On the ratification of the Agreement between the Government of the Republic of Kazakhstan and the Government of the United Arab Emirates on the Promotion and Mutual Protection of Investments

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

The Law of the Republic of Kazakhstan dated December 28, 2022 No. 171-VII SAM.

To ratify the Agreement between the Government of the Republic of Kazakhstan and the Government of the United Arab Emirates on the Promotion and Mutual Protection of Investments, signed in Abu Dhabi on March 24, 2018.

President of the Republic of Kazakhstan

K. TOKAEV

Agreement between the Government of the Republic of Kazakhstan and the Government of the United Arab Emirates on the promotion and Mutual Protection of Investments

The Government of the Republic of Kazakhstan and the Government of the United Arab Emirates, hereinafter referred to as the "Contracting Parties",

Desiring to create favorable conditions for greater economic cooperation between them, and in particular for investments by an investor of one Contracting Party in the territory of the State of the other Contracting Party,

Recognizing the need to encourage and protect investors' investments and to encourage investment inflows and individual business initiatives in accordance with the national legislation of the Contracting Party in whose territory investments are made for the purpose of economic well-being of both Contracting Parties,

taking into account that this agreement does not apply to the pre-investment period of the investment,

have agreed on the following:

Article 1 Definitions

1. The term "investment" means any type of assets directly or indirectly invested for business purposes by one Contracting Party or by an investor of one Contracting Party in the territory of the other Contracting Party in accordance with the national legislation of the State of the latter Contracting Party and, in particular, but not exclusively includes:

a) movable and immovable property and any other property rights, such as lease, pledge and mortgage;

b) shares, shares, debt obligations of the company and other forms of participation in companies;

c) intellectual property rights that are protected in accordance with the national legislation of the Contracting Party in whose territory the investment is made, including copyrights, trademarks, patents, industrial designs and technical processes, know-how, and trade secrets;

d) business concessions that are granted in accordance with a law or contract. Natural resources are not regulated by this Agreement.

Investments do not include the provision of loans in connection with commercial transactions, such as trade finance and commercial loans for the sale of goods or services.

Any change in the form in which assets are reinvested does not affect their nature as investments, provided that such a change does not contradict the issued permit.

2. The term "investor" means an individual who is a national of a State of one Contracting Party and invests in the territory of the other Contracting Party in accordance with the national legislation of the State of the latter Contracting Party and the provisions of this Agreement.:

a) in relation to the Government of the Republic of Kazakhstan:

i. citizens of Kazakhstan;

ii. a legal entity established and registered in accordance with the national legislation of the Republic of Kazakhstan, engaged in investment activities;

b) in relation to the Government of the United Arab Emirates:

i. UAE citizens;

ii. state and local executive bodies and their institutions;

iii. any legal entity or other form of organization established in accordance with the national legislation of the United Arab Emirates and engaged in investment activities.

3. The term "income" means funds received as a result of investments, including profits, interest, dividends, royalties, royalties and other remuneration.

4. The term "territory" means:

a) in relation to the Republic of Kazakhstan:

the territory of the Republic of Kazakhstan over which the Republic of Kazakhstan extends its sovereignty, and the zones within which the Republic of Kazakhstan exercises its sovereign rights and extends jurisdiction, in accordance with the national legislation of the Republic of Kazakhstan and international law;

b) in relation to the United Arab Emirates:

the territory of the United Arab Emirates and its territorial sea, the airspace, the underwater zone over which the United Arab Emirates exercises sovereignty, in accordance with international law and the legislation of the United Arab Emirates, in relation to any activity carried out in connection with the extraction and exploitation of minerals, including the exclusive economic zone, as well as land and islands located under their jurisdiction.

5. The term "freely convertible currency" means a currency widely used for making payments under international transactions and freely traded on international currency markets.

6. The term "national legislation" means laws, decrees, regulations, regulations and other legal acts of the States of the Contracting Parties.

Article 2 Investment promotion

1. In accordance with its national legislation, each Contracting Party encourages and creates favorable conditions in its territory for investments by investors of the other Contracting Party to achieve its development goals.

2. The Contracting Parties shall promote the formation and establishment of appropriate joint legal entities between investors of the Contracting Parties for the establishment and development of investment projects in various economic sectors in accordance with the national legislation of the host Contracting Party.

Article 3 Investment protection

1. Investments of investors of either Contracting Party and income are provided with full protection and security in the territory of the other Contracting Party in accordance with national legislation and this Agreement, as well as applicable norms of international law. Without prejudice to its obligations and conditions of WTO membership, no Contracting Party shall impair the management, protection, maintenance, use, possession or other forms of investment management by arbitrary, unjustified or discriminatory measures.

2. Full protection and security does not create any obligation to a Contracting Party other than that which the host State provides to its national and other foreign investments.

Article 4 National and most-favored-nation treatment

1. Each Contracting Party shall provide investors of the other Contracting Party and their investments and investment income with a regime no less favorable than the regime it provides to its investors and their investments with respect to the management, protection, maintenance, use, possession, or other forms of disposal of investments, unless otherwise provided for by national legislation.

2. Each Contracting Party reserves the right, in accordance with its national legislation, to identify sensitive sectors of the economy and/or other areas of activity that should be limited or excluded.

3. Each Contracting Party shall provide investors of the State of the other Contracting Party, their investments and income from investments with a regime no less favorable than the regime it provides to investors of a third country, their investments and income from investments in respect of management, storage, use, use or any other form of alienation of investments.

4. The provisions of this Agreement shall not be interpreted as obliging a Contracting Party to provide investors of the State of the other Contracting Party and their investments and income from investments with existing or future benefits of any regime, preference or privilege resulting from:

a) membership in a free trade area, a customs union, a monetary union, a common market for regional or bilateral cooperation, or a similar international agreement to which any of the Contracting Parties is or may become a party;

b) any international agreement or national legislation of the State of the Contracting Party relating to taxation issues.

5. The Contracting Parties reserve the right to establish or maintain the exemptions necessary to ensure national security.

6. For greater certainty, the most-favored-nation regime does not apply to procedural and judicial matters.

Article 5 Compensation for damages and losses

1. When investments made by investors of one Contracting Party have suffered losses in the territory of the State of the other Contracting Party as a result of war or other armed conflicts, rebellion, insurrection, mutiny or other similar events, the latter Contracting Party shall grant in respect of restitution, compensation or other compensation a regime no less favorable than that provided to investors of its State or investors any third country.

2. Any investor of the State of one Contracting Party who, in any of the cases referred to in paragraph 1 of this Article, incurs losses as a result of:

(a) The requisition of his investments or part thereof by the armed forces or authorities of another Contracting Party, or

b) destruction of investments or parts thereof by the armed forces or authorities of the State of the other Contracting Party, which were not required by the necessity of the situation,

On the ratification of the Agreement between the Government of the Republic of Kazakhstan and the Government of the United Arab Emirates on the Promotion and Mutual Protection of Investments

The Law of the Republic of Kazakhstan dated December 28, 2022 No. 171-VII SAM.

President of the Republic of Kazakhstan

K. TOKAEV

Agreement between the Government of the Republic of Kazakhstan and the Government of the United Arab Emirates on the promotion and Mutual Protection of Investments

The Government of the Republic of Kazakhstan and the Government of the United Arab Emirates, hereinafter referred to as the "Contracting Parties",

taking into account that this agreement does not apply to the pre-investment period of the investment,

have agreed on the following:

Article 1 Definitions

a) movable and immovable property and any other property rights, such as lease, pledge and mortgage;

b) shares, shares, debt obligations of the company and other forms of participation in companies;

d) business concessions that are granted in accordance with a law or contract. Natural resources are not regulated by this Agreement.

Investments do not include the provision of loans in connection with commercial transactions, such as trade finance and commercial loans for the sale of goods or services.

Any change in the form in which assets are reinvested does not affect their nature as investments, provided that such a change does not contradict the issued permit.

a) in relation to the Government of the Republic of Kazakhstan:

i. citizens of Kazakhstan;

ii. a legal entity established and registered in accordance with the national legislation of the Republic of Kazakhstan, engaged in investment activities;

b) in relation to the Government of the United Arab Emirates:

i. UAE citizens;

ii. state and local executive bodies and their institutions;

iii. any legal entity or other form of organization established in accordance with the national legislation of the United Arab Emirates and engaged in investment activities.

3. The term "income" means funds received as a result of investments, including profits, interest, dividends, royalties, royalties and other remuneration.

4. The term "territory" means:

a) in relation to the Republic of Kazakhstan:

b) in relation to the United Arab Emirates:

5. The term "freely convertible currency" means a currency widely used for making payments under international transactions and freely traded on international currency markets.

6. The term "national legislation" means laws, decrees, regulations, regulations and other legal acts of the States of the Contracting Parties.

Article 2 Investment promotion

Article 3 Investment protection

2. Full protection and security does not create any obligation to a Contracting Party other than that which the host State provides to its national and other foreign investments.

Article 4 National and most-favored-nation treatment

b) any international agreement or national legislation of the State of the Contracting Party relating to taxation issues.

5. The Contracting Parties reserve the right to establish or maintain the exemptions necessary to ensure national security.

6. For greater certainty, the most-favored-nation regime does not apply to procedural and judicial matters.

Article 5 Compensation for damages and losses

2. Any investor of the State of one Contracting Party who, in any of the cases referred to in paragraph 1 of this Article, incurs losses as a result of:

(a) The requisition of his investments or part thereof by the armed forces or authorities of another Contracting Party, or

b) destruction of investments or parts thereof by the armed forces or authorities of the State of the other Contracting Party, which were not required by the necessity of the situation,

Compensation must be provided in accordance with paragraph 1 of this Article by the last Contracting Party in respect of restitution, reparation or compensation in accordance with the national legislation of its State, which must be adequate, prompt and effective.

Article 6 Nationalization and expropriation

1. Investments made by investors of one Contracting Party in the territory of the other Contracting Party may not be nationalized, expropriated, requisitioned or subjected to direct or indirect measures, the result of which is equivalent to nationalization, expropriation or requisition (hereinafter referred to as expropriation), with the exception of measures taken by:

a) for public purposes;

b) in a non-discriminatory manner;

c) in accordance with due process of law;

d) with the payment of adequate, prompt and effective compensation in accordance with paragraph 3 of this article.

2. The investor has the right to apply to the administrative or judicial authorities in order to verify that the expropriation was carried out in accordance with the national legislation of the Contracting Party receiving the investment.

3. Compensation resulting from expropriation must be equal to the sum of the value of the expropriated investments and be determined on the basis of the fair market value of the expropriated investments at the time immediately preceding the expropriation or before the impending expropriation became generally known, whichever occurred earlier. The market value should be determined in accordance with the national legislation of the Contracting Party receiving the investment.

4. Compensation must be paid in freely convertible currency and without any delay, including interest at the commercial rate established on a market basis for the currency of payment from the date of expropriation of the property to the date of actual payment.

5. The provisions of paragraph 1 of this article shall also apply to current income from investments and proceeds from liquidation in the event of liquidation.

6. It is understood that there is no intention of both Contracting Parties to nationalize or expropriate investments of the other Contracting Party in their territories. The Contracting Parties have agreed to consider providing additional guarantees against expropriation and nationalization for each investment project within the framework of a separate agreement to be signed between the Contracting Parties.

Article 7 Transfer of capital and income

1. Each Contracting Party in whose territory investments of investors from the State of the other Contracting Party have been made, after fulfilling all tax obligations under the Convention between the two Contracting Parties for the Avoidance of Double Taxation and the Prevention of Fiscal Evasion with respect to Taxes on Income, signed on December 22, 2008, must provide these investors in accordance with the national legislation of the State of the Contracting Party The Parties freely transfer payments related to investments, which includes:

a) initial capital and any additional amounts to maintain, manage and increase investments;

b) income;

c) payments under the contract made in accordance with the loan agreement;

d) income received from the total or partial liquidation or sale of investments, including shares;

e) salaries and other remuneration of personnel employed abroad in connection with investments;

(e) Compensation payments payable in accordance with articles 5 and 6 of this Agreement.

2. Transfers of payments referred to in paragraph 1 of this article shall be carried out without delay and restrictions in freely convertible currency. In case of unjustified delay of the required transfers, the affected investor is paid interest at the commercial rate established on a market basis for the given currency.

3. Transfers are carried out in accordance with the market exchange rate of the State receiving investments, effective on the day of transfer.

Article 8 Restriction of transfer

Without prejudice to the provisions of Article 7 of this Agreement, a Contracting Party may restrict the transfer after prior notification to the other Contracting Party through the fair, non-discriminatory and fair application of national legislation concerning:

1) bankruptcy, insolvency or protection of creditors' rights;

2) issue, sale or transaction with securities;

3) ensuring the execution of orders or court decisions in judicial or administrative proceedings;

4) taking protective measures for the required period of time, which can be taken in exceptional circumstances, such as serious balance of payments difficulties and external financial difficulties, without violating the articles of Agreement of the International Monetary Fund, adopted on July 22, 1944 in Bretton Woods.

Article 9 Subrogation

1. If a Contracting Party or its authorized body makes payments in accordance with a guarantee (insurance contract) given in respect of an investor's investments in the territory of the other Contracting Party, the other Contracting Party recognizes:

a) transfer of any rights or claims of such investor to the first Contracting Party or its authorized body in accordance with national legislation or insurance contract;

b) that the first Contracting Party or its authorized body is authorized to exercise the rights and claims to the same extent as their predecessor;

and assumes obligations related to investments on the basis of subrogation.

2. The rights or claims specified in paragraph 1 of this article shall not exceed the original rights or claims of the investor.

3. Subrogation must take place after the prior consent of the Contracting Party in whose territory the investments are made.

Article 10 Settlement of investment disputes between an investor and a Contracting Party

1. Any dispute concerning investments between one Contracting Party and an investor of the other Contracting Party should, if possible, be settled amicably through negotiations, consultations, mediation or any other dispute settlement mechanism.

2. To start negotiations, the investor sends a written notification to the Contracting Party, which must specify:

a) the name and address of the disputing investor;

b) the provisions of this Agreement that have been violated in the investor's opinion;

c) the factual and legal grounds for the claim;

d) the means of judicial protection and the amount of the claimed damage.

3. If the dispute cannot be resolved in writing within six (6) months from the date of its occurrence, it shall, at the discretion of the parties to the dispute, be submitted for consideration to:

a) the competent courts of the State of the Contracting Party in whose territory the investment is made, or

b) arbitration of the International Center for Settlement of Investment Disputes, established in accordance with the Convention on Settlement of Investment Disputes between States and Citizens of Other States, opened for signature in Washington on March 18, 1965 (hereinafter referred to as arbitration).

4. Each Contracting Party hereby agrees to submit the dispute between it and the investor of the State of the other Contracting Party to arbitration in accordance with this article.

5. None of the Contracting Parties, being a party to the dispute, may raise objections at any stage of the arbitration proceedings or the enforcement of the award, or indicate that the investor, being a Contracting Party to the dispute, has received compensation covering part or all of the losses due to insurance.

6. The decision of the arbitration court is final and binding, provided that the requirement of articles 48 to 53 of the Convention of the International Center for Settlement of Investment Disputes is fulfilled. Each Contracting Party shall ensure the recognition and enforcement of an arbitral award in accordance with the laws of its States.

7. The decision is carried out in accordance with the national legislation of the State of the Contracting Party in whose territory the decision is made by the competent authority of the State of the Contracting Party.

Article 11 Settlement of disputes between the Contracting Parties

1. Disputes between the Contracting Parties concerning the interpretation and application of this Agreement shall, if possible, be resolved through diplomatic channels through negotiations and consultations.

2. If disputes between the Contracting Parties cannot be settled within six (6) months after receiving the first written request for negotiations and consultations in accordance with paragraph 1 of this Article, the dispute must, at the request of one Contracting Party, be submitted to an arbitration court consisting of three members.

3. The arbitral tribunal shall be established for each case as follows: within two (2) months from the date of the official request for arbitration, each Contracting Party shall appoint one arbitrator. These two arbitrators then select a third-Party national as the chairman of the court after the agreement of both Contracting Parties. The Chairman is appointed within two (2) months after the date of appointment of the other two arbitrators.

4. If the necessary appointments have not been made during the period referred to in paragraph 3 of this Article, any Contracting Party may invite the President of the International Court of Justice in his personal and individual capacity to make the necessary appointments. If the President is a national of a State that cannot be considered neutral and relative to the dispute, or another circumstance prevents the performance of the specified function, the Vice-President or the next-oldest member of the International Court of Justice, who is not a national of the State or another circumstance does not prevent the performance of the specified function, must make the necessary appointments.

5. The Arbitration court shall make a decision by a majority vote. The court's decision is final and binding on both Contracting Parties. Each Contracting Party shall bear the costs of its designated member and its representation in the arbitration process. Both Contracting Parties shall bear the expenses of the Chairman, as well as other expenses, which must be shared equally by both Contracting Parties. In all other cases, the arbitration court determines its own rules of procedure.

6. The decision is made in writing and must contain the applicable factual and legal conclusions and be delivered to each Contracting Party.

Article 12 Application to investments

This Agreement applies to all investments that were made by investors of either Contracting Party in the territory of the other Contracting Party before and after the entry into force of this Agreement, and does not apply to any dispute or claim related to investments that arose and/or were settled before the entry into force of this Agreement.

Article 13 Consultation

The Contracting Parties shall consult on any issue related to the application of this Agreement, including the settlement of investment disputes. These consultations are conducted at the request of one of the Contracting Parties at a place and time agreed through diplomatic channels.

Article 14 Amendments

1. By mutual agreement of the Contracting Parties, amendments and additions may be made to this Agreement, which are formalized in separate protocols and are integral parts of this Agreement.

2. Proposals of any Contracting Party on amendments and additions to this Agreement shall be submitted in writing through diplomatic channels and contain the justifications on the basis of which the amendments and additions have been prepared.

Article 15 Requirements for carrying out activities

Without prejudice to its obligations and conditions of WTO membership, no Contracting Party should impose on its territory mandatory measures on investments of investors of the other Contracting Party in relation to the purchase of materials, means of production, operation, transportation, marketing of its products or similar purchases with discriminatory consequences.

Article 16 Refusal to grant benefits

1. A Contracting Party may refuse to grant the benefits of this Agreement to an investor if he acquires the citizenship of a third Party in order to obtain benefits from this Agreement that would not be available to him otherwise by forming a legal entity for such a purpose.

2. The presentation of the benefits of this Agreement may also be refused to an investor who has invested through mediation.

Article 17 Entry into force

This Agreement shall enter into force on the fifteenth (15th) day after receipt through diplomatic channels of the last of the written notifications on the completion of the internal procedures necessary for the entry into force of this Agreement.

Article 18 Period of validity and termination

1. This Agreement is concluded for a period of ten (10) years, and will be automatically extended for other ten (10) years, and remains in force for one (1) year prior to the expiration of the initial or any subsequent ten-year (10) period from the date of written notification by one Contracting Party through the diplomatic channels of the other Contracting Party. about her intention to terminate this Agreement.

2. With respect to investments made prior to the date of termination of this Agreement, the provisions of articles 1-18 of this Agreement shall remain in force for a further ten-year (10) period from the date of termination of this Agreement.

Done in Abu Dhabi on March 24, 2018, in two copies each in the Kazakh, Arabic, English and Russian languages, all texts being equally authentic. In case of different interpretation of the provisions of this Agreement, the Contracting Parties shall refer to the English text.

For the Government

Republic of Kazakhstan

For the Government

United Arab Emirates

President

Republic of Kazakhstan

Constitution Law Code Standard Decree Order Decision Resolution Lawyer Almaty Lawyer Legal service Legal advice Civil Criminal Administrative cases Disputes Defense Arbitration Law Company Kazakhstan Law Firm Court Cases