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ARTICLE 5

(a) This Agreement shall enter into force on the date on which
the Government of Pakistan notifies the Government of the United
States of America that all legal requirements for entry into force of this
Agreement have been fulfilled. Upon so entering into force, this
Agreement shall replace and supersede the agreement between the
United States of America and Pakistan on the Guarantee of Private
Investments effected by exchange of notes signed at Washington on May
26, 1955, as supplemented by an exchange of notes signed st Rawalpindi
and Islamabad on March 27, 1968, and s memorandum of
understanding signed at Islamabad on March 27, 1968, and any matter
relating to Investment Support or otherwise pending under such
agreement shall be treated or disposed of under the terms of this
Agreement.

(b) 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 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 ycars after the termination of this Agrecment.

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

DONE at Islamabad, Islamic Republic of Pakistan, on the 18th
day of November, 1997, in the English language.

YotoasRie Olb.:5 ¢—

(MADELEINE K. ALBRIGHT) {GOHAR AYUB KHAN)

U.S. SECRETARY OF STATE MINISTER FOR FOREIGN AFTAIRS

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF

THE UNITED STATES OF THE ISLAMIC REPUBLIC OF
AMERICA PAKISTAN.



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INVESTMENT INCENTIVE AGREEMENT
BETWEEN
THE GOVERNMENT OF
THE UNITED STATES OF AMERICA
AND
- THE GOVERNMENT OF
ISLAMIC REPUBLIC OF PAKISTAN

THE GOVERNMENT OF THE UNITED STATES OF
AMERICA AND THE GOVERNMENT OF THE ISLAMIC
REPUBLIC OF PAKISTAN

AIFIRMING their common desire to encourage economic
activities in Palsistan that promote the development of the economic
resources and productive capacities of Pakistan; 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 and
reinsurance, debt and equity investments and investment guarantees;

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 guarantee and any investment
insurance or reinsurance which is provided by the Issuer in connection
with a project in the territory uf Pakistan The term “Issuer” refers to
OPIC and any successor agency of the United States of America, and
any agent of either. The terms "Taxes" means all present and future
taxes, levies, imposts, stamps, duties and charges imposed by the
Government of Pakistan and all liabilitics with respect thereto.

‘ARTICLE 2

(a) The Issucr shall not be subject to regulation under the laws
of Pakistan applicable to insurance or financial organizations.

(b) All operations and activities undertaken by the Issuer in
connection with sny Investment Support, and all payments, whether of
interest, principal, fees, dividends, premiums, the proceeds from the
liquidation of assets (subject, in the case of liquidation of assets in the
winding up or dissolution of any company, to the payment of Taxes owed
by that company), or of any other nature, that are made, received or
guaranteed by the Issuer in connection with any Investment Support
shall be exempt from Taxcs. The Issuer shall not be subject to any Taxes



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in connection with any transfer, succession or other acquisition which
occurs pursuant to paragraph (c) of this Article or Articte 3 (a) hereof.
Any project in connection with which Investment Support has been
provided shall be accorded tax treatment no less favorable than that
which is accorded at any time while such Investment Support is in effect
to commercial or private sector projects benefitting from the investment
support programmes of any other. national (other than Pakistani
national) or multilateral development institution which operates in
Pakistan, cxcept to the extent that such other institution is cntitled to
more favorable tax treatment under the terms of an agreement for the
avoidance of double taxation concluded between Pakistan and any other
country.

(c) If the issuer makes # payment tu any person or entity, or
exercises its rights ns a creditor or subrogee, in connection with any
Investment Support, the Government of Pakistan shall recognize the
transfer to, or acquisition by, the Issuer of nny 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 Issucr 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
any interests to which the Issuer succeeds under this Article, 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 Americs to assert a claim under international jaw in its sovereign
capacity, as distinct from any rights it may have as the Issucr pursuant
to paragraph (c) of this Article.

ARTICLE 3

(a) Amounts in the currency of Pakistan, including cash,
accounts, ercdits, instruments or otherwisc, acquired by the Issucr upon
making s payment, or upon the exercise of its rights as 3 creditor, in
connection with uny Investment Support provided by the Issuer for a
project in Pakistan, shall be accorded treatment in the territory of
Pakistan no less favourable as to usc and conversion than the treatment
to which such funds would have been entitled in the hands of the person
or entity from which the Issuer acquired such amounts.

(b) Such currency and credits may be transferred by the Issuer
to any person or entity that is permitted to hold such currency under the
laws of Pakistan and upon such transfer shall be frecly available for use
by such person or entity in the territory of Pakistan in accordance with
its laws.



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ARTICLE 4

(a) Any dispute between the Government of the United States
of American and the Government of Pakistan regarding the
interpretation of this Agreement or which, in the opinion of either party
hereto, prescnts a question of international law arising out of any project
or activity for which Investment Support bas been provided shall be
resolved, insofur us 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 Gavernment, 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:

(i) Each Government shall appoint one arbitrator. These
two arbitrators shall by agreement designute a President of the
tribunal who shall be a citizen of o 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 arc not made within the foregoing time limits, cither
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 appuintments.

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

(iii) During the proceedings, cach 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 equa)
parts by the two Governments. In its award, the arbitral tribunal
may reallocate expenses and costs between the two Governments.

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