Having resolved to conclude a
Treaty concerning the encouragement and reciprocal protection of
investment,
Have agreed as follows:
ARTICLE I
1. For the purposes of this
Treaty,
(a) "investment' means
every kind of investment, in the territory of one Party owned or
controlled directly or indirectly by nationals or companies of the other
Party, such as equity, debt, and service and investment contracts; and
includes:
(i) tangible and intangible
property, including rights, such as mortgages, liens and pledges;
(ii) a company or shares of
stock or other interests in a company or interests in the assets
thereof;
(iii) a claim to money or a claim
to performance having economic value, and associated with an investment;
(iv) intellectual and industrial
property rights, including rights with respect to copyrights, patents,
trademarks, trade names, industrial designs, trade secrets and know-how,
and goodwill; and
(v) any right conferred by law
or contract, and any licenses and permits pursuant to law;
(b) "national" of a
Party means:
(i) with respect to Tunisia:
natural persons of Tunisian nationality in accordance with Tunisian law;
(ii) with respect to the United
States: natural persons who are nationals of the United States under its
law;
(c) "company of a Party"
means any kind of corporation, company, association, or other
organization, legally constituted under the laws and regulations of a
Party or a political subdivision thereof whether or not organized for
pecuniary gain, or privately or governmentally owned;
(d) "return" means an
amount derived directly or indirectly from or associated with an
investment, including profits; dividends; interest; capital gains;
royalties on industrial and intellectual property rights; management,
technical assistance or other fees;
(e) "associated activities"
include the organization, control, operation, maintenance, and
disposition of companies, branches, agencies, offices, factories or
other facilities for the conduct of business; the making, performance
and enforcement of contracts; the acquisition, use, protection and
disposition of property of all kinds including intellectual and
industrial property rights; and the borrowing of funds, the purchase and
issuance of equity shares, and the purchase of foreign exchange for
imports.
2. Each Party reserves the right
to deny to any company the advantages of this Treaty if nationals of any
third country directly or indirectly control such company; but, in the
case of a company of the other Party, only if that company has no
substantial business activities in the territory of the other Party or
is controlled directly or indirectly by nationals of a third country
with which the denying Party does not maintain normal economic
relations.
3. Any alteration of the form in
which assets are invested or reinvested shall not affect their character
as investment.
ARTICLE II
1. Each Party shall permit in its
territory investments, and activities associated therewith, by nationals
and companies of the other Party on a basis no less favorable than that
accorded in like situations to investments of nationals or companies of
any other country and, within the framework of its existing laws and
regulations, no less favorable than that accorded in like situations to
investments of its own nationals and companies.
2. Each Party shall accord to
these investments, once established, and associated activities,
treatment not less favorable than that accorded in like situations to
investments of its own nationals and companies or to investments of
nationals and companies of any third country, whichever is the most
favorable.
3. Investment shall at all times
be accorded fair and equitable treatment and shall enjoy full protection
and security and shall in no case be accorded treatment less than that
required by international law. Neither Party shall in any way impair by
arbitrary and discriminatory measures the management, operation,
maintenance, use, enjoyment, acquisition, expansion, or disposal of
investments. Each Party shall observe any obligation it may have entered
into with regard to investments.
4. Subject to the laws relating
to the entry and sojourn of aliens, nationals of either Party shall be
permitted to enter and to remain in the territory of the other Party for
the purpose of establishing, developing, administering or advising on
the operation of an investment to which they, or a company of the first
Party that employs them, have committed or are in the process of
committing a substantial amount of capital or other resources.
5. Without prejudice to the right
of either Party to prescribe fair procedures in connection with the
employment of top managerial personnel, companies which are legally
constituted under the applicable laws and regulations of one Party, and
which are investments, shall be permitted to engage such personnel of
their choice, regardless of nationality.
6. Each Party shall endeavor not
to impose performance requirements as a condition of establishment,
expansion or maintenance of investments, which require or enforce
commitments to export goods produced, or which specify that goods or
services must be purchased locally, or which impose any other similar
requirements.
7. Each Party shall provide to
the nationals and companies of the other Party the right of recourse to
administrative and judicial authorities in order to assert claims and
enforce rights in the event of a dispute relating to an investment.
8. Each Party shall make public
all laws and regulations that pertain to or affect investments in its
territory of nationals or companies of the other Party. The party's
practices, administrative procedures, and verdicts can be consulted by
investors of the other Party.
9. The treatment accorded by the
United States of America to investments and associated activities under
the provisions of this Article shall in any political subdivision of the
United States of America be the treatment accorded therein to companies
legally constituted under the laws and regulations of any other
political subdivision of the United States of America.
10. The most favored nation
provisions of this Article shall not apply to advantages accorded by
either Party to nationals or companies of any third country by virtue of
that Party's binding obligations that derive from full membership in a
regional customs union or free trade area.
ARTICLE III
1. Investments shall not be
expropriated or nationalized either directly or indirectly through
measures tantamount to: expropriation or nationalization ("expropriation")
except for a public purpose; in a non-discriminatory manner; upon
payment of prompt, adequate and effective compensation; and in
accordance with due process of law and the general principles of
treatment provided for in Article II (3). Compensation shall be
equivalent to the full value of the expropriated investment immediately
before the expropriatory action was taken or became known.
2. A national or company of
either Party that asserts that all or part of its investment has been
expropriated shall have a right to prompt review by the appropriate
judicial or administrative authorities of the other Party to determine
whether any such expropriation has occurred and, if so, whether such
expropriation, and any compensation therefor, conforms to the principles
of international law.
3. Nationals or companies of
either Party whose investments suffer losses in the territory of the
other Party owing to war or other armed conflict, revolution, state of
national emergency, insurrection, civil disturbance or other similar
events shall be accorded treatment by such other Party no less favorable
than that accorded to its own nationals or companies or to nationals or
companies of any third country, whichever is the most favorable
treatment, as regards any measures it adopts in relation to such losses.
ARTICLE IV
1. Each Party shall, with respect
to investment by nationals or companies of the other Party, permit the
free and prompt transfer, related to such investment, of: (a) returns;
(b) compensation pursuant to Article III; (c) payments arising out of an
investment dispute; (d) payments made under a contract, including
amortization of principal and accrued interest payments made pursuant to
a loan agreement; (e) proceeds from the sale or liquidation of all or
any part of an investment; and (f) additional contributions to capital
for the maintenance or development of an investment.
2. Transfers shall be made in a
freely convertible currency at the prevailing rate of exchange for
commercial transactions on the date of transfer.
3. Notwithstanding the provisions
of paragraphs I and 2, either Party may maintain laws and regulations
(a) requiring reports of currency transfer and (b) imposing income taxes
by such means as a withholding tax applicable to dividends or other
transfers. Furthermore, either Party may protect the rights of
creditors, or ensure the satisfaction of judgments in adjudicatory
proceedings, through the equitable and nondiscriminatory application of
its law.
ARTICLE V
The Parties agree to consult
promptly, on the request of either, to resolve any disputes in
connection with the Treaty, or to discuss any matter relating to the
interpretation or application of the Treaty.
ARTICLE VI
1. For the purposes of this
Article, an investment dispute is defined as a dispute involving (a) the
interpretation or application of an investment agreement between a Party
and or (b) an alleged breach national or company of the other Party; or
of any right conferred or created by this Treaty with respect to an
investment.
2. In the event of an investment
dispute between a Party and a national or company of the other Party,
the parties to the dispute shall initially seek to resolve the dispute
by consultation and negotiation. Subject to Paragraph 3 of this Article,
if the dispute cannot be resolved through consultation and negotiation,
the dispute shall be submitted for settlement in accordance with
previously agreed, applicable dispute-settlement procedures.
3. (a) The national or company
concerned may choose to consent in writing to the submission of the
dispute to the International Centre for the Settlement of Investment
Disputes ('Centre") for the settlement by conciliation or
arbitration, at any time after six months from the date upon which the
dispute arose. Once the national or company concerned has so consented,
either party to the dispute may institute such proceedings provided:
(i) the dispute has not been
submitted by the national or company for resolution in accordance with
any applicable previously agreed dispute settlement procedures; and
(ii) the national or company
concerned has not brought the dispute before the courts of justice or
administrative tribunals or agencies of competent jurisdiction of the
Party that is a party to the dispute. Unless the parties to the
dispute agree otherwise, the national or company may choose whether to
proceed through conciliation or arbitration.
(b) Each Party hereby consents
to the submission of an investment dispute to the Centre for settlement
by conciliation or arbitration, applying the provisions of the
Convention on the Settlement of Investment Disputes between States and
Nationals of Other States done at Washington, March 18, 1965
('Convention') and the Regulations and Rules of the Centre.
4. In any proceeding involving
an investment dispute, a Party shall not assert, as a defense,
counter-claim, right of set-off or otherwise, that the national or
company concerned has received or will receive, pursuant to an insurance
or guarantee contract, indemnification or other compensation for all or
part of its alleged damages.
5. For the purposes of this
Article, any company legally constituted under the applicable laws and
regulations of either Party or a political subdivision thereof but that,
immediately before the occurrence of the event or events giving rise to
the dispute, was an investment of nationals or companies of the other
Party, shall, in accordance with Article 25(2)(b) of the Convention
referred to in paragraph 3 of this Article, be treated as a national or
company of such other Party.
ARTICLE VII
1. Any dispute between the
Parties concerning the interpretation or application of the Treaty which
is not resolved through consultations or other diplomatic channels,
shall be submitted, upon the request of either Party, to an arbitral
tribunal for binding decision in accordance with the applicable rules of
international law. in the absence of an agreement by the Parties to the
contrary, the arbitration rules of the United Nations Commission on
International Trade Law (UNCITRAL), except to the extent modified by the
Parties or by the arbitrators, shall govern.
2. Within two months of receipt
of a request, each Party shall appoint an arbitrator. The two
arbitrators shall select a third arbitrator as Chairman, who in a
national of a third State. The UNCITRAL Rules for appointing members of
three member panels shall apply mutatis mutandis to the
appointment of the arbitral panel except that the appointing authority
referenced in those rules shall be the Secretary General of the Centre.
3. Unless otherwise agreed, all
submissions shall be made and all hearings shall be completed within six
months of the data of selection of the third arbitrator, and the
Tribunal shall render its decisions within two months of the date of the
final submissions of the date of the closing of the hearings, whichever
is later.
4. Expenses incurred by the
Chairman, the other arbitrators, and other costs of the proceedings
shall be paid for equally by the Parties. The Tribunal may, however, at
its discretion, direct that a higher proportion of the costs be paid by
one of the Parties.
ARTICLE VIII
The provisions of Article VI and
VII shall not apply to a dispute arising (a) under the export credit,
guarantee or insurance programs of the Export-Import Bank of the united
States or (b) under other official credit, guarantee or insurance
arrangements pursuant to which the Parties have agreed to other means of
settling disputes.
ARTICLE IX
This Treaty shall not derogate
from:
(a) laws and regulations, administrative
practices or procedures, or administrative or adjudicatory decisions
of either Party;
(b) international legal obligations; or
(c) obligations assumed by either Party,
including those contained in an investment agreement or an investment
authorization
that entitle investments or associated
activities to treatment sore favorable than that accorded by this
Treaty in like situations.
ARTICLE X
1. This Treaty shall not preclude
the application by either Party of measures necessary for the
maintenance of public order, the fulfillment of its obligations with
respect to the maintenance or restoration of international peace or
security, or the protection of its own essential security interests.
2. This Treaty shall not
preclude either Party from requiring that investments and associated
activities be established in accordance with the terms and conditions
set forth in its legislation provided that such terms and conditions do
not impair any right set forth in this Treaty.
ARTICLE XI
1. With respect to its tax
policies, each Party should strive to accord fairness and equity in the
treatment of investment of nationals and companies of the other Party.
2. Nevertheless, the provisions
of this Treaty, and in particular Article VI and VII, shall apply to
matters of taxation only with respect to the following:
(a) expropriation, pursuant to Article III;
(b) transfers, pursuant to Article IV; or
(c) the observance and enforcement of terms of
an investment agreement or authorization as referred to in Article
VI(l)(a),
to the extent they are not subject to the
dispute settlement provisions of a Convention for the avoidance of
double taxation between the two Parties, or have been raised under
such settlement provisions and are not resolved within a reasonable
period of time.
ARTICLE XII
This Treaty shall apply to the
political subdivisions of the Parties.
ARTICLE XIII
1. This Treaty shall enter into
force thirty days after the date of exchange of instruments of
ratification. It shall remain in force for a period of ten years and
shall continue in force unless terminated in accordance with paragraph 2
of this Article. It shall apply to investments made or acquired after
the time of entry into force as well as to investments existing at the
time of entry into force. If any issue arises with respect to any
pre-1956 U.S. investment, the two sides agree to consult as necessary on
such issues to reach a satisfactory solution.
2. Either Party may, by giving
one year's written notice to the other Party, terminate this Treaty at
the end of the initial ten year period or at any time thereafter.
3. With respect to investments
made or acquired prior to the date of termination of this Treaty and to
which this Treaty otherwise applies, the provisions of all of the other
Articles of this Treaty shall thereafter continue to be effective for a
further period of ten years from such date of termination.
4. The Protocol shall form an integral part of
the Treaty.
IN WITNESS WHEREOF, the
respective plenipotentiaries have signed this Treaty.
DONE in duplicate at Washington
on the fifteenth day of May, 1990, in the English, Arabic and French
languages, the three texts being equally authentic.
FOR THE UNITED STATES OF AMERICA:
[signature] Carla Hills
FOR THE REPUBLIC OF TUNISIA:
[signature]
Ismail Khelil
PROTOCOL
1. (a) with respect to Article
II, paragraphs 1 and 2, the United States reserves the right to limit
the extent to which nationals or companies of Tunisia or their
investments may within U.S. territory establish, acquire interests in,
or carry on investments engaged in air transportation; ocean and coastal
shipping; banking; insurance; government grants; government insurance
and loan programs; energy and power production; custom house brokers;
ownership of real estate; ownership and operation of broadcast or common
carrier radio and television stations; ownership of shares in the
Communications Satellite Corporation; the provision of common carrier
telephone and telegraph services; the provision of submarine cable
services; primary dealership in U.S. Government securities; maritime
related services; use of land and natural resources. Rights to engage in
mining on the public domain shall be dependent on reciprocal rights
being granted to investments of U.S. nationals or companies within the
territory of Tunisia.
(b) With respect to Article II,
paragraph 9, the United States interprets 'political subdivision of the
United States of America' to mean the fifty states of the United States
and the District of Columbia.
(c) With respect to Article II,
paragraph 10, the Republic of Tunisia reserves the right not to apply
most favored nation provisions to nationals and companies of the United
States that arise out of any relationship with the Arab Maghreb Union.
2. With respect to Article III,
paragraph 1, the compensation shall include an amount to compensate for
any delay in payment that may occur from the date of expropriation.
Prompt transfer of the compensation at the rate of exchange used for
commercial purposes on the date of expropriation shall be guaranteed in
order to maintain the value of the compensation.
3. With respect to Article IV, in
exceptional financial or economic circumstances relating to foreign
exchange, the Republic of Tunisia may temporarily delay transfers of the
type specified in Article XV(1)(e), but only (a) in a manner consistent
with Article 11; (b) for the time period necessary to restore its
reserves of foreign exchange to a minimally acceptable level, but not to
exceed three years from the date when the transfer is requested; and (c)
provided that the national or company has an opportunity to invest the
proceeds in a manner which will preserve the value until transfer
occurs.
4. With respect to Article VI, if
the Government of Tunisia (or any of its competent agencies) makes
payment to any of its nationals or companies under an indemnity or a
guarantee it has granted with respect to an investment or any part
thereof in the territory of the United States, and therefore has become
subrogated to any of the rights of such nationals or companies with
respect to such investment, the United States shall recognize (a) such
rights of the Government of Tunisia (or its competent agency), and that
the Government of Tunisia (or its competent agency) in entitled by
virtue of subrogation to enforce such rights.
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