Treaty Between the
UNITED STATES OF AMERICA
Signed at Santiago April 17, 1998
Annex and Protocol
NOTE BY THE DEPARTMENT OF STATE
Pursuant to Public Law 89—497, approved July 8, 1966
(80 Stat. 271; 1 U.S.C. 113)—
“. . .the Treaties and Other International Acts Series issued
under the authority of the Secretary of State shall be competent
evidence . . . of the treaties, international agreements other than
treaties, and proclamations by the President of such treaties and
international agreements other than treaties, as the case may be,
therein contained, in all the courts of law and equity and of maritime
jurisdiction, and in all the tribunals and public offices of the
United States, and of the several States, without any further proof
or authentication thereof.”
Treaty signed at Santiago April 17, 1998;
Transmitted by the President of the United States of America
to the Senate May 23, 2000 (Treaty Doc. 106-26,
106th Congress, 2d Session);
Reported favorably by the Senate Committee on Foreign Relations
September 27, 2000 (Senate Executive Report No. 106-23,
106th Congress, 2d Session);
Advice and consent to ratification by the Senate
October 18, 2000;
Ratified by the President February 7, 2001;
Ratifications exchanged at La Paz May 7, 2001;
Entered into force June 6, 2001.
THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND
THE GOVERNMENT OF THE REPUBLIC OF BOLIVIA
CONCERNING THE ENCOURAGEMENT
AND RECIPROCAL PROTECTION OF INVESTMENT
The Government of the United States of America and the Government of the Republic
of Bolivia (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:
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
(b) "company of a Party" means a company constituted or organized under the laws of
(c) "national" of a Party means a natural person who is a national of that Party under its
(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
(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,
rights in plant varieties,
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;
(The list of items in (i) through (vi) above is illustrative and not exhaustive.)
(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
(i) "ICSID Convention" means the Convention on the Settlement of Investment
Disputes between States and Nationals of Other States, done at Washington, March I8, I965;
(j) "Centre" means the International Centre for Settlement of Investment Disputes
Established by the ICSID Convention; and
(k) "UNCITRAL Arbitration Rules" means the arbitration rules of the United Nations
Commission on International Trade Law.
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 I
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 I do not apply to procedures provided in
multilateral agreements concluded under the auspices of the World Intellectual Property
Organization relating to the acquisition or maintenance of intellectual property rights.
3. (a) Each Party shall at all times accord to covered investments fair and equitable
treatment and full protection and security, and shall in no case accord treatment less favorable
than that required by international law.
(b) Neither Party shall in any way impair by unreasonable and discriminatory
measures the management, conduct, operation, and sale or other disposition of covered
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.
I. 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, paragraph 3.
2. Compensation shall be paid without delay; be equivalent to the fair market value
of the expropriated investment immediately before the expropriatory action was taken ("the
date of expropriation"); and be fully realizable and freely transferable. The fair market value
shall not reflect any change in value occurring because the expropriatory action had become
known before the date of expropriation.
3. If the fair market value is denominated in a freely usable currency, the
compensation paid shall be no less than the fair market value on the date of expropriation, plus
interest at a commercially reasonable rate for that currency, accrued from the date of
expropriation until the date of payment.
4. If the fair market value is denominated in a currency that is not freely usable, the
compensation paid — converted into the currency of payment at the market rate of exchange
prevailing on the date of payment — shall be no less than:
(a) the fair market value on the date of expropriation, converted into a freely
usable currency at the market rate of exchange prevailing on that date, plus
(b) interest, at a commercially reasonable rate for that freely usable currency,
accrued from the date of expropriation until the date of payment.
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
(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.
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
(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
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 I 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.
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
(b) to restrict 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 restrict 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
(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
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 paragraph1(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.
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.
1. For purposes of this Treaty, an investment dispute is a dispute between a Party
and a national or company of the other Party arising out of or relating to an investment
authorization, an investment agreement or an alleged breach of any right conferred, created or
recognized by this Treaty with respect to a covered investment.
2. A national or company that is a party to an investment dispute may submit the
dispute for resolution under one of the following alternatives:
(a) to the courts or administrative tribunals of the Party that is a party to the
(b) in accordance with any applicable, previously agreed dispute-settlement
(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;
(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 I0, I958, for an "agreement
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 I0, I958.
6. Any arbitral award rendered pursuant to this Article shall be final and binding on
the parties to the dispute. Each Party shall carry out without delay the provisions of any such
award and provide in its territory for the enforcement of such award.
7. In any proceeding involving an investment dispute, a Party shall not assert, as a
defense, counterclaim, right of set-off or for any other reason, that indemnification or other
compensation for all or part of the alleged damages has been received or will be received
pursuant to an insurance or guarantee contract.
8. For purposes of Article 25 (2) (b) of the ICSID Convention and this Article, a
company of a Party that, immediately before the occurrence of the event or events giving rise to
an investment dispute, was a covered investment, shall be treated as a company of the other
1. Any dispute between the Parties concerning the interpretation or application of
the Treaty, that is not resolved through consultations or other diplomatic channels, shall be
submitted upon the request of either Party to an arbitral tribunal for binding decision in
accordance with the applicable rules of international law. In the absence of an agreement by
the Parties to the contrary, the UNCITRAL Arbitration Rules shall govern, except to the extent
these rules are (a) modified by the Parties or (b) modified by the arbitrators unless either Party
objects to the proposed modification.
2. Within two months of receipt of a request, each Party shall appoint an arbitrator.
The two arbitrators shall select a third arbitrator as chairman, who shall be a national of a third
state. The UNCITRAL Arbitration Rules applicable to appointing members of three-member
panels shall apply mutatis mutandis to the appointment of the arbitral panel except that the
appointing authority referenced in those rules shall be the Secretary General of the Centre.
3. Unless otherwise agreed, all submissions shall be made and all hearings shall be
completed within six months of the date of selection of the third arbitrator, and the arbitral
panel shall render its decisions within two months of the date of the final submissions or the
date of the closing of the hearings, whichever is later.
4. Expenses incurred by the Chairman and other arbitrators, and other costs of the
proceedings, shall be paid for equally by the Parties. However, the arbitral panel may, at its
discretion, direct that a higher proportion of the costs be paid by one of the Parties.
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.
Each Party reserves the right to deny to a company of the other Party the benefits of this
Treaty if nationals of a third country own or control the company and:
(a) the denying Party does not maintain normal economic relations with the
third country; or
(b) the company has no substantial business activities in the territory of the
Party under whose laws it is constituted or organized.
I. No provision of this Treaty shall impose obligations with respect to tax matters,
(a) Articles III, IX and X will apply with respect to expropriation; and
(b) Article IX will apply with respect to an investment agreement or an
2. With respect to the application of Article III, an investor that asserts that a tax
measure involves an expropriation may submit that dispute to arbitration pursuant to Article IX,
paragraph 3, provided that the investor concerned has first referred to the competent tax
authorities of both Parties the issue of whether that tax measure involves an expropriation.
3. However, the investor cannot submit the dispute to arbitration if, within nine
months after the date of referral, the competent tax authorities of both Parties determine that the
tax measure does not involve an expropriation.
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.
1. (a) The obligations of this Treaty shall apply to the political subdivisions of the
(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
1. This Treaty shall enter into force thirty days after the date of exchange of
instruments of ratification. It shall remain in force for a period of ten years and shall continue
in force unless terminated in accordance with paragraph 2. It shall apply to covered
investments existing at the time of entry into force as well as to those established or acquired
2. A Party may terminate this Treaty at the end of the initial ten year period or at
any time thereafter by giving one year's written notice to the other Party.
3. For ten years from the date of termination, all other Articles shall continue to
apply to covered investments established or acquired prior to the date of termination, except
insofar as those Articles extend to the establishment or acquisition of covered investments.
4. The Annex and Protocol shall form an integral part of the Treaty.
IN WITNESS WHEREOF, the respective plenipotentiaries have signed this Treaty.
DONE in duplicate at Santiago, Chile this 17th day of April,
I998, in the English and Spanish languages, each text being equally authentic.
FOR THE GOVERNMENT FOR THE GOVERNMENT OF
OF THE UNITED STATES THE REPUBLIC OF BOLIVIA:
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 II02 of the
North American Free Trade Agreement pursuant to Article II08 thereof; and landing of
Most favored nation treatment shall be accorded in the sectors and matters indicated
2. The Government of the United States of America may adopt or maintain exceptions to
the obligation to accord national and most favored nation treatment to covered investments in
the sectors or with respect to the matters specified below:
fisheries; air and maritime transport, and related activities; banking, securities, and other
non-insurance financial services; and one-way satellite transmissions of direct-to-home (DTH)
and direct broadcast satellite (DBS) television services and of digital audio services.
3. The Government of the United States of America may adopt or maintain exceptions to
the obligation to accord national and most favored nation treatment to covered investments,
provided that the exceptions do not result in treatment under this Treaty less favorable than the
treatment that the Government of the United States of America has undertaken to accord in the
North American Free Trade Agreement with respect to another party to that Agreement, in the
sector or with respect to the matter specified below:
4. The Government of the Republic of Bolivia 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:
the acquisition and/or possession by foreigners, directly or indirectly, through any type
of title, of land or subsoil within 50 kilometers of Bolivia's borders, in so far as required by
Article 25 of the Constitution; subsidies or grants, including government-supported loans,
guarantees and insurance; and the obligation of foreign construction and consulting companies
participating in public sector tenders to associate with one or more Bolivian companies.
Most favored nation treatment shall be accorded in the sectors and matters indicated
5. The Government of the Republic of Bolivia 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:
air transport; transportation on interior navigable waterways; and limitation on foreign
equity ownership of international passenger and freight land transportation companies to a
maximum of 49 percent.
6. With respect to the leasing of minerals and pipeline rights of way on government lands:
(a) The Government of the Republic of Bolivia agrees to accord national treatment to
covered investments, subject to limitations set forth in Article 25 of the Constitution of the
Republic of Bolivia;
(b) The Government of the United States of America agrees to accord national treatment
to covered investments, subject to the Mineral Lands Leasing Act.
1. The Parties confirm their mutual understanding that advantages given to national
suppliers in government procurement programs are not precluded by Article VI.
2. The Government of the Republic of Bolivia confirms that pursuant to the Treaty,
Article 3 of the Bolivian Labor Law shall not apply to top managerial personnel.
3. The Parties confirm their mutual understanding that the provisions of Article IX
do not apply to government contract disputes, except where (i) such contracts contain
investment authorizations, (ii) such contracts constitute investment agreements, or (iii)
such disputes arise out of or relate to an alleged breach of any right conferred, created or
recognized by this Treaty with respect to a covered investment.
4. With respect to Article XV, paragraph 1(b), the Government of the United States
confirms that its federal system of government contains substantial protections against
burdens on commerce, including investment by a State of the United States with respect
to investors of other States of the United States.
5. The Government of the Republic of Bolivia confirms that joint ventures may be
established in Bolivia, including in the areas within 50 kilometers of its borders, without
any limitation on the respective capital contributions or proportionate shares of the joint