[Senate Executive Report 111-8]
[From the U.S. Government Publishing Office]


111th Congress                                              Exec. Rept.
                                 SENATE
 2d Session                                                       111-8

======================================================================



 
                     INVESTMENT TREATY WITH RWANDA 
                          (TREATY DOC. 110-23)

                                _______
                                

                December 22, 2010.--Ordered to be printed

                                _______
                                

          Mr. Kerry, from the Committee on Foreign Relations,
                        submitted the following

                                 REPORT

                   [To accompany Treaty Doc. 110-23]

    The Committee on Foreign Relations, to which was referred 
the Treaty Between the Government of the United States of 
America and the Government of the Republic of Rwanda Concerning 
the Encouragement and Reciprocal Protection of Investment, 
signed at Kigali on February 19, 2008 (the ``Rwanda BIT'' or 
the ``Treaty'') (Treaty Doc. 110-23), having considered the 
same, reports favorably thereon with one declaration, as 
indicated in the resolution of advice and consent, and 
recommends that the Senate give its advice and consent to 
ratification thereof.

                                CONTENTS

                                                                   Page

  I. Purpose..........................................................1
 II. Background.......................................................2
III. Summary of Key Provisions........................................2
 IV. Entry Into Force.................................................9
  V. Committee Action.................................................9
 VI. Committee Recommendations and Comments...........................9
VII. Text of Resolution of Advice and Consent to Ratification........13

                               I. Purpose

    Like other U.S. bilateral investment treaties (``BITs''), 
the Rwanda BIT is intended to provide protections for investors 
that underscore the shared commitment of the United States and 
Rwanda to open investment and trade policies. It contains the 
standard features of U.S. bilateral investment treaties: 
nondiscriminatory treatment; the free transfer of investment-
related funds; prompt, adequate, and effective compensation in 
the event of an expropriation; a minimum standard of treatment 
in accordance with customary international law; freedom of 
investment from specified performance requirements; 
prohibitions on nationality-based restrictions for the hiring 
of senior managers; and transparency in governance. The Treaty 
also provides investors with the opportunity to resolve 
investment disputes with a host government through 
international arbitration, and it permits one party to the 
Treaty to bring an arbitration claim against the other party 
concerning the interpretation or application of the Treaty. 
And, it sets out an acknowledgement by the Parties that it is 
inappropriate to encourage investment by weakening or reducing 
the protection afforded in domestic environmental or labor 
laws.

                             II. Background

    The United States and Rwanda announced their intent to 
negotiate a BIT on June 14, 2007. The BIT negotiations grew out 
of consultations between the two countries under the U.S.-
Rwanda Trade and Investment Framework Agreement, signed in June 
2006. The proposed BIT is the 47th such treaty signed by the 
United States and the first between the United States and a 
sub-Saharan African country since 1998. Rwanda was considered a 
good candidate for a BIT negotiation, having opened its 
economy, improved its business climate, and embraced trade and 
investment as a means to boost economic development and help 
alleviate poverty. The Treaty, which was signed by the United 
States and Rwanda on February 19, 2008, is expected to 
reinforce the efforts of the Rwandan Government's economic 
reform program. It was submitted to the Senate for advice and 
consent to ratification on November 20, 2008.
    The Rwanda BIT is the second BIT negotiated on the basis of 
the most recent U.S. model BIT, which was completed in 2004. It 
is largely consistent with the U.S. model, which is intended to 
encompass certain objectives from the Bipartisan Trade 
Promotion Authority Act of 2002 and contains similar provisions 
to the investment chapters of recently negotiated free trade 
agreements.

                     III. Summary of Key Provisions

    A detailed article-by-article discussion of the proposed 
BIT is attached to the Letter of transmittal from the Secretary 
of State to the President, which is reprinted in full in Treaty 
Document 110-23. A summary of the key provisions of the 
proposed BIT is set forth below.

                               ARTICLE 1

Definitions

    The Treaty defines the term ``investment'' as ``every asset 
that an investor owns or controls, directly or indirectly, that 
has the characteristics of an investment, including such 
characteristics as the commitment of capital or other 
resources, the expectation of gain or profit, or the assumption 
of risk.'' The definition of investment provides an 
illustrative list of different types of investments. A 
``covered investment'' is defined, with respect to a party, as 
an ``investment in its territory of an investor of the other 
party in existence as of the date of entry into force of this 
Treaty or established, acquired, or expanded thereafter.''

                               ARTICLE 2

Scope and Coverage

    The proposed BIT applies to measures adopted or maintained 
by a party relating to: (a) investors of the other party, (b) 
covered investments, and (c) with respect to obligations 
involving performance requirements (Art. 8) and investment-
related activities with environmental and labor implications 
(Arts. 12-13), all investment in the territory of a party.

                               ARTICLE 3

National Treatment

    The Treaty protects investors of a party and their covered 
investments from discriminatory measures by the other party 
during the full life-cycle of an investment, including the 
establishment phase, when investors are attempting to make an 
investment. Under Article 3, a party must accord treatment to 
investors of the other party and covered investments no less 
favorable than that it accords, ``in like circumstances,'' to 
its own investors or investments in its territory.

                               ARTICLE 4

Most Favored Nation Treatment

    Each party commits to provide to investors of the other 
party and to their covered investments treatment no less 
favorable than that which it provides in like circumstances to 
investors from any third country and their investments. These 
obligations apply with regard to the ``establishment, 
acquisition, expansion, management, conduct, operation, and 
sale or other disposition of investments.''

                         ARTICLE 5 AND ANNEX A

Minimum Standard of Treatment

    Article 5 establishes a minimum standard of treatment that 
each party owes to covered investments. Under that standard, 
the Parties are obligated to treat covered investments ``in 
accordance with customary international law, including fair and 
equitable treatment and full protection and security.'' Article 
5 contains a number of other provisions further clarifying this 
obligation.
    ``Fair and equitable treatment'' includes the obligation 
not to deny justice in criminal, civil, or administrative 
adjudicatory proceedings in accordance with the principle of 
due process embodied in the principal legal systems of the 
world. The obligation to provide ``full protection and 
security'' requires the host party to provide the level of 
police protection required under customary international law. 
The Article further requires that each party must accord to 
covered investments of the other party non-discriminatory 
treatment with respect to measures adopted in relation to 
losses suffered by investments due to armed conflict or civil 
strife. In the event that an investor suffers losses as a 
result of a party's requisition or unnecessary destruction of 
its covered investment, restitution or compensation must be 
paid. Article 5 states that a breach of another provision of 
the proposed BIT or of a separate international agreement would 
not necessarily constitute a breach of this article. Finally, a 
footnote to Article 5 provides that the Article shall be 
interpreted in accordance with Annex A.

Annex A

    Annex A contains the understanding of the Parties that 
``customary international law,'' generally and as specifically 
referenced in Article 5 (and Annex B), ``results from a general 
and consistent practice of States that they follow from a sense 
of legal obligation.'' It further provides that, for purposes 
of Article 5, the ``customary international law minimum 
standard of treatment of aliens refers to all customary 
international law principles that protect the economic rights 
and interests of aliens.''

                         ARTICLE 6 AND ANNEX B

Expropriation and Compensation

    Article 6 incorporates into the Treaty the customary 
international law standard for expropriation. It prohibits 
either party from expropriating or nationalizing a covered 
investment unless such action is for a public purpose, is taken 
in a non-discriminatory manner, in accordance with due process 
of law and the minimum standard of treatment set out in Article 
5(1) through (3), and is accompanied by prompt, adequate, and 
effective compensation. Compensation must be paid without delay 
and be equivalent to the fair market value of the expropriated 
investment immediately before the expropriation. Footnote 10 
indicates that Article 6 shall be interpreted in accordance 
with Annexes A and B.

Annex B

    Annex B clarifies the understanding of the Parties with 
respect to Article 6 and the determination of whether an 
expropriation has occurred. Annex B states that an action or 
series of actions by a party does not ``constitute an 
expropriation unless it interferes with a tangible or 
intangible property right or property interest in an 
investment.'' Annex B further explains that Article 6 addresses 
two types of expropriation: direct expropriation, involving 
formal transfer of title or outright seizure, and indirect 
expropriation, involving a case-by-case inquiry that considers 
the economic impact of the government action, its interference 
with investment-backed expectations, and its character. 
Finally, Annex B observes that, except in rare circumstances, 
non-discriminatory regulatory actions designed and applied to 
protect legitimate public welfare objectives do not constitute 
indirect expropriations.

                               ARTICLE 7

Transfers

    Article 7 sets out the Treaty's ``free transfer'' 
obligation. Under this provision, each party is required to 
``permit all transfers relating to a covered investment to be 
made freely and without delay into and out of its territory.'' 
Notwithstanding this obligation, a party may prevent a transfer 
based on the ``equitable, non-discriminatory, and good faith 
application'' of certain laws, including those pertaining to 
bankruptcy, securities dealing, and criminal law.

                               ARTICLE 8

Performance Requirements

    Article 8 prohibits the imposition by Parties of 
requirements relating to the performance of investments, 
including any requirement to achieve a given level or 
percentage of exports or domestic content or to transfer 
technology, production processes, or other proprietary 
knowledge to a person in its territory. The Article also 
prohibits Parties from offering advantages, such as a tax 
holiday, in exchange for a more limited set of performance 
requirements.
    The Parties agreed to two footnotes not present in the 2004 
Model. First, the Parties agreed to clarify that the 
enforcement of a commitment or undertaking to use a particular 
technology, a production process, or other proprietary 
knowledge is not, by itself, inconsistent with the performance 
requirement obligation relating to transfers of technology, a 
production process, or other proprietary knowledge. Second, the 
Parties agreed to clarify that nothing in Article 8(1) shall be 
construed to prevent a party from imposing or enforcing a 
requirement or enforcing a commitment or undertaking to train 
workers in its territory, provided that such training does not 
require the transfer of a particular technology, a production 
process, or other proprietary knowledge to a person in its 
territory.

                               ARTICLE 9

Senior Management and Board of Directors

    The Treaty prohibits measures requiring that persons of any 
particular nationality be appointed to senior management 
positions in a covered investment.

                             ARTICLES 10-11

Publications of Laws and Decisions Respecting Investment and 
        Transparency in Lawmaking and Administrative Proceedings

    Article 10 requires each party to ensure that its laws, 
regulations, procedures, and administrative rulings of general 
application, and adjudicatory decisions respecting any matter 
covered by the Treaty are promptly published or otherwise made 
publicly available.
    Article 11 includes several provisions aimed at ensuring 
transparency. It requires that, to the extent possible, each 
party publish in advance laws, regulations, procedures, and 
administrative rulings of general application, and provide 
interested persons and the other party a reasonable opportunity 
to comment on such proposed measures. It further requires a 
party, upon the request of the other party, to provide 
information and respond to questions pertaining to any actual 
or proposed measure that the party requesting the information 
considers may materially affect the operation of the Treaty or 
its interests under the Treaty. Such information requests will 
be made through contact points that each party will designate. 
Finally, Article 11 includes detailed provisions concerning the 
character of administrative proceedings that impact covered 
investments or investors of the other party.

                             ARTICLES 12-13

Investment in Environment and Labor

    In Articles 12 and 13, the Parties acknowledge that it 
would be inappropriate to encourage investment by weakening or 
reducing the protections afforded in domestic environmental and 
labor laws, respectively. This is a relatively new feature of 
the 2004 Model BIT that was also contained in the recent U.S.-
Uruguay BIT. Both Articles also provide that a party may 
request consultations with the other party if it considers that 
the other party has offered such an encouragement. Article 12 
provides that nothing in the Treaty shall be construed to 
prevent a party from adopting, maintaining, or enforcing any 
measure otherwise consistent with the Treaty that it considers 
appropriate to ensure that investment activity in its territory 
is conducted in a manner sensitive to environmental concerns.

                   ARTICLE 14 AND ANNEXES I, II, III

Non-conforming Measures

    Article 14 establishes the framework for the Treaty's 
Annexes of non-conforming measures (NCMs), which provide the 
extent to which existing and future domestic measures are, or 
may be exempt from, BIT obligations. The Article specifies that 
a party may list measures that do not conform to the following 
four obligations: National Treatment (Article 3), Most-Favored-
Nation Treatment (Article 4), Performance Requirements (Article 
8), and Senior Management and Boards of Directors (Article 9). 
In the Annexes, each party lists existing measures to which any 
or all of four key obligations of the Treaty do not apply, and 
sectors or activities in which each party reserves the right to 
adopt future measures to which any or all of those obligations 
will not apply.

Annexes I, II, and III.

    Existing NCMs of both Parties are listed in Annexes I and 
III. Annex III is reserved for existing financial services 
NCMs, and Annex II contains a list of the sectors or activities 
in which the Parties reserve the right to adopt future NCMs.

                               ARTICLE 16

Non-derogation

    Article 16 stipulates that the Treaty does not derogate 
from other obligations or laws of a party that entitle an 
investor to more favorable treatment than that accorded by the 
Treaty.

                               ARTICLE 17

Denial of Benefits

    Article 17 establishes that a party may deny the benefits 
of the Treaty to an investor of the other party that is an 
enterprise of the other party, and to its investments, if 
persons of a third country own or control the enterprise, and 
the denying party either (1) does not maintain diplomatic 
relations with the third country; or (2) adopts or maintains 
measures, such as foreign policy sanctions, with respect to the 
third country or to a person of the third country that prohibit 
transactions with the enterprise or that would be violated or 
circumvented if the benefits of the Treaty were accorded to the 
enterprise or to its investments. A party may also deny the 
benefits of the Treaty to an investor of the other party that 
is an enterprise of such other party and to investments of that 
investor if the enterprise has no substantial business 
activities in the territory of the other party and persons of a 
non-party, or the denying party, own or control the enterprise.

                               ARTICLE 18

Essential Security

    The Rwanda BIT contains a self-judging essential security 
exception. Article 18 states that nothing in the Treaty may be 
construed to preclude a party from applying measures that it 
considers necessary either to protect its own essential 
security interests or to fulfill its obligations with respect 
to the maintenance or restoration of international peace and 
security. The Treaty makes explicit the implicit understanding 
that 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. 
Article 18 also clarifies that nothing in the Treaty shall be 
construed to require a party to provide or allow access to any 
information the disclosure of which it determines to be 
contrary to its essential security interests.

                               ARTICLE 20

Financial Services

    Article 20 includes two provisions that relate to the 
regulation of financial markets. Paragraph 1 specifies that the 
Treaty does not prohibit a party from adopting or maintaining 
measures relating to financial services for prudential reasons, 
including for the protection of depositors, investors, policy 
holders, or persons to whom a fiduciary duty is owed by a 
financial services supplier, or for the preservation of the 
integrity and stability of the financial system. Paragraph 2, 
the monetary and exchange rate policy exception, establishes 
that no provision of the Treaty applies to non-discriminatory 
measures of general application that may be taken by a party's 
central bank or monetary authority pursuant to monetary and 
related credit policies or exchange rate policies.
    In the event that an investor-State claim is submitted to 
arbitration and the responding party invokes either of these 
provisions as a defense, specific provisions in Article 20 will 
apply to the dispute. If a party invokes one of the exceptions, 
it must within 120 days of the date the investor's claim is 
submitted to arbitration submit to the competent financial 
authorities of both Parties a written request for a joint 
determination on the issue of whether and to what extent one of 
the exceptions is a valid defense to the investor's claim. If 
the competent financial authorities agree that the defense is 
valid, the investor's claim will be barred from arbitration. If 
the competent financial authorities fail to reach a 
determination by the end of the 120-day period, the tribunal 
will decide the issue. Article 20 also contains provisions that 
apply to State-State disputes involving financial services.

                             ARTICLES 23-27

Submitting Investor Claims to Arbitration

    Article 24 provides a mechanism for investors to submit to 
arbitration a claim that a party has breached an obligation 
under Articles 3 through 10 of the Treaty, an investment 
agreement, or an investment authorization.
    Article 27 provides for the establishment of three-member 
arbitral tribunals, with one member appointed by each disputing 
party and a presiding arbitrator appointed by agreement between 
them. If, within 75 days of the submission of a claim to 
arbitration, one of the disputing Parties has failed to appoint 
an arbitrator, or the two disputing Parties have failed to 
agree on a presiding arbitrator, arbitrators may be named by 
the ICSID Secretary-General.

                             ARTICLES 28-33

Conduct of Investor-State Arbitration

    Article 28 provides that, unless otherwise agreed, 
arbitrations must take place in a country that is a party to 
the United Nations Convention on the Recognition and 
Enforcement of Foreign Arbitral Awards, also known as the New 
York Convention. This article authorizes a party that is not 
involved in a dispute to make oral or written submissions to 
the Tribunal on questions of interpretation of the Treaty. 
Article 28 also grants the tribunal the power to address 
preliminary questions of law and issue interim measures of 
protection to preserve the rights of a disputing party, as well 
as interim decisions and awards. Article 29 ensures that all 
substantive documents submitted to or issued by the tribunal 
shall be made public, with the exception of certain proprietary 
or confidential information. Article 30 sets out the governing 
law that the Tribunal must follow.

                               ARTICLE 34

Awards

    Under Article 34, when an arbitral tribunal makes a final 
award against a responding party, it may award separately or in 
combination (1) monetary damages and any applicable interest, 
and (2) restitution of property, in which case the award must 
provide that the respondent may pay monetary damages and any 
applicable interest in lieu of restitution. Punitive damages 
are not permitted. A disputing party may seek enforcement of an 
award under the New York Convention or the Convention on the 
Settlement of Investment Disputes (ICSID Convention). If the 
respondent in an arbitration fails to comply with a final 
award, the other party to the arbitration may ask a State-State 
arbitral panel to determine whether the respondent's failure to 
comply is inconsistent with the Treaty.

                               ARTICLE 37

State-to-State Dispute Settlement

    Article 37 provides that any dispute between the Parties 
concerning the interpretation or application of the Treaty not 
resolved through consultations or other diplomatic channels 
shall be submitted on the request of either party to binding 
arbitration. Unless the Parties otherwise agree, the 
arbitration shall be governed by UNCITRAL arbitration Rules. 
State-State arbitration cannot be established for matters 
arising under Articles 12 (Environment) and 13 (Labor).

                          IV. Entry Into Force

    The Treaty will enter into force thirty days after the date 
on which the Parties exchange instruments of ratification. The 
Treaty will remain in force for at least ten years and will 
continue in force thereafter unless one of the Parties 
terminates the Treaty. At the end of the ten year period, or 
any time thereafter, a party may terminate the Treaty by giving 
one year's written notice to the other party. Upon termination, 
the Treaty will remain in force for an additional ten years 
with respect to covered investments that existed at the time of 
termination.

                          V. Committee Action

    The committee held a public hearing on the proposed BIT on 
November 10, 2009. The hearing was chaired by Senator 
Kaufman.\1\ The committee considered the Treaty on December 14, 
2010, and ordered the Treaty favorably reported by voice vote, 
with a quorum present, with the recommendation that the Senate 
give advice and consent to its ratification, as set forth in 
this report and the accompanying resolution of advice and 
consent to ratification. Senator Feingold asked to be recorded 
as voting against the Treaty.
---------------------------------------------------------------------------
    \1\ A transcript of the November 10, 2009 hearing is included as an 
appendix to Executive Report 111-3.
---------------------------------------------------------------------------

               VI. Committee Recommendations and Comments

    The committee believes that the Rwanda BIT is in the 
interest of the United States and urges that the Senate act 
promptly to give advice and consent to ratification.

                       A. HUMAN RIGHTS IN RWANDA

    The Executive Branch chose to negotiate a BIT with Rwanda, 
in part, based on its strong economic reform program, which has 
helped to rebuild the Rwandan economy since the 1994 genocide. 
The Rwandan government has opened its economy, improved its 
business climate, and embraced trade and investment as a means 
to boost economic development and help alleviate poverty. As a 
result, the Rwandan economy has grown by over 9 percent per 
year since 1995.
    While Rwanda has served as an example of economic 
prosperity and stability and it has made genuine efforts to 
promote reconciliation after the horrific events of the 1990s, 
its human rights record remains more troubling. There are 
restraints on judicial independence and limits on freedoms of 
speech, press, association, and religion are widespread. In 
August, Rwanda's incumbent president, Paul Kagame, was re-
elected with 93 percent of the vote, leading to increased 
criticism concerning the state of democracy and overall lack of 
opposition in Rwanda politics.
    The committee takes such human rights concerns seriously 
and supports efforts to help foster democracy throughout the 
Great Lakes region, including Rwanda. Senator Kaufman raised 
this issue during the November 10, 2009 hearing on the Treaty. 
In response, Wesley Scholz, the Director of the Office of 
Investment Affairs in the Bureau of Economic, Energy, and 
Business Affairs at the Department of State testified:


          Rwanda's made admirable advances over the last decade 
        in economic development and making significant progress 
        in adjudicating an enormous backlog of genocide cases. 
        Despite these advances, Rwanda continues to face 
        significant challenges regarding reconciliation, human 
        rights, democratization, as it continues its efforts to 
        rebuild a society torn asunder by war and genocide. The 
        United States and the international community continue 
        to work toward the goal of a stable, growing, 
        democratic Rwanda with improved respect for human 
        rights. Specifically, the U.S. works with the 
        Government of Rwanda to open the political space, 
        increase civil liberties, and to strengthen the 
        judiciary. The treaty itself can promote economic 
        development and employment in Rwanda, as well as 
        improve the rule of law and transparency. These 
        objectives are complementary to our efforts to work 
        with the Rwandan government to improve human rights and 
        democracy in Rwanda. We also continue to use other 
        channels to raise our views on issues of human rights 
        and democratization. These include our bilateral 
        dialogues and other contacts and the Annual AGOA 
        Country Review and the Department's Annual Human Rights 
        Report.


    The committee shares the administration's view that the 
Treaty can improve the rule of law and transparency in Rwanda. 
At the same time, it urges the administration to ensure that 
promotion of human rights remains an essential aspect of our 
bilateral relationship with Rwanda. The committee looks forward 
to continued dialogue with the Executive Branch on this matter.

              B. DOMESTIC IMPLEMENTATION OF THE RWANDA BIT

    Following the Supreme Court's decision in Medellin v. 
Texas, 552 U.S. 491 (2008), the committee has taken special 
care to reflect in its record of consideration of treaties its 
understanding of how each treaty will be implemented, including 
whether the treaty is self-executing. As noted in Executive 
Report 110-25, the committee believes it is of great importance 
that the United States complies with the treaty obligations it 
undertakes. In accordance with the Constitution, all treaties--
whether self-executing or not--are the supreme law of the land, 
and the President shall take care that they be faithfully 
executed. In general, the committee does not recommend that the 
Senate give advice and consent to treaties unless it is 
satisfied that the United States will be able to implement 
them, either through implementing legislation, the exercise of 
relevant constitutional authorities, or through the direct 
application of the treaty itself in U.S. law.
    The resolution of advice and consent contains a statement 
reflecting the committee's understanding of the extent to which 
this Treaty will be self-executing. This provides that Articles 
3-10 of the Treaty are self-executing and do not confer private 
rights of action enforceable in United States courts. The 
remaining provisions of the Treaty are not self-executing and 
do not confer private rights of action enforceable in United 
States courts.
    Among the provisions of the treaty that are not self-
executing are those related to two separate procedures for 
resolving disputes under the Treaty.
    The first of these procedures allows investors of one party 
to the Treaty to bring to binding arbitration claims that the 
government of the other party has breached specified provisions 
of the Treaty. In the event that such an arbitration resulted 
in an award against the United States, the legal authority 
exists to enforce the award. Such authorities include the 
Convention on the Recognition and Enforcement of Foreign 
Arbitral Awards (TIAS 6697) and related provisions of the 
Federal Arbitration Act (9 U.S.C. Sec. 201 et seq.), as well as 
the Convention on the Settlement of Investment Disputes Between 
States and Nationals of Other States (TIAS 6090) and related 
provisions of the Convention on the Settlement of Investment 
Disputes Act of 1966 (22 U.S.C. Sec. 1650a).
    The second of these procedures allows the two states 
parties to the Treaty (i.e. the United States and Rwanda) to 
submit disputes regarding the interpretation or application of 
the treaty to binding arbitration. No comparable treaty or 
statutory scheme governs the implementation in the United 
States of state-to state arbitration awards. In response to a 
question for the record on the authorities available to enforce 
such awards, Wesley Scholz, the Director of the State 
Department's Office of Investment Affairs, provided the 
following answer:


          State-to-State arbitrations are extremely rare. In 
        fact, no State-to-State arbitrations have taken place 
        to date under U.S. bilateral investment treaties. 
        Nevertheless, there are various tools at our disposal 
        for implementing a State-to-State award should the 
        situation arise.
          Articles 3 through 10 of the BIT and other provisions 
        that qualify or create exceptions to these Articles, 
        such as Article 15, are self-executing but do not 
        confer a private right of action. All remaining 
        articles of the BIT are non-self-executing. As a 
        result, should an arbitral decision conclude that U.S. 
        state law is inconsistent with the BIT, the U.S. 
        government could, if necessary, choose to initiate a 
        legal action against the state to ensure compliance 
        with a self-executing provision of the BIT. To the 
        extent an arbitral decision determines that federal law 
        is inconsistent with the BIT and an award addresses a 
        self-executing provision of the BIT, then as long as 
        the statute in question pre-dated the entry into force 
        of the treaty, the later-in-time self-executing BIT 
        provision would prevail over the earlier inconsistent 
        statute.
          To the extent an award addresses Article 11 of the 
        BIT, which is a non-self-executing provision of the BIT 
        establishing investment protections and subject to 
        State-to-State arbitration, the U.S. government could 
        seek legislation where no other existing authority 
        permitted it to comply with the award or take other 
        appropriate steps, such as seeking to interpret the 
        statute in a manner that is consistent with the 
        arbitral decision. Under current U.S. law, however, 
        existing federal authorities, for example, the 
        Administrative Procedures Act, 5 U.S.C. Sec. 551 et. 
        seq., along with comparable state-level authorities, 
        adequately ensure compliance with the transparency 
        standards established in Article 11 of the BIT.
          Finally, were a State-to-State tribunal to award 
        money damages against the United States, funds to 
        satisfy such an award could be sought from appropriated 
        funds, if any, or from the Judgment Fund (31 U.S.C. 
        Sec. 1304) to the extent appropriate.
          In brief, should a dispute between the parties lead 
        to arbitration pursuant to the mechanism provided for 
        in Article 37, there are a number of options available 
        for implementing State-to-State arbitral decisions.


    Under the approach outlined by the administration, state-
to-state arbitral awards against the United States will not be 
directly enforceable in U.S. courts by private parties. Rather, 
in most cases (i.e. those involving awards that interpret 
Articles 3-10 of the treaty), the executive branch will rely on 
the self-executing character of substantive provisions of the 
treaty to give effect to arbitral awards that interpret those 
provisions. This approach will require U.S. courts to give 
substantial weight to the interpretations of such treaty 
provisions rendered by arbitral tribunals in cases brought by 
the U.S. Government to give effect to such awards. U.S. courts 
have not invariably agreed with treaty interpretations rendered 
by international courts and tribunals in cases to which the 
United States has been a party (See, e.g., Sanchez-Llamas v. 
Oregon, 548 U.S.C. 331 (2006)). However, in order to give 
effect to the shared intent of the Senate and the executive 
branch that the United States comply with its obligations in 
connection with the dispute settlement provisions of this 
Treaty and other bilateral investment treaties to which the 
United States is already a party, the committee expects that 
U.S. courts will not interpret the substantive provisions of 
bilateral investment treaties to preclude the United States 
giving effect to awards issued in state-to-state arbitrations 
to which the United States is a party if any other possible 
interpretation is available. (cf. Murray v. Charming Betsy, 6 
U.S.C. (2 Cranch) 64, 118 (1804) (``an act of Congress ought 
never to be construed to violate the law of nations if any 
other possible construction remains.'')
    There remains a category of disputes that could be referred 
to state-to-state arbitration involving provisions of the 
Treaty that are not self-executing. Such disputes could arise 
under Article 11 of the treaty, which addresses transparency 
measures to be taken by the two parties. Because Article 11 is 
not self-executing, the executive branch would be unable to 
rely on the authority of the Treaty itself as the basis for 
giving effect to an arbitral award related to that article. The 
executive branch has represented to the committee that existing 
federal and state laws regarding transparency measures governed 
by the treaty are fully adequate to satisfy U.S. obligations 
under the treaty, and that the possibility of an arbitral award 
against the United States relating to these provisions is 
accordingly extremely remote. In the event of such an adverse 
award, the executive branch has observed that it could seek 
legislation after the fact to provide the necessary authority 
to give effect to the award.
    The committee has reservations about the soundness of the 
proposed approach for this category of disputes. Waiting until 
an actual case arises and an award has been rendered against 
the United States to secure authority to comply with the award 
leaves matters on an uncertain footing. Complications posed by 
the Congressional calendar, competing legislative priorities, 
and political considerations specific to the case may make it 
difficult for the executive branch to seek or to secure such 
authority in a timely manner. In an analogous case--relating to 
the International Court of Justice's judgment against the 
United States in the case of Avena and Other Mexican Nationals 
(Mexico v. United States of America) (I.C.J. Reports 2004, p. 
12)--successive administrations have not formally proposed 
after the fact legislation to provide authority allowing the 
United States to comply with an adverse judgment. This has left 
the ability of the United States to meet its treaty obligations 
in a state of uncertainty, and caused concerns for our treaty 
partners, including our neighbor Mexico. The committee is 
concerned that failure to put the United States' ability to 
implement awards relating to non-self-executing provisions of 
this treaty on sounder footing at the time of ratification of 
the treaty creates the risk of this unfortunate situation 
repeating itself. The committee's concerns on this issue - 
which arise only with respect to a single, relatively narrow 
provision of this Treaty--do not lead it to decline to 
recommend ratification of the Treaty. However, the committee 
urges the executive branch to review its approach to ensuring 
compliance with adverse arbitral awards arising from non-self 
executing treaties (including as it relates to compliance with 
the ICJ judgment in the Avena case) and to identify effective 
means to facilitate U.S. compliance with its treaty 
obligations.

     VII. Text of Resolution of Advice and Consent to Ratification

    Resolved (two-thirds of the Senators present concurring 
therein),

SECTION 1. SENATE ADVICE AND CONSENT SUBJECT TO A DECLARATION

    The Senate advises and consents to the ratification of the 
Treaty Between the Government of the United States of America 
and the Government of the Republic of Rwanda Concerning the 
Encouragement and Reciprocal Protection of Investment, signed 
at Kigali on February 19, 2008 (Treaty Doc. 110-23), subject to 
the declaration of section 2.

SECTION 2. DECLARATION

    The advice and consent of the Senate under section 1 is 
subject to the following declaration:
          Articles 3 through 10 and other provisions that 
        qualify or create exceptions to these Articles are 
        self-executing. With the exception of these Articles, 
        the Treaty is not self-executing. None of the 
        provisions in this Treaty confers a private right of 
        action.

                                  
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