Agreement on the Encouragement and Reciprocal Protection of In-vestments between the Government of the People's Republic of China and theGovernment of the Republic of Korea
Agreement on the Encouragement and Reciprocal Protection of In-vestments between the Government of the People's Republic of China and theGovernment of the Republic of Korea
Whole Doc.
The Government of the People's Republic of China and the Government
of the Republic of Korea (hereinafter referred to as "the Contracting
Parties"),
Desiring to strengthen economic cooperation between the two States,
Intending to create favourable conditions for investment by investors
of each State within the territory of the other State by means of the
favourable treatment and the protection accorded by each Contracting Party
to investment, business activities in connection therewith, and
Recognizing that the encouragement and reciprocal protection of
investment will stimulate economic and technological exchanges between the
two States,
Have agreed as follows:
Article 1
For the purposes of the present Agreement:
(1) The term "investments" means every kind of asset, used as
investment by investors of one State within the territory of the other
State, in accordance with the applicable laws and regulations of the other
State at the time of investment and shall include, in particular, though
not exclusively:
((1)) movable and immovable property as well as any other property
rights, such as mortgages, liens, pledges, usufruct and similar rights;
((2)) shares, stocks, bonds and debentures or any other forms of
participation in a company, business enterprise or joint venture;
((3)) claims to money or to any performance having an economic value
associated with an investment;
((4)) intellectual property rights, including copyrights, trademarks,
patents, industrial designs, technical processes, know-how, trade secrets
and trade names, and goodwill;
((5)) any right conferred by law or under contract and any licenses
and permits pursuant to law, including the right to search for, extract,
cultivate or exploit natural resources.
Any alteration of the form in which assets are invested shall not
affect their classification as investment.
(2) The term "returns" means the amounts yielded by an investment,
and, in particular, though not exclusively, includes profit, interest,
capital gains dividends, royalties and fees.
Returns from investments and, in the case of their reinvestments,
returns from those reinvestments shall enjoy the same protection as
investments.
(3) The term "investors" means nationals or companies of one State
who invest in the territory of the other State.
((1)) The term "nationals" means, in relation to one Contracting
Party, physical persons possessing the nationality of that State.
((2)) The term "companies" means,
(a) in relation to the People's Republic of China, enterprises, other
economic organizations and associations; and
(b) in relation to the Republic of Korea, corporations, partnerships,
companies and associations whether or not with limited liability, whether
or not with legal personality and whether or not for pecuniary profit.
Companies constituted under the applicable laws and regulations of
one State and having their seat within its territory shall be deemed
companies of that State.
Article 2
(1) Each Contracting Party shall within the territory of its own
State promote as far as possible investment by investors of the other
State and shall enable such investment to get admission in accordance with
the applicable laws and regulations of the former State.
(2) Investors of either State shall within the territory of the other
State be accorded treatment no less favourable than that accorded to
investors of third State in respect of the admission of investment and the
matters in connection therewith.
(3) Nationals of either State who wish to enter the territory of the
other State and to remain therein for the purpose of making investment and
carrying on business activities in connection therewith, shall be given
sympathetic consideration to their applications for the entry, sojourn and
residence in that State as well as to the applications for licenses and
permits to conduct business activities, in accordance with the applicable
legislation of that State.
Article 3
(1) Investors of either State shall within the territory of the other
State be guaranteed treatment no less favourable than that accorded to
investors of any third State, with respect to investments, returns and
business activities in connection with the investment.
(2) Investors of either State shall within the territory of the other
State be guaranteed treatment no less favourable than that accorded to
investors of the latter State, with respect to investments, returns and
business activities in connection with the investment.
(3) The term "business activities in connection with the investment"
referred to in the provisions of the present Article shall include, in
particular, though not exclusively:
((1)) the maintenance of branches, agencies, offices, factories and
other establishments appropriate to the conduct of business activities;
((2)) the control and management of companies which they have
established or acquired;
((3)) the employment and discharge of specialists including technical
experts, executive personnel and attorneys, and other workers;
((4)) the making and performance of contracts.
(4) The provisions of Paragraph 1 of this Article shall not be
construed so as to oblige one State to extend to investors of the other
State the benefit of any treatment, preference or privilege which may be
extended by the former State by virtue of:
((1)) any existing or future customs union or free trade area or a
common external tariff area or a monetary union or a similar international
agreement or other forms of regional cooperation to which either of the
State is or may become a party; or
((2)) any international agreement or arrangement relating wholly or
mainly to taxation.
Article 4
Treatment accorded to investors of either State within the territory
of the other State with respect to access to the courts of justice and
administrative tribunals and authorities both in pursuit and in defence of
their rights shall not be less favourable than that accorded to investors
of the latter State or to investors of any third State.
Article 5
(1) Investments and returns of investors of either State shall
receive the most constant protection and security within the territory of
the other State.
(2) Investments and returns of investors of either State shall not be
nationalised, expropriated or subjected to measures having effect
equivalent to nationalisation or expropriation (hereinafter referred to as
"expropriation") in the territory of the other State except for a public
purpose on a non-discriminatory basis. The expropriation shall be carried
out in accordance with the applicable laws and regulations and against
compensation.
(3) Such compensation referred to in the Paragraph 2 of this Article
shall be computed on the basis of the market value of the investment
immediately prior to the point of time when the decision for expropriation
was announced or becomes known. Where the market value can not be readily
ascertained, the compensation shall be determined in accordance with
generally recognized principles of valuation and on equitable principles
taking into account, inter alia, the capital invested, depreciation,
capital already repatriated, and other relevant factors. Such compensation
shall be made without delay, shall include interest at an appropriate rate
from the date of expropriation until the date of payment, and shall be
effectively realizable and freely transferable at the official exchange
rate in effect on the date used for the determination of amount of
compensation.
(4) Investors of either State shall within the territory of the other
State be guaranteed treatment on a non-discriminatory basis with respect
to the matters set forth in the provisions of Paragraphs 1 to 3 of the
present Article.
(5) The investor affected shall have the right, under the law of the
State making the expropriation, to prompt review by competent courts of
justice or administrative tribunals or authorities of that State,
concerning such measures set out in Paragraphs 2, 3 and 4 of this Article,
and amount of compensation.
(6) Where either State expropriates the assets of a company which is
incorporated or constituted under the law in force in any part of its own
territory, and in which the investors of the other State own shares, the
provisions of this Article shall apply.
Article 6
(1) Investors of either State whose investments in the territory of
the other State suffer losses of their investments owing to any armed
conflict, a State of national emergency or civil disturbances in the
territory of the latter State shall be accorded by the latter Contracting
Party treatment, as regards restitution, indemnification, compensation or
other settlement, no less favourable 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 State who in any of the events referred to in that paragraph suffer
damage or loss in the territory of the other State resulting from:
((1)) requisition of their property by its forces or authorities;
((2)) 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 fair and reasonable compensation for the damage or
loss sustained during the period of the requisition or as a result of the
destruction of the property.
(3) Resulting payments from compensation in Paragraphs 1 and 2 of
this Article shall be made without delay and be freely transferable at the
exchange rate determined in accordance with the official exchange rate in
force, on the date of determining the amount of compensation.
Article 7
If either Contracting Party or its designated agency makes payment to
the investors of its own State under a guarantee it has accorded in
respect of an investment in the territory of the other State, the other
Contracting Party shall recognize:
(1) the assignment, whether under the law or pursuant to a legal
transaction in that State, of any right or claim by the investors to the
former Contracting Party or its designated agency as well as,
(2) that the former Contracting Party or its designated agency is
entitled by virtue of subrogation to exercise the rights and enforce the
claims of that investor and shall assume the obligations related to the
investment.
Article 8
(1) Investors of either State shall, in accordance with the
applicable laws and regulations of the other State, be guaranteed in
respect of the investment, the transfer out of the territory without delay
in any freely convertible currency of, in particular, though not
exclusively:
((1)) the net profits, dividends royalties, technical assistance and
technical service fees, interest and other current income, accruing from
any investment by investors of the former State;
((2)) the proceeds accruing from the sale or the total or partial
liquidation of any investment made by an investor of the former State;
((3)) initial capital and complementary amounts necessary to increase
an investment;
((4)) funds in repayment of borrowings related to an investment;
((5)) the ear nings of nationals of the former State who are allowed
to work in connection with a n investment in the territory of the other
State; and
((6)) compensation.
(2) For the purpose of this Agreement, exchange rates shall be the
rates in accordance with the official rate of exchange in force at the
date of transfer.
Article 9
(1) Any dispute between an investor of one State and the Government
of the other State with respect to investment within the territory of the
latter State shall, as far as possible, be settled amicably through
consultation between the parties to the dispute.
(2) The legal remedies under the applicable laws and regulations of
one State in the territory of which the investment has been made are
available for the investor of the other State on the basis of treatment no
less favourable than that accorded to investments of its own investors or
investors of any third State.
(3) If a dispute concerning the amount of compensation referred to in
the provisions of Paragraph 3 of Article 5 between an investor of either
State and the Government of the other State or other entity, charged with
the obligation for making compensation under its laws and regulations,
cannot be settled within 6 months form the date either party requested
amicable settlement, such dispute shall, at the request of such investor,
be submitted to a conciliation board or an arbitration board (hereinafter
referred to as "the arbitration board"), to be established with reference
to the Convention on the Settlement of Investment Disputes between States
and Nationals of other States done at Washington on March 18, 1965
(hereinafter referred to as "the Washington Convention"). Any dispute
concerning other matters between an investor of either State and the
Government of the other State shall be submitted by mutual agreement to
the arbitration board as stated above.
In the event that such national or company has resorted to
administrative or judicial settlement within the territory of the latter
State, such dispute shall not be submitted to the arbitration board.
(4) The arbitration board referred to in the provisions of Paragraph
3 of the present Article shall be composed of 3 arbitrators, with each
party appointing 1 arbitrator within a period of 60 days from the date of
receipt by either party from the other party of a notice requesting
arbitration of the dispute referred to in the provisions of Paragraph 3 of
the dispute referred to in the provisions of Paragraph 3 of the present
Article, and the third arbitrator to be agreed upon as the President of
the arbitration board by the 2 arbitrators so chosen within a further
period of 90 days, provided that the third arbitrator shall not be a
national of either State.
(5) If the third arbitrator is not agreed upon between the
arbitrators appointed by each party within the period referred to in the
provision of Paragraph 4 of the present Article, either party shall
request the third party agreed upon in advance by both parties to appoint
the third arbitrator who shall be a national of a third State which has
diplomatic relations with the two States.
(6) The arbitral procedures shall be determined by the arbitration
board with reference to the Washington Convention.
(7) The decision of the arbitration board shall be final and binding.
Execution of the decision of the arbitration board shall be governed by
the laws and regulations concerning the execution of decision in force in
the State in whose territories such execution is sought. The arbitration
board shall state the basis of its decision and state the reasons at the
request of either party.
(8) Each party shall bear the cost of its own arbitrator and its
representation in the arbitral proceedings. The cost of the President of
the arbitration board in discharging his duties and the remaining costs of
the arbitration board shall be borne equally by the parties concerned.
(9) When and after a case is submitted to the arbitration board
referred to in the provisions of Paragraph 3 of the present Article, no
claim concerning such case shall be made between the two States.
(10) Notwithstanding the provisions of the present Article, any
dispute except those disputes which shall not be submitted to the
International Centre for the Settlement of Investment Disputes Established
by the Washington Convention (hereinafter referred to as "the Centre")
through the notification of reservation by the People's Republic of China
to the Centre shall, upon request of an investor of either State or the
Government of the other State, be submitted to the Centre in the event
that the People's Republic of China becomes a party to the Washington
Convention.
Article 10
(1) Disputes between the Contracting Parties concerning the
interpretation or application of this Agreement shall, if possible, be
settled through consultation or negotiation.
(2) If a dispute cannot be so settled within 3 months, it shall upon
the request of either Contracting Party, be submitted to an Arbitral
Tribunal.
(3) The Arbitral Tribunal shall be constituted for each individual
case in the following way. Within 2 months of the receipt of the request
for arbitration, each Contracting Party shall appoint one member of the
Tribunal. These 2 members shall then select a national of a third State
who on approval of the two Contracting Parties shall be appointed Chairman
of the Tribunal (hereinafter referred to as the "Chairman"). The Chairman
shall be appointed within 2 months from the date of appointment of the
other 2 members.
(4) If within the periods specified in Paragraph 3 of this Article
the necessary appointment has not been made, either Contracting Party may,
unless otherwise agreed, request the President of the International Court
of Justice to appoint the third arbitrator. If the President is a national
of either State, or if he is otherwise prevented from discharging the said
function, the Vice-president shall be invited to make the appointment. If
the Vice-president also is a national of either State or is prevented from
discharging the said function, the member of the International Court of
Justice next in seniority who is not a national of either State shall be
invited to make the appointment.
(5) The Arbitral Tribunal shall reach its decision by a majority of
votes. Such decision shall be final and binding. Each Contracting Party
shall bear the cost of its own arbitrator and its representation in the
arbitral proceedings; the cost of the Chairman and the remaining costs
shall be borne in equal parts by both Contracting Parties. The Arbitral
Tribunal shall determine its own procedure.
Article 11
This Agreement shall apply to the investments and returns made in the
territory of one State by investors of the other State.
(1) In relation to investors of the People's Republic of China, on or
after October 1, 1949.
(2) In relation to investors of the Republic of Korea, on or after
August 15, 1948.
Article 12
(1) Where a matter is governed simultaneously both by this Agreement
and by another international agreement to which the two States are
parties, nothing in this Agreement shall prevent either Contracting Party
or any of its investors who own investments in the territory of the other
State from taking advantage of whichever rules are the more favourable to
his case.
(2) If the treatment to be accorded by one State to investors of the
other State in accordance with its laws and regulations or other specific
provisions or contracts is more favourable than that accorded by this
Agreement, the more favourable treatment shall be accorded.
Article 13
Companies of any third State in which investors of either State have
a substantial interest shall within the territory of the other State be
guaranteed, unless international agreement between the Governments of such
other State and such third State concerning investment and protection of
investments is in effect:
(1) treatment no less favourable than that accorded, within the
territory of the latter State, to companies of any third State in which
investors of any other third State have a substantial interest with
respect to the matters set forth in the provisions of Paragraph 2 of
Article 2, Article 3, Paragraphs 1 to 4 and 6 of Article 5, Article 6,
Article 8 and Article 11; and
(2) treatment no less favourable than that accorded, within the
territory of the latter State, to companies of any third State in which
investors of the latter State have a substantial interest with respect to
the matters set forth in the provisions of Paragraph 2 of Article 2,
Article 3, Paragraphs 1 to 4 and 6 of Article 5, Article 6, Article 8 and
Article 11.
Article 14
(1) In order to facilitate the implementation of the present
Agreement, the Contracting Parties agree to set up a Joint Committee
composed of the representatives of the Contracting Parties.
(2) The functions of the Joint Committee shall include, in
particular:
((1)) reviewing the implementation of the Agreement and the matters
related to investment between the two States;
((2)) holding consultations on the operation and the matters related
to the operation of the present Agreement in connection with the
development of legal systems or of policies of either or both of the two
States with respect to the receiving of foreign investment;
((3)) making appropriate recommendations to the Governments of both
States.
(3) The Joint Committee shall meet alternately in Beijing and Seoul
at the req uest of either Contracting Party.
Article 15
The Agreement on the Encouragement and Reciprocal Protection of
Investments between the China Chamber of International Commerce and the
Korea Trade Promotion Corporation signed on May 2, 1992 shall cease to be
effective upon the entry into force of the present Agreement.
Article 16
(1) This Agreement shall come into force on the 30th day after the
date on which each Contracting Party exchange notifications that its
domestic legal procedures have been completed after the signing, and shall
remain in force for a period of 5 years. It shall be automatically
extended for successive period of 1 year unless either Party notifies the
other in writing of its intention to terminate this Agreement at least 1
year prior to the expiry of this Agreement.
(2) In respect of investments and returns acquired prior to the date
of termination of the present Agreement, the provisions of Articles 1 to
14 shall continue to be effective for a further period of 15 years from
the date of termination of the present Agreement.
(3) This Agreement shall be amended by mutual consent of the
Contracting Parti es.
In witness whereof, the undersigned duly authorised, have signed this
Agreemen t. Done in duplicate at Beijing on September 30, 1992, in the
Chinese, Korean and English languages, all 3 texts being equally
authentic. In case of any divergence of interpretation, the English text
shall prevail.
For the Government of For the Government of
the People's Republic the Republic
of China of Korea
LI LAN QING LI XIANG YU
Protocol
At the time of signing the Agreement on the Encouragement and
Reciprocal Protection of Investments between the Government of the
People's Republic of China and the Government of the Republic of Korea
(hereinafter referred to as "the Agreement"), the undersigned have agreed
upon the following provisions which shall form an integral part of the
Agreement:
1. Nothing in the Agreement shall be construed so as to affect any
right or obligation with respect to intellectual property rights under the
International Convention for the Protection of Industrial Property Done at
Paris on March 20, 1883, or any subsequent revisions thereof, or under any
existing or future international agreement to which either State is or may
become a party.
2. For the purpose of the provisions of Paragraph 2 of Article 3 and
Paragraph 2 of Article 13 of the Agreement, it shall not be deemed"
treatment less favourable" for the Government of either State to accord
discriminatory treatment, in accordance with its applicable laws and
regulations, to investors of the other State, in case it is indispensable
for the reason of a public purpose, national security or sound development
of national economy and, provided that such discriminatory treatment
undertaken for the reason of a public purpose, national security or sound
development of national economy shall not aim at specifically investors of
the other State or at joint companies in which investors of the other
State have holdings.
3. The provisions of Paragraph 2 of Article 3 of the Agreement shall
not prevent the Government of either State from prescribing special
formalities in connection with the activities of foreign investors within
its territory, but it shall be guaranteed that such formalities shall not
impair the substance of the rights set forth in the afore-said paragraph.
4. With respect to Paragraph 4 of Article 5:
(1) each Contracting Party shall accord treatment to investors of the
other St ate, which shall be no less favorable than that accorded to
investors of any third State.
(2) each Contracting Party reserves the rights to make or maintain,
in accordance with its legislation in force, limited exceptions to
treatment accorded to investors of the other State, which is no less
favourable than that accorded to its own investors.
5. The provisions of Paragraph 2 of Article 8 of the Agreement shall
not affect the rights and obligations with respect to exchange
restrictions that either State has or may have as a Contracting Party to
the Articles of Agreement of the International Monetary Fund.
6. For the purpose of the provisions of Article 8, the term "without
delay" means that the transfer shall be made within a period as is
normally required for the completion of transfer formalities. Such period
shall commence on the day on which the relevant transfer application has
been submitted and shall not exceed 6 months for the transfer mentioned in
Article 8.
7. The term "substantial interest" as used in the provision of
Article 13 of the Agreement means such extent of interest as to permit the
exercise of control or decisive influence on the company.
In witness whereof, the undersigned, being duly authorised
respectively, have signed the present Protocol.
Done in duplicate at Beijing on September 30, 1992, in the Chinese,
Korean and English languages, all 3 texts being equally authentic. In case
of any divergence of interpretation, the English test shall prevail.
For the Government For The Government
of the People's Republic of the Republic
of China of Korea
LI LAN QING LI XIANG YU
oard shall be governed by
the laws and regulations concerning the execution of decision in force in
the State in whose territories such execution is sought. The arbitration
board shall state the basis of its decision and state the reasons at the
request of either party.
(8) Each party shall bear the cost of its own arbitrator and its
representation in the arbitral proceedings. The cost of the President of
the arbitration board in discharging his duties and the remaining costs of
the arbitration board shall be borne equally by the parties concerned.
(9) When and after a case is submitted to the arbitration board
referred to in the provisions of Paragraph 3 of the present Article, no
claim concerning such case shall be made between the two States.
(10) Notwithstanding the provisions of the present Article, any
dispute except those disputes which shall not be submitted to the
International Centre for the Settlement of Investment Disputes Established
by the Washington Convention (hereinafter referred to as "the Centre")
through the notification of reservation by the People's Republic of China
to the Centre shall, upon request of an investor of either State or the
Government of the other State, be submitted to the Centre in the event
that the People's Republic of China becomes a party to the Washington
Convention.
Article 10
(1) Disputes between the Contracting Parties concerning the
interpretation or application of this Agreement shall, if possible, be
settled through consultation or negotiation.
(2) If a dispute cannot be so settled within 3 months, it shall upon
the request of either Contracting Party, be submitted to an Arbitral
Tribunal.
(3) The Arbitral Tribunal shall be constituted for each individual
case in the following way. Within 2 months of the receipt of the request
for arbitration, each Contracting Party shall appoint one member of the
Tribunal. These 2 members shall then select a national of a third State
who on approval of the two Contracting Parties shall be appointed Chairman
of the Tribunal (hereinafter referred to as the "Chairman"). The Chairman
shall be appointed within 2 months from the date of appointment of the
other 2 members.
(4) If within the periods specified in Paragraph 3 of this Article
the necessary appointment has not been made, either Contracting Party may,
unless otherwise agreed, request the President of the International Court
of Justice to appoint the third arbitrator. If the President is a national
of either State, or if he is otherwise prevented from discharging the said
function, the Vice-president shall be invited to make the appointment. If
the Vice-president also is a national of either State or is prevented from
discharging the said function, the member of the International Court of
Justice next in seniority who is not a national of either State shall be
invited to make the appointment.
(5) The Arbitral Tribunal shall reach its decision by a majority of
votes. Such decision shall be final and binding. Each Contracting Party
shall bear the cost of its own arbitrator and its representation in the
arbitral proceedings; the cost of the Chairman and the remaining costs
shall be borne in equal parts by both Contracting Parties. The Arbitral
Tribunal shall determine its own procedure.
Article 11
This Agreement shall apply to the investments and returns made in the
territory of one State by investors of the other State.
(1) In relation to investors of the People's Republic of China, on or
after October 1, 1949.
(2) In relation to investors of the Republic of Korea, on or after
August 15, 1948.
Article 12
(1) Where a matter is governed simultaneously both by this Agreement
and by another international agreement to which the two States are
parties, nothing in this Agreement shall prevent either Contracting Party
or any of its investors who own investments in the territory of the other
State from taking advantage of whichever rules are the more favourable to
his case.
(2) If the treatment to be accorded by one State to investors of the
other State in accordance with its laws and regulations or other specific
provisions or contracts is more favourable than that accorded by this
Agreement, the more favourable treatment shall be accorded.
Article 13
Companies of any third State in which investors of either State have
a substantial interest shall within the territory of the other State be
guaranteed, unless international agreement between the Governments of such
other State and such third State concerning investment and protection of
investments is in effect:
(1) treatment no less favourable than that accorded, within the
territory of the latter State, to companies of any third State in which
investors of any other third State have a substantial interest with
respect to the matters set forth in the provisions of Paragraph 2 of
Article 2, Article 3, Paragraphs 1 to 4 and 6 of Article 5, Article 6,
Article 8 and Article 11; and
(2) treatment no less favourable than that accorded, within the
territory of the latter State, to companies of any third State in which
investors of the latter State have a substantial interest with respect to
the matters set forth in the provisions of Paragraph 2 of Article 2,
Article 3, Paragraphs 1 to 4 and 6 of Article 5, Article 6, Article 8 and
Article 11.
Article 14
(1) In order to facilitate the implementation of the present
Agreement, the Contracting Parties agree to set up a Joint Committee
composed of the representatives of the Contracting Parties.
(2) The functions of the Joint Committee shall include, in
particular:
((1)) reviewing the implementation of the Agreement and the matters
related to investment between the two States;
((2)) holding consultations on the operation and the matters related
to the operation of the present Agreement in connection with the
development of legal systems or of policies of either or both of the two
States with respect to the receiving of foreign investment;
((3)) making appropriate recommendations to the Governments of both
States.
(3) The Joint Committee shall meet alternately in Beijing and Seoul
at the req uest of either Contracting Party.
Article 15
The Agreement on the Encouragement and Reciprocal Protection of
Investments between the China Chamber of International Commerce and the
Korea Trade Promotion Corporation signed on May 2, 1992 shall cease to be
effective upon the entry into force of the present Agreement.
Article 16
(1) This Agreement shall come into force on the 30th day after the
date on which each Contracting Party exchange notifications that its
domestic legal procedures have been completed after the signing, and shall
remain in force for a period of 5 years. It shall be automatically
extended for successive period of 1 year unless either Party notifies the
other in writing of its intention to terminate this Agreement at least 1
year prior to the expiry of this Agreement.
(2) In respect of investments and returns acquired prior to the date
of termination of the present Agreement, the provisions of Articles 1 to
14 shall continue to be effective for a further period of 15 years from
the date of termination of the present Agreement.
(3) This Agreement shall be amended by mutual consent of the
Contracting Parti es.
In witness whereof, the undersigned duly authorised, have signed this
Agreemen t. Done in duplicate at Beijing on September 30, 1992, in the
Chinese, Korean and English languages, all 3 texts being equally
authentic. In case of any divergence of interpretation, the English text
shall prevail.
For the Government of For the Government of
the People's Republic the Republic
of China of Korea
LI LAN QING LI XIANG YU
Protocol
At the time of signing the Agreement on the Encouragement and
Reciprocal Protection of Investments between the Government of the
People's Republic of China and the Government of the Republic of Korea
(hereinafter referred to as "the Agreement"), the undersigned have agreed
upon the following provisions which shall form an integral part of the
Agreement:
1. Nothing in the Agreement shall be construed so as to affect any
right or obligation with respect to intellectual property rights under the
International Convention for the Protection of Industrial Property Done at
Paris on March 20, 1883, or any subsequent revisions thereof, or under any
existing or future international agreement to which either State is or may
become a party.
2. For the purpose of the provisions of Paragraph 2 of Article 3 and
Paragraph 2 of Article 13 of the Agreement, it shall not be deemed"
treatment less favourable" for the Government of either State to accord
discriminatory treatment, in accordance with its applicable laws and
regulations, to investors of the other State, in case it is indispensable
for the reason of a public purpose, national security or sound development
of national economy and, provided that such discriminatory treatment
undertaken for the reason of a public purpose, national security or sound
development of national economy shall not aim at specifically investors of
the other State or at joint companies in which investors of the other
State have holdings.
3. The provisions of Paragraph 2 of Article 3 of the Agreement shall
not prevent the Government of either State from prescribing special
formalities in connection with the activities of foreign investors within
its territory, but it shall be guaranteed that such formalities shall not
impair the substance of the rights set forth in the afore-said paragraph.
4. With respect to Paragraph 4 of Article 5:
(1) each Contracting Party shall accord treatment to investors of the
other St ate, which shall be no less favorable than that accorded to
investors of any third State.
(2) each Contracting Party reserves the rights to make or maintain,
in accordance with its legislation in force, limited exceptions to
treatment accorded to investors of the other State, which is no less
favourable than that accorded to its own investors.
5. The provisions of Paragraph 2 of Article 8 of the Agreement shall
not affect the rights and obligations with respect to exchange
restrictions that either State has or may have as a Contracting Party to
the Articles of Agreement of the International Monetary Fund.
6. For the purpose of the provisions of Article 8, the term "without
delay" means that the transfer shall be made within a period as is
normally required for the completion of transfer formalities. Such period
shall commence on the day on which the relevant transfer application has
been submitted and shall not exceed 6 months for the transfer mentioned in
Article 8.
7. The term "substantial interest" as used in the provision of
Article 13 of the Agreement means such extent of interest as to permit the
exercise of control or decisive influence on the company.
In witness whereof, the undersigned, being duly authorised
respectively, have signed the present Protocol.
Done in duplicate at Beijing on September 30, 1992, in the Chinese,
Korean and English languages, all 3 texts being equally authentic. In case
of any divergence of interpretation, the English test shall prevail.
For the Government For The Government
of the People's Republic of the Republic
of China of Korea
LI LAN QING LI XIANG YU
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