ASEAN Comprehensive Investment Agreement

ASEAN Comprehensive Investment Agreement
Name	ASEAN Comprehensive Investment Agreement
Type	International investment agreement
Date signed	26 February 2009
Location signed	Cha-am, Thailand
Date effective	29 March 2012
Condition effective	Ratification by all 10 ASEAN member states
Signatories	Brunei, Cambodia, Indonesia, Laos, Malaysia, Myanmar, Philippines, Singapore, Thailand, Vietnam
Depositor	Secretary-General of ASEAN
Languages	English

ASEAN Comprehensive Investment Agreement is a pivotal regional treaty designed to create a free and open investment environment within Southeast Asia. It consolidates and enhances earlier investment agreements among the ASEAN member states, establishing a modern, comprehensive legal framework. The accord aims to promote foreign direct investment flows, provide robust protections for investors, and foster deeper economic integration across the ASEAN Economic Community.

Background and history

The agreement emerged from the broader agenda of the ASEAN Economic Community to establish a single market and production base. It replaced two previous, narrower pacts: the ASEAN Investment Area framework and the ASEAN Agreement for the Promotion and Protection of Investments. Negotiations were driven by the need for a unified, modern rulebook to attract investment in competition with other regions like East Asia and to support the implementation of the ASEAN Charter. The treaty was signed during the 14th ASEAN Summit held in Thailand and entered into force after ratification by all ten member states, a process completed by Myanmar in 2012.

Key provisions

Core obligations include granting national treatment and most-favoured-nation treatment to covered investors at both pre- and post-establishment phases. The treaty mandates fair and equitable treatment and full protection and security for investments, drawing from principles in other major agreements like the North American Free Trade Agreement. It includes strong provisions against direct and indirect expropriation without adequate compensation. Furthermore, it guarantees the free transfer of funds related to an investment, such as capital, profits, and proceeds from sales, through freely usable currencies as defined by the International Monetary Fund.

Scope and coverage

The agreement applies to investments made by investors of any ASEAN member state in the territory of any other member state. It adopts an asset-based definition of "investment," encompassing a broad range of assets including equity, debt instruments, intellectual property rights, and concessions. Coverage extends to investments in all sectors, though parties may list temporary reservations in schedules attached to the treaty. Certain sensitive areas, such as taxation measures and government procurement, are generally excluded from its disciplines, similar to carve-outs found in agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.

Investor-state dispute settlement

The treaty establishes a mechanism for investor-state arbitration, allowing foreign investors to bring claims directly against a host state for alleged treaty breaches. Procedures are largely modeled on rules from the International Centre for Settlement of Investment Disputes and the United Nations Commission on International Trade Law. Before initiating arbitration, parties must engage in mandatory consultations and negotiations. Arbitral tribunals constituted under the agreement can award monetary damages and restitution of property, but not orders for a state to change its domestic laws, a feature common in many bilateral investment treaties.

Relationship with other agreements

The agreement is a cornerstone of the investment pillar within the ASEAN Economic Community Blueprint. It coexists with a network of existing bilateral investment treaties among ASEAN members and with external partners like China, Japan, and South Korea under the ASEAN+3 framework. Its provisions are intended to be consistent with and supportive of broader regional initiatives, including the Regional Comprehensive Economic Partnership. The treaty also acknowledges that nothing in it shall derogate from the obligations of member states under other international agreements, such as those of the World Trade Organization.

Implementation and impact

Implementation is overseen by the ASEAN Coordinating Committee on Investment and the ASEAN Secretariat. The agreement has contributed to a more predictable and transparent investment regime within the region, complementing other integration efforts like the ASEAN Free Trade Area. While quantifying its direct impact is complex, it is seen as a key factor in strengthening Southeast Asia's appeal as an investment destination, particularly for intra-ASEAN investment flows. The framework continues to evolve through periodic reviews, with discussions often informed by global developments in investment law and the practices of forums like the Organisation for Economic Co-operation and Development.

Category:ASEAN treaties Category:International investment agreements Category:2009 in economics Category:2009 in Southeast Asia