Trade
Compliance Center
CAMEROON
BILATERAL INVESTMENT TREATY Signed
February 26, 1986; Entered into Force April 6, 1989
99th
CONGRESS 2nd Session
SENATE TREATY DOC.
99-22 INVESTMENT
TREATY WITH CAMEROON
MESSAGE
FROM
THE
PRESIDENT OF THE UNITED STATES
TRANSMITTING
THE TREATY
BETWEEN THE UNITED STATES OF AMERICA AND THE REPUBLIC OF CAMEROON
CONCERNING THE RECIPROCAL ENCOURAGEMENT AND PROTECTION OF INVESTMENT,
SIGNED AT WASHINGTON ON FEBRUARY 26, 1985
JUNE 2,
1986. Treaty was read the first time, and together with the accompanying
papers, referred to the Committee on Foreign Relations and ordered to be
printed for use of the Senate
U.S.
GOVERNMENT PRINTING OFFICE
WASHINGTON
: 1986
LETTER
OF TRANSMITTAL
THE WHITE
HOUSE, May
22,1986.
To the
Senate of the United States.
With a
view to receiving the advice and consent of the Senate to ratification,
I transmit herewith the Treaty between the United States of America and
the Republic of Cameroon concerning the Reciprocal Encouragement and
Protection of Investment, signed at Washington on February 26, 1986. I
transmit also, for the information of the Senate, the report of the
Department of State with respect to this treaty.
The
Bilateral Investment Treaty (BIT) program, initiated in 1981, is
designed to encourage and protect U.S. investment in developing
countries. The treaty is an integral part of U.S. efforts to encourage
Cameroon and other governments to adopt macroeconomic and structural
policies that will promote economic growth. It is also fully consistent
with U.S. policy toward international investment. That policy holds that
an open international investment system in which participants respond to
market forces provides the best and most efficient mechanism to promote
global economic development. A specific tenet, reflected in this treaty,
is that U.S. direct investment abroad and foreign investment in the
United States should receive fair, equitable, and nondiscriminatory
treatment. Under this treaty, the parties also agree to international
law standards for expropriation and compensation; free financial
transfers; and procedures, including international arbitration, for the
settlement of investment disputes.
I
recommend that the Senate consider this treaty as soon as possible, and
give its advice and consent to ratification of the treaty at an early
date.
RONALD
REAGAN.
LETTER
OF SUBMITTAL
DEPARTMENT OF STATE
Washington, May 6, 1986 .
The
PRESIDENT,
The
White House.
THE
PRESIDENT: I have the honor to submit to you the Treaty between the
United States of America and the Republic of Cameroon concerning the
Reciprocal Encouragement and Protection of Investment, signed at
Washington, February 26, 1986. I recommend that this treaty be
transmitted to the Senate for its advice and consent to ratification.
Also
enclosed for information only is a related exchange of letters between
the parties, the first an inquiry by the United States dated November
27, 1984 and the second a response, from Cameroon, signed in Yaounde and
dated April 7, 1986.
This
treaty was negotiated under the bilateral investment treaty (BIT)
program which you initiated in 1981. Development of the BIT program and
the negotiation of the individual treaties have been pursued by the
Office of the United States Trade Representative and the Department of
State with the active participation of the Departments of Commerce and
Treasury, in conjunction with other interested U.S. Government agencies.
On March 25 this year, the first six BITs--with Haiti, Morocco, Panama,
Senegal, Turkey, and Zaire--were submitted to the Senate for its advice
and consent to .ratification. Additional BITs, with Bangladesh and
Egypt, are being prepared for submission to the Senate.
In 1981
you initiated the global bilateral investment treaty (BIT) program to
encourage and protect U.S. investment in developing countries. By
providing certain mutual guarantees and protections, a BIT creates a
more stable and predictable legal framework for foreign investors in the
territory of each of the treaty Parties. The negotiation of a series of
bilateral treaties with interested countries establishes greater
international discipline in the investment area.
The BITs
which have been signed as well as others under negotiation are an
integral part of U.S. efforts to encourage other governments to adopt
macroeconomic and structural policies that will promote economic growth.
They are also fully consistent with your policy statement on
international investment of September 9, 1983, which states that
international direct investment flows should be determined by private
market forces and should receive fair, equitable and nondiscriminatory
treatment.
Our
experience to date has shown that interested countries are willing to
provide U.S. investors with significant investment guarantees and
assurances as a way of inducing additional investment. It is U.S. policy
to advise potential treaty partners that conclusion of a BIT with the
United States is an important and favorable factor in the investment
relationship, but does not in and of itself result in immediate increase
in U.S. investment flows.
Congressional
support for the BIT program is reflected in Section 601(a) and (b) of
the Foreign Assistance Act, as amended, in particular at Section 601(b)
which provides:
In order
to encourage and facilitate participation by private enterprise to the
maximum extent practicable in achieving any of the purposes of this Act,
the President shall . . . (3) accelerate a program of negotiating
treaties for commerce and trade, including tax treaties, which shall
include provisions to encourage and facilitate the flow of private
investment to, and its equitable investment in, friendly countries and
participating in programs under this Act.
BITS are
consistent in purpose with the network of treaties of Friendship,
Commerce and Navigation (FCNA) which the United States, negotiated from
the early years of the Republic until the last successful negotiations
with Thailand and Togo in the late 1960s. They continue the U.S. policy
of securing by agreement standards of equitable treatment and protection
of U.S. citizens carrying on business abroad, and institutionalizing
processes for the settlement of disputes between investors and host
countries, and between governments. We expect that a series of bilateral
treaties with interested countries will establish greater international
discipline in the investment area.
The BIT
was designed to protect investment not only by treaty but also by
reinforcing traditional international legal principles and practice
regarding foreign direct private investment. In pursuit of this
objective, the model BIT adopts FCN language and concepts. Traditional
FCN provisions granting rights which are not important to the typical
U.S. investor were eliminated and replaced with more specific language
concerning investment protection. Perhaps most significantly, the BIT
goes beyond the traditional FCN to provide investor-host country
arbitration in instances where an investment dispute arises.
Our BIT
approach followed similar programs that had been undertaken with
considerable success by a number of European countries, including the
Federal Republic of Germany and the United Kingdom, since the early
1960s. Indeed, our industrialized partners already have nearly two
hundred BITs in force, primarily with developing countries. Our
treaties, which draw upon language as well as European counterparts, are
more comprehensive and far-reaching than European BITS.
The
U..S-Cameroon Treaty
The treaty
with Cameroon was negotiated by an inter-agency team led by officials
from the Office of the United States Trade Representative and the
Department of State. The treaty satisfies all four main BIT objectives:
-foreign
investors are to be accorded treatment in accordance with international
law and are to be treated no less favorably than investors of the host
country or no less favorably than investors of third countries,
whichever is the most favorable treatment ("national" or "most-favored-nation"
treatment) subject to certain specified exceptions;
-international
law standards shall apply to the expropriation of investments and to the
payment of compensation for expropriation;
-free
transfers shall be afforded to funds associated with an investment into
and out of the host country; and procedures are to be established which
allow an investor to a dispute with a Party directly to binding
third-party arbitration.
The
provisions on treatment of foreign investment and arbitration, and in
particular Cameroon's acceptance of international law as the governing
law, mark an important achievement for the BIT program and our
investment and international arbitration policies.
A
technical memorandum explaining in detail the provisions of this treaty
will be transmitted separately to the Senate Committee on Foreign
Relations. That technical memorandum explains, clause by clause, the
provisions of the treaty with Cameroon.
Some
provisions of the treaty with Cameroon differ in minor respects from the
U.S. model text. In general, however, the treaty closely follows the
language contained in the U.S. model text, the most significant
provisions of which are as follows.
The model
BIT's definition section clarifies terms such as "company of a
Party" and "investment." The BIT concept of "investment"
is broad and designed to be flexible; although numerous types of
economic interests are enumerated, the intent is to include all
legitimate interests in the territory of either Party whether directly,
or indirectly controlled by nationals of the other, having economic
value or "associated" with an investment. Protected "companies
of a Party" are those incorporated or otherwise organized under the
laws of a Party in which nationals of that party have a substantial
interest.
The model
BIT accords the better of national or most-favored-nation (MFN)
treatment to foreign investment, subject to each Party's exceptions
which are listed in a separate Annex. The exceptions are designed to
protect state regulatory interests and for the United States to
accommodate the derogations from national treatment in state or federal
law relating to such areas as air transport, shipping, banking,
telecommunications, energy and power production, insurance, and from
national and MFN treatment in the case of ownership of real property.
Any additional restrictions or limitations which a Party may adopt with
respect to those matters or sectors excepted from the standards are not
to affect existing investments. The BIT also includes general treatment
protections designed to be a guide to interpretation and application of
the treaty. Thus, the Parties agree to accord investments "fair and
equitable treatment" and "full protection and security"
in no case "less than that required by international law." It
specifically grants nationals of a Party the right to establish
investments in the territory of the other Party, restricts the right to
impose performance requirements, and obliges Parties to observe their
contractual obligations with investors. The U.S. model also provides
that companies legally constituted under the laws of the other Party
(i.e. subsidiaries of companies of a Party) with investments in that
country shall be permitted to engage "top managerial personnel of
their choice, regardless of nationality."
The model
BIT also confers protection from unlawful interference with property
interests and assures compensation in accordance with international law
standards. It provides that any direct or indirect taking must be: for a
public purpose, nondiscriminatory; accompanied by the payment of prompt,
adequate and effective compensation; and in accordance with due process
of law and the general standards of treatment discussed above. The BIT's
definition of "expropriation" is broad and flexible;
essentially "any measure" regardless of form, which the effect
of depriving an investor of his management, control or economic value in
a project may constitute an expropriation requiring compensation equal
to the "fair market value." Such compensation, which "shall
not reflect any reduction in such fair market value due to the
expropriatory action," must be "without delay," "effectively
realizable, freely transferable and bear current interest from the date
of the expropriation . . . " The BIT grants the right to "prompt
review" by the relevant judicial or administrative authorities in
order to determine whether the compensation offered is consistent with
these principles. It also extends national and MFN treatment to
investors in cases of loss due to war or other civil disturbance. The
BIT does not provide, however, a specific valuation method for
compensating such losses.
The model
BIT provides for free transfers "related to an investment,"
specifically of returns, compensation for expropriation, contract
payments, proceeds from sale, and contributions to capital for
maintenance or development of an investment. Such transfers are to be
made in a "freely convertible currency at the prevailing market
rate of exchange on the date of transfer with respect to spot
transactions in the currency to be transferred." The model text
recognizes that notwithstanding this guarantee Parties can maintain
certain laws, regulations, or court-imposed obligations which could
affect the disposition of investment assets. In particular, the model
text provides that Parties can require reports of currency transfers and
impose income taxes by such means as a withholding tax on dividends. The
model text also recognizes that Parties retain the right to protect the
rights of creditors and ensure the satisfaction of judgments in
adjudicatory proceedings.
The model
BIT provides that where certain defined investment disputes arise
between a Party and a national or company of the other Party, including
disputes as to the interpretation of an investment agreement, and the
dispute cannot be solved through negotiation, it may be submitted to
arbitration in accordance with any dispute settlement procedures to
which the national or company and the host country have previously
agreed. Unless the national or company has submitted the dispute to
previously agreed dispute settlement procedures or to adjudication by
domestic courts or other tribunals of the host country, the national or
company may submit the dispute to the International Centre for the
Settlement of Investment Disputes ("ICSID") for binding
arbitration. Exhaustion of local remedies is not required. In a separate
provision, the BIT Parties also agree to grant nationals and companies
of the other Party access to their domestic courts in order to assert
claims and enforce rights with respect to investments.
The model
BIT provides for state-to-state arbitration between the Parties in case
of a dispute regarding the interpretation or application of the treaty.
In the absence of an agreement that other rules apply, the BIT refers
the Parties to specific procedural rules which must govern the
arbitration. The BIT also outlines the procedures for the creation of
the arbitral panel.
The model
BIT exhorts Parties to apply their tax policies fairly and equitably.
Because the United States specifically addresses tax matters in tax
treaties, the BIT generally excludes such matters. Another BIT provision
exempts disputes arising under Export-Import Bank programs, or other
credit guarantee or insurance arrangements providing for alternative
dispute settlement arrangements, from the standard BIT arbitration
clauses. The model BIT also states that the treaty shall not derogate
from any obligations that require more favorable treatment of
investments and declares that the treaty shall not preclude measures
necessary for public order or essential security interests. The model
BIT enters into force 30 days after exchange of ratifications and
continues in force for at least ten years. Thereafter, either Party may
terminate the treaty, subject to one year's written notice.
Each of
these model provisions was developed after lengthy and extensive
consultations within the U.S. Government and with the private sector.
Nonetheless, in negotiating a particular treaty, the U.S. Government
retains, of course, some flexibility to adopt modifications as necessary
and in light of experience. While the U.S. model text has recently been
simplified, the provisions summarized above have all been retained.
Some of
the provisions of the U.S.-Cameroon treaty differ in minor respects from
the U.S. negotiating text, although none of the changes represent
substantive departures from U.S. objectives. The more significant
modifications are as follows:
(1)
Expropriation (Article III): The treaty with Cameroon is substantively
identical to the model text with respect to what constitutes an
expropriation and the compensation due under international law in such
cases. This treaty provides, however, for payment of interest in such
cases at a rate equivalent to "current international rates,"
instead of the "commercially reasonable rate" provided for in
the model text. In addition, this treaty provides that compensation for
expropriation shall be freely transferable at the "rate of exchange
generally used by the IMF" on the date of expropriation. The model
text provides for such payments at the "prevailing market rate of
exchange on the date of expropriations." Both of these changes were
made in response to concerns by the Cameroonians and neither is intended
to be substantive.
(2)
Transfers (Article V): The treaty's transfers provisions are generally
similar in substance to the model text and provide for free transfer of
funds associated with an investment in freely convertible currency,
without delay, at prevailing market exchange rates. There are two minor
deviations in the Cameroonian text:
(a) The
model text provides that transfers shall be permitted at "the
prevailing market rate of exchange," while the treaty with Cameroon
refers to "the prevailing exchange rate generally used by the IMF;"
and
(b) The
treaty with Cameroon provides that in the case of investments in
Cameroon, if the free currency of the investor's choice is unavailable,
transfers will be permitted in the currency or currencies in which the
investment was constituted or in any other freely convertible currency.
(3)
Dispute settlement/Arbitration (Article VII). Dispute settlement
provisions closely follow those in the model text. In the absence of
other dispute settlement procedures specified in an investment agreement
between a Party and an investor, investors covered under the treaty have
recourse to binding arbitration--through the International Centre for
the Settlement of Investment Disputes (ICSID).
The treaty
with Cameroon contains a provision, not contained in the model text,
which states that investors will not be entitled to compensation "for
more than the value of its affected investment . . ." This reponds
to Cameroonian concerns that investors not be compensated, through
insurance or otherwise, in excess of actual losses incurred.
(4)
Compensation for Damages (Article IV): Unlike the model text, the treaty
with Cameroon specifically states that in the case of damages caused by
war or similar events, "both Parties agree" that no
compensation is owed to nationals or companies responsible for damage to
their own investment." The model treaty implicitly denies
compensation for damages in such cases.
(5)
Consultations (Article VI): Unlike the model text, the treaty with
Cameroon provides that consultations shall be held to resolve any
disputes related to the treaty at the request of either Party. The
treaty goes beyond the model text provision by:
(a)
allowing Parties to request consultations on the ground that their
international interests are or are likely to be affected by investment
related laws, practices, or policies of the other Party; and
(b)
including a provision that in order to assess the effectiveness of the
treaty in encouraging and protecting investments, consultations "could"
take place periodically between the two Parties. This provision, which
does not represent a firm obligation, was included in response to
Cameroon's desire to include a formal joint economic commission as an
element of the treaty, a proposal which the United States did not
accept.
(6)
Employment Rights (Article 11 5(b)): In the model text, investors have
the right to engage top managerial personnel "regardless of
nationality." In this treaty, the phrase "regardless of
nationality" is qualified by a cross-reference to each Party's laws
relating to the entry and sojourn of aliens. The Cameroonians insisted
on this clarification to insure that "regardless of nationality"
would not permit entry into Cameroon of South Africans or certain other
nationalities which the Cameroonian Government wishes to exclude. The "regardless
of nationality" phrase has been included in the model text to
insure that companies of a Party investing in the United States comply
with U.S. anti-discrimination employment laws in their hiring practices.
Although this phrase has not been included in the provision of Article
II 5(b) which permits investors to hire technical, professional and
managerial personnel of their choice, it is understood that the right to
hire such personnel nevertheless remains subject to U.S.
anti-discrimination employment laws.
(7) Entry
into Force (Article XIII): Paragraph two of Article XIII of the treaty
with Cameroon provides that the treaty will enter into force 30 days
after the Parties have notified each other that "the constitutional
procedures required for ratification in their respective countries have
been completed." The U.S. will seek assurances that this means that
entry into force will take place 30 days after exchange of instruments
of ratification, as is provided in the model text.
(8)
Taxation (Article XI): The model text provides that the disdispute
settlement provisions of the BIT apply only to certain matters of
taxation expressly mentioned in the treaty. This clause was deemed
unnecessary and was omitted at the request of the Cameroonian
negotiators. Instead, the treaty with Cameroon expressly provides that
the provisions on treatment of investment and consultation between the
Parties do not apply to taxation matters. This clause responds to U.S.
concerns that neither Party be deemed to be under obligations either to
grant national treatment or to engage in consultations with respect to
matters of taxation. Under U.S. law and policy, such issues are
negotiated in the context of bilateral income tax treaties.
At the
request of U.S. negotiators, Cameroon has confirmed in a letter signed
in Yaounde and dated April 7, 1986, that PECTEN, a Cameroonian
subsidiary of Shell Oil Company, is considered to be a U.S. firm covered
under the Treaty. This exchange of letters is enclosed with this report
for information only.
Submission
of this treaty marks a significant development in our international
investment policy. I join with the United States Trade Representative
and other U.S. Government agencies in supporting this treaty and favor
its transmission to the Senate at an early date.
Respectfully
submitted,
Enclosure: As stated.
TREATY
BETWEEN THE UNITED STATES OF AMERICA AND THE REPUBLIC OF CAMEROON
CONCERNING THE RECIPROCAL ENCOURAGEMENT AND PROTECTION OF INVESTMENT
The United
States of America and the Republic of Cameroon (each hereinafter
referred to as a "Party"),
Desiring
to promote greater mutual economic cooperation between them,
particularly with respect to investments by nationals and companies of
one Party in the territory of the other Party; and
Recognizing
that agreement upon the treatment to be accorded such investments will
stimulate the flow of private capital and the economic development of
both Parties,
Aware that
fair and equitable treatment would contribute to maintaining a stable
framework for investment in order to facilitate the maximum effective
utilization of economic resources,
Have
resolved to conclude a treaty concerning the encouragement and
reciprocal protection of investments, and
Have
agreed as follows:
ARTICLE
I Definitions
1. For the
purpose of this Treaty,
(a) "Company
of a Party means any kind of juridical entity including any 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;
(b) "Investment"
means every kind of asset in the territory of either Party, owned or
controlled directly or indirectly by nationals or companies of either
party, including equity, debt, service and investment contracts; and
includes:
(i)
tangible and intangible property, including rights, such as mortgages,
liens and pledges;
(ii) all
or part of the 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 all permits and licenses such as
those required for the exploitation of natural resources; (c) "Return"
means any amount derived directly or indirectly from an investment,
including profits; dividends; interest; capital gains; royalty payment;
management, technical assistance or other fee; and payments in kind;
(d) "National"
of a Party means a natural person who is a national of a Party under its
laws and regulations;
(e) "Own
or control" means ownership or control that is direct or indirect,
including ownership or control exercised through subsidiaries of,
affiliates, wherever located;
(f) "Territory"
means all the territory of country recognized by international law.
2. Any
assets or returns invested or reinvested are also considered as
investment.
3. Each
Party reserves the right to deny to any of its own companies or to a
company of the other Party the advantages of this Treaty; if nationals
of any third country own or control such company. However, if one Party
believes that the benefits of this Treaty should not be extended to a
company of the other Party for this reason, it shall promptly consult
with the other Party to seek a mutually satisfactory resolution.
ARTICLE
II
Encouragement
and Treatment of Investment
1. Each
Party shall endeavor to maintain a favorable environment for existing or
new investments in its territory by nationals and companies of the other
Party and shall permit such investments be acquired and established on
terms and conditions that accord treatment no less favorable than the
treatment it accords in like situations to investment of its own
nationals or companies or to nationals and companies of any third
country, whichever is most favorable.
2. Each
Party shall accord existing or new investments in its territory, and
associated activities related to these investments, of nationals or
companies of the other Party treatment no less favorable than that which
it accords in like situations to investments and associated activities
of its own nationals or companies, or nationals or companies of any
third country, whichever is the most favorable. Associated activities
related to an investment include, but are not limited to:
(i) the
establishment, control and maintenance of branches, agencies, offices,
factories or other facilities for the conduct of business;
(ii) the
organization of companies under applicable laws and regulations; the
acquisition of companies or interests in companies or in their property;
and the management, control, maintenance, use, enjoyment and expansion
and the sale, liquidation, dissolution or other disposition, of
companies organized or acquired
(iii) the
making, performance and enforcement of contracts related to investment;
(iv) the
acquisition (whether by purchase, lease or any other legal means),
ownership and disposition (whether by sale, testament or any other legal
means) of personal property of all kinds, both tangible and intangible.
3. (a)
Notwithstanding the preceding provisions of this Article, each Party
reserves the right to maintain limited exceptions to the standard of
treatment otherwise required if such exceptions fall within one of the
sectors or matters listed in the Annex to this Treaty. Each Party agrees
to notify the other Party of any future exceptions falling within the
sectors or matters listed in the Annex, and to limit as much as possible
the number of exceptions. It is understood the treatment accorded
pursuant to this subparagraph shall not be less favorable than that
accorded in like situations to investments and associated activities of
nationals or companies of any third country, except with respect to
ownership of real property. Rights to engage in mining on the public
domain shall dependent on reciprocity.
(b) No
exception introduced after the date of entry into force of this treaty
shall apply to investments of nationals or companies of the other Party
existing in that sector at the time the exception becomes effective.
4.
Investment of nationals and companies of either Party shall at all Arial
be accorded fair and equitable treatment and shall enjoy full protection
and security in the territory of the other Party. The treatment,
protection and security of investment shall be in accordance with
applicable national laws and 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 investment made by nationals or companies of the other
Party. Each Party shall observe any obligation it may have entered into
with regard to investment of nationals or companies of the other Party.
5. (a)
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, directing, 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.
(b)
Nationals and companies of either Party shall be permitted to engage,
within the territory of the other Party, professional, technical and
managerial personnel of their choice, for the particular purpose of
rendering professional, technical and managerial assistance necessary
for the planning and operation of investments. Companies which are
incorporated, constituted, or otherwise organized under the applicable
laws or regulations of one Party, and which are owned or controlled by
nationals or companies of the other Party, shall be permitted to engage,
within the territory of the first Party, top managerial personnel of
their choice, regardless of nationality, subject to the provisions of
paragraph 5(a) above.
6. Neither
Party shall impose performance requirements as a condition of
establishment, expansion or maintenance of investments owned by
nationals or companies of the other Party, which require or enforce
commitments to export goods produced locally, or which specify that
goods or services must be purchased locally, or which impose any other
similar requirements.
7. Each
Party recognizes that in order to maintain a favorable environment for
investments in its territory by nationals or companies of the other
Party, it shall provide effective means of asserting claims and
enforcing rights with respect to investment agreements, investment
authorizations and properties. Each Party shall grant to nationals or
companies of the other Party, on terms and conditions no less favorable
than those which it grants in like situations to its own nationals or
companies or to nationals and companies of any third country, whichever
is the most favorable treatment, the right of access to its courts of
justice, administrative tribunals and agencies, and all other bodies
exercising adjudicatory authority, and the right to employ persons of
their choice, who otherwise qualify under applicable laws and
regulations of the forum for the purpose of asserting claims, and
enforcing rights, with respect to their investments.
8. Each
Party and its political or administrative subdivisions shall make public
all laws, regulations, administrative practices and procedures, and
adjudicatory decisions that pertain to or affect investments in its
territory of nationals or companies of the other Party.
9. The
treatment accorded by a Party to nationals or companies of the other
Party under the provisions of paragraphs 1 and 2 of this article shall
in any State, Territory, possession, or political or administrative
subdivision of the Party be the treatment accorded therein to companies
incorporated, constituted or otherwise duly organized in other States,
Territories, possessions, or political or administrative subdivisions of
the said Party.
ARTICLE
III Compensation
for Expropriation
1.
Investments shall not be expropriated or nationalized either directly or
indirectly except for a public purpose and in accordance with due
process of law and the principles enunciated in paragraph 4 of Article
II. Such expropriations or nationalizations give right to prompt,
adequate and effective compensation corresponding to the fair market
value of the investments as of the day before the measures were taken,
or, as the case may be, as of the day before the measures contemplated
were made public. Such compensation shall include interest at a rate
equivalent to current international rates from the date of expropriation
or nationalization; it shall be paid without delay and be freely
transferable at the rate of exchange generally used by the IMF on that
date.
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 administrative or judicial authorities of the other
Party to determine whether any such expropriation has occurred and, if
so, whether such expropriation, and compensation therefor, conforms to
the provisions of the preceding paragraph.
ARTICLE
IV Compensation
for Damages Due to War and Similar Events
1.
Nationals or companies of one Party whose investments in the territory
of the other Party suffer
(a)
damages due to war or other armed conflict between such other Party and
a third country or
(b)
damages due to revolution, state of national emergency, revolt,
insurrection, riot or act of terrorism in the territory of such other
Party,
shall be
accorded treatment no less favorable than that which the other Party
accords to its own nationals or companies or to nationals or companies
of any third country, whichever is the most favorable treatment, when
making restitution, indemnification, compensation or other appropriate
settlement with respect to such damages. Both Parties agree that no
compensation is owed to nationals or companies responsible for damage to
their own investments.
2. In the
event that such damages result from:
(a) a
requisitioning of property by the other Party's forces or authorities,
or
(b)
destruction of property by the other Party's forces or authorities which
was not caused in combat action or was not required by the necessity of
the situation,
the
national or company shall be accorded restitution or adequate
compensation consistent with Article III.
3. The
payment of any indemnification, compensation or other appropriate
settlement pursuant to this Article shall be freely transferable.
ARTICLE
V
Transfers
1. Each
Party shall permit all transfers related to an investment in its
territory of a national or company of the other Party to be made freely
and without delay into and out of its Territory. Such transfers include,
among others, the following: returns; compensation; payments made
arising out of a dispute concerning an investment; payments made under a
contract, including amortization of principal and accrued interest
payments made pursuant to a loan agreement; amounts to cover expenses
relating to the management of the investment; royalties and other
payments derived from licenses; franchises or other grants of rights or
from administrative or technical assistance agreements, including
management fees; proceeds from the sale of all or any part of an
investment and from the partial or complete liquidation of the company
concerned, including any incremental value; additional contributions to
capital necessary or appropriate for the maintenance or development of
an investment.
2. Except
as provided in Article III paragraph 1, transfers shall be at the
prevailing rate of exchange generally used by the IMF on the date of
transfer in the currency or currencies to be transferred.
(a) The
Republic of Cameroon assures that such transfers shall be permitted in
the currency or currencies, in which the investment was constituted, or
in the absence of such currency or currencies in any other freely
convertible currency.
(b) The
United States assures that such transfers shall be permitted in any
freely convertible currency.
3.
Notwithstanding the preceding paragraphs, either Party may maintain laws
and regulations: (a) prescribing transfers procedures provided such
procedures are carried out expeditiously and do not derogate from the
provisions in paragraphs 1 and 2; (b) requiring reports of currency
transfer; and (c) 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
VI
Consultations
and Exchange of Information
1. The
Parties, upon the written request of one of them, shall promptly hold
consultations for the purpose of discussing the interpretation of
application of the Treaty or to resolve any disputes in connection
therewith. Consultations shall be held should one Party request
consultations on grounds that its international interests are or are
likely to be adversely affected by laws, regulations, administrative
practices or procedures, adjudicatory decisions, or policies of the
other Party that pertain to or affect investments of its nationals or
companies in the territory of such other Party, including conditions
imposed on establishment.
2. If one
Party requests in writing that the other Party supply information in its
possession concerning investments in its territory by nationals or
companies of the Party making the request, then the other Party shall,
consistent with its applicable laws and regulations and with due regard
for business confidentiality, endeavor to establish appropriate
procedures and arrangements for the provision of any such information.
3.
Furthermore, in order to assess the effectiveness of this Treaty in
encouraging and protecting investments, consultations could take place
periodically between the two parties.
ARTICLE
VII
Settlement
of Investment Disputes Between One Party and a National or Company of
the Other Party
1. For
purposes of this Article, an investment dispute is defined as a dispute
involving:
(i) the
interpretation or application of an investment agreement between one
Party and a national or company of the other Party;
(ii) the
interpretation or application of any investment authorization granted by
the foreign investment authorities of one Party to the national or
company of the other Party;
(iii) an
alleged breach 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 shall first seek to resolve the dispute
by consultation and negotiation.
The
parties may, upon the initiative of either of them and during the course
of their consultation and negotiation, agree to rely upon non-binding,
third party procedures.
If the
dispute cannot be resolved through consultation and negotiation, the
dispute settlement procedures agreed upon in advance shall be used.
With
respect to expropriation by either Party, any dispute settlement
procedures specified in the investment agreement between such Party and
the national or company of the other Party shall remain binding and
shall be enforceable in accordance with the terms of the investment
agreement and the relevant provisions of the domestic laws of such Party
and treaties and other international agreements regarding enforcement of
arbital awards to which such Party has subscribed.
3. If the
dispute has not been resolved in accordance with the aforementioned
procedures, the national or company concerned has the option to submit
the dispute in writing to the International Centre for the Settlement of
Investment Disputes (ICSID) for settlement by conciliation or binding
arbitration at any time, provided that within six months from the date
on which the dispute arose, the dispute has not, for any reason, been
submitted by the national or company for resolution in accordance with
any Applicable dispute-settlement procedure previously agreed to by the
parties to the dispute, or, the national or company concerned has not
brought the dispute before the administrative agencies or competent
courts of the Party concerned.
Each Party
hereby consents to the submission of an investment dispute to ICSID for
settlement by conciliation or binding arbitration.
Conciliation
or binding arbitration of such disputes shall be done in accordance with
the provisions of the Convention of the Settlement of Investment
Disputes Between States and nationals of other States and the
Regulations and Rules of ICSID.
4. In any
proceeding, judicial, arbitral, or otherwise, concerning an investment
dispute between it and a national or company of the other Party, a Party
shall not assert, as a defense, counterclaim, right of set-off or any
other right, that the national or company concerned has received or will
receive, pursuant to an insurance contract, indemnification or other
compensation for all or part of the alleged damages from any third party
whatsoever, including such other Party and its political subdivision,
agencies, or instrumentalities. Nevertheless, a national or company of
the said Party shall not be entitled to compensation for more than the
value of its affected investments, taking into account all sources of
compensation within the territory of the other Party liable for
compensation.
5. For the
purpose of any proceedings initiated before ICSID in accordance with
this Article, any company of either Party that, before the occurrence of
the event or events giving rise to the dispute, was owned or controlled
by nationals or companies of the other Party, shall be treated as a
national or company of such other Party.
The
provisions of this Article 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
VIII
Settlement
of Disputes Between the Parties Concerning the Interpretation or
Application of This Treaty
1. Any
dispute between the Parties concerning the interpretation or application
of this treaty shall be resolved through consultations between the
representatives of the two Parties and, if this should fail, through
other diplomatic channels.
2. If the
dispute between the Parties cannot be resolved through the aforesaid
means, and unless there is agreement between the Parties to submit the
dispute to the International Court of Justice, both Parties hereby agree
to submit it upon the request of either Party to an arbitral tribunal
for binding decision in accordance with the applicable rules and
principles of international law.
3. The
tribunal shall be established for each case as follows: within two
months of receipt of a request for arbitration, each Party shall appoint
an arbitrator; the two arbitrators so appointed shall select a third
arbitrator as chairman, who is a national of a third state; the chairman
shall be appointed within two months of the date of appointment of the
other two arbitrators.
4. If the
required appointments have not been made within the time specified in
paragraph 3 of this Article, either of the Parties may, in the absence
of any other agreement, request that the President of the International
Court of Justice make the required appointments. If the President is a
national of one of the Parties or if he is unable to act, the Vice
President shall be asked to make the required appointments. If the Vice
President is unable to act, the next most senior member of the
International Court of Justice who is not a national of one of the
Parties and is able to act shall be asked to make the required
appointments.
5. In the
event that an arbitrator resigns or is for any reason unable to perform
his duties, a replacement shall be appointed within thirty days,
utilizing the same method as described above.
6. Unless
otherwise agreed to by the Parties, all submissions shall be made and
all hearings shall be held within six months of the date of the
selection of the third arbitrator, and the tribunal shall render its
decision within two months of the date of the final submissions or the
date of the closing of the hearings, whichever is later.
1. The
tribunal shall decide in all matters by majority vote. All decisions
shall be binding on both Parties. Each Party shall bear the extent of
its own representation in the arbitration proceedings. The costs of the
proceeding shall be paid for equally by the Parties. The tribunal may,
however, decide that a higher proportion of the costs be paid by the
losing Party. Such a decision shall be binding.
8. The
Parties may agree to specific arbitral procedures. In the absence of
such agreement, the Model Rules on Arbitral Procedures adopted by the
United Nations International Law Commission in 1958 and commended to
member states by the United Nations General Assembly in Resolution 1262
(XII) shall govern.
9. This
Article shall not be applicable to a dispute submitted to ICSID pursuant
to Article VII(3). Recourse to the procedures set forth in this Article
is not precluded, however, in the event an award rendered in such
dispute is not honored by a Party, or an issue exists related to a
dispute submitted to the Center but not argued or decided.
10. The
provisions of this Article 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
Preservation
of Rights
This
Treaty shall not supersede, prejudice or otherwise derogate from
(a) laws,
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, whether extant at
the time of entry into force of the Treaty or thereafter, that entitle
investments or associated activities of nationals or companies of the
other Party to treatment more favorable than that accorded by this
Treaty in like situation.
ARTICLE
X
Measures
Not Precluded by This Treaty
1. This
Treaty shall not preclude the application by either Party or any
political subdivision thereof of any and all measures necessary in its
territory for the maintenance of public order and morals, 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 prescribing special
formalities in connection with the establishment of investments in its
territory of nationals and companies of the other Party, but such
formalities shall not impair the substance of any of the rights set
forth in this Treaty.
ARTICLE
XI
Taxation
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. The
provisions of Articles II and VI of this treaty do not apply to taxation
matters.
ARTICLE
XII
Application
of This Treaty to Political Subdivisions of the Parties
This
treaty shall apply to political subdivisions of the Parties.
ARTICLE
XIII
Entry
into Force, Duration, and Termination
1. This
Treaty shall be subject to ratification by each of the Parties, and the
instruments of ratification shall be exchanged as soon as possible.
2. This
treaty shall enter into force thirty days following the date on which
the Parties have notified each other that the constitutional procedures
required for ratification in their respective countries have been
completed. It shall remain in force for a period of ten years and shall
continue in force, unless otherwise terminated in accordance with the
provisions of paragraph 3 of this Article. It shall apply to investment
existing at the time of entry into force as well as to investments made
or acquired thereafter.
3. This
Treaty shall be renewed by tacit agreement for another ten-year period
unless one of the Parties notifies the other Party in writing of its
intention to terminate it, one year prior to the expiration of the
initial ten year period.
If the
Treaty is not renewed, its termination shall become effective one year
after the other Party receives notification thereof.
4. With
respect to investments made prior to the effective date of termination,
the provisions of this Treaty shall remain in effect for a further
period of ten years from such date of termination.
5. The
Annex to this Treaty shall be an integral part thereof.
6. IN
WITNESS THEREOF, the undersigned representatives, duly authorized by
their respective governments, have signed this Treaty in duplicate in
French and English, both texts being equally authentic. DONE in
Washington, February 26, 1986.
For the
Government of the United States of America:
CLAYTON
YEUTTER.
For the
Government of the Republic of Cameroon:
WILLIAM
ETEKI MBOUMOUA.
ANNEX
In
accordance with Article II, paragraph 3, each Party reserves the right
to maintain limited exceptions in the sectors it has indicated below:
THE
UNITED STATES OF AMERICA
Air
transportation; ocean and coastal shipping; banking; insurance;
government procurement, 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; use of land and
natural resources.
THE
REPUBLIC OF CAMEROON
Air
transportation, ocean shipping, public markets, radio and television,
ownership of shares in INTELCAM, provision of common carrier telephone
and telegraph service, provision of submarine cable services,
consultants on taxation matters.
_______________
119356-B
REPUBLIC
OF CAMEROON,
MINISTRY
OF FOREIGN AFFAIRS,
Yaounde,
April 7,1986.
The
MINISTER,
His
Excellency CLAYTON YEUTTER
U.S.
Trade Representative, Washington, D.C.
MR.
AMBASSADOR: I hereby
acknowledge receipt of the letter that reads as follows:
"As
part of our understanding regarding the Treaty between the United States
of America and the Republic of Cameroon concerning the Reciprocal
Encouragement and Protection of Investment, our two governments have
discussed the subject of investments entitled to coverage under this
Treaty.
"We
would appreciate confirmation that your Government agrees to extend
Pecten International Company the benefits of this Treaty."
I have the
honor to confirm that our Government has decided to extend the benefits
of this Treaty to Pecten International Company.
Accept,
Excellency, the assurances of my high consideration.
WILLIAM
ETEKI MBOUMOUA,
Minister
of Foreign Affairs
OFFICE OF
THE UNITED STATES TRADE REPRESENTATIVE,
EXECUTIVE
OFFICE OF THE PRESIDENT
Washington,
November 27, 1984.
Ambassador
PAUL PONDI,
Embassy
of the Republic of Cameroon 2349
Massachusetts Avenue
NW.,
Washington, DC.
DEAR MR.
AMBASSADOR: As part of
our understanding regarding the Treaty between the United States of
America and the Republic of Cameroon concerning the Reciprocal
Encouragement and Protection of Investment, our two governments have
discussed the subject of investments entitled to coverage under this
Treaty.
We would
appreciate confirmation that your Government agrees to extend Pecten
International Company the benefits of this Treaty.
Respectfully,
EDWARD M.
ROZYNSKI
Director,
Bilateral Investment
Treaty
Program
The TCC
offers these agreements electronically as a public service for general
reference. Every effort has been made to ensure that the text presented
is complete and accurate. However, copies needed for legal purposes
should be obtained from official archives maintained by the appropriate
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