Croatia Bilateral Investment Treaty
Signed July 13, 1996; Entered into
Force June 20, 2001
106th Congress
2d Session
|
SENATE
|
Treaty
Doc.
106-29
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_______________________________________________________________________
INVESTMENT TREATY WITH CROATIA
MESSAGE
FROM
THE PRESIDENT
OF THE UNITED STATES
TRANSMITTING
TREATY BETWEEN THE GOVERNMENT OF THE UNITED STATES
OF AMERICA AND THE
GOVERNMENT OF THE REPUBLIC OF CROATIA CONCERNING THE ENCOURAGEMENT
AND RECIPROCAL PROTECTION OF INVESTMENT, WITH ANNEX AND PROTOCOL,
SIGNED AT ZAGREB ON JULY 13, 1996
MAY 23, 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, May 23, 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 Croatia Concerning
the Encouragement and Reciprocal Protection of Investment, with Annex
and Protocol, signed at Zagreb on July 13, 1996. 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 Croatia was the fourth such
treaty between the United States and a Southeastern European country.
The Treaty will protect U.S. investment and assist Croatia in its efforts
to develop its economy by creating conditions more favorable for U.S.
private investment and thus strengthen the development of its private
sector.
The Treaty is fully consistent with U.S. policy toward international
and domestic investment. A specific tenet of U.S. policy, reflected
in this Treaty, is that U.S. investment abroad and foreign investment
in the United States should receive national treatment. Under this Treaty,
the Parties also agree to 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, May 3, 2000.
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 Croatia Concerning the Encouragement and Reciprocal
Protection of Investment, with Annex and Protocol, signed at Zagreb
on July 13, 1996. I recommend that this Treaty, with Annex and Protocol,
be transmitted to the Senate for its advice and consent to ratification.
The bilateral investment treaty (BIT) with Croatia was the fifteenth
such treaty signed between the United States and a country of Central
or Eastern Europe. The Treaty is based on the view that an open investment
policy contributes to economic growth. This Treaty will assist Croatia
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 a 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 Croatia,
the United States has signed, but not yet brought into force, BITs
with Azerbaijan, Bahrain, Belarus, Bolivia, 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 and Treasury.
The
U.S.-Croatia Treaty
The Treaty with Croatia 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 Croatia 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 IX.
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 of a Party" (hereinafter
"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
that any change in the form of an investment does not affect its
character as an investment.
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 XIII.
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.
Territory
A definition of "territory" was included at the request
of Croatia. The Treaty defines "territory" as the territory
of the United States or Croatia. including the territorial sea established
in accordance with international law as reflected in the 1982 United
Nations Convention on the Law of the Sea. The definition also applies,
in accordance with international law as reflected in that convention,
to the seas, subsoil, and seabed adjacent to the territorial sea
in which either the United States or Croatia has sovereign rights
or jurisdiction.
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 post-entry 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 nationally-based post-establishment measures. For purposes of
the Treaty, "national treatment" means treatment no less
favorable than that which a Party accords, in like situation, 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 regulations
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 of prompt, 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."
Paragraphs 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 owing to war or 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 (Subrogation)
Article V of the Treaty protects a Party or designated agency's
rights and claims under any indemnity, guarantee, or contract of
insurance given by that Party (or designated agency) for a covered
investment by requiring the other Party to recognize the assignment
to the Party or its designated agency of any right or claim of an
indemnified national or company. The Party (or designated agency)
is entitled to the same treatment with respect to those rights and
claims acquired by it through assignment. The Party (or its designated
agency) is also entitled to any payments received in pursuance of
those rights or claims.
Provisions of this type are generally included in separate bilateral
OPIC agreements. Croatia requested the addition to the Treaty of
an article on subrogation so as to have a mutual agreement in place
should Croatia create an agency equivalent to OPIC in the future.
The terms of Article V were drafted by the United States, based
on its standard OPIC agreements.
Article VI (Transfers)
Article VI protects investors from certain government exchange controls
that limit current and capital 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 VII (Performance Requirements)
Article VII 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"
of 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 VII makes clear that a Party may, however,
impose conditions for the receipt or continued receipt of benefits
and incentives.
Article VIII (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 Croatia eligible for treaty-investor visas under U.S. immigration
law. It also affords similar treatment for U.S. nationals entering
Croatia. 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 personnel of their choice, regardless of nationality.
This provision does not require that such personnel be 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 IX (State-State Consultations)
Article IX provides for prompt consultation between the Parties,
at 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 X (Settlement of Disputes Between One Party and a National
or Company of the Other Party)
Article X 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 X 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. The Treaty provides that the parties to
the dispute should initially seek a resolution through consultation
and negotiation.
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 X.
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 or 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 Treaty also provides
that each Party's enforcement of an arbitral award in its territory
will be governed by its national law. This additional provision
merely confirms that since each Party must fully enforce all arbitral
awards as provided in the Treaty, the means of doing so is through
each Party's domestic law. 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 in the United States.
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 XI (Settlement of Disputes Between the Parties)
Article XI provides for binding arbitration of disputes between
the United States and Croatia 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 XII (Preservation of Rights)
Article XII 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 XIII (Denial of Benefits)
Article XIII(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 or diplomatic 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 XIII(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 Croatia 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 Croatia that maintains its central administration or principal
place of business in the territory of, or has a real and continuous
link with, Croatia.
Article XIV (Taxation)
Article XIV 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 XIV does not preclude a national
or company from bringing claims under article X that taxation provisions
in a investment agreement or authorization have been violated. In
addition, the dispute settlement provisions of Article X and XI
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 X(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 the time of referral, that the matter does not involve an 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 XV (Measures Not Precluded)
The first paragraph of Article XV 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 protection of 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 XVI (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 XVII (Entry Into Force, Duration, and Termination)
Paragraph 1 stipulates that the Treaty enters into force 30 days
after exchange of instruments of ratification through diplomatic
channels. 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 through diplomatic channels
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 Protocol
to the Treaty confirms the Parties' mutual understanding that the
provisions of the Treaty do not bind either Party in relation to
any act or fact that took place or any situation that ceased to
exist before entry into force of the Treaty. This provision thus
explicitly states the standard under customary international law
that applies in the absence of the Parties' express intent to apply
the treaty retroactively.
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 and Protocol 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.
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 Croatia as they do
U.S. investments or investments from a third country. Paragraph
1 through 3 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.
During negotiations, the United States informed Croatia that if
Croatia undertook acceptable commitments with respect to all or
certain financial services, the United States would consider limiting
its exceptions with respect to its national and MFN treatment obligation
in financial services.
Croatia offered to take no exceptions to the treaty's national or
MFN treatment obligations with respect to banking, insurance, securities,
and other financial services. Therefore in paragraph 3 of the Annex,
the United States has limited its exceptions with respect to banking,
insurance, securities, and other financial services to afford treatment
no less favorable than that accorded with respect to Canada and
Mexico in the North American Free Trade Agreement.
Paragraphs 4 of the Annex lists Croatia's exceptions to its national
treatment obligation, which are: ownership and operation of broadcast
or common carrier radio and television stations; the provision of
common carrier telephone and telegraph services; the provision of
submarine cable services; and subsidies or grants, including government
supported loans;
Paragraph 5 of the Annex lists Croatia's exceptions to its national
and MFN treatment obligation, which are: fisheries; and air and
maritime transport, and related activities (including maritime services).
Paragraph 6 of the Annex ensures that national treatment is granted
by each Party in all leasing of minerals; concession rights for
exploration and exploitation of mineral resources (reflecting the
form of mineral leases under Croation law); and pipeline rights-of-way
on government lands. In so doing, this provision 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 Croatia. 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.
Croatia's extension of national treatment in these sectors will
fully meet the objectives of the MLLA and 10 U.S.C. 7435. Croatia
was informed during negotiations that, were it to include this sector
in its list of treatment exemptions, the United States would (consist
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.
Protocol
As described under Article XVII(1), the Protocol states that the
Treaty does not apply retroactively. This clarification was added
to the Treaty at the request of Croatia.
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,
MADELINE
ALBRIGHT .
TREATY BETWEEN
THE
GOVERNMENT OF THE UNITED STATES OF AMERICA AND
THE
GOVERNMENT OF THE REPUBLIC OF CROATIA
CONCERNING THE ENCOURAGEMENT
AND RECIPROCAL PROTECTION OF INVESTMENT
The Government
of the United States of America and the Government of the Republic
of Croatia (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;
Any change in the form of an investment does not affect its character
as an investment.
(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;
(k) "UNCITRAL Arbitration Rules" means the arbitration
rules of the United Nations Commission on International Trade Law;
and
(l) "territory" means the territory of the United States
of America or the Republic of Croatia, including the territorial
sea established in accordance with international law as reflected
in the 1982 United Nations Convention on the Law of the Sea. This
Treaty also applies in the seas, subsoil and seabed adjacent to
the territorial sea in which the United States of America or the
Republic of Croatia has sovereign rights or jurisdiction, in accordance
with international law as reflected in the 1982 United Nations Convention
on the Law of the Sea.
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 prctection 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 covered 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. If a Party or its designated agency makes a payment under an
indemnity, guarantee or contract of insurance given in respect of
a covered investment, the other Party shall recognize the assignment
to the first Party or its designated agency of any right or claim
of the indemnified national or company, and the first Party or its
designated agency is entitled to exercise such rights and enforce
such claims by virtue of subrogation, to the same extent as that
national or company.
2. The first Party or its designated agency shall be entitled in
all circumstances to the same treatment in respect of the rights
or claims acquired by it by virtue of the assignment. The first
Party or its designated agency shall also be entitled to any payments
received in pursuance of those rights or claims as the indemnified
national or company was entitled to receive by virtue of this Treaty
in respect of the covered investment concerned.
ARTICLE VI
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 VII
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 VIII
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 IX
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 X
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.
In the event of an investment dispute, the parties to the dispute
should initially seek a resolution through consultation and negotiation.
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. Each Party's
enforcement of an arbitral award in its territory shall be governed
by its national law.
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 XI
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 which maintains
diplomatic relations with both Parties. 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, as its discretion, direct
that a higher proportion of the costs be paid by one of the Parties.
ARTICLE XII
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 XIII
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 or diplomatic
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 XIV
1. No provision of this Treaty shall impose obligations with respect
to tax matters, except that:
(a) Articles III, X and XI will apply with respect to expropriation;
and
(b) Article X will apply with respect to an investment agreement
or an investment authorization.
2. A national or company, that asserts in an investment dispute
that a tax matter involves an expropriation, may submit that dispute
to arbitration pursuant to Article X(3) only if:
(a) the national or company concerned has first referred to the
competent tax authorities of both Parties the issue of whether the
tax matter involves an expropriation; and
(b) the competent tax authorities have not both determined, within
nine months from the time the national or company referred the issue,
that the matter does not involve an expropriation.
ARTICLE XV
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 XVI
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 XVII
1. This Treaty shall enter into force thirty days after the date
of exchange of instruments of ratification through diplomatic channels.
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 through diplomatic channels 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 and Protocol shall form an integral part of the Treaty.
IN WITNESS WHEREOF, the respective plenipotentiaries have signed
this Treaty.
DONE in duplicate at Zagreb this 13th day of July, 1996, in the
English and Croatian languages, each text being equally authentic.
FOR
THE GOVERNMENT OF THE UNITED STATES OF AMERICA: |
FOR
THE GOVERNMENT OF THE REPUBLIC OF CROATIA
|
|
|
[signature]
Mickey Kantor
|
[signature]
Davor Stern
|
ANNEX
1. The Government of the United States of America 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:
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.
3. The Government of the United States of American 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 sectors or with respect to
the matters specified below:
banking, insurance, securities and other financial services.
4. The Government of the Republic of Croatia 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 and operation of broadcast or common carrier radio
and television stations; the provision of common carrier telephone
and telegraph services; the provision of submarine cable services;
and subsidies or grants, including government supported loans.
Most favored nation treatment shall be accorded in the sectors
and matters indicated above.
5. The Government of the Republic of Croatia 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
(including maritime services).
6. Each Party agrees to accord national treatment to covered
investments in the following sectors:
leasing of minerals; concession rights for exploration and
exploitation of mineral resources; and pipeline rights-of-way
on government lands.
PROTOCOL
The Parties confirm their mutual understanding that the provisions
of this Treaty do not bind either Party in relation to any act or
fact which took place or any situation which ceased to exist before
the date of entry into force of this Treaty.
PROTOCOL
of Exchange
of Instruments of Ratification of the Treaty between the
Government of the United States of America and the Government of
the
Republic of Croatia concerning the Encouragement and Reciprocal
Protection of
Investment
The undersigned
Mr. Lawrence
G. Rossin
and
Mrs. Vesna Cvjetkovic Kurelec
being duly authorized by their respective governments, have met
for the purpose of
exchanging instruments of ratification of the
Treaty between the Government
of the United States of America and the Government
of the Republic of Croatia concerning the Encouragement and Reciprocal
Protection
of Investment, signed at Zagreb, on July 13, 1996
and having examined the respective instruments of ratification,
found them to be in
due form, and exchanged them.
In witness whereof, the respective plenipotentiaries have signed
the present Protocol of Exchange of Instruments of Ratification.
The undersigned have agreed that, in accordance with its Paragraph
1, Article 17, the
aforementioned Agreement shall enter into force on 20 June 2001.
Done at Zagreb on 21 May
2001, in duplicate, in English and Croatian languages.
Mr.
Lawrence G. Rossin
[signature]
|
Mrs. Vesna Cvjetkovic
Kurelec
[signature]
|
|
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