"The standing agreement is unbalanced and disadvantageous for our country," said Marek Zeman, spokesman for the Finance Ministry, "so it should be changed."

The ministry, concerned that the Czech government could be held responsible if a major contract with a U.S. investor is broken, submitted a proposal to the Cabinet Nov. 16 that would eliminate protection for some investments. Those made by American interests registered outside the United States are the prime targets.

Current law protects all U.S. investments in the Czech Republic, whether made directly from American soil or via third-party countries. But the government has soured on protecting the latter since the 2003 ruling by the Stockholm Court of Arbitration that found the state responsible for making up $353 million (14.1 billion Kč) in losses suffered by Netherlands-based U.S. investor Ron Lauder's Central European Media Enterprises (CME) in the Czech Republic.

The state was ordered to compensate CME because TV Nova's then-general manager, Vladimír Železný, seized control of the station. CME has since re-invested, buying out TV Nova in December.

The current law proposal would only slash part of the investor protection agreement, which dates back to 1991, but the entire protection plan could be retired if the Americans don't agree, say Finance Minstry officials. U.S. representatives, not surprisingly, want to keep the current agreement intact to give investors as much protection as possible.

Finance Ministry backers of the amendment believe it would protect the Czech Republic from being held accountable for any future TV Nova-style financial misdeeds. The Americans, however, are not budging on their position, prompting the ministry to consider pulling out of the contract altogether, said Marek Zeman, Finance Ministry spokesman.

But American investors aren't likely to suffer if the Czech Republic pulls out of the bilateral agreement because they'll still be protected by the EU, said Radomil Novák, the former CEO of state inbound investment agency CzechInvest. He now heads the agency's office in California.

Sundering the agreement would be unfortunate, he said, arguing that the best solution is to simply scrap the section protecting indirect investments.