Communication from the Ministry of Foreign Affairs No 187 / 1993 Coll.
Communication from the Ministry of Foreign Affairs on the negotiation of the Agreement between the United States of America and the Czech and Slovak Federal Republic on mutual support and protection of investment
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Effective from 19.12.1992
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187
COMMUNICATION
Ministry of Foreign Affairs
The Ministry of Foreign Affairs states that on 22 October 1991 the Agreement between the United States of America and the Czech and Slovak Federal Republic on mutual support and protection of investment was signed in Washington.
The agreement was approved by the Federal Assembly of the Czech and Slovak Federal Republic and was ratified by the Prime Minister of the Czech and Slovak Federal Republic on behalf of the President of the Czech and Slovak Federal Republic. The instruments of ratification were exchanged in Prague on 19 November 1992.
The Agreement entered into force on 19 December 1992 on the basis of Article XIV (1) thereof.
The Czech version of the Agreement is hereby published at the same time.
AGREEMENT
between the United States of America and the Czech and Slovak Federal Republic on mutual support and investment protection
the United States of America and the Czech and Slovak Federal Republic (hereinafter the Contracting Parties), wishing to promote greater mutual economic cooperation with regard to the investment of nationals and companies from one Contracting Party in the territory of the other Contracting Party; and
Recognising that the treatment arrangements to be granted to such investments will promote the flow of private capital and the economic development of the Contracting Parties,
agreeing that fair and impartial treatment of investments is desirable to maintain a stable investment system and to make the most efficient use of economic resources; and
confirming its interest in developing economic cooperation in accordance with the principles and provisions of the Final Act signed in Helsinki on 1 August 1975 and other documents of the Conference on Security and Cooperation in Europe,
convinced that private business in free and freely accessible markets provides the best opportunities to raise the standard of living and the value of the life of the inhabitants of the Contracting Parties, improve the well-being of workers and promote the general respect of internationally recognised workers' rights,
decisions to conclude agreements on mutual support and investment protection,
agree on the following:
1. For the purposes of this Agreement:
(a) "investment" shall mean any type of investment in the territory of one Party that is owned or controlled directly or indirectly by nationals or companies of the other Party, such as shares, debt, service contract and investment contract, and shall include:
(i) tangible and intangible ownership, including rights such as mortgages, collateral and liability;
(ii) the company or shares or other shares in the company or shares in its assets;
(iii) cash claims or performance claims which have an economic value and which are linked to the investment;
(iv) intellectual property which includes, inter alia, rights relating to:
- literary and artistic works, including sound recordings,
- inventions in all fields of human effort,
- industrial designs,
- the arrangement of parts of semiconductor integrated circuits,
- business secrets and confidential business information, and
- trade and service marks and product names,
(v) any right arising from a law or contract, and any authorisation and authorisation in accordance with the law, including concessions for the search, cultivation, extraction or exploitation of natural resources;
(b) "company of a Contracting Party" means any corporation, company, association, state or other undertaking, or other organisation, legally established in accordance with the laws of the Contracting Party or their political subdivisions, whether or not established for the purpose of financial revenues and is privately owned or owned by the Government;
(c) "national" of a Contracting Party means a natural person who is a national of a Contracting Party in accordance with its respective law;
(d) "return" shall mean the amount resulting from or associated with the investment and shall include profits, dividends, interest, capital gains, royalties and management fees, technical assistance and other charges; or tangible income;
(e) "accompanying activities" shall include the organisation, control, operation, maintenance and availability with companies, filials, agents, offices, factories and other commercial activities; the conclusion, performance and implementation of contracts; the acquisition, use, protection and availability of assets of all kinds, including intellectual property rights and industrial rights; borrowing of funds, the purchase, issue and sale of shares and other securities, and the purchase of foreign currencies for imports;
(f) "non-discriminatory treatment" shall mean treatment at least as favourable as the best of national or most favoured-nation treatment;
(g) "national treatment" means treatment at least as favourable as the most favourable treatment granted by a Contracting Party to companies or nationals of that Contracting Party in similar cases; and
(h) "most-favoured-nation treatment" refers to treatment at least as favourable as that accorded to companies or third-country nationals in similar cases.
2. Each Contracting Party reserves the right to deny any company benefits under this Agreement if such a company is controlled by citizens of a third country or if the company of the other Contracting Party does not engage in any more extensive business activity in the territory of the other Contracting Party or is controlled by citizens of a third country with which the opposing Contracting Party does not maintain normal economic relations.
3. Any change in the form in which assets are invested or reinvested shall not affect their nature of the investment.
1. Each Contracting Party shall authorise and treat investments and related activities on a non-discriminatory basis, each Contracting Party having the right to make or maintain exemptions in the sectors or matters listed in the Appendix to this Agreement.
Both Parties agree to notify the other Contracting Party in advance or on the date on which this Agreement enters into force, of any such laws and regulations which they are aware are relevant to the sector or matters listed in the Appendix.
In addition, each Contracting Party agrees to notify the other Contracting Party of any future exemptions concerning the sectors or matters listed in the Appendix and also to keep those exemptions to a minimum.
Any future exemption, adopted by one Contracting Party in a given sector or subject matter, shall not apply to an investment existing at the time such exemption entered into force.
The treatment applied under any exceptions shall not be less favourable than that applied in similar cases to investments and related activities of nationals or companies of any third country, unless otherwise specified in the Appendix.
2. (a) Fair and equal treatment will always be ensured for the investor and shall enjoy full protection and security and shall in no case be granted worse treatment than that in accordance with international law.
(b) None of the Contracting Parties shall restrict the management, operation, maintenance, use, use, use, extension or availability of investment by any arbitrary and discriminatory measure.
For the purposes of resolving disputes pursuant to Articles VI and VII of this Agreement, a measure may be arbitrary and discriminatory, even if the Party in the dispute has or has made use of the possibility of reviewing such a measure by the courts or administrative courts of the relevant Contracting Party.
(c) Each Party shall respect any commitment it has made in relation to investments.
3. In accordance with the laws relating to the entry and residence of aliens, nationals of each Contracting Party shall be allowed to enter and reside in the territory of the other Contracting Party for the purpose of establishing, developing, managing or consulting on the operation of an investment in which a substantial proportion of the capital or other resources are transferred or are intended to be used by the first Contracting Party in person or by the company which employs them.
4. Companies legally established in accordance with the legal order of one Contracting Party and which are investments shall be allowed to employ senior managers at their choice, irrespective of their nationality.
5. No Contracting Party shall, as a condition for the establishment, expansion and maintenance of investments, impose obligations which require or enforce the export of manufactured goods or prescribe that goods or services must be purchased locally or impose other similar requirements.
6. Each Contracting Party shall ensure effective means for the exercise of rights and rights relating to investments and their approval and investment arrangements.
7. Each Party shall provide access to all laws, regulations, administrative practices and procedures and to judicial statements concerning or affecting investment.
8. The treatment of investments and ancillary activities granted by the United States of America under this Article shall be the treatment granted to companies legally established in accordance with the laws of other States, territories and holdings of the United States of America in all States, territories and holdings of the United States of America in this respect.
9. Non-discriminatory treatment and most-favoured-nation treatment under this Agreement shall not apply to benefits granted by either Party to nationals or companies from any third country on the basis of:
(a) the obligations of the Contracting Party relating to investments and resulting from full membership in the free trade zone or in the customs union; or
(b) the obligations of the Contracting Party in any multilateral international agreement under the General Agreement on Tariffs and Trade to be concluded subsequently after that agreement.
10. The Contracting Parties confirm and agree that "accompanying activities" include, without limitation, the following types of activities:
(a) the award of concessions or authorisations by authorisation;
(b) the possibility of registration, authorisation, authorisation and other consent of the authorities (which must in any case be issued promptly);
(c) access to financial institutions and credit markets;
(d) access to own funds deposited with financial institutions;
(e) the import and installation of equipment necessary for the normal conduct of business matters, including without restrictions on office equipment and cars and the export of equipment and vehicles so imported;
(f) the dissemination of commercial information;
(g) conducting market surveys;
(h) the appointment of agents, including intermediaries, consultants, distributors and their participation in trade fairs and advertising events;
(i) marketing of goods and services, including through internal distribution and marketing systems, as well as advertising and direct contacts with individual persons and companies;
(j) access to municipal distribution, public services and commercial premises leased at non-discriminatory prices, provided that they are established and controlled by the Government;
(k) access to raw materials, production inputs and services of all types at non-discriminatory prices, provided that they are established and controlled by the Government.
1. Investments shall not be expropriated or nationalised or subject to direct or indirect measures equivalent to expropriation or nationalisation (expropriation), except in the public interest; by legal procedure; in a non-discriminatory manner; against immediate, adequate and effective replacement; and in accordance with the general principles of treatment referred to in Article II (2) of this Agreement.
The compensation must correspond to the fair market price of the expropriated investment immediately before the expropriation or before it has become known; they must be paid without delay, including interest from the date of expropriation at a reasonable market interest rate; it shall be fully feasible and freely transferable at the prevailing market rate on the day of expropriation.
2. A national or a company of each of the Contracting Parties which declares that all or part of its investment has been expropriated shall have the right to an immediate review by the competent judicial or administrative authorities of the other Contracting Party as to whether such expropriation has taken place and, if so, whether such expropriation and the compensation in question comply with the provisions of this Agreement which express the principles of international law.
Nationals and companies of both Contracting Parties whose investment in the territory of the other Contracting Party will suffer damage as a result of war or other armed conflict, revolution, exceptional state, insurrection, civil unrest or other similar events, shall be granted non-discriminatory treatment by the other Contracting Party as regards any measures taken in relation to such damage.
1. Each Contracting Party shall authorise all transfers relating to the investment freely and without delay to and from its own territory.
Such transfers shall include:
(a) revenue;
(b) the refunds provided for in Article III of this Agreement;
(c) payments resulting from investment disputes;
(d) payments made in accordance with the contract, including the amortisation of principal and accrued interest payments under credit agreements;
(e) proceeds from the sale or liquidation of all or part of the investment;
(f) additional capital injections to maintain or expand the investment.
2. With the exception of the provisions of Article III (1) of this Agreement, transfers shall be made in freely convertible currency at the prevailing market rate for spot transactions in force on the date of the transfer for the currency in which the transfer takes place.
3. Notwithstanding the provisions of paragraphs 1 and 2, both Parties may have laws and regulations:
(a) requiring the reporting of cash transfers; and
(b) imposing income tax in a form such as income tax on dividends and other transfers.
In addition, each Party may protect the rights of creditors or ensure the execution of judgments by courts, by the fair and non-discriminatory application of its laws in good faith.
1. For the purposes of this Article, an investment dispute shall be defined as relating to:
(a) interpretation or use of an investment contract between one Party and a national or company of the other Party;
(b) the interpretation or use of any investment authorisation granted by the Office of a Contracting Party for Foreign Investment to such a national or company;
(c) alleged infringement of any right relating to an investment granted or resulting from this Agreement.
2. In the event of an investment dispute between a Contracting Party and a national or a company of the other Contracting Party, the Parties shall first endeavour to resolve the dispute through consultations and negotiations, subject to non-binding negotiations with a third party.
Subject to paragraph 3 of this Article, a dispute, unless it can be resolved by consultations and negotiations, shall be submitted for settlement by an appropriate dispute settlement procedure agreed in advance by the Parties.
Any property settlement in a dispute, including those relating to expropriation, provided for in the Investment Agreement shall be binding and enforceable in accordance with the terms of the Investment Agreement, the relevant provisions of local law and relevant international agreements on the enforcement of the statements of arbitration courts.
3. At any time after six months from the date of the dispute, the national or company concerned may choose to express its agreement in writing to settle the dispute by conciliation or binding arbitration to the International Investment Dispute Settlement Centre ("the Centre ') or under the additional possibilities of the Centre or under the UN International Trade Law (" UNCITRAL') Arbitration Rules or by any arbitration body mutually agreed by the Parties in the dispute.
(a) Once the national or company concerned has given its consent, each party in the dispute may initiate such proceedings, provided that:
(i) the dispute has not been submitted by a national or company in accordance with the dispute settlement procedure previously agreed; and
(ii) the national or company concerned has not submitted a dispute to the court, administrative court or authority with the relevant jurisdiction of the Contracting Party in the dispute.
If the parties in the dispute do not agree on whether it is more appropriate to apply an amicable or binding arbitration procedure, the opinion of the national or company concerned shall be decisive.
(b) The two Parties hereby agree to submit an investment dispute to an amicable or binding arbitration procedure:
(i) the Centre, where the Czech and Slovak Federal Republic becomes a participant in the Convention on the Settlement of Investment Disputes between States and nationals of other States, signed in Washington on 18 March 1965 ("the Conventions") and the Statutes and Rules of the Centre, and the Additional Options of the Centre; and
(ii) the arbitration panel established under UNCITRAL rules, which may be governed by mutual agreement between the parties in the dispute (the appointment point shall be the Secretary-General of the Centre).
(c) The reconciliation or arbitration of disputes referred to in (b) (i) shall be carried out using the provisions of the Convention and the Statutes and the rules of the Centre, or Additional Options, as appropriate.
(d) A State participating in the United Nations Convention on the Recognition and Enforcement of Foreign Judicial Decisions signed in New York in 1958 shall be the place of any arbitration procedure under this Article.
(e) Each Contracting Party shall ensure that the regulation of any arbitration ruling made in accordance with this Article VI is enforced without delay. Furthermore, each Contracting Party shall allow such arbitration to be exercised in its territory.
4. A Contracting Party may not, in any dispute concerning an investment dispute, invoke as a defence a counterclaim, a right of compensation or otherwise that the national or company concerned has already received or received, by way of insurance or guarantee agreement, compensation or other compensation for all or part of its alleged damage.
5. In the case of arbitration proceedings, for the purposes of this Article, any company legally established in accordance with the relevant legal order of one Contracting Party or its political subdivisions, which, however, immediately before manifesting the fact or fact causing the dispute, was an investment of nationals or companies of the other Contracting Party, shall be regarded as a national or a company of that other Contracting Party (in accordance with Article 25 (2) (b) of the Convention).
1. Any dispute between the Parties concerning the interpretation or application of this Agreement, which will not be resolved by consultations or other diplomatic channels, shall be submitted at the request of one of the Parties to the arbitration panel for a binding decision under the relevant rules of international law. Unless otherwise agreed by the Parties, the UN International Trade Law Commission's Arbitration Rules (UNCITRAL) will apply, with the exception of the provisions amended by the Parties or the Arbitrators.
2. Each Contracting Party shall appoint one arbitrator within two months of receipt of the request. These two arbitrators shall elect a third arbitrator, a third-State national, as chairman. The UNCITRAL rules for the appointment of members of a three-member arbitration panel shall be applied to the appointment of an arbitration panel with the exception that the Secretary-General of the Standing Arbitration Court shall be the appointment point referred to in those rules.
3. Unless otherwise agreed, all submissions shall be made and all sessions shall be held within six months of the date of the election of the third arbitrator and the court shall take its decisions within two months of the date of the last submissions or the date of the conclusion of the hearing, whichever is the later.
4. (a) Each Contracting Party shall bear the costs of its representation in arbitration proceedings.
(b) The expenses and other costs of the President, other arbitrators and other costs of the proceedings shall be borne equally by both Parties. However, the Court of First Instance may, at its discretion, determine that a major proportion of these costs shall be paid by one of the Contracting Parties.
Article VI and VII shall not apply to disputes arising from:
(a) in respect of the United States Export and Import Bank programmes for export credits, guarantees and insurance; or
(b) in the context of other official credit, guarantee or insurance arrangements in which the Parties agree to settle disputes by other means.
This Agreement shall not reduce the effectiveness of:
(a) the laws and regulations, administrative practice or administrative or judicial decisions of both Parties;
(b) international legal obligations; or
(c) commitments made by both Contracting Parties, including obligations contained in an investment contract or an investment authorisation, which entitle investment and ancillary activities to treatment more favourable than in similar situations is granted by this Agreement.
1. This Agreement shall not preclude any Contracting Party from applying the measures necessary to maintain public order, fulfil its obligations to maintain or restore international peace or security, or to protect its essential security interests.
2. This Agreement shall not preclude any Contracting Party from laying down specific rules on the setting-up of investments, including investments made in or in connection with state undertakings undergoing privatisation, but shall not restrict the substance of any rights referred to in this Agreement.
1. Each Contracting Party shall endeavour, as regards its tax policy, to provide fair and impartial treatment to the investment of nationals and companies of the other Contracting Party.
2. However, the provisions of this Agreement, in particular Articles VI and VII, shall apply only to the following matters of taxation:
(a) expropriation, in accordance with Article III;
(b) transfers, in conformity with Article V; or
(c) compliance with and implementation of the terms and conditions of an investment agreement or an investment authorisation as referred to in Article VI (1), (a) or (b), to the extent that they are not subject to the provisions on the settlement of disputes in the Double Taxation Agreement between the two Parties, or have been raised in accordance with such provisions on dispute settlement and are not resolved within a reasonable period of time.
The Parties shall agree, at the request of one of them, to consult promptly to resolve any dispute concerning this Agreement or to discuss any matter relating to the interpretation or application of this Agreement.
This Agreement shall apply in all political subdivisions of the Parties.
1. This Agreement shall enter into force 30 days after the date of replacement of the instruments of ratification. It shall remain in force for a period of 10 years and shall continue to apply if it is not terminated in accordance with paragraph 2 of this Article. It will concern investments existing at the time of its entry into force as well as investments made or acquired since then.
2. Each Contracting Party may terminate this Agreement at the end of the initial 10-year period of validity, or at any time thereafter, by sending a one-year written statement to the other Contracting Party.
3. The provisions of all other Articles of this Agreement shall continue to apply for a period of 10 years from the date of termination of this Agreement as regards investments made or acquired before the expiry of this Agreement and to which this Agreement otherwise applied.
4. The Appendix, the Protocol and the Supplementary Letters shall be an integral part of this Agreement.
They have signed this agreement to prove it, duly empowered to do so.
Done in duplicate in Washington on 22 October 1991 in English and Czech, the two texts being equally authentic.
For the United States of America:
Julius L. Katz v. r.
For the Czech and Slovak Federal Republic:
Václav Klaus CSc v. r. o.
Appendix
1. In accordance with Article II, paragraph 1 The United States reserves the right to make or maintain limited derogations from national treatment in the sectors or matters listed below:
- air transport
- maritime and coastal transport
- banking
- insurance
- government subsidies
- government insurance and lending programmes
- energy and electricity production
- agency customs
- property ownership
- ownership and control of radio stations or public radio and television stations
- ownership of shares of the Communications Satellite Corporation
- equipment for public telephone and telegraphic services
- equipment for underwater cable services
- land use and natural resources
- mining on public land
- primary sales representation for United States Government securities
- land maritime services and associated services.
2. In accordance with Article II (1), the United States reserves the right to make or maintain limited exemptions from treatment under the most-favoured-nation clause in the sectors or matters listed below:
- property ownership
- mining on public land
- primary sales representation for United States Government securities
- seagoing services.
3. In accordance with Article II (1), the Czech and Slovak Federal Republic reserves the right to make or maintain limited derogations from national treatment in the sectors or matters listed below:
- property ownership
- insurance.
This Appendix forms an integral part of the Agreement.
Protocol
1. The Parties agree that nothing in this Agreement shall be interpreted as applying to bodies accredited as part of a diplomatic mission or consular post of a Contracting Party.
2. Under the terms of "political subdivisions' referred to in Article I (1) (b), Article VI (5) and Article XIII, the Contracting Parties shall:
- as regards the Czech and Slovak Federal Republic, the Czech Republic and the Slovak Republic;
- as regards the United States of America, the United States of America.
3. The Contracting Parties recognise that the conditions of Article II (9) (a) are met where economic relations between a Contracting Party and a third country include an area of free trade or a customs union.
The Protocol shall be an integral part of this Agreement.
EMPLOYMENT OF COMMERCIAL CERTIFICATE OF UNITED STATES
PRESIDENT CANCELLAR
WASHINGTON, D.C. 20506
22 October 1991
Dear Mr. Deputy Prime Minister,
in connection with today's signing of the Agreement between the United States of America and the Czech and Slovak Federal Republic ("CSFR ') concerning mutual support and protection of investment (" the Agreement'), I have the honour to confirm the following arrangements of our governments relating to Article II, paragraph 1 of the Agreement as regards investment:
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Regulation Information
| Citation | Communication from the Ministry of Foreign Affairs No. 187 / 1993 Coll., on the negotiation of the Agreement between the United States of America and the Czech and Slovak Federal Republic on mutual support and protection of investment |
|---|---|
| Regulation Type | - |
| Author | - |
| Collection | Code of Laws |
| Date of Promulgation | 01.07.1993 |
|---|---|
| Effective from | 19.12.1992 |
| Effective until | - |
| Status | Valid |
The regulation text is for informational purposes only.
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