International
Investment Rules
UK International Investment Policy
Foreign
direct investment (FDI) is now generally recognised as one of
the key factors in economic growth and wealth. The UK government
believes that investment flows benefit both developed and developing
countries, creating opportunities for investors and helping
developing countries to achieve sustainable development.
Therefore
UK policy is to work towards an international framework of rules
which could encourage FDI by creating a stable, transparent,
predictable and non-discriminatory business climate. It can
also make a significant contribution to sustainable development.Investment
Discussions in International Organisations
The
UK is involved in international investment rules and policy
discussions at a number of international fora;
WTO
and Investment
The
UK Government wants to include negotiations on foreign direct
investment (FDI) in the WTO with a view to a simple, basic framework
of rules based on transparency and non-discrimination in the
treatment of foreign investors. Countries would make basic commitments
on transparency and treating existing foreign investors fairly,
and also select sectors they wished to open up to FDI. The vast
majority of WTO members are seeking to attract increased inflows
of FDI and are liberalising their regimes as a means of accomplishing
this. According to UNCTAD of the nearly 1000 changes in FDI
regulations made worldwide in the 1990s, 94 percent created
more favourable conditions for FDI. A WTO agreement on FDI could
provide the stable and predictable climate that foreign investors
seek and help countries, especially in the developing world,
that do not currently attract much FDI.
The
WTO Ministerial at Doha in November 2001 agreed the following
on investment:
"20. Recognizing
the case for a multilateral framework to secure transparent,
stable and predictable conditions for long-term cross-border
investment, particularly foreign direct investment, that will
contribute to the expansion of trade, and the need for enhanced
technical assistance and capacity-building in this area as referred
to in paragraph 21, we agree that negotiations will take
place after the Fifth Session of the Ministerial Conference
on the basis of a decision to be taken, by explicit consensus,
at that Session on modalities of negotiations.
21. We
recognize the needs of developing and least-developed countries
for enhanced support for technical assistance and capacity building
in this area, including policy analysis and development so that
they may better evaluate the implications of closer multilateral
cooperation for their development policies and objectives, and
human and institutional development. To this end, we shall work
in cooperation with other relevant intergovernmental organisations,
including UNCTAD, and through appropriate regional and bilateral
channels, to provide strengthened and adequately resourced assistance
to respond to these needs.
22. In
the period until the Fifth Session, further work in the Working
Group on the Relationship Between Trade and Investment will
focus on the clarification of: scope and definition; transparency;
non-discrimination; modalities for pre-establishment commitments
based on a GATS-type, positive list approach; development provisions;
exceptions and balance-of-payments safeguards; consultation
and the settlement of disputes between Members. Any framework
should reflect in a balanced manner the interests of home and
host countries, and take due account of the development policies
and objectives of host governments as well as their right to
regulate in the public interest. The special development, trade
and financial needs of developing and least-developed countries
should be taken into account as an integral part of any framework,
which should enable Members to undertake obligations and commitments
commensurate with their individual needs and circumstances.
Due regard should be paid to other relevant WTO provisions.
Account should be taken, as appropriate, of existing bilateral
and regional arrangements on investment.
The
UK Government welcomes the recognition of the need for
a multilateral investment framework and the commitment to negotiate
one. We will need to use the time between now and the next Ministerial
to identify areas for the future negotiations that all WTO members
can feel comfortable about participating in.
The
EU/UK position differs greatly from the OECD Multilateral Agreement
on Investment (MAI) negotiations, for example by conducting
negotiations in the WTO negotiations developing countries would
be involved; the MAI used a "top down" approach (every sector
was included unless it was explicitly made an exception), but
the EU proposes that a WTO negotiation take a "bottom up" approach
(participants would make specific negotiated commitments regarding
access to sectors for investment). In addition, unlike the MAI,
the WTO would have only state to state dispute settlement procedures.
WTO
Working Group on Trade and Investment (WGTI)
Established
after the WTO Ministerial in Singapore in 1996 the WGTI has
a remit to carry out analytical work on the relationship between
trade and investment, including areas such as FDI flow, technology
transfer, investment incentives and multilateral rules. The
European Commission presents an agreed EU position in this group
on behalf of the member countries and this position is discussed
at EU coordination meetings. Discussions in the WGTI have been
helpful in allowing an exchange of experiences and views between
WTO members. The outcome of these discussions will no doubt
be taken into account during the WTO Ministerial meeting in
Cancun in September 2003.
The
EU position on any future multilateral investment negotiations
was agreed at the EU Council in October 1999. It states that:
"The
WTO should begin negotiations aiming at establishing a multilateral
framework of rules governing international investment, with
the objective of securing a stable and predictable climate for
foreign direct investment worldwide. Such a framework should
focus on foreign direct investment to the exclusion of short-term
capital movements, and has to ensure the right conditions for
international investment to be conducive to sustainable development,
and preserve the ability of host countries to regulate the activity
of investors on their respective territories, in accordance
with basic WTO principles, also taking into account the concerns
expressed by civil society, including those regarding investors’
responsibilities. Negotiations should address the issues of
access to investment opportunities and non-discrimination, protection
of investment, and stable and transparent business climate"
The
EU position differs greatly from the OECD Multilateral Agreement
on Investment (MAI) negotiations, for example by conducting
negotiations in the WTO negotiations developing countries would
be involved; the MAI used a "top down" approach (every sector
was included unless it was explicitly made an exception), but
the EU proposes that a WTO negotiation take a "bottom up" approach
(participants would make specific negotiated commitments regarding
access to sectors for investment). In addition, unlike the MAI,
the WTO would have only state-to-state dispute settlement procedures
and the definition of investment would also be narrower (FDI
only, so excluding portfolio investment).
The
UK Government priorities for Cancun are agriculture and access
to certain medicines for for developing countries. Whilst supporting
the EU objectives for negotiating a new Trade and Investment
agreement in the WTO, the UK Government will not sign up to
something that it did not believe to be in the interests of
developing countries.
The
attached UK Government Briefing takes account of EU proposals
for new WTO agreements on Trade & Competition and Trade
& Investment. The Briefing is intended to compliment discussions
taking place in the UK with business and civil society leading
up to the WTO Ministerial in Cancun in September 2003.
UK
Government Briefing 
(160kb)
UK Government Briefing
(270kb)
WTO
Committee on Trade Related Investment Measures (TRIMs)
The
TRIMs Committee is responsible for overseeing implementation
of the WTO TRIMs Agreement, for example by discussing notifications
of TRIMs that do not conform with the Agreement. The TRIMs Agreement
commits WTO members not to impose discriminatory investment
measures that distort trade, for example by imposing local content
requirements on foreign investors. Developing countries should
have implemented the TRIMs Agreement by 1 January 2000. It is
clear that many have not. Some countries have submitted requests
for extended transitional periods. WTO members have agreed that
all such requests are granted a 2 year transitional period with
the possibility of a further 2 years if they can demonstrate
particular difficulties and agree a phase-out plan.
The
WTO investment site (link above) also covers TRIMs and click
here for a more detailed
background note 
(16kb).
OECD
Committee on International Investment and Multinational Enterprises
(CIME)
CIME
has the task of further developing and strengthening co-operation
among Member countries in the field of international investment
and multinational enterprises. CIME is also responsible for
OECD Guidelines for Multinational Enterprises. Although the
European Commission participates in the meeting, the UK has
direct input and there is no agreed EU position.
OECD
Working Party on the Guidelines for Multinational Enterprises
This
Working Party overseas the implementation of the Guidelines
and associated issues such as outreach to non-OECD countries.
The UK is an active participant in this Working Party. Further
information is available on www.dti.gov.uk/worldtrade/ukncp.htm.
UNCTAD
Trade and Development Board: Commission on Investment, Technology
and Related Financial Issues
Examines
global trends in foreign direct investment (FDI) flows; the
inter-relationships between FDI, trade, technology and development;
and the development implications of a possible multilateral
framework on investment. It also assists developing countries
to promote inward investment and improve their investment climate.
There is an agreed EU position, however individual EU member
states are still able to make individual contributions.
Energy
Charter Treaty
The
Energy Charter Treaty obliges Contracting Parties to endeavour
to accord non-discriminatory treatment to Investors of other
Contracting Parties as regards the Making of Investments. This
obligation is relevant for the 38 Contracting Parties who have
ratified the Treaty and for the five Signatories applying the
Treaty provisionally. An investment committee regularly meets
to discuss investment regimes in developing countries and other
investment issues relevant to the treaty. The EU does coordinate
on certain issues in the meeting but member states are free
to make their own contributions too.
Investment Promotion and Protection
Agreements (IPPAs)
IPPAs are international bilateral
agreements between governments can protect and encourage British
investment overseas. They are more commonly known internationally
as Bilateral Investment Treaties
(BITs). The UK has concluded 101 IPPAs with other countries,
of which 94 are in force.
IPPAs are designed to encourage
investor confidence by setting high standards of investor protection
applicable in international law. Key elements include provisions
for equal and non-discriminatory
treatment of investors and their investments, compensation for
expropriation, transfer of capital and
returns and access to independent settlement of disputes.
The Foreign & Commonwealth
Office is the lead UK department for the negotiation of new
IPPAs and IPPA policy in general. For further information please
call FCO Economic Policy Department on 020 7270 2672.
UK IPPAs are not currently published
on the internet, but copies can be bought from the Stationery
Office;
The Stationery Office Ltd
PO Box 29
Norwich
NR3 1GN
T: 0870 600 5522
F: 0870 600 5533
Email: bookorders@theso.co.uk
Web: www.clicktso.com
The
full list of IPPAs is below:
Country
|
Date
signed
|
Entry
into force
|
Published
text
|
|
Albania
|
30
March 1994
|
30
August 1995
|
TS(17)
1996 Cm 3072
|
|
Angola
|
04
July 2000
|
Not
yet in force |
TS(01)
2002 Cm 5525 |
|
Antigua
& Barbuda
|
12
June 1987
|
12
June 1987
|
TS
(38) 1987 Cm 197
|
|
Argentina
|
11
December 1990
|
19
February 1993
|
TS
(41) 1993 Cm 2278
|
|
Armenia
|
27
May 1993
|
11
July 1996
|
TS
(102) 1996 Cm 3479
|
|
Azerbaijan
|
04
January 1996
|
11
December 1996
|
TS
(19) 1997 Cm 3576
|
|
Bahrain
|
30
October 1991
|
30
October 1991
|
TS
(21) 1992 Cm 1958
|
|
Bangladesh
|
19
June 1980
|
19
June 1980
Amended
by E of N of 31 August 1981
|
TS
(73) 1980 Cm 8013
|
|
Barbados
|
7
April 1993
|
7
April 1993
|
TS
(54) 1993 Cm 2326
|
|
Belarus
|
1
March 1994
|
28
December 1994
|
TS
(15) 1995 Cm 2768
|
|
Belize
|
30
April 1982
|
30
April 1982
Amended
by E of N of 8 March 1983
|
TS
(33) 1982 Cm 8631
|
|
Benin
|
27
November 1987
|
27
November 1987
|
TS
(27) 1988 Cm 369
|
|
Bolivia
|
24
May 1988
|
16
February 1990
|
TS
(34) 1990 Cm 1071
|
|
Bosnia
and Herzegovina
|
02
October 2002
|
25
July 2003 |
TS(37)
2003 Cm 5973 |
|
Brazil
|
19
July 1994
|
not
yet in force |
TS
(01) 1997 Cm 3510 |
|
Bulgaria
|
11
December 1995
|
24
June 1997
|
TS
(52) 1997 Cm 3748
|
|
Burundi
|
13
September 1990
|
13
September 1990
|
TS
(11) 1991 Cm 3510
|
|
Cameroon
|
4
June 1982
|
7
June 1985
|
TS
(40) 1985 Cm 9592
|
|
Chile
|
8
January 1996
|
21
April 1997
|
TS
(37) 1997 Cm 3682
|
|
China
|
15
May 1986
|
15
May 1986
|
TS
(33) 1986 Cm 9821
|
|
Colombia
|
09
March 1994
|
not
yet in force
|
TS
(01) 1994 Cm 2643 |
|
Congo
|
25
May 1989
|
9
November 1990
|
TS
(85) 1994 Cm 2643
|
|
Coast
Rica
|
07
September 1989
|
9
November 1990
|
TS
(01) 1983 Cm 8767 |
|
Cote
D’Ivoire
|
8
June 1995
|
9
October 1997
|
TS
(78) 1997 Cm 3826
|
|
Croatia
|
11
March 1997
|
16
April 1998
|
TS
(29) 1998 Cm 4013
|
|
Cuba
|
30
January 1995
|
11
May 1995
|
TS
(50) 1995 Cm 2912
|
|
Czech
& Slovak Republics
|
10
July 1990
|
26
October 1992
|
TS
(42) 1993 Cm 2277
|
|
Dominica
|
23
January 1987
|
23
January 1987
|
TS
(53) 1987 Cm 252
|
|
Ecuador
|
10
May 1994
|
24
August 1995
|
TS
(18) 1996 Cm 3076
|
|
Egypt
|
11
June 1975
|
24
February 1976
|
TS
(97) 1976 Cm 6638
|
|
El
Salvador
|
14
October 1999
|
1
December 2000
|
TS
(17) 2001 Cm 5085
|
|
Estonia
|
12
May 1994
|
19
December 1994
|
TS
(30) 1995 Cm 2837
|
|
The
Gambia
|
02
July 2002
|
Not
Yet Into Force
|
TS
(01) 2002 Cm 5602
|
|
Georgia
|
15
February 1995
|
15
February 1995
|
TS
(41) 1995 Cm 2882
|
|
Ghana
|
22
March 1989
|
25
October 1991
|
TS
(8) 1992 Cm 1804
|
|
Grenada
|
25
February 1988
|
25
February 1988
|
TS
(33) 1988 Cm 381
|
|
Guyana
|
27
October 1989
|
11
April 1990
|
TS
(47) 1990 Cm 1120
|
|
Haiti
|
18
March 1985
|
27
March 1995
|
TS
(75) 1995 Cm 2973
|
|
Honduras
|
7
December 1993
|
8
March 1995
|
TS
(34) 1995 Cm 2861
|
|
Hong
Kong SAR
|
30
July 1998
|
12
April 1999
|
TS
(9) 2000 Cm 4598
|
|
Hungary
|
9
March 1987
|
28
August 1987
|
TS
(3) 1988 Cm 281
|
|
India
|
14
March 1994
|
6
January 1995
|
TS
(27) 1995 Cm 2797
|
|
Indonesia
|
27
April 1976
|
24
March 1977
|
TS
(62) 1977 Cm 6858
|
|
Jamaica
|
20
January 1987
|
14
May 1987
|
TS
(28) 1987 Cm 168
|
|
Jordan
|
10
October 1979
|
24
April 1980
|
TS
(52) 1980 Cm 7945
|
|
Kazakhstan
|
23
November 1995
|
23
November 1995
|
TS
(30) 1996 Cm 3176
|
|
Kenya
|
13
September 1999
|
13
September 1999
|
TS
(8) 2000 Cm 4597
|
|
Korea,
Republic of
|
4
March 1976
|
4
March 1976
|
TS
(45) 1976 Cm 6510
|
|
Kyrgyzstan
|
8
December 1994
|
18
June 1998
|
TS
(7) 1999 Cm 4259
|
|
Laos
|
1
June 1995
|
1
June 1995
|
TS
(95) 1996 Cm 3473
|
|
Latvia
|
24
January 1994
|
15
February 1995
|
TS
(60) 1995 Cm 2944
|
|
Lebanon
|
13
March 1999
|
16
September 2001
|
TS(03)
2002 Cm 5358
|
|
Lesotho
|
18
February 1981
|
18
February 1981 Amended by No. 13 of 19 January 1983
|
TS
(31) 1981 Cm 8246
|
|
Lithuania
|
17
May 1993
|
21
September 1993
|
TS
(3) 1994 Cm 2455
|
|
Malaysia
|
21
May 1981
|
21
October 1988
|
TS
(16) 1989 Cm 707
|
|
Malta
|
4
October 1986
|
4
October 1986
|
TS
(62) 1986 Cm 20
|
|
Mauritius
|
20
May 1986
|
13
October 1986
|
TS
(6) 1987 Cm 65
|
|
Moldova
|
19
March 1996
|
30
July 1998
|
TS
(8) 1999 Cm 4260
|
|
Mongolia
|
4
October 1991
|
4
October 1991
|
TS
(22) 1992 Cm 1959
|
|
Morocco
|
30
October 1990
|
14
February 2002
|
TS
(07) 2003 Cm 5749
|
|
Nepal
|
2
March 1993
|
2
March 1993
|
TS
(55) 1993 Cm 2327
|
|
Nicaragua
|
04
December 1996
|
21 December 2001
|
|
|
Nigeria
|
11
December 1990
|
11
December 1990
|
TS
(66) 1991 Cm 1661
|
|
Oman
|
25
November 1995
|
21
May 1996
|
TS
(99) 1996 Cm 3476
|
|
Pakistan
|
30
November 1994
|
30
November 1994
|
TS
(24) 1995 Cm 2794
|
|
Panama
|
7
October 1983
|
7
November 1985
|
TS
(14) 1986 Cm 9736
|
|
Papua
New Guinea
|
14
May 1981
|
22
December 1981 Amended by E of N of 4 May 1983
|
TS
(15) 1982 Cm 8506
|
|
Paraguay
|
4
June 1981
|
23
April 1992
|
TS
(56) 1992 Cm 2026
|
|
Peru
|
4
October 1993
|
21
April 1994
|
TS
(35) 1994) Cm 2631
|
|
Philippines
|
3
December 1980
|
2
January 1981
|
TS
(7) 1981 Cm 8148
|
|
Poland
|
8
December 1987
|
14
April 1988
|
TS
(26) 1988 Cm 365
|
|
Romania
|
19
March 1976
|
22
November 1976
|
TS
(15) 1977 Cm 6722
|
|
Senegal
|
7
May 1980
|
9
February 1984
|
TS
(54) 1984 Cm 9292
|
|
Sierra
Leone
|
13
January 2000
|
20
November 2001
|
TS
(17) 2002 Cm 5490
|
|
Singapore
|
22
July 1975
|
22
July 1975 Amended by E of N of 9 January 1978
|
TS
(151) 1975 Cm 6300
|
|
Slovenia
|
3
July 1996
|
12
May 1999
|
TS
(50) 1999 Cm 4225
|
|
South
Africa
|
25
November 1997
|
27
May 1998
|
TS
(35) 1998 Cm 4039
|
|
Sri
Lanka
|
13
February 1980
|
14
January 1981
|
TS
(14) 1981 Cm 8186
|
|
St
Lucia
|
18
January 1983
|
18
January 1983 Amended by E of N 8 February 1984
|
TS
(25) 1983 Cm 8872
|
|
Swaziland
|
5
May 1995
|
5
May 1995
|
TS
(76) 1995 Cm 2967
|
|
Tanzania
|
7
January 1994
|
19
August 1996
|
TS
(90) 1996 Cm 3453
|
|
South
Africa
|
20
September 1994
|
27
May 1998
|
TS
(35) 1998 Cm 1988
|
|
Soviet
Union (Russia)
|
6
April 1989
|
3
July 1991
|
TS
(3) 1992 Cm 1791
|
|
Sri
Lanka
|
13
February 1980
|
18
December 1980 Amended by E of N of 14 January 1981
|
TS
(14) 1981 Cm 8186
|
|
Thailand
|
28
November 1978
|
11
August 1979 Amended by E of N 27 September 1979
|
TS
(99) 1979 Cm 7732
|
|
Tonga
|
22
October 1997
|
22
October 1997
|
TS
(71) 1997 Cm 3800
|
|
Trinidad
& Tobago
|
23
July 1993
|
8
October 1993
|
TS
(78) 1993 Cm 2417
|
|
Tunisia
|
14
March 1989
|
4
January 1990 Amended by E of N of 21 May 1991 & 23
December 1992
|
TS
(18) 1990 Cm 976
Tunisia
No. 15
|
|
Turkey
|
15
March 1991
|
22
October 1996
|
TS
(13) 1997 Cm 3545
|
|
Turkmenistan
|
9
February 1995
|
9
February 1995
|
TS
(1) 1995 Cm 2976
|
|
Uganda
|
24
March 1998
|
24
April 1998
|
TS
(33) 1998 Cm 4037
|
|
Ukraine
|
10
February 1993
|
10
February 1993
|
TS
(24) 1993 Cm 2192
|
|
United
Arab Emirates
|
8
December 1992
|
15
December 1993
|
TS
(24) 1994 Cm 2535
|
|
Uruguay
|
21
October 1991
|
1
August 1997
|
TS
(69) 1997 Cm 3795
|
|
Uzbekistan
|
24
November 1993
|
24
November 1993
|
TS
(8) 1994 Cm 2475
|
| Venezuela
|
15
March 1995 |
1
August 1996 |
TS
(83) 1996 Cm 3423 |
|
Vietnam
|
1
August 2002
|
1
August 1996 |
TS
(96) 2003 Cm 5748 |
|
Yemen
Arab Republic
|
25
February 1982
|
11
November 1983
|
TS
(79) 1983 Cm 9096
|
|
Zimbabwe
|
1
March 1995
|
not
yet in force
|
TS
(06) 2003 Cm 5748
|
Further
Information
For
further information on investment matters please contact;
Andy
Weller or Dave Harvey
Tel: 020 7215 4510
e-mail andy.weller@dti.gsi.gov.uk
David
Harvey
Tel: 020 7215 4510
Fax: 020 7215 4577
E-mail: david.harvey@dti.gov.uk
Last
revised on 16 October 2003
