Legal and Regulatory Framework - ADB
Jong Woo KANG
Regional Cooperation and Integration Division (ERCI)
Economic Research and Regional Cooperation Department
Asian Development Bank
Tel: +632 632 5984
Fax: +632 636 2183
E-mail: jkang [at] adb.org
To better gauge and understand the extent that investment provisions in FTAs accord liberalization (market access) and regulation (protection) to enhance cross-border investments flows, ADB’s database on FTAs with investment chapter/clauses (available in the Asia Regional Integration Center website) monitors whether investment provisions in an FTA are set in a separate investment chapter or form part of the services chapter. The database also identifies whether an FTA contains key provisions promoting liberalization and protection of investment.
Provisions on liberalization include most-favored nation (MFN) status and national treatment at both pre-establishment and post-establishment, and prohibition of performance requirements. Regulatory and legal protection provisions may include a dispute settlement mechanism, fair and equitable treatment, free transfers on investment-related transactions and capital movements, expropriation and compensation for loses, and restrictions on nationality requirements for senior management and boards of directors.