|Free Trade Area of the Americas - FTAA||
of American States, Trade Unit
The 1990s have witnessed an unprecedented growth in the number of agreements covering rules on foreign direct investment in the Americas. Countries have signed bilateral investment treaties (BITs), included investment chapters in their trade agreements, and negotiated investment protocols and decisions. Out of the 58 bilateral investment treaties examined in this Compendium, 55 were concluded after 1990. Although the first BITs originated in Europe in the late 1950s, 1 it took more than 30 years before countries of the region started negotiating and concluding bilateral investment treaties with other countries of the Hemisphere. However, several countries such as Colombia, the Dominican Republic, Ecuador, El Salvador, Haiti, Honduras and Paraguay had signed BITs with the Federal Republic of Germany, France and Switzerland during the 1960s and the 1970s. The first BIT concluded within the region was between the United States and Panama in 1982. In fact, during the 1980s, only the United States was active in entering into bilateral investment treaties with other countries of the region. In addition to the treaty with Panama, the U.S. signed a BIT with Haiti in 1983 and one with Grenada in 1986.
An overwhelming majority of countries in the Hemisphere have signed at least one bilateral investment treaty. In fact, only two countries have not yet done so, while 24 have concluded at least one BIT with another country of the region. 2 With the exception of Trinidad and Tobago, Barbados and Jamaica, most Caribbean countries have not entered into bilateral investment treaties with other countries of the Hemisphere. Most BITs signed by these countries were with the United Kingdom and Germany. However, Trinidad and Tobago concluded a bilateral investment treaty with the United States in 1994 and one with Canada in 1995, Barbados with Venezuela in 1994 and Canada in 1996, while Jamaica signed a BIT with the United States and another with Argentina, both in 1994.
The mid-1980s and the early 1990s brought sweeping economic reforms and trade liberalization to Latin America and the Caribbean. This also led to a substantial liberalization in the investment regime of most of these countries. These new investment regimes are intended to promote foreign investment through the granting of national treatment and the elimination of most restrictions on capital and profit remittances. They also allow countries to accept international arbitration as a means of solving disputes that might have arisen between the host State and foreign investors, reversing what had been the tradition of most Latin American countries based on the Calvo doctrine. According to this doctrine, a foreigner is required to "waive the diplomatic protection of [his] home state and rights under international law, and rely solely on local remedies. Foreigners may be treated as favourably as nationals but are not entitled to better treatment." 3 This new approach to foreign investment has eliminated a major impediment hampering the negotiation and signature of bilateral investment treaties between Latin American countries and capital exporting countries.
The surge in new investment treaties in the Western Hemisphere is also a trend present at the regional level with the elaboration of detailed investment provisions in the North American Free Trade Agreement (NAFTA) 4 and the Group of Three (G-3),5 the liberalization of the Andean Pact’s investment regime (Decision 291),6 and the enactment of two Mercosur Protocols for the promotion and protection of investments: the Colonia Protocol 7 for Mercosur’s Member Countries, and the Buenos Aires Protocol 8 applicable to Non-Member Countries. A number of free trade agreements (FTAs) containing investment provisions have also been negotiated between Bolivia and Mexico,9 Costa Rica and Mexico,10 Canada and Chile,11 Mexico and Nicaragua,12 Chile and Mexico,13 and Central America and the Dominican Republic,14 as well as other bilateral trade agreements between, on the one hand, Chile, and, on the other hand, Colombia, Ecuador, Mercosur, Mexico, and Venezuela, all containing provisions on investment.15
The first section of this Compendium covers the key provisions of 58 bilateral investment treaties signed between countries of the region.
The second section is devoted to the investment provisions included in the multilateral trade and integration arrangements found in the Western Hemisphere: NAFTA, G-3, the two Mercosur investment protocols, Decision 291 of the Andean Pact, and Caricom. 16
The third section examines the investment provisions in the Bolivia-Mexico, Costa Rica-Mexico and Canada-Chile FTAs, and the fourth section looks at the Chile-Mexico, Mexico-Nicaragua, and the Central America-Dominican Republic FTAs. Building on the methodology used by the International Centre for Settlement of Investment Disputes (ICSID), the Compendium covers seven elements: scope of application, admission, treatment, transfers, expropriation, settlement of disputes between Contracting Parties, and settlement of disputes between a Contracting Party and an investor.
A detailed summary of each of these elements follows.
The scope of application of investment treaties is determined by the definition of investments and investors which are covered by their provisions and thus enjoy the protection accorded by them. Recent BITs and the investment chapters of the trade and integration arrangements examined in the Compendium have a broader scope of application than traditional investment agreements. These new instruments have expanded their definition of covered investments to include new forms of transactions and are being applied to a more diverse group of investors. There is an important degree of uniformity in the type of language used to that effect.
The Compendium includes information on three important aspects related to the agreements’ scope of application: definition of covered investment, definition of covered investor, and application in time.
1. Forms of Investment
When defining the covered forms of investment, most agreements refer to “every kind of asset” or “any kind of asset”, while U.S. BITs use the expression “every kind of investment.” This general formulation is commonly illustrated by a non exhaustive list of examples. Typically, such a list includes: movable and immovable property and any related property rights, such as mortgages, liens or pledges; shares, stock, bonds or debentures or any other form of participation in a company, business enterprise or joint venture; money, claims to money, claims to performance under contract having a financial value, and loans directly related to a specific investment; intellectual property rights, including rights with respect to copyrights, patents, trademarks as well as trade names, industrial designs, good will, trade secrets and know-how; rights, conferred by law or under contract, to undertake any economic and commercial activity, including any rights to search for, cultivate, extract or exploit natural resources.
In other cases such as NAFTA, the Canada-Chile, Mexico-Nicaragua and Chile-Mexico FTAs, the definition of investment encompasses a broad list of assets expressly linked to the activities of an enterprise, including: equity and debt securities of an enterprise (with terms of at least three years or, regardless of term, where the issuing enterprise is an affiliate of the investor); interests entitling sharing in an enterprise’s assets on dissolution or income or profits; real estate and other tangible and intangible property acquired or used for business purposes; interests arising from commitment of capital such as turnkey or construction contracts; and contracts where remuneration depends on the production, revenues or profits of an enterprise. A few agreements also define what is not included in the definition of an investment, for example: claims to money that arise solely from commercial contracts as well as debt securities of a state enterprise.
Generally, BITs and investment chapters in trade and integration agreements define “investors” or “nationals” who are entitled to the benefits accorded by the Agreement. Typically, the definition covers: a) natural persons and, b) juridical persons or other legal entities.
a) Natural Persons
When defining “investors,” all investment agreements include natural persons who are citizens of a Party to the agreement. Determination of the nationality is normally left to the Party’s internal nationality law. In most cases, citizenship is the only criterion used to determine if a natural person should be considered an “investor” under the agreement. In other cases, the definition is broadened and not only citizens but also permanent residents are considered “investors.”
Residency is sometimes used to exclude natural persons from coverage of the agreements. In the case of most bilateral investment treaties between Argentina and other countries in the region and the BITs signed by Ecuador with Chile and El Salvador, 17 the treaty does not apply to investments made by natural persons from the home country if they have been domiciled in the host country for more than two years, unless it is proved that the investment was admitted from abroad. Mercosur Protocols also include this limitation and refer to permanent residents regardless of the time they have resided in the host country.
The definition of natural persons takes two different forms in BITs. Some treaties use a single definition that applies to both Contracting Parties, while others include a different definition for each Party. This second approach is not used very frequently but is found in most BITs signed by Canada, and in the Argentina-Chile treaty.
b) Juridical Persons
Bilateral investment treaties and trade and integration agreements use different criteria to define the nationality of a company or legal entity in order to grant it the benefits of an “investor” under the agreement. These criteria include: the place of constitution; place of seat; and, nationality of controllers.
Countries with common law tradition use the place of incorporation of a company to determine its nationality. All BITs signed by the United States and Canada with countries of the region use the place of constitution as the sole criterion to define the companies covered by the agreement. NAFTA and other agreements such as the Canada-Chile and Chile-Mexico FTAs follow the same approach. Under NAFTA, to be an “investor of a Party” an enterprise 18 (and a branch of an enterprise) must be constituted or organized under the law of a Party. There is no requirement that the enterprise be controlled by nationals of a NAFTA country. However, if the enterprise is controlled by investors of a non-NAFTA country, benefits can be denied if the enterprise has no substantial business activities in the territory of the Party under whose laws it is constituted.
Civil law countries traditionally rely instead on the place where the management or seat of the company is located. In the case of BITs signed between Latin American countries, this criterion is combined with the place of constitution and, in some cases, with the requirement that the company actually has effective economic activities in the home country.
In some cases, BITs use the control of the company by nationals of a Party as the sole criterion to determine its nationality. This is the case of the Colombia-Peru BIT. 19 In other cases, it is used as a possible alternative to the seat or constitution criteria. 20
(iv) Combination of different criteria
Some agreements combine the above criteria or use them as alternatives. In general, it can be said that the combination of different criteria is used in those cases where States are interested in restricting the benefits of the Agreement to those legal entities that effectively have ties with the home country. On the contrary, when the objective is to broaden the scope of application, agreements provide for the possibility of applying different alternative criteria.
Reference has already been made to BITs signed between Latin American countries which combine the seat criterion with the place of constitution and, in some cases, with the requirement that the company actually has effective economic activities in the home country. In other cases, the control of the company is used as an alternative to the seat or constitution criteria to determine the nationality of the company. Finally, the Colonia Protocol grants protection to “any legal person constituted under the laws and regulations of a Contracting Party, and having its seat in the territory of said Party;” and, to “any legal person constituted in the territory of the host country, and effectively controlled, directly or indirectly, by a natural or legal person” as defined in the Protocol. The Buenos Aires Protocol, on the other hand, includes in the definition of investor “any legal person constituted under the laws and regulations of a Party or of the Third State and having its seat in the territory of constitution;” and, “any legal person established under the law of any country effectively controlled by a natural o legal person,” as defined in the Protocol.
3. Application in Time
BITs normally include provisions regarding the treaty’s entry into force as well as its duration. With some variations, the most common formulation is to provide that the treaty enters into force one month from the date of exchange of instruments of ratification and remains in force for an initial period of 10 years, usually renewable according to procedures set out in detail in the agreement.
Increasingly, and departing from what was common in earlier agreements, BITs apply not only to investments made after the entry into force of the treaty but also to those made prior to that date. While in some cases this forms part of the definition of covered investments, in others, a separate provision to that effect is included in the section dealing with application in time of the treaty. This last approach is followed in all BITs signed by the United States with countries of the region.
The section on Admission refers to the entry of investments and investors of a Contracting Party into the territory of the another Contracting Party. Two different approaches have been adopted with regard to this issue. Newer instruments such as the Colonia Protocol in Mercosur; NAFTA; the Group of Three; the Bolivia-Mexico, Costa Rica-Mexico, Canada-Chile, Mexico-Nicaragua and Chile-Mexico FTAs; as well as bilateral investment treaties signed by the United States and most new BITs signed by Canada, all call for national treatment and most-favored-nation (MFN) treatment as a condition for both the pre-establishment phase (admission) and the post-establishment phase. Other bilateral investment treaties require that these two standards be applied to investments of investors after admission of these investments, i.e. the national treatment and MFN treatment standards are only applied at the post-establishment phase.
With respect to investors and investments from Member Countries, the Colonia Protocol says that each Party shall admit investment of investors of the other Contracting Parties in a way that is no less favorable than that accorded to its own investors (national treatment) or investments of third States (MFN treatment). A list of limited exceptions is included in the Annex to the Protocol. In fact, the Colonia Protocol, like NAFTA; the Group of Three; the bilateral free trade agreements mentioned above; U.S. BITs and most post-NAFTA investment treaties signed by Canada has been designed with the purpose of assuring the free entry of such investments -albeit with limited exceptions- into the territory of the host country. These instruments require national treatment and MFN treatment, and prohibit performance requirements as a condition for establishment. With the exception of the Colonia Protocol, they also mention that such treatment shall be for investments made in “like circumstances” (or in “like situations” in the case of U.S. BITs). Moreover, these agreements state that nothing in the article on national treatment shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with the establishment of investments by investors of another Party such that investments be legally constituted under the laws or regulations of the Party, provided that such formalities do not materially impair the protection afforded by a Party. U.S. BITs also emphasize that treaties shall not preclude the application by either Party of measures necessary for the maintenance of public order, the fulfillment of its obligations with respect to the maintenance or restoration of international peace or security, or the protection of its own essential security interests.
The Buenos Aires Protocol and the Central America-Dominican Republic FTA, like most bilateral investment treaties covered in the Compendium, follow the more traditional approach. Admission is generally dealt with in the provision on Promotion of Investment, or the provision on Promotion and Protection of Investment. The most representative clause reads as follows: Each Contracting Party shall promote, in its territory, investments of investors of the other Contracting Party and shall admit such investments in accordance with its laws and regulations. There is no explicit reference to domestic laws or requirements.
With the exception of newer instruments noted above, "treatment is a broad term which ... refers to the legal regime that applies to investments once they have been admitted by the host State."21 Most investment treaties and provisions require the five following standards: fair and equitable treatment; some form of protection; non-discrimination; national treatment and most-favored-nation treatment.
a) Fair and Equitable Treatment and Full Protection and Security
Fair and equitable treatment is a general concept without a precise definition. It provides a basic standard not related to the host State’s domestic law and serves as an additional element in the interpretation of treaty and trade agreement provisions on investment. Full protection and security is a principle which has its origin in the modern Friendship, Commerce and Navigation Treaties signed mainly by the United States until the 1960s. 22 Although this principle does not create any liability for the host State, it “serves to amplify the obligations that the parties have otherwise taken upon themselves” and provides a general standard for the host State “to exercise due diligence in the protection of foreign investment.” 23
Most treaties as well as the two Mercosur Protocols, NAFTA, and the free trade agreements between Chile and Canada, Mexico and Chile, and Central America and the Dominican Republic include a fair and equitable treatment clause. This standard is generally combined with the principle of non-discrimination or that of full protection and security. In a few cases, these three principles are combined together. Moreover, some treaties refer to international law. Most treaties also require some form of protection. The bilateral investment treaties signed by Venezuela with Barbados and Brazil, and U.S. and Canadian BITs refer to full protection and security. Some BITs mention full legal protection; and others only require full protection or protection. Colombia-Peru uses the phrase protection and security.
Mercosur and almost all investment treaties prohibit discrimination against investments of investors of the other Contracting Party. The terms “unreasonable,” “arbitrary” or “unjustified” are used with the word discriminatory to prohibit measures that impair the management, maintenance, use, enjoyment or disposal of investments of investors of the other Contracting Party. U.S. BITs state that “neither Party shall in any way impair by unreasonable and discriminatory measures the management, conduct, operation, and sale or other disposition of covered investments.” In some cases, prohibited measures have to be both unreasonable (or arbitrary or unjustified) and discriminatory; in other cases, measures can either be unreasonable (or arbitrary or unjustified) or discriminatory.
c) National Treatment and MFN
Most investment agreements covered in this Compendium provide for both national treatment and MFN treatment, albeit the Dominican Republic-Ecuador BIT does not mention these two standards. The Andean Pact contains a provision for national treatment explaining that such treatment can be regulated according to the national laws of its members. Caricom is the only arrangement that recognizes preferential treatment with regard to investments of its nationals. Most treaties state that each Contracting Party shall grant treatment no less favorable than that it accords to investments of its own nationals or companies, or those of third States. Other treaties also emphasize that a Contracting Party shall grant the MFN treatment to investors of the other Contracting Party if this treatment is more favorable than the one it accords to its own investors.
Most treaties and arrangements provide for specific exceptions, especially with respect to national treatment and MFN treatment. The two most common exceptions , found in several bilateral investment treaties, the Buenos Aires Protocol, and the free trade agreements between Bolivia and Mexico, Costa Rica and Mexico, Mexico and Nicaragua, and Central America and the Dominican Republic are those related to
U.S. and Canadian BITs list a series of exceptions to national treatment (also true for the Brazil-Chile BIT) and MFN treatment in the Protocol or Annex to the treaties. The Colombia-Peru BIT also specifies a number of exceptions to both national treatment and MFN.
Other exceptions include general exceptions, which allow, for example, countries to exempt from treaty obligations actions such as the maintenance of national security, international peace and security, and public order. For instance, the Honduras-United States BIT states that “This Treaty shall not preclude a Party from applying measures necessary for the fulfillment of its obligations with respect to the maintenance or restoration of international peace or security, or the protection of its own essential security interests.” 24 In this context, obligations with respect to the maintenance or restoration of international peace or security means obligations under the Charter of the United Nations. The Nicaragua-United States BIT mentions that “whether a measure is undertaken by a Party to protect its national security interests is self-judging,” 25 which means that, according to the Parties, it is not subject to review by any international tribunal. The Peruvian BITs (with Bolivia and Paraguay) also provide for general exceptions. For instance, the Bolivia-Peru states that “Nothing in this Treaty shall prevent a Contracting Party from adopting measures, if not discriminatory, for reasons of internal and external national security, public or moral order.” 26
Other exceptions are also found in some treaties. Bilateral investment treaties signed by the United States with Trinidad and Tobago, Honduras, Bolivia and Nicaragua include a provision where “Each Party reserves the right to deny to a company of the other Party the benefits of this Treaty if nationals of a third country own or control the company and:
All the free trade agreements covered in this study have similar provisions.
3. Performance Requirements
U.S. and Canadian BITs; the El Salvador-Peru and Dominican Republic-Ecuador bilateral investment treaties; NAFTA; the Colonia Protocol; the Group of Three and the free trade agreements between Bolivia and Mexico, Costa Rica and Mexico, Canada and Chile, Mexico and Nicaragua, and Chile and Mexico demand that specific performance requirements (for instance, to achieve a particular level or percentage of local content; to limit imports and sales, and to transfer technology) be prohibited as a condition for the establishment, acquisition, expansion, management, conduct or operation of a covered investment. The Central America-Dominican Republic FTA refers to the TRIMs Agreement, as does the Canada-Costa Rica BIT. The Andean Pact, on the other hand, establishes particular provisions for the performance of contracts for the license of technology, technical assistance, technical services, and other technological contracts under the national laws of each Member. Caricom is the only arrangement which requires investments to meet certain performance requirements, i.e., use of labor, raw materials, and financial resources.
4. Losses Due to War
Most treaties and arrangements state that nationals or companies of either Contracting Party whose investments suffer losses in the territory of the other Contracting Party due to war or other armed conflict, revolution, national emergency, civil disturbances or other similar events shall receive treatment, in regard to restitution, indemnification, compensation or other settlement, no less favorable than that accorded by the latter Contracting Party to its own investors or investors of any third State. Several treaties emphasize that these payments shall be transferable, others require the better of either national treatment or MFN treatment.
5. Other Aspects
Several treaties state that if the legislation of a Contracting Party or if the existing or future obligations of the Parties under international law or if an agreement between an investor and a Contracting Party include provisions granting investments of investors of the other Contracting Party a more favorable treatment, these provisions shall prevail. Moreover, U.S. BITs state that the treaties shall not derogate from any of the following that entitle covered investments to treatment more favorable than that accorded by the treaties:
Many BITs also stipulate that each Contracting Party shall fulfill the obligations it has contracted with respect to the investments of nationals or companies of the other Contracting Party. U.S. BITs say that each Party shall observe any obligation it may have entered into with regard to investments.
U.S. and post-NAFTA Canadian BITs also provide that subject to the laws relating to the entry and sojourn of aliens, nationals of either Party shall be permitted to enter and to remain in the territory of the other Party for the purpose of establishing, developing, administering or advising on the operation of an investment to which they, or a company of the first Party that employs them, have committed or are in the process of committing a substantial amount of capital or other resources. Other treaties between Latin American countries (for example, El Salvador-Peru, Argentina-Nicaragua and Dominican Republic-Ecuador) contain a similar provision. Most free trade agreements (NAFTA, Bolivia-Mexico, Costa Rica-Mexico, Canada-Chile, Mexico-Nicaragua, Chile-Mexico and Central America-Dominican Republic) also state that no Party may require than an enterprise of that Party appoint to senior management positions individuals of any particular nationality. In most cases, a similar clause is also included with respect to board of directors.
Most free trade agreements and post-NAFTA Canadian BITs mention that nothing shall be construed to prevent a Party from adopting, maintaining or enforcing any measure otherwise consistent with the Agreement, which it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to domestic health, safety, and environmental concerns.
Finally, the free trade agreements between Mexico and Bolivia, Costa Rica and Mexico, and Mexico and Nicaragua provide that with respect to the investments of its investors established and organized in accordance with the legislation of another Party, a Party may not exercise jurisdiction or adopt any measure that has the effect of extraterritorial application of its legislation or of obstructing trade between the Parties, or between a Party and a non-Party country.
Continuation of the Summary: D. Transfers Clauses
1 The first bilateral investment treaty was signed between the Federal Republic of Germany and Pakistan on November 25, 1959. However, the first BIT to be ratified was signed by the Dominican Republic and the Federal Republic of Germany. See Rudolf Dolzer and Margrete Stevens, Bilateral Investment Treaties (The Hague/Boston/London: International Centre for Settlement of Investment Disputes/Martinus Nijhoff Publishers, 1995), 267.
2 To our knowledge, only The Bahamas (Commonwealth of) and St. Kitts and Nevis have not signed BITs with other countries. Argentina, Barbados, Bolivia, Brazil, Canada, Chile, Colombia, Costa Rica, Ecuador, El Salvador, Grenada, Guatemala, Haiti, Honduras, Jamaica, Mexico, Nicaragua, Panama, Paraguay, Peru, Trinidad and Tobago, United States, Uruguay, and Venezuela have signed at least one BIT with another country of the Hemisphere.
3 Jon R. Johnson, The North American Free Trade Agreement: A Comprehensive Guide (Aurora, Ontario: Canada Law Book, 1994), 280. Johnson notes that "the general rule in customary international law is that a foreigner is obliged to exhaust local remedies as a prerequisite to international redress. [However,] Carlos Calvo, an Argentine jurist, took this rule a step further in a treatise published in 1868."
4 North American Free Trade Agreement (hereinafter NAFTA), December 17, 1992.
5 Free Trade Agreement of the Group of Three among Mexico, Colombia, and Venezuela (hereinafter the Group of Three), June 13, 1994.
6 Decision 291 of the Commission of the Cartagena Agreement. Common Code for the Treatment of Foreign Capital, Trademarks, Patents, Licenses, and Royalties (hereinafter Decision 291), March 21, 1991.
7 Protocol of Colonia for the Reciprocal Promotion and Protection of Investments in Mercosur (hereinafter Colonia Protocol), January 17, 1994, Mercosur/CMC / Dec. No. 11/93.
8 Protocol for the Promotion and Protection of Investments of third States (hereinafter Buenos Aires Protocol), August 5, 1994. According to Articles 1 and 2, Parties shall not grant to investments of investors of third countries more favorable treatment than the one established in this Protocol.
9 Free Trade Agreement between Bolivia and Mexico, September 10, 1994.
10 Free Trade Agreement between Costa Rica and Mexico, April 5, 1994.
11 Free Trade Agreement between Canada and Chile, December 5, 1996.
12 Free Trade Agreement between Mexico and Nicaragua, December 18, 1997.
13 Free Trade Agreement between Chile and Mexico, April 17, 1998.
14 Free Trade Agreement between Central American countries and the Dominican Republic, April 16, 1998. This agreement shall apply bilaterally between each of the Central American countries (Guatemala, El Salvador, Honduras, Nicaragua, and Costa Rica) and the Dominican Republic. See Article 1.01 (2). It has not yet entered into force.
15 Bilateral Complementarity Agreements: Chile-Colombia (December 6, 1993); Chile-Ecuador (December 20, 1994); Chile-Mercosur (June 25, 1996); Chile-Mexico (September 22, 1991); and Chile-Venezuela (April 2, 1993).
16 Apart from the aforementioned agreements signed during the 1990s, this study also covers the Caricom regime on foreign investment. In addition to the investment provisions in the Treaty of Chaguaramas which established the Caribbean Community and the Caribbean Common Market on July 4, 1973, Caricom countries also approved in 1982 a body of principles and guidelines dealing with investment issues. Principles and Guidelines on Foreign Investment approved by the Caricom Heads of Government Conference (hereinafter Guidelines), 1982.
17 See Chile-Ecuador BIT, Art. 1 (3); Ecuador-El Salvador BIT, Article 1 (2).
18 “Enterprise means any entity constituted or organized under applicable law, whether or not for profit, and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, sole proprietorship, joint venture or other association.” NAFTA, Article 201. See Canada-Chile FTA, Article B-01.
19 See Colombia-Peru BIT, Article 1 (3).
20 See section iv) Combination of different criteria infra.
21 Dolzer and Stevens, Bilateral Investment Treaties, 58.
22 These treaties provided for “the most constant protection and security.”
23 Dolzer and Stevens, Bilateral Investment Treaties, 61.
24 See Honduras-U.S. BIT, Article XIV (1).
25 See Nicaragua-U.S. BIT, Paragraph 1 of the Protocol.
26 See Bolivia-Peru BIT, Article 3 (5).
27 See, for instance, Nicaragua-U.S. BIT, Article XII.
* This report was prepared by the Organization of American States, Trade Unit at the request of the Free Trade Area of the Americas Negotiating Group on Investment and does not necessarily represent the opinions of the OAS or its Member States.
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