AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINAAND THE GOVERNMENT OF THE STATE OF ISRAEL FOR THE PROMOTION AND RECIPROCALPROTECTION OF INVESTMENTS
AGREEMENT BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINAAND THE GOVERNMENT OF THE STATE OF ISRAEL FOR THE PROMOTION AND RECIPROCALPROTECTION OF INVESTMENTS
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The Government of the People's Republic of China and the Government of
the State of Israel (hereinafter referred to as the Contracting Parties),
DESIRING to intensify the economic cooperation of both States on the
basis of equality and mutual benefits,
INTENDING to create favorable conditions for greater investments by
investors of either Contracting Party in the territory of the other
Contracting Party,
and,
RECOGNIZING that the encouragement and reciprocal protection of
investment on the basis of the present Agreement will be conducive to the
stimulation of individual business initiative and will increase prosperity
in both states,
have agreed as follows:
Article 1 Definitions
For the purposes of the present Agreement:
1. The term "investments" shall comprise any kind of assets,
implemented in accordance with the laws and regulations of the Contracting
Party in whose territory the investment is made, including, but not
limited to:
a) movable and immovable property;
b) right derived from shares, debentures and other kinds of interests
in companies;
c) claims to money and other assets and to any performance having an
economic value;
d) rights in the field of intellectual property, technical processes,
goodwill and know-how;
e) business concessions conferred by law or under contract, permitted
by law, including concessions to search for, cultivate, extract or
exploit natural resources.
2. A change in the form in which assets are invested or reinvested, in
accordance with the laws and regulations of the Contracting Party in whose
territory the investment is made, does not affect their character as
investments within the meaning of this Agreement.
3. The term "investor" shall comprise:
a)natural persons who are nationals of the Contracting Party concerned
from the law in force in that Contracting Party, who are not also
nationals of the other Contracting Party, or
b)companies including corporations, firms or associations incorporated
or constituted in accordance with the law of the Contracting Party
concerned.
4. The term "returns" shall comprise the amount yielded by an
investment including, but not limited to: dividends, profit, interest,
capital gains, royalties or fees.
5. This Agreement shall also apply to investments made by investors of
one Contracting Party in the territorial sea or maritime zone or on the
Continental Shelf where the other Contracting Party exercises its
sovereignty or sovereign rights or jurisdiction, under international law.
Article 2 Promotion and Protection of Investments
1. Each Contracting Party shall, in its territory, encourage and
create favorable conditions for investments by investors of the other
Contracting Party and, subject to its right to exercise the powers
conferred by its laws, shall admit such investments.
2. Investments made by investors of each Contracting Party shall be
accorded fair and equitable treatment and shall enjoy full protection and
security in the territory of the other Contracting Party. Neither
Contracting Party shall, without prejudice to its laws and regulations, in
any way impair by unreasonable or discriminatory measures the management,
maintenance, use, enjoyment or disposal of investments in its territory
of investors of the other Contracting Party.
3. Each Contracting Party shall, subject to and in accordance with its
laws and regulations and the procedures and practices thereunder, grant
assistance in and provide facilities for obtaining visas and working
permits to nationals of the other Contracting Party to or in the territory
of the former in connection with such investments.
Article 3 Most Favoured Nation Treatment
1. Neither Contracting Party shall, in its territory, subject
investments or returns of investors of the other Contracting Party to
treatment less favorable than that which it accords to investments or
returns of investors of any third state.
2. Neither Contracting Party shall, in its territory, subject
investors of the other Contracting Party, as regards their management,
maintenance, use, enjoyment or disposal of their investments, to treatment
less favorable than that which it accords to investors of any third state.
Article 4
1. Investors of one Contracting Party whose investments in the
territory of the other Contracting Party suffer losses owing to war or
other armed conflict, revolution, a state of national emergency, revolt,
insurrection, riot or other such similar activity in the territory of the
latter Contracting Party shall be accorded by the latter Contracting Party
treatment regarding compensation no less favorable than that which the
latter Contracting Party accords to investors of any third state.
2. Without prejudice to paragraph (1) of this Article, investors of
one Contracting Party who, in any of the situations referred to in that
paragraph, suffer losses in the territory of the other Contracting Party,
resulting from:
(a) requisitioning of their property by its forces or authorities, or
(b) destruction of their property by its forces or authorities, which
was not caused in combat action or was not required by the necessity of
the situation, shall be accorded restitution or reasonable compensation.
3. Resulting payments under this Article shall be freely transferable.
Article 5 Expropriation
1. Investments of investors of either Contracting Party shall not be
nationalized, expropriated or subjected to measures having effect
equivalent to nationalization or expropriation (hereinafter:
"expropriation") in the territory of the other Contracting Party, except
for a public purpose related to the internal needs of that Contracting
Party on a non-discriminatory basis and against reasonable compensation.
Such compensation shall amount to the market value of the investment
expropriated immediately before the expropriation or before the impending
expropriation became public knowledge, whichever is the earlier, shall
include interest as provided by law until the date of payment, shall be
made without undue delay, be effectively realizable and be freely
transferable. The investors affected shall have a right, under the law of
the Contracting Party making the expropriation, to prompt review, by a
judicial or other independent authority of that Contracting Party, of his
or its case and of the valuation of his or its investment, in accordance
with the principles set out in this paragraph.
2. Where a Contracting Party expropriates the assets of a company,
within the meaning of Article 1 (3), which is incorporated or constituted
under the law in force in its territory and in which investors of the
other Contracting Party own shares, or other ownership rights, it shall
ensure that the provisions of paragraph (1) of this Article are applied to
the extent necessary to guarantee reasonable compensation, as provided for
above, in respect of their investment to such investors of the other
Contracting Party who are owners of those shares or other ownership
rights.
Article 6 Repatriation of Investment and Returns
Each Contracting Party shall, subject to its laws and regulations,
guarantee to investors of the other Contracting Party all the rights and
benefits regarding the unrestricted transfer of their investments and
returns which were in force on the day the current investment was
implemented; provided, however, that the investor has complied with all
his fiscal obligations and has fulfilled all the requirements of the
exchange regulations. Transfers shall be effected without undue delay in
the convertible currency in which the capital was originally invested or
in any other convertible currency agreed by the investor and the
Contracting Party concerned. Unless otherwise agreed by the investor,
transfers shall be made at the rate of exchange applicable on the date of
transfer pursuant to the exchange regulations in force.
Article 7 Exceptions
The provisions of this Agreement relative to the grant of treatment
not less favorable than that accorded to the investors of either
Contracting Party or of any third state shall not be construed so as to
oblige one Contracting Party to extend to the investors of the other the
benefit of any treatment, preference or privilege resulting from:
(a) any international agreement or arrangement relating wholly or
mainly to taxation or any domestic legislation relating wholly or mainly
to taxation;
(b) any customs union, free trade area agreement or similar
international agreement to which either Contracting Party is or becomes a
party.
Article 8 Disputes Between an Investor and a Contracting Party
1. Any dispute with respect to the amount of compensation in the case
of expropriation may be submitted to the International Centre for
Settlement of Investment Disputes for resolution, as follows:
(a) Each Contracting Party hereby consents to submit to the
International Centre for the Settlement of Investment Disputes
(hereinafter: the "Centre") for settlement by conciliation or arbitration
under the Convention on the Settlement of Investment Disputes between
States and Nationals of Other States opened for signature at Washington on
18 March 1965 any legal dispute arising between that Contracting Party and
an investor of the other Contracting Party concerning the amount of
compensation in the case of expropriation.
(b) If any such dispute should arise and cannot be resolved,
amicably, within six (6) months from written notification of the existence
of the dispute, then the investor affected may institute conciliation or
arbitration proceedings by addressing a request to that effect to the
Secretary-General of the Centre, as provided in Article 28 or 36
respectively of the Convention.
2. All arbitral awards shall be final and binding on the parties to
the dispute.
3. All sums received as a result of a settlement shall be freely
transferable.
Article 9 Disputes Between the Contracting Parties
1. Disputes between the Contracting Parties concerning the
interpretation or application of this Agreement should, if possible, be
settled through the diplomatic channel, which may include, if both Parties
so desire, referral to a Bilateral Commission composed of representatives
of both Contracting Parties.
2. If a dispute between the Contacting Parties cannot thus be settled
within six (6) months from notification of the dispute, it shall, upon
the request of either Contracting Party, be submitted to an arbitral
tribunal.
3. Such an arbitral tribunal shall be constituted for each individual
case in the following way: Within four months of the receipt of the
request for arbitration, each Contracting Party shall appoint one member
of the tribunal. Those two members shall then select a national of a third
State who, on approval by the two Contracting Parties, shall be appointed
Chairman of the Tribunal. The Chairman shall be appointed within four
months from the date of appointment of the other two members, and shall
not be a national of either Contracting Party.
4. The arbitral tribunal shall reach its decision by a majority of
votes. Such decision shall be binding on both Contracting Parties. Each
Contracting Party shall bear the cost of its own member of the tribunal
and of its representation in the arbitral proceedings; the cost of the
Chairman and the remaining costs shall be borne in equal parts by the
Contracting Parties. The tribunal shall determine its own procedure.
Article 10 Subrogation
1. If one Contracting Party or its designated Agency (hereinafter: the
"First Contracting Party") makes a payment under an indemnity given in
respect of an investment in the territory of the other Contracting Party
(hereinafter: the
"Second Contracting Party"), the Second Contracting Party shall
recognize:
(a) The assignment to the First Contracting Party by law or by legal
transaction of all the rights and claims of the party indemnified; and
(b) That the First Contracting Party is entitled to exercise such
rights and enforce such claims by virtue of subrogation, to the same
extent as the party indemnified.
2. The First Contracting Party shall be entitled in all circumstances
to:
(a) the same treatment in respect of the rights and claims acquired by
it, by virtue of the assignment; and
(b) any payments received in pursuance of those rights and claims, as
the party indemnified was entitled to receive by virtue of this Agreement,
in respect of the investment concerned and its related returns.
3. The First Contracting Party shall assume all the obligations
related to the investment.
4. Any payments received by the First Contracting Party, in pursuance
of the rights and claims acquired, shall be freely available to the First
Contracting Party for the purpose of meeting any expenditure incurred in
the territory of the Second Contracting Party.
Article 11 Application of Other Rules
If the provisions of law of either Contracting Party or obligations
under international law existing at present or established hereafter
between the Contracting Parties in addition to the present Agreement
contain rules, whether general or specific, entitling investments by
investors of the other Contracting Party to a treatment more favorable
than is provided for by the present Agreement, such rules shall to the
extent that they are more favorable prevail over the present Agreement.
Article 12 Application to Investments
The provisions of this Agreement shall apply to the rights and
obligations of both Contracting Parties with respect to investments made
on or before the date of entry into force of this Agreement.
Article 13 Entry into Force
Each Contracting Party shall notify the other Contracting Party of the
completion of the procedures required for bringing this Agreement into
force. This Agreement shall enter into force on the date of the latter
notification.
Article 14 Duration and Termination
This Agreement shall remain in force for a period of 5 years.
Thereafter, it shall continue in force until the expiration of 12 months
from the date on which either Contracting Party shall have given written
notice of termination to the other. In respect of investments made while
this Agreement is in force, its provisions shall continue in effect with
respect to such investments for a period of 10 years after the date of
termination.
In witness whereof the undersigned, duly authorized thereto by their
respective Governments, have signed this Agreement.
Done at Beijing this 10th day of April 1995, which corresponds to the
10 of Nissan, 5755, in duplicate, in the Chinese, Hebrew and English
languages, all three texts being equally authentic.
In case of differences of interpretation, the English text shall
prevail.
FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF
THE PEOPLE'S REPUBLIC OF CHINA THE STATE OF ISRAEL
Protocol
At the time of signing the Agreement between the Government of the
People's Republic of China and the Government of the State of Israel for
the Promotion and Reciprocal Protection of Investments, the undersigned,
duly authorized by their respective governments, have in addition, agreed
upon the following provisions:
1. Article 1, paragraph 3:
(a) With regards to all aspects of this Agreement, an Israeli
permanent resident enjoys the same rights and obligations as Israeli
national, and shall therefore, for the purposes of this Agreement, be
considered an Israeli national.
(b) Companies of one Contracting Party wishing to invest in the
territory of the other Contracting Party shall not be considered for the
time being as investors of the first Contracting Party, if they are owned
or controlled directly or indirectly by companies of the second
Contracting Party.
2. Article 6: The representatives of the Government of the State Israel
stipulated that the State of Israel entered into several Investment
Agreements prior to January 1, 1992 which contained language different
from that contained in the Agreement between the Contracting Parties.
The process of modifying those prior Agreements has begun, so as to
conform to the language of this Agreement. The Contracting Parties have
agreed that the procedures for bringing this Agreement into force will be
undertaken after the prior Agreements have been so modified.
3. Article 10: The Contracting Parties shall construe this Article as
including the following:
(a) In the event of a dispute between an investor and a Contracting
Party, the Contracting Party which is a party to the dispute shall not
raise as an objection at any stage of the proceedings or enforcement of an
award the fact that the investor which is the other party to the dispute
has received, in pursuance of an insurance contract, an indemnity in
respect of some or all of his or its losses, unless the investor has
assigned his or its rights and claims to the First Contracting Party
according to this Article.
This protocol shall be an integral part of the Agreement between
Government of the People's Republic of China and the Government of State
of Israel for the Promotion and Reciprocal Protection Investments.
Done in duplicate at Beijing on this 10th day of April, 1995, which
corresponds to the 10th day of Nissan, 5755 in the Chinese, Hebrew and
English languages, all three texts being equally authentic. In case of
divergence of interpretation, the English text shall prevail.
FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF
THE PEOPLE'S REPUBLIC OF CHINA THE STATE OF ISRAEL
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