CARICOM Investment Code [M. Odle]

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11/18/2010 M. Odle

CARICOM Investment Code

Dr Maurice OdleEconomic Intelligence and Policy UnitCARICOM Secretariat

[email protected]



11/18/2010 M. Odle

CARICOM Investment Code

Market access for non ±national investor is an integral partof any integration process whether bilateral , regional or multilateral. Accordingly , this presentation on the evolving

investment regime in CARICOM will be structured asfollows :-� Strategic Approach and Basic Principles underpinning

the CIC� Structure and Coverage of the CIC

� Expected Benefits from the CIC



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Mandate for the CIC: Revised

Treaty of Chaguaramas� Article 68 on Community Investment Policy:

³COTED in collaboration with COFAP and COHSODshall establish a Community Investment Policy which

shall include :-� sound national macroeconomic policies� a harmonised system of investment incentives� stable industrial relations� appropriate financial institutions and arrangements� supportive legal and social infrastructure and

� modernisation of the role of public authorities´



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Mandate for the Cont¶d

Article 69 on Harmonization of Investment Incentives calls for thefollowing :

� harmonization of national incentives to investmentin the industrial , agricultural and services sectors

� Consideration to be given to :o sustainable export ±led industrial and service-

oriented developmento Investment facilitation through the removal of

bureaucratic impediments ando Non±discrimination in the granting of incentives

among Community nationals



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Mandate for the CIC Cont¶d

Articles 32 to 43 on Regulatory Standstilland Relaxation of Existing Measures

Article 32 Prohibition of new restrictions on the Rightof Establishment

Article 33 Removal of Restrictions on the Right of Establishment

Article 36 Prohibition on new Restrictions on the

Provision of Services Article 38 Removal of Restrictions on Provision of Services



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Article 39 Prohibition of New Restrictions onMovement of Capital and Current Transactions

Article 40 Removal of Restrictions onMovement of Capital and Current Transactions Article 41 Authorisation to Facilitate Movementof Capital

Article 43 Restrictions to safeguard Balance of-Payments



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Other Supporting and Related Measures Article 65: Environment Protection

Article 66: Protection of Intellectual Property Articles 168-186 : Competition Policy andConsumer Protection Article 187-224: Dispute Settlement



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Decision of the Second Meetingof the Council for Finance and

Planning

� The Second Meeting of the Council for Finance andPlanning which was held in Jamaica on 17-18September 1999 ³agreed that a Special TechnicalTeam of officials spearheaded by Dr Maurice Odle,be established to formulate recommendations on aharmonised investment framework including anappropriate system of incentives , which could be

the basis for an investment code , for theCommunity , while taking into account thedifferential levels of development of Member States´



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Strategic Approach and Basic

Principles� Holistic form: CIC relates to investment from both Intra-CARICOM

and Extra- CARICOM Sources� Built in Preferences of intra vs extra CARICOM Sourced

Investmento

Intra-CARICOM provisions are intended to be WTO, FTAA,EPA etc ³Plus´ ( i.e. single economy oriented)o Provisions relating to investment from Third Party States are

less favourable� ³Negative List´ Approach� Coverage of Both Goods and Services

� Omission of Financial Services� Regime Vis ±a ±Vis Third Party States subject to principle of

³progressive liberalisation´



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Selected Critical Articles of

the CIC� Article 1: Definitions� Article 2: Scope

� Article 6: National Treatment� Article 7: Most Favoured Nation Treatment� Article 10:Key Personnel� Article 13:Compensation for Losses

� Article 14 : Sectoral Reservations� Article 22 : Corporate Social Responsibility� Article 26 : Investor-State Disputes



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Sectoral Reservations

� A CARICOM State may reserve the right to restrict entry to anextra regional investor in very small scale and low technologyservices and manufacturing activities in the following areas :-o Small hotel constructiono Travel agency / tour operator/tour guideo Cultural activitieso Car rental, taxi and bus transporto Road repairso Personal and household services such as hair dressing and beauty

care and cleaning and dyeingo Manufacturing , including handicraft, furniture , beverages and

creole food operationso Small scale primary activity including, agriculture , fishing and

quarryingo Retail operationso Printed media



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Expected Benefits

� Increased Market Access( Market Seeking , Resource Seeking, Efficiency Seeking; and Technology seeking)

� Investment Creation and Diversion

� Lower Transaction Costs� Greater Certainty and Predictability� Synergy of a Single Intra-Regional Regime (One jurisdiction

instead of 14)� Emergence of Cross-Border Investment by SMEs� Greater Intra-CARICOM Flows by TCCs

� Greater Inflows from Extra-CARICOM Sources

Documents

CARICOM Investment Code [M. Odle]