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Ministry of Economic Affairs,R.O.C.

Improving the investment environment

Investment Protection Agreements (IPA)

1.The objective of IPAs is for the signatory national governments to agree to use their authority to reduce investment risks, such as those related to foreign exchange controls, expropriation, nationalization, confiscation, wars, rebellion, and riots.

2.The main elements of an IPA include 1) its parameters, 2) investment promotion and protection, 3) investment treatment, 4) expropriation, 5) war and rebellion, 6) riots and damage compensation, 7) repatriation of investment capital and proceeds, 8) settlement of investment disputes, 9) subrogation, 10) applicability of the IPA, 11) validity period, and 12) termination. An IPA shall also include details regarding regulations and shall be designed to facilitate and promote closer relations between the signatory states with regard to economics, trade and investment.

3.IPA Summary:
(1)Investment treatment: The contracting parties shall treat investors from the other party no less favorably than they treat their own nationals or investors of any third country.
(2)Expropriation, war, revolt, riots and damage compensation: Neither signatory to the IPA shall pursue any expropriation measure relative to the other party, except for the public purpose of compensation. Entities of a signatory party investing in the other party that suffer any losses as a result of events such as war, armed conflict, emergency, or insurrection shall be given appropriate repayment, compensation or other restitution that shall be no less than that provided to the country's own nationals or third-country investors that encounter the same circumstances.
(3)Repatriation of investment capital and income: The investors of both contracting parties have the right to freely repatriate capital and income (for example, capital gains, investment profit, interest, dividends, and royalties).
(4)Settlement of investment disputes: Disputes between the relevant authorities of one contracting party and the investors of the other Contracting Party should be resolved through negotiations between the two parties. If such negotiations fail to resolve the issue, the parties can then seek international arbitration.
Mr. Yu