CETA - 4. Investment protection (En)
Investment protection is an important chapter in the Canada-EU agreement. In 2011, Canadian direct investment in the EU reached $ $172.5 trillion, and foreign direct investment from the EU in Canada reached $ $160.7 billion.
1. The definition of "investment" in CETA
CETA provides a very broad definition of what is an “investment”, covering “all kinds of assets”. Using the negative list method, a matter must be expressly excluded by the parties to escape the scope of the Agreement.
New sectors and services open to investment include telecommunications, dredging activities, uranium investment for Canada and, for the EU, information technology, research & development, and activities mining.
However, not all foreign investment will be liberalized.
The Canadian federal government, for example, will maintain its ability to study high-value foreign investment to ensure that it is capable of producing a "net profit" for Canada, or for reasons of national security. This type of ministerial decision is not subject to CETA's dispute resolution provisions.
Investors in the EU are therefore not exempt, in certain cases, from the notification and decision-making procedures of the Canadian government regarding their investments.
However, Canada has agreed to increase its review threshold to $1.5 billion (instead of $1.5 billion in enterprise value). Also, Canada is committed to making investment in uranium less restrictive (exemption from the condition of having to find a Canadian partner first).
2. Investment protection rules
Canadian and EU investors cannot be treated less favorably than that accorded to domestic investors or investors from other foreign countries. This is provided for in the national treatment clause as well as the most favored nation clause.
Investors and their investments receive fair and equitable treatment and must be treated in a non-discriminatory manner. They are guaranteed, at a minimum, the processing of the minimum standard.
CETA rules also provide protection against arbitrary acts on the part of governments and fix compensation for expropriation, which also affects indirect expropriation. However, it should be noted that governments can take non-discriminatory and good faith measures to protect public safety, health and the environment.
3. Investment dispute resolution mechanism
In the event that investor rights are violated under CETA, the dispute can be resolved through arbitration in the host state.
CETA seeks to promote the resolution of investor-state disputes through a transparent and efficient procedure. The consultations will thus be increased and the writings submitted to the arbitral tribunal made public.
Also, as a party to the ICSID Convention, Canada adopts the ICSID arbitration rules which provide a legal and structured basis for the Investor-State Dispute Resolution (ISDS). According to these rules, a foreign company established locally can initiate a request.
The ICSID court can make an award providing for the payment of damages or the return of property, as well as the payment of costs, but it cannot revoke the measure of the host state which affected the investment of the foreign investor. .
In order to avoid abuse of this arbitration procedure, provisions of the agreement will protect against frivolous requests.
All articles on CETA
All articles on CETA
1. Elimination of agricultural tariffs
2. Elimination of industrial tariffs
3. Services and labor mobility
4. Investment protection
5. Public procurement
CETA – 4. Protection des investissements (FR)
CETA - 7. Sustainable development, environment and work
CETA - 8. Dispute resolution and monitoring
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