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Law No. 38 Of 27 May 1996

Original Language Title:  LEGE nr. 38 din 27 mai 1996

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LEGE No. 38 of 27 May 1996 for the ratification of the Agreement between the Government of Romania and the Federal Government of the Federal Republic of Yugoslavia on the promotion and mutual protection of investments signed in Belgrade on 28 November 1995
ISSUER PARLIAMENT
Published in OFFICIAL MONITOR NO. 112 of 31 May 1996



The Romanian Parliament adopts this law + Article UNIC The Agreement between the Government of Romania and the Federal Government of the Federal Republic of Yugoslavia on the promotion and mutual protection of investments, signed in Belgrade on 28 November 1995, is ratified. This law was adopted by the Senate at its meeting on February 13, 1996, in compliance with the provisions of art 74 74 para. (2) of the Romanian Constitution. p. SENATE PRESIDENT ION SOLCANU This law was adopted by the Chamber of Deputies at its meeting on May 13, 1996, in compliance with the provisions of 74 74 para. (2) of the Romanian Constitution. CHAMBER OF DEPUTIES PRESIDENT ADRIAN NASTASE AGREEMENT between the Government of Romania and the Federal Government of the Federal Republic of Yugoslavia on the promotion and mutual protection The Government of Romania and the Federal Government of the Federal Republic of Yugoslavia, hereinafter referred to as Contracting Parties, wanting to enhance economic cooperation to the mutual benefit of their states, recognising the need to promote and protect foreign investment in order to increase the economic prosperity of both States, have agreed on the following: + Article 1 Definitions For purposes of this Agreement: 1. The term investment will designate any assets invested by the investors of a contracting party in the territory of the other contracting party, in accordance with the latter's legislation, and shall include, in particular, but not exclusively: (1) proprietary rights to movable and immovable property, as well as any other rights, such as: mortgages, sequestration, grovels and other similar rights; ((2) shares, bonds or any other securities, as well as any other form of participation in companies; ((3) claim rights or any other rights relating to benefits which have an economic value; (4) intellectual property rights, such as: copyrights, patents, industrial designs, trade or service marks, trade names, technical procedures, know-how and goodwil, and any other similar rights recognized by the the laws of the (5) concessions under public law, including concessions on prospecting, extraction or exploitation of natural resources, as well as other rights conferred by law. Any change in the form in which the assets are invested or reinvested will not affect their investment character. 2. The term investor will designate: (1) any natural person who, in accordance with the law of the contracting party, is considered to be its citizen; (2) any legal person, including companies, corporations, business associations and other organizations, which are constituted or otherwise organized, appropriately, in accordance with the law of that Contracting Party and which are based in the same Contracting Party. 3. The term income will designate the amounts produced by an investment and will include, in particular, but not exclusively, profits, dividends, interest, capital increases, royalties, license fees, as well as other similar fees, regardless of the form in which it is paid income. 4. The term territory shall designate the territory of the Contracting Parties, including the territorial sea and the exclusive economic zone, on which that State, in accordance with domestic and international law, exercises its sovereignty, Sovereign rights and jurisdiction. + Article 2 Promotion, admission 1. Each Contracting Party shall promote the investments made in its territory by the investors of the other Contracting Party and shall admit these investments in accordance with its legislation. 2. Each Contracting Party shall protect on its territory the investments made, in accordance with its legislation, by the investors of the other Contracting Party and shall not take any discriminatory measure against such investments. + Article 3 Investment treatment 1. 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. 2. The treatment of the most favored nation shall not be construed as an obligation of a contracting party to extend to investors and investments of the other contracting party the advantages resulting from any customs or economic union, the area of free trade or regional economic organisation, 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 agreements on the basis of reciprocity relating to taxes. + Article 4 Indemnity 1. None of the Contracting Parties shall take either directly or indirectly expropriation measures or any other measures of the same nature or effect against the investments of the investors of the other Contracting Party, unless such 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 they are taken by the granting of effective and adequate compensation. The amount of the compensation will be determined at the real value of the investment, immediately before the expropriation measure, and will be freely transferable, without undue delay. 2. Investors of a Contracting Party, whose investments in the territory of the other Contracting Party suffer losses due to war or other armed conflicts, revolution, state of necessity or insurrection, shall be granted treatment no less favourable than that accorded to the investors of the latter Contracting Party or to the investors of a third State in respect of compensation. + Article 5 Transfer 1. Each contracting party on whose territory investments have been made by the investors of the other contracting party will guarantee those investors, after payment of their tax obligations and other similar obligations, the free transfer of payments in relation to these investments, in particular: (1) capital and additional funds necessary for the maintenance and extension of the investment; (2) incomes, according to art. 1 paragraph 3 of this Agreement; ((3) the amounts coming from the total or partial sale, the alienation or the liquidation of an investment; (4) the compensation provided in art. 4 4 of this agreement. 2. The transfers shall be made in convertible currency, without undue delay, in accordance with the legislation in force of the contracting party on whose territory the investment was made, at the exchange rate applicable at the date of the transfer. + Article 6 Subrogation 1. If any contracting party or institution designated by it makes a payment to one of its investors on the basis of a financial guarantee granted against non-commercial risks, granted in connection with an investment from the territory of the other Contracting Parties, 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 institution designated by it. The other contracting party will be entitled to deduct the taxes and other obligations of a public nature due and payable by the investor. 2. The transfer of payments made in accordance with paragraph 1 of this article will also be regulated by the provisions of art. 4 4 and 5 of this agreement. + Article 7 Other privileges If the national legislation of the Contracting Parties or an international agreement to which both Contracting Parties are parties grants investment or investors to the other Contracting Party more favourable than that granted on the basis of this agreement, this treatment will prevail against this agreement. + Article 8 Regulation of disputes 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 disputes referred to in paragraph 1 of this article cannot be settled amicably within a period of 6 months from the date on which a contracting party has made a written request, they shall be subject to the arbitral tribunal, to request of one of the Contracting Parties 3. The arbitral tribunal shall be constituted ad hoc for each individual case. Each contracting party will appoint an arbitrator and these two arbitrators will, in agreement, choose as president, a national of a third state. The arbitrators shall be appointed within two months from the date on which a Contracting Party has notified the other Contracting Party of its intention to subject the dispute to the arbitral tribunal. The president will be appointed in a period of 3 months from that date. 4. 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 two months, the arbitrator shall be appointed by the President of the International Court of Justice, at the request of the latter Contracting Party. 5. If both arbitrators cannot reach an agreement on the election of the President within two months after their appointment, it shall be appointed by the President of the International Court of Justice at the request of any Contracting Party. 6. If, in the cases specified in paragraphs 4 and 5 of this article, the President of the International Court of Justice is prevented from fulfilling his office or if he is a national of a Contracting Party, the appointment shall be made by vice president, and if the latter is prevented or if it is national of one of the contracting parties, the appointment will be made by the judge of the International Court of Justice with the highest office, which is not national of a party Contracting. 7. The arbitral tribunal will decide by a majority of votes and will determine its procedure to follow in its work. 8. The decisions of the arbitral tribunal shall be final and binding on both Contracting Parties. 9. Each Contracting Party shall bear the expenses of the arbitrator whom it has appointed and of its representation in the arbitral proceedings. The expenditure of the President and the other expenditure shall be borne by the Contracting Parties in equal parts. + Article 9 Regulation of disputes between a Contracting Party and an investor of the other Contracting Party 1 1. In order to resolve disputes relating to investments between a Contracting Party and an investor of the other Contracting Party, consultations shall take place between the interested 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, to the settlement: ((1) either the competent court of the contracting party in whose territory the investment was made; (2) either the International Centre for the Regulation 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, concluded in Washington at 18 March 1965 (3) either to 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, during the proceedings relating to investment disputes, rely as a defence, its immunity or the fact that the investor has received an indemnity under an insurance contract fully or partially covering the injury or loss suffered. + Article 10 Consultations 1. The representatives of the two contracting parties shall have meetings, when necessary, for the purpose of: (1) analysis of the application of this agreement; (2) the exchange of information on investment legislation and opportunities; (3) the exchange of views on the differences in relation to investments; (4) the presentation of proposals to promote investment; (5) studying other investment issues. 2. If any Contracting Party requests consultations on any of the matters referred to in paragraph 1 of this Article, the other Contracting Party shall respond as soon as possible and consultations shall take place, Alternatively, in Romania or in the Federal Republic of Yugoslavia. + Article 11 Previous Investment Agreement This Agreement shall also apply to investments made in the territory of a Contracting Party in accordance with its legislation by the investors of the other Contracting Party prior to the entry into force of this Agreement, such investments as from the date of its entry into force. Accordingly, the agreement will not apply to the differences that arose before its entry into force. + Article 12 Entry into force This agreement is subject to ratification and will enter into force on the date of exchange of ratification instruments. + Article 13 Duration and expiration 1. This agreement will remain in force for an initial period of 10 years. After the expiry of that period of validity, the agreement will continue to be in force automatically for successive subsequent periods of 5 years, if it does not cease by the submission, by any contracting party, of a written notice, with 6 months before the expiry date. 2. For investments made prior to the expiry date of this agreement, the provisions of art. 1 1-12 will continue to be effective for a future period of 10 years after the expiry date of this agreement. As for which, the undersigned, being fully authorized by the respective governments, have signed this agreement. Concluded in Belgrade on 28 November 1995, in two original copies, each in Romanian, Serbian and English, all texts being equally authentic. In the case of differences in interpretation, the English text will prevail. For the Romanian Government, Teodor Viorel Melescanu, minister of state, minister of foreign For the Federal Government of The Federal Republic of Yugoslavia, Jovan Zebici, Deputy Prime Minister, Finance Minister --------------