AGREEMENT ON THE ENCOURAGEMENT AND RECIPROCAL PROTECTION OF INVESTMENTS BETWEEN THE GOVERNMENT OF THE PEOPLE'S REPUBLIC OF CHINA AND THE GOVERNMENT OF THE UNION OF THE SOVIET SOCIALIST REPUBLICS




The original official languages of this BIT were: Chinese and Russian.  The Tsinghua Rule of Law Project has produced this unofficial English language version from the original Chinese text.  While the English language version is for the benefit of the website readers, users should rely on official language versions when advising clients or undertaking some legal process.  

The Government of the People's Republic of China and the Government of the USSR (hereinafter referred to as “the Contracting Parties”),

Intending to encourage and protect investment made in the territory of one Contracting Party by investors of the other Contracting Party, and to create favorable conditions, and  

Desiring to develop the economic cooperation of both States on the basis of principle of mutual respect for sovereignty and principle of equality and mutual benefits;

Have agreed as follows:

 

Article 1

For the purpose of this Agreement,

1. The term “investment” means every kind of asset invested by investors of one Contracting Party in accordance with the laws and regulations of the other Contracting Party in the territory of the latter, including , in particular:

(a) movable and immovable property and other property rights;

(b) shares in companies or other form of participation in such companies;

(c) a claim to money or to any performance having an economic value;

(d) copyrights, industrial rights, know-how and technological processes;

(e) concessions conferred by law or contract to participate economic activities, including the concessions to search for or exploit natural resources.

2. The term “ investor ”  with respect to either Contracting Party, means:

(a) any natural or legal person who invests in the territory of the other Contracting Party.
(b) any enterprise or company constituted in either Contracting Party in accordance with its laws.

Provided that such natural person, enterprise or company shall have the right to invest in one Contracting Party in accordance with laws and regulations of the other Contracting Party

3. The term “returns” means amounts yielded by an investment and in particular, though not exclusively, includes profits, dividends, interests or royalties.

4.  The term “territory” means with respect to either Contracting Party, means:

(a) the territory of the People’s Republic of China and the territory of the Union of Soviet Socialist Republics.
(b) territorial sea or outside sea areas adjacent to its territory over which either Contracting Party has sovereignty or jurisdiction rights in accordance with international law, and excises rights of exploration, extraction, exploitation, development and preservation of natural resources of such areas .

 

Article 2


1. Each Contracting Party shall encourage investors of the other Contracting Party to make investments in its territory and admit such investments in accordance with its laws and regulations

2. Subject to its laws and regulations, one Contracting Party shall provide assistance in and facilities for obtaining visas and working permit to nationals of the other Contracting Party engaging in activities associated with investments made in the territory of that Contracting Party.

 

Article 3

1. Investments of investors of each Contracting Party shall all the time be accorded fair and equitable treatment in the territory of the other Contracting Party.

2. The treatment in Paragraph 1 of this Article, accorded by either Contracting Party within the territory to investors of the other Contracting Party in connection with investment shall be no less favorable than that accorded to investors of any third State.

3. The provisions of Paragraph 1 and 3 of this Article shall not be applicable to oblige one Contracting Party to extend to the investors of any third State the benefit of preference or privilege by virtue of:

(a) any free trade zone, customs or economic union, economic mutual assistance organization, or international agreements coming into force before this Agreement is signed which accord similar preference or privilege accorded to participator of organizations above;
(b) international agreement on taxations or other taxation agreements;
(c) agreements on frontier trade.

 

Article 4

  1. Neither Contracting Party shall take any measures of expropriation nationalization or any dispossession having effect equivalent to nationalization or expropriation (hereinafter referred to as” expropriation”) against the investments made by investors of the other Contracting Party except for needs of the public interests; under domestic legal procedure; against compensation without discrimination.
  2. The compensation mentioned in Paragraph 1 of this Article shall be equivalent to the actual value of the expropriated investments at the date before the day of expropriation decision was passed or publicized.

Compensation shall be made without undue delay, and shall be convertible and be freely transferred from the territory of one Contracting Party to the territory of the other Contracting Party.

3. Investors of one Contracting Party whose investments in the territory of the other Contracting Party suffer losses owing to war, a state of national emergency, revolt, riot or other similar events in the territory of the latter Contracting Party shall be accorded by the latter Contracting Party treatment, as regards restitution, indemnification, compensation or other settlement, if any, no less favorable than treatment which the latter Contracting Party accords to investors of any third State.

 

Article 5

Each Contracting Party shall subject to its laws and regulations, guarantee to the investors of the other Contracting Party the transfer of their returns after paying all taxation, including

(a ) returns stipulated in Paragraph 3, Article 1 of this Agreement;

(b) proceeds obtained from the total or partial sale or liquidation of investments;

(c) payments of technical assistance or  technical service fee, management fee;

(d) payments made pursuant to a loan agreement in connection with investments;

(e) earnings or salaries of nationals of one Contracting Party pursuant to laws and regulations, who work or provide service in connection with an investment in the territory of the other Contracting Party.

 

Article 6

The transfer mentioned in Article 4 and Article 5 of this Agreement shall be made in a freely convertible currency and at the prevailing market rate of exchange applicable within the Contracting Party accepting the investments and on the date of transfer.

 

Article 7

This Agreement shall apply to all investments made after the date of January 1, 1985. 

 

Article 8

  1. Any dispute between the Contracting Parties concerning the interpretation or application of this Agreement shall, as far as possible, be settled with consultation through diplomatic channel.
  2. If a dispute cannot thus be settled within six months, it shall, upon the request of either Contracting Party, be submitted to an ad hoc arbitral tribunal.
  3. Such tribunal comprises of three arbitrators, and shall be formed as the following way: within two months of the receipt of the written notice requesting arbitration, each Contracting Party shall appoint one arbitrator. Those two arbitrators shall, within further two months, together select a national of a third State having diplomatic relations with both Contracting Parties as Chairman of the arbitral tribunal.
  4. If the arbitral tribunal has not been constituted within four months from the receipt of the written notice requesting arbitration, either Contracting Party may, in the absence of any other agreement, invite the President of the International Court of Justice to make any necessary appointments. If the President is a national of either Contracting Party or is otherwise prevented from discharging the said functions, the Member of the International Court of Justice next in seniority who is not a national of either Contracting Party or is not otherwise prevented from discharging the said functions shall be invited to make such necessary appointments.
  5. The arbitral tribunal shall determine its own procedure. The arbitral tribunal shall reach its award in accordance with the provisions of this Agreement and the principles of international law recognized by both Contracting Parties.
  6. The arbitral tribunal shall reach its award by a majority of votes. Such award shall be final and binding upon both Contracting Parties. The arbitral tribunal shall, upon the request of either Contracting Party, explain the reasons of its award.
  7. Each Contracting Party shall bear the costs of its appointed arbitrator and of its representation in arbitral proceedings. The relevant costs of the Chairman and tribunal shall be borne in equal parts by the Contracting Parties.

 

Article 9

  1. Any dispute between an investor of one Contracting Party and the other Contracting Party in connection with the amount of compensation against expropriation may be submitted to an arbitral tribunal for arbitration.
  2. Such an arbitral tribunal shall be constituted for each individual case in the following way: each party to the dispute shall appoint an arbitrator, and these two shall select a national of any other State which has diplomatic relations with the two Contracting Parties as Chairman. The first two arbitrators shall be appointed within two months of the written notice for arbitration by either party to the dispute to the other, and the Chairman shall be selected within four months. If within the period specified above the tribunal has not been constituted either party to the dispute may invite the President of the International Court of Arbitration of the International Chamber of Commerce in Stockholm to make the necessary appointments.
  3. The tribunal shall determine its own procedure. However, the tribunal may, in the course of determination of procedure, take as guidance the Arbitration Rules of International Court of Arbitration of the International Chamber of Commerce in Stockholm.
  4. The tribunal shall reach its decision by a majority of votes. Such decision shall be final and binding on both parties to the dispute. Both Contracting Parties shall commit themselves to the enforcement of the decision in accordance with their respective domestic law.
  5. The tribunal shall adjudicate in accordance with the provisions of this Agreement, the laws of the Contracting Party to the dispute accepting the investment ( including its rules on the conflict of laws), as well as the generally recognized principles of international law.
  6. Each party to the dispute shall bear the cost of its appointed member of the tribunal and of its representation in the proceedings. The cost of the appointed Chairman and the remaining costs shall be borne equally by the parties to the dispute.

 

Article 10

If the laws and legislations of either Contracting Party or international obligations existing at present or established hereafter between the Contracting Parties result in a position entitling investments by investors of the other Contracting Party to a treatment more favorable than is provided for by the Agreement, the favorable treatment shall be applicable.

 

Article 11

1. The representatives of the Contracting Parties shall hold meetings from for the purpose of:

(a)     reviewing the implementation of this Agreement;

(b)     exchanging legal information and investment opportunities;

(c)     resolving disputes arising out of investments;

(d)     studying other issues in connection with investment;

(e)     studying on possible amendments or supplements to this Agreement.

2. Where either Contracting Party requests consultation on any matter of Paragraph 1 of this Article, the other Contracting Party shall give prompt response and the consultation be held alternatively in Beijing and Moscow.

 

Article 12

  1. This Agreement shall enter into force on the 30th day of the following month after the date on which both Contracting Parties have notified each other in writing that their respective internal legal procedures necessary have been fulfilled and shall remain in force for a period of fifteen years.
  2. This Agreement shall continue in force if either Contracting Party fails to give a written notice to the other Contracting Party to terminate this Agreement one year before the expiration of the period specified in Paragraph 1 of this Article.
  3. After the expiration of initial five years period, either Contracting Party may at any time thereafter terminate this Agreement by giving a written notice to the other Contraction Party. The notice shall come into effect after 12 months the other Contracting Party’s receipt of the notice.
  4. With respect to investments made prior to the date of termination of this Agreement, the provisions of Article 1 to 11 shall continue to be effective for a further period of 15 years from such date of termination.

 

 

IN WITNESS WHEREOF, the duly authorized representatives of their respective Governments, have signed this Agreement.
Done in duplicate at Beijing on July 21th, 1990 in the Chinese and Russian languages, both texts being equally authentic.

For the Government of
the People’s Republic of China


For the Government of
the Union of Soviet Socialist Republics