Treaty between the United States of America and the
Argentine Republic
concerning the Reciprocal Encouragement and Protection of Investment
The United States of America and the Argentine Republic,
hereinafter referred to as 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 use 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 internationally recognized worker rights
and having resolved to conclude a Treaty concerning the
encouragement and reciprocal protection of investment;
Have agreed as follows:
ARTICLE I:
(1) For the purposes of this Treaty,
a) "investment" means every kind of investment in the
territory of one Party owned or controlled directly or indirectly
by nationals or companies of the other Party, such as equity,
debt, and service and investment contracts; and includes 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 or interests in the assets thereof;
(iii) a claim to money or a claim to performance
having economic value and directly related to
an investment;
(iv) intellectual property which includes, inter alia, rights relating to:
literary and artistic works, including sound
recordings,
inventions in all fields of human endeavor,
industrial designs,
semiconductor mask works,
trade secrets, know-how, and confidential
business information, and
trademarks, service marks, and trade names; and
(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, state enterprise, 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, and whether privately or governmentally owned;
c) "national" of a Party means a natural person who is
national of a Party under its applicable law;
d) "return" means an amount derived from or associated
with an investment, including profit; dividend; interest; capita
gain; royalty payment; management, technical assistance or other
fee; or returns in kind;
e) -associated activities- include the organization,
control, operation, maintenance and disposition of companies,
branches, agencies, offices, factories or other facilities for
the conduct of business; the making, performance and
enforcement of contracts; the acquisition, use, protection and
disposition of property of all kinds including intellectual and
industrial property rights; and the borrowing of funds, the
purchase, issuance, and sale of equity shares and other
securities, and the purchase of foreign exchange for imports.
f) "territory" means the territory of the United
States or the Argentine Republic, including the territorial sea
established in accordance with international law as reflected
in the 1982 United Nations Convention on the Law of the Sea.
This Treaty also applies in the seas and seabed adjacent to the
territorial sea in which the United States or the Argentine
Republic has sovereign rights or jurisdiction in accordance
with international law as reflected in the 1982 United Nations
Convention on the Law of the Sea.
(2) Each Party reserves the right to deny to any company of
the other Party the advantages of this Treaty if (a) nationals
of any third country, or nationals of such Party, control such
company and the company has no substantial business activities
in the territory of the other Party, or (b) the company 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 investment.
ARTICLE II:
(1) Each Party shall permit and treat investment, and
activities associated therewith, on a basis no less favorable
than that accorded in like situations to investment or
associated activities of its own nationals or companies, or of
nationals or companies of any third country, whichever is the
more favorable, subject to the right of each Party to make or
maintain exceptions falling within one of the sectors or
matters listed in the Protocol to this Treaty. 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 Protocol. Moreover, each Party agrees to notify the other
of any future exception with respect to the sectors or matters
listed in the Protocol, and to limit such exceptions to a
minimum. Any future exception by either Party shall not apply
to investment existing in that sector or matter at the time the
exception becomes effective. The treatment accorded pursuant to
any exceptions shall, unless specified otherwise in the
Protocol, be not less favorable than that accorded in like
situations to investments and associated activities of
nationals or companies of any third country.
(2)
a) Investment 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 arbitrary
or discriminatory measures the management, operation,
maintenance, use, enjoyment, acquisition, expansion, or
disposal of investments. For the purposes of dispute resolution
under Articles VII and VIII, a measure may be arbitrary or
discriminatory notwithstanding the opportunity to review such
measure in the courts or administrative tribunals of a Party.
c) Each Party shall observe any obligation it may have
entered into with regard to investments.
(3) Subject to the laws relating to the entry and sojourn
of aliens, nationals of either Party shall be permitted to
enter and to remain in the territory of the other Party for the
purpose of establishing, developing, administering or advising
on the operation of an investment to which they, or a company
of the first Party that employs them, have committed or are in
the process of committing a substantial amount of capital or
other resources
(4) Companies which are legally constituted under the
applicable laws or regulations of 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.
(6) Each Party shall provide effective means of asserting
claims and enforcing rights with respect to investments,
investment agreements, and investment authorizations.
(7) Each Party shall make public 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 the Argentine Republic 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 Article
shall not apply to advantages accorded by either Party to
nationals or companies of any third country by virtue of that
Party's binding obligations that derive from full membership in
a regional customs union or free trade area, whether such an
arrangement is designated as a customs union, free trade area,
common market or otherwise.
ARTICLE III:
This Treaty shall not preclude either Party from
prescribing laws and regulations in connection with the
admission of investments made in its territory by nationals or
companies of the other Party or with the conduct of associated
activities, provided, however, that such laws and regulations
shall not impair the substance of any of the rights set forth
in this Treaty.
ARTICLE IV:
(1) Investments shall not be expropriated or nationalized
either directly or indirectly through measures tantamount to
expropriation or nationalization ('expropriation-) except for a
public purpose; in a non-discriminatory manner; upon payment of
prompt, adequate and effective compensation; and in accordance
with due process of law and the general principles of treatment
provided for in Article II(2). Compensation shall 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; and be freely
transferable at the prevailing market rate of exchange on the
date of expropriation.
(2) A national or company of either Party that asserts that
all or part of its investment has been expropriated shall have
a right to prompt review by the appropriate judicial or
administrative authorities of the other Party to determine
whether any such expropriation has occurred and, if so, whether
such expropriation, and any compensation therefore, conforms to
the provisions of this Treaty and the principles of
international law.
(3) Nationals or companies of either Party whose investments
suffer losses in the territory of the other Party owing to war
or other armed conflict, revolution, state of national
emergency, insurrection, civil disturbance or other similar
events shall be accorded treatment by such other Party no less
favorable than that accorded to its own nationals or companies
or to nationals or companies of any third country,
whichever is the more favorable treatment, as regards any
measures it adopts in relation to such losses.
ARTICLE V
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 IV; (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 directly related to
an investment; (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 IV 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. The free
transfer shall take place in accordance with the procedures
established by each Party; such procedures shall not impair the
rights set forth in this Treaty.
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, through the equitable,
nondiscriminatory and good faith application of its law.
ARTICLE VI
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 VII
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 (if any such authorization exists) 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.
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) to the Additional Facility of the Centre, if the
Centre is not available; or
(iii) in accordance with the Arbitration Rules of the
United Nations Commission on International Trade
Law (UNICTRAL): or
(iv) 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:
(a) written consent of the parties to the dispute for
purposes of Chapter II of the ICSID Convention (Jurisdiction of
the Centre) and for purposes of the Additional Facility Rules;
and
(b) an "agreement in writing- for purposes of Article
II of the United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, done at New York, June
10, 1958 (-New York Convention-).
5. Any arbitration under paragraph 3(a)(ii), (iii) or (iv)
of this Article shall be held in a state that is a party to the
New York Convention.
6. 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.
7. In any proceeding involving an investment dispute, a
Party shall not assert, as a defense, counterclaim, right of
set-off or otherwise, that the national or company concerned
has received or will receive, pursuant to an insurance or
guarantee contract, indemnification or other compensation for
all or Part of its alleged damages.
8. For purposes of an arbitration held under paragraph 3
of this Article, any company legally constituted under the
applicable laws and regulations of a Party or a political
subdivision thereof but that, immediately before the occurrence
of the event or events giving rise to the dispute, was an
investment of nationals or companies of the other Party, shall
be treated as a national or company of such other Party in
accordance with Article 25(2)(b) of the ICSID Convention.
ARTICLE VIII
1. Any dispute between the Parties concerning the
interpretation or application of the Treaty which is not
resolved through consultations or other diplomatic channels,
shall be submitted, upon the request of either Party, to an
arbitral tribunal for binding decision in accordance with the
applicable rules of international law. In the absence of an
agreement by the Parties to the contrary, the arbitration rules
of the United Nations Commission on International Trade Law
(UNCITRAL), except to the extent modified by the Parties or by
the arbitrators, shall govern.
2. Within two months of receipt of a request, each Party
shall appoint an arbitrator. The two arbitrators shall select
a third arbitrator as Chairman, who 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 the Secretary General of the
Permanent Court of Arbitration.
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 IX
The provisions of Article VII and VIII 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 X
This Treaty shall not derogate from:
(a) laws and regulations, administrative practices or
procedures, or administrative or adjudicatory
decisions of either Party;
(b) international legal obligations; or
(c) obligations assumed by either Party, including
those contained in an investment agreement or an
investment authorization, that entitle investments or
associated activities to treatment more favorable than
that accorded by this Treaty in like situations
ARTICLE XI
This Treaty shall not preclude the application by either
Party of measures necessary for the maintenance of public
order, the fulfillment of its obligations with respect to the
maintenance or restoration of international peace or security,
or the Protection of its own essential security interests.
ARTICLE XII
1. With respect to its tax policies, each Party should
strive to accord fairness and equity in the treatment of
investment of nationals and companies of the other Party.
2. Nevertheless, the provisions of this Treaty, and in
particular Article VII and VIII, shall apply to matters of
taxation only with respect to the following:
(a) expropriation, pursuant to Article IV;
(b) transfers, pursuant to Article V; or
(c) the observance and enforcement of terms of an
investment agreement or authorization as referred
to in Article VII(l)(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 XIII
This Treaty shall apply to the political subdivisions of
the Parties.
ARTICLE XIV
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 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 fourteenth day of
November, 1991, in the English and Spanish languages, both
texts being equally authentic.
FOR THE UNITED STATES
OF AMERICA:
FOR THE ARGENTINE
REPUBLIC:
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