Summary: In furtherance of their economic development policies, most countries have entered into one or more investment agreements that in various ways liberalize, promote, protect or regulate international investment flows. Such agreements typically apply to investment in the territory of one country by investors of another country. The scope of investment agreements is delimited primarily through definitions of key terms, such as "investment" and "investor". By themselves and in conjunction with the operative provisions, these definitions may play one or both of two critical functions in an agreement: they identify those assets to which the treaty applies; and they may determine the nature of the obligations created by the treaty. The terms "investment" and "investor" are the principal focus of this paper. The discussion will consider both how these terms have been defined in existing investment agreements and how these definitional provisions interact with key operative provisions of investment agreements. Investment agreements often define "investment" in a way that is both broad and open-ended. The broadest definitions embrace every kind of asset. They include in particular movable and immovable property, interests in companies (including both portfolio and direct investment), contractual rights (such as service agreements), intellectual property, and business concessions. Each of these types of investment has different economic and development implications for home and host countries. The parties to an investment agreement thus may not wish to liberalize, promote, protect or regulate all investment flows in the same manner or to the same extent. For example, the economic development policies of treaty parties may call for excluding certain assets from coverage by a particular investment agreement or for treating certain assets differently under the agreement
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International Institute for Trade and Developement : UNCTAD Collection
