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means treatment no less favorable than that provided by a State to U.S. out-of-State residents and corporations. Paragraph 2 extends a Party’s obligations under the Treaty to its state enterprises in the exercise of any delegated governmental au- thority. This paragraph is designed to clarify that the exercise of governmental authority by a state enterprise must be consistent with a Party’s obligations under the Treaty. Article XVI (Entry Into Force, Duration, and Termination) Paragraph 1 stipulates that the Treaty enters into force 30 days after exchange of instruments of ratification. The Treaty remains in force for a period of 10 years and continues in force thereafter unless terminated by either Party as provided in paragraph 2. Paragraph 2 permits a Party to terminate the Treaty at the end of the initial 10 year period, or at any later time, by giving 1 year’s written notice to the other Party. Paragraph 1 also provides that the Treaty applies to covered investments existing at the time of entry into force as well as to those established or acquired there- after. The Treaty does not state an intention by the Parties to apply the Treaty’s provisions retroactively. Thus, under customary international law, the Treaty does not apply to disputes with re- spect to acts or facts which took place before the Treaty came into force or to any situation which ceased to exist before the date of entry into force of the Treaty. Paragraph 3 provides that, if the Treaty is terminated, all invest- ments that qualified as covered investments on the date of termi- nation (i.e., 1 year after the date of written notice of termination) continue to be protected under the Treaty for 10 years from that date as long as these investment qualify as covered investments. A Party’s obligations with respect to the establishment and acquisi- tion of investments would lapse immediately upon the date of ter- mination of the Treaty. Paragraph 4 stipulates that Annex and Protocol shall form an in- tegral part of the Treaty. Annex U.S. bilateral investment treaties allow for exceptions to national and MFN treatment, where the Parties’ domestic regimes do not af- ford national and MFN treatment, or where treatment in certain sectors or matters is negotiated in and governed by other agree- ments. Future derogations from the national treatment obligations of the Treaty are generally permitted only in the sectors or matters listed in the Annex, pursuant to Article II(2), and must be made on an MFN basis unless otherwise specified therein. Under a number of statutes, many of which have a long histor- ical background, the U.S. federal government or States may not necessarily treat investments of nationals or companies of Hon- duras as they do U.S. investments or investments from a third country. Paragraphs 1 through 3 of the Annex list the sectors or matters subject to U.S. exceptions. The U.S. exceptions from its national treatment obligation are: atomic energy; customhouse brokers; licenses for broadcast, com- mon carrier, or aeronautical radio stations; COMSAT; subsidies or grants, including government-supported loans, guarantees, and in-
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