Title
Arrangement between the Canadian Trade Office in Taipei and the Taipei Economic and Cultural Office in Canada for the promotion and protection of investments
Preamble
The Canadian Trade Office in Taipei (CTOT) and the Taipei Economic and Cultural Office in Canada (TECO), hereinafter referred to as the “Participants”,
Recognizing that the promotion and the protection of investments of investors of the territory of one Participant in the territory of the other Participant will be conducive to the stimulation of mutually beneficial business activity, to the development of economic co-operation between them, and to the promotion of sustainable development;
Reaffirming the importance of encouraging investment promotion activities and to make these activities more accessible to underrepresented groups, including by encouraging investments by women, Indigenous Peoples, and micro, small, or medium-sized enterprises;
Reaffirming the importance of promoting responsible business conduct, cultural identity and diversity, environmental protection and conservation, gender equality, the rights of Indigenous Peoples, labour rights, inclusive trade, sustainable development, and traditional knowledge;
Reaffirming the right of the authorities of the territory of each Participant to regulate within the territory of that Participant to achieve legitimate public policy objectives, such as with respect to the protection of the environment and addressing climate change; social or consumer protection; or the promotion and protection of health, safety, rights of Indigenous Peoples, gender equality, and cultural diversity,
Have come to this Arrangement:
Body
Part A. Definitions
Article 1. Definitions
For the purpose of this Arrangement:
“algorithm” means a defined sequence of steps taken to solve a problem or obtain a result;
“authorization” means the granting of permission by a competent authority to a person with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of an investment in the territory of a Participant;
“authorization procedures” means administrative or procedural rules that must be adhered to in order to obtain, amend, or renew an authorization;
“competent authority” means:
(a) any authority of the territory of a Participant, or
(b) any person, including a publicly-owned enterprise or any other body, in the exercise of powers delegated by any authority of the territory of a Participant,
that grants an authorization;
“confidential information” means confidential business information or information that is privileged or otherwise protected from disclosure under the domestic law of the territory of a Participant;
“covered investment” means, with respect to a Participant, an investment:
(a) in the territory of the Participant;
(b) made in accordance with the applicable domestic law of the territory of the Participant at the time the investment is made;
(c) directly or indirectly owned or controlled by an investor of the territory of the other Participant; and
(d) existing on the date this Arrangement comes into effect, or made or acquired thereafter;
“enterprise” means an entity constituted or organized under applicable law, whether or not for profit, whether privately or publicly-owned, including a corporation, trust, partnership, sole proprietorship, joint venture, or other association, and a branch of any such entity;
“existing” means in effect on the date this Arrangement comes into effect;
“financial institution” means a financial intermediary or other enterprise that is located in the territory of a Participant, and that is authorized to do business and regulated or supervised as a financial institution under the law of that territory;
“financial service” means a service of a financial nature, including insurance, and a service incidental or auxiliary to a service of a financial nature;
“intellectual property rights” means copyright and related rights, trademark rights, rights in geographical indications, rights in industrial designs, patent rights, rights in layout designs of integrated circuits, rights in relation to protection of undisclosed information, and plant breeders’ rights;
“investment” means:
(a) any of the following:
(i) an enterprise,
(ii) a share, stock, or other form of equity participation in an enterprise,
(iii) a bond, debenture, or other debt instrument of an enterprise,
(iv) a loan to an enterprise,
(v) an interest in an enterprise that entitles the owner to share in income or profits of the enterprise,
(vi) an interest in an enterprise that entitles the owner to share in the assets of that enterprise on dissolution,
(vii) an interest arising from the commitment of capital or other resources in the territory of a Participant to economic activity in that territory, such as under:
(A) a contract involving the presence of an investor’s property in the territory of the Participant, including a turnkey or construction contract, or a concession, or
(B) a contract under which remuneration depends substantially on the production, revenues, or profits of an enterprise;
(viii) intellectual property rights, and
(ix) any other tangible or intangible, moveable or immovable, property and related property rights acquired in the expectation of, or used for the purpose of, economic benefit or other business purpose; and
(b) in each case involves the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk;
(c) for the purpose of this definition, “investment” does not mean:
(i) a claim to money that arises solely from:
(A) a commercial contract for the sale of a good or service by a natural person or enterprise in the territory of a Participant to an enterprise in the territory of the other Participant, or
(B) the extension of credit in connection with a commercial transaction, such as trade financing;
(ii) an order or judgment in a judicial or administrative action, or
(iii) any other claim to money that does not involve the kinds of interests set out in subparagraphs (a)(i) to (ix);
“investor of the territory of a Participant” means an authority of the territory of a Participant, a natural person of the territory of a Participant, or an enterprise of the territory of a Participant, that seeks to make, is making, or has made an investment. For the purpose of this definition, “enterprise of the territory of a Participant” means:
(a) an enterprise that is constituted or organized under the law of the territory of that Participant and that has substantial business activities in the territory of that Participant. Whether an enterprise has substantial business activities in the territory of a Participant will entail a case-by-case, fact-based analysis; or
(b) an enterprise that is constituted or organised under the law of the territory of that Participant, and is directly or indirectly owned or controlled by a natural person of that territory or by an enterprise mentioned under subparagraph (a);
“measure” includes a law, regulation, procedure, requirement, or practice;
“natural person of a territory” means:
(a) for the CTOT, a person who holds a passport of Canada or is a permanent resident of Canada; and
(b) for the TECO, a person who holds a passport of Taiwan with an identification number or is a permanent resident of Taiwan;
except that:
(c) a natural person of both territories will be deemed to be exclusively a natural person of the territory where that person has his or her dominant and effective connection; and
(d) a passport-holder of the territory of one Participant and a permanent resident of the territory of the other Participant will be deemed to be exclusively a natural person of the territory of its passport;
“person” means a natural person or an enterprise;
“publicly-owned enterprise” means an enterprise that is owned, or controlled through ownership interests, by an authority of the territory of a Participant;
“tax convention or arrangement” means a convention for the avoidance of double taxation or other international taxation agreement or arrangement.
“territory” or “territory of a Participant” means:
(a) for the CTOT:
(i) the land territory, air space, internal waters, and territorial sea of Canada,
(ii) the exclusive economic zone of Canada, and
(iii) the continental shelf of Canada,
as determined by Canada’s domestic law and consistent with international law; and
(b) for the TECO: the Separate Customs Territory of Taiwan, Penghu, Kinmen and Matsu;
“third territory” means any territory other than the territory of a Participant;
“TRIPS Agreement” means the Agreement on Trade-Related Aspects of Intellectual Property Rights, Annex 1C of the WTO Agreement; and
“WTO Agreement” means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on April 15, 1994.
Part B. Investment Protections
Article 2. Scope
1. This Arrangement will apply to measures adopted or maintained by authorities of the territory of a Participant relating to:
(a) an investor of the territory of the other Participant;
(b) a covered investment; and
(c) with respect to Paragraph 3, Paragraph 11, and Paragraph 15, an investment in the territory of the Participant.
2. A Participant’s commitments under this Arrangement will apply to measures adopted or maintained by:
(a) authorities of the territory of that Participant; and
(b) any person, including a publicly-owned enterprise or any other body, when it exercises any public authority delegated to it by an authority of the territory of that Participant.
3. This Arrangement will not apply in relation to an act or fact that took place or a situation that ceased to exist before the date when this Arrangement comes into effect.
Article 3. Non-Derogation
The Participants recognize that it would not be appropriate to encourage investment by relaxing domestic measures relating to health, safety, the environment, other regulatory objectives or the rights of Indigenous Peoples. Accordingly, within the territory of a Participant, there will be no relaxation, waiving or other derogation from, or offer to relax, waive or otherwise derogate from, such measures in order to encourage the establishment, acquisition, expansion, or management of the investments of an investor. If a Participant considers that such an encouragement has been offered in the territory of the other Participant, the Participant may request consultations with the other Participant and the two Participants will consult with a view to avoiding the encouragement.
Article 4. National Treatment
1. An investor of the territory of a Participant will be accorded treatment by an authority of the territory of the other Participant no less favourable than the treatment accorded by the authority, in like circumstances, to investors of the territory of the other Participant, with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in the territory of the other Participant.
2. A covered investment will be accorded treatment by an authority of the territory of a Participant no less favourable than the treatment accorded by the authority, in like circumstances, to investments of investors of the territory of that Participant with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in the territory of that Participant.
3. The “treatment” accorded under subparagraphs 1 and 2 means, with respect to an authority of the territory of a Participant, treatment accorded, in like circumstances, by that authority to investors, and to investments of investors, of the territory of that Participant.
4. Whether treatment is accorded in like circumstances will depend on the totality of the circumstances, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public policy objectives.
5. Subparagraphs 1 and 2 relate to discrimination based on whether the investor is of the territory of the other Participant, or whether the covered investment is an investment of an investor of the territory of the other Participant, respectively. A difference in treatment accorded to an investor or covered investment, and to the investors or investments of investors of that Participant, would not, in and of itself, establish discrimination based on these grounds.
Article 5. Most-Favoured-Nation Treatment
1. An investor of the territory of a Participant will be accorded treatment by an authority of the territory of the other Participant no less favourable than the treatment accorded by the authority, in like circumstances, to investors of a third territory with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in the territory of the other Participant.
2. A covered investment will be accorded treatment by an authority of the territory of a Participant no less favourable than the treatment accorded by the authority, in like circumstances, to investments of investors of a third territory with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in the territory of the Participant.
3. The “treatment” accorded under subparagraphs 1 and 2 means, with respect to an authority of the territory of a Participant, treatment accorded, in like circumstances, by that authority to investors, and to investments of investors, of a third territory.
4. Whether treatment is accorded in like circumstances will depend on the totality of the circumstances, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public policy objectives.
5. Subparagraphs 1 and 2 relate to discrimination based on whether the investor is of the territory of the other Participant, or whether the covered investment is an investment of an investor of the territory of the other Participant, respectively. A difference in treatment accorded to an investor or covered investment and to investors or investments of investors of a third territory would not, in and of itself, establish discrimination based on these grounds.
6. The “treatment” referred to in subparagraphs 1 and 2 will not include procedures for the resolution of investment disputes or differences provided for in international investment treaties or arrangements and in trade agreements.
7. Substantive obligations in international investment treaties and in trade agreements, or commitments in investment arrangements, do not in themselves constitute “treatment”, and thus would not be inconsistent with this Paragraph, absent measures adopted or maintained by an authority of the territory of a Participant pursuant to those obligations or commitments.
Article 6. Treatment In Case of Armed Conflict, Civil Strife, or Natural Disaster
1. Notwithstanding Paragraph 20(6)(b), an investor of the territory of the other Participant and a covered investment will be accorded treatment no less favourable than an authority of the territory of a Participant accords to its own investors or investments, or to the investors or investments of investors of a third territory, whichever is more favourable to the investors or investments concerned, with respect to measures adopted or maintained relating to restitution, indemnification, compensation, or other settlement for losses incurred by investments in the territory of a Participant as a result of armed conflict, civil strife, or a natural disaster.
2. Notwithstanding subparagraph 1, if an investor of the territory of a Participant, in a situation referred to in subparagraph 1, suffers a loss in the territory of the other Participant resulting from:
(a) requisitioning of its covered investment or part thereof by the forces or authorities of the territory of the latter Participant; or
(b) destruction of its covered investment or part thereof by the forces or authorities of the territory of the latter Participant, which was not required by the necessity of the situation;
authorities of the territory of the latter Participant will provide the investor restitution, compensation, or both, as appropriate, for that loss.
3. Subparagraph 1 will not apply to an existing subsidy or grant provided by an authority of the territory of a Participant, including an authority-supported loan, a guarantee, or insurance that would be inconsistent with Paragraph 4 but for Paragraph 20(6)(b).
Article 7. Minimum Standard of Treatment
1. A covered investment and an investor with respect to their covered investment will be accorded treatment by an authority of the territory of a Participant that corresponds to the applicable customary international law minimum standard of treatment of aliens. A measure is inconsistent with this Paragraph only if it constitutes:
(a) denial of justice in criminal, civil, or administrative proceedings;
(b) fundamental breach of due process in judicial and administrative proceedings;
(c) manifest arbitrariness; (1)
(d) targeted discrimination on manifestly wrongful grounds such as gender, race, or religious beliefs;
(e) abusive treatment of investors, such as physical coercion, duress, and harassment; or
(f) a failure to provide full protection and security. (2)
2. The fact that another commitment in this Arrangement or in a separate arrangement has not been met, or that there has been a breach of an international agreement, will not establish that a measure is inconsistent with this Paragraph.
3. The fact that a measure breaches the domestic law of the territory of a Participant will not establish that a measure is inconsistent with this Paragraph.
Article 8. Expropriation
1. Expropriation of a covered investment either directly or indirectly by an authority of the territory of a Participant, will not be done except:
(a) for a public purpose; (3)
(b) in accordance with due process of law;
(c) in a non-discriminatory manner; and
(d) on payment of compensation in accordance with subparagraph 5.
2. A direct expropriation under subparagraph 1 will occur only when a covered investment is taken by an authority of the territory of a Participant through formal transfer of title or outright seizure.
3. An indirect expropriation under subparagraph 1 may occur when a measure or a series of measures of an authority of the territory of a Participant has an effect equivalent to direct expropriation without formal transfer of title or outright seizure. A non-discriminatory measure of an authority of the territory of a Participant that is adopted and maintained in good faith to protect legitimate public welfare objectives, such as health, safety and the environment, will not constitute indirect expropriation, even if it has an effect equivalent to direct expropriation. Whether a measure or a series of measures has an effect equivalent to direct expropriation will entail a case-by-case, fact-based analysis that will consider the following:
(a) the economic impact of the measure or the series of measures of an authority of the territory of a Participant, although the sole fact that a measure or a series of measures has an adverse effect on the economic value of a covered investment will not establish that an indirect expropriation has occurred;
(b) the duration of the measure or series of measures;
(c) the extent to which the measure or the series of measures interferes with distinct, reasonable investment-backed expectations; and
(d) the character of the measure or the series of measures.
4. A measure of an authority of the territory of a Participant will not be inconsistent with this Paragraph unless it expropriates a covered investment that is a tangible or intangible property right under the domestic law of the territory in which the investment was made. Relevant factors will include the nature and scope of the tangible or intangible property right under the applicable domestic law of the territory in which the investment was made.
5. The compensation referred to in subparagraph 1 will:
(a) be paid without delay in a freely convertible currency;
(b) be equivalent to the fair market value of the expropriated investment immediately before the expropriation took place (date of expropriation). Appropriate valuation criteria include going concern value, asset value including the declared tax value of tangible property, and other criteria, which may be appropriate or relevant under the circumstances, to determine fair market value;
(c) not reflect any change in value occurring because the intended expropriation had become known earlier;
(d) include interest at a commercially reasonable rate for that currency from the date of the expropriation until the date of payment; and
(e) be freely transferable.
6. A measure of an authority of the territory of a Participant that would otherwise constitute an expropriation of an intellectual property right under this Paragraph is not inconsistent with this Paragraph if it is consistent with the TRIPS Agreement and any waiver or amendment of that Agreement accepted by an authority of the territory of that Participant.
Article 9. Transfer of Funds
1. All transfers of funds relating to a covered investment will be permitted by an authority of the territory of a Participant to be made freely, and without delay, into and out of its territory. Those transfers include:
(a) contributions to capital;
(b) profits, dividends, interest, capital gains, royalty payments, management fees, and technical assistance and other fees;
(c) proceeds from the sale or liquidation of the whole or part of the covered investment;
(d) payments made under a contract entered into by the investor or the covered investment, including payments made pursuant to a loan agreement;
(e) payments made under Paragraph 6 and Paragraph 8;
(f) earnings and other remuneration of foreign personnel working in connection with a covered investment; and
(g) payments arising out of a dispute.
2. Transfers of funds relating to a covered investment will be permitted in a freely convertible currency at the market rate of exchange in effect at the time of transfer.