CYIL vol. 10 (2019)

CYIL 10 ȍ2019Ȏ EUǧSINGAPORE INVESTMENT PROTECTION AGREEMENT IN THE LIGHT … person” or “Singapore juridical person” shall additionally have its registered office, central administration1 or principal place of business in the territory of the Union or Singapore, respectively and there is additional requirement of substantive business operations 14 business in the territory of the Union or Singapore, respectively. Investment protection Chapter two covers Investment protection. The scope applies to covered investors and covered investments (legally made, both before and after the agreement came into force). However, the investment protection does not cover the pre-establishment phase. 15 Article on Investment and Regulatory Measures reaffirms the Parties’ right to regulate 16 . This provision can be found also in other EU investment agreements (e.g. Vietnam) or chapters (e.g. CETA). The list of public policy objectives in para one is non-exhaustive. Para two explains that mere negative effect on investor’s expectations, including those related to profit does not amount to a breach of the treaty. Paras three and four to a significant extent exclude subsidies and grants from investment protection. National treatment guarantees “ to covered investors of the other Party and to their covered investments, treatment in its territory no less favourable than the treatment the Party accords, in like situations, to its own investors and their investments […]”. 17 The “in like circumstances” criterion shall secure that comparison will be made based on relevant characteristics. The article refers to relevant provisions of the FTA, in particular, the Schedule of Specific Commitments in Annex 8-A and 8-B of Chapter 8 (Services, Establishment and Electronic Commerce) of the EUSFTA 18 . This is the so-called bridging language and is important because it is a certain exception from National Treatment for the home state for adoption of measures provided they are not inconsistent with the Schedule above. As to the exceptions for national treatment, it does not apply to subsidies/ grants (including government-supported loans, guarantees, and insurance), to government procurement, audiovisual services and government authority activities 19 . The National Treatment also includes the GATS Article 14 on General Exceptions. It is important to note that there is no most favoured nation clause in the Investment Protection Agreement, unlike in CETA and EU VN Investment Protection Agreement. Standard of treatment 20 covers fair and equitable treatment, full protection and security and the umbrella clause. Fair and equitable treatment is defined as a closed list of measures or series of measures which establishes a breach of this standard 21 . This approach differs from e.g. FET clause in 15 Article 2.1. 16 Article 2.2. 17 Article 2.3. 18 Schedule of Specific Commitments in Annex 8-A and 8-B of Chapter 8 (Services, Establishment and Electronic Commerce) of the EUSFTA. 19 Article 2.1 para 3. 20 Article 2.4. 21 The following measures are a breach of FET: a) “denial of justice 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 14 The EU Party understands that the concept of “effective and continuous link” with the economy of a Member State of the Union enshrined in Article 54 of the Treaty on the Functioning of the European Union is equivalent to the concept of “substantive business operations”.

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