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13006 Mozambique - Treaty Concerning the Encouragement and Reciprocal Protection of Investment


   
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TREATIES AND OTHER INTERNATIONAL ACTS SERIES 13006

 

 

INVESTMENT

 

 

 

Treaty Between the
UNITED STATES OF AMERICA
and MOZAMBIQUE

 

Signed at Washington December 1, 1998


with

Annex and Protocol

and

Exchange of Letters

 



 

 


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.”


 

 

 

 


MOZAMBIQUE

Investment

Treaty signed at Washington December 1, 1998;
Transmitted by the President of the United States of America
to the Senate May 23, 2000 (Treaty Doc. 106-31,
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;
Ratified by Mozambique December 27, 2004;
Ratifications exchanged at Maputo February 1, 2005;
Entered into force March 3, 2005.

 

 

 

 

 

TREATY BETWEEN
THE UNITED STATES OF AMERICA AND
THE REPUBLIC OF MOZAMBIQUE
CONCERNING THE ENCOURAGEMENT
AND RECIPROCAL PROTECTION OF INVESTMENT
The United States of America and the Republic of Mozambique (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:
- 2 -
ARTICLE I
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 organization;
(b) "company of a Party" means a company constituted or organized under the laws of
that Party;
(c) "national" of a Party means a natural person who is a national of that Party under its
applicable law;
(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 contracts;
(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,
patents,
rights in plant varieties,
industrial designs,
-3-
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;
(e) "covered investment under this treaty" 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 under this treaty 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 under this treaty 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 investment under this
treaty;
(i) "ICSID Convention" means the Convention on the Settlement of Investment Disputes
between States and Nationals of Other States, done at Washington, March 18,
1965;
(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.
-4-
ARTICLE II
1. With respect to the establishment, acquisition, expansion, management, conduct,
operation and sale or other disposition of covered investment under this treaty, 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 investment under this treaty.
2. (a) A Party may adopt or maintain exceptions to the obligations of paragraph 1 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 investment
under this treaty existing at the time the exception becomes effective.
(b) The obligations of paragraph 1 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 investment under this treaty 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
investment under this treaty.
4. Each Party shall provide effective means of asserting claims and enforcing rights
with respect to covered investment under this treaty.
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
investment under this treaty are promptly published or otherwise made publicly available.
-5-
ARTICLE III
1. Neither Party shall expropriate or nationalize a covered investment under this
treaty 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.
ARTICLE IV
1. Each Party shall accord national and most favored nation treatment to covered
investment under this treaty 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 investment under this treaty 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:
- 6 -
(a) requisitioning of all or part of such investments by the Party's forces or
authorities, 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.
ARTICLE V
1. Each Party shall permit all transfers relating to a covered investment under this
treaty 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
other fees;
(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
investment dispute.
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 under this treaty or a national or company of the other Party.
4. Notwithstanding paragraphs 1 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.
-7-
ARTICLE VI
Neither Party shall mandate or enforce, as a condition for the establishment, acquisition,
expansion, management, conduct or operation of a covered investment under this treaty, 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 domestic source;
(b) to limit 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 limit 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 earnings;
(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 advantage.
-8-
ARTICLE VII
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.
7. Each Party shall permit covered investment under this treaty to engage top
managerial personnel of their choice, regardless of nationality.
ARTICLE VIII
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.
ARTICLE IX
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 under this treaty.
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
dispute; or
(b) in accordance with any applicable, previously agreed dispute-settlement
procedures; or
(c) in accordance with the terms of paragraph 3.
-9-
3. (a) Provided that the national or company concerned has not submitted the dispute
for resolution under paragraph 2 (a) or (b), and that ninety days 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;
or
(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 10,
1958, for an "agreement in writing."
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 10, 1958.
-10-
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 under this treaty, shall be treated as a company
of the other Party.
ARTICLE X
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.
-11-
ARTICLE XI
This Treaty shall not derogate from any of the following that entitle covered investment
under this treaty 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.
ARTICLE XII
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.
ARTICLE XIII
1. No provision of this Treaty shall impose obligations with respect to tax matters,
except that:
(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
investment authorization.
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.
ARTICLE XIV
1. This Treaty shall not preclude a Party from applying measures that it considers
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 investment under this treaty, 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.
ARTICLE XV
1. (a) The obligations of this Treaty shall apply to the political subdivisions of the
Parties.
(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 that
Party.
ARTICLE XVI
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 investment
under this treaty existing at the time of entry into force as well as to those established or acquired
thereafter.
-12-
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 investment under this treaty established or acquired prior to the date of
termination, except insofar as those Articles extend to the establishment or acquisition of covered
investment under this treaty.
4. The Annex, Protocol, and side letter shall form an integral part of the Treaty.
IN WITNESS WHEREOF, the respective plenipotentiaries have signed this Treaty.
DONE in duplicate at Washington this first day of December, 1998, in the English and
Portuguese languages, each text being equally authentic.
FOR THE UNITED STATES
OF AMERICA:
FOR THE REPUBLIC OF
MOZAMBIQUE:
-13-
ANNEX
1. The United States of America may adopt or maintain exceptions to the obligation to
accord national treatment to covered investment under this treaty 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 1102 of the North American Free Trade Agreement pursuant to Article 1108
thereof; and landing of submarine cables.
Most favored nation treatment shall be accorded in the sectors and matters indicated above.
2. The United States of America may adopt or maintain exceptions to the obligation to
accord national and most favored nation treatment to covered investment under this treaty in the
sectors or with respect to the matters specified below:
fisheries; air and maritime transport, and related activities; banking, insurance, securities,
and other 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. Each Party agrees to accord national treatment to covered investment under this treaty in
the following sectors:
leasing of minerals and pipeline rights-of-way on government lands.
Protocol
1. The parties confirm their mutual understanding that nothing in Article VI shall be construed
to prohibit the Parties from requiring environmental impact statements, environmental
management plans, or other such measure of public health and safety, provided all such measures
are otherwise consistent with the other provisions of the treaty.
2. With respect to Article VII, the Republic of Mozambique confirms that the Treaty shall serve
to satisfy the requirements for any and all authorizations necessary under its laws for engagement
of foreign nationals as top managers.
3. The Parties confirm their mutual understanding that the provisions of this Treaty do not bind
either Party in relation to any act or fact which took place or any situation which ceased to exist
before entry into force of this Treaty.
December 1, 1998.
Dear Minister Simao:
I have the honor to confirm the receipt of your letter that reads as follows:
"Dear Madame Ambassador:
I have the honor to confirm the following understanding that was reached between the
Republic of Mozambique and the United States of America in the course of
negotiations of the Treaty Concerning the Encouragement and Reciprocal Protection
of Investment (the "Treaty").
For the purpose of fulfilling its obligations under Article II of the Treaty, the Republic
of Mozambique will implement the provisions of its Law No. 19/97 (The Land Law),
and any other provision of law that relates to the same or substantially the same
subject matter, in a manner that provides covered investments with the treatment and
opportunities afforded in like situations to national individual persons and juridical
persons deemed to have Mozambican nationality, whether for profit or not for profit,
including but not limited to national corporate persons.
I have the honor to propose that this understanding be treated as an integral part of the
Treaty.
I would be grateful if you would confirm that this understanding is shared by your
Government."
I have the further honor to confirm that this understanding is shared by my Government
and that this understanding be treated as an integral part of the Treaty.
Sincerely,Charlene Barshefsky
His Excellency
Leonard Santos Simao,
Minister of Foreign Affairs and Cooperation, Mozambique.
U.S. Department of State
Office of Language Services
Translating Division
LS No. 0400004
JPM
Portuguese
Her Excellency Charlene Barshefsky
United States Trade Representative
Madam Ambassador:
I have the honor to confirm the following understanding that was reached between the
Republic of Mozambique and the United States of America in the course of negotiations of the
Treaty Concerning the Encouragement and Reciprocal Protection of Investment.
For the purpose of fulfilling its obligations under Article II of the Treaty, the Republic of
Mozambique will implement the provisions of its Law No. 19/97 of October 1 (Land Use and
Development Law) and any other provision of law that relates to the same or substantially the
same subject matter, in a manner that provides covered investments with the treatment and
opportunities afforded in like situations to national individual persons and juridical persons
deemed to have Mozambican nationality, whether for profit or not for profit, including but not
limited to national corporate persons.
I have the honor to propose that this understanding be treated as an integral part of the
Treaty.
I should be grateful if you would confirm that this understanding is acceptable to your
government.
Washington, December 1, 1998
[Signature]
Leonardo Santos Simao
Minister of Foreign Affairs and Cooperation



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