EMBASSY OF THE
. UNITED STATES OF AMERICA

January 20, 1988

Excellency:

I have the honor to refer to conversations which have recently
taken place between representatives of our two governments
relating to economic activities in the Republic of The Marshall
Islands which promote the development of the economic resources
and productive capacities of the Republic of the, Marshall
Islands and to investment insurance (including reinsurance) and
guaranties which are backed in whole or in part by the credit or
public monies of the United States of America and are
administered either directly by the Overseas Private Investment
Corporation (“OPIC"), an independent Government Corporation
Organized under the laws of the United States of America, or
pursuant to arrangements between OPIC and commercial insurance,
reinsurance and other companies. I also have the honor to
confirm the following understandings reached as a result of
those conversations:

Article 1

As used herein, the term "coverage" shall refer to any.
investment insurance, reinsurance or guaranty which is issued in
accordance with this Agreement by OPIC, by any successor agency
of the United States of America or by any other entity or group
of entities, pursuant to arrangements with OPIC or any successor
agency, all of whom are hereinafter deemed included in the term
“issuer to the extent of their interest as insurer, reinsurer,
or guarantor in any coverage, whether as a party or successor to
a contract providing coverage or as an agent for the
administration of coverage.

Article 2

The procedures set forth in this Agreement shall apply only with
respect to coverage relating to projects or activities,
including contracts involving the provision of goods or
services, registered with or otherwise approved by the
Government of the Republic of the Marshall Islands through the
Minister of Foreign Affairs.

Article 3

(A) If the issuer makes payment to any party under coverage,
the Government of the Republic of the Marshall Islands shall,
subject to the provisions of article 4 hereof, recognize the
transfer to the issuer of any currency, credits, assets, or
investment on account of which payment under such coverage is
made as well as the succession of the issuer to any right,
title, claim, privilege, or cause of action existing, or which
may. arise, in connection therewith


(B) The Arbitral Tribunal for resolution of disputes pursuant
to article 6 (A) shall pe established and function as follows:

(I) Each government shall appoint one arbitrator: these two
arbitrators shall designate a President by common agreement who
shall be a citizen of a third state and be appointed by the two
governments. The arbitrators shall be appointed within two
months and the President within three months of the date of
receipt of either governments 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
Center for the Settlement of Investment Disputes 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 public international law.
The Arbitral Tribunal shall decide by majority vote. Its
decision shall be final and binding

(III) Each of the governments shall pay the expense of its
arbitrator and of its representation in the proceedings before
the Arbitral Tribunal; the expenses of the President and the
other costs shall be paid in equal parts by the two
Governments. The Arbitral Tribunal may adopt regulations
concerning the costs, consistent with the foregoing.

{IV) In all other matters, the Arbitral Tribunal shall
reguiate its own procedures.

Article 7

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 no longer to be a party to the agreement. In
such event, the provisions of the agreement with respect to
coverage issued while the agreement was in force shall remain in
force for the duration of such coverage, but in no case longer
than twenty years after the denunciation of the Agreement

Upon receipt of a note from Your Excellency indicating that the
foregoing provisions are acceptable to the Government of the
Republic of the Marshall Islands, the Government of the United
States of America will consider that this note and your reply
thereto constitutes an agreement between our two governments on
this subject, to enter into force on the date of the note by
which the Government of the Republic of the Marshall Islands
Communicates to the Government of the United States of America
that this exchange of notes has been approved pursuant to its
constitutional procedures.

Institution of this Agreement is an important step in
furtherance of the economic cooperation between our two
governments. Within the framework of the OPIC programs, The
Government of the United States will encourage United States
private investment in the Marshall Islands.

Accept, Excellency, the renewed assurances of my highest

consideration.
Certified true copy of
the original
His Excellency . old H. Campbe
tom D, Kijiner Consul - Majuro

Minister of Poreign Affairs
Republic of The Marshall Islands


(B) The issuer shall assert no greater rights than those of
the transferring party under coverage with respect to any
interests transferred or succeeded to under this article.
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 issuer.

(Cc) The issuance of coverage outside of the Republic of the
Marshall Islands with respect to a project or activity in the
Republic of the Marshall Islands Shall not subject the issuer to
regulation under the laws of the Republic of the ‘Marshall
Islands applicable to insurance or financial organizations.

(D) Punds introduced or acquired in the Republic of the
Marshall Islands or withdrawn from the Republic of the marshall
Islands by the issuer shall be exempt from all taxes upon
income, real property or sales, from customs duties, and from
any other similar taxes or levies in the Marshall Islands.

Article 4

To the extent that the laws of the Republic of the Marshall
Islands partially or wholly invalidate or prohibit the
acquisition from a party under coverage of any interest in any
property within the territory of the Republic of the Marshall
Islands by the issuer, the Government of the Republic of the
Marshall Islands shall permit such party and the issuer to make
appropriate arrangements pursuant to which such interests are
transferred to an entity permitted to own such interests under
the laws of the Republic of the Marshall Islands.

Article 5

Amounts in the lawful currency of the Republic of the Marshall
Islands, including credits thereof, acquired by the issuer by
virtue of such coverage shall be accorded treatment by the
Government of the Republic of the Marshall Islands no less
favorable as. to use and conversion than the treatment which such
would be entitled in the hands of the party under coverage.

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 the Marshall Islands.

Article 6

(A) Any dispute between the Government of the United States of
America and the Government of the Republic of the Marshall
Islands regarding the interpretation of this agreement or which,
in the opinion of one of the governments, involves a question of
Public International Law arising out of any project or activity
for which coverage has been issued shall be resolved, insofar as
possible, through negotiations between the two governments. If
at the end of three 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 public international law,
shall be submitted, at the initiative of either government, to
an arbitral tribunal for resolution in accordance with article 6
(B).


January 25, 1989

Excellency

The Government of the Republic of the Marshall Islands
accepts the terms and conditions set forth in the "Investment
Incentive Agreement Between the Government of the United States
of America and the Government of the Republic of the Marshall
Islands", which shall enter into force upon the date written
above, and which exchange of notes has been approved pursuant to
the constitutional procedures of the Republic of the Marshall
Islands.

Accept, Excellency, the renewed assurances of my highest

consideration.

His Excellency
Samuel B. Thomsen
Representative of the
United States of America



(3) The Arpitral Tribunal for resolution of disputes pursuant
to article 6 (A) shall be established and function as follows:

(I) Each government shall appoint one arbitrator: these two
arbitrators shall designate a President by common agreement who
shall be a citizen of a third state and be appointed by the two
governments. The arbitrators shall be appointed within two
months and the President within three months of the date of
receipt of either governments 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
Center for the Settlement of Investment Disputes 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 public international law.
The Arbitral Tribunal shall decide by majority vote. Its
decision shall be final and binding.

{III) Each of the governments shall pay the expense of its
arbitrator and of its representation in the proceedings before
the Arbitral Tribunal; the expenses of the President and the
other costs shall be paid in equal parts by the two
Governments, The Arbitral Tribunal may adopt regulations
concerning the costs, consistent with the foregoing.

(IV) In all other matters, the Arbitral Tribunal shall
regulate its own procedures.

Article 7

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 no longer to be a party to the agreement. In
such event, the provisions of the agreement with respect to
coverage issued while the agreement was in force shall remain in
force for the duration of such coverage, but in no case longer
than twenty years after the denunciation of the Agreement.

Upon receipt of a note from Your Excellency indicating that the
foregoing provisions are acceptable to the Government of the
Republic of the Marshall Islands, the Government of the United
States of America will consider that this note and your reply
thereto constitutes an agreement between our two governments on
this subject, to enter into force on the date of the note by
which the Government of the Republic of the Marshall Islands
Communicates to the Government of the United States of America
that this exchange of notes has been approved pursuant to its
constitutional procedures.

Institution of this Agreement is an important step in
furtherance of the economic cooperation between our two
governments. Within the framework of the OPIC programs, The
Government of the United States will encourage United States
private investment in the Marshall Islands.

Accept, Excellency, the renewed assurances of my highest
consideration.

Certified true copy of
the original

His Excellency . old“. Campbe
Tom D. Kijiner n ues
Minister of Foreign Affairs . Consul - Majuro
Republic of The Marshall Islands


PN

EMBASSY OF THE
, UNITED STATES OF AMERICA

January 20, 1988

Excellency:

I have the honor to refer to conversations which have recently
taken place between representatives of our two governments
relating to economic activities in the Republic of The Marshall
Islands which promote the development of the economic resources
and productive capacities of the Republic of the. Marshall
Islands and to investment insurance (including reinsurance) and
guaranties which are backed in whole or in part by the credit or
public monies of the United States of America and are
administered either directly by the Overseas Private Investment
Corporation ("OPIC"), an independent Government Corporation
organized under the laws of the United States of America, or
pursuant to arrangements between OPIC and commercial insurance,
reinsurance and other companies. I also have the honor to
confirm the following understandings reached as a result of
those conversations:

Article 1

As used herein, the term "coverage" shall refer to any
investment insurance, reinsurance or guaranty which is issued in
accordance with this Agreement by OPIC, by any successor agency
of the United States of America or by any other entity or group
of entities, pursuant to arrangements with OPIC or any successor
agency, all of whom are hereinafter deemed included in the term
“issuer" to the extent of their interest as insurer, reinsurer,
or guarantor in any coverage, whether as a party or successor to
a contract providing coverage or as an agent for the
administration of coverage.

Article 2

The procedures set forth in this Agreement shall apply only with
respect to coverage relating to projects or activities,
including contracts involving the provision of goods or
services, registered with or otherwise approved by the
Government of the Republic of the Marshall Islands through the
Minister of Poreign Affairs.

Article 3

(A) If the issuer makes payment to any party under coverage,
the Government of the Republic of the Marshall Islands shall,
subject to the provisions of article 4 hereof, recognize the
transfer to the issuer of any currency, credits, assets, or
investment on account of which payment under such coverage is
made as well as the succession of the issuer to any right,
title, claim, privilege, or cause of action existing, or which
may. arise, in connection therewith.


=

(B) The issuer shall assert no greater rights than those of
the transferring party under coverage with respect to any
interests transferred or succéeded to under this article.
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 issuer.

(c) The issuance of coverage outside of the Republic of the
Marshall Islands with respect to a project or activity in the
Republic of the Marshall Islands Shall not subject the issuer to
regulation under the laws of the Republic of the ‘Marshall
Islands applicable to insurance or financial organizations.

(D) Punds introduced or acquired in the Republic of the
Marshall Islands or withdrawn from the Republic of the Marshall
Islands by the issuer shall be exempt from all taxes upon
income, real property or sales, from customs duties, and from
any other similar taxes or levies in the Marshall Islands.

Article 4

To the extent that the laws of the Republic of the Marshall
Islands partially or wholly invalidate or prohibit the
acquisition from a party under coverage of any interest in any
property within the territory of the Republic of the Marshall
Islands by the issuer, the Government of the Republic of the
Marshall Islands shall permit such party and the issuer to make
appropriate arrangements pursuant to which such interests are
transferred to an entity permitted to own such interests under
the laws of the Republic of the Marshall Islands.

Article 5

Amounts in the lawful currency of the Republic of the Marshall
Islands, including credits thereof, acquired by the issuer by
virtue of such coverage shall be accorded treatment by the
Government of the Republic of the Marshall Islands no less
favorable as. to use and conversion than the treatment which such
would be entitled in the hands of the party under coverage.

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 the Marshall Islands.

Article 6

(A) Any dispute between the Government of the United States of
America and the Government of the Republic of the Marshall
Islands regarding the interpretation of this agreement or which,
in the opinion of one of the governments, involves a question of
Public International Law arising out of any project or activity
for which coverage has been issued shall be resolved, insofar as
possible, through negotiations between the two governments. If
at the end of three 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 public international law,
shall be submitted, at the initiative of either government, to
an arbitral tribunal for resolution in accordance with article 6

(B).