Croatia regarding the interpretation of this Agreement or
which, in the opinion of one of the Governments, presents a
question of international law arising out of any project or
activity for which Coverage has been issued or a loan made
shall be resolved, insofar as possible, through negotiations
between the two Governments. If, at the end of six months
following the request for negotiations, the two Governments
have not resolved the dispute by agreement, 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 function as
follows:
(1) Each Government shall appoint one arbitrator;
these two arbitrators shall, by agreement, designate a
president of the arbitral 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


DONE at Washington on the 15th day of January, 1993, in
duplicate, in the English and Croatian languages, both texts

being equally authentic.

FOR THE GOVERNMENT OF FOR THE GOVERNMENT OF
THE UNITED STATES OF AMERICA THE REPUBLIC OF CROATIA

me -



to which such interests are transferred to a person or
entity permitted to own such interests under the laws of the

Republic of Croatia.

ARTICLE 4

(a) Amounts in the currency of the Republic of
Croatia, including credits thereof, acquired by the Issuer
in connection with payment to a party under Coverage shall
be accorded treatment in the territory of the Republic of
Croatia no less favorable as to use and conversion than the
treatment to which such funds would be entitled in the hands
of the party under Coverage.

(b) Such amounts and credits may be transferred by the
Issuer 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 Republic of Croatia in accordance with its
laws.

(ec) The provisions of this Article shall also apply to
any amounts and credits in the currency of the Republic of
Croatia which may be accepted by the Issuer in settlement of
obligations with respect to loans made by the Issuer for

projects in the Republic of Croatia.

ARTICLE 5
(a) Any dispute between the Government of the United

States of America and the Government of the Republic of


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Permanent Court of Arbitration to make the necessary
appointment or appointments, and both Governments agree
to accept such appointment or appointments.

(ii) The arbitral tribunal shall base its
decision on the applicable principles and rules of
international law. The arbitral tribunal shall decide
by majority vote. Its decision shall be final and
binding.

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

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

(¢c) 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 of the Issuer.


INVESTMENT INCENTIVE AGREEMENT BETWEEN
THE GOVERNMENT OF THE UNITED STATES OF AMERICA
AND THE GOVERNMENT OF THE REPUBLIC OF CROATIA’

The Government of the United States of America and the
Government of the Republic of Croatia;

Affirming their common desire to encourage economic
activities in the Republic of Croatia which promote the
development of the economic resources and productive
capacities of the Republic of Croatia; and

Recognizing that this objective can be promoted through
investment insurance (including reinsurance), loans and
investment guaranties which are backed in whole or in part
by the Government of the United States of America and
provided by the Overseas Private Investment Corporation
("OPIC"), an agency of the Government of the United States
of America;

Have agreed as follows:


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ARTICLE 6

(a) This Agreement shall enter into force on the date
of signing.

(b) This Agreement shall continue in force until the
expiration of twelve months from the date on which either
Government shall have given written notice of termination of
this Agreement to the other. Notwithstanding termination of
this Agreement, the provisions of this Agreement shall
continue to apply with respect to Coverage issued or loans
made at any time before the date of termination.

(c) Upon entry into force, this Agreement shall
supersede the agreement on investment guaranties between the
Government of the United States of America and the
Government of the Socialist Federal Republic of Yugoslavia
effected by exchange of notes signed at Belgrade on January
18, 1973, as between the Governments of the United States of
America and the Republic of Croatia. Any matter concerning
the Republic of Croatia relating to such agreement or to any
investment guaranteed in accordance with such agreement

shall be resolved under the terms of the present Agreement.


ARTICLE 1
As used in this Agreement, the term "Coverage" shall
refer to any investment insurance, reinsurance or investment
guaranty which is provided by an Issuer in connection with a
project in the territory of the Republic of Croatia, and the
term "Issuer" shall refer to OPIC, any successor agency of
the Government of the United States of America, and the

agent of either.

ARTICLE 2

(a) (i)} If the Issuer makes payment to any party
under Coverage, the Government of the Republic of
Croatia shall, subject to the provisions of Article 3
of this Agreement, recognize the transfer to the Issuer
of any assets, including those in the form of
investment as well as currency or credits, in
connection with such payment, as well as the succession
ef the Issuer to any right, title, claim, privilege, or
cause of action existing, or which may arise, in
connection therewith.

(ii) If the Issuer, in the exercise of its rights
as a creditor, acquires any such assets or succeeds to
any right, title, claim, privilege or cause of action,
the Government of the Republic of Croatia shall,
subject to the provisions of Article 3 of this

Agreement, recognize such acquisition or succession.


(b) The Issuer shall assert no greater rights than
those of the party from whom such rights were acquired as
described in paragraph (a) of this Article.

(ec) The Issuer, as a development agency of the
Government of the United States of America, shall not be
subject to regulation under the laws of the Republic of
Croatia applicable to insurance or financial organizations.

(ad) Interest and fees on loans made or guaranteed by
the Issuer shall be exempt from tax in the Republic of
Croatia. The Issuer shall not be subject to tax in the
Republic of Croatia as a result of any transfer, succession
or other acquisition described in paragraph (a) of this
Article. In all other cases, tax treatment of transactions
conducted by the Issuer in the Republic of Croatia shall be
determined by applicable law of the Republic of Croatia or
specific agreement between the Issuer and appropriate fiscal

authorities of the Government of the Republic of Croatia.

ARTICLE 3
To the extent that the laws of the Republic of Croatia
partially or wholly invalidate or prohibit the transfer,
succession or other acquisition, as described in Article
2(a) of this Agreement, of any interest in any property
within the territory of the Republic of Croatia by the
Issuer, the Government of the Republic of Croatia shall

permit the Issuer to make appropriate arrangements pursuant