Commentaries on Selected Model Investment Treaties. Edited by CHESTER BROWN

Transcription

1 Commentaries on Selected Model Investment Treaties Edited by CHESTER BROWN

2 Notes on Contributors Table of Cases Table of Instruments xxix xxxv 1. INTRODUCTION: THE DEVELOPMENT AND IMPORTANCE OF THE MODEL BILATERAL INVESTMENT TREATY 1 Chester Brown I. Introduction 1 II. Historical Background 3 III. Precursors to the Bilateral Investment Treaty 4 A. Friendship, Commerce and Navigation Treaties 4 B. Efforts to Reach Multilateral Agreement 6 IV. Emergence of the Bilateral Investment Treaty 8 V. Scope and Content of this Volume A. Scope of the Volume B. Content of each Chapter 12 VI. Conclusion AUSTRIA 15 August Reinisch I. Investment Policy 15 II. Austria's BIT Programme 16 III. The Practice of Concluding BITs in Austria 19 IV. The Austrian Model BIT Preamble 20 A. Chapter One: General Provisions Article 1: Definitions 22 Article 2: Promotion and Admission of Investments 24 Article 3: Treatment of Investments 25 Article 4: Investment and Environment 29 Article 5: Investment and Labour 29 Article 6: Transparency 30 Article 7: Expropriation and Compensation 31 Article 8: Compensation for Losses 33 Article 9: Transfers 33 Article 10: Subrogation 35 Article 11: Other Obligations 35 Article 12: Denial of Benefits 36 B. Chapter Two: Dispute Settlement 37 Part One: Settlement of Disputes between an Investor and a Contracting Party 37 Article Scope and Standing 38 Article 14: Means of Settlement, Time Periods 39 Article 15: Contracting Party Consent 42 Article 16: Place of Arbitration 43

3 xii Contents Article 17: Indemnification 44 Article 18: Applicable Law 44 Article 19: Awards and Enforcement Part Two: Settlement of Disputes between the Contracting Parties 46 Article 20: Scope, Consultations, Mediation and Conciliation 46 Article 21: Initiation of Proceedings 46 Article 22: Formation of the Tribunal 46 Article 23: Applicable Law, Default Rules 47 Article 24: Awards 47 Article 25: Costs 48 Article 26: Enforcement 48 C. Chapter Three: Final Provisions 48 Article 27: Scope and Application of the Agreement 48 Article 28: Consultations 49 Article 29: Entry into Force and Duration 50 Select Bibliography CANADA 53 Celine and Andrew I. Introduction 53 II. Canadian Investment Policy 53 III. Canada's Bilateral Investment Treaties and Free Trade Agreements with Investment Chapters 56 IV. Internal Government Issues V. Commentary on the Canadian Model 62 Preamble 62 A. Article 1: Definitions 63 Article 1: Definitions 63 B. Substantive Obligations (Articles 2-19) 73 Article 2: Scope 73 Article 3: National Treatment 73 Article 4: Most-Favoured-Nation Treatment 76 Article 5: Minimum Standard of Treatment 78 Article 6: Senior Management, Boards of Directors and Entry of Personnel 80 Article 7: Performance Requirements Article 8: Monopolies and State Enterprises 84 Article 9: Reservations and Exceptions 85 Article General Exceptions 87 Article Health, Safety and Environmental Measures Article Compensation for Losses 92 Article 13: Expropriation 93 Article 14: Transfer of Funds 96 Article 15: Subrogation 98 Article Taxation Measures 99 Article Prudential Measures 100 Article 18: Denial of Benefits 101 Article 19: Transparency 101 C. Setdement of Disputes between an Investor and the Host Party (Articles 103

4 xiii Article 20: Purpose 103 Article 21: Limitation of Claims with Respect to Financial Institutions 104 Article 22: Claim by an Investor of a Party on Its Own Behalf 105 Article 23: Claim by an Investor of a Party on Behalf of an Enterprise 105 Article 24: Notice of Intent to Submit a Claim to Arbitration 107 Article 25: Settlement of a Claim through Consultation 107 Article 26: Conditions Precedent to Submission of a Claim to Arbitration 108 Article 27: Submission of a Claim to Arbitration Article 28: Consent to Arbitration Article 29: Arbitrators Article 30: Constitution of a Tribunal When a Party Fails to Appoint an Arbitrator or the Disputing Parties Are Unable to Agree on a Presiding Arbitrator Article 31: Agreement to Appointment of Arbitrators Article 32: Consolidation Article 33: Notice to the Non-Disputing Party Article 34: Documents Article 35: Participation by the Non-Disputing Party Article 36: Place of Arbitration Article 37: Preliminary Objections to Jurisdiction or Admissibility Article 38: Public Access to Hearings and Documents Article 39: Submissions by a Non-Disputing Party 120 Article 40: Governing Law 121 Article 41: Interpretation of Annexes 122 Article 42: Expert Reports 122 Article 43: Interim Measures of Protection 123 Article 44: Final Award 123 Article 45: Finality and Enforcement of an Award Article 46: General 124 Article 47: Exclusions 125 D. State-to-State Dispute Settlement Procedures (Article 48) Article 48: Disputes between the Parties E. Final Provisions (Articles 49-52) Article 49: Consultations 127 Article 50: Extent of Obligations 127 Article 51: Commission 127 Article 52: Application and Entry into Force 128 F. Annexes 128 VI. Concluding Remarks Select Bibliography 4. CHINA 131 Shan and Norah Gallagher I. Introduction 131 II. Chinese Investment Policy

5 A. Policy-orientation: from Capital-import to both and Capital-export B. Definition of Foreign Investment 133 C. Historical Foreign Investment Inflows 133 D. Historical Outward Investment Flows 133 E. Domestic Legislative and Policy Regime Relating to Foreign Investment F. Portfolio Investment Regulation G. Market Access and Price Control 136 H. Domestic Legal Position on Expropriation 138 III. China's Investment Treaties and Free Trade Agreements 140 IV. Internal Government Issues V. Commentary on the Model BIT 145 Preamble 145 A. Definitions 147 Article 1: Definition 147 Article 1: Definition Natural Persons Corporate Entities 155 B. Promotion and Protection of Investments Article 2: Promotion and Protection of Investments Admission 2. Constant Protection and Security Non-Discriminatory Treatment C. Treatment of Investments 158 Article 3: Treatment of Investment Fair and Equitable Treatment National Treatment 3. Most Favoured Nation ('MFN') Standard 160 D. Expropriation 162 Article 4: Expropriation E. Compensation for Damages and Losses Article 5: Compensation for Damages and Losses F. Repatriation of Investments and Returns 167 Article 6: Repatriation of Investments and Returns 167 G. Subrogation 169 Article 7: Subrogation H. Dispute Settlement 170 Article 8: Setdement of Disputes between Contracting Parties 170 Article 9: Settlement of Disputes between an Investor and a Host State I. Other Obligations 176 Article 10: Other Obligations 176 J. Scope of Application Article Application Territorial Extension 178 K. Consultations 178 Article 12: Consultations 178

6 xv L. Final Provisions 179 Article 13: Entry into Force, Duration and Termination 179 M. Exceptions 180 VI. Concluding Remarks 180 Select Bibliography 5. COLOMBIA 183 Jose Antonio Rivas I. Introduction 183 II. Investment Law and Policy of Colombia A. State Policy on Investment during Successive Governments: B. The Foreign Investment Outlook of Colombia 185 C. Legal Regime on Investment in Connection to IIAs Economic Rights, Freedoms, and Treatment by the Colombian Constitution to Persons, Including Aliens 2. The Right to Property and Restrictions on Expropriation 3. Colombia, an Economy Open to Foreign Investment under its General Foreign Investment Regime III. IIAs in and FTAs 190 A. Friendship, Commerce and Navigation Treaties of Colombia between 1829 and B. Colombian IIAs in Numbers 191 C. The Current Colombian Model IIA 193 IV. Internal Government Issues 196 V. Commentary on the Colombian 2009 Model IIA Preamble 197 A. Article I: Definitions Character of the Model Exclusion of Economic Assets Acquired or Invested in Breach of Domestic Law Exclusions based on Public Policy Minimum Characteristics of an Investment 204 B. Article II: Scope of Application Public Order Essential Security Maintenance of International Peace and Security C. Article III: Promotion, Admission and Protection of Investments 1. Promotion and Admission of Investments Minimum Standard of Fair and Equitable Treatment 3. Minimum Standard of Full Protection and Security 216 D. Article IV: Treatment of Investments National and Most Favoured Nation Treatment Rejection the Maffezini Doctrine MFN Exception to Regional Trade Agreements E. Article V: Free Transfers 220 F. Article VI: Expropriation and Compensation 223 G. Article VII: Compensation for Damages or Losses 229

7 xvi Contents H. Article VIII: Investment and Environment 229 I. Settlement of Disputes Article DC: Settlement of Disputes between One Contracting Party and an Investor of the Other Contracting Party 2. Article X: Settlement of Disputes between the Contracting Parties Article XI: Cooperation and Other Provisions Article XII: Consultations 238 J. Article XIII: Final Provisions 239 K. Rejection of the Umbrella Clause 241 VI. Concluding Remarks 242 Select Bibliography FRANCE 245 and Andre von Walter I. Introduction 245 II. Overview of France's Investment Policy and Domestic Legal Framework 245 III. France's Bilateral Investment Treaties 247 IV. Internal Government Issues 249 V. Commentary on the French Model BIT 250 A. Preamble 250 B. Definitions: Qualification for Protection Protected 'Investment' 253 (i) The Definition of an 'Investment' under the Current French Model BIT 253 (ii) Interpretation of French Treaty Practice in Relation to the Definition Protected 'Investor' 255 C. Encouragement and Promotion of Investments 257 D. Standards of Protection of Investments Fair and Equitable Treatment 257 (i) Fair and Equitable Treatment under the Current French Model BIT 257 (ii) Evolution of French Treaty Practice 258 (iii) Interpretation of French Treaty Practice in Relation to Fair and Equitable Treatment National and Most-Favoured-Nation Treatment (i) National and Most-Favoured-Nation Treatment under the Current French Model BIT 261 (ii) Evolution of French Treaty Practice Taking into Account Specific Commitments 263 (i) The Protection of Contracts and Special Commitments under the Current French Model BIT 264 (ii) Evolution of French Treaty Practice Expropriation, Nationalization, and Compensation 266 (i) Expropriation, Nationalization, and Compensation under the Current French Model BIT 266

8 xvii (ii) Evolution of French Treaty Practice 266 (iii) Interpretation of French Treaty Practice with Regard to Expropriation and Nationalization Full Protection and Security 269 (i) Protection and Security under the Current French Model BIT 269 (ii) Evolution of French Treaty Practice 269 (iii) Interpretation of French Treaty Practice with Regard to Protection and Security Free Transfer of Capital 273 (i) Free Transfer of Capital under the Current French Model BIT 273 (ii) Evolution of French Treaty Practice 274 E. Setdement of Investment Disputes between the Investor and the Host State 276 Investment Disputes undet the Current French Model BIT Evolution of French Treaty Practice Interpretation of French Treaty Practice with Regard to Investor-State Arbitration 282 F. Guarantee and Subrogation 284 G. Settlement of Disputes between Contracting Parties 284 H. Final Provisions: Entry into Force and Duration 286 VI. General Conclusions and Oudook 286 Select Bibliography GERMANY 289 Rudolf Dolzer and Kim I. Introduction 289 II. Germany's Investment Policy 289 III. Germany's Bilateral Investment Treaties 292 IV. Internal Government Issues 295 V. German Arbitral Practice 296 VI. Commentary on Germany's Model BIT (2009) 301 A. Characteristics of the German Approach 301 B. Commentary 301 Preamble 301 Article 1: 302 Article 2: Admission and Protection of Investments 306 Article 3: National and Most Favoured Nation Treatment 308 Article 4: Compensation in Case of Expropriation 309 Article 5: Free Transfer 312 Article 6: Subrogation 313 Article 7: Other Provisions 313 Article 8: Scope of Application 314 Article 9: Settlement of Disputes between the Contracting States 314 Article 10: Settlement of Disputes between a Contracting State and an Investor of the other Contracting State Article Relations between the Contracting States 317

9 xviii Contents Article Registration Clause Article 13: Entry into Force, Duration and Notice of Termination 318 VII. Concluding Remarks 318 Select Bibliography ITALY 321 Federico Ortino I. Investment Policy of Italy 321 A. Outflows and Inflows B. Legislative and Policy Regime 322 II. Italy's Investment Treaty Programme 323 III. Concluding BITs in Italy 324 IV. The Italian Model BIT Preamble 325 Article I: Definitions 327 Article II: Promotion and Protection of Investments 330 Article III: National Treatment and the Most Favoured Nation Clause 333 Article IV: Compensation for Damages or Losses 335 Article V: Nationalisation or Expropriation 335 Article VI: of Capital, Profits and Income 337 Article VII: Subrogation 338 Article VIII: Transfer Procedures 339 Article LX: Article X: Settlement of Disputes between the Contracting Parties 339 Setdement of Disputes between Investors and Contracting Parties 340 Article XI: Relation between Governments 343 Article XII: Application of other Provisions 343 Article XIII: Entry into Force 344 Article Duration and Expiry 345 V. Concluding Remarks 345 Select Bibliography JAPAN 347 Shotaro Hamamoto and Luke Nottage I. Introduction 347 A. Japan's Investment Policy 347 B. Japan's Domestic Law on Foreign Investment 349 II. Japan's Bilateral Investment Treaty and Free Trade Agreement Investment Chapter Programme 352 III. Internal Government Issues 353 IV. Commentary on Japan's BITs and FTA Investment Chapters 354 A. Scope of Japan's Investment Treaties Definition Definition 355

10 xix 3. Definition Provisions Regarding Investor-State Dispute Settlement Denial of Benefits Area' and 'WTO Agreement' 358 B. Substantive Standards Non-discrimination 358 (i) National Treatment 358 (ii) Most-Favoured-Nation Treatment Promotion of Investments General Treatment 361 (i) Fair and Equitable Treatment (ii) Full Protection and Security (iii) Obligation Observance Clause ('Umbrella Clause') 362 (iv) Access to the Courts of Justice Expropriation 363 (i) Scope 363 Direct and Indirect Expropriation 363 Taxation Measures 364 (ii) Conditions 364 (iii) Compensation Protection from Civil Disturbance or Strife Performance Requirements Monetary Transfers 367 (i) Guarantee of Capital Transfers 367 (ii) Currency and Exchange Rate 368 (iii) Restrictions 369 General Restrictions 369 Exceptional Restrictions 369 C. Exceptions 370 D. 'Social Clauses' 370 E. Subrogation F. Dispute Settlement 371 Provisions on Inter-State Dispute Settlement and Prevention 2. Provisions on Investor-State Arbitration 373 (i) Scope of 'Investment Dispute' 374 Amicable Settlement 376 (iii) 'Fork-in-the-road' Provisions 377 (iv) Arbitration and Conciliation 379 (v) Consent to Arbitration 382 (vi) Other Significant Provisions in BITs FTAs 383 (vii) Arbitral Tribunal and Procedures 384 (viii) Enforcement or Execution of Awards 386 (ix) Awards and Costs 387 G. Final Provisions 388 V. Conclusion 389 Select Bibliography 390

11 xx Contents REPUBLIC OF KOREA 393 Hi-Taek Shin I. Introduction 393 II. Korea's Investment Policy 393 III. Korea's Bilateral Investment Treaty Programme 397 IV. Internal Government Issues 398 V. The 2001 Korean Model BIT 399 A. Provisions in the Model BIT 400 Tide 400 Preamble 400 Article 1: Definitions 401 Article 2: Promotion and Protection of Investments 404 Article 3: Treatment of Investments 405 Article 4: Compensation for Losses 407 Article 5: Expropriation 408 Article 6: Transfers Article 7: Subrogation 412 Article 8: Settlement of Investment Disputes between a Contracting Party and an Investor of the Other Contracting Party Article 9: Settlement of Disputes between Contracting Parties 416 Article 10: Application of Other Rules 417 Article 11: Application of the Agreement 418 Article 12: Entry into Force, Duration and Termination B. Additional Provisions Transparency 419 Entry and Sojourn of Personnel 420 Prohibition of Performance Requirements 420 Senior Management and Boards of Directors 421 Environment 422 Establishment of a Joint Committee 422 Exceptions for Essential Security Interests 423 VI. Concluding Remarks 423 Select Bibliography LATVIA 425 Martins Paparinskis I. Introduction 425 II. Latvia's Investment Policy 425 III. Latvia's Bilateral Investment Treaties and Free Trade Agreements 430 IV. Internal Government Issues 432 V. Commentary on the Model BIT 433 Preamble 434 Article 1: Definitions 436 Article 2: Promotion and Protection of Investments 441 Article 3: National and Most-Favoured-Nation Treatment 445 Article 4: Exemptions 447 Article 5: Expropriation and Compensation 447

12 xxi Article 6: Compensation for Losses 450 Article 7: Transfers 451 Article 8: Subrogation 452 Article 9: Disputes between an Investor and a Contracting Party 453 Article 10: Settlement of Disputes between the Contracting Parties 456 Article Application of Other Rules and Special Commitments 458 Article 12: Applicability of this Agreement 459 Article 13: General Exceptions 459 Article 14: Transparency 460 Article 15: Consultations 460 Article 16: Amendments 460 Article 17: Entry into Force, Duration and Termination 461 VI. Concluding Remarks 462 Select Bibliography NAFTA CHAPTER Andrea Bjorklund I. Investment Policy of the NAFTA Contracting Parties 465 A. Canada 465 B. Mexico 467 C. United States 468 II. Bilateral Investment Treaties and Free Trade Agreements of the NAFTA Contracting Parties 470 III. Internal Government Issues 471 IV. Commentary on NAFTA Chapter 473 Article Scope and Coverage 474 Article 1102: National Tteatment 477 Article Most-Favoured-Nation Treatment 480 Article 1104: Standard of Treatment 482 Article 1105: Minimum Standard of Treatment 482 Article Performance Requirements 485 Article Senior Management and Boards of 487 Article 1108: Reservations and Exceptions 488 Article 1109: Transfers 491 Article 1110: Expropriation and Compensation 492 Article Special Formalities and Information Requirements 495 Article 1112: Relation to Other Chapters 495 Article 1113: Denial of Benefits 496 Article 1114: Environmental Measures 498 Article Purpose 499 Article Claim by an Investor of a Party on its Own Behalf 500 Article Claim by an Investor of a Party on Behalf of an Enterprise 503 Article Settlement of a Claim through Consultation and Negotiation 504 Article Notice of Intent to Submit a Claim to Arbitration 505 Article Submission of a Claim to Arbitration 505 Article Conditions Precedent to Submission of Claim to Arbitration 509

13 xxii Contents Article 1122: Consent to Arbitration Article Number of Arbitrators and Method of Appointment Article Constitution of a Tribunal When a Party Fails to Appoint an Arbitrator or the Disputing Parties Are Unable to Agree on a Presiding ator Article Agreement to Appointment of Arbitrators Article 1126: Consolidation 514 Article Notice 516 Article Participation by a Party Article Documents 518 Article 1130: Place of Arbitration 518 Article 1131: Governing Law 519 Article 1132: Interpretation of Annexes 521 Article 1133: Expert Reports 521 Article 1134: Interim Measures of Protection 522 Article 1135: Final Award 523 Article Finality and Enforcement of an Award 524 Article General 526 Article 1138: Exclusions 527 Article 1139: Definitions 529 V. Concluding Remarks 531 Select Bibliography THE NETHERLANDS 535 Nico Schrijver and Vid Frisian I. Introduction 535 II. The Foreign Investment Policy of the Netherlands 535 A. Foreign Investment in the Netherlands 537 B. Promotion and Protection of Dutch Investments Abroad 539 III. The BIT Programme 540 A. Origins of the BIT Programme 541 B. History of the Model Text 544 C. Negotiation and Conclusion of BITs Scope Negotiation and Ratification Process 546 IV. Commentary 547 Tide and Preamble 548 Article 1: Definitions Investments Investors Territory 558 Article 2: Investment Promotion and Admission 558 Article 3: General Treatment Standards 560 Fair and Equitable Treatment Non-impairment Clause Full Protection and Security National and Most-Favoured-Nation Treatment 565

14 xxiii 5. The Umbrella Clause Preservation of Rights and Minimum Standard 568 Article 4: Taxation 569 Article 5: Transfer of Funds 570 Article 6: Expropriation Compensation Clause and Other Legality Requirements 576 Article 7: Compensation for Losses 577 Article 8: Subrogation 579 Article 9: Investor-State Dispute Settlement 580 Article Temporal Scope 584 Article Consultations 584 Article 12: Inter-State Dispute Settlement 584 Article 13: Territorial Scope 588 Article 14: Entry into Force, Termination 588 V. The Future of the Dutch BIT Programme and the Role of the European Union 589 Select Bibliography 14. RUSSIA 593 Sergey Ripinsky I. Introduction 593 II. Russia's Investment Policy 593 A. Investment Flows 593 B. Domestic Regulation of Foreign Investment 594 III. Russia's BITs and Other Investment Treaties 595 IV. Internal Government Issues 597 V. Commentary on the Russian Model BIT 597 Preamble 598 Article 1: Definitions Investor Investment Returns Territory Legislation 603 Article 2: Protection of Investments 603 Article 3: Treatment of Investments 604 Fair and Equitable Treatment Most-Favoured-Nation Treatment and National Treatment Exceptions 608 Article 4: Expropriation 609 Article 5: Compensation for Losses Article 6: Transfer of Payments 612 Article 7: Subrogation 613 Article 8: Settlement of Disputes between a Party and an Investor of the Other Contracting Party 614 Article 9: Setdement of Disputes between the Contracting Parties Article 10: Consultations Article 11: Application of this Agreement 618 Article 12: Entry into Force and Duration of the Agreement

15 xxiv Contents VI. Concluding Remarks 620 Select Bibliography SINGAPORE 623 Jean Ho I. Introduction 623 II. Singapore's Investment Policy 624 III. Singapore's Investment Guarantee Agreement and Free Trade Agreement Regime 627 IV. Internal Government Issues 629 V. Commentary on De Facto Model Preamble 631 Article 1: Definitions 632 Article 2: Applicability of this Agreement 634 Article 3: Promotion and Protection of Investment 635 Article 4: Most Favoured Nation Provision 636 Article 5: Exceptions 637 Article 6: Expropriation 639 Article 7: Compensation for Losses 641 Article 8: Repatriation Article 9: Exchange Rate 642 Article 10: Laws 642 Article Prohibitions and Restrictions 643 Article 12: Subrogation 643 Article 13: Investment Disputes 644 Article Disputes between the Contracting Parties 646 Article 15: Other Obligations 647 Article Entry into Force, Duration and Termination 648 VI. Concluding Remarks 649 Select Bibliography SWITZERLAND 651 Michael I. Introduction 651 II. Investment Policy of Switzerland III. Swiss Investment Treaty Short Historical Overview 656 IV. Internal Government Issues 658 V. Commentary on Typical Clauses in Swiss BITs 659 Preamble 660 Article 1: Definitions Investment Investor Returns Territory 666 Article 2: Scope of Application 666 Article 3: Promotion and Admission 668 Article 4: Protection and Treatment 669 Fair and Equitable Treatment 669

16 xxv 2. Protection and Security Non-impairment by Unreasonable or Discriminatory Measures National Treatment and Most-Favoured-Nation Treatment 673 Article 5: Expropriation, Compensation 676 Article 6: Compensation for Losses 678 Article 7: Transfers 678 Article 8: Principle of Subrogation 681 Article 9: More Favourable Provisions 682 Article 10: Other Commitments 682 Article Disputes between a Contracting Party and an Investor of the Other Contracting Party 688 Article 12: Disputes between the Contracting Parties 694 Article 13: Final Provisions 695 VI. Conclusion/Summary 695 Select Bibliography UNITED KINGDOM 697 Chester Brown and Audley Sheppard I. Introduction 697 II. The United Kingdom's Investment Policy 698 A. Inward and Outward Foreign Direct Investment 698 B. Local Policy and Legislative Regime Relating to Foreign Investment 699 C. Domestic Legal Position on Governmental Taking of Property III. The United Kingdom's Investment Promotion and Protection Agreements 702 A. History of British Practice in Negotiating Commercial Treaties 702 B. The UK's IPPA Programme 703 IV. Internal Government Issues 705 V. Commentary on United Kingdom Model IPPA (2008) 707 Tide and Preamble 707 Article 1: Definitions 'Investment' 2. 'Returns' 714 'Nationals' 4. 'Companies' 5. 'Territory' 718 Article 2: Promotion and Protection of Investment 1. Article 2(1) Article 2(2) 720 (i) Fait and Equitable Treatment 720 (ii) Full Protection and 723 (iii) Non-impairment 724 (iv) Umbrella Clause 726 Article 3: National Treatment and Most-Favoured-Nation Provisions 727 Article 4: Compensation for Losses 730 Article 5: Expropriation 733

17 xxvi Contents 1. Article 5(1) Article 5(2) 737 Article 6: Repatriation of Investment and Returns 738 Article 7: Exceptions 740 Article 8 [Preferred]: Reference to International Centre for Settlement of Investment Disputes 743 Article 8 [Alternative]: Settlement of Disputes between an Investor and a Host State 743 Article 9: Disputes between the Contracting Parties 746 Article 10: Subrogation 747 Article Application of Other Rules 749 Article 12: Scope of Application 750 Article 13: Territorial Extension 752 Article 14: Entry into Force 752 Article 15: Duration and Termination 753 VI. Concluding Remarks 754 Select Bibliography 754 UNITED STATES 755 Lee M Caplan and Jeremy I. Introduction 755 II. Investment Policy of the United States 758 III. Existence of US Bilateral Investment Treaties and Free Trade Agreements with Investment Chapters 760 IV. Internal US Government Issues 762 V. Commentary on the US Model BIT: Article-by-Article Analysis 763 A. Preamble and Scope and Coverage Preamble Scope and 1 and (i) Measures Relating to Investors and 2(1) 766 'Investment' and 'Investor of a Party' 766 'Covered Investment', 'Investors of the other Party', and 'All Investments in the Territory of the Party' 770 'Measures Adopted or Relating to' Investors and Investment 772 (ii) State Enterprises and Political 2(2) 773 (iii) Temporal 2(3) 774 B. Substantive Obligations, Exceptions and Qualifications, and Entry into Force Substantive Obligations 774 (i) National Treatment and Most-Favoured-Nation 3 and National Most-Favoured-Nation (ii) Minimum Standard of (iii) (iv) (v) Performance 8 796

18 xxvii (vi) Senior Management and Boards of (vii) Publication of Laws and Decisions Respecting (viii) 801 (ix) Investment and the 804 (x) Investment and Exceptions and Qualifications 807 (i) Non-conforming 14(1) (3) 807 (ii) Exceptions for Certain Intellectual Property Measures, Government Procurement, Subsidies and l4(4)-(5) 809 (iii) Special Formalities and Information Article (iv) 16 (v) Denial of (vi) Essential (vii) Disclosure of Certain (viii) Financial (ix) Entry into C. Investor-State Dispute Settlement Consultation and Submission of a Claim to Consent to Conditions and Limitations on Consent of Each Selection of Conduct of the Transparency of Arbitral Governing Interpretation of Expert Annexes and Service D. State-State Dispute E. Specialized Procedures for the Resolution of Disputes concerning Financial Services and 20(3)-(5) and 21(2) Financial Services Disputes Taxation Expropriation Disputes 850 VI. Conclusion 850 Select Bibliography 850 Index 853