This presentation by Sufian Jusoh was made at the session " Evolving approaches to treaty policy in ASEAN and beyond" during the 2nd ASEAN-OECD Investment Policy Conference held on 10-11 December 2014. Find out more at: http://www.oecd.org/daf/inv/investment-policy/2014-asean-oecd-investment-policy-conference.htm

1. Evolving Approach to Investment
Treaties in ASEAN
Sufian Jusoh
Jakarta 10.12.2014
AEC Workshop - Brisbane 19 May 2014 1

2. Evolution
BIT
FTA
Positive
List
FTA
Negative
List
ASEAN
IGA
AIA ACIA

3. 6
21
63
23
67
6
35
40 40
60
2
0 1 0
4
0 1
14
7
23 3 3 3 3 3 3 3 3 3
0
7 7 7
4 4 5 4
6
8
0
10
20
30
40
50
60
70
80
Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar The
Philippines
Singapore Thailand Vietnam
BIT
FTA
ASEAN FTA
BIT with AMS
3

4. Key Features of Bilateral Investment
Treaties
Direct action by
investors v. states
Minimum standard
of Protections
Clear Forum
Direct
Enforcement
BIT
4

5. ASEAN IGA
• Protection and Promotion
• Investor-State Dispute Settlement Mechanism
AIA Agreement
• Schedules (I. Facilitation, II. Promotion, III. Liberalisation), Temporary
Exclusion List 5 Sectors; Sensitive List 5 Sectors
• Protocol: Temporary Exclusion List for 5 services; Sensitive Lists for services
incidental to 5 sectors.
ACIA
• Four Pillars, Liberalisation, 2 Annexes: Approval in writing, Expropriation and
compensation, ISDS
• Schedule: Reservation Lists
5

6. Came into force
on 29 March
2012.
to enhance the flow
of cross-border
investment and to
promote the freer
flow of capital.
Measures adopted or
maintained by an AMS in
relation to: any
investment in that AMS
by an investor of a
different AMS on or after
29March 2012
6

7. ACIA
Protection
Facilitation
Promotion
Liberalisation
7

8. 3rd country
national
through
juridical person
in AMS
Juridical
person in
AMS
Natural
person of
AMS
8

9. 9
Manufacturing Agriculture Fishery Forestry
Mining and
Quarrying

10. 10
National Treatment
Most -Favoured-Nation Treatment at
pre and post-establishment
Senior Management and Boards of
Directors
Freedom to operate without any
performance requirement

11. More
transparent,
consistent and
predictable
investment
rules,
regulations,
policies and
procedures;
Harmonised
investment
policies;
Streamlined
and simplified
procedures for
investment
applications
and approvals;
and
Dissemination
of investment
information,
rules,
regulations,
policies and
procedures.
11

12. Main Protections
12
Fair &
Equitable
Treatment
Full
Protection
and
Security
No
Unlawful
Expropriati
on
Free
Transfer of
Funds

13. 13
Alternative
Dispute
Resolutions
Mediation
Conciliation
Consultation
& Negotiation
Domestic Courts
Domestic
Courts
Domestic
Tribunals
Arbitration
ICSID
UNCITRAL
Other Agreed
Rules

14. Protocol to ACIA: Annex 3- Procedures for
Amendment or Modification of Reservation
Reduction or
elimination
Modification within 12
months of entry into
force
Modification or
withdrawal after the 12
months of entry into
force
Procedures for
“Member States who
consider interest
affected”: consultation
and negotiations .

15. Major Policy Considerations in
Negative List Approach
Standstill Roll Back
Ratchet

16. Evolved Role of ACIA
ASEAN Wide
Investment
Agreement
Benchmarked for
National Level
Investment Law

17. ACIA and other ASEAN FTAs
ACIA ACFTA AKFTA AANZFTA
Application To investment
establishment
Before and after
the agreement.
Include China
Customs Territory
to investment after coming
into force
National
Treatment
admission,
establishment,
acquisition,
expansion,
management,
conduct of
operation, sale
and disposition
of investment
management,
conduct of
operation,
maintenance, use,
sale, liquidation
Same as in
ACIA
Subject to work
program.
establishment,
acquisition,
expansion,
management,
conduct,
operation,
liquidation,
sale, transfer,
other
disposition of
investment

18. Most-Favoured Nation
ACIA ACFTA AANZFTA AKFTA
In like circumstances No automatic
MFN, Subject to
Work Program
In like
circumstances
to member states in
relation treatment
accorded to a
member state and
non-member state
to parties or third
country
To parties or
third country
admission, establishment, acquisition,
expansion, management, conduct, operation
and sale or other disposition of investments.
ACFTA include maintenance, use, liquidation
Same as ACIA

19. MFN Exclusion
ACIA ACFTA AKFTA
benefit resulting from any
sub-regional arrangements
any PT under any existing bilateral, regional and/or
international agreements or to non-parties
existing or future PT in any agreement or
arrangement between or among ASEAN Member
States. ACFTA includes between party and its
customs territories
A party may request MFN accorded under any future
agreements or arrangements between a Party and
non-Party, AKFTA includes the party is not obliged to
grant MFN but provide an adequate opportunity to
negotiate the benefits. ACFTA also includes
negotiated MFN

20. Denial of Benefits
ACIA ACFTA AANZFTA AKFTA
juridical person who is
controlled by a non-AMS
person and has no
substantive business persons
in the country where it is
established
To juridical person who is
controlled by a non Party and
has no substantive business
persons in the country where it
is established
Where the non-AMS person
comes from a country that
has no diplomatic relations
with the host AMS

21. Protections
Investment Topic ACIA ACFTA AANZFTA AKFTA
FET and protection of
security
Applicable
Compensation for
Losses in cases if strife
applicable Not applicable Applicable Not
applicable
Transfers Applicable
Expropriation and
compensation
Applicable
ISDS Applicable

22. Thanks You