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LAW 1720 OF 2014
(June 25)
Official Journal No. 49.193 of 25 June 2014
CONGRESS OF THE REPUBLIC
By means of which the "Agreement between the Republic of Colombia and Japan for the Liberalization, Promotion and Investment Protection" is approved, signed in Tokyo, Japan, on 12 September 2011.
THE CONGRESS OF THE REPUBLIC
Having regard to the text of the "Agreement between the Republic of Colombia and Japan for the Liberalization, Promotion and Investment Protection" , signed in Tokyo, Japan, on September 12, 2011.
(To be transcribed: A faithful and complete photocopy of the original text of the Agreement is attached, which consists of fifty-eight (58) folios, certified by the Coordinator of the Internal Working Group of the Treaties of the International Legal Affairs of the Ministry of Foreign Affairs, a document based on the Ministry's archives.
BILL NUMBER
by means of which the "Agreement between the Republic of Colombia and Japan for the Liberalization, Promotion and Investment Protection" is approved, signed in Tokyo, Japan, on September 12, 2011.
The Congress of the Republic, having regard to the text of the "Agreement between the Republic of Colombia and Japan for the Liberalization, Promotion and Protection of Investment", in Tokyo, Japan, on 12 September. 2011.
(To be transcribed: A faithful and complete photocopy of the original text of the Agreement is attached, which consists of fifty-eight (58) folios, certified by the Coordinator of the Internal Working Group of the Treaties of the International Legal Affairs of the Ministry of Foreign Affairs, a document based on the Ministry's archives.
www.imprenta.gov.co>
THE UNDERSIGNED COORDINATOR OF THE INTERNAL WORKING GROUP OF TREATIES OF THE DIRECTORATE OF INTERNATIONAL LEGAL AFFAIRS OF THE MINISTRY OF FOREIGN RELATIONS OF THE REPUBLIC OF COLOMBIA
CERTIFIES:
That the reproduction of the text above is a faithful and complete copy of the original text of the Spanish language version of the " Agreement between the Republic of Colombia and Japan for the liberalization, promotion and protection of ", signed in Tokyo, Japan, on September 12, 2011, a document that is based on the file of the Internal Working Group of the International Legal Affairs Directorate of this Ministry.
Dada in Bogotá, D. C., at eight (8) days of the month of August of two thousand twelve (2012).
The Coordinator of the Internal Working Group of the Treaties Directorate of International Legal Affairs,
ALEJANDRA VALENCIA GARTNER.
Honorable Senators and Representatives:
On behalf of the National Government, and pursuant to items 150 numeral 16, 189 numeral 2 and 224 of the Political Constitution, we present to the honorable Congress of the Republic the bill of law by means of which the "Agreement between the Republic" of Colombia and Japan for the Liberalization, Promotion and Protection of Investment, " Tokyo, Japan, 12 September 2011.
Strengthening economic ties with Japan, the world's third largest economic power, development and technology leader is an imperative for any developed or developing economy.
The Agreement on the Promotion and Protection of Investments, which is presented for consideration by the Congress of the Republic, is an important step in strengthening the economic relations between Colombia and Japan.
This Agreement is also an important approach to the Asian Pacific, which has become one of the most dynamic poles of the world economy, the core of development and economic growth, the epicenter of trade. investment, a leader in technological advances and an important stage of economic integration and cooperation.
According to the 2011 World Investment Report, Japan is the seventh largest source of foreign direct investment globally[1].
El Tiempo] It should also be noted that the Colombian Government and Congress have been working together for several years to provide greater legal certainty and a better climate of business, so that better conditions for the domestic and foreign investment in the country. In this sense the following events are highlighted:
-- Changes have been made to the International Investment Statute (Decree number 2080 of 2000) that seek to guarantee the contribution of investments to the country's economic growth, as well as to purge the registration procedures of the investment.
In this way, control by the State is guaranteed, as well as the simplicity and clarity of the procedures that the investor must take to make their investment effective.
El Salvador] The honorable Congress of the Republic has recently approved several treaties with characteristics similar to that presented today. These treaties, mentioned below, also strengthen the conditions in Colombia to attract foreign investment:
The Agreements for the Promotion and Reciprocal Protection of Investments with China and India that are next to take effect, approved by the honorable Congress of the Republic by Laws 1462 2011 and 1449 , 2011, respectively.
Likewise, the honorable Congress approved similar agreements concluded by Colombia with Peru (the first agreement was approved via Laws 279 of 1996 and 801 of 2003; the deepened agreement was approved by Law 1342 of 2009), Spain (Law 1069 of 2006), and Switzerland (Law 1198 of 2008), as well as Free Trade Agreements that have an investment chapter, such as Those signed with the United States (Law 1143 of 2003), Chile (Law 1189 of 2008) and with Honduras, Guatemala and El Salvador-Northern Triangle-(Law 1130 2008).
The improvement of physical and legal security conditions, and the rebound in economic growth have been perceived positively by foreign investors who acknowledge Colombia's efforts to improve the investment climate, highlighting the country's favorable conditions for developing its business. The approval by the honorable Congress of the Republic and the consequent ratification of the 'Agreement between the Republic of Colombia and Japan for the Liberalization, Promotion and Protection of Investment' will promote the realization of new investments. The foreign investors of that nationality will be encouraged to stay in the country. In addition, it represents one more achievement within the entrenchment of our relations with that country with which we hope to soon begin negotiations of a state of the art trade agreement.
This paper consists of four parts. In the first, the public policy on foreign investment is exposed. In the second, the importance of foreign investment for economic development, supported by figures on foreign investment between Colombia and Japan, is highlighted. In the third, the content of the Agreement is set out and, in the fourth, the conclusions are presented.
1. PUBLIC POLICY ON INVESTMENT.
This Agreement is part of the forecasts of the National Development Plan 2010-2014 "Prosperity for All", which Chapter VII establishes, among others, that the Government will design a promotion policy aimed at facilitating investment by the National and foreign entrepreneurs in Colombia and Colombian investors abroad, and will implement a strategic agenda for the negotiation of International Investment Agreements (IAs)[2].
However, the interest in attracting foreign investment to the country is not limited to the 2010-2014 Development Plan. This is a consistent policy that dates back to the 2002-2006 Development Plan "Towards a Community State", in which the subscription of bilateral investment treaties as a public policy aimed at economic development was raised.
The positive relationship between the Investment Agreements signed with highly capital-exporting countries, such as Japan, and the increase in foreign direct investment flows into a country has been analyzed in econometric studies[3] It is possible to conclude that such agreements are not only important instruments for the country's economic development, in accordance with the National Development Plan, but also, these agreements allow to protect the domestic investments abroad.
Following these guidelines, the Superior Council of Foreign Trade, in Session No. 81 of March 27, 2007, determined the guidelines to be followed in the area of trade and investment negotiations, giving priority to the search for agreements and, as a result, the strengthening of relations with those countries that meet a number of criteria. In this prioritization, conducted for several countries, the Higher Council of Foreign Trade established Japan as a priority country, both for the subscription of International Investment Agreements and for the Trade Negotiations Agenda. established for the Government.
Consequently, the ratification of the Investment Treaty between Colombia and Japan is part of a coherent strategy to insert the country into the world economy, as it creates a favorable atmosphere for Colombian businessmen to seek new Japan's market niches and contributes to Colombia becoming an important player in the attraction of capital flows. The expected increase in foreign investment will have positive effects on economic growth and job creation.
2. IMPORTANCE OF THE AGREEMENT FOR COLOMBIA.
is foreign investment important for Colombia?
The process of economic globalization in which all countries are immersed emphasizes the importance of actively integrating the economies of the developing countries into the international economy. In turn, Foreign Direct Investment (FDI) day by day is consolidated as the most dynamic source of resources to finance the economic growth of developing countries. This is because foreign investment can contribute to the development of a country by supplementing domestic investment, increasing the tax base, strengthening trade ties and export capacity, generating technology transfers, disseminate skills and expertise and become an engine for job creation.
The foreign investor tends to introduce new and modern technologies in the least developed countries that would otherwise not be available in these economies, taking into account that, in general, one of the countries ' characteristics in development is a smaller capacity for scientific research. Also, foreign direct investment can finance the opening of markets for the export of goods and services to international markets, thus taking advantage of the comparative advantages of each country. Similarly, foreign investment helps domestic economies in job creation and employee training, as foreign investors tend to have a global reach in terms of human resources and investment. advanced knowledge in the development of their business, two aspects that they normally transfer to their branches and therefore encourage the exchange of experts and the productive training of their staff.
Possible investors before making the investment decision review the political, economic and legal factors that allow them to direct their investments to those places that offer them the best conditions. It is at this point that regulatory competition is decisive and requires the design of policies that attract foreign capital that increases the country's productivity, while maintaining constitutional and legal standards in the field of order. public, labour and environmental protection, among others.
A study by the Foundation for Education and Development called "Impact of Foreign Investment in Colombia"[4] sheds significant conclusions on the importance of foreign investment for the country, namely:
-- "Foreign direct investment in Colombia has contributed at least one percentage point of annual GDP growth on average over the past five years."
Given percentages, this means that between 2002 and 2007, growing foreign investment contributed on average by more than 1% to annual GDP growth.
Thanks to the National Government's policy on attracting foreign investment, in 2011 Colombia reported a record number of Foreign Direct Investment (FDI) reception. The total amount of foreign investment in the country reached US$ 13.234 billion, representing an increase of 91.8% over FDI flows in 2010[5]. This is the largest amount of FDI in the country's economic history and exceeds the $10.62 billion margin reported in 2008.
-- "Companies with foreign direct investment use more skilled labor."
Our country has become a regional hub and an export platform for some foreign companies in recent years. Several multinational companies (EMN) have carried out rationalization processes and have centralized their administrative, production, marketing and service (accounting, advertising, etc.) headquarters in our country.
The performance of EMNs in Colombia has defined some characteristics of the recipient companies, among which the highest utilization of skilled labor is highlighted.
Given the high degree of sophistication of EMNs, generally involved in high-complexity industrial or commercial sectors, it is often the case that they require skilled workers, with sufficient technical expertise. to meet the requirements of the economic activity developed.
-- "Companies with foreign direct investment pay higher wages."
The business survey carried out by Fedesarrollo showed that, compared to Colombian companies belonging to the same sector, multinational companies usually pay higher wages and offer better employment benefits for their employees. The reason why EMNs tend to be more efficient and productive, which would allow them to invest larger sums in human capital.
-- "Companies with foreign direct investment develop more research and development."
The contribution of FDI has resulted in increased industrialization and increased investments in public services (electrical energy, telecommunications and infrastructure), in mining (coal and ferronickel), in the hydrocarbon sector and in the financial sector.
The incidence of FDI in these sectors of high demand for capital goods has a direct impact on the country's renovation and technological upgrading. In the case of Colombia, the recent evolution of international markets with the presence of foreign investment generates great opportunities for entrepreneurs in obtaining an integrated system of production, distribution and marketing. of a globalized market for goods and services[6].
-- "Companies with foreign direct investment are more deeply rooted in the culture of social responsibility."
Social responsibility or corporate responsibility is a concept that originated in Anglo-Saxon business models. Little by little and on account of globalization, the theory of responsibility was spreading all over the world. Colombia is no exception. The arrival of Multinational Enterprises (MNCs) brings with it the implementation of models of good corporate governance, based on actions of social impact and on the involvement with the community of companies.
To the extent that corporate responsibility can change consumer behavior (who can show predilection for products from socially responsible companies), a healthy competition is created that gives added value to the companies that practice it. Thus, the corporate responsibility practiced by the EMN can have the multiplier effect of being imitated by the national companies that want to compete with the multinationals.
For the reasons outlined above, Colombia continues to focus on major efforts and resources to achieve substantial improvements in issues such as physical security, legal security, and investment climate. According to the 2012 World Bank's Doing Business report, in 2011 the country ranked within the 10 leading countries in reforms that facilitate global business and gained third place in the world. Latin America in the ranking of ease to do business, ranking 42 among 183 countries.
Why is it important to increase investment flows between Colombia and Japan? As mentioned earlier, Japan is the third world economy, surpassed only by the United States and China, a leader in development and technology. In addition, the Asian Pacific is one of the most dynamic poles of the world economy, core of development and economic growth, the epicenter of trade and investment, a leader in technological advances and important stage of integration and economic cooperation. According to the 2011 World Investment Report, Japan is the seventh largest source of investment globally[7].
However, the capital flows between Colombia and that region of the world are still small. For this reason, the government has been developing several initiatives to approach this region of the world. With this objective in mind, agreements have been negotiated and concluded with Korea, India and China and in addition to this Agreement for the Liberalization, Promotion and Protection of Investment between Colombia and Japan. this country.
According to figures provided by the Bank of the Republic of FDI during 2011, as mentioned, it reached a figure of US$ 13.234 billion, representing an increase of 91.8% against the figure recorded in 2010 (US$6,899). This figure is in line with the Latin American trend of inflow of foreign investment flows and is consistent with the government's foreign investment attraction policy.
For its part, investment from Japan in Colombia has had a growing dynamism over the years. Indeed, Japan's accumulated foreign direct investment (FDI) flow in Colombia for the period 2001 to 2011 was US$ 75.7 million.
With respect to the accumulated FDI in Colombia from Asia, between 2001 and 2011, Japan ranked among the 16 countries in that region from which FDI comes from, in the second place, with a share of 36% within the total figure Asia. that was US$ 210.5 million. Over the past five years, FDI in Colombia from Japan was concentrated, mainly in the trade and mining sectors with a share of 50 and 41%, respectively.
Now, enough has been shown about the benefits that foreign investment is making to Colombia as a capital recipient country, and it has been stated that increasing foreign direct investment is of interest to our country. However, it is not enough to stress that due to the bilateral nature of the Convention between the Republic of Colombia and Japan for the Liberalization, Promotion and Protection of Investment, Colombian investors in Japan will also enjoy the benefits and protection standards agreed between the two countries.
Colombia has been consolidating itself as an important country in terms of investments abroad. During 2011 Colombia invested US$ 8.289 billion abroad, consolidating a foreign direct foreign investment stock , accumulated between 2001 and 2011, of US$ 28.819 billion, representing a growth of the 40% compared to the figure obtained during 2010, which was US$ 20,530. These figures clearly show the potential of Colombian industry to cater for foreign markets through direct investment.
The accumulated FDI of Colombia in Japan for the period between 2001 and 2011, according to balance of payments, was US$ 2.2 million. In the order of countries that have the largest cumulative FDI amounts in Colombia abroad for 2011, Japan ranks No. 37 in the 57 countries where the country has made investments, which means that 0.01% Colombia's accumulated FDI flow abroad is in that country.
It should be said about Japanese investors in Colombia and Colombians in Japan, who in addition to the agreement gives them legal certainty for the treatment of their investments, the treatment offered by the receiving country at no time be less favourable than that granted to their own nationals.
For the arguments set forth in this document, the ratification of the Agreement on Liberalization, Promotion and Investment Protection is beneficial for our country as the economic ties between the two countries are narrowing. The United States is creating a favorable atmosphere for Colombian businessmen to seek new market niches in Japan, and a climate of security and confidence for Japanese investments is taking hold. The current situation provides an important opportunity for Colombia, through this Agreement, to promote both the entry and exit of investment flows by consolidating themselves as mechanisms that promote the economy.
Given the above, it is clear that this Agreement, and the other instruments and integration actions, will be a contribution to the dynamism and strengthening of relations between Colombia, Japan and the Asian Pacific region. The content of the Agreement will then be analysed.
The main objective sought by the states in negotiating a treaty on the promotion and mutual protection of investments (APPRI or BIT) is to establish a fair and transparent legal framework that promotes investment through the creation of an environment that protects the investor, his investment and related flows, without creating undue obstacles to investments from the other party of the treaty. In other words, it seeks to establish clear rules of play for investors from both sides, which provide protection and mutual security in the treatment of investments in the spirit of generating incentives for attracting investment. foreign.
To achieve this objective, in this instrument, commitments related to the treatment that will be given to the investor (national treatment and most favored nation treatment), the standards of responsibility assumed by the States with (a) to the investors of the other State (minimum level of treatment), the establishment of rules for the compensation of the investor in the event of expropriation, and the transfer of capital linked to the investment. In addition, clear dispute settlement procedures are established through these treaties.
It is important to note that, for a correct understanding and application of the agreement, it is necessary to clearly define who the subjects are the recipients of this (definition of investor) and what type of economic activities or transactions will be covered by the same (investment definition). Other necessary elements must also be defined to give greater clarity and effectiveness to the agreement such as the rules for its entry into force, termination and the conditions of application in time and space.
to negotiate this Agreement, the Colombian negotiators took into account the legal, economic and political peculiarities of the country, as well as the previous statements by several members of the Congress of the Republic and the Honorable Constitutional Court in relation to Agreements with similar characteristics to the present.
This is how clauses that are compatible with our Constitution were reiterated and the Honorable Constitutional Court has referred to when it has had the opportunity to review the laws approving other treaties of this very nature. In order to respect the provisions of Article 100 of the Constitution, the Treaty provides that nothing in it shall be construed as preventing a Party from adopting or maintain measures aimed at preserving public order. Likewise, it was agreed that the Parties may establish monopolies in accordance with the provisions of the Agreement, and in the case of Colombia in accordance with Article 336 of the Constitution. In the same sense, in order for the treaty to be consistent with article 58 of the Constitution it was agreed that only for reasons of public utility or social interest and according to the law can to expropriate investments, provided that it provides for the payment of an early, adequate and effective compensation.
The clauses that develop the acquired commitments are described below:
In the Preamble it is established that the Agreement aims to promote investment in order to strengthen the economic relationship between the two countries and create stable, equitable and favorable conditions for investments made by investors and the economic prosperity of both countries.
CHAPTER I
Definitions
Item 1o. Definitions.
This includes the definition of "investor", "investment", "company", "area" and "national", among others. This article incorporates into the Agreement an investment definition that includes acts that are of an investment character (such as acquisition of property, shares, copyrights and intellectual property rights, among others). In addition, the minimum characteristics of an investment are considered: capital contribution, profit expectation and risk taking.
Those operations that should not be understood as protected under the agreement are excluded from this definition. These are the operations of public debt or external commercial credit (such as a credit requested by the State to a private bank), the net commercial contracts for the sale of goods and services (such as intermediation). Finally, within the definition of an investor, it is established that the agreement will not apply for investments made by persons who have dual nationality.
CHAPTER II
Investing
Article 2o. National Treatment.
The so-called "national treatment" is established, whereby the Parties undertake to treat the investments and investors of the other Party as if they have been made by nationals of the territory itself, prohibiting any type of discrimination.
Article 3o. Most Favoured Nation Deal.
This article establishes the "most favored nation" deal that a Party commits to treat investment and investors in the other Party in the same way it deals with investments and investors in a third country, which eventually have additional benefits to those granted by the Agreement.
However, the most favored nation treatment, does not apply in the matter of dispute settlement mechanisms, nor to more favorable agreements given under any area of free trade, customs unions, common markets or unions. economic, or tax issues, or Agreements to avoid double taxation.
Article 4o. Minimum Treatment Level.
The "minimum level of treatment" is established, whereby the Parties undertake to treat investors of the other Party in accordance with customary international law, including fair and equitable treatment and protection, and Full security.
The agreement states that "fair and equitable treatment" includes the obligation to ensure access to courts and administrative courts and not to deny justice in criminal, civil or administrative proceedings, according to the agreement. with the beginning of due process.
Article 5o. Performance Requirements.
The purpose of Article 5o is to exclude certain constraints on foreign investment that end up being a disincentive to their realization and affect the principle of freedom of enterprise.
It states that neither party may impose requirements in relation to the investment activities of an investor of the other Contracting Party or a non-Contracting Party such as exporting a certain percentage of the production, to achieve a certain degree of national content, to grant preferences to national products, to relate the volume of exports to that of imports, to transfer particular technologies (without prejudice to staff training obligations) or to provide exclusively in the territory of a Party the product of the investment for a specific market, among others.
There is also no similar condition for the receipt of an advantage or for it to continue to be received. In this case, the article does not prevent the requirement that in its territory the production, services, training or employment of workers be provided, facilities shall be constructed or extended or research or development carried out.
Article 6o. Discompliant Measures.
This article enshrines exceptions as regards the obligations of National Treatment, Most Favoured Nation, Senior Executives, Boards of Directors and Performance Requirements with respect to the current regulations (Annex I Disconforming Measures) and with relationship to sectors, sub-sectors or activities that may be subject to subsequent regulatory developments (Annex II Sectors or Excluded Activities). Specifically, the sectors where Colombian legislation restricts foreign investment: security and defense; and toxic waste; in addition to the maintenance of the restriction by 40% to foreign investment in television, essentially for reasons of cultural protection.
Also included are specific Disagreeable Measures for the Financial Services Sector, where the consignations to be made to orders of the offices of the judicial branch, of the National Treatment Article, are excluded from the application of the National Treatment Article. Police authorities, rubbershops, etc. Likewise, the advantages that are given to certain public entities such as Finagro, Banco Agrario, National Guarantee Fund, etc. are excluded from the National Treatment.
Article 7o. Transparency.
This article states that the Parties shall make public their rules, general application court decisions, and international agreements that are in force and concern or affect investment activities. They must also respond promptly to the specific questions of the other Party. However, it is clarified that nothing established by this article will be interpreted as requiring any of the Contracting Parties to disclose confidential information.
Article 8o. Measures against Corruption
States that the Parties shall ensure that measures and efforts are taken to prevent and combat corruption in relation to the matters covered by the Agreement.
Article 9o. Input, State, and Residency.
This article provides that each Party shall give due consideration to requests for entry, stay, and residence of nationals of the other Party who wish to enter and remain for the purpose of carrying out investment activities.
Article 10. Top Executives and Boards.
The article's first numeral prevents Parties from requiring certain nationality from natural persons to hold senior management positions in a covered investment (e.g. in a company established by a Japanese investor in Colombia).
The numeral second allows, in contrast, when it comes to a majority of persons from a Board of Directors or any committee thereof, the Party may require certain nationality or place of residence, provided that this does not undermine significantly the investor's ability to exercise control over its investment.
Article 11. Expropriation and Compensation.
This article establishes as requirements for the origin of the expropriation or the direct or indirect nationalization, that the motive is of public utility or social interest; that the measure is not discriminatory; that it be carried out by means of the prompt, appropriate and effective compensation; that due process is respected and performed in accordance with the Minimum Level of Treatment.
The second part of the aforementioned article sets out the characteristics of the compensation: to be paid without delay; corresponding to the fair value of the market before the expropriation; which is not affected by the loss of value as a result of the notice of a future expropriation; and that it be liquidable and transferable. The precept also develops the interest payment and the exchange rate regulation.
Finally, the article excludes from its application the issuance of compulsory licenses within the framework of the TRIPS agreement[8].
Article 12. Treatment in Case of Content.
It states that the Parties shall grant to the investors of the other Party a treatment no less favourable than that which they give to their own investors or to investors of a non-Contracting Party, in respect of restitution, compensation, compensation or any other solution, when they have suffered loss or damage as a result of armed conflicts, revolution and insurrection, among others.
It also states that any payment as a means of solution will be effectively achievable, freely transferable and freely convertible.
Finally, paragraph 3 clarifies that in the case of subsidy-related measures the Parties shall not guarantee the granting of a treatment no less favourable than that which it grants to its own investors or to investors of a Non-Contracting Party.
Article 13. Subrogation.
With this provision, it is sought to prevent an investor who has already been compensated by an insurer against non-commercial risks, for example, political risks, to sue the State seeking compensation. Likewise, it seeks that the contracting party or the agency designated by it, has, by virtue of the subrogation, the ability to exercise the rights, to demand the claims of the investor and to assume the obligations related to the investment in the same measure that the investor.
Article 14. Transfers.
This article establishes a reciprocal framework in which all transfers are made freely and without delay. Such transfers include several detailed items, such as capital contributions, earnings, dividends, interest, royalties, technical assistance, sale or settlement of the investment, etc.
Similarly, the use of free currencies is stipulated at the exchange rate in force at the time of the transfer.
Article 15. General and Security Exceptions.
In this article, a safeguard of the State's regulatory authority is established to adopt certain measures if they comply with the requirement of not being discriminatory between investments or investors, or are not constituted in a restriction Covert to international trade or investment.
Such measures are those relating to the protection of human, animal or plant life, which ensure compliance with laws and standards that are not incompatible with the Agreement and the conservation of living and non-living natural resources. renewable; measures necessary to protect public morality or to maintain public order; measures for the prevention of deceptive and fraudulent practices; measures for the protection of individual privacy related to processing and the disclosure of personal data and the protection of confidentiality of personal records and accounts; measures imposed for the protection of national treasures of artistic, historical, archaeological or cultural value and measures deemed necessary for the protection of the essential security interests of the Parties.
Article 16. Temporary Safeguarding Measures
To respect the autonomy of the Bank of the Republic, it was agreed that in circumstances of problems or threats to the balance of payments and difficulties or threats to the macroeconomic management, transfers can be temporarily restricted.
Such restrictions must be non-discriminatory, of limited duration, in accordance with the Articles of the International Monetary Fund Agreement and promptly notified.
Article 17. Prudential
Another safeguard of the State's regulatory authority is established in the power to adopt related measures aimed at maintaining the stability of the financial system. Such measures have a preventive or prudential nature and aim to maintain the soundness and integrity of the country's financial institutions.
Article 18. Intellectual Property Rights
Since an appropriate intellectual property rights system is one of the determining incentives for investment, the agreement provides that the Parties shall promote adequate, effective and non-discriminatory protection of property rights. intellectual in accordance with this Agreement, the TRIPS Agreement of which Colombia is a party and other international agreements of which the Parties are a party.
It is further clarified that the obligations of the Parties to grant more favoured nation treatment related to the protection of intellectual property rights under international agreements in force for the Parties shall not be repealed.
Article 19. Taxation.
This article stipulates that the Treaty shall not apply in tax matters, with the exception of paragraphs 1 and 3 of Article 7o (transparency) and Article 11 (Expropriation and Compensation).
It also states that if an investor alleges that a tax measure is expropriatory or a violation of Article 7o was filed, the matter may be referred to the investor-state dispute settlement in accordance with the prescribed procedure. in the agreement.
Article 20. Joint Committee
This article establishes the creation of a Joint Committee, its functions and powers, with the purpose of carrying out the objectives of the Agreement.
Article 21. Measures on Health, Safety, Environment and Labor
Provides that Parties shall repeal or waive measures that diminish their labor standards or relax standards on health, safety or the environment that exist as an incentive for the establishment, acquisition or expansion of investments of the other Party or of a non-Contracting Party.
Additionally grants the Parties the power to adopt, maintain or execute any measures it deems appropriate to ensure that investment activities are carried out in accordance with their environmental laws.
Article 22. Denial of Benefits.
In essence, Article 22 seeks to prevent, through a kind of triangulation, the benefit of investment protection rules, investors from third countries with whom the party that denies the benefits does not maintain relations. diplomatic, or maintain measures that would be violated or mocked if the benefits of this Agreement were granted to the company or its investments.
Article 23. Special Formalities or Information Requirements.
This article clarifies that the principle of national treatment cannot be interpreted in the sense of preventing or maintaining measures that prescribe special formalities in relation to the investment activities of the investors of the the other Party, including among others, the requirement that investors be residents of the Party and provide routine information concerning such investments.
Additionally states that business information that is confidential must be protected.
CHAPTER III
Dispute Settlement between Contracting Parties
In the event of a conflict between the two Contracting States concerning the interpretation or application of the Agreement, the Agreement shall, as far as possible, be resolved through consultations. If the dispute cannot be resolved within 60 days, it may be submitted to an arbitration tribunal appointed by common agreement by the parties.
Additionally, the chapter includes an article in which the limitation of claims regarding disputes relating to financial services and with activities or services that are part of a public retirement plan is established, or of the social security system.
CHAPTER IV
Dispute Settlement between a Contracting Party and an Investor of the Other Contracting Party
This Chapter establishes the procedure to resolve disputes arising between any of the States and investors of the other State.
Overall the agreement provides that once the consultation and negotiation phases, which will have a minimum duration of six months, are exhausted, an investor may submit their differences with a Party to arbitration under the ICSID Convention, the mechanism complementary to the ICSID, the UNCITRAL rules or other ad hoc mechanism agreed by the parties to a dispute.
There will be no arbitration under this chapter under Article 7o (transparency) measures, nor those related to anti-corruption measures (Article 8) and entry, stay and residence (article 9o).
Beyond the particularities of the agreed normativity, the central point of this section is the possibility of settling a dispute between the investor and the receiving State of the investment through arbitral tribunals. international. This possibility has been recognized in past International Investment Agreements approved by the Honorable Congress and reviewed positively by the Constitutional Court.
CHAPTER V
Final Provisions
Article 42. Titles.
Clarifies that chapter titles and articles were inserted only for reference convenience.
Article 43. Application and Entry into Vigency.
It is noted that the treaty will enter into force 30 days after the Governments of the Parties notify, through diplomatic channels, the fulfillment of their respective internal procedures necessary for the entry into force.
The Agreement will remain in force for an initial period of ten years, after that period, will continue in force unless it is reported by any of the Parties.
Additionally, this article provides that the Agreement shall apply to all investors ' investments of a Party that have been legally established, acquired or expanded in the other Party, regardless of when they were established, acquired or expanded such investments.
Article 44. Amendments.
It provides that the Agreement may be amended by mutual agreement between the parties. Amendments shall be approved by the Contracting Parties in accordance with their respective internal procedures.
The Agreement that the National Government is putting to the Congress of the Republic is an important tool to stimulate the flow of reciprocal investments between Colombia and Japan. It serves as a mechanism for promoting Japan's investments in Colombia and for the protection of Colombian investments in Japan. It contributes to the generation of advantages inherent in the entry of foreign capital such as technological innovation, the transfer of knowledge, the creation of employment and the economic and social development of the country, achieving this support the process of modernization of the Colombian economy and the proper insertion of the country into the global market.
With the execution of investment promotion policies designed jointly with the Congress of the Republic, and within which this agreement is framed, Colombia is offering foreign investors, a clear message of acceptance of international standards for the protection of investments.
Congressmen, Colombia has a strategic geographic position on the continent, is a country favored by nature and we have an exceptional human resource.
However, factors of physical and legal insecurity have turned our country's foreign investment away. For this reason, progress must be made in a joint effort so that the existing foreign investment will be consolidated and promoted to future investments, as well as to protect Colombian investors who have ventured to open new markets. markets in other countries.
El Comercio] Taking into account the reasons outlined above, the National Government, through the Minister of Foreign Affairs and the Minister of Commerce, Industry and Tourism, respectfully requests the honorable Congress of the Republic to approve the Draft law through which the "Agreement between the Republic of Colombia and Japan for the Liberalization, Promotion and Protection of Investment" is approved, in Tokyo, Japan, on September 12, 2011.
Of the honorable Senators and Representatives,
The Foreign Minister,
MARIA ANGELA HOLGUIN HANG.
The Minister of Commerce, Industry and Tourism,
SERGIO DÍAZ-GRANADOS GUIDA.
EXECUTIVE BRANCH OF PUBLIC POWER
PRESIDENCY OF THE REPUBLIC
Bogotá, D. C., July 19, 2012.
Authorized. Submit to the consideration of the honorable Congress of the Republic for the constitutional effects.
(Fdo.) JUAN MANUEL SANTOS CALDERÓN
The Foreign Minister,
(Fdo.) Maria Angela Holguin Cuellar.
DECRETA:
ARTICLE 1o. Approve the "Agreement between the Republic of Colombia and Japan for the Liberalization, Promotion and Protection of Investment", signed in Tokyo, Japan, on September 12 2011.
ARTICLE 2o. In accordance with the provisions of Article 1 of Law 7ª of 1944, the " Agreement between the Republic of Colombia and Japan for the Liberalization, Promotion and Protection of Investment ", signed in Tokyo, Japan, on September 12, 2011, which, under article 1 of this law, will be approved, will force the Republic of Colombia from the date on which the international link with respect to it is perfected.
ARTICLE 3o. This law governs from the date of its publication.
Dada en Bogotá, D. C., a los
Presented to the honorable Congress of the Republic by the Minister of Foreign Affairs and the Minister of Commerce, Industry and Tourism.
The Foreign Minister,
MARIA ANGELA HOLGUIN HANG.
The Minister of Commerce, Industry and Tourism,
SERGIO DÍAZ-GRANADOS GUIDA.
(January 13)
by which the follow-up to the international conventions signed by Colombia is ordered.
The Congress of Colombia
DECRETA:
ARTICLE 1or. The National Government through the Foreign Ministry will submit annually to the Senate and Senate Foreign Relations Committees, and within the first thirty days of the legislative period, which begins every 20 years. July, a detailed report on how the existing International Conventions signed by Colombia with other States are being complied with and developed.
ARTICLE 2or. Each dependency of the National Government responsible for implementing the International Treaties of its competence and requiring reciprocity in them, will transfer the relevant information to the Ministry of Foreign Affairs and the Ministry of Foreign Affairs. Second.
ARTICLE 3or. The full text of this law shall be incorporated as an annex to any and all International Conventions that the Ministry of Foreign Affairs presents to the Congress.
ARTICLE 4or. This law governs from its enactment.
The President of the honorable Senate of the Republic,
AMYLKAR ACOSTA MEDINA.
The Secretary General of the honorable Senate of the Republic,
PEDRO PUMAREJO VEGA.
The President of the honorable House of Representatives,
CARLOS SQUIRLA BALLESTEROS.
The Secretary General of the honorable House of Representatives,
DIEGO VIVAS TAFUR.
COLOMBIA-NATIONAL GOVERNMENT
Publish and execute.
Dada en Santa Fe de Bogota, D. C., on January 13, 1998.
ERNESTO SAMPER PIZANO
The Foreign Minister,
MARIA EMMA MEJIA VELEZ.
EXECUTIVE BRANCH OF PUBLIC POWER
PRESIDENCY OF THE REPUBLIC
Bogotá, D. C., July 19, 2012.
Authorized. Submit to the consideration of the honorable Congress of the Republic for the constitutional effects.
(Fdo.) JUAN MANUEL SANTOS CALDERÓN
The Foreign Minister,
(Fdo.) Maria Angela Holguin Cuellar.
DECRETA:
ARTICLE 1o. Approve the "Agreement between the Republic of Colombia and Japan for the Liberalization, Promotion and Protection of Investment", signed in Tokyo, Japan, on September 12 2011.
ARTICLE 2o. In accordance with the provisions of Article 1 of Law 7ª of 1944, the " Agreement between the Republic of Colombia and Japan for the Liberalization, Promotion and Protection of Investment ", signed in Tokyo, Japan, on September 12, 2011, which, under article 1 of this law, will be approved, will force the Republic of Colombia from the date on which the international link with respect to it is perfected.
ARTICLE 3o. This law governs from the date of its publication.
The President of the honorable Senate of the Republic,
JOHN FERNANDO CHRIST BUSTS.
The Secretary General of the honorable Senate of the Republic,
GREGORIO ELJACH PACHECO.
The President of the honorable House of Representatives,
HERNAN PENAGOS GIRALDO.
The Secretary General of the honorable House of Representatives,
JORGE HUMBERTO MANTILLA SERRANO.
COLOMBIA-NATIONAL GOVERNMENT
Communicate and comply.
Execute, upon review of the Constitutional Court, pursuant to article 241-10 of the Political Constitution.
Dada en Bogotá, D. C., June 25, 2014.
JUAN MANUEL SANTOS CALDERÓN
The Foreign Minister,
MARIA ANGELA HOLGUIN HANG.
The Minister of Commerce, Industry and Tourism,
SANTIAGO ROJAS ARROYO.
* * *
1. UNCTAD, "World Report on Investment 2011: Non-Action for International Production and Development", p. 9.
2. National Development Plan 2010-2011, "Prosperity for All". Presidency of the Republic. National Planning Department, p. 514.
3. Salaccuse, Jeswald W.; Sullivan, Nicholas P. "Do BITs really work?: an evaluation of Bilateral Investment Treaties and their grand bargain", at Harvard International Law Journal; p. 105; Harvard University Press, Winter 2005. See also UNCTAD, "Bilateral Investment Treaties in the mid-1990s", UN Doc.; UNCTAD/ITE/IIT/IIA/7, page 110, (1998).
4. FEDEVELOPMENT. "Impact of Foreign Investment in Colombia" December 2007. www.fedesarrollo.org.co/wp-content/uploads/2011/08/Impacto-de-la-inversi%C3%B3n-extranjera-en-Colombia- Report-Final-Proexport-Dec-de-2007-_.pdf
5. Source: Bank of the Republic. For 2011, foreign investment in the oil sector was US$ 5.083 million, with an increase of 82.3% compared to the previous year, followed by the mining and quarrying sector to which $2.621 billion was entered. These two sectors accounted for 58.2% of total FDI.
The trade sector restaurants and hotels with US$ 2,264 ranked third in importance.
6. In 2004 the UNCTAD, in the "World Report on Investment 2004: The Turn to Services", mentioned that foreign investment was experiencing a shift to the market for services.
7. UNCTAD, "World Report on Investment 2011: Non-Action for International Production and Development", p. 9.
8. The exclusivity inherent in most intellectual property rights gives the holder the legal power to prevent third parties from using, producing or marketing the invention, sign or job protected. That power is not absolute. Article 30 of the TRIPS allows you to set exceptions, which are regulated by article 31 of the same agreement and include licenses mandatory.
The granting and effective exploitation of a compulsory license may limit the economic benefits that the patent holder can obtain. It is therefore necessary to express that the granting of a compulsory licence cannot be the subject of claims for expropriation.
