had the compensation been paid immediately on the date of expropriation.

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b) be equivalent to the fair market value of the expropriated investment immediately before the expropriation occurred. The fair market value shall not reflect any change in value occurring because the expropriation had become publicly known earlier.

c) be paid and made freely transferable to the country designated by the claimants concerned and in the currency of the country of which the claimants are nationals or in any freely convertible currency accepted by the claimants,

d) include interest at a commercial rate established on a market basis for the currency of payment from the date of expropriation until the date of actual payment.

3. Due process of law includes the right of an investor of a Contracting Party which claims to be affected by expropriation by the other Contracting Party to prompt review of its case, including the valuation of its investment and the payment of compensation in accordance with the provisions of this Article by a judicial authority or another competent and independent authority of the latter Contracting Party.

Article 6. Compensation for Losses

An investor of a Contracting Party who has suffered a loss relating to its investment in the territory of the other Contracting Party due to war or to other armed conflict, state of emergency, revolution, insurrection, civil disturbance, or any other similar event, or acts of God or force majeure, in the territory of the latter Contracting Party, shall be accorded by the latter Contracting Party, as regards restitution, indemnification, compensation or any other settlement, treatment no less

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Favourable than that which it accords to its own investors or to investors of any third state, whichever is most favourable to the investor.

Article 7. Transfers

1. Each Contracting Party shall guarantee that all payments relating to an investment by an investor of the other Contracting Party may be freely transferred into and out of its territory without delay. Such transfers shall include, in particular:

a) the initial capital and additional amounts to maintain or increase an investment;

b) returns;

c) payments made under a contract including a loan agreement;

d) proceeds from the sale or liquidation of all or any part of an investment;

e) payments of compensation under Articles 5 and 6;

f) payments arising out of the settlement of a dispute;

g) earnings and other remuneration of personnel engaged from abroad in connection with an investment.

2. Each Contracting Party shall further guarantee that such transfers may be made in a freely convertible currency at the market rate of exchange prevailing

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On the date of transfer in the territory of the Contracting Party from which the transfer is made.

3. In the absence of a market for foreign exchangethe rate to be used shall be the most recent exchange rate for conversion of currencies into Special Drawing Rights.

4. Notwithstanding paragraphs 1 to 3 a Contracting Party may prevent a transfer through the equitable, non-discriminatory and good faith application of measures to protect the rights of creditors, relating to or ensuring compliance with laws and regulations on the issuing, trading and dealing in securities, futures and derivatives, reports or records of transfer, or in connection with criminal offences and orders or judgements in administrative and adjudicatory proceedings, provided that such measures and their application shall not be used as a means of avoiding the Contracting Party's commitments or obligations under this Agreement.

Article 8. Subrogation

If a Contracting Party or its designated agency makes a payment under an indemnity, guarantee or contract of insurance against non-commercial risks given in respect of an investment by an investor in the territory of the other Contracting Party, the latter Contracting Party shall recognise the assignment of any right or claim of such investor to the former Contracting Party or its designated agency and the right of the former Contracting Party or its designated agency to exercise by virtue of subrogation any such right or claim to the same extent as its predecessor in title. As regards the transfer of payments to the Contracting Party concerned by virtue of such assignment, Articles 5, 6 and 7 of the present Agreement shall apply mutatis mutandis. However, in case of a dispute, only the investor or a designated

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Agency organised under private law may initiate, or participate in proceedings before a national tribunal or submit the case to international arbitration in accordance with the provisions of Part One of Chapter Two of this Agreement.

Article 9. Other Obligations

1. Each Contracting Party shall observe any obligation it may have entered into with regard to specific investments by investors of the other Contracting Party.

2. If the laws of either Contracting Party or obligations under international law existing at present or established hereafter between the Contracting Parties in addition to the present Agreement contain rules, whether general or specific, entitling investments by nationals or enterprises of the other Contracting Party to a treatment more favourable than is provided for by the present Agreement, such rules shall to the extent that they are more favourable prevail over the present Agreement.

Article 10. Denial of Benefits

A Contracting Party may deny the benefits of this Agreement to an investor of the other Contracting Party and to its investments, if investors of a Non-Contracting Party own or control the first mentioned investor and that investor has no substantial business activity in the territory of the Contracting Party under whose law the investment is constituted or organised.

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Chapter TWO.

"DISPUTE SETTLEMENT PART ONE: SETTLEMENT OF DISPUTES BETWEEN AN INVESTOR AND A

CONTRACTING PARTY

Article 11. Scope and Standing

This Part applies to disputes between a Contracting Party and an investor of the other Contracting Party concerning an alleged breach of an obligation of the former under this Agreement which causes loss or damage to the investor or its investment.

Article 12. Means of Settlement, Time Periods

1. A dispute between a Contracting Party and an investor of the other Contracting Party shall, if possible, be settled by negotiation or consultation. If it is not so settled, the investor may choose to submit it for resolution:

a) to the competent courts or administrative tribunals of the Contracting Party, party to the dispute;

b) in accordance with any applicable previously agreed dispute settlement procedure; or

c) in accordance with this Article to:

i. the International Centre for Settlement of Investment Disputes ("the Centre") established pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of other States ("the

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ICSID Convention"), if the Contracting Party of the investor and the Contracting Party, party to the dispute, are both parties to the ICSID Convention;

ii. the Centre under the rules governing the Additional Facility for the Administration of Proceedings by the Secretariat of the Centre, if the Contracting Party of the investor or the Contracting Party, party to the dispute, but not both, is a party to the ICSID Convention;

iii. a sole arbitrator or an ad hoc arbitration tribunal established under the Arbitration Rules of the United Nations Commission on International Trade Law ("UNCITRAL");

Iv. the International Chamber of Commerce, by a sole arbitrator or an ad hoc tribunal under its rules of arbitration.

2. A dispute may be submitted for resolution pursuant to paragraph 1 c) of this Article after 60 days from the date notice of intent to do so was provided to the Contracting Party, party to the dispute, but not later than five years from the date the investor first acquired or should have acquired knowledge of the events which gave rise to the dispute.

Article 13. Contracting Party Consent

Each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration in accordance with this Part. This consent implies the renunciation of the requirement that the internal administrative or juridical remedies should be exhausted. However, a dispute may not be submitted

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