INTERNATIONAL AGREEMENT ON INVESTMENT
(CONSUMER UNITY TRUST SOCIETY)
PREAMBLE
The Contracting Parties to this Agreement,
Recognizing the growing importance of international investment in the world economy and its
contribution to development in their countries;
Wishing to establish a well-defined multilateral framework of principles and rules for international
investment with a view to the expansion of such investment flows under conditions of transparency,
predictability and progressive liberalization and as a means of promoting the economic growth of
all Contracting Parties and the development of developing countries;
Desiring the early achievement of progressively higher levels of liberalization of investment flows
through successive rounds of multilateral negotiations aimed at promoting the interests of all parties
and beneficiaries on a mutually advantageous basis and at securing an overall balance of rights and
obligations between and among investors and host countries, while giving due respect to national
policy objectives;
Recognizing the right of Contracting Parties to regulate, and to introduce new regulations, on a non-
discriminatory basis, on the manner and flow of investments within their territories in order to meet
national policy objectives and, given asymmetries existing with respect to the degree of
development and market regulation in different countries, the particular need of developing
countries to exercise this right;
Recognizing that investment, as an engine of economic growth, has a vital role in ensuring
sustainable economic growth and development, when accompanied by appropriate policies at the
domestic and international levels governing the interests of environment, consumers, labour,
citizens and culture;
Renewing their commitment to the international covenants and principles enunciated at several
international events, such as the Agenda 21 adopted at the Earth Summit, the Copenhagen
Declaration of World Summit on Social Development, Bejing Declaration at the Womens' Summit
etc. and to observance of the UN Charter on Human Rights and Covenants on Social, Economic and
Political Rights, the Tripartite Declaration of Principles concerning Multilateral Enterprises and
Social Policy, the UN Guidelines on Consumer Protection etc.;
Reiterating their support for the United Nations Guidelines for Transnational Investment, as
fundamental principles of behaviour of firms and contracting parties between and among each
other;
Affirming their decision to create a free-standing independent agreement operating under an
independent secretariat of the International Agreement on Investment;
Hereby agree as follows:
Article 1. DEFINITIONS
1. "Investor" means:
(i) a natural person who has the nationality of, or who is permanently residing in, the
territory of a Contracting Party in accordance with its applicable law; or
(ii) a legal person or any other entity constituted or organised under the applicable law of
a Contracting Party, whether or not for profit, and whether private or government
owned or controlled, and includes a corporation, trust, partnership , joint venture,
association or organisation as recognised under the law of the Contracting Party in
whose territory the investment is made.
2. "Investment" means:
(a) Every kind of asset owned or controlled, directly or indirectly, by an investor,
including:
(i) an enterprise (being a legal person or any other entity constituted or
organised under the applicable law of the Contracting Party, whether or not
for profit, and whether private or government owned or controlled, and
includes a corporation, trust, partnership, branch, joint venture, association or
organisation);
(ii) shares, stocks or other forms of equity participation in an enterprise, and
rights derived therefrom;
(iii) bonds, debentures, loans to and other form of debt of an enterprise and rights
derived therefrom;
(iv) rights under contracts, including turnkey, construction, management,
production or revenue-sharing contracts;
(v) claims to money and claims to performance;
(vi) intellectual property rights;
(vii) rights conferred pursuant to law or contract, including rights conferred by
licenses, authorisations, and permits.
(viii) any other tangible and intangible, movable and immovable property, and any
related property rights, such as leases, mortgages, liens and pledges, unless
such assets lack the characteristics of an investment.
(b) "Investment" does not include:
(i) public debt, debt securities of and loans to a state enterprise or Contracting
Party;
(ii) financial assets, unless the respective claims are assets of an enterprise
mentioned in paragraph(a) (i);
(iii) derivatives where the underlying asset is not regarded as an investment;
(iv) real estate or other property, tangible or intangible (including rights
associated therewith), not acquired in the expectation or used for the
purpose of economic benefit or other business purposes;
(v) movable or immovable property, and any related rights, acquired for personal
use.
3. "Territory" means:
(a) the land territory, internal waters, and the territorial sea of a Contracting Party, and, in the
case of a Contracting Party which is an archipelagic state, its archipelagic waters; and
(b) the maritime areas beyond the territorial sea with respect to which a Contracting Party
exercises sovereign rights or jurisdiction in accordance with international law, as reflected
particularly in the 1982 United Nations Convention on the Law of the Sea.
Article 2. APPLICATION
APPLICATION TO OVERSEAS TERRITORIES
A Contracting Party may, at any time, declare in writing to the Depositary that this Agreement shall
apply to all or to one or more of the territories for the international relations of which it is
responsible. Such declaration, made prior to or upon ratification, accession or acceptance, shall take
effect upon entry into force of this Agreement for that State. A subsequent declaration shall take
effect with respect to the territory or territories concerned on the ninetieth day following receipt of
the declaration by the Depositary.
A Party may at any time declare in writing to the Depositary, that this Agreement shall cease to
apply to all or to one more of the territories for the international relations of which it is responsible.
Such declaration shall take effect upon the expiry of one year from the date of receipt of the
declaration by the Depositary, with the same effect regarding existing investment as withdrawal of a
Party.
Article 3. NATIONAL TREATMENT AND MOST FAVOURED NATION TREATMENT
1.1 Each Contracting Party shall accord to investors of another Contracting Party and to their
investments, treatment no less favourable than the treatment which it accords, in like circumstances,
to its own investor and their investments with respect to the establishment, acquisition, expansion,
operation, management, maintenance, use, enjoyment and sale or other disposition of investment.
1.2 Each Contracting Party shall accord to investors of another Contracting Party and to their
investments, treatment no less favourable than the treatment which it accords, in like circumstances
to investors of any other Contracting Party or of a non-Contracting Party, and to the investments of
investors of any other Contracting Party or of a non-Contracting Party, with respect to the
establishment, acquisition, expansion, operation, management, maintenance, use, enjoyment, and
sale or other disposition of investment.
1.3 Each Contracting Party shall accord to investors of another Contracting Party and to their
investments the better of the treatment required by Article 1.1 and 1.2, whichever is the more
favourable to those investors or investments.
1.4 Nothing in paragraphs 1. 1 to 1.3 shall apply to measures adopted by a Contracting Party for
compelling reasons connected with its national interest.
1.5 THE PROVISIONS OF THIS ARTICLE SHALL BE SUBJECT TO THOSE OF ARTICLES
1.A TO 1.K
1.A ENTRY AND ESTABLISHMENT
A Contracting Party shall have the right to impose, on the entry of, and establishment and conduct
of business by, investors, restrictions where such restrictions are:
(i) non-discriminatory in nature;
(ii) based on vital social, economic or cultural considerations; and
(iii) mandatory by national legislation or policy of the Contracting Party.
(iv) Entry and establishment have to remain subject to the industrial policy and other policy
instruments as per the Contracting Party's preference.
1.B NATIONAL TREATMENT WITHOUT DISCRIMINATION
A Contracting Party shall have freedom to discriminate between an investor of the Contracting
Party and an investor of another Contracting Party, where such discrimination is considered
absolutely necessary for:
(i) promoting or maintaining any public utility project in the Contracting Party's
territory;
(ii) for maintaining national security or public order;
(iii) for preserving public health;
(iv) for preserving the culture of the Contracting Party;
(v) protection of consumers against fraud or unfair practices; or
(vi) for protecting other vital national considerations.
1.C INVESTMENT REGULATIONS: STAND-STILL AND ROLL BACK
A Contracting Party shall be free to adopt or continue (with or without modifications) such
restrictive measures in regard to investment as are considered necessary in the national interest.
However, a Contracting Party shall use its best endeavours to limit such measures to the absolute
minimum.
1D TRANSFER OF FUNDS (BALANCE OF PAYMENTS ASPECT)
A Contracting Party shall be free to adopt or continue (with or without modifications) such
measures in regard to investments as are considered necessary in the interest of the economy of the
Contracting Party, including the rectification or avoidance of an unfavourable position regarding
balance of payments. The Contracting Party shall, however, use its best endeavour to limit such
measures to the absolute minimum.
1.E HUMAN RIGHTS AND CULTURE
A Contracting Party shall be free to adopt or continue (with or without modification), such
measures as are required for securing conformity with international treaties, conventions and
agreements relating to-
(a) human rights; and
(b) cultural protection.