Key Features of the Canada-China FIPA Can Canad ada-China China Inve Investme stment P nt Prote rotectio ction a n and nd Busine Business ss Coop Coopera erati tion on Foru Forum To Toron ronto to Dec Decemb ember er 15, 201 15, 2014 Matthew Kronby International Trade and Investment Group Be Bennett J tt Jones s LLP LLP 416-777-4664 kronbym@bennettjones.com
The The Can Canad ada-China China FIPA FIPA in Cont in Contex ext Canada: 28 FIPAs + 5 FTAs with equivalent protections in force Model since 2003 based on NAFTA experience, balancing state and investor interests Typically "Pre-establishment" model, offering protection and liberalization China: More than 100 BITs in force Major evolution in protections, especially since 1998, reflecting China's growth as a capital exporter For now: "Admission" model, offering protection only after investment admitted 2
Key FIPA Features: Non-Discrimination National Treatment: "Admission" model Protects investments once made: "expansion, management, conduct and sale or other disposition" (not to establishment or acquistion) Carve out for all existing non-conforming measures: National treatment and MFN for new measures Plus "ratchet" on existing measures – can be liberalized but not made more restrictive 3
Key Features: Admission of Investments Canada can continue to review and approve investments under Investment Canada Act as can China under its laws Decisions not subject to arbitration (ISDS or State-State) Therefore does not liberalize market access, but…. China negotiating BITs with US and EU: MFN in FIPA means Canadian investors will gain the benefits if China grants "pre-establishment" rights 4
Oth Other er Key Key Pro Prote tect ctions ions Expropriation and nationalization Forbidden unless: For a public purpose Domestic due process Non-discriminatory Fair market value compensation Covers measures "equivalent to expropriation" subject to clarification to protect legitimate public welfare measures 5
Other Key Protections (II) Minimum standard of treatment: Fair and equitable treatment Full protection and security Tied to international law standard (like NAFTA note) Right to repatriate investment returns "freely and without delay" "Transfers" defined broadly: includes capital, capital gains, profits, royalties, proceeds of sale, employment earnings 6
Other Notable Features Transparency of Laws obligation No "Umbrella" clause - unlike some Chinese BITs Performance Requirements prohibition limited to those in WTO "TRIMs" Agreement Broad carve out for taxation measures (other than expropriation) General exceptions include: national security; health, safety and the environment; and "prudential measures" 7
Dispute Settlement State-State or Investor-State Investor-State features: Arbitration under ICSID, ICSID AF, or UNCITRAL rules Transparency: awards public, State party to the dispute can make pleadings public and insist on public hearing Investments in financial institutions: claims limited to expropriations and transfers (like NAFTA) "Filters" for: Expropriation claims concerning taxation measures Claims where "prudential" exception invoked 8
Thank You! Matthew Kronby International Trade and Investment Group Bennett Jones LLP 416-777-4664 kronbym@bennettjones.com 9
Recommend
More recommend
