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Your Current Location:Home » Law&Policy » Policy Interpretation » Interpretation of Supplementary Agreement on Investment of China-Chile Free Trade Agreement by An Official from the Department of Treaty and Law of MOFCOM

Policy Interpretation

Interpretation of Supplementary Agreement on Investment of China-Chile Free Trade Agreement by An Official from the Department of Treaty and Law of MOFCOM

Time:2013-03-05   Hits:1909
On September 9, China’s Minister of Commerce Chen Deming and Chile’s Minister of Foreign Affairs Alfredo Moreno signed the Supplementary Agreement on Investment of the Free Trade Agreement Between the Government of the People's Republic of China and the Government of the Republic of Chile (hereinafter referred to as the Agreement) in Vladivostok, Russia. An official from the Department of Treaty and Law of the Ministry of Commerce introduced the main contents and significance of the Agreement today.

I. What are the main contents of the Agreement?

The official said that the Agreement covers all the main contents and elements usually included in the conventional investment treaties. Specifically, the Agreement is composed of 33 provisions and four annexes, mainly covering two areas, i.e. substantive provisions on investment and treatment and procedural requirements on disputes settlement.

The body part has 33 articles in five sections. Section I is Definition. The applicant, the investment committee, the disputing parties, a party to the dispute, Free Trade Agreement, freely-usable currency, the Additional Facility Rules of International Center for Settlement of Investment Disputes (ICSID), the ICSID Convention, investment, investors, supplementary agreement on trade in services, the arbitral tribunal, UNCITRAL Arbitration Rules and other concepts are defined.

Section II sets out the substantive rules of the Agreement, specifically including investment access, national treatment, performance requirements, most favored nation treatment, minimum standard of treatment, compensation for losses, expropriation and compensation, transfer, subrogation, refusal of granting most favored nation treatment, exceptions and other rules. On national treatment, the Agreement expressly limits national treatment to the later stage of access, while allowing both Parties to keep the existing measures that are inconsistent with national treatment.

Section III covers the procedural provisions. Detailed provisions on the rules and procedures of disputes settlement between investors and States are stipulated, including consultations and negotiations, submission of request for arbitration, consent to arbitration by the Contracting Parties, the agreed restrictions and conditions by both Contracting Parties, the selection of arbitrators, the preliminary objection, the applicable law, joint hearing, rulings and other contents.

Section IV specifies Exceptions to the Agreement, specifically including the fundamental security exceptions, tax exceptions, balance of payment exceptions and other contents.

Section V stipulates the final provisions, covering transparency, disputes settlement between the Contracting Parties, the Investment Committee, annexes and footnotes, the relationship between this Agreement and the China-Chile Free Trade Agreement, amendments, entry-into-force, duration and termination, etc.

The Agreement also includes four annexes of expropriation, transfer, public debt and termination of the China-Chile Bilateral Investment Agreements. The Contracting Parties agree that the Agreement on Encouragement and Reciprocal Protection of Investments Between the Government of the People's Republic of China and the Government of the Republic of Chile signed on March 23, 1994 expires on the effective date of this Agreement.

On September 9, China’s Minister of Commerce Chen Deming and Chile’s Minister of Foreign Affairs Alfredo Moreno signed the Supplementary Agreement on Investment of the Free Trade Agreement Between the Government of the People's Republic of China and the Government of the Republic of Chile (hereinafter referred to as the Agreement) in Vladivostok, Russia. An official from the Department of Treaty and Law of the Ministry of Commerce introduced the main contents and significance of the Agreement today.

I. What are the main contents of the Agreement?
The official said that the Agreement covers all the main contents and elements usually included in the conventional investment treaties. Specifically, the Agreement is composed of 33 provisions and four annexes, mainly covering two areas, i.e. substantive provisions on investment and treatment and procedural requirements on disputes settlement.

The body part has 33 articles in five sections. Section I is Definition. The applicant, the investment committee, the disputing parties, a party to the dispute, Free Trade Agreement, freely-usable currency, the Additional Facility Rules of International Center for Settlement of Investment Disputes (ICSID), the ICSID Convention, investment, investors, supplementary agreement on trade in services, the arbitral tribunal, UNCITRAL Arbitration Rules and other concepts are defined.

Section II sets out the substantive rules of the Agreement, specifically including investment access, national treatment, performance requirements, most favored nation treatment, minimum standard of treatment, compensation for losses, expropriation and compensation, transfer, subrogation, refusal of granting most favored nation treatment, exceptions and other rules. On national treatment, the Agreement expressly limits national treatment to the later stage of access, while allowing both Parties to keep the existing measures that are inconsistent with national treatment.

Section III covers the procedural provisions. Detailed provisions on the rules and procedures of disputes settlement between investors and States are stipulated, including consultations and negotiations, submission of request for arbitration, consent to arbitration by the Contracting Parties, the agreed restrictions and conditions by both Contracting Parties, the selection of arbitrators, the preliminary objection, the applicable law, joint hearing, rulings and other contents.

Section IV specifies Exceptions to the Agreement, specifically including the fundamental security exceptions, tax exceptions, balance of payment exceptions and other contents.

Section V stipulates the final provisions, covering transparency, disputes settlement between the Contracting Parties, the Investment Committee, annexes and footnotes, the relationship between this Agreement and the China-Chile Free Trade Agreement, amendments, entry-into-force, duration and termination, etc.

The Agreement also includes four annexes of expropriation, transfer, public debt and termination of the China-Chile Bilateral Investment Agreements. The Contracting Parties agree that the Agreement on Encouragement and Reciprocal Protection of Investments Between the Government of the People's Republic of China and the Government of the Republic of Chile signed on March 23, 1994 expires on the effective date of this Agreement.

II. What is the significance of the Agreement?

The official pointed out that since the establishment of diplomatic relations between China and Chile, bilateral relations have witnessed rapid development, with frequent high-level exchanges, and deepening interaction and cooperation between the two countries. Not long ago, the two countries announced the establishment of a strategic partnership, which is a new starting point for bilateral relations. Two-way economic and trade cooperation has been extremely fruitful, and has expanded into many areas. In particular the building of China-Chile Free Trade Area has become a milestone in the development of economic and trade relations between the two countries.

The signing of the Agreement marks the completion of China-Chile Free Trade Area. We hope with the signing of the supplementary agreement on investment of China-Chile Free Trade Agreement and the completion of China-Chile Free Trade Area, the two sides can better protect investors’ interests, further promote two-way investment between enterprises, and deepen Sino-Chile economic and trade cooperation, bring bilateral economic and trade relations to a new level and accelerate the pace to build China-Chile strategic partnership.
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