WORLD TRADE WT/WGTI/W/28
26March 1998
ORGANIZATION(98-1216)
Original: French Working Group ontheRelationship
between Trade andInvestment
COMMUNICATION FROM SWITZERLAND
Thefollowing communication, dated 17March 1998, hasbeenreceived fromthePermanent
Mission ofSwitzerland withtherequest thatitbecirculated toMembers.
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BILATERAL AGREEMENTS ONINVESTMENT PROMOTION AND PROTECTION
INTRODUCTION
Thetotalnumberofbilateralagreementsoninvestmentpromotionandprotectionhasconsiderably
increased overthepastyears (more that1,500 atthebeginning of1998). Thistrend isduepartly to
thefactthatagrowing number ofdeveloping countries andeconomies intransition seeforeign direct
investment asadriving force intheireconomic development andconsider these agreements, byvirtue
ofthelegalsecurity theyprovide, tobeanimportant factor inmaking themmore attractive asbusiness
locations.
Switzerlandbeganasfarbackasthe1960stobuildasextensiveanetworkofbilateralagreements
aspossible (86agreements havenowbeensigned ofwhich 73areinforce -seelistinAnnex).
Thepurpose ofthisCommunication totheWorking Group ontheRelationship Between Trade
andInvestment istodiscuss theobjective andthemain provisions ofthese agreements.
1. Objective
Before investing abroad, anyenterprise likestoensure thatitbenefits fromproper framework
conditions (e.g.transparency, legalsecurity andpredictability). Indoing so,ittakes account ofthe
existence ofbilateral agreements oninvestment protection inthehostcountry concerned together with
theother factors (sizeofmarket, etc.)before chosing whether ornottoenter themarket. Indeed,
byadopting themain acquis ofpublic international lawinthatarea, acountry shows thatitisready
toensure thatforeign investment benefits from thenecessary operating conditions. Thus, bilateral
agreements arealsoafactor ofintegration intheworld market.
Whileimportantforallinvestors,thislegaltoolisevenmoreimportantforthesmallandmedium
enterprises which, inspiteoftheirlimited means, areunder increasing pressure todiversify their
production sitesandenter foreign markets ofstrategic value tothem.WG/WGTI/W/28
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2. Main provisions
Scope ofapplication oftheagreement
Theinvestor mustbeeither anatural person oralegalperson: thiscovers soleproprietorships,
partnerships orjoint-stock companies, jointventures, associations ororganisations, etc.
Initsbroadest sense, theconcept ofinvestment covers alltypes ofrealrights, company shares,
monetary claims, intellectual property rights, concessions, etc.
Encouragement andprotection ofinvestments
Parties totheagreement encourage investment intheirterritory andfacilitate access thereto.
Asarule,however, therighttomake theinvestment isnotspecified intheagreement: itisonlyonce
ithasbeenaccepted inaccordance withnational lawthataninvestment isgranted security andprotection,
andjustandequitable treatment.
National treatment andthemost-favoured-nation clause
Thehostcountry accords foreign investors treatment nolessfavourable thanthatgiven toits
owninvestors, ortothose ofthemost favoured nation ifsuchtreatment ismore favourable.
Guarantee offreetransfer ofcapital andinvestment income
Theguarantee offreetransfer ofcapital (repatriation) andinvestment income isusually
accompanied byacommitment onthepartofthehostcountry toprovide theinvestor withthenecessary
freely convertible foreign exchange.
Protection against dispossession andinjury
Expropriation, nationalization andother measures having equivalent effect areauthorised only
under certain conditions (public interest, non-discrimination, legality andprompt andadequate
compensation).
Asregards compensation fordamage toaninvestment attributable tocivildisturbances orother
similar causes, theinvestor isaccorded national treatment ormost-favoured-nation treatment where
thelatter ismore favourable.
Settlement ofdisputes
Where ithasnotbeenpossible tosettle them through consultations, disputes between the
contracting parties orbetween acontracting party andaninvestor oftheother contracting party may
besubmitted tointernational arbitration.
Annex: Listofagreements concerning investment promotion andencouragement concluded by
Switzerland todate.WG/WGTI/W/28
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ANNEX
ListofAgreements onInvestment Protection andEncouragement Concluded bySwitzerland
toDate(inChronological Order ofSignature)
Situation asat1March 1998
86agreements signed
73inforce
Dateofsignature Dateofentry intoforce
Tunisia 2December 1961 19January 1964
Nigeria128March 1962 17November 1962
Guinea126April 1962 29July1963
Côted'Ivoire126June1962 18November 1962
Senegal116August 1962 13August 1964
Congo118October 1962 11July1964
Cameroon128January 1963 6April 1964
Liberia223July1963 22September 1964
Rwanda3,415October 1963 15October 1963
Togo117January 1964 9August 1966
Madagascar117March 1964 31March 1966
Malta120January 1965 23February 1965
Tanzania 3May1965 16September 1965
Costa Rica 1September 1965 18August 1966
Benin120April 1966 6October 1973
Chad121February 1967 31October 1967
Ecuador 2May1968 11September 1969
Burkina Faso16May1969 15September 1969
Korea 7April 1971 7April 1971
Uganda 23August 1971 8May1972
Gabon (terminated)128January 1972 18October 1972
Democratic Republic oftheCongo 10March 1972 10May1983
Central African Republic328February 1973 4July1973
Egypt 25July1973 4June1974
Indonesia 6February 1974 9April 1976
Sudan 17February 1974 14December 1974
Mauritania59September 1976 30May1978
Jordan 11November 1976 2March 1977
Syria 22June1977 10August 1978
Malaysia 1March 1978 9June1978
Singapore 6March 1978 3May1978
Mali 8March 1987 8December 1978WG/WGTI/W/28
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Dateofsignature Dateofentry intoforce
SriLanka 23September 1981 12February 1982
Panama 19October 1983 22August 1985
Morocco 17December 1985 12April 1991
China 12November 1986 18March 1987
Bolivia 6November 1987 13May1991
Turkey 3March 1988 21February 1990
Hungary 5October 1988 16May1989
Uruguay 7October 1988 22April 1991
Poland 8November 1989 17April 1990
Slovakia 5October 1990 7August 1991
Czech Republic 5October 1990 7August 1991
Russia 1December 1990 26August 1991
Jamaica 11December 1990 21November 1991
Argentina 12April 1991 6November 1992
Ghana 8October 1991 16June1993
Bulgaria 28October 1991 26October 1993
Cape-Verde 28October 1991 6May1992
Chile 11November 1991 -
Peru 22November 1991 23November 1993
Paraguay 31January 1992 28September 1992
Vietnam 3July1992 3December 1992
Albania 22September 1992 30April 1993
Estonia 21December 1992 18August 1993
Latvia 22December 1992 16April 1993
Lithuania 23December 1992 13May1993
Uzbekistan 16April 1993 5November 1993
Belarus 28May1993 13July1994
Honduras614October 1993 -
Romania 25October 1993 30July1994
Venezuela 18November 1993 30November 1994
Gambia 22November 1993 30March 1994
Kazakstan 12May1994 -
Namibia 1August 1994 -
Zambia 3August 1994 7March 1995
Hong Kong, China 22September 1994 22October 1994
Brazil 11November 1994 -
ElSalvador 8December 1994 16September 1996
Barbados 29March 1995 22December 1995
Ukraine 20April 1995 21January 1997
South Africa 27June1995 29November 1997
Mexico 10July1995 14March 1996WG/WGTI/W/28
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Dateofsignature Dateofentry intoforce
Pakistan 11July1995 6May1996
Slovenia 9November 1995 20March 1997
Moldova 30November 1995 29November 1996
Cuba 28June1996 7November 1997
Zimbabwe 15August 1996 -
Macedonia 26September 1996 6May1997
Cambodia 12October 1996 -
Croatia 30October 1996 -
Laos 4December 1996 4December 1996
Mongolia 29January 1997 -
Philippines 31March 1997 -
India 4April 1997 -
Thailand 17November 1997 -
1Agreement alsocontains provisions concerning trade andcooperation.2Friendship andtrade agreement containing aclause oninvestment.3Agreement ontrade andinvestment protection.4Applicable onaprovisional basis.5Also contains provisions ontrade andcooperation.6Replaces theAgreement of20July1966.
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