Azerbaijan Bilateral Investment Treaty
Signed August 1, 1997; Entered into
Force August 2, 2001
106th Congress
2d Session
|
SENATE
|
Treaty
Doc.
106-47
|
_______________________________________________________________________
INVESTMENT TREATY WITH AZERBAIJAN
MESSAGE
FROM
THE PRESIDENT
OF THE UNITED STATES
TRANSMITTING
THE TREATY BETWEEN THE GOVERNMENT OF THE UNITED
STATES OF AMERICA AND THE GOVERNMENT OF THE REPUBLIC OF AZERBAIJAN
CONCERNING THE ENCOURAGEMENT AND RECIPROCAL PROTECTION OF INVESTMENT,
WITH ANNEX, SIGNED, AT WASHINGTON ON AUGUST 1, 1997, TOGETHER WITH
AN AMENDMENT TO THE TREATY SET FORTH IN AN EXCHANGE OF DIPLOMATIC
NOTES DATED AUGUST 8, 2000, AND AUGUST 25, 2000
SEPTEMBER 12, 2000.-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 the use of the
Senate
U.S. GOVERNMENT PRINTING
OFFICE
79-118 WASHINGTON : 2000
LETTER
OF TRANSMITTAL
----------
The
White House, September 12, 2000.
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 Government
of the United States of America and the Government of the Republic of
Azerbaijan Concerning the Encouragement and Reciprocal Protection of
Investment, with Annex, signed at Washington on August 1, 1997, together
with an amendment to the Treaty set forth in an exchange of diplomatic
notes dated August 8, 2000, and August 25, 2000. 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) with Azerbaijan is the fourth
such treaty signed between the United States and a Transcaucasian or
Central Asian country. The Treaty will protect U.S. investment and assist
Azerbaijan in its efforts to develop its economy by creating conditions
more favorable for U.S. private investment and thereby strengthening
the development of its private sector.
The Treaty furthers the objectives of 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 the Treaty,
the Parties also agree to customary international law standards for
expropriation. The Treaty includes detailed provisions regarding the
computation and payment of prompt, adequate, and effective compensation
for expropriation; free transfer of funds related to investments; freedom
of investments from specified performance requirements; fair, equitable,
and most-favored-nation treatment; and the investor's freedom to choose
to resolve disputes with the host government through international arbitration.
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.
WILLIAM
J. CLINTON
LETTER
OF SUBMITTAL
----------
Department
of State,
Washington, September 8, 2000.
The President,
The White House.
THE PRESIDENT:
I have the honor to submit to you the Treaty Between the Government
of the United States of America and the Government of the Republic of
Azerbaijan Concerning the Encouragement and Reciprocal Protection of
Investment, with Annex, signed at Washington on August 1, 1997, together
with an amendment to the Treaty set forth in an exchange of diplomatic
notes dated August 8, 2000 and August 25, 2000. I recommend that this
Treaty, with Annex and the related diplomatic notes, be transmitted
to the Senate for its advice and consent to ratification.
The bilateral investment treaty (BIT) with Azerbaijan is the fourth
such treaty signed between the United States and a Transcaucasian or
Central Asian country. The Treaty is based on the view that an open
investment policy contributes to economic growth. This Treaty will assist
Azerbaijan in its efforts to develop its economy by creating conditions
more favorable for U.S. private investment and thereby strengthening
the development of its private sector. It is U.S. policy, however, to
advise potential treaty partners during BIT negotiations that conclusion
of such treaty does not necessarily result in increases in private U.S.
investment flows.
To date, 31 BITs are in force for the United States--with Albania, Argentina,
Armenia, Bangladesh, Bulgaria, Cameroon, the Republic of the Congo,
the Democratic Republic of the Congo (formerly Zaire), the Czech Republic,
Ecuador, Egypt, Estonia, Georgia, Grenada, Jamaica, Kazakhstan, Kyrgyzstan,
Latvia, Moldova, Mongolia, Morocco, Panama, Poland, Romania, Senegal,
Slovakia, Sri Lanka, Trinidad & Tobago, Tunisia, Turkey, and Ukraine.
In addition to the Treaty with Azerbaijan, the United States has signed,
but not yet brought into force, BITs with Bahrain, Belarus, Bolivia,
Croatia, El Salvador, Honduras, Jordan, Lithuania, Mozambique, Nicaragua,
Russia, and Uzbekistan.
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, Treasury, and Energy.
The
U.S.-Azerbaijan Treaty
The Treaty with Azerbaijan is based on the 1994 U.S.
prototype BIT and satisfies the U.S. principal objectives in bilateral
investment treaty negotiations:
--All forms of U.S. investment in the territory of Azerbaijan are covered.
--Covered investments receive the better of national treatment or most-favored-nation
(MFN) treatment both while they are being established and thereafter,
subject to certain specified exceptions.
--Specified performance requirements may not be imposed upon or enforced
against covered investments.
--Expropriation is permitted only in accordance with customary international
law standards.
--Parties are obligated to permit the transfer, in a freely usable currency,
of all funds related to a covered investment, subject to exceptions
for specified purposes.
--Investment disputes with the host government may be brought by investors,
or by their covered investments, to binding international arbitration
as an alternative to domestic courts.
These elements are further described in the following article-by-article
analysis of the provisions of the Treaty:
Title and Preamble
The Title and Preamble state the goals of the Treaty. Foremost is the
encouragement and protection of investment. Other goals include economic
cooperation on investment issues; the stimulation of economic development;
higher living standards; promotion of respect for internationally-recognized
worker rights; and maintenance of health, safety, and environmental
measures. While the Preamble does not impose binding obligations, its
statement of goals may assist in interpreting the Treaty and in defining
the scope of Party-to-Party consultations pursuant to Article VIII.
Article I (Definitions)
Article I defines terms used throughout the Treaty.
Company, Company of a Party
The definition of "company" is broad, covering all types of
legal entities constituted or organized under applicable law, and includes
corporations, trusts, partnerships, sole proprietorships, branches,
joint ventures, and associations. The definition explicitly covers not-for-profit
entities, as well as entities that are owned or controlled by the state.
"Company of a Party" is defined as a company constituted or
organized under the laws of that Party.
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.
Investment, Covered Investment
The Treaty's definition of investment is broad, recognizing that investment
can take a wide variety of forms. Every kind of investment is specifically
incorporated in the definition; moreover, it is explicitly noted that
investment may consist or take the form of any of a number of interests,
claims, and rights.
The Treaty provides an illustrative list of the forms an investment
may take. Establishing a subsidiary is a common way of making an investment.
Other forms that an investment might take include equity and debt interests
in a company; contractual rights; tangible, intangible, and intellectual
property; and rights conferred pursuant to law, such as licenses and
permits. Investment as defined by the Treaty generally excludes claims
arising solely from trade transactions, such as a sale of goods across
a border that does not otherwise involve an investment.
The Treaty defines "covered investment" as an investment of
a national or company of a Party in the territory of the other Party.
An investment of a national or company is one that the national or company
owns or controls, either directly or indirectly. Indirect ownership
or control could be through other, intermediate companies or persons,
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, or by other arrangements.
The broad nature of the definitions of "investment," "company,"
and "company of a Party" means that investments can be covered
by the Treaty even if ultimate control lies with non-Party nationals.
A Party may, however, deny the benefits of the Treaty in the limited
circumstances described in Article XII.
State Enterprise, Investment Authorization, Investment Agreement
The Treaty defines "state enterprise" as a company owned,
or controlled through ownership interests, by a Party. Purely regulatory
control over a company does not qualify it as a state enterprise.
The Treaty defines an "investment authorization" as an authorization
granted by the foreign investment authority of a Party to a covered
investment or a national or company of the other Party.
The Treaty defines an "investment agreement" as a written
agreement between the national authorities of a Party and a covered
investment or a national or company of the other Party that (1) grants
rights with respect to natural resources or other assets controlled
by the national authorities and (2) the investment, national, or company
relies upon in establishing or acquiring a covered investment. This
definition thus excludes agreements with subnational authorities (including
U.S. States) as well as agreements arising from various types of regulatory
activities of the national government, including, in the tax area, rulings,
closing agreements, and advance pricing agreements.
ICSID Convention, Centre, UNCITRAL Arbitration Rules
The "ICSID Convention," "Centre," and "UNCITRAL
Arbitration Rules" are explicitly defined to make the text brief
and clear.
Article II (Treatment of Investment)
Article II contains the Treaty's major obligations with respect to the
treatment of covered investments.
Paragraph 1 generally ensures the better of national or MFN treatment
in both the entry and postentry phases of investment. It thus prohibits,
outside of exceptions listed in the Annex, "screening" on
the basis of nationality during the investment process, as well as nationality-based
post-establishment measures. For purposes of the Treaty, "national
treatment" means treatment no less favorable than that which a
Party accords, in like situations, to investments in its territory of
its own nationals or companies. For purposes of the Treaty, "MFN
treatment" means treatment no less favorable than that which a
Party accords, in like situations, to investments in its territory of
nationals or companies of a third country. The Treaty obliges each Party
to provide whichever of national treatment or MFN treatment is the most
favorable. This is defined by the Treaty as "national and MFN treatment."
Paragraph 1 explicitly states that the national and MFN treatment obligation
will extend to state enterprises in their provision of goods and services
to covered investments.
Paragraph 2 states that each Party may adopt or maintain exceptions
to the national and MFN treatment standard with respect to the sectors
or matters specified in the Annex. Further restrictive measures are
permitted in each sector. (The specific exceptions are discussed in
the section entitled "Annex" below.) In the Annex, Parties
may take exceptions only to the obligation to provide national and MFN
treatment; there are no sectoral exceptions to the rest of the Treaty's
obligations. Finally, in adopting any exception under this provision,
a Party may not require the divestment of a preexisting covered investment.
Paragraph 2 also states that a Party is not required to extend to covered
investments national and MFN treatment with respect to procedures provided
for in multilateral agreements concluded under the auspices of the World
Intellectual Property Organization relating to the acquisition or maintenance
of intellectual property rights. This provision clarifies that certain
procedural preferences granted under intellectual property conventions,
such as the Patent Cooperation Treaty, fall outside the BIT. This exception
parallels those in the Uruguay Round's Agreement on Trade-Related Aspects
of Intellectual Property Rights (TRIPS) and the North American Free
Trade Agreement (NAFTA).
Paragraph 3 sets out a minimum standard of treatment based on standards
found in customary international law. The obligations to accord "fair
and equitable treatment" and "full protection and security"
are explicitly cited, as is each Party's obligation not to impair, through
unreasonable and discriminatory means, the management, conduct, operation,
and sale or other disposition of covered investments. The general reference
to international law also implicitly incorporates other fundamental
rules of customary international law regarding the treatment of foreign
investment. However, this provision does not incorporate obligations
based on other international agreements.
Paragraph 4 requires that each Party provide effective means of asserting
claims and enforcing rights with respect to covered investments.
Paragraph 5 ensures the transparency of each Party's regulation of covered
investments.
Article III (Expropriation)
Article III incorporates into the Treaty customary international law
standards for expropriation. Article III also includes detailed provisions
regarding the computation and payment, adequate, and effective compensation.
Paragraph 1 describes the obligations of the Parties with respect to
expropriation and nationalization of a covered investment. These obligations
apply to both direct expropriation and indirect expropriation through
measures "tantamount to expropriation or nationalization"
and thus apply to "creeping expropriations"--a series of measures
that effectively amounts to an expropriation of a covered investment
without taking title.
Paragraph 1 further bars all expropriations or nationalizations except
those that are for a public purpose; carried out in a non-discriminatory
manner; in accordance with due process of law; in accordance with the
general principles of treatment provided in Article II(3); and subject
to "prompt, adequate, and effective compensation."
Paragraph 2, 3, and 4 more fully describe the meaning of "prompt,
adequate, and effective compensation." The guiding principle is
that the investor should be made whole.
Article IV (Compensation for Damages Due to War and Similar Events)
Paragraph 1 entitles investments covered by the Treaty to national and
MFN treatment with respect to any measure relating to losses suffered
in a Party's territory owning to war or to other armed conflict, civil
disturbances, or similar events. Paragraph 2, by contrast, creates an
unconditional obligation to pay compensation for such losses when the
losses result from requisitioning or from destruction not required by
the necessity of the situation.
Article V (Transfers)
Article V Protects investors from certain government exchange controls
that limit current and capitol account transfers, as well as limits
on inward transfers made by screening authorities and, in certain circumstances,
limits on returns in kind.
In paragraph 1 each Party agrees to "permit all transfers relating
to a covered investment to be made freely and without delay into and
out of its territory." Paragraph 1 also provides a list of transfers
that must be allowed. The list is non-exclusive, and is intended to
protect flows to both affiliated and non-affiliated entities.
Paragraph 2 provides that each Party must permit transfers to be made
in a "freely usable currency" at the market rate of exchange
prevailing on the date of transfer. "Freely usable" is a term
used by the International Monetary Fund; at present there are five "freely
usable" currencies; the U.S. dollar, Japanese yen, German mark,
French franc, and British pound sterling.
In paragraph 3, each Party agrees to permit returns in kind to be made
where such returns have been authorized by an investment authorization
or written agreement between a Party and a covered investment or a national
or company of the other Party.
Paragraph 4 recognizes that, notwithstanding the obligations of paragraphs
1 through 3, a Party may prevent a transfer through the equitable, non-discriminatory
and good faith application of laws relating to bankruptcy, insolvency,
or the protection of the rights of creditors; securities; criminal or
penal offenses; or ensuring compliance with orders or judgments in adjudicatory
proceedings.
Article VI (Performance Requirements)
Article VI prohibits either Party from mandating or enforcing specified
performance requirements as a condition for the establishment, acquisition,
expansion, management, conduct, or operation of a covered investment.
The list of prohibited requirements is exhaustive and covers domestic
content requirements and domestic purchase preferences, the "balancing"
imports or sales in relation to exports or foreign exchange earnings,
requirements to export products or services, technology transfer requirements,
and requirements relating to the conduct of research and development
in the host country. Such requirements are major burdens on investors
and impair their competitiveness.
The last sentence of Article VI makes clear that a Party may, however,
impose conditions for the receipt or continued receipt of benefits and
incentives.
Article VII (Entry, Sojourn, and Employment of Aliens)
Paragraph 1 requires each Party to allow, subject to its laws relating
to the entry and sojourn of aliens, the entry into its territory of
the other Party's nationals for certain purposes related to a covered
investment and involving the commitment of a "substantial amount
of capital." This paragraph serves to render nationals of Azerbaijan
eligible for treaty-investor visas under U.S. immigration law. It also
affords similar treatment for U.S. nationals entering Azerbaijan. The
requirement to commit a "substantial amount of capital" is
intended to prevent abuse of treaty-investor status; it parallels the
requirements of U.S. immigration law.
In addition, paragraph 1(b) prohibits labor certification requirements
and numerical restrictions on the entry of treaty-investors.
Paragraph 2 requires that each Party allow covered investments to engage
top managerial personal of their choice, regardless of nationality.
This provision does not require that such personnel granted entry into
a Party's territory. Such persons must independently qualify for an
appropriate visa for entry into the territory of the other party. Nor
does this provision create an exception to U.S. equal employment opportunity
laws.
Article VIII (State-State Consultations)
Article VIII provides for prompt consultation between the Parties, as
either Party's request, on any matter relating to the interpretation
or application of the Treaty or to the realization of the Treaty's objectives.
A Party may thus request consultations for any matter reasonably related
to the encouragement or protection of covered investment, whether or
not a Party is alleging a violation of the Treaty.
Article IX (Settlement of Disputes Between One Party and a National
or Company of the Other Party)
Article IX sets forth several means by which disputes brought against
a Party by an investor (specifically, a national or company of the other
Party) may be resolved.
Article IX procedures apply to an "investment dispute," which
is any dispute arising out of or relating to an investment authorization,
an investment agreement, or an alleged breach of rights conferred, created,
or recognized by the Treaty with respect to a covered investment.
In the event that an investment dispute cannot be settled amicably,
paragraph 2 gives an investor an exclusive (with the exception in paragraph
3(b) concerning injunctive relief, explained below) choice among three
options to settle the dispute. These three options are: (1) submitting
the dispute to the courts or administrative tribunals of the Party that
is a party to the dispute; (2) invoking dispute-resolution procedures
previously agreed upon by the national or company and the host country
government; or (3) invoking the dispute-resolution mechanisms identified
in paragraph 3 of Article IX.
Under paragraph 3(a), the investor can submit an investment dispute
to binding arbitration 3 months after the dispute arises; provided that
the investor has not submitted the claim to a court or administrative
tribunal of the Party or invoked a dispute resolution procedure previously
agreed upon. The investor may choose among the International Centre
for Settlement of Investment Disputes (ICSID) (Convention Arbitration),
the Additional Facility of ICSID (if Convention Arbitration is not available),
ad hoc arbitration using the Arbitration Rules of the United Nations
Commission on International Trade Law (UNCITRAL), or any other arbitral
institution or rules agreed upon by both parties to the dispute.
Before or during such arbitral proceedings, however, paragraph 3(b)
provides that an investor may seek, without affecting its right to pursue
arbitration under this Treaty, interim injunctive relief not involving
the payment of damages from local courts for administrative tribunals
of the Party that is a party to the dispute for the preservation of
its rights and interests. This paragraph does not alter the power of
the arbitral tribunals to recommend or order interim measures they may
deem appropriate.
Paragraph 4 constitutes each Party's consent to the submission of investment
disputes to binding arbitration in accordance with the choice of the
investor.
Paragraph 5 provides that any non-ICSID Convention arbitration shall
take place in a country that is a party to the United Nations Convention
on the Recognition and Enforcement of Arbitral Awards. This provision
facilitates enforcement of arbitral awards.
In addition, in paragraph 6, each Party commits to enforcing arbitral
awards rendered pursuant to this Article. The Federal Arbitration Act
(9 U.S.C. 1 et seq.) satisfies the requirement for the enforcement of
non-ICSID Convention awards in the United States. The Convention on
the Settlement of Investment Disputes Act of 1966 (22 U.S.C. 1650-1650a)
provides for the enforcement of ICSID Convention awards.
Paragraph 7 ensures that a Party may not assert as a defense, or for
any other reason, that the investor involved in the investment dispute
has received or will receive reimbursement for the same damages under
an insurance or guarantee contract.
Paragraph 8 provides that, for the purposes of this article, the nationality
of a company in the host country will be determined by ownership or
control, rather than by place of incorporation. This provision allows
a company that is a covered investment to bring a claim in its own name.
Article X (Settlement of Disputes Between the Parties)
Article X provides for binding arbitration of disputes between the United
States and Azerbaijan concerning the interpretation or application of
the Treaty that are not resolved through consultations or other diplomatic
channels. The article specifies various procedural aspects of such arbitration
proceedings, including time periods, selection of arbitrators, and distribution
of arbitration costs between the Parties. The article constitutes each
Party's prior consent to such arbitration.
Article XI (Preservation of Rights)
Article XI clarifies that the Treaty does not derogate from any obligation
a Party might have to provide better treatment to the covered investment
than is specified in the Treaty. Thus, the Treaty establishes a floor
for the treatment of covered investments. A covered investment may be
entitled to more favorable treatment through domestic legislation, other
international legal obligations, or a specific obligation (e.g., to
provide a tax holiday) assumed by a Party with respect to that covered
investment.
Article XII (Denial of Benefits)
Article XII(a) preserves the right of each Party to deny the benefits
of the Treaty to a company owned or controlled by nationals of a non-Party
country with which the denying Party does not have normal economic relations,
e.g., a country to which it is applying economic sanctions. For example,
at this time the United States does not maintain normal economic relations
with, among other countries, Cuba and Libya.
Article XII(b) permits each Party to deny the benefits of the Treaty
to a company of the other Party if the company is owned or controlled
by non-Party nationals and if the company has no substantial business
activities in the Party where it is established. Thus, the United States
could deny benefits to a company that is a subsidiary of a shell company
organized under the laws of Azerbaijan if controlled by nationals of
a third country. However, this provision would not generally permit
the United States to deny benefits to a company of Azerbaijan that maintains
its central administration or principal place of business in the territory
of, or has a real and continuous link with, Azerbaijan.
Article XIII (Taxation)
Article XIII excludes tax matters generally from the coverage of the
BIT, on the basis that tax matters should be dealt with in bilateral
tax treaties. However, Article XIII does not preclude a national or
company from bringing claims under Article IX that taxation provisions
in an investment agreement or authorization have been violated. In addition,
the dispute settlement provisions of Articles IX and X apply to tax
matters in relation to alleged violations of the BIT's expropriation
article.
Under paragraph 2, a national or company that asserts in a dispute that
a tax matter involves expropriation may submit that dispute to arbitration
pursuant to Article IX(3) only if (1) the investor has first referred
to the competent tax authorities of both Parties the issue of whether
the tax matter involves an expropriation, and (2) the tax authorities
have not both determined, within 9 months from time of referral, that
the matter does not involve expropriation. The "competent tax authority"
of the United States is the Assistant Secretary of the Treasury for
Tax Policy, who will make such a determination only after consultation
with the Inter-Agency Staff Coordinating Group on Expropriations.
Article XIV (Measures Not Precluded)
The first paragraph of Article XIV reserves the right of a Party to
take measures for the fulfillment of its international obligations with
respect to maintenance or restoration of international peace or security,
as well as those measures it regards as necessary for the protectionof
its own essential security interests.
International obligations with respect to maintenance or restoration
of peace or security would include, for example, obligations arising
out of Chapter VII of the United Nations 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
interests of the Party involved. Measures to protect a Party's essential
security interests are self-judging in nature, although each Party would
expect the provisions to be applied by the other in good faith.
The second paragraph permits a Party to prescribe special formalities
in connection with covered investments, provided that these formalities
do not impair the substance of any Treaty rights. Such formalities could
include reporting requirements for covered investments or for transfers
of funds, or incorporation requirements.
Article XV (Application to Political Subdivisions and State Enterprises
of the Parties)
Paragraph 1(a) makes clear that the obligations of the Treaty are applicable
to all political subdivisions of the Parties, such as provincial, State,
and local governments.
Paragraph 1(b) 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 by a State to U.S. out-of-State residents and corporations.
Paragraph 2 extends a Party's obligations under the Treaty to its state
enterprises in the exercise of any delegated governmental authority.
This paragraph is designed to clarify that the exercise of governmental
authority by a state enterprise must be consistent with a Party's obligations
under the Treaty.
Article XVI (Entry Into Force, Duration, and Termination)
Paragraph 1 stipulates that the Treaty enters into force 30 days after
exchange of instruments of ratification. The Treaty remains in force
for a period of 10 years and continues in force thereafter unless terminated
by either Party as provided in paragraph 2.
Paragraph 2 permits a Party to terminate the Treaty at the end of the
initial 10 year period, or at any later time, by giving 1 year's written
notice to the other Party. Paragraph 1 also provides that the Treaty
applies to covered investments existing at the time of entry into force
as well as to those established or acquired thereafter. The Treaty does
not state an intention by the Parties to apply the Treaty's provisions
retroactively. Thus, under customary international law, the Treaty does
not apply to disputes with respect to acts or facts which took place
before the Treaty came into force or to any situation which ceased to
exist before the date of entry into force of the Treaty.
Paragraph 3 provides that, if the Treaty is terminated, all investments
that qualified as covered investments on the date of termination (i.e.,
1 year after the date of written notice of termination) continue to
be protected under the Treaty for 10 years from that date as long as
these investments qualify as covered investments. A Party's obligations
with respect to the establishment and acquisition of investments would
lapse immediately upon the date of termination of the Treaty.
Paragraph 4 stipulates that the Annex shall form an integral part of
the Treaty.
Annex
U.S. bilateral investment treaties allow for exceptions to national
and MFN treatment, where the Parties' domestic regimes do not afford
national and MFN treatment, or where treatment in certain sectors or
matters is negotiated in and governed by other agreements. Future derogations
from the national treatment obligations of the Treaty are generally
permitted only in the sectors or matters listed in the Annex, pursuant
to Article II(2), and must be made on an MFN basis unless otherwise
specified therein.
During a review of the Treaty in preparation for its submittal to the
Senate for advice and consent to ratification, the Parties determined
that there was an ambiguity in the Annex. This ambiguity reflected a
misunderstanding regarding whether Azerbaijan had taken an exception
from its national and MFN treatment obligation for insurance services.
To resolve this ambiguity, the Parties agreed in an exchange of notes
to amend the Treaty. Specifically, as amended, the Annex now takes an
explicit exception from the parties' respective national and MFN treatment
obligations for insurance services, and in so doing, removes a U.S.
commitment to limit its exception for insurance services. The Annex,
as amended, is further described below.
Under a number of statutes, many of which have a long historical background,
the U.S. federal government or States may not necessarily treat investments
of nationals or companies of Azerbaijan as they do U.S. investments
or investments from a third country. Paragraphs 1 and 2 of the Annex
list the sectors or matters subject to U.S. exceptions.
The U.S. exceptions from its national treatment obligation are: atomic
energy; customhouse brokers; licenses for broadcast, common carrier,
or aeronautical radio stations; COMSAT; subsidies or grants, including
government-supported loans, guarantees, and insurance; State and local
measures exempt from Article 1102 of the North American Free Trade Agreement
pursuant to Article 1108 thereof; and landing of submarine cables.
The U.S. exceptions from its national and MFN treatment obligation are:
fisheries; air and maritime transport, and related activities; banking,
insurance, securities, and other financial services; and one-way satellite
transmissions of Direct-to-Home (DTH) and Direct Broadcasting Satellite
(DBS) television services and of digital audio services.
The Treaty is the first to include a U.S. exception from its national
and MFN treatment obligation for one-way satellite transmission of DTH
and DBS television services and of digital audio services. This exception
was added to the prototype BIT following conclusion of the 1997 WTO
Basic Telecommunications Services Agreement to be consistent with the
U.S. position taken with respect to that agreement. The Treaty is the
first BIT negotiated after conclusion of the 1997 WTO Basic Telecommunications
Services Agreement.
Paragraph 3 of the Annex lists Azerbaijan's exceptions from its national
treatment obligation, which are: ownership of land, its subsoil, water,
plant and animal life, and other natural resources; ownership of real
estate (during the transition period to a market economy); ownership
or control of television and radio broadcasting and other forms of mass
media; air transportation; preparation of stocks and bond notes issued
by Azerbaijan; fisheries; and construction of pipelines for transportation
of hydrocarbons.
Paragraph 4 of the Annex lists Azerbaijan's exceptions from its national
and MFN treatment obligation, which are: banking, insurance,securities,
and other financial services.
As described above, Article II states the general obligation of the
Parties to accord national and MFN treatment to covered investments
except in those sectors or with respect to the matters specified in
the Annex. Neither the United States nor Azerbaijan took an exception
in their respective Annex entries with respect to all leasing of minerals
or pipeline rights-of-way on government lands. Accordingly, this Treaty
affects the implementation of the Mineral Lands Leasing Act (MLLA) (30
U.S.C. 181 et seq.) and 10 U.S.C. 7435, regarding Naval Petroleum Reserves,
with respect to nationals and companies of Azerbaijan. The Treaty provides
for resort to binding international arbitration to resolve disputes,
rather than denial of mineral rights or rights to naval petroleum shares
to investors of the other Party, as is the current process under the
statute. U.S. domestic remedies, would, however, remain available for
use in conjunction with the Treaty's provisions.
The MLLA and 10 U.S.C. 7435 direct that a foreign investor be denied
access to leases for minerals on on-shore federal lands, leases of land
within the Naval Petroleum and Oil Shale Reserves, and rights-of-way
for oil or gas pipelines across on-shore federal lands, if U.S. investors
are denied access to similar or like privileges in the foreign country.
Azerbaijan's extension of national treatment in these sectors will fully
meet the objectives of the MLLA and 10 U.S.C. 7435. Azerbaijan was informed
during negotiations that, were it to include this sector in its list
of treatment exemptions, the United States would (consistent with the
MLLA and 10 U.S.C. 7435) exclude the leasing of minerals or pipeline
rights-of-way on Government lands from the national and MFN treatment
obligations of this Treaty.
The listing of a sector or matter in the Annex does not necessarily
signify that domestic laws have entirely reserved it for nationals.
And, pursuant to Article II(2), any additional restrictions or limitations
that a Party may adopt with respect to listed sectors or matters may
not compel the divestiture of existing covered investments.
Finally, listing a sector or matter in the Annex exempts a Party only
from the obligation to accord national or MFN treatment. Both Parties
are obligated to accord to covered investments in all sectors--even
those listed in the Annex--all other rights conferred by the Treaty.
The other U.S. Government agencies that participated in negotiating
the Treaty join me in recommending that it be transmitted to the Senate
at an early date.
Respectfully submitted,
TREATY BETWEEN
THE GOVERNMENT
OF THE UNITED STATES OF AMERICA AND
THE GOVERNMENT
OF THE REPUBLIC OF AZERBAIJAN
CONCERNING THE ENCOURAGEMENT
AND RECIPROCAL PROTECTION OF INVESTMENT
The Government of the United States of America and the Government of
the Republic of Azerbaijan (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 a stable framework for investment will maximize effective
utilization of economic resources and improve living standards;
Recognizing that the development of economic and business ties can promote
respect for internationally recognized worker rights;
Agreeing that these objectives can be achieved without relaxing health,
safety and environmental measures of general application; and
Having resolved to conclude a Treaty concerning the encouragement and
reciprocal protection of investment;
Have agreed as follows:
ARTICLE I
For the purposes of this Treaty,
(a) "company" means any entity constituted or organized under
applicable law, whether or not for profit, and whether privately or
governmentally owned or controlled, and includes a corporation, trust,
partnership, sole proprietorship, branch, joint venture, association,
or other organization;
(b) "company of a Party" means a company constituted or organized
under the laws of that Party;
(c) "national" of a Party means a natural person who is a
national of that Party under its applicable law;
(d) "investment" of a national or company means every kind
of investment owned or controlled directly or indirectly by that national
or company, and includes investment consisting or taking the form of:
(i) a company;
(ii) shares, stock, and other forms of equity participation, and bonds,
debentures, and other forms of debt interests, in a company;
(iii) contractual rights, such as under turnkey, construction or management
contracts, production or revenue-sharing contracts, concessions, or
other similar contracts;
(iv) tangible property, including real property; and intangible property,
including rights, such as leases, mortgages, liens and pledges;
(v) intellectual property, including: copyrights and related rights,
patents, rights in plant varieties, industrial designs, rights in semiconductor
layout designs, trade secrets, including know-how and confidential business
information, trade and service marks, and trade names; and
(vi) rights conferred pursuant to law, such as licenses and permits;
(e) "covered investment" means an investment of a national
or company of a Party in the territory of the other Party;
(f) "state enterprise" means a company owned, or controlled
through ownership interests, by a Party;
(g) "investment authorization" means an authorization granted
by the foreign investment authority of a Party to a covered investment
or a national or company of the other Party;
(h) "investment agreement" means a written agreement between
the national authorities of a Party and a covered investment or a national
or company of the other Party that (i) grants rights with respect to
natural resources or other assets controlled by the national authorities
and (ii) the investment, national or company relies upon in establishing
or acquiring a covered investment.
(i) "ICSID Convention" means the Convention on the Settlement
of Investment Disputes between States and Nationals of Other States,
done at Washington, March 18, 1965;
(j) "Centre" means the International Centre for Settlement
of Investment Disputes Established by the ICSID Convention; and
(k) "UNCITRAL Arbitration Rules" means the arbitration rules
of the United Nations Commission on International Trade Law.
ARTICLE II
1. With respect to the establishment, acquisition, expansion, management,
conduct, operation and sale or other disposition of covered investments,
each Party shall accord treatment no less favorable than that it accords,
in like situations, to investments in its territory of its own nationals
or companies (hereinafter "national treatment") or to investments
in its territory of nationals or companies of a third country (hereinafter
"most favored nation treatment"), whichever is most favorable
(hereinafter "national and most favored nation treatment").
Each Party shall ensure that its state enterprises, in the provision
of their goods or services, accord national and most favored nation
treatment to covered investments.
2. (a) A Party may adopt or maintain exceptions to the obligations of
paragraph 1 in the sectors or with respect to the matters specified
in the Annex to this Treaty. In adopting such an exception, a Party
may not require the divestment, in whole or in part, of covered investments
existing at the time the exception becomes effective.
(b) The obligations of paragraph 1 do not apply to procedures provided
in multilateral agreements concluded under the auspices of the World
Intellectual Property Organization relating to the acquisition or maintenance
of intellectual property rights.
3. (a) Each Party shall at all times accord to covered investments fair
and equitable treatment and full protection and security, and shall
in no case accord treatment less favorable than that required by international
law.
(b) Neither Party shall in any way impair by unreasonable and discriminatory
measures the management, conduct, operation, and sale or other disposition
of covered investments.
4. Each Party shall provide effective means of asserting claims and
enforcing rights with respect to covered investments.
5. Each Party shall ensure that its laws, regulations, administrative
practices and procedures of general application, and adjudicatory decisions,
that pertain to or affect covered investments are promptly published
or otherwise made publicly available.
ARTICLE III
1. Neither Party shall expropriate or nationalize a covered investment
either directly or indirectly through measures tantamount to expropriation
or nationalization ("expropriation") except for a public purpose;
in a non-discriminatory manner; upon payment of prompt, adequate and
effective compensation; and in accordance with due process of law and
the general principles of treatment provided for in Article II(3).
2. Compensation shall be paid without delay; be equivalent to the fair
market value of the expropriated investment immediately before the expropriatory
action was taken ("the date of expropriation"); and be fully
realizable and freely transferable. The fair market value shall not
reflect any change in value occurring because the expropriatory action
had become known before the date of expropriation.
3. If the fair market value is denominated in a freely usable currency,
the compensation paid shall be no less than the fair market value on
the date of expropriation, plus interest at a commercially reasonable
rate for that currency, accrued from the date of expropriation until
the date of payment.
4. If the fair market value is denominated in a currency that is not
freely usable, the compensation paid -- converted into the currency
of payment at the market rate of exchange prevailing on the date of
payment -- shall be no less than:
(a) the fair market value on the date of expropriation, converted into
a freely usable currency at the market rate of exchange prevailing on
that date, plus
(b) interest, at a commercially reasonable rate for that freely usable
currency, accrued from the date of expropriation until the date of payment.
ARTICLE IV
1. Each Party shall accord national and most favored nation treatment
to covered investments as regards any measure relating to losses that
investments suffer in its territory owing to war or other armed conflict,
revolution, state of national emergency, insurrection, civil disturbance,
or similar events.
2. Each Party shall accord restitution, or pay compensation in accordance
with paragraphs 2 through 4 of Article III, in the event that covered
investments suffer losses in its territory, owing to war or other armed
conflict, revolution, state of national emergency, insurrection, civil
disturbance, or similar events, that result from:
(a) requisitioning of all or part of such investments by the Party's
forces or authorities, or
(b) destruction of all or part of such investments by the Party's forces
or authorities that was not required by the necessity of the situation.
ARTICLE V
1. Each Party shall permit all transfers relating to a covered investment
to be made freely and without delay into and out of its territory. Such
transfers include:
(a) contributions to capital;
(b) profits, dividends, capital gains, and proceeds from the sale of
all or any part of the investment or from the partial or complete liquidation
of the investment;
(c) interest, royalty payments, management fees, and technical assistance
and other fees;
(d) payments made under a contract, including a loan agreement; and
(e) compensation pursuant to Articles III and IV, and payments arising
out of an investment dispute.
2. Each Party shall permit transfers to be made in a freely usable currency
at the market rate of exchange prevailing on the date of transfer.
3. Each Party shall permit returns in kind to be made as authorized
or specified in an investment authorization, investment agreement, or
other written agreement between the Party and a covered investment or
a national or company of the other Party.
4. Notwithstanding paragraphs 1 through 3, a Party may prevent a transfer
through the equitable, non-discriminatory and good faith application
of its laws relating to:
(a) bankruptcy, insolvency or the protection of the rights of creditors;
(b) issuing, trading or dealing in securities;
(c) criminal or penal offenses; or
(d) ensuring compliance with orders or judgments in adjudicatory proceedings.
ARTICLE VI
Neither Party shall mandate or enforce, as a condition for the establishment,
acquisition, expansion, management, conduct or operation of a covered
investment, any requirement (including any commitment or undertaking
in connection with the receipt of a governmental permission or authorization):
(a) to achieve a particular level or percentage of local content, or
to purchase, use or otherwise give a preference to products or services
of domestic origin or from any domestic source;
(b) to limit imports by the investment of products or services in relation
to a particular volume or value of production, exports or foreign exchange
earnings;
(c) to export a particular type, level or percentage of products or
services, either generally or to a specific market region;
(d) to limit sales by the investment of products or services in the
Party's territory in relation to a particular volume or value of production,
exports or foreign exchange earnings;
(e) to transfer technology, a production process or other proprietary
knowledge to a national or company in the Party's territory, except
pursuant to an order, commitment or undertaking that is enforced by
a court, administrative tribunal or competition authority to remedy
an alleged or adjudicated violation of competition laws; or
(f) to carry out a particular type, level or percentage of research
and development in the Party's territory.
Such requirements do not include conditions for the receipt or continued
receipt of an advantage.
ARTICLE VII
1. (a) Subject to its laws relating to the entry and sojourn of aliens,
each Party shall permit to enter and to remain in its territory nationals
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 other Party that employs them, have committed or are in the process
of committing a substantial amount of capital or other resources.
(b) Neither Party shall, in granting entry under paragraph 1(a), require
a labor certification test or other procedures of similar effect, or
apply any numerical restriction.
2. Each Party shall permit covered investments to engage top managerial
personnel of their choice, regardless of nationality.
ARTICLE VIII
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 or
to the realization of the objectives of the Treaty.
ARTICLE IX
1. For purposes of this Treaty, an investment dispute is a dispute between
a Party and a national or company of the other Party arising out of
or relating to an investment authorization, an investment agreement
or an alleged breach of any right conferred, created or recognized by
this Treaty with respect to a covered investment.
2. A national or company that is a party to an investment dispute may
submit the dispute for resolution under one of the following alternatives:
(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 three
months have elapsed from the date on which the dispute arose, the national
or company concerned may submit the dispute for settlement by binding
arbitration:
(i) to the Centre, if the Centre is available; or
(ii) to the Additional Facility of the Centre, if the Centre is not
available; or
(iii) in accordance with the UNCITRAL Arbitration Rules; or
(iv) if agreed by both parties to the dispute, to any other arbitration
institution or in accordance with any other arbitration rules.
(b) a national or company, notwithstanding that it may have submitted
a dispute to binding arbitration under paragraph 3(a), may seek interim
injunctive relief, not involving the payment of damages, before the
judicial or administrative tribunals of the Party that is a party to
the dispute, prior to the institution of the arbitral proceeding or
during the proceeding, for the preservation of its rights and interests.
4. Each Party hereby consents to the submission of any investment dispute
for settlement by binding arbitration in accordance with the choice
of the national or company under paragraph 3(a)(i), (ii), and (iii)
or the mutual agreement of both parties to the dispute under paragraph
3(a) (iv). This consent and the submission of the dispute by a national
or company under paragraph 3(a) shall satisfy the requirement of:
(a) Chapter II of the ICSID Convention (Jurisdiction of the Centre)
and the Additional Facility Rules for written consent of the parties
to the dispute; and
(b) Article II of the United Nations Convention on the Recognition and
Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958,
for an "agreement in writing."
5. Any arbitration under paragraph 3(a) (ii), (iii) or (iv) shall be
held in a state that is a party to the United Nations Convention on
the Recognition and Enforcement of Foreign Arbitral Awards, done at
New York, June 10, 1958.
6. Any arbitral award rendered pursuant to this Article shall be final
and binding on the parties to the dispute. Each Party shall carry out
without delay the provisions of any such award and provide in its territory
for the enforcement of such award.
7. In any proceeding involving an investment dispute, a Party shall
not assert, as a defense, counterclaim, right of set-off or for any
other reason, that indemnification or other compensation for all or
part of the alleged damages has been received or will be received pursuant
to an insurance or guarantee contract.
8. For purposes of Article 25(2)(b) of the ICSID Convention and this
Article, a company of a Party that, immediately before the occurrence
of the event or events giving rise to an investment dispute, was a covered
investment, shall be treated as a company of the other Party.
ARTICLE X
1. Any dispute between the Parties concerning the interpretation or
application of the Treaty, that 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 UNCITRAL Arbitration Rules
shall govern, except to the extent these rules are (a) modified by the
Parties or (b) modified by the arbitrators unless either Party objects
to the proposed modification.
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 shall be a national of a third state. The UNCITRAL Arbitration
Rules applicable to appointing members of three-member panels shall
apply mutatis mutandis to the appointment of the arbitral panel except
that the appointing authority referenced in those rules shall be the
Secretary General of the Centre.
3. Unless otherwise agreed, all submissions shall be made and all hearings
shall be completed within six months of the date of selection of the
third arbitrator, and the arbitral panel 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 and other arbitrators, and other
costs of the proceedings, shall be paid for equally by the Parties.
However, the arbitral panel may, at its discretion, direct that a higher
proportion of the costs be paid by one of the Parties.
ARTICLE XI
This Treaty shall not derogate from any of the following that entitle
covered investments to treatment more favorable than that accorded by
this Treaty:
(a) laws and regulations, administrative practices or procedures, or
administrative or adjudicatory decisions of a Party;
(b) international legal obligations; or
(c) obligations assumed by a Party, including those contained in an
investment authorization or an investment agreement.
ARTICLE XII
Each Party reserves the right to deny to a company of the other Party
the benefits of this Treaty if nationals of a third country own or control
the company and
(a) the denying Party does not maintain normal economic relations with
the third country; or
(b) the company has no substantial business activities in the territory
of the Party under whose laws it is constituted or organized.
ARTICLE XIII
1. No provision of this Treaty shall impose obligations with respect
to tax matters, except that:
(a) Articles III, IX and X will applywith respect to expropriation;
and
(b) Article IX will apply with respect to an investment agreement or
an investment authorization.
2. With respect to the application of Article III, an investor that
asserts that a tax measure involves an expropriation may submit that
dispute to arbitration pursuant to Article IX, paragraph 3, provided
that the investor concerned has first referred to the competent tax
authorities of both Parties the issue of whether that tax measure involves
an expropriation.
3. However, the investor cannot submit the dispute to arbitration if
within nine months after the date of referral, the competent tax authorities
of both Parties determine that the tax measure does not involve an expropriation.
ARTICLE XIV
1. This Treaty shall not preclude a Party from applying measures necessary
for 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 a Party from prescribing special formalities
in connection with covered investments, such as a requirement that such
investments be legally constituted under the laws and regulations of
that Party, or a requirement that transfers of currency or other monetary
instruments be reported, provided that such formalities shall not impair
the substance of any of the rights set forth in this Treaty.
ARTICLE XV
1. (a) The obligations of this Treaty shall apply to the political subdivisions
of the Parties.
(b) With respect to the treatment accorded by a State, Territory or
possession of the United States of America, national treatment means
treatment no less favorable than the treatment accorded thereby, in
like situations, to investments 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.
2. A Party's obligations under this Treaty shall apply to a state enterprise
in the exercise of any regulatory, administrative or other governmental
authority delegated to it by that Party.
ARTICLE XVI
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. It shall apply to covered investments
existing at the time of entry into force as well as to those established
or acquired thereafter.
2. A Party may terminate this Treaty at the end of the initial ten
year period or at any time thereafter by giving one year's written
notice to the other Party.
3. For ten years from the date of termination, all other Articles
shall continue to apply to covered investments established or acquired
prior to the date of termination, except insofar as those Articles
extend to the establishment or acquisition of covered investments.
4. The Annex shall form an integral part of the Treaty.
DONE in duplicate at Washington this first day of August, 1997, in
the English and Azerbaijani languages, each text being equally authentic.
FOR
THE GOVERNMENT OF THE UNITED STATES OF AMERICA: |
FOR THE
GOVERNMENT OF THE REPUBLIC OF AZERBAIJAN:
|
|
|
[signature]
|
[signature]
|
ANNEX
1. The Government of the United States of America may adopt or maintain
exceptions to the obligation to accord national treatment tocovered
investments in the sectors or with respect to the matters specified
below:
atomic energy; customhouse brokers; licenses for broadcast, common
carrier, or aeronautical radio stations; COMSAT; subsidies or grants,
including government-supported loans, guarantees and insurance; state
and local measures exempt from Article 1102 of the North American
Free Trade Agreement pursuant to Article 1108 thereof; and landing
of submarine cables.
Most favored nation treatment shall be accorded in the sectors and
matters indicated above.
2. The Government of the United States of America may adopt or maintain
exceptions to the obligation to accord national and most favored nation
treatment to covered investments in the sectors or with respect to
the matters specified below:
fisheries; air and maritime transport, and related activities; banking,
securities, and other financial services; and one-way satellite transmissions
of Direct-to-Home (DTH) and Direct Broadcast Satellite (DBS) television
services and of digital audio services.
3. The Government of the United States of America may adopt or maintain
exceptions to the obligation to accord national and most favored nation
treatment to covered investments, provided that the exceptions do
not result in treatment under this Treaty less favorable than the
treatment that the Government of the United States of America has
undertaken to accord in the North American Free Trade Agreement with
respect to another party to that Agreement, in the sector or with
respect to the matter specified below:
insurance.
4. The Government of the Republic of Azerbaijan may adopt or maintain
exceptions to the obligation to accord national treatment to covered
investments in the sectors or with respect to the matters specified
below:
ownership of land, its subsoil, water, plant and animal life, and
other natural resources; ownership of real estate (during the transition
period to a market economy); ownership or control of television and
radio broadcasting and other forms of mass media; air transportation;
preparation of stocks and bond notes issued by the Government of the
Republic of Azerbaijan; fisheries; and construction of pipelines for
transportation of hydrocarbons.
Most favored nation treatment shall be accorded in the sectors and
matters indicated above.
5. The Government of the Republic of Azerbaijan may adopt or maintain
exceptions to the obligation to accord national and most favored nation
treatment to covered investments in the sectors or with respect to
the matters specified below:
banking, securities, and other financial services.
|
EMBASSY
OF THE
UNITED STATES OF AMERICA |
No. 222/2000
The Embassy of the United States of America presents its compliments
to the Ministry of Foreign Affairs of the Azerbaijan Republic and
refers to the previous correspondence between our Governments regarding
the Bilateral Investment Treaty.
Text of
U.S. Note:
Excellency:
I have the honor to refer to the Treaty between the Government of
the United States of America and the Government of the Republic of
Azerbaijan Concerning the Encouragement and Reciprocal Protection
of Investment, With Annex, signed at Washington on August 1, 1997
("the Treaty").
In conjunction with the preparation of documents for submission of
the Treaty to the U.S. Senate for its advice and consent to ratification,
representatives of our two governments have discussed the intentions
of the parties regarding the application of the national treatment
and most-favored-nation obligations of the treaty to our respective
insurance sectors.
Our representatives have concluded that an amendment to the Treaty
would provide greater clarity regarding our respective undertakings.
Based on those discussions, I have the honor to propose that the annex
to the Treaty is amended as follows:
1. The phrase ". . . banking, securities, and other financial
services; . . ." in Paragraph 2 of the annex shall read ".
. . banking, securities, insurance, and other financial services;
. . .
2. Paragraph 3 of the annex shall be deleted in its entirety and the
subsequent paragraphs of the Annex shall be renumbered accordingly.
3. The phrase ". . . banking, securities, and other financial
services" in Paragraph 4 (as renumbered) of the Annex shall read
". . . banking, securities, insurance, and other financial services.
If the foregoing is acceptable to your government, I have the further
honor to propose that this note, together with your reply to that
effect, shall constitute an agreement between the two governments
amending the Treaty, which agreement shall be subject to ratification
and shall enter into force upon entry into force of the Treaty.
Accept, excellency, the renewed assurances of my highest consideration.
Text of
draft GOAJ response:
Excellency:
I have the honor to refer to your note of (date) regarding the Treaty
between the Government of the Republic of Azerbaijan and the Government
of the United States of America Concerning the Encouragement and Reciprocal
Protection of Investment, With Annex, signed at Washington on August
1, 1997 ("the Treaty"), the substantive portions of which
note read as follows:
"In conjunction with the preparation of documents for submission
of the treaty to the U.S. Senate for its advice and consent to ratification,
representatives of our two governments have discussed the intentions,
of the parties regarding the application of the national treatment
and most-favored-nation obligations of the treaty to our respective
insurance sectors.
Our representatives have concluded that an amendment to the Treaty
would provide greater clarity regarding our respective undertakings.
Based on those discussions, I have the honor to propose that the annex
to the treaty is amended as follows:
1. The phrase ". . . banking, securities, and other financial
services; . . ." in Paragraph 2 of the Annex shall read ".
. . banking, securities, insurance, and other financial services;
. . .
2. Paragraph 3 of the Annex shall be deleted in its entirety and the
subsequent paragraphs of the Annex shall be renumbered accordingly.
3. The phrase ". . . banking, securities, and other financial
services" in Paragraph 4 (as renumbered) of the Annex shall read
". . . banking, securities, insurance, and other financial services.
If the foregoing is acceptable to your government, I have the further
honor to propose that this note, together with your reply to that
effect, shall constitute an agreement between the two governments
amending the treaty, which agreement shall be subject to ratification
and shall enter into force upon entry into force of the treaty."
I have the further honor, on behalf of my government, to accept the
aforesaid proposal and to confirm that your note and this reply constitute
an agreement between the two governments that will enter into force
upon entry into force of the treaty. Accept, excellency, the renewed
assurances of my highest consideration.
The Embassy of the United States of America avails itself of this
opportunity to renew to the Ministry of Foreign Affairs of the Azerbaijan
Republic the assurances of its highest consideration.
[Embassy Baku Seal]
Embassy of the United States of America,
Baku, August 8, 2000
[Hand-written note states: "This is a certified
copy of the original note."]
DEPARTMENT OF STATE
OFFICE OF
LANGUAGE SERVICES
(Translation)
Azeri
REPUBLIC OF AZERBAIJAN
MINISTRY OF FOREIGN AFFAIRS
TO: THE EMBASSY OF THE UNITED STATES OF AMERICA
BAKU
August 25, 2000
No.: 1356
The Republic of Azerbaijan Ministry of Foreign Affairs sends its best
regards to the Embassy of the United States of America and would like
to point out these comments regarding the Bilateral Investment Contract
between the two countries:
Dear Sir:
We have the honor to refer to the Embassy's note numbered 222/2000,
and dated Angust 8, 2000. This note was related to the contract ("Contract"),
and its amendment, which was signed on August 1, 2000, in Washington,
between the Governments of the United States of America and the Republic
of Azerbaijan, for the promotion and protection of investment. The
main essence of the note was:
"The representatives of both Governments have discussed the intentions
of the two sides regarding the application of national treatment and
also our obligations for a better treatment in the area of insurance,
and are preparing the documents related to the Contract, in order
to present them to the United States Senate for advice and ratification.
Our representatives have concluded that an amendment to the Contract
would clarify the obligations on our part. Based on the subject under
discussion, I propose the amendment to the Addition of the Contract
to be changed as following:
1. In the second paragraph, the statement of ". . . bank procedures,
securities, and the other financial services. . ." to be changed
to ". . . bank procedures, securities, insurance, and the other
financial services. . ."
2. The third paragraph of the amendment to be taken out and the other
paragraphs to be numbered accordingly.
3. The fourth paragraph of the amendment, (after renumeration), to
be changed as ". . . bank procedures, securities, insurance,
and the other financial services. . ."
If these proposals are acceptable to your Government, I also propose
that this note, along with your reply, shall serve as an agreement
between the two Governments, related to the amendment to the Contract.
This agreement shall enter into force after the ratification, and
on the same date when the Contract takes effect.
I would like to inform you on behalf of my Government that we accept
the abovementioned proposal. We also approve that your note, along
with this reply, shall constitute the agreement between the two Governments,
and it shall enter into force at the same time with the Contract.
Please accept my highest regards.
The Republic of Azerbaijan Ministry of Foreign Affairs, taking advantage
of this opportunity, again sends its highest regards to the Embassy
of the United States of America.
[Stamp of certification of correct translation, Office
of Language Services of Department of State]
|
|