On the ratification of the Agreement between the Government of the Republic of Kazakhstan and the Government of the Republic of Finland on the Promotion and Mutual Protection of Investments

Home / RLA / On the ratification of the Agreement between the Government of the Republic of Kazakhstan and the Government of the Republic of Finland on the Promotion and Mutual Protection of Investments

Law of the Republic of Kazakhstan dated October 30, 1997 No. 179

To ratify the Agreement between the Government of the Republic of Kazakhstan and the Government of the Republic of Finland on the Promotion and Mutual Protection of Investments, signed on September 29, 1992 in Almaty.

President of the Republic of Kazakhstan

Agreement * between the Government of the Republic of Kazakhstan and the Government of the Republic of Finland on the Promotion and Mutual Protection of Investments

*(Entered into force on February 15, 1998 - Bulletin of International Treaties of the Republic of Kazakhstan, 2004, No. 4, art. 16)

The Government of the Republic of Kazakhstan and the Government of the Republic of Finland, hereinafter referred to as the "Contracting Parties", striving to develop and expand trade and economic relations between the Republic of Kazakhstan and Finland based on the principles of mutual equality and mutual benefit, desiring to promote, protect and create favorable conditions for investments made by investors of each Contracting Party in the territory of the other Contracting Party Recognizing, That the promotion and mutual protection of investments increases business activity in the development of economic relations between the two Contracting Parties, have agreed as follows:

Article 1 Definitions

In this Agreement: a) The term "Investment" means all types of funds and property values related to economic activity, and covers in particular, but not exclusively: 1) movable and immovable property and other property rights, such as the right of pledge; 2) contributions to companies, shares and other forms of participation in property of legal entities; 3) the rights of monetary claims, the rights to monetary debt claims; 4) rights to industrial, commercial and intellectual property, including rights related to copyrights, patents, trademarks, service marks, trade names and industrial designs, trade secrets, technological processes, "know-how" and "goodwill"; 5) rights to commercial activities and concessions, including related to the exploration, development, extraction or exploitation of natural resources, as well as all other rights granted in accordance with legislation or agreement; 6) leased investment goods related to the investments provided for in this Agreement and used by the lessee in accordance with the legislation. b) The term "investor" means: 1) an individual who is a citizen of Kazakhstan or Finland in accordance with the legislation in force in their countries, or a legal entity established in accordance with the legislation in force in Kazakhstan or Finland, and who are authorized under the legislation of their country to invest in the territory of the other Contracting Party; 2) a legal entity that has its location in the territory of one of the Contracting Parties or a third State, and the investor of one of the Contracting Parties has a predominant participation in it; 3) a legal entity or an individual whose definitions do not cover paragraphs 1 and 2, provided that the Contracting Parties jointly approve each individual investment planned by this person. (c) The term "income" means sums of money or other property assets received as a result of activities in connection with investments, including, in particular, but not exclusively, profits, interest, dividends, royalties and other payments specified in Article 6 of this Agreement. e) The term "territory" means the State territory of each of the Contracting Parties, as well as the economic zone, fishing zone and continental shelf extending beyond the territorial waters of each of the Contracting Parties over which the Contracting Parties exercise their sovereign rights and jurisdiction in accordance with international law for the purposes of exploration, development and conservation of natural resources.

Article 2 Application of the Agreement

1. This Agreement applies to investments made in accordance with the legislation of the Contracting Party in whose territory the investments are made. 2. Subject to the provisions of paragraph 1 of this Article, this Agreement applies to all investments made by investors of one Contracting Party in the territory of the other Contracting Party, before and after the entry into force of this Agreement.

Article 3 Most-favored-nation treatment

1. Each of the Contracting Parties will not apply in its territory a less favorable regime in respect of investments made in accordance with the provisions of this Agreement by investors of the other Contracting Party and the income received from them than in similar cases with respect to investments and income of investors of third countries. 2. In relation to investors of one of the Contracting Parties whose investments have suffered losses as a result of war or other armed conflict, proclamation of a state of emergency, public unrest, the other Contracting Party provides a regime no less favorable than that which the other Contracting Party applies to investors of any third country regarding the restoration of property, property compensation, compensation or other types of settlement related to tangible assets. The payments provided for in the previous paragraph must be made in a freely convertible currency and must be freely transferred from one country to another. 3. The regime provided for in paragraphs 1 and 2 of this Article does not apply to advantages, privileges or grounds for compensation provided by one of the Contracting Parties to investors, investments and incomes of third countries and arising from: existing or future agreement on economic space, customs union or free trade area; agreement on the elimination of double taxation; from another international agreement, fully or partially related to taxation.

Article 4 Investment protection

Each of the Contracting Parties shall ensure, in all circumstances and within the framework provided for by its legislation and regulations, as well as in accordance with international law, reasonable and fair treatment in respect of investments made by investors of the other Contracting Party, as well as in respect of income from these investments.

Article 5 Expropriation

1) Investments of investors of either Contracting Party made in the territory of the other Contracting Party may not be nationalized, expropriated or subjected to measures having similar consequences to nationalization or expropriation (hereinafter referred to as "expropriation"), except in cases where such measures are taken in the public interest. At the same time, the procedure established by the legislation in force in this territory is observed and appropriate compensation is paid. Such measures should not be discriminatory. Compensation will be calculated on the basis of the actual market value of the expropriated investments immediately before the expropriation was carried out or the decision to take such measures was made public, whichever occurs earlier and will be determined in accordance with the valuation principles adopted in international practice. Compensation is paid in freely convertible currency at the official exchange rate in effect on the day of the valuation. The amount of compensation is transferred without undue delay within the period normally required for the completion of transfer-related formalities, but no later than three months from the date of expropriation. Compensation should include a percentage calculated from the date of determining the real value of the investment until the date of payment according to the London Interbank Offered Rate (LIBOR). In the absence of such a rate, the usual commercial interest applied by the central bank of the Contracting Party implementing the enforcement measures applies. The investor whose investments have been affected will have the right, in accordance with the legislation of the Expropriating Contracting Party, to have his case promptly reviewed by a judicial or other independent body of that Contracting Party and to determine the value of his investments, in accordance with the principles set out in this paragraph. (2) If one of the Contracting Parties expropriates the property of a company or enterprise established in any part of its territory in accordance with applicable law and whose shares are owned by investors of the other Contracting Party, the provisions of paragraph 1 of this Article shall apply.

Article 6 Transfer of payments, income and return of movable property in connection with investments

Each of the Contracting Parties shall ensure to the investors of the other Contracting Party, without undue delay, but within no more than three months, the unhindered return of movable property in connection with the investment and the transfer of payments in freely convertible currency in connection with the investment, in particular: 1) profits, dividends, interest, royalties, royalties, commissions, payments for technical assistance and maintenance, and other income earned from investments, carried out by an investor of the other Contracting Party; 2) loans or monetary amounts related to the repayment of relevant obligations; 3) amounts owed to the investor in connection with the sale, partial or complete liquidation of investments; 4) salaries and other income-related incomes of citizens of the investor's country for work in the territory of the host country in connection with investments.

Article 7 Investment promotion

The Contracting Parties shall promote, within the framework of their legislation, the provision of favorable conditions for investment activities.

Article 8 Disputes between a Contracting Party A party and an investor

1) Legal disputes between an investor of one of the Contracting Parties and the other Contracting Party concerning investments of the former in the territory of the latter, on the settlement of which the disputing Parties have not reached an agreement within three months from the date of submission of a written claim by one of the parties to the other party, may, at the request of one of the parties to the dispute, be submitted for consideration or:) to the International Center for Settlement of Investment Disputes (hereinafter referred to as the "center"), Taking into account the relevant provisions of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) concluded in Washington on March 18, 1965, if both Contracting Parties participate in the said Agreement; or b) to the international arbitration court "ad hoc", established in accordance with the applicable Arbitration Rules of the United Nations Commission The United Nations Office on International Trade Law. The disputing parties may enter into written agreements on amendments to the provisions of the Arbitration Rules. 2. Regardless of the provisions of paragraph 1 of this article concerning the transfer of a dispute to an arbitration court, the investor has the right to choose the dispute resolution procedure before the dispute is transferred to the arbitration court. 3. The Contracting Parties shall recognize the award of the arbitral tribunal and enforce it in accordance with the Convention on the Recognition and Enforcement of Foreign Arbitral Awards, adopted in 1958 in New York.

Article 9 Disputes between the Contracting Parties

1. Disputes between the Contracting Parties concerning the interpretation or application of this Agreement should, if possible, be resolved through diplomatic channels. 2. If it is impossible to resolve a dispute between the Contracting Parties through diplomatic channels, it should be referred to an arbitration court at the request of one of the Contracting Parties. 3. Such an arbitration court will be established separately for each specific case in the following order. Within two months after receiving the request for arbitration, each of the Contracting Parties appoints one arbitrator. These two arbitrators then elect a citizen of a third country, who, with the consent of the two Contracting Parties, will be appointed chairman of the arbitral tribunal. The Chairman must be appointed within two months after the date of appointment of the other two members of the arbitral tribunal. 4. If the necessary appointments are not made within the time limits specified in paragraph 3 of this Article, either Contracting Party may, in the absence of any other agreement, request the President of the International Court of Justice to make the necessary appointments. If the President is a national of one of the Contracting Parties or if he is unable for any reason to perform this function, the Vice-President of the International Court of Justice will be invited to make the necessary appointments. If the Vice-President is a national of one of the Contracting Parties or if he is also unable to perform the specified function, the member of the International Court of Justice next to him in seniority, who is not a national of one of the Contracting Parties and can perform the specified function without hindrance, will be invited to make the necessary appointments. 5. The Arbitration court shall make a decision by a majority vote. The decision of the arbitration court is binding on both Contracting Parties. The Contracting Parties shall bear the expenses of the Chairman in equal shares. The costs associated with the activities of the arbitrator appointed by it shall be borne by each of the Contracting Parties. The arbitral tribunal may, however, determine in its decision that one of the Contracting Parties will bear a greater share of the costs, and such a decision will be binding on both Contracting Parties. The Court decides on the rules of procedure itself.

Article 10 Subrogation

If a Contracting Party or its designated representative pays compensation to the investor on the basis of a guarantee issued by them in respect of investments of an investor of that Contracting Party, that Contracting Party or its designated representative shall acquire, by way of subrogation, the relevant rights of the investor based on this Agreement.

Article 11 Application of national legislation and international agreements

If one of the Contracting Parties, in accordance with its legislation or an international agreement to which both Contracting Parties are Parties, provides investments of investors of the other Contracting Party with a more favorable regime than the regime provided by this Agreement, the more favorable regime will be applied.

Article 12 Entry into force, term and termination of the Agreement

1. This Agreement shall enter into force thirty (30) days after the Contracting Parties notify each other through diplomatic channels of the completion of the constitutional formalities necessary for the entry into force of the Agreement. 2. This Agreement shall be in force for a period of fifteen (15) years and shall remain in force after the expiration of this period, unless it is denounced in accordance with paragraph 3 of this article. 3. Either Contracting Party may, by notifying the other Contracting Party in writing through diplomatic channels no later than one (1) year in advance, terminate this Agreement by denunciation upon expiration of the initial fifteen (15) year period or at any time thereafter. 4. With respect to those investments made prior to the termination of this Agreement, provisions I-II will remain in force for a period of fifteen (15) years after the termination of the Agreement. Done in Alma Ata on September 29, 1992, in two original copies, each in Kazakh, Finnish and Russian, all texts being equally authentic.

FOR THE GOVERNMENT FOR THE GOVERNMENT OF THE REPUBLIC OF KAZAKHSTAN OF THE REPUBLIC OF FINLAND

President

Republic of Kazakhstan

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