Jamaica Bilateral Investment Treaty
Signed
February 4, 1994; Entered into Force March 7, 1997
103rd CONGRESS 2nd Session
SENATE TREATY Doc. 103-35
TREATY BETWEEN THE UNITED STATES OF AMERICA AND
JAMAICA CONCERNING THE RECIPROCAL ENCOURAGEMENT AND PROTECTION OF
INVESTMENT, WITH ANNEX AND PROTOCOL
MESSAGE
FROM
THE PRESIDENT OF THE UNITED STATES
TRANSMITTING
TREATY BETWEEN THE UNITED STATES OF AMERICA AND
JAMAICA CONCERNING THE RECIPROCAL ENCOURAGEMENT AND PROTECTION OF
INVESTMENT, WITH ANNEX AND PROTOCOL, SIGNED AT WASHINGTON ON FEBRUARY
4, 1994
September 21, 1994.-Convention was read the
first time and, together with the accompanying papers, referred to the
Committee on Foreign Relations and ordered to be printed for the use
of the Senate
U.S. GOVERNMENT PRINTING OFFICE
79-118 WASHINGTON : 1994
LETTER OF TRANSMITTAL
THE WHITE HOUSE, September 21, 1994.
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 Jamaica Concerning the Reciprocal
Encouragement and Protection of Investment, with Annex and Protocol,
signed at Washington on February 4, 1994. Also transmitted for the
information of the Senate is the report of the Department of State
with respect to this Treaty.
This bilateral investment Treaty with Jamaica is
the second such Treaty between the United States and a member of the
Caribbean Community (CARICOM). This Treaty will protect U.S. investors
and assist Jamaica in its efforts to develop its economy by creating
conditions more favorable for U.S. private investment and thus
strengthening the development of the private sector.
The Treaty is fully consistent with U.S. policy
toward international and domestic investment. a specific tenet of U.S
policy, reflected in this Treaty, is that U.S. investment abroad and
foreign investment in the United States should receive national
treatment. Under this Treaty, the Parties also agree to international
law standards for expropriation and compensation for expropriation;
free transfer of funds associated with investments; freedom of
investments from performance requirements; fair, equitable and
most-favored-nation treatment; and the investor or investment's
freedom to choose to resolve disputes with the host government through
international arbitration.
I recommend that the Senate consider this Treaty
as own as possible, and give its advice and consent to ratification of
the Treaty, with Annex and Protocol, at an early date.
WILLIAM J. CLINTON.
LETTER OF SUBMITTAL
DEPARTMENT OF STATE,
Washington, September 7, 1994.
THE PRESIDENT,
The White House.
THE PRESIDENT: I have the honor to submit to you
the Treaty Between the United States of America and Jamaica Concerning
the Reciprocal Encouragement and Protection of Investment, with
Protocol, signed at Washington on February 4, 1994. I recommend that
this Treaty, with Protocol, be transmitted to the Senate for its
advice and consent to ratification.
The bilateral investment treaty (BIT) with
Jamaica is the second such treaty between the United States and a
member of the Caribbean Community (CARICOM). The Treaty is based on
the view that an open investment policy contributes to economic
growth. This Treaty will assist Jamaica in its efforts to further
develop its economy by creating conditions more favorable for U.S.
private investment and thus strengthening the development of the
private sector. It is U.S. policy, however, to advise potential treaty
partners during BIT negotiations that conclusion of a BIT does not
necessarily result in immediate increases in private U.S. investment
flows.
To date, nineteen BITs are in force for the
United States--with Bangladesh, Bulgaria, Cameroon, the Congo, the
Czech Republic, Egypt, Grenada, Kazakhstan, Kyrgyzstan, Morocco,
Panama, Poland, Romania, Senegal, Slovakia, Sri Lanka, Tunisia,
Turkey, and Zaire. In addition to the Treaty with Jamaica, the United
States has signed, but not yet brought into force, BITs with
Argentina, Armenia, Belarus, Ecuador, Estonia, Haiti, Jamaica,
Moldova, Russia, and Ukraine.
The Office of the United States Trade
Representative and the Department of State jointly led this BIT
negotiation, with assistance from the Departments of Commerce and
Treasury.
THE U.S.-JAMAICA TREATY
The Treaty with Jamaica is based on the 1990 and
1991 U.S. prototype BITs. The Treaty contains in substance the
protections and obligations that are contained in other U.S. BITs and
achieves all of the prototype's objectives, which are:
-All forms of U.S. investment in the territory
of the Jamaica are covered.
-Investments receive the better of national
treatment or most favored-nation DUN) treatment both on establishment
and thereafter, subject to certain specific exceptions.
-Performance requirements may not be imposed
upon or enforced against investments.
-Expropriation can occur only in accordance with
international law standards; that is, for a public purpose; in a
nondiscriminatory manner, in accordance with due process of law; and
upon payment of prompt, adequate, and effective compensation.
-The unrestricted transfer, in a freely usable
currency, of funds related to an investment is guaranteed.
-Investment disputes with the host government
may be brought by investors, or by their subsidiaries, to binding
arbitration as an alternative to domestic courts.
These elements, and noteworthy variations in the
body of the text, are further described below.
The following is an article-by-article analysis
of the provisions of the Treaty:
Preamble
The Preamble states the goals of the Treaty. The
Treaty is premised on the view that an open investment policy leads to
economic growth. These goals include economic cooperation, increased
flow of capital, a stable framework for investment, and development of
respect for internationally-recognized worker rights. While the
Preamble does not impose binding obligations, its statement of goals
may serve to assist in the interpretation of the Treaty.
Article I (Definitions)
Article I sets out definitions for terms used
throughout the Treaty. As a general matter, they are designed to be
broad and inclusive in nature.
Investment
The Treaty's definition of investment is broad,
recognizing that investment can take a wide variety of forms. It
covers investments that are owned or controlled by nationals or
companies of one of the Treaty partners in the territory of the other.
Investments can be made either directly or indirectly through one or
more subsidiaries, including those of third countries. Control is not
specifically defined in the Treaty. Ownership of over 50 percent of
the voting stock of a company would normally convey control, but in
many cases the requirement could be satisfied by less than that
proportion.
The definition provides a non-exclusive list of
assets, claims and rights that constitute investment. These include
both tangible and intangible property, interests in a company or its
assets, "a claim to money or performance having economic value,
and associated with an investment," intellectual property rights,
and any right conferred by law or contract (such as government-issued
licenses and permits). The Jamaica BIT varies from the prototype by
using "patentable inventions" and deleting "know-how"
in the illustrative list. The requirement that a "claim to money"
be associated with an investment excludes claims arising solely from
trade transactions, such as a transaction involving only a
cross-border sale of goods, from being considered investments covered
by the Treaty.
Under paragraph 2 of Article 1, either country
may deny the benefits of the Treaty to investments by companies
established in the other that are owned or controlled by nationals of
a third country if (1) the company is a mere shell, without
substantial business activities in the home country, or (2) the third
country is one with which the denying Party does not maintain normal
economic relations. For example, at this time the United States does
not maintain normal economic relations with, inter alia, Cuba or
Libya.
Paragraph 3 confirms that any alteration in the
form in which an asset is invested or reinvested shall not affect its
character as investment. For example, a change in the corporate form
of an investment will not deprive it of protection under the Treaty.
Company
The definition of "company" is broad
in order to cover virtually any type of legal entity, including any
corporation, company, association, or other entity that is organized
under the laws and regulations of a Party. The definition also ensures
that companies of a Party that establish investments in the territory
of the other Party have their investments covered by the Treaty, even
if the parent company is ultimately owned by non-Party nationals,
although the other Party may deny the benefits of the Treaty in the
limited circumstances set forth in Article 1, paragraph 2. Likewise, a
company of a third country that is owned or controlled by nationals or
companies of a Party will also be covered. The definition also covers
charitable and non-profit entities, as well as entities that are owned
or controlled by the state.
National
The Treaty defines "national" as a
natural person who is a national of a Party under its own laws. Under
U.S. law, the term "national" is broader than the term "citizen;"
for example, a native of American Samoa is a national of the United
States, but not a citizen.
Return
"Return" is defined as "an amount
derived from or associated with an investment," and the Treaty
provides a non-exclusive list of examples, including: profits;
dividends; interest; capital gains; royalty payments; management,
technical assistance or other fees; and returns in kind. The scope of
this definition provides breadth to the Treaty's transfer provisions
in Article IV.
Associated Activities
The Treaty recognizes that the operation of an
investment requires protections extending beyond the investment to
numerous related activities. This definition provides a list of such
investor activities, including operating a business facility,
borrowing money, disposing of property, issuing stock and purchasing
foreign exchange for imports. These activities are covered by Article
II, paragraph 1, which guarantees the better of national or MFN
treatment for investments and associated activities. While the wording
of the Jamaica BIT varies slightly from that of the prototype, the use
of "and other similar activities" ensures that this list is
illustrative.
Article II (Treatment)
Article II contains the Treaty's major
obligations with respect to the treatment of investment. Article II of
the Jamaica Treaty rearranges the text of the prototype but contains
all of its elements and obligations. By inserting the terms "national
treatment" and "most favored nation treatment!" after
the descriptions of these obligations in the text, the Jamaica Treaty
makes these defined terms.
Article II, paragraph 1, was reorganized,
without substantive effect, for greater clarity. This paragraph
generally ensures the better of MFN or national treatment in both the
entry and post-entry phases of investment. It thus prohibits both the
screening of proposed foreign investment on the basis of nationality
and discriminatory measures once the investment has been made, subject
to specific exceptions provided for in a separate Annex. The United
States and Jamaica have both reserved certain exceptions in the Annex
to the Treaty, the provisions of which are discussed in the section
entitled "Annex."
Paragraph 2 guarantees that investment shall be
granted "fair and equitable" treatment. It prohibits Parties
from impairing, through unreasonable or discriminatory means, the
management, operation, maintenance, use, enjoyment, acquisition,
expansion or disposal of investment. Rather than adding a sentence to
clarify the mean of "arbitrary," the phrase "arbitrary
and discriminatory" was replace by "unreasonable or
discriminatory." This paragraph sets out a minimum standard of
treatment based on customary international law.
In paragraph 2(c), each Party pledges to respect
any obligations it may have entered into with respect to investments.
Thus, in dispute settlement under Articles VI or VII, a Party would be
foreclosed from arguing, on the basis of sovereignty, that it may
unilaterally ignore its obligations to such investments.
Paragraph 3 allows, subject to each Party's
immigration and employment laws and regulations, the entry of each
Party's nationals into the territory of the other for purposes linked
to investment and involving the commitment of a "substantial
amount of capital." This paragraph serves to render nationals of
a BIT partner eligible for treaty-investor visas under U.S.
immigration law and guarantees similar treatment for U.S. investors.
The reference to employment laws was called for, as Jamaica currently
regulates the entry of aliens through such laws (rather than only
through laws on immigration).
Paragraph 4 allows companies the right to engage
top managerial personnel of their choice, regardless of nationality.
The Jamaica BIT varies from the prototype in that this right is made
subject to each Party's immigration and employment laws and
regulations.
Under paragraph 5, neither Party may impose
performance requirements such as those conditioning investment on the
export of good produced or the local purchase of goods or services.
Such requirements are major burdens on investors. The Jamaica BIT adds
a provision to the BIT prototype clarifying what is implicit in this
paragraph--that this agreement does not preclude such measures as a
condition for receipt of an advantage.
Paragraph 6 provides that each Party must
provide effective means of asserting rights and claims with respect to
investment, investment agreements and any investment authorizations.
The Jamaica BIT adds to the prototype language the clarification that
"investment authorizations" refer to those granted by a
Party's foreign investment authority. Under paragraph 7, each Party
must make publicly available all laws, regulations, administrative
practices and procedures and adjudicatory decisions pertaining to or
affecting investments.
Paragraph 8 recognizes that under the U.S.
federal system, States of the United States may, in some instances,
treat out-of-State residents and corporations in a different manner
than they treat in-State residents and corporations. The Treaty
provides that the national treatment commitment, with respect to the
States, means treatment no less favorable than that provided to U.S.
out-of-State residents and corporations.
Paragraph 9 limits the Article's MFN obligation
by providing that it will not apply to advantages accorded by either
Party to third countries by virtue of a Party's membership in a free
trade area or customs union or a multilateral agreement under the
auspices of the General Agreement on Tariffs and Trade (GATT).
Article III (Expropriation)
Article III incorporates into the Treaty the
international law standards for expropriation and compensation.
Paragraph 1 describes the general rights of
investors and obligations of the Parties with respect to expropriation
and nationalization. These rights also apply to direct or indirect
state measures "tantamount to expropriation or nationalization,"
and thus apply to "creeping expropriations" that result in a
substantial deprivation of the benefit of an investment without taking
of the title to the investment. The Jamaica Treaty adds a sentence to
the prototype language stating that the determination of fair market
value should not reflect any change in the value of the investment
attributable to the expropriation itself.
Paragraph 1 further bars all expropriations or
nationalizations, except those that are for a public purpose; carried
out in a non-discriminatory manner, subject to "prompt, adequate,
and effective compensation"; subject to due process; and accorded
the treatment provided in the standards of Article II (2). (These
standards guarantee fair and equitable treatment and prohibit the
arbitrary and discriminatory impairment of investment in its broadest
sense.)
The second sentence of paragraph 1 clarifies the
meaning of "prompt, adequate, and effective compensation."
Compensation must be equivalent to the fair market value of the
expropriated investment immediately before the expropriatory action
was taken or became known (whichever is earlier); be paid without
delay, include interest at a commercially reasonable rate from the
date of expropriation; be fully realizable; be freely transferable;
and be calculated in a freely usable currency on the basis of the
prevailing market rate of exchange.
Paragraph 2 entitles an investor claiming that
an expropriation has occurred to prompt judicial or administrative
review of the claim in the host country, including a determination of
whether the expropriation and any compensation conform to the
provisions of the Treaty.
Paragraph 3 entitles investors to the better of
national or MFN treatment with respect to losses related to war or
civil disturbances, but, unlike paragraph 1, does not specify an
absolute obligation to pay compensation for such losses.
Article IV (Transfers)
Article IV protects investors from certain
government exchange controls limiting current account and capital
account transfers.
In paragraph 1, the Parties agree to permit "transfers
related to an investment to be made freely and without delay into and
out of its territory. Paragraph 1 also provides a non-exclusive list
of transfers that must be allowed, including returns (as defined in
Article I); payments made in compensation for expropriation (as
defined in Article III); payments arising out of an investment
dispute; payments made under a contract, including the amortization of
principal and interest payments on a loan; proceeds from the
liquidation or sale of all or part of an investment; and additional
contributions to capital for the maintenance or development of an
investment.
Paragraph 2 provides that transfers are to be
paid in a "freely usable currency" at the prevailing market
rate of exchange on the date of transfer with respect to spot
transactions in the currency to be transferred. "Freely usable is
a standard of the International Monetary Fund; at present there are
five such "freely usable" currencies: the U.S. doIlar,
Japanese yen, German mark, French franc and British pound sterling.
Paragraph 3 recognizes that notwithstanding
these guarantees, Parties may maintain certain laws or obligations
that could affect transfers with respect to investments. It provides
that the Parties may require reports of currency transfers and impose
income taxes by such means an a withholding tax on dividends. It also
recognizes that Parties may protect the rights of creditors, ensure
the satisfaction of judgments, transfers in adjudicatory proceedings
through their laws, even if such measures interfere with transfers.
Such laws must be applied in an equitable, nondiscriminatory and good
faith manner.
Article V (State-State Consultations)
Article V provides for prompt consultation
between the Parties, at either Party's request, on any matter relating
to the interpretation or application of the Treaty.
Article VI (State-Investor Dispute Resolution)
Article VI, combining elements of the 1990 and
1992 prototypes, sets forth several means by which disputes between an
investor and the host country may be settled.
Article VI procedures apply to an "investment
dispute," a term which covers any dispute arising out of or
relating to an investment authorization, or an agreement between the
investor and the host government or to rights granted by the Treaty
with respect to an investment.
When a dispute arises, Article VI, paragraph 2,
provides that the disputants should initially seek to resolve the
dispute by consultation and negotiation, which may include non binding
third party procedures. Should such consultations fail, paragraphs 2
and 3 set forth the investor's range of choices of dispute settlement.
Paragraph 2 permits the investor to make an exclusive and irrevocable
choice to: (1) employ one of the several arbitration procedures
outlined in the Treaty; (2) submit the dispute to procedures
previously agreed upon by the investor and the host country government
in an investment agreement or otherwise; or (3) submit the dispute to
the local courts or administrative tribunals of the host country.
Under paragraph 3, if the investor has not
submitted the dispute under the procedures in paragraph 2 and six
months have elapsed from the date the dispute arose, the investor may
consent to submission of the dispute for binding arbitration by either
the International Centre for the Settlement of Investment Disputes
(ICSID) or ad hoc arbitration using the Arbitration Rules of the
United Nations Commission on International Trade Law (UNCITRAL).
Following the 1990 prototype, the Jamaica BIT does not refer to the
Additional Facility of the Center. Paragraph 3 also recognizes that,
by mutual agreement, the parties to the dispute may choose another
arbitral institution or set of arbitral rules.
Paragraph 4 contains the consent of the United
States and Jamaica to the submission of investment disputes to binding
arbitration in accordance with the choice of the investor.
Paragraph 5 includes a separate commitment by
each Party to enforce arbitral awards rendered pursuant to Article VI
procedures.
Paragraph 6 provides that in any dispute
settlement proceeding, a Party may not invoke as a defense,
counterclaim, set-off or in any other manner the fact that the company
or national concerned has received or will be reimbursed for the same
damages under an insurance or guarantee contract.
Paragraph 7 is included in the Treaty to ensure
that ICSID arbitration will be available for investors making
investments in the form of companies created under the laws of the
Party with which there is a dispute.
Paragraph 8, not found in the prototype,
explicitly incorporates language pursuant to Article 27 of the ICSID
Convention, preventing a Party from giving diplomatic protection or
bringing an international claim for a dispute already submitted to
arbitration under the Convention, (unless the other Party has failed
to abide by or comply with the award rendered in that dispute). The
article also makes clear, however, that informal diplomatic exchanges
to facilitate settlement of a dispute are not limited by paragraph 8.
Article VII (State-State Arbitration)
Article VII provides for binding arbitration of
disputes between the United States and Jamaica that are not resolved
through consultations or other diplomatic channels. The article
constitutes each Party's prior consent to arbitration.
Article VIII (Exclusions from Dispute
Settlement)
Article VIII excludes from the dispute
settlement provisions of the BIT those disputes arising under the
export credit, guarantee or insurance programs of the Export-Import
Bank of the United States, as well as those arising under any other
such official programs pursuant to which the Parties agreed to other
means of settling disputes.
Article IX (Preservation of Rights)
Article IX clarifies that the Treaty is meant
only to establish a floor for the treatment of foreign investment. An
investor may be entitled to more favorable treatment through domestic
legislation, other international legal obligations, or a specific
obligation assumed by a Party with respect to that investor. This
provision ensures that the Treaty will not be interpreted to derogate
from any entitlement to such more favorable treatment.
Article X (Measures Not Precluded)
The first paragraph of Article X reserves the
right of a Party to take measures for the maintenance of public order,
the fulfillment of its international obligations with respect to
international peace and security, or those measures it regards as
necessary for protection and security, or those measures it regards as
necessary for the protection of its own essential security interests.
These provisions are common in international investment agreements.
The maintenance of public order would include
measures taken pursuant to a Party's police powers to ensure public
health and safety. International obligations with respect to peace and
security would include, for example, obligations arising out of
Chapter VII of the United Nations Charter. The Jamaica BIT differs
from the prototype in its explicit reference to the U.N. Charter.
Measures permitted by the provision on the protection of a Party's
essential security interests would include security-related actions
taken in time of war or national emergency, actions not arising from a
state of war or national emergency must have a clear and direct
relationship to the essential security interest of the Party involved.
The second paragraph allows a Party to
promulgate special formalities in connection with the establishment of
investment, provided that the formalities do not impair the substance
of any Treaty rights. Such formalities would include, for example,
U.S. reporting requirements for certain inward investment.
Article XI (Tax Policies)
The Treaty exhorts both countries to provide
fair and equitable treatment to investors with respect to tax
policies. However, tax matters an generally excluded from the coverage
of the prototype BIT, based on the assumption that tax matters are
properly covered in bilateral tax treaties.
The Treaty, and particularly the dispute
settlement provisions, do apply to tax matters in three areas, to the
extent they are not subject to the dispute settlement provisions of a
tax treaty, or, if so subject, have been raised under a tax treaty's
dispute settlement procedures and are not resolved in a reasonable
period of time.
The three areas where the Treaty could apply to
tax matters are expropriation (Article III), transfers (Article IV)
and the observance and enforcement of terms of an investment agreement
or authorization (Article VI (1) (a) or (b)). These three areas are
important for investors, and two of the three--expropriatory taxation
and tax provisions contained in an investment agreement or
authorization--are not typically addressed in tax treaties.
Article XII (Application to Political
Subdivisions)
Article XII makes clear that the obligations of
the Treaty are applicable to all Political subdivisions of the
Parties, such as provincial, state and local governments.
Article XIII (Entry into Force, Duration and
Termination)
The Treaty enters into force thirty days after
exchange of instruments of ratification and continues in force for a
period of ten years. From the date of its entry into force, the Treaty
applies to existing and future investments. After the ten-year term,
the Treaty will continue in force unless terminated by either Party
upon one year's notice. If the Treaty is terminated, all existing
investments would continue to be protected under the Treaty for ten
years thereafter.
Annex
U.S. bilateral investment treaties allow for
sectoral exceptions to national and MFN treatment. The U.S. exceptions
are designed to protect governmental regulatory interests and to
accommodate the derogations from national treatment and, in some
cases, MFN treatment in existing federal law.
The U.S. portion of the Annex contains a list of
sectors and matters in which, for various legal and historical
reasons, the federal government or the States may not necessarily
treat investments of nationals or companies of the other Party as they
do U.S. investments or investments from a third country. The U.S.
exceptions from national treatment are: 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 property; 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; mining on
the public domain; maritime and maritime-related services; and primary
dealership in U.S. government securities.
Ownership of real property, mining on the public
domain, maritime and maritime-related services, and primary dealership
in U.S. government securities are excluded from MFN as well as
national treatment commitments. The last three sectors are exempted by
the United States from MFN treatment obligations because of U.S. laws
that require reciprocity. Enforcement of reciprocity provisions could
deny both national and MFN treatment.
The listing of a sector does not necessarily
signify that domestic laws have entirely reserved it for nationals.
Future restrictions or limitations on foreign investment are only
permitted in the sectors listed; must be made on an MFN basis, unless
otherwise specified in the Annex; and must appropriately notified. Any
additional restrictions or limitations which a Party may adopt with
respect to listed sectors may not affect existing investments.
Jamaica's exceptions to national treatment are:
civil aviation; real estate; banking; shipping; communications
(including postal and telegraph services and broadcasting); mining and
natural resources; government grants and other assistance to
small-scale enterprises with total assets of U.S. $50,000 or less;
customs brokerages; car rental; real estate agencies; travel agencies;
and gaming, betting and lotteries. Jamaica has reserved the right to
make or maintain limited exceptions to MFN treatment in shipping.
Protocol
In a Protocol specific to the Jamaica Treaty,
the two sides confirm their Understanding that the term "regulations"
in Article II (1)(b) includes, where appropriate, the provisions of a
treaty to which one of the Parties has adhered. The two sides also
confirm that neither Party shall use its laws or regulations to
require that its nationals be employed as top managerial personnel by
an "investment" (as defined by the Treaty). Finally, with
respect to transfers, the Protocol confirms that if Jamaica's foreign
exchange reserves do not permit the transfer of proceeds of the sale
or liquidation of an investment as provided for in Article IV(1)(e),
Jamaica shall allow the transfer of such proceeds to take place over a
period not to exceed three years.
The other U.S. Government agencies which
negotiated the Treaty join me in recommending that it be transmitted
to the Senate at an early date.
Respectfully submitted.
WARREN CHRISTOPHER.
TREATY
BETWEEN THE UNITED STATES OF AMERICA AND JAMAICA CONCERNING THE
RECIPROCAL ENCOURAGEMENT AND PROTECTION OF INVESTMENT
The United
States of America and Jamaica (hereinafter "the Parties");
Desiring to promote greater economic cooperation
between them, with respect to investment by nationals and companies of
one Party in the territory of the other Party;
Recognizing
that agreement upon the treatment to be accorded such investment will
stimulate the flow of private capital and the economic development of
the Parties;
Agreeing that fair and
equitable treatment of investment is desirable in order to maintain a
stable framework for investment and maximum effective utilization of
economic resources;
Recognizing that the
development of economic and business ties can contribute to the
well-being of workers in both Parties and promote respect for worker
rights; and Having resolved to conclude a Treaty concerning the
reciprocal encouragement and 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 without limitation:
(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 assets thereof;
(iii) a claim to money or
a claim to performance having economic value, and associated with an
investment;
(iv) intellectual property
which includes, inter alia, rights relating to:
literary and artistic
works, including sound recordings, patentable inventions, industrial
designs, semiconductor mask works, trade secrets and confidential
business information, and trademarks, service marks, and trade names;
(v) any right conferred by
law or contract, and any licenses and permits pursuant to law;
(b) "company" of
a Party means any kind of corporation, company, association,
partnership, or other organization, legally constituted under laws and
regulations of a Party or a political subdivision thereof whether or
not organized for pecuniary gain, or privately or governmentally owned
or controlled;
(c) "national" of
a Party means a natural person who is a national of a Party under its
applicable law;
(d) "return"
means an amount derived from or associated with an investment,
including profit; dividend; interest; capital gain; royalty payment;
management, technical assistance or other fee; or returns in kind;
(e) "associated
activities" means 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 property rights; the borrowing of funds; the purchase,
issuance, and sale of equity shares and other securities; the purchase
of foreign exchange for imports; and other similar activities.
2. Each Party reserves the
right to deny to any company the advantages of this Treaty if
nationals of any third country control such company and, in the case
of a company of the other Party, that company has no substantial
business activities in the territory of the other Party or is
controlled 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 an investment.
ARTICLE II:
1. (a) Each Party shall
permit and treat investments, and activities associated therewith, on
a basis no less favorable than that accorded in like situations to
investments or associated activities of its own nationals or companies
("national treatment"), or of nationals or companies of any
third country ("most favored nation treatment"), whichever
is the most favorable, subject to the right of each Party to make or
maintain exceptions falling within one of the sectors or matters
listed in the Annex to this Treaty. The treatment accorded investments
and activities associated therewith pursuant to any exceptions to
national treatment shall be that of most favored nation treatment,
unless specified otherwise in the Annex.
(b) Each Party agrees to
notify the other Party before or on the date of entry into force of
this Treaty of all such laws and regulations of which it is aware
concerning the sectors or matters listed in the Annex. Moreover, each
Party agrees to notify the other of any future exception with respect
to the sectors or matters listed in the Annex, and to limit such
exceptions to a minimum. Any future exception by either Party shall
not apply to investments existing in that sector or matter at the time
the exception becomes effective.
2. (a) Investments shall at
all times be accorded fair and equitable treatment, shall enjoy full
protection and security and shall in no case be accorded treatment
less than that required by international law.
(b) Neither Party shall in
any way impair, by unreasonable or discriminatory measures the
management, operation, maintenance, use, enjoyment, acquisition,
expansion, or disposal of investments.
(c) Each Party shall
observe any obligation it may have entered into with regard to
investments.
3. Subject to the laws of
each Party relating to the entry, sojourn and employment 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.
4. Subject to the laws of
each Party relating to entry, sojourn and employment of aliens,
companies which are legally constituted under the applicable laws or
regulations or one Party, and which are investments, shall be
permitted to engage top managerial personnel of their choice,
regardless of nationality.
5. Neither Party shall
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, provided, however, that nothing in this paragraph shall
preclude a Party from providing benefits and incentives to investments
which export a proportion of the goods produced.
6. Each Party shall provide
effective means of asserting claims and enforcing rights with respect
to investments, investment agreements, and investment authorizations
granted by a Party's foreign investment authority.
7. Each Party shall make
publicly available all laws, regulations, administrative practices and
procedures, and adjudicatory decisions that pertain to or affect
investments.
8. The treatment accorded
by the United States of America to investments and associated
activities of nationals and companies of Jamaica under the provisions
of this Article shall in any
State, Territory or possession of the United States of America be no
less favorable than the treatment accorded therein to investments and
associated activities of nationals of the United States of America
resident in, and companies legally constituted under the laws and
regulations of, other States, Territories or possessions of the United
States of America.
9. The most favored nation
provisions of this Agreement shall not apply to advantages accorded by
either Party to nationals or companies of any third country by virtue
of:
(a) that Party's binding
obligations that derive from full membership in a free trade area or
customs union, or from some other relationship which satisfies the
requirements for a free trade area or customs union as set forth in
Article XXIV of the General Agreement on Tariffs and Trade; or
(b) that Party's binding
obligations under any multilateral international agreement under the
framework of the General Agreement on Tariffs and Trade.
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 nondiscriminatory 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(2) Compensation shall be equivalent to the fair
market value of the expropriated investment immediately before the
expropriatory action was taken or was made known by the authorities,
whichever is earlier; be paid without delay; include interest at a
commercially reasonable rate from the date of expropriation; be fully
realizable; and be freely transferable at the prevailing market rate
of exchange on the date of expropriation. The determination of fair
market value shall no reflect any change in the value of the
investment attributable to the expropriatory or to public knowledge of
the expropriatory action before it was taken or made known by the
authorities.
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, and any compensation therefor,
conforms to the provisions of this Treaty.
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 permit
all transfers related to an investment to be made freely and without
delay into and out of its territory. Such transfers include (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. Except as provided in
Article III paragraph 1, transfers shall be made in a freely usable
currency at the prevailing market rate of exchange on the date of
transfer with respect to spot transactions in the currency to be
transferred.
3. Notwithstanding the
provisions of paragraphs 1 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, or prevent fraudulent transfers, through the
equitable, nondiscriminatory and good faith 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 purposes of this
Article, an investment dispute is a dispute between a Party and a
national or company of the other Party arising out of or relating to
(a) an investment agreement between that Party and such national or
company; (b) an investment authorization granted by that Party's
foreign investment authority to such national or company; or (c) 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, the parties to the dispute should initially seek a
resolution through consultation and negotiation. If the dispute cannot
be settled amicably, the national or company concerned may choose to
submit the dispute for resolution:
a) to the courts or
administrative tribunals of the Party that is a party to the dispute;
or
b) in accordance with any
applicable previously agreed dispute settlement procedures; or
c) in accordance with the
terms of paragraph 3. A party which elects one of the three procedures
mentioned in this paragraph does so to the exclusion of the others.
3. a) Provided that the
national or company concerned has not submitted the dispute for
resolution under paragraph 2 (a) or (b) and that six months have
elapsed from the date on which the dispute arose, the national or
company concerned may choose to consent in writing to the submission
of the dispute for settlement by binding arbitration:
(i) to the International
Centre for the Settlement of Investment Disputes ("Centre")
established by the Convention on the Settlement of Investment Disputes
between States and Nationals of Other States, done at Washington,
March 18, 1965 ("ICSID Convention"), provided that the Party
is a party to such Convention; or
(ii) in accordance with the
Arbitration Rules of the United Nations Commission on International
Trade Law; or
(iii) to any other
arbitration institution, or in accordance with any other arbitration
rules, as may be mutually agreed between the parties to the dispute.
b) Once the national or
company concerned has so consented, either party to the dispute may
initiate arbitration in accordance with the choice so specified in the
consent.
4. Each Party hereby
consents to the submission of any investment dispute for settlement by
binding arbitration in accordance with the choice specified in the
written consent of the national or company under paragraph 3. Such
consent, together with the written consent of the national or company
when given under paragraph 3 shall satisfy the requirement for written
consent of the parties to the dispute for purposes of Chapter II of
the ICSID Convention (Jurisdiction of the Centre).
5. Any arbitral award
rendered pursuant to this Article shall be final and binding on the
parties to the dispute. Each Party undertakes to carry out without
delay the provisions of any such award and to provide in its territory
for its enforcement.
6. In any proceeding
involving an investment dispute, a Party shall not assert, as a
defense, counterclaim, right of setoff 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.
7. For purposes of an
arbitration held under paragraph 3 of this Article, any company
legally constituted under the applicable laws and regulations of
either Party or a political subdivision hereof 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 be treated as a national or company of such other Party
in accordance with Article 25(2)(b) of the ICSID Convention.
8. As provided for in
Article 27 of the Convention, neither Party shall give diplomatic
protection, or bring an international claim, in respect of a dispute
which one of its nationals or companies has consented to submit to
arbitration under the Convention, unless the other Party which is
party to the dispute shall have failed to abide by and comply with the
award rendered in such dispute. Diplomatic protection, for the
purposes of this paragraph, shall not include informal diplomatic
exchanges for the sole purpose of facilitating a settlement of the
dispute.
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 with the
consent of the Parties, 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 is 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 he Secretary General of the
International Centre for the Settlement of Investment Disputes.
3. Unless otherwise agreed,
all submissions shall be made and all hearings shall be completed
within six months of the date of selection of the third arbitrator,
and the Tribunal shall render its decisions within two months of the
date of the final submissions or 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.
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 granted by a Party's foreign investment
authority, that entitle investments or associated activities to
treatment more 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 under
the Chapter of the United Nations 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, but such formalities
shall not impair the substance of any of the rights set forth in this
Treaty.
ARTICLE
XI:
1. With
respect to its tax policies, each Party shall strive to accord
fairness and equity in the treatment of investments of nationals and
companies of the other Party.
2. Nevertheless, the
provisions of this Treaty, and in particular Articles 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 (1) (a) or (b),
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 existing at the time
of entry into force as well as to investments made or acquired
thereafter.
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 Annex and 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 fourth day of February, 1994, in the English
language.
ANNEX
1. The United States
reserves the right to make or maintain limited exceptions to national
treatment, as provided in Article II, paragraph 1, in the sectors or
matters it has indicated below:
air transportation; ocean
and coastal shipping; banking; insurance; government grants;
government insurance and loan programs; energy and power production;
customhouse brokers; ownership of real property; 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; mining on the public domain; maritime services and
maritime related services; and primary dealership in United Stales
government securities.
2. The United States
reserves the right to make or maintain limited exceptions to most
favored nation treatment, as provided in Article II, paragraph 1, in
the sectors or matters it has indicated below:
ownership of real property;
mining on the public domain; maritime services and maritime related
services; and primary dealership in United States government:
securities.
3. Jamaica reserves the
right to make or maintain limited exceptions to national treatment, as
provided in Article II, paragraph 1 in the sectors or matters it has
indicated below:
civil aviation; real
estate; banking; shipping; communications (including postal and
telegraph services, and broadcasting); mining and natural resources;
government grants and other assistance to small-scale enterprises with
total assets of U.S. $50,000 or less; customs brokerages; car rental;
real estate agencies; travel agencies; gaming; betting and lotteries.
4. Jamaica reserves the
right to make or maintain limited exceptions to most favored nation
treatment, as provided in Article II, paragraph 1, in the sectors or
matters it has indicated below:
shipping.
PROTOCOL
1. The Parties understand
that the term "regulations" in Article II(l)(b) includes,
where appropriate, the provisions of a treaty to which one of the
Parties has adhered.
2. With respect to Article
II(4), neither Party shall apply its laws and regulations to require
that its nationals be engaged as top managerial personnel by
investments.
3. If the foreign exchange
reserves of Jamaica do not permit the transfer of the proceeds of the
sale or of the liquidation of all or part of an investment as provided
for in Article IV(l)(e), Jamaica shall allow the transfer of such
proceeds to take place over a period not to exceed three years from
the date the transfer is requested and shall guarantee the
availability of at least one-third of the necessary freely usable
currency during each of the first two years of the three year period.
With respect to such transfers, Jamaica shall treat nationals and
companies of the United States no less favorably than it treats
nationals or companies of any third country. Jamaica shall ensure that
the national or company has an opportunity to invest the proceeds of
sale or liquidation in a manner designed to preserve its value until
the transfer occurs. Pursuant to Article V of this Treaty, and without
prejudice to the procedures set forth in Article VI and VII, the two
Parties agree to consult at the request of either one of them
concerning the implementation of Article IV and of this paragraph.
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
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