INVESTMENT POLICY MONITOR

INVESTMENT POLICY MONITOR A PERIODIC report by the UNCTAD secretrit N o. 3, 7 October 2010 Introduction This Monitor is the third of new series lunched by the UNCTAD secretrit in order to provide policymkers nd the interntionl community with up-to-dte informtion bout the ltest developments nd slient fetures in foreign investment policies t the ntionl nd interntionl level. It covers mesures tken in the period between April nd the beginning of October 2010. The policy mesures mentioned in the Monitor re identified through systemic review of government nd business intelligence sources. Mesures re verified, to the fullest extent possible, by referencing government sources. Highlights of min developments nd policy implictions The review period (April to beginning of October 2010) witnessed n ongoing trend towrds more investment liberliztion, fcilittion nd promotion. At lest 41 countries or economies dopted policy mesures ffecting foreign investment, with countries in Asi being prticulrly ctive. At the sme, numerous countries dopted policies to strengthen the role of the stte in the economy. Mesures tken include, inter li, some instnces of exproprition/ntionliztion in Ltin Americ nd stronger regultion of the finncil sector. Investment protectionism remins serious potentil thret to the foreign direct investment (FDI) recovery, prticulrly protectionism tht is hidden in the implementtion of existing lws. At the interntionl level, countries continued to conclude new investment greements 50 new such greements were signed between 79 economies. Notble is the continued trend towrds signing double txtion treties. The overll trend towrds ttrcting more foreign investment cn enhnce the economic recovery in the ftermth of the finncil crisis, prticulrly t this criticl juncture when public investment hs run out of stem in mny countries nd when privte investment is yet to ressume its led role in the globl economy. Likewise, the development towrds strengthening the role of the Stte, in prticulr in the finncil sector, cn contribute to more responsible investment in the future. However, finding the right blnce between more regultion, on the one hnd, nd investment promotion, on the other hnd, remins chllenge. 1 Note: This report cn be freely cited provided pproprite cknowledgement is given to UNCTAD nd UNCTAD s website is mentioned (www.unctd.org/die).

Between April nd the beginning of October 2010, t lest 27 countries or economies dopted investment-specific policy mesures. The gret mjority of them went into the direction of more investment liberliztion, fcilittion nd promotion. 1. Investment-specific policy mesures Numerous investment-specific mesures were tken in the review period. Most of them relte to investment liberliztion, fcilittion nd promotion, but there hve lso been instnces where new restrictions hve been introduced (nnex tble 1). Investment liberliztion mesures were mostly tken in the Middle Est nd Asi. For instnce, the Syrin Arb Republic issued Lw No. 56/2010 llowing the estblishment of investment bnks in the Syrin Arb Republic for the first time. The lw sttes tht foreign bnk s equity stke in finncil institution be normlly limited to 25 per cent; however, it cn be rised to mximum of 60 per cent upon cbinet pprovl. 1 Lebnon dopted lw tht opens its offshore res to oil nd nturl-gs explortion. 2 In Cmbodi, the Ntionl Assembly pproved the long-wited Foreign Ownership Property Lw, llowing foreigners to buy rel estte bove the ground floor. 3 Indonesi issued Presidentil Regultion No. 36/2010, prtilly liberlizing the cyclmte nd scchrine industries, the construction industry, film nd helth services, s well s electricity genertion. 4 Cnd removed restrictions on foreign ownership of Cndin stellites. 5 Finlly, Tiwn Province of Chin prtilly liberlized outwrd investment to Chin with regrd to number of ctivities relted to griculture, mnufcturing, services, nd infrstructure. 6 Mny countries took steps to further fcilitte investment, with countries in Asi being prticulrly ctive. For instnce, in the Republic of Kore the Ministry of Knowledge Economy (MKE) nnounced tht it will provide soclled red crpet service for foreign investors recommended by centrl government gencies, provincil governments nd foreign embssies. Government services will include immigrtion, trnsporttion, escorting, interprettion, relted industry consulttion nd industril field trip. 7 The government will lso step up efforts to ttrct investments from Chin with n im to increse the mount more thn 10-fold to $2 billion in 2015. 8 Indi introduced Consolidted FDI Policy circulr, which combines in one document ll Foreign Direct Investment (FDI) regultions in n effort to mke those policies more trnsprent, predictble, simpler nd clerer. 9 In the Philippines, the Bord of Investment strengthened its Ntionl Economic Reserch nd Business Action Center (NERBAC), considered s the investor s door to mking investment decisions, with view to reduce the cost of doing business by stremlining procedures nd fcilitting business trnsctions. 10 In Chin, Circulr of the Ministry of Commerce on Delegting Approvl Authority over Foreign Investment to Locl Counterprts delegtes the uthority to del with foreign investment to locl uthorities. 11 Tunisi issued Presidentil order, stipulting, inter li, the estblishment of one-stop shops of the Industry Promotion Agency (IPA) in order to speed up dministrtive procedures for the setting up of compnies. 12 In Egypt centre of investment disputes settlement hs been lunched within the Ministry of Investment. It 2 1 Cpitl br set high for investment bnks, Economist Intelligence Unit, 6 September 2010. 2 Lebnon psses gs lw, pves wy for explortion, Reuters, 17 August 2010. 3 Cmbodin lw to let foreigners buy rel estte, Invest in Cmbodi, 5 April 2010. 4 Negtive investment list: simplifying, ssuring nd ttrcting investors, Indonesi Investment Coordinting Bord, June 2010. Another objective is to simplify procedures, increse legl certinty nd to fulfill commitments regrding the ASEAN Economic Community. 5 Cnd Minister of Finnce, Budget 2010: Leding the Wy on Jobs nd Growth (www.budget.gc.c). 6 Restrictions Loosened on Investment in Chin, Council for Economic Plnning nd Development, 9 April 2010. 7 Red Crpet Service for Foreign Investors, Invest Kore, 23 Aug 2010. 8 Seoul Seeks More Chinese Investment, Invest Kore, 12 August 2010. 9 Consolidted FDI Policy, Ministry of Commerce nd Industry, 1 April 2010. 10 BOI Strengthens Frontline Services, Bord of Investment of Philippines, 23 Aug 2010. 11 Circulr of the Ministry of Commerce on Delegting Approvl Authority over Foreign Investment to Locl Counterprts, Ministry of Commerce of the People s Republic of Chin, 10 June 2010. 12 Communiction from the Tunisi Foreign Investment Promotion Agency, 24 July 2010 nd Hed of Stte chirs cbinet meeting on esing dministrtive procedures to boost investment, Government press relese, 7 April 2010.

cts s mechnism for reching consensul nd speedy settlement of disputes within nd between compnies. 13 Ugnd dopted the Contrcts Act 2010, imed t improving the generl regultory climte for investment s well s FDI inflows in the country. 14 Bosni nd Herzegovin mended its Lw on Direct Foreign Investment Policy, simplifying the registrtion process for foreign investments. 15 The Russin Federtion introduced simplified rules for employing highly qulified foreign specilists. 16 Finlly, Ukrine revoked number of restrictions on foreign investment, nmely the limittion to invest exclusively through investment ccounts opened in Ukrinin bnks, the mndtory registrtion of investments, nd the prohibition to erly (premturity) repy lons received from non-residents. 17 A third prominent ctegory of policy mesures tken in the review period reltes to investment promotion. For instnce, in Chin, the Stte Council identified specific sectors tht re to be encourged through tx incentives but lso those which re to be discourged or bnned. The former include high-technology nd energy-efficient projects, the ltter polluting industries nd sectors suffering from overcpcity. 18 Chin lso recently nnounced t the UNCTAD World Investment Form 2010 tht it would tret foreign compnies hoping to win government contrcts eqully with domestic firms. 19 In Tiwn Province of Chin, the Prliment pssed revision of the Offshore Bnking Act to boost the development of the economy s regionl finncil centre. In the future, the income tht overses investors ern from investments in structured products through Tiwn s offshore bnking units (OBUs) will remin exempt from txes. 20 In ddition, the Government nnounced tht under the new Business Income Tx Exemption Rules for Foreign Profit-seeking Enterprises Engged in the Storge or Simple Processing of Goods in Free Trde Zones, foreign owners of goods tht undergo storge or simple processing in free trde zones will be exempt from the business income tx. 21 In Thilnd, the cbinet pproved the proposed tx incentives for Regionl Operting Hedqurters (ROH). 22 The Libyn Arb Jmhiriy dopted n investment promotion lw which encourges domestic nd foreign investment projects in ccordnce with ntionl development strtegies. 23 In Bulgri, the Government dopted mendments to the Investment Promotion Act reducing the investment thresholds for investment certifictes nd providing stte id to foreign investors engged in certin economic ctivities. 24 Some countries estblished new free economic zones or improved existing regultions therein in order to promote investment, both domestic nd foreign. For exmple, the Libyn Arb Jmhiriy dopted lw concerning the estblishment nd moderniztion of the Zour-Rs Ajdir development region. This lw grnts tx incentives nd immunities to investors nd investments in this zone nd llows English to be used s officil lnguge. 25 The Russin Federtion creted new Specil Economic Zone in the Smr Region with view to ttrcting investors prticulrly in the cr-mking nd 13 Ministry of Investment, Decree No. 170 (2009) on the Estblishment of n Investor Dispute Settlement Center t the Generl Authority for Investment nd Free Zones. 14 Communiction from the Ugnd Investment Authority, 16 August 2010. 15 Officil Gzette No. 48/10. 16 Federl Lw No.86-FZ of 19 My 2010. 17 Lw No.2155-VI of 27 April 2010. 18 Severl Opinions of the Stte Council on Further Utilizing Foreign Cpitl, Stte Council, 6 April 2010. 19 Press Relese on the Opening of the UNCTAD World Investment Forum, Ximen, Chin, 6-9 September 2010, vilble t www.unctd.org. 20 Tx Exemption Reinstted for OBU Investment in Structured Products, Council for Economic Plnning nd Development, 11 June 2010. 21 Business Tx Exemption for Foreign Goods Stored or Processed in FTZs, Council for Economic Plnning nd Development, 21 My 2010. 22 Revised Tx Pckge for Regionl Operting Hedqurters, Bord of Investment, 4 June 2010; BOI Investment Inititives nd Policies, Bord of Investment, 15 June 2010. 23 Lw No. 9 of 2010. 24 Regultions for ppliction of the Investment Promotion Act. Stte Gzette No.62, 10 August 2010. 25 Lw No. 14/2010. 3

relted industries. 26 In the Republic of Kore, the government is offering n improved pckge of incentives to lure foreign investors into free economic zones (FEZs). 27 On the other hnd, some countries continued their ntionliztion nd exproprition policies. In the Plurintionl Stte of Bolivi, the Government ntionlized severl electricity genertion compnies s well s the Vinto Antimonio smelter, Swiss foreign subsidiry. 28 The Government of the Bolivrin Republic of Venezuel took over the domestic ssets of Mexicn food compny. 29 In Pnm, the Government nnounced its decision to ssume control of two toll-rod concessions wrded to foreign compnies in the 1990s. 30 Outside Ltin Americ, the Kyrgyz Republic ntionlized one of the country s lrgest bnks, the foreign-controlled AsiUniverslBnk. 31 Severl countries, in prticulr in Afric, dopted or prolonged other restrictive mesures for foreign investors. Algeri dopted new mesure which increses the preference mrgin in fvour of domestic firms in wrding public contrcts nd requires foreign compnies tht re selected in the process to enter into joint venture with ntionl firms. 32 Nigeri dopted the Oil nd Gs Industry Development Act 2010. It cretes the Nigerin Content Development Agency nd demnds tht 70 per cent of Nigeri s oil nd gs production is done loclly by 2010. 33 Austrli nnounced tightening of the foreign investment rules relting to residentil rel estte. 34 In Brzil, existing restrictions on the sle of frm lnd to foreign investors, including domestic compnies with more thn 50 per cent stke controlled by foreigners, hve been formlized through new interprettion of n existing lw. 35 Between April nd the beginning of October 2010, t lest 16 countries or economies dopted investment-relted policy mesures. Privtiztion progrmmes nd tx reductions figure prominently mong them, but there ws lso trend towrds more regultion of the finncil sector. 2. Investment-relted policy mesures A number of generl policy mesures were dopted during the review period tht my ffect foreign investors. They primrily include new privtiztion progrmmes nd mendments of tx regultions. Countries in ll regions were ctive in this respect. Most of the policies im t improving investment conditions, but there were lso some instnces where investors hve been subject to stricter 2regultory conditions or higher txes. Of mjor importnce for foreign investors re lso new regultory policies tht some countries dopted in the bnking sector in response to the finncil crisis (nnex tble 1). Vrious countries round the globe dopted new privtiztion progrmmes, opening up investment opportunities for both domestic nd foreign privte investors. In the Russin Federtion, the Government hs provisionlly pproved list of 10 Stte-run compnies in which the Government will sell prt of its shreholding over the course of 2011-2013 the biggest privtiztion progrmme since the sset sles of the 1990s. The compnies include () the country s lrgest oil producer, Rosneft; (b) the pipeline monopoly Trnsneft; (c) leding bnks Sberbnk nd Vneshtorgbnk (VTB); nd (d) the ril nd shipping gints Russin Rilwys (RZhD) nd Sovkomflot. However, the Government hs no intention of surrendering mjority control of these gint compnies. 36 Polnd sold 30 per cent stke in PZU Centrl Europe s lrgest insurnce compny. 37 Kuwit pssed privtiztion lw, llowing the sle of up to 35 per cent of the shres of privtized compny to foreign investors. The Government will retin golden shre in the 42 26 Government Resolution No. 621 of 12 August 2010. 27 More Incentives to be Offered for FEZ Foreign Investors, Invest Kore, 1 Sep 2010. 28 Supreme Decrees 493 nd 494 of 1 My 2010 nd Bolivi revierte su dominio fundidor Vinto Antimonio, Agenci Bolivin de Informción, 2 My 2010. 29 Decree No. 7.394, Gcet Oficil de l Republic Bolivrin de Venezuel No. 39422. 30 Estdo dquiere cciones totles del Corredor Sur y el 51% del Corredor Norte, Government press relese, 25 Mrch 2010. 31 Decree of the Provisionl Government of the Kyrgyz Republic No.56 of 7 June 2010. 32 Communiqué du Conseil des Ministres, 11 July 2010. 33 UNCTAD, World Investment Report 2010, p. 80. 34 Foreign Acquisitions nd Tkeovers Amendment Regultions, 24 April 2010. 35 New interprettion of Lw No. 5.709/71 by the Brzilin Generl Attorney, pproved by President Luiz Incio Lul d Silv, published in the Officil Gzette (Diário Oficil d União) 23 August 2010. 36 Russi economy: Privtistion with twist, Economist Intelligence Unit, 29 July 2010. 37 PZU shres rocket, New Polnd Express, 14 My 2010.

privtized firms. The bill expressly excludes the production of oil nd gs, oil refineries, nd helth nd eduction services from privtiztion. 38 The country lso dopted lw to privtize power nd wter deslintion plnts under specific conditions. 39 The Islmic Republic of Irn reduced its stke in the country s two biggest utomotive mnufcturers, Sip nd Khodro, from 49 per cent to 31 per cent. 40 In Bhutn, the Finncil Services Bill ws rtified by the Ntionl Assembly, requiring ll bnks to be public limited compnies with mximum of 25 per cent public ownership. This mens tht shres in bnks with higher public ownership hve to be sold to privte investors. 41 In Jmic, the Government pproved the sle of the lst three sugr fctories under Stte control. 42 Severl countries reduced corporte tx rtes or provided other forms of tx incentives. For exmple, the United Kingdom decresed corporte income tx by 1 per cent per yer from 28 per cent in 2010 to 24 per cent in 2014. 43 Tunisi pssed Lw No. 29/2010 relting to the encourgement of compnies to list their shres t the stock exchnge. It reduces for these compnies the corporte tx rte from 30 per cent to 20 per cent. 44 Jordn decided for tx breks to the ICT sector. 45 In Uzbekistn, decree issued by the President exempted the bus mnufcturer MB Centrl Asi joint venture between Dimler AG nd Uzvtosnot from pyment of ll txes on the territory of Uzbekistn for five-yer term. 46 Nmibi reduced the corporte tx rte pyble by non-mining compnies to 34 per cent from previously 35 per cent. 47 Vice vers, some countries, mostly in Ltin Americ, dopted new restrictive mesures for investment, both domestic nd foreign. In Peru, decree by the Ministry of Trnsport nd Communictions regultes the forms in which n investment my be mde. The decree estblishes tht ny privte firm bidding for port infrstructure concession would hve to enter into prtnership with the Empres Ncionl de Puertos (ENAPU, the Stteowned ports enterprise). The decree lso sttes tht concessions would not necessrily be wrded on the bsis of public bidding process, s hs been the cse up to now. 48 In Ecudor, the Government put into effect reform of the hydrocrbons lw. It obliges privte oil compnies to renegotite their contrcts from production-shring to service rrngement, nd will give effective control of the industry to the Stte. 49 Some countries incresed txes for compnies. Kzkhstn reintroduced n oil export tx for nerly ll crude oil products. The oil export tx is designed to pply to hydrocrbons compnies operting in Kzkhstn, including those with foreign prticiption. 50 In Viet Nm, the Lw on Nturl Resources Tx entered into force. The tx pplies to new investment projects s of 1 July 2010 nd ffects compnies exploiting precious stones nd col, nd compnies using forest products, mrine products or nturl wter. The new lw lso incresed roylty rtes for some ctegories of nturl 38 Kuwit MPs pss privtistion lw, exclude energy production, Frnce24, 12 My 2010. 39 Kuwit to privtise new power plnts, Middle Est Online, 26 My 2010, vilble t http://www.middleest-online.com/english/business/?id=39199. 40 Stte reduces stke in Sip nd Khodro, Economist Intelligence Unit, 1 September 2010. 41 A new bill my led to divestment in the BoB, Economist Intelligence Unit, 5 August 2010. 42 Gov t Finlising US$9 Million Sle of Lst 3 Sugr Fctories, Jmic Informtion Service, 13 July 2010. 43 Price Wterhouse Coopers, Worldwide tx summries, vilble t http://www.pwc.com/gx/en/ worldwide-tx-summries/index.jhtml. 44 Communiction from the Tunisi Foreign Investment Promotion Agency, 24 July 2010. 45 Government gives tx breks to the ICT sector, Economist Intelligence Unit, 2 August 2010. 46 JV Mercedes-Benz Centrl Asi ws relesed from txes, Uzbekistn Dily, 7 July 2010, vilble t http://www.uzdily.uz/rticles-id-3258.htm. 47 Income Tx Amendment Act, 2010, Government Gzette of the Republic of Nmibi No. 4475, 30 April 2010, nd Nmibin TAX Alert Issue No. 5/2010, Deloitte, 30 April 2010. 48 Decreto Supremo 019-2010-MTC, El Peruno, 13 April 2010. 49 Proyecto de Ley Reformtori l Ley de Hidrocrburos y l Ley de Regimen Tributrio Interno, Ntionl Assembly Memorndo No. PAN-FC-2010-160, 25 June 2010. 50 Government Resolution No.709 of 13 July 2010, effective from 15 August 2010. 5

resources. 51 Hungry introduced temporry bnk tx, pyble by wide rnge of finncil institutions, in order to reduce its budget deficit. 52 The continution of Stte id nd stimulus pckges with potentil impcts on interntionl cpitl movements continued to be mong the most common investment-relted mesure tken by G-20 governments. Furthermore, some G-20 countries strengthened the regultion of the finncil sector. For exmple, the United Sttes pssed the Wll Street Reform nd Consumer Protection Act of 2010. The bill increses the role of the Stte in the finncil mrkets by restricting the ctivities of finncil compnies nd enhncing consumer protection. To this purpose, the Act () prohibits future bilouts in the bnking sector (end of too big to fil pproch); (b) seprtes bnking nd specultive trding; (c) increses consumer protection; nd (d) reinforces the regultory oversight over opertions nd dvisors. 53 In the Europen Union, greement ws reched on the estblishment of new frmework for finncil supervision in order to help prevent future finncil crises (estblishment of the Europen Systemic Risk Bord nd of three dditionl supervisory bodies tht will oversee bnking, finncil mrkets, insurnce nd pensions). The introduction of Europen-wide trnsction tx nd bnk levies is under discussion. Germny, Frnce nd the United Kingdom hve lredy decided to introduce bnk tx. 54 Bsel III is considered to be the biggest chnge to globl bnking regultion. It will, inter li, require bnks to increse their percentge of topqulity cpitl of their risk-bering ssets from 2 per cent to 7 per cent. Due to Bsel III regultions, bnks re required to perform less risky business strtegies nd hve to secure enough reserves in cses of finncil shocks without needing txpyers bilout. Bsel III hs been greed by centrl bnk governors nd top supervisors from the 27 member countries of the Bsel Committee. 55 It is expected to be pproved by the G-20 leders t their summit in November 2010. 56 Between April nd the beginning of October 2010, 79 economies concluded 50 interntionl investment greements (IIAs). This number includes 39 double txtion treties (DTTs), 1 bilterl investment trety (BIT) nd 10 greements other thn BITs nd DTTs. 3. Interntionl investment rulemking Within the reporting period (April to beginning of October 2010), countries continued to sign other greements with investment provisions nd DTTs (nnex tbles 2 nd 3). Prtly motivted by interntionl efforts to increse coopertion ginst tx evsion, 39 DTTs were signed in the reporting period. Twenty-two of these treties involved either G-20 country (Austrli, Chin, Germny, Jpn, Sudi Arbi, Turkey nd United Kingdom) or Europen Union (EU) member Stte (Austri, Belgium, Denmrk, Finlnd, Hungry, Irelnd, Mlt, Netherlnds, Portugl nd Spin). 57 Other countries tht stnd out s very ctive in concluding DTTs re Georgi, Hong Kong (Chin), Kuwit, Serbi nd Switzerlnd. 58 During the reporting period, countries concluded 1 BIT (between the Russin Federtion nd Singpore) nd 10 IIAs other thn BITs nd DTTs. Seven of them involved one or severl G-20 countries (Cnd, Chin, Frnce, 51 Nturl Resources Tx Lw (Lw number 45/2009/QH12), vilble t www.dlt.gov.vn. 52 Investment, Trde nd Development Agency (ITD), vilble t http://www.itdh.com/engine. spx?pge=showcontent_befekteto&content=10pwc0811. 53 See www.finncilstbility.gov nd http://www.whitehouse.gov/wllstreetreform. 54 See http://rticle.wn.com/view/2010/09/07/eu_grees_new_finncil_supervision_frmework/. 55 Argentin, Austrli, Belgium, Brzil, Cnd, Chin, Frnce, Germny, Hong Kong (Chin), Indi, Indonesi, Itly, Jpn, Republic of Kore, Luxembourg, Mexico, the Netherlnds, Russin Federtion, Sudi Arbi, Singpore, South Afric, Spin, Sweden, Switzerlnd, Turkey, the United Kingdom nd the United Sttes. 56 Globl regultors gree on tougher Bsel III bnk rules, Reuters, 12 September 2010 nd the Bnk for Interntionl Settlements (http://www.bis.org/bcbs/). 57 Only one greement ws reched between two G-20 countries (Austrli Turkey) nd two more between G-20 country on the one hnd nd n EU member Stte on the other (Chin Finlnd, Jpn Netherlnds). 58 Hong Kong, Chin ws involved in six treties; Albni, Georgi, Kuwit, Serbi nd Switzerlnd were involved in three. Bhrin, the former Yugoslv Republic of Mcedoni, Morocco, New Zelnd, Pnm, Qtr, Sudi Arbi, nd the United Arb Emirtes signed two DTTs ech. 6

Germny, Itly, Republic of Kore, United Kingdom nd United Sttes) s well s the EU. 59 Aprt from the Economic Coopertion Frmework Agreement between Chin nd Tiwn Province of Chin, nd the Trde nd Investment Frmework Agreement (TIFA) between the United Sttes nd the Libyn Arb Jmhiriy, ll greements were free trde greements (FTAs). Three of these FTAs were formed between regionl economic orgniztion on the one hnd nd one or severl individul countries on the other (EFTA Ukrine, EU Centrl Americ, EU Republic of Kore). The EU Centrl Americ trety involves ll EU member Sttes s well s Cost Ric, El Slvdor, Guteml, Hondurs, Nicrgu nd Pnm. In ddition, nother 5 of the 9 greements involve Ltin Americn countries (Cnd Pnm, Chile Mlysi, Chin Cost Ric, Cost Ric Singpore nd Republic of Kore Peru), mking the continent the most ctive region in terms of concluding IIAs. Finlly, on 6 October 2010 the EU Republic of Kore FTA ws signed key step towrds the provisionl ppliction of the trety on 1 July 2011. 60 In terms of content, the Cost Ric Singpore FTA includes chpter on investment protection with provisions similr to those found in BITs, including with regrd to investor Stte dispute settlement. The Cnd Pnm FTA lso includes substntive investment provisions nd provides for pre-estblishment rights. The Chin Cost Ric FTA tkes commercil presence pproch nd includes provisions on the free movement of cpitl (both in chpter 9). It lso reffirms the commitments of the prties under the Chin Cost Ric BIT of 2007. Likewise, the EU Republic of Kore FTA includes provisions on estblishment nd commercil presence (chpter 7) s well s on the free movement of pyments nd cpitl (chpter 8). Thus, it follows the typicl EU templte for FTAs. Finlly, ll of the bove greements estblish leglly binding obligtions on the protection of foreign investment. The remining IIAs include limited investment provisions, minly imed t encourging nd promoting investment flows between the prties or t estblishing n institutionl frmework to monitor investment reltions, to identify new opportunities nd to remove impediments to investment (see, for exmple, the Libyn Arb Jmhiriy United Sttes TIFA)..61 Importnt policy developments were lso underwy t the Europen level. Following the entry into force of the Lisbon Trety (December 2009), which shifted certin responsibilities in the field of FDI from the member Sttes to the EU, the Europen Commission issued two policy documents in July 2010: one being the Communiction entitled Towrds comprehensive Europen interntionl investment policy 62 nd the other one being proposl for Regultion. 63 The Communiction looks t min directions of future EU investment policy tht contributes to the objectives of smrt, sustinble nd inclusive growth, nd possible next steps to be tken in this context. The drft Regultion estblishes trnsitionl rrngements for existing nd pending BITs between EU nd non-eu countries, with view to providing legl certinty to Europen nd foreign investors operting under such IIAs. 64 59 The Cost Ric Singpore nd Chile Mlysi free trde greements present the only exceptions. 60 The Foreign Affirs Council of the EU hd uthorized the signture of FTA between the EU nd the Republic of Kore on 16 September 2010. 61 It hs to be noted tht the texts of the greements between Ukrine nd EFTA s well s between Chin nd Tiwn, Province of Chin, re not yet vilble. 62 Communiction from the Commission to the Council, the Europen Prliment, the Europen Economic nd Socil Committee nd the Committee of the Regions, COM (2010) 343 finl. 63 Proposl for Regultion of the Europen Prliment nd of the Council, COM (2010) 344 finl. 64 The drft Regultion is now subject to discussion in the Europen Prliment nd the Council. The Communiction hs been submitted to the Europen Prliment, the Council, the Economic nd Socil Committee nd the Committee of the Regions, who hve n opportunity to express their opinion the topic. 7

Of globl importnce ws the UNCTAD World Investment Forum (WIF) 2010, held 6 9 September in Ximen, Chin. With its 8 high-level meetings nd conferences, bringing together more thn 1,800 prticipnts from more thn 120 countries nd 16 interntionl orgniztions, WIF estblished itself s the new centre of grvity for open, universl, inclusive nd highlevel interntionl investment discourse nd policy formultion. The Forum imed t enhncing the understnding of the chllenges nd opportunities emerging in the post-crisis investment lndscpe, in prticulr for developing countries nd lest developed countries (LDCs). The UNCTAD WIF 2010 lso provided inputs to the formultion of new ntionl nd interntionl investment policies tht cter to the need for investment to work for development nd the chievement of the Millennium Development Gols nd tht encourge the trnsformtion towrds low-crbon economy nd sustinble recovery. During the Ministeril Roundtble, the more thn 30 Ministers present stressed tht ressigning investment policies is must, both in terms of reblncing the rights nd obligtions of investors nd Sttes, nd pying more ttention to the interction of investment policies with other public policies, such s climte chnge nd finncil system reforms. The min chllenge is to find the right blnce, ntionlly nd interntionlly, i.e. estblishing rules nd norms tht ensure predictbility, trnsprency nd stbility on the one hnd, nd tht re flexible enough to serve the purpose of sustinble development on the others. Ministers lso noted the merits of exploring multilterl coopertion in this respect. 28

Annex 1. Summry tble of ntionl investment policy mesures undertken between April nd the beginning of October 2010 COUNTRY/ECONOMY Algeri Austrli Bhutn Bolivi Bosni nd Herzegovin Brzil Bulgri Cmbodi Cnd Chin Hungry Ecudor Egypt Indi Indonesi Irn, Islmic Republic of Jmic Jordn Kzkhstn Kore, Republic of Kuwit Kyrgyz Republic Lebnon Libyn Arb Jmhiriy Nmibi Nigeri Pnm Peru Philippines Polnd Russin Federtion Syri Tiwn Province of Chin Thilnd Tunisi Ugnd Ukrine United Kingdom Uzbekistn Venezuel, Bolivrin Republic of Viet Nm INVESTMENT MEASURES Entry Fcilittion Promotion Opertion Txtion Outwrd 9

Annex 2: Summry tble of interntionl investment greements signed between April nd the beginning of October 2010 NAME OF AGREEMENT DATE Albni Kuwit Income nd Cpitl Tx Trety 2010 signed 04.04.2010 Albni Germny Income nd Cpitl Tx Trety 2010 signed 06.04.2010 Free Trde Agreement between Cost Ric nd Singpore signed 06.04.2010 Free Trde Agreement between Cost Ric nd Chin signed 08.04.2010 Bhrin Mlt Income Tx Trety signed 12.04.2010 Botswn Swzilnd Income Tx Trety 2010 signed 21.04.2010 New Zelnd Turkey Income Tx Trety 2010 signed 22.04.2010 Bhrin Seychelles Income nd Cpitl Tx Trety 2010 signed 24.04.2010 Austrli Turkey Income Tx Trety 2010 signed 28.04.2010 Sudi Arbi Singpore Income Tx Trety 2010 signed 03.05.2010 Austri Serbi Income nd Cpitl Tx Trety 2010 signed 07.05.2010 The former Yugoslv Republic of Mcedoni Morocco Income Tx Trety 2010 signed 11.05.2010 Hong Kong, Chin Hungry Income Tx Trety 2010 signed 12.05.2010 Georgi Isrel Income Tx Trety 2010 signed 12.05.2010 Hong Kong, Chin Kuwit Income Tx Trety 2010 signed 13.05.2010 Azerbijn Serbi Income nd Cpitl Tx Trety 2010 signed 13.05.2010 Free Trde Agreement between Cnd nd Pnm signed 14.05.2010 negotitions concluded Free Trde Agreement between Chile nd Mlysi 14.05.2010 negotitions concluded Free Trde Agreement between the EU nd Centrl Americ 18.05.2010 Trde nd Investment Frmework Agreement between the United Sttes nd the signed 20.05.2010 Libyn Arb Jmhiriy Pkistn Serbi Income Tx Trety 2010 signed 21.05.2010 Chin Finlnd Income Tx Trety 2010 signed 25.05.2010 Austri Hong Kong, Chin Income nd Cpitl Tx Trety 2010 signed 25.05.2010 Egypt Georgi Income nd Cpitl Tx Trety 2010 signed 25.05.2010 Georgi Switzerlnd Income nd Cpitl Tx Trety signed 14.06.2010 Switzerlnd Turkey Income Tx Trety 2010 signed 18.06.2010 Hong Kong, Chin United Kingdom Income Tx Trety 2010 signed 21.06.2010 Irelnd Morocco Income Tx Trety 2010 signed 22.06.2010 Denmrk Kuwit Income nd Cpitl Tx Trety 2010 signed 22.06.2010 Hong Kong, Chin Irelnd Income Tx Trety 2010 signed 22.06.2010 Switzerlnd Tjikistn Income nd Cpitl Tx Trety 2010 signed 23.06.2010 Free Trde Agreement between EFTA nd Ukrine signed 24.06.2010 Economic Coopertion Frmework Agreement between Chin nd Tiwn, Province of Chin signed 29.06.2010 Germny United Arb Emirtes Income Tx Trety 2010 signed 01.07.2010 Irelnd United Arb Emirtes Income nd Cpitl Tx Trety 2010 signed 01.07.2010 Albni Spin Income Tx Trety 2010 signed 02.07.2010 Belgium the former Yugoslv Republic of Mcedoni Income nd Cpitl Tx Trety 2010 signed 06.07.2010 Non-Double Txtion Agreement between Tunisi nd Sudi Arbi signed 08.07.2010 Bosni nd Herzegovin Qtr Income Tx Trety 2010 signed 21.07.2010 Mrshll Islnds New Zelnd Income Tx Trety signed 04.08.2010 Hong Kong, Chin Liechtenstein Income nd Cpitl Tx Trety 2010 signed 12.08.2010 New Zelnd Smo Income Tx Trety 2010 signed 24.08.2010 Jpn Netherlnds Income Tx Trety 2010 signed 25.08.2010 Pnm Portugl Income Tx Trety 2010 signed 27.08.2010 Colombi Portugl Income Tx Trety 2010 signed 30.08.2010 Free Trde Agreement between the Republic of Kore nd Peru negotitions concluded 01.09.2010 Non-Double Txtion Agreement between Mozmbique nd Viet Nm signed 08.09.2010 Non-Double Txtion Agreement between Pnm nd Qtr signed 23.09.2010 Promotion nd Protection Agreement/Bilterl Investment Trety (IPPA) between the Russin Federtion nd Singpore signed 27.09.2010 Free Trde Agreement between the EU nd the Republic of Kore signed 06.10.2010 2 10

Annex 3: Summry tble of interntionl investment greements signed between April nd the beginning of October 2010 ordered by type of greement nd country Worldwide IIAs/01 April 2010-06 October 2010 Country BITs DTTs other IIAs Albni Austrli Austri Azerbijn Bhrin Belgium Bosni nd Herzegovin Botswn Bulgri Cnd Chile c Chin Colombi Cost Ric Cyprus Czech Republic Denmrk Egypt El Slvdor Estoni Finlnd Frnce Georgi Germny Greece Guteml Hondurs Hong Kong, Chin Hungry Icelnd b Irelnd Isrel Itly Jpn Kore, Republic of d Kuwit Ltvi Liechtenstein b Lithuni Luxembourg Libyn Arb Jmhiriy Mlysi c Mlt Mrshll Islnds 11

Annex 3: Summry tble of interntionl investment greements signed between April nd the beginning of October 2010 ordered by type of greement nd country (contd) Morocco Mozmbique Netherlnds New Zelnd Nicrgu Norwy b Pkistn Pnm Peru d Polnd Portugl Qtr Romni Russin Federtion Smo Sudi Arbi Serbi Seychelles Singpore Slovki Sloveni Spin Swzilnd Switzerlnd b Sweden Tiwn, Province of Chin Tjikistn The former Yugoslv Republic of Mcedoni Tunisi Turkey Ukrine United Arb Emirtes United Kingdom United Sttes Viet Nm Includes FTA between EU nd Centrl Americ. The negotitions were concluded, however the greement hs not yet been signed. b c d Includes FTA between EFTA nd Ukrine. FTA negotitions between Chile nd Mlysi were concluded, however the greement hs not yet been signed. FTA negotitions between the Republic of Kore nd Peru were concluded, however the greement hs not yet been signed. 2 12

For the ltest investment trends nd policy developments, plese visit the website of the UNCTAD Investment nd Enterprise Division www.unctd.org/die For further informtion, plese contct Mr. Jmes X. Zhn Director Investment nd Enterprise Division UNCTAD Tel.: 022 917 57 60 Fx: 022 917 04 98 UNCTAD/WEB/DIAE/IA/2010/2 - April 2010