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

of September 17, 1996

The government of the Republic of Kazakhstan and the Government of Georgia (hereinafter referred to as "Contracting parties"),

wishing to strengthen economic cooperation on long-term basis for mutual advantage of both Contracting Parties,

having intentions to create and support favorable conditions for investors of one Contracting Party in the territory of other Contracting Party,

recognizing that assistance and mutual protection of investments, according to this Agreement, will stimulate business initiative in this sphere,

agreed about the following:

Article 1 of Determination

For the purposes of this Agreement:

1. The term "investment" will cover any kind of the assets invested in connection with economic activity of investors of one Contracting Party in the territory of other Contracting Party according to the current legislation of the last and will include, in particular but not only:

a) personal and real estate, as well as any other rights, such as mortgages, the rights of content, providing on loan and the similar rights;

b) shares, securities and debt obligations of legal entities or property part of these legal entities;

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

d) intellectual property rights, including the copyright, trademarks, patents, industrial designs, engineering procedures, know-how, commercial secrets, brand names and goodwill connected with investment;

e) licenses and permissions according to the legislation.

Any change of form permitted by the legislation and other regulations of Contracting Parties in which assets are invested will not influence their nature as investments.

2. The term "investor" means any physical person or legal entity which invests on the territory of other Contracting Party:

a) the term "physical person" means any physical person which has nationality or the permanent residence in any of Contracting Parties according to its laws;

b) the term "legal entity" means in relation to any Contracting Party any organization, the company or the organization created according to the current legislation of each of Contracting Parties and which has the right to perform investments in the territory of other Contracting Party;

c) the legal entity who is not founded according to the legislation of one of Contracting Parties, but directly or indirectly controlled by physical persons or legal entities of the same Contracting Party.

3. The term "income" means the sums of money received as a result of investments and includes, in particular, but not only, the income, percent, capital gain, shares, dividends, royalty and service fee.

4. The term "territory" means concerning each Contracting Party the territory which is under its sovereignty and also sea and underwater areas over which this Contracting Party performs, according to international law, sovereignty, the rights and jurisdiction.

Article 2 Application of This Agreement

1. Terms of this agreement will be applied to all investments, the performed investors of one Contracting Party in the territory of other Contracting Party both to, and after the introduction in operation of this Agreement.

2. Provisions of this agreement do not extend to the investments performed till December 16, 1991.

Article 3 Encouragement and protection of investments

1. Each Contracting Party will encourage and create favorable conditions for investors of other Contracting Party for implementation of investments in the territory and to allow such investments according to its laws and rules.

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

Article 4 National treatment and most favored nation treatment

1. Each Contracting Party in the territory will provide to investments of investors of other Contracting Party the mode which is fair and equal at least favorable, than that which it provides to investments of own investors or investments of investors of any third state.

2. Each Contracting Party in the territory will provide to investors of other Contracting Party in relation to management, functioning, use or the order of these investments the mode which is fair and equal at least favorable, than that which it provides to own investors or investors of any third state.

3. Provision of Items 1 and 2 of this Article do 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 the Customs 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 5 Compensation for losses

1. When investments of investors of any Contracting Party sustain losses because of war, armed conflict, national emergency state, revolution, revolt, plot, natural disaster, accident or other similar circumstances in the territory of the Contracting Party, the mode, in relation to restitution, compensation, compensation or other decision, at least favorable will be provided to them by other Contracting Party, than that which the last Contracting Party provides to the investors and any third state.

These amounts are subject to free transfer abroad.

Article 6 Expropriation

1. Investments of investors of any Contracting Party will not be nationalized, expropriated or subject to the measures having the effect equivalent to nationalization or expropriation ("expropriation" is referred to as) in the territory of other Contracting Party, except the public purposes. Expropriation will be carried out according to legal proceedings, on non-discriminatory basis and will be followed by conditions about payment of immediate adequate and effective compensation. Such compensation will equal to market price of investments when about expropriation or threat of expropriation it became well-known, will include percent from the date of expropriation at LIBOR rate, will be paid in currency in which investment was performed, or under the agreement of Contracting Parties in any other currency, acceptable for the investor, will become without delay, will be such which effectively is implemented and is freely translated.

2. The injured investor will have the right to immediate review by judicial authority of this Contracting Party of its case and assessment of its investments according to the principles stated in this Article.

3. Provisions of Item 1 of this Article it will also be applied when the Contracting Party expropriates company assets which received the status of joint-stock company or is based according to the current legislation on any part of its own territory and in which investors of other Contracting Party have shares.

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