TREATIES AND OTHER INTERNATIONAL ACTS SERIES 12954
Agreement Between the
UNITED STATES OF AMERICA
Signed at Washington
May 19, 1998
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.”
Agreement signed at Washington May 19, 1998;
Entered into force May 19, 1998.
INVESTMENT INCENTIVE AGREEMENT
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF BANGLADESH
THE GOVERNMENT OF THE UNITED STATES OF AMERICA and THE GOVERNMENT OF
THE PEOPLE'S REPUBLIC OF BANGLADESH;
AFFIRMING their common desire to encourage economic activities in the People's
Republic of Bangladesh that promote the development of the economic resources and productive
capacities of the People's Republic of Bangladesh; and
RECOGNIZING that this objective can be promoted through investment support provided
by the Overseas Private Investment Corporation ("OPIC"), a development institution and an
agency of the United States of America, in the form of investment insurance and reinsurance,
debt and equity investments and investment guaranties;
HAVE AGREED as follows:
As used in this Agreement, the following terms have the meanings herein provided. The
term "Investment Support" refers to any debt or equity investment, any investment guaranty and
any investment insurance or reinsurance which is provided by the Issuer in connection with a
project in the territory of the People's Republic of Bangladesh. The term "Issuer" refers to OPIC
and any successor agency of the United States of America, and any agent of either. The term
"Taxes" means all present and future taxes, levies, imposts, stamps, duties and charges, whether
direct or indirect, imposed in the People's Republic of Bangladesh and all liabilities with respect
The two Governments confirm their understanding that the Issuer's activities are governmental in
nature and therefore:
(a) The Issuer shall not be subject to regulation under the laws of the People's
Republic of Bangladesh applicable to insurance or financial organizations.
(b) The Issuer, all operations and activities undertaken by the Issuer in connection
with any Investment Support, and all payments, whether of interest, principal, fees, dividends,
premiums or the proceeds from the liquidation of assets (subject, in the case of liquidation of
assets in the winding up or dissolution of any company, to the payment of Taxes owed by that
company) or of any other nature, that are made, received or guaranteed by the Issuer in
connection with any Investment Support shall be exempt from Taxes, whether imposed directly
on the Issuer or payable in the first instance by others. Neither projects receiving Investment
Support nor investors in such projects shall be exempt from Taxes by operation of this Article,
provided, however, that any Investment Support shall be accorded tax treatment no less favorable
than that accorded to the investment support of any other national or multilateral development
institution which operates in the People's Republic of Bangladesh. The Issuer shall not be
subject to Taxes in connection with any transfer, succession or other acquisition which occurs
pursuant to paragraph (c) of this Article or Article 3(a) hereof, but obligations for Taxes
previously accrued and unpaid with respect to interests received by the Issuer shall not be
extinguished as a result of such transfer, succession or other acquisition.
(c) If the Issuer makes a payment to any person or entity, or exercises its rights as a
creditor or subrogee, in connection with any Investment Support, the Government of the People's
Republic of Bangladesh shall recognize the transfer to, or acquisition by, the Issuer of any cash,
accounts, credits, instruments or other assets in connection with such payment or the exercise of
such rights, as well as the succession of the Issuer to any right, title, claim, privilege or cause of
action existing, or which may arise, in connection therewith.
(d) With respect to any interests transferred to the Issuer or any interests to which the
Issuer succeeds under this Article, the Issuer shall assert no greater rights than those of the person
or entity from whom such interests were received, provided that nothing in this Agreement shall
limit the right of the Government of the United States of America to assert a claim under
international law in its sovereign capacity, as distinct from any rights it may have as the Issuer
pursuant to paragraph (c) of this Article.
(a) Amounts in the currency of the People's Republic of Bangladesh, including cash,
accounts, credits, instruments or otherwise, acquired by the Issuer upon making a payment, or
upon the exercise of its rights as a creditor, in connection with any Investment Support provided
by the Issuer for a project in the People's Republic of Bangladesh, shall be accorded treatment in
the territory of the People's Republic of Bangladesh no less favorable as to use and conversion
than the treatment to which such funds would have been entitled in the hands of the person or
entity from which the Issuer acquired such amounts.
(b) Such currency and credits may be transferred by the issuer to any person or entity
and upon such transfer shall be freely available for use by such person or entity in the territory of
the People's Republic of Bangladesh in accordance with its laws.
(a) Any dispute between the Government of the United States of America and the
Government of the People's Republic of Bangladesh regarding the interpretation of this
Agreement or which, in the opinion of either party hereto, presents a question of international
law arising out of any project or activity for which Investment Support has been provided shall
be resolved, insofar as possible, through negotiations between the two Governments. If, six
months following a request for negotiations hereunder, the two Governments have not resolved
the dispute, the dispute, including the question of whether such dispute presents a question of
international law, shall be submitted, at the initiative of either Government, to an arbitral tribunal
for resolution in accordance with paragraph (b) of this Article.
(b) The arbitral tribunal referred to in paragraph (a) of this Article shall be established
and shall function as follows:
(i) Each Government shall appoint one arbitrator. These two arbitrators shall
by agreement designate a president of the tribunal who shall be a citizen of a third state
and whose appointment shall be subject to acceptance by the two Governments. The
arbitrators shall be appointed within three months, and the president within six months, of
the date of receipt of either Government's request for arbitration. If the appointments are
not made within the foregoing time limits, either Government may, in the absence of any
other agreement, request the Secretary-General of the International Centre for the
Settlement of Investment Disputes to make the necessary appointment or appointments.
Both Governments hereby agree to accept such appointment or appointments.
(ii) Decisions of the arbitral tribunal shall be made by majority vote and shall
be based on the applicable principles and rules of international law. Its decision shall be
final and binding.
(iii) During the proceedings, each Government shall bear the expense of its
arbitrator and of its representation in the proceedings before the tribunal, whereas the
expenses of the president and other costs of the arbitration shall be paid in equal parts by
the two Governments. In its award, the arbitral tribunal may reallocate expenses and
costs between the two Governments.
(iv) In all other matters, the arbitral tribunal shall regulate its own procedures.
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(a) This Agreement shall enter into force on the date of signature. Upon so entering
into force, this Agreement shall replace and supercede the agreement between the Government of
the United States of America and the Government of the People's Republic of Bangladesh
relating to U.S. Government investment guaranties and insurance signed by an exchange of notes
at Dhaka on January 17, 1975, and any matter relating to Investment Support or otherwise
pending under such agreement shall be treated or disposed of under the terms of this Agreement.
(b) This Agreement shall continue in force until six months from the date of a receipt
of a note by which one Government informs the other of an intent to terminate this Agreement.
In such event, the provisions of this Agreement shall, with respect to Investment Support
provided while this Agreement was in force, remain in force so long as such Investment Support
remains outstanding, but in no case longer than twenty years after the termination of this
IN WITNESS WHEREOF, the undersigned, duly authorized by their respective
Governments, have signed this Agreement.
DONE at Washington, D.C., United States of America, on the 19th day of May, 1998, in
the English language.
FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF
THE UNITED STATES OF AMERICA THE PEOPLE'S REPUBLIC OF
President and Chief Executive Officer,
Overseas Private Investment Corporation
Ambassador of the People's Republic of
Bangladesh to the United States of