U.S. GOVERNMENT PRINTING OFFICE

WASHINGTON : 

1

29–118

" SENATE ! 108TH CONGRESS

1st Session 

TREATY DOC. 

2003

108–13

ADDITIONAL PROTOCOL TO INVESTMENT TREATY 

WITH ROMANIA

MESSAGE

FROM

THE PRESIDENT OF THE UNITED STATES

TRANSMITTING

ADDITIONAL PROTOCOL BETWEEN THE GOVERNMENT OF THE 

UNITED STATES OF AMERICA AND THE GOVERNMENT OF ROMANIA CONCERNING THE RECIPROCAL ENCOURAGEMENT AND 

PROTECTION OF INVESTMENT OF MAY 28, 1992, SIGNED AT 

BRUSSELS ON SEPTEMBER 22, 2003

DECEMBER 9, 2003.—Protocol was read the first time, and together with 

the accompanying papers, referred to the Committee on Foreign Relations and ordered to be printed for the use of the Senate 


E:\Seals\Congress.#13
(III)

LETTER OF TRANSMITTAL 

THE WHITE HOUSE, December 9, 2003. 

To the Senate of the United States: 

With a view to receiving the advice and consent of the Senate to 

ratification, I transmit herewith the Additional Protocol between 

the Government of the United States of America and the Government of Romania Concerning the Reciprocal Encouragement and 

Protection of Investment of May 28, 1992, signed at Brussels on 

September 22, 2003. I transmit also, for the information of the Senate, the report of the Department of State with respect to this Additional Protocol. 

My Administration expects to forward to the Senate shortly analogous Additional Protocols for Bulgaria, the Czech Republic, Estonia, Latvia, Lithuania, Poland, and the Slovak Republic. Each of 

these Additional Protocols is the result of an understanding the 

United States reached with the European Commission and six 

countries that will join the European Union (EU) on May 1, 2004 

(the Czech Republic, Estonia, Latvia, Lithuania, Poland, and the 

Slovak Republic), as well as with Bulgaria and Romania, which are 

expected to join the EU in 2007. 

The understanding is designed to preserve U.S. bilateral investment treaties (BITs) with each of these countries after their accession to the EU by establishing a framework acceptable to the European Commission for avoiding or remedying present and possible 

future incompatibilities between their BIT obligations and their future obligations of EU membership. It expresses the U.S. intent to 

amend the U.S. BITs, including the BIT with Romania, in order to 

eliminate incompatibilities between certain BIT obligations and EU 

law. It also establishes a framework for addressing any future incompatibilities that may arise as European Union authority in the 

area of investment expands in the future, and endorses the principle of protecting existing U.S. investments from any future EU 

measures that may restrict foreign investment in the EU. 

The United States has long championed the benefits of an open 

investment climate, both at home and abroad. It is the policy of the 

United States to welcome market-driven foreign investment and to 

permit capital to flow freely to seek its highest return. This Additional Protocol preserves the U.S. BIT with Romania, with which 

the United States has an expanding relationship, and the protections it affords U.S. investors even after Romania joins the EU. 

Without it, the European Commission would likely require Romania to terminate its U.S. BIT upon accession because of existing 

and possible future incompatibilities between our current BIT and 

EU law. 

IV

I recommend that the Senate consider this Additional Protocol as 

soon as possible, and give its advice and consent to ratification at 

an early date.

GEORGE W. BUSH. 

(V)

LETTER OF SUBMITTAL 

DEPARTMENT OF STATE, Washington, October 31, 2003. 

The PRESIDENT, The White House. 

THE PRESIDENT: I have the honor to submit to you the Additional 

Protocol Between the Government of the United States of America 

and the Government of Romania amending the Treaty Between the 

Government of the United States of America and the Government 

of Romania Concerning the Reciprocal Encouragement and Protection of Investment of May 28, 1992, signed at Brussels on September 22, 2003. I recommend that this protocol be transmitted to 

the Senate for its advice and consent to ratification. 

This protocol is the result of an understanding that the United 

States reached with the European Commission and six countries 

that will join the European Union (‘‘EU’’) on May 1, 2004 (the 

Czech Republic, Estonia, Latvia, Lithuania, Poland and the Slovak 

Republic), as well as with Bulgaria and Romania, which are expected to join the EU in 2007. 

The understanding is designed to preserve our bilateral investment treaties (‘‘BITs’’) with these countries after their accession to 

the EU by establishing a framework for avoiding or remedying 

present and possible future incompatibilities between our BITs 

with these eight countries and their future obligations of EU membership. In this regard, the understanding expresses the U.S. intent to conclude substantively identical amendments and formal interpretations of the BITs with each of these eight countries. 

In addition, the understanding establishes a framework for addressing any future incompatibilities that may arise as European 

Union authority in the area of investment expands and evolves in 

the future. It endorses the principle of protecting existing U.S. investments in these countries from any future EU measures that 

may restrict foreign investment in the EU, and also clarifies certain protections afforded to U.S. investments in individual member 

states of the EU under the Treaty Establishing the European Community (‘‘EC Treaty’’). 

Finally, the understanding calls for the United States and each 

BIT partner to interpret, through an exchange of notes, two BIT 

provisions: (1) the right of each BIT Party to take measures necessary for the protection of its own essential security interests, and 

(2) the BIT prohibition on performance requirements. 

Both interpretations were undertaken at the request of the European Commission to confirm the mutual understanding of the 

United States and Romania in the context of EU enlargement. For 

example, the interpretation of the BIT provision on essential secuVerDate jul 14 2003 05:19 Dec 11, 2003 Jkt 029118 PO 00000 Frm 00005 Fmt 7633 Sfmt 7633 E:\HR\OC\TD013.XXX TD013
VI

rity interests confirms that, for Romania, these interests may include interests deriving from Romania’s membership in the EU. As 

concerns the BIT prohibition on performance requirements, many 

U.S. BITs include a provision explicitly stating that the prohibition 

on performance requirements does not extend to conditions for the 

receipt or continued receipt of an advantage. The interpretation relating to performance requirements makes this explicit with respect to the U.S.-Romania BIT. The two interpretations are enclosed for the information of the Senate. 

Investment by the United States has played an important role in 

the economic transformation of these eight countries, and the U.S. 

BITs have afforded important protections to U.S. investors. Prior to 

acceding to the EU, however, the European Commission has required that these countries terminate any international treaty containing incompatibilities with EU law. Without the understanding 

and the steps contemplated therein, including the specific amendments in this protocol, these countries would be required to terminate their U.S. BITs and the great majority of protections these 

treaties afford U.S. investors. Therefore, the understanding, together with the interpretations and specific amendments in the 

protocol, will preserve the benefits of these treaties and provide important additional protections for U.S. investors as the EU continues to evolve. 

THE U.S.-ROMANIA ADDITIONAL PROTOCOL

The United States champions EU enlargement and, at the same 

time, intends that this BIT will continue to mutually benefit U.S. 

and Romanian investors. By undertaking these amendments of the 

BIT with Romania, which would be brought into force just prior to 

its accession, incompatibilities between BIT protections and EU 

law are eliminated, and any future problems in this respect are addressed through a framework for consultations. This action preserves our BIT with Romania after its accession to the EU, and is 

consistent with the policy of the United States to welcome marketdriven foreign investment and to permit capital to flow freely to 

seek its highest return. Romania is one of the newly democratized 

countries in Europe transitioning to a market economy, and foreign 

direct investment into Romania is very much in both our countries’

interests. Protection for investors facilitates investment activity, 

and thus directly supports U.S. policy objectives. 

The principal substantive articles of the protocol provide as follows. 

Article I: that the article of the BIT prohibiting performance requirements does not limit Romania’s ability to impose, as necessary 

under EU law, certain kinds of performance requirements in the 

agricultural and audiovisual sectors; 

Article II: that the terms of the free trade area/customs union exception of the BIT shall apply, without limitation, to all of a Party’s 

obligations stemming from its membership in an economic integration agreement that includes a free trade area or customs union, 

such as the EU; 

Article III: that the BIT Parties will consult promptly whenever 

either Party believes that steps are necessary to assure compatibility between the BIT and the EC Treaty; 

VII

Article IV: that, in certain specified sectors or matters, Romania 

may take a reservation against the national treatment and mostfavored-nation treatment obligations of the BIT, provided such reservation is necessary to meet Romania’s obligations under EU law, 

and subject to the following exception; that, notwithstanding any 

such new reservation, existing U.S. investments in Romania shall 

remain protected under the national treatment and most-favorednation treatment obligations of the BIT for at least 10 years from 

the date of the relevant EU law necessitating the reservation; and 

finally, that the United States reserves the right to make or maintain limited exceptions to the national treatment obligation in two 

new sectors or matters, fisheries and subsidies, and to the mostfavored-nation treatment obligation in one new sector, fisheries. 

With respect to future developments in EU law, the United 

States recognizes that the possibility exists that these amendments 

may not suffice to ensure compatibility, and that consultations 

would be necessary to avoid or eliminate any incompatibilities that 

may arise. As noted above, the United States and Romania expressly agree to such consultations in the protocol. 

I support this protocol to the U.S. BIT with Romania, and I favor 

its transmission to the Senate at an early date. 

Respectfully submitted, 

COLIN L. POWELL. 

Enclosures: As stated. 

(IX)


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