TREATIES AND OTHER INTERNATIONAL ACTS SERIES 12985
Agreement Between the
UNITED STATES OF AMERICA
and SAO TOME AND PRINCIPE
Signed at Washington
September 10, 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.”
SAO TOME AND PRINCIPE
Agreement signed at Washington September 10, 1998;
Entered into force September 10, 1998.
INVESTMENT INCENTIVE AGREEMENT
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
THE GOVERNMENT OF SAO TOME AND PRINCIPE
THE GOVERNMENT OF THE UNITED STATES OF AMERICA and THE GOVERNMENT OF
SAO TOME AND PRINCIPE ;
AFFIRMING their common desire to encourage economic activities in Sao Tome and
Principe that promote the development of the economic resources and productive capacities of
Sao Tome and Principe; 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, coinsurance 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, reinsurance or coinsurance which is provided by the Issuer (or, in the
case of coinsurance, is provided by the Issuer and commercial insurance companies
("Coinsurers") under coinsurance arrangements under which the Issuer acts both for itself and as
agent for such Coinsurers) in connection with a project in the territory of Sao Tome and Principe.
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 or by the Government of Sao
Tome and Principe and all liabilities with respect thereto.
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 Sao Tome and
Principe applicable to insurance or financial organizations, but, in the provision of Investment
Support, shall be afforded all rights and have access to all remedies of any such entity, whether
domestic, foreign or multilateral.
(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 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 Sao Tome and Principe.
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, alone or with a Coinsurer, 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 Sao Tome and Principe shall recognize the transfer to, or acquisition by, the
Issuer and any Coinsurer 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 and any
Coinsurer to any right, title, claim, privilege or cause of action existing, or which may arise, in
(d) With respect to any interests transferred to the Issuer or any interests to which the
Issuer succeeds under this Article, in its own right or otherwise, 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 or in its capacity as agent for any Coinsurer pursuant to paragraph
(c) of this Article.
(a) Amounts in the currency of Sao Tome and Principe, including cash, accounts,
credits, instruments or otherwise, acquired by the Issuer (or by the Issuer and any Coinsurer)
upon making a payment, or upon the exercise of its rights as a creditor, in connection with any
Investment Support for a project in Sao Tome and Principe, shall be accorded treatment in the
territory of Sao Tome and Principe 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
such amounts were acquired.
(b) Such currency and credits may be transferred to any person or entity and upon
such transfer shall be freely available for use by such person or entity in the territory of Sao
Tome and Principe in accordance with its laws.
(a) Any dispute between the Government of the United States of America and the
Government of Sao Tome and Principe 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.
(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
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 tenth day of
September, 1998, in the English language. A text shall be prepared in the official language of
Sao Tome and Principe, which shall be considered equally authentic upon an exchange of
diplomatic notes confirming its conformity with the English language text.
FOR THE GOVERNMENT OF
THE UNITED STATES OF AMERICA
Kirk K. Robertson
Executive Vice President,
Overseas Private Investment Corporation
FOR THE GOVERNMENT OF
SAO TOME AND PRINCIPE
Homero Jeronimo Salvaterra
Minister of Foreign Affairs and Community,
Democratic Republic of Sao Tome and Principe