maitext2

CONFIDENTIAL DAFFEIMAI(97) 1/REV2

II. SCOPE AND APPLICATION

DEFINITIONS

1.Investor means:

(i) a natural person having the nationality of, or who is permanently residing in, a Contracting Party in accordance with its applicable law; or

(ii) a legal person or any other entity constituted or organised under the applicable law of a Contracting

Party, whether or not for profit, and whether private or government owned or controlled, and includes a corporation, trust, partnership, sole proprietorship, joint venture, association or organization.

2. Investment means:

Every kind of asset owned or controlled, directly or indirectly, by an investor, including⁽¹⁾ ⁽²⁾:

(I) an enterprise (being a legal person or any other entity constituted or organised under the applicable

law of the Contracting Party, whether or not for profit, and whether private or government owned or

controlled, and includes a corporation, trust, partnership, sole proprietorship, branch, joint venture,

association or organization);

(ii) shares, stocks or other forms of equity participation in an enterprise, and rights derived therefrom;

(iii) bonds, debentures, loans and other forms of debt, and rights derived therefrom;

(iv) rights under contracts, including turnkey, construction, management, production or revenue-sharing
contracts;

(v) claims to money and claims to performance:

(vi) intellectual property rights;

(vii) rights conferred pursuant to law or contract such as concessions, licenses, authorizations, and permits;

(viii) any other tangible and intangible, movable and immovable property, and any related property rights, such as leases, mortgages, liens and pledges.

CONFIDENTIAL DAFFE/MAI(97) 1/REV2

GEOGRAPHICAL SCOPE OF APPLICATION

This AGREEMENT shall apply in:

(a) the land territory, internal waters, and the territorial sea of a Contracting Party, and, in the

case of a Contracting Party which is an archipelagic state, its archipelagic waters; and

(b) the maritime areas beyond the territorial sea with respect to which a Contracting Party

exercises sovereign rights or jurisdiction in accordance with international law, as reflected

particularly in the 1982 United Nations Convention on the Law of the Sea.⁽⁴⁾

CONFIDENTIAL DAFFE/MAI(97) 1/REV2

APPLlCATlON TO OVERSEAS TERRITORIES

I. A State may at any time declare in writing to the Depositary that this AGREEMENT shall apply to

all or to one or more of the territories for the international relations of which it is responsible.⁽⁾ Such

declaration, made prior to or upon ratification, accession or acceptance, shall take effect upon entry into

force of this AGREEMENT for that State. A subsequent declaration shall take effect with respect to the

territory or territories concerned on the ninetieth day following receipt of the declaration by the

Depositary.

2. A Party may at any time declare in writing to the Depositary, that this AGREEMENT shall cease to

apply to all or to one or more of the territories for the international relations of which it is responsible.

Such declaration shall take effect upon the expiry of one year from the date of receipt of the declaration by

the Depositary, with the same effect regarding existing investment as withdrawal of a Party .

1. The Negotiating Group agreed that this broad definition of investment calls for further work on appropriate safeguard provisions. In addition, the following issues require further work to determine their appropriate treatment in the MAI: indirect investment, intellectual property, concessions, public debt and real estate.

2. For greater certainty, an interpretative note will be required to indicate that, in order to qualify as an investment under the MAI, an asset must have the characteristics of an investment, such as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk.

3. A number of EGI delegations were of the view that rather than an article on geographical scope, an article should define the "territory" or "area" of a Contracting Party to which the MAI would be applicable and in that case, it could be included in a general definitions part of the AGREEMENT. Some delegations had serious misgivings about the feasibility of embarking on this approach.

4. EG1 agreed that an alternative text of subparagraph (b) illustrating the "functional" approach supported by some delegations should be included in order to preserve the approach for future consideration if the Negotiating Group were to decide to pursue that option further. An alternative subparagraph (b), could read:

"......investments beyond the territorial sea under the jurisdiction of a Contracting Party in accordance with international law as reflected in the 1982 United Nations Convention on the Law of the Sea."

5. In case such a declaration of application were to be accompanied by reservations or exceptions beyond those of the declaring state, these would be subject to acceptance of the other Parties.