Following the visit of the German Chancellor’s visit to the Republic of Angola last year and the consequent strengthening of bilateral relations since then, namely through the signing of cooperation agreements in areas such as transport and the mineral sectors, it is worth recalling the Agreement on the Promotion and Reciprocal Protection of Investments, which has become even more important with the strengthening of German-Angolan relations.
On October 30, 2003, the Federal Republic of Germany and the Republic of Angola signed an agreement for the reciprocal promotion and protection of investment (BIT). The same agreement entered into force on the 1st of March 2007, after completion of the formalities of each state related to the approval of international conventions, allowing the use of this important instrument to stimulate economic relations between the two countries.
This agreement applies to all investments made before or after its entry into force but does not cover disputes that arose before its entry into force.
Each of the Contracting Parties has undertaken to promote investments by investors of the other Party in its territory.
Such investments shall in all cases be claimed fair and equitable treatment, and the management, maintenance, use, enjoyment, or disposition of the investments of investors of the other Party shall not be hindered in any way by arbitrary or discriminatory measures.
Concretely, the treatment between the Parties shall not be less favourable than that accorded to investments of their own investors or of investors of other States.
Both Contracting Parties shall favourably examine the requests for entry and stay of persons of the other Party wishing to enter its territory for the purpose of making an investment. Furthermore, this favourable examination shall cover the applications for work permits, including salaried employees of one of the Contracting Parties intending to enter and stay in the territory of the other Contracting Party in connection with an investment for the purpose of carrying out a paid activity.
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This Agreement also provides for no obligation to grant benefits to investors of the other Party in respect of their membership of or association with a customs or economic union, a common market, a free trade area, a similar international economic cooperation agreement, a double taxation agreement or other international agreements of a fiscal nature.
For the purposes of this Convention, less favourable treatment shall be deemed to be differential treatment in the case of limitations on the acquisition of raw and auxiliary materials, energy and fuel, as well as of means of production and operation of all kinds, differential treatment in the case of impediments to the sale of products within the country and abroad, and other measures having similar effects, but shall not apply to cases of measures taken for reasons of public safety or order, public health or morals.
Neither Contracting Party shall be obliged to extend to investors resident in the territory of the other Contracting Party those tax advantages, exemptions, and reductions which, according to tax legislation, are only granted to investors resident in its territory.
Enjoying full protection and full security, investments of investors of one of the Contracting Parties in the territory of the other Contracting Party shall not be directly or indirectly expropriated, nationalized or subjected to other measures with effects equivalent to expropriation or nationalization, except for reasons of public utility and upon compensation that shall correspond to the value that the investment had immediately before the date of public knowledge of the expropriation, nationalization.
Investors of a Contracting Party who suffer losses of investments in the territory of the other Contracting Party because of war or other armed conflicts, revolution, state of national emergency or insurrection, shall not receive a less favourable treatment in that Contracting Party as regards restitution, compensation, indemnity, or other consideration than that accorded to its own investors, such payments to be freely transferable.
After the fulfilment of the tax obligations, it shall ensure to the investors of the other Contracting Party the free transfer of the sums related to the investments, namely:
- Of the initial capital and the additional sums necessary for the maintenance or extension of the investment;
- Current income;
- Loan repayments;
- The proceeds resulting from the total or partial liquidation or disposal of the investment;
Disputes arising between the Contracting Parties concerning the interpretation or application of this Agreement shall be settled as far as possible by the Governments of the two Contracting Parties. If within six months the dispute cannot be settled in this way, it shall be submitted to an arbitration tribunal at the request of either of the Contracting Parties.
Article by Marco Correia Gadanha
Marco Correia Gadanha
Marco Correia Gadanha is a partner of the Portuguese law office MC&A. He is specialised in legal advice to international transactions. Marco has extensive experience of legal practice in Portugal and in the Portuguese-speaking African countries. Since 2008, he has practiced mainly in the areas of labor and litigation, assisting national and international clients in these and other matters, namely corporate law, especially in Portugal, Angola and Mozambique. He graduated at the University of Coimbra in 2005 and he holds post-graduations in Labor and Angolan Law.