Sri Lanka Bilateral Investment Treaty
September 20, 1991; Entered into Force May 1, 1993
PRESIDENT OF THE UNITED STATES
BETWEEN THE UNITED STATES OF AMERICA AND THE DEMOCRATIC REPUBLIC OF SRI
CONCERNING THE ENCOURAGEMENT AND RECIPROCAL PROTECTION OF INVESTMENT,
WITH PROTOCOL AND A RELATED EXCHANGE OF LETTERS, SIGNED AT COLOMBO, SRI
LANKA ON SEPTEMBER 20, 1991
1992.-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
GOVERNMENT PRINTING OFFICE
WASHINGTON : 1992
HOUSE , March 24,
Senate of the United States:
view to receiving the advice and consent of the Senate to ratification,
I transmit herewith the Treaty Between the United States of America and
the Democratic Socialist Republic of Sri Lanka Concerning the
Encouragement and Reciprocal Protection of Investment, with Protocol and
a related exchange of letters, signed at Colombo on September 20, 1991.
I transmit also, for the information of the Senate, the report of the
Department of State with respect to this treaty.
treaty is an integral part of U.S. efforts to encourage Sri Lanka and
the governments of other developing countries to adopt macroeconomic and
structural policies that will promote economic growth. The treaty is
fully consistent with U.S. policy toward international investment.
According to that policy, an open international investment system in
which participants respond to market forces provides the best and most
efficient mechanism to promote global economic development. A specific
tenet, reflected in this treaty, is that U.S. 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 transfer of funds associated with investments; and the option of
the investor to resolve disputes with the host government through
recommend that the Senate consider this treaty as soon as possible and
give its advice and consent to ratification of the treaty, with protocol
and exchange of letters, at an early date.
DEPARTMENT OF STATE,
Washington, DC, March 16,1992.
PRESIDENT: I have the honor to submit to you the Treaty Between the
United States of America and the Democratic Socialist Republic of Sri
Lanka Concerning the Encouragement and Reciprocal Protection of
Investment, with Protocol and a related exchange of letters, signed at
Colombo, Sri Lanka on September 20, 1991. I recommend that this treaty,
with protocol and exchange of letters, be transmitted to the Senate for
its advice and consent to ratification.
treaty is part of the bilateral investment treaty (BIT) program
initiated in 1981. The Office of the United States Trade Representative
and the Department of State jointly lead BIT negotiations, with
assistance from the Departments of Commerce and Treasury. The United
States has also signed BITs with Argentina, Bangladesh, Cameroon, the
Congo, Czechoslovakia, Egypt, Grenada, Haiti, Morocco, Panama, Senegal,
Tunisia, Turkey and Zaire; and a business and economic relations treaty
with Poland, which contains, the BIT elements.
providing important protections for investors and creating a more stable
and predictable legal framework for investment, the BIT helps to
encourage U.S. investment in the economies of its treaty partners. It is
U.S. policy, however, to advise potential treaty partners that
conclusion of a BIT with the United States does not in and of itself
result in immediate increases in U.S. investment flows.
Industrialized nations, mostly in Western Europe, have over 200 BITs in
force, primarily with developing countries. The U.S. BIT, however, is
more comprehensive than the European BITs.
U.S.-SRI LANKA TREATY
Lanka treaty satisfies the main BIT objectives, which are:
Investments of nationals and companies of either Party in the territory
of the other Party (Investments) receive the better of the treatment
accorded to domestic investments in like circumstances (national
treatment), or the treatment accorded to third country investments in
like circumstances (most-favored-nation treatment), both on
establishment and thereafter, subject to certain specified expectations;
Investments are guaranteed freedom from performance requirements, which
are commitments to use local products or to export goods;
Companies which are Investments may hire top managers of their choice,
regardless of nationality;
Expropriation can occur only in accordance with international law
standards: in a non-discriminatory manner; for a public purpose; and
upon payment of prompt, adequate, and effective compensation;
Investments are guaranteed the unrestricted transfer of funds in freely
usable currency, subject to a limited exception for severe balance of
payments difficulties; and
Nationals and companies of either Party, in investment disputes with the
host government, have access to binding international arbitration,
without first resorting
to domestic courts.
the model BIT, the Sri Lanka treaty allows sectoral exceptions to
national and most-favored-nation (MFN) treatment, as set forth in an
annex to the treaty. The U.S. exceptions are designed to protect state
regulatory interests and to accommodate the derogations from national
treatment and, in some cases, MFN treatment in existing state or federal
law. The U.S. exceptions from national treatment include, among other
sectors, air transportation, shipping, banking, telecommunications,
energy and power production, and insurance; the U.S. exceptions from
both national and MFN treatment include, among others, ownership of real
property and mining on the public domain.
Lankan exceptions to national treatment include, among other sectors,
air transportation, shipping, banking, insurance, energy and power,
radio and television broadcasting, newspapers, telecommunications,
ownership of real estate; exploitation of nonrenewable natural
resources; the allocation of textile and apparel export quotas; and
growing of plantation crops. MFN treatment may not be accorded to U.S.
investments in several sectors, including land and real property and
exploitation of non-renewable natural resources.
Government of Sri Lanka did not reserve exceptions from national or MFN
treatment for investments in the personal services or small-scale retail
sectors. It did request, and the U.S. acceded, to an exchange of letters
on this subject. The letters exchanged note the Government of Sri
Lanka's concern about these sectors and that, should the need arise, Sri
Lanka may wish to request consultations in accordance with Article V of
the Treaty about investments in these sectors.
provides incentives to any nationals and companies which export or which
contribute new technology. In the protocol to the treaty, Sri Lanka
agrees to consult with the U.S. concerning any adverse effects to U.S.
investors arising from the granting of these incentives, with a view to
eliminating any such effects.
the right to unrestricted transfer of returns in freely usable currency,
the Sri Lanka treaty permits either Party to the treaty temporarily to
delay certain transfers in the event of exceptional balance of payments
difficulties. The exception is limited to transfers of the proceeds from
the sale or liquidation of an investment, and it requires a phased
transfer of the proceeds over a period not to exceed three years. The
exception is only to be used when necessary to restore foreign exchange
reserves to a minimally acceptable level. The Party invoking this
exception must still grant transfers of such proceeds MFN treatment.
Similar balance of payments exceptions are also in the U.S. BITs with
Bangladesh, Egypt, Morocco, Turkey, and Zaire. Transfers of profits,
contractual payments, and all other forms of returns from an investment
are not subject to this limitation.
Lanka BIT utilizes the U.S. model text for resolution of disputes
between an investor and the host State. It provides that an investment
dispute between a Party and a national or company of the other Party,
including a dispute involving an investment authorization or the
interpretation of an investment agreement, may be submitted to
international arbitration six months after the dispute arose. Exhaustion
of local remedies is not required. The procedures for arbitration shall
be those of the International Centre for the Settlement of Investment
U.S. Government agencies which negotiated the treaty concur in my
recommendation that it be transmitted to the Senate at an early date.
UNITED STATES OF AMERICA
DEMOCRATIC SOCIALIST REPUBLIC OF SRI LANKA
RECIPROCAL PROTECTION OF INVESTMENT
States of America and the Democratic Socialist Republic of Sri Lanka
(hereinafter the "Parties");
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;
that agreement upon the treatment to be accorded such investment will
stimulate the flow of private capital and the economic development of
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;
that the development of economic and business ties can contribute to the
well-being of workers in both Parties and promote respect for
internationally recognized worker rights; and
resolved to conclude a Treaty concerning the encouragement and
reciprocal protection of investment;
agreed as follows:
1. For the
purposes of this Treaty,
every kind of investment in the territory of one Party owned or
controlled directly or indirectly by nationals or companies of the other
Party, such as equity, debt, and service and investment contracts; and
tangible and intangible property, including rights such as mortgages,
liens and pledges;
company or shares of stock or other interests in a company or interests
in the assets thereof;
claim to money or a claim to performance having economic value, and
associated with an investment;
intellectual property which includes, inter alia, rights relating to:
literary and artistic works, including sound recordings, patentable
inventions in all fields of human endeavor, industrial designs,
semiconductor mask works, trade secrets, know-how, and confidential
business information, and trademarks, service marks, and trade names;
right conferred by law or contract, and any licenses and permits
pursuant to law;
of a Party means any kind of corporation, company, association,
partnership, 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
of a Party means a natural person who is a national of a Party under its
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;
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 property rights; the borrowing of funds; the purchase,
insurance and sale of equity shares and other securities; and the
purchase of foreign exchange for imports.
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.
alteration of the form in which assets are invested or reinvested
undertaken in accordance with the laws of the Party concerned, provided
that the application of such laws does not
impair any rights under this Treaty, shall not affect their character as
Party shall permit and treat investment, 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,
unless specified otherwise in the Annex, be not less favorable than that
accorded in like situations to investments and associated activities of
nationals or companies of any third country.
Investment shall at all times be accorded fair and equitable treatment,
shall enjoy full protection and security and shall in no case be
accorded treatment less than that required by international law.
Neither Party shall in any way impair by arbitrary and discriminatory
measures the management, operation, maintenance, use, enjoyment,
acquisition, expansion, or disposal of investments. For purposes of
dispute resolution under Articles VI and VII, a measure may be arbitrary
and discriminatory notwithstanding the fact that a party has had or has
exercised the opportunity to review such measure through recourse to
Investment shall be governed by the laws in force in the territory of
the Party in which such investment is made, except as provided otherwise
by this Treaty.
Party shall observe any obligation it may have entered into with regard
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
Companies which are legally constituted under the applicable laws or
regulations of one Party, and which are investments, shall be permitted
to engage top managerial personnel of their choice, regardless of
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
Party shall provide effective means of asserting claims and enforcing
rights with respect to investment, investment agreements, and investment
Party shall make public all laws regulations, administrative practices
and procedures, and, adjudicatory decisions having general application
that pertain to or affect investments.
treatment accorded by the United states of America to investments and
associated activities of nationals and companies of Sri Lanka under the
provisions of this Article shall in any State, Territory or possession
of the United States of America be no less favorable than the treatment
accorded therein to investments and associated activities of nationals
of the United States of America resident in, and companies legally
constituted under the laws and regulations of other States, Territories
or possessions of the United States of America.
most favored nation provisions of this Article shall not apply to
advantages accorded by either Party to nationals or companies of any
third country by virtue of:
Party's binding obligations that derive from full membership in a free
trade area or customs union; or
Party's binding obligations under any multilateral international
agreement under the framework of the General Agreement on Tariffs and
Trade that enters into force subsequent to the signature of this
Investments shall not be expropriated or nationalized either directly or
indirectly through measures tantamount to expropriation or
nationalization ("expropriation") except for a public purpose;
in a nondiscriminatory manner; upon payment of prompt, adequate and
effective compensation; and in accordance with due process of law and
the general principles of treatment provided for in Article II(2).
Compensation shall be equivalent to the fair market value of the
expropriated investment immediately before the expropriatory action was
taken or became known, whichever is earlier; be paid without delay;
include interest at a commercial rate from the date of expropriation; be
fully realizable; and be freely transferable at the prevailing market
rate of exchange on the date of expropriation.
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 of 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.
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.
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
as provided in Article III paragraph 1, transfers shall be made in a
freely usable currency at the prevailing market rate of exchange on the
date of transfer with respect to spot transactions in the currency to be
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.
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.
1. For the
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 nations 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. Subject to Paragraph 3
of this Article, 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 including those relating
to 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
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 to ad hoc arbitration
applying the rules of the Centre, for the 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 such proceedings
dispute has not been submitted by the national or company for resolution
in accordance with any applicable previously agreed dispute settlement
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.
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.
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 applying the rules of the Centre.
Conciliation or binding arbitration of such disputes shall be done
applying 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.
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.
Any dispute between the Parties concerning the interpretation or
application of the Treaty which is not resolved through consultations or
other diplomatic channels, shall be submitted, upon the request of
either Party, to an arbitral tribunal for binding decision in accordance
with the applicable rules of international law. In the absence of an
agreement by the Parties to the contrary, the arbitration rules of the
United Nations Commission
on International Trade Law (UNCITRAL), except to the extent modified by
the Parties or by the arbitrators, shall govern.
Within two months
of receipt of arequest,
shall appoint an
arbitrator. The two arbitrators shall select
a third arbitrator as Chairman, who is a national
of a third
State . The
Rules for appointing members of three member panels shall apply mutatis
mutandis to the
of the arbitral panel except that the appointing authority referenced
shall be the Secretary General of the Center .
otherwise agreed, all submissions shall be made and all hearings shall
be completed within six months of the date of selection of the third
arbitrator, and the Tribunal shall render its decisions within two
months of the date of the final submissions; or the date of the closing
of the hearings, whichever is later.
Expenses incurred by the Chairman, the other arbitrators, and other
costs of the proceedings 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.
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 setting disputes.
Treaty shall not derogate from:
and regulations, administrative practices or procedures, or
administrative or adjudicatory decisions of either Party;
international legal obligations; or
obligations assumed by either Party, including those contained in an
investment agreement or an investment authorization,
entitle investments or associated activities to treatment more favorable
than that accorded by this Treaty in like situations.
Treaty shall not preclude the application by either Party of measures
necessary for the maintenance of public order, the fulfillment of its
obligations with respect to the maintenance or restoration of
international place or security, or the protection of its own essential
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.
respect to its tax policies, each Party shall strive to accord fairness
and equity in the treatment of investment of nationals and companies of
the other Party.
Nevertheless, the provisions of this Treaty, and in particular Article
VI and VII, shall apply to matters of taxation only with respect to the
expropriation, pursuant to Article III;
transfers, pursuant to Article IV; or
observance and enforcement of terms of an investment agreement or
authorization as referred to in Article VI (1) (a) or (b),
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 under the convention within a reasonable period of time.
Treaty shall apply to the political subdivisions of the Parties.
Treaty shall enter into force thirty days after the date of exchange of
instruments of ratification. It shall remain in force for a period of
ten years and shall continue in force unless terminated in accordance
with paragraph 2 of this Article. It shall apply to investments existing
at the time of entry into force as well as to investments made or
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.
respect to investments made or acquired prior to the date of termination
of this Treaty and to which this Treaty and to which this Treaty
otherwise applies, the provisions of all of the other Articles of this
Treaty shall thereafter continue to be effective for a further period of
ten years from such date of termination.
Annex, Protocol, and related letters exchanged this day on investments
in personal services and small-scale retail trade
in Sri Lanka shall form an integral part of the Treaty.
WHEREOF, the respective plenipotentiaries have signed this Treaty.
duplicate at Colombo on the Twentieth day of September, 1991 in the
English and Sinhala languages, both texts being equally authentic.
UNITED STATES AMERICA:
SOCIALIST REPUBLIC OF DEMOCRATIC OF SRI LANKA:
United States reserves the right to make or maintain limited exceptions
to national treatment, as provided in Article II, paragraph 1, in
the sectors or matters it has indicated below:
transportation; ocean and coastal shipping; banking; insurance;
government grants; government insurance and loan programs; energy and
power production; custom house brokers; ownership of real property;
ownership and broadcast or common carrier operation of broadcast or
common carrier radio and television stations; ownership of shares in the
Communications Satellite Corporation; the provision of common carrier
telephone and telegraph services; the provision of submarine cable
services; use of land and natural resources; mining on the public
domain; maritime services and maritime-related services; and primary
dealership in United States government securities.
United States reserves the right to make or maintain limited exceptions
to most favored nation treatment, as provided in Article II, paragraph
1, in the sectors or matters it has indicated below:
of real property; mining on the public domain; maritime-related
services; and primary dealership in United States government securities.
Lanka reserves the right to make or maintain limited exceptions to
national treatment, as provided in Article II, paragraph 1, in the
sectors or matters it has indicated below:
transportation; ocean and coastal shipping; banking and small-scale
money-lending; insurance; government grants and loan programs; finance
companies; production and distribution of energy and power; stock
brokering; customs house brokering; ownership and operation of broadcast
or common carrier radio and television stations; post and
telecommunications including sub-marine cable services; publishing of
newspapers and periodicals; exploitation of natural resources; ownership
of real estate; maritime-related services; dealings in government
securities; pawn brokering; lotteries; fishing; travel agencies; mass
transportation; supply of water; allocation of textile and apparel
export quotas; education; growing of plantation crops and rice and
Lanka reserves the right to make or maintain limited exceptions to most
favored nation treatment, as provided in Article II, paragraph 1, in the
sectors or matters it has indicated below:
use and dealings in land and real property; exploitation of
non-renewable natural resources; maritime-related Services; dealings in
respect to Article 1, paragraph 1(iv), at present Sri Lanka does not
have any legislation providing protection for semiconductor mask works
as intellectual property.
respect to Article II, paragraph 2(a), the Parties agree that the phrase
"full protection and security" shall be construed according to
its common usage under international law.
respect to Article II, paragraph 3, the phrase "laws relating to
the entry and sojourn of aliens" shall be understood to include
relevant regulations and other administrative procedures of a Party.
respect to the treatment of investment under Article II, the Parties
note that Sri Lanka has laws and regulations providing certain
incentives to nationals and companies which export or which contribute
new technology. Each Party agrees to consult with the other upon request
concerning any adverse effects arising from such laws and regulations,
with a view to eliminating any such effects.
respect to Article III, paragraph 1, the phrase "become known"
is intended to refer to any knowledge resulting in the diminution of the
fair market value of the investment.
respect to Article IV, paragraph 1(e), a Party may, in the event of
exceptional balance of payments difficulties and in consultation with
the other Party, temporarily delay transfer of the proceeds from the
sale or liquidation of an investment, but only on the following
transfer of such proceeds may be delayed for a period not to exceed
three years from the date the transfer is requested;
minimum of thirty-three and one-third percent of the proceeds may be
transferred each year;
Party availing itself of this provision shall ensure that the portion of
the proceeds whose transfer is delayed can be invested in a manner that
will preserve its real value free of exchange rate risk;
provision will be used only to the extent and for the time necessary to
restore foreign exchange reserves to a minimally acceptable level; and
Party availing itself of this provision will ensure that investments
under this Treaty are accorded treatment with respect to such transfers
in a manner not less favorable than that accorded nationals or companies
of third countries.
reference to Sri Lanka's exception to the principle of national
treatment for the "allocation of textile and apparel export quotas"
in paragraph three of the Annex, Sri Lanka affirms that, should a
textile or apparel item become subject to a bilateral export quota
subsequent to the entry into force of this Treaty, the allocation of the
export quota for that item would be considered a "future exception"
within the meaning of Article II.1, and that accordingly the exception
would not apply to investments producing that item at the time the
exception became effective.
OF FINANCE SEPTEMBER 20,1991
Marion V. Creekmore, Jr.,
of the United States of America,
the United States of America,
I have the
honor to confirm on behalf of my Government the following understanding
reached between the delegations of the Democratic Socialist Republic of
Sri Lanka and the United States of America in the course of negotiating
the Treaty concerning the Encouragement and Reciprocal Protection of
Investment (the "Treaty"), signed this day.
Government of Sri Lanka welcomes investments by nationals and companies
of the United States in accordance with the Treaty. However, the
Government of Sri Lanka is concerned about investment in the personal
service and small-scale retail sectors in Sri Lanka. It may, therefore,
request consultations in accordance with Article V of the Treaty about
investment in these sectors, should the need arise.
I would be
grateful if you would confirm that this understanding is shared by your
of the United States of America
I have the
honor to refer to your letter of this date and to confirm the following
understanding reached between the delegation of the Democratic Socialist
Republic of Sri Lanka and the United States of America in the course of
negotiating the treaty concerning the encouragement and reciprocal
protection of investment (the "Treaty'), signed this day:
"The Government of Sri Lanka welcomes
investments by nationals and companies of the United States in
accordance with the Treaty. However, the Government of Sri Lanka is
concerned about investment in the personal service and small-scale
retail sectors in Sri Lanka. It may, therefore, request consultations in
accordance with Article V of the Treaty about investment in these
sectors, should the need arise."
Ambassador of the United States of America
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