-4-
(iv) In all other matters, the arbitral tribunal shall regulate its own
procedures.

ARTICLE 5
(a) This Agreement shall enter into force on the date of signature.

(b) Upon entry into force, this Agreement shall supersede the guaranty
of private investments agreement between the United States of America and
Afghanistan effected by exchange of notes signed at Kabul on June 5 and 9, 1957.
Any matter relating to support by OPIC of projects in the territory of Afghanistan
prior to the entry into force of this Agreement shall be resolved under the terms of
this Agreement.

(c) This Agreement shall continue in force until six months from the
date of a receipt of a note by which one Government informs the other of an intent
to terminate this Agreement. In such event, the provisions of this Agreement shall,
with respect to Investment Support provided while this Agreement was in force,
remain in force so long as such Investment Support remains outstanding, but in no
case longer than twenty years after the termination of this Agreement.

IN WITNESS WHEREOF, the undersigned, duly authorized by their respective
Governments, have signed this Agreement.

Done at Kabul, Afghanistan, on the Y+_ day of April, 2004, in duplicate,
in the English language. A Dari language text shall be prepared, which, when
signed on behalf of both Governments, shall be considered equally authentic.

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF
THE UNITED STATES OF THE ISLAMIC REPUBLIC OF
AMERICA TAN
i
Dulce ahniser The Honorable Sayed Mustafa Kazemi

Deputy Chief of Staff & Senior Advisor to Minister of Commerce
the President
Overseas Private Investment Corporation


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EXCHANGE LETTER

It has bees noticed ‘in the Investinent Incentive Agreement between the ‘Government of the United States.
_of ‘America and the Governmentiof the Islamic Republic:of "Afghanistan, signed on April 17, 2004, the’
exact natne of the Governitient ofA fghantstan Is written as:

“The Islamic Republic. of Afghanistan” which hereafter, throughout this Agreerrient, it should be read ds>

“THe Transitional Islanile Staté of Afghanistan”

Both Panties agree with the term“The Transitional Islaniie State of Afghanistan” and this Exchange
s ‘be an Appendix to this Agreémient,

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF
THE UNITED STATES OF TRANSITIONAL ISLAMIC
AMERIQA STATE OF AFGHANISTAN

: list ’ The Honorable Sayed Mustafa Kazemi
Bepaty Chiet ‘Staff & Senior Advisor Minister of Commerce
to the President :
as Private Investment Corporation



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-3-
the Islamic Republic of Afghanistan no less favorable as to use and conversion than

the treatment to which such funds would have been entitled in the hands of the
person or entity from which such amounts were acquired.

(b) Such currency and credits may be transferred to any person or entity

and upon such transfer shall be freely available for use by such person or entity in
the territory of the Islamic Republic of ‘Afghanistan in accordance with its laws.

ARTICLE 4

(a) Any dispute between the Government of the United States of
America and the Government of the Islamic Republic of Afghanistan regarding the
interpretation of this Agreement or which, in the opinion of either party hereto,
presents a question of international law arising out of any project or activity for
which Investment Support has been provided shall be resolved, insofar as possible,
through negotiations between the two Governments. If, six months following a
request for negotiations hereunder, the two Governments have not resolved the
dispute, the dispute, including the question of whether such dispute presents a
question of international law, shall be submitted, at the initiative of either
Government, to an arbitral tribunal for resolution in accordance with paragraph (b)
of this Article.

(b) The arbitral tribunal referred to in paragraph (a) of this Article shall
be established and shall function as follows:

@ Each Government shall appoint one arbitrator. These two
arbitrators shall by agreement designate a president of the tribunal who shall
be a citizen of a third state and whose appointment shall be subject to
acceptance by the two Governments. The arbitrators shall be appointed
within three months, and the president within six 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 Centre for the Settlement of Investment Disputes to make the
necessary appointment or appointments. Both Governments hereby agree to
accept such appointment or appointments.

(i) Decisions of the arbitral tribunal shall be made by majority
vote and shall be based on the applicable principles and rules of
international law. Its decision shall be final and binding.

(iii) During the proceedings, each Government shall bear the
expense of its arbitrator and of its representation in the proceedings before
the tribunal, whereas the expenses of the president and other costs of the
arbitration shall be paid in equal parts by the two Governments. In its
award, the arbitral tribunal may reallocate expenses and costs between the
two Governments.


-2-
(a) The Issuer shall not be subject to regulation under the laws of the

Islamic Republic of Afghanistan applicable to insurance or financial organizations,
but, in the provision of Investment Support, shall be afforded all rights and have

access to all remedies of any such entity, whether domestic, foreign or multilateral.

(b) The Issuer, all operations and activities undertaken by the Issuer in
connection with any Investment Support, and all payments, whether of interest,
principal, fees, dividends, premiums or the proceeds from the liquidation of assets
or of any other nature, that are made, received or guaranteed by the Issuer in
connection with any Investment Support shall be exempt from Taxes, whether
imposed directly on the Issuer or payable in the first instance by others. Neither
projects receiving Investment Support nor investors in such projects shall be
exempt from Taxes by operation of this Article, provided, however, that any
Investment Support shall be accorded tax treatment no less favorable than that
accorded to the investment support of any other national or multilateral
development institution which operates in the Islamic Republic of Afghanistan.
The Issuer shall not be subject to Taxes in connection with any transfer, succession
or other acquisition which occurs pursuant to paragraph (c) of this Article or Article
3(a) hereof, but obligations for Taxes previously accrued and unpaid with respect to
interests received by the Issuer shall not be extinguished as a result of such transfer,
succession or other acquisition.

(c) If the Issuer, alone or with a Coinsurer, makes a payment to any
person or entity, or exercises its rights as a creditor or subrogee, in connection with
any Investment Support, the Government of the Islamic Republic of Afghanistan
shall recognize the transfer to, or acquisition by, the Issuer and any Coinsurer of any
cash, accounts, credits, instruments or other assets in connection with such payment
or the exercise of such rights, as well as the succession of the Issuer and any
Coinsurer to any right, title, claim, privilege or cause of action existing, or which
may arise, in connection therewith.

(d) With respect to any interests transferred to the Issuer or a Coinsurer
or any interests to which the Issuer or a Coinsurer succeeds under this Article, in its
own right or otherwise, the Issuer shall assert no greater rights than those of the
person or entity from whom such interests were received, provided that 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 the Issuer pursuant to paragraph (c) of this
Article. No Coinsurer shall be entitled to the benefits of this Agreement unless itis
acting through, or its interests have been assigned to, the Issuer.

ARTICLE 3

(a) | Amounts in the currency of the Islamic Republic of Afghanistan,
including cash, accounts, credits, instruments or otherwise, acquired by the Issuer
(or by the Issuer and any Coinsurer) upon making a payment, or upon the exercise
of its rights as a creditor, in connection with any Investment Support for a project in
the Islamic Republic of Afghanistan, shall be accorded treatment in the territory of


INVESTMENT INCENTIVE AGREEMENT
BETWEEN
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
AND

THE GOVERNMENT OF THE ISLAMIC REPUBLIC OF AFGHANISTAN

THE GOVERNMENT OF THE UNITED STATES OF AMERICA and THE
GOVERNMENT OF THE ISLAMIC REPUBLIC OF AFGHANISTAN;

AFFIRMING their common desire to encourage economic activities in the
Islamic Republic of Afghanistan that promote the development of the economic
resources and productive capacities of the Islamic Republic of Afghanistan; and

RECOGNIZING that this objective can be promoted through investment
support provided by the Overseas Private Investment Corporation ("OPIC"), a
development institution and an agency of the United States of America, in the form
of investment insurance, coinsurance and reinsurance, debt and equity investments
and investment guaranties;

HAVE AGREED as follows:

ARTICLE 1

As used in this Agreement, the following terms have the meanings herein
provided. The term "Investment Support" refers to any debt or equity investment,
any investment guaranty and any investment insurance, reinsurance or coinsurance
which is provided by the Issuer (or, in the case of coinsurance, is provided by the
Issuer and commercial insurance companies (“Coinsurers”) under coinsurance
arrangements under which the Issuer acts both for itself and for such Coinsurers) in
connection with a project in the territory of the Islamic Republic of Afghanistan.
The term "Issuer" refers to OPIC and any successor agency of the United States of
America, and any agent of either. The term "Taxes" means all present and future
taxes, levies, imposts, stamps, duties and charges, whether direct or indirect,
imposed in the Islamic Republic of Afghanistan and all liabilities with respect
thereto. .

ARTICLE 2

The two Governments confirm their understanding that the Issuer’s activities are
governmental in nature and therefore: