Title
INVESTMENT PROTECTION AGREEMENT BETWEEN THE EUROPEAN UNION AND ITS MEMBER STATES, OF THE ONE PART, AND THE REPUBLIC OF SINGAPORE, OF THE OTHER PART
Preamble
THE EUROPEAN UNION (hereinafter referred to as the "Union"),
THE KINGDOM OF BELGIUM,
THE REPUBLIC OF BULGARIA,
THE CZECH REPUBLIC,
THE KINGDOM OF DENMARK,
THE FEDERAL REPUBLIC OF GERMANY,
THE REPUBLIC OF ESTONIA,
IRELAND,
THE REPUBLIC OF CROATIA
THE HELLENIC REPUBLIC,
THE KINGDOM OF SPAIN,
THE FRENCH REPUBLIC,
THE ITALIAN REPUBLIC,
THE REPUBLIC OF CYPRUS,
THE REPUBLIC OF LATVIA,
THE REPUBLIC OF LITHUANIA,
THE GRAND DUCHY OF LUXEMBURG,
HUNGARY,
THE REPUBLIC OF MALTA,
THE KINGDOM OF THE NETHERLANDS,
THE REPUBLIC OF AUSTRIA,
THE REPUBLIC OF POLAND,
THE PORTUGUESE REPUBLIC,
ROMANIA,
THE REPUBLIC OF SLOVENIA,
THE SLOVAK REPUBLIC,
THE REPUBLIC OF FINLAND,
THE KINGDOM OF SWEDEN, and THE UNITED KINGDOM OF GREAT BRITAIN AND NORTHERN IRELAND,
of the one part, and THE REPUBLIC OF SINGAPORE (hereinafter referred to as "Singapore"),
of the other part, hereinafter jointly referred to as "the Parties",
RECOGNISING their longstanding and strong partnership based on the common principles and values reflected in the Partnership and Cooperation Agreement between the European Union and its Member States, of the one part, and the Republic of Singapore, of the other part (hereinafter referred to as "EUSPCA"), and their important economic, trade and investment relationship including as reflected in the Free Trade Agreement between the European Union and the Republic of Singapore (hereinafter referred to as "EUSFTA");
DESIRING to further strengthen their relationship as part of and in a manner coherent with their overall relations, and convinced that this Agreement will create a new climate for further development of investment between the Parties;
RECOGNISING that this Agreement will complement and promote regional economic integration efforts;
DETERMINED to strengthen their economic, trade, and investment relations in accordance with the objective of sustainable development, in its economic, social and environmental dimensions, and to promote investment in a manner mindful of high levels of environmental and labour protection and relevant internationally-recognised standards and agreements to which they are parties;
REAFFIRMING their commitment to the principles of sustainable development and transparency as reflected in the EUSFTA;
REAFFIRMING each Party's right to adopt and enforce measures necessary to pursue legitimate policy objectives such as social, environmental, security, public health and safety, promotion and protection of cultural diversity;
REAFFIRMING their commitment to the Charter of the United Nations signed in San Francisco on 26 June 1945 and having regard to the principles articulated in The Universal Declaration of Human Rights adopted by the General Assembly of the United Nations on 10 December 1948;
RECOGNISING the importance of transparency in international trade and investment to the benefit of all stakeholders;
BUILDING on their respective rights and obligations under the WTO Agreement and other multilateral, regional and bilateral agreements and arrangements to which they are party, in particular, the EUSFTA,
HAVE AGREED AS FOLLOWS:
Body
Chapter ONE. OBJECTIVE AND GENERAL DEFINITIONS
Article 1.1. Objective
The objective of this Agreement is to enhance the investment climate between the Parties in accordance with the provisions of this Agreement.
Article 1.2. Definitions
For the purposes of this Agreement:
1. "covered investment", means an investment which is owned, directly or indirectly, or controlled, directly or indirectly, by a covered investor of one Party in the territory of the other Party. (1)
"investment" means every kind of asset which has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, the assumption of risk or a certain duration. Forms that an investment may take include:
(a) tangible or intangible, movable or immovable property as well as any other property rights, such as leases, mortgages, liens, and pledges;
(b) an enterprise including a branch, shares, stocks and other forms of equity participation in an enterprise, including rights derived therefrom;
(c) bonds, debentures, and loans and other debt instruments, including rights derived therefrom;
(d) other financial assets, including derivatives, futures and options;
(e) turnkey, construction, management, production, concession, revenue-sharing, and other similar contracts;
(f) claims to money or to other assets, or to any contractual performance having an economic value;
(g) intellectual property rights (1) and goodwill; and
(h) licenses, authorisations, permits, and similar rights conferred pursuant to domestic law, including any concessions to search for, cultivate, extract or exploit natural resources. (2)
Returns that are invested shall be treated as investments and any alteration of the form in which assets are invested or reinvested shall not affect their qualification as investments.
2. "covered investor" means a natural person (3) or a juridical person of one Party that has made an investment in the territory of the other Party.
3. "natural person of a Party" means a national of Singapore, or of one of the Member States of the Union, according to their respective legislation.
4. "juridical person" means any legal entity duly constituted or otherwise organised under applicable law, whether or not for profit and whether privately-owned or governmentally-owned, including any corporation, trust, partnership, joint venture, sole proprietorship or association.
5. "Union juridical person" or "Singapore juridical person" means a juridical person set up in accordance with the law of the Union or a Member State of the Union or Singapore, respectively, and having its registered office, central administration (1) or principal place of business in the territory of the Union or Singapore, respectively. Should the juridical person have only its registered office or central administration in the territory of the Union or of Singapore, respectively, it shall not be considered as a Union juridical person or a Singapore juridical person, respectively, unless it engages in substantive business operations (2) in the territory of the Union or of Singapore, respectively.
6. "measure" means any law, regulation, procedure, requirement or practice.
7. "treatment" or "measure" (1) adopted or maintained by a Party includes those taken by:
(a) central, regional or local governments and authorities; and
(b) non-governmental bodies in the exercise of powers delegated by central, regional or local governments or authorities.
8. "returns" means all amounts yielded by or derived from an investment or reinvestment, including profits, dividends, capital gains, royalties, interests, payments in connection with intellectual property rights, payments in kind and all other lawful income.
9. "freely convertible currency" means a currency which is widely traded in international foreign exchange markets and widely used in international transactions.
10. "establishment" means:
(a) the constitution, acquisition or maintenance of a juridical person; or
(b) the creation or maintenance of a branch or representative office, with a view to establishing or maintaining lasting economic links within the territory of a Party for the purpose of performing an economic activity.
11. "economic activity" includes any activities of an economic nature except activities carried out in the exercise of governmental authority, ie., activities not carried out on a commercial basis or in competition with one or more economic operators.
12. "EU Party" means the Union or its Member States, or the Union and its Member States, within their respective areas of competence as derived from the Treaty on the European Union and the Treaty on the Functioning of the European Union.
Chapter TWO. INVESTMENT PROTECTION
Article 2.1. Scope
1. This Chapter shall apply to covered investors and covered investments made in accordance with the applicable law, whether such investments were made before or after the entry into force of this Agreement (1).
2. Notwithstanding any other provision in this Agreement, Article 2.3 (National Treatment) shall not apply to subsidies or grants provided by a Party, including government-supported loans, guarantees and insurance.
3. Article 2.3 (National Treatment) shall not apply to:
(a) the procurement by governmental agencies of goods and services purchased for governmental purposes and not with a view to commercial resale or with a view to use in the supply of goods or the supply of services for commercial sale; or
(b) audio-visual services;
(c) activities performed in the exercise of governmental authority within the respective territories of the Parties. For the purposes of this Agreement, an activity performed in the exercise of governmental authority means any activity, except an activity which is supplied on a commercial basis or in competition with one or more suppliers.
Article 2.2. Investment and Regulatory Measures
1. The Parties reaffirm their right to regulate within their territories to achieve legitimate policy objectives, such as the protection of public health, social services, public education, safety, environment or public morals, social or consumer protection privacy and data protection and the promotion and protection of cultural diversity.
2. For greater certainty, the mere fact that a Party regulates, including through a modification to its laws, in a manner which negatively affects an investment or interferes with an investor's expectations, including its expectations of profits, does not amount to a breach of an obligation under this Chapter.
3. For greater certainty, a Party's decision not to issue, renew or maintain a subsidy or grant:
(a) in the absence of any specific commitment under domestic law or contract to issue, renew, or maintain that subsidy or grant; or
(b) if the decision is made in accordance with the terms or conditions attached to the issuance, renewal or maintenance of the subsidy or grant, if any, does not constitute a breach of the provisions of this Chapter.
4. For greater certainty, nothing in this Chapter shall be construed as preventing a Party from discontinuing the granting of a subsidy (1) or requesting its reimbursement where such action has been ordered by a competent court, administrative tribunal or other competent authority (2), or requiring that Party to compensate the investor therefor.
Article 2.3. National Treatment
1. Each Party shall accord to covered investors of the other Party and to their covered investments, treatment in its territory no less favourable than the treatment it accords, in like situations, to its own investors and their investments with respect to the operation, management, conduct, maintenance, use, enjoyment and sale or other disposal of their investments.
2. Notwithstanding paragraph 1, each Party may adopt or maintain any measure with respect to the operation, management, conduct, maintenance, use, enjoyment and sale or other disposal of an establishment that is not inconsistent with commitments inscribed in its Schedule of Specific Commitments in Annex 8-A and 8-B of Chapter 8 (Services, Establishment and Electronic Commerce) of the EUSFTA respectively (1), where such measure is:
(a) a measure that is adopted on or before the entry into force of this Agreement;
(b) a measure referred to in subparagraph (a) that is being continued, replaced or amended after the entry into force of this Agreement, provided the measure is no less consistent with paragraph 1 after being continued, replaced or amended than the measure as it existed prior to its continuation, replacement or amendment; or
(c) a measure not falling within subparagraphs (a) or (b), provided it is not applied in respect of, or in a way that causes loss or damage (1) to, covered investments made in the territory of the Party before the entry into force of such measure.
3. Notwithstanding paragraphs 1 and 2, a Party may adopt or enforce measures that accord to covered investors and investments of the other Party less favourable treatment than that accorded to its own investors and their investments, in like situations, subject to the requirement that such measures are not applied in a manner which would constitute a means of arbitrary or unjustifiable discrimination against the covered investors or investments of the other Party in the territory of a Party, or is a disguised restriction on covered investments, where the measures are:
(a) necessary to protect public security, public morals or to maintain public order (1);
(b) necessary to protect human, animal or plant life or health;
(c) relating to the conservation of exhaustible natural resources if such measures are applied in conjunction with restrictions on domestic investors or investments;
(d) necessary for the protection of national treasures of artistic, historic or archaeological value;
(e) necessary to secure compliance with laws or regulations which are not inconsistent with the provisions of this Chapter including those relating to:
(i) the prevention of deceptive or fraudulent practices or to deal with the effects of a default on a contract;
(ii) the protection of the privacy of individuals in relation to the processing and dissemination of personal data and the protection of confidential of individual records and accounts;
(iii) safety;
(f) aimed at ensuring the effective or equitable (1) imposition or collection of direct taxes in respect of investors or investments of the other Party.
Article 2.4. Standard of Treatment
1. Each Party shall accord in its territory to covered investments of the other Party fair and equitable treatment (1) and full protection and security in accordance with paragraphs 2 to 6.
2. A Party breaches the obligation of fair and equitable treatment referenced in paragraph 1 if its measure or series of measures constitute:
(a) denial of justice (2) in criminal, civil and administrative proceedings;
(b) a fundamental breach of due process;
(c) manifestly arbitrary conduct;
(d) harassment, coercion, abuse of power or similar bad faith conduct.
3. In determining whether the fair and equitable treatment obligation, as set out in paragraph 2, has been breached, a Tribunal may take into account, where applicable, whether a Party made specific or unambiguous representations (1) to an investor so as to induce the investment, that created legitimate expectations of a covered investor and which were reasonably relied upon by the covered investor, but that the Party subsequently frustrated (2).
4. The Parties shall, upon request of a Party or recommendations by the Committee, review the content of the obligation to provide fair and equitable treatment, pursuant to the procedure for amendments set out in Article 4.3 (Amendments), in particular, whether treatment other than those listed in paragraph 2 can also constitute a breach of fair and equitable treatment.
5. For greater certainty, "full protection and security" only refers to a Party's obligation relating to physical security of covered investors and investments.
6. Where a Party, itself or through any entity mentioned in paragraph 7 of Article 1.2 (Definitions), had given a specific and clearly spelt out commitment in a contractual written obligation (1) towards a covered investor of the other Party with respect to the covered investor's investment or towards such covered investment, that Party shall not frustrate or undermine the said commitment through the exercise of its governmental authority (2) either:
(a) deliberately; or
(b) in a way which substantially alters the balance of rights and obligation in the contractual written obligation unless the Party provides reasonable compensation to restore the covered investor or investment to a position which it would have been in had the frustration or undermining not occurred.
7. 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.
Article 2.5. Compensation for Losses
1. Covered investors of one Party whose covered investments suffer losses owing to war or other armed conflict, revolution, a state of national emergency, revolt, insurrection or riot in the territory of the other Party shall be accorded by that Party, as regards restitution, indemnification, compensation or other settlement, treatment no less favourable than that accorded by that Party to its own investors or to the investors of any third country, whichever is more favourable to the covered investor concerned.
2. Without prejudice to paragraph 1, covered investors of a Party who, in any of the situations referred to in paragraph 1, suffer losses in the territory of the other Party resulting from:
(a) requisitioning of its covered investment or a part thereof by the other Party's armed forces or authorities; or
(b) destruction of its covered investment or a part thereof by the other Party's armed forces or authorities, which was not required by the necessity of the situation,
shall be accorded by the other Party restitution or compensation.
Article 2.6. Expropriation (1)
1. Neither Party shall directly or indirectly nationalise, expropriate or subject to measures having effect equivalent to nationalisation or expropriation (hereinafter referred to as "expropriation") the covered investments of covered investors of the other Party except:
(a) for a public purpose;