Bilateral investment treaties

Bilateral investment treaties-About Bilateral investment treaties:

What is a bilateral investment treaty?

Bilateral investment treaty is an agreement to establish the terms and conditions for private investment by nationals and companies of one country in the rest of the country. This type of investment is called foreign direct investment (FDI). Bilateral investment treaties, established by the Trade Commission.

Bilateral Investment Treaties - type
Bilateral investment treaties - three types:1, bilateral investment treaties - Treaty of Friendship, Commerce and NavigationTreaty of Friendship, Commerce and Navigation and location of the seat adjustment provisions of the object is mainly to establish friendly relations between the parties, the two sides for each other's nationals to come to engage in commercial activities due protection, given the freedom of navigation on the right. Although one of the provisions on investment protection, but its important to protect maritime trade, rather than to protect investors. This type of treaty mainly before World War II, when the international economic activities based on international trade, international investment is not dominant, reflected in the double-treaty is more about trade protection provisions, and on investment protection provisions are very small.
After World War II, rapid development of international investment, countries conclude a Treaty of Friendship, Commerce and Navigation, on a corresponding increase in investment protection provisions, most of which are provided from the general protection of property to foreign investors, treatment, and conditions imposed compensation standards. However, such a treaty involving a wide range of contents, the provisions on investment protection is too brief, not adapt to the actual needs. Therefore, the international community began to seek other forms of contracting, in order to better protect international investment.
2, bilateral investment treaties - investment guarantee agreementThe United States after World War II against the prevailing international situation, the first of the implementation of overseas investment insurance system of its kind. However, without the consent of the host country where the investment and cooperation, the United States investment insurance agency the right to subrogation claims can not be achieved. Therefore, the U.S. signed with other countries in addition to comprehensive of the FCN treaties, signed with the relevant countries signed with other countries even though the Treaty of Friendship, Commerce and navigation, the state signed with the relevant special investment guarantee agreement, later developed due signed a bilateral investment guarantee agreements with the main.
The United States and other countries signed an investment guarantee agreement is to make the core of the United States officially recognized parties other underwriting institutions in the accident and political risk insurance to foreign investors according to the contract claims, the host government to foreign investors enjoyed claims subrogation and other related rights and status. The agreement also stipulates that both sides claim the problem occurred because the government disputes the process. Design of such a law, whose main thrust is to make this type of specific U.S. domestic legal effect of the insurance contract, to double by this particular international agreement even extends to the outside of the U.S. border, to obtain official confirmation of the other parties so bear with each other compliance with international law binding on the obligation to compensate. Thus, the formerly private contractual relationship between the United States subrogation right to claim to stare "international" and "law" of the. With the United States has more than 100 countries signed a bilateral investment guarantee agreement, China also in 1980 in an exchange of letters with the United States signed an investment guarantee agreement.
3, the bilateral investment treaty - Agreement on Investment Promotion and ProtectionAfter World War II, the former East German economic recovery soon, a large number of "excess" capital to other countries looking for ways to add value, investment in developing countries is also growing rapidly. In this context, relying on the protection of Friendship, Commerce and Navigation Treaty has been very difficult to meet the growing demands of foreign investment, then, from the late 1950s, the former Federal Republic of Germany and other European countries, the traditional "Friendship, Commerce navigation Treaty "in the protection of foreign investment to extract the contents out of the industry to be specific, and integration with the American-style" investment guarantee agreements "relating to investment, insurance, subrogation, and dispute settlement provisions, and relevant countries have signed the" promotion and protection investment "of specialized double-agreement. Such agreements are more specific detail within the radiant, substantive rules and procedural requirements simultaneously, both the "Treaty of Friendship, Commerce and Navigation" and "investment guarantee agreement," this long, is a good treaty to protect the type of international investment, and thus a come they will have to follow the developed countries and large side against the implementation phase. According to statistics, to date, 133 different countries signed a total of nearly 600 bilateral "Agreement on Promotion and Protection of Investment", in which a considerable part of is signed between developing countries, where the current international legal literature called "bilateral investment treaties" (Bilateral Investment Treaty, BIT) or "double-investment protection treaties" generally refers to such agreements.
Since China's reform and opening up policy, the use of bilateral investment treaties in the form of international protection has a positive attitude. As of the end of 1993, except 1980, and the United States and Canada, respectively, in 1984 in exchange for signing two documents in the form of "investment insurance agreement", the total and other countries signed the "Agreement on the Promotion and Protection of Investments," 54. One, signed in 1982 and Sweden's "Agreement on Mutual Protection of Investments" was signed between China and foreign countries first such agreement.

Bilateral investment agreements - the role ofBilateral investment treaties of international investment law is an important part in the protection of foreign investment has played an important role:1, bilateral investment treaties for the host country to create a favorable investment environment. Agreed to abide by has become a universally accepted principles of international law, bilateral investment agreements in which the State party has a strong international legal binding. If the parties to one party does not comply with treaty obligations, it will have national responsibility. Therefore, compared with its domestic law to foreign investors by providing investment protection, bilateral investment agreements to be much stronger.
2, bilateral investment agreements because parties only two parties, than to seek a balance between the interests of multinational, multilateral investment treaties, it is easy to take into account on the basis of equality and mutual benefit the interests of both countries to agree, so. Bilateral investment agreements have been widely used in many countries, to become the most important investment protection system of international law.
3, bilateral investment agreements can enhance or ensure the effectiveness of domestic law. Today many countries, especially developed countries have established a national system for overseas investment insurance or guarantees, they are usually bilateral investment agreements as the implementation of its overseas investment insurance or guarantees domestic legal system of the premise, the bilateral investment agreement as to strengthen domestic, overseas investment insurance important to ensure that the system of international law or the means.
4, bilateral investment agreements, in particular the agreement on investment promotion and protection of both rights and obligations of the Parties with regard to the substantive provisions, but also on the right of subrogation, the settlement of investment disputes procedural requirements for private foreign investment in both Contracting States who foresees the establishment of investment relations between the legal norms to be followed by the structure and framework, to avoid or minimize legal obstacles to ensure the stability of investment relations, to promote the development of international private investment.
5, the provisions of the bilateral investment agreement between the parties not only because of treaty interpretation, performance and the way to resolve disputes and procedures, and provides foreign investors and host governments because of investment disputes between the solution and procedures, especially the big Agreement agreed by the majority yet, "International Center for Settlement of Investment Disputes," to resolve such disputes, which is the proper settlement of investment disputes provide a strong guarantee.

Bilateral Investment Treaties - ContentBilateral investment agreement between, though due to the different countries vary, but in international practice, most negotiations follow a certain template, signed. Agreement for the promotion and protection of investment, the current greater impact in practice the model are: the three Asian-African Legal Consultative Committee model, (federal) German model, Helan Fan of this, Ruishi Fan and the United States in this model. Below the main basis for the promotion and protection of investment agreements, bilateral investment treaties introduced the main content.
(A) the protection of investors and investment by1, the investorFor the protection of investors, bilateral investment agreements generally provide that the State Parties of natural persons, legal persons or companies with legal personality and other associations. That the investor is protected: (1) has the nationality of States Parties or a natural person domiciled within the State party; (2) in accordance with the laws of the States Parties, or residence in the State party in the incorporated or unincorporated economic entity; (3) States citizens or legal persons controlled by a third party country or other companies. The latter principle is the use of capital controls with the parties identified a significant link with a party or the other party a third country incorporated or unincorporated economic entity.
2, protected investmentBilateral investment protection agreements both investors a variety of assets, but also the protection of investors and investment-related activities. Typically, the investment must be protected in accordance with their respective effective parties permitted by law, or according to its laws and regulations to accept the investment. This is a capital importing country's national sovereignty, the investment can be protected is the basic premise.
For the protection of investments and investment-related activities, most bilateral investment agreements with the general type to a combination of enumerated type be provided. Although the bilateral investment agreements listed items vary, but include extensive than the range, both a form of assets, shares, property rights can be obtained through litigation, including intellectual property rights and concessions. The aim is to ensure the agreement is flexible enough to facilitate the equity investment and non-equity investments include on the inside, and can adapt to new forms of investment.
(B) the treatment of foreign investmentThe provisions of bilateral investment agreements are generally for the treatment of nationals of States parties in the State party the other party's investment and investment-related activities. In the bilateral investment agreements, as foreign investors and investment-related investment activities of three standards of treatment.
1, fair and just treatment. Most of the provisions of bilateral investment agreements with the standards of treatment. For example, the Sino-German Agreement, Article 2 provides: "Each Contracting Party shall promote the other Contracting Party in its territory investments of investors, in accordance with its law to accept such investments, and in any case to give fair and reasonable treatment." U.S. investment model agreement provides that: "Investment shall at any time to give fair and equitable treatment, shall enjoy full protection and security, must not be given treatment less than required by international law." shows American-style investment agreements are far more stringent, because It requires compliance with international law standards.
From the practice of bilateral investment agreements, although the agreements on fair and equitable treatment provisions of different wording, such as a fair and impartial, fair and reasonable, but the agreement set the goal of this treatment can be said about the same, namely: the provisions of this treatment as a matter of principle, to guide the treatment of other specific standards, such as national treatment, MFN, etc., and make up for the lack of specific standards of treatment. It takes full advantage of its vague meaning, the abstract content, flexibility to meet the terms of bilateral investment agreements, no provisions, treaties and domestic legislation to fill the gaps, so that foreign investors in the host country of investment and investment-related activities can always enjoy non-discriminatory treatment, and are fully protected.
However, the required investment treated in accordance with international law standards, such as the American-style investment provisions of the Agreement, is unreasonable. This is not only because the standard of treatment under various names, content, uncertain, ambiguous, more importantly, the standard treatment is represented by the tyranny of the imperialist powers, handed thinking. In the modern history of international practice, the standard often used to maintain the citizens of Western countries in the privileged position of small developing countries, to support foreign economic lifeline for the control of the host country to support foreigners to evade the legal jurisdiction of the host country, of the host country for foreign military intervention legitimate excuse. In fact, the so-called international standards is simply not a fair standard, on the contrary, it is a discriminatory, unequal standards. Because this standard, according to local law gives foreigners to equal treatment with nationals not necessarily be considered to fulfill the international obligations of the last, must also meet international standards of justice, if it falls, we must bear international responsibility. In reality, this is to ignore the country's national sovereignty.
2, MFN treatment. MFN means the Treaty, a Contracting State an obligation to provide the other Party not less than the treatment given to any third country. In other words, whenever a Contracting State to third countries more favorable treatment, the other Party have the right to enjoy this new, more favorable treatment. Almost all of the provisions of bilateral investment agreements with the MFN clause, they are broadly consistent with the structure and content: First, investors in the Contracting State in the territory of the other Party not less favorable than the other Party to give any third-country nationals or companies of the treatment ; Second, investors in a Contracting State in the territory of the other Party with investment-related activities (often including the management, operation, maintenance, use, disposal and access to) give not less favorable than the other Party of any third-country nationals or companies of the treatment; first Third, the exception does not apply MFN.
3, national treatment. In international investment law, national treatment is to ask the host country to foreign investors and investment-related activities in order to not less than or equal to investors within the country and investment-related activities of the treatment. As the national treatment to foreign investors and to investors in the country within the same economic conditions, competition and access to benefits, therefore, often try to capital-exporting countries in bilateral investment agreements for domestic investors national treatment for access to the host country. The most prominent example is the German national treatment as the bilateral investment agreement is an important matter of principle, it would rather give up the treaty negotiations and reluctant to give up national treatment provisions. Therefore, bilateral investment agreements often see national treatment provisions.
In order to provide for its adequate protection of foreign investors in the practice of bilateral investment agreements, there will be a combination of national treatment and most-favored trend. That bilateral investment agreements, capital-exporting countries are often required to sign, including the terms of the two treatment system so that the two no matter what kind of treatment more favorable treatment, domestic investors can enjoy preferential treatment, so that domestic investors and its investment in the host country can be fully protected. For example, the U.S. model bilateral investment agreement provisions of Article 2 states: "Parties in the permit and treat investment in each other's nationals or companies or its related activities under the same circumstances should be given not less than its own nationals or companies, or the first Three investments of nationals or companies or relating to the treatment of activity, regardless of whichever best. "
(C) the guarantee of political riskPolitical risk guarantees are an important part of bilateral investment agreements. Political risk in the war, civil strife insurance, since it does not intentionally or out of the host government for foreign direct investment behavior caused by bilateral investment agreements in general has therefore not provided.
1, expropriation and nationalizationBilateral investment agreements provisions on expropriation and nationalization of the structure generally includes the following aspects:(1) nationalization of the condition. Generally believed that the highest territorial rights under international law principles, including foreign national has the right to private property within the territory, including all property expropriation or nationalization, but to comply with certain conditions. Although the wording of this bilateral investment agreements vary, but all provisions are substantially the same conditions: nationalization or expropriation must be for reasons of national public interest considerations; must adopt non-discriminatory treatment for foreign investors; the need for foreign investors be just compensation; must follow certain legal procedures.
(2) acquisition and nationalization of the way. International investment, expropriation and nationalization law refers to the host country for foreign private property nationalized or taken away, prevent acts of ownership. In an academic, although the law is generally believed that both the nature and legal effect is basically the same, but vary. Acquisition of both Guangxia points, also has a direct expropriation and indirect expropriation of the other. In order to be adequate protection for investors, most bilateral investment treaties do not give a clear definition but only a general description of the general provisions. Model is used, such as Germany, "expropriation, nationalization or expropriation and nationalization of the effect is equivalent to any other measures," the reference. He Lanfan This is defined as "the other Contracting Party directly or indirectly, deprive any measure of national investment." The wording of the U.S. model is the "investment shall not be expropriated or nationalized, and shall not be equivalent to expropriation and nationalization measures indirect expropriation or nationalization." Asian-African Legal Consultative Committee to provide the first template is the "expropriation, nationalization or expropriation and nationalization have the effect of the measures" language.
(3) compensation for expropriation and nationalization. Compensation on expropriation and nationalization, developed and developing countries have taken the position is different, reflected in the practice of bilateral investment agreements, the performance of the principle of compensation for the two different provisions, one position of the developed countries to provide "full, timely and effective" principle of compensation, such as the U.S. model treaty provides for the imposition must be accompanied by timely, adequate and effective compensation. Second, developing countries advocated "appropriate and reasonable" compensation, such as China and Australia, China and the United Kingdom's agreement provides that "reasonable compensation." The agreement between China and France is the "appropriate compensation."
2, exchange and transferBilateral investment agreements mainly related to the exchange and transfer the contents of the following aspects: (1) the principle of free transfer. Basically all the provisions of bilateral investment agreements in principle to ensure that investors can return the original and legitimate free exchange and transfer. (2) the transfer of money should respect the laws and regulations, especially the existing exchange control laws and regulations. (3) on the transfer of currency, most of the provision to be freely convertible currency. (4) exception, which provides that in freely convertible and freely transferable under the premise of allowing recipient countries in the international balance of payments difficulties, in accordance with certain conditions, on the free transfer of capital and profits to impose some restrictions. Such as China and the United Kingdom the provisions of the agreement, investors will return their investment and the free transfer of rights and should be subject to the control the parties have the right to its international balance of payments difficulties in exceptional circumstances, and in a limited period of time to exercise fair and honest The rights conferred by law. However, such right shall not be used to prevent the profits, interest, dividends, royalties or remuneration for the transfer and shall ensure that at least 20% of the investment and the transfer of any other form of income.

 (D) the right of subrogationSubrogation is the investors' home country because of its investors in the host country political risk compensation for the losses suffered, the home country government will obtain the rights of investors in the host country and the right of recovery. Agreement usually provides that the investors' home country of the investment insurance agencies or home country government subrogation under certain conditions, to obtain all the rights and obligations of investors. Contracting Party to obtain subrogation rights and obligations can not exceed the original investors of their rights. But investors' home governments can make to the host country in accordance with international law, other than the limit required. Meanwhile, the subrogation right must be exercised subject to the constraints of the host country laws, but in some cases also allow investors and home country investment insurance agencies in the host country within the scope permitted by law to make appropriate arrangements.