Honduras - United States of America BIT (1995) (EN - ES)


tional or company from bringing claims under Article IX that tax- ation provisions in an investment agreement or authorization have been violated. In addition, the dispute settlement provisions of Ar- ticle IX and X apply to tax matters in relation to alleged violations of the BIT’s expropriation article. Under paragraph 2, a national or company that asserts in a dis- pute that a tax matter involves expropriation may submit that dis- pute to arbitration pursuant to Article IX(3) only if (1) the investor has first referred to the competent tax authorities of both Parties the issue of whether the tax matter involves an expropriation, and (2) the tax authorities have not both determined, within 9 months from the time of referral, that the matter does not involve an ex- propriation. The ‘‘competent tax authority’’ of the United States is the Assistant Secretary of the Treasury for Tax Policy, who will make such a determination only after consultation with the Inter- Agency Staff Coordinating Group on Expropriations. Article XIV (Measures Not Precluded) The first paragraph of Article XIV reserves the right of a Party to take measures for the fulfillment of its international obligations with respect to maintenance or restoration of international peace or security, as well as those measures it regards as necessary for the protection of its own essential security interests. Under paragraph 3 of the Protocol to the Treaty, the parties ex- pressed their understanding that international obligations with re- spect to maintenance or restoration of peace or security means obli- gations under the United Nations Charter. The pertinent portion of the Charter is Chapter VII ‘‘Action with Respect to Threats to the Peace, Breaches of the Peace, and Acts of Aggression.’’ Meas- ures permitted by the provision on the protection of a Party’s es- sential security interests would include security-related actions taken in time of war or national emergency. Actions not arising from a state of war or national emergency must have a clear and direct relationship to the essential security interests of the Party involved. Measures to protect a Party’s essential security interests are self-judging in nature, although each Party would expect the provisions to be applied by the other in good faith. The second paragraph permits a Party to prescribe special for- malities in connection with covered investments, provided that these formalities do not impair the substance of any Treaty rights. Such formalities could include reporting requirements for covered investments or for transfers of funds, or incorporation require- ments. Article XV (Application to Political Subdivisions and State Enter- prises of the Parties) Paragraph 1(a) makes clear that the obligations of the Treaty are applicable to all political subdivisions of the Parties, such as pro- vincial, State, and local governments. Paragraph 1(b) recognizes that under the U.S. federal system, States of the United States may, in some instance, treat out-of- State residents and corporations in a difference manner than they treat in-State residents and corporations. The Treaty provides that the national treatment committee, with respect to the States,

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