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Agreement between the United States of America and the Government of Kiribati Concerning Investment Guarantees (Suva - Tarawa) [1990] PITSE 1 (22 January 1990)

AGREEMENT BETWEEN THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF KIRIBATI CONCERNING INVESTMENT GUARANTEES

(Suva – Tarawa, 22 January 1990)

ENTRY INTO FORCE: 22 JANUARY 1990

The American Ambassador to the Secretary of Foreign Affairs of Kiribati

EMBASSY OF THE UNITED STATES OF AMERICA
 
Note No. 04

Suva, Fiji

January 22, 1990
 
Re:

INVESTMENT INCENTIVE AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF KIRIBATI
 
Mr. Secretary:

I have the honor to refer to conversations which have recently taken place between representatives of our two Governments relating to economic activities in Kiribati which promote the development of the economic resources and productive capacities of Kiribati and to investment insurance (including reinsurance) and guaranties which are backed in whole or in part by the credit or public monies of the United States of America and are administered either directly by the Overseas Private Investment Corporation ("OPIC"), an independent government corporation organized under the laws of the United States of America, or pursuant to arrangements between OPIC and commercial insurance, reinsurance and other companies. I also have the honor to confirm the following understanding reached as a result of those conversations:

Article 1

As used herein, the term "Coverage" shall refer to any investment insurance, reinsurance or guaranty which is issued in accordance with this Agreement by OPIC, by any successor agency of the United States of America or by any other entity or group of entities, pursuant to arrangements with OPIC or any successor agency, all of whom are hereinafter deemed included in the term "Issuer" to the extent of their interest as insurer, reinsurer, or guarantor in any Coverage, whether as a party or successor to a contract providing Coverage or as an agent for the administration of Coverage.

Article 2

The procedures set forth in this Agreement shall apply only with respect to Coverage relating to projects or activities registered with or otherwise approved by the Government of Kiribati or any agency or political subdivision thereof or to Coverage relating to projects with respect to which the Government of Kiribati has entered into a contract involving the provision of goods or services or invite tenders on such a contract.

Article 3

(a) If the Issuer makes payment to any party under Coverage, the Government of Kiribati shall, subject to the provisions of Article 4 hereof, recognize the transfer to the Issuer of any currency, credits, assets, or investment on account of which payment under such Coverage is made as well as the succession of the Issuer to any right, title, claim, privilege, or cause of action existing, or which may arise, in connection therewith.

(b) The Issuer shall assert no greater rights than those of the transferring party under Coverage with respect to any interests transferred or succeeded to under this Article. Nothing in this Agreement shall limit the right of the Government of the United States of America to assert a claim under international law in its sovereign capacity, as distinct from any rights it may have as Issuer.

(c) The issuance of Coverage outside of Kiribati with respect to a project or activity in Kiribati shall not subject the Issuer to regulation under the laws of Kiribati applicable to insurance or financial organizations.

(d) Funds introduced or acquired in Kiribati or withdrawn from Kiribati by the Issuer with respect to finance projects shall be exempt from all taxes upon income, real property or sales, from customs duties, and from any other similar taxes or levies in Kiribati.

Article 4

To the extent that the laws of Kiribati partially or wholly invalidate or prohibit the acquisition from a party under Coverage of any interest in any property within the territory of Kiribati by the Issuer, the Government of Kiribati shall permit such party and the Issuer to make appropriate arrangements pursuant to which such interests are transferred to an entity permitted to own such interests under the laws of Kiribati.

Article 5

Amounts in the lawful currency of Kiribati, including credits thereof, acquired by the Issuer by virtue of such Coverage shall be accorded treatment by the Government of Kiribati no less favorable as to use and conversion than the treatment to which such funds would be entitled in the hands of the party under Coverage.

Such amounts and credits may be transferred by the Issuer to any person or entity and upon such transfer shall be freely available for use by such person or entity in the territory of Kiribati.

Article 6

(a) Any dispute between the Government of the United States of America and the Government of Kiribati regarding the interpretation of this Agreement or which, in the opinion of one of the Governments, involves a question of public international law arising out of any project or activity for which Coverage has been issued shall be resolved, insofar as possible, through negotiations between the two Governments. If at the end of three months following the request for negotiations the two Governments have not resolved the dispute by agreement, the dispute, including the question of whether such dispute presents a question of public international law, shall be submitted, at the initiative of either Government, to an arbitral tribunal for resolution in accordance with Article 6(b).

(b) The arbitral tribunal for resolution of disputes pursuant to Article 6(a) shall be established and function as follows:
 

(i) Each Government shall appoint one arbitrator; these two arbitrators shall designate a president by common agreement who shall be a citizen of the third state and be appointed by the two Governments. The arbitrators shall be appointed within two months and the president within three months of the date of receipt of either Government's request for arbitration. If the appointments are not made within the foregoing time limits, either Government may, in the absence of any other agreement, request the Secretary General of the International Center for the Settlement of Investment Disputes to make the necessary appointment or appointments, and both Governments agree to accept such appointment or appointments.

(ii) The arbitral tribunal shall base its decision on the applicable principles and rules of public international law. The arbitral tribunal shall decide by majority vote. Its decision shall be final and binding.
 

(iii) Each of the Governments shall pay the expense of its arbitrator and of its representation in the proceedings before the arbitral tribunal; the expenses of the president and the other costs shall be paid in equal parts by the two Governments. The arbitral tribunal may adopt regulations concerning the costs, consistent with the foregoing.

(iv) In all other matters, the arbitral tribunal shall regulate its own procedures.

Article 7

This Agreement shall continue in force until six months from the date of receipt of a note by which one Government informs the other of an intent no longer to be a party of the Agreement. In such event, the provisions of the Agreement with respect to Coverage issued while the Agreement was in force shall remain in force for the duration of such Coverage, but in no case longer than twenty years after the denunciation of the Agreement.

Upon receipt of a note from Your Excellency indicating that the foregoing provisions are acceptable to the Government of Kiribati, the Government of the United States of America will consider that this note and your reply thereto constitute an Agreement between our two Governments on this subject, to enter into force on the date of the note by which the Government of Kiribati communicates to the Government of the United States of America that this exchange of notes has been approved pursuant to its constitutional procedures.

Accept, Excellency, the renewed assurance of my highest consideration.

Sincerely,

The Secretary for Foreign Affairs of Kiribati to the American Ambassador

MINISTRY OF FOREIGN AFFAIRS

P.O. Box 68, BAIRIKI, TARAWA, REPUBLIC OF KIRIBATI
 
Phone: 21342
Telex: K177054 SECAB
Fax: 0686 21466
 
Your ref.:
Our ref.: FA: 13/4
Date: 22 January 1990
 
Dear Madame Ambassador,
 
RE: INVESTMENT INCENTIVE AGREEMENT BETWEEN THE GOVERNMENT OF THE UNITED STATES OF AMERICA AND THE GOVERNMENT OF KIBIBATI
 
I have the honour to refer to your note number 04 dated January 22, 1990 and to the Overseas Private Investment Corporation (OPIC) Investment Incentive Agreement.
 
I now advise that this Agreement has been approved pursuant to the constitutional procedures of the Government of Kiribati and that this exchange of notes therefore constitutes an Agreement between our two Governments to enter into effect on the date of this letter.
 
Yours sincerely,

SIGNATORIES:
Evelyn I.H. Teegen

Ambassador of the United States of America
 
H. E. Peter Timeon,

Secretary of Foreign Affairs,

Republic of Kiribati.
 
P.T. Timeon
Secretary for Foreign Affairs
 
Her Excellency Evelyn Teegen
Ambassador
Embassy of the United States of America
Suva
FIJI