SELF–SELECTION MODALITY
A. INTRODUCTION
2. This modality aims to provide an AMS with a structured phased approach based on the AEC Blueprint schedules to progressively reduce/eliminate investment restrictions and impediments taken by AMS. These restrictions/impediments are reflected in the respective investment reservation lists under the Schedule to ACIA.
B. DEFINITIONS
3. For the purposes of this modality:
• Elimination means the discontinuation/abolition of the measure/or deletion of a sector/sub-sector.
• Improvement means progressive liberalisation of a measure or scoping down where the measure is gradually narrowed/reduced by making it more specific in terms of the description/scope and number of limitations in the measure.
C. PROCEDURES
4. The modality comprises of three components:
• Component 1: Reservations Not Subject to the Elimination/ Improvement
• Component 2: Reservations Subject to Elimination/ Improvement (in accordance with the 3 phases
• Component 3: CCI Peer Review Mechanism
Component 1: Reservations Not Subject to the Elimination/Improvement
5. Each Member State shall follow the non-exhaustive approach in which there will be no specific list for this Component.
6. Under this approach, Component 1 could cover, but not limited to, land use/ownership, measures prescribed under international conventions where investment is restricted, general exceptions, security exceptions and Constitutional constraints.
7. Each Member State shall self-select the reservations for placement in this Component with justifications provided to CCI for its information.
Component 2: Reservations subject to Elimination/Improvement
8. Each Member State shall self-select the reservations to be eliminated and/or improved according to the three phases of the AEC Blueprint Strategic Schedule and as agreed in this Modality.
9. Priority should be given to phase-out the ACIA Reservations that were previously contained in the Temporary Exclusion Lists under the ASEAN Investment Area (AIA) Agreement.
10. Elimination and/or improvement of the remaining reservations shall be progressively implemented according to the AEC Strategic Schedule and country-specific characteristics.
Component 3: CCI Peer Review Mechanism
11. Objective: The CCI Peer Review Mechanism is aimed at monitoring adherence by Member States to the modality for the elimination/improvement of investment impediments and restrictions.
12. Activities:
a. Peer Reviewing: The peer review process will be part of the agenda for every CCI meeting, which will involve the following:
i. Submission of internal written reports by all AMS on the progress made, if any, on the respective country implementation of this modality, with a brief presentation of overall economic situation/investment climate, especially policy context of the elimination and improvements to enable a better understanding of the rationale behind the progress made.
ii. Discussion on any new reservations in relation to (a) new and emerging sectors, sub-sectors, industries, products or activities; or (b) existing sectors, sub-sectors, industries, products, or activities; which were unregulated at the time of submission of the original reservation lists.
iii. Discussion and clarification with the view to further eliminate/improve investment impediments and restrictions. b. Any amendments to the ACIA Reservation Lists as a result of the CCI Peer Review process will be subject to the Article 10 (Modification of Commitments) of the ACIA.
Attachments
Protocol to amend the asean comprehensive investment agreement
The Governments of Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Republic of the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand, and the Socialist Republic of Viet Nam, Member States of the Association of Southeast Asian Nations ("ASEAN"), hereinafter collectively referred to as "Member States" or singularly as "Member State';
RECALLING the ASEAN Comprehensive — Investment Agreement (hereinafter referred to as the "ACIA") signed on 26 February 2009 which aims to create a free and open investment regime in ASEAN in order to achieve the end goal of economic integration under the ASEAN Economic Community (AEC) in accordance with the AEC Blueprint;
RECOGNISING the need to provide clarity to Article 9 (Reservations) and Article 10 (Modification of Commitments) of the ACIA and to adopt an efficient mechanism to effect any changes in each Member State's reservation list following subsequent amendments or modifications; and
NOTING that Article 46 (Amendments) of the ACIA provides that the provisions of the ACIA may be modified through amendments mutually agreed upon in writing by the Member States,
HAVE AGREED AS FOLLOWS:
1. Amendment to Article 9 (reservations) of the Acia
Article 9. shall be amended to read as follows:
"4. Each Member State shall reduce or eliminate the reservations specified in the Schedule in accordance with the three phases of the Strategic Schedule of the AEC Blueprint."
2. Amendments to Article 10 (modification of Commitments) of the Acia
1. Article 10(1) shall be amended to read as follows:
"4. For a period of 12 months from the date of entry into force of this Agreement, a Member State may adopt any measures or modify any of its reservations made in the Schedule under Article 9 (Reservations) for prospective applications to investors of any other Member States and their investments, provided that such measures or modification shall not adversely affect any existing investors and investments."
2. The following new paragraph shall be inserted after Article 10(4):
"5. Any amendment or modification of the commitments and reservations in accordance with this Article shall be subject to the procedures prescribed in Annex 3 (Procedures for Amendment or Modification of Reservations)."
3. Amendments to Article 42 (institutional Arrangements) of the Acia
Article 42. shall be amended as follows:
1. The following new sub-paragraph shall be inserted after sub-paragraph (d):
‘(e) update and endorse the Reservation Lists of this Agreement;"
2. The existing sub-paragraphs (e), (f), (g) and (h) shall be renumbered accordingly.
4. Insertion of Annex 3 to the Acia
The following shall be inserted as Annex 3:
"ANNEX 3 Procedures for Amendment or Modification of Reservations
1. Any amendment or modification of a Member State's reservations in the Schedule to this Agreement may be made:
(a) For the reduction or elimination of reservations under Article 9(4);
(b) For the modification of reservations within 12 months from the date of entry into force of this Agreement under Article 10(1); and
2. For the modification or withdrawal of commitments and reservations after the expiration of the period referred to in sub- paragraph (b) above, subject to negotiation and agreement under Article 10(2).
The procedures for amendment or modification of reservations under sub-paragraphs 1(a) and 1(b) above shall be as follows:
(a) A Member State intending to amend or modify its reservation (hereinafter referred to as "Modifying Member State") shall submit a Notification to the Coordinating Committee on Investment (CCI) with a copy furnished to the ASEAN Secretariat. The Notification shall include details of the proposal, such as the reservation being amended or modified, in whole or in part, and the exact nature of the proposed changes. The Template for the Notification is attached as Appendix 1;
(b) The Modifying Member State shall append to the Notification a draft Supplementary Note and the draft reservation containing the proposed amendment or modification. The Template for the Supplementary Note is attached as Appendix 2:
(c) Any other Member State may seek clarification on the proposed amendment or modification within 10 days from the date of receipt of the Notification;
(d) The Modifying Member State shall provide additional information or clarification as sought by the other Member States within 5 days from the date of receipt of the request;
(e) The CCI shall inter-sessionally within 30 days from the date of receipt of the Notification or at its next meeting, whichever is earlier, discuss the proposed amendment or modification, and may exchange views on improving the language of the amended or modified reservation, where appropriate, for clarity and specificity;
(f) After the CCl completes its discussion and exchange of views, it shall inter-sessionally within 5 days after the completion of the discussions or at its next meeting, whichever is earlier, submit a report on the proposed amendment or modification and include the Supplementary Note and the draft reservation for the endorsement of the AIA Council through the Secretary-General of ASEAN;
(g) The amendment or modification and any clarification made thereto shall be noted by the CCI and the AIA Council in their next respective meetings;
(h) The amended or modified reservations shall take effect on the date of the receipt by the Secretary- General of ASEAN of the last of the letters of endorsement of the amendment or modification from the other Member States; and
(i) The endorsement by the AIA Council, the Supplementary Note and the amended or modified reservation of the Modifying Member State shall be deposited with the ASEAN Secretariat, who shall promptly furnish certified copies thereof to each Member State.
3. The provisions set forth in paragraph 2 aboveshall apply, mutatis mutandis, to the modification or withdrawal of commitments and reservations under sub-paragraph 1(c) with the additional procedures as follows:
(a) Within 30 days from the date of receipt of the Notification for modification or withdrawal, any Member State who considers its interest affected shall communicate in writing to the Modifying Member State its intent to engage in consultations or negotiations with a copy furnished to the ASEAN Secretariat. The ASEAN Secretariat shall also notify the other Member States of such intent;
(b) The Member States concerned shall negotiate with a view to reaching an agreement within 45 days from the date that the communication under sub-paragraph 3(a) was made;
(c) Upon completion of the negotiations, the Member States concerned shall make a joint report on the outcome, which may include provisions for compensatory adjustment. The Modifying Member State shall then submit such report to the CCl;
(d) After the receipt of the joint report under sub- paragraph 3(c), the CCI shall inter-sessionally within 5 days or at its next meeting, whichever is earlier, commence discussion or exchange views on improving the language of the amended or modified reservations, where appropriate, for the purpose of clarity and specificity; and
(e) Thereafter, the procedure shall continue as set out under sub-paragraphs 2(f), 2(g), 2(h) and 2(i) above.
4. The AIA Council may, at the request of a Member State, review the procedures set out in this Annex. The CCl, as directed by the AIA Council, shall undertake the review and submit its recommendations to the AIA Council. Upon the approval by the AIA Council, the procedures shall be amended."
5. Transitory Provisions
All modifications of reservations made pursuant to Article 10(1) of the ACIA and endorsed by the AIA Council at the AEM-15" AIA Council on 27 August 2012 in Siem Reap, Cambodia, shall be deemed effective from that date.
6. Final Provisions
1. This Protocol shall form an integral part of the ACIA and shall enter into force after all Member States have notified the completion of their internal procedures for the entry into force of this Protocol to, or, where necessary, deposited instruments of ratification or acceptance with, the Secretary-General of ASEAN.
2. The Secretary-General of ASEAN shall promptly notify all Member States of the notifications or deposit of each instrument of ratification or acceptance referred to in paragraph 1.
3. This Protocol shall be deposited with the Secretary- General of ASEAN, who shall promptly furnish a certified copy thereof to each Member State.
IN WITNESS WHEREOF, the undersigned, being duly authorised by their respective Governments, have signed this Protocol to Amend the ASEAN Comprehensive Investment Agreement.
Done at Nay Pyi Taw, Myanmar, this Twenty-Sixth Day of August in the Year Two Thousand and Fourteen, in a single original copy in the English language.
For Brunei Darussalam:
LIM JOCK SENG
Second Minister of Foreign Affairs and Trade
For the Kingdom of Cambodia:
SUN CHANTHOL
Senior Minister, Minister of Commerce Vice Chairman of the Council for the Development of Cambodia
For the Republic of Indonesia:
MUHAMMAD LUTFI
Minister of Trade
For the Lao People's Democratic Republic:
KHEMMANI PHOLSENA
Minister of Industry and Commerce
For Malaysia:
MUSTAPA MOHAMED
Minister of International Trade and Industry
For the Republic of the Union of Myanmar:
KAN ZAW
Union Minister for National Planning and Economic Development
For the Republic of the Philippines:
GREGORY L. DOMINGO
Secretary of Trade and Industry
For the Republic of Singapore:
LIM HNG KIANG
Minister for Trade and Industry
For the Kingdom of Thailand:
CHUTIMA BUNYAPRAPHASARA
Permanent Secretary Acting for the Minister of Commerce
For the Socialist Republic of Viet Nam:
VU HUY HOANG
Minister of Industry and Trade
Appendix 1. Template for notification
| NOTIFICATION TO AMEND OR MODIFY THE ACIA RESERVATION LIST |
| Modifying Member State: |
| Date of Notification: |
| Reservation Number to be Modified: |
| Sector and/or Subsector to be Modified: |
| Type or Nature of Modification: |
| Rationale for Modification: |
| Source of Measure (copy may be provided): |
Appendix 2. Supplementary note
Country xxxx/RL no: xx /Rev. xx
Date/Month/Year: [xx/xx/oon]
COUNTRY: XXXX
Schedule of ACIA
Supplement 1
(This is authentic in English only)
This text replaces ACIA Reservation List No. X, XX and XXX of Country XXXX
(Description of the Amendment or Modification)
Attachments
Second protocol to amend the asean comprehensive investment agreement
The Governments of Brunei Darussalam, the Kingdom of Cambodia, the Republic of Indonesia, the Lao People's Democratic Republic, Malaysia, the Republic of the Union of Myanmar, the Republic of the Philippines, the Republic of Singapore, the Kingdom of Thailand, and the Socialist Republic of Viet Nam, Member States of the Association of Southeast Asian Nations ("ASEAN "), hereinafter collectively referred to as "Member States" or singularly as "Member State"
RECALLING the ASEAN Comprehensive Investment Agreement (hereinafter referred to as the "ACIA") signed on 26 February 2009 and which entered into force on 29 March 2012, which aims to create a free and open investment regime in ASEAN in order to achieve the end goal of economic integration under the ASEAN Economic Community ("AEC");
RECOGNISING the different regimes of each Member State on the treatment of permanent residents under the ACIA;
CONSIDERING the developments on the World Trade Organization ("WTO") membership of Member States and the outcome of the joint assessment on performance requirements pursuant to Article 7 (Prohibition of Performance Requirements) of ACIA;
RECALLING the decisions made during the ASEAN Economic Ministers -181h ASEAN Investment Area Council Meeting on 22 August 2015 in Kuala Lumpur, Malaysia on the treatment of permanent residents and Prohibition of Performance Requirements under the ACIA built-in agenda; and
NOTING that Article 46 (Amendments) of the ACIA provides that the provisions of the ACIA may be modified through amendments mutually agreed upon in writing by the Member States,
HAVE AGREED AS FOLLOWS:
1. Amendment to the Definition of 'natural Person'
1. Subparagraph (g) of Article 4 (Definitions) shall be replaced as follows:
"(g) "natural person" means a natural person who under the law of that Member State:
(i) is a national or citizen of that Member State; or
(ii) has the right of permanent residence in that Member State, where both that Member State and the Member State in which the person is making or has made an investment recognise permanent residents and accord substantially the same treatment to their respective permanent residents as they accord to their respective nationals in respect of measures affecting investment."
2. Pursuant to the amendment of the definition of "natural person" as in paragraph 1, paragraph 6 of the ACIA Headnote for the List of Reservations shall be deleted.
3. Succeeding paragraphs in the ACIA Headnote shall be renumbered accordingly.
2. Amendments to Article 7 (prohibition of Performance Requirements)'
1. Paragraph 2 shall be replaced as follows:
"2. Member States shall undertake assessment and review of their existing performance requirements and consider additional commitments under this Article, as the need arises."
2. Paragraph 3 as provided below shall be deleted:
"3. Non-WTO Members of ASEAN shall abide by the WTO provisions in accordance with their accession commitments to the WTO."
3. Final Provisions'
1. This Protocol shall form an integral part of the ACIA and shall enter into force after all Member States have notified the completion of their respective internal procedures for the entry into force of this Protocol to, or, where necessary, deposited instruments of ratification or acceptance with, the Secretary-General of ASEAN.
2. The Secretary-General of ASEAN shall promptly notify all Member States of the notifications or deposit of each instrument of ratification or acceptance referred to in paragraph 1.
3. This Protocol shall be deposited with the Secretary General of ASEAN, who shall promptly furnish a certified copy thereof to each Member State.
IN WITNESS WHEREOF, the undersigned, being duly authorised by their respective Governments, have signed this Protocol to Amend the ASEAN Comprehensive Investment Agreement. DONE at Ha-Noi, Vietnam, this Twenty-First day of September in the Year Two Thousand and Seventeen, in a single original copy in the English language.
For Brunei Darussalam:
LIM JOCK SENG
Minister at the Prime Minister's Office and Second Minister of Foreign Affairs and Trade