M.A.I. Draft 06-Oct-1997

<BODY TEXT="#000000" LINK="#0000FF" VLINK="#FF0000" ALINK="#FFFFFF" BGCOLOR="#FFFFFF"> <A NAME="top"></A> <P><CENTER><H1> MULTILATERAL AGREEMENT ON INVESTMENT<BR> CONSOLIDATED TEXT AND COMMENTARY</H1><BR> </CENTER> For Official Use DAFFE/MAI/NM(97)2<BR> <P> OECD Organisation de Coopération et de Développement Economiques <BR> OCDE Organisation for Economic Co-operation and Development<BR> <P> OLIS: 01-Oct-1997<BR> Dist: 06-Oct-1997<BR> <P> DIRECTORATE FOR FINANCIAL, FISCAL AND ENTERPRISE AFFAIRS<BR> <P> NEGOTIATING GROUP ON THE MAI (MULTILATERAL AGREEMENT ON INVESTMENT)<BR> <P> This document consolidates the texts of the agreement considered in the course of the MAI negotiations so far. The texts reproduced here result mainly from the work of expert groups and have not been adopted by the Negotiating Group. They are presented with footnotes, commentary and proposals that are still under consideration. The final text will be accompanied by country specific reservations which will form an integral part of the overall agreement.<BR> <P> 56654<BR> <P> Document complet disponible sur OLIS dans son format d'origine<BR> Complete document available on OLIS in its original format.<BR> <CENTER><BR><BR> <A NAME="contents"></A> <P><H1>Table of Contents<BR> <P></H1> <A HREF="9710-p01.htm#7"><H2>CONSOLIDATED TEXT</H2></A> </CENTER><BR> <P><BLOCKQUOTE> <P> <A HREF="9710-p01.htm#8">I. GENERAL PROVISIONS</A><BR> <P> <A HREF="9710-p01.htm#8">Preamble</A><BR> <P> <A HREF="9710-p01.htm#11">II. SCOPE AND APPLICATION</A><BR> <P> <A HREF="9710-p01.htm#11">Definitions</A><BR> <A HREF="9710-p01.htm#12">Geographical Scope of Application</A><BR> <A HREF="9710-p01.htm#13">Application to Overseas Territories</A><BR> <P> <A HREF="9710-p02.htm#14">III. TREATMENT OF INVESTORS AND INVESTMENTS</A><BR> <P> <A HREF="9710-p02.htm#14">National Treatment and Most Favoured Nation Treatment</A><BR> <A HREF="9710-p02.htm#14">Transparency</A><BR> <A HREF="9710-p02.htm#15">Special Topics</A><BR> <A HREF="9710-p02.htm#15">Temporary entry, stay and work of Investors and Key Personnel</A><BR> <A HREF="9710-p02.htm#17">Senior Management [and Boards of Directors]</A><BR> <A HREF="9710-p02.htm#17">Employment Requirements</A><BR> <A HREF="9710-p02.htm#18">Performance Requirements</A><BR> <A HREF="9710-p02.htm#24">Privatisation</A><BR> <A HREF="9710-p02.htm#30">Monopolies/State Enterprises/Concessions</A><BR> <A HREF="9710-p02.htm#44">Investment Incentives</A><BR> <A HREF="9710-p02.htm#47">Corporate Practices</A><BR> <A HREF="9710-p02.htm#47">Technology R&D</A><BR> <A HREF="9710-p02.htm#47">Intellectual Property</A><BR> <A HREF="9710-p02.htm#47">Public Debt</A><BR> <A HREF="9710-p02.htm#48">Not Lowering Standards</A><BR> <P> <A HREF="9710-p03.htm#50">IV. INVESTMENT PROTECTION</A><BR> <P> <A HREF="9710-p03.htm#50">General Treatment</A><BR> <A HREF="9710-p03.htm#50">Expropriation and Compensation</A><BR> <A HREF="9710-p03.htm#51">Protection from Strife</A><BR> <A HREF="9710-p03.htm#52">Transfers</A><BR> <A HREF="9710-p03.htm#53">Subrogation</A><BR> <A HREF="9710-p03.htm#53">Protecting Existing Investments</A><BR> <P> <A HREF="9710-p03.htm#54">V. DISPUTE SETTLEMENT </A><BR> <P> <A HREF="9710-p03.htm#54">State-State Procedures</A><BR> <A HREF="9710-p03.htm#61">Investor-State Procedures</A><BR> <P> <A HREF="9710-p03.htm#68">VI. EXCEPTIONS AND SAFEGUARDS</A><BR> <P> <A HREF="9710-p03.htm#68">General Exceptions</A><BR> <A HREF="9710-p03.htm#69">Transactions in Pursuit of Monetary and Exchange Rate Policies </A><BR> <A HREF="9710-p03.htm#70">Temporary Safeguard</A><BR> <P> <A HREF="9710-p04.htm#72">VII. FINANCIAL SERVICES</A><BR> <P> <A HREF="9710-p04.htm#72">Prudential Measures</A><BR> <A HREF="9710-p04.htm#72">Recognition Arrangements</A><BR> <A HREF="9710-p04.htm#73">Authorisation Procedures</A><BR> <A HREF="9710-p04.htm#73">Transparency</A><BR> <A HREF="9710-p04.htm#74">Information Transfer and Data Processing</A><BR> <A HREF="9710-p04.htm#74">Membership of Self-regulatory Bodies and Associations </A><BR> <A HREF="9710-p04.htm#74">Payments and Clearing Systems/Lender of Last Resort </A><BR> <A HREF="9710-p04.htm#75">Dispute Settlement</A><BR> <A HREF="9710-p04.htm#77">Definition of Financial Services </A><BR> <P> <A HREF="9710-p04.htm#79">VIII. TAXATION</A><BR> <P> <A HREF="9710-p04.htm#84">IX. RESERVATIONS</A><BR> <P> <A HREF="9710-p04.htm#84">Lodging of Country Specific Reservations</A><BR> <P> <A HREF="9710-p04.htm#86">X. RELATIONSHIP TO OTHER INTERNATIONAL AGREEMENTS</A><BR> <P> <A HREF="9710-p04.htm#86">Obligations under the Articles of Agreement of the International Monetary Fund</A><BR> <A HREF="9710-p04.htm#86">The OECD Guidelines for Multinational Enterprises</A><BR> <P> <A HREF="9710-p04.htm#88">XI. IMPLEMENTATION AND OPERATION</A><BR> <P> <A HREF="9710-p04.htm#88">The Preparatory Group</A><BR> <A HREF="9710-p04.htm#90">The Parties Group</A><BR> <P> <A HREF="9710-p04.htm#92">XII. FINAL PROVISIONS</A><BR> <P> <A HREF="9710-p04.htm#92">Signature</A><BR> <A HREF="9710-p04.htm#92">Acceptance and Entry Into Force</A><BR> <A HREF="9710-p04.htm#93">Accession</A><BR> <A HREF="9710-p04.htm#93">Non-Applicability</A><BR> <A HREF="9710-p04.htm#93">Review</A><BR> <A HREF="9710-p04.htm#93">Amendment</A><BR> <A HREF="9710-p04.htm#94">Withdrawal</A><BR> <A HREF="9710-p04.htm#94">Depositary</A><BR> <A HREF="9710-p04.htm#95">Status of Annexes</A><BR> <A HREF="9710-p04.htm#95">Authentic Texts</A><BR> <A HREF="9710-p04.htm#96">Denial of Benefits</A><BR> </BLOCKQUOTE> <P> <BR> <P><CENTER> <A HREF="9710-p05.htm#top"><H2>COMMENTARY</H2></A><BR> </CENTER> <BLOCKQUOTE> <P> <A HREF="9710-p05.htm#98">I. GENERAL PROVISIONS</A><BR> <P> <A HREF="9710-p05.htm#98">Preamble</A><BR> <P> <A HREF="9710-p05.htm#99">II. SCOPE AND APPLICATION</A><BR> <P> <A HREF="9710-p05.htm#99">Definitions</A><BR> <A HREF="9710-p05.htm#103">Geographical Scope of Application</A><BR> <P> <A HREF="9710-p05.htm#104">Ill. TREATMENT OF INVESTORS AND INVESTMENTS</A><BR> <P> <A HREF="9710-p05.htm#104">General</A><BR> <A HREF="9710-p05.htm#104">National Treatment and Most Favoured Nation Treatment</A><BR> <A HREF="9710-p05.htm#107">Transparency</A><BR> <A HREF="9710-p05.htm#109">Special Topics</A><BR> <A HREF="9710-p05.htm#109">Temporary Entry, Stay and Work of Investors and Key Personnel</A><BR> <A HREF="9710-p05.htm#110">Privatisation</A><BR> <A HREF="9710-p05.htm#111">Monopolies/State Enterprises/Concessions</A><BR> <A HREF="9710-p05.htm#114">Investment Incentives</A><BR> <A HREF="9710-p05.htm#115">Technology R&D </A><BR> <A HREF="9710-p05.htm#116">Intellectual Property </A><BR> <A HREF="9710-p05.htm#119">Public Debt</A><BR> <P> <A HREF="9710-p05.htm#120">IV. INVESTMENT PROTECTION</A><BR> <P> <A HREF="9710-p05.htm#120">General Treatment</A><BR> <A HREF="9710-p06.htm#121">Expropriation and Compensation</A><BR> <A HREF="9710-p06.htm#125">Transfers</A><BR> <A HREF="9710-p06.htm#126">Subrogation</A><BR> <A HREF="9710-p06.htm#126">Protecting Existing Investments</A><BR> <P> <A HREF="9710-p06.htm#127">V. DISPUTE SETTLEMENT </A><BR> <P> <A HREF="9710-p06.htm#127">General</A><BR> <A HREF="9710-p06.htm#127">State-State Procedures</A><BR> <A HREF="9710-p06.htm#129">Investor-State Procedures</A><BR> <P> <A HREF="9710-p06.htm#131">VI. EXCEPTIONS AND SAFEGUARDS</A><BR> <P> <A HREF="9710-p06.htm#131">General Exceptions </A><BR> <A HREF="9710-p06.htm#135">Transactions in Pursuit of Monetary and Exchange Rate Policies</A><BR> <A HREF="9710-p06.htm#136">Temporary Safeguard</A><BR> <P> <A HREF="9710-p06.htm#137">VIl. FINANCIAL SERVICES</A><BR> <P> <A HREF="9710-p06.htm#137">Prudential Measures</A><BR> <A HREF="9710-p06.htm#137">Authorisation Procedures</A><BR> <A HREF="9710-p06.htm#138">Transparency </A><BR> <A HREF="9710-p06.htm#138">Information Transfer and Data Processing</A><BR> <A HREF="9710-p06.htm#139">Membership of Self-regulatory Bodies and Associations</A><BR> <A HREF="9710-p06.htm#140">Payments and Clearing System/Lender of Last Resort </A><BR> <A HREF="9710-p06.htm#141">Dispute Settlement</A><BR> <A HREF="9710-p06.htm#142">Definition of Financial Services</A><BR> <A HREF="9710-p06.htm#143">Other lssues</A><BR> <A HREF="9710-p06.htm#143">New Financial Services </A><BR> <A HREF="9710-p06.htm#144">"Acquired Rights "</A><BR> <A HREF="9710-p06.htm#144">Right of Initial Establishment, Equality of Competitive Opportunity and Application of National Treatment in Sub-National Units of Governments</A><BR> <A HREF="9710-p06.htm#145">Restrictions Based on Dotation Capital of Branches of Financial Services Enterprises</A><BR> <A HREF="9710-p06.htm#145">Indirect Investment</A><BR> <P> <A HREF="9710-p06.htm#146">VIII. TAXATION</A><BR> <P> <A HREF="9710-p06.htm#146">Expropriation</A><BR> <A HREF="9710-p06.htm#146">Transparency</A><BR> <A HREF="9710-p06.htm#147">National Treatment</A><BR> <A HREF="9710-p06.htm#147">Most Favoured Nation Treatment </A><BR> <A HREF="9710-p06.htm#148">Performance Requirements</A><BR> <A HREF="9710-p06.htm#148">Transfers</A><BR> <A HREF="9710-p06.htm#148">Investment Incentives</A><BR> <A HREF="9710-p07.htm#149">Dispute Settlement</A><BR> <A HREF="9710-p07.htm#149">Relationship between the MAI and Other International Agreements</A><BR> <A HREF="9710-p07.htm#150">Accession </A><BR> <A HREF="9710-p07.htm#150">Definitions </A><BR> <P> <A HREF="9710-p07.htm#151">IX. RESERVATIONS</A><BR> <P> <A HREF="9710-p07.htm#151">Standstill and the Listing of Country Specific Reservations</A><BR> <A HREF="9710-p07.htm#153">Rollback</A><BR> <A HREF="9710-p07.htm#154">Lodging of Country Specific Reservations</A><BR> <P> <BR> <P> </BLOCKQUOTE> <P> <BR> <P><CENTER><A HREF="9710-p07.htm#156"><H2>ANNEX:<BR> COUNTRY SPECIFIC PROPOSALS FOR DRAFT TEXTS</H2></A> </CENTER <P><BLOCKQUOTE> <A HREF="9710-p07.htm#158">Geographical Scope</A><BR> <A HREF="9710-p07.htm#160">Regional Economic Integration Organisations</A><BR> <A HREF="9710-p07.htm#161">Conflicting Requirements</A><BR> <A HREF="9710-p07.htm#165">Secondary Investment Boycotts</A><BR> <A HREF="9710-p07.htm#167">Culture </A><BR> <A HREF="9710-p07.htm#168">Public Order</A><BR> <A HREF="9710-p07.htm#169">Subnational measures</A><BR> <A HREF="9710-p07.htm#170">Taxation</A><BR> <A HREF="9710-p07.htm#171">Social Security Contributions</A><BR> <A HREF="9710-p07.htm#172">The Svalbard Treaty </A><BR> <A HREF="9710-p07.htm#173">Labour Market Integration Agreements</A><BR> <A HREF="9710-p07.htm#175">Sami People </A><BR> <P> Technical Note:<BR> <P> The drafting groups and expert groups contributing to this document were:<BR> <P> - DGI Drafting Group No. I on "Investment Protection"<BR> - DG2 Drafting Group No. 2 on "Definition and Treatment of Investors and Investments"<BR> - DG3 Drafting Group No. 3 on "Definition, Treatment and Protection of Investors and Investments"<BR> - EGI Expert Group No. I on "Dispute Settlement and Geographical Scope"<BR> - EG2 Expert Group No. 2 on "Tax Measures"<BR> - EG3 Expert Group No. 3 on "Special Topics"<BR> - EG4 Expert Group No. 4 on "Institutional Matters"<BR> - EG5 Expert Group No. 5 on "Financial Services Matters"<BR> </BLOCKQUOTE> <P> <BR> <A NAME="7"></A> <P><CENTER> <H1>CONSOLIDATED TEXT </CENTER><BR></H1> <P> <BR> <A NAME="8"></A> <P> <H2>I. GENERAL PROVISIONS<BR> <P></H2> <H3>PREAMBLE<BR> <P></H3> The Contracting Parties to this Agreement,<A TARGET="foot" HREF="fn1.htm#0101"><SUP>1,2</SUP></A><BR> <P> Desiring to strengthen their ties of friendship and to promote greater economic co-operation between them;<BR> <P> Considering that international investment has assumed great importance in the world economy and has considerably contributed to the development of their countries;<BR> <P> Recognising that agreement upon the treatment to be accorded to investors and their investments will contribute to the efficient utilisation of economic resources, the creation of employment opportunities and the improvement of living standards;<BR> <P> Emphasising that fair, transparent and predictable investment regimes complement and benefit the world trading system;<A TARGET="foot" HREF="fn1.htm#0103"><SUP>3</SUP></A><BR> <P> [Wishing that this Agreement enhances international co-operation with respect to investment and the development of world-wide rules on foreign direct investment in the framework of the world trading system as embodied in the World Trade Organization;]<A TARGET="foot" HREF="fn1.htm#0104"><SUP>4</SUP></A><BR> <P> Wishing to establish a broad multilateral framework for international investment with high standards for the liberalisation of investment regimes and investment protection and with effective dispute settlement procedures;<BR> <P> [Resolved to implement this agreement in a manner consistent with environmental protection and conservation;]<BR> <P> <A NAME="9"></A> <P> [Reaffirming their commitment to the Rio Declaration on Environment and Development and Agenda 21, including to sustainable development as reflected therein,]<A TARGET="foot" HREF="fn1.htm#0105"><SUP>5</SUP></A> [and recognising that investment, as an engine of economic growth, can play a key role in ensuring that growth is sustainable, when accompanied by appropriate environmental policies to ensure it takes place in an environmentally sound manner];<BR> <P> [Renewing their commitment to the observance of internationally recognised core labour standards [, i.e. freedom of association, the right to organise and bargain collectively, prohibition of forced labour, the elimination of exploitative forms of child labour, and nondiscrimination in employment] [and noting that the International Labour Organisation is the competent body to set and promote core labour standards world-wide.]]<BR> <P> <A NAME="10"></A> <P> Affirming their decision to create a free-standing Agreement open to accession by all countries;<A TARGET="foot" HREF="fn1.htm#0106"><SUP>6</SUP></A><BR> <P> [Noting] [Affirming their support for] the OECD Guidelines for Multinational Enterprises and emphasising that implementation of the Guidelines, which are non-binding and which are observed on a voluntary basis, will promote mutual confidence between enterprises and host countries and contribute to a favourable climate for investment;<A TARGET="foot" HREF="fn1.htm#0107"><SUP>7</SUP></A><BR> <P> <CENTER><H1>HAVE AGREED AS FOLLOWS</CENTER><BR> <P></H1> <A NAME="11"></A> <P> <H2>II. SCOPE AND APPLICATION<BR> <P></H2> <H3>DEFINITIONS<BR> <P></H3> 1. Investor means:<BR> <P><UL> (i) a natural person having the nationality of, or who is permanently residing in, a Contracting Party in accordance with its applicable law; or<BR> <P> (ii) a legal person or any other entity constituted or organised under the applicable law of a Contracting Party, whether or not for profit, and whether private or government owned or controlled, and includes a corporation, trust, partnership, sole proprietorship, joint venture, association or organisation.<BR></UL> <P> 2. Investment means:<BR> <P> Every kind of asset owned or controlled, directly or indirectly, by an investor, including<A TARGET="foot" HREF="fn1.htm#0201"><SUP>1,2</SUP></A>:<BR> <P><UL> (i) an enterprise (being a legal person or any other entity constituted or organised under the applicable law of the Contracting Party, whether or not for profit, and whether private or government owned or controlled, and includes a corporation, trust, partnership, sole proprietorship, branch, joint venture, association or organisation);<BR> <P> (ii) shares, stocks or other forms of equity participation in an enterprise, and rights derived therefrom;<BR> <P> (iii) bonds, debentures, loans and other forms of debt, and rights derived therefrom;<BR> <P> (iv) rights under contracts, including turnkey, construction, management, production or revenue-sharing contracts;<BR> <P> (v) claims to money and claims to performance;<BR> <P> (vi) intellectual property rights;<BR> <P> (vii) rights conferred pursuant to law or contract such as concessions, licenses, authorisations, and permits;<BR> <P> (viii) any other tangible and intangible, movable and immovable property, and any related property rights, such as leases, mortgages, liens and pledges.<BR></UL> <P> <A NAME="12"></A> <P> <H3>GEOGRAPHICAL SCOPE OF APPLICATION<A TARGET="foot" HREF="fn1.htm#0203"><SUP>3</SUP></A><BR> <P></H3> This Agreement shall apply in:<BR> <P><UL> (a) the land territory, internal waters, and the territorial sea of a Contracting Party, and, in the case of a Contracting Party which is an archipelagic state, its archipelagic waters; and<BR> <P> (b) the maritime areas beyond the territorial sea with respect to which a Contracting Party exercises sovereign rights or jurisdiction in accordance with international law, as reflected particularly in the 1982 United Nations Convention on the Law of the Sea.<A TARGET="foot" HREF="fn1.htm#0204"><SUP>4</SUP></A><BR></UL> <P> <A NAME="13"></A> <P> <H3>APPLICATION TO OVERSEAS TERRITORIES<BR> <P></H3> 1. A State may at any time declare in writing to the Depositary that this Agreement shall apply to all or to one or more of the territories for the international relations of which it is responsible.<A TARGET="foot" HREF="fn1.htm#0205"><SUP>5</SUP></A> Such declaration, made prior to or upon ratification, accession or acceptance, shall take effect upon entry into force of this Agreement for that State. A subsequent declaration shall take effect with respect to the territory or territories concerned on the ninetieth day following receipt of the declaration by the Depositary.<BR> <P> 2. A Party may at any time declare in writing to the Depositary, that this Agreement shall cease to apply to all or to one or more of the territories for the international relations of which it is responsible. Such declaration shall take effect upon the expiry of one year from the date of receipt of the declaration by the Depositary, with the same effect regarding existing investment as withdrawal of a Party.<BR> <P> <CENTER> <TABLE BORDER=0 CELLPADDING=2 CELLSPACING=12> <TD><A HREF="9710.htm">PREVIOUS </A></TD><TD><A HREF="9710-p01.htm#top"> TOP</A></TD><TD><A HREF="9710-p01.htm#contents">CONTENTS</A></TD><TD><A HREF="9710-p02.htm">NEXT PAGE</A></TD> </TABLE> <P> <CENTER><A HREF="mailto:tucker@direct.ca"><EM>Comments </EM></A></P> </CENTER><BR><BR> </BODY>