Grenada Bilateral Investment Treaty
Signed
May 2, 1986; Entered into Force March 3, 1989
MESSAGE
FROM
THE
PRESIDENT OF THE UNITED STATES
TRANSMITTING
THE TREATY
BETWEEN THE UNITED STATES OF AMERICA AND GRENADA CONCERNING THE
RECIPROCAL ENCOURAGEMENT AND PROTECTION OF INVESTMENT, SIGNED AT
WASHINGTON ON MAY 2, 1986
June 3, 1986.-Treaty
was read the first time, and together with the accompanying
papers, referred to the Committee on Foreign Relations and
ordered to be printed for use of the Senate
U.S. GOVERNMENT
PRINTING OFFICE
71-318 WASHINGTON:1986
LETTER OF TRANSMITTAL
THE WHITE HOUSE, June 3, 1986.
To the Senate of the United States:
With
a view to receiving the advice and consent of the Senate to ratification,
I transmit herewith the Treaty between the United States
of America and Grenada concerning the Reciprocal Encouragement
and Protection of Investment, signed at Washington on May
2, 1986. I transmit also, for the information of the Senate, the
report of the Department of State with respect to this treaty.
The
Bilateral Investment Treaty (BIT) program, initiated in 1981, is
designed to encourage and protect US investment in developing
countries. The treaty is an integral part of US efforts to encourage
Grenada and other governments to adopt macroeconomic and structural
policies that will promote economic growth. It is also fully
consistent with US policy toward international investment. That
policy holds that an open international investment system in which
participants respond to market forces provides the beat and most
efficient mechanism to promote global economic development. A
specific tenet, reflected in this treaty, is that US direct investment
abroad and foreign investment in the United States should receive
fair, equitable, and nondiscriminatory treatment. Under this
treaty, the parties also agree to international law standards for
expropriation and compensation; free financial transfers; and
procedures, including international arbitration, for the settlement
of
investment disputes.
I
recommend that the Senate consider this treaty as soon as possible
and give its advice and consent to ratification of the treaty at
an early
date.
RONALD REAGAN.
LETTER OF SUBMITTAL
DEPARTMENT OF STATE,
Washington, May 20,
1986.
THE PRESIDENT,
The
White House
THE
PRESIDENT: I have the honor to submit to you the treaty between the
United States of America and Grenada concerning the Reciprocal
Encouragement and Protection of Investment, signed at Washington, May
2, 1986. Agreement on this treaty was reached under the bilateral
investment treaty (BIT) program which you initiated
in 1981. Development of the BIT program and the negotiations of the
individual treaties have been pursued by the Office of the
United States Trade Representative and the Department of State with
active participation of the Departments of Commerce and
Treasury, in conjunction with other interested US Government
agencies. On March 25 of this year, the first six BITs - with Haiti,
Morocco, Panama, Senegal, Turkey, and Zaire - were submitted
to the Senate for its advice and consent to ratification. Additional
BITS, with Bangladesh, Cameroon and Egypt, have been signed.
I recommend that this treaty be transmitted to the Senate for its
advice and consent to ratification.
In
1981 you initiated the global BIT program to encourage and protect
US investment in developing countries. By providing certain
mutual guarantees and protections, a BIT creates a more stable
and predictable legal framework for foreign investors in the territory
of each of the treaty Parties. The negotiation of a series of
bilateral treaties with interested countries establishes greater,
international discipline in the investment area.
The
BITS which have been signed as well as others under negotiation
are an integral part of US efforts to encourage other governments to
adopt macroeconomic and structural policies that will promote
economic growth. They are also fully consistent with your Policy
statement on international investment of September 9, 1983, which
states that international direct investment flows should be determined
by private market forces and should receive fair, equitable and
non-discriminatory treatment.
Our
experience to date-has shown that interested countries are willing
to provide US investors with significant investment guarantees and
assurances as a way of including additional foreign investment. It is
US policy to advise potential treaty partners that conclusion of a BIT
with the United States is an important and favorable factor in the
investment relationship, but does not in and of
itself result in immediate increases in US investment flows.
Congressional support for the BIT
program is reflected in Section A 601(a) and (b) of the Foreign
Assistance Act, as amended, in particular, at Section 601(b) which
provides:
In
order to encourage and facilitate participation by private
enterprise to the maximum extent practicable in
achieving any of the purposes of this Act, the President shall
. . . (3) accelerate a program of negotiating treaties for
commerce and trade, including tax treaties, which
shall include provisions to encourage and facilitate the
flow of private investment to, and its equitable investment in,
friendly countries and areas participating in programs
under this Act.
Bits
are consistent in purpose with the network of treaties of Friendship,
Commerce and Navigation (FCNs) which the United States negotiated from
the early years of the Republic until the last successful negotiations
with Thailand and Togo in the late 1960s. They continue the US policy
of securing by agreement standards of equitable treatment and
protection of US citizens carrying on business abroad, and
institutionalizing processes for the settlement of disputes between
investors and host countries, and
between governments. We expect that a series of bilateral treaties
with interested countries will establish greater international discipline
in the investment area.
The
BIT was designed to protect investment not only by treaty also
by reinforcing traditional international legal principles and
practice regarding foreign direct private investment. In pursuit
of is
objective, the model BIT adopts FCN language and concepts. Traditional
FCN provisions granting rights which are not important
to the typical US investor were eliminated and replaced with more
specific language concerning investment protection. Perhaps most
significantly, the BIT goes beyond the traditional FCN to provide
investor-host country arbitration in instances where an investment
dispute arises.
Our
BIT approach followed similar programs that had been undertaken
with considerable success by a number of European countries,
including the Federal Republic of Germany and the United Kingdom,
since the early 1960s. Indeed, our industrialized partners already
have nearly two hundred Bits in force, primarily with developing
countries. Our treaties, which draw upon language used in the
US FCN treaties as well as European counterparts, are more comprehensive
and far-reaching than European Bits
THE U.S.-GRENADA TREATY
The treaty with Grenada satisfies all
four main BIT objectives:
-
foreign investors are to be accorded treatment in accordance
with international law and are to be treated no less favorably
than
investors of the host country or no less favorably than investors
of third countries, whichever is the most favorable treatment
("national" or "most-favored-nation" treatment)
subject to certain specified exceptions;
-international
law standards shall apply to the expropriation of investments
and to the payment of compensation for expropriation;
-free
transfers shall be afforded to funds associated with an investment
into and out of the host country; and
-procedures
are to be established which allow an investor to take
a dispute with a Party directly to binding third-party arbitration.
The
provisions on treatment of foreign investment and arbitration,
and in particular Grenada's acceptance of international Iaw as
the governing law, mark an important achievement for the BIT program
and our investment and international arbitration policies.
A
technical memorandum explaining in detail the provisions of this
treaty will be transmitted separately to the Senate Committee on
Foreign Relations. That technical memorandum explains, clause by
clause, the provisions of the treaty with Grenada.
The
provisions of the treaty with Grenada do not differ in any respect
from the US model text. The language adopted is identical to
that contained in the current US model text, the most significant
provisions of which are as follows.
The
model Bits definition section clarifies terms such as "company
of a Party" and "investment." The BIT concept of "investment"
is broad and designed to be flexible; although numerous types
of economic interests are enumerated, the intent is to include all
legitimate interests in the territory of either Party, whether
directly or indirectly controlled by nationals of the other, having
economic
value or "associated" with an investment. Protected "companies
of a Party" are those incorporated or otherwise organized under
the laws of a Party in which nationals of that Party have a
substantial interest.
The
model BIT accords the better of national or most/favored-nation
(MFN) treatment to foreign investment, subject to each Party's
exceptions which are listed in a separate Annex. The exceptions are
designed to protect state regulatory interests and for the United
States to accommodate the derogations from national treatment in state
or federal law relating to such areas as air transport, shipping,
banking, telecommunications, energy and power production,
insurance, and from national and MFN treatment in the case of
ownership of real property. Grenada has listed the following sectors
or matters as exceptions: air transportation, government grants,
government insurance and loan programs, ownership of real property.
Grenada has listed the following sectors or matters as exceptions: air
transportation, government
grants, government insurance and loan programs, ownership of real
estate, use of land and natural resources. Any additional restrictions
or limitations which a Party may adopt with respect to those matters
or sectors excepted from the standards are not to affect existing
investments. The BIT also includes general treatment protections
designed to be a guide to interpretation and application of the
treaty. Thus, the Parties agree to accord investments
"fair and equitable treatment" and "full protection and
security" in no case "less
than that required by international law." It specifically grants
nationals of a Party the right to establish investments in the territory
of the other Party, restricts the right to impose performance
requirements, and obliges Parties to observe their contractual
obligations with investors. The US model also provides that
companies legally constituted under the laws of the other Parties
(i.e., subsidiaries of companies of a Party) with investments in
that country shall be permitted "top managerial personnel
of their choice, regardless of nationality."
The
model BIT also confers pro unlawful interference
with property interests and assures compensation in accordance
with international law standards. It provides that any direct or
indirect taking must be: for a public purpose; nondiscriminatory;
accompanied by the payment of prompt, adequate and effective
compensation; and in accordance with due process of law and the
general
standards of treatment discussed above. The meaning of 'expropriation"
as used in the model BIT is broad and flexible; it includes any
measure which is "tantamount to expropriation or nationalization."
Such compensation, which "shall be equivalent to the fair market
value of the expropriated investment immediately before
the expropriatory action was taken or became known," must be
"without delay," fully realizable," "freely
transferable" and "include interest at a commercially
reasonable rate from the date of
expropriation ...." The BIT grants the right to "prompt
review"
by the relevant judicial or administrative authorities in order
to determine whether the compensation offered is consistent with
these principles. It also extends national and MFN treatment to
investors in cases of loss due to war or other civil disturbance. The
BIT does not provide, however, a specific valuation method for
compensating such losses.
The
model BIT provides for free transfers "related to an investment,"
specifically of returns, compensation for expropriation, payments
arising out of an investment dispute, contract payments, proceeds
from sale, and contributions to capital for maintenance or development
of an investment. Such transfers are to be made in a "freely
convertible currency at the prevailing market rate of exchange
on the date of transfer with respect to spot transactions in the
currency to be transferred." The model text recognizes that
notwithstanding
this guarantee Parties can maintain certain laws and
regulations regarding transfers provided these are applied in a
nondiscriminatory
fashion. In particular, the model text provides that
Parties can require reports of currency transfers and impose income
taxes by such means as a withholding tax on dividends. The model
text also recognizes that Parties retain the right to protect the
rights of
creditors and ensure the satisfaction of judgments in adjudicatory
proceedings.
The
model BIT provides that where certain defined investment disputes
arise between a Party and a national or company of the other
Party, including disputes to the interpretation of an investment
agreement, and the dispute cannot be solved through negotiation,
it may be
submitted to arbitration in accordance with any
dispute-settlement procedures to which the national or company, and
the host country have previously agreed. Unless the national
or company has submitted the dispute to previously agreed dispute
settlement procedures or to adjudication by domestic courts or other
tribunals of the host country, the national or company may submit the
dispute to the International Centre for the Settlement of Investment
Disputes ("ICSID") for conciliation or binding arbitration.
If ICSID is unavailable, the dispute may be submitted under the rules
of ICSID's additional facility. Exhaustion of local remedies
is not required. In a separate provision, the BIT Parties also agree
to provide effective means of asserting claims and enforcing rights
with respect to investments.
The
model BIT provides for state-to-state arbitration between the Parties
in case of a dispute regarding the interpretation or application of
the treaty. In the absence of an agreement that other rules apply, the
BIT refers the Parties to specific procedural rules which must govern
the arbitration. The BIT also outlines the procedures for
the creation of the arbitral panel.
The
model BIT exhorts Parties to apply their tax policies fairly and
equitably. Because the United States specifically addresses tax
matters in
tax treaties, the BIT generally excludes such matters. Another
BIT provision exempts disputes arising under Export-Import
Bank programs, or other credit guarantee or insurance arrangements
providing for alternative dispute settlement arrangements,
from the standard BIT arbitration clauses. The model BIT also
states that the treaty shall not derogate from any obligations that
require more favorable treatment of investments and declares that
the treaty shall not preclude measures necessary for public order
or essential security interests. The model BIT enters into force
30 days after exchange of ratifications and continues in force for
at least ten years. Thereafter, either Party may terminate the treaty,
subject to one year's written notice.
Each
of these model provisions was developed after lengthy and extensive
consultations within the US Government and with the private
sector: While the US model text has recently been simplified,
the provisions summarized above have all been retained. The text
of the treaty with Grenada is identical to that contained in the
current
model text.
Submission
of this treaty marks a significant development in our international
investment policy. I join with the United States Trade
Representative and other US Government agencies in supporting
the treaty and favor its transmission to the Senate at an early
date.
Respectfully submitted.
GEORGE P. SCHULTZ
TREATY
BETWEEN THE UNITED STATES OF AMERICA AND GRENADA CONCERNING THE
RECIPROCAL ENCOURAGEMENT AND PROTECTION OF INVESTMENT
The
United States of America and Grenada,
Desiring
to promote greater economic cooperations between them, particularly with
respect to investment by nationals and companies of one Party in the
territory of the other Party; and
Recognizing that agreement upon the treatment to be accorded such
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, 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) "company
of a Party" means any kind of corporation, company, association, or
other organization, legally constituted under the laws and regulations
of a Party or a political subdivision thereof whether or not organized
for pecuniary gain, or privately or governmentally owned;
(b) "investment"
means every kind of investment in the territory of one Party owned or
controlled, directly or indirectly by nationals of companies of the
other Party, such as equity, debt, and service and investment contracts;
and includes:
(i)
tangible and intangible property, including rights, such as mortgages,
liens and pledges;
(ii) a
company or shares of stock or other interests in a company or interests
in the assets thereof;
(iii) a
claim to money or a claim to performance having economic value, and
associated with an investment;
(iv)
intellectual and industrial property rights, including rights with
respect to copyrights, patents, trademarks, trade names, industrial
designs, trade secrets and know-how, goodwill; and
(v) any
right conferred by law or contract, and any licenses and permits
pursuant to law;
(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" include the organization, control, operation,
maintenance and disposition of companies, branches, agencies, offices,
factories or other facilities for the conduct of business; the making,
performance and enforcement of contracts; the acquisition, use,
protection and disposition of property of all kinds including
intellectual and industrial property rights; and the borrowing of funds,
the purchase and issuance of equity shares, and the purchase of foreign
exchange for imports.
2. Each
Party reserves the right to deny to any company the advantages of this
Treaty if nationals of any third country 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 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 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. 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 investment
existing in that sector or matter at the time the exception becomes
effective. The treatment accorded pursuant to any exceptions shall not
be less favorable than that accorded in like situations to investments
and associated activities of nationals or companies of any third
country, except with respect to ownership of real property. Rights to
engage in mining on the public domain shall be dependent on reciprocity.
2.
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. Neither
Party shall in any way impair by arbitrary and discriminatory measures
the management, operation, maintenance, use, enjoyment, acquisition,
expansion, or disposal of investments. Each Party shall observe any
obligation it may have entered into with regard to investments
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 personal 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 investment agreements, investment authorizations
and properties.
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 under the provisions of this Article shall in any
State, Territory or possession of the United States of America be the
treatment accorded therein to companies legally constituted under the
laws and regulations of other States, Territories or possessions of the
United States of America.
ARTICLE
III
1.
Investments shall not be expropriated or nationalized either directly or
indirectly through measures tantamount to expropriation or
nationalization ("expropriation") except for a public purpose;
in a non-discriminatory manner; upon payment of prompt, adequate and
effective compensation; and in accordance with due process of law and
the general principles of treatment provided for in Article II (2).
Compensation shall be equivalent to the fair market value of the
expropriated investment immediately before the expropriatory action was
taken or became known; include interest at a commercially reasonable
rate from the date of expropriation; be paid without delay; 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 therefor, conforms
to the principles of international law.
3.
Nationals or companies of either Party whose investments suffer losses
in the territory of the other Party owing to war or other armed
conflict, revolution, state of national emergency, insurrection, civil
disturbance or other similar events shall be accorded treatment by such
other Party no less favorable than that accorded to its own nationals or
companies or to nationals or companies of any third country, whichever
is the most favorable treatment, as regards any measures it adopts in
relation to such losses.
ARTICLE
IV
1. Each
Party shall 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 convertible currency at the prevailing market rate of exchange on
the date of transfer with respect to spot transactions in the currency
to be transferred.
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
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 defined as a dispute
involving (a) the interpretation or application of an investment
agreement between a Party and a national or company of the other Party;
(b) the interpretation or application of any investment authorization
granted by a 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 between a Party and a national or company
of the other Party, the parties to the dispute shall initially seek to
resolve the dispute by consultation and negotiation, which may include
the use of non-binding, third-party procedures. If the dispute cannot be
resolved through consultation and negotiation, the dispute shall be
submitted for settlement in accordance with previously agreed,
applicable dispute-settlement procedures. Any dispute-settlement
procedures regarding expropriation and specified in the investment
agreement shall remain binding and shall be enforceable in accordance
with the terms of the investment agreement, relevant provisions of
domestic laws, and applicable international agreements regarding
enforcement of arbitral awards.
3. (a) The
national or company concerned may choose to consent in writing to the
submission of the dispute to the International Centre for the Settlement
of Investment Disputes ("Centre") or under the rules of the
Additional Facility of the Centre ("Additional Facility"), for
settlement by conciliation or binding arbitration, at any time after six
months from the date upon which the dispute arose. Once the national or
company concerned has so consented, either party to the dispute may
institute proceedings before the Centre or the Additional Facility
provided:
(i) the
dispute has not been submitted by the national or company for resolution
in accordance with any applicable previously agreed dispute settlement
procedures; and
(ii) the
national or company concerned has not brought the dispute before the
courts of justice or administrative tribunals or agencies of competent
jurisdiction of the Party that is a party to the dispute.
If the
parties disagree over whether conciliation or binding arbitration is the
more appropriate procedure to be employed, the opinion of the national
or company concerned shall prevail.
(b) Each
Party hereby consents to the submission of an investment dispute to the
Centre for settlement by conciliation or binding arbitration, or, in the
event the Centre is not available, to the submission of the dispute to
ad hoc arbitration in accordance with the rules and procedures of the
Centre.
(c)
Conciliation or binding arbitration of such disputes shall be done in
accordance with the provisions of the Convention on the Settlement of
Investment Disputes Between States and Nationals of other States done at
Washington March 18, 1965 ("Convention") and the Regulations
and Rules of the Centre or, if the Convention should for any reason be
inapplicable the Rules of the Additional Facility shall govern.
4. In any
proceeding involving an investment dispute, a Party shall not assert, as
a defense, counter-claim, right of set-off or otherwise, that the
national or company concerned has received or will receive, pursuant to
an insurance or guarantee contract, indemnification or other
compensation for all or part of its alleged damages.
5. For the
purposes of this Article, any company legally constituted under the
applicable laws and regulations of either Party or a political
subdivision thereof but that, immediately before the occurrence of the
event or events giving rise to the dispute, was an investment of
nationals or companies of the other Party, shall, in accordance with
Article 25 (2)(b) of the Convention, be treated as a national or company
of such other Party.
ARTICLE
VII
1. Any
dispute between the Parties concerning the interpretation or application
of this 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 Model Rules on Arbitral
Procedure adopted by the United Nations International Law Commission in
1958 as referred to in U.N. General Assembly Resolution 1262 (XIII)
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.
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 decision 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 proceeding shall be paid for equally by the Parties. The
Tribunal may, however, at its discretion, direct that a higher
proportion of the costs be paid by one of the Parties.
ARTICLE
VIII
The
provisions of Article VI and VII shall not apply to a dispute arising
(a) under the export credit, guarantee or insurance programs of the
Export-Import Bank of the United States or (b) under other official
credit, guarantee or insurance arrangements pursuant to which the
Parties have agreed to other means of settling disputes.
ARTICLE
IX
This
Treaty shall not derogate from:
(a) laws
and regulations, administrative practices or procedures, or
administrative or adjudicatory decisions of either Party;
b)
international legal obligations; or
(c)
obligations assumed by either Party, including those contained in an
investment agreement or an investment authorization,that entitle
investments or associated activities to treatment 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 in its jurisdiction for the maintenance of public order, the
fulfillment of its obligations with respect to the maintenance or
restoration of international peace or security, or the protection of its
own essential security interests.
2. This
Treaty shall not preclude either Party from 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 should strive to accord fairness
and equity in the treatment of investment of nationals and companies of
the other Party.
2.
Nevertheless, the provisions of this Treaty, and in particular Article
VI and VII, shall apply to matters of taxation only with respect to the
following:
(a)
expropriation, pursuant to Article III;
(b)
transfers, pursuant to Article IV; or
(c) the
observance and enforcement of terms of an investment agreement or
authorization as referred to in Article VI (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
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 3 of this Article. It shall apply to investments existing
at the time of entry into force 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 a
date of termination.
IN
WITNESS WHEREOF, the respective plenipotentiaries have signed this
Treaty.
DONE in
duplicate at Washington on the Second day of May 1986 in the English
language.
For the
Government of the United States of America:
Clayton
Yeutter.
For the
Government of Grenada:
Herbert
Blaize.
ANNEX
Consistent
with Article II paragraph 1, each Party reserves the right to maintain
limited exceptions in the sectors or matters it has indicated below:
THE
UNITED STATES OF AMERICA
Air
transportation; ocean and coastal shipping; banking; insurance;
government grants;government insurance and loan programs; energy and
power production;custom housebrokers; ownership of real estate;
ownership and operation of broadcast or common carrier radio and
television stations; ownership of shares in the Communications Satellite
Corporation; the provision of common carrier telephone and telegraph
services; the provision of submarine cable services; use of land and
natural resources.
GRENADA
Air
transportation; government grants; government insurance and loan
programs;ownership of real estate; use of land and natural resources.
The TCC
offers these agreements electronically as a public service for general
reference. Every effort has been made to ensure that the text presented
is complete and accurate. However, copies needed for legal purposes
should be obtained from official archives maintained by the appropriate
agency.
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