Law 801 2003

Original Language Title: LEY 801 de 2003

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LAW 801 (March 13) 2003 Official Journal No. 45.131, March 18, 2003 by means of which approves the "amend additional protocol to the agreement on promotion and reciprocal protection of investments between the Government of the Republic of Colombia and the Government of the Republic of the Peru", made in Lima on seven (7) of May two thousand one (2001).
Summary of notes of force the Congress of COLOMBIA seen the text of the "additional amendment protocol to the agreement on promotion and reciprocal protection of investments between the Government of the Republic of Colombia and the Government of the Republic of the Peru", made in Lima on seven (7) of May two thousand one (2001).
(To be transcribed: attached photocopy of the full text of the international instrument mentioned).
BILL NUMBER 133 OF 2001 SENATE.
through which approves the additional amendment "Protocol" to the Convention on the promotion and reciprocal protection of investments between the Government of the Republic of Colombia and the Government of the Republic of the Peru, in Lima made seven (7) of May two thousand one (2001).
THE Congress of COLOMBIA seen the text of the "additional amendment protocol to the agreement on promotion and reciprocal protection of investments between the Government of the Republic of Colombia and the Government of the Republic of the Peru", made in Lima on seven (7) of May two thousand one (2001).
(To be transcribed: attached photocopy of the full text of the international instrument mentioned).
«ADDITIONAL amendment protocol to the Convention on promotion and protection reciprocal of investments between the Government of the Republic of COLOMBIA and the Government of LA Republic of the PERU the Government of the Republic of Colombia and the Government of the Republic of Peru;
In order to create favourable conditions for investments by investors of each of the Contracting Parties in the territory of the other;
Recognizing that the promotion and protection of investments, serves to stimulate individual commercial initiative and increase prosperity in both States; and, with the aim of putting into force the agreement between the Government of the Republic of Colombia and the Government of the Republic of the Peru on promotion and reciprocal protection of investments, held in Lima on April 26, 1994.
They have agreed as follows: article 1.

Article 7th. the agreement between the Government of the Republic of Colombia and the Government of the Republic of the Peru on promotion and reciprocal protection of investments will be thus: EXPROPRIATIONS and equivalent measures (1) the investments of nationals or companies of any of the Contracting Parties not be subjected, in the territory of the other Contracting Party, a: to) nationalization or equivalent measures (, by means of which one of the Contracting Parties to take control of certain activities considered strategic in accordance with its domestic law, or services, or b) any form of expropriation or measures having an equivalent effect.
Except that any of these measures are carried out according to the law, not discriminatory on grounds expressly set forth in the respective constitutions and that are designated in the Ad article (7) (1) of the attached Protocol, related the internal needs of that part and a prompt, adequate and effective compensation.
(2) the compensation for the acts referred to in paragraphs (1) (a) and (b) of this article, in accordance with the principles of international law, will be the genuine value of the investment immediately before the measures were taken or until the impending measures were public knowledge, whichever comes first. You must include interest until the day of payment, must be paid without undue delay, be effectively realisable and be freely transferable, in accordance with rules stipulated in article (6) on repatriation of capital and profits from investments, provided even in the event of exceptional balance-of-payments difficulties to ensure the transfer of at least one-third annual.
(3) the national or company concerned shall be entitled, in accordance with the law of the Contracting Party that adopts the relevant measures, to prompt review, by the competent authority of that party, its case and the valuation of its investment in accordance with the principles set out in paragraphs (1) and (2) of this article.
(4) If a Contracting Party to take any of the measures referred to in paragraphs (1) (a) and (b) of this article, in relation to the assets of a company incorporated or constituted in accordance with the law in force in any part of its territory, in which national or companies of the other Contracting Party are owners of shares, it shall ensure that the provisions of paragraphs (1) to (3) of this article are applied so as to ensure a compensation prompt, adequate and effective with respect to the investment of these nationals or companies of the other Contracting Party, owners of the shares.
(5) in any case provisions this Convention oblige any contracting party to protect investments made with funds or assets that in accordance with the legislation of each Contracting Party, are determined that they come from criminal activities.
(6) in regards to Colombia, nothing in this Agreement shall prohibit that, in accordance with the law, with the purpose of public or social interest, monopolies are established as ranking discretion, prior full compensation for investors who are deprived of the exercise of an economic activity that is lawful to take account of the conditions of this article.

ARTICLE 2.

None of the provisions of the agreement between the Government of the Republic of Colombia and the Government of the Republic of the Peru that will promote and protect investments, held in Lima on April 26, 1994, nor the provisions of the present Protocol shall be construed in the sense of preventing that a party adopts or maintains measures to preserve public order.

ARTICLE 3.

This Protocol is an integral part of the agreement between the Government of the Republic of Colombia and the Government of the Republic of the Peru on promotion and reciprocal protection of investments, held at Lima, on April 26, 1994 and shall come into force on the date when this Convention to do so.
Made in Lima, to the seven days of the month of May 2001, in two copies of the same tenor, in Spanish, being both equally identical ioma id.
By the Government of the Republic of Colombia, Dr. GUILLERMO FERNÁNDEZ DE SOTO, Minister for Foreign Affairs.
By the Government of the Republic of Peru, Ambassador JAVIER PÉREZ DE CUÉLLAR, President of the Council of Ministers and Minister for Foreign Affairs".
Executive branch of the power public Presidency of the Republic Bogotá, D. C., September 18, 2001.
Approved. Subject to consideration of the honorable National Congress for constitutional purposes.
(Fdo). Andrés PASTRANA ARANGO the Vice-Minister of America and Territorial sovereignty, responsible for the functions of the Office of the Minister of Foreign Affairs, (signed.) CLEMENCIA FORERO UCROS.
Decree: Article 1. adopted the "amend additional protocol to the agreement on promotion and reciprocal protection of investments between the Government of the Republic of Colombia and the Government of the Republic of the Peru", made in Lima on seven (7) of May two thousand one (2001).

Article 2nd. In accordance with the provisions in article 1st. of the law 7a. 1944, the "amend additional protocol to the agreement on promotion and reciprocal protection of investments between the Government of the Republic of Colombia and the Government of the Republic of the Peru", made in Lima on seven (7) of May two thousand one (2001), approving the first article of this law It will oblige the country from the date in which improve the international link with respect to the same.

Article 3. This law governs the date of its publication.
Given in Bogotá, D. C., to the...
Presented to the honorable Congress of the Republic by the Minister for Foreign Affairs and foreign trade Minister subscribed.
GUILLERMO FERNÁNDEZ DE SOTO, Minister for Foreign Affairs.
MARTHA LUCIA RAMIREZ DE RINCON, Minister of foreign trade.
AMENDING Protocol to the Convention on promotion and protection reciprocal of investments between the Government of the Republic of COLOMBIA and the Government of the Republic of PERU, in Lima made seven (7) of May two thousand one (2001).
Honourable senators and representatives: on behalf of the national Government and in compliance with provisions of articles 150 paragraph 16 and 189 paragraph 2 of the Constitution politics of the Republic of Colombia, I have the honour to submit to your consideration the Bill by means of which approves the "additional protocol to amend the agreement on promotion and reciprocal protection of investments between the Government of the Republic of Colombia and the Government of the Republic of the Peru", made in Lima on seven (7) of May two thousand one (2001).
Introduction

The Governments of the republics of Colombia and Peru, with the aim of putting into effect the agreement on promotion and reciprocal protection of investments, held in Lima on April 26, 1994, which was declared partially inexequible by the Constitutional Court (by judgment C-08-97 of 1997), signed in Lima, the seven (7) of may of the current year , the additional protocol to amend the agreement on promotion and reciprocal protection of investments between the Government of the Republic of Peru and the Government of the Republic of Colombia.
This agreement is part of the forecasts of the National Plan of development "Change to build peace" 1998-2002, in which Chapter 5. establishes that foreign capital will play a major role in the construction of a productive modern and focused towards international markets, given the capacity to transfer technology and conocimientos1. There, it enshrines that the Government will encourage the installation of companies in Colombia use our territory as exporting their products to Latin America, developing clear the model of openness and internationalization of its economy policies.
The Government, in execution of its National Development Plan, has been working on providing every day more legal certainty and better conditions for foreign investment in the country. Within this context we can refer to the following events.
-The national Government issued the "General scheme of investment of Capital of the Exterior in Colombia and of Capital Colombian in the Exterior" (Decree 2080 of 2000), by which it unifies, simplifies and consolidates the legal framework for foreign investment in the country and Colombian investments abroad.
-The presidential sanction, on 30 July 2001, law 672 2001 approving of the Bilateral Agreement for the promotion and protection of investments, signed between Colombia and Chile, which is an important step in the process of ratification of the said agreement.
-During the first half of the year 2001, different meetings of negotiation of agreements of promotion and protection were made to international investments with delegations from China, Spain, and Finland.
-Inside of the framework of the FTAA, our country has been participating within the negotiating group on investment. This group identified twelve fundamental issues that will form part of the investment chapter. The selected topics are: basic definitions, scope of application, national treatment, treatment of most-favoured-nation treatment, fair and equitable treatment, expropriation, compensation for losses, key personnel, transfers, performance, General exceptions and reservations and dispute settlement requirements. Against these themes countries submitted proposals and approaches are being made in relation to the positions presented at the negotiating table.
-Observing the success of China's economy in attracting foreign investment to sectors with cutting-edge technology, the Ministry of foreign trade has driven the project on special economic zones for export, which will have a special in terms of work, the tax and the customs treatment, in order to provide favourable conditions for the development of investment plans to be established in the four special zones (Buenaventura Cúcuta, Ipiales and Valledupar).
Foreign investment trends the process of globalization, understood as the offset in the long term to a single universal market, has become the engine of the expansion of the companies transnacionales2. These companies, through its production site3, have agreed to the markets of countries that have undertaken structural changes in their economies through the process of liberalization, deregulation and privatization; While Colombia within this group of Nations.
This process will not stop and will continue to progress regardless of the circumstances in which a country like Colombia, is for this reason must prepare to face the changes involving this global process, so provide well-being and development to the colombianos4.
The trend towards the liberalization of regulatory for the promotion of foreign investment regimes has continued. According to figures provided by Unctad, during 1999 the number of agreements continued the path of growth of previous years, with a total of 96 signatories: 30 in Asia, 20 in Latin America and the Caribbean, 13 in Africa, 11 in Central Europe and East, 4 in Europe in development and 18 in industrialized countries. About half of the agreements signed was held between countries in development, and 43 were taken with the first world countries.
The expansion of transnational corporations through foreign direct investment is one of the Central phenomena in the process of economic globalization in the process. Thus, during the 1990s sales subsidiaries of TNCs grew much more rapidly than overall exports, and their levels of production expanded 5% of global GDP in 1982 to 10% in 1999. Foreign investment, on the other hand, went on to represent 2% of the gross formation of fixed capital global in 1980 to 14% in 1999 (Unctad, 2000). Foreign direct investment registered a particularly explosive growth in the second half of the 1990s. Indeed, according to Unctad estimates, the global flows of investment in 2000 surpassed the 1.1 trillion dollar.
Mergers and acquisitions are the most important driving force that drives modern foreign investment. This form of foreign investment has been mainly among companies in the United States and the European Union since 1998. At the same time, the importance of strategic alliances has increased, which may be a reflection of the development of the thought of the foreign investor, to find a partner who knows the market and local culture, and which in turn share the risk (especially in developing countries, whose economies showed a particular vulnerability in the last years of the last decade).
In the words of ECLAC, "flows of foreign direct investment - FDI - to the developing world were kept was them with respect to the 1999 around $ 190 billion." Of these, 95% was Asian countries (especially China) and Latin America and the Caribbean. In this last region, the main recipients were Brazil, with 30 billion dollars - very concentrated on the restructuring of services - and Mexico, with 13 billion dollars in investments in the manufacturing sector and acquisitions in the financial sector. Some Andean countries as Colombia and Peru, were below the average of previous years, reflecting its recent political and economic instability while flows to Venezuela increased due to acquisitions in the area of services. In Central America and the Caribbean, Dominican Republic received 25% of the total subregional".
Latin America was not alien to this process of globalization, countries in the region have implemented structural changes, and therefore the presence of multinationals in the area has been strengthened.
Latin America managed to overcome adverse circumstances affecting capital flows to developing economies due to the Asian crisis, Brazil and the Rusa5 Confederation. Despite this turbulence in the financial markets, flows of foreign investment to Latin America and the Caribbean in 2000 were more than 74,191 million dollars.
Importance of foreign investment worldwide, in the last ten years foreign investment flows have grown significantly. Flows that originate in developed countries and are directed towards the countries in development have presented the same trend. For these last, FDI has become an essential source for the financing of development. This has led Governments to make great efforts to attract greater FDI flows, underpinned also by the recognized effects that this has on growth and economic development.
Foreign investment in general, and transnational companies in particular, are important players in the global economy and a key component in the active participation of developing countries. Foreign investment can contribute to the development of a country to complement domestic investment, strengthen the ties of trade, export capacity, develop technology transfer and disseminate skills and expertise.

Thus, foreign investors can enter new and modern technologies which, by the development and research of the developing economies, capacity would not be available in the absence of such investment. Similarly, foreign direct investment can promote access to export markets for goods and services produced in the host countries of investment, helping them to switch from domestic markets to international markets, taking advantage of the comparative advantages of each country. On the other hand, foreign investment creates jobs and training of officials. Investors may have access to individuals with advanced knowledge which can transfer these skills and knowledge to their branches abroad to bring experts and give your staff the respective training.
In the Colombian case, the recent evolution of international markets with the presence of foreign investment generates two important opportunities for entrepreneurs. Firstly, partnering with foreign companies and be part of a large integrated system of production, distribution and marketing that have been developing multinational corporations in a globalized market. Secondly, it is the opportunity of increasing manufacturing exports to the markets of the world through partnership and alliances in the process of penetration of new markets or in the process of acquiring technologies that no is tienen6.
On the other hand, foreign investment is a fundamental tool in the development of energy infrastructure, transport and communications required by Colombia in the 21st century. That infrastructure has been designed with the private foreign investment. The involvement of foreign investors it is vital for the development of a modern infrastructure that you lighten the costs of production for domestic consumption and for export.
As a result of foreign investment in Colombia, our country has become in the last years in regional center and an export platform for transnational companies. These companies have carried out processes of rationalization and centralized its administrative centers, production, marketing and services (accounting, advertising, etc.) for the company. It is imperative that Colombia extended its participation in the overall structure of these companies, through an aggressive policy of promoting foreign investment.
Competition for foreign capital flows has accelerated strongly and Colombia can not stay behind. Our country needs to improve its performance in attracting investment, since other forms of development tasks undertaken by the current administration and in which you need the participation of all Colombians we take longer, leaving us behind in the international race.
The development objective the primary objective of development of the economies as the Colombian, includes the achievement of sustained income growth. This is achieved through increased investment, strengthening technological capacities and the improvement of the competitiveness of exports in the markets mundiales7. To improve the competitiveness, it is necessary that countries are able to encourage new activities that generate value added in the production of goods and services in open markets, of which foreign investment can be an important promoter agent.
Growing political instability in some countries of Latin America, as well as the decline in privatization processes, reducing the economic growth levels, and the fall of commodity prices made that by the year 2000, foreign investment in the Latin American region has decreased. In addition, the growth of the Asian economies has made more intense competition by flows of foreign investment to developing desarrollo8 economies. The reduction in investment flows towards developing countries, increased perception of risk in these economies, and increased competition, leading to the need to develop an aggressive policy of promoting foreign investment in Colombia.
Foreign investment should be attracted through a coherent policy that generates an environment favourable to investment, implemented through the design of a development strategy based on the identification of ve protective competitive to define activities that are considered relevant to attract external capital flows.
Foreign investment in Colombia the deterioration in the conditions of security and the economic situation in the country, have had an impact on foreign investment flows. While in 1998 he had entered the country nearly US$ 4,000 billion, in the first three months of the year, only $1,119 million were linked. Some investors have suspended their operations in the country, while others have stopped or canceled new investment projects or reduced operations in the country. In addition, and as it is to be expected given the nature of these flows, portfolio investment funds showed a net divestment the last two years.
Notwithstanding the foregoing, it is worth noting that foreign investment in the financial sector showed a significant dynamism during the year 20009. This was the sector more investment received during that year, and the increase of investments in the following sub-sectors is remarkable: sub-sectors with higher foreign investment in the year 2000 in dollars, without oil other financial institutions financial services 308,319,902 252,546,989 communications 223,743,665 soft drinks and carbonated waters industries 120,393,427 trade to the wholesale (exports) 97,249,973 manufacture of soaps and cleaning preparations , perfumes, cosmetics and other 94,748,380 technical services and architectural 73,364,388 financial institutions 69,869,484 coal mining 65,196,089 containers and boxes of paper and cardboard manufacturing 56,361,094 manufacturing of pharmaceutical products and drugs 48,098,625 real estate 46,717,823 source: foreign investment, Central Bank records.
INVESTMENT foreign in COLOMBIA (US $ thousands) 1994 1995 1996 1997 1998 1999 2000 2001 (March) 1,102 7,840 5,803 well unspecified activities 126 - agriculture, hunting, forestry and fishing 12,433 29,780 25,881 26,767 23,223 65,809 13,919 1,608 exploitation mi - nas and quarrying 25,446 109,814 45,533 289,444 101,131 34,994 67,001 245,894 industries manufac - tureras 364,773 582,284 652,745 640,254 576,559 1,473,852 224,580 99,448 electricity , gas, water 6,255 8,383 145,390 947,004 1,834,242 818,593 (1,204,100) 19,859 construction 33,449 31,954 22,561 44,668 21,782 117,608 14,461 2,442 trade to the ma-yor and the by minor 81,214 131,554 150,862 143,166 239,599 380,395 128,715 48,998 stores transport - lie and Communicator. 157,166 217,161 157,858 360,355 69,293 546,496 239,894 40,185 1994 1995 1996 1997 1998 1999 2000 2001 (March) establishments fi-nancial, insurance, etc. 113,436 193,555 667,020 455,027 1,309,544 523,214 770,472 643,815 community social and personal services 1,805 9,091 11,104 26,118 11,034 41,133 18,063 16,764 portfolio 587,675 242,221 292,154 561,761 (234,182) (27,586) 15,098 4,317 Total 1,389,456 1,563,136 2,172,209 3,494,689 3,952,225 3,974,507 288,192 1,123,328 s note that United States is the leading investor in Colombia, followed by countries in the European Union without taking into account the so-called tax havens. During the last years an increase in investments, has been mainly from Spain towards the sectors of financial services and energy sector.
25 top investors in Colombia at 2000.
Country millions of dollars 1 United States Stock 5,307,324 2 Cayman Islands 3 Panama 2,566,407 1,965,891 4 Spain 5 Netherlands 1,946,826 1,448,265 6 British Virgin Islands Bermuda 861,050 8 7 1,132,936 10/501,253/Switzerland/9/515,509/Germany/England 459,248 11 434,496 France 12 Venezuela 335,742 13 310,561 Bahamas 14 246,636 Japan 15 Chile 212,195 16 17 18 Antilles Netherlands 160,294 193,728 Canada Mexico 143,286 19 20 140,123 Italy 104,843 21 Sweden Ecuador 101,266 22 23 63,091 Peru Uruguay 60,929
24 25 60,670 Brazil Luxembourg 56,970 the benefits of foreign investment have been outlined above. However, in the case of Colombia, the benefits multiply before the economic crisis affecting the country, and the need for private resources to finance investment required when faces a deficit in public finances.

On the other hand linking of foreign capital to companies that have been affected by the recession, but that are economically viable, can offer to companies in difficulties a capital that allows them to return to their status, financial and hence their ability to continue to exercise its economic activity, with the creation of employment and welfare resulting. Likewise, the involvement of foreign capital to the clusters, and particularly dynamic sectors of our economy is important to achieving its continued development and internationalization.
Importance of the signing of a Bilateral agreement on promotion and reciprocal protection of investments with Peru the agreement would create a conducive atmosphere so that Colombian business people looking for new market niches in Peru, and will secure the climate of security and confidence for investment coming from the neighboring country. The current situation provides an important opportunity for Colombia, through this agreement, to promote the entry of investment as promoter of the economy flows.
For the reasons set forth above, the signing of the investment agreement on the measure is very beneficial for our country in which are closer economic ties between the two Nations.
The following is a list of countries that have signed agreements with Peru investment protection, also transcribed the date of the signature of the respective agreements: signatory country El Salvador (13.06.96) date Argentina (10.10.94) (30.07.93) China Bolivia (09.06.94) (16.03.94) Denmark (23.11.94) Czech Republic (06.10.93) (30.06.95) (05.05.94) Italy Germany France Finland (02.05.95) (03.06.93) Malaysia (13.12.95) (27.12.94) Norway Holland (10.03.95) Colombia (26.04.94) Spain (02.10.91) (21.10.91) Switzerland Germany (11.11.91) (14.07.92) Belgium France (15.07.92) (08.03.93) (24.05.93) Finland Sweden Italy Korea) (27.05.93) Paraguay (31.06.94) (22.11.94) Portugal Romania (16.05.95) Czech Republic (24.04.95) (17.11.94) Switzerland Spain (03.05.94) (22.11.91) Thailand (15.11.91) Sweden United Kingdom (04.10.93) flows of foreign investment between our two countries have acquired some dynamism in recent years, and this agreement will be an additional element for strengthening our bilateral economic relations.
INVESTMENT of COLOMBIA In PERU does not include petroleum, in dollars sectors 1994 1995 1996 1997 1998 1999 2000 agriculture, hunting, forestry and fishing - 2,414 - 16,789,967 240,387 industries manufac - 17,827 tureras 4,929,836 7,645,443 9,633,731 2,984,772 7,287,860 2,126,332 construction 259,445 216,772 - 1,114,470 4,733,646 trade to the wholesale and the by under 40,000 10,000 879,000 1,617,000 2,774,433 26,929,022 1,263,116 transport, soul-winterizing and co-munications - Estb. Financ.
Insurance, etc. 611,257 1,427,720 688,781 - 297,000 1,054,880 41,745 Total 930,523 6,586,323 9,215,220 11,255,142 6,058,203 53,178,198 8,407,226 the economic evolution of the Peru during 1999 was largely determined by the impact of external impulses which affected the country in the course of the year 98. Product returned to a path of moderate growth, with a rate of 3.8%. Inflation also had a favorable outcome, setting a record low of 3.7%. However, the economic reactivaci6n was located in the primary sector, while the rest of the economy continued to suffer the aftermath of the recession of the previous year. Credit austerity that led to the exit of foreign short-term capital started at the end of 1998, the financial difficulties in some sectors of activity and the persistence of expectations adverse during much of the year determined a decline of domestic demand (- 3%), which resulted in a reduction in employment (- 6%) and a crisis in the financial sector. The privatization process lost momentum and could be less than half of the program initially planned for 1999.
The complex political situation that erupted in the Peru from the first months of the year 2000 discouraged domestic investment, resulting in a cooling of economic activity in the second half. Growth was higher than the 1999, but does not seem to have been translated into improvements in urban employment and real wages. Although the fiscal goal could not be achieved, inflation remained under control and the external gap was reduced again. The precariousness of the financial situation forced to launch a third programme of rescue of company them sas and credit to the sector private returned to contract. The prevailing uncertainty hindered the progress of the program of privatization and concessions, registering in any case important operations principles and end of the year.
Despite the Economic Outlook before exposed, investments from Peru in Colombia have increased every year (as shown in the following graph), which is one more reason to highlight the importance of this agreement, which along with the other instruments and actions of integration, will be a contribution to the dynamism and strengthening of relations between Colombia and Peru.
INVESTMENT foreign of PERU in COLOMBIA does not include petroleum, in dollars sectors 1994 1995 1996 1997 1998 1999 2000 well unspecified activities 174,075 - industries manu-factureras 132,602 874,703 215,632 1,139,062 266-, 528 1,333,356 838,718 13,298 construction - 200,000 - trade to the wholesale and the by minor 41,309 147,326 140,660 446,149 121,085 254,935 958,675 transport, soul-storage and communications - 5,100 Estb. Financ.
Insurance, etc. 1,878,082 11,134 49,471 8,211,328 86,814 16,269,992 services 21,565,492 comu - end social and personal 14,930 - Total 2,227,700 1,033,163 405,763 9,796,539 58,629 15,391,571 23,367,985 the promotion and reciprocal protection of investments agreement between Peru and Colombia advances that have occurred recently, both worldwide and in the hemisphere, generated in the field of the law challenges against which is essential to the design of instruments among these, agreements for promoting and protecting investments, while maintaining compatibility with internal regulations, especially the constitutional, will allow the increase of the flow of goods, services, technology and capitales10.
These agreements are nothing other than the mutual commitment between countries maintain and protect certain guiding principles for foreign investment including national and most-favoured-nation treatment, no expropriation, freedom rights Exchange and international jurisdiction among others. They are the international instruments most suitable for bilateral investment extranjera11 regulation.
Although, Colombia and Peru are members of the CAN and therefore possess a common regime of treatment to the foreign capital established in Decision 291, this constitutes the framework in this matter, being the agreement for the promotion and protection of investments the call to translate fundamental principles relating to guarantees of treatment to the investment it is and provide an essential element in the decision of the investor i.e., the stability in the rules of the game or the validity of minimum guarantees for foreign investments.
This Protocol to the Convention, seeks to give effect to the agreement in which the Government of Colombia and the Government of Peru undertakes to give treatment to investors, according to the rules of international law, and ensure that the principles enshrined by Colombian legislation. Such rights relate to: - the treatment of these once established in Colombia (national treatment, most-favoured nation).
-The guarantee of Exchange rights.
-Rules relating to expropriation and - conflict resolution.
The law approving the agreement for the promotion and protection of investments signed by the Governments of Peru and Colombia, once stocked the respective procedure before the Congress of the Republic, was reviewed by the Constitutional Court, and by judgement C-08-97 in 1997 declared it partially inexequible.
In the spoken ruling, the Court played two themes, the first of which refers to expropriation without compensation contained in the then article 58 of the Constitution, article subsequently reformed, and which must be respected by the Treaty in question.
The second was due to that article 100 of the Constitution states that while foreigners must enjoy the same civil rights granted to Colombians, it is equally clear that "law may, for reasons of public order, subject to special conditions or deny the exercise of certain civil rights to foreigners".
For this reason, an international treaty cannot prevent the Colombian legislator make use of this power, so it was necessary to make clear in the agreement signed with Peru in this matter.
Clauses which develop commitments acquired with the Protocol, are outlined below:


Article 1o. EXPROPRIATION and compensation. This article provides that where there is an expropriation or equivalent measure, the State shall provide prompt, adequate and effective compensation along with the interest until the day in which the payment is made.

Article 2 Indicates that nothing in the agreement or protocol is be construed to prevent a party from adopting or maintaining measures aimed at preserving public order, this in accordance with the provisions of article 100 of the Constitution.
Conclusions after have been precipitated in 1999 to depression more deep of the 20th century, with a drop of 4.3% in the product, the Colombian economy experienced a moderate recovery (2.8%) in the year 2000, mainly led by exports, especially oil companies. However, the rebound was insufficient to bring down unemployment which stood at a high 20% in the seven metropolitan areas.
Other macroeconomic indicators evolved positively. Inflation continued its downward trajectory, and expected at year's end it is less than 8%, below the goal set by the authorities. Performance is mejante is expected in the fiscal accounts, as high international oil prices and domestic recovery, which resulted in an increase in imports, will contribute to the implementation of the agreement with the International Monetary Fund, signed in December 1999.
Considering this scenario for Colombia, foreign investment is essential to innovate, transfer technology to the production system and restore economic growth, increasing manufacturing exports, develop service sectors and generate foreign exchange to the nation.
Colombia has undertaken a policy to improve the climate for investment in the country in order to ensure conditions of stability and legal certainty to investments. This policy envisages the modernization of legislation, participation in both bilateral and multilateral negotiations, and the development of a culture within the public administration that contributes to facilitate investment in general and foreign investment in particular.
The importance of foreign investment to developing countries, the increasing level of economic integration between countries and globalization make the commitments acquired investment increasingly demanding, and offered greater security to the investor and generated an international framework of legal stability in the rules for investment-receiving countries.
Colombia has a strategic geographical position in the continent, is a country favoured by nature and we have an exceptional human quality. However, factors isolated from violence have moved away to the foreign investment in our country. The foregoing not daunted the work of the current administration and the joint effort that we must make to existing foreign investment will strengthen and serve as a promotion to future investment.
For the above reasons, this Protocol is a tool that gives stability to the Peruvian investment in Colombia, and vice versa. Similarly, it is a mechanism to promote investment, as it encourages and promotes Peruvian investment in our territory. There are countless benefits that these investments lead to the Colombian economy. Given the characteristics of the economy Peruana, these investments will contribute to our innovation economy, greater knowledge of markets for export, knowledge transfer and job creation that will contribute to the economic and social development of the country, consolidating in this way the process of modernization of the Colombian economy and the inclusion of appropriate country to the global market.
Colombia is offering to foreign investors with the ratification of this Protocol, a clear message of acceptance of international standards for the protection of investments. This is one of the first messages issued by our country since the reform of article 58 of the Charter and become those who promote Colombia as a country that, with the help of foreign investment, will face the challenges imposed by the present century.
Taking into account the foregoing, the Government national of the Republic of Colombia, through the Ministers of Foreign Affairs and foreign trade, asks the honorable National Congress to approve the additional amendment "Protocol" to the Convention on the promotion and reciprocal protection of investments between the Government of the Republic of Colombia and the Government of the Republic of the Peru made in Lima on seven (7) d may you thousand one (2001).
The Honourable senators and representatives, GUILLERMO FERNÁNDEZ DE SOTO, Minister for Foreign Affairs.
MARTHA LUCIA RAMIREZ DE RINCON, Minister of foreign trade.
LAW 424 (January 13) 1998 which ordered the follow-up to the international agreements signed by Colombia.
THE Congress of COLOMBIA Decree: article 1. The national Government, through the Ministry of Foreign Affairs shall submit annually to the latter commissions of Foreign Affairs of the Senate and House, within the first thirty calendar days subsequent to the legislative period that begins each July 20, a report detailed how they are meeting and developing the existing international agreements signed by Colombia with other States.

Article 2nd. Each dependency of the national Government responsible for executing international treaties within their competence and require reciprocity in the same, transfer relevant information to the Ministry of Foreign Affairs, and, the latter commissions.

Article 3. The full text of this law will be incorporated as an annex to each and every one of the international conventions which the Ministry of Foreign Affairs submitted to the Congress for consideration.

Article 4th. This law governed from its promulgation.
The President of the honorable Senate of the Republic, AMYLKAR ACOSTA MEDINA.
The Secretary-General of the honorable Senate of the Republic, PEDRO PUMAREJO VEGA.
The President of the honorable House of representatives, CARLOS ARDILA BALLESTEROS.
The Secretary General of the honorable House of representatives, DIEGO VIVAS TAFUR.
REPUBLIC OF COLOMBIA - NATIONAL GOVERNMENT PUBLISHED AND EXECUTED.
Given in Santa Fe de Bogotá, D. C., on January 13, 1998.
ERNESTO SAMPER PIZANO, the Foreign Minister, MARIA EMMA Mejia VELEZ.
Executive branch of the power public Presidency of the Republic Bogotá, D. C., approved September 18, 2001. Subject to consideration of the honorable National Congress for constitutional purposes.
(Fdo). Andrés PASTRANA ARANGO the Vice-Minister of America and Territorial sovereignty of the functions of the Office of the Minister of Foreign Affairs, (signed.) CLEMENCIA FORERO UCROS.
Decree: Article 1. adopted the "amend additional protocol to the agreement on promotion and reciprocal protection of investments between the Government of the Republic of Colombia and the Government of the Republic of the Peru", made in Lima on seven (7) of May two thousand one (2001).

Article 2nd. In accordance with the provisions in article 1st. of the law 7a. 1944, the "amend additional protocol to the agreement on promotion and reciprocal protection of investments between the Government of the Republic of Colombia and the Government of the Republic of the Peru", made in Lima on seven (7) of May two thousand one (2001), approving the first article of this law It will oblige the country from the date in which improve the international link with respect to the same).

Article 3. This law governs from dc. the date of its publication.
The President of the honorable Senate of the Republic, LUIS ALFREDO RAMOS BOTERO the Secretary of the honorable Senate of the Republic, EMILIO RAMON OTERO DAJUD the President of the honorable House of representatives WILLIAM VELEZ MESA the Secretary General of the honorable House of representatives, ANGELINO LIZCANO RIVERA Republic of COLOMBIA - national Government communicate and implemented.
Run, upon review of the Constitutional Court, in accordance with article 241-10 of the political Constitution.
Given in Bogotá, D. C., to March 13, 2003.
ÁLVARO URIBE VÉLEZ the Minister of Foreign Affairs, CAROLINA BARCO ISAKSON.
The Minister of trade, industry and tourism, JORGE HUMBERTO BOTERO angle.

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