SESSION 4 REGULATORY TRANSPARENCY AND PREDICTABILITY MEASURES Presenter: Wenguo Cai Director, International Programs The Conference Board of Canada Jakarta, 1-2 April 2019 Partner: Project Executed by:
UNCTAD’s Global Action Menu for Investment Facilitation Action line 1 Action line 2 Promote accessibility and transparency in investment Enhance predictability and policies and regulations and consistency in the application procedures relevant to of investment policies. investors. Regulatory transparency and predictability measures
Regulatory transparency and predictability measures Publication of existing investment-related measures Publication of investment regulations prior to their entry into force Enquiry points for foreign and domestic investors
PUBLICATION OF EXISTING INVESTMENT- RELATED MEASURES Measure 1
i Publication of existing investment- related measures Background Rationale • Publication of all investment- • Absence of easy access to related laws, regulations, information on investment- authorizations, especially in one related regulations leads to of WTO language, improves uncertainty, frustration, and transparency for investors; delays for investors; • Publishing all investment-related • For investors, the lack of regulations online, and in a complete, coherent information centralized manner, make on applicable regulations may investors’ lives easier and delay investment projects; improves ease of doing business; • For host countries, publishing all investment-related measures will • For host countries, publishing ensure that correct and and regularly updating comprehensive information is investment-related regulations shared and investment projects ensures inconsistencies can be comply with applicable spotted and can be a useful tool regulations. for domestic investors too
i Publication of existing investment- related measures Analysis Japan-Ukraine BIT (2015) Objective : This measure seeks to increase regulatory transparency for investors Article 9 Nature of obligation : Art. 9.1. is a an obligation to “promptly publish”, 1. Each Contracting Party as the expression “shall” leaves no shall promptly publish, or doubt on the mandatory nature of otherwise make publicly the measure. available , its laws, regulations, administrative procedures and Content: This obligation applies to all “laws, regulations, administrative rulings and judicial decisions of general administrative procedures and rulings” pertaining to the application as well as investment regime. international agreements which pertain to or affect the Not covered: This measure does implementation and operation not oblige governments to use a of this Agreement. specific means of publishing (online, on paper, etc.)
Example from Canada https://www.ic.gc.ca/eic/site/ica-lic.nsf/eng/h_lk00012.html
i Publication of existing investment- related measures Implementation considerations Situation in Indonesia To implement this measure: ❑ Map out all existing investment- related regulations (see scope), bearing in mind that non- investment specific and general policies may affect investors, such as cultural industry support, agricultural policies, telecommunication laws, etc. Discussion with workshop participants ❑ Choose a responsible agency to coordinate the implementation (such as BKPM or MoT) and establish a single online portal to publish all regulations (with an English version preferably) ❑ Set up a systematic process for publishing all new investment regulations
PUBLICATION OF INVESTMENT REGULATIONS PRIOR TO THEIR ENTRY INTO FORCE Measure 2
ii Publication of investment regulations prior to their entry into force Background Rationale • Lack of access to information on new or upcoming investment- • Publication of investment related regulations leads to regulations prior to their entry unpredictability for investors; into force addresses on of investors’ main concerns: policy • For investors, this may affect predictability; their perception of the domestic • Publication of all investment- investment environment, and force postponement of related regulations in advance will reduce investors’ concerns investment projects; and increase trust and • For host countries, this may confidence make their investment environment less attractive for • Early and reliable information will also reduce adjustment costs for foreign investments, and lead to higher level of non-compliance investors and ensure quick with newly adopted investment compliance and policy efficiency regulations.
ii Publication of investment regulations prior to their entry into force Canada-Guinea BIT Analysis (signed in 2015, not in force) Objective : This measure seeks to Article 12 (Transparency) increase regulatory transparency for Canadian and Guinean investors 2. To the extent possible , Nature of obligation : Art. 12.2. is each Party shall: a conditional obligation, as the expression “to the extent possible” has watered down the obligation to 1. publish in advance any publish in advance. measure referred to in paragraph 1 that it proposes to adopt; and Relationship with other measures : linked with “the opportunity to comment” as a 2. provide interested persons precondition to ensure a better and other Parties a reasonable public-private dialogue on opportunity to comment on that investment regulations to increase proposed measure. transparency
Example from Canada http://www.gazette.gc.ca/consult/consult-eng.html
ii Publication of investment regulations prior to their entry into force Implementation considerations Situation in Indonesia The process for adopting new or amending existing investment- related measures should include: ❑ A public notification to inform investors of the intention to change regulations (online, or other means of official Discussion with workshop communications) participants ❑ Proposed regulatory change is made available (preferably online and in English language) ❑ A publication period is provided before the entry into force (preferably 3 months)
ENQUIRY POINTS FOR FOREIGN AND DOMESTIC INVESTORS Measure 3
iii Enquiry points for foreign and domestic investors Background Rationale • Even in countries that adopted • Enquiry points (or information very transparent regulations on points, or national focal points) investment, sometimes investors are persons or offices designated may have specific questions, and to address queries from domestic they do not know “where to ask” or foreign investors. They are useful to provide generic and • For investors, especially specific information on foreigners that are not familiar investment-related regulations or with the government structure, projects; the absence of information points, may considerably • Enquiry points contributes to lengthen the investment project improve transparency in approval process. investment-related regulations, and to reduce time needed to • For host countries, the lack of find requested information centralized information points may be perceived as a lack of • Enquiry points are not necessary coordination amongst single windows, but they can be government agencies and not so to maximize their impact business-friendly.
iii Enquiry points for foreign and domestic investors Analysis Brazil’s proposal for an IFA Objective : This measure seeks to (circulated on 31 January 2018) increase regulatory transparency by creating “enquiry points” for investors Article 6 (National Focal Point) Nature of obligation : Draft Art. 6.1 1. Each Member shall designate a National Focal Point, which shall have provides an obligation to “designate a the following responsibilities: NFP”, as the expression “shall” leaves a. to provide investors with all no doubt on the mandatory nature of relevant public information regarding: the measure. applicable domestic laws and regulations, legal competencies of government agencies or entities with Content: NFP must provide all public delegated authority relevant to their information on investment and investments, public policies, statistics specifically help foreign investors to and all other matters directly relevant to investment; get information from government b. to assist investors from any authorities other Member in obtaining information from government agencies or entities Not covered: This measure does not with delegated authority relevant to oblige government to establish their investments and, if applicable, subnational authorities; physical offices, nor to create “single windows.”
Example from Canada “Invest in Canada”: ✓ Is an agency with an online platform to provide information to investors ✓ Uses social media to share news and information ✓ Responds to enquiries via email ✓ Currently setting up physical offices https://www.investcanada.ca/contact
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