ARRANGEMENT BETWEEN THE ASSOCIATION OF EAST ASIAN RELATIONSAND
THE INTERCHANGE ASSOCIATIONFOR THE MUTUAL COOPERATION ON THE LIBERALIZATION, PROMOTION AND
PROTECTION OF INVESTMENT

Article 1
THE ASSOCIATION OF EAST ASIAN RELATIONS AND THE
INTERCHANGE ASSOCIATION (hereinafter referred to as “bothSides”), having regard to paragraphs 3(1) and 3(7) of the
Arrangement between the Association of East Asian Relations andthe Interchange Association for the Establishment of theRespective Overseas Offices of 26 December 1972, shallcooperate with each other in order to obtain necessary consent
from the relevant authorities with regard to the matters as
contained in Articles 2 through 26 below.
Article 2
For the purposes of this Arrangement,(1)

The term “investment” means every kind of asset owned
or controlled, directly or indirectly, by aninvestor, which has the characteristics of aninvestment, including:(a) an enterprise and a branch of an enterprise;(b) shares, stocks or other forms of equity
participation in an enterprise, including rights
derived therefrom;(c) bonds, debentures, loans and other forms of debt,
including rights derived therefrom;(d) rights under contracts, including turnkey,

1construction, management, production orrevenue-sharing contracts;(e) claims to money and to any performance undercontract having a financial value;(f) intellectual property rights, including
copyrights and related rights, patent rights andrights relating to utility models, trademarks,
industrial designs, layout-designs ofintegrated circuits, new varieties of plants,
trade names, indications of source or
geographical indications and undisclosed
information;(g) rights conferred pursuant to laws andregulations or contracts such as concessions,licenses, authorizations and permits, including
those for the exploration and exploitation ofnatural resources; and(h) any other tangible and intangible, movable andimmovable property, and any related property
rights, such as leases, mortgages, liens andpledges.
An investment includes the amounts yielded byinvestments, in particular, profit, interest,
capital gains, dividends, royalties and fees. Achange in the form in which assets are invested does
not affect their character as investments.
(2)

The term “investor” means the following natural
person and enterprise that seeks to make, is making,or has made investments in the Area of the other Side.
(a) With respect to the Interchange Association:

2

(i)

a natural person having the nationality ofJapan; and(ii) an enterprise which is a legal person or any
other entity duly constituted or organizedunder the applicable laws and regulationsin Japan, whether for profit or not, andwhether private or not, including any
corporation, trust, partnership, sole
proprietorship, joint venture,association, organization or company.
(b) With respect to the Association of East Asian
Relations:(i)a natural person having the citizenship of
Taiwan; and(ii) an enterprise which is a legal person or any
other entity duly constituted or organizedunder the applicable laws and regulationsin Taiwan, whether for profit or not, andwhether private or not, including any
corporation, trust, partnership, sole
proprietorship, joint venture,association, organization or company.
(3)

The term “investment activities” means
establishment, acquisition, expansion, operation,
management, maintenance, use, enjoyment and sale orother disposal of investments.

(4)

The term “Area” means:(a) with respect to the Interchange Association,
Japan; and(b) with respect to the Association of East Asian3

Relations, Taiwan.
(5)

The term “existing” means being in effect on the dateof entry into force of this Arrangement.

(6)

The term “freely usable currency” means freely usable
currency as defined under the Articles of Agreementof the International Monetary Fund.

(7)

The term “the WTO Agreement” means the Marrakesh
Agreement Establishing the World Trade
Organization, done at Marrakesh, April 15, 1994.
Article 3

1.Investors of either Side and their investments shall within
the Area of the other Side be accorded treatment no lessfavorable than the treatment accorded in like circumstances toinvestors of the other Side and to their investments withrespect to investment activities.
2.Notwithstanding paragraph 1, it is understood that special
formalities may be prescribed in connection with investment
activities of investors of the other Side, provided that suchspecial formalities do not impair the substance of thetreatments which both Sides consider under this Arrangement tobe accorded to such investors.
Article 41.

Investors of either Side and their investments shallwithin the Area of the other Side be accorded treatment no lessfavorable than the treatment accorded in like circumstances toinvestors of any other countries or regions and to theirinvestments with respect to investment activities.
2.
For greater certainty, the treatment referred to inparagraph 1 does not include treatment accorded to investors4

of any other countries or regions and to their investments inregard to dispute settlement mechanisms that are contained ininternational treaties or agreements.
Article 5
1.Investments of investors of either Side shall within the Areaof the other Side be accorded treatment in accordance withinternational law, including fair and equitable treatment andfull protection and security.
2.The operation, management, maintenance, use, enjoyment, andsale or other disposal of investments of investors of either
Side shall within the Area of the other Side not be impaired
in any way by arbitrary measures.
3.Any obligation which the authorities in the Area of either
Side may have entered into with regard to investments andinvestment activities of investors of the other Side shall beobserved.
Article 6Investors of either Side shall within the Area of the otherSide be accorded treatment no less favorable than the treatment
accorded in like circumstances to investors of the other Sideor investors of any other countries or regions with respect toaccess to the courts of justice and administrative tribunals
and agencies in all degrees of jurisdiction, both in pursuitand in defense of such investors’ rights.
Article 71.

Any of the following requirements shall not be imposed orenforced within the Area of either Side, as a condition forinvestment activities of an investor of the other Side:(a) to export a given level or percentage of goods or5

services;(b) to achieve a given level or percentage of local
content;(c) to purchase, use or accord a preference to goods
produced or services provided in the Area of that Side,or to purchase goods or services from natural or legal
persons or any other entity in the Area of that Side;(d) to relate in any way the volume or value of imports
to the volume or value of exports or to the amount offoreign exchange inflows associated with investmentsof that investor;(e) to restrict sales of goods or services in the Area thatinvestments of that investor produce or provide byrelating such sales in any way to the volume or valueof its exports or foreign exchange earnings;(f) to restrict the exportation or sale for export;(g) to appoint, as executives, managers or members ofboards of directors, individuals of any particularnationality or citizenship;(h) to transfer technology, a production process or otherproprietary knowledge to a natural or legal person or
any other entity in the Area of that Side, except when
the requirement:(i)

is imposed or enforced by a court,
administrative tribunal or competition
authority to remedy an alleged violation ofcompetition laws; or(ii)concerns the transfer of intellectual property
rights which is undertaken in a manner not

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inconsistent with the Agreement on
Trade-Related Aspects of Intellectual Property
Rights in Annex 1C to the WTO Agreement(hereinafter referred to as “the TRIPS
Agreement”);(i) to locate the headquarters of that investor for a
specific region or the world market in the Area of thatSide;(j) to hire a given number or percentage of employees withany particular nationality or citizenship;(k) to achieve a given level or value of research anddevelopment in the Area of that Side; or(l) to supply one or more of the goods that the investor
produces or the services that the investor provides
to a specific region or the world market, exclusively
from the Area of that Side.
2.

Notwithstanding Paragraph 1, it is understood that, inconnection with investment activities of an investor of either
Side, the receipt or continued receipt of an advantage may beconditioned on compliance with any of the requirements set forthin subparagraphs 1(g) through (l).
Article 81.

It is understood that Articles 3, 4 and 7 do not cover:(a) any existing non-conforming measure that ismaintained by the following, as set out in the Scheduleof each Side in Annex I:(i)the central authorities;(ii)

a prefecture of Japan; or7

(iii) a municipality, city, or county of Taiwan;(b) any existing non-conforming measure that ismaintained by a local authority other than referred
to in sub-paragraphs (a)(ii) and (a)(iii) above;(c) the continuation or prompt renewal of any
non-conforming measure referred to in subparagraphs(a) and (b); or(d) an amendment or modification to any non-conforming
measure referred to in subparagraphs (a) and (b),provided that the amendment or modification does notdecrease the conformity of the measure as it existed
immediately before the amendment or modification with
Articles 3, 4 and 7.
2.

It is understood that Articles 3, 4 and 7 do not cover any

measure adopted or maintained with respect to sectors,
sub-sectors or activities set out in the Schedule of each Sidein Annex II.
3.
In the Area of either Side, under any measure adopted after
the date of entry into force of this Arrangement and coveredby the relevant Schedule in Annex II, an investor of the otherSide shall not be required to sell or otherwise dispose of its
investments that exist in the Area of the former Side wherein
the measure is adopted at the time the measure becomes effective,by reason that the investor is the investor of the other Side.
4.

Either Side shall, in cases where an amendment or amodification is made to any existing non-conforming measure set
out in its Schedule in Annex I or where any new or more
restrictive measure is adopted with respect to sectors,
sub-sectors, or activities set out in its Schedule in Annex II
after the date of entry into force of this Arrangement, prior
to the implementation of the amendment or modification or the
new or more restrictive measure, or in exceptional8

circumstances, as soon as possible thereafter:(a) notify the other Side of detailed information on such
amendment or modification, or such measure; and(b) hold, upon request by the other Side, consultations
in good-faith with that other Side with a view toachieving mutual satisfaction.
5.
Where appropriate, efforts shall be taken in the Area of
either Side to reduce or eliminate the reservations specified
in the relevant Schedules in Annexes I and II respectively.
6.

It is understood that Articles 3, 4 and 7 do not cover any

measure covered by the exceptions to, or derogations from,obligations under Articles 3 and 4 of the TRIPS Agreement, as
specifically provided in Articles 3 through 5 of the TRIPS
Agreement.
7.
It is understood that Articles 3, 4 and 7 do not cover any
measure adopted or maintained in the Area of either Side withrespect to:(a) government procurement;(b) subsidies or grants provided by the authorities or an
enterprise owned or controlled by the authorities in
the Area of either Side, including loans, guarantees
and insurance supported by the authorities.
Article 91.
The laws, regulations, administrative procedures andadministrative rulings and judicial decisions of generalapplication in the Area of either Side shall be promptly
published, or otherwise made publicly available.
2.

Either Side shall, upon request by the other Side, promptly

9respond to specific questions and provide information onmatters set out in paragraph 1, including that relating tocontract which the authorities in the Area of that Side enter
into with regard to investment.
3.
Paragraphs 1 and 2 shall not be construed so as to oblige
either Side to disclose confidential information, thedisclosure of which would impede law enforcement of theauthorities in the Area of either Side or otherwise be contrary
to the public interest, or which would prejudice privacy orlegitimate commercial interests.
Article 10
Except in cases of emergency or of purely minor nature,a reasonable opportunity shall be provided for comments by the
public in accordance with the laws and regulations in the Areaof either Side before the adoption, amendment or repeal of
regulations of general application that affect any mattercovered by this Arrangement．
Article 11
Where a natural person of either Side applies for theentry, sojourn and residence in the Area of the other Side forthe purpose of investment activities therein, a sympathetic
consideration shall be given to the application of such natural
person, in accordance with the applicable laws and regulationsin the Area of the other Side.
Article 12
1. Expropriation or any measure equivalent to expropriation(hereinafter referred to as “indirect expropriation”) shall not
be taken with respect to investments of investors of either Side,
except:(a) for a public purpose;

10(b) in a non-discriminatory manner;(c) upon payment of prompt, adequate and effective
compensation pursuant to paragraphs 4 through 6; and(d) in accordance with due process of law and Article 5.
2. Indirect expropriation referred to in paragraph 1 refers toan action or a series of actions by the authorities, which has
an effect equivalent to expropriation without formal transferof title or outright seizure.
3. The determination of whether an action or a series of actions
by the authorities of either Side, in a specific fact situation,
constitutes an indirect expropriation requires a case-by-case,fact-based inquiry that considers, among other factors:(a)the economic impact of the action, although thefact that such action by the authorities has anadverse effect on the economic value of aninvestment, standing alone, does not establishthat an indirect expropriation has occurred;(b)the extent to which the action interferes with
distinct, reasonable expectations arising out
of investment;(c)the character of the action; and(d)the objectives of the action, including whether
such action is taken for legitimate public
objectives, such as protecting the publicwelfare, safety and health, and protecting andpreserving the environment.

4. The compensation shall be equivalent to the fair market valueof the expropriated investments at the time when the11expropriation was publicly announced or when the expropriation
occurred, whichever is the earlier. The fair market value shallnot reflect any change in value occurring because theexpropriation had become publicly known earlier.
5. The compensation shall be paid without delay and shall
include interest at a commercially reasonable rate, taking into
account the length of time until the time of payment. It shallbe effectively realizable, freely transferable and shall befreely convertible into freely usable currencies, at the market
exchange rate prevailing on the date of expropriation.
6. Without prejudice to the provisions of Article 17, theinvestor affected by expropriation shall have a right of accessto the courts of justice or administrative tribunals or agencies
in the Area where the expropriation has taken place to seek aprompt review of the investor’s case and the amount ofcompensation in accordance with the principles set out in this
Article.
Article 131.
Investors of either Side that have suffered within the Areaof the other Side loss or damage relating to their investments
due to armed conflict or a state of emergency such as revolution,
insurrection, disturbance or any other similar event, shall beaccorded treatment, as regards restitution, indemnification,compensation or any other settlement, that is no less favorable
than that accorded to the investors of the other Side or toinvestors of any other countries or regions, whichever is morefavorable to those investors suffered.
2.
Any payment as a means of settlement referred to inparagraph 1 shall be effectively realizable, freelytransferable, and freely convertible at the market exchange
rate prevailing at the time of payment into freely usable
currencies.

12Article 14
1.

If any authority or its designated entity in the Area of

either Side makes a payment to any investor of that Side under
an indemnity, guarantee, or insurance contract, pertaining toinvestments of such investor in the Area of the other Side, thefollowing shall be recognized:(a) the assignment to such authority or entity of any rightor claim of the investor on account of which suchpayment is made; and(b) the right of such authority or entity to exercise by
virtue of subrogation any such right or claim to thesame extent as the original right or claim of theinvestor.
2.

Payment to be made to any authority or entity in the Areaof either Side, by virtue of the assignment of a right or claim
and the assignment of a payment as provided for in paragraph
1, shall be made in accordance with the principles as set out
in the relevant provisions in Articles 12, 13 and 15.
Article 15
1.

All transfers relating to investments in the Area of either

Side of an investor of the other Side shall be allowed to be
freely made into and out of the Area of that Side without delay.
Such transfers shall include, in particular, though not
exclusively:(a) the initial capital and additional amounts to maintainor increase investments;(b) profits, interest, capital gains, dividends,
royalties, fees and other current incomes accruing
from investments;

13(c) payments made under a contract including loan payments
in connection with investments;(d) proceeds of the total or partial sale or liquidationof investments;(e) earnings and remuneration of personnel engaged fromthe Area of the other Side who works in connection withinvestments in the Area of the former Side;(f) payments made in accordance with Articles 12 and 13;
and(g) payments arising out of the settlement of a dispute
under Article 17.
2.
Transfers shall be made without delay in freely usable
currencies at the market exchange rate prevailing on the dateof each transfer.
3.
Notwithstanding paragraphs 1 and 2, it is understood thata transfer may be delayed or prevented through equitable,
non-discriminatory and good-faith application of the laws andregulations relating to:(a) bankruptcy, insolvency or the protection of the rightsof creditors;(b) issuing, trading or dealing in securities, futures,
options or derivatives;(c) criminal or penal offences;(d) reports or record keeping of transfers of currency
or other monetary instruments; or(e)ensuring compliance with orders or judgments
in adjudicatory proceedings.

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Article 16
Referring to Article 1, either Side shall accord sympathetic
consideration to, and shall afford adequate opportunity for
consultations regarding, such representations as the other Sidemay make with respect to any matter affecting theinterpretation, application or implementation of thisArrangement.
Article 17

1． For the purposes of this Article, an investment disputeis a dispute between the authorities in the Area of either Sideand an investor of the other Side that has incurred loss or damage
with respect to investments and investment activities of theinvestor in the Area of the former Side.
2． An investment dispute shall, as far as possible, be settled
amicably through consultations or negotiations between theinvestor who is a party to an investment dispute (hereinafterreferred to in this Article as “disputing investor”) and theauthorities concerned in the Area of the other Side that is aparty to the investment dispute (hereinafter collectively
referred to in this Article as “the disputing parties”).
3.
It is confirmed that nothing in this Article prevent a
disputing investor from seeking administrative or judicial
settlement within the Area of the other Side.
4. If an investment dispute cannot be settled through suchconsultations or negotiations within three months from the dateon which the disputing investor requested in writing theauthorities concerned for consultations or negotiations, theinvestment dispute, subject to the mutual consent between thedisputing parties, may be submitted to an international
conciliation or arbitration, including arbitration under the15

Arbitration Rules of the United Nations Commission on
International Trade Law, arbitration under Rules ofArbitration of the International Chamber of Commerce and any
arbitration in accordance with other arbitration rules agreed
upon by the disputing parties .
5.

EitherSide shall facilitate that the authorities

concerned in the Area of that Side consents to the submissionof an investment dispute by a disputing investor to aconciliation or arbitration set forth in paragraph 4 chosen by
the disputing investor.
6.
No investment disputes may be submitted to a conciliationor arbitration set forth in paragraph 4, if more than three (3)years have elapsed since the date on which the disputing
investor acquired or should have first acquired, whichever isthe earlier, the knowledge that the disputing investor had
incurred loss or damage with respect to its investments andinvestment activities in the Area of the other Side.
7.

(a)

In the event that an investment dispute has been
submitted to courts of justice or administrative
tribunals or agencies or any other binding disputesettlement mechanism in the Area of the other Side,any conciliation or arbitration set forth in paragraph
4 can be sought only if the disputing investor
withdraws, in accordance with the laws and regulationsin the Area of the other Side, its claim from suchdomestic remedies before the final decision is madetherein.

(b)

In the event that an investment dispute has been
submitted to a conciliation or arbitration as set
forth in paragraph 4, the same investment disputeshall not be brought to the courts of justice,administrative tribunals or agencies, or any otherbinding dispute settlement mechanism in the Area ofthe other Side.

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8. In the event that, pursuant to paragraph 4, an investment
dispute has been submitted to an arbitration and that anarbitral tribunal has been established:(a) the arbitral tribunal shall decide the issues in
dispute in accordance with this Arrangement;(b) unless the disputing parties agree otherwise, thearbitration shall be held in the Area of either Sideor a country that is a party to the United Nations
Convention on the Recognition and Enforcement of
Foreign Arbitral Awards, done at New York, June 10,1958 (hereinafter referred to in this Article as “theNew York Convention”);(c) the decision or the award rendered by the arbitral
tribunal shall be binding upon the disputing parties,
and the decision or the award will be executed inaccordance with the applicable laws and regulations
as well as relevant international law concerning theexecution which is in force in the place where suchexecution is sought; and(d) the remedy under the decision or the award renderedby the arbitral tribunal shall be limited to monetarydamages or restitution of property.
9. The claim that is submitted to an arbitration pursuant toparagraph 4 shall be considered to arise out of a commercial
relationship or transaction for purpose of Article 1 of New York
Convention with respect to recognition and enforcement within
the Area of either Side.
10. Where an investment dispute has been submitted to aninternational conciliation or arbitration, both Sides shall,to the extent possible, be informed of any relevant information
including the issues in the dispute, state of play of the17

proceedings and other substantive and procedural matters.
11.

Either Side may, upon written notice to the disputing

parties, provide any relevant information or make submissions
on a question of interpretation of this Arrangement, to theconciliation body or arbitral tribunal.
Article 18
1.
It is understood that the following measures may be adopted
or enforced in the Area of either Side, to the extent that suchmeasures are not applied in a manner which would constitute ameans of arbitrary or unjustifiable discrimination against theinvestor of the other Side, or a disguised restriction on
investments of the investor of the other Side;(a)measures necessary to protect human, animal or plantlife or health;(b)measures necessary to protect public morals or tomaintain public order;
Note:

(c)

The public order exception may be invoked
only where a genuine and sufficiently
serious threat is posed to one of thefundamental interests of society.

measures necessary to secure compliance with the laws
or regulations which are not inconsistent with theprovisions of this Arrangement including thoserelating to:(i)the prevention of deceptive andfraudulent practices or to deal with theeffects of a default on contract;(ii) the protection of the privacy of theindividual in relation to the processing

18

and dissemination of personal data and theprotection of confidentiality of personal
records and accounts; or(iii) safety;(d)measures considered to be necessary for the protectionof the essential security interests:(i)taken in time of war, or armed conflict,or other emergency; or(ii) relating to the implementation ofpolicies or international agreements
respecting the non-proliferation of
weapons; or(e)measures taken with the aim of contributing to theefforts under the United Nations Charter for the
maintenance of international peace and security.

2.

In cases where any measure as referred to in paragraph 1

is taken in the Area of either Side, that Side shall, prior to
the entry into force of the measure or as soon thereafter as
possible, provide the other Side with information regarding thefollowing elements of the measure:(a) sector and sub-sector or matter;(b) any provisions of this Arrangement affected by themeasure;(c) legal source of the measure;(d) succinct description of the measure; and(e) purpose of the measure.

19

Article 19
1.

It is understood that, in either Side, measures notconforming with Article 3 relating to cross-border capitaltransactions and Article 15 may be adopted or maintained:(a) in the event of serious balance-of-payments andexternal financial difficulties or threat thereof
within the Area of that Side; or(b) in cases where, in exceptional circumstances,
movements of capital cause or threaten to cause
serious difficulties for macroeconomic management, inparticular, monetary and exchange rate policies in the
Area of that Side.
2.

Measures referred to in paragraph 1:(a) shall be consistent with the Articles of Agreement of
the International Monetary Fund;(b) shall not exceed those necessary to deal with thecircumstances set out in paragraph 1;(c) shall be temporary and shall be eliminated as soon as
conditions permit;(d) shall be promptly notified to the other Side; and(e) shall avoid unnecessary damages to the commercial,economic and financial interests of the investors of
the other Side.
Article 20

It is understood that measures may be taken in the Areaof either Side relating to financial services for prudential
reasons, including measures for the protection of investors,

20

depositors, policy holders or persons to whom a fiduciary duty
is owed by an enterprise supplying financial services, or toensure the integrity and stability of the financial system,
provided that such measures are not used as a means ofundermining the investment activities of an investor of theother Side.
Article 211.
In the Area of either Side, intellectual property rights
shall be protected adequately and effectively, and theintellectual property protection system shall be administeredin an efficient and transparent manner. For this purpose, bothSides shall promptly consult with each other at the request ofeither Side, so that the factors which are recognized as having
adverse effects to investments of investors may be removed.
2.

It is understood that this Arrangement does not affect theexercise of rights or the implementation of obligations undermultilateral agreements in respect of protection of
intellectual property rights in force in the Area of either Side．
3.
Notwithstanding Article 4, it is understood that thetreatment accorded to investors of any other countries orregions and to their investments in the Area of either Side byvirtue of multilateral agreements in respect of protection of
intellectual property rights may not be extended to investorsof the other Side and to their investments, when such
multilateral agreements are not in force in the Area of the otherSide.
Article 22
Nothing in this Arrangement covers taxation measures.
Article 23
1.

Both Sides shall establish a Joint Committee (hereinafter21

referred to as “the Committee”) with a view to accomplishing
the objectives of this Arrangement. The functions of theCommittee shall be:(a) to discuss the implementation and operation of thisArrangement;(b) to discuss the exceptional measures maintained,
amended, modified or adopted in the Area of either Side
as referred to in paragraph 1 of Article 8, for the
purpose of contributing to the reduction or
elimination of such exceptional measures;(c) to discuss the exceptional measures adopted or
maintained in the Area of either Side as referred toin paragraph 2 of Article 8, for the purpose ofencouraging favorable conditions for investors; and(d) to discuss any other investment-related mattersconcerning this Arrangement.
2.

The Committee may, as necessary, make appropriate

decisions or recommendations by consensus to both Sides for the
more effective functioning or the attainment of the objectivesof this Arrangement.
3.
The Committee shall be composed of representatives of eachSide. The Committee may, upon mutual consent of both Sides,
invite representatives of relevant entities with the necessary
expertise relevant to the issues to be discussed, and hold joint
meetings with the business sector.
4.
The Committee shall determine its own rules of procedure
to carry out its functions.
5.
The Committee may establish sub-committees and delegate
specific tasks to such sub-committees.

22

6.
The Committee and the sub-committees established pursuant
to paragraph 5 shall meet upon the request of either Side.
Article 24
Either Side recognizes that it is inappropriate toencourage investment by investors of the other Side and of any
other countries or regions by relaxing the health, safety or
environmental measures, or by lowering the labor standards.
Article 25
1.
It is understood that the benefits of this Arrangement may
be denied by either Side to an investor of the other Side thatis an enterprise of the other Side and to its investments, if
the enterprise is owned or controlled by an investor of any othercountry or region and the authorities in the Area of the denying
Side adopts or maintains measures with respect to the othercountry or region:(a)that prohibit transactions with the enterprise or thatwould be violated or circumvented if the benefits wereaccorded to the enterprise or to its investments; or(b)that prohibit or restrict investment in accordance withthe existing laws and regulations in the Area of thedenying Side.
2.
It is understood that the benefits of this Arrangement may
be denied by either Side to an investor of the other Side thatis an enterprise of the other Side and to its investments, if
that enterprise is owned or controlled by an investor of any
other country or region and that enterprise has no substantial
business activities in the Area of the other Side.
Note 1: For the purposes of this Article, unless otherwise
stipulated in the existing laws and regulations referred
to in sub-paragraph 1(b), an enterprise is:

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(a)

“owned” by an investor if more than fifty (50) percentof the equity interest in it is owned by the investor;and(b) “controlled” by an investor if the investor has thepower to name a majority of its directors or otherwise
to legally direct its actions.
Note 2:Either Side, when there arises a change in
conditions for the denial of benefits as referred to inparagraphs 1 and 2, shall notify the other Side of the change
in advance. In that event, both Sides shall consult witheach other with a view to reviewing and amending, if
necessary, this Article.
Article 26
1.

This Arrangement shall enter into force on the date thatboth Sides inform each other that respective procedures havebeen completed. It shall remain in force for a period of ten
years after its entry into force and shall continue in force
unless terminated as provided in paragraph 6 of this Article.
2.
This Arrangement also covers all investments of investorsof either Side acquired in the Area of the other Side inaccordance with the applicable laws and regulations in that Areaprior to the entry into force of this Arrangement.
3.
It is understood that claims arising out of events which
occurred or had been settled prior to its entry into force shallbe put outside the scope of this Arrangement.
4.
The Annexes to this Arrangement shall form an integral partof this Arrangement.
5.
Either Side may at any time request consultations with theother Side for the purpose of amending this Arrangement.

246.
Either Side may, by giving one year’s advance notice inwriting to the other Side, terminate this Arrangement.

This Arrangement has been made in the English language. In
witness whereof, the representative of the Association of East
Asian Relations and the representative of the Interchange
Association, signed this Arrangement in Taipei, on September
22, 2011.

FOR THE ASSOCIATION OF EAST

FOR THE INTERCHANGE

ASIAN RELATIONS:ASSOCIATION:

25