12939 Madagascar - Investment Incentive Agreement
TREATIES AND OTHER INTERNATIONAL ACTS SERIES 12939
Agreement Between the
UNITED STATES OF AMERICA
Signed at Washington
March 31, 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 March 31, 1998;
Entered into force February 7, 2000.
INVESTMENT INCENTIVE AGREEMENT
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
THE GOVERNMENT OF THE REPUBLIC OF MADAGASCAR
THE GOVERNMENT OF THE UNITED STATES OF AMERICA and THE GOVERNMENT OF THE
REPUBLIC OF MADAGASCAR;
AFFIRMING their common desire to encourage economic activities in the Republic of
Madagascar ("Madagascar") that promote the development of the economic resources and
productive capacities of Madagascar; 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 Madagascar. The term "Issuer" refers to OPIC and any successor
agency of the United States of America, or any agent designated by OPIC and any successor
agency of the United States of America to represent them. The term "Taxes" means all present
and future taxes, levies, imposts, stamps, duties and charges imposed in Madagascar and all
liabilities with respect thereto.
(a) The Issuer shall not be subject to regulation under the laws of Madagascar
applicable to insurance or financial organizations.
(b) 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.
The Issuer shall not be subject to any Taxes in connection with any transfer, succession or other
acquisition which occurs pursuant to paragraph (c) of this Article or Article 3(a) hereof. Any
project in connection with which Investment Support has been provided shall be accorded tax
treatment no less favorable than that accorded to projects benefiting from the investment support
programs of any other national or multilateral development institution which operates in
(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 Madagascar
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 Madagascar, 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 Madagascar, shall be accorded treatment in the territory of Madagascar 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
Madagascar in accordance with its laws.
(a) Any dispute between the Government of the United States of America and the
Government of Madagascar 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.
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(iv) In all other matters, the arbitral tribunal shall regulate its own procedures.
(a) This Agreement shall enter into force on the date on which the Government of
Madagascar notifies the Government of the United States of America that all legal requirements
for entry into force of this Agreement have been fulfilled.
(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 Agreement.
(c) Upon entry into force, this Agreement shall supersede the agreement on
investment guaranties between the Government of the United States of America and the
Government of the Malagasy Republic effected by exchange of notes signed at Tananarive on
July 26, 1963. Any matter concerning Madagascar relating to support by OPIC of investments
in the territory of Madagascar prior to the entry into force of this Agreement shall be resolved
under the terms of this Agreement.
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 31st day of
March, 1998, in duplicate, in the English and French languages, both texts being equally
FOR THE GOVERNMENT OF
FOR THE GOVERNMENT OF
THE UNITED STATES OF AMERICA THE REPUBLIC OF MADAGASCAR