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Agreement between the Government of the Republic of Kazakhstan and Government of the Republic of Armenia on encouragement and mutual protection of investments

of November 6, 2006

The government of the Republic of Kazakhstan and the Government of the Republic of Armenia which are hereinafter referred to as by the Parties

recognizing need to protect investments of investors of one Party in the territory of other Party on not discrimination basis;

wishing to promote expansion of economic cooperation in the field of investments of physical persons and legal entities of one Party in the territory of other Party;

recognizing that the agreement on the mode provided to such investments will stimulate flow of private equity and economic development of the Parties;

agreeing that the stable basis for investments will make contribution to the maximum increase in effective use of economic resources and will improve living standards,

recognizing that development of commercial and business contacts can promote respect of international and acknowledged labor rights;

agreeing that these objectives can be achieved without measures of common application weakening health, safety and environmental protection

agreed as follows:

Article 1. Determinations

For the purposes of this agreement,

1. The term "investments" means any kind of the assets put or enclosed by investors of one Party in the entrepreneurial purposes according to the national legal system of the state of other Party in the territory of the last, and also following from here is right, and in particular, but is not exclusive, can include:

(a) personal and real estate or any property rights, such as lease, mortgage, rights to retain of property and pledges;

(b) shares, shares, debt obligations and any other forms of participation in the companies;

(c) monetary claims or any execution according to the contract having economic value;

(d) intellectual property rights, including copyright, trademarks, patents, industrial designs and technical processes, know-how, commercial secrets, trade names and goodwill;

(e) concessions which are provided according to the law or according to the agreement, including concessions for search, developments, extraction or uses of natural resources.

Any change of form of investments, the event according to the national legal system of the state accepting in the territory of investment does not influence their determination as investments.

2. The term "investor" means subject of the state of one Party which performs investments in the territory of the state of other Party according to the national legal system of the state of the last Party and provisions of this agreement, and includes:

(a) any physical person who is the citizen of the state of any Party and competent according to the national legal system of the state to perform investments;

(b) any legal entity created and registered according to the national legal system of the state of the Party and competent to perform investments.

3. The term "income" means the means received as a result of investment implementation including profit, percent, dividends, royalty, license remunerations and other payments.

4. The term "territory" means the territory of the state of one of the Parties within overland, sea and air borders, including the land, waters subsoil and airspace over which the state of the relevant Party performs sovereignty and extends the jurisdiction according to rules of international law.

5. The term "buzzing of country houses" means:

(a) arbitrary value of business contacts of firm, the price of cumulative intangible assets, money value of intangible kapitalaprestizh of trademark, experience of business contacts, steady clientele, and also managerial, organizational and technical resources, reputations in the financial world, the mechanism of control of sales activities;

(b) intangible fixed capital, assets as difference between the price of the company in general and at the price of real fixed capital. The negative intangible asset represents difference between selling and balance sheet costs of the company.

Article 2. Encouragement and protection of investments

1. Each Party encourages and creates favorable conditions in the territory for investments of investors of the state of other Party and allows such investments according to the national legal system of the state.

2. Each Party in the territory of the state provides to investments and investment incomes of investors of the state of other Party the fair and equal address, and also complete, permanent protection and safety.

3. Any Party in the territory of the state does not interfere unreasonable, discriminatory or any measures with increase, management, preserving, use, ownership, sale or other order of investments by investors of the state of other Party.

Article 3. Legal regime

1. Each Party provides to investors of the state of other Party, their investments and investment incomes, the mode at least favorable, than the mode which it provides to national investors or investors of the third countries and their investments concerning expansion, management, maintenance, use, ownership, sale or other order of investments.

2. Each Party of this agreement according to the national legal system of the state reserves the right to determine industries, spheres and types of activity in which activities of investors are limited and excluded.

Article 4. Release

Provisions of this agreement shall not be interpreted as the existing or future benefit of any mode, the preference or the privilege which are result obliging the Party to provide to investors of the state of other Party to both their investments and investment incomes:

(a) memberships in the free trade area, custom union, the currency union, the total market and any international treaty which participant is the state of any Party, and leading to such unions or the similar organizations;

(b) any international treaty or the national legal system of the state of the Party relating completely or mainly to the taxation.

Article 5. Expropriation and compensation

1. Any Party shall not expropriate or nationalize directly or indirectly investment of the investor of the state of other Party or take any similar measures (further - expropriation) except for accepted:

(a) in the state and public purposes;

(b) by non-discriminatory method;

(c) according to due legal process;

(d) with payment of preliminary, adequate and effective compensation according to Items 2 and 3 of this Article.

2. Compensation shall:

(a) to be paid without delay. In case of delay any loss connected with the currency rate, which is result of this delay will be born by the host party;

(b) to equal fair market value of expropriated investments for the date preceding date of implementation of expropriation. Fair market value shall not reflect any change in cost because expropriation became publicly known earlier;

(c) to be completely implementable and freely translated;

(d) to include percent on the commercial rate established on market basis for payment currency from the date of expropriation before date of the actual payment.

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