ASEAN: Regional Trends in Economic Integration, Export ... - USITC

cases of dispute, but does not provide for investor-state arbitration. The latter is
guaranteed to investors under the recently signed ACIA agreement. 62
The ASEAN Comprehensive Investment Agreement (ACIA)
Signed in February 2009, the ACIA provides enhanced investor protections as compared
with the AIA and the IGA. The agreement is organized around four pillars—
liberalization, protection, facilitation, and promotion of investment—and follows
international standards for investment protection agreements, including the U.S. Model
Bilateral Investment Treaty and the OECD Guidelines for Multinational Enterprises. 63
The ACIA applies to the same list of industries as the AIA, basically covering the entire
economy except for most services, which are covered under the AFAS, discussed below.
The ASEAN Secretariat has identified a number of ACIA provisions that mark
significant improvements in investor protections, compared with the AIA.
Comprehensive investment liberalization and protection provisions:
o Performance requirements are prohibited (Article 7). 64
o Member countries may not require investors to appoint senior
management from the host country, although they may require
that a majority of the Board of Directors be nationals of the host
country (Article 8). 65
o Investor-state dispute settlement procedures are more
comprehensive (Articles 28–41).
Clear timelines for investment liberalization, although these are not
binding. 66
Benefits extended to foreign-owned (non-ASEAN) investors, for
investments that are based in an ASEAN member country, from entry
into force of the agreement.
Preservation of the special and differential treatment granted under the
AIA for the newer members of ASEAN, allowing those countries to
delay commitments under the ACIA in deference to their state of
development (Article 23).
A more liberal and transparent investment environment. 67
62 Text of the Investment Guarantee Agreement, available on the ASEAN Secretariat Web site,
http://www.aseansec.org/6464.htm (accessed April 23, 2010).
63 ASEAN Secretariat, “Highlights of the ASEAN Comprehensive Investment Agreement (ACIA),”
August 26, 2008.
64 Performance requirements, such as local content targets or export quotas, are imposed as a condition
for the establishment, acquisition, expansion, management, conduct, or operation of an investment. Office of
the U.S. Trade Representative, “Bilateral Investment Treaties,” n.d., http://www.ustr.gov/tradeagreements/bilateral-investment-treaties
(accessed July 22, 2010).
65 This holds “provided that this requirement does not materially impair the ability of the investor to
exercise control over its investment.”
66 ASEAN Secretariat official, telephone interview with USITC staff, March 17, 2010.
67 ASEAN Secretariat, ASEAN Investment Report 2008, 16; and text of the ACIA.
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