Title

Agreement between the Government of the Russian Federation and the Government of the People’s Republic of China on the Promotion and Reciprocal Protection of Investments

Preamble

The Government of the Russian Federation and the Government of the People’s Republic of China (hereinafter referred to as the Contracting Parties),

Intending to create favorable conditions for investments by investors of one Contracting Party in the territory of the other Contracting Party,

Recognizing that the mutual promotion, facilitation, and protection of such investments will contribute to stimulating the business initiative of investors and will enhance the welfare of both States,

Desiring to intensify cooperation between both States on the basis of equality and mutual benefit,

Have agreed as follows:

Body

Article 1. Definitions

For the purposes of this Agreement:

1. The term “investment” means all types of property values that are invested by an investor of one Contracting Party in the territory of the other Contracting Party in accordance with the laws of the latter Contracting Party, which possess characteristics such as, inter alia, the investment of capital or other resources, the expectation of profit and the assumption of risk, in particular, but not exclusively:

(a) movable and immovable property, as well as any property rights;

(b) shares, stocks, and any other forms of equity participation in commercial organizations;

(c) claims for monetary payments or under contracts having economic value and related to investments;

(d) rights to intellectual property, in particular copyrights, patents, designs, trademarks, industrial designs, integrated circuit layouts, trade names, technologies, and “know-how”;

(e) rights granted by law or contract to conduct business activities related, in particular, to the exploration, development, extraction, and exploitation of natural resources;

(f) bonds, debt obligations, loans, and other forms of debt instruments;

(g) goodwill. For greater clarity, the term “investment” does not include:

(i) claims for payment arising solely from commercial contracts for the sale or lease of goods or services;

(ii) claims for money arising solely from the provision of credit in connection with a commercial transaction, such as trade financing;

(iii) an award or decision in any judicial, administrative, or arbitral proceeding.

No change in the form in which assets are invested shall affect their classification as investments, provided that such change does not conflict with the laws of the Contracting Party in whose territory the investment is made.

For the purposes of the term “investment,” this Agreement does not apply to sectors of services or other activities provided or carried out on a non-commercial basis or not under conditions of competition with one or more persons engaged in the same activity.

2. The term “investor of a Contracting Party” means a natural or legal person of that Contracting Party who makes or has made an investment in the territory of the other Contracting Party. The term “investor of a Contracting Party” does not include:

(a) any natural person who is a national of the Contracting Party in whose territory the investment is made or was made;

(b) any individual who was a national of the Contracting Party in whose territory the investment was made on the date such investment was made;

(c) any legal entity of a Contracting Party that is owned by a person of the other Contracting Party or is under its direct or indirect control;

(d) any legal entity of a Contracting Party, provided that such legal entity does not carry on substantial commercial activities in the territory of that Contracting Party, including legal entities owned by a person of a third State or under its direct or indirect control;

(e) a legal entity of a Contracting Party that is owned by a third-country individual or legal entity, or is under their direct or indirect control, unless the other Contracting Party maintains diplomatic relations with such third country.

3. The term “legal entity of a Contracting Party” means a legal entity that is duly established or otherwise organized in accordance with the laws of a Contracting Party, whether or not it is organized for profit, and regardless of whether it is privately or publicly owned or controlled.

4. The term “individual of a Contracting Party” means an individual who is a national of that Contracting Party in accordance with its laws.

5. The term “income” means funds derived from an investment, including, but not limited to, profits, dividends, interest, capital gains, royalties, and other remuneration related to investments.

6. The term “investment-related activities” means the operation, management, maintenance, use, ownership, and disposal of an authorized investment.

7. The term “territory of a Contracting Party” means:

a. with respect to the Russian Federation, the territory of the Russian Federation, including internal waters and the territorial sea, as well as its exclusive economic zone and continental shelf, over which the Russian Federation exercises sovereign rights and jurisdiction in accordance with the United Nations Convention on the Law of the Sea (1982);

b. with respect to the People’s Republic of China, the entire customs territory of China, including its land territory, territorial airspace, internal waters, and territorial sea, as well as their seabed and subsoil, and any area beyond its territorial sea within which it may exercise sovereign rights and (or) exercise jurisdiction in accordance with international law and its domestic legislation.

8. The term “legislation of a Contracting Party” means the laws and other normative legal acts of the Russian Federation or the laws and other normative legal acts of the People’s Republic of China.

9. The term “freely usable currency” means a freely usable currency as defined in accordance with the Articles of Agreement of the International Monetary Fund.

10. The term “WTO” means the World Trade Organization.

11. The term “WTO Agreement” means the Marrakesh Agreement Establishing the World Trade Organization of April 15, 1994.

12. The term “claimant” means an investor of a Contracting Party who is a party to a dispute with another Contracting Party.

13. The term “Respondent” means a Contracting Party that is a party to a dispute with an investor of another Contracting Party.

14. The term “Disputing Party” means the Claimant or the Respondent.

15. The term “Disputing Parties” means the Claimant and the Respondent.

16. The term “UNCITRAL AL Arbitration Rules” means the Arbitration Rules of the United Nations Commission on International Trade Law, adopted by the General Assembly of the United Nations on December 15, 1976, as amended in 2010. For greater certainty, the UNCITRAL AL Rules on Transparency in the Context of Investor-State Arbitration under International Treaties shall not apply unless the parties to the dispute have agreed otherwise.

Article 2. Scope of Application

1. This Agreement applies to measures of the Contracting Parties adopted or maintained by: (a) the central, regional, or local governments and authorities of that Contracting Party; and (b) non-governmental bodies in the exercise of powers delegated by the central, regional, or local governments or authorities of that Contracting Party.

2. This Agreement applies to all investments made by investors of one Contracting Party in the territory of the other Contracting Party after January 1, 1985, which exist in the territory of the latter Contracting Party on the date of entry into force of this Agreement, and to all investments made by investors of one Contracting Party in the territory of the other Contracting Party after the entry into force of this Agreement.

3. This Agreement shall not apply to:

(a) the procurement by government agencies of goods or services, or any combination thereof, for government purposes and not for the purpose of commercial sale or resale or use in the production or supply of goods or services for commercial sale or resale. For greater certainty, this paragraph does not preclude the application of this Agreement to measures affecting an investment made as a result of such procurement;

(b) any act or fact that occurred, or any situation or dispute that arose or ceased to exist, prior to the entry into force of this Agreement.

Article 3. Promotion and Protection of Investments

1. Each Contracting Party shall endeavor to create favorable conditions for investors of the other Contracting Party to make investments in its territory and shall permit such investments in accordance with its laws.

2. Each Contracting Party shall, in accordance with its laws, ensure full protection within its territory of investments and returns of investors of the other Contracting Party.

3. In accordance with its laws, each Contracting Party shall give favorable consideration to the issuance of visas and work permits to nationals of the other Contracting Party engaging in investment activities in the territory of the first Contracting Party. Each Contracting Party reaffirms its obligations under the General Agreement on Trade in Services (GATS) regarding the presence of natural persons of the other Contracting Party engaged in investment activities.

4. The Contracting Parties shall endeavor to promote investment, including through:

(a) encouraging investment between the Contracting Parties;

(b) organizing and supporting joint investment promotion events, business matching events, as well as various briefings and seminars on investment opportunities and on investment legislation and policy;

(c) exchanging information on other matters of mutual interest related to investment promotion; and

(d) establishing or maintaining contact points and “one-stop shop” investment centers to provide assistance and advisory services to investors, including the simplification of procedures for issuing licenses and permits for operations.

5. In accordance with its laws and without prejudice to the obligations under Article 15 of this Agreement, the activities of a Contracting Party pursuant to subparagraph 4 (d) of this Article may include, to the extent possible, assisting investors of the other Contracting Party and investments of investors of the other Contracting Party in the peaceful resolution of complaints and claims arising in the course of their investment activities with public authorities by:

(a) receiving and, where appropriate, considering, directing, or giving due attention to complaints submitted by investors regarding the activities of government authorities affecting their investments; and

(b) providing assistance, to the extent possible, in resolving difficulties encountered by investors in connection with their investments.

Article 4. Treatment of Investments

1. Each Contracting Party shall accord, within its territory, fair and equitable treatment to investments of the other Contracting Party and to activities related to such investments. In accordance with its laws, neither Contracting Party shall apply any discriminatory measures that may impede activities related to investments.

2. In accordance with its laws, each Contracting Party shall accord to investments and activities related to such investments by investors of the other Contracting Party treatment no less favorable than that accorded to investments and activities related to such investments by its own investors.

3. Neither Contracting Party shall accord to investments made by investors of the other Contracting Party, and to activities related to such investments by investors of the other Contracting Party, treatment less favorable than that accorded to investments and activities related to such investments by investors of any third State.

4. The provisions of paragraph 3 of this Article shall not be construed as obligating a Contracting Party to extend to investments of investors of the other Contracting Party the benefits of any regime, preference, or privilege granted pursuant to:

(a) agreements establishing a free trade area, a customs union, an economic union, a monetary union, or a similar institution, or on the basis of interim agreements leading to the formation of such unions or institutions;

(b) international agreements or international arrangements on taxation; or

(c) agreements of the Russian Federation with states that were formerly part of the Union of Soviet Socialist Republics on investment matters, as understood in accordance with this Agreement.

The agreements referred to in this paragraph shall be consistent with the obligations of the first Contracting Party assumed under the WTO in respect of matters covered by the WTO Agreement.

5. Without prejudice to the obligations provided for in Articles 5, 6, and 15 of this Agreement, the Contracting Parties may grant treatment no more favorable than the treatment that the Contracting Parties grant in accordance with their obligations under the BTO Agreement, including obligations under the GATS, as well as in accordance with any other multilateral agreements concerning investment treatment to which the Contracting Parties.

Article 5. Expropriation

1. Investments of an investor of one Contracting Party made in the territory of the other Contracting Party shall not be subject, directly or indirectly, to expropriation, nationalization, or other measures having an equivalent effect (hereinafter referred to as “expropriation”) in the territory of the other Contracting Party, unless such measures are taken:

(a) in the public interest;

(b) in accordance with domestic legal procedures;

(c) on a non-discriminatory basis; and

(d) with the payment of compensation in accordance with paragraph 6 of this Article.

2. A measure (or set of measures) of a Contracting Party shall not constitute expropriation unless it infringes upon the right to tangible or intangible property in relation to an investment.

3. Determining whether a measure (or set of measures) of a Contracting Party in a specific factual situation constitutes expropriation requires, in each specific case, a fact-based examination of, among other things, the following factors:

(a) the effect of the measure (or series of measures) on the economic value of the investment of an investor of the other Contracting Party, although the mere fact that the measure (set of measures) of a Contracting Party has an adverse effect on the economic value of such an investment does not establish that expropriation has occurred;

(b) the nature of such a measure (set of measures), including the duration and purpose of such a measure (set of measures); and (c) the extent to which the measure (or set of measures) conflicts with legitimate and reasonable expectations associated with such investments.

4. A violation of other provisions of this Agreement does not in itself establish a violation of this Article or that expropriation has occurred.

5. For greater certainty, the following measures do not constitute expropriation:

(a) the granting of compulsory licenses in respect of intellectual property rights, or the revocation, limitation, or creation of intellectual property rights, to the extent that such granting, revocation, limitation, or creation is consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement);

(b) the delay, suspension, or termination of payments by a Contracting Party under credit agreements or arrangements involving such Contracting Party, even if such agreements or arrangements meet the criteria for investments set forth in Article 1(1) of this Agreement;

(c) measures taken by a Contracting Party to address a financial or economic crisis, including a moratorium on the repayment of public debt, a temporary suspension of interest payments, or negotiations with investors regarding debt restructuring;

(d) the fact that a subsidy, grant, or other form of state or municipal support has not been renewed or maintained, or has been modified or reduced by a Contracting Party in accordance with the terms and conditions of such support as provided for by its laws, even if, as a result, an investor of the other Contracting Party suffers loss or damage in connection with that investor’s investment.

6. The compensation referred to in paragraph 1 of this Article shall be paid without undue delay, shall be effectively enforceable, and shall be freely convertible. Such compensation shall correspond to the market value of the expropriated investment, calculated as of the date immediately preceding the date of expropriation or the date immediately preceding the date on which the impending expropriation became known, whichever occurs first. Such compensation shall include interest at a commercial rate determined by the market, but not less than the SOFR rate for six-month dollar-denominated loans from the date of expropriation until the date of payment.

Article 6. Compensation for Losses

Investors of one Contracting Party whose investments have suffered loss in the territory of the other Contracting Party as a result of war, civil unrest, the declaration of a state of emergency, or other similar events shall be accorded by the latter Contracting Party, with respect to restitution, compensation, compensation, and other forms of settlement with respect to such damage, shall be accorded treatment no less favorable than that accorded under similar circumstances to its own investors or to investors of any third State, whichever is more favorable.

Article 7. Transfer of Payments

1. Each Contracting Party shall, in accordance with its laws, guarantee to investors of the other Contracting Party, after they have fulfilled all tax obligations, the unimpeded transfer abroad of payments in connection with their investments made in its territory, in particular:

(a) income as defined in Article 1 of this Agreement;

(b) proceeds received in connection with the total or partial sale or liquidation of investments;

(c) funds paid to repay loans and credits;

(d) wages received by nationals of the other Contracting Party who work in connection with an investment in the territory of the first Contracting Party;

(e) payments arising from dispute resolution procedures in accordance with Article 15 of this Agreement;

(f) compensation provided for in Articles 5 and 6 of this Agreement.

The payments referred to in paragraph 1 of this Article may be freely transferred into a freely convertible currency or the national currency of the Contracting Party of the investor’s choice, in accordance with the laws of the Contracting Party in whose territory the investment was made, at the market exchange rate applicable on the date of conversion.

3. Transfers of payments shall be made without delay in freely convertible currency or the national currency of the Contracting Party, at the investor’s choice, in accordance with the applicable foreign exchange laws of the Contracting Party in whose territory the investment was made.

Article 8. Subrogation

1. If one Contracting Party or an agency authorized by it provides its investor with a financial guarantee against non-commercial risks in respect of an investment made in the territory of the other Contracting Party, and makes a payment to such investor pursuant to the guarantee, insurance contract, or other form of indemnity, the other Contracting Party shall recognize the transfer by subrogation of all rights and claims of such investor against the first Contracting Party or its authorized body.

2. The rights and claims transferred in accordance with the provisions of this Article shall not exceed the original rights and claims of such investor by way of subrogation, nor shall they prejudice any such original rights and claims acquired by a Contracting Party or its authorized body. Such rights shall be exercised and such claims shall be enforced without prejudice to the rights and obligations of the other Contracting Party under Articles 3 and 4 of this Agreement.

Article 9. Transparency

1. Each Contracting Party shall ensure that measures of general application affecting any matter covered by this Agreement are published in a timely manner or otherwise made available to the public and, except in emergency situations, no later than the time of their entry into force, in such a manner that the other Contracting Party and its interested parties may become acquainted with them.

2. Each Contracting Party shall publish the following information, if available:

(a) whether any authorization, including the filing of an application and/or its renewal, where applicable, is required for investment activities;

(b) the official names and contact information of the relevant competent authorities;

(c) applicable licensing requirements, procedures, and fees;

(d) applicable qualification requirements and procedures for the verification and assessment of qualifications, including fees; (e) applicable technical standards and requirements;

(f) procedures regarding the appeal or review of applications;

(g) where applicable, procedures for the Contracting Party and its interested parties to provide comments to the responsible authorities prior to the finalization of the relevant measure; and

(h) typical timeframes for processing an application. Where publication is impracticable, such information shall be made publicly available by other means.

3. Each Contracting Party shall, to the extent practicable:

(a) publish in advance any measure referred to in paragraph 1 of this Article that it proposes to adopt; and

(b) provide interested persons and the other Contracting Party with a reasonable opportunity to submit comments on such proposed measures.

4. With respect to draft legislation of general application affecting any matter covered by this Agreement, including technical regulations adopted by a Contracting Party, except in cases of emergency, measures related to national security, specific measures determining monetary policy, and measures the publication of which would impede law enforcement or otherwise be contrary to the public interest or would prejudice the legitimate commercial interests of a specific person, each Contracting Party shall:

(a) publish the draft legislation at least 30 days prior to the date by which comments from the public are to be submitted; and

(b) take into account comments received from interested parties regarding such draft legislation.

Article 10. Administrative Procedures

1. Each Contracting Party shall ensure that all measures of general application affecting investments of investors of the other Contracting Party are applied in a reasonable, objective, and impartial manner.

2. For the purpose of applying all measures provided for in Article 9 of this Agreement in an objective, impartial, and reasonable manner, each Contracting Party shall ensure that, in the course of its administrative procedures in which such measures are applied to specific investments or investors of the other Contracting Party, in specific cases:

(a) where possible, investments or investors of the other Contracting Party that are directly affected by the proceedings are given advance notice of the commencement of the proceedings, including a general description of the nature of the proceedings and any issues in dispute;

(b) such persons were given a reasonable opportunity to present facts and arguments in support of their positions prior to any final administrative action, where the time frame, nature of the proceedings, and public interests permit; and

(c) the conduct of the administrative proceedings was in accordance with the laws of that Contracting Party.

Article 11. Authorization Procedures

1. For the purposes of this Article, the term “authorization” means an authorization by a competent authority to carry out an investment activity, resulting from a procedure that an investor must follow to demonstrate compliance with the necessary requirements. For the purposes of this Article, the term “competent authority” means any central, regional, or local government or authority, or any non-governmental body exercising powers delegated by the central, regional, or local governments or authorities of a Contracting Party.

2. Each Contracting Party shall ensure that the licensing procedures it adopts or maintains:

(a) are based on objective and transparent criteria;

(b) are impartial and sufficient to allow applicants to demonstrate whether they meet the requirements, if such requirements exist;

(c) do not, in and of themselves, unreasonably impede compliance with the requirements under the authorization procedures; and

(d) were made publicly available in advance and did not unduly complicate or delay investment activities.

3. If a Contracting Party requires authorization for an investment, it shall ensure that its competent authorities:

(a) indicate, to the extent practicable, the estimated time frame for reviewing the application;

(b) upon request by the applicant, provide, without undue delay, information on the status of the application;

(c) without undue delay, determine, to the extent practicable, whether the application is complete for the purposes of review in accordance with the laws of the Contracting Party;

(d) if the competent authorities consider the application to be complete for the purposes of examination in accordance with the laws of the Contracting Party, ensure, within a reasonable period of time after the filing of the application, that:

(i) the examination of the application is completed; and

(ii) the applicant is notified of the decision on the application, to the extent possible, in writing. The competent authorities may fulfill this requirement by notifying the applicant in writing in advance, including through a published notice, that the absence of a response after a specified period from the date of submission of the application indicates either acceptance or rejection of the application. The term “in writing” may include electronic form.

The competent authorities may require that all information be submitted in a specific format in order to be considered “complete for the purposes of examination”;

(e) if they consider the application to be incomplete for the purposes of examination in accordance with the law of the Contracting Party, within a reasonable time after the filing of the application, to the extent practicable:

(i) notify the applicant that the application is incomplete;

(ii) either on its own initiative or at the applicant’s request, specify the additional information necessary to ensure the completeness of the application, or otherwise indicate why the application is considered incomplete; and

(iii) provided the applicant with an opportunity to submit the additional information necessary to ensure the completeness of the application. Such an opportunity does not require the competent authority to grant an extension of the filing deadline.

However, if none of the above is feasible and the application is rejected due to incompleteness, ensure that the competent authorities inform the applicant of this within a reasonable time after the rejection decision; and

(f) if an application is rejected, to the extent practicable, either on their own initiative or at the applicant’s request, inform the applicant in writing of the reasons for the rejection and, where applicable, of the procedures for resubmitting the application. The applicant shall not be prevented from submitting another application solely on the basis of a previously rejected application. The competent authorities may require that the content of such an application be revised;

(g) to the extent practicable, allow applications to be submitted at any time during the year. The competent authorities are not required to begin reviewing applications outside their official working hours and business days. If a specific time period is established for the submission of an application for authorization, the Contracting Party shall ensure that the competent authorities provide a reasonable time limit for the submission of the application;