TREATIES AND OTHER INTERNATIONAL ACTS SERIES 12980
Agreement Between the
UNITED STATES OF AMERICA
and the REPUBLIC OF KOREA
Signed at Washington
July 30, 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.”
REPUBLIC OF KOREA
Agreement signed at Washington July 30, 1998;
Entered into force July 30, 1998.
INVESTMENT INCENTIVE AGREEMENT
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
THE GOVERNMENT OF THE REPUBLIC OF KOREA
THE GOVERNMENT OF THE UNITED STATES OF AMERICA and THE GOVERNMENT OF
THE REPUBLIC OF KOREA;
AFFIRMING their common desire to encourage U.S. investment and other economic
activities in the Republic of Korea that promote the development of the economic resources and
productive capacities of the Republic of Korea; 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 Republic of Korea. The term "Issuer" refers to OPIC and any
successor agency of the United States of America, and any agent of either.
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 regulatory laws of the Republic of Korea
specifically applicable to insurance or financial organizations. Except to the extent otherwise
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provided in this Agreement, the operations of the Issuer in the Republic of Korea shall be subject
to appropriate Korean law and applicable international law.
(b) 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
Republic of Korea 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.
(c) 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 (b) of this Article.
(a) Amounts in the currency of the Republic of Korea, 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 Republic of Korea, shall be accorded treatment in the territory of the
Republic of Korea 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 Republic of Korea in accordance with its laws.
(a) Any dispute between the Government of the United States of America and the
Government of the Republic of Korea 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
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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.
(a) This Agreement shall enter into force on the date of signature.
(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
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IN WITNESS WHEREOF, the undersigned, duly authorized by their respective
Governments, have signed this Agreement.
DONE at Washington, District of Columbia, United States of America, on the 30 day of
July , 1998, in duplicate, in the English and Korean languages, both texts being equally
FOR THE GOVERNMENT OF
THE UNITED STATES OF AMERICA
FOR THE GOVERNMENT OF
THE REPUBLIC OF KOREA