E101525 - CTS 1996 No. 46
AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES FOR THE PROMOTION AND RECIPROCAL PROTECTION OF INVESTMENTS
THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES, hereinafter referred to as the "Contracting Parties",
DESIRING to intensify economic cooperation between the Contracting Parties;
INTENDING to create favourable conditions for investments by investors of one Contracting Party in the territory of the other Contracting Party, and to increase prosperity in their respective territories;
RECOGNIZING that encouragement and protection of such investments will benefit the economic prosperity of the Contracting Parties;
HAVE AGREED AS FOLLOWS:
For the purpose of this Agreement:
(a) "enterprise" means
(i) any entity constituted or organized under applicable law, whether or not for profit, whether privately-owned or governmentally-owned, including any corporation, trust, partnership, sole proprietorship, joint venture or other association; and
(ii) a branch of any such entity;
(b) "fair market value" means the value of an investment or return, immediately prior to its expropriation or immediately before the expropriation became public knowledge, whichever is the earlier. Valuation criteria shall include going concerned value, asset value including declared tax value of tangible property, and other criteria, as appropriate, to determine fair market value.
(c) "financial service" means a service of a financial nature, such as, but not limited to, insurance, and services incidental or auxiliary to a service of a financial nature;
(d) "financial institution" includes any financial intermediary or other enterprise that is authorized to do business and regulated or supervised as a financial institution under the law of the Contracting Party in whose territory it is located;
(e) "intellectual property rights" includes copyright and related rights, trademark rights, patent rights, and the other rights referred to in the Agreement on Aspects of Trade-Related Intellectual Property Rights forming part of the Agreement establishing the World Trade Organization done at Marrakesh, April 1994.
(f) "investment" means any kind of asset owned or controlled either directly, or indirectly through an investor of a third State, by an investor of one Contracting Party in the territory of the other Contracting Party in accordance with the latter's laws and, in particular, though not exclusively, includes:
(i) movable and immovable property and any related property rights, such as mortgages, liens, usufructs or pledges;
(ii) shares, stock, bonds and debentures or any other form of equity participation in a company, business enterprise or joint venture;
(iii) money, claims to money, and claims to performance under contract having an economic value;
(v) intellectual property rights;
(vi) rights, conferred by law or under contract, to undertake any economic and commercial activity, including any rights to search for, cultivate, extract or exploit natural resources.
Any change in the form of an investment does not affect its character as an investment.
(g) "investor" means
in the case of Canada:
(i) any natural person possessing the citizenship of or permanently residing in Canada in accordance with its laws; or
(ii) any enterprise incorporated or duly constituted in accordance with applicable laws of Canada,
who makes the investment in the territory of the Republic of the Philippines; and
in the case of the Republic of the Philippines:
(i) individuals who are citizens of the Philippines within the meaning of its Constitution; or
(ii) enterprises that are incorporated or, in any event, are properly organized and actually doing business under the laws of the Republic of the Philippines and have their headquarters in the territory of the Philippines where effective management is carried out.
who makes the investment in the territory of Canada and who does not possess the citizenship of Canada;
(h) "measure" includes any law, rule, regulation, requirement, or established governmental procedure or practice; "existing measure" means a measure existing at the time this Agreement enters into force;
(i) "returns" means all amounts yielded by an investment and in particular, though not exclusively, includes profits, interest, capital gains, dividends, royalties, fees or other current income;
(j) "state enterprise" means an enterprise that is governmentally-owned or controlled through ownership interests by a government;
(k) "territory" means:
(i) in respect of Canada, the territory of Canada, as well as those maritime areas, including the seabed and subsoil adjacent to the outer limit of the territorial sea, over which Canada exercises, in accordance with international law, sovereign rights for the purpose of exploration and exploitation of the natural resources of such areas;
(ii) in respect of the Republic of the Philippines, the national territory of the Philippines as defined in Article 1 of its Constitution.
Establishment, Acquisition and Protection of Investment
(1) Each Contracting Party shall promote investments in its territory by nationals and companies of the other Contracting Party.
(2) Each Contracting Party shall accord investments or returns of investors of the other Contracting Party
(a) fair and equitable treatment in accordance with principles of international law, and
(b) full protection and security.
(3) Each Contracting Party shall, subject to the terms of this Agreement and the Annex, including inter alia paragraphs 4 and 5 of this Article and paragraph 2 of Article 4, permit establishment of a new business enterprise or acquisition of an existing business enterprise or a share of such enterprise by investors or prospective investors of the other Contracting Party on a basis no less favourable than that which, in like circumstances, it permits such acquisition or establishment by:
(a) its own investors or prospective investors; or
(b) investors or prospective investors of any third state.
(4) Decisions by either Contracting Party, pursuant to measures not inconsistent with this Agreement, as to whether or not to permit an acquisition shall not be subject to the provisions of Articles XIII or XV of this Agreement.
(5) Decisions by either Contracting Party not to permit establishment of a new business enterprise or acquisition of an existing business enterprise or a share of such enterprise by investors or prospective investors shall not be subject to the provisions of Article XIII of this Agreement.
Most-Favoured-Nation (MFN) Treatment after Establishment and Exceptions to MFN
(1) Each Contracting Party shall grant to investments, or returns of investors of the other Contracting Party, treatment no less favourable than that which, in like circumstances, it grants to investments or returns of investors of any third State.
(2) Each Contracting Party shall grant investors of the other Contracting Party, as regards their management, use, enjoyment or disposal of their investments or returns, treatment no less favourable than that which, in like circumstances, it grants to investors of any third State.
(3) Subparagraph (3)(b) of Article II and paragraphs (1) and (2) of this Article do not apply to treatment by a Contracting Party pursuant to any existing or future bilateral or multilateral agreement:
(a) establishing, strengthening or expanding a free trade area or customs union or an interim agreement leading to the formation of a free trade area or customs union of which either Contracting Party is or may become a member;
(b) negotiated within the framework of the GATT or its successor organization and liberalizing trade in services; or
(c) relating to:
(ii) telecommunications transport networks and telecommunications transport services;
(iv) maritime matters, including salvage; or
(v) financial services.
(d) relating wholly or mainly to taxation, in accordance with, and subject to, the provisions of Article XII.
National Treatment after Establishment and Exceptions to National Treatment
(1) Each Contracting Party shall grant to investments or returns of investors of the other Contracting Party treatment no less favourable than that which, in like circumstances, it grants to investments or returns of its own investors with respect to the expansion, management, conduct, operation and sale or disposition of investments.
(2) Subparagraph (3)(a) of Article II, paragraph (1) of this Article, and paragraphs (1) and (2) of Article IV do not apply to:
(a) (i) any existing non-conforming measures maintained within the territory of a Contracting Party; and
(ii) any measure maintained or adopted after the date of entry into force of this Agreement, that, at the time of sale or other disposition of a government's equity interests in, or the assets of, an existing state enterprise or an existing governmental entity, prohibits or imposes limitations on the ownership of equity interests or assets or imposes nationality requirements relating to senior management or members of the board of directors;
(b) the continuation or prompt renewal of any non-conforming measure referred to in subparagraph (a);
(c) an amendment to any non-conforming measure referred to in subparagraph (a), to the extent that the amendment does not decrease the conformity of the measure, as it existed immediately before the amendment, with those obligations;
(d) the right of each Contracting Party is to make or maintain exceptions within the sectors or matters listed in Section 1 of the Annex to this Agreement.
(1) (a) A Contracting Party may not require that an enterprise of that Contracting Party, that is an investment under this Agreement, appoint to senior management positions individuals of any particular nationality.
(b) A Contracting Party may require that a majority of the board of directors, or any committee thereof, of an enterprise constituted or organized under the laws of that Contracting Party that is an investment under this Agreement be of a particular nationality, or resident in the territory of the Contracting Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.
(2) Neither Contracting Party may impose any of the following requirements in connection with permitting the establishment or acquisition of an investment or enforce any of the following requirements in connection with the subsequent regulation of that investment:
(a) to export a given level or percentage of goods;
(b) to achieve a given level or percentage of domestic content;
(c) to purchase, use or accord a preference to goods produced or services provided in its territory, or to purchase goods or services from persons in its territory;
(d) to relate in any way the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with such investment; or
(e) to transfer technology, a production process or other proprietary knowledge to a person in its territory unaffiliated with the transferor, except when the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal or competition authority, either to remedy an alleged violation of competition laws or acting in a manner not inconsistent with other provisions of this Agreement.
(3) Subject to its laws, regulations and policies relating to the entry of aliens, each Contracting Party shall grant temporary entry to citizens of the other Contracting Party employed by an enterprise who seeks to render services to that enterprise or a subsidiary or affiliate thereof, in a capacity that is managerial or executive.
(1) (a) In respect of intellectual property rights, a Contracting Party may derogate from Articles III and IV in a manner that is consistent with the agreement establishing the World Trade Organization done at Marrakesh, April 1994.
(b) The provisions of Article VIII do not apply to the issuance of compulsory licenses granted in relation to intellectual property rights, or to the revocation, limitation or creation of intellectual property rights, to the extent that such issuance, revocation, limitation or creation is consistent with the agreement establishing the World Trade Organization done at Marrakesh, April 1994.
(2) The provisions of Articles II, III, IV and V of this Agreement do not apply to:
(a) procurement by a government or state enterprise;
(b) subsidies or grants provided by a government or a state enterprise, including government-supported loans, guarantees and insurance;
(c) any current or future foreign aid program to promote economic development, whether under a bilateral agreement, or pursuant to a multilateral arrangement or agreement, such as the OECD Agreement on Export Credits.
Compensation for Losses
Investors of one Contracting Party who suffer losses because their investments or returns on the territory of the other Contracting Party are affected by an armed conflict, or a national emergency on that territory, shall be accorded by such latter Contracting Party, in respect of restitution, indemnification, compensation or other settlement, treatment no less favourable than that which it accords to its own investors or to investors of any third State.
(1) Investments or returns of investors of either Contracting Party shall not be nationalized, expropriated or subjected to measures having an effect equivalent to nationalization or expropriation, (hereinafter referred to as "expropriation") in the territory of the other Contracting Party, except for a public purpose, under due process of law, in a non-discriminatory manner and against prompt, adequate and effective compensation. Such compensation shall be based on the fair market value of the investment or returns expropriated immediately before the expropriation or at the time the proposed expropriation became public knowledge, whichever is the earlier, shall be paid without delay and shall be effectively realizable and freely transferable.
(2) The investor affected shall have a right, under the law of the Contracting Party making the expropriation, to prompt review, by a judicial or other independent authority of that Party, of its case and of the valuation of its investment or returns in accordance with the principles set out in this Article.
Transfer of Funds
(1) Each Contracting Party shall guarantee to an investor of the other Contracting Party the unrestricted transfer of investments and returns. Without limiting the generality of the foregoing, each Contracting Party shall also guarantee to the investor the unrestricted transfer of:
(a) funds in repayment of loans related to an investment;
(b) the proceeds of the total or partial liquidation of any investment;
(c) wages and other remuneration accruing to a citizen of the other Contracting Party who was permitted to work in connection with an Investment in the territory of the other Contracting Party;
(d) any compensation owed to an investor by virtue of Articles VII or VIII of this Agreement.
(2) Transfers shall be effected without delay in the convertible currency in which the capital was originally invested or in any other convertible currency agreed by the investor and the Contracting Party concerned. Unless otherwise agreed by the investor, transfers shall be made at the rate of exchange applicable on the date of transfer.
(3) Notwithstanding paragraphs 1 and 2, a Contracting Party may prevent a transfer through the equitable, non-discriminatory and good faith application of its laws relating to:
(a) bankruptcy, insolvency or the protection of the rights of creditors;
(b) issuing, trading or dealing in securities;
(c) criminal or penal offenses;
(d) reports of transfers of currency or other monetary instruments; or
(e) ensuring the satisfaction of judgments in adjudicatory proceedings.
(4) Neither Contracting Party may require its investors to transfer, or penalize its investors that fail to transfer, the returns attributable to investments in the territory of the other Contracting Party.
(5) Paragraph 4 shall not be construed to prevent a Contracting Party from imposing any measure through the equitable, non-discriminatory and good faith application of its laws relating to the matters set out in subparagraphs (a) through (e) of paragraph 3.
(1) If a Contracting Party or any agency thereof makes a payment to any of its investors under a guarantee or a contract of insurance it has entered into in respect of an investment, the other Contracting Party shall recognize the validity of the subrogation in favour of such Contracting Party or agency thereof to any right or title held by the investor. This does not necessarily imply, however, a recognition on the part of the other Contracting Party of the merits of any case or the amount of any claim arising therefrom.
(2) A Contracting Party or any agency thereof which is subrogated to the rights of an investor in accordance with paragraph (1) of this Article, shall be entitled in all circumstances to the same rights as those of the investor in respect of the investment concerned and its related returns. Such rights may be exercised by the Contracting Party or any agency thereof or by the investor if the Contracting Party or any agency thereof so authorizes.
Prudential and Financial Measures
(1) Nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or maintaining reasonable measures for prudential reasons, such as:
(a) the protection of investors, depositors, financial market participants, policy holders, policy claimants, or persons to whom a fiduciary duty is owed by a financial institution;
(b) the maintenance of the safety, soundness, integrity or financial responsibility of financial institutions; and
(c) ensuring the integrity and stability of a Contracting Party's financial system.
(2) Notwithstanding paragraphs (1), (2) and (4) of Article IX, and without limiting the applicability of paragraph (3) of Article IX, a Contracting Party may prevent or limit transfers by a financial institution to, or for the benefit of, an affiliate of or person related to such institution or provider, through the equitable, non-discriminatory and good faith application of measures relating to maintenance or the safety, soundness, integrity or financial responsibility of financial institutions.
(3) Sub-paragraph 3(b) of Article II does not apply in respect of financial services.
(1) Except as set out in this Article, nothing in this Agreement shall apply to taxation measures.
(2) Nothing in this Agreement shall affect the rights and obligations of the Contracting Parties under any tax convention. In the event of any inconsistency between the provisions of this Agreement and any such convention, the provisions of that convention apply to the extent of the inconsistency.
(3) Subject to paragraph (2), a claim by an investor that a tax measure of a Contracting Party is in breach of an agreement between the central government authorities of a Contracting Party and the investor concerning an investment shall be considered a claim for breach of this Agreement unless the taxation authorities of the Contracting Parties, no later than six months after being notified of the claim by the investor, jointly determine that the measure does not contravene such agreement.
(4) Article VIII may be applied to a taxation measure unless the taxation authorities of the Contracting Parties, no later than six months after being notified by an investor that he disputes a taxation measure, jointly determine that the measure is not an expropriation.
(5) If the taxation authorities of the Contracting Parties fail to reach the joint determinations specified in paragraphs (3) and (4) within six months after being notified, the investor may submit its claim for resolution under Article XIII.
Settlement of Disputes between an Investor and the Host Contracting Party
(1) Any dispute between one Contracting Party and an investor of the other Contracting Party, relating to a claim by the investor that a measure taken or not taken by the former Contracting Party is in breach of this Agreement, and that the investor has incurred loss or damage by reason of, or arising out of, that breach, shall, to the extent possible, be settled amicably between them.
(2) If a dispute has not been settled amicably within a period of six months from the date on which it was initiated, it may be submitted by the investor to arbitration in accordance with paragraph (4). For the purposes of this paragraph, a dispute is considered to be initiated when the investor of one Contracting Party has delivered notice in writing to the other Contracting Party alleging that a measure taken or not taken by the latter Contracting Party is in breach of this Agreement, and that the investor has incurred loss or damage by reason of, or arising out of, that breach.
(3) An investor may submit a dispute as referred to in paragraph (1) to arbitration in accordance with paragraph (4) only if:
(a) the investor has consented in writing thereto;
(b) the investor has waived its right to initiate or continue any other proceedings in relation to the measure that is alleged to be in breach of this Agreement before the courts or tribunals of the Contracting Party concerned or in a dispute settlement procedure of any kind;
(c) if the matter involves taxation, the conditions specified in paragraph 5 of Article XII have been fulfilled; and
(d) not more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage.
(4) The dispute may, at the election of the investor concerned, be submitted to arbitration under:
(a) The International Centre for the Settlement of Investment Disputes (ICSID), established pursuant to the Convention on the Settlement of Investment Disputes between States and Nationals of other States, opened for signature at Washington 18 March, 1965 (ICSID Convention), provided that both the disputing Contracting Party and the Contracting Party of the investor are parties to the ICSID Convention; or
(b) the Additional Facility Rules of ICSID, provided that either the disputing Contracting Party or the Contracting Party of the investor, but not both, is a party to the ICSID Convention; or
(c) an international arbitrator or ad hoc arbitration tribunal established under the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL).
(5) Each Contracting Party hereby gives its unconditional consent to the submission of a dispute to international arbitration in accordance with the provisions of this Article.
(6) (a) The consent given under paragraph (5), together with either the consent given under paragraph (3), or the consents given under paragraph (12), shall satisfy the requirements for:
(i) written consent of the parties to a dispute for purposes of Chapter 11 (Jurisdiction of the Centre) of the ICSID Convention and for purposes of the Additional Facility Rules; and
(ii) an "agreement in writing" for purposes of Article II of the United Nations Convention for the Recognition and Enforcement of Foreign Arbitral Awards, done at New York, June 10, 1958 ("New York Convention").
(b) Any arbitration under this Article shall be held in a State that is a party to the New York Convention, and claims submitted to arbitration shall be considered to arise out of a commercial relationship or transaction for the purposes of Article 1 of that Convention.
(7) A tribunal established under this Article shall decide the issues in dispute in accordance with this Agreement and applicable rules of international law.
(8) A tribunal may order an interim measure of protection to preserve the rights of a disputing party, or to ensure that the tribunal's jurisdiction is made fully effective, including an order to preserve evidence in the possession or control of a disputing party or to protect the tribunal's jurisdiction. A tribunal may not order attachment or enjoin the application of the measure alleged to constitute a breach of this Agreement. For purposes of this paragraph, an order includes a recommendation.
(9) A tribunal may award, separately or in combination, only:
(a) monetary damages and any applicable interest;
(b) restitution of property, in which case the award shall provide that the disputing Contracting Party may pay monetary damages and any applicable interest in lieu of restitution.
A tribunal may also award costs in accordance with the applicable arbitration rules.
(10) An award of arbitration shall be final and binding and shall be enforceable in the territory of each of the Contracting Parties.
(11) Any proceedings under this Article are without prejudice to the rights of the Contracting Parties under Articles XIV and XV.
(12) (a) A claim that a Contracting Party is in breach of this Agreement, and that an enterprise that is a juridical person incorporated or duly constituted in accordance with applicable laws of that Contracting Party has incurred loss or damage by reason of, or arising out of, that breach, may be brought by an investor of the other Contracting Party acting on behalf of an enterprise which the investor owns or controls directly or indirectly. In such a case
(i) any award shall be made to the affected enterprise;
(ii) the consent to arbitration of both the investor and the enterprise shall be required;
(iii) both the investor and enterprise must waive any right to initiate or continue any other proceedings in relation to the measure that is alleged to be in breach of this Agreement before the courts or tribunals of the Contracting Party concerned or in a dispute settlement procedure of any kind; and
(iv) the investor may not make a claim if more than three years have elapsed from the date on which the enterprise first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that it has incurred loss or damage.
(b) Notwithstanding subparagraph 12(a), where a disputing Contracting Party has deprived a disputing investor of control of an enterprise, the following shall not be required:
(i) a consent to arbitration by the enterprise under 12(a)(ii); and
(ii) a waiver from the enterprise under 12(a)(iii).
Consultations and Exchange of Information
Either Contracting Party may request consultations on the interpretation or application of this Agreement. The other Contracting Party shall give sympathetic consideration to the request. Upon request by either Contracting Party, information shall be exchanged on the measures of the other Contracting Party that may have an impact on new investments, investments or returns covered by this Agreement.
Disputes between the Contracting Parties
(1) Disputes between the Contracting Parties concerning the interpretation and application of this Agreement shall be settled, as far as possible, through friendly consultations by both parties through diplomatic channels.
(2) If such disputes cannot be settled through consultations, they shall, at the request of either Contracting Party, be submitted for settlement to an ad hoc international arbitral panel (hereinafter called "the Panel").
(3) The Panel mentioned above shall be established as follows: The Panel is composed of three arbitrators. Within two months after receipt through diplomatic channels of the request for arbitration, each Contracting Party shall appoint one arbitrator; the two arbitrators shall propose by mutual agreement the third arbitrator who is a national of a third State which has diplomatic relations with both Contracting Parties, and the third arbitrator shall, upon approval by the two Contracting Parties, be appointed as Chairman of the Panel. The Chairman shall be appointed within two months from the date of appointment of the other two members of the Panel.
(4) If the appointments of the members of the Panel are not made within the periods specified in paragraph (3) of this Article, either Contracting Party may, in the absence of any other arrangement, invite the President of the International Court of Justice to make necessary appointments within three months. Should the President be a national of one Contracting Party or should he not be able to perform this designation because of other reasons, this task shall be entrusted to the Vice-President of the Court, or to the next senior Judge of the Court who is not a national of either Contracting Party.
(5) The Panel shall determine its own procedure. The Panel shall decide its award by majority of votes. Such award is final and binding upon the Contracting Parties. Unless otherwise agreed, the decision of the Panel shall be rendered within six months of the appointment of the Chairman in accordance with paragraphs (3) or (4) of this Article.
(6) Each Contracting Party shall bear the cost of its own member of the Panel and of its representation in the arbitral proceedings. The costs of the Chairman and the remaining costs shall be borne in equal parts by the Contracting Parties. The Panel may, however, in its decision direct that a higher proportion of costs shall be borne by one of the two Contracting Parties, and this award shall be binding on both Contracting Parties.
(7) Within 60 days after a decision is made by the Panel, the Contracting Parties shall agree on the manner in which to give effect to the decision which shall normally consist of implementation of such decision. If the Contracting Parties fail to reach agreement, the Contracting Party bringing the dispute shall be entitled to compensation or to suspend benefits of equivalent value to those awarded by the panel.
(1) The Contracting Parties shall, within a two year period after the entry into force of this Agreement, exchange letters listing, to the extent possible, any existing measures that do not conform to the obligations in subparagraph (3)(a) of Article II, Article IV or paragraphs (1) and (2) of Article V.
(2) Each Contracting Party shall, to the extent practicable, ensure that its laws, regulations, procedures, and administrative rulings of general application respecting any matter covered by this Agreement are promptly published or otherwise made available in such a manner as to enable interested persons and the other Contracting Party to become acquainted with them.
Application and General Exceptions
(1) This Agreement shall apply to any investment made by an investor of one Contracting Party in the territory of the other Contracting Party before or after the entry into force of this Agreement.
(2) Nothing in this Agreement shall be construed to prevent a Contracting Party from adopting, maintaining or enforcing any measure otherwise consistent with this Agreement that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental concerns.
(3) Provided that such measures are not applied in an arbitrary or unjustifiable manner, or do not constitute a disguised restriction on international trade or investment, nothing in this Agreement shall be construed to prevent a Contracting Party from adopting or maintaining measures, including environmental measures:
(a) necessary to ensure compliance with laws and regulations that are not inconsistent with the provisions of this Agreement;
(b) necessary to protect human, animal or plant life or health; or
(c) relating to the conservation of living or non-living exhaustible natural resources.
(4) The Annex shall form an integral part of this Agreement.
Entry into force
(1) This Agreement shall enter into force three months after the notification between the Contracting Parties of the accomplishment of their respective internal procedures for the entry into force of this Agreement.
(2) This Agreement shall remain in force unless either Contracting Party notifies the other Contracting Party in writing of its intention to terminate it. The termination of this Agreement shall become effective one year after notice of termination has been received by the other Contracting Party. In respect of investments or commitments to invest made prior to the date when the termination of this Agreement becomes effective, the provisions of Articles I to XVII inclusive of this Agreement shall remain in force for a period of fifteen years.
IN WITNESS WHEREOF, the undersigned, duly authorized thereto by their respective Governments, have signed this Agreement.
DONE in duplicate at Manila on November 9, 1995 in French and English languages, both texts being equally authentic.
FOR THE GOVERNMENT OF CANADA
Rizalino S. Navarro
Department of Trade and Industry
FOR THE GOVERNMENT OF THE REPUBLIC OF THE PHILIPPINES
Section 1. Reservations and exceptions:
(a) In accordance with Article IV, subparagraph 2(d), Canada reserves the right to make and maintain exceptions in the sectors or matters listed below:
- social services (i.e. public law enforcement; correctional services; income security or insurance; social security or insurance; social welfare; public education; public training; health and child care);
- services in any other sector;
- government securities - as described in SIC 8152;
- residency requirements for ownership of oceanfront land;
- measures implementing the Northwest Territories and the Yukon Oil and Gas Accords.
(b) In accordance with Article IV, subparagraph 2(d), the Republic of the Philippines reserves the right to make and maintain exceptions in the sectors or matters listed below:
- mass media as described in Article XVI, Section 11 of the Constitution;
- services involving the practice of licensed profession;
- small-scale retail trade as described in Republic Act No. 1180;
- cooperative enterprises as described in Republic Act No. 6938;
- private security agencies as described in Republic Act No. 5487;
- small-scale mining as described in Republic Act No. 7076;
- utilization of marine resources except deep sea fishing as described in Article XII, Section 2 of the Constitution;
- trading in rice and corn as described in Republic Act No. 3018; Presidential Decree No. 194.
(c) For the purpose of this Annex, "SIC" means, with respect to Canada, Standard Industrial Classification numbers as set out in Statistics Canada, Standard Industrial Classification, fourth edition, 1980.
Section 2. Canada-specific interpretation and exceptions:
(a) For the purposes of this Agreement an "investment" shall not include real estate or other property, tangible or intangible, located in the territory of Canada, not acquired in the expectation or used for the purpose of economic benefit or other business purposes.
(b) The provisions of Articles II, III, IV and V of this Agreement do not apply to any measure denying investors of the Philippines and their investments any rights or preferences provided to the aboriginal peoples of Canada.
(c) Investments in cultural industries in Canada are exempt from the provisions of this Agreement. "Cultural industries" means natural persons or enterprises engaged in any of the following activities:
(i) the publication, distribution, or sale of books, magazines, periodicals or newspapers in print or machine readable form but not including the sole activity of printing or typesetting any of the foregoing;
(ii) the production, distribution, sale or exhibition of film or video recordings;
(iii) the production, distribution, sale or exhibition of audio or video music recordings;
(iv) the publication, distribution, sale or exhibition of music in print or machine readable form; or
(v) radiocommunications in which the transmissions are intended for direct reception by the general public, and all radio, television or cable broadcasting undertakings and all satellite programming and broadcast network services.
Section 3. Philippines-specific interpretation and exceptions
For the purposes of this Agreement, "investment" in the territory of the Philippines shall only include assets which, where registration is required by Philippine laws, rules or regulations, have been so registered.
Section 4. Interest:
The compensation for expropriation described in Article VIII (Expropriation) shall include interest payable from the date of expropriation to the date of payment at a normal commercial rate.
Section 5. Procedure for disputes on prudential and financial measures:
(a) Where an investor submits a claim to arbitration under Article XIII, and the disputing Contracting Party invokes paragraphs (1) or (2) of Article XI, the tribunal established pursuant to Article XIII shall, at the request of that Contracting Party, seek a report in writing from the Contracting Parties on the issue of whether and to what extent the said paragraphs are a valid defence to the claim of the investor. The tribunal may not proceed pending receipt of a report under this Article.
(b) Pursuant to a request received in accordance with subparagraph (a), the Contracting Parties shall proceed in accordance with Article XV, to prepare a written report, either on the basis of agreement following consultations, or by means of an arbitral panel. The consultations shall be between the financial services authorities of the Contracting Parties. The report shall be transmitted to the tribunal, and shall be binding on the tribunal.
(c) Where, within 70 days of the referral by the tribunal, no request for the establishment of a panel pursuant to subparagraph (b) has been made and no report has been received by the tribunal, the tribunal may proceed to decide the matter.
(d) Panels for disputes on prudential issues and other financial matters shall have the necessary expertise relevant to the specific financial service in dispute.