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Since the end of the twentieth century, countries around the world have worked together to build a global mechanism to carry out investment activities by international treaties on investment or international investment agreements. This article highlights Important investment protection agreements between Vietnam and other countries.
International investment agreements can be divided into 3 categories as follow:
- bilateral investment agreement (BIT). Vietnam has signed more than 60 bilateral investment promotion and protection agreements with different countries and territories globally;
- Bilateral trade agreements such as the Vietnam – Japan Economic Partnership Agreement (VJEPA), the Vietnam – Korea Free Trade Agreement (VKFTA), etc.
- multilateral agreements possessing provisions related to international investment issues such as the ASEAN Comprehensive Investment Agreement (ACIA), TPP Agreement, ASEAN-Japan Economic Partnership Agreement (AJCEP), etc.
Investment issues covered by international investment agreements often include:
- The principle of investment protection is the basic content, which always exists in all investment agreements from traditional to modern, from bilateral to multilateral. These are the basic principles of international investment law;
- committed to encouraging investment as well as opening the investment market. These commitments usually only exist in investment agreements signed in the past few years, specifically in free trade agreements such as the Vietnam Free Trade Agreement – the Asian Economic Union – EU (VN-EAEU FTA), Vietnam – EU Trade Agreement (EVFTA), TPP Agreement.
- regulations related to dispute settlement mechanism on investment issues between foreign investors and domestic investors. The above provisions in investment agreements are different.
When applying and implementing investment agreements, the primary activity that governments, investors, and arbitrators often have to answer first concerns what transactions the agreement applies to and What type of property? The scope of application of investment agreements is basically on the basis of two factors, the first is the protected “investor” and the second the protected “investment“.
For the above reason, in most of the international investment disputes up to the present time, one of the issues that cause the parties to argue from the very beginning is the arbitral tribunal has jurisdiction to resolve the dispute, or whether the investment and investor in dispute are covered by the investment agreement.
Investment protection
Most international investment agreements have defined an “investment” as an asset rather than a transaction to own an asset. With modern investment agreements, the range of assets that are considered “investments” is often much broader. In effect, these agreements introduce the concept of “investment” as “all types of assets” and continue to provide a portfolio (but an open portfolio) of asset classes that can be considered as an investment.
Investor protection
Even in the case of an asset class that can meet the conditions to be considered an investment under an investment agreement, an individual or organization cannot be protected under an investment agreement. An investor can only be protected if the individual or organization is considered an “investor” under the provisions of the investment agreement.
The next important issue is how to determine the relationship between individuals or organizations to the Contracting Party to the agreement to be protected. Investment agreements often have separate provisions on “natural persons” and “legal entities” related to investors.
The following are agreements regulating important investment protection issues between countries around the world and Vietnam.
ASEAN-India Trade in Goods Agreement (AITIG)
Possessing an important position in the heart of the ASEAN region and the Mekong region, Vietnam has always been considered an important partner in the relationship between India and ASEAN. With AITIG, the two countries will be able to increase cooperation dynamics, from trade to potential fields such as industry, oil and gas exploitation, minerals, science and technology, resource development human resources, infrastructure development, agricultural product processing, information technology, tourism, aviation, healthcare, education and especially investment.
Vietnam – Korea Free Trade Agreement (VKFTA)
The Vietnam – Korea Free Trade Agreement (VKFTA) was signed on May 5, 2015 and officially took effect on December 20, 2015. For many years, Korea has always been an important foreign investor in Vietnam. Commitments to open up the market more widely to access services and investment from Korea, as well as commitments to investment protection, ensuring the interests of investors from Korea under the VKFTA agreement will certainly become the driving force to promote investment attraction from Korea to Vietnam.
Free Trade Agreement between Vietnam and the Eurasian Economic Union (EEUV-FTA)
The Free Trade Agreement between Vietnam and the Eurasian Economic Union (including the Russian Federation, the Republic of Belarus, the Republic of Kazakhstan, the Republic of Armenia and the Kyrgyz Republic with Vietnam) was signed on 29/02. 5/2015. The agreement took effect on October 5, 2016, this agreement is the first Free Trade Agreement of the EAEU economic union with Vietnam, for this reason, Vietnamese enterprises will own many benefits when exporting or attracting investment, training human resources, renovating technology to restructure enterprises and the economy.
Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP)
The CPTPP agreement signed in Chile has created many opportunities but also brought many challenges for Vietnamese businesses. With the participation of 11 countries on both sides of the Pacific Ocean, possessing an extensive level and scope of commitment has made the business environment and conditions in the world in general and CPTPP member countries in particular changed significantly.
The signatory countries of the agreement have eliminated for each other almost all import taxes according to the roadmap, liberalized services and investment activities with the requirement to comply with the law as well as ensure the management of the host country. With the above advantages, the CPTPP has created many new business opportunities for businesses as well as improved the benefits of consumers in the countries participating in the agreement. CPTPP also helps Vietnam increase GDP by effectively attracting investment and conducting trade activities with countries participating in the CPTPP agreement.
ASL LAW is the top-tier Vietnam law firm for Anti-dumping & countervailing. If you need any advice, please contact us for further information or collaboration.
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