Scope of Application [Return to the top of the page]

DEFINITION OF INVESTMENT

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DEFINITION OF INVESTOR

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Application in Time (Entry into Force and Duration: Applicability to Investments made Prior to Entry into Force)

The Principles and Guidelines on Foreign Investment were agreed at the Caricom Heads of Government Conference in 1982 (HGC 82/3/17 Attachment IV).

Admission [Return to the top of the page]

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Treatment [Return to the top of the page]

STANDARDS

Fair and Equitable Treatment

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Full Protection and Security

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Non-Discrimination

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National Treatment

Each Member State recognizes that restrictions on the establishment and operation of economic enterprises therein by nationals of other Member States should not be applied, through accord to such persons of treatment which is less favorable than accorded in such matters to nationals of that Member State, in such a way as to frustrate the benefits expected from such removal or absence of duties and quantitative restrictions as is required by this Annex. (Treaty of Chaguaramas, Caribbean Common Market Annex, Article 35 (1)).

Member States shall not apply new restrictions in such a way that they conflict with the principles set out above. (Article 35 (2)).

Based on evolving international practices and current national aspirations, cooperation agreements on foreign investments shall tend to accord preferential treatment to the following groupings of entities, ranked as follows:

1. Nationals of the host Caricom country;
2. Nationals of other Caricom member countries;
3. Nationals of the source countries- both developed and developing;
4. Other countries. (Caricom Heads of Government Conference, 1982; see HGC 82/3/17 Attachment IV).

Most-Favored Nation Treatment

Based on evolving international practices and current national aspirations, cooperation agreements on foreign investments shall tend to accord preferential treatment to the following groupings of entities, ranked as follows:

1. Nationals of the host Caricom country;
2. Nationals of other Caricom member countries;
3. Nationals of the source countries- both developed and developing;
4. Other countries. (Caricom Heads of Government Conference, 1982; see HGC 82/3/17 Attachment IV).

Exceptions and Reservations

A Member State shall notify the Council within such period as the Council may decide of particulars of any restrictions which it applies in such a way that persons belonging to another Member State are accorded in the first-mentioned State less favorable treatment in respect of the matters set out in Article 35 (1) (Treaty of Chaguaramas, Caribbean Common Market Annex) than is accorded to persons belonging thereto. (Treaty of Chaguaramas, Caribbean Common Market Annex, Article 35(3)).

Principles and Guidelines on Foreign Investment (1982 Caricom Heads of Government Conference):

In general, private foreign investment shall not be allowed in a sector/activity where there is need to:

1. protect small local entrepreneurs;
2. insulate areas of the economy where investment is already adequate and where the effect of new overseas investment would be to drive out present investments;
3. avoid threats to national security;
4. create economic opportunities for nationals and nationally-controlled enterprises which need protection from more efficient foreign enterprises until, in the long run, they can develop the necessary entrepreneurial managerial and technological capability to adequately service the sector/activity; and
5. curtail increased investment in service activities, thus giving preference to the goods-producing sectors.

In the case of joint ventures, Governments shall determine the level of local participation which will qualify for consideration as local investments. (Caricom Heads of Government Conference, 1982; see HGC 82/3/17 Attachment IV).

OTHER ASPECTS

Performance Requirements

Principles and Guidelines on Foreign Investment (1982 Caricom Heads of Government Conference):

All foreign investments shall be required to meet performance criteria on a case by case basis as determined by Caricom host governments. In general, the following five criteria will be required (where necessary) to be met:

1. removal or reduction of restrictions under licensing agreements on production for both regional and extra-regional markets;
2. employment priority to be given first to nationals of the host country, second to Caricom nationals and then to nationals of the source country; and policies instituted to ensure that nationals of the host country receive the necessary training and achieve the required experience to equip them to assume senior management positions;
3. the use, where appropriate, of local and regional raw materials, other material inputs and services;
4. the provision of externally generated financial resources to meet a reasonable proportion (as determined by the host country) of long-term and working capital needs of the foreign enterprise; and
5. where there are joint venture enterprises, “fade out” arrangements over time to enable ultimate local or regional control. (Caricom Heads of Government Conference, 1982; see HGC 82/3/17 Attachment IV).

Others

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Transfers [Return to the top of the page]

TYPES OF PAYMENT

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CONVERTIBILITY, EXCHANGE RATES, AND TIMES OF TRANSFER

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Expropriation [Return to the top of the page]

CONDITIONS

Nationalisation of investments shall only be undertaken where it is in the host country’s broad national interest. (1982 Principles and Guidelines on Foreign Investment).

COMPENSATION

Valuation of such investments shall, as far as practicable, reflect the fair market value of the investments at the time of the disclosure of the intention to nationalise, but with due regard being paid to the maintanance of assets by the enterprise. Compensation for the nationalisation of investments shall be on terms and conditions consistent with the Constitution of the host country. (1982 Principles and Guidelines on Foreign Investment).

Settlement of Disputes between Contracting Parties
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Settlement of Disputes between a Contracting Party and an Investor [Return to the top of the page]

PREARBITRAL CONSULTATIONS

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ARBITRATION

Conditions

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Consent

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Forms of Arbitration

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ARBITRAL PROCEDURES

Constitution of the Tribunal

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Consolidation

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Applicable Law

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FINAL AWARD

Scope

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Finality and Enforcement

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