The Kingdom of the Netherlands
and
the Federal Democratic Republic of Ethiopia,
hereinafter referred to as the Contracting Parties,
Desiring to strengthen their traditional ties of friendship and to extend and intensify
the economic relations between them, particularly with respect to investments by the
nationals of one Contracting Party and in the territory of the other Contracting Party;
Recognizing that agreement upon the treatment to be accorded to such investments will
stimulate the flow of capital and technology and the economic development of the Contracting
Parties and that fair and equitable treatment of investment is desirable;
Have agreed as follows:
For the purposes of this Agreement:
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a) the term "investments" means every kind of asset and more particularly, though not
exclusively:
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(i) movable and immovable property as well as any other rights in rem in respect of every
kind of asset;
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(ii) rights derived from shares, bonds and other kinds of interests in companies and joint
ventures;
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(iii) claims to money, to other assets or to any performance having an economic value;
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(iv) rights in the field of intellectual property, technical processes, goodwill and know-how;
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(v) rights granted under public law or under contract, including rights to prospect, explore,
extract and exploit natural resources.
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(b) the term ``nationals" shall comprise with regard to either Contracting Party:
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(i) natural persons having the nationality of that Contracting Party;
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(ii) legal persons constituted under the law of that Contracting Party;
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(iii) legal persons not constituted under the law of that Contracting Party but controlled
by natural persons as defined in (i) or by legal persons as defined in (ii).
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(c) The term ``territory" means:
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(i) in respect of the Kingdom of the Netherlands: the territory of the Kingdom of the
Netherlands and any area adjacent to the territorial sea which, under the laws applicable
within the Kingdom of the Netherlands, and in accordance with international law, is
the exclusive economic zone or continental shelf of the Kingdom of the Netherlands,
in which the Kingdom of the Netherlands exercises jurisdiction or sovereign rights;
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(ii) in respect of the Federal Democratic Republic of Ethiopia: the territory in which
the Federal Democratic Republic of Ethiopia exercises sovereign rights or jurisdiction
in accordance with International law.
Article 2. Admission of Investments
Either Contracting Party shall, within the framework of its laws and regulations,
stimulate economic cooperation through the promotion and the protection in its territory
of investments of nationals of the other Contacting Party. Subject to its right to
exercise powers conferred by its laws or regulations, each Contracting Party shall
admit such investments.
Article 3. Treatment of Investments
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1 Each Contracting Party shall ensure fair and equitable treatment of the investments
of nationals of the other Contracting Party and shall not impair, by unreasonable
or discriminatory measures, the operation, management, maintenance, use, enjoyment
or disposal thereof by those nationals. Each Contracting Party shall accord to such
investments full security and protection.
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3 If a Contracting Party has accorded special advantages to nationals of any third
State by virtue of agreements establishing customs unions, economic unions, monetary
unions or similar institutions, or on the basis of interim agreements leading to such
unions or institutions, that Contracting Party shall not be obliged to accord such
advantages to nationals of the other Contracting Party.
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4 If the provisions of law of either Contracting Party or obligations under international
law existing at present or established hereafter between the Contracting Parties in
addition to the present Agreement contain a regulation, entitling investments by nationals
of the other Contracting Party to a treatment more favourable than is provided for
by the present Agreement, such regulation shall, to the extent that it is more favourable,
prevail over the present Agreement.
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5 For the avoidance of doubt it is confirmed that the national treatment principle
provided for in paragraph (2) and (4) of this Article applies to investments once
legally admitted, through specific authorization, if applicable.
Article 4. Taxes and other Fiscal Matters
With respect to taxes, fees, charges and to fiscal deductions and exemptions, each
Contracting Party shall accord to nationals of the other Contracting Party who are
engaged in any economic activity in its territory, treatment not less favourable than
that accorded to its own nationals or to those of any third State who are in the same
circumstances, whichever is more favourable to the nationals concerned. For this purpose,
however, there shall not be taken into account any special fiscal advantages accorded
by that Party:
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a) under an agreement for the avoidance of double taxation; or
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b) by virtue of its participation in a customs union, economic union or similar institution;
or
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c) on the basis of reciprocity with a third State.
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1 The Contracting Parties shall guarantee that payments relating to an investment may
be transferred. The transfers shall be made in a freely convertible currency, without
restriction or delay.
Such transfers include in particular though not exclusively:
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a) profits, interests and dividends;
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b) funds necessary
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(i) for acquisition of raw or auxiliary materials, semi-fabricated or finished products,
or
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(ii) to replace capital assets in order to safeguard the continuity of an investment;
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c) additional funds necessary for the development of an investment;
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d) funds in repayment of loans;
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e) royalties or fees;
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f) earnings of natural persons;
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g) the proceeds of sale or liquidation of the investment;
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h) payments arising under Article 7.
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2 In accordance with the provisions of Paragraph 1, the transfers referred to above
shall be made pursuant to the exchange regulations in force of the Contracting Party
in whose territory the investment was made, at the rate of exchange applicable on
the date of transfer.
Article 6. Expropriation and Nationalisation
Neither Contracting Party shall take any measure of expropriation, nationalisation
or any other measures having the same nature or the same effect against investments
of investors of the other Contracting Party unless the following conditions are complied
with:
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a) the measures are taken in the public interest and under due process of law;
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b) the measures are not discriminatory;
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c) the measures are taken against prompt, adequate and affective compensation. Such compensation
shall represent the fair market value of the investment immediately before the moment
the measures or impending measures became public knowledge and shall include interest
at a normal banking commercial rate from the date the measures were taken, until the
date of payment and shall, in order to be effective for the affected investors, be
paid and made transferable, without delay to the country designated by the investors
concerned in any freely convertible currency.
Article 7. Compensation for Damages or Losses
Nationals of one Contracting Party who suffer losses in respect of their investments
in the territory of the other Contracting Party owing to war or other armed conflict,
revolution, a state of national emergency, revolt, insurrection or riot shall be accorded
by the latter Contracting Party treatment, as regards restitution, indemnification,
compensation or other settlement, no less favourable than that which that Contracting
Party accords to its own nationals or to nationals of any third State, whichever is
more favourable to the nationals concerned.
If the investments of a national of the one Contracting Party are insured against
non-commercial risks or otherwise give rise to payment of indemnification in respect
of such investments under a system established by law, regulation or government contract,
any subrogation of the insurer or re-insurer or Agency designated by the one Contracting
Party to the rights of the said national pursuant to the terms of such insurance or
under any other indemnity given shall be recognized by the other Contracting Party.
Article 9. Settlement of Disputes between a Contracting Party and an Investor
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1 Disputes which might arise between one of the Contracting Parties and an investor
of the other Contracting Party concerning an investment of that investor in the territory
of the former Contracting Party shall, whenever possible, be settled amicably between
the parties concerned.
Article 10. Scope of Application
The present Agreement shall apply to investments made in the territory of one Contracting
Party, whether prior to or after the entry into force of the Agreement. It shall,
however, not be applicable to claims arising out of events which occurred prior to
its entry into force.
Article 11. Consultations
Either Contracting Party may propose to the other Party that consultations be held
on any matter concerning the interpretation of the Agreement. The other Party shall
accord sympathetic consideration to the proposal and shall afford adequate opportunity
for such consultations.
Article 12. Settlement of Disputes between the Contracting Parties
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1 Any dispute between the Contracting Parties concerning the interpretation or application
of the present Agreement, which cannot be settled within a reasonable lapse of time
by means of diplomatic negotiations, shall, unless the Parties have otherwise agreed,
be submitted, at the request of either Party, to an arbitral tribunal, composed of
three members. Each Party shall appoint one arbitrator and the two arbitrators thus
appointed shall together appoint a third arbitrator as their chairman who is not a
national of either Party.
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3 If the two arbitrators are unable to reach agreement, in the two months following
their appointment, on the choice of the third arbitrator, either Party may invite
the President of the International Court of Justice to make the necessary appointment.
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4 If, in the cases provided for in the paragraphs (2) and (3) of this Article, the
President of the International Court of Justice is prevented from discharging the
said function or is a national of either Contracting Party, the Vice-President shall
be invited to make the necessary appointments. If the Vice-President is prevented
from discharging the said function or is a national of either Party the most senior
member of the Court available who is not a national of either Party shall be invited
to make the necessary appointments.
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5 The tribunal shall decide on the basis of generally recognized principles of international
law. Before the tribunal decides, it may at any stage of the proceedings propose to
the Parties that the dispute be settled amicably. The foregoing provisions shall not
prejudice settlement of the dispute ex aequo et bono if the Parties so agree.
Article 13. Territorial Application
As regards the Kingdom of the Netherlands, the present Agreement shall apply to the
part of the Kingdom in Europe, to the Netherlands Antilles and to Aruba, unless the
notification provided for in Article 14, paragraph (1) provides otherwise.
Article 14. Entry into Force and Termination
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1 The present Agreement shall enter into force on the first day of the second month
following the date on which the Contracting Parties have notified each other in writing
that their constitutionally required procedures have been complied with, and shall
remain in force for a period of fifteen years.
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2 Unless notice of termination has been given by either Contracting Party at least
six months before the date of the expiry of its validity, the present Agreement shall
be extended tacitly for periods of ten years, whereby each Contracting Party reserves
the right to terminate the Agreement upon notice of at least six months before the
date of expiry of the current period of validity.