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

of April 8, 1997

The agreement is ratified according to the Law of the Republic of Kazakhstan of October 28, 1997 No. 174-1, became effective from the date of exchange of instruments of ratification - since June 1, 2005.

The government of the Republic of Kazakhstan and the Government of the Kyrgyz Republic, the "Contracting parties" which further are referred to as,

understanding that encouragement and mutual protection of investments will promote development mutually advantageous trade and economic and sci-tech cooperation between two Contracting Parties, and also will increase welfare of both states,

aiming to create favorable conditions for investments of investors of one Contracting Party in the territory of other Contracting party, based on the principles of equality, mutual respect, sovereignty and mutual advantage,

agreed as follows:

Article 1 of Determination

For the purposes of this agreement:

1. The term "Investments" means any asset and, enclosed by the investor of one Contracting Party in the territory of other Contracting Party, in particular, but not only:

a) personal and real estate and any other related property rights, including mortgages, right to retain of mortgage or other pledge and money on accounts in banks and other financial institutions;

b) shares, deposits (shares), bonds, and other forms of participation in the companies, economic partnerships and societies, associations and in other legal entities recognized by the legislation registered according to the legislation of each of Contracting Parties;

c) the loans, the credits, purpose-oriented bank and financial deposits and other monetary claims connected with implementation of investments;

d) the rights to objects of intellectual and industrial property, including the objects protected by copyright, patents, trademarks, service marks, trade names, industrial designs and "know-how";

e) reinvestment of the income and payments of principal debt and percent on credit agreements;

e) the rights to economic activity, including the right to concession which is expressed in investigation, to development, production or operation of natural resources, received under the law or the agreement.

2. The term "Investor" means:

a) the physical person who is the citizen of one of Agreeing the Parties and performing investment in the territory of other Contracting Party according to its current legislation;

b) the legal entity, other associations with the right of the legal entity or without it, the location founded according to the legislation of any of Contracting Parties, having in its territory and performing investment on the territory of other Contracting Party.

3. The term "income" means:

the means received as a result of implementation of investments or related in cash or natural form, including profit, dividends, remuneration for enterprise management, the maintenance and any other means received in the legal way.

4. The term "territory" means:

concerning Contracting Parties: the state territory of Contracting Parties, including free economic zones, the continental shelf and subsoil over which Contracting Parties perform, according to international law, the sovereign rights and jurisdiction.

5. Change of form of the investment permitted according to the legislation of the Contracting Party in the territory of which investment was performed does not change its nature as investment.

Article 2 Encouragement and protection of investments

1. Each of Contracting Parties will promote investments of investors of other Contracting Party and will resolve such investments according to the legislation.

2. Each of Contracting Parties will provide the fair and equal mode for investments of investors of other Contracting Party and will not restrain due to any or discriminatory measures of management, functioning, use or the order of these investments.

Article 3 Legal regime of investments

1. Each of Contracting Parties provides in the territory concerning investments the mode, at least favorable, than that which is provided to investments of own investors or investments of investors of the third countries.

2. This mode does not extend on:

a) benefits which one of Contracting Parties provides to investors of the certain countries in connection with participation, joint with them, in custom or economic union of free trade;

b) benefits which one of Contracting Parties provides to investors of the certain countries based on the agreement on avoidance of double taxation or other agreements on tax questions.

Article 4 of the Guarantee from expropriation

1. Investments of investors of one of Contracting Parties cannot be confiscated, nationalized, expropriated or subjected to other measures having such effects as requisition, nationalization, expropriation (further expropriation) unless expropriation is performed in public concerns and is made:

- according to the established legislation procedure;

- without discrimination;

- with payment without delay of adequate compensation.

2. The specified compensation equals market value of investments for the day preceding day of acceptance or promulgation of the decision on expropriation. Compensation shall include the percent corresponding to effective interest rate of investments and calculated for the period between date of expropriation and date of the actual payment of compensation. Compensation is paid in that currency in which investments, or, with the consent of the investor, in any other currency were performed. Compensation is subject to transfer abroad without restrictions and excess delay.

Article 5 Compensation of Damage

1. To investors of one of Contracting Parties, to whose investments in the territory of other Contracting Party the damage as a result of war or other armed conflict, emergency state, civil collisions or similar circumstances was caused, the mode, at least favorable, than applied concerning the investors, or investors of the third countries is provided, in case of compensation of the damage suffered by them as a result of the above-stated circumstances. The payments made at the same time will be freely convertible and transferred.

2. Without damage to Item (1) this Article to investors of one of Contracting Parties to whom in any of the situations stipulated in this Item damage in the territory of other Contracting Party as a result will be caused:

a) withdrawals of their property by law-enforcement bodies or military forces or the authorities which was not caused by military operations or was not caused by the necessity of situation indemnification or adequate compensation shall be provided. The payments made at the same time will be freely convertible and transferred.

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