Title
AGREEMENT BETWEEN THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE UNITED ARAB EMIRATES FOR THE PROMOTION AND PROTECTION OF INVESTMENTS
Preamble
THE GOVERNMENT OF CANADA AND THE GOVERNMENT OF THE UNITED ARAB EMIRATES (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 cooperation between them, and to the promotion of sustainable development;
REAFFIRMING the importance of encouraging investment promotion activities and to make such activities more accessible and diverse, including encouraging investments by women, Indigenous peoples, youth, and micro, small, or medium-sized enterprises,
HAVE AGREED as follows:
Body
Section A. Definitions
Article 1. Definitions
For the purposes of this Agreement:
“algorithm” means a defined sequence of steps, taken to solve a problem or to obtain a result;
“authorization” means the granting of permission by a competent authority to a person with respect to the expansion, management, conduct, operation and sale or other disposition of an investment in the territory of a Party;
“claimant” means an investor of a Party that makes a claim under Article 26 (Submission of a Claim to Dispute Settlement);
“competition authority” means:
(a) for Canada, the Commissioner of Competition or a successor to be notified to the United Arab Emirates by diplomatic note; and
(b) for the United Arab Emirates, the Undersecretary to the Ministry of Finance or a successor to be notified to Canada by diplomatic note;
“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 in its territory made in accordance with the applicable law of the Party at the time the investment is made, that is owned or controlled, directly or indirectly, by an investor of the other Party, and existing on the date of entry into force of this Agreement, as well as an investment made or acquired thereafter;
“disputing party” means either the respondent Party or the claimant;
“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” has the same meaning as subparagraph 5(a) of the Annex on Financial Services of the General Agreement on Trade in Services, contained in Annex 1B to the WTO Agreement;
“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 18 March 1965, as amended;
“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 every kind of asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, which includes characteristics such as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Forms that an investment may take include:
(a) an enterprise;
(b) shares, stocks, and other forms of equity participation in an enterprise;
(c) bonds, debentures, and other debt instruments of an enterprise;
(d) a loan to an enterprise;
(e) any other kind of interest in an enterprise;
(f) an interest arising from:
(i) a concession conferred pursuant to the law of a Party or under a contract, excluding those for the exploration and exploitation of natural resources; (1)
(ii) a turnkey, construction, production, or revenue-sharing contract; or
(iii) other similar contracts;
(g) intellectual property rights;
(h) other moveable property, tangible or intangible, or immovable property and related rights;
(i) claims to money or claims to performance under a contract;
For greater certainty, “claims to money” does not include:
(a) claims to money that arise solely from commercial contracts for the sale of goods or services by a natural person or enterprise in the territory of a Party to a natural person or enterprise in the territory of the other Party;
(b) the domestic financing of such contracts; or
(c) any order, judgment, or arbitral award related to subparagraph (a) or (b);
“investor of a Party” means a Party, or a national or an enterprise of a Party, that has made an investment. For the purposes of this definition the “enterprise of a Party” means:
(a) an enterprise constituted or organised 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 and 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 the United Arab Emirates, a natural person having the nationality according to the domestic law of the United Arab Emirates;
“national government” means:
(a) for Canada, the federal government; and
(b) for the United Arab Emirates, the federal government of the United Arab Emirates;
“New York Convention” means the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, done at New York on 10 June 1958;
“person” means a natural person or an enterprise;
“respondent Party” means a Party against which a claim is made under Section E (Settlement of Disputes between a Party and an Investor of the Other Party) or Section G (State-to-State Dispute Settlement Procedures);
“sub-national government” means:
(a) for Canada, a provincial, territorial, or other government; and
(b) for the United Arab Emirates, an emirate or a local government;
“tax convention” means a convention for the avoidance of double taxation or other international taxation agreement or arrangement;
“territory” means:
For Canada:
(a) the land territory, internal waters, and territorial sea, including the air space above these areas, of Canada;
(b) the exclusive economic zone of Canada, as determined by its domestic law, consistent with Part V of the United Nations Convention on the Law of the Sea, done at Montego Bay on 10 December 1982 (“UNCLOS”); and
(c) the continental shelf of Canada, as determined by its domestic law, consistent with Part VI of UNCLOS; and
For the United Arab Emirates:
(a) the land territory, internal waters, and territorial sea, including the air space above these areas, which is under the sovereignty of the United Arab Emirates as well as the waters, seabed, and subsoil outside the territorial sea over which the United Arab Emirates exercises sovereign and jurisdictional rights in respect of the exploration or the exploitation of natural resources by virtue of its law consistent with international law;
“Tribunal” means an arbitration tribunal established under Section E (Settlement of Disputes between a Party and an Investor of the Other Party) or Section F (Optional Expedited Arbitration);
“TRIPS Agreement” means the Agreement on Trade-Related Aspects of Intellectual Property Rights, contained in Annex 1C to 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; and
“WTO Agreement” means the Marrakesh Agreement Establishing the World Trade Organization, done at Marrakesh on 15 April 1994.
Section B. Substantive Obligations
Article 2. Scope
1. This Agreement shall apply 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 10 (Performance Requirements), Article 16 (Non-Derogation), and Article 17 (Corporate Social Responsibility), an investment in its territory.
2. The obligations in Section B (Substantive Obligations) apply to a person of a Party when it exercises a regulatory, administrative, or other governmental authority delegated to it by that Party.
3. For greater certainty, the establishment or acquisition of an investment is excluded from the scope of this Agreement.
4. For the purposes of this Agreement, 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.
5. For greater certainty, the mere fact that a Party regulates, including through a modification to its laws, in a manner which negatively affects a covered investment or interferes with an investor’s expectations, including its expectations of profits, does not in itself amount to a breach of an obligation under this Agreement.
6. For greater certainty, this Agreement shall 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.
Article 3. Promotion of Investment
Each Party shall encourage the creation of favourable conditions for investment in its territory by investors of the other Party. Each Party shall admit those investments in accordance with this Agreement.
Article 4. Special Formalities and Information Requirements
1. Nothing in Article 5 (National Treatment) shall be construed to prevent a Party from adopting or maintaining a measure that prescribes special formalities in connection with covered investments, such as a requirement that investors be residents of the Party or that covered investments be legally constituted under the laws or regulations of the Party, provided that these formalities do not materially impair the protections afforded by the Party to investors of the other Party and covered investments pursuant to this Agreement.
2. Notwithstanding Article 5 (National Treatment) and Article 6 (Most-Favoured-Nation Treatment), a Party may require an investor of the other Party or its covered investment to provide information concerning that investment solely for informational or statistical purposes. The Party shall protect such information that is confidential from any disclosure that would prejudice the competitive position of the investor or its covered investment. Nothing in this paragraph shall be construed to prevent a Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application of its law.
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 expansion, management, conduct, operation, enjoyment, 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 expansion, management, conduct, operation, enjoyment, 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 sub-national government, treatment no less favourable than the most favourable treatment accorded, in like circumstances, by that sub-national government to investors and to investments of investors of the Party of which it forms a part.
4. For greater certainty, 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 expansion, management, conduct, operation, enjoyment, 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 expansion, management, conduct, operation, enjoyment, 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 sub-national government, treatment accorded, in like circumstances, by that sub-national government to investors and to investments of investors of a non-Party.
4. For greater certainty, 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. For greater certainty, the “treatment” referred in paragraphs 1 and 2 does not include investor-to-state dispute settlement procedures provided for in other international investment treaties and other trade agreements. 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 by a Party pursuant to those obligations.
Article 7. Minimum Standard of Treatment (2)
1. Each Party shall accord to covered investments treatment in accordance with applicable customary international law principles, including fair and equitable treatment and full protection and security.
2. For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens as the standard of treatment to be afforded to covered investments. The concepts of “fair and equitable treatment” and “full protection and security” do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights. The obligation in paragraph 1 to provide:
(a) “fair and equitable treatment” includes the obligation not to deny justice in criminal, civil or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world; and
(b) “full protection and security” requires each Party to provide the level of police protection required under customary international law. (3)
3. 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.
4. The fact that a measure breaches domestic law does not establish a breach of this Article.
Article 8. Compensation for Losses
With respect to measures a Party adopts or maintains relating to compensation for losses incurred by investments in its territory as a result of armed conflict, civil strife, or a natural disaster, notwithstanding Article 21(6)(b)(Non-Conforming Measures), the 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 their investments or to the investors or investments of a non-Party, whichever is more favourable to the investor or covered investment concerned, as regards to restitution, indemnification, compensation, or other settlement.
Article 9. Senior Management, Boards of Directors, and Entry of Personnel
1. A Party shall not require that an enterprise of that Party that is a covered investment appoint to a senior management position an individual of any particular nationality.
2. A Party may require that a majority of the board of directors or a committee thereof of an enterprise of that Party that is a covered investment be of a particular nationality or resident in the territory of the Party, provided that the requirement does not materially impair the ability of the investor to exercise control over its investment.
3. A Party may require enterprises operating within their territory or subject to their jurisdiction to nominate women in senior management positions or on boards of directors.
4. Subject to its domestic law relating to the entry of aliens, each Party may grant temporary entry to nationals employed by an investor of the other Party who seek to render to a covered investment of that investor in the territory of the Party managerial or executive services, or services that require specialized knowledge.
Article 10. Performance Requirements
1. A Party shall not impose or enforce the following requirements, or enforce a commitment or undertaking, in connection with the expansion, management, conduct, operation, enjoyment, or sale or other disposition of a covered investment or any other investment in its territory:
(a) to export a given level or percentage of a good or service;
(b) to achieve a given level or percentage of domestic content;
(c) to purchase, use, or accord a preference to a good produced or service provided in its territory, or to purchase a good or service from a person in its territory;
(d) to relate the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with that investment;
(e) to restrict sales of a good or service in its territory that the investment produces or provides by relating those sales to the volume or value of its exports or foreign exchange earnings;
(f) to transfer technology, a production process, source code of software, or other proprietary knowledge to a person in its territory;
(g) to supply exclusively from the territory of the Party a good that the investment produces or a service it provides to a specific regional market or to the world market;
(h) (i) to purchase, use, or accord a preference to, in its territory, technology of the Party or of a person of the Party, (4) or
(ii) that prevents the purchase or use of, or the according of a preference to, in its territory, a technology; or
(i) that prohibits or restricts the cross-border transfer of information by electronic means, if this transfer is related to the business of a covered investment or the business of an investor of a Party.
2. A Party shall not condition the receipt or continued receipt of an advantage, in connection with a covered investment or any other investment in its territory, on compliance with the following requirements:
(a) to achieve a given level or percentage of domestic content;
(b) to purchase, use, or accord a preference to a good produced in its territory, or to purchase a good from a producer in its territory;
(c) to relate the volume or value of imports to the volume or value of exports or to the amount of foreign exchange inflows associated with that investment; or
(d) to restrict sales of a good or service in its territory that the investment produces or provides by relating those sales to the volume or value of its exports or foreign exchange earnings.
3. In relation to paragraphs 1 and 2:
(a) paragraph 2 does not prevent a Party from conditioning the receipt or continued receipt of an advantage in connection with a covered investment or any other investment in its territory on compliance with a requirement to locate production, provide a service, train or employ workers, construct or expand particular facilities, carry out research and development, or comply with a requirement seeking to promote gender equality, in its territory;
(b) subparagraphs 1(f), and 1(h) do not apply if:
(i) the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal, or competition authority to remedy an alleged violation of domestic competition law, or
(ii) a Party authorizes the use of an intellectual property right in accordance with Article 31 (5) of the TRIPS Agreement or a measure requires the disclosure of proprietary information that falls within the scope of, and is consistent with, Article 39 of the TRIPS Agreement;
(c) subparagraphs 1(h) and 1(i) do not apply to a measure that a Party adopts or maintains with respect to financial institutions;
(d) subparagraphs 1(b), 1(c), 1(f), 1(h), 1(i), 2(a), and 2(b) shall not prevent a Party from adopting or maintaining a measure to achieve a legitimate public policy objective, provided that the measure:
(i) is not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination or a disguised restriction on trade, and
(ii) does not impose restrictions greater than are required to achieve the objective;
4. Paragraphs 1 and 2 do not apply to a requirement other than the requirements set out in those paragraphs.