Chile Investment Protections
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1. INVESTMENT & SETTLEMENT OF DISPUTES TREATIES
Chile is a Contracting State of the Washington Convention on the Settlement of Investment Disputes between States and Nationals of other States (the “ICSID Convention”) which, on 14 October 1966, established the International Centre (“the Centre”) for the Settlement of Investment Disputes, otherwise known as ICSID. In addition, Chile has signed, or has in force, bilateral investment treaties (“BITs”), Free Trade Agreements (“FTAs”) and economic association or complementation agreements with a large number of countries. These treaties and agreements often designate ICSID as the venue for the settlement of investor-State disputes.
Chile signed the ICSID Convention on 25 January 1991. Following ratification, the ICSID Convention entered into force on 24 October 1991 and remains in force as of this writing. Unlike certain other countries, Chile has not notified the Centre pursuant to ICSID Convention Article 25(3) of any constituent subdivision or agency as to which no further approval of the State would be needed in order for it to consent to the jurisdiction of the Centre. Nor has Chile notified the Centre, pursuant to ICSID Convention Article 25(4), that it would or would not consider submitting a certain class of disputes to the jurisdiction of the Centre. As of this writing, Chile has been a respondent in three ICSID disputes.[1]
As of July 2010, Chile had signed 49 BITs. Out of these, 16 were with Latin American countries, 23 with European countries, 7 with countries from Asia, the Middle East and Oceania, and 3 with African countries. All include chapters on the treatment of investments and settlement of investor-State disputes through international arbitration. . . . Out of the 49 BITs, 36 treaties have entered into force, and 13 have been signed but not been ratified. The BITs which have not been ratified include: in Latin America: Brazil, Colombia and the Dominican Republic; in Europe: Hungary, the Netherlands and Turkey; in Asia, Oceania and the Middle East, Indonesia, Lebanon, New Zealand and Vietnam; and in Africa, South Africa, Egypt and Tunisia.[2]
As of July 2010, Chile had signed a total of 21 international trade agreements or treaties. These have included FTAs, Economic Associations, Complementary Economic Agreements, and Partial Economic Agreements with both individual countries and trade associations. FTAs are presently in force with Australia, Canada, China, Korea, the United States, Japan, Mexico, Panama, Central America and the European Free Trade Association (“EFTA”). The first FTA signed by Chile was with Canada,[3] whose provisions on investor-State disputes follow closely those of the North American Free Trade Agreement (“NAFTA”).[4] The investor-State dispute provisions of the FTA with the United States also follow the NAFTA model but with [some] important differences . . . .[5]
The FTA with Central America,[6] is special in that it applies bilaterally with each of the five countries individually, Costa Rica, El Salvador, Guatemala, Honduras and Nicaragua, and not with Central America as a separate legal entity. In addition, this treaty explicitly incorporates the BITs Chile has in force with each of these five countries.[7]
Chile’s FTA with the EFTA countries (Switzerland, Norway, Lichtenstein and Iceland) is similar to that with Central America in that it also applies bilaterally with each of the four countries individually and not with the EFTA as a legal entity. However, in contrast with the Central American FTA, Chilean BITs in force with three of the EFTA members—Iceland, Norway and Switzerland[8]—are not incorporated into the EFTA.
[1] Those cases are i) Victor Pey Casado and President Allende Foundation vs. Republic of Chile, ICSID Case No. ARB/98/2; ii) Mtd Equity Sdn. Bhd. and MTD Chile S.A. vs. Republic of Chile, ICSID Case No. ARB/01/7; and iii) Sociedad Anónima Eduardo Vieira vs. Republic of Chile, ICSID Case No. ARB/04/7.
[2] For a listing of all of Chile's BITs, see Foreign Investment Committee Website, available at http://www.inversionextranjera.cl/index.php?option=com_content&view=article&id=230&Itemid=61
[3] Canada-Chile Free Trade Agreement (Santiago, 5 Dec. 1996) entered into force 2 June 1997.
[4] North American Free Trade Agreement, NAFTA, 17 Dec. 1992 entered into force 1 Jan. 1994..
[5] BIGGS, Gonzalo. “The Latin American Treatment of International Arbitration and Foreign Investments and the Chile-US Free Trade Agreement.” In: ICSID Review, Foreign Investment Journal Vol. 19 No. 2 (2004), and BIGGS, Gonzalo: “Investment and Trade in Latin America: Settling Investor-State Disputes”. In “ Visions From Finis Terrae. Chilean Voices in The United States” Inter-American Dialogue. Washington, D.C. 2008
[6] Chile-Central America Free Trade Agreement (Guatemala City, 18 Oct. 1999) entered into force 30 Nov. 2000 (El Salvador), 14 Feb. 2002 (Costa Rica), 19 July 2008 (Honduras), 23 March 2010 (Guatemala), pending (Nicaragua) (collectively, "Chile-Central America FTA") .
[7] Chile-Central America FTA, Annex 1, Art. 10.0.l. See www.direcon.cl
[8] Agreement between the Government of the Republic of Chile and the Government of the Republic of Iceland for the Reciprocal Promotion and Protection of Investments (Kristiansand, 26 June 2003) entered into force 12 Aug. 2006. Agreement between the Government of the Republic of Chile and the Government of the Kingdom of Norway for the Reciprocal Promotion and Protection of Investments (Oslo, 1 June 1993) entered into force 7 Sept. 1994. Agreement between the Swiss Confederation and the Republic of Chile for the Reciprocal Promotion and Protection of Investments (Bern, 24 Sept. 1999) entered into force 22 Aug. 2002.
