CHAPTER 10
INVESTMENT
Article 10.1: Definitions
For the purposes of this Chapter:(a)covered investment means, with respect to a Party, aninvestment in its territory of an investor of another Party inexistence as of the date of entry into force of thisAgreement or established, acquired, or expanded
thereafter, and which, where applicable, has been
admitted1, 2 by the host Party, subject to its relevant laws,
regulations, and policies;3(b)freely usable currency means a freely usable currency as
determined by the IMF under the IMF Articles ofAgreement as may be amended;(c)

investment means every kind of asset that an investor
owns or controls, directly or indirectly, and that has thecharacteristics of an investment, including suchcharacteristics as the commitment of capital or otherresources, the expectation of gains or profits, or theassumption of risk. Forms that an investment may takeinclude:(i)shares, stocks, and other forms of equity
participation in a juridical person, including rights
derived therefrom;1

For Malaysia and Thailand, protection under this Chapter shall be accorded tocovered investments which, where applicable, have been specifically approved inwriting for protection by their respective competent authorities in accordance with theirrespective laws, regulations, and policies.
2

For Cambodia, Indonesia, and Viet Nam, “has been admitted” means “has been
specifically registered or approved in writing, as the case may be”.
3

For the purposes of this definition, “policies” means those policies affecting an
investment that are endorsed and announced by the government of a Party in a written
form and made publicly available in a written form.

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(ii)

bonds, debentures, loans,4 and other debt
instruments of a juridical person and rights derived
therefrom;5(iii)

rights under contracts, including turnkey,
construction, management, production, or revenuesharing contracts;(iv)

intellectual property rights and goodwill, which arerecognised pursuant to the laws and regulations of
the host Party;(v)

claims to money or to any contractual performance
related to a business and having financial value;6(vi)

rights conferred pursuant to the laws andregulations of the host Party or contracts, such asconcessions, licences, authorisations, and permits,
including those for the exploration and exploitationof natural resources; and(vii)

movable and immovable property, and otherproperty rights, such as leases, mortgages, liens, or
pledges.7

The term “investment” does not include an order or
judgment entered in a judicial or administrative action or an
arbitral proceeding.

4

A loan issued by a Party to another Party is not an investment.

5

Some forms of debt, such as bonds, debentures, and long-term notes, are more likely
to have the characteristics of an investment, while other forms of debt, such as claims
to payment that are immediately due and result from the sale of goods or services, areless likely to have such characteristics.
6

For greater certainty, investment does not mean claims to money that arise solely
from:
(a)

commercial contracts for the sale of goods or services; or(b)the extension of credit in connection with such commercial contracts.

7

For greater certainty, market share, market access, expected gains, and opportunities
for profit-making are not, by themselves, investments.

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For the purposes of the definition of investment in thissubparagraph, returns that are invested shall be treated as
an investment and any alteration of the form in whichassets are invested or reinvested shall not affect theircharacter as an investment;(d)investor of a non-Party means, with respect to a Party,
an investor that seeks to make,8 is making, or has madean investment in the territory of that Party, that is not an
investor of a Party;(e)investor of a Party means a natural person of a Party ora juridical person of a Party that seeks to make,9 is making,or has made an investment in the territory of another Party;(f)juridical person means any entity constituted ororganised under applicable law, whether or not for profit,
and whether private or governmental, including any
corporation, trust, partnership, joint venture, sole
proprietorship, association or similar organisation, and abranch of a juridical person;10, 11, 12(g)juridical person of a Party means a juridical person
constituted or organised under the law of that Party, and a

8

For greater certainty, the Parties understand that an investor “seeks to make” aninvestment when that investor has taken concrete action or actions to make an
investment. Where a notification or approval process is required for making an
investment, an investor that “seeks to make” an investment refers to an investor that
has initiated such notification or approval process.
9

For greater certainty, the Parties understand that an investor “seeks to make” aninvestment when that investor has taken concrete action or actions to make an
investment. Where a notification or approval process is required for making an
investment, an investor that “seeks to make” an investment refers to an investor that
has initiated such notification or approval process.
10

For greater certainty, a branch of a juridical person does not have any right to makeany claim against any Party under this Agreement.
11

For greater certainty, the inclusion of a “branch” in the definition of “juridical person”
is without prejudice to a Party’s ability to treat a branch under its law as an entity thathas no independent legal existence and is not separately organised.
12

A branch of a legal entity of a non-Party shall not be considered as a juridical personof a Party.

10-3branch located in the territory of that Party and carrying out
business activities there;13, 14, 15
(h)

(i)

measure by a Party means any measure adopted or
maintained by:(i)central, regional, or local
authorities of that Party; andgovernments

and

(ii)

non-governmental bodies in the exercise of powers
delegated by central, regional, or local governments
or authorities of that Party; andnatural person of a Party means, for the purposes of
subparagraph (e), a natural person who under the law ofthat Party:(i)is a national or citizen of that Party; or(ii)

has the right of permanent residence in that Party,
where both that Party and another Party recognisepermanent residents and accord substantially thesame treatment to their respective permanent
residents as they accord to their respective
nationals in respect of measures affecting
investment.

Article 10.2: Scope
1.

This Chapter shall apply to measures adopted or maintained by a
Party relating to:(a)investors of another Party; and(b)covered investments.

13

For greater certainty, a branch of a juridical person does not have any right to makeany claim against any Party under this Agreement.
14

For greater certainty, the inclusion of a “branch” in the definition of “juridical personof a Party” is without prejudice to a Party’s ability to treat a branch under its law as anentity that has no independent legal existence and is not separately organised.
15

A branch of a legal entity of a non-Party shall not be considered as a juridical personof a Party.

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2.

This Chapter shall not apply to:(a)government procurement;(b)subsidies or grants provided by a Party;(c)services supplied in the exercise of governmental authority
by the relevant body or authority of a Party. For the
purposes of this Chapter, “service supplied in the exerciseof governmental authority” means any service which issupplied neither on a commercial basis nor in competition
with one or more service suppliers;(d)measures adopted or maintained by a Party to the extent
that they are covered by Chapter 8 (Trade in Services); and(e)measures adopted or maintained by a Party to the extent
that they are covered by Chapter 9 (Temporary Movementof Natural Persons).

For greater certainty, this Chapter does not bind any Party inrelation to any act or fact that took place or any situation thatceased to exist before the date of entry into force of thisAgreement.
3.

Notwithstanding subparagraph 2(d), Article 10.5 (Treatment of
Investment), Article 10.7 (Senior Management and Board of
Directors),16 Article
10.9(Transfers),
Article10.11(Compensation for Losses), Article 10.12 (Subrogation), andArticle 10.13 (Expropriation) shall apply, mutatis mutandis, to any
measure affecting the supply of a service by a service supplier ofa Party through commercial presence in the territory of any otherParty within the meaning of Chapter 8 (Trade in Services), but
only to the extent that any such measure relates to a covered
investment and an obligation under this Chapter.

16

Article 10.7 (Senior Management and Board of Directors) shall apply to measures
affecting the supply of a service only for a Party making commitments in accordancewith Article 8.8 (Schedules of Non-Conforming Measures).

10-5Article 10.3: National Treatment17
1.

Each Party shall accord to investors of another Party, and tocovered investments, treatment no less favourable than that it
accords, in like circumstances, to its own investors and theirinvestments with respect to the establishment, acquisition,
expansion, management, conduct, operation, and sale or otherdisposition of investments in its territory.

2.

For greater certainty, the treatment to be accorded by a Party
under paragraph 1 means, with respect to a government otherthan at the central level, treatment no less favourable than themost favourable treatment accorded, in like circumstances, bythat government to investors, and to the investments of investors,of the Party of which it forms a part.

Article 10.4: Most-Favoured-Nation Treatment18, 19
1.

Each Party shall accord to investors of another Party treatment
no less favourable than that it accords, in like circumstances, toinvestors of any other Party or non-Party with respect to theestablishment, acquisition, expansion, management, conduct,
operation, and sale or other disposition of investments in its
territory.

2.

Each Party shall accord to covered investments treatment no lessfavourable than that it accords, in like circumstances, toinvestments in its territory of investors of any other Party or nonParty with respect to the establishment, acquisition, expansion,
management, conduct, operation, and sale or other disposition of
investments.

17

For greater certainty, whether the treatment is accorded in “like circumstances” under
this Article depends on the totality of the circumstances, including whether the relevant
treatment distinguishes between investors or investments on the basis of legitimate
public welfare objectives.
18

This Article shall not apply to Cambodia, Lao PDR, Myanmar, and Viet Nam. The
treatment under this Article shall not be accorded to investors of Cambodia, Lao PDR,
Myanmar, and Viet Nam, and to covered investments of such investors.
19

For greater certainty, whether the treatment is accorded in “like circumstances” under
this Article depends on the totality of the circumstances, including whether the relevant
treatment distinguishes between investors or investments on the basis of legitimate
public welfare objectives.

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3.

For greater certainty, the treatment referred to in paragraphs 1
and 2 does not encompass any international dispute resolution
procedures or mechanisms under other existing or futureinternational agreements.

Article 10.5: Treatment of Investment20
1.

Each Party shall accord to covered investments fair and equitable
treatment and full protection and security, in accordance with thecustomary international law minimum standard of treatment ofaliens.

2.

For greater certainty:

3.

(a)

fair and equitable treatment requires each Party not todeny justice in any legal or administrative proceedings;(b)full protection and security requires each Party to take suchmeasures as may be reasonably necessary to ensure thephysical protection and security of the covered investment;
and

(c)

the concepts of fair and equitable treatment and full
protection and security do not require treatment to beaccorded to covered investments in addition to or beyond
that which is required under the customary internationallaw minimum standard of treatment of aliens, and do notcreate additional substantive rights.

A determination that there has been a breach of another provisionof this Agreement, or of a separate international agreement, does
not establish that there has been a breach of this Article.

Article 10.6: Prohibition of Performance Requirements
1.

No Party shall impose or enforce, as a condition forestablishment, acquisition, expansion, management, conduct,
operation, or sale or other disposition of an investment in its

20This Article shall be interpreted in accordance with Annex 10A (Customary
International Law).

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territory of an investor of any other Party, any of the following
requirements:21(a)to export a given level or percentage of goods;(b)to achieve a given level or percentage of domestic content;(c)to purchase, use, or accord a preference to goods
produced in its territory, or to purchase goods from persons
in its territory;(d)to relate the volume or value of imports to the volume orvalue of exports or to the amount of foreign exchange
inflows associated with investments of that investor;(e)

to restrict sales of goods in its territory that suchinvestments produce by relating such sales to the volume
or value of its exports or foreign exchange earnings;(f)to transfer a particular technology, a production process, orother proprietary knowledge to a person in its territory;(g)

to supply exclusively from the territory of the Party thegoods that such investments produce to a specific regional
market or to the world market; or(h)to adopt a given rate or amount of royalty under a licence
contract, in regard to any licence contract in existence atthe time the requirement is imposed or enforced, or any
future licence contract freely entered into between theinvestor and a person in its territory, provided that therequirement is imposed or enforced in a manner that
constitutes direct interference with that licence contract byan exercise of non-judicial governmental authority of a
Party.22 For greater certainty, this subparagraph does not
apply when the licence contract is concluded between theinvestor and a Party.

21

For greater certainty, each Party may maintain existing measures or adopt new ormore restrictive measures that do not conform with obligations under this Article, as set
out in List A and List B of its Schedule in Annex III (Schedules of Reservations andNon-Conforming Measures for Services and Investment).
22

For the purposes of this subparagraph, a “licence contract” means any contract
concerning the licensing of technology, a production process, or other proprietaryknowledge.

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Notwithstanding this Article, subparagraphs (f) and (h) shall not
apply to Cambodia, Lao PDR, and Myanmar.
2.

3.

No Party shall condition the receipt or continued receipt of anadvantage, in connection with the establishment, acquisition,
expansion, management, conduct, operation, or sale or otherdisposition of an investment in its territory of an investor of any
other Party on compliance with any of the following requirements:(a)to achieve a given level or percentage of domestic content;(b)

to purchase, use, or accord a preference to goods
produced in its territory, or to purchase goods from persons
in its territory;(c)

to relate the volume or value of imports to the volume orvalue of exports or to the amount of foreign exchange
inflows associated with investments of that investor; or(d)to restrict sales of goods in its territory that suchinvestments produce by relating such sales to the volume
or value of its exports or foreign exchange earnings.

(a)Nothing in paragraph 2 shall be construed to prevent a
Party from conditioning the receipt or continued receipt ofan advantage, in connection with an investment in its
territory of an investor of any other Party, on compliancewith a requirement to locate production, supply a service,train or employ workers, construct or expand particularfacilities, or carry out research and development, in its
territory.

(b)

Subparagraphs 1(f) and (h) shall not apply:(i)if a Party authorises use of an intellectual property
right in accordance with Article 31 or Article 31bis of
the TRIPS Agreement,23 or to measures requiring
the disclosure of proprietary information that fallwithin the scope of, and are consistent with, Article
39 of the TRIPS Agreement; or23This includes any amendment to the TRIPS Agreement implementing paragraph 6of the Doha Declaration on the TRIPS Agreement and Public Health(WT/MIN(01)/DEC/2) adopted at Doha on 14 November 2001.

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(ii)

4.

if the requirement is imposed or enforced by a court,
administrative tribunal, or competition authority toremedy a practice determined after judicial oradministrative process to be anti-competitive under
the Party’s competition laws and regulations.

(c)Subparagraph 1(h) shall not apply if the requirement is
imposed or enforced by a tribunal or competent authority
as equitable remuneration under the Party’s copyright laws
and regulations.

(d)Subparagraphs 1(a) through (c), 2(a), and 2(b) shall not
apply to qualification requirements for goods with respect
to export promotion and foreign aid programmes.

(e)

Subparagraphs 2(a) and (b) shall not apply to requirements
imposed by an importing Party relating to the content ofgoods necessary to qualify for preferential tariffs orpreferential quotas.

For greater certainty, paragraphs 1 and 2 shall not apply to any
requirement other than those set out in those paragraphs.

Article 10.7: Senior Management and Board of Directors
1.

No Party shall require that a juridical person of that Party that is acovered investment appoint to a senior management position anatural person of any particular nationality.

2.

A Party may require that a majority of the board of directors, or
any committee thereof, of a juridical person of that Party that is acovered investment, be of a particular nationality or resident in the
territory of that Party, provided that the requirement does notmaterially impair the ability of the investor to exercise control overits investment.

Article 10.8: Reservations and Non-Conforming Measures
1.

Article 10.3 (National Treatment), Article 10.4 (Most-FavouredNation Treatment), Article 10.6 (Prohibition of Performance
Requirements), and Article 10.7 (Senior Management and Boardof Directors) shall not apply to:

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(a)

any existing non-conforming measure that is maintained bya Party at:(i)the central level of government, as set out by that
Party in List A of its Schedule in Annex III(Schedules of Reservations and Non-Conforming
Measures for Services and Investment);(ii)

a regional level of government, as set out by that
Party in List A of its Schedule in Annex III(Schedules of Reservations and Non-Conforming
Measures for Services and Investment); or(iii)

a local level of government;(b)the continuation or prompt renewal of any non-conforming
measure referred to in subparagraph (a); and(c)an amendment to any non-conforming measure referred toin subparagraph (a) to the extent that the amendment does
not decrease the conformity of the measure:(i)for Cambodia, Indonesia, Lao PDR, Myanmar, and
the Philippines, as it existed at the date of entry into
force of this Agreement; and(ii)

for Australia, Brunei, China, Japan, Korea,
Malaysia, New Zealand, Singapore, Thailand, andViet Nam, as it existed immediately before theamendment,with Article 10.3 (National Treatment), Article 10.4 (MostFavoured-Nation Treatment), Article 10.6 (Prohibition of
Performance Requirements), and Article 10.7 (Senior
Management and Board of Directors).
2.

Article 10.3 (National Treatment), Article 10.4 (Most-FavouredNation Treatment), Article 10.6 (Prohibition of Performance
Requirements), and Article 10.7 (Senior Management and Boardof Directors) shall not apply to any measure that a Party adopts
or maintains with respect to sectors, subsectors, or activities, as
set out by that Party in List B of its Schedule in Annex III(Schedules of Reservations and Non-Conforming Measures forServices and Investment).

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3.

Notwithstanding subparagraph 1(c)(ii), for five years after the dateof entry into force of this Agreement, Article 10.3 (National
Treatment), Article 10.4 (Most-Favoured-Nation Treatment),
Article 10.6 (Prohibition of Performance Requirements), andArticle 10.7 (Senior Management and Board of Directors) shall not
apply to an amendment to any non-conforming measure referred
to in subparagraph 1(a) to the extent that the amendment does
not decrease the conformity of the measure as it existed at thedate of entry into force of this Agreement with Article 10.3
(National Treatment), Article 10.4 (Most-Favoured-Nation
Treatment), Article 10.6 (Prohibition of Performance
Requirements), and Article 10.7 (Senior Management and Boardof Directors).

4.

No Party shall, under any measure adopted after the date of entry
into force of this Agreement and covered by List B of its Schedulein Annex III (Schedules of Reservations and Non-Conforming
Measures for Services and Investment), require an investor ofanother Party, by reason of its nationality, to sell or otherwise
dispose of an investment that exists at the time the measure
becomes effective, unless otherwise specified in the initialapproval by the relevant authorities.

5.

Article 10.3 (National Treatment) and Article 10.4 (MostFavoured-Nation Treatment) shall not apply to any measure that
falls within Article 5 of the TRIPS Agreement, and any measurethat is covered by an exception to, or derogation from, theobligations imposed by Article 11.7 (National Treatment), or
imposed by Article 3 or 4 of the TRIPS Agreement.

Article 10.9: Transfers
1.

Each Party shall allow all transfers relating to a covered
investment to be made freely and without delay into and out of its
territory. Such transfers include:(a)contributions to capital, including the initial contribution;(b)

profits, capital gains, dividends, interest, royalty payments,
technical assistance and technical and management fees,
licence fees, and other current income accruing from thecovered investment;(c)proceeds from the sale or liquidation of all or any part ofthe covered investment;

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(d)

payments made under a contract, including a loan
agreement;(e)payments made pursuant to Article 10.11 (Compensation
for Losses) and Article 10.13 (Expropriation);(f)payments arising out of the settlement of a dispute by anymeans including adjudication, arbitration, or the agreementof the parties to the dispute; and(g)earnings and other remuneration of personnel engaged
from abroad in connection with the covered investment.

2.

Each Party shall allow such transfers relating to a covered
investment to be made in any freely usable currency at the market
rate of exchange prevailing at the time of transfer.

3.

Notwithstanding paragraphs 1 and 2, a Party may prevent ordelay a transfer through the equitable, non-discriminatory, andgood faith application of its laws and regulations relating to:(a)bankruptcy, insolvency, or the protection of the rights ofcreditors including employees;(b)issuing, trading, or dealing in securities, futures, options, orderivatives;(c)criminal or penal offences and the recovery of the proceedsof crime;(d)financial reporting or record keeping of transfers whennecessary to assist law enforcement or financial regulatory
authorities;(e)ensuring compliance with awards or orders or judgments
in judicial or administrative proceedings;(f)taxation;24

24

For greater certainty, this also includes the adoption or enforcement of any taxation
measure aimed at ensuring the equitable or effective imposition or collection of taxes
including any taxation measure that differentiates between persons based on theirplace of residence or incorporation.

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4.

(g)

social security, public retirement, superannuation,
compulsory savings schemes, or other arrangements toprovide pension or similar retirement benefits;(h)severance entitlement of employees; and(i)requirements to register and satisfy other formalities
imposed by the central bank and other relevant authoritiesof that Party.

Nothing in this Chapter shall affect the rights and obligations of a
Party as a member of the IMF under the IMF Articles ofAgreement as may be amended, including the use of exchange
actions which are in conformity with the IMF Articles of Agreement
as may be amended, provided that the Party shall not impose
restrictions on any capital transactions inconsistently with the
obligations under this Chapter regarding such transactions,
except under Article 17.15 (Measures to Safeguard the Balanceof Payments) or on request of the IMF.

Article 10.10: Special Formalities and Disclosure of Information
1.

Nothing in Article 10.3 (National Treatment) shall be construed toprevent a Party from adopting or maintaining a measure thatprescribes special formalities in connection with covered
investments, including a requirement that covered investments belegally constituted under its laws or regulations, provided thatsuch formalities do not materially impair the protections affordedby that Party to investors of another Party and covered
investments pursuant to this Chapter.

2.

Notwithstanding Article 10.3 (National Treatment) and Article 10.4
(Most-Favoured-Nation Treatment), a Party may require an
investor of another Party or its covered investment to provide
information concerning that investment solely for informational or
statistical purposes. The Party shall protect, to the extent
possible, any confidential information which has been provided
from any disclosure that would prejudice the legitimate
commercial interests or the competitive position of the investor or
the covered investment. Nothing in this paragraph shall be
construed to prevent a Party from otherwise obtaining or
disclosing information in connection with the equitable and goodfaith application of its laws and regulations.

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Article 10.11: Compensation for Losses
Each Party shall accord to investors of another Party, and their covered
investments, with respect to measures it adopts or maintains relating tolosses suffered by investments in its territory owing to armed conflict,civil strife, or state of emergency, treatment no less favourable than thatit accords, in like circumstances, to:(a)its own investors and their investments; and(b)investors of any other Party or non-Party, and theirinvestments.

Article 10.12: Subrogation
1.

If a Party, or an agency designated by a Party, makes a payment
to an investor of that Party under a guarantee, a contract of
insurance or other form of indemnity that it has granted in respectof a covered investment, the other Party in whose territory thecovered investment was made shall recognise the subrogation ortransfer of any right or claim in respect of such covered
investment. The subrogated or transferred right or claim shall not
be greater than the original right or claim of the investor.

2.

Where a Party or an agency designated by a Party has made apayment to an investor of that Party and has taken over any rightor claim of the investor, that investor shall not pursue that right or
claim against the other Party in whose territory the covered
investment was made, unless that investor is authorised to act onbehalf of the Party making the payment or the agency designatedby that Party.

3.

In the exercise of subrogated or transferred right or claim, a Partyor an agency designated by a Party exercising such right or claim
shall disclose the coverage of the claims arrangement with its
investors to the relevant Party.

Article 10.13: Expropriation25
1.

25

No Party shall expropriate or nationalise a covered investment
either directly or through measures equivalent to expropriation orThis Article shall be interpreted in accordance with Annex 10B (Expropriation).

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nationalisation (hereinafter referred to as “expropriation” in this
Chapter), except:

2.

3.

(a)

for a public purpose;(b)in a non-discriminatory manner;(c)

on payment of compensation in accordance withparagraphs 2 and 3; and(d)in accordance with due process of law.

The compensation referred to in subparagraph 1(c) shall:(a)be paid without delay;26(b)

be equivalent to the fair market value of the expropriatedinvestment at the time when the expropriation was publicly
announced,27 or when the expropriation occurred,
whichever is earlier (hereinafter referred to as the “date of
expropriation” in this Chapter);28, 29, 30(c)

not reflect any change in value occurring because theintended expropriation had become known earlier; and(d)be effectively realisable and freely transferable.

In the event of delay, the compensation shall include anappropriate interest in accordance with the expropriating Party’s
laws, regulations, and policies provided that such laws,

26

The Parties understand that there may be legal and administrative processes thatneed to be observed before payment can be made.
27

For the Philippines, the time when the expropriation was publicly announced for the
purpose of calculating the fair market value of the expropriated investment refers to thedate of filing of the Petition for Expropriation.
28

For Australia, Brunei Darussalam, Korea, Malaysia, New Zealand, and Singapore,
the date of expropriation for the purpose of calculating the fair market value of the
expropriated investment means the date immediately before the expropriation occurs.
29

For Cambodia, Lao PDR, Myanmar, and Viet Nam, the date of expropriation for the
purpose of calculating the fair market value of the expropriated investment means thedate when the expropriation decision is issued by the competent authority.
30

For Thailand, the date of expropriation for the purpose of calculating the fair market
value of the expropriated investment means the date when the expropriation occurs.

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regulations, and policies are applied on a non-discriminatory
basis.
4.

This Article does not apply to the issuance of compulsory licences
granted in relation to intellectual property rights, or to therevocation, limitation, or creation of intellectual property rights, tothe extent that such issuance, revocation, limitation, or creation isconsistent with Chapter 11 (Intellectual Property) and the TRIPS
Agreement.31

5.

Notwithstanding paragraphs 1 through 3, any measure of
expropriation relating to land shall be as defined in the existinglaws and regulations of the expropriating Party, and shall be, forthe purposes of and on payment of compensation, in accordancewith the aforesaid laws and regulations. Such compensation shallbe subject to any subsequent amendments to the aforesaid laws
and regulations relating to the amount of compensation wheresuch amendments follow the general trends in the market valueof the land.

Article 10.14: Denial of Benefits32
1.

2.

A Party may deny the benefits of this Chapter to an investor ofanother Party that is a juridical person of that other Party and toinvestments of that investor if the juridical person:(a)is owned or controlled by a person of a non-Party or of thedenying Party; and(b)

has no substantial business activities in the territory of any
Party other than the denying Party.

A Party may deny the benefits of this Chapter to an investor ofanother Party that is a juridical person of that other Party and toinvestments of that investor if persons of a non-Party own orcontrol the juridical person and the denying Party adopts or

31

For greater certainty, the Parties recognise that, for the purposes of this Article, the“revocation” of intellectual property rights includes the cancellation or nullification ofsuch rights, and the “limitation” of intellectual property rights includes exceptions tosuch rights.
32

A Party’s right to deny the benefits of this Chapter as provided for in this Article may
be exercised at any time.

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maintains measures with respect to the non-Party or a person of
the non-Party that prohibit transactions with the juridical person orthat would be violated or circumvented if the benefits of this
Chapter were accorded to the juridical person or to its
investments.
3.

A Party may deny the benefits of this Chapter to an investor ofanother Party that is a juridical person of that other Party and toinvestments of that investor if persons of a non-Party own orcontrol the juridical person and the denying Party does not
maintain diplomatic relations with the non-Party.

4.

Notwithstanding paragraph 1, Thailand may, under its applicablelaws and regulations, deny the benefits of this Chapter relating to
the admission, establishment, acquisition, and expansion of
investments to an investor of another Party that is a juridical
person of such Party and to investments of such an investor
where Thailand establishes that the juridical person is owned orcontrolled by natural persons or juridical persons of a non-Partyor of Thailand.

5.

For the purposes of this Article, for Thailand, a juridical person is:(a)“owned” by natural persons or juridical persons of a Partyor of a non-Party if more than 50 per cent of the equity
interest in it is beneficially owned by such persons; and(b)“controlled” by natural persons or juridical persons of a
Party or of a non-Party if such persons have the power toname a majority of its directors or otherwise to legally direct
its actions.

6.

The Philippines may deny the benefits of this Chapter to investorsof another Party and to investments of that investor where it
establishes that such investor has made an investment in breachof the provisions of Commonwealth Act No. 108, entitled An Act
to Punish Acts of Evasion of Laws on the Nationalization of
Certain Rights, Franchises or Privileges, as amended byPresidential Decree No. 715, otherwise known as The AntiDummy Law, as may be amended.

7.

A Party may deny the benefits of this Chapter to an investor ofanother Party or of a non-Party and to investments of that investor
where such an investor has made an investment in breach of theprovisions of the denying Party’s laws and regulations that
implement the Financial Action Task Force Recommendations.

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Article 10.15: Security Exceptions
Notwithstanding Article 17.13 (Security Exceptions), nothing in this
Chapter shall be construed to:(a)require a Party to furnish or allow access to any information
the disclosure of which it determines to be contrary to its
essential security interests; or(b)preclude a Party from applying measures that it considers
necessary for:(i)the fulfilment of its obligations with respect to themaintenance or restoration of international peace or
security; or(ii)

the protection of its own essential security interests.

Article 10.16: Promotion of Investment
The Parties shall endeavour to promote and increase awareness of theregion as an investment area including through:(a)encouraging investments among the Parties;(b)organising joint investment promotion activities between or
among Parties;(c)promoting business matching events;(d)organising and supporting the organisation of various
briefings and seminars on investment opportunities and on
investment laws, regulations, and policies; and(e)conducting information exchanges on other issues ofmutual concern relating to investment promotion.

Article 10.17: Facilitation of Investment
1.

Subject to its laws and regulations, each Party shall endeavour tofacilitate investments among the Parties, including through:(a)creating the necessary environment for all forms ofinvestment;

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2.

(b)

simplifying its procedures for investment applications andapprovals;(c)promoting the dissemination of investment information,
including investment rules, laws, regulations, policies, andprocedures; and(d)establishing or maintaining contact points, one-stop
investment centres, focal points, or other entities in therespective Party to provide assistance and advisory
services to investors, including the facilitation of operating
licences and permits.

Subject to its laws and regulations, a Party’s activities undersubparagraph 1(d) may include, to the extent possible, assisting
investors of any other Party and covered investments to amicably
resolve complaints or grievances with government bodies whichhave arisen during their investment activities by:(a)receiving and, where appropriate, considering referring or
giving due consideration to complaints raised by investors
relating to government activities impacting their covered
investment; and(b)providing assistance, to the extent possible, in resolving
difficulties experienced by the investors in relation to theircovered investments.

3.

Subject to its laws and regulations, each Party may, to the extent
possible, consider establishing mechanisms to makerecommendations to its relevant government bodies addressing
recurrent issues affecting investors of another Party.

4.

The Parties shall endeavour to facilitate meetings between theirrespective competent authorities aimed at exchanging knowledge
and approaches to better facilitate investment.

5.

Nothing in this Article shall be subject to, or otherwise affect, any
dispute resolution proceedings under this Agreement.

Article 10.18: Work Programme
1.

The Parties shall, without prejudice to their respective positions,enter into discussions on:

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(a)

the settlement of investment disputes between a Party andan investor of another Party; and(b)the application of Article 10.13 (Expropriation) to taxation
measures that constitute expropriation,

no later than two years after the date of entry into force of thisAgreement, the outcomes of which are subject to agreement by
all Parties.
2.

The Parties shall conclude the discussions referred to inparagraph 1 within three years from the date of commencementof the discussions.

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ANNEX 10A
CUSTOMARY INTERNATIONAL LAW
The Parties confirm their shared understanding that “customaryinternational law” generally and as specifically referenced in Article 10.5
(Treatment of Investment), including in relation to the customaryinternational law minimum standard of treatment of aliens, results froma general and consistent practice of States that they follow from a senseof legal obligation.

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ANNEX 10B
EXPROPRIATIONThe Parties confirm their shared understanding that:1.

An action or a series of related actions by a Party cannot
constitute an expropriation unless it interferes with a tangible orintangible property right or property interest1 in a covered
investment.

2.

Article 10.13 (Expropriation) addresses two situations:

3.

(a)

the first situation is direct expropriation, where a covered
investment is nationalised or otherwise directly
expropriated through formal transfer of title or outrightseizure; and(b)the second situation is where an action or a series ofrelated actions by a Party has an effect equivalent to direct
expropriation without formal transfer of title or outrightseizure.

The determination of whether an action or series of related actions
by a Party, in a specific fact situation, constitutes an expropriationof the type referred to in subparagraph 2(b) requires a case-bycase, fact-based inquiry that considers, among other factors:(a)the economic impact of the government action, although
the fact that an action or a series of related actions by a
Party has an adverse effect on the economic value of aninvestment, standing alone, does not establish that suchan expropriation has occurred;(b)whether the government action breaches the government’s
prior binding written commitment to the investor, whether
by contract, licence, or other legal document; and1

For the purposes of this Annex, “property interest” refers to such property interest as
may be recognised under the laws and regulations of that Party.

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(c)
4.

the character of the government action, including its
objective and context.2

Non-discriminatory regulatory actions by a Party that aredesigned and applied to achieve legitimate public welfare
objectives, such as the protection of public health, safety, public
morals, the environment, and real estate price stabilisation, do notconstitute expropriation of the type referred to in subparagraph
2(b).

2

For Korea, a relevant consideration could include whether the investor bears a
disproportionate burden, such as a special sacrifice that exceeds what the investor orinvestment should be expected to endure for the public interest. This footnote does
not prejudice the determination of the character of the government action of any otherParty.

10B-2