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Law No. 59 Of 15 April 1999

Original Language Title:  LEGE nr. 59 din 15 aprilie 1999

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LEGE no. 59 59 of 15 April 1999 on the ratification of the Agreement between the Government of Romania and the Government of the State of Israel for the Promotion and Mutual Protection of Investments, signed in Jerusalem
ISSUER PARLIAMENT
Published in OFFICIAL MONITOR no. 182 182 of 28 April 1999



The Romanian Parliament adopts this law + Article UNIC The Agreement between the Government of Romania and the Government of the State of Israel for the promotion and mutual protection of investments, signed in Jerusalem on August 3, 1998 This law was adopted by the Senate at the meeting of February 22, 1999, in compliance with the provisions of art 74 74 para. (2) of the Romanian Constitution. p. SENATE PRESIDENT, DORU IOAN TARACILA This law was adopted by the Chamber of Deputies at its meeting on March 29, 1999, in compliance with the provisions of 74 74 para. (2) of the Romanian Constitution. p. CHAMBER OF DEPUTIES PRESIDENT, PAULA IVANESCU + AGREEMENT between the Romanian Government and the Government of the State of Israel to promote and protect The Government of Romania and the State Government of Israel, hereinafter referred to as wishing to enhance economic cooperation to the mutual benefit of both countries, intended to create favourable conditions for the development of investment by the investors of a Contracting Party in the territory of the and recognising that the promotion and mutual protection of investments on the basis of this Agreement will lead to the stimulation of the business initiative and enhance prosperity in both States, have agreed the following: + Article 1 Definitions 1 for the purposes of this Agreement: a) The term of investment shall include any assets made in accordance with the laws and regulations of the Contracting Party in whose territory the investment is made, including, but not limited to: ((i) proprietary rights to movable and immovable property, as well as any other real rights; (ii) rights arising from shares, bonds and other categories of legal participation in companies; ((iii) monetary and other assets, as well as any activity having an economic value; (iv) rights derived from goodwill, intellectual property rights, technical procedures and know-how; (v) business concessions, granted by law or by virtue of a contract, including concessions for prospecting, cultivation, extraction or exploitation of natural resources. b) A change in the form in which the assets are invested or reinvested, in accordance with the laws and legal regulations of the contracting party on whose territory the investment is made, does not affect their investment character within the meaning of this Agreement. c) The term investor will designate: On Romania: ---------------------- -any natural person who, in accordance with the law in force, has Romanian citizenship, as well as any legal person established according to the Romanian law and who has his registered office in Romania; On the State of Israel: ---------------------------- ((i) natural persons who acquire the status of a citizen or permanent resident of the State of Israel in accordance with the law in force of the State of Israel; or ((ii) companies, including corporations, firms or associations, registered or constituted in accordance with the law of the State of Israel. With regard to individuals-a person who has both Israeli citizenship and Romanian citizenship, who invests in Israel, will not be considered a Romanian investor, for the purposes of this agreement. With regard to legal entities-a legal person, constituted in accordance with Romanian law and having its main office in Romania, which is controlled, either directly or indirectly, by Israeli citizens, will not be considered an investor novel, for the purposes of this agreement d) The term income will include the amount produced by an investment, including, but not limited to: dividends, profit, interest, capital gains, royalties and fees. e) The term of the territory shall include the territory of the State of each Contracting Party, including the territorial sea, as well as the continental shelf and the exclusive economic zone, on which that State shall exercise, in accordance with with international law, sovereignty, sovereign rights or jurisdiction. + Article 2 Promoting and protecting investments 1. Each Contracting Party, on its territory, shall encourage and create favourable conditions for the investments of investors of the other Contracting Party and shall admit such investments, according to its right to exercise its powers conferred by your own laws 2. The investments made by the investors of each contracting party will be given fair and equitable treatment and they will enjoy the entire protection and security on the territory of the other contracting party. None of the Contracting Parties shall in any way prevent, by unreasonable or discriminatory measures, the management, maintenance, use, valorisation or the right to dispose of investments in its territory by investors. Other Contracting Parties 3. Each Contracting Party undertakes to ensure effective means of supporting claims and enforcement of rights in connection with this Agreement, investment and property permits. Neither of the Contracting Parties shall prevent the right of investors of the other Contracting Party from having access to the courts, tribunals and administrative institutions as well as to any other bodies exercising powers. Judicial. 4. Each Contracting Party shall publish all laws and legal regulations, which are related to or affecting the territory or investments of investors of the other Contracting Party. + Article 3 Treatment of the Most Favoured Nation 1. None of the Contracting Parties shall, in its territory, subject the investment or income of investors to the other Contracting Party to a treatment less favourable than that which is granted to the investments or income of its own investors or investments or income of investors of any third country. 2. None of the Contracting Parties shall, in its territory, subject investors to the other Contracting Party to a treatment less favourable than that which is granted to its own investors or to the investors of a third State, in what concerns management, maintenance, use, valorisation or the right to dispose of their investments. 3. The provisions of this article will not be interpreted in the sense of obliging a contracting party to extend to the investors of the other contracting party the benefit of any treatment, preference or privilege resulting from: a) any international agreement or arrangement relating, in whole or in principal, to taxation or any domestic legislation relating, in whole or in principal, to taxation; or b) any existing customs or economic union, any agreement on a free trade zone or any similar international agreement to which any contracting party is or could become a party. + Article 4 Compensation for losses 1. Investors of a Contracting Party, whose investments in the territory of the other Contracting Party suffer losses as a result of a war or other armed conflict, revolution, national state of emergency, riots, insurrections, rascoals or other similar events in the territory of the last Contracting Party, will be granted by the latter Contracting Party, in respect of the refund, compensation, compensation or other regulation, a treatment no less favourable than that which the last Contracting Party grants to its own investors or investors of any third country. The resulting payments will be freely transferable. 2. Without violating the provisions of paragraph 1 of this article, to investors of a contracting party who, in any of the situations referred to in this paragraph, suffer losses in the territory of the other contracting party, resulting from: a) requisition of their property by their forces or authorities; or b) the destruction of their property by the forces or its authorities, which was not caused by combat actions or was not required by the necessity of the situation, will be granted adequate restitution or compensation. The resulting payments will be freely transferable. + Article 5 Expropriation and Compensation 1. Investments made by investors of a contracting party in the territory of the other contracting party shall not be nationalised, expropriated or subject to measures having an effect equivalent to nationalisation or expropriation (hereinafter: expropriation), except: a) the public utility connected with the internal needs of that contracting party; b) on a non-discriminatory basis; and c) against prompt, adequate and effective compensation. 2. Despification: a) will be equal to the market value of the expropriated investment, immediately before expropriation or before the imminent expropriation becomes known publicly, whichever comes first; b) will include interest, as required by law, until the date of payment; and c) will be carried out without delay, being effectively achievable and freely transferable. 3. If the market value cannot be easily established, the compensation will be determined on the basis of fair principles, taking into account, inter alia, the invested capital, its appreciation and depreciation, the income current, replacement value and other relevant factors. 4. The affected investors shall be entitled, in accordance with the law of the Contracting Party which makes the expropriation, to a prompt review of their case, carried out by a judicial authority or by another independent authority of that party contracting, as well as the assessment of their investment, in accordance with the principles set out in this paragraph. + Article 6 Currency transfers 1. Each Contracting Party, in whose territory the investments were made by the investors of the other Contracting Party, shall guarantee those investors the free transfer of payments relating to such investments in freely convertible currency, in particular, but not exclusively, of: a) the capital and additional amounts necessary to maintain and develop the investment; b) revenues, in accordance with art. 1 lit. d) of this agreement; c) the amounts for the reimbursement of current loans, contracted and documented, with direct reference to a certain investment; d) the amounts resulting from the total or partial sale, from the disposal or liquidation of an investment; e) the compensation provided in art. 4 4 and 5; f) earnings of citizens of a contracting party, who are allowed to work, in accordance with the laws and legal regulations in force, related to an investment from the territory of the other contracting party. 2. The transfers will be made without undue delay in the convertible currency in which the capital was initially invested or in any other convertible currency agreed by the investor and the respective contracting party, at the exchange rate applicable at the date of the transfer, in accordance with the legal regulations of foreign exchange in force of the contracting party in whose territory the investment was made and provided that the investor has fulfilled all his tax obligations. If the legal foreign exchange regulations of a contracting party change, that contracting party guarantees that those changes will not affect the rights of repatriation of investments and income, but they will remain in the force as they were at the time the investment was made. However, if those changes give investment and income more favourable conditions than those that were in force at the time of the investment, the most favourable conditions will prevail. 3 3. The contracting parties undertake to grant transfers referred to in paragraphs 1 and 2 of this Article a treatment no less favourable than that granted to transfers relating to investments made by investors. any third country. + Article 7 Regulation of the Investment Disputes between a Contracting Party and an Investor 1. Any dispute between a Contracting Party and an investor of the other Contracting Party concerning an investment of that investor from the territory of the first Contracting Party shall be settled, as far as possible, amicably, through consultations and negotiations between the parties to the dispute. 2. If such a dispute arises and cannot be resolved amicably or otherwise within 6 months of the written notification of the existence of the dispute, then the affected investor may institute regulatory proceedings by addressing the dispute. an application: -either the competent court of the Contracting Party on the territory of the State where the investment was made -or international arbitration, in accordance with the provisions of paragraph 3 of this article. When the investor subdued the dispute to the competent court settlement of the contracting party on whose territory the investment was made or international arbitration, the investor shall have the right to withdraw his application from the procedure chosen and to present the dispute to the other proceedings, provided that a final and binding decision has not been given. 3. In the case of international arbitration, at the election of the interested investor, the dispute may be submitted for the settlement of the International Centre for the Settlement of Investment Disputes (hereinafter referred to as the Centre), constituted on the basis of Convention for the Settlement of Investment Disputes between States and Persons of Other States, opened for signature in Washington on 18 March 1965. 4. If the investor chooses international arbitration, the contracting party that is a party to the dispute consents by this submission for settlement of the dispute relative to the investment of such arbitration. 5. The contracting party that is a party to the dispute, at any time during the pending proceedings for the settlement of disputes relative to investments, will not be able to use, as a defense, its immunity or the fact that the investor has received compensation as following an insurance contract, covering all or part of the damage or loss. 6. No Contracting Party shall pursue on diplomatic paths any dispute transmitted to the Centre, unless: a) the Secretary-General of the Centre or a conciliation commission or an arbitral tribunal, constituted by him, decides that the dispute is not under the jurisdiction of the Centre; or b) the other contracting party refuses to submit to a judgment given by an arbitral tribunal. 7. All arbitral decisions shall be final and binding on the parties to the dispute. 8. All amounts received as a result of the regulation will be freely transferable. + 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 governed by diplomatic channels. 2. If the two Contracting Parties cannot reach a settlement within 6 months of notification of the dispute, the dispute shall be subject, at the request of any Contracting Party, to an arbitral tribunal of 3 members. Each contracting party will designate one arbitrator, and these 2 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 arbitrator and has not followed the invitation of the other Contracting Party to make this designation within two months, the arbitrator shall be designated, at the request of that Contracting Party, by the President of the Permanent Court of 4. If both arbitrators do not reach a settlement in respect of the election of the President within two months of their designation, it shall be appointed, at the request of any Contracting Party, by the President of the Permanent Court of Arbitration. 5. If, in the cases specified in paragraphs 3 and 4 of this article, the President of the Permanent Court of Arbitration is prevented from exercising that office or if he is a citizen of any Contracting Party, the appointment shall be made by vice-president, and if the latter is prevented from exercising that office or if he is a citizen of any contracting party, the appointment will be made by the highest office judge in the Court, who is not a citizen of any Contracting Party. 6. Subject to other provisions given by the Contracting Parties, the Tribunal shall determine its own procedure. 7. Each Contracting Party shall bear the expenses of the arbitrator it has designated and those of its representation in the arbitration proceedings. The expenditure for the President and the other expenditure shall be borne equally by the Contracting Parties. 8. The decisions of the tribunal shall be final and binding on each Contracting Party. + Article 9 Subrogation If a Contracting Party or the Agency designated by it (hereinafter: the first Contracting Party) makes a payment to the account of a compensation given with respect to an investment from the territory of the other Contracting Party (hereinafter: the second part contracting), the second contracting party will recognize: a) the transfer to the first contracting party, on the basis of the law or a legal transaction, of all rights and claims of the compensated party and the fact that the first contracting party is entitled to the same treatment with respect to rights and claims as well as the indemnity; and b) that the first contracting party is entitled to exercise such rights and to support such claims by virtue of subrogation and for any payment received as a result of such rights and claims, to the same extent as the indemnity. Any payments received in non-convertible currency by the first contracting party, as a result of the rights and claims acquired, will be freely usable by the first contracting party to carry out any expenditure arising on the territory of the two Contracting Parties. + Article 10 Applying other rules If the provisions of the law of any Contracting Party or the obligations under international law, currently existing or which will be established in the future between the Contracting Parties in addition to this Agreement, contain rules, either general or specific, which entitle the investment of investors of the other Contracting Party to a more favourable treatment than is provided for in this Agreement, such rules, to the extent that they will be more favourable, shall prevail over this Agreement. + Article 11 Scope of application 1 1. This Agreement shall apply to investments in the territory of a Contracting Party, carried out in accordance with the laws and its legal regulations by the investors of the other Contracting Party either before or after the entry into force of this agreement. 2. However, the differences which arose prior to the entry into force of this Agreement shall be settled in accordance with the Agreement between the Government of Romania and the Government of the State of Israel for the promotion and mutual protection of investments, signed in Jerusalem on September 2, 1991. + Article 12 Entry into force 1. Each Contracting Party shall notify the other Contracting Party of fulfilling the procedures required for the entry into force of this Agreement. This Agreement will enter into force on the date of last notification. 2. Without violating the provisions of paragraph 2 of art. 11 of this agreement, from the date of its entry into force this Agreement will replace the Agreement between the Government of Romania and the Government of the State of Israel for the promotion and mutual protection of investments, signed in Jerusalem on 2 September 1991 + Article 13 Validity and expiry This agreement will remain in place for a period of 10 years. It will then continue to be in force until the expiry of the 12-month period from the date on which any Contracting Party notifies in writing to the other Contracting Party about the termination of its validity. With regard to investments made during the validity of the agreement, its provisions will continue to be valid with respect to these investments for a period of 10 years from the expiry date and without prejudice to further application of the general rules of international law. As the undersigned, fully authorised to do so by their respective governments, they have signed this agreement. Signed in Jerusalem on August 3, 1998, the date corresponding to 11 AV. 5758, in two original copies, in Romanian, Hebrew and English, all three texts being equally authentic. In case of divergences of interpretation, the English text will prevail. For the Romanian Government, PRIME minister RADU VASILE For the Government of Israel, PRIME minister BENJAMIN NETANYAHU --------