HARPERS LOOP-HOLE How do Canadian investors and investments stand to benefit from this FIPA? The treaty confers a number of important benefits on Canadian investors and their investments in China. Under the FIPA, for example, both existing and future Canadian investors are guaranteed the same treatment in China that is provided to all other foreign investors. This creates a level playing field on which Canadian investors can compete with investors from over seventy other countries that already have similar investment treaties with China in place or from the many other countries that may soon have them. Secondly, once established in China, Canadian investors will be entitled to the same treatment as domestic investors with respect to the expansion, management, conduct, operation and sale or other disposition of their investments in China. This means that Canadian companies cannot be singled out and treated less favourably than Chinese domestic investments. Thirdly, Canadian investments are protected from expropriation, nationalization or measures having the effect equivalent to expropriation or nationalization in China. The treaty states that such actions are prohibited except if there is a public purpose, under domestic due procedure of law, which is applied in a non-discriminatory manner. Furthermore, even in the event that such actions occur, a Canadian investor is guaranteed compensation at fair market value under the FIPA. Fourthly, Canadian investors will now have recourse to a new dispute resolution mechanism. While this mechanism will be described in further detail below, essentially it would allow a Canadian investor to claim damages from a breach of the FIPA, by any level of the Government of China, directly to an independent arbitration tribunal, and the tribunal would have the power to order an award of compensation to that Canadian investor.
Posted on: Wed, 17 Sep 2014 17:15:58 +0000
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