Bilateral investment treaty
|The examples and perspective in this article deal primarily with the United States and do not represent a worldwide view of the subject. (October 2013)|
A bilateral investment treaty (BIT) is an agreement establishing the terms and conditions for private investment by nationals and companies of one state in another state. This type of investment is called foreign direct investment (FDI). BITs are established through trade pacts. A nineteenth-century forerunner of the BIT is the friendship, commerce, and navigation treaty (FCN).
Most BITs grant investments made by an investor of one Contracting State in the territory of the other a number of guarantees, which typically include fair and equitable treatment, protection from expropriation, free transfer of means and full protection and security. The distinctive feature of many BITs is that they allow for an alternative dispute resolution mechanism, whereby an investor whose rights under the BIT have been violated could have recourse to international arbitration, often under the auspices of the ICSID (International Center for the Settlement of Investment Disputes), rather than suing the host State in its own courts.
The world's first BIT was signed on November 25, 1959 between Pakistan and Germany. There are currently more than 2500 BITs in force, involving most countries in the world. Influential capital exporting states usually negotiate BITs on the basis of their own "model" texts (such as the US model BIT).
NGOs have spoken against the use of BITs, stating that they are mostly designed to protect the foreign investors and do not take into account obligations and standards to protect the environment, labour rights, social provisions or natural resources. Moreover when such clauses are agreed upon the formulation is legally very open-ended and unpredictable.
BITs involving the U.S.
- 23x15px Albania: signed January 11, 1995, entered into force January 4, 1998
- 23x15px Argentina: signed November 14, 1991, entered into force October 20, 1994
- 23x15px Armenia: signed September 23, 1992, entered into force March 29, 1996
- 23x15px Azerbaijan: signed August 1, 1997, entered into force August 2, 2001
- 23x15px Bahrain: signed September 29, 1999, entered into force May 30, 2001
- 23x15px Bangladesh: signed March 12, 1986, entered into force July 25, 1989
- 23x15px Bolivia: signed April 17, 1998, entered into force June 6, 2001
- 23x15px Bulgaria: signed September 23, 1992, entered into force June 2, 1994
- 23x15px Cameroon: signed February 26, 1986, entered into force April 6, 1989
- 23x15px Democratic Republic of the Congo (Kinshasa): signed August 3, 1984, entered into force July 28, 1989
- 23x15px Republic of the Congo (Brazzaville): signed February 12, 1990, entered into force August 13, 1994
- 23x15px Croatia: signed July 13, 1996, entered into force June 20, 2001
- 23x15px Czech Republic: signed October 22, 1991, entered into force December 19, 1992
- 23x15px Ecuador: signed August 27, 1993, entered into force May 11, 1997
- 23x15px Egypt: signed March 11, 1986, entered into force June 27, 1992
- 23x15px Estonia: signed April 19, 1994, entered into force February 16, 1997
- 23x15px Georgia: signed March 7, 1994, entered into force August 17, 1997
- 23x15px Grenada: signed May 2, 1986, entered into force March 3, 1989
- Template:Country data Honduras: signed July 1, 1995, entered into force July 11, 2001
- Template:Country data Jamaica: signed February 4, 1994, entered into force March 7, 1997
- Template:Country data Jordan: signed July 2, 1997, entered into force June 12, 2003
- Template:Country data Kazakhstan: signed May 19, 1992, entered into force January 12, 1994
- Template:Country data Kyrgyzstan: signed January 19, 1993, entered into force January 12, 1994
- 23x15px Latvia: signed January 13, 1995, entered into force December 26, 1996
- 23x15px Lithuania: signed January 14, 1998, entered into force November 22, 2001
- 23x15px Moldova: signed April 21, 1993, entered into force November 25, 1994
- 23x15px Mongolia: signed October 6, 1994, entered into force January 1, 1997
- 23x15px Morocco: signed July 22, 1985, entered into force May 29, 1991
- 23x15px Mozambique: signed December 1, 1998, entered into force March 3, 2005
- 23x15px Panama: signed October 27, 1982, entered into force May 30, 1991. Amendment: signed June 1, 2000, entered into force May 14, 2001
- 23x15px Poland: signed March 21, 1990, entered into force August 6, 1994
- 23x15px Romania: signed May 28, 1992, entered into force January 15, 1994
- 23x15px Rwanda: signed February 19, 2008, entered into force January 1, 2012
- 23x15px Senegal: signed December 6, 1983, entered into force October 25, 1990
- 23x15px Slovakia: signed October 22, 1991, entered into force December 19, 1992
- 23x15px Sri Lanka: signed September 20, 1991, entered into force May 1, 1993
- 23x15px Trinidad and Tobago: signed September 26, 1994, entered into force December 26, 1996
- 23x15px Tunisia: signed May 15, 1990, entered into force February 7, 1993
- 23x15px Turkey: signed December 3, 1985, entered into force May 18, 1990
- 23x15px Ukraine: signed March 4, 1994, entered into force November 16, 1996
- 23x15px Uruguay: signed November 4, 2005, entered into force November 1, 2006
Not yet ratified
- 23x15px Belarus: signed January 15, 1994, not yet ratified
- 23x15px El Salvador: signed March 10, 1999, not yet ratified
- Template:Country data Haiti: signed December 13, 1983, not yet ratified by Haiti or the U.S.
- 23x15px Nicaragua: signed July 1, 1995, not yet ratified by the U.S.
- 23x15px Russia: signed June 17, 1992, not yet ratified by Russia
- 23x15px Uzbekistan: signed December 16, 1994, not yet ratified
- 23x15px Pakistan: negotiations announced September 28, 2004, began February 7, 2005
Note: Many countries that do not have BITs with the U.S. are instead covered by free trade agreements.
- See W. Michael Reisman et al.,"International Law in Comparative Perspective" (2004), p. 460.
- See Jarrod Wong, "Umbrella Clauses In Bilateral Investment Treaties: Of Breaches of Contract, Treaty Violations, and the Divide Between Developing and Developed Countries In Foreign Investment Disputes", George Mason Law Review (14 Geo. Mason L. Rev. 135) (2007).
- "International Investment", by Americo Beviglia Zampetti and Pierre Sauve, in Research Handbook in International Economic Law (E. Elgar, 2007), p215; http://www.bilaterals.org/article-print.php3?id_article=717
- See Rudolf Dolzer and Christoph Schreuer, Principles of International Investment Law, Oxford, 2008, p. 2. Also see UNCTAD, World Investment Report (2006) XVII, 26.
- http://www.ustr.gov/trade-agreements/bilateral-investment-treaties (discusses model BITs). See also INTERNATIONAL INVESTMENT INSTRUMENTS: A COMPENDIUM VOLUME XIV, 01/03/05 (UNCTAD/DITE/4(Vol.XIV)), Part II, for the Canadian model BIT.
- Protest against EU investment policy Transnational Institute
- http://tcc.export.gov/Trade_Agreements/Bilateral_Investment_Treaties/index.asp Trade Compliance Center
- Agreement on Trade Related Investment Measures (WTO agreement)
- Trade and Investment Framework Agreement (TIFA)
- United Nations Conference on Trade and Development (UNCTAD) list of all current BITs between states, with links to treaty texts.
- The Trade Compliance Center, U.S. Department of Commerce International Trade Administration - Includes links to U.S. BIT texts.
- Canadian Treaty Information
- Investment Arbitration Reporter - news site tracking disputes under investment treaties
- Investor-State LawGuide - online research tool for investment treaty arbitration
- Discover the dark side of investment Resources critiquing investment agreements for prioritising corporate profits above human rights and protection of the environment