e. payments in respect of technical assistance, technical service and management fees;
f. payments in connection with contracting projects;
g. earnings of nationals of a Member State who work in connection with an investment in the territory of the other Member State; and
h. compensation, restitution, indemnification or other settlement pursuant to the investments.
Article 16. Exceptions to the Transfer of Funds
1. A Member State shall apply restrictions on international transfers of funds and payments for current transactions relating to investments made in its territory in accordance with its taxation as well as financial laws and regulations.
2. Exceptions to the transfer of funds are permitted under the following conditions:
a. capital can only be transferred after a period of five years after full operation of the investment in a Member State unless its national legislation provides for more favorable treatment; or
b. proceeds of the investment can be transferred one year after the investment entered the territory of a Member State unless its national legislation provides for more favorable treatment.
3. A Member State may prevent a transfer in a non-discriminatory manner and in accordance with its laws relating to:
a. bankruptcy, insolvency or other legal proceedings to protect the rights of creditors;
b. criminal or administrative violations; or
c. ensuring the satisfaction of judgments in adjudicatory proceedings.
4. A Member State may adopt or maintain measures not conforming with its obligations relating to cross-border capital transactions:
a. in the event of serious balance-of-payments and external financial difficulties or threat thereof; or
b. in cases where, in exceptional circumstances, movements of capital cause or threaten to cause serious difficulties for macroeconomic management, in particular, monetary and exchange rate policies.
5. Measures under paragraph 4 shall be made public, be temporary and be eliminated as soon as conditions permit.
Chapter 3. DEVELOPMENT RELATED ISSUES
Article 17. Performance Requirements
1. Member States may support the development of local, regional and continental industries that provide, inter alia, up-stream and down-stream linkages and have a favorable impact on attracting investments and generating increased employment in Member States.
2. Member States may introduce performance requirements to promote domestic investments and local content. Measures covered by this Paragraph include, inter alia:
a. measures to grant preferential treatment to any enterprise so qualifying under the domestic law of a Member State in order to achieve national or sub-national regional development goals;
b. measures to support the development of local entrepreneurs;
c. measures to enhance productive capacity, increase employment, increase human resource capacity and training, research and development including of new technologies, technology transfer, innovation and other benefits of investment through the use of specified requirements on investors; and
d. measures to address historically based economic disparities suffered by identifiable ethnic or cultural groups due to discriminatory or oppressive measures against such groups prior to the adoption of this Code.
Article 18. Lists of Scheduled Investment Sectors
1. The process of harmonizing the investment regimes among Member States takes place with due respect for national policy objectives and the level of development of individual Members States. There shall be appropriate flexibility for Member States to prescribe their national List of scheduled investment sectors open for liberalization, in line with their development situation.
2. Any Member State may also, within its List of scheduled investment sectors, use further classification into subsectors and/or decide segments of sectors to better inform on the scope of its commitments under this Code.
3. Any Member State may submit a List of scheduled investment sectors that are excluded from the National Treatment principle where applicable.
4. The Lists of scheduled investment sectors form integral part of this Code; and Member States agree to respect them.
Chapter 4. INVESTORS OBLIGATIONS
Article 19. Framework for Corporate Governance
1. Investments shall meet national and internationally accepted standards of corporate governance for the sector involved, in particular for transparency and accounting practices.
2. In this regard, Member States, public bodies and companies are encouraged to improve the legal, institutional and regulatory framework for corporate governance and any other issues such as environmental or ethical concerns.
3. Investors shall:
a. ensure the equitable treatment of all shareholders, in accordance with national laws;
b. encourage active co-operation between corporations and stakeholders in creating wealth, jobs and the sustainability of financially sound enterprises;
c. ensure that timely and accurate disclosure is made on all material matters regarding a corporation, including the financial situation, performance, ownership, and governance of the company, risks related to environmental liabilities, and any other matters in accordance with the relevant regulations and requirements; and
d. provide information relating to human resource policies, such as programs for human resource development.
Article 20. Socio-political Obligations
1. Investors shall adhere to socio-political obligations including, but not exclusively, the following:
a. respect for national sovereignty and observance of domestic laws, regulations and administrative practices;
b. respect for socio-cultural values;
c. non-interference in internal political affairs;
d. non-interference in intergovernmental relations; and
e. respect for labor rights.
2. Investors shall not influence the appointment of persons to public office or finance political patties.
3. Investors shall refrain from exercising restrictive practices and from trying to achieve gains through unlawful means.
Article 21. Bribery
1. Investors shall not offer, promise or give any unlawful or undue pecuniary or other advantage or present, whether directly or through intermediaries, to a public official of a Member State, or to a member of an official's family or business associate or other person in order that the official or other person act or refrain from acting in relation to the performance of official duties.
2. Investors shall also not aid or abet a conspiracy to commit or authorize acts of bribery.
Article 22. Corporate Social Responsibility
1. Investors shall abide by the laws, regulations, administrative guidelines and policies of the host State.
2. Investors shall, in pursuit of their economic objectives, ensure that they do not conflict with the social and economic development objectives of host States and shall be sensitive to such objectives.
3. Investors shall contribute to the economic, social and environmental progress with a view to achieving sustainable development of the host State.
Article 23. Obligations as to the Use of Natural Resources
1. Investors shall not exploit or use local natural resources to the detriment of the rights and interests of the host State.
2. Investors shall respect rights of local populations, and avoid land grabbing practices vis-a-vis local communities.
Article 24. Business Ethics and Human Rights
The following principles should govern compliance by investors with business ethics and human rights: a. support and respect the protection of internationally recognized human rights; b. ensure that they are not complicit in human rights abuses; eliminate all forms of forced and compulsory labor, including the effective abolition of child labor; d. eliminate discrimination in respect of employment and occupation; and ensure equitable sharing of wealth derived from investments.
Chapter 5. INVESTMENT RELATED ISSUES
Article 25. Intellectual Property Rights and Traditional Knowledge
1. Each Member State shall ensure the enforcement of intellectual property rights within its territory and in accordance with the rights and obligations under the Trade Related Aspects of Intellectual Property Rights (TRIPS) agreement and other relevant international instruments.
2. Member States may provide exceptions to the exclusive rights conferred by an intellectual property right, and allow for its use without the authorization of the right holder, including use by the government or third parties authorized by the government.
3. Member States and investors shall, in accordance with generally accepted international legal standards and best practices, protect traditional knowledge systems and expressions of culture as well as genetic resources that are sought, used or exploited by investors, or are otherwise relevant to their contracts, practices and other operations in such Member States.
4. Member States shall provide, within national laws, principles for the patenting of biological materials or of traditional knowledge systems and expressions of culture for the protection of local communities in such Member States.
Article 26. State Contracts
1. State contracts should be negotiated and implemented, subject to national laws and regulations, in a mutually supportive manner with due respect to and taking into consideration the legitimate development objectives of Member States as set out in their investment policies, while giving due consideration to the rights and interests of investors.
2. Member States may set thresholds in the amount of tenders and procurements, as well as sectors and subsectors limited to the exclusive benefit of local suppliers, especially the small and medium size enterprises, provided that such measures are not applied in sucha manner as to nullify or impair the benefits accruing to any Member State under this Code.
Article 27. Public Private Partnership
Member States may cooperate on policies and other related issues that encourage and facilitate the use of Public Private Partnership to ensure development in Member States.
Article 28. Competition Law and Policy
Member States shall:
a. promote, maintain and encourage competition to enhance economic efficiency in investment at the national and regional levels;
b. prohibit any anti-competitive investment conduct that prevents, restricts or distorts competition at the national and regional levels;
c. adopt and implement clear and transparent rules on competition to increase the ability of the regional economy to attract investment and to maximize the benefits of such investment.
Article 29. Transfer of Technology
1. Member States shall put in place policies for the purpose of promoting and encouraging the transfer and acquisition of appropriate technology.
2. Investors are encouraged to adopt in the course of their business activities, practices that permit the transfer and rapid diffusion of technologies and know-how, with due regard to the protection of intellectual property rights, on reasonable terms and conditions and in a manner that contributes to the research and development goals of the host State.
3. Member States undertake to cooperate and facilitate the international transfer of technology by various measures such as:
a. getting access to available information regarding description, location and, as far as possible, approximate cost of technology;
b. establishing or strengthening of technology transfer centers;
c. providing training for research, engineering, design and other personnel engaged in the development of national technologies or in the adaptation and use of technologies transferred;
d. providing assistance in the development and administration of laws and regulations with a view to facilitating the transfer of technology;
e. granting credits on preferential terms for financing the acquisition of capital and intermediate goods in the context of approved development projects involving transfer of technology transaction; and
f. assisting in the development of technological capabilities of the companies and their personnel.
Article 30. Environment and Technologies
1. Member States and investors should take all practicable steps to promote, facilitate, and finance, as appropriate, the transfer of, or access to, environmentally sound technologies and know-how, based on the relevant international instruments, without prejudice to their rights and obligations, where applicable, under these texts. The access and transfer of those technologies by the investors shall take place under fair and most favorable terms, including on concessional and/or preferential terms where mutually agreed, based on international and local standards for the transfer of environmentally sound technologies.
2. Investors are encouraged to provide adequate financial resources, including for the transfer of technology, needed for implementing measures to assist the Member States that are particularly vulnerable to the adverse effects of climate change in meeting costs of adaptation to, or mitigation of those adverse effects.
Article 31. Banking Law and Policy
In order to facilitate investment flows, Member States are encouraged to establish a framework for co-operation and co-ordination between National Central Banks on banking regulatory and supervisory matters with the view to:
a. promoting the identification, measurement and management of banking risks, including systemic risks;
b. integrating the payment systems; and
c. sharing information regarding depositor protection, anti-money laundering compliance, co-operation in cyber tracking and criminality, and combating the financing of terrorism.
Article 32. Foreign Exchange Controls
1. Investors shall have free access to foreign exchange subject to the applicable laws, regulations and monetary policies in Member States.
2. Each Member State shall permit transfers to be made in a convertible currency at the market rate of exchange prevailing on the date of transfer.
3. Unless otherwise agreed by the investor, transfers shall be made in any convertible currency at the rate of exchange applicable on the date of transfer pursuant to the exchange regulations in force.
Article 33. Prudential Measures
In the event of serious balance-of-payments and external financial difficulties or threat thereof, a Member State may adopt or maintain restrictions on investments under the provisions of this Code. These measures shall be temporary and be phased out progressively as there are changes in the initial circumstances surrounding the use of the measures.
Article 34. Labor Issues
1. Member States shall not encourage investment by relaxing domestic labor legislation. Accordingly, each Member State shall ensure that it does not waive or derogate from such legislation as an encouragement for the establishment, maintenance or expansion of an investment in its territory.
2. In this regard, investors may:
a. consult with the host State authorities and national employers' and workers' organizations in order to keep manpower plans in harmony with national social development policies, making optimal use of labor available locally and within the sub region to provide substantial employment or reduce unemployment;
b. ensure the employment and promotion of the host State nationals;
c. use technologies that specifically generate employment; and
d. promote employment in the Member States by entering into supply contracts with local enterprises and by prioritizing, to the full extent possible, the use and processing of local raw materials.
3. Investors shall comply with international conventions and existing labor policies and, in particular, not use child labor and shall support efforts for the elimination of all sort of child labor, including forced or compulsory labor within Member States.
Article 35. Foreign Workers and Visa Requirements
1. Member States may facilitate the granting of visas and permits to foreign workers, employees and consultants as designated by the investor in order to assist in the management of the enterprise or company and provide services to the investor in accordance with applicable national laws and regulations. Each such foreign worker, employee and consultant shall not be exempted from income taxes and social security obligations as per the conditions set forth in the national laws and procedures, if applicable, in Member States.
2. In relation to the management and operation of the investment in the host State, investors and business community members may enjoy the benefit of fast-track visa applications and smooth process in the issuance of such visas.
Article 36. Human Resources Development
1. Member States may develop national policies to guide investors in developing human capacity of the labor force. Such policies may include incentives to encourage employers to invest in training, capacity building and knowledge transfer.
2. Member States should develop national policies that pay particular attention to the special needs for youth, women and other vulnerable groups.
3. Member States should develop policies for the mutual recognition for certificates and diplomas.
Article 37. Environment
1. Member States shall ensure that their laws and regulations provide for environmental protection.
2. In this regard, Member States shall not encourage investment by relaxing or waiving compliance with domestic environmental legislation. If a Member State considers that another Member State has encouraged such relaxation or non-compliance, it may request consultations with the other Member State and the two Member States shall consult with a view to avoiding any such encouragement.
3. Investors shall, in performing their activities, protect the environment and where such activities cause damages to the environment, take reasonable steps to restore it as far as possible.
4. Member States and investors shall carry out Environmental Impact Assessment (EIA) in relation to investments.
Article 38. Cultural Diversity
Member States may adopt policies on cultural and linguistic diversity in promotion of investments.
Article 39. Taxation
1. This Code shall not affect the rights and obligations of a Member State under Double Taxation Agreements.
2. Member States are encouraged to put in place measures for transparency, streamlining due process and good governance in their fiscal legislations and regulations.
3. Member States, with a view to encouraging the movement of investment, may conclude between themselves Double Tax Avoidance Agreements.
4. Regional Economic Communities may establish a comprehensive network of Double Tax Avoidance Agreements.
Article 40. Consumer Protection
1. Member States and investors shall take measures to protect the health, safety and economic interests of consumers and their right to information, education and to organize themselves in order to safeguard their interests.
2. Investors should act in accordance with fair business, marketing and advertising practices when dealing with consumers and should ensure the safety and quality of the goods and services they provide.
Chapter 6. DISPUTE SETTLEMENT
Article 41. State-State
Member States are encouraged to resolve any disputes regarding the interpretation and application of this code initially through consultations, negotiations or mediation.
1. Where Member States agree to arbitration, the arbitration shall be conducted at any established African public or African alternative dispute resolution center.
2. Where Member States are unable to resolve any dispute regarding the interpretation and application of this Code, through any of the methods under Paragraph 1 of this Article, within six months, any of the disputing Member State may refer the matter to the African Court of Justice whose decision shall be final and binding.
Article 42. Investor-State
1. Member States may, in line with their domestic policies, agree to utilize the Investorâ State dispute settlement mechanism. In the event that the Investor-State dispute settlement mechanism is agreed upon, the process below shall apply;
a. Disputes arising between investors and Members States under the specific agreements that govern their relations shall be resolved under those agreements;
b. In the event of an investment dispute between an investor and a Member State pursuant to this Code, the investor and the Member State should initially seek to resolve the dispute within six months at the latest, through consultations and negotiations, which may include the use of non-binding third-party mediation or other mechanisms;
c. If consultations fail, the dispute may be resolved through arbitration, subject to the applicable laws of the host State and/or the mutual agreement of the disputing parties, and subject to exhaustion of local remedies; and
d. Where recourse is made to arbitration under Paragraph 3, the arbitration may be conducted at any established African public or African private alternative dispute resolution center. Arbitration shall be governed by the United Nations Commission on International Trade Law (UNCITRAL) rules.
2. Once recourse is made to a particular forum of dispute settlement, the forum chosen shall be used to the exclusion of the other. Decisions of this particular forum shall be final.
Article 43. Counterclaims by Member States
1. Where an investor or its investment is alleged by a Member State party in a dispute settlement proceeding under this Code to have failed to comply with its obligations under this Code or other relevant rules and principles of domestic and international law, the competent body hearing such a dispute shall consider whether this breach, if proven, is materially relevant to the issues before it, and if so, what mitigating or off-setting effects this may have on the merits of a claim or on any damages awarded in the event of such award.
2. A Member State may initiate a counterclaim against the investor before any competent body dealing with a dispute under this Code for damages or other relief resulting from an alleged breach of the Code.
Article 44. Applicable Law In Disputes
Any claim or dispute arising from this Code shall be decided in accordance with the provisions of this Code as well as any other national, regional or international laws, rules or principles.
Chapter 7. PROCEDURAL ISSUES AND INSTITUTIONAL ARRANGEMENTS
Article 45. Application
1. Member States shall endeavour to adopt appropriate measures to apply the rules contained in this Code.