CARICOM Investment Code

1
CARICOM Investment Code

• Dr Maurice Odle
• Economic Intelligence and Policy Unit
• CARICOM Secretariat
• eipu_at_caricom.org

2
CARICOM Investment Code

• Market access for non national investor is an
  integral part of any integration process
  whether bilateral , regional or multilateral.
  Accordingly , this presentation on the evolving
  investment regime in CARICOM will be
  structured as follows -
• Strategic Approach and Basic Principles
  underpinning the CIC
• Structure and Coverage of the CIC
• Expected Benefits from the CIC

3
Mandate for the CIC Revised Treaty of
Chaguaramas

• Article 68 on Community Investment Policy
• COTED in collaboration with COFAP and COHSOD
  shall 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

4
Mandate for the Contd

• Article 69 on Harmonization of Investment
  Incentives calls for the following
• harmonization of national incentives to
  investment in the industrial , agricultural and
  services sectors
• Consideration to be given to
• sustainable export led industrial and
  service-oriented development
• Investment facilitation through the removal of
  bureaucratic impediments and
• Nondiscrimination in the granting of
  incentives among Community nationals

5
Mandate for the CIC Contd

• Articles 32 to 43 on Regulatory Standstill and
  Relaxation of Existing Measures
• Article 32 Prohibition of new restrictions on
  the Right of 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

6
Mandate for the CIC Contd

• Article 39 Prohibition of New Restrictions on
  Movement of Capital and Current
  Transactions
• Article 40 Removal of Restrictions on
  Movement of Capital and Current
  Transactions
• Article 41 Authorisation to Facilitate
  Movement of Capital
• Article 43 Restrictions to safeguard Balance
  of-Payments

7
Mandate for the CIC Contd

• Other Supporting and Related Measures
• Article 65 Environment Protection
• Article 66 Protection of Intellectual
  Property
• Articles 168-186 Competition Policy and
  Consumer Protection
• Article 187-224 Dispute Settlement

8
Decision of the Second Meeting of the Council
for Finance and Planning

• The Second Meeting of the Council for Finance
  and Planning which was held in Jamaica on 17-18
  September 1999 agreed that a Special Technical
  Team of officials spearheaded by Dr Maurice
  Odle, be established to formulate
  recommendations on a harmonised investment
  framework including an appropriate system of
  incentives , which could be the basis for an
  investment code , for the Community , while
  taking into account the differential levels of
  development of Member States

9
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 Investment
• Intra-CARICOM provisions are intended to be
  WTO, FTAA, EPA etc Plus ( i.e. single economy
  oriented)
• Provisions relating to investment from Third
  Party States are less favourable
• Negative List Approach
• Coverage of Both Goods and Services
• Omission of Financial Services
• Regime Vis a Vis Third Party States subject to
  principle of progressive liberalisation

10
Selected Critical Articles of the CIC

• Article 1 Definitions
• Article 2 Scope
• Article 6 National Treatment
• Article 7 Most Favoured Nation Treatment
• Article 10Key Personnel
• Article 13Compensation for Losses
• Article 14 Sectoral Reservations
• Article 22 Corporate Social Responsibility
• Article 26 Investor-State Disputes

11
Sectoral Reservations

• A CARICOM State may reserve the right to
  restrict entry to an extra regional investor in
  very small scale and low technology services
  and manufacturing activities in the following
  areas -
• Small hotel construction
• Travel agency / tour operator/tour guide
• Cultural activities
• Car rental, taxi and bus transport
• Road repairs
• Personal and household services such as hair
  dressing and beauty care and cleaning and
  dyeing
• Manufacturing , including handicraft, furniture
  , beverages and creole food operations
• Small scale primary activity including,
  agriculture , fishing and quarrying
• Retail operations
• Printed media

12
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