Cross-strait investment protection and promotion

Head of Association for Relations across the Taiwan Straits and head of Straits Exchange Foundation signed in Taipei on August 9 the Cross-strait Investment Protection and Promotion Agreement (hereinafter referred to as the “Investment Protection Agreement”). MOFCOM of mainland China spokesman Shen Danyang made a comment that the Investment Protection Agreement is the first follow-up agreement signed since the “Cross-Strait Economic Cooperation Framework Agreement” (hereinafter referred to as the “Framework Agreement”) was implemented, which reflects the features of Mainland and Taiwan, and is an important institutional arrangements complying with the peaceful development of cross-strait relations.

Shen Danyang said that the signing of the Investment Protection Agreement is conductive to protection of the interests of the investors on both sides of the Strait, to reduction gradually of restrictions on investment, and to creation of a fair investment environment, so as to promote two-way investment and economic prosperity on both sides of the Strait.

Shen Danyang pointed out that the signing of the Investment Protection Agreement is of great significance in bridging the past and future for institutionalized economic and trade cooperation across the Strait. In days to come, the two parties will speed up negotiations of the follow-up agreements in services trade, goods trade and dispute settlement process in accordance with the regulations of the Framework Agreement, keeping enriching and strengthening institutionalized arrangements. And MOFCOM will work with relevant departments to implement the Investment Protection Agreement, so that people across the Strait could benefit more from trade and investment facilitation, making greater contributions to the development of cross-strait economic prosperity.

Head of MOFCOM Department of Treaty and Law made an interpretation on the Agreement.

I. Contents of the Agreement

Head of MOFCOM Department of Treaty and Law said that the Agreement covers the elements and contents of a conventional agreement on investment protection. Specifically, the Agreement consists of the text and attachments. The text includes 18 articles, namely, definitions, scope and exceptions, investment treatment, transparency, gradual reduction of investment restrictions, investment facilitation, expropriation, compensation, subrogation, transfer, refusing to grant the interests, dispute settlement on this Agreement’s two parties, dispute settlement of investors and the party in investment location, investment and commercial disputes, the contact mechanism, instrument format, revision and entering into force. The attachments had specific provisions on investment compensation and dispute settlement procedures.

II. Features of the Agreement

Head of MOFCOM Department of Treaty and Law pointed out that the Agreement includes both the general content of an investment agreement and the characteristics across strait. Features are as follows:

1. Effective protection: On one hand, the Agreement covers general rules on investment protection, and reflects the tradition of investment protection; On the other hand, the Agreement focuses on the real needs of both sides of the Strait, enhances its operability and copes with the issues like investing in a third place, habeas corpus, and dispute settlement of investors and the party in investment location. The flexibility and appropriate arrangements made by the Agreement meet with the features of cross-strait.

2. Two-way promotion: Mainland’s enterprises began to invest in Taiwan in June, 2009 and is still at the start. The Agreement reflects the principle of mutual promotion as much as possible, and balance between rights and obligations.

3.  Reduction of restrictions: In accordance with Article 5 of the Cross-Strait Economic Cooperation Framework Agreement, the Agreement clearly stipulates the terms of investment treatment, investment facilitation, and reducing restrictions on investing, truly reflecting the purpose of promoting two-way investment.

Source: Ministry of Commerce Website;;


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