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Transparency - A Sequel

UNCTAD Series on Issues in International Investment Agreements II

image of Transparency - A Sequel
Section I of the book contains an explanation of the concept of transparency as it is understood in the context of international investment agreements. Section II provides a review of current treaty and arbitral practice with respect to transparency issues. Section III analyses the interaction of transparency obligations with other related issues. The final section of this paper contains a series of policy options available to IIA negotiators and those involved in revising arbitral rules. In this final section, the paper also briefly discusses the implications of those options for host State development considerations so as to assist with negotiator decision-making on whether or not to include transparency provisions in IIAs, and, if so, which formulation to insert into new agreements.

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Explanation of the issue

Transparency obligations in IIAs have traditionally centred on the provision of adequate information to foreign investors to enable informed investment decisions and to enhance the predictability and stability of the on-going investment relationship between the host State and the investor. Foreign investment processes benefit from transparency on a wide range of matters, including existing laws, proposed regulatory frameworks, and government policies that may affect the investment. This includes not only those regulations that address financial matters of direct relevance to foreign investors, such as capital transfer restrictions, establishment fees, operating licences, and taxes, but also regulation of a more general nature, such as environmental, health, and social welfare law and policy. Transparency obligations incumbent on the host State also extend to due process issues. In particular, this aspect relates to governmental decision-making and the activities of administrative agencies, including the desire for transparent processes in their dealings with foreign investors. Statements by the Asia Pacific Economic Cooperation (APEC) (box 1) and the Working Group on the Relationship between Trade and Investment of the World Trade Organization (box 2) illustrate the traditional elements of transparency in the context of international trade and investment.

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