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Law No. 111 Of 24 November 1994

Original Language Title:  LEGE nr. 111 din 24 noiembrie 1994

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LEGE No. 111 of 24 November 1994 for the ratification of the Agreement between the Government of Romania and the Government of the Republic of Croatia on the promotion and mutual protection of investments, signed in Zagreb
ISSUER PARLIAMENT
Published in OFFICIAL MONITOR NO. 334 of 2 December 1994



The Romanian Parliament adopts this law + Article UNIC The Agreement between the Government of Romania and the Government of the Republic of Croatia on the promotion and mutual protection of investments, signed in Zagreb on 8 June 1994, This law was adopted by the Senate at the meeting of October 20, 1994, in compliance with the provisions of art 74 74 para. (2) of the Romanian Constitution. SENATE PRESIDENT prof. univ. dr. OLIVIU GHERMAN This law was adopted by the Chamber of Deputies at the meeting of November 7, 1994, in compliance with the provisions of 74 74 para. (2) of the Romanian Constitution. p. CHAMBER OF DEPUTIES PRESIDENT MARTIAN DAN + AGREEMENT between the Government of Romania and the Government of the Republic of Croatia on promoting and The Government of Romania and the Government of the Republic of Croatia, referred to as Contracting Parties wanting to enhance economic cooperation to the mutual benefit of both states, intended to create and maintain favourable conditions for the investments of investors of a Contracting Party in the territory of the other Contracting Party, recognising the need to promote and protect foreign investment in order to increase the economic prosperity of both States, have agreed the following: + Article 1 Definitions For purposes of this Agreement: 1. The term investor refers, in relation to each contracting party, to: a) natural persons who, in accordance with the legislation of that Contracting Party, are regarded as its citizens; b) legal entities, including companies, corporations, business associations and other organizations that are constituted or otherwise organized, appropriately, in accordance with the legislation of that Contracting Party and which are based, together with actual economic activities in the territory of the same Contracting Party. 2. The term investment will include any assets invested by the investors of a contracting party in the territory of the other contracting party, in accordance with the laws and regulations of the latter and in particular, but not exclusively: a) proprietary rights to movable and immovable property, as well as other real rights, such as servitude, mortgages, guarantees, pledging; b) shares, shares or any other kind of participation in companies; c) claim rights or any other rights relating to benefits which have an economic value; d) intellectual property rights, such as: copyrights, patents, industrial designs, trade or service marks, trade names, know-how and goodwill, as well as any other similar rights recognized by the legislation Contracting Parties e) concessions in accordance with public law, including concessions on prospecting, extraction or exploitation of natural resources, as well as any other rights conferred by law, by contract or by the decision of the authorities, in accordance with by law. Any change in the form in which the assets are invested or reinvested will not affect their investment character. 3. The term income means the amounts produced by an investment and includes in particular, but not exclusively, profits, dividends, interest, capital increases, royalties, management and technical assistance or other fees, regardless of the form in which it is paid income. 4. The term territory designates the territory of Romania or, respectively, the territory of the Republic of Croatia, as well as those maritime areas including the soil and basement adjacent to the external boundary of the territorial sea of each of the above territories, on which that State exercises, in accordance with international law, sovereign rights or jurisdiction for the purpose of exploring and exploiting the natural resources of these areas. + Article 2 Promotion, admission 1. Each Contracting Party shall promote, as far as possible, the investments made on its territory by the investors of the other Contracting Party and shall admit these investments in accordance with its laws and regulations. 2. If a Contracting Party has admitted an investment on its territory, it shall grant, in accordance with its laws and regulations, the necessary permits in relation to that investment, including authorisations for the hiring of management personnel and Technically, at his choice, regardless of nationality. + Article 3 Protection, treatment 1. Each Contracting Party shall protect in its territory the investments made, in accordance with its laws and regulations, by the investors of the other Contracting Party and shall not affect, by unreasonable or discriminatory measures, the management, maintenance, use, fruition, extension, sale or liquidation of such investments. In particular, each contracting party or its competent authorities will issue the necessary authorisations referred to in art. 2 2 paragraph 2 of this Agreement. 2. Each Contracting Party shall ensure fair and equitable treatment in the territory or investments of investors of the other Contracting Party. This treatment will not be less favourable than that granted by each contracting party to investments made on its territory by its own investors or than that granted by each contracting party to investments made on the territory of or by investors of any third country, if the latter treatment is more favourable. 3. The most favoured nation clause shall not be construed as an obligation of the Contracting Party to extend to the investors and investments of the other Contracting Party the advantages resulting from any customs or economic union, existing or future, or the free trade zone, to which any of the contracting parties is or becomes a member. This treatment will also not refer to the advantages that any contracting party grants to investors of a third country by virtue of an agreement to avoid double taxation or other reciprocity-based agreements relating to taxation. + Article 4 Free transfer 1. Each Contracting Party on whose territory investments have been made by the investors of the other Contracting Party shall grant those investors the free transfer of the parties relating to such investments, in particular of: a) income, according to art. 1 paragraph 3 of this Agreement; b) amounts from contracted loans or other contractual obligations assumed for the investment; and c) the amounts from the total or partial sale, disposal or liquidation of an investment. 2. If it has not been agreed otherwise with the investor, the transfers will be made at the exchange rate applicable at the date of the transfer, in accordance with the foreign exchange regulations in force of the contracting party on the territory of which the investment was made. + Article 5 Dispossession, indemnity 1. None of the Contracting Parties shall either directly or indirectly take measures of expropriation, nationalization or any other measures of this nature or with the same effect against the investments of the investors of the other Contracting Party, unless the measures are taken in the public interest, as established by law, on a non-discriminatory basis and in accordance with the legal procedure and provided that they are taken by effective and adequate compensation. This compensation will be equivalent to the market value of the expropriated investment, immediately before expropriation or before the imminent expropriation becomes publicly known, will include interest from the date of expropriation and will be freely transferable. 2. Investors of one of the contracting parties whose investments suffered losses due to war or any other armed conflict, revolution, state of necessity, rebellion, which took place in the territory of the other contracting party, shall benefit, from the latter, from a treatment in accordance with art. 3 3 paragraph 2 of this Agreement. They will be entitled, in any situation, to compensation. + Article 6 Previous Investment Agreement This Agreement shall also apply to investments legally registered and existing in the territory of a Contracting Party made by the investors of the other Contracting Party prior to the entry into force of this Agreement. However, the agreement will not apply to disputes arising before its entry into force. + Article 7 Other obligations 1. If the legislation of any Contracting Party entitles the investments of investors of the other Contracting Party to a treatment more favourable than that provided for by this Agreement, this legislation shall prevail, in so far as it is more Favorable. 2. Each Contracting Party shall comply with any other obligations it has undertaken concerning the investments made in its territory by the investors of the other Contracting Party. + Article 8 Subrogation principle If any contracting party or agency designated by it makes payments to one of its investors on the basis of any financial guarantee against non-commercial risks, which it has granted in connection with an investment from the territory of the other Contracting Party, the latter shall recognise, by virtue of the principle of subrogation, the assignment of any right or title of that investor to the first Contracting Party or to the Agency designated by it. The other contracting party will be entitled to deduct the taxes and other legal obligations due and payable by the investor. + Article 9 Differences between a Contracting Party and an investor of the other Contracting Party 1 1. For the purpose of regulating disputes concerning investments between a Contracting Party and an investor of the other Contracting Party, consultations shall take place between those Parties, with a view to resolving the case, as far as possible, by way of amiable. 2. If these consultations do not lead to a solution within 6 months from the date of the regulatory request, the investor may submit the dispute, at his or her choice, for resolution to: a) the competent court of the contracting party in whose territory the investment was made; or b) The International Centre for the Settlement of Relative Investment Differences (I.C.S.I.D.), provided by the Convention for the Settlement of Investment Disputes between States and Persons of Other States, opened for signature in Washington at 18 March 1965, after both Contracting Parties have become parties to this Convention; or c) an ad hoc arbitral tribunal, which, unless otherwise agreed between the parties to the dispute, will be constituted on the basis of the arbitration rules of the United Nations Commission for International Commercial Law (UNCITRAL). 3. The contracting party which is a party to the dispute shall never invoke in defence, during proceedings concerning disputes relating to investment, its immunity or the fact that the investor has received compensation under an insurance contract. fully or partially covering the injury or loss suffered. + Article 10 Differences between Contracting Parties 1. The differences between the Contracting Parties concerning the interpretation or application of the provisions of this Agreement shall be settled on diplomatic channels. 2. If the two Contracting Parties cannot reach an agreement within 12 months of the dispute between them, it shall, at the request of any Contracting Party, be subject to an arbitral tribunal composed of three members. Each contracting party will appoint an arbitrator, and the two arbitrators will appoint a president who will be a citizen of a third state. 3. If one of the Contracting Parties has not appointed its own arbitrator and has not followed the invitation of the other Contracting Party to make the appointment within 2 months, the arbitrator shall be appointed, at the request of this Contracting Party, by the President of the Court International Justice. 4. If both arbitrators cannot reach an agreement on the election of the President within 2 months after their appointment, it shall be appointed, at the request of any Contracting Party, by the President of the International Court of Justice. 5. If, in the cases specified in paragraphs 3 and 4 of this article, the President of the International Court of Justice is prevented from fulfilling his office or if he is a citizen of one of the Contracting Parties, the appointment shall be made by to the Vice-President and if the latter is also prevented or if he is a citizen of one of the Contracting Parties, the appointment will be made by the highest ranking judge of the Court, who is not a citizen of one of the parties Contracting. 6. In the absence of other provisions agreed by the contracting parties, the tribunal will determine its procedure 7. Each Contracting Party shall bear the expenses of the arbitrator whom it has appointed and of its representation in the arbitration proceedings. The expenditure for the President and the other expenditure shall be borne, in equal parts, by the Contracting Parties. 8. The decisions of the tribunal shall be final and binding on each Contracting Party. + Article 11 Entry into force This Agreement will enter into force 30 days after the last date on which each Contracting Party notifies the other Contracting Party, on diplomatic channels, that its legal requirements for the entry into force of this Agreement have been fulfilled. + Article 12 Duration and denunciation 1. This Agreement shall remain in force for a period of 10 years and shall continue to be in force for the same period or periods, if, one year before the expiry of the original period or any subsequent period, whichever the Contracting Party shall not notify the other Contracting Party of its intention to terminate the Agreement. 2. In the event of denunciation, the provisions of this agreement will continue to apply for a period of 10 years from the expiry date of this agreement. As for which, the undersigned, fully authorized by the respective governments, have signed this agreement. Concluded in Zagreb on 8 June 1994, in two original copies in Romanian, Croatian and English, each text being equally authentic. In case of divergence, the English text will prevail. For the Romanian Government, Nicolae Constantinescu, State Secretary at Finance Ministry For the Government of Croatia, Nadan Vidosevici, minister of economy ----------------------