TREATY BETWEEN THE UNITED STATES OF AMERICA AND THE ARAB
REPUBLIC OF EGYPT CONCERNING THE RECIPROCAL ENCOURAGEMENT
AND PROTECTION OF INVESTMENTS
Signed March 11, 1986 (modified); Entered into Force June 27, 1992
Whereas, the United States of America and the Arab Republic of Egypt (each
hereinafter referred to as a "Party"), both recognize the importance of providing
mutually beneficial support for the major efforts that each has contributed in fostering
international peace both within and beyond their respective regions, and
Whereas, each Party recognizes that economic expansion and development are
basic elements in the process of strengthening the efforts for and the bonds of
international peace and friendship within an atmosphere of stability and security, and
Whereas, each agrees that economic cooperation through the pursuit of policies an
practices which foster bilateral trade and investment, will contribute substantially to
the long-term benefit and welfare of the peoples of each Party, and
Recognizing that agreement on a general framework for the encouragement and
nondiscriminatory treatment of investments will stimulate the flow of productive
capital and technology and thereby provide for a more effective use of capital and
technical resources for development needs, further promoting economic stability and
durable peace,
Both have resolved to conclude a bilateral Treaty pertaining to the reciprocal
encouragement and protection of investments, and
Have agreed as follows:
ARTICLE I
DEFINITIONS
For the purposes of this Treaty,
1. (a) "Company" means any kind of juridical entity, including any corporation,
company association, or other organization, that is duly incorporated, constituted, or
otherwise duly organized, regardless of whether or not the entity is organized for
pecuniary gain, privately or governmentally owned, or organized with limited or
unlimited liability.
(b) "company of a Party" means a company duly incorporated, constituted or
otherwise duly organized under the applicable laws and regulations of a Party or its
political subdivisions in which
(i) natural persons who are nationals of such Party, or
(ii) such Party or its subdivision or its agencies or instrumentalities have a substantial
interest.
The juridical status of a company of a Party shall be recognized by the other Party
and its subdivisions.
(c) "Investment" means every kind of asset owned or controlled and includes but is
note limited to:
(i) tangible and intangible property, including rights, such as mortgages, liens and
pledges;
(ii) a company or shares, stock, or other interests in a company or interests in the
assets thereof;
(iii) a claim to money or a claim to performance having economic value, and
associated with an investment;
(iv) valid intellectual and industrial rights property, including, but not limited to rights
with respect copyrights and related patents, trade marks and trade names, industrial
designs, trade secrets and know-how, and goodwill.
(v) licenses and permits issued pursuant to law, including those issued for
manufacture and sale of products.
(vi) any right conferred by law or contract, but not limited rights to with in the confines
of law to search for or utilize natural resources, and rights to manufacture, use and
sell products;
(vii) returns which are reinvested.
(d) "own or control" includes ownership or control that is direct of indirect, including
ownership or control exercised through subsidiaries or affiliates.
(e) "national" of a Party means a natural person who is a national of a party under its
applicable law.
(f) "return" means an amount derived from or associated with an investment,
including, but not limited to, profit; dividend; interest; capital gain; royalty payment;
management, technical assistance or other fee; and payment in kind.
ARTICLE II
ENCOURAGEMENT AND PROMOTION OF INVESTMENTS
1. Each Party undertakes to provide an maintain a favorable environment for
investments in this territory by nationals and companies of the other Party and shall,
in applying its laws, regulations, administrative practices and procedures, permit such
investments to be established and acquired on terms and conditions that accord
treatment no less than that accorded in like situations to investments of nationals or
companies of any third country, whichever is more favorable.
2. (a) Each Party shall accord investments in its territory, and associated activities in
connection with these investments of nationals or companies of the other Party,
treatment no less favorable than that accorded in like situations to investments of its
own nationals and companies or to investments of nationals and companies of any
third country, whichever is most favorable. Associated activities in connection with an
investment include, but are not limited to:
(i) the establishment, control and maintenance of branches, agencies, offices,
factories or other facilities for the conduct of business;
(ii) the organization of companies under applicable laws and regulations; the
acquisition of companies or interests in companies or in the property; and the
management, control, maintenance, use, enjoyment and expansion, and the sale,
liquidation, dissolution or other disposition, of companies organized or acquired;
(iii) the making, performance and enforcement of contracts related to investment;
(iv) the acquisition (whether by purchase, lease or any other legal means), ownership
and disposition (whether by sale, testament or any other legal means) of personal
property of all kinds, both tangible and intangible;
(v) the leasing of real property appropriate for the conduct of business;
(vi) acquisition, maintenance and protection of copyrights, patents, trademarks, trade
secrets, trade names, licenses and other approvals or products and manufacturing
processes, and other industrial property rights; and
(vii) the borrowing of funds at market terms and conditions from local financial
institutions, as well as the purchase and issuance of equity shares in the local
financial markets, and, in accordance with national regulations and practices, the
purchase of foreign exchange for the operation of the enterprise.
(b) This Treaty shall also apply to investments by nationals or companies of either
Party, made prior to the entering into force of this Treaty and accepted in accordance
with the respective prevailing legislation of either party.
3. (a) Notwithstanding the preceding provisions of this Article, each Party reserves
the right to maintain limited exceptions to the standard of national treatment
otherwise required concerning investments or associated activities if exceptions fall
within one of the sectors listed in the Annex to this Treaty. Both Parties hereby agree
to maintain the number of such exceptions to a minimum. In addition, each Party
shall notify the other Party of any specific measures which constitute exceptions to
the standard of national treatment provided herein. In no event, however, shall the
treatment to be accorded pursuant to any exception be less favorable than that
accorded in like situations to investments and associated activities of nationals or
companies of any third country. Moreover, no exception, within the sectors contained
in the Annex, introduced after the date of entry into force of this Treaty shall apply to
investments of nationals or companies of the other Party existing in that sector at the
time the exception becomes effective.
(b) Each Party retains the discretion to approve investments according to national
plans and priorities on a nondiscriminatory basis consistent with paragraphs (1) and
(3)(a) of this Article.
4. The treatment, protection and security of investments shall never be less than that
required by international law and national legislation.
5. (a) Subject to the laws relating to the entry and sojourn of aliens, nationals of either
Party shall be permitted to enter and to reside in the territory of the other Party for the
purpose of establishing, developing, directing, administering or advising on the
operations of an investment to which they or the companies that employ them have
committed or are in the process of committing a substantial amount of capital or other
resources.
(b) Nationals and companies of either Party, and their companies which they own or
control in the territory of the other Party, shall be able to engage the managing
director of their choice. Further, subject to employment laws of each Party, nationals
and companies of either Party shall be permitted to engage, within the territory of the
other Party, professional and technical personnel of their choice, for the particular
purpose of rendering professional, technical and managerial assistance necessary
for the planning and operation of investments.
6. In the context of its national economic policies and objectives, each Party shall
seek to avoid the imposition of performance requirements of the investment of
nationals and companies of the other Party.
7. Each Party recognizes that in order to maintain a favorable environment for
investments in its territory by nationals or companies of the other Party, it should
provide effective means of asserting claims and enforcing rights with respect to
investment agreements, investments authorizations and properties. Each Party shall
grant to nationals or companies of the other Party, on terms and conditions no less
favorable than those which it grants in like situations to its own nationals or
companies or to nationals or companies of any third country, whichever is the most
favorable treatment, the right of access to its courts of justice, administrative tribunals
and agencies, and all other bodies exercising adjudicatory authority, and the right to
employ persons of their choice ,who otherwise qualify under applicable laws and
regulations of the forum for the purpose of asserting claims, and enforcing rights, with
respect to their investments.
8. Each Party and its subdivisions shall make public all laws, regulations,
administrative practices and procedures, and adjudicatory decisions that pertain to
[or] affect investments in its territory of nationals or companies of the other Party.
ARTICLE III
COMPENSATION FOR EXPROPRIATION
1. No investment or any part of an investment of a national or company of either
Party shall be expropriated or nationalized by the other Party or by -a subdivision
thereof-or subjected to any other measure, direct or indirect, if the effect of such other
measure, or a series of such other measures, would be tantamount to expropriation
or nationalization (all expropriations, all nationalizations and all such other measures
hereinafter referred to as "expropriation")-unless the expropriation
(a) is done for a public purpose;
(b) is accomplished under due process of law;
(c) is not discriminatory;
(d) is accompanied by prompt and adequate compensation, freely realizable; and
(e) does not violate any specific contractual engagement.
Compensation shall be equivalent to the fair market value of the expropriated
investment on the date of expropriation. The calculation of such compensation shall
not reflect any reduction in such fair market value due to either prior public notice or
announcement of the expropriatory action, or the occurrence of the events that
constituted or resulted in the expropriatory action. Such compensation shall include
payments for delay as may be considered appropriate under international law, and
shall be freely transferable at the prevailing rate of exchange for current transactions
on the date of the expropriatory action.
2. If either Party or a subdivision thereof expropriates the investment of any company
duly incorporated, constituted or otherwise duly organized in its territory, and if
nationals or companies of the other Party, directly or indirectly, own, hold or have
other rights with respect to the equity-of such company, then the Party within whose
territory the expropriation occurs shall ensure that such nationals or companies of the
other Party receive compensation in accordance with the provisions of the preceding
paragraph.
3. Except as otherwise provided in an agreement between the Parties, or between a
Party and a national or company of the other Party, a national or company of either
Party that asserts that all or part of its investment in the territory of the other Party
has been expropriated shall have a right to prompt review by the appropriate judicial
or administrative authorities of such other Party to determine whether any such
expropriation has occurred and, if and any compensation thereof, conforms to the
principals of international law.
ARTICLE IV
COMPENSATION FOR DAMAGES DUE TO WAR AND SIMILAR EVENTS
Nationals or companies of either Party whose investments or returns in the territory of
either Party suffer
(a) damages due to war or other armed conflict between such other Party and a third
country or
(b) damages due to any kind of civil disturbance or insurrection in the territory of such
other Party,
shall be accorded treatment no less favorable than that which such other Party
accords to its own nationals or companies or to nationals or companies of any third
country, whichever is the most favorable treatment, when making restitution,
indemnification, compensation or other appropriate settlement with respect to such
damages.
ARTICLE V
TRANSFERS
1. Either Party shall in respect to investments by nationals or companies of the other
Party grant to those nationals or companies the free transfer of-
(a) returns;
(b) royalties and other payments deriving from licenses, franchises and other similar
grants or rights;
(c) installments in repayment of loans;
(d) amounts spent for the management of the investment in the territory of the other
Party or a third country;
(e) additional funds necessary for the maintenance of the investment;
(f) the proceeds of partial or total sale or liquidation of the investment, including a
liquidation effected as a result of any event mentioned in Article IV; and
(g) compensation payments pursuant to Article III.
2. To the extent a national or company of either Party has not made another
arrangement with the appropriate authorities of the other Party in whose territory the
investment of such national or company is situated, currency transfers made
pursuant to Paragraph 1 of this Article shall be permitted in the currency of the
original investment or in any other freely convertible currency. Such transfers shall be
made at the prevailing rate of exchange on the date of transfer with respect to current
transactions in the currency to be transferred.
3. Notwithstanding the preceding paragraphs, either Party may maintain laws and
regulations: (a) requiring reports of currency transfer; and (b) imposing income taxes
by such means as a with holding tax applicable to dividends or other transfers.
Furthermore, either Party may protect the rights of creditors, or ensure the
satisfaction of judgements in adjudicatory proceedings, through the equitable,
nondiscriminatory and good faith application of the law.
ARTICLE VI
CONSULTATIONS AND EXCHANGE OF INFORMATION
1. The Parties shall, upon the written request of either of them, promptly hold
consultations to discuss the interpretation or application of this Treaty or to resolve
any disputes in connection therewith.
2. Further, for the purpose of reviewing the operation of this Treaty in encouraging
investments, consultations should be held biennially between the two Parties. Those
consultations should aim at exchanging information and views on the progress
regarding investments.
3. If one Party requests in writing that the other Party supply information in its
possession concerning investments in its territory by nationals or companies of the
Part making the request, then the other Party shall, consistent with its applicable laws
and regulations and with due regard for business confidentiality, endeavor to
establish appropriate procedures and arrangements for the provision of any such
information.
ARTICLE VII
SETTLEMENT OF LEGAL INVESTMENT DISPUTES BETWEEN ONE PARTY AND
A NATIONAL OR COMPANY OF THE OTHER PARTY
1. For purposes of this Article, a legal investment dispute is defined as a dispute
involving (i) the interpretation or application of an investment agreement between a
Party and a national or company of the other Party; or (ii) an alleged breach of any
right conferred or created by this Treaty with respect to an investment.
2. In the event of a legal investment dispute between a Party and a national or
company of the other Party with respect to an investment of such national or
company in the territory of such Party, the parties shall initially seek to resolve the
dispute by consultation and negotiation. The Parties may, upon the initiative of either
of them and as a part of their consultation and negotiation, agree to rely upon non-
binding, third-party procedures. If the dispute cannot be resolved through
consultation and negotiation, then the dispute shall be submitted for settlement in
accordance with the procedures upon which a Party and national or company of
other Party have previously agreed. With respect to expropriation by either Party, any
dispute-settlement procedures specified in an investment between such Party and
such national or company shall remain binding and shall be enforceable in
accordance with the terms of the investment agreement and relevant provisions of
domestic laws of such Party and treaties and other international agreements
regarding enforcement of arbitral awards to which such Party has subscribed.
3. (a) In the event that the legal investment dispute is not resolved under procedures
specified above, the national or company concerned may choose to submit the
dispute to the International Centre for the Settlement of Investment Disputes
("Centre") for settlement by conciliation or binding arbitration, if, within six (6) months
of the date upon which it arose: (i) the dispute has not been settled through
consultation and negotiation; or (ii) the dispute has not, for any good faith reason,
been submitted for resolution in accordance with any applicable dispute-settlement
procedures previously agreed to by the Parties to dispute: or (iii) the national or
company, has not brought before the courts of justice or administrative tribunal of
competent jurisdiction of the Party that is a Party to the dispute.
(b) Each Party hereby consents to the submission of an investment dispute to the
Centre for settlement by conciliation or binding arbitration.
(c) Conciliation or binding arbitration of such disputes shall be done in accordance
with the provisions of the Convention on the Settlement of Investment Disputes
Between States and Nationals of Other States ("Convention") and the Regulations
and Rules of the Centre.
4. In any proceeding , judicial, arbitral or otherwise, concerning a legal investment
dispute between it and a national or company of the other Party, A Party Shall not
assert, as a defense, counterclaim, right of set-off or otherwise, that the national or
company concerned has received or Will receive, pursuant to an insurance contract,
indemnification or other compensation for all or part of its alleged damages from any
third Party whatsoever, whether public or private, including such other Party and its
subdivisions, agencies and instrumentalities. Notwithstanding the foregoing, a
national or company of the other Party shall not be entitled to compensation for more
than the value of its affected assets, taking into account all sources of compensation
within the territory of the Party liable for the compensation.
5. For the purpose of any proceedings initiated before the Centre in accordance with
this Article, any company that, immediately prior to the occurrence of the event or
events giving rise to the dispute was a company of the other Party, shall be treated
as a national or company of such other Party.
6. The provisions of this Article shall not apply to a dispute arising under an official
export credit, guarantee, or insurance arrangement, pursuant to which the Parties
have agreed to other means of settling disputes.
ARTICLE VIII
SETTLEMENT OF DISPUTES BETWEEN THE PARTIES CONCERNING
INTERPRETATION OR APPLICATION OF THIS TREATY
1. Any dispute between the Parties concerning the interpretation or application of this
Treaty should, if possible, be resolved through diplomatic channels.
2. If the dispute cannot be resolved through diplomatic channels, it shall, upon the
agreement of the Parties, be submitted to the International Court of Justice.
3. (a) In the absence of such agreement, the dispute shall, upon the written request
of either Party, be submitted to an arbitral tribunal for binding decision in accordance
with the applicable rules and principles of international law.
(b) The Tribunal shall consist of three arbitrators, one appointed by each Party, and a
Chairman appointed by agreement of the other two arbitrators. The Chairman shall
not be a national of either Party. Each Party shall appoint an arbitrator within 60 days,
and the Chairman shall be appointed within 90 days, after a Party has requested
arbitration of a dispute.
(c) If the period set forth in (b) above are not met, and in the absence of some other
arrangement between the Parties, either Party may invite the President of the
International Court of Justice to make the necessary appointment. If the President is
a national of either of the Parties or is unable to act for any reason, either Party may
invite the Vice President, or if he is also a national of either Party or otherwise unable
to act, the next most senior member of the International Court of Justice, to make the
appointment.
(d) In the event that an arbitrator is for any reason unable to perform his duties, a
replacement shall be appointed within thirty (30) days of determination thereof,
utilizing the same method by which the arbitrator being replaced was appointed. If a
replacement is not appointed within the time limit specified above, either Party may
invite the President of the International Court of Justice to make the necessary
appointment. If the President is a national of either of the Parties or is unable to act
for any reason, either Party may invite the Vice President, or if he is also a national of
either Party or otherwise unable to act, the next most senior member of the
International Court of Justice, to make the appointment.
(e) Unless otherwise agreed to by the Parties to the dispute, all submissions shall be
made. and all hearings shall be completed within one hundred and twenty (120) days
of the date of the selection of the third arbitrator, and the Tribunal shall render its
decision within thirty (30) days of the date of the final submissions or the date of the
closing of the hearings, whichever is later, and such decision shall be binding on
each Party.
(f) Except as otherwise agreed to by the Parties, arbitration proceedings shall be
governed by the Model Rules on Arbitral Procedure adopted by the United Nations
International Law Commission in 1958 ("Model Rules") and commended to Member
States by the United Nations General Assembly in Resolution 1262 (XIII). To the
extent that procedural questions are not resolved by this Article or the Model Rules
they shall be resolved by the Tribunal. Notwithstanding any other provision of this
Treaty or the Model Rules, the Tribunal shall in all cases act by majority vote.
(g) Each Party shall bear the costs of its own arbitrator and counsel in the arbitral
proceeding. Expenses incurred by the Chairman and other costs of the proceedings
shall be paid for equally by the Parties. The Tribunal may, however, at its discretion,
direct that a higher proportion of the costs be paid by one of the Parties. Such a
decision shall be binding.
4. The provisions of this Article shall not apply to a dispute arising under an official
export credit, guarantee or insurance arrangement, pursuant to which the Parties
have agreed to other means of settling disputes.
ARTICLE IX
PRESERVATION OF RIGHTS
1. This Treaty shall not supersede, prejudice, or otherwise derogate from (a) laws,
regulations, administrative practices or procedures, or adjudicatory decisions of either
Party, (b) international legal obligations, or (c) obligations assumed by either Party,
including those contained in an investment agreement or an investment
authorization, whether extant at the time of entry into force of this Treaty or
thereafter, that entitle investments or associated activities of nationals or companies
of the other Party to treatment more favorable than that accorded by this Treaty in
like situations.
2. This Treaty shall not derogate from or terminate any other agreement entered into
by the two Parties and in force as between the two Parties on the date on which this
Treaty enters into force.
ARTICLE X
MEASURES NOT PRECLUDED BY TREATY
1. This Treaty shall not preclude the application by either Party or any subdivision
thereof of any and all measures necessary for the maintenance of public order and
morals, the fulfillment of its existing international obligations, the protection of its own
security interests, or such measures deemed appropriate by the Parties to fulfill
future international obligations.
2. This Treaty shall not preclude either Party from prescribing special formalities in
connection with the establishment of investments in its territory of nationals and
companies of the other Party, but such formalities shall not impair the substance of
any of the rights set forth in this Treaty.
ARTICLE XI
TAXATION
With respect to its tax policies, each Party should strive to accord fairness and equity
in the treatment of investments of nationals or companies of the other Party.
Nevertheless, all matters relating to the taxation of nationals or companies of a Party,
or their investments in the territories of the other Party or a subdivision thereof shall
be excluded from this Treaty, except with regard to measures covered by Article III
and the specific provisions of Article V.
ARTICLE XII
APPLICATION OF TREATY TO POLITICAL OR ADMINISTRATIVE SUBDIVISIONS
OF THE PARTIES
This Treaty shall apply to the political and/or administrative subdivisions of each
Party.
ARTICLE XIII
ENTRY INTO FORCE AND DURATION AND TERMINATION
1. This Treaty shall be ratified by each of the Parties, and the instruments of
ratification thereof shall be exchanged as soon as possible.
2. This Treaty shall enter into force thirty (30) days after the date of exchange of the
instruments of ratification. It shall remain in force for a period of ten (10) years and
shall continue in force unless terminated in accordance with Paragraph 3 of this
Article.
3. Either Party may, by giving one (1) year's written notice to the other Party,
terminate this Treaty at the end of the initial ten (10) year period or at any time
thereafter.
4. With respect to investments made or acquired prior to the date of termination of
this Treaty and to which this Treaty otherwise applies, the provisions of all of the
other Articles of this Treaty shall continue to be effective for a further period of ten
(10) years from such date of termination.
5. The attached Annex and Protocol are integral parts of this Treaty.
DONE in duplicate at Washington this twenty-ninth day of September 1982* in the
English and Arabic languages, both texts being equally authentic.
For the United States of America:
WILLIAM E. BROCK, Jr.
For the Arab Republic of Egypt:
WAJIH SHINDI.
* As modified by the Supplementary Protocol, signed at Cairo, March 11, 1986,
ANNEX
Consistent with Article II paragraph 3, each Party reserves the right to maintain
limited exceptions in the sectors it has indicated below
THE UNITED STATES OF AMERICA
Air transportation, ocean and coastal shipping; banking; insurance; government
grants; government insurance and loan programs; energy and power production; use
of land and natural resources; custom house brokers; ownership of real estate; radio
and television broadcasting; telephone and telegraph services; submarine cable
services; satellite communications.
THE REPUBLIC OF EGYPT
Air and sea transportation; maritime agencies; land transportation other than that of
tourism; mail, telecommunication, telegraph services and other public services which
are state monopolies; banking and insurance; commercial activity such as
distribution, wholesaling, retailing, import and export activities; commercial agency
and broker activities; ownership of real estate; use of land; natural resources;
national loans; radio, television, and the issuance of newspapers and magazines.
PROTOCOL*
On signing the Treaty concerning the Reciprocal Encouragement and Protection of
Investments, the Arab Republic of Egypt and the United States of America have, in
addition, agreed on the following provisions which should be regarded as an integral
part of the Treaty:
1. Each Party reserves the right to deny the benefits of this Treaty to any company of
either Party, or its affiliates or subsidiaries, if nationals of any third country control
such company, affiliate or subsidiary; provided that, whenever one Party concludes
that the benefits of this Treaty should not be extended for this reason, it shall
promptly consult with the other Party to seek a mutually satisfactory resolution of this
matter.
2. "Control" means to have a substantial share of ownership rights and the ability to
exercise decisive influence. Differences as to the existence of control shall be
resolved according to the provisions of Article VIII.
3. (a) The treatment accorded by the United States to nationals or companies of
Egypt under the provisions of Article II (1) and (2) shall in any State of the United
States or other territory, possession, or political or administrative subdivision of the
United States be the treatment accorded therein to residents of or companies
incorporated, constituted or otherwise duly organized in other States of the United
States or territories, possessions, or political or administrative subdivisions of the
United States.
(b).The treatment accorded by Egypt to nationals and companies of the United States
with respect to the establishment and acquisition of investments in limited sensitive
geographic areas designated for exclusive Egyptian investment shall be no less
favorable than the treatment it accords to investments of nationals and companies of
any third country. Egypt reserves the right to modify the areas covered, provided that
such areas will be kept to a minimum and will not substantially impair the investment
opportunities of United States nationals and companies.
4. The provisions of Article II, paragraph 3, relating to most favored nation treatment,
shall not apply to advantages accorded by either Party to nationals or companies of a
third country by virtue of a special security or regional arrangement, including
regional customs unions or free trade areas. Further, these provisions do not apply to
the ownership of real estate. The provisions of Article II paragraph 1, relating to most
favored nation treatment, shall not be construed to oblige one Party to extend to
nationals or companies of the other the benefit of any treatment, preference or
privilege which may be extended by the former Party by virtue of a customs union or
in the field of housing. Moreover, with regard to rights to engage in mining on the
public domain, each Party retains the right to accord to nationals or companies of the
other Party treatment which is like or similar to that accorded by the other Party to
nationals or companies of the first Party.
5. It is understood that this Treaty does not derogate from the rights of either Party
regarding the establishment of qualifications as for the practice of professions,
including law and accountancy. These qualifications may confine the practice of such
professions to nationals or companies of a Party, provided that they are applied on a
nondiscriminatory basis; and provided, further, that such nationality requirements do
not derogate from the right of nationals and companies of either Party, pursuant to
Article II (5)(b) to engage professional and technical personnel of their choice to
render professional and technical services necessary for the internal planning and
operation of the investment.
6. This Treaty, and in particular, the provisions of Article II, paragraph 5 (b) shall be
subjected to the provisions of Article X.
7. With respect to Article II (6), performance requirements are conditions imposed
which would require an investor to export a minimum percentage of final product or to
source some inputs locally.
8. With regard to Article III, paragraph l(d) the term "prompt" does not necessarily
mean instantaneous. The intent is that the Party diligently and expeditiously carry out
any necessary formalities.
9. With regard to Article III, paragraph 1, the phrase "events that constituted or
resulted in the expropriatory action" refers to conduct attributable to the expropriatory
Party and not to conduct of the national or company, The inclusion of subparagraph
(e) in Article III, paragraph 1, is without prejudice to the measure of compensation
due in the event of expropriation.
10. The Parties recognize that restrictions on transfers abroad of sales or liquidation
proceeds of an investment will adversely affect future capital inflows, contrary to the
spirit of this Treaty and the interests of the Party imposing those restrictions.
Nevertheless, the Parties recognize that it is possible that the Arab Republic of Egypt
may find its foreign exchange reserves at a very low level. In these circumstances,
the Arab Republic of Egypt may temporarily delay transfers required under Article V,
Paragraph l(f), but only: (i) in a manner not less favorable that accorded to
comparable transfers to investors of third countries; (ii) to the extent and for the time
period necessary to restore its reserves to a minimally acceptable level, but in no
case for period of time longer than that permitted by the provisions of Law 43 in force
on the date of signature of this Treaty; and (iii) after providing the investor an
opportunity to invest the sales or liquidation proceeds in a manner which will preserve
their real value free of exchange risk until transfer occurs.
11. Concerning Article VII (3)(a)(ii), it is understood that the Parties to the dispute
may previously agree to submission of the dispute to the jurisdiction of domestic
courts and tribunals. The Parties will maintain a nondiscriminatory policy regarding
the inclusion and implementation of such provisions in any investment contract.
12. With regard to the Annex, the exceptions noted by the Arab Republic of Egypt
under "commercial activity" do not include integrated operations which combine
production and sales activities for their products.
13. Recognizing that international financial markets and institutions further stimulate
the process of economic development through the international transmission of
investment and associated technology, each Party undertakes to maintain a
favorable environment for investment by nationals or companies of the other Party in
the insurance and banking sectors. Therefore, each Party accords to investments by
nationals or companies of the other Party in investment banks, merchant-banks and
reinsurance companies whose activities are confined to transactions in foreign
currencies treatment no less favorable than that accorded under existing laws and
regulations to investments by its own nationals and companies or to investments by
nationals or companies of any third country, whichever is the more favorable. Both
Parties agree to hold future discussions concerning the expansion of investment
possibilities in these sectors by nationals or companies of either Party in the territory
of the other Party.
DONE in duplicate at Cairo this llth day of March 1986 in the English and Arabic
languages, both texts being equally authentic.
For the Government of the United States of America:
NICHOLAS A. VELIOTES,
Ambassador.
For the Government of the Arab Republic of Egypt:
Sultan ABOU ALI,
Minister of Economy and Trade.
* Text as agreed in Supplementary Protocol, signed at Cairo. March 11, 1986. This
replaces the protocol of September 29, 1982
THE TREATY BETWEEN THE UNITED STATES OF AMERICA AND THE ARAB
REPUBLIC OF EGYPT CONCERNING THE RECIPROCAL ENCOURAGEMENT
AND PROTECTION OF INVESTMENTS
Whereas, the United States of America and the Arab Republic of EGYPT (each
herein referred to as a "Party"), both recognize the importance of providing mutually
beneficial support for the major efforts that has contributed in fostering international
peace both within and beyond their respective regions, and
Whereas, each Party recognizes that economic expansion and development are
basic elements in the process of strengthening the efforts for and the bonds of
international peace and friendship within an atmosphere of stability and security, and
Whereas, each agrees that economic cooperation through the pursuit of policies and
practices which foster bilateral trade and investment, will contribute substantially to
the long-term benefit and welfare of the peoples of each Party, and
Recognizing that agreement on a general framework for the encouragement and
nondiscriminatory treatment of investments will stimulate the flow of productive
capital and technology and thereby provide for a more effective use of capital and
technical resources for development needs, further promoting economic stability and
durable peace,
Both have resolved to conclude a bilateral Treaty pertaining to the reciprocal
encouragement and protection of investments, and Have agreed as follows:
ARTICLE I
DEFINITIONS
1. (a) "Company" means any kind of juridical entity, including any corporation,
company association, or other organization, that is duly incorporated, constituted, or
otherwise duly organized, regardless of whether or not the entity is organized for
pecuniary gain, privately or governmentally owned, or organized with limited or
unlimited liability.
(b) "company of a Party" means a company duly incorporated, constituted or
otherwise duly organized under the applicable laws and regulations of a Party or its
political subdivisions in which
(i) natural persons who are nationals of such Party, or
(ii) such Party or its subdivision or its agencies or instrumentalities
have a substantial interest.
Each Party reserves the right to deny to any of its own companies or to a company of
the other Party the advantages of this Treaty, if nationals of any third country own or
control such company; provided that whenever one Party believes that the benefits of
this Treaty should not be extended to a company of the other Party for this reason, it
shall first consult with the other Party to seek a mutually satisfactory resolution of this
matter.
The juridical status of a company of a Party shall be recognized by the other Party
and its subdivisions.
(c) "Investment" means every kind of asset owned or controlled and includes but is
note limited to:
(i) tangible and intangible property, including rights, such as mortgages, liens and
pledges;
(ii) a company or shares, stock, or other interests in a company or interests in the
assets thereof;
(iii) a claim to money or a claim to performance having economic value, and
associated with an investment;
(iv) intellectual property, including rights with respect copyrights and related patents,
trade marks and trade names, industrial designs, trade secrets and know-how, and
goodwill.
(v) licenses and permits issued pursuant to law, including those issued for
manufacture and sale of products.
(vi) any right conferred by law or contract, including rights to search for or utilize
natural resources, and rights to manufacture, use and sell products;
(vii) returns which are reinvested.
(d) "own or control" means ownership or control that is direct of indirect, including
ownership or control exercised through subsidiaries or affiliates.
(e) national or a Party means a natural person who is a national of a party under
its applicable law.
(f) "return" means an amount derived from or associated with an investment,
including profit; dividend; interest; capital gain; royalty payment; management,
technical assistance or other fee; and payment in kind.
ARTICLE II
ENCOURAGEMENT AND PROMOTION OF INVESTMENTS
1. Each Party undertakes to provide and maintain a favorable environment for
investments in its territory by nationals and companies of the other Party and shall, in
applying its laws, regulations, administrative practices and procedures, permit such
investments to be established and acquired on terms and conditions that accord
treatment no less favorable than the treatment it accords to investments of its own
nationals or companies or to nationals and companies of any third country, whichever
is the most favorable.
2. (a) Each Party shall accord investments in its territory, and associated activities
related to these investments, of nationals or companies of the other Party treatment
no less favorable than that which it accords in like situations to investments and
associated activities of its own nationals or companies, or nationals or companies of
any third country, whichever is the most favorable. Associated activities related to an
investment include, but are not limited to:
(i) the establishment, control and maintenance of branches, agencies, offices,
factories or other facilities for the conduct of business;
(ii) the organization of companies under applicable laws and regulations; the
acquisition of companies or interests in companies or in their property; and the
management, control, maintenance, use, enjoyment and expansion, and the sale,
liquidation, dissolution or other disposition, of companies organized or acquired;
(iii) the making, performance and enforcement of contracts related to investment;
(iv) the acquisition (whether by purchase, lease or any other legal means), ownership
and disposition (whether by sale, testament or any other legal means) of personal
property of all kinds, both tangible and intangible.
(v) the leasing of real property appropriate for the conduct of business;
(vi) the acquisition, maintenance and protection of copyrights, patents, trademarks,
trade secrets, trade names, licenses and other approvals of products and
manufacturing processes, and other industrial property rights; and,
(vii) the borrowing of funds at market terms and conditions from local, financial
institutions, as well as the purchase and issuance of equity shares in the local
financial markets, and, in accordance with national regulations and practices, the
purchase of foreign exchange for the operation of the enterprise.
2. (b) Consistent with paragraph 4 to this Article, each Party shall apply the present
Treaty to investments in its territory by nationals or companies of the other Party
made prior to the entry into force of this Treaty provided such application is not
inconsistent with agreements, contractual arrangements, investment authorizations
and licenses made under legislation existing at the time the concerned investments
were made.
3. Notwithstanding the preceding provisions of this Article, each Party reserves the
right to maintain limited exceptions to the standard of national treatment otherwise
required concerning investments or associated activities if such exceptions fall within
one of the sectors listed in the Annex to this Treaty. Both parties hereby agree to
maintain the number of such exceptions to a minimum. In addition, each Party shall
notify the other Party of any specific measures which constitute exceptions to the
standard of national treatment provided herein. In no event, however, shall the
treatment to be accorded pursuant to any exception be less favorable than that
accorded in like situations to investments and associated activities of nationals or
companies of any third country. Moreover, no exception, within the sectors contained
in the Annex, introduced after the date of entry into force of this Treaty shall apply to
investments of nationals or companies of the other Party existing in that sector at the
time the exception becomes effective.
4. The treatment, protection and security of investments shall never be less than that
required by international law and national legislation.
5. (a) Subject to the laws relating to the entry and sojourn of aliens, nationals of either
Party shall be permitted to enter and to remain in the territory of the other Party for
the purpose of establishing, developing, directing, administering or advising on the
operations of an investment to which they or the companies that employ them have
committed or are in the process of committing a substantial amount of capital or other
resources.
(b) Nationals and companies of either Party, and their companies which they own or
control in the territory of the other Party, shall be able to engage the managing
director of their choice. Further, subject to employment laws of each Party, nationals
and companies of either Party shall be permitted to engage, within the territory of the
other Party, professional and technical personnel of their choice, for the particular
purpose of rendering professional, technical and managerial assistance necessary
for the planning and operation of investments.
6. In the context of national economic policies and the desire to promote investment
of all types, both private an public, the Parties recognize that conditions of
competitive equality be should be maintained where investments owned or controlled
within the territory of such Party, are in competition under similar conditions with
privately owned or controlled investments of nationals and companies of the other
Party.
7. In the context of its national economic policies and objectives, each Party shall
seek to avoid the imposition of performance requirements on the investments of
nationals and companies of the other Party.
8. Each Party recognizes that in order to maintain a favorable environment for
investments in its territory by nationals or companies of the other Party, it should
provide effective means of asserting claims and enforcing rights with respect to
investment agreements, investment authorizations and properties. Each Party shall
grant to nationals or companies of the other Party, on terms and conditions no less
favorable than those which it grants in like situations to its own nationals or
companies or to nationals or companies of any third country, whichever is the most
favorable treatment, the right of access to its courts of justice, administrative tribunals
and agencies, and all other bodies exercising adjudicatory authority, and the right to
employ persons of their choice, who otherwise qualify under applicable laws and
regulations of the forum for the purpose of asserting claims, and enforcing rights, with
respect to their investments.
9. Each Party and its political or administrative subdivisions shall make public all
laws, regulations, administrative practices and procedures, and adjudicatory
decisions that pertain to or affect investments in its territory of nationals or companies
of the other Party.
ARTICLE III
COMPENSATION FOR EXPROPRIATION
1. No investment or any party of an investment of a national or a company of either
Party shall be expropriated or nationalized by the other Party or a political or
administrative subdivision thereof or subjected to any other measure, direct or
indirect (including, for example, the levying of taxation, the compulsory sale of all or
part of such an investment, or impairment or deprivation of management, control or
economic value of such an investment by the national or company concerned), if the
effect of such other measure, or a series of such other measures, would be
tantamount to expropriation or nationalization (all expropriations, all nationalizations
and all such other measures hereinafter referred to as "expropriation") unless the
expropriation
(a) is done for a public purpose;
(b) is accomplished under due process of law;
(c) is not discriminatory;
(d) is accompanied by prompt and adequate compensation, freely realizable; and
(e) does not violate any specific provision on contractual stability or expropriation
contained in an investment agreement between the national or company concerned
and the Party making the expropriation.
Compensation shall be equivalent to the fair market value of the expropriated
investment on the date of expropriation. The calculation of such compensation shall
not reflect any reduction in such fair market value due to either prior public notice or
announcement of the expropriatory action, or the occurrence of the events that
constituted or resulted in the expropriatory action. Such compensation shall include
payments for delay as may be considered appropriate under international law, and
shall be freely transferable at the prevailing rate of exchange for current transactions
on the date of the expropriatory action.
2. If either Party or a political or administrative subdivision thereof expropriates the
investment of any company duly incorporated, constituted or otherwise duly
organized in its territory, and if nationals or companies of the other Party, directly or
indirectly, own, hold or have other rights with respect to the equity of such company,
then the Party within whose territory the expropriation occurs shall ensure that such
nationals or companies of the other Party receive compensation in accordance with
the provisions of the preceding paragraph.
3. Except as otherwise provided in an agreement between the Parties, or between a
Party and a national or company of the other Party, a national or company of either
Party that asserts that all or part of its investment in the territory of the other Party
has been expropriated shall have a right to prompt review by the appropriate judicial
or administrative authorities of such other Party to determine whether any such
expropriation has occurred and, if so, whether such expropriation, and any
compensation thereof, conforms to the principles of international law as set forth in
this Article.
ARTICLE IV
COMPENSATION FOR DAMAGES DUE TO WAR AND SIMILAR EVENTS
Nationals or companies of either Party whose investments or returns in the territory of
either Party suffer
(a) damages due to war or other armed conflict between such other Party and a third
country or
(b) damages due to any kind of civil disturbance or insurrection in the territory of such
other party, shall be accorded treatment no less favorable than that which such other
Party accords to its own nationals or companies or to nationals or companies of any
third country, whichever is the most favorable treatment, when making restitution,
indemnification, compensation or other appropriate settlement with respect to such
damages.
ARTICLE V
TRANSFERS
1. Either Party shall in respect to investments by nationals or companies of the other
Party grant to those nationals or companies the free transfer of:
a. returns.
b. royalties and other payments deriving from licenses, franchises and other similar
grants or rights.
c. installments in repayment of loans.
d. amounts spent for the management of the investment in the territory of the other
Party or a third country.
e. Additional funds necessary for the maintenance of the investment.
f. the proceeds of partial or total sale or liquidation of the investment, including a
liquidation effected as a result of any event mentioned in Article IV; and
g. compensation payments pursuant to Article III.
2. To the extent a national or company of either Party has not made another
arrangement with the appropriate authorities of the other Party in whose territory the
investment of such national or company is situated, currency transfers made
pursuant to Paragraph 1 of this Article shall be permitted in the currency of the
original investment or in any other freely convertible currency. Such transfers shall be
made at the prevailing rate of exchange on the date of transfer with respect to current
transactions in the currency to be transferred.
3. Notwithstanding the preceding paragraphs, either Party may maintain laws and
regulations: (a) requiring reports of currency transfer; and (b) imposing income taxes
by such means as a withholding tax applicable to dividends or other transfers.
Furthermore, either Party may protect the rights of creditors, or ensure the
satisfaction of judgments in adjudicatory proceedings, through the equitable,
nondiscriminatory and good faith application of its law.
ARTICLE VI
CONSULTATIONS AND EXCHANGE OF INFORMATION
1. The Parties shall, upon the written request of either of them, promptly hold
consultations to discuss the interpretation or application of this Treaty or to resolve
any disputes in connection therewith. Consultations shall be held should one Party
request consultations to discuss the effects on its national interests of laws,
regulations, decisions, administrative practices or procedures, or that pertain to or
affect investments of in the territory of such other Party, including conditions im on
establishment of investments. The consultations will seek to avoid or ameliorate the
adverse effects .that these laws, regulations, decisions, administrative practices or
procedures, or policies may have on the Party requesting the consultations.
2. Further, for the purpose of reviewing the operation of this Treaty in encouraging
investments, consultations should be held biennially between the two Parties. Those
consultations should aim at exchanging information and views on the progress
regarding investments.
3. If one Party requests in writing that the other Party supply information in its
possession concerning investments in its territory by nationals or companies of the
Party making the request, then the other Party shall, consistent with its applicable
laws and regulations and with due regard for business confidentiality, endeavor to
establish appropriate procedures and arrangements for the provision of any such
information.
ARTICLE VII
SETTLEMENT OF LEGAL INVESTMENT DISPUTES BETWEEN ONE PARTY AND
A NATIONAL OR COMPANY OF THE OTHER PARTY
1. For purposes of this Article, a legal investment dispute is defined as a dispute
involving (i) the interpretation or application of an investment agreement between a
Party and a national or company of the other Party; or (ii) an alleged-breach of any
right conferred or created by this Treaty with respect to an investment.
2. In the event of a legal investment dispute between a Party and a national or
company of the other Party with respect to an investment of such national or
company m the territory of such Party, the parties shall initially seek to resolve the
dispute by consultation and negotiation. The Parties may, upon the initiative of either
of them and as part of their consultation and negotiation, agree to rely upon non-
binding, third-Party procedures. If the dispute cannot be resolved through
consultation and negotiation, then the dispute shall be submitted for settlement in
accordance with the applicable dispute-settlement procedures upon which a Party
and national or company of the other Party have previously agreed. With respect to
expropriation by either Party, any dispute-settlement procedures specified in an
investment agreement between such Party and such national or company shall
remain binding and shall be enforceable in accordance with the terms of the
investment agreement and relevant provisions of domestic laws of such Party and
treaties and other international agreements regarding enforcement of arbitral awards
to which such Party has subscribed.
3. (a) In the event that the legal investment dispute is not resolved under procedures
specified above, the national or company concerned may choose to submit the
dispute to the International Centre for the Settlement of Investment Disputes
("Centre") for settlement by conciliation or binding arbitration, if, within six (6) months
of the date upon which it arose: (i) the dispute has not been settled through
consultation and negotiation; or (ii) the dispute has not, for any good faith reason,
been submitted for resolution in accordance with any applicable dispute-settlement
procedures previously agreed to by the Parties to the dispute; or (iii) the national or
company concerned has not brought the dispute before the courts of justice or
administrative tribunals or agencies of competent jurisdiction of the Party that is a
Party to the dispute.
(b) Each Party hereby consents to the submission of an investment dispute to the
Centre for settlement by conciliation or binding arbitration.
(c) Conciliation or binding arbitration of such disputes shall be done in accordance
with the provisions of the Convention on the Settlement of Investment Disputes
Between States and Nationals of Other States ("Convention") and the Regulations
and Rules of the Centre.
4. In any proceeding, judicial, arbitral or otherwise, concerning a legal investment
dispute between it and a national or company of the other Party, a Party shall not
assert, as a defense, counterclaim right of set-off or otherwise, that the national or
company concerned has received or will receive, pursuant to an insurance contract,
indemnification or other compensation for all or part of its alleged damages from any
third Party whatsoever, whether public or private, including such other Party and its
political or administrative subdivisions, agencies and instrumentalities.
Notwithstanding the foregoing, a national or company of the other Party shall not be
entitled to compensation for more than the value of its affected assets, taking into
account all sources of compensation within the territory of the Party liable for the
compensation.
5. For the purpose of any proceedings initiated before the Centre in accordance with
this Article, any company that, immediately prior to the occurrence of the event or
events giving rise to the dispute, was a company of the other Party, shall be treated
as a national or company of such other Party.
6. The provisions of this Article shall not apply to a dispute arising under an official
export credit, guarantee, or insurance arrangement, pursuant to which the Parties
have agreed to other means of settling disputes.
ARTICLE VIII
SETTLEMENT OF DISPUTES BETWEEN THE PARTIES CONCERNING
INTERPRETATION OR APPLICATION OF THIS TREATY
1. Any dispute between the Parties concerning the interpretation or application of this
Treaty should, if possible, be resolved through diplomatic channels.
2. If the dispute cannot be resolved through diplomatic channels, it shall, upon the
agreement of the Parties, be submitted to the International Court of Justice.
3. (a) In the absence of such agreement, the dispute shall, upon the written request
of either Party, be submitted to an arbitral tribunal for binding decision in accordance
with the applicable rules and principles of international law.
(b) The Tribunal shall consist of three arbitrators, one appointed by each Party, and a
Chairman appointed by agreement of the other two arbitrators. The Chairman shall
not be a national of either Party. Each Party shall appoint an arbitrator within 60 days,
and the Chairman shall be appointed within 90 days, after a Party has requested
arbitration of a dispute.
(c) If the periods set forth in (b) above are not met, and in the absence of some other
arrangement between the Parties, either Party may invite the President of the
International Court of Justice to make the necessary appointment. If the President is
a national of either of the Parties or is unable to act for any reason, either Party may
invite the Vice President, or if he is a national of either Party or otherwise unable to
act, the next most senior member of the International Court of Justice, to make the
appointment.
(d) In the event that an arbitrator is for any reason unable to perform his duties, a
replacement shall be appointed within thirty (30) days of determination thereof,
utilizing the same method by which the arbitrator being replaced was appointed. If a
replacement is not appointed within the time limit specified above, either Party may
invite the President of the International Court of Justice to make the necessary
appointment. If the President is a national of either of the Parties or is unable to act
for any reason, either Party may invite the Vice President, or if he is also a national of
either Party or otherwise unable to act, the next most senior member of the
International Court of Justice, to make the appointment.
(e) Unless otherwise agreed to by the Parties to the dispute, all submissions shall be
made and all hearings shall be completed within one hundred and twenty (120) days
of the date of the selection of the third arbitrator, and the Tribunal shall render its
decision within thirty (30) days of the date of the final submissions or the date of the
closing of the hearings, whichever is later, and such decisions shall be binding on
each Party.
(f) Except as otherwise agreed to by the Parties, arbitration proceedings shall be
governed by the Model Rules on Arbitral Procedure adopted by the United Nations
International Law Commission in 1958 ("Model Rules"), and commended to Member
States by the United Nations General Assembly in Resolution 1262 (XIII). To the
extent that procedural questions are not resolved by this Article or the Model Rules
they shall be resolved by the Tribunal. Notwithstanding any other provisions of this
Treaty or the Model Rules, the Tribunal shall in all cases act by majority vote.
(g) Each Party shall bear the costs of its own arbitrator and counsel in the arbitral
proceeding. The cost of the Chairman and remaining expenses shall be borne in
equal parts by the Parties.
4. The provisions of this Article shall not apply to a dispute arising under an official
export credit, guarantee, or insurance arrangement, pursuant to which the Parties
have agreed to other means of settling disputes.
ARTICLE IX
PRESERVATION OF RIGHTS
1. This Treaty shall not supersede, prejudice, or otherwise derogate from (a) laws,
regulations, administrative practices or procedures, or adjudicatory decisions of either
Party, (b) international legal obligations, or (c) obligations assumed by either Party,
including those contained in an investment agreement or an investment
authorization, whether extant at the time of entry into force of this Treaty or
thereafter, that entitle investments or associated activities of nationals or companies
of the other Party to treatment more favorable than that accorded by this Treaty in
like situations.
2. This Treaty shall not derogate from or terminate any other agreement entered into
by the two Parties and in force as between the two Parties on the date on which this
Treaty enters into force.
ARTICLE X
MEASURES NOT PRECLUDED BY TREATY
1. This Treaty shall not preclude the application by either Party or any political or
administrative subdivision thereof of any and all measures necessary for the
maintenance of public order and morals, the fulfillment of its existing international
obligations, the protection of its own security interests, or such measures deemed
appropriate by the Parties to fulfill future international obligations.
2. This Treaty shall not preclude either Party from prescribing special formalities in
connection with the establishment of investments in its territories of nationals and
companies of the other Party, but such formalities shall not impair the substance of
any of the rights set forth in this Treaty.
ARTICLE XI
TAXATION
With respect to its tax policies, each Party should strive to accord fairness and equity
in the treatment of investments of nationals or companies of the other Party.
Nevertheless, all matters relating to the taxation of nationals or companies of a Party,
or their investments in the territories of the other Party or a political or administrative
subdivision thereof shall be excluded from this Treaty, subject, however, to specific
provisions of Articles III and V.
ARTICLE XII
APPLICATION OF TREATY TO POLITICAL OR ADMINISTRATIVE SUBDIVISIONS
OF THE PARTIES
This Treaty shall apply to the political and/or administrative subdivisions of each
Party.
ARTICLE XIII
ENTRY INTO FORCE AND DURATION AND TERMINATION
1. This Treaty shall be ratified by each of the Parties, and the instruments of
ratification thereof shall be exchanged as soon as possible.
2. This Treaty shall enter into force thirty (30) days after the date of exchange of the
instruments of ratification. It shall remain in force for a period of ten (10) years and
shall continue in force unless terminated in accordance with Paragraph 3 of this
Article.
3. Either Party may, by giving one (1) year's written notice to the other Party,
terminate this Treaty at the end of the initial ten (10) year period or at any time
thereafter.
4. With respect to investments made or acquired prior to the date of termination of
this Treaty and to which this Treaty otherwise applies, the provisions of all of the
other Articles of this Treaty shall continue to be effective for a further period of ten
(10) years from such date of termination.
5. The attached Annex and Protocol are integral parts of this Treaty.
DONE in duplicate at Washington this twenty-ninth day of September 1982 in the
English and Arabic languages, both texts being equally authentic.
For the United States of America:
WILLIAM E. BROCK, Jr.
For the Arab Republic of Egypt:
WAJIH SHINDY.
ANNEX
Consistent with Article II Paragraph 3, each Party reserves the right to maintain
limited exceptions in the sectors it has indicated below:
THE UNITED STATES OF AMERICA
Air transportation, ocean and coastal shipping; banking; insurance; government
grants; government insurance and loan programs; energy and power production; use
of land and natural resources; custom house brokers; ownership of real estate; radio
and television broadcasting, telephone and telegraph services; submarine cable
services; satellite communications.
THE ARAB REPUBLIC OF EGYPT
Air and sea transportation; maritime agencies; land transportation other than that of
tourism; mail, telecommunication, telegraph services and other public services which
are state monopolies; banking and insurance; commercial activity such as
distribution, wholesaling, retailing, import and export activities; commercial agency
and broker activities; ownership of real estate; use of land; natural resources;
national loans; radio, television, and the issuance of newspapers and magazines.
SUPPLEMENTARY PROTOCOL
The duly authorized Plenipotentiaries of the Parties have agreed upon the following
provisions regarding the Treaty between the United States of America and the Arab
Republic of Egypt concerning the Reciprocal Encouragement and Protection of
Investments, signed in Washington, D.C. on September 29, 1982. The following
changes will form an integral p art of the Treaty. Upon the completion of the Parties
respective constitutional procedures for approval, these changes will be integrated
into a single unified text of the Treaty which will, as modified, be published as the
official Treaty text.
ARTICLE I
Paragraph l(a) is changed to read as follows:
(a) "company" means any kind of juridical entity; including any corporation, company,
association, or other juridical entity, that is duly incorporated, constituted, or
otherwise duly organized, regardless of whether or not the entity is duly organized for
pecuniary Privately or publicly owned or organized with limited or unlimited liability.
Paragraph l(b) is changed to read as follows:
(b) "company of a Party" means a company duly incorporated, constituted, or
otherwise duly organized under the applicable laws and regulations of a Party or its
subdivisions in which
(i) natural persons who are nationals of such Party, or
(ii) such Party or its subdivisions or their agencies or instrumentalities have a
substantial interest. The Juridical status of a company of a Party shall be recognized
by the other Party and its subdivisions.
Paragraph l(c) is changed to read as follows:
(c) investment means every kind of asset, owned or controlled, and includes but is
not limited to:
(i) tangible and intangible property, including rights, such as mortgages, liens and
pledges;
(ii) a company or shares of stock in a company or interests in the assets thereof,
(iii) a claim to money or a claim to performance having economic value due under an
investment agreement;
(iv) valid intellectual and industrial property rights, including, but not limited to, rights
with respect to copyrights, patents, trademarks, trade names, industrial designs,
trade secrets, know-how, and goodwill;
(v) licenses and permits issued pursuant to law, including those issued for
manufacture and sale of products;
(vi) any right conferred by law or contract including, but not limited to , rights, within
the confines of law, to search for or utilize natural resources, and rights to
manufacture, use and sell products;
(vii) returns which are reinvested.
Paragraph l(d) is changed to read as follows:
(d) "own or control" includes ownership or control exercised through subsidiaries or
affiliates.
ARTICLE II
Paragraph 2 is changed to read as follows:
2. (a) Each Party shall accord investments in its territory, and associated activities in
connection with these investments, of nationals or companies of the other Party
treatment no less favorable than that which it accords in like situations to investments
and associated activities of its own nationals or companies, or nationals or
companies of any third country, whichever is the most favorable. Associated activities
in connection with an investment include, but are not limited to:
(i) the establishment, control and maintenance of branches, agencies, offices,
factories or other facilities for the conduct of business;
(ii) the organization of companies under applicable laws and regulations; the
acquisition of companies or interests in companies or in their property; and the
management, control, maintenance, use, enjoyment and expansion, and the sale,
liquidation, dissolution or other disposition, of companies organized or acquired;
(iii) the making, performance and enforcement of contracts related to investment;
(iv) the acquisition (whether by purchase, lease or any other legal means),
ownerships and disposition (whether by sale, testament or any other legal means) of
personal property of all kinds, both tangible and intangible.
(v) the leasing of real property appropriate for the conduct of business;
(vi) the acquisition, maintenance and protection of copyrights, patents, trademarks,
trade secrets, trade names, licenses and other approvals of products and
manufacturing processes, and other industrial property rights; and,
(vii) the borrowing of funds at market terms and conditions from local financial
institutions, as well as the purchase and issuance of equity shares in the local
financial markets, and, in accordance with national regulations and practices, the
purchase of foreign exchange for the operation of the enterprise.
(b) This Treaty shall also apply to investments by nationals or companies of either
Party, made prior to the entering into force of this Treaty and accepted in accordance
with the respective prevailing legislation of either Party.
Paragraph 3 is renumbered as paragraphs 3(a) and 3(b) and changed to read as
follows:
3. (a) Notwithstanding the preceding provisions of this Article, each Party reserves
the right to maintain limited exceptions to the standard of national treatment
otherwise required concerning investments or associated activities if exceptions fall
within one of the sectors listed in the Annex to this Treaty. Both Parties hereby agree
to maintain the number of such exceptions to a minimum. In addition, each Party
shall notify the other Party of any specific measures which constitute exceptions to
the standard of national treatment provided herein. In no event, however, shall the
treatment to be accorded pursuant to any exception-be less favorable than that
accorded in like situations to investments and associated activities of nationals or
companies of any third country. Moreover, no exception, within the sectors contained
in the Annex, introduced after the date of entry into force of this Treaty shall apply to
investments of nationals or companies of the other Party existing in that sector at the
time the exception becomes effective.
(b) Each Party retains the discretion to approve investments according to national
plans and priorities on a nondiscriminatory basis consistent with paragraphs (1) and
(3)(a) of this Article.
Paragraph 5(a) is changed to read as follows:
5. (a) Subject to the laws relating to the entry and sojourn of aliens, nationals of either
Party shall be permitted to enter and reside in the territory of the other Party for the
purpose of establishing, developing, directing, administering or advising on the
operations of an investment to which they or the companies that employ them have
committed or are in the process of committing a substantial amount of capital or other
resources. Paragraph 6 is deleted and paragraphs 7, 8, and 9 are renumbered as
paragraphs 6, 7, and 8, respectively.
Paragraph 8 (formerly paragraph 9) is changed to read as follows:
8. Each Party and its subdivisions shall make public all laws, regulations,
administrative practices and procedures, and adjudicatory decisions that pertain to
affect investments in its territory of the other Party.
ARTICLE III
Paragraph 1 is changed to read as follows:
1. No investment or any part of an investment of a national or company of either
Party shall be expropriated or nationalized by the other Party or by a subdivision
thereof-or subjected to any other measure, direct or indirect, if the effect of such other
measure, or a series of such other measures, would be tantamount to expropriation
or nationalization (all expropriations, all nationalizations and all such other measures
hereinafter referred to as "expropriation")-unless the expropriation
(a) is done for a public purpose;
(b) is accomplished under due process of law;
(c) is not discriminatory;
(d) is accompanied by prompt and adequate compensation, freely realizable; and
(e) does not violate any specific contractual engagement.
Compensation shall be equivalent to the fair market value of the expropriated
investment on the date of expropriation. The calculation of such compensation shall
not reflect any reduction in such fair market value due to either prior public notice or
announcement of the expropriatory action, or the occurrence of the events that
constituted or resulted in the expropriatory action. Such compensation shall include
payments for delay as may be considered appropriate under international law, and
shall be freely transferable at the prevailing rate of exchange for current transactions
on the date of the expropriatory action.
Paragraph 2 is changed to read as follows:
2. If either Party or a subdivision thereof expropriates the investment duly
incorporated, constituted or otherwise duly organized in its territory, and if nationals
or companies of the other Party, directly or indirectly, own, hold or have other rights
with respect to the equity of such company, then the Party within whose territory the
expropriation occurs shall ensure that such nationals or companies of the other Party
receive compensation in accordance with the provisions of the preceding paragraph.
Paragraph 3 is changed to read as follows:
3. Except as otherwise provided in an agreement between the Parties, or between a
Party and a national or company of the other Party, a national or company of either
Party that asserts that all or part of its investment in the territory of the other Party
has been expropriated shall have a right to prompt review by the appropriate judicial
or administrative authorities of such other party to determine whether any such
expropriation has occurred and, if so, whether any such expropriation, and any
compensation thereof, conforms to the principles of international law.
ARTICLE VI
Paragraph 1 is changed to read as follows:
1. The Parties shall, upon the written request of either of them, promptly hold
consultations to discuss the interpretation or application of this Treaty or to resolve
any disputes in connection therewith.
ARTICLE VII
Paragraph 4 is changed to read as follows:
4. In any proceeding, judicial, arbitral or otherwise, concerning a legal investment
dispute between it and a national or company of the other Party, a Party shall not
assert, as a defense, counterclaim, right of set-off or otherwise, that the national or
company concerned has received or will receive, pursuant to an insurance contract,
indemnification or other compensation for all or part of its alleged damages from any
third party whatsoever, whether public or private, including such other Party and its
subdivisions, agencies and instrumentalities. Notwithstanding the foregoing, a
national or company of the other Party shall not be entitled to compensation for more
than the value of its affected assets, taking into account all sources of compensation
within the territory of the Party liable for the compensation.
ARTICLE VIII
Paragraph 3(g) is changed to read as follows:
(9) Each Party shall bear the costs of its own arbitrator and counsel in the arbitral
proceeding. Expenses, incurred by the Chairman and other costs of the proceedings
shall be paid for equally by the Parties. The Tribunal may, however, at its discretion,
direct that a higher proportion of the costs be paid by one of the Parties. Such a
decision shall be binding.
ARTICLE X
Paragraph 1 is changed to read as follows:
1. This Treaty shall not preclude the application by either Party or any subdivision
thereof of any and all measures necessary for the maintenance of public order and
morals, the fulfillment of its existing international obligations, the protection of its own
security interests, or such measures deemed appropriate by the Parties to fulfill
future international obligations.
ARTICLE XI
The paragraph is changed to read as follows:
With respect to its tax policies, each Party should strive to accord fairness and equity
in the treatment of investments of nationals or companies of the Party. Nevertheless,
all matters relating to the taxation of nationals or companies of a Party, or their
investments in the territories of the other Party or a subdivision thereof shall be
excluded from this Treaty, except with regard to measures covered by Article III and
the specific provisions of Article V.
PROTOCOL
The Protocol is changed to read as follows:
On signing the Treaty concerning the Reciprocal Encouragement and Protection of
Investments, the Arab Republic of Egypt and the United States of America, have, in
addition, agreed on the following provisions which should be regarded as an integral
part of this Treaty:
1. Each Party reserves the right to deny the benefits of this Treaty to any company of
either Party, or its affiliates or subsidiaries, if nationals of any third country control
such company, affiliate or subsidiary; provided that, whenever one Party concludes
that the benefits of this Treaty should not be extended for this reason, it shall
promptly consult with the other Party to seek a mutually satisfactory resolution of this
matter.
2. "Control" means to have a substantial share of ownership rights and the ability to
exercise decisive influence. Differences as to the existence of control shall be
resolved according to the provisions of Article VIII.
3. (a) The treatment accorded by the United States to nationals or companies of
Egypt under the provisions of Article II(l) and (2) shall in any State of the United
States or other territory, possession, or political or administrative subdivision of the
United States be the treatment accorded therein to residents of or companies
incorporated, constituted or otherwise duly organized in other States of the United
States or territories, possessions, or political or administrative subdivisions of the
United States.
(b) The treatment accorded by Egypt to nationals and companies of the United States
with respect to the establishment and acquisition of investments in limited sensitive
geographic areas designated for exclusive Egyptian investment shall be no less
favorable then the treatment it accords to investments of nationals and companies of
any third country. Egypt reserves the right to modify the areas covered, provided that
such areas will be kept to a minimum and will not substantially impair the investment
opportunities of United States nationals and companies.
4. The provisions of Article II, paragraph 3, relating to most favored nation treatment,
shall not apply to advantages accorded by either Party to nationals or companies of a
third country by virtue of a specific security or regional arrangement, including
regional customs unions or free trade areas. Further, these provisions do not apply to
the ownership of real estate. The provisions of Article II paragraph 1, relating to most
favored nation treatment, shall not be construed to oblige one Party to extend to
nationals or companies of the other the benefit of any treatment, preference or
privilege which may be extended by the former Party by virtue of a customs union or
in the field of housing. Moreover, with regard to rights to engage in mining on the
public domain, each Party retains the right to accord to nationals or companies of the
other Party treatment which is like or similar to that accorded by the other Party to
nationals or companies of the first Party.
5. It is understood that this Treaty does not derogate from the rights of either Party
regarding the establishment of qualifications as for the practice of professions,
including law and accountancy. These qualifications may confine the practice of such
professions to nationals or companies of. a Party, provided that they are applied on a
nondiscriminatory basis; and provided, further, that such nationality requirements do
not derogate from the right of nationals and companies of either Party, pursuant to
Article II (5)(b) to engage professional and technical personnel of their choice to
render professional and technical services necessary for the internal planning and
operation of the investment.
6 This Treaty, and in particular, the provisions of Article II, paragraph 5(b) shall be
subject to the provisions of Article X.
7. With respect to Article II (6), performance requirements are conditions imposed
which would require an investor to export a minimum percentage of final product or to
source some inputs locally.
8. With regard to Article III, paragraph l(d) the term "prompt" does not necessarily
mean instantaneous. The intent is that the Party diligently and expeditiously carry out
any necessary formalities.
9. With regard to Article III, paragraph 1, the phrase "events that constituted or
resulted in the expropriatory action" refers to conduct attributable to the expropriatory
Party and not to conduct of the national or company. The inclusion of paragraph (e)
in Article III, paragraph 1, is without prejudice to the measure of compensation due in
the event of expropriation.
10. The Parties recognize that restrictions on transfers abroad of sales or liquidation
proceeds of an investment will adversely affect future capital inflows, contrary to the
spirit of this Treaty and the interests of the Party imposing those restrictions.
Nevertheless, the Parties recognize that it is possible that the Arab Republic of Egypt
may find its foreign exchange reserves at a very low level. In these circumstances,
the Arab Republic of Egypt may temporarily delay transfers required under Article V,
Paragraph l(f), but only: (i) in a manner not less favorable than that accorded to
comparable transfers to investors of third countries; (ii) to the extent and for the time
period n to restore its reserves to a minimally acceptable level, but in no case for
period of time longer than that permitted by the provisions of Law 43 in force on the
date of signature of this Treaty; and (iii) after providing the investor an opportunity to
invest the sales or liquidation proceeds in a manner which will preserve their real
value free of exchange risk until transfer occurs.
11. Concerning Article VII (3)(a)(ii), it is understood that the Parties to the dispute
may Previously agree to submission of the dispute to the jurisdiction of domestic
courts and tribunals. The Parties will maintain a nondiscriminatory policy regarding
the inclusion and implementation of such provisions in any investment contract.
12. With regard to the Annex, the exceptions noted by the Arab Republic of Egypt
under "commercial activity" do not include integrated operations which combine
production and sales activities for their products.
13. Recognizing that international financial markets and institutions further stimulate
the process of economic development through the international transmission of
investment and associated technology, each Party undertakes to maintain a
favorable environment for investment by nationals or companies of the other Party in
the insurance and banking sectors. Therefore, each Party accords to investments by
nationals or companies of the other Party in investment banks, merchant-banks and
reinsurance companies whose activities are confined to transactions in foreign
currencies treatment no less favorable than that accorded under existing laws and
regulations to investments by its own nationals and companies or to investments by
nationals or companies of any third country, whichever is the more favorable. Both
Parties agree to hold future discussions concerning the expansion of investment
possibilities in these sectors by nationals or companies of either Party in the territory
of the other Party.
DONE in duplicate at Cairo this llth day of March 1986 in the English and Arabic
languages, both texts being equally authentic.
For the Government of the United States of America:
NICHOLAS A. VELIOTES
Ambassador.
For the Government of the Arab Republic of Egypt:
Sultan ABOU ALI,
Minister of Economy and Trade.
ARAB REPUBLIC OF EGYPT,
MINISTER OF PLANNING AND INTERNATIONAL COOPERATION,
March 11, 1985.
Hon. WILLIAM E. BROCK,
US. Trade Representative,
Washington, D.C.
DEAR MR. AMBASSADOR,
As part of the review of the signed Bilateral Investment Treaty prior to its submission for
ratification, our two Governments have discussed the question of compensation for
expropriation, under Article III. With regard to the issue of compensation, the Government of
Egypt understands that in conformity with contemporary international law, compensation
pursuant to Article III paragraph 1 shall be determined in a manner consistent with
international legal norms and standards rather than norms and standards that are particular to a
specific domestic legal system. I would appreciate confirmation that your government shares
this understanding.
Sincerely,
Dr. KAMAL AHMED EL GANZOURI,
Minister of Planning and
International Cooperation.
THE UNITED STATES TRADE REPRESENTATIVE
Washington, March 11, 1985.
Dr. KAMAL AHMED EL GANZOURI,
Minister of Planning and International Cooperation.
DEAR MR. MINISTER: I have the honor to refer to your letter of March 11, 1985, in
which you state that: "With regard to the issue of compensation, the Government of
Egypt understands that in conformity with contemporary international law,
compensation pursuant to Article II paragraph 1 shall be determined in a manner
consistent with international legal norms and standards rather than norms and
standards that are particular to a specific domestic legal system." The understanding
you express conforms to the understanding of the Government of the United States
regarding the determination of the amount of compensation due to an investor
pursuant to Article III of the Bilateral Investment Treaty.
Very truly yours,
WILLIAM E. BROCK.
I certify this to be a true copy of the original.
EDWARD ROZYNSKI.