Title
AGREEMENT BETWEEN CANADA AND _________________FOR THE PROMOTION AND PROTECTION OF INVESTMENTS
Preamble
Canada and (the "Parties"),
Recognizing that the promotion and the protection of investments of investors of one Party in the territory of the other Party 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, as well as the importance of preserving the Party's right to regulate in the public interest;
Have agreed as follows:
Body
Section A. Definitions
Article 1. Definitions
“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 Party;
“authorization procedures” means administrative or procedural rules that must be adhered to in order to obtain, amend or renew an authorization;
“central level of government” means:
(a) for Canada, the Government of Canada; and
(b) for __________, the government of ___;
“claimant” means an investor of a Party that makes a claim under Article 27 (Submission of a Claim to Arbitration);
“competent authority” means any government of a Party, or non-governmental body in the exercise of powers delegated by any government of a Party, that grants an authorization;
“confidential information” means confidential business information or information that is privileged or otherwise protected from disclosure under the law of a Party;
“covered investment” means, with respect to a Party, an investment:
(a) in its territory;
(b) made in accordance with the applicable domestic law of the Party at the time the investment is made;
(c) directly or indirectly owned or controlled by an investor of the other Party; and
(d) existing on the date of entry into force of this Agreement, or made or acquired thereafter;
“disputing parties” means the claimant and the respondent Party;
“disputing party” means either the claimant or the respondent Party;
“enterprise” means an entity constituted or organized under applicable law, whether or not for profit, whether privately owned or governmentally 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 of entry into force of this Agreement;
“financial institution” means a financial intermediary or other enterprise that is authorized to do business and regulated or supervised as a financial institution under the law of the Party in whose territory it is located;
“financial service” means a service of a financial nature, including insurance, and a service incidental or auxiliary to a service of a financial nature;
“ICSID” means the International Centre for Settlement of Investment Disputes established by the ICSID Convention;
“ICSID Additional Facility Rules” means the Rules Governing the Additional Facility for the Administration of Proceedings by the Secretariat of the International Center for Settlement of Investment Disputes, in their most recent form;
“ICSID Convention” means the Convention on the Settlement of Investment Disputes between States and Nationals of other States done at Washington, D.C. on March 18, 1965;
“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;
“Inter-American Convention” means Inter-American Convention on International Commercial Arbitration done at Panama on January 30, 1975;
“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 Party 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 Party, 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;
(b) in each case shall involve the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk; and
(c) for the purpose of this definition, “investment” does not mean:
(i) a claim to money that arises solely from:
(A) commercial contract for the sale of a good or service by a national or enterprise in the territory of a Party to an enterprise in the territory of the other Party, 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 a Party” means a Party, or a national or an enterprise of a Party, that seeks to make, is making or has made an investment. For the purpose of this definition, “enterprise of a Party” means:
(a) an enterprise that is constituted or organized under the law of that Party and that has substantial business activities in the territory of that Party. A determination of whether an enterprise has substantial business activities in the territory of a Party requires a case-by-case, fact-based inquiry; or
(b) an enterprise that is constituted or organised under the law of that Party, and is directly or indirectly owned or controlled by a national of that Party or by an enterprise mentioned under subparagraph (a);
“measure” includes a law, regulation, procedure, requirement or practice;
“national” means:
(a) for Canada, a natural person who is a citizen or permanent resident of Canada; and
(b) for __________,
except that:
(c) a natural person who is a dual citizen of Canada and __________ shall be deemed to be exclusively a national of the Party of his or her dominant and effective nationality; and
(d) a natural person who is a citizen of one Party and a permanent resident of the other Party shall be deemed to be exclusively a national of the Party of his or her citizenship;
“New York Convention” means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on June 10, 1958;
“person” means a natural person or an enterprise;
“respondent Party” means a Party against which a claim is made under Article 27 (Submission of a Claim to Arbitration);
“regional level of government” means:
(a) for Canada, a provincial or territorial government; and
(b) for ____________, ____________;
“tax convention” means a convention for the avoidance of double taxation or other international taxation agreement or arrangement;
“territory” means:
(a) for Canada:
(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 its domestic law and consistent with international law; and
(b) for ____________: ____________;
“third party funding” means any funding or other equivalent support provided by a person who is not a disputing party in order to finance part or all of the cost of the proceedings including through a donation or grant, or in return for remuneration dependent on the outcome of the dispute;
“Tribunal” means an arbitration tribunal established under Section E (Investor-State Dispute Settlement) or Section F (Expedited Arbitration);
“TRIPS Agreement” means the Agreement on Trade-Related Aspects of Intellectual Property Rights, Annex 1C of the WTO Agreement;
“UNCITRAL Arbitration Rules” means the arbitration rules of the United Nations Commission on International Trade Law, in their most recent form;
“UNCITRAL Transparency Rules” means the UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration, in their most recent form;
“Vienna Convention on the Law of Treaties” means the Vienna Convention on the Law of Treaties done at Vienna on May 23, 1969; and
“WTO Agreement” means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on April 15, 1994.
Section B. Investment Protections
Article 2. Scope
1. This Agreement applies to measures adopted or maintained by a Party relating to:
(a) an investor of the other Party;
(b) a covered investment; and
(c) with respect to Article 4 (Non-Derogation), Article 12 (Performance Requirements), and Article 16 (Responsible Business Conduct), an investment in its territory.
2. A Party's obligations under this Agreement applies to measures adopted or maintained by:
(a) the central, regional or other governments of that Party; and
(b) any person, including a state enterprise or any other body, when it exercises any governmental authority delegated to it by central, regional or other governments of that Party.
3. This Agreement does not bind a Party in relation to an act or fact that took place or a situation that ceased to exist before the date of entry into force of this Agreement for that Party.
Article 3. Right to Regulate
The Parties reaffirm the right of each Party to regulate within its territory to achieve legitimate 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.
Article 4. Non-Derogation
The Parties recognize that it is not appropriate to encourage investment by relaxing domestic measures relating to health, safety, the environment, other regulatory objectives, or the rights of Indigenous peoples. Accordingly, no Party shall relax, waive or otherwise derogate from, or offer to relax, waive or otherwise derogate from, such measures in order to encourage the establishment, acquisition, expansion or management of the investment of an investor in its territory. If a Party considers that the other Party has offered such an encouragement, it may request consultations with the other Party and the two Parties shall consult with a view to avoiding the encouragement.
Article 5. National Treatment
1. Each Party shall accord to an investor of the other Party treatment no less favourable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of an investment in its territory.
2. Each Party shall accord to a covered investment treatment no less favourable than that it accords, in like circumstances, to investments of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of an investment in its territory.
3. The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a government other than at the central level, treatment accorded, in like circumstances, by that government to investors, and to investments of investors, of the Party of which it forms a part.
4. Whether treatment is accorded in like circumstances depends 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. Paragraphs 1 and 2 prohibit discrimination based on nationality. A difference in treatment accorded to an investor or covered investment and a Party's own investors or investments of its own investors does not, in and of itself, establish discrimination based on nationality.
Article 6. Most-Favoured-Nation Treatment
1. Each Party shall accord to an investor of the other Party treatment no less favourable than that it accords, in like circumstances, to investors of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of an investment in its territory.
2. Each Party shall accord to a covered investment treatment no less favourable than that it accords, in like circumstances, to investments of investors of a non-Party with respect to the establishment, acquisition, expansion, management, conduct, operation and sale or other disposition of an investment in its territory.
3. The treatment accorded by a Party under paragraphs 1 and 2 means, with respect to a government other than at the central level, treatment accorded, in like circumstances, by that government to investors, and to investments of investors, of a non-Party.
4. Whether treatment is accorded in like circumstances depends 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. Paragraphs 1 and 2 prohibit discrimination based on nationality. A difference in treatment accorded to an investor or covered investment and a non-Party's investors or investments of a non-Party's investors does not, in and of itself, establish discrimination based on nationality.
6. The "treatment" referred to in paragraphs 1 and 2 does not include procedures for the resolution of investment disputes between investors and States provided for in other international investment treaties and other trade agreements.
7. Substantive obligations in other international investment treaties and other trade agreements do not in themselves constitute "treatment", and thus cannot give rise to a breach of this Article, absent measures adopted or maintained by a Party pursuant to those obligations.
Article 7. Treatment In Case of Armed Conflict, Civil Strife or Natural Disaster
1. Notwithstanding Article 21(6)(b) (Non-Conforming Measures), each Party shall accord to an investor of the other Party and to a covered investment treatment no less favourable than it accords to its own investors or investments, or to the investors or investments of a non-Party, whichever is more favourable to the investors or investments concerned, with respect to measures it adopts or maintains relating to restitution, indemnification, compensation or other settlement for losses incurred by investments in its territory as a result of armed conflict, civil strife, or a natural disaster.
2. Notwithstanding paragraph 1, if an investor of a Party, ina situation referred to in paragraph 1, suffers a loss in the territory of the other Party resulting from:
(a) requisitioning of its covered investment or part thereof by the latter's forces or authorities; or
(b) destruction of its covered investment or part thereof by the latter's forces or authorities, which was not required by the necessity of the situation;
the latter Party shall provide the investor restitution, compensation or both, as appropriate, for that loss.
3. Paragraph 1 shall not apply to an existing subsidy or grant provided by a Party, including a government supported loan, a guarantee, or insurance that would be inconsistent with Article 5 (National Treatment) but for Article 21(6)(b) (Non- Conforming Measures).
Article 8. Minimum Standard of Treatment
1. Each Party shall accord in its territory to a covered investment of the other Party and to an investor with respect to their covered investment treatment in accordance with the customary international law minimum standard of treatment of aliens. A Party breaches this obligation only if a measure 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) or
(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. A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article.
3. The fact that a measure breaches domestic law does not establish a breach of this Article.
Article 9. Expropriation
1. No Party shall expropriate a covered investment either directly or indirectly, 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 paragraph 5.
2. A direct expropriation under paragraph 1 occurs only when a covered investment is taken by a Party through formal transfer of title or outright seizure.
3. An indirect expropriation under paragraph 1 may occur when a measure or a series of measures of a Party has an effect equivalent to direct expropriation without formal transfer of title or outright seizure. A non-discriminatory measure of a Party that is adopted and maintained in good faith to protect legitimate public welfare objectives, such as health, safety and the environment, does not constitute indirect expropriation, even if it has an effect equivalent to direct expropriation. The determination of whether a measure or a series of measures of a Party has an effect equivalent to direct expropriation requires a case-by-case, fact-based inquiry that shall consider:
(a) the economic impact of the measure or the series of measures, although the sole fact that a measure or a series of measures of a Party has an adverse effect on the economic value of a covered investment does not establish that an indirect expropriation has occurred;
(b) the duration of the measure or series of measures of a Party;
(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 a Party cannot violate this Article unless it expropriates a covered investment that is a tangible or intangible property right under the domestic law of the Party in which the investment was made. This determination requires the consideration of relevant factors, such as the nature and scope of the tangible or intangible property right under the applicable domestic law of the Party in which the investment was made.
5. The compensation referred to in paragraph 1 shall:
(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 includes 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;