The Government of the Republic of Korea
Attachments
Footnotes
Expropiation
The Parties confirm that share the following criteria:
1. An action or series of actions by a party cannot constitute an expropriation unless it interferes with a tangible or intangible property right in an investment.
2. Article 5 addresses two situations. the first is the
Where an expropriation, direct investment is expropriated or nationalized otherwise directly through the transfer of title or total confiscation.
3. The second situation is covered by article 5
Indirect expropriation, where an action or series of actions by a Party has an effect equivalent to expropriation without direct
Formal transfer of title or total confiscation.
(a) The determination of whether an action or by a series of actions
In particular situation constitutes an indirect expropriation requires a case by case analysis based on facts, where they consider all relevant factors relating to the
Investment, including the following:
(i) The economic impact of the Government Action although the fact that an action or series of actions by a Party has an adverse effect on the economic value of an investment alone does not establish that an indirect expropriation has occurred.
(ii) The extent to which the Government Action interferes with reasonable expectations and private investment; and 2 2
(iii) The character of the government action, including its objectives and context. relevant considerations could include whether the Government Action imposes a special sacrifice on the particular investor or investment that exceeds what should be expected that an investor or bear an investment in the public interest.
(b) Except in special cases, such as when an action or a series of actions is extremely severe or disproportionate in light of its purpose or effect, non-discriminatory regulatory actions by a Party that are designed and applied to protect legitimate public welfare objectives, such as public health, safety, environmental, price stabilization of immovable property (for example through measures to improve the conditions of housing for low-income households) do not constitute indirect expropriations 3
For greater certainty, if the expectation of Investment of the investor are reasonable depends on the nature and scope of governmental regulation in the sector concerned. for example, of an investor expectations that regulations shall not be modified would least reasonable in a sector more tightly regulated in a less rigid regulated.
3 for greater certainty, the list of "legitimate objectives of public interest" in subparagraph (b) is not exhaustive.