1. Neither Party may nationalize or expropriate a covered investment either directly, or indirectly through measures having an effect equivalent to nationalization or expropriation (hereinafter referred to as "expropriation"), except:
(a) for a public purpose;
(b) under due process of law;
(c) in a non-discriminatory manner; and
(d) against payment of prompt, adequate and effective compensation.
For greater certainty, this paragraph shaii be interpreted in accordance with Annex X.ll on the clarification of expropriation.
2. Such compensation shall amount to the fair market value of the investment at the time immediately before the expropriation or the impending expropriation became known, whichever is earlier. Valuation criteria shaii include going concern value, asset value including the declared tax value of tangible property, and other criteria, as appropriate, to detemiine fair market value.
3. The compensation shaii also include interest at a normal commercial rate from the date of expropriation until the date of payment and shaii, in order to be effective for the investor, be paid and made transferable, without delay, to the country designated by the investor and in the 'Currency of the country of which the investor is a national or in any freely convertible .currency accepted by the investor.
4. The investor affected shall have a right, under the law of the expropriating Party, to prompt review of its claim and of the valuation of its investment, by a judicial or other independent authority ofthat Party, in accordance with the principles set out in this Article.
5. This Article does not apply to the issuance of compulsory licenses granted in relation to intellectual property rights, to the extent that such issuance is consistent with the Agreement on Trade-Related Aspects of Intellectual Property Rights in Annex lC to the WTO Agreements ('TRIPS Agreement').
6. For greater certainty, the revocation, limitation or creation of inteiiectual prope.rty rights to the extent that these measures are consistent with TRIPS and Chapter X (Intellectual Property) of this Agreement, do not constitute expropriation. Moreover, a determination that these actions are inconsistent with the TRIPS Agreement or Chapter X (Inteiiectual Property) of this Agreement does not establish that there has been an expropriation.
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1831. Expropriation may be either direct or indirect:
direct expropriation occurs when an investment is nationalised or otherwise directly expropriated through formal transfer of title or outright seizure; and
indirect expropriation occurs where a measure or series of measures of a Party has an effect equivalent to direct expropriation, in that it substantially deprives the Investor of the fundamental attributes of property in its investment, including the right to use, enjoy and dispose of its investment, without formal transfer oftitle or outright seizure.
2. The determination of whether a measure or series of measures of a Party, in a specific fact situation, constitutes an indirect expropriation requires a case-by-case, fact-based inquiry that considers, among other factors:
the economic impact of the measure or series of measures, although the sole fact that a measure or series of measures of a Party has an adverse effect on the economic value of an investment does not establish that an indirect expropriation has occurred;
the duration ofthe measure or series ofmeasures by a Party;
the extent to which the measure or series of measures interferes with distinct, reasonable investment-backed expectations; and
the character of the measure or series of measures, notably their object, context and intent.
3. For greater certainty, except in the rare circumstance where the impact of the measure or series of measures is so severe in light of its purpose that it appears manifestly excessive, non- discriminatory measures of a Party that are designed and applied to protect legitimate public welfare objectives, such as health, safety and the environment, do not constitute indirect expropriations .