The Russian-Iranian Intergovernmental Agreement on the Encouragement and Mutual Protection of Capital Investment and the Protocol thereto were signed on 23 December 2015 in Tehran. The ratification and entry into force of the agreement and the protocol will protect the interests of Russian and Iranian investors and facilitate investment cooperation between Russia and the Islamic Republic of Iran.
The draft federal law On the Ratification of the Agreement between the
Government of the Russian Federation and the Government of the Islamic Republic
of Iran on the Encouragement and Mutual Protection of Capital Investment and
the Protocol thereto (hereinafter referred to as Agreement and Protocol,
respectively) was submitted
by the Russian Foreign Ministry.
The Agreement and the Protocol were signed on 23 December 2015 in Tehran pursuant to Government Directive 2569-r of 12 December 2015.
The Agreement grants investors most favoured nation (MFN) treatment whereby access for capital investment to the territory of one party to the Agreement is provided in keeping with its legislation while capital investment by investors of the other state is guaranteed treatment no less favourable than national investors or investors from third-party countries.
Each party reserves the right to introduce MFN exemptions in accordance with its laws and apply them with regard to foreign investors and their investments.
Under the Agreement, neither of the parties is obligated to extend to investors from the other party the advantages that it provides to investors of any third-party state in connection with its participation in a free trade zone, a customs or economic union or similar associations, or on the basis of double taxation avoidance agreements or other tax agreements.
The Agreement and the Protocol guarantee the protection of capital investment from forcible seizure: nationalisation, expropriation or other measures with similar consequences, except for cases where such measures are taken in the public interest and in due compliance with the procedure established under the laws of the contracting parties.
The Agreement and the Protocol specify capital investment protection and damage reimbursement mechanisms. They provide for the legal protection of investors’ rights and procedures for the adjudication of investment disputes, including through international arbitration. They guarantee the unhindered transfer of income and other payments related to capital investment after investors meet all of their tax obligations.
The Protocol contains a provision clarifying the categories of capital investment of Russian and Iranian investors that are covered by the Agreement.
The ratification and entry into force of the Agreement and the Protocol will protect the interests of Russian and Iranian investors and facilitate investment cooperation between Russia and the Islamic Republic of Iran.
The provisions of the Agreement and the Protocol are in keeping with Russia’s international obligations and do not conflict with the norms of international law, including the provisions of the Treaty on the Eurasian Economic Union, as well as other international treaties of the Russian Federation.
After the signing, the Agreement and the Protocol are subject to ratification, as they contain rules beyond those stipulated by Russian legislation.