Albania’s legal, regulatory, and accounting systems have improved in recent years, but there are still many serious challenges. Endemic corruption, uneven enforcement of legislation, cumbersome bureaucracy, distortion of competition, and a lack of transparency all hinder the business community.

Albanian legislation includes rules on disclosure requirements, formation, maintenance, and alteration of firms’ capitalization structures, mergers and divisions, takeover bids, shareholders’ rights, and corporate governance principles. The Competition Authority (  http://caa.gov.al   ) is an independent agency tasked with ensuring fair and efficient competition in the market. However, business groups have raised concerns about unfair competition and monopolies, rating the issue as one of the most concerning items damaging the business climate.

The Law on Accounting and Financial Statements includes reporting provisions related to international financial reporting standards (IFRS) for large companies, and national financial reporting standards for small and medium enterprises. Albania meets minimum standards on fiscal transparency, and debt obligations are published by the Ministry of Finance and Economy. Albania’s budgets are publicly available, substantially complete, and reliable.

In August 2020, Albania approved the law for the establishment of the register of the Ultimate Beneficiary Owners. The law aims to ensure transparency on the ultimate beneficiary owners, who directly and indirectly own more than 25 percent of shares, voting rights, or ownership interests in all entities registered to do business in Albania, and was adopted following the recommendations of MONEYVAL.

The rulemaking process in Albania meets the minimum requirements of transparency. Ministries and regulatory agencies develop forward regulatory plans that include changes or proposals intended to be adopted within a set timeframe. The law on notification and public consultation requires the GoA to publish draft laws and regulations for public consultation or notification and sets clear timeframes for these processes. Such draft laws and regulations are published at the following page:   http://www.konsultimipublik.gov.al/ . The business community frequently complains that final versions of laws and regulations fail to address their comments and concerns and that comment periods are frequently not respected.

The Albania Assembly ( www.parlament.al ) publishes a list of both proposed and adopted legislation. All laws, by-laws, regulations, decisions by the Council of Ministers (the government), decrees, and any other regulatory acts are published at the National Publication Center at the following site:  https://qbz.gov.al/

Independent agencies and bodies, including but not limited to, the Energy Regulatory Entity (ERE), Agency for Electronic and Postal Communication (AKEP), Financial Supervising Authority (FSA), Bank of Albania, Competition Authority (CA), National Agency of Natural Resources (NARN), and Extractive Industries Transparency Initiative (EITI), oversee transparency and competition in specific sectors.

Albania acceded to the WTO in 2000 and the country notifies the WTO Committee on Technical Barriers to Trade of all draft technical regulations.

Albania signed a Stabilization and Association Agreement (SAA) with the EU in 2006. The EU agreed to open accession talks on March 25, 2020, and the country is awaiting to hold the first Inter-Governmental Conference (IGC), which would mark the official opening of accession talks. Albania has long been involved in the gradual process of legislation approximation with the EU acquis. This process is expected to accelerate with the opening of accession negotiations.

The Albanian legal system is a civil law system. The Albanian constitution provides for the separation of legislative, executive, and judicial branches, thereby supporting the independence of the judiciary. The Civil Procedure Code, enacted in 1996, governs civil procedures in Albania. The civil court system consists of district courts, appellate courts, and the High Court (the supreme court). The district courts are organized in specialized sections according to the subject of the claim, including civil, family, and commercial disputes.

The administrative courts of first instance, the Administrative Court of Appeal, and the Administrative College of the High Court adjudicate administrative disputes. The Constitutional Court, reviews cases related to the constitutionality of legislation and, in limited instances, protects and enforces the constitutional rights of citizens and legal entities.

Parties may appeal the judgment of the first-instance courts within 15 days of a decision, while appellate court judgments must be appealed to the High Court within 30 days. A lawsuit against an administrative action is submitted to the administrative court within 45 days from notification and the law stipulates short procedural timeframes, enabling faster adjudication of administrative disputes.

Investors in Albania are entitled to judicial protection of legal rights related to their investments. Foreign investors have the right to submit disputes to an Albanian court. In addition, parties to a dispute may agree to arbitration. Many foreign investors complain that endemic judicial corruption and inefficient court procedures undermine judicial protection in Albania and seek international arbitration to resolve disputes. It is beneficial to U.S. investors to include binding international arbitration clauses in any agreements with Albanian counterparts. Albania is a signatory to the New York Arbitration Convention and foreign arbitration awards are typically recognized by Albania. However, the government initially refused to recognize an injunction from a foreign arbitration court in one high-profile case in 2016. The Albanian Civil Procedure Code outlines provisions regarding domestic and international commercial arbitration.

Albania does not have a specific commercial code but has a series of relevant commercial laws, including the Entrepreneurs and Commercial Companies Law, Bankruptcy Law, Public Private Partnership and Concession Law, Competition Law, Foreign Investment Law, Environmental Law, Law on Corporate and Municipal Bonds, Transport Law, Maritime Code, Secured Transactions Law, Employment Law, Taxation Procedures Law, Banking Law, Insurance and Reinsurance Law, Concessions Law, Mining Law, Energy Law, Water Resources Law, Waste Management Law, Excise Law, Oil and Gas Law, Gambling Law, Telecommunications Law, and Value-Added Law.

There is no one-stop-shop that lists all legislation, rules, procedures, and reporting requirements for investors. However, foreign investors should visit the Albania Investment Development Agency webpage (  www.aida.gov.al   ), which offers broad information for foreign investors.

Major laws pertaining to foreign investments include:

Law on Foreign Investments

Law on Strategic Investments: Defines procedures and rules to be observed by government authorities when reviewing, approving, and supporting strategic domestic and foreign investments in Albania

Law on Foreigners

Law on Concessions and Public Private Partnerships: Establishes the framework for promoting and facilitating the implementation of privately financed concessionary projects

Law on Entrepreneurs and Commercial Companies: Outlines general guidelines on the activities of companies and the legal structure under which they may operate

Law on Cross-Border Mergers: Determines rules on mergers when one of the companies involved in the process is a foreign company

Law on Protection of Competition: Stipulates provisions for the protection of competition, and the concentration of commercial companies; and

Law on Collective Investment Undertakings: Regulates conditions and criteria for the establishment, constitution, and operation of collective investment undertakings and of management companies.

The Law on Foreign Investments seeks to create a hospitable legal climate for foreign investors and stipulates the following:

No prior government authorization is needed for an initial investment.

Foreign investments may not be expropriated or nationalized directly or indirectly, except for designated special cases, in the interest of public use and as defined by law.

Foreign investors enjoy the right to expatriate all funds and contributions in kind from their investments.

Foreign investors receive most favored nation treatment according to international agreements and Albanian law.

There are limited exceptions to this liberal investment regime, most of which apply to the purchase of real estate. Agricultural land cannot be purchased by foreigners and foreign entities but may be leased for up to 99 years. Investors can buy agricultural land if registered as a commercial entity in Albania. Commercial property may be purchased, but only if the proposed investment is worth three times the price of the land. There are no restrictions on the purchase of private residential property.

To boost investments in strategic sectors, the government approved a new law on strategic investments in May 2015. Under the new law, a “strategic investment” may benefit from either “assisted procedure” or “special procedure” assistance from the government to help navigate the permitting and regulatory process. Despite supporting legislation, very few foreign investors have benefited from the “Strategic Investor” status, and almost all projects have been granted to domestic companies operating in the tourism sector.

Authorities responsible for mergers, change of control, and transfer of shares include the Albanian Competition Authority ACA:   http://www.caa.gov.al/laws/list/category/1/page/1   , which monitors the implementation of the competition law and approves mergers and acquisitions when required by the law; and the Albanian Financial Supervisory Authority FSA: http://www.amf.gov.al/ligje.asp   , which regulates and supervises the securities market and approves the transfer of shares and change of control of companies operating in this sector.

Albania’s tax system does not distinguish between foreign and domestic investors. Informality in the economy, which may be as large as 40 percent of the total economy, presents challenges for tax administration.

Visa requirements to obtain residence or work permits are straightforward and do not pose an undue burden on potential investors. Generally, U.S. passport holders are entitled to a one year stay in Albania without a residence permit, a special provision the GoA reaffirmed in March 2022. The government approved a new Law on Foreigners in July 2021, which partially aligns the domestic legislation, including that on migration, with the EU Directives. The new law introduces a single application procedure for permits in general. For investors there is a special permit called “Unique Investor Permit.” Foreign investors are issued a 2-year unique investor permit if they invest in Albania and meet certain criteria, including a quota ratio of one to five, of foreign and Albanian workers. In addition, same ratio should be preserved in the Board of Directors and other leading and supervisory structures of the company. Salaries of the Albanian workers should match the average of last year for equivalent positions. The permit can be renewed for an additional three years and after that the investor is eligible to receive a permanent permit provided that they fulfil the criteria outlined above and prove that the company is properly registers, has paid taxes and is not incurring losses. The Council of Ministers approves the annual quota of foreign workers following a needs assessment by sector and profession. However, work permits for staff that occupy key positions, among other categories, can be issued outside the annual quota.

Foreign investors can obtain the single permit by the immigration authorities following the initial approval for employment from the National Agency for Employment and Skills https://www.akpa.gov.al/ . U.S. citizens along with EU, Western Balkans, and Schengen-country citizens are exempt from this requirement. In addition, U.S., EU, and Kosovo citizens when applying for residency permit for the first time, have a term of 5 years. The new law also introduced the National Electronic Register for Foreigners (NERF), which is a state database on foreigners, who enter or intend to enter Albania, with purpose of staying, transiting, working, or studying in Albania. NERF will register data on foreign nationals, who have an entry visa, stay, or transit in the Republic of Albania, have a temporary or permanent residence permit, and have a have a unique permit (residence and employment) in Albania.

The Law on Entrepreneurs and Commercial Companies sets guidelines on the activities of companies and the legal structure under which they may operate. The government adopted the law in 2008 to conform Albanian legislation to the EU’s Acquis Communitaire. The most common type of organization for foreign investors is a limited liability company.

The Law on Public Private Partnerships and Concessions establishes the framework for promoting and facilitating the implementation of privately financed concessionary projects. According to the law, concession projects may be identified by central or local governments or through third party unsolicited proposals. To limit opportunities for corruption, the 2019 amendments prohibited unsolicited bids, beginning in July 2019, on all sectors except for works or services in ports, airports, generation and distribution of electricity, energy for heating, and production and distribution of natural gas. In addition, the 2019 amendments removed the zero to 10 percent bonus points for unsolicited proposals, which gave companies submitting unsolicited bids a competitive advantage over other contenders. Instead, if the party submitting the unsolicited proposal does not win the bid, it will be compensated by the winning company for the cost of the feasibility study, which in no case shall exceed 1 percent of the total cost of the project.

The Albanian Competition Authority http://www.caa.gov.al/?lng=en    is the agency that reviews transactions for competition-related concerns. The Law on Protection of Competition governs incoming foreign investment whether through mergers, acquisitions, takeovers, or green-field investments, irrespective of industry or sector. In the case of share transfers in insurance, banking and non-banking financial industries, the Financial Supervisory Authority (  http://amf.gov.al/   ) and the Bank of Albania https://www.bankofalbania.org/    may require additional regulatory approvals. Transactions between parties outside Albania, including foreign-to-foreign transactions, are covered by the competition law, which states that its provisions apply to all activities, domestic or foreign, that directly or indirectly affect the Albanian market. Parties can appeal the decision of the CA to the Tirana First Instance Court within 30 days of receiving the notification. The appeal does not suspend the enforcement of the decision that authorize concentrations and the temporary measures.

The Albanian constitution guarantees the right of private property. According to Article 41, expropriation or limitation on the exercise of a property right can occur only if it serves the public interest and with fair compensation. During the post-communist period, expropriation has been limited to land for public interest, mainly infrastructure projects such as roads, energy infrastructure, water works, airports, and other facilities. Compensation has generally been reported as being below market value and owners have complained that the compensation process is slow, and unfair. Civil courts are responsible for resolving such complaints.

Changes in government can also affect foreign investments. Following the 2013 elections and peaceful transition of power, the new government revoked, or renegotiated numerous concession agreements, licenses, and contracts signed by the previous government with both domestic and international investors. This practice has occurred in other years as well.

There are many ongoing disputes regarding property confiscated during the communist regime. Identifying ownership is a longstanding problem in Albania that makes restitution for expropriated properties difficult. The restitution and compensation process started in 1993 but has been slow and marred by corruption. Many U.S. citizens of Albanian origin have been in engaged in long-running restitution disputes. Court cases go on for years without a final decision, causing many to refer their case to the European Court of Human Rights (ECHR) in Strasbourg, France. A significant number of applications are pending for consideration before the ECHR. Even after settlement in Strasbourg, enforcement remains slow.

To address the situation, the GOA approved new property compensation legislation in 2018 that aims to resolve pending claims for restitution and compensation. The 2018 law reduces the burden on the state budget by changing the cash compensation formula. The legislation presents three methods of compensation for confiscation claims: restitution; compensation of property with similarly valued land in a different location; or financial compensation. It also set a ten-year timeframe for completion of the process. In February 2020, the Albanian parliament approved a law “On the Finalization of the Transitory Process of Property Deeds in the Republic of Albania,” which aims to finalize land allocation and privatization processes contained in 14 various laws issued between 1991 and 2018.

The GOA has generally not engaged in expropriation actions against U.S. investments, companies, or representatives. There have been limited cases in which the government has revoked licenses, specifically in the mining and energy sectors, based on contract violation claims.

The Law on Strategic Investments, approved in 2015, empowers the government to expropriate private property for the development of private projects deemed special strategic projects. Despite the provision that the government would act when parties fail to reach an agreement, the clause is a source of controversy because it entitles the government to expropriate private property in the interest of another private party. The expropriation procedures are consistent with the law on the expropriation, and the cost for expropriation would be incurred by the strategic investor. The provision has yet to be exercised.

Albania maintains adequate bankruptcy legislation, though corrupt and inefficient bankruptcy court proceedings make it difficult for companies to reorganize or discharge debts through bankruptcy.

A 2016 law on bankruptcy aimed to close loopholes in the insolvency regime, decrease unnecessary market exit procedures, reduce fraud, and ease collateral recovery procedures. The Bankruptcy Law governs the reorganization or liquidation of insolvent businesses. It sets out non-discriminatory and mandatory rules for the repayment of the obligations by a debtor in a bankruptcy procedure. The law establishes statutory time limits for insolvency procedures, professional qualifications for insolvency administrators, and an Agency of Insolvency Supervision to regulate the profession of insolvency administrators.

Debtors and creditors can initiate a bankruptcy procedure and can file for either liquidation or reorganization. Bankruptcy proceedings may be invoked when the debtor is unable to pay the obligations at the maturity date or the value of its liabilities exceeds the value of the assets.

According to the provisions of the Bankruptcy Law, the initiation of bankruptcy proceedings suspends the enforcement of claims by all creditors against the debtor subject to bankruptcy. Creditors of all categories must submit their claims to the bankruptcy administrator. The Bankruptcy Law provides specific treatment for different categories, including secured creditors, preferred creditors, unsecured creditors, and final creditors whose claims would be paid after all other creditors were satisfied. The claims of the secured creditors are to be satisfied by the assets of the debtor, which secure such claims under security agreements. The claims of the unsecured creditors are to be paid out of the bankruptcy estate, excluding the assets used for payment of the secured creditors, following the priority ranking as outlined in the Albanian Civil Code.

Pursuant to the provisions of the Bankruptcy Law, creditors have the right to establish a creditors committee. The creditors committee is appointed by the Commercial Section Courts before the first meeting of the creditor assembly. The creditors committee represents the secured creditors, preferred creditors, and the unsecured creditors. The committee has the right (a) to support and supervise the activities of the insolvency administrator; (b) to request and receive information about the insolvency proceedings; (c) to inspect the books and records; and (d) to order an examination of the revenues and cash balances.

If the creditors and administrator agree that reorganization is the company’s best option, the bankruptcy administrator prepares a reorganization plan and submits it to the court for authorizing implementation.

According to the insolvency procedures, only creditors whose rights are affected by the proposed reorganization plan enjoy the right to vote, and the dissenting creditors in reorganization receive at least as much as what they would have obtained in a liquidation. Creditors are divided into classes for the purposes of voting on the reorganization plan and each class votes separately. Creditors of the same class are treated equally. The insolvency framework allows for the continuation of contracts supplying essential goods and services to the debtor, the rejection by the debtor of overly burdensome contracts, the avoidance of preferential or undervalued transactions, and the possibility of the debtor obtaining credit after commencement of insolvency proceedings. No priority is assigned to post-commencement over secured creditors. Post-commencement credit is assigned over ordinary unsecured creditors.

The creditor has the right to object to decisions accepting or rejecting creditors’ claims and to request information from the insolvency representative. The selection and appointment of insolvency representative does not require the approval of the creditor. In addition, the sale of substantial assets of the debtor does not require the approval of the creditor. According to the law on bankruptcy, foreign creditors have the same rights as domestic creditors with respect to the commencement of, and participation in, a bankruptcy proceeding. The claim is valued as of the date the insolvency proceeding is opened. Claims expressed in foreign currency are converted into Albanian currency according to the official exchange rate applicable to the place of payment at the time of the opening of the proceeding.

The Albanian Criminal Code contains several criminal offenses in bankruptcy, including (i) whether the bankruptcy was provoked intentionally; (ii) concealment of bankruptcy status; (iii) concealment of assets after bankruptcy; and (iv) failure to comply with the obligations arising under bankruptcy proceeding.

According to the World Bank’s 2020 Doing Business Report, Albania ranked 39th out of 190 countries in the insolvency index. A referenced analysis of resolving insolvency can be found at the following link:

 http://documents.worldbank.org/curated/en/255991574747242507/Doing-Business-2020-Comparing-Business-Regulation-in-190-Economies-Economy-Profile-of-Albania

The national government manages all regulatory processes. Legal and regulatory procedures, as written, are considered consistent with international norms, although the decision-making process is at times opaque.

Algeria implemented the Financial Accounting System (FAS) in 2010. Though legislation does not make explicit references, FAS appears to be based on International Accounting Standards Board and International Financial Reporting Standards (IFRS). Operators generally find accounting standards follow international norms, though they note that some particularly complex processes in IFRS have detailed explanations and instructions but are explained relatively briefly in FAS.

There is no mechanism for public comment on draft laws, regulations, or regulatory procedures. Copies of draft laws are generally not made publicly accessible before enactment, although the Ministry of Finance published drafts of the 2021 and 2022 Finance Laws in advance of consideration by Parliament. Government officials often give testimony to Parliament on draft legislation, and that testimony typically receives press coverage. Occasionally, copies of bills are leaked to the media. All laws and some regulations are published in the Official Gazette (www.joradp.dz ) in Arabic and French, but the database has only limited online search features and no summaries are published. Secondary legislation and/or administrative acts (known as “circulaires” or “directives”) often provide important details on how to implement laws and procedures. Administrative acts are generally written at the ministry level and not made public, though may be available if requested in person at a particular agency or ministry. Public tenders are often accompanied by a book of specifications only provided upon payment. The government does not specifically promote or require companies’ environmental, social, and governance (ESG) disclosure.

In some cases, authority over a matter may rest among multiple ministries, which may impose additional bureaucratic steps and the likelihood of either inaction or the issuance of conflicting regulations. The development of regulations occurs largely away from public view; internal discussions at or between ministries are not usually made public. In some instances, the only public interaction on regulations development is a press release from the official state press service at the conclusion of the process; in other cases, a press release is issued earlier. Regulatory enforcement mechanisms and agencies exist at some ministries, but they are usually understaffed, and enforcement remains weak.

The National Economic, Social, and Environmental Council (CNESE) studies the effects of Algerian government policies and regulations in economic, social, and environmental spheres. CNESE provides feedback on proposed legislation, but neither the feedback nor legislation are necessarily made public.

Information on external debt obligations up to fiscal year 2019 is publicly available online via the Central Bank’s quarterly statistical bulletin. The statistical bulletin describes external debt and not public debt, but the Ministry of Finance’s budget execution summaries reflect amalgamated debt totals. The Ministry of Finance is planning to create an electronic, consolidated database of internal and external debt information, and in 2019 published additional public debt information on its website. A 2017 amendment to the 2003 law on currency and credit covering non-conventional financing authorizes the Central Bank to purchase bonds directly from the Treasury for a period of up to five years. The Ministry of Finance indicated this would include purchasing debt from state enterprises, allowing the Central Bank to transfer money to the treasury, which would then provide the cash to, for example, state owned enterprises in exchange for their debt. In September 2019, the Prime Minister announced Algeria would no longer use non-conventional financing, although the Ministry of Finance stressed the program remains available until 2022. In 2021, the non-profit Cercle d’Action et de Réflexion pour l’Entreprise (CARE) launched an online dashboard compiling key economic figures published by various ministries within the Algerian government.

Algeria is not a member of any regional economic bloc or of the WTO. The structure of Algerian regulations largely follows European – specifically French – standards.

Algeria’s legal system is based on the French civil law tradition. The commercial law was established in 1975 and most recently updated in 2007 ( www.joradp.dz/TRV/FCom.pdf). The judiciary is nominally independent from the executive branch, but U.S. companies have reported allegations of political pressure exerted on the courts by the executive. Organizations representing lawyers and judges have protested during the past year against alleged executive branch interference in judicial independence. Regulation enforcement actions are adjudicated in the national courts system and are appealable. Algeria has a system of administrative tribunals for adjudicating disputes with the government, distinct from the courts that handle civil disputes and criminal cases. Decisions made under treaties or conventions to which Algeria is a signatory are binding and enforceable under Algerian law.

The 51/49 investment rule requires a majority Algerian ownership in “strategic sectors” as prescribed in the 2020 Complementary Finance Law (see section 2), as well as for importers of goods available for resale domestically as prescribed in the 2021 Finance Law. There are few other laws restricting foreign investment. In practice, the many regulatory and bureaucratic requirements for business operations provide officials avenues to informally advance political or protectionist policies. The investment law enacted in 2016 charged ANDI with creating four new branches to assist with business establishment and the management of investment incentives. ANDI’s website (www.andi.dz/index.php/en/investir-en-algerie ) lists the relevant laws, rules, procedures, and reporting requirements for investors. Much of the information lacks detail – particularly for the new incentives elaborated in the 2016 investments law – and refers prospective investors to ANDI’s physical “one-stop shops” located throughout the country.

There is an ongoing effort by the customs service, under the Ministry of Finance, to establish a new digital platform featuring one-stop shops for importers and exporters to streamline bureaucratic processes. The Ministry announced the service would begin in 2021, but the Ministry of Industry clarified in February 2022 that the one-stop shop would be set up with the approval of the new investment law.

The National Competition Council (www.conseil-concurrence.dz/) is responsible for reviewing both domestic and foreign competition-related concerns. Established in late 2013, it is housed under the Ministry of Commerce. Once the economic concentration of an enterprise exceeds 40 percent of a market’s sales or purchases, the Competition Council is authorized to investigate, though a 2008 directive from the Ministry of Commerce exempted economic operators working for “national economic progress” from this review.

The Algerian state can expropriate property under limited circumstances, with the state required to pay “just and equitable” compensation to the property owners. Expropriation of property is extremely rare, with no reported cases within the last 10 years. In late 2018, however, a government measure required farmers to comply with a new regulation altering the concession contracts of their land in a way that would cede more control to the government. Those who refused to switch contract type by December 31, 2018, lost the right to their land.

Algeria’s bankruptcy system is underdeveloped. While bankruptcy per se is not criminalized, management decisions (such as company spending, investment decisions, and even procedural mistakes) can be subject to criminal penalties including fines and incarceration, so decisions that lead to bankruptcy could be punishable under Algerian criminal law. However, bankruptcy cases rarely proceed to a full dissolution of assets. The Algerian government generally props up public companies on the verge of bankruptcy via cash infusions from the public banking system. According to the World Bank’s Doing Business report, debtors and creditors may file for both liquidation and reorganization.

Since the resignation of former President Abdelaziz Bouteflika in early 2019, the courts have given the government authority to put several companies in receivership and have appointed temporary heads to direct them following the arrests of their CEOs as part of a broad anti-corruption drive. The government has since nationalized some of the companies following the conviction of the owners.

Andorra set out transparent policies and laws, which have significantly liberalized all economic sectors in Andorra. New foreign-owned businesses must be approved by the government and the process can take up to a month. Andorra is committed to a transparent process. Andorra has begun to relax labor and immigration standards; previously, foreign professionals had to establish 20 years of residency before being eligible to own 100 percent of their business in Andorra. This restriction has been lifted for nationals coming from countries that have reciprocal standards for Andorran citizens.

Following approval of the new Accounting Law in 2007, individuals carrying out business or professional activities, trading companies, and legal persons or entities with a profit purpose must file financial statements with the administration.

Although not a member of the European Union (EU), Andorra is a member of the European Customs Union and is subject to all EU free trade regulations and arrangements regarding industrial products. Concerning agriculture, the EU allows duty free importation of products originating in Andorra.

Andorra is negotiating a new association agreement with the European Union alongside Monaco and San Marino that will allow Andorrans to establish themselves in Europe and Andorran companies will be able to trade in the EU market.

Andorra holds observer status at the WTO, although it took steps in the past for full membership of the World Trade Organization (WTO). Andorra became the 190th member of the International Monetary Fund (IMF) in October 2020.

Andorra has a mixed legal system of civil and customary law with the influence of canon law. The judiciary is independent from the executive branch. The Supreme Court consists of a court president and eight judges, organized into civil, criminal, and administrative chambers. Four magistrates make up the Constitutional Court. The Tribunal of Judges and the Tribunal of the Courts are lower courts. Regulations and enforcement actions can be appealed in the national court system.

The Law on Foreign Investment (10/2012) entered into force in 2012, opening the country’s economy by removing the sectorial restrictions stipulated in the prior legislation. In this way, Andorra has positioned itself on equal terms with neighboring economies, enabling it to become more competitive for new sectors and enterprises. On March 2022, Andorra approved a sanctions package in line with EU sanctions against designated Russian and Belarusian individuals and entities.

Andorra Business is responsible for economic promotion and provides information on relevant laws, rules, procedures to set up a business in Andorra, as well as reporting requirements to investors. The organization also provides other services to facilitate foreign and local investments in strategic sectors.

The Law on Effective Competence and Consumer Protection (13/2013) protects investors against unfair practices. The Ministry of Economy is responsible for administering anti-trust laws and reviews transactions for both domestic and international competition-related concerns.

The Law of Expropriation (1993) allows the Government to expropriate private property for public purposes in accordance with international norms, including appropriate compensation. We know of no incidents of expropriation involving the U.S. entities in Andorra.

ICSID Convention and New York Convention

Andorra became a party to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards in September 2015, requiring Andorran courts to enforce financial awards. Andorra is not a member of the International Center for the Settlement of Investment Disputes (ICSID).

Investor-State Dispute Settlement

Andorran legislation establishes mechanisms to resolve disputes if they arise and its judicial system is transparent. The constitution guarantees an independent judiciary branch, overseen by a High Council of Justice. The prosecution system allows for successive appeals to higher courts. The European Court of Justice is the ultimate arbiter of unsettled appeals.

Contractual disputes between U.S. individuals or companies and Andorran entities are rare, but when they arise are handled appropriately. There have been no reported cases of U.S. investment disputes.

International Commercial Arbitration and Foreign Courts

Parties to a dispute can also resolve disputes contractually through arbitration. The Arbitration Court of the Principality of Andorra (TAPA) was established in July 2020 by the Chamber of Commerce, Industry and Services and the Andorran Bar Association in accordance with Law 16/2018. The main goal of this institution is to mediate both national and international business disputes to reach a fair settlement for both parties without having to go to court.

Andorra’s bankruptcy decree dates to 1969. Other laws from 2008 and 2014 complement the initial text and further protect workers’ rights to fair salaries and sets up mechanisms to monitor the implementation of judicial resolutions. Additionally, Law 8/2015 outlines urgent measures allowing Government intervention of the banking sector in a crisis.

Angola’s regulatory system is complex, vague, and inconsistently enforced. In many sectors, no effective regulatory system exists due to a lack of institutional and human capacity. The banking system is slowly beginning to adhere to International Financial Reporting Standards (IFRS). SOEs are still far from practicing IFRS. The public does not participate in draft bills or regulations formulation, nor does a public online location exist where the public can access this information for comment or hold government representatives accountable for their actions. The Angolan Communications Institute (INACOM) is the regulatory authority for the telecommunications sector and regulates prices for telecommunications services such as mobile telephone, internet, and TV services, particularly in sectors without much competition. Revised energy-sector licensing regulations have permitted some purchase power agreements (PPA) participation.

Overall, Angola’s regulatory system does not conform to other international regulatory systems.

Angola became a member of the WTO in 1996. However, it is not party to the Plurilateral Agreements on Government Procurement, or the Trade in Civil Aircraft Agreement and it has not yet notified the WTO of its state-trading enterprises under Article XVII of the GATT. A government procurement management framework introduced in late 2010 stipulates a preference for goods produced in Angola and/or services provided by Angolan or Angola-based suppliers. Technical Barriers to Trade regimes are not coordinated. Angola conducts distinct bilateral negotiations with seven of the nine full members of the Community of Portuguese Language countries (CPLP), Cuba, and Russia and extends trade preferences to China due to previously negotiated credit facilitation terms, while attempting to encourage and protect local content.

Regulatory reviews are based on scientific, or data driven assessments or baseline surveys. Evaluations are based on data, but not made available for public comment.

The state reserves the right to have the final say in all regulatory matters and relies on sectorial regulatory bodies for supervision of institutional regulatory matters concerning investment. The Economic Commission of the Council of Ministers oversees investment regulations that affect the country’s economy including the ministries in charge. Other major regulatory bodies responsible for getting deals through include:

• The National Petroleum, Gas and Biofuels Agency (ANPG) is the government regulatory and oversight body responsible for regulating oil exploration and production activities. On February 6, 2019, the parastatal oil company Sonangol launched ANPG through Presidential decree 49/19. The ANPG is the national concessionaire of hydrocarbons in Angola, authorized to conduct, execute, and ensure oil, gas, and biofuel operations run smoothly, a role previously held by state owned Sonangol. The ANPG must also ensure adherence to international standards and establish relationships with other international agencies and sector relevant organizations.
• The Regulatory Institute of Electricity and Water Services (IRSEA) is the regulatory authority for renewable energies and enforcing powers of the electricity regulatory authority. Revised energy-sector licensing regulations have improved legal protection for investors to attract more private investment in electrical infrastructure, such as dams and hydro distribution stations.
• The Angolan Communications Institute (INACOM) is the regulatory authority for the telecommunications sector including for prices for telecommunications services.
• As of October 1, 2019, a 14 percent VAT regime came into force, replacing the existing 10 percent Consumption Tax. For The General Tax Administration (AGT) oversees tax operations and ensures taxpayer compliance. The new VAT tax regime aimed to boost domestic production and consumption and reduce the incidence of compound tax for businesses unable to recover the consumption tax. The government introduced a temporary reduction of the VAT in October 2021 for key items in the basic basket of goods to 7 percent. The temporary measure should run at least through 2022. Corporate taxpayers can be reimbursed for the VAT on the purchase of good and services, including imports.

There are no informal regulatory processes managed by nongovernmental organizations or private sector associations, and the government does not allow the public to engage in the formulation of legislation or to comment on draft bills. Procurement laws and regulations are unclear, little publicized, and not consistently enforced. Oversight mechanisms are weak, and no audits are required or performed to ensure internal controls are in place or administrative procedures are followed. Inefficient bureaucracy and possible corruption frequently lead to payment delays for goods delivered, resulting in an increase in the price the government must pay.

No regulatory reform enforcement mechanisms have been implemented since the last ICS report. The Diário da República (the Federal Register equivalent) publishes official regulatory action.

The Ministry of Finance’s Debt Management Unit has a portal with quarterly public debt reports, debt strategy, annual debt plan, bond reports, and other publications in Portuguese and in English for the quarterly reports and the debt plan, though it does not have regular reporting on contingent liabilities.

Regionally, Angola is a member of SADC and ECCAS, though it is not a member of SADC’s Free Trade Area or of the Economic and Monetary Community of Central Africa (CEMAC) the customs union associated with ECCAS. New regulations are generally developed in line with regulatory provisions set by AfCTA, SADC, and ECCAS. Standards for each organization can be found at their respective websites: AfCTA: https://au.int/en/cfta ; SADC: SADC Standards and Quality Infrastructure ; ECCAS: https://ceeac-eccas.org/en/#presentation 

Angola is a WTO member but does not notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT). Technical Barriers to Trade (TBT) regimes are not coordinated and often trade regulations are passed and implemented without the due oversight of the WTO.

Angola’s legal system follows civil law tradition and is heavily influenced by Portuguese law, though customary law often prevailed in rural areas. Legislation is the primary source of law. Precedent is accepted but not binding as it is in common-law countries. The Angolan Constitution is at the top of the hierarchy of legislation and establishes the general principle of separation of powers between the judicial, executive, and legislative power. Primary judicial authority in Angola is vested in its courts, which have institutional weaknesses that include lack of independence from political influence in the decision-making process at times.

The Angolan justice system is slow, arduous, and often partial. Legal fees are high, and most businesses avoid taking commercial disputes to court in the country. The World Bank’s Doing Business 2020 survey ranked Angola 186 out of 190 countries on contract enforcement, and estimated that commercial contract enforcement, measured by time elapsed between filing a complaint and receiving restitution, takes an average of 1,296 days, at an average cost of 44.4 percent of the claim.

Angola has commercial legislation that governs all contracts and commercial activities but no specialized court. On August 5, 2020, the Economic Council of Ministers approved the opening of the Court for Litigation on Commercial, Intellectual, and Industrial Property Matters, at the Luanda First Instance Court. With the introduction of this commercial court, the GRA hopes the business environment and trust in public institutions will improve. Prior to this arrangement, trade disputes were resolved by judges in the Courts of Common Pleas. The commercial legislation provides that before going to court, investors can challenge the decision under the terms of the administrative procedural rules, either through a complaint (to the entity responsible for the decision) or through an appeal (to the next level above the entity responsible for the decision). In the new system, investors will be able, in general, to appeal to civil and administrative courts. Investors exercising their right to appeal, however, should expect decisions to take months, or even years, in the case of court decisions.

Angola enacted a new Criminal Code and a new Criminal Procedure Code which entered into force on February 9, 2021, to better align the legal framework with internationally accepted principles and standards, with an emphasis on white-collar crimes and corruption. The legal reforms extend criminal liability for corruption offenses and other crimes to legal entities; provide for private sector corruption offenses to face similar fines and imprisonment to the punishments applicable to the public sector, and modernize and broaden the list of criminal offenses against the financial system. The legal system lacks resources and independence, limiting the effectiveness of the reforms.

There is a general right of appeal to the Court of First Instance against decisions from the primary courts. To enforce judgments/orders, a party must commence executive proceedings with the civil court. The main methods of enforcing judgments are:

• Execution orders (to pay a sum of money by selling the debtor’s assets).
• Seizure of assets from the party and
• Provision of information on the whereabouts of assets.

The Civil Procedure Code also provides for ordinary and extraordinary appeals. Ordinary appeals consist of first appeals, review appeals, interlocutory appeals, and full court appeals, while extraordinary appeals consist of further appeals and third-party interventions. Generally, an appeal does not operate as a stay of the decision of the lower court unless expressly provided for as much in the Civil Procedure Code.

Angola’s legal system is becoming more favorable to FDI and has generally not allowed FDI in specific sectors such as military and security, activities of the Central Bank, and key infrastructure port and airport infrastructure. Under PROPRIV the government has encouraged FDI in ports and airports through management and operation tenders. Investment values exceeding $10 million require an investment contract that needs to be authorized by the Council of Ministers and signed by the President.

AIPEX, Angola’s investment and export promotion agency, maintains the Janela Única do Investimento  (Single Investment Window), which serves as Angola’s one-stop-shop for investment.

Mergers and acquisitions, including those which take place through the sale of state-owned assets, are reviewed by the Institute of Asset Management and State Holdings (IGAPE) and competition related concerns receive oversight by the Competition Regulatory Authority (the “CRA”) which is also responsible for prosecuting offenses. Competition is also regulated by the Competition Act of 2018, which prohibits cartels and monopolistic behavior. A leniency regime was added in September 2020 to reduce fines for the first party to come forward under specific conditions.

CRA decisions are subject to appeal, though Angola does not have special courts of jurisdiction to deal with competition matters.

Angola’s Competition Act creates a formal merger control regime. Mergers are subject to prior notification to the CRA, and they must meet certain specified requirements. The thresholds requiring prior notification are the following:

• the creation, acquisition, or reinforcement of a market share which is equal to or higher than 50 percent in the domestic market or a substantial part of it; or
• the parties involved in the concentration exceeded a combined turnover in Angola of 3.5 billion Kwanzas in the preceding financial year; or
• the creation, acquisition, or reinforcement of a market share which is equal to or higher than 30 percent, but less than 50 percent in the relevant domestic market or a substantial part of it, if two or more of the undertakings achieved more than 450 million Kwanzas individual turnover in the preceding financial year.

Mergers must not hamper competition and must be consistent with public interest considerations such as:

• a particular economic sector or region.
• the relevant employment levels.
• the ability of small or historically disadvantaged enterprises to become competitive; or

the capability of the industry in Angola to compete internationally.

Under the revised Law of Expropriations by Public Utility (LEUP), which came into force in October 2021, real property and any associated rights can be expropriated for specific public purposes listed in the LEUP in exchange for fair and prompt compensation to be calculated pursuant to the act. Only property strictly indispensable to achieve the relevant public purpose can be expropriated. The LEUP does not apply to compulsory eviction, nationalization, confiscation, easements, re-homing, civil requisition, expropriation for private purpose, temporary occupation of buildings, destruction for public purpose and revocation of concessions. Save for the urgent expropriation instances specifically set forth in the act, the LEUP enshrines the primacy of acquisition through private-law mechanisms, providing for a negotiation process between the expropriating entity – national or local government – and the relevant citizen or private-law entity.

Despite the reforms, expropriation without compensation remains a common practice with idle or underdeveloped areas frequently reverting to the state with little or no compensation to the claimants who paid for the land, who in most cases allege unfair treatment and at times lack of due process.

Angola’s Law on Corporate Restructuring and Insolvency went into force on May 10, 2021, representing the first amendment to bankruptcy legislation since 1961. The law regulates the legal regime of extrajudicial and judicial recovery of the assets of natural and legal persons in economic distress or imminent insolvency, provided recovery is viable and the legal regime of insolvency proceedings of natural and legal persons. The law permits the conservation of national and foreign investment since investors know they have a legal remedy that has as its purpose the preservation of the company.

The government of Antigua and Barbuda publishes laws, regulations, administrative practices, and procedures of general application and judicial decisions that affect or pertain to investments or investors in the country. Where the government establishes policies that affect or pertain to investments or investors that are not expressed in laws and regulation or by other means, the national government has committed to make them publicly available.

Rulemaking and regulatory authority lie with the bicameral parliament of the government of Antigua and Barbuda. The House of Representatives has 19 members, 17 of whom are elected for a five-year term in single-seat constituencies, one of whom is an ex-officio member, and one of whom is Speaker. The Senate has 17 appointed members.

Respective line ministries develop relevant national laws and regulations, which are then drafted by the Ministry of Legal Affairs. Laws relating to the ABIA and the Citizenship by Investment program are the main laws relevant to foreign direct investment. This website contains the full text of laws already in force, as well as those Parliament is currently considering.

While some draft bills are not subject to public consideration, input from stakeholder groups may be considered. The government encourages stakeholder organizations to support and contribute to the legal development process by participating in technical committees and providing comments on drafts.

Accounting, legal, and regulatory procedures are generally transparent and consistent with international norms. The International Financial Accounting Standards, which stem from the General Accepted Accounting Principles, govern the accounting profession.

The constitution provides for the independent Office of the Ombudsman to guard against abuses of power by government officials. The Ombudsman is responsible for investigating complaints about acts or omissions by government officials that violate the rights of members of the public.

The ABIA has primary responsibility for investment supervision, and the Ministry of Finance, Corporate Governance and Public-Private Partnerships monitors investments to collect information for national statistics and reporting purposes. The ABIA can revoke an issued Investment Certificate if the holder fails to comply with certain stipulations detailed in the Investment Authority Act and its regulations.

Antigua and Barbuda’s membership in regional organizations, particularly the OECS and its Economic Union, commits the state to implement all appropriate measures to fulfill its various treaty obligations. The eight member states and territories of the ECCU tend to enact laws uniformly, though minor differences in implementation may exist. The enforcement mechanisms of these regulations include penalties and other sanctions.

The February 2022 Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found Antigua and Barbuda to be largely compliant.

The ECCB is the supervisory authority over financial institutions in Antigua and Barbuda registered under the Banking Act of 2015.

As a member of the OECS and the ECCU, Antigua and Barbuda subscribes to principles and policies outlined in the Revised Treaty of Basseterre. The relationship between national and regional systems is such that each participating member state is expected to coordinate and adopt, where possible, common national policies aimed at the progressive harmonization of relevant policies and systems across the region. Thus, Antigua and Barbuda is obligated to implement regionally developed regulations such as legislation passed under the authority of the OECS, unless it seeks specific concessions to do otherwise.

As a member of the WTO, Antigua and Barbuda is a signatory to the WTO Agreement on the Technical Barriers to Trade and is obligated to notify the Committee of any draft new and updated technical regulations. The Antigua and Barbuda Bureau of Standards is a statutory body that prepares and promulgates standards in relation to goods, services, processes, and practices. Antigua and Barbuda ratified the WTO Trade Facilitation Agreement (TFA) in 2017. The TFA is intended to improve the speed and efficiency of border procedures, facilitate trade costs reduction, and enhance participation in the global value chain. Antigua and Barbuda has implemented a number of TFA requirements, but it has also missed two implementation deadlines.

Antigua and Barbuda bases its legal system on the British common law system. The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice. The Eastern Caribbean Supreme Court Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal. The High Court hears criminal and civil matters and rules on constitutional law issues. Parties may appeal first to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all OECS members. The final appellate authority is the Judicial Committee of the UK Privy Council.

The Caribbean Court of Justice (CCJ) has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas. Antigua and Barbuda is only subject to the original jurisdiction of the CCJ.

As a member of the WTO, Antigua and Barbuda is a party to the WTO Dispute Settlement Panel and Appellate Body which resolves disputes over WTO agreements. Courts of appropriate jurisdiction in both countries resolve private disputes. Antigua and Barbuda brought a case before the WTO against the United States concerning the cross-border supply of online gambling and betting services. The WTO ruled in favor of Antigua and Barbuda, but agreement on settlement terms remains outstanding.

The ABIA provides guidance on the relevant laws, rules, procedures, and reporting requirements for investors. These are available at  http://www.theiguides.org/public-docs/guides/antiguabarbuda  .

The ABIA may grant concessions as specified in the Investment Authority Act Amended 2019. These concessions are listed on Antigua and Barbuda’s iGuide website. Investors must apply to ABIA to take advantage of these incentives.

Under the Citizenship by Investment program, foreign individuals can obtain citizenship in accordance with the Citizenship by Investment Act of 2013, which grants citizenship (without voting rights) to qualified investors. Applicants are required to undergo a due diligence process before citizenship can be granted. The minimum contribution for investors under the program is $100,000 (270,225 Eastern Caribbean dollars) to the National Development Fund for a family of up to four people and $125,000 (337,818 Eastern Caribbean dollars) for a family of five, with additional contributions of $15,000 (40,538 Eastern Caribbean dollars) per person for up to four additional family members. Individual applicants can also qualify for the program by buying real estate valued at $400,000 (1,081,020 Eastern Caribbean dollars) or more or making a business investment of $1.5 million (4,053,825 Eastern Caribbean dollars). Alternatively, at least two applicants can propose to make a joint investment in an approved business with a total investment of at least $5 million (13.5 million Eastern Caribbean dollars). Each investor must contribute at least $400,000 (1,081,020 Eastern Caribbean dollars) to the joint investment. Citizenship by investment investors must own real estate for a minimum of five years before selling it. A fourth option involves a contribution of $150,000 (405,383 Eastern Caribbean dollars) to the University of the West Indies (UWI) Fund for a family of six people, which entitles one member of the family to a one-year tuition-only scholarship at UWI’s Five Islands campus. All applicants must also pay relevant government and due diligence fees, and provide a full medical certificate, police certificate, and evidence of the source of funds.

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to CARICOM states. Member states are required to establish and maintain a national competition authority for implementing the rules of competition. CARICOM established a Caribbean Competition Commission (CCC) to rule on complaints of anti-competitive cross-border business conduct. CARICOM competition policy addresses anti-competitive business conduct such as collusion between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within the Community, and actions by which an enterprise abuses its dominant position within the Community. Antigua and Barbuda does not have any legislation regulating competition. The OECS agreed to establish a regional competition body to handle competition matters within its single market. The draft OECS bill has been submitted to the Ministry of Legal Affairs for review.

According to the Investment Authority Act of 2006, investments in Antigua and Barbuda will not be nationalized, expropriated, or subject to indirect measures having an equivalent effect, except as necessary for the public good, in accordance with the due process of law, on a non-discriminatory basis, and accompanied by prompt, adequate, and effective compensation. Compensation in such cases is the fair market value of the expropriated investment immediately before the expropriation or the impending expropriation became public knowledge, whichever is earlier. Compensation includes interest from the date of dispossession of the expropriated property until the date of payment and is required to be paid without delay.

There is an unresolved dispute regarding the 2007 expropriation of an American-owned property. Following the expropriation, the owners initiated legal action to enforce their rights under Antigua and Barbuda’s Land Acquisition Act. A 2014 Privy Council court decision ordered the Government of Antigua and Barbuda to pay the former property owners $39.8 million in compensation. The government has only paid approximately $20 million as of June 2021, and the property owners have continued to pursue multiple legal remedies to compel the government to pay the outstanding balance. Antigua and Barbuda appealed a 2018 court decision in favor of the claimants; legal proceedings are ongoing. The government has not made any additional payments to the claimants since 2015. The claimants continue to pursue recourse in other jurisdictions and in Antigua and Barbuda, with the latest legal filings in 2020. The outstanding debt is currently $19.1 million with daily accruing interest. Because of Antigua and Barbuda’s failure to fully compensate the owners as required by its own laws, the U.S. government recommends continued caution when investing in real estate or any other venture in Antigua and Barbuda.

Under the Bankruptcy Act (1975), Antigua and Barbuda has a bankruptcy framework that grants certain rights to debtors and creditors. The full text of the legislation can be found on the government’s website .

The Secretary of Strategic Affairs under the Cabinet is in charge of transparency policies and the digitalization of bureaucratic processes as of December 2019.

Argentine government authorities and a number of quasi-independent regulatory entities can issue regulations and norms within their mandates. There are no informal regulatory processes managed by non-governmental organizations or private sector associations. Rulemaking has traditionally been a top-down process in Argentina, unlike in the United States where industry organizations often lead in the development of standards and technical regulations.  The Constitution establishes a procedure that allows for citizens to draft or propose legislation, which is subject to Congressional and Executive approval before being passed into law.

Ministries, regulatory agencies, and Congress are not obligated to provide a list of anticipated regulatory changes or proposals, share draft regulations with the public, or establish a timeline for public comment. They are also not required to conduct impact assessments of the proposed legislation and regulations.

All final texts of laws, regulations, resolutions, dispositions, and administrative decisions must be published in the Official Gazette (https://www.boletinoficial.gob.ar ), as well as in the newspapers and the websites of the Ministries and agencies. These texts can also be accessed through the official website Infoleg (http://www.infoleg.gob.ar/ ), overseen by the Ministry of Justice and Human Rights. Interested stakeholders can pursue judicial review of regulatory decisions.

In September 2016, Argentina enacted a Right to Access Public Information Law (27,275) that mandates all three governmental branches (legislative, judicial, and executive), political parties, universities, and unions that receive public funding are to provide non-classified information at the request of any citizen. The law also created the Agency for the Right to Access Public Information to oversee compliance.

During 2017, the government introduced new procurement standards including electronic procurement, formalization of procedures for costing-out projects, and transparent processes to renegotiate debts to suppliers. The government also introduced OECD recommendations on corporate governance for state-owned enterprises to promote transparency and accountability during the procurement process. The regulation may be viewed at: http://servicios.infoleg.gob.ar/infolegInternet/verNorma.do?id=306769 .

In April 2018, Argentina passed the Business Criminal Responsibility Law (27,041) through Decree 277. The decree establishes an Anti-Corruption Office in charge of outlining and monitoring the transparency policies with which companies must comply to be eligible for public procurement.

The Argentine government has sought to increase public consultation in the rulemaking process; however, public consultation is non-binding and has been done in an ad-hoc fashion. In 2017, the Government of Argentina issued a series of legal instruments that seek to promote the use of tools to improve the quality of the regulatory framework. Amongst them, Decree 891/2017 for Good Practices in Simplification establishes a series of tools to improve the rulemaking process. The decree introduces tools on ex-ante and ex-post evaluation of regulation, stakeholder engagement, and administrative simplification, amongst others. Nevertheless, no formal oversight mechanism has been established to supervise the use of these tools across the line of ministries and government agencies, which make implementation difficult and severely limit the potential to adopt a whole-of-government approach to regulatory policy, according to a 2019 OECD publication on Regulatory Policy in Argentina.

Some ministries and agencies developed their own processes for public consultation by publishing drafts on their websites, directly distributing the draft to interested stakeholders for feedback, or holding public hearings.

In November 2017, the Government of Argentina launched a new website to communicate how the government spends public funds in a user-friendly format (https://www.argentina.gob.ar/economia/transparencia/presupuesto ).

The Argentine government also made an effort to improve citizens’ understanding of the budget, through the citizen’s budget “Presupuesto Ciudadano” website: https://www.economia.gob.ar/onp/presupuesto_ciudadano/seccion6.php . The initiative aligns with the Global Initiative for Fiscal Transparency (GIFT) and UN Resolution 67/218 on promoting transparency, participation, and accountability in fiscal policy.

Argentina requires public companies to adhere to International Financial Reporting Standards (IFRS). Argentina is a member of UNCTAD’s international network of transparent investment procedures.

The government of Argentina does not promote or require environmental, social, and governance (ESG) disclosures to facilitate transparency and/or help investors and consumers distinguish between high and low-quality investments.

Argentina is a founding member of MERCOSUR and has been a member of the Latin American Integration Association (ALADI for Asociación Latinoamericana de Integración) since 1980.  Once any of the decision-making bodies within MERCOSUR agrees to apply a certain regulation, each of the member countries must incorporate it into its legislation according to its own legislative procedures. Once a regulation is incorporated in a MERCOSUR member’s legislation, the country must notify MERCOSUR headquarters.

Argentina has been a member of the WTO since 1995, and it ratified the Trade Facilitation Agreement in January 2018. Argentina notifies technical regulations, but not proposed drafts, to the WTO Committee on Technical Barriers to Trade.  Argentina submitted itself to an OECD regulatory policy review in March 2018, which was released in March 2019.  The Fernandez administration has not actively pursued OECD accession.  Argentina participates in all 23 OECD committees.

Additionally, the Argentine Institute for Standards and Certifications (IRAM) is a member of international and regional standards bodies including the International Standardization Organization (ISO), the International Electrotechnical Commission (IEC), the Pan-American Commission on Technical Standards (COPAM), the MERCOSUR Association of Standardization (AMN), the International Certification Network (i-Qnet), the System of Conformity Assessment for Electrotechnical Equipment and Components (IECEE), and the Global Good Agricultural Practice network (GLOBALG.A.P.).

Argentina follows a Civil Law system. In 2014, the Argentine government passed a new Civil and Commercial Code that has been in effect since August 2015. The Civil and Commercial Code provides regulations for civil and commercial liability, including ownership of real and intangible property claims. The current judicial process is lengthy and suffers from significant backlogs. In the Argentine legal system, appeals may be brought from many rulings of the lower courts, including evidentiary decisions, not just final orders, which significantly slows all aspects of the system. The Justice Ministry reported in December 2018 that the expanded use of oral processes had reduced the duration of 68 percent of all civil matters to less than two years.

According to the Argentine constitution, the judiciary is a separate and equal branch of government. In practice, there are continuous instances of political interference in the judicial process. Companies have complained that courts lack transparency and reliability, and that the Argentine government has used the judicial system to pressure the private sector. Media revelations of judicial impropriety and corruption feed public perception and undermine confidence in the judiciary.

Many foreign investors prefer to rely on private or international arbitration when those options are available. Claims regarding labor practices are processed through a labor court, regulated by Law 18,345 and its subsequent amendments, and implementing regulations by Decree 106/98. Contracts often include clauses designating specific judicial or arbitral recourse for dispute settlement.

According to the Foreign Direct Investment Law 21,382 and Decree 1853/93, foreign investors may invest in Argentina without prior governmental approval, under the same conditions as investors domiciled within the country. Foreign investors are free to enter into mergers, acquisitions, greenfield investments, or joint ventures. Foreign firms may also participate in publicly financed research and development programs on a national treatment basis. Incoming foreign currency must be identified by the participating bank to the Central Bank of Argentina (www.bcra.gob.ar ).

All foreign and domestic commercial entities in Argentina are regulated by the Commercial Partnerships Law (Law No. 19,550) and the rules issued by the commercial regulatory agencies. Decree 27/2018 amended Law 19,550 to eliminate regulatory barriers and reduce bureaucratic burdens, expedite and simplify processes in the public domain, and deploy existing technological tools to better focus on transparency. Full text of the decree can be found at: http://servicios.infoleg.gob.ar/infolegInternet/anexos/305000-309999/305736/norma.htm.  All other laws and norms concerning commercial entities are established in the Argentina Civil and Commercial Code, which can be found at: http://servicios.infoleg.gob.ar/infolegInternet/anexos/235000-239999/235975/norma.htm 

Further information about Argentina’s investment policies can be found at the following websites:

Ministry of Productive Development (https://www.argentina.gob.ar/produccion )

Ministry of Economy (https://www.argentina.gob.ar/economia )

The Central Bank of the Argentine Republic (http://www.bcra.gob.ar/ )

The National Securities Exchange Commission (https://www.argentina.gob.ar/cnv )

The National Investment and Trade Promotion Agency (https://www.inversionycomercio.org.ar/ )

Investors can download Argentina’s investor guide through this link: https://www.investargentina.org.ar/ 

The National Commission for the Defense of Competition and the Secretariat of Domestic Trade, both within the Ministry of Productive Development, have enforcement authority of the Competition Law (Law 25,156). The law aims to promote a culture of competition in all sectors of the national economy. In May 2018, the Argentine Congress approved a new Defense of Competition Law (Law 27,442), which would have, among other things, established an independent competition agency and tribunal. The new law incorporates anti-competitive conduct regulations and a leniency program to facilitate cartel investigation. The full text of the law can be viewed at: http://servicios.infoleg.gob.ar/infolegInternet/verNorma.do?id=310241 . The Government of Argentina, however, has thus far not taken steps to establish the independent agency or tribunal. In February 2021, a bill introducing amendments to the Defense of Competition Law was passed by the Senate and is currently under study in the Lower House. The main changes are related to the removal of the “Clemency Program,” which encourages public reports of collusive and cartel activities, and the elimination of public hearings to appoint members of the Competition Office. The private sector has expressed concern over this bill, stating these changes are contrary to transparency standards embodied in the Law.

In September 2014, Argentina amended the 1974 National Supply Law to expand the ability of the government to regulate private enterprises by setting minimum and maximum prices and profit margins for goods and services at any stage of economic activity. Private companies may be subject to fines and temporary closure if the government determines they are not complying with the law. Although the law is still in effect, the U.S. Government has not received any reports of it being applied since December 2015.  However, the Fernandez administration has expressed its potential use when resisted compliance with price control programs, even if the program was supposed to be voluntary.

In March 2020, the Government of Argentina enacted the Supermarket Shelves Law (Law 27,545) that states that any single manufacturer and its associated brands cannot occupy more than 30 percent of a retailer’s shelf space devoted to any one product category.  The law’s proponents claim it will allow more space for domestic SME-produced products, encourage competition, and reduce shortages. U.S. companies have expressed concern over the pending regulations, seeking clarification about issues such as whether display space percentages would be considered per brand or per production company, as it could potentially affect a company’s production, distribution, and marketing business model.

Section 17 of the Argentine Constitution affirms the right of private property and states that any expropriation must be authorized by law and compensation must be provided. The United States-Argentina BIT states that investments shall not be expropriated or nationalized except for public purposes upon prompt payment of the fair market value in compensation.

Argentina has a history of expropriations under previous administrations. The most recent expropriation occurred in March 2015 when the Argentine Congress approved the nationalization of the train and railway system. A number of companies that were privatized during the 1990s under the Menem administration were renationalized under the Kirchner administrations. Additionally, in October 2008, Argentina nationalized its private pension funds, which amounted to approximately one-third of total GDP and transferred the funds to the government social security agency.

In May 2012, the Fernandez de Kirchner administration nationalized oil and gas company Repsol-YPF. Most of the litigation between the Government of Argentina and Repsol was settled in 2016.  An American hedge fund still holds a claim against YPF and is in litigation in U.S. courts.

ICSID Convention and New York Convention

Argentina is signatory to the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitration Awards, which the country ratified in 1989. Argentina is also a party to the International Center for Settlement of Investment Disputes (ICSID) Convention since 1994.

There is neither specific domestic legislation providing for enforcement under the 1958 New York Convention nor legislation for the enforcement of awards under the ICSID Convention. Companies that seek recourse through Argentine courts may not simultaneously pursue recourse through international arbitration.

Investor-State Dispute Settlement

The Argentine government officially accepts the principle of international arbitration. The United States-Argentina BIT includes a chapter on Investor-State Dispute Settlement for U.S. investors.

In the past ten years, Argentina has been brought before the ICSID in 7 cases involving U.S. or other foreign investors. Argentina currently has seven pending arbitration cases, three of them filed against it by U.S. investors. For more information on the cases brought by U.S. claimants against Argentina, go to: https://icsid.worldbank.org/en/Pages/cases/AdvancedSearch.aspx #.

Local courts cannot enforce arbitral awards issued against the government based on the public policy clause. There is no history of extrajudicial action against foreign investors.

Argentina is a member of the United Nations Commission on International Trade Law (UNCITRAL) and the World Bank’s Multilateral Investment Guarantee Agency (MIGA).

Argentina is also a party to several bilateral and multilateral treaties and conventions for the enforcement and recognition of foreign judgments, which provide requirements for the enforcement of foreign judgments in Argentina, including:

Treaty of International Procedural Law, approved in the South American Congress of Private International Law held in Montevideo in 1898, ratified by Argentina by law No. 3,192.

Treaty of International Procedural Law, approved in the South American Congress of Private International Law held in Montevideo in 1939-1940, ratified by Dec. Ley 7771/56 (1956).

Panama Convention of 1975, CIDIP I: Inter-American Convention on International Commercial Arbitration, adopted within the Private International Law Conferences – Organization of American States, ratified by law No. 24,322 (1995).

Montevideo Convention of 1979, CIDIP II: Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitral Awards, adopted within the Private International Law Conferences – Organization of American States, ratified by law No. 22,921 (1983).

International Commercial Arbitration and Foreign Courts

Alternative dispute resolution (ADR) mechanisms can be stipulated in contracts. Argentina also has ADR mechanisms available such as the Center for Mediation and Arbitrage (CEMARC) of the Argentine Chamber of Trade. More information can be found at: http://www.intracen.org. 

Argentina does not have a specific law governing arbitration, but it has adopted a mediation law (Law 24.573/1995), which makes mediation mandatory prior to litigation. Some arbitration provisions are scattered throughout the Civil Code, the National Code of Civil and Commercial Procedure, the Commercial Code, and three other laws. The following methods of concluding an arbitration agreement are non-binding under Argentine law: electronic communication, fax, oral agreement, and conduct on the part of one party. Generally, all commercial matters are subject to arbitration. There are no legal restrictions on the identity and professional qualifications of arbitrators. Parties must be represented in arbitration proceedings in Argentina by attorneys who are licensed to practice locally. The grounds for annulment of arbitration awards are limited to substantial procedural violations, an ultra petita award (award outside the scope of the arbitration agreement), an award rendered after the agreed-upon time limit, and a public order violation that is not yet settled by jurisprudence when related to the merits of the award. On average, it takes around 21 weeks to enforce an arbitration award rendered in Argentina, from filing an application to a writ of execution attaching assets (assuming there is no appeal). It takes roughly 18 weeks to enforce a foreign award. The requirements for the enforcement of foreign judgments are set out in section 517 of the National Procedural Code.

No information is available as to whether the domestic courts frequently rule in cases in favor of state-owned enterprises (SOE) when SOEs are party to a dispute.

Argentina’s bankruptcy law was codified in 1995 in Law 24,522. The full text can be found at: http://www.infoleg.gov.ar/infolegInternet/anexos/25000-29999/25379/texact.htm .

Under the law, debtors are generally able to begin insolvency proceedings when they are no longer able to pay their debts as they mature. Debtors may file for both liquidation and reorganization. Creditors may file for insolvency of the debtor for liquidation only. The insolvency framework does not require approval by the creditors for the selection or appointment of the insolvency representative or for the sale of substantial assets of the debtor. The insolvency framework does not provide rights to the creditor to request information from the insolvency representative, but the creditor has the right to object to decisions by the debtor to accept or reject creditors’ claims. Bankruptcy is not criminalized; however, convictions for fraudulent bankruptcy can carry two to six years of prison time.

Financial institutions regulated by the Central Bank of Argentina (BCRA) publish monthly outstanding credit balances of their debtors; the BCRA National Center of Debtors (Central de Deudores) compiles and publishes this information. The database is available for use of financial institutions that comply with legal requirements concerning protection of personal data. The credit monitoring system only includes negative information, and the information remains on file through the person’s life. At least one local NGO that makes microcredit loans is working to make the payment history of these loans publicly accessible for the purpose of demonstrating credit history, including positive information, for those without access to bank accounts and who are outside of the Central Bank’s system. Equifax, which operates under the local name “Veraz” (or “truthfully”), also provides credit information to financial institutions and other clients, such as telecommunications service providers and other retailers that operate monthly billing or credit/layaway programs.

The Armenian government increasingly makes efforts to uses transparent policies and laws to foster competition. Some contacts have reported that over the last few years the Armenian government has pursued a more consistent execution of these laws and policies in an effort to improve market competition and remove informal barriers to market entry, especially for small- and medium-sized enterprises. Armenia’s legislation on the protection of competition has been improved with clarifications regarding key concepts. There have been some procedural improvements for delivering conclusions and notifications of potential anti-competitive behavior via electronic means. However, companies regard the efforts of the State Commission for the Protection of Economic Competition (SCPEC) alone as insufficient to ensure a level playing field. They indicate that improvements in other state institutions and authorities that support competition, like the courts, tax and customs, public procurement, and law enforcement, are necessary. Numerous studies observe a continuing lack of contestability in local markets, many of which are dominated by a few incumbents. Banking supervision is relatively well developed and largely consistent with the Basel Core Principles. The Central Bank of Armenia (CBA) is the primary regulator of the financial sector and exercises oversight over banking, securities, insurance, and pensions. Armenia has adopted IFRS as the accounting standard for enterprises. Data on Armenia’s public finances and debt obligations are broadly transparent, and the Ministry of Finance publishes periodic reports that are available online.

Safety and health requirements, many of them holdovers from the Soviet period, generally do not impede investment activities. Nevertheless, investors consider bureaucratic procedures to be sometimes burdensome, and discretionary decisions by individual officials may present opportunities for petty corruption. A unified online platform for publishing draft legislation was launched in March 2017.  Proposed legislation is available for the public to view. Registered users can submit feedback and see a summary of comments on draft legislation. However, the time period devoted to public comments is often regarded as insufficient to solicit substantive feedback. The results of consultations have not been reported by the government in the past. The government maintains other portals, including http://www.e-gov.am and http://www.arlis.am, that make legislation and regulations available to the public. The governmental https://www.aipa.am/en/ portal is a comprehensive platform for a range of services including registering intellectual property, opening a company, or applying for a construction permit. It also provides links to key regulatory institutions and laws and regulations. The government does not require environmental and social disclosures to help investors and consumers distinguish between high- and low-quality investments. Some regulations that affect Armenia are developed within the Eurasian Economic Commission, the executive body for the EAEU.

Armenia is a member of the EAEU and adheres to relevant technical regulations. Armenia’s entry into CEPA will lead it to pursue harmonization efforts with the EU on a range of laws, regulations, and policies relevant to economic affairs. Armenia is also a member of the WTO, and the Armenian government notifies draft technical regulations to the WTO Committee on Technical Barriers to Trade. Armenia is a signatory to the Trade Facilitation Agreement and has already sent category “A”, “B,” and “C” notifications to the WTO.

Armenia has a hybrid legal system that includes elements of both civil and common law. Although Armenia is developing an international commercial code, the laws regarding commercial and contractual matters are currently set forth in the civil code. Thus, because Armenia lacks a commercial court, all disputes involving contracts, ownership of property, or other commercial matters are resolved by litigants in courts of general jurisdiction, which handle both civil and criminal cases. Judges that handle civil matters may be overwhelmed by the volume of cases before them and are frequently seen by the public as corrupt. Despite the ability of courts to use the precedential authority of the Court of Cassation and the European Court of Human Rights, many judges who specialize in civil cases do not do so, increasing the unpredictability of court decisions in the eyes of investors.

Businesses tend to perceive that many Armenian courts suffer from low levels of efficiency, independence, and professionalism, which drives a need to strengthen the judiciary. Very often in proceedings when additional forensic expertise is requested, the court may suspend a case until the forensic opinion is received, a process that can take several months. Businesses have noted that many judges at courts of general jurisdiction may be reluctant to make decisions without getting advice from higher court judges. Thus, the public opinion is that decisions may be influenced by factors other than the law and merits of individual cases. In general, the government honors judgments from both arbitration proceedings and Armenian national courts.

Due to the nature and complexity of commercial and contractual issues and the caseload of judges who specialize in civil cases, many matters involving investment or commercial disputes take months or years to work their way through the courts. In addition, businesses have complained of the inefficiencies and institutional corruption of the courts. Even though the Armenian constitution provides investors the tools to enforce awards and their property rights, investors claim that there is little predictability in what a court may do.

Basic legal provisions covering foreign investment are specified in the 1994 Law on Foreign Investment. Foreign companies are entitled by law to the same treatment as Armenian companies. A Law on Public-Private Partnership (PPP), adopted in 2019, establishes a framework for the government to attract investment for projects focused on infrastructure. In 2021, the Law on PPP has been amended to introduce clear criteria for PPP project selection by the Government, as well as enabled investors to apply to the government with PPP project proposals. 

The Investment Support Center (Enterprise Armenia) is Armenia’s national authority for investment and export promotion. It provides information to foreign investors on Armenia’s business climate, investment opportunities, and legislation; supports investor visits; and serves as a liaison for government institutions. More information is available via the Investment Support Center’s website.

SCPEC reviews transactions for competition-related concerns. Relevant laws, regulations, commission decisions, and more information can be found on SCPEC’s website. Concentrations, including mergers, acquisitions of shares or assets, amalgamations, and incorporations, are subject to ex ante control by SCPEC in accordance with the law. Whenever a concentration gives rise to concerns about harm to competition, including the creation or strengthening of a dominant position, SCPEC can prohibit such a transaction or impose certain remedies. Armenia’s Law on Protection of Economic Competition has been amended several times in recent years to bring Armenia’s competition framework into alignment with EAEU and CEPA requirements. The law was changed in 2020 to improve SCPEC’s capabilities to investigate anti-competitive behavior, in collaboration with Armenia’s investigative bodies, whereas before SCPEC had to rely primarily on document studies and request information from other state bodies. 

Amendments to the competition law made in 2021 strengthened SCPEC’s preventive measures by allowing private sector representatives to obtain SCPEC’s advisory opinion on market concentration risks prior to a planned transaction or activity (formerly available only to state bodies). The most recent changes to competition law also defined the order to conduct sectoral market studies to identify potential competition violations and enlarged the scope of market transactions that can be assessed as market concentrations.

Under Armenian law, foreign investment cannot be confiscated or expropriated except in extreme cases of natural or state emergency upon obtaining an order from a domestic court. According to the Armenian constitution, equivalent compensation is owed prior to expropriation.

According to the Law on Bankruptcy adopted in 2006, creditors and equity and contract holders (including foreign entities) have the right to participate and defend their interests in bankruptcy cases. Armenia decided with the passage of a new Judicial Code in 2018 to adopt a new, specialized bankruptcy court, which began operations in 2019. Creditors have the right to access all materials relevant to cases, submit claims to court, participate in meetings of creditors, and nominate candidates to administer cases. Monetary judgments are usually made in local currency. The Armenian Criminal Code defines penalties for false and deliberate bankruptcy, concealment of property or other assets of the bankrupt party, or other illegal activities during the bankruptcy process. UNCTAD observes that Armenia’s framework for bankruptcy procedures needs improvement, adding that insolvency cases are expensive and almost always result in liquidation. Armenia amended its bankruptcy law in December 2019 to reduce the cost of bankruptcy proceedings. In addition, premiums have been set for bankruptcy managers for submitting financial recovery plans, as well as for the recovery of a bankrupt person, with the aim of raising rates of financial recovery. In 2020, the debt threshold to launch bankruptcy proceedings was raised to grant companies a greater ability to pay off debts rather than having their assets frozen.

The Australian Government utilizes transparent policies and effective laws to foster national competition and is consultative in its policy making process. The government generally allows for public comment of draft legislation and publishes legislation once it enters into force. Details of the Australian government’s approach to regulation and regulatory impact analysis can be found on the Department of Prime Minister and Cabinet’s website: https://www.pmc.gov.au/regulation 

Regulations drafted by Australian Government agencies must be accompanied by a Regulation Impact Statement when submitted to the final decision maker (which may be the Cabinet, a Minister, or another decision maker appointed by legislation.) All Regulation Impact Statements must first be approved by the Office of Best Practice Regulation (OBPR) which sits within the Department of Prime Minister and Cabinet, prior to being provided to the relevant decision maker. They are required to demonstrate the need for regulation, the alternative options available (including non-regulatory options), feedback from stakeholders, and a full cost-benefit analysis. Regulations are subsequently required to be reviewed periodically. All Regulation Impact Statements, second reading speeches, explanatory memoranda, and associated legislation are made publicly available on Government websites. Australia’s state and territory governments have similar processes when making new regulations.

The Australian Government has tended to prefer self-regulatory options where industry can demonstrate that the size of the risks are manageable and that there are mechanisms for industry to agree on, and comply with, self-regulatory options that will resolve the identified problem. This manifests in various ways across industries, including voluntary codes of conduct and similar agreements between industry players.

The Australian Government has recognized the impost of regulations and has undertaken a range of initiatives to reduce red tape. This has included specific red tape reduction targets for government agencies and various deregulatory groups within government agencies. In 2019, the Australian Government established a Deregulation Taskforce within its Treasury Department, stating its goal was to “drive improvements to the design, administration and effectiveness of the stock of government regulation to ensure it is fit for purpose.” The taskforce’s work is ongoing.

Australian accounting, legal, and regulatory procedures are transparent and consistent with international standards. Accounting standards are formulated by the Australian Accounting Standards Board (AASB), an Australian Government agency under the Australian Securities and Investments Commission Act 2001. Under that Act, the statutory functions of the AASB are to develop a conceptual framework for the purpose of evaluating proposed standards; make accounting standards under section 334 of the Corporations Act 2001, and advance and promote the main objects of Part 12 of the ASIC Act, which include reducing the cost of capital, enabling Australian entities to compete effectively overseas and maintaining investor confidence in the Australian economy. The Australian Government conducts regular reviews of proposed measures and legislative changes and holds public hearings into such matters.

Australian government financing arrangements are transparent and well governed. Legislation governing the type of financial arrangements the government and its agencies may enter into is publicly available and adhered to. Updates on the Government’s financial position are regularly posted on the Department of Finance and Treasury websites. Issuance of government debt is managed by the Australian Office of Financial Management, which holds regular tenders for the sale of government debt and the outcomes of these tenders are publicly available. The Australian Government also publishes and adheres to strict procurement guidelines. Australia formally joined the WTO Agreement on Government Procurement in 2019.

Environmental Social Governance (ESG) reporting is not currently mandated for companies in Australia. However, companies are required to disclose any information that shareholders may deem relevant in assessing the performance of value of the company and this may include ESG components. Companies are also increasingly disclosing ESG aspects of their operations in response to shareholder demands and in order to secure an advantage over competitors. Further, financial services companies are required to disclose their exposure to climate risk as part of their standard risk disclosures (see further detail here: https://asic.gov.au/about-asic/news-centre/speeches/corporate-governance-update-climate-change-risk-and-disclosure/ )

Australia is a member of the WTO, G20, OECD, and the Asia-Pacific Economic Cooperation (APEC), and became the first Association of Southeast Nations (ASEAN) Dialogue Partner in 1974. While not a regional economic block, Australia’s free trade agreement with New Zealand provides for a high level of integration between the two economies with the ultimate goal of a single economic market. Details of Australia’s involvement in these international organizations can be found on the Department of Foreign Affairs and Trade’s website: https://www.dfat.gov.au/trade/organisations/Pages/wto-g20-oecd-apec 

The Australian legal system is firmly grounded on the principles of equal treatment before the law, procedural fairness, judicial precedent, and the independence of the judiciary. Strong safeguards exist to ensure that people are not treated arbitrarily or unfairly by governments or officials. Property and contractual rights are enforced through the Australian court system, which is based on English Common Law. Australia’s judicial system is fully independent and separate from the executive branch of government.

Information regarding investing in Australia can be found in Austrade’s “Guide to Investing” at http://www.austrade.gov.au/International/Invest/Investor-guide . The guide is designed to help international investors and businesses navigate investing and operating in Australia.

Foreign investment in Australia is regulated by the Foreign Acquisitions and Takeovers Act 1975 and Australia’s Foreign Investment Policy. The Foreign Investment Review Board (FIRB) is a non-statutory body, comprising independent board members advised by a division within the Treasury Department, established to advise the Treasurer on Australia’s foreign investment policy and its administration. The FIRB screens potential foreign investments in Australia above threshold values, and based on advice from the FIRB the Treasurer may deny or place conditions on the approval of particular investments above that threshold on national interest grounds. In January 2021 new legislation, the Foreign Investment Reform (Protecting Australia’s National Security) Act 2020, took effect. This legislation tightened Australia’s investment screening rules by introducing the concept of a “national security business” and “national security land,” the acquisition of which trigger a FIRB review. Further details on national security considerations, including the definitions of national security businesses, are available on the FIRB website: https://firb.gov.au/guidance-resources/guidance-notes/gn8.

The Australian Government applies a “national interest” consideration in reviewing foreign investment applications. “National interest” covers a broader set of considerations than national security alone and may include tax or competition implications of an investment. Further information on foreign investment screening, including screening thresholds for certain sectors and countries, can be found at FIRB’s website: https://firb.gov.au/ . Under the AUSFTA agreement, all U.S. greenfield investments are exempt from FIRB screening.

The Australian Competition and Consumer Commission (ACCC) enforces the Competition and Consumer Act 2010 and a range of additional legislation, promotes competition, and fair trading, and regulates national infrastructure for the benefit of all Australians. The ACCC plays a key role in assessing mergers to determine whether they will lead to a substantial lessening of competition in any market. The ACCC also engages in consumer protection enforcement and has, in recent years, been given expanded responsibilities to monitor energy assets, the national gas market, and digital industries.

Private property can be expropriated for public purposes in accordance with Australia’s constitution and established principles of international law. Property owners are entitled to compensation based on “just terms” for expropriated property. There is little history of expropriation in Australia.

Bankruptcy is a legal status conferred under the Bankruptcy Act 1966 and operates in all of Australia’s states and territories. Only individuals can be made bankrupt, not businesses or companies. Where there is a partnership or person trading under a business name, it is the individual or individuals who make up that firm that are made bankrupt. Companies cannot become bankrupt under the Bankruptcy Act though similar provisions (called “administration and winding up”) exist under the Corporations Act 2001. Bankruptcy is not a criminal offense in Australia.

Creditor rights are established under the Bankruptcy Act 1966, the Corporations Act 2001, and the more recent Insolvency Law Reform Act 2016. The latter legislation commenced in two tranches over 2017 and aims to increase the efficiency of insolvency administrations, improve communications between parties, increase the corporate regulator’s oversight of the insolvency market, and “improve overall consumer confidence in the professionalism and competence of insolvency practitioners.” Under the combined legislation, creditors have the right to: request information during the administration process; give direction to a liquidator or trustee; appoint a liquidator to review the current appointee’s remuneration; and remove a liquidator and appoint a replacement.

The Australian parliament passed the Corporations Amendment (Corporation Insolvency Reforms) Act 2020 in December 2020. The legislation is a response to the economic impacts of the COVID-19 pandemic and is designed to both assist viable businesses remain solvent and simplify the liquidation process for insolvent businesses. The new insolvency process under this legislation came into effect in January 2021.

Australia ranks 20th globally on the World Bank’s Doing Business Report “resolving insolvency” measure.

Austria’s legal, regulatory, and accounting systems are transparent and consistent with international norms. The government does not provide assistance in distinguishing between high- and low-quality investments, leaving this up to the market.

Federal ministries generally publish draft laws and regulations, including investment laws, for public comment prior to their adoption by Austria’s cabinet and/or Parliament. Relevant stakeholders such as the “Social Partners” (Economic Chamber, Agricultural Chamber, Labor Chamber, and Trade Union Association), the Federation of Industries, and research institutions are invited to provide comments and suggestions on draft laws and regulations, directly online, which may be taken into account before adoption of laws. These comments are publicly available. Austria’s nine provinces can also adopt laws relevant to investments; their review processes are generally less extensive, but local laws are less important for investments than federal laws. The judicial system is independent from the executive branch, helping ensure the government follows administrative processes. The government is required to follow administrative processes and its compliance is monitored by the courts, primarily the Court of Auditors. Individuals can file proceedings against the government in Austria’s courts, if the government did not act in accordance with the law. Similarly, the public prosecution service can file cases against the government.

Draft legislation by ministries (“Ministerialentwürfe”) and resulting government draft laws and parliamentary initiatives (“Regierungsvorlagen und Gesetzesinitiativen”) can be accessed through the website of the Austrian Parliament: https://www.parlament.gv.at/PAKT/ (all in German). The parliament also publishes a history of all law-making processes. All final Austrian laws can be accessed through a government database, partly in English: https://www.ris.bka.gv.at/defaultEn.aspx.

The effectiveness of regulations is not reviewed as a regular process, only on an as-needed basis. Austrian regulations governing accounting provide U.S. investors with internationally standardized financial information. In line with EU regulations, listed companies must prepare their consolidated financial statements according to the International Financial Reporting Standards (IAS/IFRS) system.

Public finances are transparent and easily accessible, through the Finance Ministry’s website, Austria’s Central Bank, and various economic research institutes. Overall, Austria has no legal restrictions, formally or informally, that discriminate against foreign investors.

Austria is a member of the EU. As such, its laws must comply with EU legislation and the country is therefore subject to European Court of Justice (ECJ) jurisdiction. Austria is a member of the WTO and largely follows WTO requirements. Austria has ratified the Trade Facilitation Agreement (TFA) but has not taken specific actions to implement it.

The Austrian legal system is based on Roman law. The constitution establishes a hierarchy, according to which each legislative act (law, regulation, decision, and fines) must have its legal basis in a higher legislative instrument. The full text of each legislative act is available online for reference. All final Austrian laws can be accessed through a government database, partly in English: https://www.ris.bka.gv.at/defaultEn.aspx.

Commercial matters fall within the competence of ordinary regional courts except in Vienna, which has a specialized Commercial Court. The Commercial Court also has nationwide competence for trademark, design, model, and patent matters. There is no special treatment of foreign investors, and the executive branch does not interfere in judicial matters.

The legal system provides an effective means for protecting property and contractual rights of nationals and foreigners. Sensitive cases must be reported to the Ministry of Justice, which can issue instructions for addressing them. Austria’s civil courts enforce property and contractual rights and do not discriminate against foreign investors. Austria allows for court decisions to be appealed, first to a Regional Court and in the last instance, to the Supreme Court.

Austria has restrictions on investments in industries designated as critical infrastructure, technology, resources, and industries with access to sensitive information and involved in freedom and plurality of the media. The government must approve any foreign acquisition of a 25 percent or higher stake in any companies that generally fall within these areas. The threshold is 10 percent for sensitive sectors, defined as military goods and technology, operators of critical energy or digital infrastructure and water, system operators charged with guarding Austria’s data sovereignty and R&D in medicine and pharmaceutical products. Additional screenings are required when an investor in the above categories plans to increase the stake above the thresholds of 25 percent or 50 percent. The investment screening review period generally takes 2 months. The number of filed applications has increased significantly since the law was implemented, from three per year to 50 completed screenings in the first 12 months after the updated investment screening law went into effect (from July 2020 to July 2021). None of the completed screenings were rejected, and two were approved with amendments to safeguard domestic supply of the product/service in question.

There is no discrimination against foreign investors, but businesses are required to follow numerous local regulations. Although there is no requirement for participation by Austrian citizens in ownership or management of a foreign firm, at least one manager must meet Austrian residency and other legal requirements. Expatriates may deduct certain expenses (costs associated with moving, maintaining a double residence, education of children) from Austrian-earned income.

The “Law to Support Investments in Municipalities” (published in the Federal Law Gazette, 74/2017, available online in German only on the federal legal information system www.ris.bka.gv.at), allows federal funding of up to 25 percent of the total investment amount of a project to “modernize” a municipality. The Austrian Business Agency serves as a central contact point for companies looking to invest in Austria. It does not serve as a one-stop-shop but can help answer any questions potential investors may have (https://investinaustria.at/en/).

Austria’s Antitrust Act (ATA) is in line with European Union antitrust regulations, which take precedence over national regulations in cases concerning Austria and other EU member states. The Austrian Antitrust Act prohibits cartels, anticompetitive practices, and the abuse of a dominant market position. The independent Federal Competition Authority (FCA) and the Federal Antitrust Prosecutor (FAP) are responsible for administering antitrust laws. The FCA can conduct investigations and request information from firms. The FAP is subject to instructions issued by the Justice Ministry and can bring actions before Austria’s Cartel Court. Additionally, the Commission on Competition may issue expert opinions on competition policy and give recommendations on notified mergers. The most recent amendment to the ATA was in 2017. This amendment facilitated enforcing private damage claims, strengthened merger control, and enabled appeals against verdicts from the Cartel Court.

Companies must inform the FCA of mergers and acquisitions (M&A). Special M&A regulations apply to media enterprises, such as a lower threshold above which the ATA applies, and the requirement that media diversity must be maintained. A cartel court is competent to rule on referrals from the FCA or the FCP. For violations of antitrust regulations, the cartel court can impose fines of up to the equivalent of 10 percent of a company’s annual worldwide sales. The independent energy regulator E-Control separately examines antitrust concerns in the energy sector but must also submit cases to the cartel court.

Austria’s Takeover Law applies to friendly and hostile takeovers of corporations headquartered in Austria and listed on the Vienna Stock Exchange. The law protects investors against unfair practices, since any shareholder obtaining a controlling stake in a corporation (30 percent or more in direct or indirect control of a company’s voting shares) must offer to buy out smaller shareholders at a defined fair market price. The law also includes provisions for shareholders who passively obtain a controlling stake in a company. The law prohibits defensive action to frustrate bids. The Shareholder Exclusion Act allows a primary shareholder with at least 90 percent of capital stock to force out minority shareholders. An independent takeover commission at the Vienna Stock Exchange oversees compliance with these laws. Austrian courts have also held that shareholders owe a duty of loyalty to each other and must consider the interests of fellow shareholders in good faith.

According to the European Convention on Human Rights and the Austrian Civil Code, property ownership is guaranteed in Austria. Expropriation of private property in Austria is rare and may be undertaken by federal or provincial government authorities only based on special legal authorization “in the public interest” in such instances as land use planning, and infrastructure project preparations. The government can initiate such a procedure only in the absence of any other alternatives for satisfying the public interest; when the action is exclusively in the public interest; and when the owner receives just compensation. For example, in 2017-18, the government expropriated Hitler’s birth house in order to prevent it from becoming a place of pilgrimage for neo-Nazis, paying the former owner EUR 1.5 million (USD 1.8 million) in compensation. The expropriation process is non-discriminatory toward foreigners, including U.S. firms. There is no indication that further expropriations will take place in the foreseeable future.

The Austrian Insolvency Act contains provisions for business reorganization and bankruptcy proceedings. Reorganization requires a restructuring plan and the debtor to be able to cover costs or advance some of the costs up to a maximum of EUR 4,000 (USD 4,720). The plan must offer creditors at least 20 percent of what is owed, payable within two years of the date the debtor’s obligation is determined. The plan must be approved by a majority of all creditors and a majority of creditors holding at least 50 percent of all claims.

If the restructuring plan is not accepted, a bankruptcy proceeding is begun. Bankruptcy proceedings take place in court upon application of the debtor or a creditor; the court appoints a receiver for winding down the business and distributing proceeds to the creditors. Bankruptcy is not criminalized, provided the affected person performed all his documentation and reporting obligations on time and in accordance with the law.

Austria’s major commercial association for the protection of creditors in cases of bankruptcy is the “KSV 1870 Group”, www.ksv.at, which also carries out credit assessments of all companies located in Austria. Other European-wide credit bureaus, particularly “CRIF” and “Bisnode”, also monitor the Austrian market.

Azerbaijan’s central government is the primary source of regulations relevant to foreign businesses.  Azerbaijan’s regulatory system has improved in recent years, although enforcement is inconsistent, and decision-making remains opaque.  Private sector associations do not play a significant role in regulatory processes.  The draft legislation process typically does not include public consultations and draft legislation text is rarely made available for public comment.  The government has in some cases engaged business organizations, such as AmCham, and consulting firms on various draft laws.  The website of Azerbaijan’s National Parliament, http://meclis.gov.az/ lists all the country’s laws, but only in the Azerbaijani language.

Legal entities in Azerbaijan must adhere to the International Financial Reporting Standards (IFRS).  These are only obligatory for large companies.  Medium-sized companies can choose between reporting based on IFRS or IFRS-SME standards, which are specially designed for large and medium enterprises.  Small and micro enterprises can choose between reporting based on IFRS, IFRS-SME, or simplified accounting procedures established by the Finance Ministry.

Several U.S. companies with operations and investments in Azerbaijan previously reported they had been subjected to repeated tax audits, requests for prepayment of taxes, and court-imposed fines for violations of the tax code.  These allegations have markedly decreased since 2017.

On October 19, 2015, Azerbaijan suspended inspections of entrepreneurs for two years, but inspections still may occur if a complaint is lodged.  This suspension was subsequently extended through January 1, 2023. Medicine quality and safety, taxes, customs, financial markets, food safety, fire safety, construction and safe usage of hazardous facilities, radioactive substances, and mining fields are not subject to this suspension order and are inspected for quality and safety.

The government has also simplified its licensing regime.  All licenses are now issued with indefinite validity through ASAN service centers and must be issued within 10 days of application.  The Economy Ministry also reduced the number of activities requiring a license from 60 to 32.  

Azerbaijan has held observer status at the World Trade Organization (WTO) since 1997 but has not made significant progress toward joining the WTO for the past several years.  A working party on Azerbaijan’s accession to the WTO was established on July 16, 1997 and Azerbaijan began negotiations with WTO members in 2004.  The WTO Secretariat reports Azerbaijan is less than a quarter of the way to full membership.  In 2016, Azerbaijan imposed higher tariffs on a number of imported goods, including agricultural products, to promote domestic production and reduce imports.  In February 2020, Azerbaijani President Ilham Aliyev made public remarks outlining Azerbaijan’s “cautious” approach to the WTO, saying that “the time [had] not come” for Azerbaijan’s membership.  Currently, Azerbaijan is negotiating bilateral market access with 19 economies.

Azerbaijan’s legal system is based on civil law.  Disputes or disagreements arising between foreign investors and enterprises with foreign investment, Azerbaijani state bodies and/or enterprises, and other Azerbaijani legal entities, are to be settled in the Azerbaijani court system or, upon agreement between the parties, in a court of arbitration, including international arbitration bodies.  The judiciary consists of the Constitutional Court of the Republic of Azerbaijan, the Supreme Court of the Republic of Azerbaijan, the appellate courts of the Republic of Azerbaijan, trial courts, and other specialized courts.  Trial court judgments may be appealed in appellate courts and the judgments of appellate courts can be appealed in the Supreme Court.  The Supreme Court is the highest court in the country.  Under the Civil Procedure Code of Azerbaijan, appellate court judgments are published within three days of issuance or within ten days in exceptional circumstances.  The Constitutional Court has the authority to review laws and court judgments for compliance with the constitution.  

Businesses report problems with the reliability and independence of judicial processes in Azerbaijan.  While the government promotes foreign investment and the law guarantees national treatment, in practice investment disputes can arise when a foreign investor or trader’s success threatens well-connected or favored local interests.

Foreign investment in Azerbaijan is regulated by a number of international treaties and agreements, as well as domestic legislation.  These include the Bilateral Investment Treaty (BIT) between the United States and Azerbaijan, the Azerbaijan-European Commission Cooperation Agreement, the Law on Protection of Foreign Investment, the Law on Investment Activity, the Law on Investment Funds, the Law on Privatization of State Property, the Second Program for Privatization of State Property, and sector-specific legislation.  Azerbaijani law permits foreign direct investment in any activity in which a national investor may also invest, unless otherwise prohibited (see “Limits on Foreign Control and Right to Private Ownership and Establishment” for further information).

A January 2018 Presidential decree called for drafting a new law on investment activities to conform to international standards.  The decree also established mechanisms to protect investor rights and regulate damages, including lost profit caused to investors.  The details of the proposed new law have not been publicized as of April 2022.

The State Service for Antimonopoly Policy and Consumer Protection under the Economy Ministry is responsible for implementing competition-related policy.  The law on Antimonopoly Activity was amended in April 2016 to introduce regulations on price fixing and other anti-competitive behavior.  Parliament began revising a new version of the Competition Code in late 2014, but it has not yet been adopted.  Azerbaijan’s antimonopoly legislation does not constrain the size or scope of the handful of large holding companies that dominate the non-oil economy.

The Law on the Protection of Foreign Investments forbids nationalization and requisition of foreign investment, except under certain circumstances.  Nationalization of property can occur when authorized by parliamentary resolution, although there have been no known cases of official nationalization or requisition against foreign firms in Azerbaijan.  By a decision of the Cabinet of Ministers, requisition is possible in the event of natural disaster, an epidemic, or other extraordinary situation.  In the event of nationalization or requisition, foreign investors are legally entitled to prompt, effective, and adequate compensation.  Amendments made to Azerbaijan’s Constitution in September 2016 enabled authorities to expropriate private property when necessary for social justice and effective use of land.  In one recent case U.S. citizen property owners were pressured by local authorities to relinquish property rights at rates perceived to be well below fair market value.  The case has not yet been tested in the courts and the owners maintained their property, resisting government communications regarding an imminent takeover and indicating that the attempted expropriation was not being lawfully carried out under the terms of the Bilateral Investment Treaty or Azerbaijani law.  The Azerbaijani government has not shown any pattern of discriminating against U.S. persons by way of direct expropriations. 

Azerbaijan’s Bankruptcy Law applies only to legal entities and entrepreneurs, not to private individuals.  Either a debtor facing insolvency or any creditor may initiate bankruptcy proceedings.  In general, the legislation focuses on liquidation procedures.  The bankruptcy law in Azerbaijan is underdeveloped, which restricts private sector economic development by deterring entrepreneurship.  Amendments to Azerbaijan’s bankruptcy law adopted in 2017 extended the obligations of bankruptcy administrators and defined new rights for creditors.

In 2018, the GOB issued a competition law, a personal data protection law, a bankruptcy law, and a health insurance law to enhance the country’s investment eco-system. The Law of Commerce (Legislative Decree No. 7, passed in 1987) addresses the concept of unfair competition and prohibits acts that would have a damaging effect on competition. Companies also are forbidden from undertaking practices detrimental to their competitors or from attracting the customers of their competitors through anti-competitive means. There is no official competition authority in Bahrain and the country has yet to institute comprehensive anti-monopoly laws or an independent anti-corruption agency.

Bahrain’s industrial sector is dominated by state-controlled companies such as Aluminum Bahrain (ALBA), Bahrain Petroleum Company (BAPCO), and Gulf Petrochemical Industries Company (GPIC). De facto monopolies also exist in some industries led by individuals or family-run businesses.

The GOB uses International Financial Reporting Standards (IFRS) as part of its implementation of Generally Accepted Accounting Principles (GAAP). IFRS are used by domestic listed and unlisted companies in their consolidated financial statements for external financial reporting.

Bahrain adopted International Accounting Standard 1 (IAS 1) in 1994 in the absence of other local standards. Non-listed banks and other business enterprises use IASs in the preparation of financial statements.

The 2001 Bahrain Commercial Companies Law requires each registered entity to produce a balance sheet, a profit-and-loss account and the director’s report for each financial year. All branches of foreign companies, limited liability companies and corporations, must submit annual audited financial statements to the Directorate of Commerce and Company Affairs at the MoICT, along with the company’s articles and /or articles of association.

Depending on the company’s business, financial statements may be subject to other regulatory agencies such as the Bahrain Monetary Agency (BMA) and the Bahrain Stock Exchange (banks and listed companies).

Bahrain encourages firms to adhere to both the International Financial Reporting Standards (IFRS) and Bahrain’s Code of Corporate Governance. Bahrain-based companies by and large remain in compliance with IAS-1 disclosure requirements.

There are no informal regulatory processes managed by non-governmental organizations or private sector associations.

According to the World Bank, the GOB does not have the legal obligation to publish the text of proposed regulations before their enactment but bills that are discussed by Parliament may be reported in the local news. The text of the proposed regulations is publicly available one day, two weeks or thirty days after it is published in the Official Gazette. Bahrain, therefore, ranks among the countries with low rule-making transparency.

Bahrain’s laws can be drafted or proposed by the Cabinet or originate in the bicameral National Assembly, comprised of an elected, lower house Council of Representatives (COR) and an appointed, upper house Consultative Council (“Shura”). The independent Legislation and Legal Opinion Commission drafts legislation based on the proposals. The King’s signature is required to ratify any laws following parliamentary approval; laws are in force once published in the Official Gazette. The King may issue royal orders and royal decrees that are immediately effective once issued. For matters deemed urgent, the King can also decree-laws when COR is in recess. These decree-laws must be approved by both chambers with no changes within a month of the COR resuming session, or they are considered null. GOB ministers and heads of agencies are authorized to issue regulations that pertain to the administration of their respective bodies.

Bahrain is a member of the GCC, which created a Unified Economic Agreement to expedite trade and the movement of people and goods within GCC borders.  The GCC has also adopted several unified model laws, such as the GCC Trademark Law.  Bahrain is a signatory to the Apostille Convention and is a member of the Permanent Court of Arbitration.  It is a dualist state, therefore, international treaties are not directly incorporated into its law and must be approved by the National Assembly and ratified by the King.

Commercial regulations can be proposed by the EDB, MoICT, Cabinet, or COR. Draft regulations are debated within the COR and Shura Council. The Bahrain Chamber of Commerce and Industry board of directors may raise concerns over draft legislation at committee meetings or send written comments for review by Members of Parliament; bills are otherwise not available for public comment. The Cabinet issues final approval of regulations.

The e-Government portal and the Legislation and Legal Opinion Commission website list laws by category and date of issuance. Some laws are translated into English. The National Audit Office publishes results of its annual audits of government ministries and parastatals.

As a GCC member, Bahrain has agreed to enforce GCC standards and regulations where they exist, and not to create any domestic rules that contradict established GCC-wide standards and regulations.  In certain cases, the GOB applies international standards where domestic or GCC standards have not been developed.  Bahrain is a member of the WTO and notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade. Bahrain ratified the Trade Facilitation Agreement (TFA) in September 2016 through Law No. 17 of 2016.

Bahrain’s Constitution defines the Kingdom as a sovereign, independent, Arab Muslim State. Article 2 of the Constitution states that Islamic Sharia (Islamic law) is the main source of legislation; however, general matters and private transactions are governed mainly by laws derived from international law. Three types of courts are present in Bahrain: civil, criminal, and family (Sharia) courts. The civil court system consists of lower courts, courts of appeal, and the Court of Cassation – the highest appellate court in the Kingdom, hearing a variety of civil, criminal, and family cases. Civil courts deal with all administrative, commercial, and civil cases, as well as disputes related to the personal status  of non-Muslims. Family courts deal primarily with personal status matters, such as marriage, divorce, custody, and inheritance.

High-ranking judges in Bahrain are often from prominent families but may be non-Bahraini citizens. On January 19, 2022, the king appointed nine English-speaking foreign judges and legal experts to the Court of Cassation, all of whom are commercial arbitration specialists. Bahraini law borrows elements from European or other Arab states’ legal codes.

Bahrain has a long-established framework of commercial law. English is widely used, and several well-known international (including U.S.) law firms, working in association with local partners, are authorized to practice law in Bahrain and provide expert legal services nationally and regionally. Fees are charged according to internationally accepted practices. Non-Bahraini lawyers can represent clients in Bahraini courts. In April 2007, the government permitted international law firms to be established in Bahrain. These firms provide services such as commercial and financial consultancy in legal matters.

Investors report general satisfaction with government cooperation and support. Foreign competitors have occasionally perceived that legal interpretation and application varied between Ministries and was influenced by prominent local business interests or the stature and connections of an investor’s local partner. Such departures from the consistent, transparent application of regulations and the law are uncommon.

The GOB is eager to develop its legal framework. The U.S. Department of Commerce’s Commercial Law Development Program (CLDP) has conducted training and capacity-building programs in Bahrain for years, in cooperation with the National Assembly; Ministry of Justice, Islamic Affairs, and Endowments; Supreme Judicial Council; Bahrain Chamber for Dispute Resolution; Judicial and Legal Studies Institute; and MoICT.

Judgments of foreign courts are recognized and enforceable under local courts. Article nine of the U.S.-Bahrain BIT outlines the disposition of U.S. investment cases within the Bahraini legal system. The most common investment-related concern in Bahrain has been the slow or incomplete application of the law. Although some international law and human rights monitoring organizations have collected anecdotal evidence pointing to a lack of transparency, the judicial process in civil courts is generally considered fair, and cases can be appealed.

The U.S.-Bahrain BIT provides benefits and protection to U.S. investors in Bahrain, such as most-favored nation and national treatment, the right to make financial transfers freely and immediately, the application of international legal standards for expropriation and compensation cases, and access to international arbitration. The BIT guarantees national treatment for U.S. investments across most sectors, with exceptions of a limited list of activities, including ownership of television, radio or other media, fisheries, real estate brokerages, and land transportation. Bahrain provides most-favored nation or national treatment status to U.S. investments in air transportation, the purchase or ownership of land, and the purchase or ownership of shares traded on the Bahrain Bourse.

The national treatment clause in the BIT ensures American firms interested in selling products exclusively in Bahrain are no longer required to appoint a commercial agent, though they may opt to do so. A commercial agent is any Bahraini party appointed by a foreign party to represent the foreign party’s product or service in Bahrain.

Bahrain generally permits 100 percent foreign ownership of new industrial entities and the establishment of representative offices or branches of foreign companies without local sponsors or business partners. Wholly foreign-owned companies may be set up for regional distribution services and may operate within the domestic market provided they do not exclusively pursue domestic commercial sales. Private investment (foreign or Bahraini) in petroleum extraction is permitted.

Expatriates may own land in designated areas in Bahrain. Non-GCC nationals, including Americans, may own high-rise commercial and residential properties, as well as properties used for tourism, banking, financial and health projects, and training centers.

Bahrain issued Bankruptcy Law No. 22 in May 2018 governing corporate reorganization and insolvency. The law is based on U.S. Chapter 11 insolvency legislation and provides companies in financial difficulty with an opportunity to restructure under court supervision.

Below is a link to a site designed to assist foreign investors to navigate the laws, rules, and procedures related to investing in Bahrain: http://cbb.complinet.com/cbb/microsite/laws.html 

The GOB issued Competition Law No. 31 in July 2018 to prevent the formation of monopolies or the practice of anti-competitive behavior. This law makes it easier for new businesses to enter existing markets and compete with significant players.

MoICT’s Consumer Protection Directorate is responsible for ensuring that the law determining price controls is implemented and that violators are punished.

There have been no expropriations in recent years, and there are no cases in contention. The U.S.-Bahrain BIT protects U.S. investments by banning all expropriations (including “creeping” and “measures tantamount to”) except those for a public purpose. Such transactions must be carried out in a non-discriminatory manner, with due process, and prompt, adequate, effective compensation.

ICSID Convention and New York Convention

Bahrain uses multiple international and regional conventions to enhance its commercial arbitration legal framework. Bahrain is a party to the UNCITRAL Model Law on International Commercial Arbitration, the New York Convention, the International Centre for the Settlement of Investment Disputes (ICSID), and the GCC Convention for Execution of Judgments, among others. These conventions and international agreements established the foundation for the GCC Arbitration Centre, and the Bahrain Chamber for Disputes & Resolution (BCDR). Bahrain’s Constitution stipulates international conventions and treaties have the power of law.

Investor-State Dispute Settlement

Article 9 of The U.S.-Bahrain BIT provides for three dispute settlement options:

1. Submitting the dispute to a local court or administrative tribunals of the host country.
2. Invoking dispute-resolution procedures previously agreed upon by the foreign investor or company and the host country government; or,
3. Submitting the dispute for binding arbitration to the International Center for Settlement of Investment Disputes (ICSID) or, the Additional Facility of ICSID, or ad hoc arbitration using the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL), or any other arbitral institution or rules agreed upon by both parties.

Bahrain Chamber for Dispute Resolution Court

The Bahrain Chamber for Dispute Resolution (BCDR) Court was established by Legislative Decree No. 30 of 2009. It operates in partnership with the American Arbitration Association (AAA). BCDR’s casework emanates from disputes brought before the BCDR Court and BCDR’s international arbitration wing, BCDR-AAA.

The BCDR Court administers disputes in excess of 500,000 Bahraini Dinars (approximately $1.3 million) in which at least one party is a financial institution licensed by the Central Bank of Bahrain, or the dispute is of an international commercial nature.

Since its establishment in 2010, BCDR has administered more than 350 cases under its jurisdiction as a court with monetary claims totaling over $6.2 billion.

In February 2022, the Minister of Justice clarified the use of travel bans against insolvent debtors (individuals and companies). The new Enforcement Law  in Civil and Commercial Matters 22/2021 stated that the insolvent debtor must disclose any owned assets, within seven days from the beginning of the judicial proceedings. Companies can settle their debts within 21 days. The justice ministry said it would coordinate with debt collectors from the private sector to expedite the enforcement process.

BCDR-AAA International Arbitration Center

BCDR-AAA is an international arbitration center with jurisdiction over disputes with respect to which the parties have agreed in writing that the BCDR-AAA Arbitration Rules shall apply.

As of December 2020, BCDR-AAA registered 17 cases under its jurisdiction as an international arbitration center, one in 2013, one in 2015, three in 2016, five in 2017, two in 2019, and five in 2020. Of these cases, only seven are ongoing: one that was filed in 2017 and one filed in 2019, five that were filed in 2020. The remainder were awarded or settled.

Bahrain Chamber for Dispute Resolution
Suite 301, Park Plaza
Bldg. 247, Road 1704
P.O. Box 20006
Manama, Kingdom of Bahrain
Tel: + (973) 17-511-311
Website: www.bcdr-aaa.org 

The United Nations Conference on Trade and Development (UNCTAD) reported that Bahrain faced its first known Investor-State Dispute Settlement (ISDS) claim in 2017. The case involved investor claims over the CBB’s 2016 move to close the Manama branch of Future Bank, a commercial bank whose shareholders included Iranian banks. Bahrain and Iran are party to a BIT. UNCTAD reported another investor-state dispute case involving Qatar Airways in 2020.

International Commercial Arbitration and Foreign Courts

Arbitration procedures are largely a contractual matter in Bahrain. Disputes historically have been referred to an arbitration body as specified in the contract, or to the local courts. In dealings with both local and foreign firms, Bahraini companies have increasingly included arbitration procedures in their contracts. Most commercial disputes are resolved privately without recourse to the courts or formal arbitration. Resolution under Bahraini law is generally specified in all contracts for the settlement of disputes that reach the stage of formal resolution but is optional in those designating the BCDR. Bahrain’s court system has adequately handled occasional lawsuits against individuals or companies for nonpayment of debts.

Bahrain Law No. 9 of 2015 promulgating the Arbitration Law (the “New Arbitration Law”) came into effect on August 9, 2015. The law provides that the UNCITRAL 1985 Model Law with its 2006 amendments on international commercial arbitration (the “UNCITRAL Law”) will apply to any arbitration, taking place in Bahrain or abroad, if the parties to the dispute agreed to be subject to the UNCITRAL Law.

The GCC Commercial Arbitration Center, established in 1995, serves as a regional specialized body providing arbitration services. It assists in resolving disputes among GCC countries or between other parties and GCC countries. The Center implements rules and regulations in line with accepted international practice. Thus far, few cases have been brought to arbitration. The Center conducts seminars, symposia, and workshops to help educate and update its members on any new arbitration-related matters.

GCC Commercial Arbitration Center
P.O. Box 2338
Manama, Kingdom of Bahrain
Arbitration Boards’ Secretariat
Tel: + (973) 17278000
Email: case@gcccac.org 
Website: http://www.gcccac.org/en/ 

The GOB enacted its original bankruptcy and insolvency law through Decree by Law No. 11 in 1987.  In May 2018, the GOB issued and ratified Law No. 22, updating the original legislation. Modeled on U.S. Chapter 11 legislation, the law introduces reorganization whereby a company’s management may continue business operations during the administration of a case. The Bankruptcy Law also includes provisions for cross-border insolvency, and special insolvency provisions for small and medium-sized enterprises that were further amended in July 2020 and enhanced creditors rights and expediting liquidation proceedings. The Bahrain credit reference bureau, known as “BENEFIT,” is licensed by the CBB and operates as the credit monitoring authority in Bahrain.

As part of a wider effort to promote sustainability and transparency in Bahrain’s capital market, Bahrain’s national stock market, the Bahrain Bourse (BHB), announced in 2020 new Environmental Social & Governance (ESG) reporting guidelines for listed companies . The voluntary reporting guidance aims to assist listed companies to integrate ESG issues in their reporting cycle and better meet the demands of institutional investors for material ESG information. The ESG reporting guidance encourages listed companies to disclose a set of 32 ESG metrics and indicators in alignment with the recommendations of the Sustainable Stock Exchanges (SSE) initiative and the World Federation of Exchanges, Global Reporting Initiatives (GRI) standards, and the United Nations Sustainable Development Goals. The guidance explains the key regional and international drivers for adoption of ESG reporting, the importance of ESG reporting, the ways to report on ESG, and emphasizes Bahrain Bourse’s efforts in promoting sustainability.

Since 1989, the government has gradually moved to decrease regulatory obstruction of private business. Various chambers of commerce have called for privatization and for a greater voice for the private sector in government decisions, but at the same time many chambers support protectionism and subsidies for their own industries. The result is policy and regulations which are often unclear, inconsistent, or little publicized. Registration and regulatory processes are frequently alleged by businesses to be used as rent-seeking opportunities. The major rule-making and regulatory authority exists at the national level under each Ministry with many final decisions being made at the top-most levels, including the Prime Minister’s Office (PMO). The PMO is actively engaged in directing policies, as well as foreign investment in government-controlled projects.

Bangladesh has made incremental progress in using information technology both to improve the transparency and efficiency of some government services and develop independent agencies to regulate the energy and telecommunication sectors. Some investors cited government laws, regulations, and lack of implementation as impediments to investment. The government has historically limited opportunities for the private sector to comment on proposed regulations. In 2009, Bangladesh adopted the Right to Information Act providing for multilevel stakeholder consultations through workshops or media outreach. Although the consultation process exists, it is still weak and in need of further improvement.

The Environment Conservation Act 1995 (ECA ’95) as amended in 2010 and the Biodiversity Act of 2018 are the main acts governing environmental protection in Bangladesh. The ECA ’95 replaced the earlier environment pollution control ordinance of 1992 and provides the legal basis for Environment Conservation Rules, 1997 (ECR’97). The objective of the Biodiversity Act is equitable sharing of benefits arising out of the use of biological resources. The main objectives of ECA’95 are conservation of the natural environment, improvement of environmental standards, and control and mitigation of environmental pollution. According to the act, all industrial projects require before being undertaken an Environmental Clearance Certificate from the Director General. In issuing the certificate, the projects are classified into the following four categories – Green, Orange-A, Orange-B, and Red.

Environmental Clearance for the Green category is through a comparatively simple procedure. In the case of Orange-A, Orange-B and Red Categories, site clearance is mandatory at the beginning, then Environmental Impact Assessment approval and finally Environmental Clearance is issued. The Environment Clearance is to be renewed after three years for the Green category and one year for Orange-A, Orange-B and Red categories. Red Category projects require an Environmental Impact Statement prior to approval.

Ministries and regulatory agencies do not generally publish or solicit comments on draft proposed legislation or regulations. However, several government organizations, including the Bangladesh Bank (the central bank), Bangladesh Securities and Exchange Commission, BIDA, the Ministry of Commerce, and the Bangladesh Telecommunications Regulatory Commission have occasionally posted draft legislation and regulations online and solicited feedback from the business community. In some instances, parliamentary committees have also reached out to relevant stakeholders for input on draft legislation. The media continues to be the main information source for the public on many draft proposals. There is also no legal obligation to publish proposed regulations, consider alternatives to proposed regulation, or solicit comments from the general public.

The government printing office, The Bangladesh Government Press ( http://www.dpp.gov.bd/bgpress/ ), publishes the “Bangladesh Gazette” every Thursday and Extraordinary Gazettes as and when needed. The Gazette provides official notice of government actions, including issuance of government rules and regulations and the transfer and promotion of government employees. Laws can also be accessed at  http://bdlaws.minlaw.gov.bd/ .

Bangladesh passed the Financial Reporting Act of 2015 which created the Financial Reporting Council in 2016 aimed at establishing transparency and accountability in the accounting and auditing system. The country follows Bangladesh Accounting Standards and Bangladesh Financial Reporting Standards, which are largely derived from International Accounting Standards and International Financial Reporting Standards. However, the quality of reporting varies widely. Internationally known firms have begun establishing local offices in Bangladesh and their presence is positively influencing the accounting norms in the country. Some firms can provide financial reports audited to international standards while others maintain unreliable (or multiple) sets of accounting records. Regulatory agencies do not conduct impact assessments for proposed regulations; consequently, regulations are often not reviewed based on data-driven assessments. Not all national budget documents are prepared according to internationally accepted standards.

The Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC) aims to integrate regional regulatory systems among Bangladesh, India, Burma, Sri Lanka, Thailand, Nepal, and Bhutan. However, efforts to advance regional cooperation measures have stalled in recent years and regulatory systems remain uncoordinated.

Local laws are based on the English common law system but most fall short of international standards. The country’s regulatory system remains weak and many of the laws and regulations are not enforced and standards are not maintained.

Bangladesh has been a member of the World Trade Organization (WTO) since 1995. WTO requires all signatories to the Agreement on Technical Barriers to Trade (TBT) to establish a National Inquiry Point and Notification Authority to gather and efficiently distribute trade-related regulatory, standards, and conformity assessment information to the WTO Member community. The Bangladesh Standards and Testing Institute (BSTI) has been working as the National Enquiry Point for the WTO-TBT Agreement since 2002. There is an internal committee on WTO affairs in BSTI and it participates in notifying WTO activities through the Ministry of Commerce and the Ministry of Industries.

General Contact for WTO-TBT National Enquiry Point:
Email: bsti_std@bangla.net;  bsti_ad@bangla.net 
Website:  http://www.bsti.gov.bd/  

Focal Point for TBT:
Mr. Md. Golam Baki,Deputy Director (Certification Marks), BSTI
Email: bakibsti@gmail.comTel: +88-02-48116665Cell: +8801799828826, +8801712240702

Focal Point for other WTO related matters, except sanitary and phytosanitary systems:
Mr. Md. Hafizur Rahman,Director General, WTO Cell, Ministry of Commerce
Email: dg.wto@mincom.gov.bdTel: +880-2-9545383Cell: +88 0171 1861056

Mr. Mohammad Ileas Mia,Director-1, WTO Cell, Ministry of Commerce
Email: director1.wto@mincom.gov.bdTel: +880-2-9540580Cell: +88 01786698321

Bangladesh is a common law-based jurisdiction. Many of the basic laws, such as the penal code, civil and criminal procedural codes, contract law, and company law are influenced by English common law. However, family laws, such as laws relating to marriage, dissolution of marriage, and inheritance are based on religious scripts and therefore differ among religious communities. The Bangladeshi legal system is based on a written constitution and the laws often take statutory forms that are enacted by the legislature and interpreted by the higher courts. Ordinarily, executive authorities and statutory corporations cannot make any law, but can make by-laws to the extent authorized by the legislature. Such subordinate legislation is known as rules or regulations and is also enforceable by the courts. However, as a common law system, the statutes are short and set out basic rights and responsibilities but are elaborated by the courts in the application and interpretation of those laws. The Bangladeshi judiciary acts through: (1) The Superior Judiciary, having appellate, revision, and original jurisdiction; and (2) The Sub-Ordinate Judiciary, having original jurisdiction.

Since 1971, Bangladesh has updated its legal system concerning company, banking, bankruptcy, and money loan court laws, and other commercial laws. An important impediment to investment in Bangladesh is its weak and slow legal system in which the enforceability of contracts is uncertain. The judicial system does not provide for interest to be charged in tort judgments, which means procedural delays carry no penalties. Bangladesh does not have a separate court or court division dedicated solely to commercial cases. The Joint District Judge court (a civil court) is responsible for enforcing contracts.

Some notable commercial laws include:

• The Contract Act, 1872 (Act No. IX of 1930).
• The Sale of Goods Act, 1930 (Act No. III of 1930).
• The Partnership Act, 1932 (Act No. IX of 1932).
• The Negotiable Instruments Act, 1881 (Act No. XXVI of 1881).
• The Bankruptcy Act, 1997 (Act No. X of 1997).
• The Arbitration Act, 2001 (Act No. I of 2001).

The judicial system of Bangladesh has never been completely independent from interference by the executive branch of the government. In a significant milestone, the government in 2007 separated the country’s judiciary from the executive but the executive retains strong influence over the judiciary through control of judicial appointments. Other pillars of the justice system, including the police, courts, and legal profession, are also closely aligned with the executive branch. In lower courts, corruption is widely perceived as a serious problem. Regulations or enforcement actions are appealable under the Appellate Division of the Supreme Court.

Major laws affecting foreign investment include: the Foreign Private Investment (Promotion and Protection) Act of 1980, the Bangladesh Export Processing Zones Authority Act of 1980, the Companies Act of 1994, the Telecommunications Act of 2001, and the Bangladesh Economic Zones Act of 2010.

Bangladesh industrial policy offers incentives for “green” (environmental) high-tech or “transformative” industries. It allows foreigners who invest $1 million or transfer $2 million to a recognized financial institution to apply for Bangladeshi citizenship. The GOB will provide financial and policy support for high-priority industries (those creating large-scale employment and earning substantial export revenue) and creative industries – architecture, arts and antiques, fashion design, film and video, interactive laser software, software, and computer and media programming. Specific importance is given to agriculture and food processing, RMG, ICT and software, pharmaceuticals, leather and leather products, and jute and jute goods.

In addition, Petrobangla, the state-owned oil and gas company, has modified its production sharing agreement contract for offshore gas exploration to include an option to export gas. In 2019, Parliament approved the Bangladesh Flag Vessels (Protection) Act 2019 with a provision to ensure Bangladeshi flagged vessels carry at least 50 percent of foreign cargo, up from 40 percent. In 2020, the Ministry of Commerce amended the digital commerce policy to allow fully foreign-owned e-commerce companies in Bangladesh and remove a previous joint venture requirement.

The One Stop Service (OSS) Act of 2018 mandated the four IPAs to provide OSS to local and foreign investors in their respective jurisdictions. The move aims to facilitate business services on behalf of multiple government agencies to improve ease of doing business. In 2020, BIDA issued time-bound rules to implement the Act of 2018. Although the IPAs have started to offer a few services under the OSS, corruption and excessive bureaucracy have held back the complete and effective roll out of the OSS. BIDA has a “one-stop” website that provides information on relevant laws, rules, procedures, and reporting requirements for investors at:  http://www.bida.gov.bd/ .

Aside from information on relevant business laws and licenses, the website includes information on Bangladesh’s investment climate, opportunities for businesses, potential sectors, and how to do business in Bangladesh. The website also has an eService Portal for Investors which provides services such as visa recommendations for foreign investors, approval/extension of work permits for expatriates, approval of foreign borrowing, and approval/renewal of branch/liaison and representative offices.

Bangladesh formed an independent agency in 2011 called the “Bangladesh Competition Commission (BCC)” under the Ministry of Commerce. Parliament then passed the Competition Act in 2012. However, the BCC has not received sufficient resources to operate effectively.

In 2018, the Bangladesh Telecommunication Regulatory Commission (BTRC) finalized Significant Market Power (SMP) regulations to promote competition in the industry. In 2019, BTRC declared the country’s largest telecom operator, Grameenphone (GP), the first SMP based on its revenue share of more than 50 percent and customer shares of about 47 percent. Since the declaration, the BTRC has attempted to impose restrictions on GP’s operations, which GP has challenged in the judicial system.

Since the Foreign Investment Act of 1980 banned nationalization or expropriation without adequate compensation, Bangladesh has not nationalized or expropriated property from foreign investors. In the years immediately following independence in 1971, widespread nationalization resulted in government ownership of more than 90 percent of fixed assets in the modern manufacturing sector, including the textile, jute and sugar industries and all banking and insurance interests, except those in foreign (but non-Pakistani) hands. However, the government has taken steps to privatize many of these industries since the late 1970s and the private sector has developed into a main driver of the country’s sustained economic growth.

Many laws affecting investment in Bangladesh are outdated. Bankruptcy laws, which apply mainly to individual insolvency, are sometimes disregarded in business cases because of the numerous falsified assets and uncollectible cross-indebtedness supporting insolvent banks and companies. A Bankruptcy Act was passed by Parliament in 1997 but has been ineffective in addressing these issues. Some bankruptcy cases fall under the Money Loan Court Act-2003 which has more stringent and timely procedures.

Barbados’ legal framework establishes clear rules for foreign and domestic investors regarding tax, labor, environmental, health, and safety concerns. These regulations are in accord with international standards. The Ministry of Finance, Economic Affairs, and Investment and Invest Barbados provide oversight aimed at ensuring the transparency of investment.

Rulemaking and regulatory authority rest with the bicameral parliament of the Government of Barbados. The House of Assembly consists of 30 members who are elected in single-seat constituencies. The Senate consists of 21 members who are appointed by the President. Responsibility for Senate appointments shifted in 2021 when Barbados removed the UK’s Queen Elizabeth as head of state and became a republic.

Foreign investment into Barbados is governed by a series of laws and implementing regulations. These laws and regulations are developed with the participation of relevant ministries, drafted by the Office of the Attorney General, and enforced by the relevant ministry or ministries.

Additional compliance supervision is delegated to specific agencies, by sector, as follows:

• Banking and financial services – Central Bank of Barbados (CBB)
• Insurance and non-banking financial services – Financial Services Commission (FSC)
• International business – International Business Unit, Ministry of International Business and Industry
• Business incorporation and intellectual property – CAIPO

The Ministry of Finance, Economic Affairs and Investment monitors investments to collect information for national statistics and reporting purposes.

All foreign businesses must be registered or incorporated through CAIPO and will be regulated by one of the other agencies depending on the nature of the business.

Although Barbados does not have formal legislation that guarantees access to information or freedom of expression, access to information is generally available. The government maintains a website and an information service to facilitate the dissemination of information such as government office directories and press releases. The government also maintains a parliamentary website at http://www.barbadosparliament.com  where it posts legislation prior to parliamentary debate and live streams House sittings. The government budget is also available on this website.

Although some bills are not subject to public consultation, input from various stakeholder groups and agencies is enlisted during the initial drafting of legislation. Public awareness campaigns, through print and electronic media, are used to inform the public. Copies of regulations are circulated to stakeholders and are published in the Official Gazette after passage in parliament. The Official Gazette is available at  https://gisbarbados.gov.bb/the-official-gazette .

Accounting, legal, and regulatory procedures are transparent. Publicly listed companies publish annual financial statements and changes in portfolio shareholdings, including share value. Service providers are required to adhere to international best practice standards including International Financial Reporting Standards, International Standards on Auditing, and International Public Sector Accounting Standards for government and public sector bodies.

They must also comply with the provisions of the Money Laundering and Financing of Terrorism Prevention and Control Act. Accounting professionals must engage in continuous professional development. The Corporate and Trust Service Providers Act regulates Barbados financial service providers. Failure to adhere to these laws and regulations may result in the revocation of

a company’s business license and/or cancellation of work permit(s). The most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found Barbados to be largely compliant. The government does not promote or require companies’ environmental, social, and governance disclosures.

The Office of the Ombudsman is established by the constitution to guard against abuses of power by government officers in the performance of their duties. The Office of the Ombudsman aims to provide quality service in an impartial and expeditious manner when investigating complaints by Barbadian nationals or residents who consider the conduct of a government body or official unreasonable, improper, inadequate, or unjust.

The Office of the Auditor General is also established by the constitution and is regulated by the Financial Administration and Audit Act. The Auditor General is responsible for the audit and inspection of all public accounts of the Supreme Court, the Senate, the House of Assembly, all government ministries, government departments, government-controlled entities, and statutory bodies. The Office of the Auditor General’s annual reports can be found on the Barbados Parliament website.

The OECD recognized Barbados as largely compliant with international regulatory standards. Barbados is a signatory to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, the Multilateral Competent Authority Agreement, and the Multilateral Convention to Implement Tax Treaty Related Matters to Prevent Base Erosion and Profit Sharing.

The Barbados National Standards Institution (BNSI) oversees a laboratory complex housing metrology, textile, engineering, and chemistry/microbiology laboratories. The primary functions of the BSNI include the preparation, promotion, and implementation of standards in all sectors of the economy, including the promotion of quality systems, quality control, and certification.

The Standards Act (2006) and the Weights and Measures Act (1977) and Regulations (1985) govern the work of the BNSI. As a signatory to the World Trade Organization (WTO) Agreement to Technical Barriers to Trade, Barbados is obligated to harmonize all national standards through the BNSI to international norms to avoid creating technical barriers to trade.

Barbados ratified the WTO Trade Facilitation Agreement in 2018. The Agreement improves the speed and efficiency of border procedures, facilitates trade costs reduction, and enhances participation in the global value chain. In 2019 Barbados implemented the Automated System for Customs Data, which streamlined document compliance and inspections by port authorities. The government also increased issuance fees for certificates of origin, making trade more expensive.

Barbados’ legal system is based on the British common law. Modern corporate law is modeled on the Canadian Business Corporations Act. The Attorney General, the Chief Justice, junior judges, and magistrates administer justice in Barbados. The Supreme Court consists of the Court of Appeal and the High Court. The High Court hears criminal and civil (commercial) matters and makes determinations based on interpretation of the constitution.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal. The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas (RTC). In 2005, Barbados became a full member of the CCJ, making the body its final court of appeal and original jurisdiction of the RTC.

The United States and Barbados are both parties to the WTO. The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.

Invest Barbados’ foreign direct investment policy is to promote Barbados as a desirable investment location, to provide advice, and to assist prospective investors. The main laws concerning investment in Barbados are the Barbados International Business Promotion Act (2005), the Tourism Development Act (2005), and the Companies Act. There is also a framework of legislation that supports the jurisdiction as a global hub for business including insurance, shipping registration, and wealth management.

All proposals for investment concessions are reviewed by Invest Barbados to ensure proposed projects are consistent with the national interest and provide economic benefits to the country.

Invest Barbados provides complimentary “one-stop shop” facilitation services for investors to guide them through the investment process. It offers a website useful for navigating the laws, rules, procedures, and registration requirements for foreign investors:  http://www.investbarbados.org .

Chapter 8 of the RTC outlines the competition policy applicable to CARICOM states. Member states are required to establish and maintain a national competition authority for facilitating the implementation of the rules of competition. At the CARICOM level, a regional Caribbean Competition Commission (CCC) applies the rules of competition. The CARICOM competition policy addresses anticompetitive business conduct such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within the Community and actions by which an enterprise abuses its dominant position within the Community. The Fair Competition Act codified the establishment of the Barbados Fair Trading Commission (FTC) in 2001. The FTC is responsible for the promotion and maintenance of fair competition participates in the CCC. The FTC regulates the principles, rates, and standards of service for public utilities and other regulated service providers. The Telecommunications Act regulates competition in the telecommunications sector.

The Barbados constitution and the Companies Act (Chap. 308) contain provisions permitting the government to acquire property for public use upon prompt payment of compensation at fair market value. U.S. Embassy Bridgetown is not aware of any outstanding expropriation claims or nationalization of foreign enterprises in Barbados.

Under the Bankruptcy and Insolvency Act (2002), Barbados has a bankruptcy framework that recognizes certain debtor and creditor rights. The act gives a potentially bankrupt company three options: bankruptcy (voluntary or involuntary), receivership, or reorganization of the company. The Companies Act provides for the insolvency and/or liquidation of a company incorporated under this act. In 2019, the Supreme Court of Judicature Act was amended to include the establishment of a commercial division in the High Court which will oversee proceedings connected to bankruptcy and insolvency.

According to Belarusian law, drafts of laws and regulations pertaining to investment and doing business are subject to public discussion, though authorities rarely pay heed to public views. The government alleges its policies are transparent, and the implementation of laws is consistent with international norms to foster competition and establish clear rules of the road. However, independent economic experts note that private sector businesses are often discriminated against in favor of public sector businesses. In particular, SOEs often receive government subsidies, benefits, and exemptions like cheaper loans and debt forgiveness that are generally unavailable to private sector companies unless such companies have close connections with Belarus’ ruling circles.

International Financial Reporting Standards (IFRS) have been a part of Belarus’ legislative framework since 2016. Public-interest entities, which include banks, insurance companies, and public corporations with subsidiary companies, are required to publish their financial statements, which comply with the IFRS. Such statements are subject to statutory audit. The IFRS in Belarus can be accessed at  http://www.minfin.gov.by/ru/accounting/inter_standards/docs/  

Belarus’ Ministry of Finance posts regular updates and information on budgetary policy, public finances, and debt obligations on its website: http://www.minfin.gov.by/en/budgetary_policy/  and http://www.minfin.gov.by/en/public_debt/ .

On March 24, 2022, the WTO announced it had suspended Belarus’ application to join the organization because of the GOB’s support for the Russian invasion of Ukraine. Belarus had been working to join the WTO since 1993.

Belarus is a member of the Eurasian Economic Union (EAEU); EAEU regulations and decisions supersede the national regulatory system.

Belarus has a civil law system with a legal separation of branches and institutions and with the main source of law being legal acts, not precedent. For example, Article 44 of Belarus’ Constitution guarantees the inviolability of property. Article 11 of the Civil Code officially safeguards property rights, but presidential edicts and decrees, controlled exclusively by Lukashenka, typically carry more force than legal acts adopted by the legislature. This weakens investor protections and incentives previously passed into law. There is sometimes a public comment process during drafting of legislation or presidential decrees, but the process is not transparent or sufficiently inclusive of investors’ concerns. Belarus has broadly codified commercial laws, but the laws contain inconsistencies and are not considered business friendly.

According to the 2021 Human Rights Report, “The constitution provides for an independent judiciary, but authorities did not respect judicial independence and impartiality. Observers believed corruption, inefficiency, and political interference with judicial decisions were widespread.” Businesses complain the authorities selectively enforce regulations and criminal laws and that cases are often politically motivated. At the February 2021 All Belarusian People’s Assembly, for example, Lukashenka announced he had ordered the closure of over 200 private businesses because of their “illegal support” for the political opposition.

Each of Belarus’ six regions and the capital city of Minsk have economic courts to address commercial and economic issues.  In addition, the Supreme Court has a judicial panel on economic issues.  In 2000, Belarus established a judicial panel to enforce intellectual property rights.  Under the Labor Code, any claims of unfair labor practices are heard by regular civil courts or commissions on labor issues.  However, the judiciary’s lack of independence from the executive branch prevents it from acting as a reliable and impartial mechanism for resolving disputes, whether labor, economic, political, commercial, or otherwise.  According to Freedom House’s 2021 Nations in Transit report, for example, thousands of people were brutally repressed by Belarusian authorities following the fraudulent August 2020 presidential elections. No security officials were ever investigated for wrongdoing and none of the protestors who were prosecuted by the state received a fair trial.

Local economic court proceedings normally do not exceed two months.  Court cases involving foreign persons are typically resolved within seven months unless an international agreement signed by Belarus dictates the resolution must take place sooner.

Foreign investment in Belarus is governed by the 2013 laws “On Investments” and “On Concessions,” the 2009 Presidential Decree No. 10 “On the Creation of Additional Conditions for Investment Activity in Belarus,” and other legislation as well as international and investment agreements signed and ratified by Belarus.

Issued in 2016, Presidential decree number 188 authorizes the Ministry of Antimonopoly Regulation and Trade to counteract monopolistic activities and promote market competition.

According to Article 12 of the Investment Code, neither party may expropriate or nationalize investments both directly and indirectly by means of measures similar to expropriation or nationalization, for other purposes than for the public benefit and on a nondiscriminatory basis; according to the appropriate legal procedure; and on conditions of compensation payment. However, Belarus has no law provisions that establish clear procedures for fair and timely compensation of an investor’s nationalized property. Belarus has signed 70 bilateral agreements on the mutual protection and encouragement of investments which include obligations regarding expropriation.

In 2021, there were no nationally-reported cases of nationalization, and there have been no instances of confiscation of business property as a penalty for violations of law. It should be noted, however, an official decree signed by Lukashenka on March 14 provides for special fees and penalties for businesses from “unfriendly” countries, including the United States, looking to leave the Belarusian market.

Belarus’ recent actions in response to Western sanctions indicate the government is prepared to violate its commitments under international agreements and domestic law. However, Belarus is party to the following dispute resolution mechanisms:

Belarus and the United States signed a Bilateral Investment Treaty (BIT), but entry into force is pending exchange of instruments of ratification. This is unlikely to take place in the near future given the breakdown of relations between the two countries over Belarus’ continued human rights abuses and support for Russia’s invasion of Ukraine. Most of the BITs concluded by Belarus include a provision on international investment arbitration as a mechanism for settling investor-State disputes and recognize the binding force of the awards issued by tribunals. Under Belarusian law, if an international treaty signed by Belarus establishes rules other than those established by local law, the rules of the international treaty prevail.

Since 2017, Belarus has faced three investment arbitration claims involving investors from the Netherlands and Russia. There were no known investment disputes between Belarusian government authorities and U.S. investors in 2021.

Judgments of foreign courts are accepted and enforced if there is a relevant international agreement signed by Belarus. Courts recognize and enforce foreign arbitral awards. The Belarusian Chamber of Commerce and Industry has an International Arbitration Court. The 2013 “Law on Mediation,” as well as codes of civil and economic procedures, established various alternative ways of addressing investment disputes.

Belarus’ 2012 bankruptcy law, related presidential edicts, and government resolutions are not always consistently applied. Additional legal acts, such as the Civil Code and Code of Economic Procedures, also include certain regulations on bankruptcy-related issues. Under the bankruptcy law, foreign creditors have the same rights as Belarusian creditors. Belarusian law criminalizes false and intentional insolvency as well as concealing insolvency. According to the World Bank’s 2020 Doing Business Index, Belarus was ranked 74 in Resolving Insolvency.

The Belgian government has adopted a generally transparent competition policy.  The government has implemented tax, labor, health, safety, and other laws and policies to avoid distortions or impediments to the efficient mobilization and allocation of investment, comparable to those in other EU member states. While U.S. companies continue to play key and long-standing roles in the development of the Belgian economy, a major U.S.-based multinational firm operating in the chemical cluster near the Port of Antwerp has raised concerns that Flemish government officials have unfairly regulated the company and subjected it to strict limitations not applied to other companies operating in the same sector and space.  The firm and the Flemish government remain in regular contact to seek a fair and equitable solution; however, the perceived lack of regulatory certainty could lead to a reduction of industry investment and operations in Belgium if unresolved.

Political competences in Belgium are shared between the federal government, the three regions – Flanders, Wallonia, and Brussels-Capital – and the French and German linguistic communities. (Note. Flanders merged the Flemish linguistic community into its regional government. End Note.) Notwithstanding the fact that the regions in Belgium are responsible for attracting foreign investors, most regulations impacting the business environment (taxes, labor market, energy) are controlled at the federal level. In contrast, environmental regulations are developed mostly at the regional level. A regulatory impact assessment (RIA) is mandatory for all primary and some subordinate legislation submitted to the Cabinet of Ministers at the federal level and is usually shared with social partners as a basis for consultation. Belgium publishes all its relevant legislation and administrative guidelines in an official Gazette, called Het Staatsblad/Le Moniteur Belge (https://www.ejustice.just.fgov.be/cgi/welcome.pl ).

Recognizing the need to streamline administrative procedures in many areas, in 2015 the federal government set up a special task force to simplify official procedures.  Traditionally, scientific studies or quantitative analysis conducted on the impact of regulations are made publicly available for comment. However, not all stakeholder comments received by regulators are made public.

Accounting standards are regulated by the Belgian law of January 30, 2001, and balance sheet and profit and loss statements are in line with international accounting norms. Cash flow positions and reporting changes in non-borrowed capital formation are not required.  However, contrary to IAS/IFRS standards, Belgian accounting rules do require an extensive annual policy report.

Regarding Environmental, Social and Governance Impacts reporting (ESG), the EU’s Non-Financial Reporting Directive (NFRD) was transposed into Belgian law in 2017. The NFRD requires very large public interest entities (PIEs) to report environmental, social and employee, human rights, anti-bribery, and corruption information on an annual basis. On April 21, 2021, the European Commission adopted a proposal for a Corporate Sustainability Reporting Directive (CSRD), which will update the NFRD. The CSRD aims to be applicable as of fiscal year 2023 and will significantly extend the scope of reporting requirements to all large companies and all companies listed on regulated markets (except listed micro-enterprises).

Regarding oversight or enforcement mechanisms to ensure governments follow administrative processes, local courts are expected to enforce foreign arbitral awards issued against the government.  Recourse to the courts is available if necessary.

Public finances and debt obligations are generally transparent. Details on government budgets are available online, and the debt agency (https://www.debtagency.be/en ) publishes all relevant data concerning government debt.

Belgium is a founding member of the EU, whose directives and regulations are enforced.  On May 25, 2018, Belgium implemented the General Data Protection Regulation (GDPR) (EU) 2016/679, an EU regulation on data protection and privacy for all individuals within the European Union.

Through the European Union, Belgium is a member of the WTO, and notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).  Belgium does not maintain any measures that are inconsistent with the Agreement on Trade-Related Investment Measures (TRIMs) obligations.

Belgium’s (civil) legal system is independent of the government and is a means for resolving commercial disputes or protecting property rights.  Belgium has a wide-ranging codified law system since 1830.  There are specialized commercial courts which apply the existing commercial and contractual laws. As in many countries, the Belgian courts labor under a growing caseload and ongoing budget cuts causing backlogs and delays. There are several levels of appeal.

Payments and transfers within Belgium and with foreign countries require no prior authorization. Transactions may be executed in euros as well as in other currencies.

Belgium has no debt-to-equity requirements.  Dividends may be remitted freely except in cases in which distribution would reduce net assets to less than paid-up capital.  No further withholding tax or other tax is due on repatriation of the original investment or on the profits of a branch, either during active operations or upon the closing of the branch.

Belgian authorities are currently developing a national security-based investment screening law that will likely establish certain restrictions based on national security concerns.  The law likely will not be finalized and delivered to Parliament for a vote before the end of 2022.

There are three different regional Investment Authorities:

• Flanders: http://www.flandersinvestmentandtrade.com 
• Wallonia: http://www.awex.be 
• Brussels: https://be.brussels/brussels 

The contact address for competition-related concerns:

Federal Competition Authority
City Atrium, 6th floor
Vooruitgangsstraat 50
1210 Brussels
tel: +32 2 277 5272
fax: +32 2 277 5323
email: info@bma-abc.be

EU member states are responsible for competition and anti-trust regulations if there are cross-border dimensions. If cross-border effects are present, EU law applies, and European institutions are competent.

There are no outstanding expropriation or nationalization cases in Belgium with U.S. investors. There is no pattern of discrimination against foreign investment in Belgium.

When the Belgian government uses its eminent domain powers to acquire property compulsorily for a public purpose, current market value is paid to the property owners. Recourse to the courts is available if necessary.  The only expropriations that occurred during the last decade were related to infrastructure projects such as port expansions, roads, and railroads.

Belgian bankruptcy law falls is under the jurisdiction of the commercial courts.  The commercial court appoints a judge-auditor to preside over the bankruptcy proceeding and whose primary task is to supervise the management and liquidation of the bankrupt estate, in particular with respect to the claims of the employees.  Belgian bankruptcy law recognizes several classes of preferred or secured creditors.  A person who has been declared bankrupt may subsequently start a new business unless the person is found guilty of certain criminal offences that are directly related to the bankruptcy.  The Business Continuity Act of 2009 provides the possibility for companies in financial difficulty to enter into a judicial reorganization.  These proceedings are to some extent similar to Chapter 11 as the aim is to facilitate business recovery.  In the World Bank’s 2020 Doing Business Index, Belgium ranks number 9 (out of 190) for the ease of resolving insolvency.

There are no reports of government policies, processes, or laws significantly distort or discriminate against foreign investors.  Nonetheless, some investors have complained of systematic shortfalls such as unreliable land titles and bureaucratic delays or corruption, which hinder doing business in Belize. U.S. firms have also identified challenges in participating and competing in areas related to the bidding, procurement, and dispute settlement processes, particular to State Owned Enterprises (SOEs). There are no nongovernmental organizations (NGOs) or private sector associations that manage regulatory processes.  NGOs and private sector associations do lobby on behalf of their members but have no statutory authority.

Regulatory authority exists both at the local and national levels with national laws and regulations being most relevant to foreign businesses.  The cabinet dictates government policies that are enacted by the legislature and implemented by the various government authorities.  Some quasi-governmental organizations are also mandated by law to manage specific regulatory processes, e.g., the Belize Tourism Board, BELTRAIDE, and the Belize Agricultural Health Authority.  Regulations exist at the local level, primarily relating to property taxes and registering for trade licenses to operate businesses in the municipality.

Some supra-national organizations and regulatory structures exist.  For example, some elements of international trade affecting U.S. businesses are affected by CARICOM treaties, as in the case of the export of sugar within CARICOM.

Accounting, legal, and regulatory systems are consistent with international norms.  Publicly owned companies generally receive audits annually, and the reports are in accordance with International Financial Reporting Standards and International Standards on Auditing.

The government does not promote or require companies’ environmental, social and governance disclosure to facilitate transparency or help investors and consumers distinguish between high- and low-quality investments.

Draft bills or regulations are generally made available for public comment through a public consultation process.  Once introduced in the House of Representatives, draft bills are sent to the relevant standing committee, which then meet and invite the public and interested persons to review, recommend changes, or object to draft laws prior to further debate.  The mechanism for drafting bills, and enacting regulations and legislation generally applies across the board and includes investment laws and regulations.  Public comments on draft legislation are not generally posted online nor made publicly available.  In a few instances, laws are passed quickly without meaningful publication, public review, or public debate. The government does not generally disclose the basis on which it reviews regulations.  Some government agencies make scientific studies publicly available.

Printed copies of the Belize Government Gazette contain proposed as well as enacted laws and regulations and are publicly available for a subscription fee.  Additionally, enacted laws are published free of cost on the website of the National Assembly or Parliament, but there is a delay in updating the website.

Regulations and enforcement actions are appealable with regulatory decisions subject to judicial review.  The Office of the Ombudsman also may investigate allegations of official wrongdoing but has no legal authority to bring judicial charges.  Reports of wrongdoing are submitted to the affected ministry. Additionally, the Annual Report of the Ombudsman is presented to the National Assembly and is a publicly available document.

The offices for business and personal income tax amalgamated into the Belize Tax Service, which launched an online tax payment system in August 2021. The Companies Registries, along with the court system, are being digitized to facilitate e-filing of documents and online payment of fees. In March 2022, the government lowered business tax on the net interest income charged to banks and financial institutions with a view to incentivizing lending in strategic foreign exchange earning sectors and at the same time increased the tax on specific sectors to disincentivize personal and distribution loans. The amendments to the tax system will improve tax collection and a stem leakage. Other anticipated reforms are expected to improve the ease of doing business, provide greater transparency and stimulate economic growth with lending to foreign exchange earning sectors.

Information on public finance, both the government’s budget and its debt obligations (including explicit and contingent liabilities) are widely accessible to the public, with most documents available online.  The budget documents do not include information on contingent or state-owned enterprise (SOE) debt unless the GoB guarantees or is paying these debts. Nonetheless, the audited annual reports of all major SOEs were publicly available on their websites.  The Auditor General’s report on government spending, however, is often significantly delayed.

As a full member of the Caribbean Community (CARICOM), Belize’s foreign, economic and trade policies vis-a-vis non-member states are coordinated regionally.  The country’s import tariffs are largely defined by CARICOM’s Common External Tariff.

Besides CARICOM, Belize is a member of the Central American Integration System (SICA) at a political level, but is not a part of the Secretariat of Central American Economic Integration (SIECA) that supports economic integration with Central America.  Belize is also a member of the WTO and adheres to the Organization’s agreements and reporting system.

The Belize Bureau of Standards (BBS) is the national standards body responsible for preparing, promoting, and implementing standards for goods, services, and processes.  The BBS operates in accordance with the WTO Agreement on Technical Barriers to Trade and the CARICOM Regional Organization for Standards and Quality.  The BBS is also a member of the International Electrotechnical Commission (IEC), the International Organization for Standardization (ISO), and Codex Alimentarius.

As a former British colony, Belize follows the English Common Law legal system. The Belize Constitution is the supreme law and founded on the principle of a separation of powers with independence of the judiciary from the executive and legislative branches of government. Belize has a written Contract Act, but no specialized courts to deal with commercial disputes or cases.

The judicial system remains generally independent of the executive branch.  Case law exists where the judiciary has ruled against the government, and its judgements are respected and authoritative.  The highest appellate court exists outside of Belize at the Caribbean Court of Justice, providing a level of independence for the judiciary.  The judiciary remains underfunded and understaffed resulting in frequent adjournments, delays, poor case-flow management and a backlog of cases.  General information relating to Belize’s judicial and legal system, including links to Belize’s Constitution, Laws and judicial decisions are available at the Judiciary of Belize website www.belizejudiciary.org .

Businesses and citizens may appeal regulations and enforcement actions.  Regulatory decisions are also subject to judicial review.  Judgments by the Belize Supreme Court and the Court of Appeal are available at http://www.belizejudiciary.org .

The Caribbean Court of Justice has two jurisdictions, appellate and original, in relation to CARICOM Members States. In its appellate jurisdiction, the CCJ is the final court of appeal for both civil and criminal matters emanating from CARICOM Member States. In its original jurisdiction, this Court is responsible for interpreting and applying the Revised Treaty of Chaguaramas, the treaty establishing the Caribbean Community and CARICOM Single Market and Economy.

The country has an English Common Law legal system supplemented by local legislation and regulations.  The legal system does not generally discriminate against foreign investment and there are no restrictions to foreign ownership.  The Exchange Control Act and its subsidiary laws and regulations, however, provide the legal framework that applies to foreign ownership and control. Other laws stipulate that foreign investment can qualify for incentives; citizens have the right to private property; contracts are legally binding and enforceable, and regulations are subject to judicial review among other provisions favorable to foreign investment.

Major laws enacted or amended are generally available in the National Assembly’s website at www.nationalassembly.gov.bz .  For the previous year, these include the Blue Bond Loan Act, 2021; Companies (Amendment) Act, 2021; Data Protection Act, 2021; Electronic Evidence Bill, 2021; Electronic Transactions Act, 2021; Electronic Transfer of Funds Crime Act, 2021; Immigration (Amendment) Act,, 2021; Patents (Amendment) Act, 2021; Public Sector Data Sharing Act, 2021; Securities Industry Act, 2021; Stamp Duties (Amendment) Act, 2021; Sugar Industry (Amendment) Act, 2021; Trademarks (Amendment) Act, 2021; Tax Administration and Procedures (Amendment) Act, 2021; Central Bank of Belize (Amendment) Act, 2022; and Income and Business Tax (Amendment) Act, 2022.

There is no “one-stop-shop” website for investment, and the laws, rules, procedures, and reporting requirements related to investors differ depending on the nature of the investment.  BELTRAIDE provides advisory services for foreign investors relating to procedures for doing business in Belize and what incentives might be available to qualifying investors.  Further information is available at the BELTRAIDE website:  http://www.belizeinvest.org.bz 

Belize does not have any laws governing competition, but there are attempts to limit outside competition in certain industries (such as food and agriculture) by levying high import duties and import licensing requirements.

The government used the right of eminent domain in several cases to expropriate private property, including land belonging to foreign investors.  There were no new expropriation cases in 2021. However, claimants in previous cases of expropriation assert the GoB failed to honor agreements entered into by a previous administration.  Belizean law requires that the government assess and compensate according to fair market value.  Expropriation cases can take several years to settle and there are a few cases where compensation is still pending.  Belize nationalized two companies in public-private partnership: Belize Electricity Limited and Belize Telemedia Limited.  These actions were challenged in the courts and resolved in 2015 and 2017, respectively.

The Caribbean Court of Justice delivered a judgment relating to the Belmopan Land Development Corporation Limited (BLDCL) in January 2022, wherein it upheld the decision of the trial judge in favor of BLDCL. The case pertained to compensation owed by the government for 1,394 acres of land expropriated in 2013. After negotiations for market value failed, the matter was taken before local courts. The CCJ upheld the trial judge’s quantum of damages to BLDCL for just over US $8 million.

The Bankruptcy Act of Belize provides for bankruptcy filings.  The Act provides for the establishment of receivership, trustees, adjudication, and seizures of the property of the bankrupt.  The court may order the arrest of the debtor as well as the seizure of assets and documents in the event the debtor may flee or avoid payment to creditors.  The Director of Public Prosecutions may institute proceedings for offenses related to the bankruptcy proceedings.   The bankruptcy law generally outlines actions a creditor may take to recoup losses.  Bankruptcy protections are not as comprehensive as U.S. bankruptcy law.

Benin is a member of UNCTAD’s international network of transparent investment procedures. Foreign and domestic investors can find detailed information on administrative procedures applicable to investment and income generating operations at https://unctad.org/news/how-un-helped-benin-become-worlds-fastest-place-start-business-mobile-phone , including the number of steps, name and contact details of the entities and persons in charge of procedures, required documents and conditions, costs, processing time, and legal bases justifying the procedures. There is no rule to prevent a monopoly over a particular business sector. The Benin Private Investment Council ( http://www.cipb.bj/ ) is the only business-related think-tank or body that advocates for investors. Generally, draft bills are not available for public comment though promulgated laws are available at https://sgg.gouv.bj/documentheque/lois/ . Individuals, including non-citizens, have the option to file appeals about or challenge enacted laws with the Constitutional Court.

Benin is a member of WAEMU and the Organization for the Harmonization of African Business Law (OHADA) and has adopted OHADA’s Universal Commercial Code (codified law) to manage commercial disputes and bankruptcies within member countries. Benin is also a member of OHADA’s Common Court of Justice and Arbitration and the International Center for the Settlement of Investment Disputes (ICSID). OHADA provisions govern bankruptcy. Debtors may file for reorganization only, and the creditors may file for liquidation only. Benin is a member of the WTO and notifies all draft technical regulations to the organization’s Committee on Technical Barriers to Trade (TBT).

Benin has a civil law system. The legal framework includes various legislative and regulatory texts covering family law, land law, labor law, criminal law, criminal procedure, and civil, commercial, social, and administrative proceedings. The Cotonou commercial court, created in 2017, enforces commercial laws and regulations. In 2018, Benin created an anti-terrorism, drugs, and economic crimes court (CRIET), which until recently lacked a mechanism for substantive appeal. The CRIET has convicted and sentenced numerous government detractors and political opponents, raising concerns about its independence. In February 2020, Benin created an appeals chamber within the CRIET. In general, judicial processes are slow, and challenges to the enforcement of court decisions are common. Magistrates and judges are appointed by the President of the Republic. Benin’s courts enforce rulings of foreign courts and international arbitration.

The Investment Code provides the legal framework for foreign direct investment. The Code establishes conditions, advantages, and rules applicable to domestic and foreign direct investment. The GOB websites https://benindoingbusiness.bj/  and https://gdiz-benin.com/  make available online information on foreign direct investment regulations and procedures, though at times these websites may be out of date. Benin is a member of OHADA’s Common Court of Justice and Arbitration (CCJA) and the International Center for the Settlement of Investment Disputes (ICSID). Investors may include arbitration provisions in their contracts in order to avoid prolonged entanglements in the Beninese courts. The United Nations investment guide for Benin ( https://www.theiguides.org/public-docs/guides/benin/ ) provides a general guide for foreign direct investment steps and procedures.

Benin’s legal framework does not address anti-trust or competition issues. The government does not have an agency or office that reviews transactions for competition-related concerns.

Local laws forbid the government from nationalizing private enterprises operating in Benin. In July 2020 West African hotel developer Teyliom International filed a request for arbitration with the World Bank International Center for Settlement of Investment Disputes (ICSID) in relation to the Beninese government’s expropriation of a hotel the company had been constructing in Cotonou. This arbitration case is currently pending at ICSID.

OHADA provisions govern bankruptcy. Debtors may file for reorganization only, and creditors may file for liquidation only.

Bolivia has no laws or policies that directly foster competition on a non-discriminatory basis.  However, Article 66 of the Commercial Code (Law 14379, 1977) states that unfair competition, such as maintaining an import, production, or distribution monopoly, should be penalized according to criminal law.  There are no informal regulatory processes managed by nongovernmental organizations or private sector associations. Regulatory authority regarding investment exists solely at the national level in Bolivia.  There are no subnational regulatory procedures.

The Commercial Code requires that all companies keep adequate accounting records and legal records for transparency.  However, there is a large informal sector that does not follow these practices.  Most accounting regulations follow international principles, but the regulations do not always conform to international standards.  Large private companies and some government institutions, such as the Central Bank and the Banking Supervision Authority, have transparent and consistent accounting systems.

Formal bureaucratic procedures have been reported to be lengthy, difficult to manage and navigate, and sometimes debilitating.  Many firms complain that a lack of administrative infrastructure, corruption, and political motives impede their ability to perform. The one exception has been when registering a new company in Bolivia.

There is no established public comment process allowing social, political, and economic interests to provide advice and comment on new laws and decrees.  However, the government generally — but not always — discusses proposed laws with the relevant sector.  The lack of laws to implement the 2009 Constitution creates legal discrepancies between constitutional guarantees and the dated policies currently enforced, and thus an uncertain investment climate.

Online regulatory disclosures by the Bolivian government can be found in the Official Gazette (  http://www.gacetaoficialdebolivia.gob.bo/ ).

Supreme Decree 71 in 2009 created a Business Auditing Authority (AEMP), which is tasked with regulating the business activities of public, private, mixed, or cooperative entities across all business sectors.  AEMP’s decisions are legally reviewable through appeal.  However, should an entity wish to file a second appeal, the ultimate decision-making responsibility rests with the Bolivian government ministry with jurisdiction over the economic sector in question.  This has led to a perception that enforcement mechanisms are neither transparent nor independent.

Environmental regulations can slow projects due to the constitutional requirement of “prior consultation” for any projects that could affect local and indigenous communities.  This has affected projects related to the exploitation of natural resources, both renewable and nonrenewable, as well as public works projects.  Issuance of environmental licenses has been slow and subject to political influence and corruption.

In 2010, the new pension fund was enacted increasing companies’ contributions from 1.71 percent of payroll to 4.71 percent.

Bolivia is a full member of the Andean Community of Nations (CAN), which includes Colombia, Ecuador, and Peru.  Bolivia is also in the process of joining the Southern Common Market (MERCOSUR) as a full (rather than associate) member.  The CAN’s norms are considered supranational in character and have automatic application in the regional economic block’s member countries.  The government does notify the WTO Committee on Technical Barriers to Trade regarding draft technical regulations.

Property and contractual rights are enforced in Bolivian courts under a civil law system, but some have complained that the legal process is time consuming and has been subject to political influence and corruption.  Although many of its provisions have been modified and supplanted by more specific legislation, Bolivia’s Commercial Code continues to provide general guidance for commercial activities.  The constitution has precedence over international law and treaties (Article 410) and stipulates that the state will be directly involved in resolving conflicts between employers and employees (Article 50).  Corruption within the judiciary is pervasive.  Regulatory and enforcement actions are appealable.

No major laws, regulations, or judicial decisions impacting foreign investment came out in the past year.  There is no primary, central point-of-contact for investment that provides all the relevant information to investors.

Bolivia does not have a competition law, but cases related to unfair competition can be presented to AEMP.  Article 314 of the 2009 Constitution prohibits private monopolies.  Based on this article, in 2009 the Bolivian government created an office to supervise and control private companies ( http://www.autoridadempresas.gob.bo/ ). Among its most important goals are:

• regulating, promoting, and protecting free competition.
• trade relations between traders; implementing control mechanisms, social projects, and voluntary corporate responsibility.
• corporate restructuring, supervising, verifying, and monitoring companies with economic activities in the country in the field of commercial registration and seeking compliance with legal and financial development of its activities.
• qualifying institutional management efficiency, timeliness, transparency, and social commitment to contribute to the achievement of corporate goals.

The Bolivian Constitution allows the central government or local governments to expropriate property for the public good or when the property does not fulfill a “social purpose” (Article 57).  In the case of land, “Economic Social Purpose” (known as FES in Spanish) is understood as “sustainable land use to develop productive activities, according to its best use capacity, for the benefit of society, the collective interest and its owner.”  The Bolivian government has no official definition of “collective interest” and makes decisions on a case-by-case basis.  Noncompliance with the social function of land, tax evasion, or the holding of large acreage is cause for reversion, at which point the land passes to “the Bolivian people” (Article 401).  In cases where the expropriation of land is deemed a necessity of the state or for the public good, just indemnification is required by law. However, in cases where there is non-compliance in fulfilling this “Economic Social Purpose,” the Bolivian government is not required to pay for the land and the land title reverts to the state.

The Constitution also gives workers the right to reactivate and reorganize companies that are in the process of bankruptcy, insolvency, or liquidation, or those closed in an unjust manner, into employee-owned cooperatives (Article 54).  The mining code of 1997 (last updated in 2007) and hydrocarbons law of 2005 both outline procedures for expropriating land to develop underlying concessions.

The Bolivian government between 2006 and 2014, nationalized companies in the hydrocarbons sector, most of the electricity sector, some mining companies (including mines and a tin smelting plant), and a cement plant.  To do so, the government forced private entities to sell shares to the government, often at below market prices.  Some of the affected companies have cases pending with international arbitration bodies.  All outsourcing, private contracts were canceled and assigned to public companies (such as airport administration and water provision).

Countries affected included the United States, France, the United Kingdom, Spain, Argentina, and Chile.  Bolivian governments have previously nationalized private interests to appease social groups protesting.

The average time to complete bankruptcy procedures to close a business in Bolivia is 20 months.  The Bolivian Commercial Code includes (Article 1654) three different categories of bankruptcy:

1. No Fault Bankruptcy – when the owner of the company is not directly responsible for its inability to pay its obligations.
2. At-Fault Bankruptcy – when the owner is guilty or liable due to the lack of due diligence to avoid harm to the company.
3. Bankruptcy due to Fraud – when the owner intentionally tries to cause harm to the company.

In general, the application of laws related to commercial disputes and bankruptcy has been perceived as inconsistent, and corruption charges are common.  Foreign creditors often have little redress beyond Bolivian courts, and judgments are generally more favorable to local claimants than international ones.  If a company declares bankruptcy, the company must pay employee benefits before other obligations.  Workers have broad-ranging rights to recover pay and benefits from foreign firms in bankruptcy, and criminal actions can be taken against individuals the Bolivian government deems responsible for failure to pay in these matters.

No credit bureaus or credit monitoring authorities serve the Bolivian market.

In 2018, the Bolivian government enacted a new law (No. 1055) called the Creation of Social Enterprises.  The law allows for employees of a company to assert ownership rights over companies under financial distress heading into bankruptcy.  Passage of the law was controversial, with numerous business chambers asserting that the law could incentivize employees and labor unions to undermine the performance of companies in order to force bankruptcy and gain control of company assets.

The government has adequate laws to foster competition; however, due to corruption, laws are often not implemented transparently or efficiently. Additionally, political dysfunction results in lengthy delays in adapting and/or updating regulations necessary to implement legislation. The multitude of state, entity, cantonal (in the Federation only), and municipal administrations – each with the power to establish laws and/or regulations affecting business – creates a heavily bureaucratic, non-transparent system. Ministries and/or regulatory agencies are not typically obligated to publish the text of proposed regulations before they are enacted. Some local and international companies have expressed frustration with generally limited opportunities to provide input and influence/improve draft legislation that impacts the business community.

Foreign investors have criticized government and public procurement tenders for a lack of openness and transparency. Dispute resolution is also challenging as the judicial system moves slowly, often does not adhere to existing deadlines, and provides no recourse if the company in question re-registers under a different name.

In an effort to promote the growth of business in its entity, the Republika Srpska government created a RS one-stop-shop for business registration in 2013. This institution centralizes the process of registering a business, ostensibly making it easier, faster, and cheaper for new business owners to register their companies in the RS. The Federation’s announced plans to establish a one-stop-shop have long been delayed.

Businesses are subject to inspections from a number of entity and cantonal/municipal agencies, including the financial police, labor inspectorate, market inspectorate, sanitary inspectorate, health inspectorate, fire-fighting inspectorate, environmental inspectorate, institution for the protection of cultural monuments, tourism and food inspectorate, construction inspectorate, communal inspectorate, and veterinary inspectorate. Some investors have complained about non-transparent fees levied during inspections, changing rules and regulations, and an ineffective appeals process to protest these fines.

BiH is not a part of the EU, the WTO, nor a signatory to the Trade Facilitation Agreement (TFA).

BiH has an overloaded court system and it often takes many years for a case to be brought to trial. Moreover, commercial cases with subject matter that judges do not have experience adjudicating, such as intellectual property rights, are often left unresolved for lengthy periods of time. Most judges have little to no in-depth knowledge of adjudicating international commercial disputes and require training on applicable international treaties and laws. Regulations or enforcement actions can be appealed, and appeals are adjudicated in the national court system.

The U.S. government has provided training to judges, trustees, attorneys, and other stakeholders at the state and entity levels to assist in the development of bankruptcy and intellectual property laws. Those laws are now in effect at both the entity and state levels, but have not been fully implemented.

The state-level Law on the Policy of Foreign Direct Investment accords foreign investors the same rights as domestic investors and guarantees foreign investors national treatment, protection against nationalization/expropriation, and the right to dispose of profits and transfer funds. In practice, most business sectors in Bosnia and Herzegovina are fully open to foreign equity ownership. Notable exceptions to this general rule are select strategic sectors, such as defense; electric power transmission, which is closed to foreign investment; and some areas of publishing and media, where foreign ownership is restricted to 49 percent (see below). However, the sub-national governments — Federation of BiH, Republika Srpska — may decide to exempt companies from these restrictions.

According to legal amendments adopted in March 2015, foreign investors can own more than 49 percent of capital business entities dealing with media activities, such as publishing newspapers, magazines and other journals, publishing of periodical publications, production and distribution of television programs, privately owned broadcasting of radio and TV programs, and other forms of daily or periodic publications. The 2015 law maintains the restriction that foreign investors cannot own more than 49 percent of public television and radio services. It also sets conditions to enhance legal security and clarity for foreign direct investment flows. The Foreign Investment Promotion Agency maintains a list of laws relevant to investors on its website:

http://www.fipa.gov.ba/publikacije_materijali/zakoni/default.aspx?id=317&langTag=en-US 

The complex legal environment in BiH underscores the utility of local legal representation for foreign investors. Attorneys in BiH have limited experience with respect to legal questions and the issues that arise in a market-oriented economy. However, local lawyers are quickly gaining experience in working with international organizations and companies operating in BiH. Companies’ in-house legal counsel should be prepared to oversee their in-country counsel, with explicit explanations and directions regarding objectives. The U.S. Embassy maintains a list of local lawyers willing to represent U.S. citizens and companies in BiH. The list can be accessed at https://ba.usembassy.gov/u-s-citizen-services/attorneys/

BiH has a Competition Council, designed to be an independent public institution to enforce anti-trust laws, prevent monopolies, and enhance private sector competition. The Council reviews and approves foreign investments in cases of mergers and acquisitions of local companies by foreign companies. The Competition Council consists of six members appointed for six-year terms of office with the possibility of one reappointment. The BiH Council of Ministers appoints three Competition Council members, the Federation Government appoints two members, and the RS Government appoints one member. From the six-member Competition Council, the BiH Council of Ministers affirms a president of the Council for a one-year term without the possibility of reappointment.

BiH investment law forbids expropriation of investments, except in the public interest. According to Article 16, “Foreign investment shall not be subject to any act of nationalization, expropriation, requisition, or measures that have similar effects, except where the public interest may require otherwise.” In such cases of public interest, expropriation of investments would be executed in accordance with applicable laws and regulations, be free from discrimination, and include payment of appropriate compensation. Neither the entity governments nor the state government have expropriated any foreign investments to date.

Both the Federation and Republika Srpska entities have Laws on Bankruptcy. However, bankruptcy proceedings are not resolved in a timely manner, and there is insufficient emphasis placed on companies’ rehabilitation and/or reorganization. The entities’ laws define the rights of creditors, equity shareholders, and holders of other financial contracts. Foreign contract holders enjoy the same rights as local contract holders. Bankruptcy is not criminalized. The U.S. government provided recent training to judges on international bankruptcy principles.

Bureaucratic procedures necessary to start and maintain a business tend to be transparent, though slow, and regulatory procedures can be cumbersome to navigate.  In 2018, Botswana launched a Regulatory Impact Assessment Strategy to improve the regulatory environment, ensure legislation is necessary and cost effective, reduce administrative burdens imposed by the regulatory environment to businesses, and to improve transparency, consultation, and government accountability.  Most complaints by foreign investors are about the inefficiency and/or unresponsiveness of mid- and low-level government bureaucrats.  The GoB has introduced a Performance Management System to improve the service and accountability of its employees.  Additionally, President Masisi presented a Reset Agenda in May 2021 and one of its priorities is to align government’s machinery to the presidential agenda.  This will ensure transformation and improved service delivery in the public service by bringing significant reforms in all public institutions.  Unfair business practices or conduct can be reported to the Competition Authority, which seeks to level the playing field for all business operators and foster a conducive environment for business.  The GoB does not require companies’ environmental, social, and governance (ESG) disclosure to facilitate transparency and/or help investors and consumers to distinguish between high- and low-quality investments.  However, Environmental Impact Assessments (EIA) are a requirement and taken very seriously when undertaking infrastructural developments projects.  Bills in Botswana, including investment laws, go through a public consultation process and are available for public comment.  Bills are also debated in Parliament sessions that are open to the public.

The Companies Act of 2004 requires all companies registered in Botswana to prepare annual financial statements on the basis of generally accepted accounting principles.  It further requires every public company, including non-exempt private companies, to prepare their Financial Statement in accordance with the International Financial Reporting Standards.

The GoB’s procuring entity, Public Procurement and Asset Disposal Board (PPADB) has since April 1, 2022, transitioned to a regulatory authority, Public Procurement and Regulatory Authority (PPRA), under a new procurement act.  The new act dictates for all government procurements to be adjudicated and awarded from the relevant procuring ministries/government entities. PPRA will play an oversight role, ensuring that all procurement processes are followed according to the new act.  Further, PPRA will provide necessary and relevant training and capacity building to align the local procurement processes with international best practices.  Prospective government contractors are still required to register with the PPRA.  An independent body from the PPRA known as the Public Procurement Tribunal will be established to adjudicate on any disputes.  The PPRA will use a national eProcurement system which will serve as an electronic end-to-end One Stop information and transaction portal for any public procurement.  Since 2014, PPADB has partnered with the United States Trade and Development Agency’s (USTDA) Global Procurement Initiative in a shared commitment to utilize best-value determination procurement practices and to professionalize procurement.  Through training, USTDA also assisted PPADB’s transition to PPRA.

Online services are available at https://ipms.ppadb.co.bw/login 

The PPRA Act shall from time-to-time call for preferential procurement of citizen-owned contractors for works, service, and supplies.  To be eligible for a specific reservation or preference the contractor is required to attach to the bidding package proof of eligibility from the issuing authority.  Parliament enacted an Economic Inclusion Act to provide for the establishment of the office of the Coordinator of the Economic Empowerment office that will promote the effective participation of targeted citizens in the growth and development of the economy and facilitate enforcement of the economic empowerment initiatives.  Targeted citizen according to this act means a citizen whose access to economic resources has been constrained by various factors as may be prescribed by the minister from time to time.

Health and safety laws, embodied in the Factories Act of 1973, provide basic protection for workers from unsafe working conditions.  Minimum working conditions required on work premises include cleanliness of the premises, adequate ventilation and sanitation, sufficient lighting, and the provision of safety precautions.  Health inspectors and the Botswana Bureau of Standards carry out periodic checks at both new and operating factories.

Botswana is a member of SACU and SADC.  Neither has authority over member state national regulatory systems.  Botswana is a member of the World Trade Organization (WTO) and notifies all draft technical regulations to the WTO’s Technical Barriers to Trade (TBT) Committee.

The Constitution provides for an independent judiciary system.  Botswana’s legal system is based on Roman-Dutch law as influenced by English common law.  This type of system exists with legislation, judicial decisions, and local customary law.  The courts enforce commercial contracts, and the judicial system is widely regarded as being fair.  Both foreign and domestic investors have equal access to the judicial system.  Botswana does not have a dedicated commercial court.  The Industrial Court, set up by the Trade Dispute Act of 2004, primarily addresses labor matters.

The GoB is planning to create a corps of commercially specialized judges within the civil court system.  Under the new system, commercial cases will be overseen by these commercial judges to expedite handling and ensure relevant expertise.  Botswana already has a specialized anti-corruption court that handles all corruption cases.

Some U.S. litigants have reported that the time to obtain and enforce a judgment in a commercial dispute is unreasonably long.  The turnaround time for civil cases is approximately two years.  To improve adjudications efficiency, the GoB has established a land tribunal, and industrial, small claims, and corruption courts.  In the past several years, some dockets have improved, but progress has been uneven.

Local laws are accessible through the Botswana Attorney General’s Office website ( www.elaws.gov.bw ).  It can take up to 24 months for a law, once passed, to appear on the website.

Under Botswana’s Company Act, foreigners who wish to operate a business are required to register, as well as obtain, the relevant licenses and permits as prescribed by the Trade Act of 2008.

Licenses are required for a wide spectrum of businesses, including banking, non-bank financial services, transportation, medical services, mining, energy provision, and alcohol sales.  Although amendments to the Trade Act have eliminated the catchall miscellaneous business license category, investors have reported on local authorities insisting a business apply for a license even when it does not fall within the established categories.  In addition, some businesses have observed the enforcement of licenses, as well as the time taken for inspections to comply with licensing requirements, varies widely across local government authorities.

Botswana has anti-trust legislation and policies to ensure appropriate and fair competition in business.  Under the Competition Act, the Competition Authority (CA) monitors mergers and acquisitions.  In 2019, the CA expanded its mandate by taking over the operations of the Consumer Protection Act from MITI and rebranded itself as the Competition and Consumer Authority (CCA).  The CCA’s mandate is to prevent and rectify anti-competitive practices and protect the interests of consumers through the control of unfair business practices.  During the year 2020/2021, the CCA engaged in the Financial Inclusion Program with other stakeholders.  While the aim of the program is to reach out to populations that are excluded from financial services, the CCA’s participation ensures that consumers’ interests are taken into consideration, especially the interests of people in remote areas or with limited education.

On the competition side, the authority ramped up its public outreach using digital platforms and increased its engagement on public platforms, resulting in an increase in the number of complaints lodged online.  The authority handled 41 mergers in 2020/21 financial year, a 26 percent decrease from 56 mergers handled in 2019/20.  The decrease could be attributable to the 18-month COVID-19 related State of Emergency that started in March 2020, under which the authority temporarily suspended receipt of new mergers.  The CCA investigated a total of 25 competition related cases with 15 of them being carried over from the previous financial year, while 10 were new cases and successfully closed off four cases; the remaining 21 cases are under investigation and have been carried over to the 2021/22 financial year.  The CCA is empowered to reject mergers deemed not in the public interest.  CCA interprets this power to mean that it can prohibit mergers that concentrate most shares in the hands of foreign investors.  For consumer complaints, a total of 1,158 cases were lodged in the year under review with most complaints related to motor vehicles, motor parts and services (mostly involving grey imports) at 23.7 percent, followed by cellphones and accessories at 18.7 percent, electronic category at 16.2 percent, furniture complaints at 11.2 percent, and e-commerce transactions at 0.45 percent.  A total of 1,267 of these complaints or 90.3 percent were resolved while 136 of these were still pending at the end of the financial year.  During the 2020/21 financial year, the CCA also carried out a research study on cement as a policy advisory instrument to the Ministry of Investment, Trade and Industry (MITI) and will use the policy paper to shape the development of a cement sector in Botswana.

Section 8 of Botswana’s Constitution prohibits the nationalization of private property.  The Constitution is currently under review and a committee has been set up to do consultations and gather public opinion across the country.  The GoB has never pursued a forced nationalization policy and is highly unlikely to adopt one.  The Acquisition of Property Act provides a process for any expropriation, including parameters to determine market value and receive compensation.  The 2007 Amendment to the Electricity Supply Act allows the GoB to revoke an Independent Power Producer’s license and confiscate the operations, with compensation, for public interest purposes.

Botswana’s commercial and bankruptcy laws are comprehensive.  Secured and unsecured creditors enjoy similar rights under bankruptcy proceedings as those they would enjoy in the United States.

According to the World Bank, it takes approximately 17 days to start a business in Brazil. Brazil is seeking to streamline the process and decrease the amount of time it takes to open a small- or medium-sized enterprise (SME) to only five days through its RedeSimples Program. Similarly, the government has reduced regulatory compliance burdens for SMEs through the continued use of the SIMPLES program, which simplifies the collection of up to eight federal, state, and municipal-level taxes into one single payment. The Doing Business law (14.195/2021) included provisions to streamline the process, such as unifying federal, state and municipal registrations and eliminating requirements such as address analysis and pre-checking business names.

In 2020, the World Bank noted that Brazil’s lowest-ranked component in its Ease of Doing Business score was the annual administrative burden for a medium-sized business to comply with Brazilian tax codes with an average of 1,501 hours per year, a significant improvement from 2019’s 1,958 hour average but still much higher than the 160.7 hour average of OECD high-income countries. The total tax rate for a medium-sized business in Brazil is 65.1 percent of profits, compared to the average of 40.1 percent in OECD high-income countries. Business managers often complain of not being able to understand complex and sometimes contradictory tax regulations, despite having large local tax and accounting departments in their companies.

Tax regulations, while burdensome and numerous, do not generally differentiate between foreign and domestic firms. However, some investors complain that in certain instances the processing of rebates for exported goods of the value-added tax collected by individual states (ICMS) favors local companies. Exporters in many states report difficulty receiving their ICMS rebates when their goods are exported. Taxes on commercial and financial transactions are particularly burdensome, and businesses complain that these taxes hinder the international competitiveness of Brazilian-made products.

Of Brazil’s ten federal regulatory agencies, the most prominent include:

1. ANVISA, the Brazilian counterpart to the U.S. Food and Drug Administration, which has regulatory authority over the production and marketing of food, drugs, and medical devices
2. ANATEL, the country’s telecommunications regulatory agency, which handles telecommunications as well as the licensing and assigning of radio spectrum bandwidth (the Brazilian FCC counterpart)
3. ANP, the National Petroleum Agency, which regulates oil and gas contracts and oversees auctions for oil and natural gas exploration and production
4. ANAC, Brazil’s civil aviation agency
5. IBAMA, Brazil’s environmental licensing and enforcement agency
6. ANEEL, Brazil’s electricity regulator that regulates Brazil’s power sector and oversees auctions for electricity transmission, generation, and distribution contracts

In addition to these federal regulatory agencies, Brazil has dozens of state- and municipal-level regulatory agencies.

The United States and Brazil conduct regular discussions on customs and trade facilitation, good regulatory practices, standards and conformity assessment, digital issues, and intellectual property protection. Discussions in all these areas occurred during the 19th plenary of the Commercial Dialogue which took place virtually in October 2021, and continue through ongoing regular exchanges at the working level between the U.S. Department of Commerce, Brazil’s Ministry of Economy, and other agencies and regulators throughout the year.

Regulatory agencies complete Regulatory Impact Analyses (RIAs) on a voluntary basis. The Brazilian congress passed Law 13.848 in June 2019 on Governance and Accountability (PLS 52/2013 in the Senate, and PL 6621/2016 in the Chamber). Among other provisions, the law makes RIAs mandatory for regulations that affect “the general interest.”

The Chamber of Deputies, the Federal Senate, and the Office of the Presidency maintain websites providing public access to both approved and proposed federal legislation. Brazil is seeking to improve its public comment and stakeholder input process. In 2004, the GoB opened an online “Transparency Portal” with data on funds transferred to and from federal, state, and city governments, as well as to and from foreign countries. It also includes information on civil servant salaries.

In December 2021, Brazil’s Securities and Exchange Commision (CMV) issued Resolution 59/2021, establishing the first transparency mechanism for environmental, social, and corporate governance (ESG) practices in the country. The goal of the change was to provide more comprehensive information to potential investors, therefore allowing the market environment to drive changes in business behavior. According to the resolution, starting in January 2023, listed companies will be required to inform the CVM whether they disclose information on ESG indicators and provide details on their reports, such as existence of independent audits, which indicators were used, and if UN Sustainable Development Goals (SDGs) have been considered. The new requirement will also include questions regarding the companies’ consideration of the Task Force on Climate Change-Related Financial Disclosures or other recognized entities’ recommendations, the existence of a gas emission inventory, and the role of management bodies in assessing climate-related risks. Regarding diversity issues, companies will be required to disclose information showing the diversity of the body of administrators and employees as well as salary disparities between executives and staff.

In 2022, the Department of State concluded in its annual 2021 Fiscal Transparency Report that Brazil had met minimum fiscal transparency requirements. The International Budget Partnership’s Open Budget Index ranked Brazil slightly ahead of the United States in terms of budget transparency in its most recent (2019) index. The Brazilian government demonstrates adequate fiscal transparency in managing its federal accounts, although there is room for improvement in terms of completeness of federal budget documentation. Brazil’s budget documents are publicly available, widely accessible, and sufficiently detailed. They provide a relatively full picture of the GoB’s planned expenditures and revenue streams. The information in publicly available budget documents is considered credible and reasonably accurate.

Brazil is a member of Mercosul – a South American trade bloc whose full members include Argentina, Paraguay, and Uruguay. Brazil routinely implements Mercosul common regulations.

Brazil is a member of the WTO and the government regularly notifies draft technical regulations, such as potential agricultural trade barriers, to the WTO Committee on Technical Barriers to Trade (TBT).

Brazil has a civil legal system with state and federal courts. Investors can seek to enforce contracts through the court system or via mediation, although both processes can be lengthy. The Brazilian Superior Court of Justice (STJ) must accept foreign contract enforcement rulings for the rulings to be considered valid in Brazil. Among other considerations, the foreign judgment must not contradict any prior decisions by a Brazilian court in the same dispute. The Brazilian Civil Code regulates commercial disputes, although commercial cases involving maritime law follow an older Commercial Code which has been otherwise largely superseded. Federal judges hear most disputes in which one of the parties is the Brazilian State, and also, rule on lawsuits between a foreign state or international organization and a municipality or a person residing in Brazil.

The judicial system is generally independent. The Supreme Federal Court (STF), charged with constitutional cases, frequently rules on politically sensitive issues. State court judges and federal level judges below the STF are career officials selected through a meritocratic examination process. The judicial system is backlogged, and disputes or trials frequently take several years to arrive at a final resolution, including all available appeals. Regulations and enforcement actions can be litigated in the court system, which contains mechanisms for appeal depending upon the level at which the case is filed. The STF is the ultimate court of appeal on constitutional grounds; the STJ is the ultimate court of appeal for cases not involving constitutional issues.

In 2019, Brazil established a “one-stop shop” for international investors. The one-stop shop, the Direct Investments Ombudsman (DIO), is a ‘single window’ for investors provided by the Executive Secretariat of CAMEX. It is responsible for receiving requests and inquiries about investments, to be answered jointly with the public agency responsible for the matter (at the federal, state and municipal levels) involved in each case (the Network of Focal Points). This new structure allows for supporting the investor via a single governmental body in charge of responding to investor requests within a short time. Private investors have noted the single window is better than the previous system, but does not yet provide all the services of a true “one-stop shop” to facilitate international investment. The DIO’s website in English is: http://oid.economia.gov.br/en/menus/8  

The Administrative Council for Economic Defense (CADE), which falls under the purview of the Ministry of Justice, is responsible for enforcing competition laws, consumer protection, and carrying out regulatory reviews of proposed mergers and acquisitions. CADE was reorganized in 2011 through Law 12529, combining the antitrust functions of the Ministry of Justice and the Ministry of Finance. The law brought Brazil in line with U.S. and European merger review practices and allows CADE to perform pre-merger reviews, in contrast to the prior legal framework that directed the government to review mergers after they had already been completed. In October 2012, CADE performed Brazil’s first pre-merger review.

In 2021, CADE conducted 611 total formal investigations. It approved 165 merger and/or acquisition requests and did not reject any requests.

Article 5 of the Brazilian Constitution assures property rights of both Brazilians and foreigners that own property in Brazil. The Constitution does not address nationalization or expropriation. Decree-Law 3365 allows the government to exercise eminent domain under certain criteria that include, but are not limited to, national security, public transportation, safety, health, and urbanization projects. In cases of eminent domain, the government compensates owners at fair market value.

There are no signs that the current federal government is contemplating expropriation actions in Brazil against foreign interests. Brazilian courts have previously ruled in U.S. citizens’ favor for some claims regarding state-level land expropriations. However, as states have filed appeals of these decisions, the compensation process for foreign entities can be lengthy and have uncertain final outcomes.

ICSID Convention and New York Convention

In 2002, Brazil ratified the 1958 Convention on the Recognition and Enforcement of Foreign Arbitration Awards. Brazil is not a member of the World Bank’s International Center for the Settlement of Investment Disputes (ICSID). Brazil joined the United Nations Commission on International Trade Law (UNCITRAL) in 2010, and its membership will expire in 2022.

Investor-State Dispute Settlement

Article 34 of the 1996 Brazilian Arbitration Act (Law 9307) defines a foreign arbitration judgment as any judgment rendered outside of the national territory. The law established that the Superior Court of Justice (STJ) must ratify foreign arbitration awards. Law 9307, updated by Law 13129/2015, also stipulates that a foreign arbitration award will be recognized or executed in Brazil in conformity with the international agreements ratified by the country and, in their absence, with domestic law. A 2001 Brazilian Supreme Federal Court (STF) ruling established that the 1996 Brazilian Arbitration Act, permitting international arbitration subject to STJ ratification of arbitration decisions, does not violate the federal constitution’s provision that “the law shall not exclude any injury or threat to a right from the consideration of the Judicial Power.”

Contract disputes in Brazil can be lengthy and complex. Brazil has both a federal and a state court system, and jurisprudence is based on civil code and contract law. Federal judges hear most disputes in which one of the parties is the State and rule on lawsuits between a foreign State or international organization and a municipality or a person residing in Brazil. Five regional federal courts hear appeals of federal judges’ decisions.

International Commercial Arbitration and Foreign Courts

Brazil ratified the 1975 Inter-American Convention on International Commercial Arbitration (Panama Convention) and the 1979 Inter-American Convention on Extraterritorial Validity of Foreign Judgments and Arbitration Awards (Montevideo Convention). Law 9307/1996 amplifies Brazilian law on arbitration and provides guidance on governing principles and rights of participating parties. Brazil developed a new Cooperation and Facilitation Investment Agreement (CFIA) model in 2015 (https://concordia.itamaraty.gov.br/  ), but it does not include ISDS mechanisms. (See sections on bilateral investment agreements and responsible business conduct.)

Brazil’s commercial code governs most aspects of commercial association, while the civil code governs professional services corporations. In December 2020, Brazil approved a new bankruptcy law (Law 14.112) which largely models the UNCITRAL Model Law on International Commercial Arbitration and addresses criticisms that its previous bankruptcy legislation favored holders of equity over holders of debt. The new law facilitates the judicial and extrajudicial resolution process between debtors and creditors and accelerates reorganization and liquidation processes. Both debtors and creditors are allowed to provide reorganization plans that would eliminate non-performing activities and sell-off assets, thus avoiding bankruptcy. The new law also establishes a framework for cross-border insolvencies that recognizes legal proceedings outside of Brazil.

Brunei’s regulatory system has limited transparency, particularly in lawmaking processesand impact assessments. Each ministry is responsible for coordinating with the Attorney General’s Chambers to draft proposed legislation. Legislation does not receive broad review and little input is provided from outside of the originating ministry. The sultan has final authority to approve proposed legislation. Laws and regulations are readily accessible on the Attorney General’s Chambers website .

Brunei encourages environment, social, and governance (ESG) disclosure but does not mandate it.

Brunei is an active member of ASEAN, through which it has concluded FTAs with Australia & New Zealand, China, India, Japan and South Korea. Brunei became a WTO member in 1995 and a signatory to the General Agreement on Tariffs and Trade (GATT) in 1993.

Brunei’s constitution does not specifically provide for judicial independence, but in practice the court system operates without government interference. Brunei’s legal system includes two parallel systems: one based on common law and the other based on Islamic law. The common law judicial system is presided over by the Supreme Court, which comprises the Court of Appeal and the High Court.

Recognizing the importance of protecting investors’ rights and contract enforcement, Brunei established a Commercial Court in 2016.

In 2014, Brunei implemented the first phase of its Sharia Penal Code (SPC), which expanded existing restrictions on minor offenses—such as eating during Ramadan—that are punishable by fines or imprisonment. On April 3, 2019 Brunei commenced full implementation of the SPC, introducing the possibility of harsher punishments such as stoning to death for rape, adultery, or sodomy, and execution for apostasy, contempt of the Prophet Muhammad, or insult of the Quran. However, these forms of punishment require higher standards of proof than the common-law-based penal code (for example, four pious men must personally witness an act of fornication to support a sharia-based harsh sentence), placing them under a de facto moratorium. The sultan confirmed the moratorium in a 2019 public statement.

The basic legislation on investment includes the Investment Incentive Order 2001 and the Income Tax (As Amended) Order 2001. Investment Order 2001 supports economic development in strategically important industrial and economic enterprises and, through the Ministry of Finance and Economy, offers investment incentives through a favorable tax regime. Although Brunei does not have a stock exchange, the government is reportedly planning to establish a securities market.

Foreign ownership of companies is not restricted, although under the Companies Act, at least one of two directors of a locally incorporated company must be a resident of Brunei, unless granted an exemption from the appropriate authorities.

Brunei’s Competition Order, published in 2015 to promote and maintain fair and healthy competition to enhance market efficiency and consumer welfare, entered into force on January 1, 2020. The sultan also announced the establishment of the Competition Commission in 2017 to oversee and act on competition issues that include adjudicating anti-competitive cases and imposing penalties on companies that violate the Competition Order.

Brunei is a signatory to the 1987 ASEAN Agreement for the Promotion and Protection of Investments. There is no history of expropriation of foreign owned property in Brunei, but there have been cases of domestically owned private property being expropriated for infrastructure development. The government provided compensation in such cases and claimants were afforded due process.

In 2012, amendments to Brunei’s Bankruptcy Act increased the minimum threshold for a creditor to present a bankruptcy petition against a debtor from BND 500 to BND 10,000 (USD350 to USD7,060) and enabled an appointed bankruptcy trustee to direct the Controller of Immigration to impound and retain the debtor’s passport, certificate of identity, or travel document to prevent the debtor from leaving the country. The amendment also requires the debtor to deliver all property under the debtor’s possession to the trustee. Information about Brunei’s bankruptcy laws is available on the judiciary’s website .

In general, the regulatory environment in Bulgaria is characterized by complexity, lack of transparency, and arbitrary or weak enforcement. These factors create incentives for public corruption. Public procurement rules are at times tailored to match certain local business interests. Bulgarian law lists 38 operations subject to licensing. The law requires all regulations to be justified by defined need (in terms of national security, environmental protection, or personal and material rights of citizens), and prohibits restrictions merely incidental to the stated purposes of the regulation. The law also requires the regulating authority, or the member of Parliament sponsoring the draft law containing the regulation, to perform a cost-benefit analysis of any proposed regulation. This requirement, however, is often ignored when Parliament reviews draft bills. With few exceptions, all draft bills are made available for public comment, both on the central government website and the respective agency’s website, and interested parties are given 30 days to submit their opinions.

The government maintains a web platform, www.strategy.bg , on which it posts draft legislation. Тhe government posts all its decisions on: pris.government.bg .

In addition, the law eliminates bureaucratic discretion in granting requests for routine economic activities and provides for silent consent (default judgement in favor of the requestor) when the government does not respond to a request in the allotted time. Local companies in which foreign partners have controlling interests may be requested to provide additional information or to meet additional mandatory requirements in order to engage in certain licensed activities, including production and export of arms and ammunition, banking and insurance, and the exploration, development, and exploitation of natural resources. The Bulgarian government licenses the export of dual-use goods and bans the export of all goods under international trade sanctions lists. The Bulgarian government’s budget is assessed as transparent and in accordance with international standards and principles. Central government debt and debt guarantees are published monthly, and debt obligations by individual state-owned enterprises (SOEs) are published every three months on the website of the Agency for Public Enterprises and Control.

The first and only Bulgarian think tank for sustainable finance and energy, the Green Finance & Energy Centre , was launched in March 2021 by the Bulgarian Stock Exchange (BSE) and the Independent Bulgarian Energy Exchange (IBEX), in partnership with the Ministries of Finance and Energy, the Financial Supervision Commission, and the Fund of Funds. The mission of the Green Centre includes raising business awareness and upgrading corporate governance codes with environmental and social responsibility provisions. Major banks and investors increasingly recognize the importance of sustainable finance and investment in supporting economic growth while reducing environmental degradation.

Bulgaria became a member of the World Trade Organization (WTO) in December 1996. Under the provisions of Article 207 of the Treaty on the Functioning of the European Union (Lisbon Treaty), common EU trade policies are exclusively the responsibility of the EU and the European Commission (EC), which coordinates them with the 27 member states. The EC negotiates in the WTO on behalf of the Member States and coordinates issues with them within the Trade Policy Committee of the Council of the EU. The United States supports EU measures to increase digital market competition through the EU’s future Digital Market Act.

Following systemic government-controlled prosecutions during Bulgaria’s communist era, the 1991 Constitution created an independent judicial branch comprised of judges, prosecutors, and magistrate-investigators.  The system is governed by a 25-member Supreme Judicial Council (SJC), which is responsible for the selection and disciplining of magistrates; however, according to local and international observers its decisions have been opaque and politically influenced.  Eleven of the SJC members are appointed by a supermajority in Parliament, a process often leading to behind-the-scenes distribution of seats to politically convenient candidates.  All 1,500 prosecutors are administratively subordinate through their chiefs to the Prosecutor General, who is also a voting member of the SJC and as such has significant decision-making power over judicial selections.  Numerous well documented media and civil society investigations in recent years have alleged nepotism, corruption, and undue political and business influence over prosecutions, including with the purpose to take over lucrative businesses.  Prosecutors’ decisions to dismiss cases are not subject to review by a judge, and trials, especially in criminal cases, often take years to complete because of the inefficient procedures laid out in the criminal procedure code.  Polls show a consistent lack of public confidence in the Prosecutor General and the courts.

There are three levels of courts. Bulgaria’s 113 regional courts exercise jurisdiction over civil and criminal cases. Above them, 28 district courts, including the Sofia City Court, serve as courts of appellate review for regional court decisions and have trial-level (first-instance) jurisdiction in serious criminal cases and in civil cases where claims exceed BGN 25,000 (USD 14,320), excluding alimony, labor disputes, and financial audit discrepancies, or in property cases where the property’s value exceeds BGN 50,000 (USD 28,640). Five appellate courts review the first-instance decisions of the district courts. The Supreme Court of Cassation is the court of last resort for criminal and civil appeals. There is a separate system of 28 specialized administrative courts which rule on the legality of local and national government decisions, with the Supreme Administrative Court serving as the court of final instance. The Constitutional Court, which is separate from the rest of the judiciary, issues final rulings on the compliance of laws with the Constitution.

Bulgaria’s legislation has been largely aligned with EU directives to provide adequate means of enforcing property and contractual rights. In practice, however, investors regularly complain about regulatory impediments, prosecutorial intervention in administrative cases, and inconsistent jurisprudence. Overall, the government’s handling of investment disputes has been slow, interagency coordination is poor, and intervention at the highest political level is often required.

The 2004 Investment Promotion Act stipulates equal treatment of foreign and domestic investors. The law encourages investment in manufacturing and high technology, knowledge intensive services, education, and human resource development. It creates investment incentives by helping investors purchase land, providing state financing for basic infrastructure, training new staff, and facilitating tax incentives and opportunities for public-private partnerships (PPPs) with the central and local governments. The most common form of PPPs are concessions, which include the lease of government property for private use for up to 35 years for a construction and service concession. The term of the concession may be extended by a maximum of one-third of the original term. In 2021, defense and security were excluded from concession-eligible sectors.

Foreign investors must comply with the 1991 Commercial Law, which regulates commercial and company enterprise law, and the 1951 Law on Obligations and Contracts, which regulates civil transactions.

The Invest Bulgaria Agency (IBA) is the government’s investment attraction body and serves as a one-stop-shop for foreign investors. It provides information, administrative services, and incentive assessments to prospective foreign investors.

The Commission for Protection of Competition (the “Commission”) oversees market competition and enforces the Law on the Protection of Competition (the “Competition Law”). The Competition Law, enacted in 2008, is intended to implement EU rules that promote competition. The law forbids monopolies, restrictive trade practices, abuse of market power, and certain forms of unfair competition. Monopolies can only be legally established in enumerated categories of strategic industries. In practice, the Competition Law has been applied inconsistently, and some of the Commission’s decisions are questionable and appear subject to political influence.

Private real property rights are legally protected by the Bulgarian Constitution. Only in the case where a public need cannot be met by other means may the Council of Ministers or a regional governor expropriate land, in which case the owner is compensated at fair market value. Expropriation actions by the Council of Ministers, by regional authorities, or by municipal mayor can be appealed at a local administrative court. In its Bilateral Investment Treaty (BIT) with the United States, Bulgaria committed to international arbitration to judge expropriation claims and other investment disputes.

The 1994 Commercial Law Chapter on Bankruptcy provides for reorganization or rehabilitation of a legal entity, maximizes asset recovery, and provides for fair and equal distribution among all creditors. The law applies to all commercial entities, except public monopolies or state-owned enterprises (SOEs). The 2015 Insurance Code regulates insurance company failures, while bank failures are regulated under the 2002 Bank Insolvency Act and the 2006 Credit Institutions Act. The 2014 bankruptcy of the country’s fourth-largest bank, Corporate Commercial Bank, was a test case that showed serious deficiencies in the process of recovery and preservation of bank assets during bankruptcy proceedings.

Non-performance of a financial obligation must be adjudicated before the bankruptcy court can determine whether the debtor is insolvent. There is a presumption of insolvency when the debtor is unable to perform an executable obligation under a commercial transaction or public debt or related commercial activities, has suspended all payments, or is able to pay only the claims of certain creditors. The debtor is deemed over-indebted if its assets are insufficient to cover its short-term monetary obligations.

Bankruptcy proceedings may be initiated on two grounds: the debtor’s insolvency, or the debtor’s excessive indebtedness. Under Part IV of the Commercial Law, debtors or creditors, including state authorities such as the National Revenue Agency, can initiate bankruptcy proceedings. The debtor must declare bankruptcy within 30 days of becoming insolvent or over-indebted. Bankruptcy proceedings supersede other court proceedings initiated against the debtor except for labor cases, enforcement proceedings, and cases related to receivables securitized by third parties’ property. Such cases may be initiated even after bankruptcy proceedings begin.

Creditors must declare to the trustee all debts owed to them within one month of the start of bankruptcy proceedings. The trustee then has seven days to compile a list of debts. A rehabilitation plan must be proposed within one month after publication of the list of debts in the Commercial Register. After creditors’ approval, the court endorses the rehabilitation plan, terminates the bankruptcy proceeding, and appoints a supervisory body for overseeing the implementation of the rehabilitation plan. The court must endorse the plan within seven days and put it forward to the creditors for approval. The creditors must convene to discuss the plan within a period of 45 days. The court may renew the bankruptcy proceedings if the debtor does not fulfill its obligations under the rehabilitation plan.

The Bulgarian National Bank may revoke the operating license of an insolvent bank when the bank’s own capital is negative, and the bank has not been restructured according to the procedure defined in Article 51 in the Law on the Recovery and Resolution of Credit Institutions and Investment Firms. The license of a bank may be withdrawn under the conditions set out in Article 36 of the Law on Credit Institutions.

The government of Burkina Faso aims for transparency in law and policy to foster competition. By law, prices of goods and services must be established according to fair and sound competition. The Burkinabe government does not promote or require environmental, social, and governance disclosure to help investors and consumers distinguish between high and low quality investments. However, the government believes that cartels, the abuse of dominant position, restrictive practices, refusal to sell to consumers, discriminatory practices, unauthorized sales, and selling at a loss are practices that distort free competition. At the same time, the price of some staple goods and services are still regulated by the government, including fuel, essential generic drugs, tobacco, cotton, school supplies, water, electricity, and telecommunications, and bread (e.g. baguettes). There are regulatory authorities for government procurement, for electronic communication and posts, for electricity, and for quality standards. Provinces and municipalities have the power to regulate in their jurisdiction, but that regulation has a minimal effect on business entities. There are several regulatory bodies at the national level, and they usually internalize regulations enacted by international organizations. Regulations exist at the supra-national level mostly through WAEMU and ECOWAS.

Burkina Faso’s legal, regulatory, and accounting systems are transparent and consistent with international norms. Since January 2018, Burkina Faso, as a member state of the Organization for the Harmonization of Corporate Law in Africa (OHCLA), adopted the revised version of the OHCLA accounting system. It is composed of the Uniform Act on Accounting and Financial Law (AUDCIF); the OHADA General Accounting Plan (PCGO); the OHADA Accounting System (SYSCOHADA) application guide, and the International Financial Reporting Standards (IFRS) application guide. The OHCLA accounting system complies with the IFRS norms.

There is no online Regulatory Disclosure. However, the regulations of the National Assembly allow the various commissions to hear civil society organizations wishing to share information to inform parliamentarians when they are examining bills.

Burkina Faso is a member of the West African Economic Monetary Union (WAEMU) and the Economic Community of West African States (ECOWAS). There is a supranational relationship between these organizations and their state members. Burkina Faso is also a member of the Organization for the Harmonization of Corporate Law in Africa (OHCLA). As such, Uniform Laws adopted by the OHCLA are automatically part of the national legal system.

The Government of Burkina Faso regularly notifies all the draft technical barriers to the relevant WTO Committee. In the October 2017 Trade Policy Review, the WTO congratulated WAEMU countries for their continued efforts to improve their international trading environment, especially through the implementation of the Trade Facilitation Agreement (TFA). Burkina Faso has begun the ratification process of the TFA, but it has not yet completed it. However, WAEMU and ECOWAS members already implement many of the TFA provisions.

The legal system of Burkina Faso is the civil law. Contracts must always be performed in good faith. Burkina Faso has commercial courts and commercial law is constituted by the uniform acts of the OHADA. The Commercial Code governs all matters that are not covered by the OHADA law. The Burkinabe judiciary is independent although there are press reports of cases of corruption of judges. The Disciplinary Commission of the Judiciary has sanctioned corrupt judges. There are three degrees of jurisdiction in Burkina Faso allowing the loser to appeal a decision rendered in first instance. In the event of a dispute over the execution of a contract, the plaintiff must first obtain a judgment from a court and if the loser does not execute, the winner can retain a bailiff.

The investment code adopted by law 038-2018 demonstrates the government’s interest in attracting FDI to create industries that produce export goods and provide training and jobs for its domestic workforce. The code provides standardized guarantees to all legally established firms operating in Burkina Faso, whether foreign or domestic. It contains four investment and operations preference schemes, which are equally applicable to all investments, mergers, and acquisitions. Burkina Faso’s regulations governing the establishment of businesses include most forms of companies admissible under French business law, including public corporations, limited liability companies, limited share partnerships, sole proprietorships, subsidiaries, and affiliates of foreign enterprises. With each scheme, there is a corresponding set of related preferences, duty exceptions, corporate tax exemptions, and operation-related taxes.

Under the investment code, all personal and legal entities lawfully established in Burkina Faso, both local and foreign, are entitled to the following rights: fixed property, forest and industrial rights, concessions, administrative authorizations, access to permits, and participation in state contracts.

The National Commission for Competition and Consumption (Commission Nationale pour la Concurrence et la Consommation) reviews competition matters. Some competition matters are under the aegis of the West African Economic and Monetary Union (WAEMU). Law No. 016-2017/AN of 27 April 2017 on organizing competition in Burkina Faso governs market competitiveness. This law is intended to create a free and transparent market, a guarantee of the development of a market economy driven by competitive and wealth-creating businesses.

The Burkinabe constitution guarantees basic property rights. These rights cannot be infringed upon except in the case of public necessity, as defined by the government. This has rarely occurred. Until 2007, all land belonged to the government but could be leased to interested parties. The government reserves the right to expropriate land at any time for public use. In instances where property is expropriated, the government must compensate the property holder in advance, except in the event of an emergency.

In 2007, Burkina Faso drafted a national land reform policy that recognizes and protects the rights of all rural and urban stakeholders to land and natural resources. It also clarifies the institutional framework for conflict resolution at a local level, establishes a viable institutional framework for land management, and strengthens the general capacities of the government, local communities, and civil society on land issues. A 2009 rural land management law provides for equitable access to rural lands to promote agricultural productivity, manage natural resources, encourage investment, and reduce poverty. It enables legal recognition of rights legitimated by traditional rules and practices. In rural areas, traditional land tenure rules have long governed land transactions and allocations. The 2009 law reinforces the decentralization and devolution of authority over land matters and provides for formalization of individual and collective use rights and the possibility of transforming these rights into private titles.

In 2012, the government revised the 2009 law, marking the end of exclusive authority of the state over all land. The new law includes provisions to recognize local land use practices. The new law provides conciliation committees to resolve conflicts between parties prior to any legal action. There are several property rights recognition and protection acts, such as land charters, individual or collective land ownership certificates, and loan agreements that govern the nature, duration, and counterparties for transfer rights between a landowner and a third party.

The first Millennium Challenge Corporation (MCC) compact (2010-2014) supported the establishment of local authorities and the issuance of titles as part of the land tenure reform process.

Since Burkina Faso is a member of the OHADA, the Uniform Act on Bankruptcy is applicable.

There are no bankruptcy courts in Burkina Faso. The World Bank’s 2019 “Doing Business” report ranked Burkina Faso 107 out of 190 countries for Resolving Insolvency.

The military regime has not demonstrated an interest in providing, or an ability to provide, clear rules. Regulatory and legal transparency are significant challenges for foreign investors in Burma. The military established the SAC, which is vested with authority to make and issue laws, regulations, and notifications with no oversight or transparency. Previously, government ministries drafted most laws and regulations relevant to foreign investors, which were reviewed by the Attorney General and then voted on and discussed by Parliament. The current law-making process is opaque and amendments to laws have been made without public consultation.

Burma is not legally obligated to share regulatory development plans with the public or conduct public consultations.

There is not a centralized online location where key regulatory actions are published similar to the Federal Register in the United States. The Burmese government previously published new regulations and laws in government-run newspapers and “The State Gazette,” and also sometimes posted new regulations on government ministries’ official Facebook pages. Presently, the military regime announces some regulatory changes via state media or in the Commander-in-Chief’s public addresses, but copies of the changes are not easily accessibly or routinely posted anywhere.

There are no oversight or enforcement mechanisms to ensure the government follows administrative processes.

Foreign investors previously could appeal adverse regulatory decisions. For instance, under the Myanmar Investment Law, the MIC serves as the regulatory body and has the authority to impose penalties on any investor who violates or fails to comply with the law. Investors have the right to appeal any decision made by the MIC to the government within 60 days from the date of decision.

Under the military regime, there is no demonstrated action or espoused commitment to transparent public finance and debt obligations. There are allegations that the military is incurring off-budget debt and using government funds beyond which was allocated in the government budget. Prior to the coup, public finance, and debt obligations, exclusive of contingent liabilities, were public and transparent. Budget reports were published on the Ministry of Planning, and Finance website ( https://myanmar.gov.mm/ministry-of-planning-finance ). Prior to 2021, the budget was published on the Ministry of Planning, Finance, and Industry website (https://www.mopfi.gov.mm/en/content/budget-news). Burma has issued the annual Citizen Budget in the Burmese language since FY 2015-16. The Ministry of Planning, Finance, and Industry has published quarterly budget execution reports, six-month-overview-of-budget-execution reports, and annual budget execution reports on its website since FY 2015-16. However, details regarding the budget allocations for defense expenditures were not transparent, a problem that has been exacerbated since the military coup. The Burmese government also previously published its debt obligation report on the Treasury Department’s Facebook page. (See:  https://www.facebook.com/pages/biz/Treasury-Department-of-Myanmar-777018172438019/  ). The Public Expenditure and Financial Accountability (PEFA) program reviewed Burma’s public finance system in 2020 ( https://www.pefa.org/about ).

The government does not promote or require environmental, social, and governance disclosure to help investors and consumers distinguish between high- and low-quality investments. Businesses seeking to legally extract mineral resources, however, are required to prepare an environmental management plan to receive a license to mine from the regime.

Burma has been a member of the Association of Southeast Asian Nations (ASEAN) since July 1997. However, there is not a consistent relationship between ASEAN and Burma regulatory standards. As an ASEAN member state, Burma’s regulatory systems are expected to conform to harmonization principles established in the ASEAN Trade in Goods Agreement (ATIGA) to support regional economic integration.

Burma’s regulatory system does not consistently use international norms or standards. It contains a mix of unique Burma-developed standards and some British-colonial era standards. Prior to the coup, the government had been making progress on legal reforms to ensure the country’s regulations and standards reflected international norms or standards, including ASEAN-developed standards. In an example of ASEAN regulatory harmonization, Burma officially joined the ASEAN Single Window in March 2020 with the launch of the National Single Window Routing Platform, which streamlined the import process by adopting the ASEAN Certificate of Origin Form D.

Burma is a WTO member, but it does not regularly notify draft technical regulations to the WTO Committee on Technical Barriers to Trade.

Burma’s legal system is a unique combination of customary law, English common law, statutes introduced through the pre-independence India Code, and post-independence Burmese legislation. Where there is no statute regulating a particular matter, courts are to apply Burma’s general law, which is based on English common law as adopted and modified by Burmese case law.  Each state and region has a High Court, with lower courts in each district and township. High Court judges are appointed by the President while district and township judges are appointed by the Chief Justice through the Office of the Supreme Court of the Union. The Union Attorney General’s Office law officers (prosecutors) operate sub-national offices in each state, region, district, and township.

Immediately following the 2021 coup, the military regime replaced several members of the Supreme Court with judges seen as more reliable to its interests. After several weeks of largely peaceful protest and increasingly violent responses by security forces including arbitrary detentions, the military regimes placed several Yangon townships under martial law, where court proceedings are conducted by military judges who have meted out harsh punishments with limited to no due process rights for those accused.

The Ministry of Home Affairs, led by an active-duty military minister appointed by the Commander-in-Chief, controls the Myanmar Police Force, which files cases directly with the courts. The Attorney General prosecutes criminal cases in civilian court and reviews pending legislation. The current Attorney General, Dr Thida Oo, was appointed the day after the coup by Commander-in-Chief Min Aung Hlaing . The Attorney General’s Office was reorganized as a ministry  on August 30, 2021. On January 31, 2022, the U.S. Department of the Treasury  added Attorney General, Dr Thida Oo to its Specially Designated Nationals list. While foreign companies have the right to bring cases to and defend themselves in local courts, there are deep concerns about the impartiality and lack of independence of the courts.

Burma does not have specialized civil or commercial courts.

To address long-standing concerns of foreign investors regarding dispute settlement, the government acceded in 2013 to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (“New York Convention”). In 2016, Burma’s parliament enacted the Arbitration Law, putting the New York Convention into effect and replacing arbitration legislation that was more than 70 years old. Since April 2016, foreign companies can pursue arbitration in a third country. However, the Arbitration Law does not eliminate all risks. There is a limited track record of enforcing foreign awards in Burma and inherent jurisdictional risks remain in any recourse to the local legal system.

Certain regulatory actions are appealable and are adjudicated with the respective ministry. For instance, according to the Myanmar Investment Law, investment disputes that cannot be settled amicably are “settled in the competent court or the arbitral tribunal in accord with the applicable laws.” An investor dissatisfied with any enforcement action made by the regulatory body has the right to appeal to the government within 60 days from the date of administrative decision. The government may amend, revoke, or approve any decision made by the regulatory body. This decision is considered final and conclusive.

The Myanmar Investment Law outlines the procedures the MIC must take when considering foreign investments. The MIC evaluates foreign investment proposals and stipulates the terms and conditions of investment permits. The MIC does not record foreign investments that do not require MIC approval. Many smaller investments may go unrecorded. Foreign companies may register locally without an MIC license, in which case they are not entitled to receive the benefits and incentives provided for in the Myanmar Investment Law.

There is no “one-stop-shop” for investors except in Special Economic Zones. Burma has three Special Economic Zones (SEZs) in Thilawa, Dawei, and Kyauk Phyu with preferential policies for businesses that locate there, including “one-stop-shop” service. Of the three SEZs, Thilawa is the only SEZ currently in operation.

A Competition Law went into effect in 2017. The objective of the law is to protect public interest from monopolistic acts, limit unfair competition, and prevent abuse of dominant market position and economic concentration that weakens competition. The Myanmar Competition Commission serves as the regulatory body to enforce the Competition Law and its rules. The Commission is chaired by the Minister of Commerce, with the Director General of the Department of Trade serving as Secretary. Members also include a mixture of representatives from relevant line ministries and professional bodies, such as lawyers and economists.

The 2016 Myanmar Investment Law prohibits nationalization and states that foreign investments approved by the MIC will not be nationalized during the term of their investment. In addition, the law stipulates that the Burmese government will not terminate an enterprise without reasonable cause, and upon expiration of the contract, the Burmese government guarantees an investor the withdrawal of foreign capital in the foreign currency in which the investment was made. Finally, the law states that “the Union government guarantees that it shall not terminate an investment enterprise operating under a Permit of the Commission before the expiry of the permitted term without any sufficient reason.”

However, under previous military regimes, private companies have been nationalized. The current military regime has threatened private banks with nationalization if they fail to reopen, including threatening to transfer certain deposits in private banks to state-owned or military-affiliated banks. In addition, security forces have physical cut private company’s fiber wires and the military regimes onerous restrictions and suspension of mobile internet service have deprived private telecommunication operators and internet service providers of their property without any compensation offered. The military regime has also banned a number of private media print outlets from publication and restricted citizen’s access to other private company’s internet platforms.

There is a significant risk of nationalization and expropriation by the military regime, particularly in the financial and telecommunications sectors. There is no expectation of due process should the military regime pursue nationalization of private companies despite the provisions in the Myanmar Investment Law prohibiting nationalization and expropriation.

In February 2020, the government of Burma passed the new Insolvency Law. The law adopted the UNCITRAL Model Law on cross-border insolvency, providing greater legal certainty on transnational insolvency issues.

The legislation established an insolvency regime that addresses both corporate and personal insolvency, with a focus on protecting micro, small and medium-sized enterprises. With regards to personal insolvency, the new law encourages debtors to enter into a voluntary legally binding arrangement with their creditors. This agreement allows part or all of the debt to be written off over a fixed period of time. The law also provides equitable treatment for creditors by enabling an efficient liquidation process to ensure creditors receive maximum financial recovery from the property value of a non-viable business.

The law also established the Myanmar Insolvency Practitioners’ Regulatory Council to act as an independent regulatory body and assigned DICA the role of Registrar with the authority to fine individuals contravening the law. In addition, the court with legal jurisdiction can order an individual to make good on the default within a specified time.

Although parts of the government are working to create more transparent policies for fostering competition, Burundi lacks much of the necessary regulatory framework.  Many policies for foreign investment are not transparent, and laws or regulations on the books are often ineffective or unenforced.  Burundi’s regulatory and accounting systems are generally transparent and consistent with international norms on paper, but a lack of capacity or training for staff and political constraints sometimes limit the regularity and transparency of their implementation.

Rule-making and regulatory authority is exercised exclusively at the national level.  Relevant ministries and the Council of Ministers exercise regulatory and rule-making authority, based on laws passed by the Senate and National Assembly.  In practice, government officials sometimes exercise influence over the application and interpretation of rules and regulations outside of formal structures.  The government sometimes discusses proposed legislation and rule-making with private sector interlocutors and civil society but does not have a formal public comment process.  There are no informal regulatory processes managed by non-governmental organizations (NGOs) or private sector associations.

Draft bills or regulations are not subject to a public consultation process.  There are no conferences that involve citizens in a consultative process to give them an opportunity to make comments or contributions, especially at the time of project development, and, even if this were the case, the public does not have access to the detailed information needed to participate in this process.

Burundi does not have a centralized online location where key regulatory actions are published; however, regulatory actions are sometimes posted on the websites of GoB institutions (typically that of the Office of the President or respective ministries).

Burundi has sectoral regulatory agencies covering taxes and revenues, mining and energy, water, and agriculture.  Regulatory actions are reviewable by courts.  There have been no recent reforms to the regulatory enforcement system.

The government generally issues terms of reference and recruits private consultants who prepare a study on the draft legislation for review and comment by the private sector.  The government analyzes these comments and takes them into consideration when drafting new regulations.  New regulations can be issued by a presidential decree or Parliament can make them into a law.  This mechanism applies to laws and regulations on investment.

Information on public finances and debt obligations (including explicit and contingent liabilities) is published in the Burundi Central Bank’s Reports and on its website: https://www.brb.bi/ . However, some publications on the website are not up to date.

Burundi is a member of the East African Community (EAC), a regional economic bloc composed of seven member states, the republics of Burundi, Kenya, Rwanda, South Sudan, Tanzania, Uganda and the recently admitted Democratic Republic of the Congo.  The EAC integration process is anchored on four pillars: a customs union, a common market, a monetary union, and political federation. Each member state must harmonize its national regulatory system with that of the EAC.

Burundian law and regulations reference several standards, including the East African Standards, Codex Alimentarius Standards, the International Organization for Standardization (ISO), and Burundi’s own standards.  ISO remains the main standard of reference.

The country joined the WTO on July 23, 1995.  According to the Ministry of Trade, Transport, Industry and Tourism, Burundi has not notified the WTO Committee on Technical Barriers to Trade of all its draft technical regulations.

The country’s legal system is civil (Roman), based on German and French civil codes.  For local civil matters, customary law also applies.  Burundi’s legal system contains standard provisions guaranteeing the right to private property and the enforcement of contracts.  The country has a written commercial law and a commercial court.  The investment code offers plaintiffs recourse in the national court system and to international arbitration.

The judicial system is not effectively independent of the executive branch.  A lack of capacity hinders judicial effectiveness, and judicial procedures are not rigorously observed.

In June 2021, the GoB adopted a revised investment code and the first national industrialization policy and its accompanying implementation strategy.  Along with the new investment code, the Burundi Development Agency (ADB) officially replaced the Investment Promotion Agency (API) (See Policies Towards Foreign Direct Investment above).

There is no agency in charge of reviewing transactions for competition-related concerns.

Burundian law allows the GoB to expropriate property for exceptional and state-approved reasons, but the GoB is then committed to provide compensation based on the fair market value prior to expropriation.

There are no recent cases involving expropriation of foreign investments nor do any foreign firms have active pending complaints regarding compensation in Burundian courts.

Burundi has two laws governing or pertaining to bankruptcy:  Law N°1/07 of March 15, 2006, on bankruptcy and Law N°1/08 of March 15, 2006, on legal settlement of insolvent companies.  Under Burundian law, creditors have the right to file for liquidation and the right to request personal or financial information about the debtors from the legal bankruptcy agent.  The bankruptcy framework does not require that creditors approve the selection of the bankruptcy agent and does not provide creditors the right to object to decisions accepting or rejecting creditors’ claims.

Cabo Verde is a regional model of transparency and good governance. The government is committed to improving conditions for foreign investment and encouraging a more transparent and competitive economic environment. Laws to promote exports and free-zone enterprises stress the government’s commitment to encouraging investment in export-oriented industries. The tax regime encourages entrepreneurial activity, and government policies support free trade and open markets.

Environmental issues are a priority in Cabo Verde’s sustainable development strategic planning. Legislation requires promotion of an ecologically balanced environment by private companies. Local companies and foreign investment projects must complete environmental-impact studies for assessment of potential impacts by relevant government authorities.

The government promotes the disclosure from companies on the social and corporate governance aspects of their businesses. Many companies, including those operating in sectors such as telecommunications, banking, pharmaceuticals, and laboratories, disclose the information in reports, normally available online.

There is free online access to all laws through the government’s official register website, https://kiosk.incv.cv/ .

Regulations on economic activity can also be viewed on the Cabo Verde TradeInvest website, http://cvtradeinvest.com/ .

Cabo Verde’s regulatory agencies do not solicit comments on proposed regulations from the general public, according to the World Bank .

Public finance and debt obligations are in line with international norms and standards on budget credibility, thoroughness, and fiscal transparency. Cabo Verde continues to improve its processes for the planning, execution, and control of its budgets. The Ministry of Finance uses a digital platform to publish public accounts. With this web portal, any institution or citizen can observe the execution of the budget in real time. A Public Finance Council independently assesses the sustainability of the budget and policies. Cabo Verde has an independent Supreme Audit Institution (SAI), which operates in accordance with International Standards of Supreme Audit Institutions and the Mexico Declaration and is responsible for verifying and publishing the government’s annual financial statements.

In February 2022, Cabo Verde submitted the instrument of ratification of the Agreement Establishing the African Continental Free Trade Area (AfCFTA).

Regionally, Cabo Verde is committed to integration into ECOWAS but has announced postponement of implementation of the ECOWAS Common External Tariffs to later in 2022 and does not foresee adoption of an ECOWAS single currency.

Cabo Verde formally acceded to the World Trade Organization (WTO) in 2008. Cabo Verde has not notified the WTO of any measures that are inconsistent with its Agreement on Trade-Related Investment Measures (TRIM)s obligations.

Cabo Verde’s legal system is based on the civil law system of Portugal. The 1992 constitution provides for a judiciary independent from the executive branch. The judicial system is composed of the Supreme Court, the Constitutional Court, and regional courts. Judges cannot be affiliated with political parties.

The Ministry of Justice appoints local judges. The judiciary generally provides due process rights; however, an overburdened and understaffed judicial system constrains the right to an expeditious trial. Cabo Verde has modern commercial and contractual laws. The judicial system in Cabo Verde is transparent and independent. There is no government interference in the court system, but judicial decisions are often delayed, sometimes for years.

The right to private ownership is guaranteed under the constitution. Property rights are also recognized and guaranteed by several laws. There is a legal entity that records secured interests in property, both chattel and real estate. The legal system also protects and facilitates acquisition and disposition of all property rights.

Cabo Verdean laws concerning FDI include the Investment Law of 2012, which applies to both foreign and domestic investors and preserves the principle of freedom of investment. The Industrial Development Statute regulates incentives and the investment approval process. Law 41/2016 defines the mandate of Cabo Verde TradeInvest ( https://cvtradeinvest.com/ ) as a one-stop shop for external investors.

Cabo Verde does not have an agency charged with regulating competition, though the government has explored the creation of one. The law protects competition in all economic activities.

The Investment Law protects against direct and indirect expropriation. Private property is protected against requisition and nationalization, except for public interest reasons (Investment Law, article 6.1). Under the law, in the event of expropriation, the government is to compensate the owner on the basis of prevailing market prices or the actual market value of the property. To date there have been no cases of unlawful expropriation or claims of discriminatory behavior by the government against foreigners.

In case of noncompliance of investment projects, the law states that land can be recovered by the state and made available to new investment projects.

ICSID Convention and New York Convention

In 2011, Cabo Verde became a contracting state to the ICSID convention. In 2018 Cabo Verde became a state party to the 1958 Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention).

Investor-State Dispute Settlement

Disputes between the government and investors concerning the interpretation and application of the law that cannot be resolved amicably or via negotiation are submitted for resolution by judicial authorities in accordance with Cabo Verdean law. Disputes between the government and foreign investors on investments authorized and made in the country are settled by arbitration if no other process has been agreed upon.

International Commercial Arbitration and Foreign Courts

The law favors arbitration as a mechanism for settling investment disputes between the Government of Cabo Verde and foreign investors, under national and international dispute resolution rules. Courts recognize and enforce foreign arbitral awards. Generally, arbitration is conducted in Cabo Verde and in Portuguese unless the parties agree on another location and language. The decision of the single referee or the arbitration committee is final and not subject to appeal. In 2018, the Tax Arbitration Center was created to resolve disputes regarding tax matters.

Cabo Verdean law provides for a reorganization procedure and a framework that allows creditors involvement in insolvency proceedings.

Cambodia’s regulatory system, while improving, still lacks transparency. This is the result of a lack of legislation and the limited capacity of key institutions, which is further exacerbated by a weak court system. Investors often complain that the decisions of Cambodian regulatory agencies are inconsistent, arbitrary, and influenced by corruption. For example, in May 2016, in what was perceived as a populist move, the government set caps on retail fuel prices, with little consultation with petroleum companies.  In April 2017, the National Bank of Cambodia introduced an interest rate cap on loans provided by the microfinance industry with no consultation with relevant stakeholders. More recently, investors have regularly expressed concern overdraft legislation that has not been subject to stakeholder consultations.

Cambodian ministries and regulatory agencies are not legally obligated to publish the text of proposed regulations before their enactment. Draft regulations are only selectively and inconsistently available for public consultation with relevant non-governmental organizations (NGOs), private sector, or other parties before their enactment. Approved or passed laws are available on websites of some ministries but are not always up to date. The Council of Jurists,

the government body that reviews laws and regulations, publishes a list of updated laws and regulations on its website.

Businesses are not required to have audited financial statements or publish their financial reports unless they are financial institutions (banks/microfinance institutions) or publicly listed companies.

The RGC does not mandate companies to make environmental, social, and governance (ESG) disclosures with respect to investments.

As a member of ASEAN since 1999, Cambodia is required to comply with certain rules and regulations regarding free trade agreements with the 10 ASEAN member states. These include tariff-free importation of information and communication technology (ICT) equipment, harmonizing custom coding, harmonizing the medical device market, as well as compliance with tax regulations on multi-activity businesses, among others.

As a member of the WTO since 2004, Cambodia has both drafted and modified laws and regulations to comply with WTO rules. Relevant laws and regulations are notified to the WTO legal committee only after their adoption. A list of Cambodian legal updates in compliance with the WTO is described in the above section regarding Other Investment Policy Reviews.

The Cambodian legal system is primarily based on French civil law. Under the 1993 Constitution, the King is the head of state and the elected Prime Minister is the head of government. Legislative power is vested in a bicameral parliament, while the judiciary makes up the third branch of government. Contractual enforcement is governed by Decree Number 38 D Referring to Contract and Other Liabilities. More information on this decree can be found at this link .

Although the Cambodian Constitution calls for an independent judiciary, both local and foreign businesses report problems with inconsistent judicial rulings, corruption, and difficulty enforcing judgments. For these reasons, many commercial disputes are resolved through negotiations facilitated by the Ministry of Commerce, the Council for the Development of Cambodia, the Cambodian Chamber of Commerce, and other institutions. Foreign investors often build into their contracts clauses that dictate that investment disputes must be resolved in a third country, such as Singapore.

Cambodia’s new Law on Investment, passed in October 2021, regulates the approval process for FDI and provides incentives to potential investors, both domestic and foreign. Sub-decree No. 111 (2005) lays out detailed procedures for registering a QIP with the CDC and provincial/municipal investment subcommittees.

The new Law on Investment introduces an online registration process for QIP applications and shortens the timeline for the CDC’s issuance of a Registration Certificate to 20 working days. The portal for QIP registration with CDC can be found at this link .

Information about investment procedures and incentives in Cambodia may be found on the CDC’s website .

Cambodia’s Competition Law was signed in October 2021, following the enactment of a Law on Consumer Protection in 2019. Cambodia’s Consumer Protection Competition and Fraud Repression Directorate-General ( CCF ), is mandated to enforce these laws and investigate complaints. When disputes arise, individuals or businesses can file complaints with the CCF, with courts acting as the final arbitrator.

Land rights are a contentious issue in Cambodia, complicated by the fact that most property holders do not have legal documentation of their ownership because of the policies and social upheaval during Khmer Rouge era in the 1970s. Numerous cases have been reported of influential individuals or groups acquiring land titles or concessions through political and/or financial connections and then using force to displace communities to make way for commercial enterprises.

In late 2009, the National Assembly approved the Law on Expropriation, which sets broad guidelines on land-taking procedures for public interest purposes. It defines public interest activities to include construction, rehabilitation, preservation, or expansion of infrastructure

projects, and development of buildings for national defense and civil security. These provisions include construction of border crossing posts, facilities for research and exploitation of natural resources, and oil pipeline and gas networks. Property can also be expropriated for natural disasters and emergencies, as determined by the government. Legal procedures regarding compensation and appeals are expected to be established in a forthcoming sub-decree, which is under internal discussion at the Ministry of Economy and Finance.

The government has shown willingness to use tax issues for political purposes. For instance, in 2017, a U.S.-owned independent newspaper had its bank account frozen purportedly for failure to pay taxes. It is believed that, while the company may have had some tax liability, the General Department of Taxation inflated the assessment to pressure the newspaper to halt operations. The action took place in the context of a widespread government crackdown on independent media in the country.

Cambodia’s 2007 Law on Insolvency is intended to provide collective, orderly, and fair satisfaction of creditor claims from debtor properties and, where appropriate, the rehabilitation of the debtor’s business. The law applies to the assets of all businesspeople and legal entities in Cambodia.

In 2012, Credit Bureau Cambodia (CBC) was established to create a more transparent credit market in the country. CBC’s main role is to provide credit scores to banks and financial institutions and to improve access to credit information.

Cameroon’s laws are consistent with international business and legal norms. Cameroon’s legal architecture is made up of national, regional CEMAC, and supra-national regulations, most of which are applicable to domestic and foreign businesses. Weak implementation and investigative capacity, a lack of understanding of international business practices, and corruption in the judiciary limit the effectiveness of the rule of law. In many circumstances, judicial loopholes persist, leading to arbitrary interpretations of the texts.

Some government ministries, though not all, consult with public and private sector organizations through targeted outreach with stakeholders, such as business associations or other groups. There is no formal process for such consultations. Ministries do not report the results of consultations, but there is no evidence that such processes disadvantage U.S. or other foreign investors.

Cameroon’s National Assembly and Senate pass laws. The Executive proposes bills and then executes laws. Though there is technically a separation of powers, the Presidency is the supreme rule-making and regulatory authority. Decentralized institutions in the regions and municipalities have little additional regulatory authority. Draft bills and regulations are not made available for public comment. The website for the Office of the Prime Minister (www.spm.gov.cm) contains PDF versions of most new regulatory actions published in the Cameroon Tribune, the country’s newspaper of record.

Ministries and regulatory agencies do not have a list of anticipated regulatory changes or proposals intended to be adopted/implemented within a specified period. Ministries do not have a legal obligation to publish the text of proposed regulations before their enactment. There is no period set by law for the text of the proposed regulations to be publicly available. There is no specialized government body tasked with reviewing and monitoring regulatory impact assessments conducted by other individual agencies or government bodies.

Cameroon has administrative courts that specialize in the application and enforcement of public laws. From a strictly legal perspective, the Supreme Court has oversight on enforcement mechanisms, but a lack of separation of powers prevents the judiciary from carrying out its responsibilities. There have been no new regulatory or enforcement reforms announced since the 2021 Investment Climate Statement.

Cameroon does not meet the minimum standards of fiscal transparency. This is partly because many of the state-owned enterprises do not have public accounts. Companies that are listed or aspire to be listed on the Central African Stock Exchange (CASE) have more stringent transparency requirements. There are only four publicly listed companies on the CASE. All four use the Organization for the Harmonization of Business Law in Africa (OHADA) accounting system, which does not align completely with International Financial Reporting Standards (IFRS) or Generally Accepted Accounting Principles (GAAP). Cameroon is a member of CEMAC and is thus subject to its regulations, though implementation remains weak. CEMAC’s central bank, the Bank of Central African States (BEAC), controls monetary policy and is the de facto finance sector regulator, in coordination with the Ministry of Finance.

The National Institute of Statistics (INS) conducts surveys and produces statistics, which are meant to inform policy decisions. Some of these statistics are cited in government documents when ministries are drafting legislative proposals or during parliamentary debates. Quantitative analysis conducted by the INS has often been used by multilateral lenders such as the IMF, the World Bank, and the African Development Bank. However, empirical evaluation and data-driven assessments of the impact of new and existing regulations are limited.

Similarly, public comments are not the main drivers of regulations. However, some consultations take place for the national budget, which is produced each year, but there is little oversight to ensure adherence to the document.

The government does not require companies to have environmental, social, or governance disclosures.

Cameroon is a CEMAC member state. CEMAC regulations supersede those of individual members, though areas such as the free movement of people, goods, and services are not respected by some states. Recent reforms by CEMAC’s central bank, BEAC, have met stiff resistance and delays in their application by individual member states, including Cameroon.

The government requires use of OHADA accounting standards, which are used by 14 African nations. No other norms or standards are referenced in the country’s regulatory system.

Cameroon joined the World Trade Organization (WTO) on December 13, 1995 and was previously a member of the General Agreement on Taxes and Tariffs. Cameroon did not notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT) in 2020 and submitted eight notifications between 1995 and 2020.

The Cameroonian legal system is a legacy of French (Civil Law), German (Codified Laws), English (Common Law), and domestic national customs, which vary for each ethnic group. The government wants to harmonize these different legal traditions to equip Cameroon with laws that are applicable across the country and to reduce the need to navigate different legal opinions. This project, however, is being met with stiff resistance from English-speaking lawyers, who believe that the initiative will undermine the English system to which they are accustomed.

In terms of standards, Cameroon’s commercial legal system follows the OHADA rules, which are supposed to be aligned with International Financial Reporting Standards (IFRS).  Enforcement is weak, partly because of lack of capacity. There are not enough specialized judges in the commercial and economic fields. Consequently, poor enforcement of laws and accounting standards tend to create confusion for foreign investors. Despite efforts to align OHADA standards to international norms, government accounting regulations remain obsolete in the context of rapid developments in international finance and capital markets. To circumvent the problem, U.S. enterprises and investors often maintain two sets of accounting records, one in accordance with U.S. Generally Accepted Accounting Principles (GAAP) or suitable international standards, and another set to address the OHADA standards and government reporting requirements.

Arbitration is becoming the solution of choice to solve business disputes in Cameroon.  Arbitration is in the OHADA corporate law and business associations can choose to use OHADA law to run arbitration councils. Since OHADA is a supra-national law, Cameroon is bound by its decisions. In OHADA, regulations and enforcement actions are appealable, and they can also be adjudicated in the national court system. In Cameroon, businesses mostly use the GICAM and Abidjan Arbitration Councils.

Foreign direct investments are governed by Law No. 2013/004 of April 18, 2013, which defines incentives for private investment in Cameroon, while proposing generic and special incentives and affirming the government’s responsibilities towards private investors.  The law applies to both domestic and foreign investors.  Additional laws and regulations that refer to specific economic sectors are available on the website of the Ministry of Finance ( http://www.minfi.gov.cm/index.php/en/documents ).

The 2022 finance law is the newest legal instrument to have been published in the past year.  The 2021 finance law created new taxes, while maintaining some existing exonerations, notably on value-added taxes and life insurance savings. The 2022 law created new taxes as well, including a tax on electronic payments. CIPA maintains a list of relevant laws, rules, procedures, and reporting requirements for investors ( https://www.investincameroon.net/language/en/ ).

The National Competition Commission handles anti-competition and anti-trust disputes.  In some cases, the regulator of a specific economic sector can play the anti-trust role. State-owned enterprises tend to have quasi-monopoly or monopsony status in their markets.

Decree No.85-9 of July 4, 1985 and the subsequent implementation of Decree N°.87-1872 of December 16, 1987, outline the procedures governing expropriation for public purposes and conditions for compensation. Some of the provisions of these legal texts were repealed by Instruction No. 005/I/Y.25/MINDAF/D220 of December 29, 2005. Essentially, for the public interest, the state may expropriate privately-owned land. The laws also explain the formalities to be observed within the context of the procedure, both at the central and local levels.

In recent years, the government of Cameroon has expropriated large infrastructure road and hydroelectric dam projects. The government has a compensation process in place to meet the losses of those affected by such decisions.

Despite weakness in the actual implementation and execution of laws on the ground, compensation after expropriation generally follows a due process. There are no cases of indirect expropriation, confiscatory tax regimes, or regulatory actions that deprive investors of substantial economic benefits from their investments. However, serious allegations of corruption have plagued compensation procedures over the last decade. These incidents, often carried out by civil servants, have undermined trust in the process.

Canada’s regulatory transparency is similar to the United States. Regulatory and accounting systems, including those related to debt obligations, are transparent and consistent with international norms. Proposed legislation is subject to parliamentary debate and public hearings, and regulations are issued in draft form for public comment prior to implementation in the Canada Gazette, the government’s official journal of record. While federal and/or provincial licenses or permits may be needed to engage in economic activities, regulation of these activities is generally for statistical or tax compliance reasons. Under the USMCA, parties agreed to make publicly available any written comments they receive, except to the extent necessary to protect confidential information or withhold personal identifying information or inappropriate content.

Canada published regulatory roadmaps for clean technology, digitalization and technology neutrality, and international standards in June 2021. These roadmaps, part of the federal government’s multi-year Targeted Regulatory Review program, lay out plans to advance regulatory modernization to support economic growth and innovation. Canadian securities legislation does not currently mandate environmental, social, and governance (ESG) disclosure for public or private companies. The Canadian Securities Administrators, an umbrella organization of all provincial and territorial securities regulators, released two proposed ESG disclosure policies for public comment between October 2021 and February 2022. The policies would require climate-related governance disclosures and climate-related strategy, risk management and metrics and targets disclosures if adopted.

Canada publishes an annual budget and debt management report. According to the Ministry of Finance, the design and implementation of the domestic debt program are guided by the key principles of transparency, regularity, prudence, and liquidity.

Canada addresses international regulatory norms through its FTAs and actively engages in bilateral and multilateral regulatory discussions. U.S.-Canada regulatory cooperation is guided by Chapter 28 of the USMCA “Good Regulatory Practices” and the bilateral Regulatory Cooperation Council (RCC). The USMCA aims to promote regulatory quality through greater transparency, objective analysis, accountability, and predictability. The RCC is a bilateral forum focused on harmonizing health, safety, and environmental regulatory differences. Canada-EU regulatory cooperation is guided by Chapter 21 “Regulatory Cooperation” of the CETA and the Regulatory Cooperation Forum (RCF). CETA encourages regulators to exchange experiences and information and identify areas of mutual cooperation. The RCF seeks to reconstitute regulatory cooperation under the previous Canada-EU Framework on Regulatory Cooperation and Transparency. The RCF is mandated to seek regulatory convergence where feasible to facilitate trade. CPTPP Chapter 25 “Regulatory Coherence” seeks to encourage the use of good regulatory practices to promote international trade and investment, economic growth, and employment. The CPTPP also established a Committee on Regulatory Coherence charged with considering developments to regulatory best practices in order to make recommendations to the CPTPP Commission for improving the chapter provisions and enhancing benefits to the trade agreement.

Canada is a member of the WTO and notifies draft technical regulations to the WTO Committee on Technical Barriers to Trade. Canada is a signatory to the Trade Facilitation Agreement, which it ratified in December 2016.

Canada’s legal system is based on English common law, except for Quebec, which follows civil law. Law-making responsibility is split between the Parliament of Canada (federal law) and provincial/territorial legislatures (provincial/territorial law). Canada has both written commercial law and contractual law, and specialized commercial and civil courts. Canada’s Commercial Law Directorate provides advisory and litigation services to federal departments and agencies whose mandate includes a commercial component and has legal counsel in Montréal and Ottawa.

The judicial branch of government is independent of the executive branch and the current judicial process is considered procedurally competent, fair, and reliable. The provinces administer justice in their jurisdictions, including management of civil and criminal provincial courts.

Foreign investment in Canada is regulated under the provisions of the ICA. U.S. FDI in Canada is also subject to the provisions of the WTO, the USMCA, and the NAFTA. The purpose of the ICA is to review significant foreign investments to ensure they provide an economic net benefit and do not harm national security.

Canada relies on its Invest In Canada promotion agency to provide relevant information to foreign investors: https://www.investcanada.ca/ 

Competition Bureau Canada is an independent law enforcement agency charged with ensuring Canadian businesses and consumers prosper in a competitive and innovative marketplace as stipulated under the Competition Act, the Consumer Packaging and Labelling Act, the Textile Labelling Act, and the Precious Metals Marking Act. The Bureau is housed under the Department of Innovation, Science, and Economic Development (ISED) and is headed by a Commissioner of Competition. Competition cases, excluding criminal cases, are brought before the Competition Tribunal, an adjudicative body independent from the government. The Competition Bureau and Tribunal adhere to transparent norms and procedures. Appeals to Tribunal decisions may be filed with the Federal Court of Appeal as per section 13 of the Competition Tribunal Act. Criminal violations of competition law are investigated by the Competition Bureau and are referred to Canada’s Public Prosecution Service for prosecution in federal court.

The federal government announced in February 2022 an intention to review competition law and policy including specific evaluation of loopholes that allow for harmful conduct, drip pricing, wage fixing agreements, access to justice for those injured by harmful conduct, adaptions to the digital economy, and penalty regime modernization. The announcement cited competition as a key tool to strengthen Canadian post-pandemic economic recovery.

In September 2020, the Bureau signed the Multilateral Mutual Assistance and Cooperation Framework for Competition Authorities (MMAC) with the Australian Competition and Consumer Commission, the New Zealand Commerce Commission, the United Kingdom Competition & Markets Authority, the U.S. Department of Justice, and the U. S. Federal Trade Commission. The MMAC aims to improve international cooperation through information sharing and inter-organizational training.

Canadian federal and provincial laws recognize both the right of the government to expropriate private property for a public purpose and the obligation to pay compensation. The federal government has not nationalized a foreign firm since the nationalization of Axis property during World War II. Both the federal and provincial governments have assumed control of private firms, usually financially distressed companies, after reaching agreement with the former owners.

The USMCA, like the NAFTA, requires expropriation only be used for a public purpose and done in a nondiscriminatory manner, with prompt, adequate, and effective compensation, and in accordance with due process of law.

Bankruptcy in Canada is governed at the federal level in accordance with the provisions of the Bankruptcy and Insolvency Act (BIA) and the Companies’ Creditors Arrangement Act. Each province also has specific laws for dealing with bankruptcy. Canada’s bankruptcy laws stipulate that unsecured creditors may apply for court-imposed bankruptcy orders. Debtors and unsecured creditors normally work through appointed trustees to resolve claims. Trustees will generally make payments to creditors after selling the debtors assets. Equity claimants are subordinate to all other creditor claims and are paid only after other creditors have been paid in full per Canada’s insolvency ladder. In all claims, provisions are made for cross-border insolvencies and the recognition of foreign proceedings. Secured creditors generally have the right to take independent actions and fall outside the scope of the BIA.

Chad implements laws to foster competition and establish clear rules based on Uniform Acts produced by the Organization for the Harmonization of Business Law in Africa (OHADA, Organisation pour l’Harmonisation en Afrique du Droit des Affaires, www.ohada.com ). However, certain Chadian and foreign companies may encounter difficulties from well-established companies with a corner on the market, discouraging competition.

Regulations and financial policies generally do not impede competition in the financial sector. Legal, regulatory, and accounting systems pertaining to banking are transparent and consistent with international norms. Chad began using OHADA’s accounting system in 2002, bringing its national standards into harmony with accounting systems throughout the region. Several international accounting firms have offices in Chad. However, while accounting, legal, and regulatory procedures are consistent with international norms, some local firms do not use generally accepted standards and procedures in their business practices.

Chad develops forward regulatory plans to encourage foreign investment and budget support. Government ministries draft regulations, subject to approval by the Secretary General of the Government, Council of Ministers, National Assembly, and President. National regulations are most relevant to foreign investors. There are no informal regulatory processes managed by nongovernmental organizations or private sector associations. The GOC occasionally provides opportunities for local associations, such as the National Council of Employers (CNPT, Conseil National du Patronat Tchadien) or the CCIAMA to comment on proposed laws and regulations pertaining to investment. All contracts and practices are subject to legal review, which can be weak.

The government publishes all budget information, including on the Ministry of Finance and Budget website. Other proposed laws and regulations are not published in draft form for public comment. The Observatory on Public Finance is an online framework for the dissemination of public finance data and the operationalization of the Code of Transparency and Good Governance. This code is an implementation of one of the six CEMAC directives on the December 2011 harmonized framework for public financial management that set 2020 as its goal for complete implementation.

The Presidential Council to Improve the Business Climate was announced in 2018, met once in late 2019, and formally launched in January 2021 due to the negative impact of COVID-19 in 2020. This effort to reform Chad’s investment climate and improve Chad’s performance in World Bank assessments is still in its embryonic stage.

The government has not registered Chad on UNCTAD’s website for helping governments simplify, digitize, and automate administrative procedures, www.businessfacilitation.org , despite the website’s ability to be customized for any procedure or level of government without changing any of its laws. To date, the government has not promoted or required companies environmental, social, and governance (ESG) disclosure to facilitate transparency and/or help investors and consumers distinguish between the quality of potential investments.

While the government publishes both its general budget and a simplified “citizen” budget to the website of the Ministry of Finance and Budget and to the Observatory on Public Finance website, it does not allow transparency into its debt obligations, including explicit and contingent liabilities.

Chad has been a member of the WTO since October 19, 1996, and a member of GATT since July 12, 1963. Chad is a member of OHADA and the CEMAC ( www.cemac.int ). Since 2017, Chad is gradually implementing business and economic laws and regulations based on CEMAC standards and OHADA Uniform Acts. Chad’s banking sector is regulated by COBAC (Commission Bancaire de l’Afrique Centrale), a regional agency.

Chad’s legal system and commercial law are based on the French Civil Code which gives rise to the proliferation of frivolous lawsuits and judicial abuse by corrupt authorities. The constitution recognizes customary and traditional law if it does not interfere with public order or constitutional rights. Chad’s judicial system, which often lacks access to printed versions of Chad’s own laws, rules on commercial disputes in a limited technical capacity. Courts normally award monetary judgments in local currency, although it may designate awards in foreign currencies based on the circumstances of the disputed transaction. Historically, the Chadian President appointed judges without National Assembly confirmation, and thus the judiciary may have been subject to executive influence. Following the April 2021 establishment of the Transitional Military Council, its members appointed 93 members to an interim legislative body known as the Transitional National Council (CNT). Many Chadian civil society groups criticized the CNT’s appointment, rather than popular election, as well as its makeup as disproportionately reflecting individuals aligned with former President Deby, and for resulting perceptions of a lack of neutrality.

Chad’s commercial laws are based on standards promulgated by CEMAC, OHADA, and the Economic Community of Central African States (CEEAC, Communaute Economique des Etats de l’Afrique Centrale, http://www.ceeac-eccas.org ). The government is in the process of adopting legislation to comply fully with all these provisions.

Specialized commercial tribunal courts were authorized in 1998 and operationalized in 2004. These tribunals exist in five major cities but lack adequate technical capacity to perform their duties. Firms not satisfied with judgments in these tribunals may appeal to OHADA’s regional court in Abidjan, Cote d’Ivoire, that ensures uniformity and consistent legal interpretations across its member countries. Several Chadian companies have done so. OHADA also allows foreign companies to utilize tribunals outside of Chad, generally in Paris, France, to adjudicate business disputes. Finally, CEMAC established a regional court in N’Djamena in 2001 to hear business disputes, but this body is not widely used.

Contracts and investment agreements can stipulate arbitration procedures and jurisdictions for settlement of disputes. If both parties agree, and settlements do not violate Chadian law, Chadian courts uphold the decision of the court in the nation where an agreement was signed, such as the United States. This principle also applies to disputes between foreign companies and the Chadian Government. The International Chamber of Commerce (ICC) can arbitrate such disputes and foreign companies frequently choose to include clauses in their contract to mandate ICC arbitration.

Bilateral judicial cooperation is in effect between Chad and certain nations. Chad signed the Antananarivo Convention in 1970, covering the discharge of judicial decisions and serving of legal documents, with eleven other former French colonies (Benin, Burkina Faso, Cameroon, CAR, Congo-Brazzaville, Gabon, Cote d’Ivoire, Madagascar, Mauritania, Niger, and Senegal). Chad has similar arrangements in place with France, Nigeria, and Sudan.

The National Investment Charter encourages foreign direct investment. Chad is a member of CEMAC and OHADA. Since 2017, Chad has gradually implemented business and economic laws and regulations based on CEMAC standards and OHADA Uniform Acts.

Foreign investors using the court system are not generally subject to executive interference. In addition, the OHADA Treaty allows foreign companies to utilize tribunals outside of Chad, e.g., the International Chamber of Commerce (ICC) in Paris, France, to adjudicate any disputes. Companies may also access the OHADA’s court located in Abidjan, Ivory Coast.

Foreign businesses interested in investing in or establishing an office in Chad should contact ANIE, which offers a one-stop shop for filing the legal forms needed to start a business. The process officially takes 72 hours and is the most important legal requirement for investment. ANIE’s website ( www.anie-tchad.com ) provides additional information.

Regulation of competition is covered by the OHADA Uniform Acts that form the basis for Chadian business and economic laws and regulations. The Office of Competition in Chad’s Ministry of Industrial and Commercial Development & Private Sector Promotion reviews transactions for competition-related concerns.

Chadian law protects businesses from nationalization and expropriation, except in cases where expropriation is in the public interest. There were no direct government expropriations of foreign-owned property in 2021, though the government maintains indirect expropriation measures, such as a confiscatory tax regime that boasts the third-highest corporate tax rate in the world. There are no indications that the GOC intends to directly expropriate foreign property in the near term, though foreign businesses have reported difficulty repatriating profits from Chadian bank accounts and the open-source reporting indicates that the Chadian government has demanded an extralegal multi-million dollar exit payment from a large multinational.

Historically, a 1967 Land Law has prohibited since its passage the deprivation of ownership without due process, stipulating that the state may not take possession of expropriated properties until 15 days after the payment of compensation. While the government continues to work on reform of the 1967 Land Law, the May 2018 constitution (amended in December 2020), prohibited in its Article 45 the seizure of private property, except in cases of urgent public need — of which there are no known cases. The transitional government’s constitutional charter, which came into place in April 2021 upon the dissolution of Chad’s constitution by the Transitional Military Council, likewise prohibits expropriation outside the framework of the law in its Article 26, though without inclusion of “public utility” or “fair and prior compensation” that were present in the 2018 document.

Chad’s bankruptcy laws are based on OHADA Uniform Acts. According to Section 3, Articles 234 – 239 of OHADA’s Uniform Insolvency Act, creditors and equity shareholders may designate trustees to lodge complaints or claims to the commercial court collectively or individually. The OHADA provisions grant Chad the discretion to apply its own sentences.

Chile’s legal, regulatory, and accounting systems are transparent and provide clear rules for competition and a level playing field for foreigners. They are consistent with international norms; however, environmental regulations – which include mandatory indigenous consultation required by the International Labor Organization’s Indigenous and Tribal Peoples Convention (ILO 169) – and other permitting processes have become lengthy and unpredictable, especially in politically sensitive cases.

Chile does not have a regulatory oversight body. Four institutions play key roles in the rule-making process: The General-Secretariat of the Presidency (SEGPRES), the Ministry of Finance, the Ministry of Economy, and the General Comptroller of the Republic. Most regulations come from the national government; however, some, in particular those related to land use, are decided at the local level. Both national and local governments are involved in the issuance of environmental permits. Regulatory processes are managed by governmental entities. NGOs and private sector associations may participate in public hearings or comment periods.

In Chile, non-listed companies follow norms issued by the Accountants Professional Association, while publicly listed companies use the International Financial Reporting Standards (IFRS). Since January 2018, IFRS 9 entered into force for companies in all sectors except for banking, in which IFRS 15 will be applied. IFRS 16 entered into force in January 2019. On January 1, 2022, Chile’s Financial Market Commission (CMF) began implementation of the IFRS 17 accounting standards in the Chilean insurance market.

The legislation process in Chile allows for public hearings during discussion of draft bills in both chambers of Congress. Draft bills submitted by the Executive Branch to the Congress are readily available for public comment. Ministries and regulatory agencies are required by law to give notice of proposed regulations, but there is no formal requirement in Chile for consultation with the general public, conducting regulatory impact assessments of proposed regulations, requesting comments, or reporting results of consultations. For lower-level regulations or norms that do not need congressional approval, there are no formal provisions for public hearing or comment. As a result, Chilean regulators and rulemaking bodies normally consult with stakeholders, but in a less formal manner.

All decrees and laws are published in the Diario Oficial (roughly similar to the Federal Register in the United States), but other types of regulations will not necessarily be found there. There are no other centralized online locations where regulations in Chile are published.

According to the OECD, compliance rates in Chile are generally high. The approach to enforcement remains punitive rather than preventive, and regulators still prefer to inspect rather than collaborate with regulated entities on fostering compliance. Each institution with regulation enforcement responsibilities has its own sanction procedures. Law 19.880 from 2003 establishes the principles for reversal and hierarchical recourse against decisions by the administration. An administrative act can be challenged by lodging an action in the ordinary courts of justice, or by administrative means with a petition to the Comptroller General of the Republic. Affected parties may also make a formal appeal to the Constitutional Court against a specific regulation.

Chile still lacks a comprehensive, “whole of government” regulatory reform program. The OECD’s April 2016 “Regulatory Policy in Chile” report asserts that Chile took steps to improve its rule-making process, but still lags behind the OECD average in assessing the impact of regulations, consulting with outside parties on their design and evaluating them over time. The World Bank´s Global Indicators of Regulatory Governance project finds that Chile is not part of the countries that have improved their regulatory governance framework since 2017.

Chile’s level of fiscal transparency is excellent. Information on the budget and debt obligations, including explicit and contingent liabilities, is easily accessible online.

Chile does not share regulatory sovereignty with any regional economic bloc. However, several international norms or standards from multilateral organizations (UN, WIPO, ILO, among others) are referenced or incorporated into the country’s regulatory system. As a member of the WTO, the Chile notifies draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).

Chile’s legal system is based on civil law. Chile’s legal and regulatory framework provides for effective means for enforcing property and contractual rights.

Laws governing issues of interest to foreign investors are found in several statutes, including the Commercial Code of 1868, the Civil Code, the Labor Code and the General Banking Act. Chile has specialized courts for dealing with tax and labor issues.

The judicial system in Chile is generally transparent and independent. The likelihood of government intervention in court cases is low. If a state-owned firm is involved in the dispute, the Government of Chile may become directly involved through the State Defense Council, which represents the government interests in litigation cases related to expropriations.

Regulations can be challenged before the court system, the National Comptroller, or the Constitutional Court, depending on the nature of the claim.

Law 20,848 of 2015, established a new framework for foreign investment in Chile and created the Agency for the Promotion of Foreign Investment (APIE), successor to the former Foreign Investment Committee and which also acts under the name of “InvestChile.” The InvestChile website provides relevant laws, rules, procedures, and reporting requirements for investors. For more on FDI regulations and services for foreign investors, see the section on Policies Towards Foreign Direct Investment.

Chile’s anti-trust law prohibits mergers or acquisitions that would prevent free competition in the industry at issue. An investor may voluntarily seek a ruling by an Anti-trust Court that a planned investment would not have competition implications. The national economic prosecutor (FNE) is an active institution in conducting investigations for competition-related cases and filing complaints before the Free Competition Tribunal (TDLC), which rules on those cases.

In January and March 2021, the TDLC approved two extra-judicial settlements between the FNE and Nestle, after the company faced two cases of anti-competitive clauses in the contracts with fresh milk producers. The settlement included a US$ 1.8 million payment from Nestle. On the other hand, in April 2021, the FNE cleared Nestle´s acquisition of Chilean premium chocolate maker La Fete, after finding that the two companies serve different market segments.

In March 2021, the FNE cleared Chinese state-owned enterprise State Grid International Development Limited’s (SGIDL) acquisition of Chilean energy company Compañia General de Electricidad (CGE).

In September 2020, the FNE imposed fines amounting to US$ 4.1 million on the Walt Disney Company and its subsidiary TWDC Enterprises 18 Corp. for failing to provide accurate information to adopt adequate mitigation measures during the approval process for its acquisition of Twenty-First Century Fox, Inc. In June 2021, the TDLC approved the payment of a US$ 220,000 fine for the second charge, while the investigation for the main charge remains ongoing.

In October 2021, the TDLC approved remedies agreed upon by Delta and LATAM airlines with the FNE to mitigate the risks to competition arising from Delta’s acquisition of a 20% minority stake in LATAM’s share capital, along with a joint venture and code share agreements for direct routes between the United States and Canada and between certain South American countries with the United States.

In October 2021, the FNE presented a collusion case against the three main securities transport companies that operate in Chile -Brink’s Chile S.A., Prosegur and Loomis-, for having entered into an agreement to fix the prices of its services between 2017 and 2018. The FNE asked the TDLC to apply fines amounting to US$ 63.4 million against the firms (US$30.5 million for Brink’s Chile S.A., US$25.8 million for Prosegur and US$6.4 million for Loomis), as well as fines between US$ 88,000 and US$ 135,000 against the general managers and the regional heads who were in charge of the Chile offices.

Chilean law grants the government authority to expropriate property, including property of foreign investors, only on public interest or national interest grounds, on a non-discriminatory basis and in accordance with due process. The government has not nationalized a private firm since 1973. Expropriations of private land take place in a transparent manner, and typically only when the purpose is to build roads or other types of infrastructure. The law requires the payment of immediate compensation at fair market value, in addition to any applicable interest.

Chile’s Insolvency Law from 1982 was updated in October 2014. The current law aims to clarify and simplify liquidation and reorganization procedures for businesses to prevent criminalizing bankruptcy. It also established the new Superintendence of Insolvency and created specialized insolvency courts. The new insolvency law requires creditors’ approval to select the insolvency representative and to sell debtors’ substantial assets. The creditor also has the right to object to decisions accepting or rejecting creditors’ claims. However, the creditor cannot request information from the insolvency representative. The creditor may file for insolvency of the debtor, but for liquidation purposes only. The creditors are divided into classes for the purposes of voting on the reorganization plan; each class votes separately, and creditors in the same class are treated equally.

One of China’s WTO accession commitments was to establish an official journal dedicated to the publication of laws, regulations, and other measures pertaining to or affecting trade in goods, services, trade related aspects of IPR (TRIPS), and the control of foreign exchange. Despite mandatory 30-day public comment periods, PRC ministries continue to post only some draft administrative regulations and departmental rules online, often with a public comment period of less than 30 days. As part of the Phase One Agreement, China committed to providing at least 45 days for public comment on all proposed laws, regulations, and other measures implementing the Phase One Agreement. While China has made some progress, U.S. businesses operating in China consistently cite arbitrary legal enforcement and the lack of regulatory transparency among the top challenges of doing business in China.

In China’s state-dominated economic system, the relationships between the CCP, the PRC government, PRC business (state- and private-owned), and other PRC stakeholders are blurred. Foreign-invested enterprises (FIEs) perceive that China prioritizes political goals, industrial policies, and a desire to protect social stability at the expense of foreign investors, fairness, and the rule of law. The World Bank Global Indicators of Regulatory Governance gave China a composite score of 1.75 out 5 points, attributing China’s relatively low score to stakeholders not having easily accessible and updated laws and regulations; the lack of impact assessments conducted prior to issuing new laws; and other concerns about transparency.

For accounting standards, PRC companies use the Chinese Accounting Standards for Business Enterprises (ASBE) for all financial reporting within mainland China. Companies listed overseas or in Hong Kong may choose to use ASBE, the International Financial Reporting Standards, or Hong Kong Financial Reporting Standards.

While the government of China made many policy announcements in 2021 that will provide impetus to ESG reporting, stock exchanges on mainland China (not including Hong Kong) have not made ESG reporting mandatory. For instance, currently eighteen  PRC companies are signatories to the UN Principles for Responsible Investment. While the PRC government did announce its green finance taxonomy known as China’s “Catalogue of Green Bond Supported Projects”, experts cited the taxonomy lacks mandatory reporting and verification. On November 4, the People’s Bank of China and the European Commission also jointly launched a sustainable finance taxonomy to create comparable standards on green finance products. Mainland ESG efforts were also primarily focused on environmental and social impact-related, and less so on governance-related reporting. China’s goal to peak carbon emissions before 2030 and reach carbon neutrality by 2060 will drive reporting on decarbonization plans and targets and could increase alignment with international standards such as those outlined in the Task Force on Climate-Related Financial Disclosures (TCFD) recommendations. The PRC government also incorporated non-mandatory ESG-like principles into overseas development initiatives such as its signature Belt and Road Initiative (BRI) via its Guiding Opinions on Promoting Green Belt and Road Construction. For instance, the PRC adopted the Green Investment Principles (GIP) for greening investment for BRI projects; under this initiative members – including major PRC policy banks funding BRI projects – are expected to provide their first TCFD disclosure by 2023. Obstacles contacts cited include a shortage of quality data and ESG professionals, such as third-party auditors which are required to support evidence based ESG reporting.

In December, MEE issued new disclosure rules  requiring five types of domestic entities to disclose environmental information on an annual basis, effective February 8, 2022. The rules will apply only to listed companies and bond issuers that were subject to environmental penalties the previous year and other MEE-identified entities, including those that discharged high levels of pollutants. Entities must disclose information on environmental management, pollution generation, carbon emissions, and contingency planning for environmental emergencies. These same companies and bond issuers must also disclose climate change and environmental protection information related to investment and financing transactions.

On June 28, the CSRC issued final amendments requiring listed companies disclose environmental penalties and encouraging carbon emissions disclosures. It also issued guidelines on the format and content of annual reports and half-year reports of listed companies, requiring them to set up a separate “Section 5 Environmental and Social Responsibility” to encourage carbon emission reduction related disclosure. In May, the Ministry of Ecology and Environment (MEE) issued a plan  for strengthening environmental disclosure requirements by 2025. Most contacts assessed investors are the key drivers of increased ESG disclosures.

As part of its WTO accession agreement, China agreed to notify the WTO Committee on Technical Barriers to Trade (TBT) of all draft technical regulations. However, China continues to issue draft technical regulations without proper notification to the TBT Committee.

The PRC is also a member of the Regional Comprehensive Economic Partnership (RCEP), which entered into force on January 1, 2022. Although RCEP has some elements of a regional economic bloc, many of its regulatory provisions (for example on data flow) are weakened by national security exemptions.

On September 16, China submitted a written application to join the Comprehensive and Progressive Trans-Pacific Partnership (CPTPP) to New Zealand (the depositary of the agreement). The PRC would face challenges in addressing obligations related to SOEs, labor rights, digital trade, and increased transparency.

China’s legal system borrows heavily from continental European legal systems, but with “Chinese characteristics.” The rules governing commercial activities are found in various laws, regulations, departmental rules, and Supreme People’s Court (SPC) judicial interpretations, among other sources. While China does not have specialized commercial courts, it has created specialized courts and tribunals for the hearing of intellectual property disputes (IP), including in Beijing, Guangzhou, Shanghai, and Hainan.  The PRC’s constitution and laws are clear that PRC courts cannot exercise power independent of the Party. Further, in practice, influential businesses, local governments, and regulators routinely influence courts. Outside of the IP space, U.S. companies often hesitate in challenging administrative decisions or bringing commercial disputes before local courts due to perceptions of futility or fear of government retaliation.

The PRC’s new foreign investment law, the FIL, came into force on January 1, 2020, replacing the previous foreign investment framework. The FIL provides a five-year transition period for foreign enterprises established under previous foreign investment laws, after which all foreign enterprises will be subject to the same domestic laws as PRC companies, such as the Company Law. The FIL standardized the regulatory regimes for foreign investment by including the negative list management system, a foreign investment information reporting system, and a foreign investment security review system all under one document. The FIL also seeks to address foreign investors complaints by explicitly banning forced technology transfers, promising better IPR, and the establishment of a complaint mechanism for investors to report administrative abuses. However, foreign investors remain concerned that the FIL and its implementing regulations provide PRC ministries and local officials significant regulatory discretion, including the ability to retaliate against foreign companies.

The December 2020 revised investment screening mechanism under the Measures on Security Reviews on Foreign Investments (briefly discussed above) came into effect January 18 without any period for public comment or prior consultation with the business community. Foreign investors complained China’s new rules on investment screening were expansive in scope, lacked an investment threshold to trigger a review, and included green field investments – unlike most other countries. Moreover, new guidance on Neutralizing Extra-Territorial Application of Unjustified Foreign Legislation Measures, a measure often compared to “blocking statutes” from other markets, added to foreign investors’ concerns over the legal challenges they would face in trying to abide by both their host-country’s regulations and China’s. Foreign investors complained that market access in China was increasingly undermined by national security-related legislation. While not comprehensive, a list of official PRC laws and regulations is here .

On June 10, the Standing Committee of the NPC adopted the Law of the People’s Republic of China on Countering Foreign Sanctions (“Anti-Foreign Sanctions Law” or AFSL). The AFSL gives the government explicit authority to impose countermeasures related to visas, deportation, and asset freezing against individuals or organizations that broadly endanger China’s “sovereignty, security, or development interests.” The law also calls for Chinese citizens and organizations harmed by foreign “sanctions” to pursue damages via PRC civil courts.

On October 13, MOF issued a circular prohibiting discrimination against foreign-invested enterprises (FIEs) in government procurement for products “produced in China.” The circular required that suppliers not be restricted based on ownership, organization, equity structure, investor country, or product brand, to ensure fair competition between domestic and foreign companies. The circular also required the abolition of regulations and practices violating the circular by the end of November, including the establishment of alternative databases and qualification databases. This circular may have been intended to address the issuance of Document No. 551 in May by MOF and the Ministry of Industry and Information Technology (MIIT) (without publishing on official websites), titled “Auditing guidelines for government procurement of imported products,” outlining local content requirements for hundreds of items, many of which are medical devices, including X-ray machines and magnetic resonance imaging equipment. It is unclear whether Document 551 will be rescinded or revised based on this circular. Additionally, the circular applies only to FIEs and does not provide fair treatment for imported products from companies overseas. While the circular does state FIEs should be afforded equal treatment, the circular does not address concerns about localization pressures created by Document 551. Further, the circular provides no guidance on what constitutes a “domestic product” and does not address treatment of products manufactured in China that incorporate content from other jurisdictions, key concerns for a wide range of U.S. firms.

In November 2021, the PRC government announced transformation of the Anti-Monopoly Bureau of the SAMR, renaming it the National Anti-Monopoly Bureau, adding three new departments, and doubled staffing. The National Anti-Monopoly Bureau enforces China’s Anti-Monopoly Law (AML) and oversees competition issues at the central and provincial levels.  The bureau reviews mergers and acquisitions, and investigates cartel and other anticompetitive agreements, abuse of a dominant market positions, including those related to IP, and abuse of administrative powers by government agencies. The bureau also oversees the Fair Competition Review System (FCRS), which requires government agencies to conduct a review prior to issuing new and revising administrative regulations, rules, and guidelines to ensure such measures do not inhibit competition. SAMR issues implementation guidelines to fill in gaps in the AML, address new trends in China’s market, and help foster transparency in enforcement. Generally, SAMR has sought public comment on proposed measures, although comment periods are sometimes less than 30 days.

In October 2021, SAMR issued draft amendments to the AML for public comment. Revisions to the AML are expected to be finalized in 2022 and likely will include changes such as stepped-up fines for AML violations and specification of the factors to consider in determining whether an undertaking in the internet sector has abused a dominant market position. In February 2021, SAMR published (after public comment) the “Antitrust Guidelines for the Platform Economy.” The Guidelines address monopolistic behaviors of online platforms operating in China.

Foreign companies have long expressed concern that the government uses AML enforcement in support of China’s industrial policies, such as promoting national champions, particularly for companies operating in strategic sectors. The AML explicitly protects the lawful operations of government authorized monopolies in industries that affect the national economy or national security. U.S. companies expressed concerns that in SAMR’s consultations with other PRC agencies when reviewing M&A transactions, those agencies raise concerns not related to competition concerns to block, delay, or force transacting parties to comply with preconditions – including technology transfer – to receive approval.

China’s law prohibits nationalization of FIEs, except under vaguely specified “special circumstances” where there is a national security or public interest need. PRC law requires fair compensation for an expropriated foreign investment but does not detail the method used to assess the value of the investment.  The Department of State is not aware of any cases since 1979 in which China has expropriated a U.S. investment, although the Department has notified Congress through the annual 527 Investment Dispute Report of several cases of concern.

The PRC introduced bankruptcy laws in 2007, under the Enterprise Bankruptcy Law (EBL), which applies to all companies incorporated under PRC laws and subject to PRC regulations. In May 2020, the PRC released the Civil Code, contract and property rights rules. Despite the NPC listing amendments to the EBL as a top work priority for 2021, the NPC has not released the amendments to the public. Court-appointed administrators – law firms and accounting firms that help verify claims, organize creditors’ meetings, list, and sell assets online – look to handle more cases and process them faster.  As of 2021 official statements cited 5,060 institutional administrators and 703 individual administrators.

On August 18, the Law Enforcement Inspection Team of the Standing Committee of the NPC was submitted its report on the enforcement of enterprise bankruptcy to the 30th meeting of the Standing Committee of the Thirteenth NPC for deliberation. While the report is unavailable publicly, the Supreme People’s Court (SPC) website issued a press release  noting the report found that from 2007 to 2020, courts at all levels nationwide accepted 59,604 bankruptcy cases, and concluded 48,045 bankruptcy cases (in 2020 there were 24,438 liquidation and bankruptcy cases). Of the total liquidation and bankruptcy cases recorded in that same period, 90 percent involved private enterprises. The announcement also cited the allocation of additional resources, including future establishment of at least 14 bankruptcy tribunals and 100 Liquidation & Bankruptcy Divisions and specialized collegial panels to handle bankruptcy cases. As of August 2021, bankruptcy cases are handled by 417 bankruptcy judges, 28 high people’s courts, and 284 intermediate people’s courts.

In 2021 the government added a new court in Haikou. National data is unavailable for 2021, but local courts have released some information that suggest a nearly 10 percent increase in liquidation and bankruptcy cases in Jiangxi province and about a 66 percent increase in Guangzhou, the capital city of Guangdong province. While PRC authorities are taking steps to address corporate debt and are gradually allowing some companies to fail, companies generally avoid pursing bankruptcy because of the potential for local government interference and fear of losing control over the outcome. According to the SPC, 2.899 million enterprises closed business in 2020, of which only 0.1 percent or 3,908 closed because of bankruptcy.

In August 2020, Shenzhen released the Personal Bankruptcy Regulations of Shenzhen Special Economic Zone, to take effect on March 1, 2021. This is the PRC’s first regulation on personal bankruptcy. On July 19, the Shenzhen Intermediate People’s Court of Guangdong Province, China served a ruling on Liang Wenjin approving his personal bankruptcy reorganization plan. This was the first personal bankruptcy case closed by Shenzhen Court since the implementation of the Personal Bankruptcy Regulations of Shenzhen Special Economic Zone and is the first personal bankruptcy reorganization case in China.

The Personal Bankruptcy Regulations is China’s first set of rules on personal bankruptcy, which formally establishes the personal bankruptcy system in China for the first time. At present, the Personal Bankruptcy Regulations is only applicable in Shenzhen. Numerous other localities have also begun experimenting with legal remedies for personal insolvency, in part to deter debtors from taking extreme measures to address debt.

The Colombian legal, accounting, and regulatory systems are generally transparent and consistent with international norms. The written commercial code and other laws cover broad areas, including banking and credit, bankruptcy/reorganization, business establishment/conduct, commercial contracts, credit, corporate organization, fiduciary obligations, insurance, industrial property, and real property law. The civil code contains provisions relating to contracts, mortgages, liens, notary functions, and registries. There are no identified private-sector associations or non-governmental organizations leading informal regulatory processes. The ministries generally consult with relevant actors, both foreign and national, when drafting regulations. Proposed laws are typically published as drafts for public comment, although sometimes with limited notice. Information on Colombia’s public finances and debt obligations is readily available and is published in a timely manner.

Enforcement mechanisms exist, but historically the judicial system has not taken an active role in adjudicating commercial cases. The Constitution establishes the principle of free competition as a national right for all citizens and provides the judiciary with administrative and financial independence from the executive branch. Colombia has transitioned to an oral accusatory system to make criminal investigations and trials more efficient. The new system separates the investigative functions assigned to the Office of the Attorney General from trial functions. Lack of coordination among government entities, clear lines of responsibility, as well as insufficient resources complicate timely resolution of cases.

Colombia is a member of UNCTAD’s international network of transparent investment procedures (see http://www.businessfacilitation.org  and Colombia’s websites http://colombia.eregulations.org  and https://www.colombiacompra.gov.co ). Foreign and national investors can find detailed information on administrative procedures for investment and income generating operations, including the number of steps, name, and contact details of the entities and people in charge of procedures, required documents and conditions, costs, processing time, and legal bases justifying the procedures. In general, Colombia does not promote or require environmental, social, and governance disclosure to help investors and consumers distinguish between high- and low-quality investments.

Colombia became the 37th member of the OECD in April 2020. Colombia is part of the World Trade Organization (WTO). The government generally notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade. In August 2020, Colombia fully joined the WTO Trade Facilitation Agreement (TFA). Regionally, Colombia is a member of organizations such as the Inter-American Development Bank (IADB), the Pacific Alliance, and the Andean Community of Nations (CAN).

Colombia has a comprehensive, civil law-based legal system. Colombia’s judicial system defines the legal rights of commercial entities, reviews regulatory enforcement procedures, and adjudicates contract disputes in the business community. The judicial framework includes the Council of State, the Constitutional Court, the Supreme Court of Justice, and various departmental and district courts, which collectively are overseen administratively by the Superior Judicial Council. The 1991 Constitution provided the judiciary with greater administrative and financial independence from the executive branch. Regulations and enforcement actions are appealable through the different stages of legal court processes in Colombia. The judicial system in general remains hampered by time-consuming bureaucratic requirements.

Colombia has a comprehensive legal framework for business and FDI that incorporates binding norms resulting from its membership in the Andean Community of Nations and the WTO, as well as other free trade agreements and bilateral investment treaties.

Colombia’s official investment portal explains procedures and relevant laws for those wishing to invest (see https://investincolombia.com.co/en/how-to-invest ).

The Superintendence of Industry and Commerce (SIC), Colombia’s independent national competition authority, monitors and protects free economic competition, consumer rights, compliance with legal requirements and regulations, and protection of personal data. It also manages the national chambers of commerce. The SIC has been strengthened in recent years with the addition of personnel, including economists and lawyers. The SIC has recently investigated companies, including U.S.-based technology firms and Colombian banks, for failing to protect customer data. Other investigations include those related to pharmaceutical pricing, “business cartelization” among companies supplying public entities, and misleading advertising by a major brewing company. One U.S. gig-economy platform was temporarily barred from operating in Colombia in early 2020, although other similarly-situated companies remained; a court overturned the prohibition on appeal. U.S. companies have expressed concern about limited ability to appeal SIC orders and the SIC’s increasing reliance on orders to remedy perceived problems. Other U.S. companies have noted that SIC investigations can be drawn-out and opaque, similar to the judicial system. In general Stakeholders continue to express concern that some regulatory rulings in Colombia target specific companies, resulting in an uneven playing field and regulatory inconsistency. Investors also note concern that the SIC has ruled differently on similar issues for different companies, leading to different results.

Article 58 of the Constitution governs indemnifications and expropriations and guarantees owners’ rights for legally-acquired property. For assets taken by eminent domain, Colombian law provides a right of appeal both on the basis of the decision itself and on the level of compensation. The Constitution does not specify how to proceed in compensation cases, which remains a concern for foreign investors. The Colombian government has sought to resolve such concerns through the negotiation of bilateral investment treaties and strong investment chapters in free trade agreements, such as the CTPA.

Colombia’s 1991 Constitution grants the government the authority to intervene directly in financial or economic affairs, and this authority provides solutions similar to U.S. Chapter 11 filings for companies facing liquidation or bankruptcy. Colombia’s bankruptcy regulations have two major objectives: to regulate proceedings to ensure creditors’ protection, and to monitor the efficient recovery and preservation of still-viable companies. This was revised in 2006 to allow creditors to request judicial liquidation, which replaces the previous forced auctioning option. Now, inventories are valued, creditors’ rights are considered, and either a direct sale takes place within two months or all assets are assigned to creditors based on their share of the company’s liabilities. The insolvency regime for companies was further revised in 2010 to make proceedings more flexible and allow debtors to enter into a long-term payment agreement with creditors, giving the company a chance to recover and continue operating. Bankruptcy is not criminalized in Colombia. In 2013, a bankruptcy law for individuals whose debts surpass 50 percent of their assets value entered into force.

Restructuring proceedings aim to protect the debtors from bankruptcy. Once reorganization has begun, creditors cannot use collection proceedings to collect on debts owed prior to the beginning of the reorganization proceedings. All existing creditors at the moment of the reorganization are recognized during the proceedings if they present their credit. Foreign creditors, equity shareholders (including foreign equity shareholders), and holders of other financial contracts (including foreign contract holders) are recognized during the proceeding. Established creditors are guaranteed a vote in the final decision. According to the Doing Business 2020 report Colombia ranked 32nd for resolving insolvency and it takes an average of 1.7 years – the same as OECD high-income countries – to resolve insolvency; the average time in Latin America is 2.9 years.

Costa Rican laws, regulations, and practices are generally transparent and meant to foster competition in a manner consistent with international norms, except in the sectors controlled by a state monopoly, where competition is explicitly excluded. Rule-making and regulatory authority is housed in any number of agencies specialized by function (telecom, financial, personal data, health, environmental) or location (municipalities, port authorities). Tax, labor, health, and safety laws, though highly bureaucratic, are not seen as unfairly interfering with foreign investment. It is common to have Professional Associations that play a role in policing or guiding their members.

Costa Rica is a member of UNCTAD’s international network of transparent investment procedures ( http://www.businessfacilitation.org ). Within that context, the Ministry of Economy compiled the various procedures needed to do business in Costa Rica: https://tramitescr.meic.go.cr/ . Accounting, legal, and regulatory procedures are transparent and consistent with international norms. The stock and bond market regulator SUGEVAL requires International Accounting Standards Board for public companies, while the Costa Rican College of Public Accountants (Colegio de Contadores Publicos de Costa Rica -CCPA) has adopted full International Financial Reporting Standards for non-regulated companies in Costa Rica; for more, see the international federation of accountants IFAC: https://www.ifac.org/about-ifac/membership/country/costa-rica .

While the government does not require companies’ environmental, social, and governance (ESG) disclosure, to facilitate transparency and better inform investors, government entities do regularly encourage commitments to environmental and social standards (e.g., within the coffee and tourism industries) beyond or complementary to purely legal requirements.  Certifications with Responsible Business Conduct (RBC) components used by the Costa Rican private sector include an array of agricultural certifications, the B Corporation Certificate, the Environmental Design Certification from the Green Building Council, and the ISO 26000 Social Responsibility standard.  In the banking sector, entities under the supervision of the Superintendencia General de Entidades Financieras (Financial Regulator) must comply with corporate governance regulations such as transparency and accountability to shareholders.

Regulations must go through a public hearing process when being drafted. Draft bills and regulations are made available for public comment through public consultation processes that will vary in their details according to the public entity and procedure in question, generally giving interested parties sufficient time to respond. The standard period for public comment on technical regulations is 10 days. As appropriate, this process is underpinned by scientific or data-driven assessments. A similarly transparent process applies to proposed laws. The Legislative Assembly generally provides sufficient opportunity for supporters and opponents of a law to understand and comment on proposals. To become law, a proposal must be approved by the Assembly by two plenary votes. The signature of 10 legislators (out of 57) is sufficient after the first vote to send the bill to the Supreme Court for constitutional review within one month, although the court may take longer.

Regulations and laws, both proposed and final, for all branches of government are published digitally in the government registry “La Gaceta”: https://www.imprentanacional.go.cr/gaceta/ . The Costa Rican American Chamber of Commerce (AmCham – http://amcham.co.cr  ) and other business chambers closely monitor these processes and often coordinate responses as needed.

The government has mechanisms to ensure laws and regulations are followed. The Comptroller General’s Office conducts operational as well as financial audits and as such provides the primary oversight and enforcement mechanism within the Costa Rican government to ensure that government bodies follow administrative processes. Each government body’s internal audit office and, in many cases, the customer-service comptroller (Contraloria de Servicios) provide additional support.

There are several independent avenues for appealing regulatory decisions, and these are frequently pursued by persons or organizations opposed to a public sector contract or regulatory decision. The avenues include the Comptroller General (Contraloria General de la Republica), the Ombudsman (Defensor de los Habitantes), the public services regulatory agency (ARESEP), and the constitutional review chamber of the Supreme Court. The State Litigator’s office (Procuraduria General) is frequently a participant in its role as the government’s attorney.

Costa Rica is transparent in reporting its public finances and debt obligations, including explicit and contingent liabilities. Debt obligations are transparent; the Ministry of Finance provides updates on public debt through the year, with the debt categorized as Central Government, Central Government and Non-Financial Sector, and Central Bank of Costa Rica.

https://www.hacienda.go.cr/contenido/12519-informacion-de-la-deuda-publica .

The following chart covers contingent debt as of January 31, 2022:

https://www.hacienda.go.cr/docs/6213fa8ea594c_01-2022%20DEUDA%20CONTINGENTE%20PUBLICAR.pdf

The review and enforcement mechanisms described above have kept Costa Rica’s regulatory system relatively transparent and free of abuse, but have also rendered the system for public sector contract approval exceptionally slow and litigious. There have been several cases in which these review bodies have overturned already-executed contracts, thereby interjecting uncertainty into the process. Bureaucratic procedures are frequently long, involved and can be discouraging to new investors.

Furthermore, Costa Rica’s product market regulations are more stringent than in any other OECD country, according to the OECD’s 2020 Product Market Regulations Indicator, leading to market inefficiencies. Find this explanation as well as a detailed review of the regulatory challenges Costa Rica faces in the September 2020 OECD report on regulatory reform:

https://www.oecd.org/countries/costarica/enhancing-business-dynamism-and-consumer-welfare-in-costa-rica-with-regulatory-reform-53250d35-en.htm 

While Costa Rica does consult with its neighbors on some regulations through participation in the Central American Integration System (SICA) ( http://www.sica.int/sica/sica_breve.aspx ), Costa Rica’s lawmakers and regulatory bodies habitually refer to sample regulations or legislation from OECD members and others. Costa Rica’s commitment to OECD standards as an OECD member has accentuated this traditional use of best-practices and model legislation. Costa Rica regularly notifies all draft technical regulations to the WTO Committee on Technical Barriers in Trade (TBT).

Costa Rica uses the civil law system. The fundamental law is the country’s political constitution of 1949, which grants the unicameral legislature a particularly strong role. Jurisprudence or case law does not constitute legal precedent but can be persuasive if used in legal proceedings. For example, the Chambers of the Supreme Court regularly cite their own precedents. The civil and commercial codes govern commercial transactions. The courts are independent, and their authority is respected. The roles of public prosecutor and government attorney are distinct: the Chief Prosecuting Attorney or Attorney General (Fiscal General) operates a semi-autonomous department within the judicial branch while the government attorney or State Litigator (Procuraduria General) works within the Ministry of Justice and Peace in the Executive branch. The primary criminal investigative body “Organismo de Investigacion Judicial” OIJ, is a semi-autonomous department within the Judicial Branch. Judgments and awards of foreign courts and arbitration panels may be accepted and enforced in Costa Rica through the exequatur process. The Constitution specifically prohibits discriminatory treatment of foreign nationals. The Costa Rican Judicial System addresses the full range of civil, administrative, and criminal cases with a number of specialized courts.  The judicial system generally upholds contracts, but caution should be exercised when making investments in sectors reserved or protected by the Constitution or by laws for public operation. Regulations and enforcement actions may be, and often are, appealed to the courts.

Costa Rica’s commercial code details all business requirements necessary to operate in Costa Rica. The laws of public administration and public finance contain most requirements for contracting with the state.

The legal process to resolve cases involving squatting on land can be especially cumbersome. Land registries are at times incomplete or even contradictory. Buyers should retain experienced legal counsel to help them determine the necessary due diligence regarding the purchase of property.

Costa Rican websites are useful to help navigate laws, rules and procedures including that of the investment promotion agency CINDE, http://www.cinde.org/en , the export promotion authority PROCOMER, http://www.procomer.com/ (“inversionista”), and the Health Ministry, https://www.ministeriodesalud.go.cr/  (product registration and import/export). In addition, the State Litigator’s office ( www.pgr.go.cr,  the “SCIJ” tab) compiles relevant laws.

Two public institutions are responsible for consumer protection as it relates to monopolistic and anti-competitive practices. The “Commission for the Promotion of Competition” (COPROCOM), an autonomous agency housed in the Ministry of Economy, Industry and Commerce, is charged with investigating and correcting anti-competitive behavior across the economy. The Telecommunications Superintendence (SUTEL) shares that responsibility with COPROCOM in the Telecommunications sector. Both agencies are charged with defense of competition, deregulation of economic activity, and consumer protection. Their decisions may be appealed judicially. For the OECD assessment of competition law and policy in Costa Rica, see this July 2020 report: https://www.oecd.org/countries/costarica/costarica-competition.htm. 

The three principal expropriating government agencies in recent years have been the Ministry of Public Works – MOPT (highway rights-of-way), the state-owned Costa Rican Electrical Institute – ICE (energy infrastructure), and the Ministry of Environment and Energy – MINAE (National Parks and protected areas). Expropriations generally conform to Costa Rica’s laws and treaty obligations.

Article 45 of Costa Rica’s Constitution stipulates that private property can be expropriated without proof that it is done for public interest. The 1995 Law 7495 on expropriations further stipulates that expropriations require full and prior payment, and upon full deposit of the calculated amount the government may take possession of land despite the former owner’s dispute of the price. The law makes no distinction between foreigners and nationals. The expropriations law was amended in 1998, 2006, and 2015 to clarify and expedite some procedures, including those necessary to expropriate land for the construction of new roads. (For full detail go to https://PGRweb.go.cr/SCIJ  . When reviewing the articles of the law go to the most recent version of each article.)

There is no discernible bias against U.S. investments, companies, or representatives during the expropriations process. Costa Rican public institutions follow the law as outlined above and generally act in a way acceptable to the affected landowners. However, when landowners and government differ significantly in their appraisal of the expropriated lands’ value, the resultant judicial processes generally take years to resolve. In addition, landowners have, on occasion, been prevented from developing land which has not yet been formally expropriated for parks or protected areas; the courts will eventually order the government to proceed with the expropriations but the process can be long.

The Costa Rican bankruptcy law, addressed in both the commercial code and the civil procedures code, has long been similar to corresponding U.S. law. In February 2021, Costa Rica’s National Assembly approved a comprehensive bankruptcy law #9957 “Ley Concursal”, in effect since December 1, 2021. The new law eases bankruptcy processes and help companies in financial distress to move through the “administrative intervention” intended to save the companies. The previous law too often ended with otherwise viable companies ceasing operations, rather than allowing them to recover, due to a bias towards dissolution of companies in distress. As in the United States, penal law will also apply to criminal malfeasance in some bankruptcy cases.

The government aims for transparency in law and policy to foster competition and provide clear rules of the game and a level playing field for domestic and foreign investors.  However, at the operational level, lack of regulatory transparency is a concern.  Publication of draft legislation and regulations is not required.  Foreign and Ivoirian companies complain that new regulations are issued with little warning and without a period for public comment.  For instance, new duties and taxes on products are generally reported in the fiscal annexes towards the end of the year and take immediate effect at the beginning of the next year.  The Ministry of Commerce supports introducing a period for public comment on new regulations and changes in regulation before they are implemented, and government often holds ad hoc public seminars and workshops to discuss proposed plans with trade and industry associations.  Further work in this area would boost investor confidence.

Regulatory actions, once adopted, are published on the government website at enforcement stage.  They are also published in the Official Journal of the Republic of Côte d’Ivoire  (Journal Officiel de la République de Côte d’Ivoire) , which is available for purchase at newsstands and by subscription on the Journal’s website http://www.sgg.gouv.ci/jo.php and at https://abidjan.net/.

The National Regulatory Authority for Public Procurement (ANRMP – Autorité Nationale de Régulation des Marchés Publics) polices transparency in public procurement and private sector compliance with public procurement rules.  Consumers, trade associations, private companies, and individuals have the right to file complaints with ANRMP to hold the government to its own administrative processes.   Since 2019, public tenders’ audits have not been published on the ANRMP official website.

Regulatory bodies regularly publish and promote access to their data for the business community and development partners, allowing for scientific and data-driven reviews and assessments.  Quantitative analysis and public comments are made available.

Regulatory authority and decision-making exist only at the national level. Sub-national jurisdictions do not regulate business. For most industries or sectors, regulations are developed through the ministry responsible for that sector.  In the telecommunications, electricity, cocoa, coffee, cotton, and cashew sectors, the government has established control boards or independent agencies to regulate the sector and pricing.  Companies have complained that rules for buying prices determined by the agriculture commodity regulatory agencies tend to be opaque and local prices are set arbitrarily without reference to world prices.

Côte d’Ivoire’s agency regulating cocoa and coffee (CCC – Conseil Café et Cacao) has identified the need for a single mechanism to control traceability to prevent child labor and deforestation. The private sector and non-governmental stakeholders agree on the need for increased accountability and traceability, but generally prefer a multi-prong approach which incorporates the work already being done in this area outside of government.  Growing international awareness of child labor and environmental challenges in CDI, and the possibility that this could impact exports, are catalysts for action.

The government publishes tender notices in the local press and sometimes in international magazines and newspapers.  On occasion, there is a charge for the bidding documents.  Côte d’Ivoire has a generally decentralized government procurement system, with most ministries undertaking their own procurements.  The National Bureau of Technical and Development Studies, the government’s technical and investment planning agency and think tank, occasionally serves as an executing agency in major projects to be financed by international institutions.

The Public Procurement Department is a centralized office of public tenders in the Ministry of Finance tasked with ensuring compliance with international bidding practices. Côte d’Ivoire’s update to its public procurement code in 2019 introduced electronic procurement bidding, provisions for sustainable public procurement, and promotion of socially responsible vendors as a bidding qualification.  While the public procurement process is open by law, in practice it is often opaque and government contracts are occasionally awarded outside of public tenders.  During negotiations on a tender, the Ivorian Government at times imposes local content requirements on foreign companies.   There are specific regulations governing the government’s use of sole source procurements and the government has awarded sole source bids without tenders, citing the high technical capacity of a firm or a declared emergency.  Many firms continue to cite corruption as an obstacle to a transparent understanding of procurement decisions.

The National Authority for Regulation of Public Procurement (ANRMP) regulates public procurement with a view to improving governance and transparency.  It has the authority to audit and sanction private-sector entities that do not comply with public-procurement regulations, and to provide recommendations to ministries to address irregularities.

Côte d’Ivoire’s accounting, legal, and regulatory procedures are consistent with international norms, though both foreign and Ivoirian businesses often complain about the government’s poor communication.  Côte d’Ivoire is a member of the Organization for the Harmonization of African Business Law (OHADA), which is common to 16 countries and adheres to the WAEMU accounting system.   In accounting, companies use the WAEMU system, which complies with international norms and is a source of economic and financial data.

Banking regulation follows the Central Bank (BCEAO) monetary policy covering the eight countries of WAEMU.  Ivoirian authorities have limited power to conduct monetary policy.  The Central Bank regulates interest rates to control the money supply. IMF assessments confirm CDI’s creditworthiness, with strong financial oversight.  The Ivoirian government promotes transparency of public finances and debt obligations (including explicit and contingent liabilities) with the publication of this information through the following websites:

http://budget.gouv.ci

https://www.tresor.gouv.ci/tres/fr_FR/rapport-de-la-dette-publique/

The Ivoirian government incorporates WAEMU directives into its public procurement bidding policy, processes, and auditing.  This includes separating auditing and regulatory functions and increasing advance payment for the initial procurement of goods and services from 25 to 30 percent.

Côte d’Ivoire is part of the Intergovernmental Action Group against Money Laundering in West Africa (GIABA), whose mandate is to protect economies, reinforce cooperation among member states, harmonize measures, and evaluate current strategies against money laundering and terrorism financing.  The government hopes to adopt the draft national strategy to combat money laundering and terrorism financing in 2022.   Once adopted, this strategy will put in place regulations and institutions that protect the Ivoirian financial system against money laundering and the financing of terrorism .  CDI’s National Financial Information Processing Unit (CENTIF – Cellule nationale de Traitement des Informations financières) analyzes, processes, exploits, and circulates information from atypical financial transactions transmitted by professions subject to the law, in the form of “suspicious transaction reports.”

Ivoirian laws, codes, professional-association standards, and regional-body membership obligations are incorporated in the country’s regulatory system.  The private sector often follows European norms to take advantage of the Ivoirian trade agreement with the EU – CDI’slargest market.

Côte d’Ivoire has been a WTO member since 1995 but has not notified all the draft technical regulations to the WTO Committee on Technical Barriers to Trade.  Côte d’Ivoire signed the Trade Facilitation Agreement (TFA) in December 2013 and ratified it in December 2015.  The National TFA Committee (NTFC) coordinates TFA implementation.  Consistent with the Economic Community of West African States (ECOWAS), Côte d’Ivoire applies a Common External Tariff (CET) on goods importations.

The Ivoirian legal system is based on the French civil-law model.  The law guarantees to all the right to own and transfer private property.  Rural land, however, is governed by a separate set of laws, which makes ownership and transfer very difficult.  The court system enforces contracts.

The Commercial Court of Abidjan adjudicates corporate law cases and contract disputes.  Mediation is also available through the Ivoirian legal framework in addition to the Commercial Court and the Arbitration Tribunal. The Commercial Court of Abidjan retains jurisdiction for the entire country.

The Ivoirian judicial system is ostensibly independent, but magistrates are sometimes subject to political or financial influence.  Judges sometimes fail to prove that their decisions are based on the legal or contractual merits of a case and often rule against foreign investors in favor of entrenched interests.  A frequent complaint from investors is the slow dispute-resolution process.  Cases are often postponed or appealed without a reasonable explanation, moving from court to court for years or even decades.  Regulations or enforcement actions are appealable and adjudicated through the national court system.

The 2018 Investment Code is the primary governing authority for investment conduct.  The Code does not restrict foreign investment or the repatriation of funds.  The Code offers a mixture of fiscal incentives, combining tax exoneration, patents and licenses contribution and tax credits to encourage investment.  The government also offers incentives to promote small businesses and entrepreneurs, low-cost housing construction, factories, and infrastructure development, which the government considers key to the country’s economic development. Concessionary agreements that exempt investors from tax payments require the additional approval of the Ministry of Finance and Economy and the Ministry of Commerce and Industry.  The clearance procedure for planned investments, if the investor seeks tax breaks, is time consuming and confusing.  Even when companies have complied fully with the requirements, the Tax Office sometimes denies tax exemptions with little explanation, giving rise to accusations of favoritism.

Some sectors have additional laws that govern investment activity in those sectors. In mining, for example, the Mining Code allows for a ten-year holding period for permits with an option to extend for an two additional years on a limited permit area of 400 square kilometers.  The government drafted not yet passed in the National Assembly that would impose local-content requirements in the oil and gas sector such as the requirement that companies hire locals, finance personnel training, and support local SMEs.

The government is actively seeking to increase the share of local processing of raw agricultural commodities for export from 10 percent to 50 percent by 2025 and is looking for private investments to help reach this goal.

Côte d’Ivoire was once a net energy exporter and it is making investments to retake that position as the sub-region’s energy hub.  According to 2020 data, the country produces 38,000 barrels-per-day (bpd) of oil from four blocks and 213 million cubic-feet-per-day of gas.  The country has divided its offshore Exclusive Economic Zone into 51 hydrocarbons blocks, of which 18 blocks remain available for bid.  Currently, the production of gas is entirely used for electricity production.  The government seeks to attract more foreign companies to invest in the oil and gas sector.  In 2021, the large Italian oil company ENI discovered oil and gas at an offshore well site called “Baleine.”

The CEPICI provides a one-stop shop website to assist investors.  More information on Côte d’Ivoire’s laws, rules, procedures, and reporting requirements can be found at:

www.apex-ci.org/

www.cepici.gouv.ci/

The Ministry of Commerce, Industry and Small Business Promotion, through the Commission on Anti-Competition Practices, is responsible for reviewing competition–related concerns under the 1991 competition law, which was updated in 2013.  ANRMP is responsible for reviewing the awarding of contracts.

No significant competition cases were reported over the past year.

The Ivoirian constitution guarantees the right to own property and freedom from expropriation without compensation.  The government may expropriate property with due compensation (fair market value) at the time of expropriation in the case of “public interest.”  Perceived corruption and weak judicial and security capacity, however, have resulted in poor enforcement of private property rights, particularly when the entity in question is foreign and the plaintiff is Ivoirian or a long-established foreign resident.

Côte d’Ivoire is ranked 85 out of 190 countries for ease of resolving insolvency, according to the World Bank’s 2020 Doing Business Report.  As a member of OHADA, CDI has both commercial and bankruptcy laws that address the liquidation of business liabilities. OHADA is a regional system of uniform laws on bankruptcy, debt collection, and rules governing business transactions.  OHADA permits three different types of bankruptcy liquidation:  an ordered suspension of payment to permit a negotiated settlement; an ordered suspension of payment to permit restructuring of the company, like Chapter 11; and the complete liquidation of assets, similar to Chapter 7.   Creditors’ rights, irrespective of nationality, are protected equally by the Act.  Bankruptcy is not criminalized.  Court-ordered monetary settlements resulting from declarations of bankruptcy are usually paid out in local currency.

The joint venture Credit Info – Volo West Africa manages regional credit bureaus in WAEMU.

Croatian legislation, which is harmonized with European Union legislation (acquis communautaire), affords transparent policies and fosters a climate in which all investors are treated equally. Nevertheless, bureaucracy and regulations can be complex and time-consuming, although the government is working to remove unnecessary regulations.  There are no informal regulatory processes, and investors should rely solely on government-issued legislation to conduct business.

The Croatian Parliament promulgates national legislation, which is implemented at every level of government, although local regulations vary from county to county.  Members of Government and Members of Parliament, through working groups or caucuses, are responsible for presenting legislation.  Responsible ministries draft and present new legislation to the government for approval. When the Government approves a draft text, it is sent to Parliament for approval.  The approved act becomes official on the date defined by Parliament and when it is published in the National Gazette. Citizens maintain the right to initiate a law through their district Member of Parliament.  New legislation and changes to existing legislation which have a significant impact on citizens are made available for public commentary at   https://esavjetovanja.gov.hr/ECon/Dashboard .  The Law on the Review of the Impact of Regulations defines the procedure for impact assessment, planning of legislative activities, and communication with the public, as well as the entities responsible for implementing the impact assessment procedure. The complete text of all legislation is published both online and in the National Gazette, available at:  www.nn.hr .

Croatia adheres to international accounting standards and abides by international practices through the Accounting Act, which is applied to all accounting businesses.  Publicly listed companies must adhere to these accounting standards by law.

The Croatian government does not promote or require companies to disclose ESG standards, but the Croatian Financial Services Supervisory Agency (HANFA) oversees implementation of the EU directive on sustainability-related disclosures in the financial sector. HANFA also publishes information regarding sustainable financing, and in March 2021 published guidelines to encourage companies listed on the Zagreb Stock Exchange to start regularly publishing their best practices for sustainability, in order to attract investors interested in sustainable investments.

Croatian courts are responsible for ensuring that laws are enforced correctly.  If an investor believes that the law or an administrative procedure is not implemented correctly, the investor may initiate a case against the government at the appropriate court.  However, judicial remedies are frequently ineffective due to delays or political influence.

The Enforcement Act defines the procedure for enforcing claims and seizures carried out by the Financial Agency (FINA), the state-owned company responsible for offering various financial services to include securing payment to claimants following a court enforced order.  FINA also has the authority to seize assets or directly settle the claim from the bank account of the person or legal entity that owes the claim. Enforcement proceedings are regulated by the Enforcement Act, last amended in 2017, and by laws regulating its execution, such as the Act on Implementation of the Enforcement over Monetary Assets, amended in 2020.  The legislation incorporates European Parliament and European Commission provisions for easily enforcing cross-border financial claims in both business and private instances.  Enforcement proceedings are conducted on the basis of enforcement title documents which specify the creditor and debtor, the subject, type, scope, and payment deadline. More information can be found at www.fina.hr  .

Public finances and debt obligations are transparent and available on the Ministry of Finance website, in Croatian only, at https://mfin.gov.hr/ .

Croatia, as an EU member, transposes all EU directives.  Domestic legislation is applied nationally and – while local regulations vary from county to county — there is no locally-based legislation that overrides national legislation.  Local governments determine zoning for construction and therefore have considerable power in commercial or residential building projects.  International accounting, arbitration, financial, and labor norms are incorporated into Croatia’s regulatory system.

Croatia has been a member of the World Trade Organization (WTO) since 2000. Croatia submits all draft technical regulations to the WTO, in coordination with the European Commission.

The legal system in Croatia is civil and provides for ownership of property and enforcement of legal contracts.  The Commercial Company Act defines the forms of legal organization for domestic and foreign investors. It covers general commercial partnerships, limited partnerships, joint stock companies, limited liability companies and economic interest groupings.  The Obligatory Relations Act serves to enforce commercial contracts and includes the provision of goods and services in commercial agency contracts.

The Croatian constitution provides for an independent judiciary.  The judicial system consists of courts of general and specialized jurisdictions.  Core structures are the Supreme Court, County Courts, Municipal Courts, and Magistrate/Petty Crimes Courts.  Specialized courts include the Administrative Court and High and Lower Commercial Courts.  The Constitutional Court determines the constitutionality of laws and government actions and protects and enforces constitutional rights. Municipal courts are courts of first instance for civil and juvenile/criminal cases.  The High Commercial Court is located in Zagreb and has appellate review of lower commercial court decisions.  The Administrative Court has jurisdiction over the decisions of administrative bodies of all levels of government. The Supreme Court is the highest court in the country and, as such, enjoys jurisdiction over civil and criminal cases.  It hears appeals from the County Courts, High Commercial Court, and Administrative Court. Regulations and enforcement actions are appealable and adjudicated in the national court system.

On January 1, 2021 the government established a High Criminal Court, headquartered in Zagreb, with responsibility for adjudication of second instance appeals against decisions made by County Courts in cases that involve criminal acts.

The Ministry of Justice and Public Administration continues to pursue a court reorganization plan intended to increase efficiency and reduce the backlog of judicial cases.  The World Bank approved a $110 million loan to Croatia for the Justice for Business Project in March 2020, to support ICT infrastructure upgrades, court process improvements, and other reforms to judicial services to improve the business climate.  This initiative will last until 2024.  The government is undertaking additional reforms, but significant challenges remain in relation to land registration, training court officers, providing adequate resources to meet the court case load, and reducing the length of bankruptcy procedures.  Investors often face problems with unusually protracted court procedures, lack of clarity in legal proceedings, contract enforcement, and judicial efficiency.  Croatian courts have decreased the number of civil, criminal, and commercial cases and decreased the disposition time for resolution of those cases, however there is still a significant case backlog.  The last available European Commission Country Report for Croatia from 2020 assessed that the length of court proceedings continues to be a burden for business.

There are no specific laws aimed at foreign investment; both foreign and domestic market participants in Croatia are protected under the same legislation. The Company Act defines the forms of legal organization for domestic and foreign investors. The following entity types are permitted for foreigners: general partnerships; limited partnerships; branch offices; limited liability companies; and joint stock companies. The Obligatory Relations Act regulates commercial contracts.

The Ministry of Economy and Sustainable Development Internationalization Directorate           (https://investcroatia.gov.hr/en/ ) facilitates both foreign and domestic investment. The directorate’s website offers relevant information on business and investment legislation and includes an investment guide.

According to Croatian commercial law, significant or “strategic” business decisions must be approved by 75 percent of the company’s shareholders.  Minority investors with at least 25 percent ownership plus one share have what is colloquially called a “golden share,” meaning they can block or veto “strategic” decisions requiring a 75 percent vote. The law calls for minimum 75 percent shareholder approval to remove a supervisory board member, authorize a supervisory board member to make a business decision, revoke preferential shares, change company agreements, authorize mergers or liquidations, and to purchase or invest in something on behalf of the company that is worth more than 20 percent of the company’s initial capita (Note: This list is not exhaustive).

The Competition Act defines the rules and methods for promoting and protecting competition.  In theory, competitive equality is the standard applied with respect to market access, credit and other business operations, such as licenses and supplies.  In practice, however, state-owned enterprises (SOEs) and government-designated “strategic” firms may still receive preferential treatment. The Croatian Competition Agency is the country’s competition watchdog, determining whether anti-competitive practices exist and punishing infringements. The Agency adheres to international norms and standards.  It has determined in the past that some subsidies to SOEs constituted unlawful state aid, however state aid issues are now handled by the Ministry of Finance.  Information on authorities of the Agency and past rulings can be found at www.aztn.hr .  The website includes a “call to the public” inviting citizens to provide information on competition-related concerns.

Croatia’s Law on Expropriation and Compensation gives the government broad authority to expropriate real property in economic and security-related circumstances, including eminent domain. The Law on Strategic Investments also provides for expropriation for projects that meet the criteria for “strategic” projects.  However, it includes provisions that guarantee adequate compensation, in either the form of monetary compensation or real estate of equal value to the expropriated property, in the same town or city.  The law includes an appeals mechanism to challenge expropriation decisions by means of a complaint to the Ministry of Justice and Public Administration within 15 days of the expropriation order.  The law does not describe the Ministry’s adjudication process.  Parties not pleased with the outcome of a Ministry decision can pursue administrative action against the decision, but no appeal to the decision is allowed. There is not a history of alleged expropriations since Croatia declared independence in 1991. The government has not taken measures alleged to be indirect expropriation.

Article III of the U.S.-Croatia Bilateral Investment Treaty (BIT) covers both direct and indirect expropriations.  The BIT bars all expropriations or nationalizations except those that are for a public purpose, carried out in a non-discriminatory manner, in accordance with due process of law, and subject to prompt, adequate, and effective compensation.

ICSID Convention and New York Convention

In 1998 Croatia ratified the Washington Convention that established the International Center for the Settlement of Investment Disputes (ICSID).  Croatia is a signatory to the 1958 New York Convention on the Acceptance and Execution of Foreign Arbitration Decisions.

Investor-State Dispute Settlement

The Croatian Law on Arbitration addresses both national and international proceedings in Croatia. Parties to arbitration cases are free to appoint arbitrators of any nationality or professional qualifications and Article 12 of the Law on Arbitration requires impartiality and independence of arbitrators.  Croatia recognizes binding international arbitration, which may be defined in investment agreements as a means of dispute resolution. Croatia is a signatory to the following international conventions regulating the mutual acceptance and enforcement of foreign arbitration: the 1923 Geneva Protocol on Arbitration Clauses, the 1927 Geneva Convention on the Execution of Foreign Arbitration Decisions, and the 1961 European Convention on International Business Arbitration.

The Arbitration Act covers domestic arbitration, recognition and enforcement of arbitration rulings, and jurisdictional matters.  Once an arbitration decision has been reached, the judgment is executed by court order.  If no payment is made by the established deadline, the party benefiting from the decision notifies the Commercial Court, which becomes responsible for enforcing compliance. Arbitration rulings have the force of a final judgment, but can be appealed within three months.

In regard to implementation of foreign arbitral awards, Article 19 of the Act on Enforcement states that judgments of foreign courts may be executed only if they “fulfill the conditions for recognition and execution as prescribed by an international agreement or the law.”  More detailed requirements for executing foreign arbitral awards are set out in Article 40 of the Arbitration Act. The two main requirements that must be met are: 1) Croatian law must allow for the subject matter to be resolved by arbitration, and 2) recognizing and enforcing the foreign decision would not be contrary to Croatian public order. Moreover, an arbitral award will be recognized in Croatia only if it was not contested by one of the parties on any of the legally prescribed grounds and subsequently annulled by a court. If the arbitral award has not yet become binding for the parties, or if it has been annulled by a court of the country in which it was rendered or if its legal effects were delayed, then the Croatian courts will not recognise such an arbitral award.

The Act on Enforcement provides for the collection of financial claims and seizures by the Financial Agency (FINA), which is authorised to implement court decisions ordering enforcement.  FINA has the authority to instruct a bank to seize assets or directly settle the claim from the bank account of the debtor. FINA also has the authority to seize assets or directly settle the claim from the bank account of the person or legal entity that owes the claim. More information can be found at www.fina.hr.

Article Ten of the U.S.-Croatia BIT sets forth mechanisms for the resolution of investment disputes, defined as any dispute arising out of or relating to an investment authorization, an investment agreement, or an alleged breach of rights conferred, created, or recognized by the BIT with respect to a covered investment.

Croatia has no history of extrajudicial action against foreign investors. There is currently one known case filed by a U.S. investor in Croatian courts in 2016, following an investment dispute with a municipality that began in the early 2000s. The investor has announced plans to file a claim at international arbitration courts, citing the U.S.-Croatia BIT as the basis for the action, if an agreement with the government cannot be reached. The Croatian government settled a second longstanding investment dispute with a U.S. investor in December 2021.

International Commercial Arbitration and Foreign Courts

To reduce the backlog of court cases in the Croatian judiciary, non-disputed cases are passed to public notaries, but before those decisions are final and enforceable, they can be contested, in which case procedures will be continued before the competent court.

Both mediation and arbitration services are available through the Croatian Chamber of Economy. The Chamber’s permanent arbitration court has been in operation since 1965.  Arbitration is voluntary and conforms to UNCITRAL procedures.  The Chamber of Economy’s Mediation Center has been operating since 2002 – see https://www.hok-cba.hr/centar-za-mirenje/.

There are no major investment disputes currently underway involving state-owned enterprises, other than a dispute between the Croatian government and a Hungarian energy company over implementation of a purchase agreement with a Croatian oil and gas company. There is no evidence that domestic courts rule in favor of state-owned enterprises.

Croatia’s Bankruptcy Act corresponds to the EU regulation on insolvency proceedings and United Nations Commission on International Trade Law (UNCITRAL) Model Law on Cross-Border Insolvency.  All stakeholders in the bankruptcy proceeding, foreign and domestic, are treated equally in terms of the Bankruptcy Act.  Bankruptcy is not considered a criminal act.

The Financial Operations and Pre-Bankruptcy Settlement Act helps expedite proceedings and establish timeframes for the initiation of bankruptcy proceedings.  One of the most important provisions of pre-bankruptcy is that it allows a firm that has been unable to pay all its bills to remain open during the proceedings, thereby allowing it to continue operations and generate cash under financial supervision in hopes that it can recover financial health and avoid closure.

The Commercial Court of the county in which a bankrupt company is headquartered has exclusive jurisdiction over bankruptcy matters. A bankruptcy tribunal decides on initiating formal bankruptcy proceedings, appoints a trustee, reviews creditor complaints, approves the settlement for creditors, and decides on the closing of proceedings.  A bankruptcy judge supervises the trustee (who represents the debtor) and the operations of the creditors’ committee, which is convened to protect the interests of all creditors, oversee the trustee’s work and report back to creditors.  The Act establishes the priority of creditor claims, assigning higher priority to those related to taxes and revenues of state, local and administration budgets.  It also allows for a debtor or the trustee to petition to reorganize the firm, an alternative aimed at maximizing asset recovery and providing fair and equitable distribution among all creditors.

REPUBLIC OF CYPRUS

The ROC achieved a score of 4 out of 6 in the World Bank’s composite Global Indicators of Regulatory Governance score (based on data collected December 2015 to April 2016) designed to explore good regulatory practices in three core areas: publication of proposed regulations, consultation around their content, and the use of regulatory impact assessments. For more information, please see: http://rulemaking.worldbank.org/en/data/explorecountries/cyprus .

U.S. companies competing for ROC government tenders have noted concerns about opaque rules and possible bias by technical committees responsible for preparing specifications and reviewing tender submissions. Overall, however, procedures and regulations are transparent and applied in practice by the government without bias towards foreign investors. The ROC actively promotes good governance and transparency as part of its administrative reform action plan.

In line with the above plan and EU requirements, the ROC launched the National Open Data Portal ( https://www.data.gov.cy/ ) in 2016 to increase transparency in government services. Government agencies are now required to post publicly available information, data, and records, on the entire spectrum of their activities. The number of data sets available through this portal has been growing rapidly, although much of it is in Greek only.

Several agencies and non-governmental organizations (NGOs) share competency on fostering competition and transparency, including the ROC Commission for the Protection of Competition ( http://www.competition.gov.cy/competition/competition.nsf/index_en/index_en?OpenDocument ), the Competition and Consumer Protection Service, under MECI ( https://meci.gov.cy/en/departments-services/consumer-protection-service ), the Cyprus Consumers Association ( https://www.katanalotis.org.cy/ ), and the Cyprus Securities and Exchange Commission ( https://www.cysec.gov.cy/en-GB/home/ ).

Government and independent oversight agencies such as the Cyprus Securities and Exchange Commission actively promote companies’ environmental, social, and governance (ESG) disclosure to facilitate transparency. In 2017, the European Commission published guidelines to help companies disclose environmental and social information, which it supplemented in 2019 with guidelines on reporting climate-related information. These guidelines are not mandatory, but many progressive local companies are adopting them to secure their sustainability and long-term gains.

Most laws and regulations are published only in Greek and obtaining official English translations can be difficult, but expert analysis in English is generally available from local law and accounting firms when the regulation affects international investment or business activity. When passing new legislation or regulations, Cypriot authorities follow the EU acquis communautaire – the body of common rights and obligations that is binding on all EU members. A formal procedure of public notice and comment is not required in Cyprus, except for specific types of laws. In general, the ROC will seek stakeholder feedback directly. Draft legislation must be published in the Official Gazette before it is debated in the House to allow stakeholders an opportunity to submit comments. The ROC House of Representatives typically invites specific stakeholders to offer their feedback when debating bills. Draft regulations, on the other hand, need not be published in the Official Gazette prior to being approved.

In an effort to contribute to global tax transparency, the ROC has adopted the Standard of Automatic Exchange of Information developed by the Organization for Economic Co-Operation and Development (OECD) known as Common Reporting Standard (CRS). Since 2016, the ROC Tax Department requires all financial institutions to confirm their clients’ jurisdiction(s) of Tax Residence and Respective Tax Identification Number, if applicable. Additionally, the ROC has signed the U.S. Foreign Account Tax Compliance Act (FATCA), allowing Cypriot tax authorities to share information with U.S. counterparts.

Public finances and debt obligations are published as part of the annual budget process.

AREA ADMINISTERED BY TURKISH CYPRIOTS

The level of transparency for “lawmaking” and adoption of “regulations” in the “TRNC” lags behind U.S. and EU standards. There are no informal regulatory processes managed by nongovernmental organizations or private sector associations. Draft legislation or regulations are made available for public comment for 21 days after the legislation is sent to “parliament.” Almost all legislation and regulations are published only in Turkish.

REPUBLIC OF CYPRUS

As an EU member state since May 1, 2004, the Republic of Cyprus must ensure compliance with the acquis communautaire. The acquis is constantly evolving and comprises of Treaties, international agreements, legislation, declarations, resolutions, and other legal instruments. EU legislation, for its part, is subdivided into:

• Regulations, which are directly applicable to member states and require no further action to have legal effect;
• Directives, which are addressed to and are binding on member states, but the member state may choose the method by which to implement the directive. Generally, a member state must enact national legislation to comply with a directive;
• Decisions, which are binding on those parties to whom they are addressed; and
• Recommendations and opinions, which have no binding force.

When there is conflict between European law and the law of any member state, European law prevails; the norms of national law have to be set aside, under the principle of EU law primacy or supremacy. The ROC is often slow to transpose EU directives into local law, but transposition is generally consistent with EU intent when it happens.

AREA ADMINISTERED BY TURKISH CYPRIOTS

The entire island of Cyprus is considered EU territory, but the acquis communautaire is suspended in the areas administered by Turkish Cypriots and the north is not considered to be within the EU customs area.

REPUBLIC OF CYPRUS

Cyprus is a common law jurisdiction and its legal system is based on English Common Law for both substantive and procedural matters. Cyprus inherited many elements of its legal system from the United Kingdom, including the presumption of innocence, the right to due process, the right to appeal, and the right to a fair public trial. Courts in Cyprus possess the necessary powers to enforce compliance by parties who fail to obey judgments and orders made against them. Public confidence in the integrity of the Cypriot legal system remains strong, although long delays in courts, and the perceived failure of the system collectively to punish those responsible for the island’s financial troubles in 2013 have tended to undermine this trust in recent years.

International disputes are resolved through litigation in Cypriot courts or by alternative dispute resolution methods such as mediation or arbitration. Businesses often complain of court gridlock and judgments on cases generally taking years to be issued, particularly for claims involving property foreclosure.

AREA ADMINISTERED BY TURKISH CYPRIOTS

Investors should note the EU’s acquis communautaire is suspended in the area administered by the Turkish Cypriots.

The “TRNC” is a common law jurisdiction. Judicial power other than the “Supreme Court” is exercised by the “Heavy Penalty Courts,” “District Courts,” and “Family Courts.” Turkish Cypriots inherited many elements of their legal system from British colonial rule before 1960, including the right to appeal and the right to a fair public trial. There is a high level of public confidence in the judicial system in the area administrated by Turkish Cypriots. The judicial process is procedurally competent, fair, and reliable.

Foreign investors can make use of all the rights guaranteed to Turkish Cypriots. Commercial courts and alternative dispute resolution mechanisms are not available in the “TRNC.” The resolution of commercial or investment disputes through the “judicial system” can take several years. The Turkish Cypriot administration has trade and industry “law” and contractual “law.” The Turkish Cypriot administration has several trade and economic cooperation agreements with Turkey. For more information about “legislation,” visit https://investnorthcyprus.gov.ct.tr/ . Because the “TRNC” is not recognized internationally, “TRNC court” decisions and orders may be difficult to enforce outside of the area administered by Turkish Cypriots or Turkey.

REPUBLIC OF CYPRUS

For more information on laws affecting incoming foreign investment see https://www.investcyprus.org.cy/ 

AREA ADMINISTERED BY TURKISH CYPRIOTS

Visit the “YAGA” website, for more information about laws and regulations on FDI: https://investnorthcyprus.gov.ct.tr/ 

REPUBLIC OF CYPRUS

The oversight agency for competition is the Commission for the Protection of Competition: http://www.competition.gov.cy/competition/competition.nsf/index_en/index_en?OpenDocument 

AREA ADMINISTERED BY TURKISH CYPRIOTS

The oversight “agency” for competition is the “Competition Board:” http://www.rekabet.gov.ct.tr/ 

REPUBLIC OF CYPRUS

Private property may, in exceptional instances, be expropriated for public purposes, in a non-discriminatory manner, and in accordance with established principles of international law and consistent with EU law, rights, and directives. The expropriation process entitles investors to proper compensation, whether through mutual agreement, arbitration, or the local courts. Foreign investors may claim damages resulting from an act of illegal expropriation by means other than litigation. Investors and lenders to expropriated entities receive compensation in the currency in which the investment was made. In the event of any delay in the payment of compensation, the Government is also liable for the payment of interest based on the prevailing six-month interest rate for the relevant currency. Like most other jurisdictions, banks in Cyprus are expected to complete the switch from the London Inter-Bank Offered Rate (LIBOR) to the Secured Overnight Financing Rate (SOFR) by June 2023.

Following a financial crisis in 2013, the ROC took extraordinary steps as part of the Memorandum of Understanding (MOU) between the Republic of Cyprus and international lenders (European Commission, European Central Bank, and the IMF – the “troika”). Depositors in two of the largest Cypriot banks were forced to take a cut on almost half of their deposits exceeding insured limits. This action sparked 3,000 lawsuits against the ROC and the banks, but the European Court of Justice ruled that the MOU with the troika was not an unlawful act and dismissed actions for compensation. The ROC has not taken any similar extraordinary actions since.

AREA ADMINISTERED BY TURKISH CYPRIOTS

Private property may be expropriated for public purposes. The expropriation process entitles investors to proper compensation. Foreign investors may claim damages resulting from an act of illegal expropriation by means other than litigation.

In expropriation cases involving private owners, they are first notified, the property is then inspected, and, if an agreement is reached regarding the amount, then the owner is compensated. In cases where the owner declines the compensation package, the case relegated to local “courts” for a final decision.

Because the “TRNC” is not recognized internationally, “TRNC court” decisions and orders may be difficult to enforce outside of the area administered by Turkish Cypriots or Turkey.

REPUBLIC OF CYPRUS

New insolvency legislation introduced in 2015 helped overhaul bankruptcy procedures, with a view to resolving the island’s high levels of non-performing loans (NPLs). Bankruptcy procedures can be initiated by a creditor through compulsory liquidation or by the debtor through voluntary liquidation. The court can impose debt rescheduling, in cases where aggregate liabilities do not exceed USD 409,500 (EUR 350,000) and individuals with minimal assets and income may apply to the court via the Insolvency Service for a debt relief order of up to USD 29,250 (EUR 25,000). Discharge from bankruptcy is automatic after three years, provided all debtor assets are sold and the proceeds distributed to creditors. Fraudulent alienation of assets prior to bankruptcy and non-disclosure of assets draws criminal sanctions under the new legislation. Cypriot authorities are closely monitoring implementation of the new insolvency framework. Despite concerted efforts by Cypriot authorities and the banks NPLs remained stubbornly high at 28.5 percent of total loans at the end of 2019, compared to 30.3 percent a year earlier, although two major banks are in the process of selling significant NPL portfolios to investors.

The World Bank’s 2020 Doing Business report ranked Cyprus 31st from the top among 190 countries in terms of the ease with which it resolves insolvency. For additional information, please see: https://www.doingbusiness.org/en/data/exploreeconomies/cyprus#DB_ri  .

AREA ADMINISTERED BY TURKISH CYPRIOTS

In 2013, the “TRNC” passed a debt restructuring “law” aimed at providing incentives to restructure debts and NPLs separately. Turkish Cypriots also have a bankruptcy “law” that defines “collecting power;” conditions under which a creditor can file a bankruptcy application; and the debtor’s bankruptcy application, and agreement plans.

As of the end of the third quarter of 2021, NPLs were 1.5 billion Turkish Lira (USD 10 million).

Tax, labor, environment, health and safety, and other laws generally do not distort or impede investment.  Policy frameworks are consistent with a market economy.  Fair market competition is overseen by the Office for the Protection of Competition (UOHS) (http://www.uohs.cz/en/homepage.html).  UOHS is a central administrative body entirely independent in its decision-making practice.  The office is mandated to create conditions for support and protection of competition and to supervise public procurement and state aid.

The government requires companies with over 500 employees to undertake environmental, social, and governance (ESG) disclosures to facilitate transparency.

All laws and regulations in the Czech Republic are published before they enter into force.  Opportunities for prior consultation on pending regulations exist, and all interested parties, including foreign entities, can participate.  A biannual governmental plan of legislative and non-legislative work is available online, along with information on draft laws and regulations (often only in the Czech language).  Business associations, consumer groups, and other non-governmental organizations, including the American Chamber of Commerce, can submit comments on laws and regulations.  Laws on auditing, accounting, and bankruptcy are in force.  These laws include the use of international accounting standards (IAS) for consolidated corporate groups.  Public finances are transparent.  The government’s budget and information on debt obligations are publicly available and published online.

Membership in the EU requires the Czech Republic to adopt EU laws and regulations, including rulings by the European Court of Justice (ECJ).

Czechoslovakia was a founding member of the GATT in 1947 and a member of the World Trade Organization (WTO).  Since the Czech Republic’s entry into the EU in 2004, the European Commission – an independent body representing all EU members – oversees Czech equities in the WTO and in trade negotiations.

The Czech Commercial Code and Civil Code are largely based on the German legal approach, which follows a continental legal system where the principal areas of law and procedures are codified.  The commercial code details rules pertaining to legal entities and is analogous to corporate law in the United States.  The civil code deals primarily with contractual relationships among parties.

The Czech Civil Code, Act. No. 89/2012 Coll. and the Act on Business Corporations, Act No. 90/2012 Coll. (Corporations Act) govern business and investment activities.  The Act on Business Corporations introduced substantial changes to Czech corporate law such as supervision over the performance of a company’s management team, decision-making process, and remuneration and damage liability.  Detailed provisions for mergers and time limits on decisions by the authorities on registration of companies are covered, as well as protection of creditors and minority shareholders.

The judiciary is independent of the executive branch.  Regulations and enforcement actions are appealable, and the judicial process is procedurally competent, fair, and reliable.

The Foreign Direct Investment agenda is governed by the Civil Code and by the Act on Business Corporations.  In addition, the newly adopted investment screening law, which came into effect on May 1, 2020, gives the government the ability to screen greenfield investments and acquisitions by non-EU investors for national security considerations.

The Czech Ministry of Industry and Trade maintains a “one-stop-shop” website available in Czech only at https://www.businessinfo.cz/, which aids foreign companies in establishing and managing a foreign-owned business in the Czech Republic, including navigating the legal requirements, licensing, and operating in the EU market.

The Office for the Protection of Competition (UOHS) is the central authority responsible for creating conditions that favor and protect competition.  UOHS also supervises public procurement and monitors state aid (subsidy) programs.  UOHS is led by a chairperson who is appointed by the president of the Czech Republic for a six-year term.

Government acquisition of property is done only for public purposes in a non-discriminatory manner and in full compliance with international law.  The process of tracing the history of property and land acquisition can be complex and time-consuming, but it is necessary to ensure clear title.  Investors participating in privatization of state-owned companies are protected from restitution claims through a binding contract with the government.

The government amended the bankruptcy law on June 1, 2019, expanding the categories of debtors qualified for debt discharge.   The basic debt relief period for individuals is currently five years.  However, if the debtor is a pensioner, disabled, his or her debt was created prior 18 years of age, or manages to repay at least 60 percent of debt, then the debt relief period shortened to three years.

The 2018 Law on Pricing, Freedom, and Competition (the “Competition Act”) created a Competition Commission. DRC law mandates review if a company’s turnover is equal to or exceeds the amount determined by Decree of the Prime Minister upon proposal of the Minister of the Economy; if the party in question also holds a combined market share of 25% or more; or if the contemplated transaction creates / reinforces an already dominant position. DRC law requires notification prior to a corporate merger.

The DRC is a member of the regional competition bodies, the Common Market for Eastern and Southern Africa (COMESA),and the Organization for the Harmonization of Business Law in Africa (“OHADA”), which covers francophone African countries . OHADA does not have an operational merger control regime in place, while COMESA does have merger control. Merger activities in the DRC should should comply with COMESA standards.

There are no informal regulations run by private or nongovernmental organizations that discriminate against foreign investors. However, some U.S. investors perceive the regulations in the mining and agricultural sectors mandating a percentage of local ownership as discriminatory against foreign investment.

Proposed laws and regulations are rarely published in draft format for public discussion and comment; discussion is typically limited to the governmental entity that proposes the draft law and Parliament prior to enactment. Sometimes the government will hold a public hearing after public appeals. The Official Gazette of the DRC is a specialized service of the Presidency of the Republic, which publishes and disseminates legislative and regulatory texts, judicial decisions, acts of companies, associations and political parties, designs, industrial models, trademarks as well as any other act referred to in the law. More information is available at  http://www.leganet.cd/ .

There are no formal or informal GDRC provisions that systematically impede foreign investment. Companies often complain of facing administrative hurdles as laws and regulations are often poorly or unevenly applied.

DRC is member of Francophone Africa’s OHADA – the Organization for Business and Customs Harmonization, or Organisation pour l’Harmonisation en Afrique du Droit des Affaires – a system of accounting, legal, and regulatory procedures which covers the legal framework in the areas of contract, company, and bankruptcy law and sets up an accounting system better aligned to international standards. A Coordination Committee in the DRC monitors OHADA implementation.

The GDRC does not promote or require companies’ environmental, social, and governance (ESG) disclosure. However, some companies believe that compliance with international ESG standards can attract new financing and are taking steps to ensure that their companies are ESG compliant. These companies believe that compliance allows them to have a positive impact on the communities in which they operate and protect the environment.

Draft bills or regulations are rarely made available for public comment, or through a public comment process. Discussion is usually limited to the government entity proposing the bill and to Parliament before the bill’s enactment. Sometimes the government will hold a public hearing after public appeals.

The Official Gazette of the DRC is a specialized service of the Presidency of the Republic, which publishes and disseminates legislative and regulatory texts, judicial decisions, acts of companies, associations and political parties, designs, industrial models, trademarks as well as any other act referred to in the law. More information is available at http://www.leganet.cd/ .

Oversight mechanisms are weak, and often the law does not require audits to ensure that internal controls are in place or that administrative procedures are followed. Companies often complain that they face administrative barriers, with the government often poorly or unevenly enforcing laws and regulations. However, there are regulatory authorities in different sectors that ensure compliance with laws, regulations, conventions, etc., in order to guarantee effective and fair competition for the benefit of consumers and to provide legal and regulatory certainty for private investors. Some of them can issue, suspend, or withdraw authorizations and establish corresponding specifications.

In August 2021, the GDRC established the National Agency for Export Promotion (ANAPEX), with the aim of identifying and attracting foreign investments to sectors with export potential.

Following the decree signed in March 2022 by the Prime Minister, a new public establishment called the Agency for the Steering, Coordination and Monitoring of Collaboration Agreements Between the DRC and Private Partners (APCSC) was created. It replaces the Office for Coordination and Monitoring of the Sino-Congolese Program (BCPSC) established by former President Kabila and limited to agreements with Chinese investors. The APCSC will focus particularly on the areas of basic infrastructure and natural resources.

Through the National Agency for the Promotion of Exports (ANAPEX), the DRC can take advantage of its commitments at the regional level and can also target the Asian, European, and American markets to increase exports and further diversify its international markets. APCSC will interface between the various parties and entities interested in collaborating on projects in basic infrastructure and natural resources.

The enforcement process is legally reviewable, sometimes digitalized, and otherwise made accountable to the public. Public and private institutions responsible for monitoring and regulating various sectors make regulatory enforcement mechanisms publicly available. Regulatory agencies regularly publish their data and make it available to the business community and development partners, allowing for scientific and data-driven reviews and assessments.

In 2021, the DRC made significant progress by producing and publicly issuing a revised budget when budget execution deviated significantly from budget projections. Information on debt obligations was publicly available, except for major State-Owned Enterprise debt information.  However, the GDRC strives to promote transparency in public finances and debt obligations (including explicit and contingent liabilities) by publishing information on https://budget.gouv.cd/ .

The DRC is a member of several regional economic blocs, including the Southern African Development Community (SADC), the Common Market for Eastern and Southern Africa (COMESA), the Organization for the Harmonization of Business Law in Africa (“OHADA”), the Economic Community of Central African States (ECCAS), and the Economic Community of the Great Lakes Countries (ECGLC). In April 2022, the DRC joined the East African Community. The Congolese Parliament must still ratify the EAC’s laws and regulations before the agreement take effect. The GDRC has made efforts to harmonize its system with these regional bodies.

According to the Congolese National Standardization Committee, the DRC has adopted 470 harmonized COMESA standards, which are based on the European system.

The DRC is a member of the World Trade Organization (WTO) and seeks to comply with Trade Related Investment Measures (TRIM) requirements, including notifying regulations to the WTO Committee on Technical Barriers to Trade (TBT).

The DRC is a civil code country, and the main provisions of its private law date back to the Napoleonic Civil Code. The general characteristics of the Congolese legal system are similar to those of the Belgian system. Various local laws govern both personal status laws and property rights, including inheritance and land ownership systems in traditional communities throughout the country. The Congolese legal system consists of three branches: public law, private law, and economic law. Public law governs legal relationships involving the state or state authority; private law governs relationships between private persons; and economic law governs interactions in areas such as labor, trade, mining, and investment.

The DRC has written commercial and contractual laws. The DRC has thirteen commercial courts located in its main business cities, including Kinshasa, Lubumbashi, Matadi, Boma, Kisangani, and Mbuji-Mayi. These courts are designed to be led by professional judges specializing in commercial matters and exist in parallel to the judicial system. However, a lack of qualified personnel and reluctance by some DRC jurisdictions to fully recognize OHADA law and institutions have hindered the development of commercial courts. Legal documents in the DRC can be found at: http://www.leganet.cd/ .

The current executive branch has generally not interfered with judicial proceedings. The current judicial process is not procedurally reliable, and its rulings are not always respected.

The national court system provides an appeals mechanism under the OHADA framework.

The 2002 Investment Code governs most foreign direct investment (FDI) and provides for investment protection. Law n°004/2002 on the Investment Code, through the provisions of articles 23-30, which provide the mechanisms of security and guarantees for investments as well as customs, tax, and parafiscal exemptions. The country’s constitution and laws state that the property (private and collective) of all persons in the DRC is sacred. The GDRC guarantees the right to individual or collective property acquired in accordance with the law or custom. It encourages and ensures the security of private, national, and foreign investments. No one may be deprived of his or her property except for reasons of public utility and in return for fair and prior compensation granted under the conditions established by law; the State guarantees the right to private initiative to both nationals and foreigners.

The Public Private Partnership (PPP) Act provides for the guarantee of execution of the partnership contract regardless of a change of government (art. 15). Taxation in this law a common application of the law, except for the reduction of the tax on profits and earnings, which is set at 15%. There are other laws that grant customs exemptions, such as the Agricultural Act, the Partnership Act in the Value Chain, etc. The law favors amicable settlement or arbitration in case of investment disputes. Specific sectoral laws govern agriculture, industry (protection of industrial property), infrastructure and civil engineering, transportation (operating license in air transport), mining research and exploitation, hydrocarbons, various electricity sub-sectors, information and communication technologies (ICT) (license to operate telecommunications services), insurance and reinsurance, healthcare, and arms production and related military activities. Notwithstanding the specific provisions governing each of these sectors, all investors are required to submit a copy of their investment file to the DRC investment agency ANAPI ( www.investindrc.cd ).

The Telecommunications Law went into effect in 2021, bringing the first revision of the law since 2002. The government’s decisions in 2021 to establish an agency to monitor foreign investment in infrastructure and natural resources and to create a presidential body to review all mining contracts have affected some of the largest investments in the DRC.

The GUCE provides a One-Stop Shop designed to simplify business creation. The GUCE has reduced the processing time from five months to three days and for corporations, the fee was lowered from $120 to $80. For sole proprietorships, the fee has been reduced from $40 to $30. There is also an Integral One-Stop Shop for foreign trade (GUICE), which is a neutral, transparent, and secure electronic platform, accessible 24 hours a day to the entire foreign trade community. It centralizes all regulatory, customs and logistical components related to the import, export, and transit of goods ( https://segucerdc.com ). GUICE is operated by SEGUCE RDC SA, a private operator under the framework of a public-private partnership.

Competition Commission – COMCO is the regulatory and supervisory body for competition in DRC under the Organic Law no. 18/020 on Pricing Freedom and Competition and the COMESA Competition Regulation. It ensures that the rules of free competition are respected by economic operators. This commission works to allow all economic operators, according to their capacities, to exercise a fair competition, based on the quality of goods, products, and services, respecting the official price structure. Its priorities are acquisitions and mergers (investigating, evaluating, and monitoring acquisitions and mergers), business practices and exemptions (investigating anti-competitive practices), consumer welfare (acting against violators), and good practice awareness (good practices and anti-competitive consequences).

The U.S. District Court for the District of Columbia ordered the GDRC to pay a liability judgment of $619 million to the South African company Dig Oil due to breach of contract. The GDRC is considering settling the 2020 judgment but has yet to do so. In August 2021, the Minister of Justice informed the GDRC of six emblematic cases of international litigation. The main causes of the DRC’s multiple liabilities in these cases are the poor management of the disputes by the sectoral authorities, the late transmission of files to the Ministry of Justice, and the failure to respect the findings of arbitration procedures. President Tshisekedi has called for better monitoring of cases involving the DRC before the courts in order to reduce the risk of the state being found liable for hundreds of millions of dollars.

As a member of COMESA, the DRC follows the COMESA Competition Regulations and rules, and the COMESA competition body regulates competition.

Agency decisions may be appealed to the courts/judicial system.

The GDRC may proceed with an expropriation when it benefits the public interest, and the person or entity subject to an expropriation should receive fair compensation.

There have been no expropriations of property in the past three years.

Some claims have been taken to arbitration, though many arbitral judgments against the GDRC have are not resulted in a payment.

Businesses report that the GDRC levies heavy fines, which is a form of financial expropriation. A government agency imposes fines because a company has not paid a tax, although often the tax system is unclear, and several government agencies impose different taxes. Companies that appeal these fines in court often face a long wait.

Denmark’s judicial system is highly regarded and considered fair. Its legal system is independent of the government’s legislative branch and includes written and consistently applied commercial and bankruptcy laws. Secured interests in property are recognized and enforced. The World Economic Forum’s (WEF) 2019 Global Competitiveness Report ranked Denmark as the world’s tenth most competitive economy and fourth among EU member states, characterizing it as having among the best functioning and most transparent institutions in the world. Denmark ranks high on specific WEF indices related to macroeconomic stability (first), labor market (third), business dynamism (third), institutions (seventh), ICT adoption (ninth), and skills (third).

To facilitate business administration, Denmark maintains only two “legislative days” per year—January 1 and July 1—as the only days when new laws and regulations affecting the business sector can come into effect. Danish laws and policies granting national treatment to foreign investments are designed to increase FDI in Denmark. Denmark consistently applies high standards to health, environment, safety, and labor laws. Danish corporate law is generally in conformity with current EU legislation. The legal, regulatory, and accounting systems are relatively transparent and follow international standards.

Bureaucratic procedures are streamlined and transparent; proposed laws and regulations are published in draft form for public comment. Public finances and debt obligations are transparent.

The government uses transparent policies and effective laws to foster competition and establish “clear rules of the game,” consistent with international norms and applicable equally to Danish and foreign entities. The Danish Competition and Consumer Authority (CCA) works to make markets well-functioning so that businesses compete efficiently on all parameters. The CCA is a government agency under the Danish Ministry of Industry, Business, and Financial Affairs. It enforces the Danish Competition Act. This Act, along with Danish consumer legislation, aims to promote efficient resource allocation in society, promote efficient competition, create a level playing field for enterprises, and protect consumers.

Corporate tax records of all companies, associations, and foundations that pay taxes in Denmark are published by the tax authorities according to public law since December 2012 and are updated annually. The corporate tax rate is 22 percent. Greenland and the Faroe Islands retain autonomy for their respective tax policies.

Publicly listed companies in Denmark must adhere to the Danish Financial Statements Act when preparing their annual reports. The accounting principles are International Accounting Standards (IAS), International Financial Reporting Standards (IFRS), and Danish Generally Accepted Accounting Principles (GAAP). Financial statements must be prepared annually. The Danish Financial Statements Act covers all businesses.

Private limited companies, public limited companies, and corporate funds are obliged to prepare financial statements under accounting classes determined by company size. There are four different accounting classes: A, B, C and D. Accounting class B is further divided into micro B and B, and C is divided into medium-sized C and large C. The smallest companies belong to accounting class A, while the largest belong to accounting class D. The classification is based on the assessed size of the company based on two out of three parameters: net revenue, balance sheet, and number of employees.

Personal companies as well as companies with limited liability (Class A): Less than an annual average of 10 full-time employees and total assets not exceeding $1.1 million (DKK 7 million) or net revenue not exceeding $2.2 million (DKK 14 million) during the fiscal year. According to the Danish Financial Statements Act, personally-owned businesses, personally-owned general partnerships (multiple owners), and general funds are characterized as Class A; there is no requirement to prepare financial statements unless the owner voluntarily chooses to do so.

Class B. Private limited liability companies, commercial funds, and companies with limited liability. Micro businesses (Class micro B): Less than an annual average of 10 full-time employees and total assets not exceeding $429,000 (DKK 2.7 million) or net revenue not exceeding $858,000 (DKK 5.4 million) during the fiscal year.

Small businesses (Class B): Less than an annual average of 50 full-time employees and total assets not exceeding $7.0 million (DKK 44 million) or net revenue not exceeding $14.1 million (DKK 89 million) during the fiscal year.

Medium-sized enterprises (Class C medium): Less than an annual average of 250 full-time employees and total assets not exceeding $24.8 million (DKK 156 million) or net revenue not exceeding $49.7 million (DKK 313 million) during the fiscal year.

Large companies (Class C large): Companies that are neither small nor medium companies, and have an annual average of at least 250 full-time employees, total assets in excess of $24.8 million (DKK 156 million), or net revenue in excess of $49.7 million (DKK 313 million) during the fiscal year, but are not a class D company.

Accounting class D: Publicly-traded companies and state-owned stock-based enterprises.

Large companies (Class C and D) are required to report annually on environmental, social, and governance (ESG) efforts. This includes reporting on environmental; social; labor and human rights; and anti-corruption and bribery efforts. The reporting requirement covers four components: the company’s business model, material risks associated with each of the four issue areas, non-financial key performance indicators, and integrative referral to the financial amounts provided elsewhere in the annual report. There is no requirement for companies to have policies on the four issues, though they are required to follow a do-or-explain principle that requires companies to explain their policies in substance or explain why they have decided not to have a policy on the issue. For implemented policies, companies are required to disclose the substance of the policy and how they translate policies into action.

The rules on reporting generally follow EU Directive 2014/95/EU on disclosure of non-financial information though certain issues, including reporting on the company’s impact on climate change, are stricter in Denmark than the directive. The rules on reporting on these issues allow for an exception if the companies report on similar issues using international standards such as UN Global Compact’s Communication on Progress.

All government draft proposed regulations are published at “Høringsportalen” ( www.hoeringsportalen.dk ) and are available for comment from interested parties. Following the comment period, the government may revise draft regulations before publication on the Danish Parliament’s website ( www.ft.dk ). Final regulations are published at www.lovtidende.dk  and www.ft.dk . All ministries and agencies are required to publish proposed regulations. Denmark has a World Bank composite score of 4.75 for the Global Indicators of Regulatory Governance, on a zero to five scale. Concerning governance, the World Bank suggests the following areas for improvement:

Affected parties cannot request reconsideration or appeal adopted regulations to the relevant administrative agency.

There is no existing requirement that regulations be periodically reviewed to see whether they should be revised or eliminated.

Denmark is a member of the European Union and is an active supporter of the internal market. As a result, many aspects of business regulation are dictated by the EU and hence aligned with other EU Member States.

Denmark adheres to the WTO Agreement on Trade-Related Investment Measures (TRIMs); no inconsistencies have been reported.

Denmark’s decision-making power is divided into the legislative, executive, and judicial branches. The principles of separation of power and an independent judiciary help ensure democracy and Danish citizens’ legal rights. The district courts, the high courts, and the Supreme Court represent the Danish legal system’s three basic levels. The legal system also comprises other institutions with special functions, e.g., the Maritime and Commercial Court.

For further information, please see:  domstol.dk/om-os/english/the-danish-judicial-system/

As an EU member state, Denmark is bound by EU rules on the free movement of goods, capital, persons, and certain services. The government agency “Invest in Denmark” is part of the Danish Trade Council and is situated within the Ministry of Foreign Affairs. The agency provides detailed information to potential investors. The website for the agency is  investindk.com . The Faroese government promotes Faroese trade and investment through its website  faroeislands.fo/economy-business . For further information concerning Greenland’s investment potential, please see Greenland Venture at  www.venture.gl  or the Greenland Tourism & Business Council at  visitgreenland.com .

The Danish Competition and Consumer Authority (CCA) reviews transactions for competition-related concerns. A merger or takeover is subject to approval by the CCA. Large-scale mergers also require approval from EU competition authorities. According to the Danish Competition Act, the CCA requires notification of mergers and takeovers if the aggregate annual revenue in Denmark of all undertakings involved is more than $134 million (DKK 900 million) and the aggregate yearly revenue in Denmark of each of at least two of the undertakings concerned is more than $15.9 million (DKK 100 million), or if the aggregate annual revenue in Denmark of at least one of the undertakings involved is more than $604 million (DKK 3.8 billion) and the aggregate yearly worldwide revenue of at least one of the other undertakings concerned is more than $604 million (DKK 3.8 billion). When a merger results from the acquisition of parts of one or more undertakings, the calculation of the revenue referred to shall only comprise the share of the revenue of the seller or sellers that relates to the assets acquired. Merger control provisions are contained in Part Four of the  Danish Competition Act and in the Executive Order on the Notification of Mergers . Revenue is calculated under the Executive Order on the Calculation of Turnover in the Competition Act .

A full notification of a merger must include the information and documents specified in the full notification form, Annex 1 – Information for Full Notification of Mergers . A simplified notification of a merger must include the information and documents specified in the simplified notification form, Annex 2 – Information for Simplified Notification of Mergers . From August 1, 2013, merger fees are payable for merger notifications submitted to the CCA. The fee for a simplified notification amounts to $7,950 (DKK 50,000). The fee for a full notification amounts to 0.015 percent of the aggregate annual turnover in Denmark of the undertakings involved; this fee is capped at $238,400 (DKK 1,500,000).

Additional information concerning notification of mergers is available in the Guidelines to the Executive Order on Notification of Mergers and on Merger Fees . More general information on Danish merger control can be found in the Merger Guidelines .

By law, private property can only be expropriated for public purposes, in a non-discriminatory manner, with reasonable compensation, and under established principles of international law. There have been no recent expropriations of significance in Denmark.

Monetary judgments under the bankruptcy law are made in freely convertible Danish Kroner. The bankruptcy law addresses creditors’ claims in the following order: (1) costs and debt accrued during the treatment of the bankruptcy; (2) costs, including the court tax, relating to attempts to find a solution other than bankruptcy; (3) wage claims and holiday pay; (4) excise taxes owed to the government; and (5) all other claims.

Government policies are sometimes not transparent, and do not foster competition on a non-discriminatory basis. Likewise, the legal, regulatory, and accounting systems are not always transparent nor are they consistent with international norms. Rule-making and regulatory authority exists at the state level.

The Djiboutian accounting system is loosely based on the French accounting system as it existed at independence (1977) with subsequent updates.

The regulatory regime is written in a way that promotes open competition, but application of the rules is not always consistent. Draft bills are initiated by the relevant ministry in consultation with stakeholders from relevant ministries or public institutions. Laws are then proposed by the relevant ministry, and then debated and passed by the parliament. The promulgation by the president is the last stage.

Regulatory actions including laws and decrees are available online: https://www.presidence.dj/jord . Ministries and regulatory agencies do not develop forward regulatory plans – that is, a public list of anticipated regulatory changes or proposals intended to be adopted/implemented within a specified time frame

The government has no environmental, social, and governance disclosure requirement.

The State Inspector General (SGI) is tasked with ensuring human and material resources in the public sector are properly utilized. It also acts as an enforcement mechanism to ensure administrative processes are followed.

Public finances and the terms of debt obligations are opaque.

Djibouti is a member of the Intergovernmental Authority on Development (IGAD) and the Common Market for Eastern and Southern Africa (COMESA). The regulatory systems in these countries are not yet harmonized. European norms and standards, especially French, are referenced in Djibouti. Djibouti is a member of the WTO.

Djibouti’s legal system is based on Civil law, inherited from the French Napoleonic Code. It consists of three courts: a Court of First Instance presided over by a single judge; a Court of Appeals, with three judges; and the Supreme Court. In addition, Islamic law (shariah) and traditional law is practiced. Djibouti has a written commercial code and specialized courts, including commercial, criminal, administrative, and civilian courts.

The court system is de jure independent from executive power, but may be susceptible to political pressure. Most investors request the right to counsel, including agreements for arbitration, in a recognized international court. International lawyers practicing in Djibouti have reported effective application of maritime and other commercial laws, but in the past, foreign companies operating in Djibouti have reported that court deliberations were biased or delayed.

The country’s legal system has no discriminatory policy against foreign investment, and frequently negotiates extended tax breaks and other incentives to attract larger investments. In conjunction with UNCTAD, NIPA developed an investment guide that provides useful information: https://www.theiguides.org/public-docs/guides/djibouti.

The Djibouti Office of Industrial and Commercial Protection (ODPIC) is the agency in charge of registering businesses. Its website contains information about the registration process:  https://odpic.net/ .

In 2008, Djibouti adopted a law on competition and consumer protection, which does not cover state-owned enterprises, such as electricity and telecommunications. Under this law, the Government of Djibouti regulates prices in areas where competition remains limited. For example, the government regulates postal services, telecommunications, utilities, and urban transport services. Djibouti does not have an agency that specifically promotes competition and does not have a comprehensive strategy to restrict market monopolies.

Foreign companies enjoy the same benefits as domestic companies under Djibouti’s Investment Code. The Investment Code stipulates that “no partial or total, temporary or permanent expropriation will take place without equitable compensation for the damages suffered.” There are no known recent cases of U.S. companies in Djibouti being subject to expropriation. There have been cases of foreign companies facing de facto expropriation via fines, while other companies have had their concession to run a public service unilaterally revoked (see discussion below about DP World). The government may expropriate land when it is needed for public utility. In that case, the government will compensate the landowner by providing land at a different location or by cash settlement.

ICSID Convention and New York Convention

On April 12, 2019, Djibouti signed the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention, also known as the Washington Convention). Djibouti made its deposit of ratification on June 9, 2020 for an entry into force on July 9, 2020.

Djibouti is a contracting member of the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Investor-State Dispute Settlement

Djibouti’s government has had only a few investment disputes in the past several years, none with U.S. businesses. In some cases, the disputes have been settled in international arbitration courts and the government has abided by those decisions. In other cases, there has been de facto expropriation through large fines. As in any country, a strong, enforceable contract is important.

The government passed a law in November 2017 permitting the government to unilaterally alter or terminate contracts. Using this law, in February 2018, Djibouti’s president issued a decree abrogating the government’s contract with the Emirati company, DP World, concerning the Doraleh Container Terminal, later nationalizing the equipment, physical assets, and land. DP World continued to hold 33.33% of shares until July 2018, when the government terminated the shareholders’ agreement with DP World and later nationalized all shares. Throughout, DP World has continued to claim that the 30-year 2006 Doraleh Container Terminal concession agreement remains in force.

In July 2021, the London Court of International Arbitration decided, in a seventh ruling, that Djibouti should restore DP World’s rights to operate Doraleh Container Terminal in line with the original deal and receive compensation. Djibouti has not yet officially replied, but responded to a similar London Court of International Arbitration ruling in January 2020 with an official communiqué rejecting the court ruling, stating “As the Republic of Djibouti has consistently indicated since the termination of the concession, the only possible outcome is allocation of fair compensation in accordance with international law.”

International Commercial Arbitration and Foreign Courts

There is no domestic arbitration body within the country. In February 2014, the IGAD countries agreed to set up an international Business Arbitration Center in Djibouti. This institution provides a mechanism for resolving business disputes and helps create a more transparent business environment in the region by reinforcing the principles of contract law and increasing the number of lawyers practicing commercial and contract law in Djibouti. Investment dispute cases are not made public.

Djibouti has bankruptcy laws, and bankruptcy is not criminalized.

The Government of Dominica provides a legal framework to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety.  The Ministry of Finance and the IDA provide oversight of the transparency of the system as it relates to investment.

Rule-making and regulatory authority lies within the unicameral parliament.  The parliament has 21 members elected for a five-year term in single-seat constituencies, nine appointed members, one speaker, and one clerk.

Relevant ministries develop laws which are drafted by the Ministry of National Security and Home Affairs.  FDI is governed principally through the laws that oversee the IDA and the Citizenship by Investment program.  Laws are available online at  http://www.dominica.gov.dm/laws-of-dominica .

Although some draft bills are not subject to public consultation, the government generally solicits input from various stakeholder groups in the formulation of laws.  In some instances, the government convenes a special committee to make recommendations on provisions outlined in the law.  The government uses public awareness campaigns to sensitize the general population on legislative reforms. Copies of proposed regulations are published in the official gazette shortly before the bills are taken to parliament.  Although Dominica does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice.  The government maintains a website and an information service on which it posts information such as directories of officials and a summary of laws and press releases.

The International Financial Accounting Standards, which stem from the General Accepted Accounting Principles, govern the accounting profession in Dominica. Accounting, legal, and regulatory procedures are generally transparent and consistent with international norms.

The Office of the Parliamentary Commissioner or Ombudsman guards against excesses by government officers in the performance of their duties.  The Ombudsman is responsible for investigating complaints related to any decision or act of any government officer or body in any case in which a member of the public claims to be aggrieved or appears to the Ombudsman to be the victim of injustice as a result of the exercise of the administrative function of that officer or body. The government does not promote nor require companies’ environmental, social, and governance disclosures.

Dominica’s membership in regional organizations, particularly the OECS and its Economic Union, commits it to implement all appropriate measures to ensure the fulfillment of its various treaty obligations.  For example, the Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the ECCU, although there are some minor differences in implementation from country to country.

The enforcement mechanisms of these regulations include penalties or legal sanctions.  The IDA can revoke an issued investment certificate if the holder fails to comply with certain stipulations detailed in the IDA Act and its regulations. The regulatory enforcement process is not digitized.

As a member of the OECS and the ECCU, Dominica subscribes to a set of principles and policies outlined in the Revised Treaty of Basseterre.  The relationship between national and regional systems is such that each participating member state is expected to coordinate and adopt, where possible, common national policies aimed at the progressive harmonization of relevant policies and systems across the region. Thus, Dominica is obligated to implement regionally developed regulations such as legislation passed under OECS authority, unless specific concessions are sought.

The Dominica Bureau of Standards develops, maintains, and promotes standards for improving industrial development, industrial efficiency, promoting the health and safety of consumers, protecting the environment, and facilitating trade.  It also conducts national training and consultations in international standards practices.  As a signatory to the WTO Agreement on the Technical Barriers to Trade, Dominica, through the Dominica Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

Dominica ratified the WTO Trade Facilitation Agreement (TFA) in 2016.  Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade.  The TFA aims to improve the speed and efficiency of border procedures, facilitate trade costs reduction, and enhance participation in the global value chain.  Dominica has already implemented a number of TFA requirements.  A full list is available at  https://tfadatabase.org/members/dominica/measure-breakdown .

As a member of CARICOM, Dominica utilizes the Advanced Cargo Information System, a computer-based system developed by the United Nations Conference on Trade and Development (UNCTAD) to harmonize and standardize electronic cargo information in order to improve the capability to track cargo efficiently and to support regional and international trade. The Advance Cargo Information System forms a critical part of the World Customs Organization SAFE Framework of Standards. Dominica has also fully implemented the Automated System for Customs Data.

Dominica bases its legal system on British common law.  The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice in the country.  The Eastern Caribbean Supreme Court Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal.  The High Court hears criminal and civil matters and makes determinations on the interpretation of the constitution.  Parties may appeal to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all OECS members.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas.  In 2015, Dominica acceded to the CCJ, making the CCJ its final court of appeal.

The United States and Dominica are both parties to the WTO.  The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.

The main laws concerning investment in Dominica are the Invest Dominica Authority Act (2007), the Tourism Act (2005), and the Fiscal Incentives Act.  Regulatory amendments have been made to the Income Tax Act, the Value Added Tax Act, the Title by Registration Act, the Alien Landholding Regulation Act, and the Residential Levy Act. The IDA provides a full list of the relevant legislation on their website.

The IDA reviews all proposals for investment concessions and incentives to ensure the project is consistent with the national interest and provides economic benefits to the country.  The Cabinet makes the final decision on investment proposals.

Under Dominica’s citizenship by investment program, qualified foreign investors may obtain citizenship without voting rights.  Applicants can contribute a minimum of $100,000 to the Economic Diversification Fund for a single person or invest in designated real estate with a value of at least $200,000.  Applicants must also provide a full medical certificate, undergo a background check, and provide evidence of the source of funds before proceeding to the final stage of an interview.  The government introduced a citizen by investment certificate in order to minimize the risk of unlawful duplication.  Further information is available at  http://cbiu.gov.dm .

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to CARICOM States.  Member states are required to establish and maintain a national competition authority for implementing the rules of competition.  CARICOM established a Caribbean Competition Commission to apply rules of competition regarding anti-competitive cross-border business conduct.  CARICOM competition policy addresses anti-competitive business conduct such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM.  Dominica does not have domestic legislation to regulate competition.

There are no known pending expropriation cases involving American citizens.  In such an event, Dominica would employ a system of eminent domain to pay compensation when property must be acquired in the public interest.  There were no reported tendencies of the government to discriminate against U.S. investments, companies, or landholdings.  There are no laws mandating local ownership in specified sectors.

Under the Bankruptcy Act (1990), Dominica has a bankruptcy framework that grants certain rights to debtor and creditor. A full copy of the act is available for download from the government’s website .

The Government of Dominica provides a legal framework to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety.  The Ministry of Finance and the IDA provide oversight of the transparency of the system as it relates to investment.

Rule-making and regulatory authority lies within the unicameral parliament.  The parliament has 21 members elected for a five-year term in single-seat constituencies, nine appointed members, one speaker, and one clerk.

Relevant ministries develop laws which are drafted by the Ministry of National Security and Home Affairs.  FDI is governed principally through the laws that oversee the IDA and the Citizenship by Investment program.  Laws are available online at  http://www.dominica.gov.dm/laws-of-dominica .

Although some draft bills are not subject to public consultation, the government generally solicits input from various stakeholder groups in the formulation of laws.  In some instances, the government convenes a special committee to make recommendations on provisions outlined in the law.  The government uses public awareness campaigns to sensitize the general population on legislative reforms. Copies of proposed regulations are published in the official gazette shortly before the bills are taken to parliament.  Although Dominica does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice.  The government maintains a website and an information service on which it posts information such as directories of officials and a summary of laws and press releases.

The International Financial Accounting Standards, which stem from the General Accepted Accounting Principles, govern the accounting profession in Dominica. Accounting, legal, and regulatory procedures are generally transparent and consistent with international norms.

The Office of the Parliamentary Commissioner or Ombudsman guards against excesses by government officers in the performance of their duties.  The Ombudsman is responsible for investigating complaints related to any decision or act of any government officer or body in any case in which a member of the public claims to be aggrieved or appears to the Ombudsman to be the victim of injustice as a result of the exercise of the administrative function of that officer or body. The government does not promote nor require companies’ environmental, social, and governance disclosures.

Dominica’s membership in regional organizations, particularly the OECS and its Economic Union, commits it to implement all appropriate measures to ensure the fulfillment of its various treaty obligations.  For example, the Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the ECCU, although there are some minor differences in implementation from country to country.

The enforcement mechanisms of these regulations include penalties or legal sanctions.  The IDA can revoke an issued investment certificate if the holder fails to comply with certain stipulations detailed in the IDA Act and its regulations. The regulatory enforcement process is not digitized.

As a member of the OECS and the ECCU, Dominica subscribes to a set of principles and policies outlined in the Revised Treaty of Basseterre.  The relationship between national and regional systems is such that each participating member state is expected to coordinate and adopt, where possible, common national policies aimed at the progressive harmonization of relevant policies and systems across the region. Thus, Dominica is obligated to implement regionally developed regulations such as legislation passed under OECS authority, unless specific concessions are sought.

The Dominica Bureau of Standards develops, maintains, and promotes standards for improving industrial development, industrial efficiency, promoting the health and safety of consumers, protecting the environment, and facilitating trade.  It also conducts national training and consultations in international standards practices.  As a signatory to the WTO Agreement on the Technical Barriers to Trade, Dominica, through the Dominica Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

Dominica ratified the WTO Trade Facilitation Agreement (TFA) in 2016.  Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade.  The TFA aims to improve the speed and efficiency of border procedures, facilitate trade costs reduction, and enhance participation in the global value chain.  Dominica has already implemented a number of TFA requirements.  A full list is available at  https://tfadatabase.org/members/dominica/measure-breakdown .

As a member of CARICOM, Dominica utilizes the Advanced Cargo Information System, a computer-based system developed by the United Nations Conference on Trade and Development (UNCTAD) to harmonize and standardize electronic cargo information in order to improve the capability to track cargo efficiently and to support regional and international trade. The Advance Cargo Information System forms a critical part of the World Customs Organization SAFE Framework of Standards. Dominica has also fully implemented the Automated System for Customs Data.

Dominica bases its legal system on British common law.  The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice in the country.  The Eastern Caribbean Supreme Court Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal.  The High Court hears criminal and civil matters and makes determinations on the interpretation of the constitution.  Parties may appeal to the Eastern Caribbean Supreme Court, an itinerant court that hears appeals from all OECS members.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas.  In 2015, Dominica acceded to the CCJ, making the CCJ its final court of appeal.

The United States and Dominica are both parties to the WTO.  The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.

The main laws concerning investment in Dominica are the Invest Dominica Authority Act (2007), the Tourism Act (2005), and the Fiscal Incentives Act.  Regulatory amendments have been made to the Income Tax Act, the Value Added Tax Act, the Title by Registration Act, the Alien Landholding Regulation Act, and the Residential Levy Act. The IDA provides a full list of the relevant legislation on their website.

The IDA reviews all proposals for investment concessions and incentives to ensure the project is consistent with the national interest and provides economic benefits to the country.  The Cabinet makes the final decision on investment proposals.

Under Dominica’s citizenship by investment program, qualified foreign investors may obtain citizenship without voting rights.  Applicants can contribute a minimum of $100,000 to the Economic Diversification Fund for a single person or invest in designated real estate with a value of at least $200,000.  Applicants must also provide a full medical certificate, undergo a background check, and provide evidence of the source of funds before proceeding to the final stage of an interview.  The government introduced a citizen by investment certificate in order to minimize the risk of unlawful duplication.  Further information is available at  http://cbiu.gov.dm .

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to CARICOM States.  Member states are required to establish and maintain a national competition authority for implementing the rules of competition.  CARICOM established a Caribbean Competition Commission to apply rules of competition regarding anti-competitive cross-border business conduct.  CARICOM competition policy addresses anti-competitive business conduct such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM.  Dominica does not have domestic legislation to regulate competition.

There are no known pending expropriation cases involving American citizens.  In such an event, Dominica would employ a system of eminent domain to pay compensation when property must be acquired in the public interest.  There were no reported tendencies of the government to discriminate against U.S. investments, companies, or landholdings.  There are no laws mandating local ownership in specified sectors.

Under the Bankruptcy Act (1990), Dominica has a bankruptcy framework that grants certain rights to debtor and creditor. A full copy of the act is available for download from the government’s website .

The national government manages all regulatory processes. Information about regulations is often scattered among various ministry and agency websites and is sometimes only available through direct communication with officials. It is advisable for U.S. investors to consult with local attorneys or advisors to assist with locating comprehensive regulatory information.

On the 2021 Global Innovations Index, the Dominican Republic’s overall rank was 93 out of 131 nations analyzed, which is a setback from its rank in 2020 by three positions. In sub-sections of the report, the Dominican Republic ranks 101 out of 131 for regulatory environment and 74 out of 131 for regulatory quality.

The World Bank Global Indicators of Regulatory Governance report states that Dominican ministries and regulatory agencies do not publish lists of anticipated regulatory changes or proposals intended for adoption within a specific timeframe. Law No. 107-13 requires regulatory agencies to give notice of proposed regulations in public consultations and mandates publication of the full text of draft regulations on the relevant agency’s website. Additionally, Law No. 200-04 allows citizens in general to request information to the government on a unified website: https://saip.gob.do/ . Foreign investors, however, note that these requirements are not always met in practice since not all relevant Dominican agencies provide content, and those that do often do not keep the content up to date, and many businesses point out that the scope of SAIP’s website content is not always adequate for investors or interested parties. U.S. businesses also reported years’ long delays in the enactment of regulations supporting new legislation, even when the common legal waiting period is normally six months.

The process of public consultation is not uniform across the government. Some ministries and regulatory agencies solicit comments on proposed legislation from the public; however, public outreach is generally limited and depends on the responsible ministry or agency. For example, businesses report that some ministries upload proposed regulations to their websites or post them in national newspapers, while others may form working groups with key public and private sector stakeholders participating in the drafting of proposed regulations. Often the criteria used by the government to select participants in these informal exchanges are unclear, which at a minimum creates the appearance of favoritism and that undue influence is being offered to a handpicked (and often politically connected) group of firms and investors. Public comments received by the government are generally not publicly accessible. Some ministries and agencies prepare consolidated reports on the results of a consultation for direct distribution to interested stakeholders. Ministries and agencies do not conduct impact assessments of regulations or ex post reviews. Affected parties cannot request reconsideration or appeal of adopted regulations, although they could challenge any of its content if deemed unconstitutional at the Constitutional Court and contest its application before the Superior Administrative Tribunal.

In February 2022, the Dominican Republic’s General Directorate of Internal Taxes (DGII) proposed to extend the existing 18% value added tax known as the ITBIS to digital services and published the draft regulation on its website (https://dgii.gov.do/Paginas/default.aspx) for public comment.

The Dominican Institute of Certified Public Accountants (ICPARD) is the country’s legally recognized professional accounting organization and has authority to establish accounting standards in accordance with Law No. 479-08, which also declares that (as amended by Law No. 311-14) financial statements should be prepared in accordance with generally accepted accounting standards nationally and internationally. The ICPARD and the country’s Securities Superintendency require the use of International Financial Reporting Standards (IFRS) and IFRS for small and medium-sized entities (SMEs).

By law, the Office of Public Credit publishes on its website a quarterly report on the status of the non-financial public sector debt, which includes a wide array of information and statistics on public borrowing ( www.creditopublico.gov.do/publicaciones/informes_trimestrales.htm ).

In addition to the public debt addressed by the Office of Public Credit, the Central Bank maintains on its balance sheet nearly $10 billion in “quasi-fiscal” debt. When consolidated with central government debt, the debt-to-GDP ratio is over 60 percent, and the debt service ratio is over 30 percent.

As of the end of 2020, the Dominican Republic was involved in 18 dispute settlement cases with the WTO: one as complainant, eight as respondent, and nine as a third party. In recent years, the Dominican Republic has frequently changed technical requirements (e.g., for steel rebar imports and sanitary registrations, among others) and has failed to provide proper notification under the WTO TBT agreement and CAFTA-DR.

The judicial branch is an independent branch of the Dominican government. According to Article 69 of the Constitution, all persons, including foreigners, have the right to appear in court. The basic concepts of the Dominican legal system and the forms of legal reasoning derive from French law—civil law system in general. The five basic French Codes (Civil, Civil Procedure, Commerce, Penal, and Criminal Procedure) were translated into Spanish and passed as legislation in 1884. Some of these codes have since been amended and parts have been replaced, including the total derogation of the Code of Criminal Procedure in 2002, resulting in a hybrid legal framework.

There is a Commercial Code and a wide variety of laws governing business formation and activity. The main laws governing commercial disputes are the Commercial Code; Law No. 479-08, the Commercial Societies Law; Law No. 3-02, concerning Business Registration; Commercial Arbitration Law No. 489-08; Law No. 141-15 concerning Restructuring and Liquidation of Business Entities; and Law No. 126-02, concerning e-Commerce and Digital Documents and Signatures.

Some investors complain of significant delays in obtaining a decision by the Judiciary. While Dominican law mandates overall time standards for the completion of key events in a civil case, these standards frequently are not met. The Judiciary has requested additional funds to hire more judges, clerks, and judicial personnel to address these concerns. In 2020 the World Bank noted that resolving complaints raised during the award and execution of a contract can take more than four years in the Dominican Republic, although some take longer. Dominican nationals and foreigners alike have the constitutional right to submit their cases to an appeal court or to request the Supreme Court review (recurso de casación in Spanish) the ruling of a lower court. If a violation of fundamental rights is alleged, the Constitutional Court might also review the case with the authority to nullify the lower court judgment. Notwithstanding, foreign investors have complained that the local court system is unreliable, is biased against them, and that special interests and powerful individuals are able to use the legal system in their favor. Others who have successfully won in courts, have struggled to get their ruling enforced.

While the law provides for an independent judiciary, businesses and other external groups have noted that traditionally the government did not respect judicial independence or impartiality, and improper influence on judicial decisions was widespread. The Abinader administration has made a concerted effort to respect the autonomy of the Public Ministry and the Office of the Attorney General, and investors have noted improvements. The administration has proposed a constitutional amendment to strengthen the independence of the Office of the Attorney General, but it faces uncertain prospects in the Dominican Congress.

Several large U.S. firms cite the improper and disruptive use of lower court injunctions as a way for local distributors to obtain more beneficial settlements at the end of contract periods. To engage effectively in the Dominican market, many U.S. companies seek local partners that are well-connected and understand the local business environment, but even this is a not a guarantee.

The legal framework supports foreign investment. Article 221 of the Constitution declares that foreign investment shall receive the same treatment as domestic investment. Foreign Investment Law No. 16-95 states that unlimited foreign investment is permitted in all sectors, with a few exceptions. According to the law, foreign investment is not allowed in the following categories: a) disposal and remains of toxic, dangerous, or radioactive garbage not produced in the country; b) activities affecting the public health and the environmental equilibrium of the country, pursuant to the norms that apply in this regard; and c) production of materials and equipment directly linked to national defense and security, except for an express authorization from the Executive.

The Export and Investment Center of the Dominican Republic (ProDominicana, formally known as CEI-RD) aims to be the one-stop shop for investment information, registration, and investor after-care services. ProDominicana maintains a user-friendly website for guidance on the government’s priority sectors for inward investment and on the range of investment incentives ( https://prodominicana.gob.do ).

In February 2020, the Dominican government enacted the Public-Private Partnerships (PPP) Law No. 47-20 to establish a regulatory framework for the initiation, selection, award, contracting, execution, monitoring and termination of PPPs in line with the 2030 National Development Strategy of the Dominican Republic. The law also created the General Directorate of Public-Private Partnerships (DGAPP) as the agency responsible for the promotion and regulation of public-private alliances and the National Council of Public-Private Partnerships as the highest body responsible for evaluating and determining the relevance of the PPPs. The PPP law recognizes public-private and public-private non-profit partnerships from public or private initiatives and provides for forty-year concession contracts, five-year exemptions of the tax on the transfer of goods and services (ITBIS), and accelerated depreciation and amortization regimes. The DGAPP website has the most up to date information on PPPs ( https://dgapp.gob.do/en/home/  ).

The National Commission for the Defense of Competition (ProCompetencia) has the power to review transactions for competition-related concerns. Private sector contacts note, however, that strong public pressure is required for ProCompetencia to act. Its decisions can be challenged before the Superior Administrative Tribunal (TSA). The TSA’s ruling can be revised in its legality through a recurso de casación by the Supreme Court of Justice (SCJ), and if there was a constitutional violation, the case could be heard by the Constitutional Court.

On June 14, 2021, ProCompetencia approved sanctions against four pharmaceuticals firms found guilty of price fixing (Profarma Internacional, S.R.L, Sued & Fargesa, S.R.L., Mercantil Farmacéutica, S.A. y J. Gassó Gassó, S.A.S) for certain drugs such as analgesics and anti-flu medicines. Total fines reached $250,000 ($14 million pesos).

The Dominican constitution permits the government’s exercise of eminent domain after the President has declared a plot of land for public use by official decree; however, it also mandates fair market compensation in advance of the use of seized land. Nevertheless, there are many outstanding disputes between U.S. investors and the Dominican government concerning unpaid government contracts or expropriated property and businesses, as well indirect expropriation. Property claims make up the majority of cases. Most, but not all, expropriations have been used for infrastructure or commercial development and many claims remain unresolved for years. The Abinader administration has committed to resolve disputes over land title before government use, but in some cases the matters are protracted and there are multiple claims to the same piece of land.

Traditionally, investors and lenders have reported that they typically do not receive prompt payment of fair market value for their losses. They have complained of difficulties in the subsequent enforcement even in cases in which the Dominican courts, including the Supreme Court, have ordered compensation or when the government has recognized a claim. In other cases, some indicate that lengthy delays in compensation payments are blamed on errors committed by government-contracted property assessors, slow processes to correct land title errors, a lack of budgeted funds, and other technical problems. There are also cases of regulatory action that investors say could be viewed as indirect expropriation. For example, they note that government decrees mandating atypical setbacks from roads, or establishing new protected areas can deprive investors of their ability to use purchased land in the manner initially planned, substantially affecting the economic benefit sought from the investment.

Many companies report that the procedures to resolve expropriations lack transparency. Government officials are rarely, if ever, held accountable for failing to pay a recognized claim or failing to pay in a timely manner.

Law 141-15 provides the legal framework for bankruptcy. It allows a debtor company to continue to operate for up to five years during reorganization proceedings by halting further legal proceedings. It also authorizes specialized bankruptcy courts; contemplates the appointment of conciliators, verifiers, experts, and employee representatives; allows the debtor to contract for new debt which will have priority status in relation to other secured and unsecured claims; stipulates civil and criminal sanctions for non-compliance; and permits the possibility of coordinating cross-border proceedings based on recommendations of the UNCITRAL Model Law of 1997. In March 2019, a specialized bankruptcy court was established in Santo Domingo.

The Dominican Republic scores lower than the regional average and comparator economies on resolving insolvency on most international indices.

The Lasso administration, in office since May 2021, has stressed its desire to build the capacity of Ecuador’s weak institutions and promote democracy, transparency, and governability.  Combatting corruption is a top priority of the Lasso administration including developing state institutions to be more transparent and responsive to the Ecuadorian people and enhancing civil society’s role in promoting transparency and accountability. President Lasso has reaffirmed Ecuador’s commitment to pursue a trade policy that holistically supports workers, protects the environment, and fosters equitable and inclusive growth. However, economic, commercial, and investment policies are subject to frequent changes and can increase the risks and costs of doing business in Ecuador. National and municipal level regulations can conflict with each other. Regulatory agencies are not required to publish proposed regulations before enactment, and rulemaking bodies are not required to solicit public comments on proposed regulations, although there has been some movement toward public consultative processes. Government ministries generally consult with relevant national actors when drafting regulations, but not always and not broadly.

The government does not promote or require companies’ environmental, social, and governance (ESG) disclosures to facilitate transparency and/or help investors and consumers distinguish between high- and low-quality investments.

The Government of Ecuador publishes regulatory actions in the Official Registry and posts them online at https://www.registroficial.gob.ec/ . Publicly listed companies generally adhere to International Financial Reporting Standards (IFRS). While there are some transparency enforcement mechanisms within the government, they tend to be weak and rarely enforced.

There are no identified informal regulatory processes led by private sector associations or nongovernmental organizations.

Ecuador is a member of the Andean Community of Nations (CAN) along with Bolivia, Colombia, and Peru. Ecuador is an associate member of the Southern Cone Common Market (MERCOSUR). Ecuador is a member of the World Trade Organization (WTO) and notifies draft regulations to the WTO Technical Barriers to Trade (TBT) Committee. Ecuador ratified the WTO Trade Facilitation Agreement on October 16, 2018.

Ecuador has a civil codified legal system. Systemic weakness in the judicial system and its susceptibility to external pressures constitute challenges faced by U.S. companies investing in Ecuador. While Ecuador updated its Commercial Code in May 2019, enforcement of contract rights, equal treatment under the law, intellectual property protections, and unstable regulatory regimes continue to be concerns for foreign investors.

Ecuador does not have laws specifically on FDI, but several have effects on overall investment. The Organic Law for Production Incentives and Tax Fraud Prevention, passed in December 2014, includes provisions to improve tax stability and lower the income tax rate in the mining sector. The Organic Law of Incentives for Public-Private Associations and Foreign Investment from 2015 includes provisions to improve legal stability, reduce red tape, and exempt public private partnerships from paying income and capital exit taxes under certain conditions. The 2021 Tax Reform Law repealed the zero-tariff income tax incentives included in previous legislation and replaced them with income tax reductions. These range from three to five percentage points of the current corporate income tax rate (25 percent), provided the compliance with certain conditions. Investments done under the prior legal framework will continue to enjoy the benefits offered from that legislation. ProEcuador’s website https://www.proecuador.gob.ec/  provides a guide for investors in English and Spanish and highlights the procedures to register a company, types of incentives for investors, and relevant taxes related to investing in Ecuador.

The Superintendence of Control of Market Power reviews transactions for competition-related concerns. Ecuador’s 2011 Organic Law for Regulation and Control of Market Power includes mechanisms to control and sanction market power abuses, restrictive market practices, market concentration, and unfair competition. The Superintendence of Control of Market Power can fine up to 12 percent of gross revenue of companies found to be in violation of the law.

The Constitution establishes that the state is responsible for managing the use and access to land, while recognizing and guaranteeing the right to private property. It also provides for the redistribution of land if it has not been in active use for more than two years.

The Article 101 of the 2015 Telecommunications Law grants permission for the occupation or expropriation of private property for telecommunication network installation provided there are no other economically viable alternatives. Service providers must assume costs associated with the property’s expropriation or occupation.

With the goal of protecting consumers and preventing a real estate bubble, the National Assembly approved in June 2012 a law that allows homeowners to default on their first home and car loan without penalty if they forfeit the asset. The provisions do not apply to homes with a market value of more than 500 times the basic 2022 monthly salary (currently USD 212,500) or vehicles worth more than 100 times the basic monthly salary (currently USD 42,500).

In cases of foreclosure, the average time for banks to collect on debts is 5.3 years, usually taking 4.5 years for courts to approve the initiation of foreclosures. After the appointment and acceptance of an auctioneer, it takes about six months for the auction to take place.

The Egyptian government has made efforts to improve the transparency of government policy and to support a fair, competitive marketplace.  Nevertheless, improving government transparency and consistency has proven difficult, and reformers have faced strong resistance from entrenched bureaucratic and private interests.  Significant obstacles continue to hinder private investment, including the reportedly arbitrary imposition of bureaucratic impediments and the length of time needed to resolve them.  Nevertheless, the impetus for positive change driven by the government reform agenda augurs well for improvement in policy implementation and transparency.

Enactment of laws is the purview of the Parliament, while executive regulations are the domain of line ministries.  Under the Constitution, the president, the cabinet, and any member of parliament can present draft legislation.  After submission, parliamentary committees review and approve legislation, including any amendments.  Upon parliamentary approval, a judicial body reviews the constitutionality of any legislation before referring it to the president for his approval.

Although notice and full drafts of legislation are typically printed in the Official Gazette (similar to the Federal Register in the United States), there is no centralized online location where the government publishes comprehensive details about regulatory decisions or their summaries, and in practice consultation with the public is limited.  In recent years, the Ministry of Trade and other government bodies have circulated draft legislation among concerned parties, including business associations and labor unions. This has been a welcome change from previous practice, but is not yet institutionalized across the government.

Accounting, legal, and regulatory procedures are transparent and consistent with international norms.  The Financial Regulatory Authority (FRA) supervises and regulates all non-banking financial markets and instruments, including capital markets, futures exchanges, insurance activities, mortgage finance, financial leasing, factoring, securitization, and microfinance.  It issues rules that facilitate market efficiency and transparency. FRA has issued legislation and regulatory decisions on non-banking financial laws, which govern FRA’s work and the entities under its supervision. ( http://www.fra.gov.eg/jtags/efsa_en/index_en.jsp  )

The criteria for awarding government contracts and licenses are made available when bid rounds are announced.  The process actually used to award contracts is broadly consistent with the procedural requirements set forth by law.  Further, set-aside requirements for small and medium-sized enterprise (SME) participation in GoE procurement are increasingly highlighted. The FRA publishes key laws and regulations to the following website:

http://www.fra.gov.eg/content/efsa_en/efsa_pages_en/laws_efsa_en.htm  

The Parliament and the independent “Administrative Control Authority” both ensure the government’s commitment to follow administrative processes at all levels of government.

The cabinet develops and submits proposed regulations to the president following discussion and consultation with the relevant ministry and informal consultation with other interest groups. Based on the recommendations provided in the proposal, including recommendations by the presidential advisors, the president issues “Presidential Decrees” that function as implementing regulations.  Presidential decrees are published in the Official Gazette for enforcement.

The degree to which ministries and government agencies responsible for drafting, implementing, or enforcing a given regulation coordinate with other stakeholders varies widely.  Although some government entities may attempt to analyze and debate proposed legislation or rules, there are no laws requiring scientific studies or quantitative regulatory impact analyses prior to finalizing or implementing new laws or regulations. Not all issued regulations are announced online, and not all public comments received by regulators are made public.

The government made its budget documents widely and easily accessible to the general public, including online.  Budget documents did not include allocations to military state-owned enterprises, nor allocations to and earnings from state-owned enterprises.  Information on government debt obligations was publicly available online, but up-to-date and clear information on state-owned enterprise debt guaranteed by the government was not available.  According to information the Central Bank has provided to the World Bank, the lack of information available about publicly guaranteed private-sector debt meant that this debt was generally recorded as private-sector non-guaranteed debt, thus potentially obscuring some contingent debt liabilities.

In general, international standards are the main reference for Egyptian standards.  According to the Egyptian Organization for Standardization and Quality Control, approximately 7,000 national standards are aligned with international standards in various sectors.  In the absence of international standards, Egypt uses other references referred to in Ministerial Decrees No. 180/1996 and No. 291/2003, which stipulate that in the absence of Egyptian standards, the producers and importers may use European standards (EN), U.S. standards (ANSI), or Japanese standards (JIS).

Egypt is a member of the WTO, participates actively in various committees, and notifies technical regulations to the WTO Committee on Technical Barriers to Trade.  Egypt ratified the Trade Facilitation Agreement (TFA) in June 2017 (Presidential decree No. 149/2017) and deposited its formal notification to the WTO on June 24, 2019.  Egypt notified indicative and definitive dates for implementing Category B and C commitments on June 20, 2019, but to date has not notified dates for implementing Category A commitments.  In August 2020, the Egyptian Parliament passed a new Customs Law, Law 207 of 2020, that includes provisions for key TFA reforms, including advance rulings, separation of release, a single-window system, expedited customs procedures for authorized economic operators, post-clearance audits, and e-payments.

Egypt’s legal system is a civil codified law system based on the French model.  If contractual disputes arise, claimants can sue for remedies through the court system or seek resolution through arbitration.  Egypt has written commercial and contractual laws. The country has a system of economic courts, specializing in private-sector disputes, which have jurisdiction over cases related to economic and commercial matters, including intellectual property disputes.  The judiciary is set up as an independent branch of the government.

Regulations and enforcement actions can be appealed through Egypt’s courts, though appellants often complain about the lengthy judicial process, which can often take years.  To enforce judgments of foreign courts in Egypt, the party seeking to enforce the judgment must obtain an exequatur (a legal document issued by governments allowing judgements to be enforced).  To apply for an exequatur, the normal procedures for initiating a lawsuit in Egypt must be satisfied. Moreover, several other conditions must be satisfied, including ensuring reciprocity between the Egyptian and foreign country’s courts, and verifying the competence of the court rendering the judgment.

Judges in Egypt enjoy a high degree of public trust, according to Egyptian lawyers and opinion polls, and are the designated monitors for general elections.  The Judiciary is proud of its independence and can point to a number of cases where a judge has made surprising decisions that run counter to the desires of the regime.  The judge’s ability to interpret the law can sometimes lead to an uneven application of justice.

No specialized court exists for foreign investments.

The 2017 Investment Law (Law 72 of 2017) as well as other FDI-related laws and regulations, are published on GAFI’s website,  https://gafi.gov.eg/English/StartaBusiness/Laws-and-Regulations/Pages/default.aspx .

In 2017, the Parliament also passed the Industrial Permits Act, which reduced the time it takes to license a new factory by mandating that the Industrial Development Authority (IDA) respond to a request for a license within 30 days of the request being filed.  As of February 2020, new regulations allow IDA regional branch directors or their designees to grant conditional licenses to industrial investors until other registration requirements are complete.

In 2016, the Import-Export Law was revised to allow companies wishing to register in the Import Registry to be 51 percent owned and managed by Egyptians; formerly the law required 100 percent Egyptian ownership and management.  Later in 2016, the inter-ministerial Supreme Investment Council also announced seventeen presidential decrees designed to spur investment or resolve longstanding issues. These include:

• Forming a “National Payments Council” that will work to restrict the handling of FX outside the banking sector;
• Producers of agricultural crops that Egypt imports or exports will get tax exemptions;
• Five-year tax exemptions for manufacturers of “strategic” goods that Egypt imports or exports;
• Five-year tax exemptions for agriculture and industrial investments in Upper Egypt; and
• Begin tendering land with utilities for industry in Upper Egypt for free as outlined by the Industrial Development Authority.

The Egyptian Competition Law (ECL), Law 3 of 2005, provides the framework for the government’s competition rules and anti-trust policies. The ECL prohibits the abuse of dominant market positions, which it defines as a situation in which a company’s market share exceeds 25 percent and in which the company is able to influence market prices or volumes regardless of competitors’ actions. The ECL prohibits vertical agreements or contracts between purchasers and suppliers that are intended to restrict competition, and also forbids agreements among competitors such as price collusion, production-restriction agreements, market sharing, and anti-competitive arrangements in the tendering process. The ECL applies to all types of persons or enterprises carrying out economic activities, but includes exemptions for some government-controlled public utilities. In early 2019, the Egyptian Parliament endorsed a number of amendments to the ECL, including controls on price hikes and prices of essential products and higher penalties for violations.

In addition to the ECL, other laws cover various aspects of competition policy. The Companies Law (Law 159/1981) contains provisions on mergers and acquisitions; the Law of Supplies and Commerce (Law 17 of 1999) forbids competition-reducing activities such as collusion and hoarding; and the Telecommunications Law (Law 10 of 2003), the Intellectual Property Law (Law 82 of 2002), and the Insurance Supervision and Control Law (Law 10 of 1981) also include provisions on competition.

The Egyptian Competition Authority (ECA) is responsible for protecting competition and prohibiting the monopolistic practices defined within the ECL. The ECA has the authority to receive and investigate complaints, initiate its own investigations, and take decisions and necessary steps to stop anti-competitive practices. The ECA’s enforcement powers include conducting raids; using search warrants; requesting data and documentation; and imposing “cease and desist orders” on violators of the ECL. The ECA’s enforcement activities against government entities are limited to requesting data and documentation, as well as advocacy.

Egypt’s Investment Incentives Law provides guarantees against nationalization or confiscation of investment projects under the law’s domain.  The law also provides guarantees against seizure, requisition, blocking, and placing of assets under custody or sequestration.  It offers guarantees against full or partial expropriation of real estate and investment project property.  The U.S.-Egypt Bilateral Investment Treaty also provides protection against expropriation.  Private firms are able to take cases of alleged expropriation to court, but the judicial system can take several years to resolve a case.

Egypt passed a Bankruptcy Law (Law 11 of 2018) in January 2018, which was designed to speed up the restructuring of troubled companies and settlement of their accounts.  It also replaced the threat of imprisonment with fines in cases of bankruptcy.  As of July 2020, the Egyptian government was considering but had not yet implemented amendments to the 2018 law that would allow debtors to file for bankruptcy protection, and would give creditors the ability to determine whether debtors could continue operating, be placed under administrative control, or be forced to liquidate their assets.

In practice, the paperwork involved in liquidating a business remains convoluted and protracted; starting a business is much easier than shutting one down. Bankruptcy is frowned upon in Egyptian culture, and many businesspeople still believe they may be found criminally liable if they declare bankruptcy.

The laws and regulations of El Salvador are relatively transparent and generally foster competition, but government accountability has weakened in recent years. Legal, regulatory, and accounting systems are transparent and consistent with international norms. However, the discretionary application of rules can complicate routine transactions, such as customs clearances and permitting applications. Regulatory agencies are often understaffed and inexperienced in dealing with complex issues. New foreign investors should review the regulatory environment carefully. In addition to applicable national laws and regulations, localities may impose permitting requirements on investors.

Environmental, social and governance (ESG) disclosures are not mandatory in El Salvador. However, the financial services industry is introducing ESG factors into investment portfolios and strategies. In 2019, 12 private banks signed the “Sustainable Finance Protocol” to develop green finance strategies, design specialized products and services for sustainable development, and implement result-based frameworks for achieving environmental and social sustainability. In June 2021, the Stock Exchange issued guidelines for the issuance of sustainability-linked bonds and announced dedicated listing segments for thematic bonds (green, social and sustainable bonds).

Companies note the GOES has enacted laws and regulations without adhering to established notice and comment procedures. The Regulatory Improvement Law, which entered into force in 2019, requires GOES agencies to publish online the list of laws and regulations they plan to approve, reform, or repeal each year. Institutions cannot adopt or modify regulations and laws not included in that list. The implementation of the law is gradual; the regulatory agenda is required for the executive branch since 2020, for the legislative and judicial branches, and autonomous entities in 2022, and municipalities in 2023. Prior to adopting or amending laws or regulations, the Simplified Administrative Procedures Law requires the GOES to perform a Regulatory Impact Analysis (RIA) based on a standardized methodology. Proposed legislation and regulations, as well as RIAs, must be made available for public comment. In practice, however, the Legislative Assembly does not publish draft legislation on its website and does not solicit comments on pending legislation. The GOES does not yet require the use of a centralized online portal to publish regulatory actions. The reforms have not been fully implemented. In 2021, 13 ministries (out of 16) drafted and published their regulatory agendas. Only five ministries revised their regulatory agendas to publish modifications. GOES agencies performed only five RIAs prior to approving new legislation. Although the implications of the reforms are still not apparent, private sector stakeholders have expressed support for the measures.

El Salvador continues to develop the National Procedures Registry, an online platform listing all investment and trade-related procedures and requirements. The registry aims at increasing transparency and legal certainty, as only registered procedures and requirements will be enforceable. Procedures and requirements of central government agencies will be registered in 2022, autonomous institutions and state-owned companies in 2023, and municipalities in 2024. In 2021, ten ministries registered their procedures and requirements.

El Salvador began implementing the Simplified Administrative Procedures Law in February 2019. This law seeks to streamline and consolidate administrative processes among GOES entities to facilitate investment. In 2016, El Salvador adopted the Electronic Signature Law to facilitate e-commerce and trade. Policies, procedures and needed infrastructure (data centers and specialized hardware and software) are in place for implementation. The first digital certification providers were licensed in 2021. Six GOES agencies plan to implement electronic signature in 2022, including the Ministry of Economy, the National Directorate of Medicines, the National Registry Center, and the Planning Office of the Metropolitan Area of San Salvador. El Salvador also enacted the Electronic Commerce Law, which entered into force in February 2021. The law establishes the framework for commercial and financial activities, contractual or not, carried out by electronic and digital means, introduces fair and equitable standards to protect consumers and providers, and sets processes to minimize risks arising from the use of new technologies. The law aims to support rapidly growing online businesses and financial technology (FinTech).

In 2018, El Salvador enacted the Law on the Elimination of Bureaucratic Barriers, which created a specialized tribunal to verify that regulations and procedures are implemented in compliance with the law and to sanction public officials who impose administrative requirements not contemplated in the law. However, the law is pending implementation until the GOES appoints members of the tribunal.

The GOES controls the price of some goods and services, including electricity, liquid propane gas, gasoline, public transport fares, and medicines. The government also directly subsidizes water services and residential electricity rates. Electricity price is set by supply and demand and traded on a spot market. The market also operates with Power Purchase Agreements (PPAs) and long-term contracts. The GOES took over some private buses and routes in March 2022 in an effort to confront rising inflation, which critics said violated the Constitution.

The Superintendent of Electricity and Telecommunications (SIGET) oversees electricity rates, telecommunications, and distribution of electromagnetic frequencies. The Salvadoran government subsidizes residential consumers for electricity use of up to 105 kWh monthly. The electricity subsidy costs the government between $50 million to $64 million annually.

El Salvador’s public finances are relatively transparent, but do not fully meet international standards. Budget documents, including the executive budget proposal, enacted budget, and end-of-year reports, as well as information on debt obligations are accessible to the public at: http://www.transparenciafiscal.gob.sv/ptf/es/PTF2-Index.html  An independent institution, the Court of Accounts, audits the financial statements, economic performance, cash flow statements, and budget execution of all GOES ministries and agencies. The results of these audits are publicly available online.

The GOES has not disclosed information on the use of public funds devoted for Bitcoin implementation, including information about bitcoin holdings and operations. In addition, the GOES continues to shield the accounts of the Intelligence Agency from Court of Accounts and has limited the Court’s capacity to audit state-owned enterprise subsidiaries.

El Salvador belongs to the Central American Common Market and the Central American Integration System (SICA), organizations which are working on regional integration, (e.g., harmonization of tariffs and customs procedures). El Salvador commonly incorporates international standards, such as the Pan-American Standards Commission (Spanish acronym COPANT), into its regulatory system.

El Salvador is a member of the WTO, adheres to the Agreement on Technical Barriers to Trade (TBT Agreement), and has adopted the Code of Good Practice annexed to the TBT Agreement. El Salvador is also a signatory to the Trade Facilitation Agreement (TFA) and has notified its Categories A, B, and C commitments. In 2017, El Salvador established a National Trade Facilitation Committee (NTFC) as required by the TFA, which was reactivated in July 2019.

El Salvador is a member of the U.N. Conference on Trade and Development’s international network of transparent investment procedures:  https://elsalvador.eregulations.org/  Investors can find information on administrative procedures applicable to investment and income-generating operations including the name and contact details for those in charge of procedures, required documents and conditions, costs, processing time, and legal bases for the procedures.

El Salvador’s legal system is codified law. Commercial law is based on the Commercial Code and the corresponding Commercial and Civil Code of Procedures. There are specialized commercial courts that resolve disputes.

Although foreign investors may seek redress for commercial disputes through Salvadoran courts, many investors report the legal system to be slow, costly, and unproductive. Local investment and commercial dispute resolution proceedings routinely last many years. Final judgments are at times difficult to enforce. The Embassy recommends that potential investors carry out proper due diligence by hiring competent local legal counsel.

According to the Constitution, the judicial system is independent of the executive branch. Recent actions by the Legislative Assembly have eroded separation of powers and independence of the judiciary. In May 2021, the Legislative Assembly dismissed the Attorney General and all five justices of the Supreme Court’s Constitutional Chamber and immediately replaced them with officials loyal to President Bukele. Furthermore, in August 2021, the legislature amended the Judicial Career Organic Law to force into retirement judges ages 60 or above and those with at least 30 years of service. The move was justified by the ruling party as an effort to root out corruption in the judiciary from past administrations. Legal analysts believe these measures were unconstitutional and enabled the Legislative Assembly and the Bukele administration to exert control over the judiciary.

Miempresa is the Ministry of Economy’s website for new businesses in El Salvador. At Miempresa, investors can register new companies with the Ministry of Labor (MOL), Social Security Institute, pension fund administrators, and certain municipalities; request a tax identification number/card; and perform certain administrative functions. https://www.miempresa.gob.sv/ 

The country’s e-Regulations site provides information on procedures, costs, entities, and regulations involved in setting up a new business in El Salvador. https://elsalvador.eregulations.org/ 

The Exports and Investment Promoting Agency of El Salvador (PROESA) is responsible for attracting domestic and foreign private investment, promoting exports of goods and services, evaluating and monitoring the business climate, and driving investment and export policies. PROESA provides technical assistance to investors interested in starting operations in El Salvador, regardless of the size of the investment or number of employees. http://www.proesa.gob.sv/ 

The Office of the Superintendent of Competition reviews transactions for competition concerns. The OECD and the Inter-American Development Bank note the Superintendent employs enforcement standards that are consistent with global best practices and has appropriate authority to enforce the Competition Law effectively. Superintendent decisions may be appealed directly to the Supreme Court, the country´s highest court. https://www.sc.gob.sv/ 

The Constitution allows the government to expropriate private property for reasons of public utility or social interest. Indemnification can take place either before or after the fact.

In November 2021, the Legislative Assembly passed the Eminent Domain Law for Municipal Works to enable the National Directorate of Municipal Works (DOM) to expropriate land necessary for the development of infrastructure projects in the 262 municipalities of the country. The law allows the DOM to begin works before condemnation proceedings are finalized and without depositing the estimated value of the property. Landowners can appeal the court’s determination of the compensation but cannot challenge the grounds for the seizure. Legal experts have noted that the law’s broad expropriation parameters and insufficient guarantees for landowners could lead to arbitrary land seizures.

There are no recent cases of expropriation. In 1980, a rural/agricultural land reform established that no single natural or legal person could own more than 245 hectares (605 acres) of land, leading to the government expropriating the land of some large landholders. In 1980, private banks were nationalized but were subsequently returned to private ownership in 1989-90. A 2003 amendment to the Electricity Law requires energy-generating companies to obtain government approval before removing fixed capital from the country.

The Commercial Code, the Commercial Code of Procedures, and the Banking Law contain sections that deal with the process for declaring bankruptcy. There is no separate bankruptcy law or court. Bankruptcy proceedings are cumbersome, lengthy, and costly. In practice, bankruptcy proceedings are uncommon. In El Salvador, real estate mortgages and pledges grant the creditor privileged rights to obtain payment from assets given in guarantee. Thus, in case of insolvency, creditors with preferred guarantees file individual lawsuits. In addition, any creditor can request the judge the appointment of a receiver, procedure much simpler than bankruptcy.

Companies in financial distress can request a payment deferral from the judge to prevent bankruptcy. If approved by the judge and the creditors, the company may be able to negotiate a rescue plan with creditors.

Bankruptcy is not criminalized, but it can become a crime if the judge determines there was intent to defraud.

Regulations governing the investment environment in Equatorial Guinea are implemented at the national level and can be introduced and enacted in one of three ways:

1. As a law, which begins as a draft bill presented by the relevant government ministry to the Council of Ministries before being submitted to Parliament for review and a vote.
2. Through a decree (at times referred to as a “decree-law”) issued directly by the president.
3. Through a ministerial order issued by the relevant ministry, in this case often the Ministry of Commerce and Business Promotion; the Ministry of Labor, Employment Promotion, and Social Security; or the Ministry of Finance, Economy, and Planning.

The government does not make draft versions of bills and regulations available for public comment at any stage of the approval process. Civil society groups complain that they are not consulted in the drafting of relevant laws and regulations.

The regulatory regime suffers from both a lack of public information and shortcomings in implementation and enforcement. Online versions of laws and regulations are difficult to find and sometimes completely unavailable. To comply with the IMF’s 2019 required reforms, the Ministry of Finance created both a website ( https://minhacienda-gob.com/biblioteca-juridica/ ) and physical office to facilitate public access to commercial regulations, but in practice limited documentation is available through either resource. In 2020, the government launched the official webpage of the state bulletin ( https://boe.gob.gq/# ) to improve public access to laws and regulations. The page has not been updated since January 2021, purportedly because of delays caused by the COVID-19 pandemic. Despite these efforts at digitalization, most of the information on regulations is still only accessible in hard copies for a fee through the Office of the National State Bulletin.

As a member country of the Organization for the Harmonization of Business Law in Africa (OHADA), Equatorial Guinea’s accounting standards are governed by the organization’s uniform act on accounting law and financial information (AUDCIF). However, due to a lack of local expertise on OHADA’s accounting standards, the government uses the Spanish model for its general accounting system. In 2020, a World Bank-sponsored program to strengthen the investment climate in the OHADA region established an office in Equatorial Guinea to train local accountants on OHADA accounting law. Of the 10 accountants registered through the office, currently only two are Equatoguineans. Officially only these accredited accountants can audit and certify companies’ financial statements.

While the government has made improvements in its overall fiscal transparency since 2019, it does not meet the minimum requirements of fiscal transparency as established by the U.S. Department of State. While the government’s published budget provides a substantially complete picture of its planned expenditures and revenue streams, including natural resource revenues, in 2021 it failed to disclose its total debt obligations, produce audited financial statements for state-owned enterprises (SOEs), or establish a supreme audited institution, which was mandated by law in 2012. Additional information is included in the Department of State’s annual Fiscal Transparency Report: https://www.state.gov/fiscal-transparency-report/.

As a CEMAC member, Equatorial Guinea’s investment-related regulations are based on CEMAC policies. Implementation of some policies at the national level remains pending, such as the commitment to free movement of people and goods between member countries. Equatorial Guinea is not a member of the World Trade Organization (WTO) but has been an observer since 2002. In 2007, the government applied for full WTO membership, and its application remains in process. The Ministry of Commerce is implementing a strategic action plan for the country’s accession, including hiring an international consultant to prepare a required Memorandum on the Foreign Trade Regime (MFTR). The legislature has yet to approve the memorandum.

Equatorial Guinea’s national judicial system is not independent of the executive branch, as the president serves as the chief magistrate and has the power to appoint or remove judges at will. In 2018, the IMF highlighted numerous factors that result in a weak judiciary, including a lack of publicly accessible information on judicial decisions and limited capacity and understaffing that cause delays in rendering court decisions. Additionally, in many cases, judges are awarded percentages of the penalties they levy against defendants, which can be particularly concerning for larger U.S. companies operating in the country. While the government has committed to addressing these issues, domestic and foreign investors continue to generally distrust the judicial system.

Equatorial Guinea’s legal system is a mix of civil and customary law. The country does not have an established commercial law, and so it instead refers to the uniform acts of the OHADA for arbitrating commercial cases. OHADA legislation creates a civil legal system that aims to provide a common business and legal framework across all 17 member states, while enhancing the legal certainty and predictability of international transactions in the region. In 2010, OHADA passed its Uniform Act Organizing Securities, which created a modern security law for OHADA nations and reinforced lenders’ rights by enabling them to use new, efficient security enforcement mechanisms, such as out-of-court appropriation. Other new and revised laws for the OHADA region include:

• Uniform Act related to general commercial law act, revised in 2010
• Uniform Act related to commercial companies and economic interest groups, revised in January 2014 and effective May 2014
• Uniform Act organizing collective proceedings for clearing debts, revised in September 2015 and effective December 2015
• Uniform Act on the harmonization of accounting, adopted in January 2017 and effective January 2018.

Each member country has the responsibility to apply these acts locally through laws and regulations, and the government in Equatorial Guinea has to date failed to implement most of them.

The primary legal instrument governing foreign investment in Equatorial Guinea is Law No. 7/1992 on the Investment Regime in Equatorial Guinea, which was last updated by in 1994 by No. 2/1994. Due to the difficulty in passing new laws, subsequent changes have mostly been implemented through more than two dozen presidential decrees, which are summarized in a document published on the Ministry of Finance’s website: https://minhacienda-gob.com/materia-de-inversion-3/ . The government published Decree 45/2020 in April 2020 reducing the minimum amount of capital needed to register a limited-liability company from one million XAF (approximately $1,650) to 100,000 XAF (approximately USD 165). Specific regulations governing investments in the hydrocarbon and mining sectors are summarized on the Ministry of Mines and Hydrocarbon’s website at https://mmie.gob.gq/ , although the English version of the page has not been updated since 2017.

The government has yet to create a one-stop-shop for foreign investors seeking information on relevant, rules, procedures, and reporting requirements.

There is no specific agency that enforces competition laws. Due to Equatorial Guinea’s membership in OHADA, OHADA competition laws should be applied to such cases. Information on all OHADA uniform acts and case law can be found at https://www.ohada.org/en/ .

Law No. 7/1992 states that the government will not expropriate foreign investments except when acting in the public interest with fair, just, and proper compensation. The government does not generally nationalize or expropriate foreign investments, although there are alleged cases of local private companies cooperating with the government to expropriate property from foreign investors after falsely accusing them of breach of contract. This practice has become less common since 2018, when the government eliminated the requirement for foreign investors to identify a local business partner. The government has an extensive record, however, of expropriating locally owned property, frequently offering little or no compensation.

OHADA uniform code and case law on bankruptcy apply in Equatorial Guinea. However, despite being an OHADA member country and therefore having recourse to insolvency and debt recovery proceedings, the country has no legal practice or expertise in judicial reorganization, judicial liquidation, or debt enforcement. Creditors are therefore likely to face difficulty in recovering their money through a formal legal process in insolvency cases.

The GSE is not transparent.  Legal and regulatory systems are not transparent.  Ministries are empowered to (and do) issue new regulations, subject to PFDJ approval, with no public debate.  There are no informal regulatory processes managed by nongovernment organizations or private sector associations. New regulations come out with no public announcement; people only learn of them through word-of-mouth. There is no publicly accessible location (online or otherwise) to find key proclamations, laws, or regulatory actions.  One can sometimes find the regulations for sale at bookshops. There is no public oversight of government actions nor legal recourse against government actions taken.

The government does not promote any form of transparency, including promoting or requiring companies’ environmental, social, and governance disclosures.

The seeming arbitrariness of government regulation and action is a drag on the economy.  Officials occasionally shutter businesses without explanation, leaving other businesses to wonder (and often spread rumors) as to what happened.

Public finances and debt obligations are not made public.

Eritrea is a founding member of the Common Market for Eastern and Southern Africa (COMESA).  It also belongs to the Community of Sahel-Saharan States and the Intergovernmental Authority on Development (though it has not participated in the latter for several years.)  COMESA decisions are binding on all member states, but as they are made by consensus this does not cause conflict.

Eritrea is one of only 10 UN member states that has no affiliation with the WTO.

The Eritrean legal system is based on the Ethiopian system that was in place at the time of independence in 1993.  It is primarily a civil law system, though these laws are deeply influenced by traditional law.

Eritrea has a written commercial code, derived from the Ethiopian commercial code in effect at the time of independence along with several proclamations to update the code.  A full rewrite was done as part of a 2015 overhaul of the major legal codes, but these were never implemented.  Any international company doing business in Eritrea will need the assistance of a local attorney versed in the complexities of the Eritrean legal system.

The judicial system is not fully independent of the executive.  Judges are National Service employees, and thus work for the executive branch.  Many enforcement decisions, and especially those that relate to the commercial or labor codes, are adjudicated solely through the national court system and are appealable.

Eritrea’s legal system plays only a minor role in foreign direct investment. All large-scale foreign direct investment is part of an opaque political process and is managed by non-public agreements negotiated directly with a small group of officials in the government and the ruling party.

Eritrea does not have a website for foreign investors to learn about relevant laws, rules, procedures and reporting requirements.

There have been no new major laws, regulations, or judicial decisions announced in the past year.

There are no indications that the GSE makes any effort to promote market competition. All large-scale economic activity is either fully controlled by the PFDJ or jointly controlled by it in partnership with international companies operating under agreements negotiated directly with the GSE/PFDJ.

There is no transparent process that would allow an individual or company to appeal any GSE expropriation of property.

The most recent public case of expropriation was in 2019, when the government expropriated 22 health clinics from the Catholic Church, citing a law prohibiting religious organizations from providing social services.  The Catholic Church said there was no due process or ability to appeal the decision.

Bankruptcy is addressed in the Eritrean Civil Law and the proclamations amending it; however due to lack of transparency in the court system, it is impossible to determine what rights, if any, creditors, shareholders and holders of other financial contracts have in practice.  No information is available on how bankruptcy is handled in practice.

The Government of Estonia has set transparent policies and effective laws to foster competition and establish “clear rules of the game.” Despite these measures, due to the small size of Estonia’s commercial community, instances of favoritism are not uncommon.

Accounting, legal, and regulatory procedures are transparent and consistent with international norms. Financial statements should be prepared in accordance with either:

• accounting principles generally accepted in Estonia; or
• International Financial Reporting Standards (IFRS) as adopted by the EU.

Listed companies and financial institutions are required to prepare financial statements in accordance with IFRS as adopted by the EU.

The Estonian Generally Accepted Accounting Principles (GAAP) are written by the Estonian Accounting Standards Board (EASB). Estonian GAAP, effective since 2013, is based on IFRS for Small and Medium-sized Entities (IFRS for SMEs) with limited differences from IFRS for SMEs with regard to accounting policies as well as disclosure requirements. More info: https://investinestonia.com/business-in-estonia/establishing-company/accounting-requirements/ 

The Minister of Justice has responsibility for promoting regulatory reform. The Legislative Quality Division of the Ministry of Justice provides an oversight and coordination function for Regulatory Impact Analysis (RIA) and evaluations with regards to primary legislation. For government strategies, EU negotiations and subordinate regulations, oversight responsibilities lie within the Government Office.

The Government of Estonia has placed a strong focus on accessibility and transparency of regulatory policy by making use of online tools. There is an up-to-date database of all primary and subordinate regulations ( https://www.riigiteataja.ee/en/ ) in an easily searchable format. An online information system tracks all legislative developments and makes available RIAs and documents of legislative intent ( http://eelnoud.valitsus.ee/main ). Estonia also established the website www.osale.ee , an interactive website of all ongoing consultations where every member of the public can submit comments and review comments made by others. Regulations are reviewed on the basis of scientific and data-driven assessments.

Estonia, an OECD member country, has committed at the highest political level to an explicit whole-of-government policy for regulatory quality and has established sufficient regulatory oversight. Estonia scores the same as the United States on the World Bank`s Global Indicators of Regulatory Governance on whether governments publish or consult with public about proposed regulations: http://rulemaking.worldbank.org/en/data/explorecountries/estonia . Estonia’s widely praised “e-governance” solutions and other bureaucratic procedures are generally far more streamlined and transparent than those of other countries in the region and are among the easiest to use globally. In addition, Estonia’s budget and debt obligations are widely and easily accessible to the general public on the Ministry of Finance website.

Estonia is a member of the EU. An EU regulation is a legal act of the European Union that becomes immediately enforceable as law in all member states simultaneously. Regulations can be distinguished from directives which, at least in principle, need to be transposed into national law. Regulations can be adopted by means of a variety of legislative procedures depending on their subject matter. European Standards are under the responsibility of the European Standardization Organizations (CEN, CENELEC, ETSI) and can be used to support EU legislation and policies.

Estonia has been a member of WTO since November 13, 1999. Estonia is a signatory to the Trade Facilitation Agreement (TFA) since 2015.

Estonia’s judiciary is independent and insulated from government influence. The legal system in Estonia is based on the Continental European civil law model and has been influenced by the German legal system. In contrast to common law countries, Estonia has detailed codifications.

Estonian law is divided into private and public law. Generally, private law consists of civil law and commercial law. Public law consists of international law, constitutional law, administrative law, criminal law, financial law and procedural law.

Estonian arbitral tribunals can decide in cases of civil matters that have not previously been settled in court. More on Estonian court system: https://www.riigikohus.ee/en . Arbitration is usually employed because it is less time consuming and cheaper than court settlements. The following disputes can be settled in arbitral tribunals:

• Labor disputes;
• Lease disputes;
• Consumer complaints arguments;
• Insurance conflicts;
• Public procurement disputes;
• Commercial and industrial disputes.

Recognition of court rulings of EU Member States is regulated by EU legislation. More: http://www.europarl.europa.eu/RegData/etudes/STUD/2015/509988/IPOL_STU(2015)509988_EN.pdf

Estonia is part of the Continental European legal system (civil law system). The most important sources of law are legal instruments such as the Constitution, European Union law, international agreements and Acts and Regulations. Major laws affecting incoming foreign investment include the Commercial Code, Taxation Act, Income Tax Act, Value Added Tax Act, Social Tax Act, and Unemployment Insurance Payment Act. More information is available at https://www.riigiteataja.ee/en/ . An overview of the investment-related regulations can be found here: http://www.investinestonia.com/en/investment-guide/legal-framework 

The Estonian Competition Authority reviews transactions for anti-competition concerns. Government review and licensing have proven to be routine and non-discriminatory.

More info on specific competition cases: https://www.konkurentsiamet.ee/en 

Private property rights are observed in Estonia. The government has the right to expropriate for public interest related to policing the borders, public ports and airports, public streets and roads, supply to public water catchments, etc. Compensation is offered based on market value. Cases of expropriation are extremely rare in Estonia, and the Embassy is not aware of any expropriation cases involving discrimination against foreign owners.

Bankruptcy is not criminalized in Estonia. Bankruptcy procedures in Estonia fall under the regulations of Bankruptcy Act that came into force in February 1997. The Estonian Bankruptcy Act focuses on the protection of the debtors and creditors’ rights. According to the Act, bankruptcy proceedings in Estonia can be compulsory, in which case a court will decide to commence the procedures for debt collection, or voluntarily by company reorganization. Detailed information about creditor’s rights: https://www.riigiteataja.ee/en/eli/ee/Riigikogu/act/504072016002/consolide 

More info from World Bank’s Doing Business Report on Estonian ranking for ease of “resolving insolvency: https://data.worldbank.org/indicator/IC.BUS.DFRN.XQ?locations=EE 

In general, the laws of the country are transparent, including laws to foster competition. The Swaziland Competition Act came into force in 2007, and the Competition Commission Regulations came into effect in 2011. The Swaziland Competition Commission (SCC) is a statutory body charged with the administration and enforcement of the Competition Act of 2007. The legal and regulatory environment is underdeveloped, but currently growing as the GKoE has recently established additional regulatory bodies in the financial, energy, communications, and construction procurement sectors. These bodies generally attempt to emulate the regulatory practices of South Africa or Britain.

Eswatini’s rule-making and regulatory authority lies with the central government and may be delegated by the relevant line ministry to a department, parastatal, or board. The primary custodian of policy and regulation is the minister responsible for the relevant law. All laws, regulations, and policies are applied at a national level. There are no regulatory processes managed by nongovernmental organizations or private sector associations. Regulatory enforcement actions can be reviewed through the court system, and court rulings are publicly available.

Adherence to the International Financial Reporting Standard (IFRS) is required for listed companies, financial institutions, and government-owned companies. It remains optional for small and medium enterprises.

Proposed laws and regulations are published in the government Gazette and have a public comment period of thirty days prior to a bill’s presentation to parliament. Ministries sometimes consult with selected members of the public and private sectors through stakeholder meetings. Most draft regulations are not available online but can be acquired in hard copy through the government printing office for a fee. Regulations are generally developed and reviewed through various stakeholder consultations. The use of science and data to inform regulatory reform is not widespread.

Foreign investors coming into the country can join Business Eswatini on equal footing with Eswatini nationals. Business Eswatini often serves as the link between the private sector and the government. There are no informal regulatory processes that apply to foreign investors.

Eswatini public finance and debt obligations are published online through the budget estimates book as well as the Central Bank of Eswatini’s annual report.

Eswatini is part of four distinct economic blocks: the Common Monetary Area (CMA), the Southern African Customs Union (SACU), the Southern African Development Community (SADC), and the Common Market for Eastern and Southern Africa (COMESA). The standards of membership in these blocks are primarily based on British law and have been domesticated accordingly into each context.

Eswatini is a member of the WTO and notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade. Eswatini signed and ratified the Trade Facilitation Agreement (TFA) in 2016 and has begun implementing its requisites. The TFA entered into force in February 2017 and requires prompt and transparent publication of trade-related information. Eswatini developed a trade portal in partnership with the World Bank to make reliable trade-related information accessible to the private sector. The GKoE approved the portal and is now at the data collection stage.

Eswatini has a dual legal system consisting of a set of courts that follow Roman-Dutch law and a set of national courts that follow Swati law and custom. The former consists of a Court of Appeals (Supreme Court) and a High Court, in addition to magistrate’s courts in each of the four districts. The traditional courts deal with minor offenses and violations of traditional Swati law and custom. Sentences in traditional courts are subject to appeal and review at the Court of Appeals and High Court. The western-style court system enforces contracts and property rights.

The country has various written commercial and contractual laws. Commercial and contractual disputes are handled in the magistrate court or High Court depending on the amount in dispute. There are currently no specialized commercial courts; however, the government is in the process of establishing a Small Claims Bench. Specialized Industrial Courts hear labor relations matters.

The constitution and law provide for an independent judiciary, and the courts are generally independent of executive control or influence in nonpolitical criminal and civil cases not involving the royal family or government officials. The current judicial process is procedurally competent, fair, and reliable, although the capacity of the judiciary to handle cases in a timely manner is extremely limited, creating significant case backlogs.

Enforcement of laws and regulations is appealable up to the Supreme Court.

The Swaziland Investment Promotion Act of 1998 established EIPA and provides for the freedom of investment, protection of investment, and non-discrimination on the part of the government with respect to investors. The Competition Act of 2007 proscribes anti-competitive trade practices and specifies requirements for mergers and acquisitions, and protection of consumer welfare. The new economic recovery strategy (Revised National Development Strategy) has emphasized the need to promote further reforms in order to facilitate investment.

In February 2018, the GKoE enacted the Special Economic Zones (SEZ) Act in an effort to attract foreign direct investment. The benefits for an SEZ investor include: a 20-year exemption from all corporate taxation, followed by taxation at the rate of 5 percent; full refunds of customs duties, value-added tax, and all other taxes payable in respect of goods purchased for use as raw material, equipment, machinery, and manufacturing; unrestricted repatriation of profits; and full exemption from foreign exchange controls for all operations conducted within the SEZ.

The Swaziland Competition Commission (SCC) was established in 2007 to encourage competition in Eswatini’s economy by controlling anti-competitive trade practices, mergers, and acquisitions; protecting consumer welfare; and providing an institutional mechanism for implementing these objectives. The Swaziland Competition Act ( http://www.compco.co.sz/documents/Competition%20Act%202007%20scanned18%20Februry%202010.pdf ) and Competition Commission Regulations ( http://www.compco.co.sz/documents/Competition%20Commission%20Regulations%20Notice%202010.pdf ) are available online. All entities must submit their merger and acquisition plans to the SCC for prior approval. The SCC has the power to not only investigate and regulate, but also to issue administrative decisions relating to mergers, competition, and anti-trust. There have been no rulings against foreign investors since the establishment of the Swaziland Competition Commission.

The law prohibits expropriation and nationalization. The Swati constitution narrowly limits the GKoE’s powers to deprive a landowner of “property or any interest in or right over property,” except where “necessary,” conducted pursuant to a court order, and compensated by the “prompt payment of fair and adequate compensation.” Anyone whose property interests are threatened by expropriation is also expressly granted due process rights under the constitution. There have been no recent cases of foreign-owned businesses being expropriated, and when disputes have arisen in the past, there has been due process through Swati institutions and/or international tribunals.

The Insolvency Act of 1955 is the law that governs bankruptcy in Eswatini. The insolvent debtor or his agent petitions the court for the acceptance of the surrender of the debtor’s estate for the benefit of his creditors. Creditors need to petition with the court and provide documents supporting their claim. Bankruptcy is only criminalized if the debtor, trustee, or sole owner does not comply with the requirements of the creditor. For example, if he/she fails to submit documents or declare assets, or if he/she obstructs or hinders a liquidator appointed under the Act in the performance of his functions, then he/she could be found guilty of an offense.

The most widely used credit bureau in Eswatini is Transunion.

In the World Bank’s 2020 Doing Business Report, Eswatini ranks 121 out of 190 economies for ease of resolving insolvency.

SEZ investors have access to numerous investment incentives more fully described above in “Laws and Regulations on Foreign Direct Investment” and below in “Foreign Trade Zones/Free Ports/Trade Facilitation.” For non-SEZ investors, the Minister of Finance has the discretion to apply a reduced tax rate of 10 percent for the first ten-year period of operation, which is available for businesses that qualify under the Development Approval Order. Capital goods imported into the country for productive investments are exempt from import duties. Raw materials imported into the country to manufacture products to be exported outside the SACU area are also exempt from import duties. The law allows for repatriation of profits and dividends including salaries for expatriate staff and capital repayments. The Central Bank of Eswatini guarantees loans raised by investors for export markets. There is also provision of loss cover that a company can carry over in case it incurs a loss in the year of assessment. Eswatini has a human resources training rebate that offers a tax credit for 150 percent of the cost of training.

The GKoE issues guarantees for key sectors like transportation and energy. There have been no reports of government jointly financing FDI projects.

In February 2018, the GKoE enacted the Special Economic Zones (SEZ) Act in an effort to attract foreign direct investment. The Act establishes two designated SEZs: the Royal Science and Technology Park and King Mswati III International Airport. According to the Act, investors may establish additional SEZs outside of these designated areas by satisfying the minimum requirements and submitting an application to the Minister of Commerce.  Under the Act, foreign-owned firms have the same investment opportunities as Swati entities.

To operate within an SEZ, a beneficiary company must meet the following minimum requirements (among others): at least 90 percent of its employees must be paid at or above the threshold for income taxation (approximately USD 330/month); at least two thirds of its employees must be Swati citizens; and the minimum capital investment must be E30 million (USD 2.1 million) for sole companies and E70 million (USD 5 million) for joint ventures. The benefits for an SEZ investor include: a 20-year exemption from all corporate taxation, followed by taxation at the rate of 5 percent; full refunds of customs duties, value-added tax, and all other taxes payable in respect of goods purchased for use as raw material, equipment, machinery, and manufacturing; unrestricted repatriation of profits; and full exemption from foreign exchange controls for all operations conducted within the SEZ.

The Ministry of Labor and Social Security’s Training and Localization Unit requires the hiring of qualified Swati workers where possible, even at executive positions. The mandate of the Unit is to ensure the maximum utilization of local manpower resources and to formulate training plans in conjunction with industries so as to maximize employment. It also facilitates and provides information on the process of obtaining work permits. Foreign investors are required to apply for residence and work permits. Although they are generally awarded, businesspeople complain that the process is cumbersome.

There are no government-imposed conditions on permission to invest. The government does not follow a “forced localization” policy. However, in the manufacturing sector, if a company plans to label a product for export as “Made in Eswatini,” the government requires that the local content of such export be at least 25 percent.

There are no requirements for foreign IT providers to turn over source code or provide access to encryption. The technology industry in Eswatini is still in its infancy.

The intellectual property rights index (2020) ranks Eswatini 7th in Africa and 79th globally in protection of intellectual property. https://www.internationalpropertyrightsindex.org/country/swaziland 

There are two major categories of land tenure: Swati Nation Land (SNL) and Title Deed Land (TDL), each subject to different rules and procedures. More than 60 percent of Eswatini’s territory is SNL, governed by the country’s traditional structures. SNL is “held in trust for the Swati people” by the King, who appoints chiefs to oversee its use. The chiefs keep records of who “owns” or resides on land in their chiefdoms. For TDL, the Eswatini government recognizes and enforces secured interest in property and there is a reliable system of recording security interests. The Constitution protects the right to own property, but most rural land is SNL and is not covered by this constitutional protection. Most urban property, on the other hand, is TDL. The law allows for eminent domain in limited circumstances but requires prompt payment of adequate compensation.

In the World Bank’s 2020 Doing Business Report, Eswatini ranks 104 out of 190 economies for ease of registering property. This ranking refers to property in peri-urban areas, where TDL is widely available. SNL is not titled, and lending institutions are reluctant to use it as collateral. Though foreign or non-resident individuals generally may not own land (with some exceptions), foreign-owned businesses are able to own or lease land. Legally purchased property cannot revert to other owners (must be “willing buyer, willing seller”).

Protection for patents, trademarks, and copyrights is currently inadequate under Swati law. Patents are currently protected under a 1936 act that automatically extends patent protection, upon proper application, to products that have been patented in either South Africa or Great Britain. Trademark protection is addressed in the Trademarks Act of 1981. Copyright protections are addressed under four statutes, dated 1912, 1918, 1933, and 1936.

Laws enacted in 2018 have updated Eswatini’s intellectual property legal framework. The Copyright and Neighboring Rights Act of 2014 (replacing the Copyright Act of 1912) protects literary, musical, artistic, audio-visual, sound recordings, broadcasts, and published editions. It also criminalizes illicit recording and false representation of someone else’s work. The Act also gives the duration of copyright among other things. The Swaziland Intellectual Property Tribunal Act of 2015 established an Intellectual Property Tribunal that is responsible for hearing all matters and disputes involving intellectual property in Eswatini.

The Trademarks (amendment) Act of 2015 brings the (1981) Trademarks Act into compliance with provisions of the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), the Madrid Agreement concerning International Registration of Marks, and the Banjul Protocol on Trademarks.

Eswatini does not track and report on seizures of counterfeit goods. Eswatini is not listed on the United States Trade Representative (USTR) Special 301 Report or the Notorious Markets List. For additional information about national laws and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/ .

Eswatini’s capital markets are closely tied to those of South Africa and operate under conditions generally similar to the conditions in that market. In 2010, the GKoE passed the Securities Act to strengthen the regulation of portfolio investments. The Act was primarily intended to facilitate and develop an orderly, fair, and efficient capital market in the country.

Eswatini has a small stock exchange with only a handful of companies currently trading. In 2010, the Financial Services Regulatory Authority (FSRA) was established. This institution governs non-bank financial institutions including capital markets, insurance firms, retirement funds, building societies, micro-finance institutions, and savings and credit cooperatives. The royal wealth fund and national pension fund invest in the private equity market, but otherwise there are few professional investors.

Existing policies neither inhibit nor facilitate the free flow of financial resources; the demand is simply not present. The Central Bank respects International Monetary Fund (IMF) Article VIII, and credit is allocated on market terms. Foreign investors are able to get credit and equity from the local market. A variety of credit instruments are available to the private sector including Central Bank of Eswatini loan guarantees for the export markets and for small businesses.

54 percent of the Swati adult population is banked. According to the Central Bank of Eswatini’s Financial Stability Report, the Swati banking sector is stable and financially sound. The asset quality (the ratio of non-performing loans (NPLs) to gross loans) stood at 9.3 per cent marginally rising from 9.2 percent. Aggregate bank liquidity to deposits stood at 38.3 per cent, increasing from 32.8 per cent the previous year. The average return on assets (ROA) and return on total equity (ROE) decreased from 2.6 percent and 16.6 percent to 1.5 percent and 10.3 percent, respectively, during the same period (June 2019 to June 2020).

The estimated total assets for the country’s banks are estimated at E19.4 billion (USD 1.4 billion) as of June 2018, up from E17.9 billion (USD 1.3 billion) in March 2017. Eswatini has a central bank system. Eswatini’s banks are primarily subsidiaries of South African banks. Standard Bank is the largest bank by capital assets and employs about 400 workers. In 2018, the Central Bank of Eswatini under the Financial Institutions Act of 2005 awarded a new commercial banking license to Farmer’s Bank.

Eswatini’s financial sector is liberalized and allows foreign banks or branches to operate under the supervision of the Central Bank’s laws and regulations (http://www.centralbank.org.sz). Foreigners may establish a bank account in Eswatini if they have residency in one of the CMA countries (Eswatini, South Africa, Lesotho, Namibia).

There have been no bank closures or banks in jeopardy in the last three years. Hostile takeovers are uncommon.

In 1968, the late King Sobhuza II created a Royal Charter that governs the Sovereign Wealth Fund (SWF) in Eswatini, Tibiyo TakaNgwane. This fund is not subject to government or parliamentary oversight and does not provide information on assets or financial performance to the public. Tibiyo TakaNgwane publishes an annual report with financials, but it is not required by law to do so as it is not registered under the Companies Act of 1912. The annual reports are not made public or submitted to any other state organ for debate or review. The SWF obtains independent audits at the discretion of its Board of Directors.

Tibiyo TakaNgwane states in its objectives that it supports the government in fostering economic independence and self-sufficiency. It widely invests in the economy and holds shares in most major industries, e.g., sugar, real estate, beverages, dairy, hotels, and transportation. For its social responsibility practices, it provides some scholarships to students. The SWF and the government co-invest to exercise majority control in many instances. Tibiyo TakaNgwane invests entirely in the local economy and local subsidiaries of foreign companies. It has shares in a number of private companies. Sometimes foreign companies can form partnerships with Tibiyo, especially if the foreign company wants to raise capital and can manage the project on its own.

Eswatini has 49 SOEs, which are active in agribusiness, information and communication, energy, automotive and ground transportation, health, housing, travel and tourism, building education, business development, finance, environment, and publishing, media, and entertainment .

The Swati government defines SOEs as private enterprises, separated into two categories. Category A represents SOEs that are wholly owned by government. Category B represents SOEs in which government has a minority interest, or which monitor other financial institutions or a local government authority. These categories are further broken down into profit-making SOEs with a social responsibility focus, those that are profit-making and developmental, those that are regulatory, and those that are regulatory but developmental. SOEs purchase and supply goods and services to and from the private sector including foreign firms. Those in which government is a minority shareholder are subject to the same tax burden and tax rebate policies as the private sector. The Public Enterprise Act governs SOEs. The Boards of the respective SOEs review their budgets before tabling them to the relevant line ministry, which in turn, tables them to Parliament for scrutiny by the Public Accounts Committee. The Ministry of Finance’s Public Enterprise Unit (PEU) maintains a published list of SOEs, available on request from the PEU. SOEs do not receive non-market-based advantages from government.

Eswatini SOEs generally conform to the OECD Guidelines on Corporate Governance for SOEs. Senior managers of SOEs report to the board and, in turn, the board reports to a line minister. The minister then works with the Standing Committee on Public Enterprise (SCOPE), which is composed of cabinet ministers. SOEs are governed by the Public Enterprises Act, which requires audits of the SOEs and public annual reports. Government is not involved in the day-to-day management of SOEs. Boards of SOEs exercise their independence and responsibility. The Public Enterprise Unit provides regular monitoring of SOEs. The line minister of the SOE appoints the board and, in some cases, the appointments are politically motivated. In some cases, the king appoints his own representative as well. Generally, court processes are nondiscriminatory in relation to SOEs.

A published list of SOEs can be found on: http://www.gov.sz/index.php/component/content/article/141-test/1995-swaziland-enterprise-parastatals?Itemid=799 

Eswatini SOEs operate primarily in the domestic market.

The International Monetary Fund (IMF) has long advised the Eswatini government to privatize SOEs, particularly in the telecommunications sector and the electricity sector. In response, the government has passed several laws, and privatization efforts have begun to advance. Since Eswatini Mobile (formerly Swazi Mobile) launched in 2016, as well as other private telecommunications companies during the intervening years, prices for cellular services have come down and mobile and data offerings have improved in the country.

Sectors and timelines have not been prioritized for future privatization, although it is likely that some SOEs will be privatized following the public launch of the Revised National Development Strategy.

The government is working to reduce the country’s dependence on foreign electricity by promoting renewable energy production. Eswatini imports the bulk of its electricity from South Africa and Mozambique, reaching 100 percent importation during a recent drought, since domestic production comes predominantly from hydropower. With assistance from USAID’s Southern Africa Energy Program (SAEP), the government has developed a National Grid Code and a Renewable Energy and Independent Power Producer (RE&IPP) Policy to provide a framework for the sector and incentivize investors.

The Swati government encourages foreign and local enterprises to follow generally accepted responsible business conduct (RBC) principles. Multinational enterprises in the country have robust standards for RBC, and consumers often recognize their efforts; however, smaller domestic companies are less likely to have RBC programs. The Development Approval Order, which is part of the income tax law, allows a company to receive a tax rate discounted by up to 10 percent if it makes significant RBC investments. Government enforcement is sporadic, but generally does not vary based on whether a company is domestic or foreign, and requirements are not waived to attract foreign investment. The government does not have corporate governance, accounting, and executive compensation standards to protect shareholders. There are no independent NGOs monitoring RBC.

The local courts are responsible for ensuring human rights, labor rights, consumer protection, environmental protections, and other laws/regulations intended to protect individuals from adverse business impacts. The courts have not demonstrated a bias against foreign-owned corporations.

The mining sector of Eswatini does not have enough economic significance to warrant special consideration by the government. It is treated consistent with other sectors of similar size.

Department of State

• Country Reports on Human Rights Practices;
• Trafficking in Persons Report;
• Guidance on Implementing the “UN Guiding Principles” for Transactions Linked to Foreign Government End-Users for Products or Services with Surveillance Capabilities;
• U.S. National Contact Point for the OECD Guidelines for Multinational Enterprises; and;
• Xinjiang Supply Chain Business Advisory 

Department of the Treasury

• OFAC Recent Actions

Department of Labor

• Findings on the Worst Forms of Child Labor Report;
• List of Goods Produced by Child Labor or Forced Labor;
• Sweat & Toil: Child Labor, Forced Labor, and Human Trafficking Around the World and;
• Comply Chain

The law provides criminal penalties for corruption by officials, but the government does not implement the law effectively. Officials sometimes engage in corrupt practices with impunity. Corruption continues to be a problem, most often involving personal relationships and bribes being used to secure government contracts on large capital projects.

The Prevention of Corruption Act and the Swaziland Public Procurement Act are the two laws that combat corruption by all persons, including public officials. The Public Procurement Act prohibits public sector workers and politicians from supplying the government with goods or services; however, this prohibition does not extend to family members of officials. The Eswatini Public Procurement Agency (ESPPRA) conducted capacity building exercises nationwide with both public and private companies to increase knowledge and encourage adoption of universally practiced purchasing systems. According to Section 27 of the Public Procurement Regulations, suppliers are prohibited from offering gifts or hospitality, directly or indirectly, to staff of a procuring entity, members of the tender board, and members of the ESPPRA. While avoiding conflict of interest and establishing codes of conduct are policies that are encouraged, they are not effectively enforced. Some companies use internal controls and audit compliance programs to try to track and prevent bribery.

Eswatini is a signatory to the African Union Convention on Preventing and Combating Corruption and Related Offenses and the SADC Protocol against Corruption. Eswatini has signed and ratified the UN Anticorruption Convention, but it is not party to the OECD Anti-Bribery Convention.

The Anti-Corruption Commission (ACC) is legally allowed to investigate corruption and does so. The ACC does not provide protection to NGOs involved in investigating corruption. Given the Commission’s current capacity, “government procurement” is the most likely area to find corruption in Eswatini. The global competitiveness report ranks Swaziland 79 of 140 countries on incidence of corruption. Transparency International reports Eswatini as the 14th least corrupt country in Africa

Though no US firms have cited corruption, the 2015 Africa Competitiveness report found that 12.8% of business owners saw corruption as a hurdle to doing business in Eswatini, impacting profits, contracts, and investment decisions for their companies. There is a public perception of corruption in the executive and legislative branches of government and a consensus that the government does little to combat it. There have been credible reports that a person’s relationship with government officials influenced the awarding of government contracts; the appointment, employment, and promotion of officials; recruitment into the security services; and school admissions. Authorities rarely took action on reported incidents of nepotism.

Contact at government agency responsible for combating corruption:

Dan Dlamini
Commissioner
Eswatini Anti-Corruption Commission
3rd Floor, Mbandzeni House, Mbabane
+268-2404-3179/0761
anticorruption@realnet.co.sz 

In July 2021, following COVID lockdowns and the banning of petition deliveries by citizenry protesting the death of a student, the country erupted in violence with business projects and installations being damaged or destroyed as a result. The resulting violence lasted for two days, culminating in the police and army restoring order. The king and government agreed to hold a dialogue on how the country should be governed. Although Eswatini has a long record of political stability with sporadic nonviolent protest, poor living and working conditions, widespread poverty, income inequality, and a large and growing youth population, however, continues to yield a political environment conducive to further unrest.

The structure of the labor market and economic fundamentals in Eswatini are better developed than in many other Sub-Saharan African countries. For example, GDP per capita is higher, the informal sector is smaller, exports are more diversified, the overall education level is higher, and the labor pool is predominantly domestic. Nevertheless, although Eswatini is considered a middle-income country, it has many characteristics of a low-income country. The minimum wage is low, inequality is high (0.51 Gini coefficient), poverty is widespread, the middle class is small, overall unemployment (especially youth unemployment) is high, and female representation is low.

Eswatini has a shortage of technically skilled labor. The government has identified several sectors as priorities in terms of building skilled labor capacity: agricultural engineering, ICT, medicine, medical imaging, and occupational health. Other priority fields that the government may sponsor include physiotherapy, paramedic studies, forestry, special education, clinical and dental science, and pharmacy.

The law requires that employers give first preference to Swati nationals unless they cannot find candidates with the necessary qualifications.

The Employment Act states that if an employer contemplates adjusting employment to respond to fluctuating market conditions, the employer must give no less than one month’s notice to the Labor Commissioner and the trade union. The employer must provide the number of employees to be affected, their occupations and remuneration, the reasons for the adjustment, the effective date, financial statements and audited accounts of the company, and options that have been considered to avert the situation. Section 34 of the Employment Act says if the services of an employee are terminated other than being fired, a severance allowance amounting to ten working days’ wages for each completed year in excess of one year continuously employed by that employer is due. Layoffs are defined as temporary absences from work that are necessitated by the employer facing certain difficulties that are temporary in nature, while firing refers to the sacking of an employee. There are no social safety net programs for workers who are laid off.

Labor laws are not waived in order to attract or retain investment. In 2018, Eswatini enacted the Special Economic Zones (SEZ) Act in an effort to attract foreign direct investment. In order to operate within an SEZ, a beneficiary company must meet the following minimum requirements (among others): at least 90 percent of its employees must be paid at or above the threshold for income taxation (approximately USD 330/month); at least two thirds of its employees must be Swati citizens; and the minimum capital investment must be E30 million (USD 2.1 million) for sole companies and E70 million (USD 5.0 million) for joint ventures.

The law provides that workers, except for those in essential services, have the right to form and join independent unions, conduct legal strikes, and bargain collectively. Labor unions practice collective bargaining, but there are few industry associations and bargaining is conducted largely with individual employers in the private sector. Collective bargaining is common in the financial and textile sectors.

The Conciliation, Mediation and Arbitration Commission (CMAC) serves as Eswatini’s labor dispute resolution mechanism. Labor disputes generally start at CMAC with mediation and arbitration. Either party can refuse arbitration and bring the case to the Industrial Court; however, due to severe backlogs at the court, the matter may not be heard for several years. According to the Industrial Relations Act, workers can engage in a strike action if there is an unresolved dispute.

Although the law permits strikes, the right to strike is strictly regulated, and the administrative requirements to register a legal strike made striking difficult. Strikes and lockouts are prohibited in essential services, and the minister’s power to modify the list of these essential services provides for broad prohibition of strikes in nonessential sectors, including postal services, telephone, telegraph, radio, and teaching. The procedure for announcing a strike action requires advance notice of at least seven days. The law details the steps to be followed when disputes arise and provides penalties for employers who conduct unauthorized lockouts. When disputes arise with civil servant unions, the government often intervenes to reduce the chances of a strike action, which may not be called legally until all avenues of negotiation are exhausted and a secret ballot of union members is conducted.

Eswatini has ratified the eight core ILO conventions; however, compliance gaps with international labor standards continue to remain in both law and practice. The law provides that workers, except for those in essential services, have the right to form and join independent unions, conduct legal strikes, and bargain collectively. The law provides for the registration of unions and federations but grants far-reaching powers to the labor commissioner with respect to determining eligibility for registration. Unions must represent at least 50 percent of employees in a workplace and submit their constitutions to be automatically recognized. The law also gives employers discretion to recognize a union as a collective employee representative if it has less than 50 percent membership, and furthermore, allows employers to set conditions for such recognition. The Department of Labor has inspectors who verify whether companies adhere to labor regulations, health and safety standards, and wage laws. The Minister of Labor sets minimum wages through the Wages Councils.

In 2018, Eswatini enacted a new Public Order Act that substantially loosened restrictions on public gatherings, including eliminating the requirement for prior consent for gatherings of fewer than 50 persons and completely removing restrictions on private gatherings. A gathering no longer requires permission, but instead only requires notice that provides basic information as to time, place, date, and logistics. Demonstrators no longer have to provide information as to the content of their planned speech.

There is strong potential for a DFC program in Eswatini, particularly in the renewable energy industry; however, there has been not yet been a DFC (or OPIC) project in Eswatini. The GKoE has demonstrated a commitment towards encouraging private sector investment.

*Host Country Statistical Source: Central Bank of Eswatini

Table 3: Sources and Destination of FDI
Data not available. No detailed information is available on the IMF’s Coordinated Portfolio Investment Survey (CPIS) website and no information is available on outward direct investment from Eswatini.

Table 4: Sources of Portfolio Investment
Data not available.

Political/Economic Officer
U.S. Embassy Eswatini
+268-2417-9663
Mbabane-Pol-Econ@state.gov 

Ethiopia’s regulatory system is generally considered fair, though there are instances in which burdensome regulatory or licensing requirements have prevented the local sale of U.S. exports, particularly health-related products. Investment decisions can involve multiple government ministries, lengthening the registration and investment process.

The Constitution is the highest law of the country. The parliament enacts proclamations, which are followed by regulations that are passed by the Council of Ministers and implementing directives that are passed by ministries or agencies. The government engages the public for feedback before passage of draft legislation through public meetings, and regulatory agencies request comments on proposed regulations from stakeholders. Ministries or regulatory agencies do neither impact assessments for proposed regulations nor ex-post reviews. Parties that are affected by an adopted regulation can request reconsideration or appeal to the relevant administrative agency or court. There is no requirement to periodically review regulations to determine whether they are still relevant or should be revised.

All proclamations and regulations in Ethiopia are published in official gazettes and most of them are available online: http://www.hopr.gov.et/web/guest/122  and https://chilot.me/federal-laws/2/ 

Legal matters related to the federal government are entertained by Federal Courts, while state matters go to state courts. To ensure consistency of legal interpretation and to promote predictability of the courts, the Federal Supreme Court Cassation Division is empowered to give binding legal interpretation on all federal and state matters. Though there are no publicly listed companies in Ethiopia, all banks and insurance companies are obliged to adhere to International Financial Reporting Standards (IFRS).

Regulations related to human health and environmental pollution are often enforced. In January 2019, the Oromia Region’s Environment, Forest, and Climate Change Commission shut down three tanneries in the Oromia Region for what was said to be repeated environmental pollution offenses. The federal government also suspended the business license of MIDROC Gold Mining in May 2018 following weeks of protests by local communities who accused the company of causing health and environmental hazards in the Oromia Region. In February 2019, the Ethiopian Parliament passed a bill entitled ‘Food and Medicine Administration Proclamation number 1112/2019’, which bans smoking in all indoor workplaces, public spaces, and means of public transport and prohibits alcohol promotion on broadcasting media.

In April 2020, Ethiopia published the Administrative Procedure Proclamation number 1183/2020 (APP). The APP’s aim is to allow ordinary citizens who seek administrative redress to file suits in federal courts against government institutions. Potential redress includes financial restitution. The APP’s passage will require government institutions to set up offices that will handle such complaints. Complainants are required to follow an administrative appeal process, and only after exhausting administrative remedies will a person be allowed to file a suit in federal court. Four government institutions are exempt from the APP: the Ministry of Justice (MOJ); the Ethiopian Federal Police; the Ethiopian National Defense Force, and the intelligence agencies. To foster transparency, the APP obligates all government agencies’ regulations to be registered with MOJ (https://www.eag.gov.et/en-us/Home) and be widely accessible to the public. The enactment of the APP is widely viewed as a positive step in increasing confidence in the public sector and addressing the need for governmental institutions to adhere to the rule of law.

Ethiopia is a member of UNCTAD’s international network of transparent investment procedures . Foreign and national investors can find detailed information from the investment commission’s website ( https://www.invest-ethiopia.com/ ) on administrative procedures applicable to investing in Ethiopia.

The GOE provides accurate, comprehensive, and detailed information on the enacted budget and overall government debt. However, fiscal transparency in Ethiopia continues to have several deficiencies, including the unavailability of executive budget proposals, a lack of publicly available information on state-owned enterprise (SOE) debt, poor legislative oversight of budget preparation and execution, and limited budget execution reports.

In April 2020 Ethiopia became a member of the African Continental Free Trade Area (AfCFTA). The AfCFTA aims to create a single continental market for goods and services, with free movement of businesspersons and investments. Ethiopia is also a member of the Common Market for Eastern and Southern Africa (COMESA), a regional economic block, which has 21 member countries and has introduced a 10 percent tariff reduction on goods imported from member states. Ethiopia has not yet joined the COMESA free trade area, however. Ethiopia resumed its WTO accession process in 2018, which it originally began in 2003, but which later stagnated.

Ethiopian standards have a national scope and applicability and some of them, particularly those related to human health and environmental protection, are mandatory. The Ethiopian Standards Agency is the national standards body of Ethiopia.

Ethiopia has codified criminal and civil laws, including commercial and contractual law. According to the contractual law, a contract agreement is binding between contracting parties. Disputes between the parties can be taken to court. There are, however, no specialized courts for commercial law cases, though there are specialized benches at both the federal and state courts.

While there have been allegations of executive branch interference in judiciary cases with political implications, there is no evidence of widespread interference in purely commercial disputes. The country has a procedural code for both civil and criminal court. Enforcement actions are appealable and there are at least three appeal processes from the lower courts to the Supreme Court. The Criminal Procedure Code follows the inquisitorial system of adjudication.

Companies that operate businesses in Ethiopia assert that courts lack adequate experience and staffing, particularly with respect to commercial disputes. While property and contractual rights are recognized, judges often lack understanding of commercial matters, including bankruptcy and contractual disputes. In addition, companies complain that these cases often face extended scheduling delays, and that contract enforcement remains weak. To address these issues, the federal Supreme Court issued a new court-led mediation directive, number 12/2021, which is expected to resolve disputes including commercial ones within a shortened period while reducing litigation costs for involved parties.

In March 2021, the parliament revised the Commercial Code for the first time in 60 years. The revised code modernizes and simplifies business regulations, develops regulations for new technologies not covered in the prior version, and seeks to implement greater transparency and accountability in commercial activities.

Investment Proclamation number 1180/2020 and its implementing regulation number 474/2020 are Ethiopia’s main legal regime related to FDI. These laws instituted the opening of new economic sectors to foreign investment, enumerated the requirements for FDI registration, and outlined the incentives that are available to investors.

The investment law allows foreign investors to invest in any investment area except those that are clearly reserved for domestic investors. A few specified investment areas are possible for foreign investors only as part of a joint venture with domestic investors or the government. The Investment Proclamation has introduced an Investment Council, chaired by the Prime Minister, to accelerate implementation of the new law and to address coordination challenges investors face at the federal and regional levels. Further, the new law expanded the mandate of the EIC by allowing it to provide approvals to foreign investors proposing to buy existing enterprises. The EIC now also delivers “one stop shop” services by consolidating investor services provided by other ministries and agencies. Still, the EIC delegates licensing of investments in some areas: air transport services (the Ethiopian Civil Aviation Authority), energy generation and transmission (the Ethiopian Energy Authority), and telecommunication services (the Ethiopian Communications Authority).

The EIC’s website ( https://www.invest-ethiopia.com/ ) provides information on the government’s policy and priorities, registration processes, and regulatory details. In addition, the Business Negarit website ( http://businessnegarit.com/a/resources1/ ) provides relevant laws, rules, procedures, and reporting requirements for investors.

The MOJ Trade Competition and Consumer Protection Adjudicative Bench is responsible for reviewing merger and acquisition transactions and monopolistic business practices. The bench’s decisions can be appealed to the federal Supreme Court. Post is not aware any significant competition cases during the reporting period.

The 2020 Investment Proclamation stipulates that no investment by a domestic or foreign investor or enterprise can be expropriated or nationalized, wholly or partially, except when required by public interest in compliance with the law and provided adequate compensatory payment.

The former Derg military regime nationalized many properties in the 1970s. The current government’s position is that property seized lawfully by the Derg (by court order or government proclamation published in the official gazette) remains the property of the state. In most cases, property seized by oral order or other informal means is gradually being returned to the rightful owners or their heirs through a lengthy bureaucratic process. Claimants are required to pay for improvements made by the government during the time it controlled the property. The Public Enterprises Holding and Administration Agency stopped accepting requests from owners for return of expropriated properties in July of 2008.

The Commercial Code (Book III) outlines bankruptcy provisions and proceedings and establishes a court system that has jurisdiction over bankruptcy proceedings. The primary purpose of the law is to protect creditors, equity shareholders, and other contractors. Bankruptcy is not criminalized. However, there is limited application of bankruptcy procedures in Ethiopia as the process can take years to settle.

Laws passed in parliament are available to the public on the parliament website and published in an official gazette. The lack of consultation with the private sector and other stakeholders on proposed laws and regulations remains an area of concern. The business community has complained that the government enacts new regulations with little prior notice or publicity. There is a perception among foreign investors that there is a lack of transparency in government procurement and approval processes. Some foreign investors considering investment in Fiji have encountered lengthy and costly bureaucratic delays, shuffling of permits among government ministries, inconsistent and changing procedures, lack of technical capacity, costly penalties due to the interpretation of tax regulations by the Fiji Revenue and Customs Service (FRCS), and slow decision-making. The Biosecurity Authority of Fiji (BAF) regulates all food and animal products entering Fiji and has stringent and costly point-of-origin inspection and quarantine requirements for foreign goods. The government does not require companies to file an environmental, social and governance (ESG) disclosure.

Fiji’s constitution provides for public access to government information and for the correction or deletion of false or misleading information. Although the constitution requires that a freedom of information law be enacted, there is no such law yet. Proposed bills or regulations, including investment regulations, are made available and usually posted on the relevant ministry or regulatory authority’s website. The parliamentary website ( http://www.parliament.gov.fj/ ) is a centralized online location that publishes laws and regulations passed in parliament. The government’s public finances and debt obligations are also made available annually in the budget documents.

Fiji is a member of the Melanesian Spearhead Group (MSG) that allows for the duty-free trade of goods between Fiji, Papua New Guinea, Vanuatu, and Solomon Islands. Fiji has been a member of the WTO since January 1996. According to Fiji’s trade profile on the WTO website, there are no records of disputes. Fiji ratified the WTO’s Trade Facilitation Agreement in 2017.

The legal system in Fiji developed from British law. Fiji maintains a judiciary consisting of a Supreme Court, a Court of Appeal, a High Court, and magistrate courts. The Supreme Court is the final court of appeal.

Both companies and individuals have recourse to legal treatment through the system of local and superior courts. A foreign investor theoretically has the right of recourse to the courts and tribunals of Fiji with respect to the settlement of disputes, but government laws have been used to block foreign investors from legal recourse in investment takeovers, tax increases, or write-offs of interest to the government.

The Foreign Investment Act (FIA) and the 2009 Foreign Investment Regulation regulate foreign investment in Fiji. However, these laws will be replaced when the Investment Act 2021, passed in parliament in 2021, is implemented. At time of writing, all businesses with a foreign-investment component in their ownership are required to register and obtain a Foreign Investment Registration Certificate (FIRC). Information on the registration procedures, regulations, and registration requirements for foreign investment is available at the Investment Fiji website: http://www.investmentfiji.org.fj . Amendments to the FIA also require that foreign investors seek approval prior to any changes in the ownership structure of the business, with penalties incurred for non-compliance.

The Fiji government’s bizFiji website (www.business-fiji.com), an information portal for businesses and foreign investors, includes links to the Investment Fiji website. Since the launch of bizFiji in 2019, the government has worked to develop a single online clearance system to improve registration processes, but inefficiencies remain.

The Fiji Competition and Commerce Commission (FCCC) regulates monopolies, promotes competition, and controls prices of selected hardware, basic food items, and utilities, to ensure a fair, competitive, and equitable market.

Expropriation has not historically been a common phenomenon in Fiji. A foreign investor theoretically has the same right of recourse as a Fijian enterprise to the courts and other tribunals of Fiji to settle disputes. In practice, the government has acted to assert its interests with laws affecting foreign investors.

In 2013, the government amended the Foreign Investment Decree with provisions to permit the forfeiture of foreign investments as well as significant fines for breaches of compliance with foreign investment registration conditions.

Fiji’s Companies Act 2015 has provisions relating to solvency and negative solvency. According to the 2020 World Bank Doing Business survey, prior to COVID-19, in terms of resolving insolvency, it took an estimated 1.8 years at a cost of ten percent of the estate to complete the process, with an estimated recovery rate of 46.5 percent of value.

The Securities Market Act (SMA) contains regulations on corporate disclosure procedures and requirements, responsibility for flagging share ownership, insider regulations and offenses, the issuing and marketing of securities, and trading. The clearing of securities trades is subject to licensing and is supervised by the Financial Supervision Authority. The SMA is at https://www.finlex.fi/en/laki/kaannokset/2012/en20120746_20130258.pdf .

See the Financial Supervisory Authority’s overview of regulations for listed companies here: https://www.finanssivalvonta.fi/en/capital-markets/issuers-and-investors/regulation-of-listed-companies/ . Finland is currently not a member of the UNCTAD Business Facilitation Program https://unctad.org/topic/enterprise-development/business-facilitation

The Act on the Openness of Public Documents establishes the openness of all records in the possession of officials of the state, municipalities, registered religious communities, and corporations that perform legally mandated public duties, such as pension funds and public utilities. Exceptions can only be made by law or by an executive order for reasons such as national security. For more information, see the Ministry of Justice’s page on Openness: https://oikeusministerio.fi/en/act-on-the-openness-of-government-activities . The Act on the Openness of Government Activities can be found here: https://www.finlex.fi/en/laki/kaannokset/1999/en19990621 .

In September 2021, the Ministry of Economic Affairs and Employment released a Sustainable Development Goals (SDG) Finance Roadmap – Finnish Roadmap for Financing a Decade of SDG Action 2021- report, where environmental, social and corporate governance (ESG) is promoted, as records show increasingly a positive relation between good ESG practices and investment returns and volatility. More information here: https://tem.fi/en/developing-finlands-sustainable-finance-ecosystems .

Finland ranks third on the World Justice Project (WJP) Rule of Law Index (2021) regarding constraints on government powers, absence of corruption, open government, fundamental rights, order and security, regulatory enforcement, civil justice and criminal justice. For more, see: https://worldjusticeproject.org/our-work/research-and-data/wjp-rule-law-index-2021 Finland ranks fourth on World Bank’s Global Indicators of Regulatory Governance: http://rulemaking.worldbank.org/en/data/explorecountries/finland .

Availability of official information in Finland is the best in the EU, according to a report by the Center for Data Information (2017). The newly established Digital and Population Data Services Agency (2020) is responsible for developing and maintaining the national open data portal https://www.avoindata.fi/en

In 2019, Finland passed the EU’s General Data Protection Regulation (GDPR) directive, which in parts rules conditions for the secondary use of private-sector health and social data. A single data permit authority (Findata) was established to oversee the entire data-sharing process: https://findata.fi/en/

Finland joined the Open Government Partnership Initiative (OGP) in April 2013. The global OGP-initiative aims at promoting more transparent, effective, and accountable public administration. The goal is to develop dialogue between citizens and administration and to enhance citizen engagement. The OGP aims at concrete commitments from participating countries to promote transparency, to fight corruption, to citizen participation and to the use of new technologies. Finland’s 4th national Open Government Action Plan for 2019–2023 was published in September 2019.

The current Government Program (issued in December 2019) sets openness of public information, including open data, application programming interface APIs and open source software, as key goals of the administration.

The status of Finland’s public finances is available at Statistics Finland, Finland’s official statistics agency: https://www.stat.fi/til/jul_en.html

The status of Finland’s national debt is available at the State Treasury: https://www.treasuryfinland.fi/statistics/statistics-on-central-government-debt/

Finland respects EU common rules and expects other Member States to do the same. The Government seeks to constructively combine national and joint European interests in Finland’s EU policy and seeks better and lighter regulation that incorporates flexibility for SMEs. The Government will not increase burdens detrimental to competitiveness during its national implementation of EU acts.

Finland, as a member of the WTO, is required under the Agreement on Technical Barriers to Trade (TBT Agreement) to report to the WTO all proposed technical regulations that could affect trade with other Member countries. In 2021, Finland submitted two notifications of technical regulations and conformity assessment procedures to the WTO and has submitted 105 notifications since 1995. Finland is a signatory to the WTO Trade Facilitation Agreement (TFA), which entered into force on February 22, 2017.

Finland follows European Union (EU) internal market practices, which define Finland’s trade relations both inside the EU and with non-EU countries. Restrictions apply to certain items such as products containing alcohol, pharmaceuticals, narcotics and dangerous drugs, explosives, etc. The import of beef cattle bred on hormones is forbidden. Other restrictions apply to farm products under the EU’s Common Agricultural Policy (CAP).

In March 1997 EU commitments required the establishment of a tax border between the autonomously governed, but territorially Finnish, Aland Islands and the rest of Finland. As a result, the trade of goods and services between the Aland Islands and the rest of Finland is treated as if it were trade with a non-EU area. The Aland Islands belong to the customs territory of the EU but not to the EU fiscal territory. The tax border separates the Aland Islands from the VAT and excise territory of the EU. VAT and excise are levied on goods imported across the tax border, but no customs duty is levied. In tax border trade, goods can be sold with a tax free invoice in accordance with the detailed taxation instructions of the Finnish Tax Administration.

Finland has a civil law system. European Community (EC) law is directly applicable in Finland and takes precedence over national legislation. The Market Court is a special court for rulings in commercial law, competition, and public procurement cases, and may issue injunctions and penalties against the illegal restriction of competition. It also governs mergers and acquisitions and may overturn public procurement decisions and require compensatory payments. The Court has jurisdiction over disputes regarding whether goods or services have been marketed unfairly. The Court also hears industrial and civil IPR cases.

Amendments to the Finnish Competition Act (948/2011) entered into force on June 17, 2019, and on January 1, 2020. The amendments include, most notably, changes to the Finnish Competition and Consumer Authority FCCA’s dawn raid practices, information exchange practices between national authorities and the calculation of merger control deadlines, which are now calculated in working days, rather than calendar days. On June 24, 2021, the Finnish Competition Act was amended to implement the EU ECN+ Directive, helping competition authorities to be more effective enforcers and to ensure proper functioning of the internal market. More information here: https://valtioneuvosto.fi/en/-/1410877/competition-act-amendments-aimed-at-improving-enforcement-enter-into-force-on-24-june

Finland is a party of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards since 1962. The provisions of the Convention have been included in the Arbitration Act (957/1992).

The Oikeus.fi website (https://oikeus.fi/en/index.html) contains information about the Finnish judicial system and links to the websites of the independent courts, the public legal aid and guardianship districts, the National Prosecution Authority, the National Enforcement Authority Finland, and the Criminal Sanctions Agency.

There is no primary or “one-stop-shop” website that provides all relevant laws, rules, procedures and reporting requirements for investors. A non-European Economic Area (EEA) resident (persons or companies) operating in Finland must obtain a license or a notification when starting a business in a regulated industry. A comprehensive list of regulated industries can be found at: https://www.suomi.fi/company/responsibilities-and-obligations/permits-and-obligations .

See also the Ministry of Employment and the Economy’s Regulated Trade guidelines: https://tem.fi/en/regulation-of-business-operations . The autonomously governed Aland Islands, however are an exception. Right of domicile is acquired at birth if it is possessed by either parent. Property ownership and the right to conduct business are limited to those with the right of domicile in the Aland Islands. The Aland Government can occasionally grant exemptions from the requirement of right of domicile for those wishing to acquire real property or conduct a business in Aland. This does not prevent people from settling in, or trading with, the Aland Islands. Provided they are Finnish citizens, immigrants who have lived in Aland for five years and have adequate Swedish may apply for domicile and the Aland Government can grant exemptions.

The Competition Act allows the government to block mergers where the result would harm market competition.

A December 2021 study on the need to expand the merger filing obligation by the Finnish Competition and Consumer Authority (FCCA) shows that the current national turnover thresholds allow harmful merges to escape the scrutiny of the authority. FCCA proposes that the current turnover thresholds in merger control should be lowered and, in addition, the FCCA be granted the right to require a notification when the thresholds are not met: https://www.kkv.fi/en/current/press-releases/fcca-study-expanding-the-obligation-to-notify-mergers-would-create-significant-consumer-benefit/#main-content

FCCA issued merger control guidelines in 2011: https://arkisto.kkv.fi/globalassets/kkv-suomi/julkaisut/suuntaviivat/en/guidelines-1-2011-mergers.pdf

EnterpriseFinland/Suomi.fi ( https://www.suomi.fi/company/ ) is a free online service offering information and services for starting, growing and developing a company. Users may also ask for advice through the My Enterprise Finland website: https://oma.yrityssuomi.fi/en#. Finnish legislation is available in the free online databank Finlex in Finnish, where some English translations can also be found: https://www.finlex.fi/en/laki/kaannokset/ .

The Finnish Competition and Consumer Authority FCCA protects competition by intervening in cases regarding restrictive practices, such as cartels and abuse of dominant position, and violations of the Competition Act and the Treaty on the Functioning of the European Union (TFEU). Investigations occur on the FCCA’s initiative and on the basis of complaints. Where necessary, the FCCA makes proposals to the Market Court regarding penalties. In international competition matters, the FCCA’s key stakeholders are the European Commission (DG Competition), the OECD Competition Committee, the Nordic competition authorities and the International Competition Network (ICN). FCCA rulings and decisions can be found in the archive in Finnish. More information at: https://www.kkv.fi/en/facts-and-advice/competition-affairs/ .

In September 2020, the Nordic Competition Authorities released a joint memorandum on digital platforms, setting out the Nordic perspective on issues of competition in digital markets in Europe. For more see: https://www.kkv.fi/globalassets/kkv-suomi/julkaisut/pm-yhteisraportit/nordic-report-2020-digital-platforms-and-the-potential-changes-to-competition-law-at-the-european-level.pdf

Finnish law protects private property rights. Citizen property is protected by the Constitution which includes basic provisions in the event of expropriation. Private property is only expropriated for public purposes (eminent domain), in a non-discriminatory manner, with reasonable compensation, and in accordance with established international law. Expropriation is usually based on a permit given by the government or on a confirmed plan and is performed by the District Survey Office. An expropriation permit granted by the Government may be appealed against to the Supreme Administrative Court. Compensation is awarded at full market price, but may exclude the rise in value due only to planning decisions.

Besides normal expropriation according to the Expropriation Act, a municipality or the State has the right to expropriate land for planning purposes. Expropriation is mainly for acquiring land for common needs, such as street areas, parks and civic buildings. The method is rarely used: less than one percent of land acquired by the municipalities is expropriated. Credendo Group ranks Finland’s expropriation risk as low (1), on a scale from 1 to 7: https://credendo.com/en/country-risk/finland .

ICSID Convention and New York Convention

In 1969, Finland became a member state to the World Bank-based International Center for Settlement of Investment Disputes (ICSID; Washington Convention). Finland is a signatory to the Convention of the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention).

Investor-State Dispute Settlement

The Finnish Arbitration Act (967/1992) is applied without distinction to both domestic and international arbitration. Sections 1 to 50 apply to arbitration in Finland and Sections 51 to 55 to arbitration agreements providing for arbitration abroad and the recognition and enforcement of foreign arbitral awards in Finland. Of 229 parties in 2021, the majority (208) were from Finland. There have been no reported investment disputes in Finland in recent years.

International Commercial Arbitration and Foreign Courts

Finland has a long tradition of institutional arbitration and its legal framework dates back to 1928. Today, arbitration procedures are governed by the 1992 Arbitration Act (as amended), which largely mirrors the UNCITRAL Model Law on International Commercial Arbitration of 1985 (with amendments, as adopted in 2006). The UNCITRAL Model law has not yet, however, been incorporated into Finnish Law.

Finland’s Act on Mediation in Civil Disputes and Certification of Settlements by Courts (394/2011) aims to facilitate alternative dispute resolution (ADR) and promote amicable settlements by encouraging mediation, and applies to settlements concluded in other EU member states: https://www.finlex.fi/en/laki/kaannokset/2011/en20110394.pdf . In June 2016, the Finland Arbitration Institute of the Chamber of Commerce (FAI) launched its Mediation Rules under which FAI will administer mediations: https://arbitration.fi/mediation/mediation_rules/ .Any dispute in a civil or commercial matter, international or domestic, which can be settled by agreement may be referred to arbitration. Arbitration is frequently used to settle commercial disputes and is usually faster than court proceedings. An arbitration award is final and binding. FAI promotes the settlement of disputes through arbitration, commonly using the “FAI Arbitration/Expedited Arbitration Rules”, which were updated in 2020: https://arbitration.fi/wp-content/uploads/sites/22/2020/01/arbitration-rules-of-the-finland-chamber-of-commerce-2020.pdf

The Finland Arbitration Institute (FAI) appoints arbitrators both to domestic and international arbitration proceedings, and administers domestic and international arbitrations governed by its rules. It also appoints arbitrators in ad hoc cases when the arbitration agreement so provides, and acts as appointing authority under the UNCITRAL Arbitration Rules. The Finnish Arbitration Act (967/1992) states that foreign nationals can act as arbitrators. For more information see: https://arbitration.fi/arbitration/

Finland signed the UN Convention on Transparency in Treaty-based Investor-State Arbitration (“Mauritius Convention”) in March 2015. Under these rules, all documents and hearings are open to the public, interested parties may submit statements, and protection for confidential information has been strengthened.

The Finnish Bankruptcy Act was amended and the amendments took effect on July 1, 2019. The main objectives of these amendments were to simplify, digitize and speed-up bankruptcy proceedings. The amended Bankruptcy Act allows administrators to send notices and invitations to creditor addresses registered in the Trade Register. This will improve accessibility for foreign companies that have established a branch in Finland. Administrators of bankruptcy and restructuring proceedings must upload data and documentation to the bankruptcy and restructuring proceedings case management system (KOSTI). KOSTI is available only in Finnish for creditors located in Finland due to the strong ID requirements.

The Reorganization of Enterprises Act (1993/47), https://www.finlex.fi/fi/laki/kaannokset/1993/en19930047, establishes a legal framework for reorganization with the aim to provide an alternative to bankruptcy proceedings. The Act excludes credit and insurance institutions and certain other financial institutions. Recognition of restructuring or insolvency processes initiated outside of the EU requires an exequatur from a Finnish court.

The bankruptcy ombudsman, https://www.konkurssiasiamies.fi/en/index.html , supervises the administration of bankruptcy estates in Finland. The Act on the Supervision of the Administration of Bankruptcy Estates dictates related Finnish law: https://www.konkurssiasiamies.fi/material/attachments/konkurssiasiamies/konkurssiasiamiehentoimistonliitteet/6JZrLGPN1/Act_on_the_Supervision_of_the_Administration_of_Bankruptcy_Estates.pdf .

Finland can be considered creditor-friendly; enforcement of liabilities through bankruptcy proceedings as well as execution outside bankruptcy proceedings are both effective. Bankruptcy proceedings are creditor-driven, with no formal powers granted to the debtor and its shareholders. The rights of a secured creditor are also quite extensive.

According to data collected by the World Bank’s 2020 Doing Business Report, resolving insolvency takes 11 months on average and costs 3.5 percent of the debtor’s estate. The average recovery rate is 88 cents on the dollar. Globally, Finland ranked first of 190 countries on the ease of resolving insolvency in the Doing Business 2020 report : https://www.doingbusiness.org/content/dam/doingBusiness/country/f/finland/FIN.pdf

The French government has made considerable progress in the last decade on the transparency and accessibility of its regulatory system. The government generally engages in industry and public consultation before drafting legislation or rulemaking through a regular but variable process directed by the relevant ministry. However, the text of draft legislation is not always publicly available before parliamentary approval. U.S. firms may also find it useful to become members of industry associations, which can play an influential role in developing government policies. Even “observer” status can offer insight into new investment opportunities and greater access to government-sponsored projects.

To increase transparency in the legislative process, all ministries are required to attach an impact assessment to their draft bills. The Prime Minister’s Secretariat General (SGG for Secretariat General du Gouvernement) is responsible for ensuring that impact studies are undertaken in the early stages of the drafting process. The State Council (Conseil d’Etat), which must be consulted on all draft laws and regulations, may reject a draft bill if the impact assessment is inadequate.

After experimenting with new online consultations, the Macron Administration is regularly using this means to achieve consensus on its major reform bills. These consultations are often open to professionals as well as citizens at large. Another innovation is to impose regular impact assessments after a bill has been implemented to ensure its maximum efficiency, revising, as necessary, provisions that do not work in favor of those that do.

Over past decades, major reforms have extended the investigative and decision-making powers of France’s Competition Authority. On April 11, 2019, France implemented the European Competition Network (ECN) Directive, which widens the powers of all European national competition authorities to impose larger fines and temporary measures. The Authority publishes its methodology for calculating fines imposed on companies charged with abuse of a dominant position. It issues specific guidance on competition law compliance, and government ministers, companies, consumer organizations, and trade associations now have the right to petition the authority to investigate anti-competitive practices. While the Authority alone examines the impact of mergers on competition, the Minister of the Economy retains the power to request a new investigation or reverse a merger transaction decision for reasons of industrial development, competitiveness, or saving jobs.  The Competition Authority continues to simplify takeover and merger notifications with online procedures via a dedicated platform in 2020 and updated guidelines in English released on January 11, 2021. Since January 2021, the Competition Authority has a new President, Benoît Cœuré, who intends to focus on the impact of the Cloud on all sectors of the French economy.

France’s budget documents are comprehensive and cover all expenditures of the central government. An annex to the budget also provides estimates of cost sharing contributions, though these are not included in the budget estimates. Last September, the French government published its first “Green Budget,” as an annex to the 2021 Finance Bill. This event attests to France’s strong commitment, notably under the OECD-led “Paris Collaborative on Green Budgeting” (which France joined in December 2017), to integrate “green” tools into the budget process. In its spring report each year, the National Economic Commission outlines the deficits for the two previous years, the current year, and the year ahead, including consolidated figures on taxes, debt, and expenditures. Since 1999, the budget accounts have also included contingent liabilities from government guarantees and pension liabilities.  The government publishes its debt data promptly on the French Treasury’s website and in other documents. Data on nonnegotiable debt is available 15 days after the end of the month, and data on negotiable debt is available 35 days after the end of the month.  Annual data on debt guaranteed by the state is published in summary in the CGAF Report and in detail in the Compte de la dette publique. More information can be found at:  https://www.imf.org/external/np/rosc/fra/fiscal.htm 

France was the first country to include extra-financial reporting in its 2001 New Economic Regulations Law. To encourage companies to develop a social responsibility strategy and limit the negative externalities of globalized trade, the law requires French companies with more than 500 employees and annual revenues above €100 million ($106 million) to report on the social and environmental consequences of their activities and include them in their annual management report. A 2012 decree on corporate social and environmental transparency obligations requires portfolio management companies to incorporate environmental, social, and governance (ESG) criteria in their investment process.

France’s 2015 Law on Energy Transition for Green Growth strengthened mandatory carbon disclosure requirements for listed companies and introduced carbon reporting for institutional investors. It requires investors (defined as asset owners and investment managers) to disclose in their annual investor’s report and on their website how they factor ESG criteria and carbon-related considerations into their investment policies. The regulation concerns all asset classes: listed assets, venture capital, bonds, physical assets, etc.

France is a founding member of the European Union, created in 1957. As such, France incorporates EU laws and regulatory norms into its domestic law. France has been a World Trade Organization (WTO) member since 1995 and a member of GATT since 1948. While developing new draft regulations, the French government submits a copy to the WTO for review to ensure the prospective legislation is consistent with its WTO obligations. France ratified the Trade Facilitation Agreement in October 2015 and has implemented all of its TFA commitments.

French law is codified into what is sometimes referred to as the Napoleonic Code, but is officially the Code Civil des Français, or French Civil Code. Private law governs interactions between individuals (e.g., civil, commercial, and employment law) and public law governs the relationship between the government and the people (e.g., criminal, administrative, and constitutional law).

France has an administrative court system to challenge a decision by local governments and the national government; the State Council (Conseil d’Etat) is the appellate court. France enforces foreign legal decisions such as judgments, rulings, and arbitral awards through the procedure of exequatur introduced before the Tribunal de Grande Instance (TGI), which is the court of original jurisdiction in the French legal system.

France’s Commercial Tribunal (Tribunal de Commerce or TDC) specializes in commercial litigation.  Magistrates of the commercial tribunals are lay judges, who are well known in the business community and have experience in the sectors they represent. Decisions by the commercial courts can be appealed before the Court of Appeals. France’s judicial system is procedurally competent, fair, and reliable and is independent of the government.

The judiciary – although its members are state employees – is independent of the executive branch. The judicial process in France is known to be competent, fair, thorough, and time-consuming. There is a right of appeal. The Appellate Court (cour d’appel) re-examines judgments rendered in civil, commercial, employment or criminal law cases. It re-examines the legal basis of judgments, checking for errors in due process and reexamines case facts. It may either confirm or set aside the judgment of the lower court, in whole or in part. Decisions of the Appellate Court may be appealed to the Highest Court in France (cour de cassation).

The French Financial Prosecution Office (Parquet National Financier, or PNF), specialized in serious economic and financial crimes, was set up by a December 6, 2013 law and began its activities on February 1, 2014.

Foreign and domestic private entities have the right to establish and own business enterprises and engage in all sorts of remunerative activities. U.S. investment in France is subject to the provisions of the Convention of Establishment between the United States of America and France, which was signed in 1959 and remains in force. The rights it provides U.S. nationals and companies include:  rights equivalent to those of French nationals in all commercial activities (excluding communications, air transportation, water transportation, banking, the exploitation of natural resources, the production of electricity, and professions of a scientific, literary, artistic, and educational nature, as well as certain regulated professions like doctors and lawyers). Treatment equivalent to that of French or third-country nationals is provided with respect to transfer of funds between France and the United States. Property is protected from expropriation except for public purposes; in that case it is accompanied by payment that is just, realizable and prompt.

Potential investors can find relevant investment information and links to laws and investment regulations at  http://www.businessfrance.fr/ .

Major reforms have extended the investigative and decision-making powers of France’s Competition Authority. France implemented the European Competition Network, or ECN Directive, on April 11, 2019, allowing the French Competition Authority to impose heftier fines (above €3 million / $3.3 million) and temporary measures to prevent an infringement that may cause harm. The Authority issues decisions and opinions mostly on antitrust issues, but its influence on competition issues is growing. For example, following a complaint in November 2019 by several French, European, and international associations of press publishers against Google over the use of their content online without compensation, the Authority ordered the U.S. company to start negotiating in good faith with news publishers over the use of their content online. On December 20, 2019, Google was fined €150 million ($177 million) for abuse of dominant position. Following an in-depth review of the online ad sector, the Competition Authority found Google Ads to be “opaque and difficult to understand” and applied in “an unfair and random manner.” On November 17, 2021, the Competition Authority brokered a “pioneering” five-year deal between the CEOs of Google and French news agency Agence France-Presse for the search giant to pay for the French news agency’s content. The deal covers the entirety of the EU and follows 18 months of negotiations. It is the first such deal by a news agency under Article 15 of the 2019 European directive creating a neighboring right for the benefit of press agencies and press publishers when online services reproduce press publications in search engine results. France was the first EU member state to implement Article 15 through its July 24, 2019 law, which came into force on October 24, 2019.

Additional U.S. firms also continue to fall under review of the Competition Authority. For example, it fined Apple $1.3 billion on March 16, 2020, for antitrust infringements involving the restriction of intra-brand competition and the rarely used French law concept of “abuse of economic dependency.”

The Competition Authority launches regular in-depth investigations into various sectors of the economy, which may lead to formal investigations and fines. The Authority publishes its methodology for calculating fines imposed on companies charged with abuse of a dominant position. It issues specific guidance on competition law compliance. Government ministers, companies, consumer organizations and trade associations have the right to petition the authority to investigate anti-competitive practices. While the Authority alone examines the impact of mergers on competition, the Minister of the Economy retains the power to request a new investigation or reverse a merger transaction decision for reasons of industrial development, competitiveness, or saving jobs.

A new law on Economic Growth, Activity and Equal Opportunities (known as the “Macron Law”), adopted in August 2016, vested the Competition Authority with the power to review mergers and alliances between retailers ex-ante (beforehand). The law provides that all contracts binding a retail business to a distribution network shall expire at the same time. This enables the retailer to switch to another distribution network more easily. Furthermore, distributors are prohibited from restricting a retailer’s commercial activity via post-contract terms. The civil fine incurred for restrictive practices can now amount to up to five percent of the business’s revenue earned in France.

In accordance with international law, the national or local governments cannot legally expropriate property to build public infrastructure without fair market compensation. There have been no expropriations of note during the reporting period.

France has extensive and detailed bankruptcy laws and regulations. Any creditor, regardless of the amount owed, may file suit in bankruptcy court against a debtor. Foreign creditors, equity shareholders and foreign contract holders have the same rights as their French counterparts. Monetary judgments by French courts on firms established in France are generally made in euros.  Not bankruptcy itself, but bankruptcy fraud – the misstatement by a debtor of his financial position in the context of a bankruptcy – is criminalized. Under France’s bankruptcy code managers and other entities responsible for the bankruptcy of a French company are prevented from escaping liability by shielding their assets (Law 2012-346).  France has adopted a law that enables debtors to implement a restructuring plan with financial creditors only, without affecting trade creditors.  France’s Commercial Code incorporates European Directive 2014/59/EU establishing a framework for the recovery and resolution of claims on insolvent credit institutions and investment firms.  In the World Bank’s 2020 Doing Business Index, France ranked 32nd of 190 countries on ease of resolving insolvency.

The Bank of France, the country’s only credit monitor, maintains files on persons having written unfunded checks, having declared bankruptcy, or having participated in fraudulent activities. Commercial credit reporting agencies do not exist in France.

Government policies and laws often do not establish clear rules of the game, and foreign firms can have difficulty navigating the bureaucracy. Despite reform efforts, hurdles and red tape remain, especially at the lower and mid-levels of the ministries. Lack of transparency in administrative processes and lengthy bureaucratic delays occasionally raise questions for companies about fair treatment and the sanctity of contracts.

Rule-making and regulatory authority rests at the ministerial level. There are no nongovernmental organizations or private sector associations that manage informal regulatory processes. The government of Gabon has not exhibited any recent tendency to discriminate against U.S. investments, companies, or representatives.

The government does not publish proposed laws and regulations in draft form for public comment. There are no centralized online locations where key regulatory actions or their summaries are published. Key regulatory actions are published in the government’s printed Official Journal. It is not uncommon for legislative proposals to be provided “off the record” to the press.

Gabon is affiliated with the Organization for the Harmonization of Corporate Law in Africa (Organisation pour l’harmonisation en Afrique du droit des affaires, OHADA, http://www.ohada.com/ ).

The Transformation Acceleration Plan (PAT) is a new structure of enforcement of mechanisms to ensure governments follow administrative processes and was launched in January 2021 in response to a request by the IMF for a transparency enforcement mechanism. The PAT will monitor the implementation of administrative processes, and regularly transmit the monitoring information necessary for decision-making to the President of the Republic and the Prime Minister.

No new regulatory systems have been announced in the last year, and no new reforms have been implemented in the last year.

Gabon lacks transparency on public finances and debt obligations, with limited availability of public documents.

Gabon is a member of CEMAC, along with Cameroon, the Central African Republic, the Republic of Congo, Equatorial Guinea, and Chad. Gabon is also a member of the larger Economic Community of Central African States (ECCAS), which is headquartered in Gabon and has 11 members: Gabon, Angola, Burundi, Cameroon, Central African Republic, Chad, the Republic of Congo, Democratic Republic of Congo, Equatorial Guinea, Rwanda, and São Tomé and Príncipe. Both CEMAC and ECCAS work to promote economic cooperation among members.

Gabon is a member of OHADA, which includes nine validated Uniform Acts: General Commercial Law, Commercial Companies and Economic Interest Groups, Secured Transactions Law, Debt Resolution Law, Insolvency Law, Arbitration Law, Harmonization of Corporate Accounting, Contracts for the Carriage of Goods, and Cooperatives Companies Law.

Gabon has been a member of the WTO since January 1, 1995. It fulfills its duties on notification of all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).

Gabon’s legal system is based on French Civil Law. Regular courts handle commercial disputes in compliance with OHADA’s standards. Courts do not apply the law consistently, however, and delays are frequent in the judicial system. A lack of transparency in administrative processes and lengthy bureaucratic delays call into question the country’s commitment to fair treatment and the sanctity of contracts. Judicial capacity is weak, and many government contacts underscore the need for specialized training in technical issues, such as money laundering and environmental crimes. Foreign court and international arbitration decisions are accepted, but enforcement may be difficult.

Gabon has a written code of commercial law.

Gabon’s judicial system is not independent from its executive branch, making it subject to political influence, which creates uncertainty around the fair treatment and the sanctity of contracts. Regulations or enforcement actions are appealable and are adjudicated in the national court system.

Gabon’s 1998 investment code, which gives foreign companies operating in Gabon the same rights as domestic firms, allows foreign investors to choose freely from a wide selection of legal business structures, such as a private limited liability company or a public limited liability company. The distinctions arise primarily from the minimum capital requirements and the conditions under which shares may be re-sold. Foreign investment in Gabon is subject to local law that is in many instances unsettled or unclear, and in certain cases, Gabonese law may require local majority ownership of businesses. The state reserves the right to invest in the equity capital of ventures established in certain sectors (e.g., petroleum and mining). There are no known systemic practices by private firms to restrict foreign investment, participation, or control.

No major related laws have been passed this past year.

ANPI-Gabon’s website contains most investment-related information in Gabon: https://www.investingabon.ga/ .

There are no specific ministries in charge of reviewing transactions and conduct for competition-related concerns. That responsibility lies with the ministry that is party to a contract.

The Gabonese Law No. 14/1998 of July 23, 1998, on the Establishment of the Competition Regime of Gabon on Competition covers all aspects of competition and anti-trust measures.

Foreign firms established in Gabon operate on an equal legal basis with national companies. Businesses are protected from expropriation or nationalization without appropriate compensation, as determined by an independent third party.

The Gabonese government has not exhibited a tendency to expropriate, nor have there been any indications or reports of incidences of indirect expropriation.

Gabon has a bankruptcy law, but it is not well developed. In the World Bank’s Ease of Doing Business Report 2020 (http://documents.worldbank.org/curated/en/134861574860295761/pdf/Doing-Business-2020-Comparing-Business-Regulation-in-190-Economies-Economy-Profile-of-Gabon.pdf ), Gabon ranked 130 out of 190 economies on the ease of resolving insolvency.

Gabon’s bankruptcy law is based on OHADA regulations. According to Section 3: Art 234-239 of OHADA’s Uniform Insolvency Act, creditors and equity shareholders, collectively or individually, may designate trustees to lodge complaints or claims to the commercial court. These laws criminalize bankruptcy, and the OHADA regulations grant Gabon the discretion to apply its own remedies.

Georgia’s legal, regulatory, and accounting systems are transparent and consistent with international norms, and the Georgian government has committed to achieving even greater transparency and simplicity of regulations for these systems.

In Georgia, the lawmaking process involves Parliament (drafting and consideration) and the President (signing). Under Georgia’s constitution, the following subjects have the right to initiate legislation: the President, the government, members of Parliament, a committee, faction, the representative bodies of the Autonomous Republics of Abkhazia and Adjara, and groups of at least 30,000 voters.

A subject who does not have the right to launch a legislative initiative does, however, has the right to submit a “legislative proposal,” which should be a well-reasoned address to Parliament advocating for the adoption of a new law or of changes/amendments to existing legislation. According to Article 150 of the Law on Parliament, the following can submit a legislative proposal: citizens of Georgia, state bodies (except the establishments of the executive branch of government), the representative and executive bodies of local self-government, political and public unions registered in Georgia according to the established rule, and other legal entities.

There are no informal regulatory processes managed by nongovernmental organizations or private sector associations, except their entitlement for participating in the law-making process prescribed by the above law. Publicly listed companies are required to prepare financial statements in accordance with IFRS – International Financial Reporting Standards. Draft bills or regulations are available for public comment. NGOs, professional associations, and business chambers actively participate in public hearings on legislation. The government publishes laws and regulations in Georgian in the official online legislative herald gazette, the Legislative Messenger, ‘Matsne’ ( www.matsne.gov.ge ). Another online tool to research Georgian legislation is www.codex.ge  or the webpage of the Parliament of Georgia, www.parliament.ge .

General oversight of the executive branch is vested in the parliament. The new Constitution, which entered into force in December 2018, and subsequently adopted new Parliamentary Rules and Procedures, aims to strengthen Parliament’s oversight role. Under their strengthened roles, public officials are obliged to respond to Parliament’s questions. Government institutions also submit annual reports. However, local watchdog organizations continue to raise concerns that one party controls all branches of government, undermining checks and balances. Independent agencies, such as the State Audit Office the Ombudsman’s office (including the Business Ombudsman), and business associations also provide an oversight function. Georgia maintains an active civil society that frequently reports on government activities.

Georgia has six types of taxes: corporate profit tax (0% or 15%; no corporate income tax on retained and reinvested profit; profit tax applies only to distributed earnings), value added tax (VAT; 18%), property tax (up to 1%), personal income tax (20%), excise (on few selected goods), and import tax (0%, 5% or 12%). Dividend income tax is five percent. There are no dividend or capital gains taxes for publicly traded equities (a free float in excess of 25 percent). Georgia imposes excise taxes on cigarettes, alcohol, fuel, and mobile telecommunication. Most goods, except for some agricultural products, have no import tariffs. For goods with tariffs, the rates are five or 12 percent, unless excluded by an FTA.

Detailed information on the types and rates of taxes applicable to businesses and individuals, as well as a payment calendar, is available on the Georgia Revenue Service website: http://www.rs.ge/ .

In 2019, the Georgian government introduced new regulations to simplify the tax regime and streamline processes for small businesses. The new legislation decreased turnover tax from five percent to one percent for small businesses and defined small business as those with less than GEL 500,000 ($160,000) annual turnover, a fivefold increase from the previous GEL 100,000 ($30,000) threshold. In addition, the new regulations allow small businesses to pay taxes by the end of month, instead of requiring advance payments. For medium and large businesses, the reform introduced an automatic system of VAT returns and activated a special system whereby entrepreneurs can pay VAT returns in five to seven business days by filling out an electronic application.

Enterprise Georgia operates the Business Service Center in Tbilisi, which provides domestic and foreign businesses with information on doing business in Georgia. The Business Service Center facilitates an online chat tool for interested individuals ( http://www.enterprisegeorgia.gov.ge/en/SERVICE-CENTER ). Additionally, the Investor’s Council provides an opportunity for the private sector to discuss legislative reforms, economic development plans, and actions to spur economic growth with the government. Different commercial chambers, such as the American Chamber of Commerce ( www.amcham.ge ), International Chamber of Commerce ( www.icc.ge ), Business Association of Georgia ( www.bag.ge ), Georgian Chamber of Commerce and Industry ( www.gcci.ge ), and EU-Georgia Business Council ( http://eugbc.net ) remain important tools for facilitating ongoing dialogue between domestic and foreign business communities and the government.

International accounting standards are binding for joint stock companies, banks, insurance companies, companies operating in the insurance field, limited liability companies, limited partnerships, joint liability companies, and cooperatives. Private companies are required to perform accounting and financial reporting in accordance with international accounting standards. Sole entrepreneurs, small businesses, and non-commercial legal entities perform accounting and financial reporting according to simplified interim standards approved by the Parliamentary Accounting Commission. Shortcomings in the use of international accounting standards persist, and qualified accounting personnel are in short supply.

The Law of Georgia on Free Trade and Competition provides for the establishment of an independent structure, the Competition Agency, to exercise effective state supervision over a free, fair, and competitive market environment. Nonetheless, certain companies have dominant positions in pharmaceutical, petroleum, and other sectors.

Public finances and debt obligations are transparent, and Georgia’s budget and information on debt obligations were widely and easily accessible to the public through government websites including the Ministry of Finance’s site ( www.mof.gov.ge ). Georgia’s State Audit Office ( www.sao.ge ) reviews the government’s accounts and makes its reports publicly available.

Georgia’s Association Agreement of 2014 with the European Union introduced a preferential trade regime, the DCFTA, which increased market access between the EU and Georgia based on better-aligned regulations. The agreement is designed to introduce European standards gradually in all spheres of Georgia’s economy and sectoral policy: infrastructure, energy, the environment, agriculture, tourism, technological development, employment and social policy, health protection, education, culture, civil society, and regional development. It also provides for the approximation of Georgian laws with nearly 300 separate European legislative acts.

The DCFTA should promote a gradual approximation with European standards for food safety, establish a transparent and stable business environment in Georgia, increase Georgia’s potential to attract investment, introduce innovative approaches and new technologies, stimulate economic growth, and support the country’s economic development. The latest progress report, adopted by the European Parliament on September 17, 2020, confirmed Georgia’s continued progress on the implementation of the agreement.

Georgia has been a WTO member since 2000 and consistently meets requirements and obligations included in the Agreement on Trade Related Investment Measures. Since WTO accession, Georgia has not introduced any Technical Barriers to Trade. In January 2016, Georgia ratified the WTO Trade Facilitation Agreement.

Georgia’s legal system is based on civil law and the country has a three-tiered court system. The first tier consists of 25 trial courts throughout the country that hear criminal, civil, and administrative cases. Two appellate courts, Tbilisi Appeal Court (East Georgia) and Kutaisi Appeal Court (West Georgia), represent the second tier. The Supreme Court of Georgia occupies the third, or the highest, instance and acts as the highest appellate court. In addition, there is a separate Constitutional Court for arbitrating constitutional disputes between branches of government and ruling on individual claims concerning human rights violations stemming from the Constitution.

Georgia does not have an integrated commercial code. There are several different laws and codes (Tax Code, Law on Entrepreneurs, and Law on Insolvency) that regulate commercial activity in Georgia. There are no specialized courts, such as a commercial court, to handle commercial disputes; however, in Tbilisi there are specialized court panels that handle high value disputes, including some commercial disputes. The Ministry of Justice’s Public Service Halls provide property registration.

The lack of independence of Georgia’s judiciary and political inference in the judicial system, especially in high-profile cases, is troubling.  Concerns regarding the integrity of the judicial appointment process and the capacity of the courts to deliver quality outcomes continue to affect investor confidence in the court system.  The Government’s hesitance to conduct a full assessment of the judicial system to ensure full compliance with Venice Commission recommendations further undermines faith in the independence of the judiciary.  OECD’s 2020 IPR notes the Georgian government’s efforts to strengthen the judiciary to improve the country’s business and investment environment under its Georgia 2020 strategy.  However, the report highlights that “the existing framework for adjudication of civil disputes in Georgian courts nonetheless continues to suffer from several significant problems despite the reforms.  Foremost of these are persisting concerns with the independence, accountability, and capacity of the High Council of Justice and the judiciary.  Many investors perceive Georgia’s court processes as slow, inefficient, lacking in transparency, and hampered by a lack of technical expertise.  All these issues affect public trust in the judicial system.  They are among the most pressing concerns for investors in their assessments of the investment climate in Georgia.”  The full OECD report is available at https://www.oecd.org/countries/georgia/oecd-investment-policy-reviews-georgia-0d33d7b7-en.htm. Regulations and enforcement actions are appealable and are adjudicated in the national court system.

The U.S.-Georgia Bilateral Investment Treaty (BIT) guarantees U.S. investors national treatment and most favored nation treatment. Exceptions to national treatment have been carved out for Georgia in certain sectors, such as maritime fisheries, air, and maritime transport and related activities, ownership of broadcast, common carrier, or aeronautical radio stations, communications satellites, government-supported loans, guarantees, and insurance, and landing of submarine cables.

Georgia’s legal system is based on civil law. Legislation governing foreign investment includes the Constitution, the Civil Code, the Tax Code, and the Customs Code. Other relevant legislation includes the Law on Entrepreneurs, the Law on Promotion and Guarantee of Investment Activity, the Bankruptcy Law, the Law on Courts and General Jurisdiction, the Law on Limitation of Monopolistic Activity, the Accounting Law, and the Securities Market Law.

Ownership and privatization of property is governed by the following acts: the Civil Code, the Law on Ownership of Agricultural Land, the Law on Private Ownership of Non-Agricultural Land, the Law on Management of State-Owned Non-Agricultural Land, and the Law on Privatization of State Property. Property rights in extractive industries are governed by the Law on Concessions, the Law on Deposits, and the Law on Oil and Gas. Intellectual property rights are protected under the Civil Code and the Law on Patents and Trademarks. Financial sector legislation includes the Law on Commercial Banks, the Law on National Banks, and the Law on Insurance Activities.

Information about the procedures and requirements during the investment process is available in English Language at the Invest in Georgia (by Enterprise Georgia) website: https://investingeorgia.org/en/downloads/useful-guides 

The Georgian Law “On Free Trade and Competition” of 2005 that governs competition is in line with the Georgian Constitution and international agreements.

The agency in charge of reviewing transactions for competition-related concerns is the Competition Agency, an independent legal entity of public law, subordinated to the Prime Minister of Georgia. The agency aims to promote market liberalization, free trade, and competition ( www.competition.ge ). Competition Agency decisions can be appealed at court. Georgia has also signed several international agreements containing competition provisions, including the EU-Georgia Association Agreement (AA). The DCFTA within the AA goes further than most FTAs, with regulatory alignment, the elimination of non-tariff barriers, and binding rules on investments and services.

In July 2020, Georgia adopted the Law of Georgia on the Introduction of Anti-dumping Measures in Trade  that became effective January 1, 2021. The aim of the law is to protect local industry from price dumping on imports. The Law establishes the basic conditions and rules for the introduction of anti-dumping measures to be implemented when importing goods via the customs territory of Georgia.

In 2022, the Georgian Parliament adopted a bill on Consumer Protection, which is an essential component among the obligations under the EU-Georgia Association Agreement; it establishes rules for consumer protection and prohibits “unfair commercial practices” that violate the values of “trust and good faith.”  The National Competition Agency is responsible for executing the Consumer Protection law.

The Georgian Constitution protects property ownership rights, including ownership, acquisition, disposal, and inheritance of property. Foreign citizens living in Georgia possess rights and obligations equal to those of the citizens of Georgia, except for certain property rights (see Section 5). The Constitution allows restriction or revocation of property rights only in cases of extreme public necessity, and then only as allowed by law.

The Law on Procedures for Forfeiture of Property for Public Needs establishes the rules for expropriation in Georgia. The law allows expropriation for certain enumerated public needs, establishes a mechanism for valuation and payment of compensation, and provides for court review of the valuation at the option of any party. The Georgian Law on Investment allows expropriation of foreign investments only with appropriate compensation. Amendments to the Law on Procedures for Forfeiture of Property for Public Needs allow payment of compensation with property of equal value as well as money. Compensation includes all expenses associated with the valuation and delivery of expropriated property. Compensation must be paid without delay and must include both the value of the expropriated property as well as the loss suffered by the foreign investor because of expropriation. The foreign investor has a right to review an expropriation in a Georgian court. In 2007, Parliament passed a law generally prohibiting the government from contesting the privatization of real estate sold by the government before August 2007. The law is not applicable, however, to certain enumerated properties.

The U.S.-Georgia BIT permits expropriation of covered investments only for a public purpose, in a non-discriminatory manner, upon payment of prompt, adequate and effective compensation, and in accordance with due process of law and general principles of fair treatment.

Expropriation disputes are not common in Georgia, although under the previous government there were cases of property transfers that lacked transparency and allegedly were implemented under coercion.

On 1 April 2021, a new insolvency law, “On Rehabilitation and Collective Satisfaction of Creditors,” entered into force in Georgia. The main aim of the law is to protect the interests of the creditors, promote mechanisms for rehabilitation, strengthen the role of the courts during the insolvency proceedings, and separate and clarify the rights and responsibilities of individuals involved in the process and the creation of fair regulations. This law has eased the process for struggling businesses to return to growth.

The law defines two types of creditors: secured and non-secured. Creditors can file a court claim for opening an insolvency proceeding, given certain conditions are satisfied (conditions vary, depending on the outstanding debt amount and the delayed days of repayment). Creditor meetings are held in court and chaired by a judge. The creditor meeting can decide several issues, including the appointment of a supervisor of the bankruptcy or rehabilitation proceedings, and the appointment of a member of the facilitation council.

Secured creditors: Secured creditors must make unanimous decisions on approving a debtor’s new debts, the encumbrance of the debtor’s property, and suretyship. If there are no secured creditors, the creditor’s meeting is authorized to make the same decisions. The secured creditors, in a creditor’s meeting, may suspend enforcement of the material conditions of the agreement with the bankruptcy or rehabilitation supervisor or on the definition of the terms of the rehabilitation. After the debtor’s property is sold on auction, secured creditors have priority for being repaid. All secured creditors must approve the rehabilitation plan and plan amendments. New equity investment in the debtor’s company is only possible if there are prior consents from all secured creditors and the rehabilitation supervisor.

Non-secured creditors: Non-secured creditors are satisfied only after all secured creditors are satisfied (unless otherwise agreed by all creditors unanimously). Non-secured creditors do not have voting rights for the rehabilitation plan approval.

The priority system shall not apply to creditors whose claim is secured by financial collateral.

Foreign creditors: The law provides additional time for foreign creditors to file claims. Creditors may file claims to the court and request to declare the agreements made by the insolvent debtor voidable and/or request reimbursement of damages, if such agreements inflicted damages to the creditor.

The Debt Registry of the National Agency of the Public Register is Georgia’s credit monitoring authority.

Germany has transparent and effective laws and policies to promote competition, including antitrust laws. The legal, regulatory, and accounting systems are complex but transparent and consistent with international norms.

Public consultation by federal authorities is regulated by the Joint Rules of Procedure, which specify that ministries must consult early and extensively with a range of stakeholders on all new legislative proposals. In practice, laws and regulations in Germany are routinely published in draft form for public comment. According to the Joint Rules of Procedure, ministries should consult the concerned industries’ associations, consumer organizations, environmental, and other NGOs. The consultation period generally takes two to eight weeks.

The German Institute for Standardization (DIN), Germany’s independent and sole national standards body representing Germany in non-governmental international standards organizations, is open to German subsidiaries of foreign companies.

As a member of the European Union, Germany must observe and implement directives and regulations adopted by the EU. EU regulations are binding and enter into force as immediately applicable law. Directives, on the other hand, constitute a type of framework law that Member States transpose via their respective legislative processes. Germany regularly adheres to this process.

EU Member States must transpose directives within a specified time period. Should a deadline not be met, the Member State may suffer the initiation of an “infringement procedure,” which could result in steep fines. Germany has a set of rules that prescribe how to break down any payment of fines devolving to the Federal Government and the federal states (Länder). Both bear part of the costs. Payment requirements by the individual states depend on the size of their population and the respective part they played in non-compliance. In 2020, the Commission opened 28 new infringement cases against Germany; at year-end, 79 total infringement cases remained open against Germany.

In accordance with WTO membership requirements, the Federal Government notifies draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT) through the Federal Ministry of Economic Affairs and Energy.

German law is stable and predictable.  Companies can effectively enforce property and contractual rights.  Germany’s well-established enforcement laws and official enforcement services ensure investors can assert their rights.  German courts are fully available to foreign investors in an investment dispute.

The judicial system is independent, and the government does not interfere in the court system.  The legislature sets the systemic and structural parameters, while lawyers and civil law notaries use the law to shape and organize specific situations.  Judges are highly competent and impartial. International studies and empirical data have attested that Germany offers an effective court system committed to due process and the rule of law.

In Germany, most important legal issues and matters are governed by comprehensive legislation in the form of statutes, codes, and regulations.  Primary legislation in the area of business law includes:

• the Civil Code (Bürgerliches Gesetzbuch, abbreviated as BGB), which contains general rules on the formation, performance, and enforcement of contracts and on the basic types of contractual agreements for legal transactions between private entities;
• the Commercial Code (Handelsgesetzbuch, abbreviated as HGB), which contains special rules concerning transactions among businesses and commercial partnerships;
• the Private Limited Companies Act (GmbH-Gesetz) and the Public Limited Companies Act (Aktiengesetz), covering the two most common corporate structures in Germany – the ‘GmbH’ and the ‘Aktiengesellschaft’; and
• the Act on Unfair Competition (Gesetz gegen den unlauteren Wettbewerb, abbreviated as UWG), which prohibits misleading advertising and unfair business practices.

Apart from the regular courts, which hear civil and criminal cases, Germany has specialized courts for administrative law, labor law, social law, and finance and tax law.  Many civil regional courts have specialized chambers for commercial matters. In 2018, the first German regional courts for civil matters (in Frankfurt and Hamburg) established Chambers for International Commercial Disputes, introducing the possibility to hear international trade disputes in English.  Other federal states are currently discussing plans to introduce these specialized chambers as well. In November 2020, Baden-Wuerttemberg opened the first commercial court in Germany with locations in Stuttgart and Mannheim, with the option to choose English– language proceedings.

The Federal Patent Court hears cases on patents, trademarks, and utility rights related to decisions by the German Patent and Trademarks Office.  Both the German Patent Office (Deutsches Patentamt) and the European Patent Office are headquartered in Munich.

In the case of acquisitions of critical infrastructure and companies in sensitive sectors, the threshold for triggering an investment review by the government is 10 percent. The Federal Ministry for Economic Affairs and Climate Action may review acquisitions of domestic companies by foreign buyers, regardless of national security concerns, where investors seek to acquire at least 25 percent of the voting rights to assess whether these transactions pose a risk to the public order or national security of the Federal Republic of Germany.

In 2021, the Federal Ministry for Economic Affairs and Climate Action screened 306 foreign acquisitions and prohibited none. MEC officials told Post the mere prospect of rejection has caused foreign investors to pull out of prospective deals in sensitive sectors in the past. All national security decisions by the Ministry can be appealed in administrative courts.

There is no general requirement for investors to obtain approval for any acquisition unless the target company poses a potential national security risk, such as operating or providing services relating to critical infrastructure, is a media company, or operates in the health sector. The Federal Ministry for Economic Affairs and Climate Action may launch a review within three months after obtaining knowledge of the acquisition; the review must be concluded within four months after receipt of the full set of relevant documents. An investor may also request a binding certificate of non-objection from the Federal Ministry for Economic Affairs and Climate Action in advance of the planned acquisition to obtain legal certainty at an early stage.

If the Federal Ministry for Economic Affairs and Climate Action does not open an in-depth review within two months from the receipt of the request the certificate is deemed as granted. During the review, MEC may ask to submit further documents. The acquisition may be restricted or prohibited within three months after the full set of documents has been submitted.

The German government has continuously amended domestic investment screening provisions in recent years to transpose the relevant EU framework and address evolving security risks. An amendment in June 2017 clarified the scope for review and gave the government more time to conduct reviews, in reaction to an increasing number of acquisitions of German companies by foreign investors with apparent ties to national governments. The amended provisions provide a clearer definition of sectors in which foreign investment can pose a threat to public order and security, including operators of critical infrastructure, developers of software to run critical infrastructure, telecommunications operators or companies involved in telecom surveillance, cloud computing network operators and service providers, and telematics companies, and which are subject to notification requirements. The new rules also extended the time to assess a cross-sector foreign investment from two to four months, and for investments in sensitive sectors, from one to three months, and introduced the possibility of retroactively initiating assessments for a period of five years after the conclusion of an acquisition. Indirect acquisitions such as those through a Germany- or EU-based affiliate company are now also explicitly subject to the new rules.

With further amendments in 2020, Germany implemented the 2019 EU Screening Regulation.

The amendments a) introduced a more pro-active screening based on “prospective impairment” of public order or security by an acquisition, rather than a de facto threat, b) consider the impact on other EU member states, and c) formally suspend transactions during the screening process.

Furthermore, acquisitions by foreign government-owned or -funded entities now trigger a review, and the healthcare industry is now considered a sensitive sector to which the stricter 10% threshold applies. In May 2021, a further amendment entered into force, which introduced a list of sensitive sectors and technologies (like the current list of critical infrastructures), including artificial intelligence, autonomous vehicles, specialized robots, semiconductors, additive manufacturing, and quantum technology. Foreign investors who seek to acquire at least 10% of ownership rights of a German company in one those fields must notify the government and potentially become subject to an investment review. The screening can now also consider “stockpiling acquisitions” by the same investor, “atypical control investments” where an investor seeks additional influence in company operations via side contractual agreements, or combined acquisitions by multiple investors, if all are controlled by one foreign government.

The Ministry for Economic Affairs and Climate Action provides comprehensive information on Germany’s investment screening regime on its website in English:

https://www.bmwi.de/Redaktion/EN/Artikel/Foreign-Trade/investment-screening.html 

The German Economic Development Agency (GTAI) provides extensive information for investors, including about the legal framework, labor-related issues and incentive programs, on their website: http://www.gtai.de/GTAI/Navigation/EN/Invest/investment-guide.html .

The German government ensures competition on a level playing field based on two main legal codes:

The Law against Limiting Competition (Gesetz gegen Wettbewerbsbeschränkungen – GWB) is the legal basis for limiting cartels, merger control, and monitoring abuse. State and Federal cartel authorities are in charge of enforcing anti-trust law. In exceptional cases, the Minister for Economic Affairs and Climate Action can provide a permit under specific conditions.

A June 2017 amendment to the GWB expanded the reach of the Federal Cartel Office (FCO) to include internet and data-based business models; the FCO has shown an interest in investigating large internet firms. A February 2019 FCO investigation found that Facebook had abused its dominant position in social media to harvest user data. Facebook challenged the FCO’s decision in court, but in June 2020, Germany’s highest court upheld the FCO’s action. In March 2021, the Higher Regional Court in Düsseldorf referred the case to the European Court of Justice for guidance. The FCO has continued to challenge the conduct of large tech platforms, particularly with regard to the use of user data. Another FCO case against Facebook, initiated in December 2020, regards the integration of the company’s Oculus virtual reality platform into its broader platform, creating mandatory registration of Facebook accounts for all Oculus users.

In 2021, a further amendment to the GWB, known as the Digitalization Act, entered into force codifying tools that allow greater scrutiny of digital platforms by the FCO, in order to “better counteract abusive behavior by companies with paramount cross-market significance for competition.” The law aims to prohibit large platforms from taking certain actions that put competitors at a disadvantage, including in markets for related services or up and down the supply chain – even before the large platform becomes dominant in those secondary markets. To achieve this goal, the amendments expand the powers of the FCO to act earlier and more broadly. Due to the relatively modest number of German platforms, the amendments will primarily affect U.S. companies. The Cartel Office commenced investigations against four U.S. platforms – Alphabet/Google, Amazon, Meta/Facebook and Apple – in 2021 to assess whether they fall under the scope of the new legislation. In January 2022, the competition authority determined Alphabet/Google will be subject to abuse control measures under the scope of the new law but has not yet announced remedies. The three other investigations are still ongoing.

While the focus of the GWB is to preserve market access, the Law against Unfair Competition seeks to protect competitors, consumers, and other market participants against unfair competitive behavior by companies. This law is primarily invoked in regional courts by private claimants rather than by the FCO.

German law provides that private property can be expropriated for public purposes only in a non-discriminatory manner and in accordance with established principles of constitutional and international law. There is due process and transparency of purpose, and investors in and lenders to expropriated entities are entitled to receive prompt, adequate, and effective compensation.

The Berlin state government is currently reviewing a petition for a referendum submitted by a citizens’ initiative calling for the expropriation of residential apartments owned by large corporations. At least one party in the governing coalition officially supports the proposal. Certain long-running expropriation cases date back to the Nazi and communist regimes.

German insolvency law, as enshrined in the Insolvency Code, supports and promotes restructuring. If a business or the owner of a business becomes insolvent, or a business is over-indebted, insolvency proceedings can be initiated by filing for insolvency; legal persons are obliged to do so. Insolvency itself is not a crime, but deliberately filing late for insolvency is.

Under a regular insolvency procedure, the insolvent business is generally broken up in order to recover assets through the sale of individual items or rights or parts of the company. Proceeds can then be paid out to creditors in the insolvency proceedings. The distribution of monies to creditors follows detailed instructions in the Insolvency Code.

Equal treatment of creditors is enshrined in the Insolvency Code. Some creditors have the right to claim property back. Post-adjudication preferred creditors are served out of insolvency assets during the insolvency procedure. Ordinary creditors are served on the basis of quotas from the remaining insolvency assets. Secondary creditors, including shareholder loans, are only served if insolvency assets remain after all others have been served. Germany ranks fourth in the global ranking of “Resolving Insolvency” in the World Bank’s Doing Business Index, with a recovery rate of 79.8 cents on the dollar.

In December 2020, the Bundestag passed legislation implementing the EU Restructuring Directive to modernize and make German restructuring and insolvency law more effective.

The Bundestag also passed legislation granting temporary relief to companies facing insolvency due to the COVID-19 pandemic, including temporary suspensions from the obligation to file for insolvency under strict requirements. This suspension expired in May 2021.

The Government of Ghana’s policies on trade liberalization and investment promotion are guiding its efforts to create a clear and transparent regulatory system.

Ghana does not have a standardized consultation process, but ministries and Parliament generally share the text or summary of proposed regulations and solicit comments directly from stakeholders or via public meetings and hearings.  All laws that are currently in effect are printed by the Ghana Publishing Company, while the notice of publication of the law, bills, or regulations are made in the Ghana Gazette (equivalent of the U.S. Federal Register).  The non-profit Ghana Legal Information Institute ( Home | GhaLII ) re-publishes hard copies of the Ghana Gazette.  The Government of Ghana does not publish draft regulations online, and the Parliament publishes only some draft bills ( https://www.parliament.gh/docs?type=Bills&OT ), which inhibits transparency in the approval of laws and regulations.

The Government of Ghana has established regulatory bodies such as the National Communications Authority, the National Petroleum Authority, the Petroleum Commission, the Energy Commission, and the Public Utilities Regulatory Commission to oversee activities in the telecommunications, downstream and upstream petroleum, electricity and natural gas, and water sectors.  The creation of these bodies was a positive step, but the lack of resources and the bodies’ susceptibility to political influence undermine their ability to deliver the intended level of oversight.

The government launched a Business Regulatory Reform program in 2017, but implementation has been slow.  The program aims to improve the ease of doing business, review all rules and regulations to identify and reduce unnecessary costs and requirements, establish an e-registry of all laws, establish a centralized public consultation web portal, provide regulatory relief for entrepreneurs, and eventually implement a regulatory impact analysis system.  The government continues to work towards achieving these goals and in 2020 established the centralized public consultation web portal ( www.bcp.gov.gh ), the Ghana Business Regulatory Reforms platform.  It is an interactive platform to allow policymakers to consult businesses and individuals in a transparent, inclusive, and timely manner on policy issues.  Ghana adopted International Financial Reporting Standards in 2007 for all listed companies, government business enterprises, banks, insurance companies, security brokers, pension funds, and public utilities.  Projects likely to have significant impacts on the environment are required to obtain environmental permits from the Ghanaian Environmental Protection Agency before commencement of construction and operations.  The government, however, does not have a policy that requires or promotes companies’ environmental, social, and governance (ESG) disclosure.

Ghana has been a World Trade Organization (WTO) member since January 1995 and a member of the General Agreement on Tariffs and Trade since 1957.  Ghana issues its own standards for many products under the auspices of the Ghana Standards Authority (GSA).  The GSA has promulgated more than 500 Ghanaian standards and adopted more than 2,000 international standards including European Union and U.S. standards for certification purposes.  The Ghanaian Food and Drugs Authority is responsible for enforcing standards for food, drugs, cosmetics, and health items.  Ghana has a WTO obligation to notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).

Ghana’s legal system is based on British common law and local customary law.  Investors should note that the acquisition of real property is governed by both statutory and customary law.  The judiciary comprises both lower courts and superior courts.  The superior courts are the Supreme Court, the Court of Appeal, and the High Court and Regional Tribunals.  Lawsuits are permitted and usually begin in the High Court.  The High Court has jurisdiction in all matters, civil and criminal, other than those involving treason and some cases that involve the highest levels of the government – which go to the Supreme Court.  There is a history of government intervention in the court system, although somewhat less so in commercial matters.  The courts have entered judgments against the government.  However, the courts have been slow in disposing of cases and at times face challenges in having their decisions enforced, largely due to resource constraints and institutional inefficiencies.

The GIPC Act codified the government’s desire to present foreign investors with a transparent foreign investment regulatory regime.  GIPC regulates foreign investment in acquisitions, mergers, takeovers and new investments, as well as portfolio investment in stocks, bonds, and other securities traded on the Ghana Stock Exchange.  The GIPC Act also specifies areas of investment reserved for Ghanaian citizens, and further delineates incentives and guarantees that relate to taxation, transfer of capital, profits and dividends, and guarantees against expropriation.

GIPC helps to facilitate the business registration process and provides economic, commercial, and investment information for companies and businesspeople interested in starting a business or investing in Ghana.  GIPC provides assistance to enable investors to take advantage of relevant incentives.  Registration can be completed online at www.gipc.gov.gh.

As detailed in the previous section on “Limits on Foreign Control and Right to Private Ownership and Establishment,” sector-specific laws regulate foreign participation/investment in telecommunications, banking, fishing, mining, petroleum, and real estate.

Ghana regulates the transfer of technologies not freely available in Ghana.  According to the 1992 Technology Transfer Regulations, total management and technical fee levels higher than eight percent of net sales must be approved by GIPC.  The regulations do not allow agreements that impose obligations to procure personnel, inputs, and equipment from the transferor or specific source.  The duration of related contracts cannot exceed ten years and cannot be renewed for more than five years.  Any provisions in the agreement inconsistent with Ghanaian regulations are unenforceable in Ghana.

Ghana is reportedly working on a new competition law to replace the existing legislation, the Protection Against Unfair Competition Act, 2000 (Act 589); however, the new bill is still under review.

The Constitution sets out some exceptions and a clear procedure for the payment of compensation in allowable cases of expropriation or nationalization.  Additionally, Ghana’s investment laws generally protect investors against expropriation and nationalization.  The Government of Ghana may, however, expropriate property if it is required to protect national defense, public safety, public order, public morality, public health, town and county planning, or to ensure the development or utilization of property in a manner to promote public benefit.  In such cases, the GOG must provide prompt payment of fair and adequate compensation to the property owner, but the process for determining adequate compensation and making payments can be complicated and lengthy in practice.  The Government of Ghana guarantees due process by allowing access to the High Court by any person who has an interest or right over the property.

Ghana does not have a bankruptcy statute.  A new insolvency law, the Corporate Restructuring and Insolvency Act, 2020 (Act 1015), was passed to replace the Bodies Corporate (Official Liquidations) Act, 1963 (Act 180).  The new law, unlike the previous one, provides for reorganization of a company before liquidation when it is unable to pay its debts, as well as cross-border insolvency rules.  The new law does not have a U.S. Chapter 11-style bankruptcy provision but allows for a process that puts the company under administration for restructuring.  The new law complements the law for private liquidations under the Companies Act, 2019 (Act 992), but does not apply to businesses that are under specialized regulations such as banks and insurance companies.

As an EU member, Greece is required to have transparent policies and laws for fostering competition.  Foreign companies consider the complexity of government regulations and procedures and their inconsistent implementation to be a significant impediment to investing and operating in Greece.  Occasionally, foreign companies report cases where there are multiple laws governing the same issue, resulting in confusion over which law is applicable.  Under its bailout programs, the Greek government committed to widespread reforms to simplify the legal framework for investment, including eliminating bureaucratic obstacles, redundancies, and undue regulations.  The fast-track law, passed in December 2010, aimed to simplify the licensing and approval process for “strategic” investments, i.e. large-scale investments that will have a significant impact on the national economy.  In 2013, Greece’s parliament passed Investment Law 4146/2013 to simplify the regulatory system and stimulate investment.  This law provides additional incentives, beyond those in the fast-track law, available to domestic and foreign investors, dependent on the sector and the location of the investment.

In February 2021, the EU introduced new trade enforcement regulations which apply to all member-states, including new policy countermeasures to services and trade-related aspects of intellectual property rights (IPR).  Former trade enforcement regulations only permitted countermeasures in goods.  The following enforcement mechanisms have been enacted at the EU-level:

• the appointment of a Chief Trade Enforcement Officer;
• the creation of a new Directorate in DG Trade for enforcement, market access and SMEs; and
• the establishment under Access2Markets of a single-entry point for complaints from EU stakeholders and businesses on trade barriers on foreign markets and violations of sustainable trade commitments in EU trade agreements.

Additionally, the European Commission has also committed to developing the EU’s anti-coercion mechanism, with the goal to deter countries from restricting or threatening to restrict trade or investment.

Greece’s tax regime lacked stability during the economic crisis, presenting additional obstacles to investment, both foreign and domestic.  Foreign firms are not subject to discrimination in taxation.  Numerous changes to tax laws and regulations since the beginning of the economic crisis injected uncertainty into Greece’s tax regime.  As part of Greece’s August 2015 bailout agreement, the government converted the Ministry of Finance’s Directorate-General for Public Revenue into a fully independent tax agency effective January 2017, with a broad mandate to increase collection and develop further reforms to the tax code aimed at reducing evasion and increasing the coverage of the Greek tax regime.  The government makes continued efforts to combat tax evasion by increasing inspections and crosschecks among various authorities and by using more sophisticated methods to find undeclared income.  Authorities held monthly lotteries offering taxpayers rewards of €1,000 ($1,200) for using credit or debit cards, which are considered more financially transparent, in their daily transactions.

Foreign investment is not legally prohibited or otherwise restricted.  Proposed laws and regulations are published in draft form for public comment before Parliament takes up consideration of the legislation.  The laws in force are accessible on a unified website managed by the government and printed in an official gazette.  Greece introduced International Financial Reporting Standards for listed companies in 2005 in accordance with EU directives.  These rules improved the transparency and accountability of publicly traded companies.

Citizens of other EU member state countries may work freely in Greece.  Citizens of non-EU countries may work in Greece after receiving residence and work permits.  There are no discriminatory or preferential export/import policies affecting foreign investors, as EU regulations govern import and export policy, and increasingly, many other aspects of investment policy in Greece.

Greece has been a World Trade Organization (WTO) member since January 1, 1995, and a member of the General Agreement on Tariffs and Trade (GATT) since March 1, 1950.  Greece complies with WTO Trade-Related Investment Measures (TRIMs) requirements.  There are no performance requirements for establishing, maintaining, or expanding an investment.  Performance requirements may come into play, however, when an investor wants to take advantage of certain investment incentives offered by the government.  Greece has not enacted measures that are inconsistent with TRIMs requirements, and the Embassy is not aware of any measures alleged to violate Greece’s WTO TRIMs obligations.  Trade policy falls within the competence and jurisdiction of the European Commission Directorate General for Trade and is generally not subject to regulation by member state national authorities.

Although Greece has an independent judiciary, the court system is an extremely time-consuming and unwieldy means for enforcing property and contractual rights.  According to the “Enforcing Contracts Indicator” of the World Bank’s ‘Doing Business 2020” survey, Greece ranks 146 among 190 countries in terms of the speed of delivery of justice, requiring 1,711 days (more than four years) on average to resolve a dispute, compared to the OECD high-income countries’ average of 589.6 days.  The government committed, as part of its three bailout packages, to reforms intended to expedite the processing of commercial cases through the court system.  In July 2015, the government adopted significant reforms to the Code of Civil Procedure (Law 4335/2015).  These reforms aimed to accelerate judicial proceedings in support of contract enforcement and investment climate stability and entered into force in January 2016.  Foreign companies report, however, that Greek courts do not consistently provide fast and effective recourse.  Problems with judicial corruption reportedly still exist.  Commercial and contractual laws accord with international norms, and the judicial system remains independent of the executive branch.

In 2019 and 2020, Parliament passed several investment-related laws.

In December 2020, Parliament passed Law 4758/2020, which introduced amendments in the current tax legislation regarding special taxation of employment services and business activity income arising in Greece, earned by individuals who transfer their tax residence in Greece.

In October 2019, Parliament passed an economic development bill, Law 4635/2019, aimed at boosting economic recovery in the post-bailout era which entered into force in January 2020.  The bill, called “Invest in Greece and other provisions,” simplifies processes for investors regarding environmental and urban planning regulations, speeding up bureaucratic processes.  The bill also introduces changes to labor union alterations to encourage job creation and reforms the functioning of the General Commercial Registry.

Law 4605/2019 expands the types of investments that qualify an individual for a residence permit, allowing investments in intangible assets.  In particular, capital contribution of at least €400,000 in a real estate investment company, in a company registered in Greece, in a purchase of state bonds, corporate bonds, or shares, in a venture capital investment company, or in mutual funds, allows the investor and his or her family members a five-year residency permit in Greece.

Law 4608/2019 for strategic investments was approved in April 2019, creating a favorable investment climate by providing various privileges to investors such as tax exemptions and fast track licensing.

Investments in Greece operate under two main laws:  the new Investment Law (4399/2016) that addresses small-scale investments and Law 4146/2013 that addresses strategic investments.  In particular:

Law 4399/2016, entitled “Statutory framework to the establishment of Private Investments Aid Schemes for the regional and economic development of the country” was passed in June 2016.  Its key objectives include the creation of new jobs, the increase of extroversion, the reindustrialization of the country, and the attraction of FDI.  The law provides aids (as incentives) for companies that invest from €50,000 (Social Cooperative Companies) up to €500,000 (large sized companies) as well as tax breaks.  The Greek government provides funds to cover part of the eligible expenses of the investment plan; the amount of the subsidy is determined based on the region and the business size.  Qualified companies are exempt from paying income tax on their pre-tax profits for all their activities.  There is a fixed corporate income tax rate and fast licensing procedures.  Eligible economic activities are manufacturing, shipbuilding, transportation/infrastructure, tourism, and energy.  More about this law can be found here: https://www.enterprisegreece.gov.gr/files/pdf/madrid2019/2-Investment-Incentives-Law.pdf.

– Law 4146/2013, entitled the “Creation of a Business-Friendly Environment for Strategic and Private Investments” is the other primary investment incentive law currently in force.  The law aims to modernize and improve the institutional framework for private investments, raise liquidity, accelerate investment procedures, and increase transparency.  It seeks to provide an efficient institutional framework for all investors and speed the approval processes for pending and approved investment projects.  The law created a general directorate for private investments within the Ministry of Development and Investment and reduced the value of investments needed to be considered strategic.  The law also provides tax exemptions and incentives to investors and allows foreign nationals from non-EU countries who buy property in Greece worth over €250,000 ($285,000) to obtain five-year renewable residence permits for themselves and their families.  In March 2019, the Greek government brought a bill to parliament to expand eligibility criteria of the existing program.

Other investment laws include:

– Law 3908/2011, which provides incentives in the form of tax relief, grants, and allowances on investments, is gradually being phased out by Law 4146 (above).

– Law 3919/2011 aims to liberalize more than 150 currently regulated or closed-shop professions.

– Law 3982/2011 reduced the complexity of the licensing system for manufacturing activities and technical professions and modernized certain qualification and certification requirements to lower barriers to entry.

– Law 4014/2011 simplified the environmental licensing process.

– Law 3894/2010 (also known as fast track) allows Enterprise Greece to expedite licensing procedures for qualifying investments in the following sectors: industry, energy, tourism, transportation, telecommunications, health services, waste management, or high-end technology/innovation. To qualify, investments must meet one of the following conditions:

• exceed €100 million;
• exceed €15 million in the industrial sector, operating in industrial zones;
• exceed €40 million and concurrently create at least 120 new jobs; or
• create 150 new jobs, regardless of the monetary value of the investment.

More about fast-track licensing of strategic investments can be found online at https://www.enterprisegreece.gov.gr/en/invest-in-greece/strategic-investments

– Law 3389/2005 introduced the use of public-private partnerships (PPP).  This law aimed to facilitate PPPs in the service and construction sectors by creating a market-friendly regulatory environment.

–  Law 3426/2005 completed Greece’s harmonization with EU Directive 2003/54/EC and provided for the gradual deregulation of the electricity market.  Law 3175/2003 harmonized Greek legislation with the requirements of EU Directive 2003/54/EC on common rules for the internal electricity market.  Law 2773/99 initially opened 34 percent of the Greek energy market, in compliance with EU Directive 96/92 concerning regulation of the internal electricity market.

– Law 3427/2005, which amended Law 89/67, provides special tax treatment for offshore operations of foreign companies established in Greece.  Special tax treatment is offered only to operations in countries that comply with OECD tax standards.

– Law 2364/95 and supporting amendments govern investment in the natural gas market in Greece.

– Law 2289/95, which amended Law 468/76, allows private (both foreign and domestic) participation in oil exploration and development.

– Law 2246/94 and supporting amendments opened Greece’s telecommunications market to foreign investment.

– Legislative Decree 2687 of 1953, in conjunction with Article 112 of the Constitution, gives approved foreign “productive investments” (primarily manufacturing and tourism enterprises) property rights, preferential tax treatment, and work permits for foreign managerial and technical staff.  The Decree also provides a constitutional guarantee against unilateral changes in the terms of a foreign investor’s agreement with the government, but the guarantee does not cover changes in the tax regime.

Under Articles 101-109 of the Treaty on the Functioning of the EU, the European Commission (EC), together with member state national competition authorities, directly enforces EU competition rules.  The EC Directorate-General for Competition carries out this mandate in member states, including Greece.  Greece’s competition policy authority rests with the Hellenic Competition Commission, in consultation with the Ministry of Economy.  The Hellenic Competition Commission protects the proper functioning of the market and ensures the enforcement of the rules on competition.  It acts as an independent authority and has administrative and financial autonomy.

Private property may be expropriated for public purposes, but the law requires this be done in a nondiscriminatory manner and with prompt, adequate, and effective compensation.  Due process and transparency are mandatory, and investors and lenders receive compensation in accordance with international norms.  There have been no expropriation actions involving the real property of foreign investors in recent history, although legal proceedings over expropriation claims initiated, in one instance, over a decade ago, continue to work through the judicial system.

Bankruptcy laws in Greece meet international norms.  Under Greek bankruptcy law 3588/2007, private creditors receive compensation after claims from the government and insurance funds have been satisfied.  Monetary judgments are usually made in euros unless explicitly stipulated otherwise.  Greece has a reliable system of recording security interests in property.  According to the World Bank’s 2020 Doing Business report, resolving insolvency in Greece takes 3.5 years on average and costs nine percent of the debtor’s estate, with the most likely outcome that the company will be sold piecemeal.  Recovery rate is 32 cents on the dollar.  Greece ranks 72 of 190 economies surveyed for ease of resolving insolvency in the Doing Business report (from 62 in 2019).

Grenada recognizes that investors value transparent rules and regulations dealing with investment.

The Investment Act and the investment promotion regime promote transparency by authorizing investment incentives to key sectors through the GIDC. This helps to streamline processes, standardize treatment of investors, and better define investment rights. It also provides procedural guarantees and reduces the possibility for political influence in business negotiation.

Grenada also seeks to promote investment by consulting with interested parties, simplifying and codifying legislation, using plain language drafting, developing registers of existing and proposed regulation, expanding electronic dissemination of regulatory material, and publishing and reviewing administrative decisions.

Tax, labor, environment, health and safety, and other laws or policies do not distort or impede investment. Bureaucratic procedures, including those for licenses and permits, are sufficiently streamlined and transparent. However, local authorities recognize that the implementation of procedures can sometimes be slow and inefficient.

Legal, regulatory, and accounting systems are generally transparent and consistent with international norms. Public finances and debt obligations, including explicit and contingent liabilities, are also transparent and in keeping with international requirements.

Depending on the type of investment, government will require companies’ environmental, social, and governance (ESG) disclosure. Not only does this facilitate transparency, but also ensures corporate responsibility and protection of the country’s social and environmental resources.

Draft bills, particularly those that directly impact the public, often go through a public consultation process to address any concerns and allow for revision before being brought before cabinet and passed into law.

No new regulatory systems and enforcement reforms have been announced since the last ICS report.

Grenada has been a member of the WTO since 1996 and is a party to agreements established under the organization. In pursuit of WTO compliance, Grenada is in the process of negotiating trade and investment agreements that contain provisions better aligned with the provisions of the WTO. Grenada is a member of CARICOM and the CARICOM Single Market Economy, which adheres to the international norms and regulatory standards outlined by the WTO. Also, in keeping with WTO regulations the government notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade.

The Prime Minister and the cabinet have the executive authority to negotiate and sign international agreements and conventions with other states and international organizations.

Grenada’s judicial system is based on English common law. The judiciary has four levels: the Magistrates Court, the High Court, the Eastern Caribbean Supreme Court, and the UK-based Privy Council.

The Magistrates Court primarily handles minor civil and criminal cases, while the High Court adjudicates cases under the purview of the Acts of Parliament. Appeals from the Magistrates Court are heard by the High Court, while appeals from the High Court are heard by the Eastern Caribbean Supreme Court. The Eastern Caribbean Supreme Court is comprised of the Chief Justice, who serves as the Head of the Judiciary; four Justices of Appeal; nineteen High Court Judges; and three Masters, who are primarily responsible for procedural and interlocutory matters. The Court of Appeal judges are based at the Court’s headquarters in Saint Lucia.

The Privy Council serves as Grenada’s final Court of Appeal. However, the Caribbean Court of Justice has compulsory and exclusive jurisdiction under Section 211 of the Revised Treaty of Chaguaramas, to which Grenada is a party. The Treaty delineates rights and responsibilities within CARICOM to hear and decide disputes concerning the interpretation and application of the Treaty.

The judicial system remains independent of the executive branch, and judicial processes are generally competent, fair, and reliable, however the process can be slow. Provisions are also made for appeals with the relevant court. Grenadian law also provides for the use of arbitration and mediation to resolve investment disputes.

The economy is supported by a strong legislative and regulatory framework that encourages FDI and promotes investment initiatives. Grenada augmented the investment climate with a revitalization of its Citizenship by Investment (CBI) program.

In 2016 parliament passed its most recent suite of legislative changes to enhance the investment climate in Grenada. Changes were made to the following Acts:

Value Added Tax Amendment Act – Provides for VAT exemptions for qualifying investments in priority sectors.

Excise Tax Amendment Act – Provides for tax incentives for investors engaged in manufacturing and investors entitled to conditional duties exemptions for motor vehicles.

Property Transfer Tax Amendment Act – Establishes more favorable rates of property transfer tax for investors.

Customs Service Charge Amendment Act – Removes the discretionary power of cabinet to prescribe varying rates of customs service charge (CSC) and to prescribe a new rate of CSC applicable to investors engaged in manufacturing.

Investment Amendment Act– Provides for specified circumstances under which the Minister of Finance may make regulations under the Principal Act.

Bankruptcy and Insolvency Amendment Act – Modernizes the law relating to bankruptcy and insolvency of individuals and companies. The act is based on the Canadian Bankruptcy and Insolvency Act, which has been used as a model in several Caribbean countries.

Income Tax Amendment Act – Provides for a waiver on withholding tax applicable on specified types of repatriated funds relating to investors engaged in tourism accommodation or health and wellness.

The GIDC and the Inland Revenue and Customs Department of Grenada work to ensure adherence to the rule of law and to facilitate the procedures outlined in the revised investment regime. The legal and regulatory framework governing foreign direct investment in Grenada is described here: http://grenadaidc.com/ 

There are no competition laws in Grenada. A number of CARICOM and Organization of Eastern Caribbean States (OECS) proposals on competition are under consideration to strengthen market regimes under the CARICOM Single Market and Economy. CARICOM established a Competition Commission and plans are underway to establish a sub-regional Eastern Caribbean Competition Commission.

According to the constitution, Grenada shall not compulsorily acquire or take possession of any investment or any asset of an investor except for a purpose which is legal and non-discriminatory. If the government expropriates property for a legal purpose, it must promptly pay adequate and effective compensation. Owners of expropriated assets have the right to file claims in the High Court regarding the amount of compensation or ownership of the expropriated asset.

In 2016, parliament repealed the 1994 Electricity Supply Act and opened the market to potential investors who will commit to transition to alternative sources of power generation, decreasing costs, reducing dependence on imported fossil fuels, and improving energy efficiency. This repealed the exclusive license that was granted to the country’s sole electricity provider Grenada Electricity Services (GRENLEC) and its majority shareholder, U.S.-owned WRB Enterprises. This regulatory change triggered a clause in the Share Purchase Agreement requiring Grenada to repurchase the GRENLEC shares from WRB. WRB filed a request for arbitration with ICSID, and the Grenada government was ordered to pay $74 million to the U.S. investors following a March 2020 ruling. A negotiated sum of $63 million was paid to WRB Enterprises in December 2020.

In the past, Grenadian citizens had their lands expropriated to permit foreign investments but were compensated for such actions, typically at the market value. There are no sectors at greater risk of expropriation, and there are no laws requiring local ownership. All expropriations have been subject to due process.

The Bankruptcy Act makes provisions for all aspects of bankruptcy and sets out procedures for creditors to apply to the High Court for a bankruptcy order against a debtor and the appointment of a trustee in bankruptcy. There are provisions for the court to appoint an interim receiver pending the outcome of the application for a bankruptcy order. It also includes provisions for a process whereby an insolvent person, with leave of the court, may make an assignment of the insolvent person’s property for the general benefit of creditors of the insolvent person. The High Court exercises exclusive jurisdiction in matters related to bankruptcy.

Tax, labor, environment, health, and safety laws do not directly impede investment in Guatemala. Bureaucratic hurdles are common for both domestic and foreign companies, including lengthy processes to obtain permits and licenses as well as to clear shipments through Customs. The legal and regulatory systems can be confusing and administrative decisions are often not transparent. Laws and regulations often contain few explicit criteria for government administrators, resulting in ambiguous requirements that are applied inconsistently by different government agencies and the courts.

Public participation in the formulation of laws or regulations is rare. In some cases, private sector groups, and to a lesser extent civil society groups are able to submit comments to the issuing government office or to the congressional committee reviewing the bill, but with limited effect. There is no legislative oversight of administrative rule making. The Guatemalan congress publishes all draft bills on its official website, but it does not make them available for public comment. The congress often does not disclose last-minute amendments before congressional decisions. Final versions of laws, once signed by the President, must be published in the official gazette before entering into force. Congress publishes scanned versions of all laws that are published in the official gazette. Information on the budget and debt obligations is publicly available at the Ministry of Finance’s primary website, but information on debt obligations does not include state-owned enterprise debt.

Guatemala is a member of the Central American Common Market and has adopted the Central American uniform customs tariff schedule. As a member of the WTO, the Guatemalan government notifies the WTO Committee on Technical Barriers to Trade (TBT) of draft technical regulations. The Guatemalan congress approved the WTO’s Trade Facilitation Agreement (TFA) in January 2017, which entered into force for Guatemala March 8, 2017. Guatemala classified 63.9 percent of its commitments under Category A, which includes commitments implemented upon entry into the agreement; 8.8 percent under Category B, which includes commitments to be implemented between February 2019 to July 2020; and 27.3 percent under Category C, which includes commitments to be implemented between February 2020 and July 2024. In February 2022, Guatemala requested an extension of time for a commitment to implement a single window for importation, exportation, and transit of goods, established under Article 10.4.1 and 10.4.2 of the TFA from the initial date of July 2022 to January 2024.

In 1996, Guatemala ratified Convention 169 of the International Labor Organization (ILO 169), which entered into force in 1997. Article 6 of the Convention requires the government to consult indigenous groups or communities prior to initiating a project that could affect them directly. Potential investors should determine whether their investment will affect indigenous groups and, if so, request that the Guatemalan government lead a consultation process in compliance with ILO 169. The Guatemalan congress began considering a draft law to create a community consultation mechanism to fulfill its ILO-mandated obligations in March 2018, but the bill was still pending congressional approval as of March 2022. The lack of a clear consultation process significantly impedes investment in large-scale projects.

Guatemala has a civil law system. The codified judicial branch law stipulates that jurisprudence or case law is also a source of law. Guatemala has a written and consistently applied commercial code. Contracts in Guatemala are legally enforced when the holder of a property right that has been infringed upon files a lawsuit to enforce recognition of the infringed right or to receive compensation for the damage caused. The civil law system allows for civil cases to be brought before, after, or concurrently with criminal claims. Guatemala does not have specialized commercial courts, but it does have civil courts that hear commercial cases and specialized courts that hear labor, contraband, or tax cases.

The judicial system is designed to be independent of the executive branch, and the judicial process for the most part is procedurally competent, fair, and reliable. There are frequent and wide-ranging accusations of corruption within the judicial branch.

More than 200 U.S. firms as well as hundreds of foreign firms have active investments in Guatemala. CAFTA-DR established a more secure and predictable legal framework for U.S. investors operating in Guatemala. Under CAFTA-DR, all forms of investment are protected, including enterprises, debt, concessions, contracts, and intellectual property. U.S. investors enjoy the right to establish, acquire, and operate investments in Guatemala on an equal footing with local investors in almost all circumstances. The U.S. Embassy in Guatemala places a high priority on improving the investment climate for U.S. investors. Guatemala passed a foreign investment law in 1998 to streamline and facilitate processes in foreign direct investment. In order to ensure compliance with CAFTA-DR, the Guatemalan congress approved in May 2006 a law that strengthened existing legislation on intellectual property rights (IPR) protection, government procurement, trade, insurance, arbitration, and telecommunications, as well as the penal code. Congress approved an e-commerce law in August 2008, which provides legal recognition to electronically executed communications and contracts; permits electronic communications to be accepted as evidence in all administrative, legal, and private actions; and, allows for the use of electronic signatures.

Guatemala previously faced two for violating its CAFTA-DR obligations—one under the labor chapter and the other under the environmental chapter. In the 2008 labor case filed by the AFL-CIO and six Guatemalan worker organizations, the arbitration panel found that the Guatemalan government failed to effectively enforce its labor laws, particularly by failing to enforce labor court orders for anti-union dismissals and to take enforcement actions in response to worker complaints. The panel determined that beyond the noted enforcement failures, evidence did not rise to a level sufficient to prove a violation of CAFTA-DR. Regarding the environmental case, the CAFTA-DR Secretariat for Environmental Matters suspended its investigation in 2012 when the Guatemalan government provided evidence that the relevant facts of the case were under consideration by Guatemala’s Constitutional Court. The constitutional court dismissed the case on procedural grounds in 2013.

Complex and confusing laws and regulations, inconsistent judicial decisions, bureaucratic impediments and corruption continue to constitute practical barriers to investment. According to the World Bank’s Doing Business Reports for 2015 and 2016, Guatemala made paying taxes easier and less costly by improving the electronic filing and payment system (“Declaraguate”) and by lowering the corporate income tax rate. Despite these measures, World Banks Doing Business Report for 2020 (the last available) ranked Guatemala 104 of 190 countries with respect to paying taxes. The Guatemalan government developed a useful website to help navigate the laws, procedures and registration requirements for investors (http://asisehace.gt/). The website provides detailed information on laws and regulations and administrative procedures applicable to investment, including the number of steps, names, and contact details of the entities and persons in charge of procedures, required documents and conditions, costs, processing time and legal grounds justifying the procedures.

Companies that carry out export activities or sell to exempted entities have the right to claim value added tax (VAT) credit refunds for the VAT paid to suppliers and documented with invoices for purchases of the goods and services used for production. Some local and foreign companies continue to experience significant delays in receiving refunds. Guatemala’s Tax and Customs Authority (SAT) began implementing a new plan in 2017 to streamline the process and expedite VAT credit refunds. The Guatemalan congress approved legal provisions in April 2019 that went into effect in November 2019. SAT established in December 2019 an electronic tax credit refund regime that expedites VAT credit refunds to exporters, but exporters claiming refunds outside the electronic tax credit refund regime continued to reportdelays in VAT refunds as of March 2022.

As part of its 2012 income tax reform, the Guatemalan government began implementing transfer pricing provisions in 2016. The Guatemalan congress approved a leasing law in February 2021 to regulate real estate and other types of leasing operations, including lease contracts with an option to purchase. A Guatemalan law to simplify, streamline, and digitize requirements and administrative procedures that are carried out with Executive Branch’s offices entered into force in August 2021.

Guatemala does not have a law to regulate monopolistic or anti-competitive practices. The Guatemalan government agreed to approve a competition law by November 2016 as part of its commitments under the Association Agreement with the European Union. The Guatemalan government submitted a draft competition law to Congress in May 2016, but it was still pending approval by Congress as of March 2022.

Guatemala’s constitution prohibits expropriation, except in cases of eminent domain, national interest, or social benefit. The Foreign Investment Law requires proper compensation in cases of expropriation. Investor rights are protected under CAFTA-DR by an impartial procedure for dispute settlement that is fully transparent and open to the public. Submissions to dispute panels and dispute panel hearings are open to the public, and interested parties have the opportunity to submit their views.

The Guatemalan government maintains the right to terminate a contract at any time during the life of the contract, if it determines the contract is contrary to the public welfare. It has rarely exercised this right and can only do so after providing the guarantees of due process.

Guatemala does not have an independent bankruptcy law in effect as of March 2022. However, the Guatemalan congress passed an insolvency law that applies to both individuals and businesses and regulates the renegotiation procedure between debtors and creditors in case of insolvency in February 2022. The new law will enter into force in August 2022 and requires the judicial branch to create specialized bankruptcy/insolvency courts within five years of the law’s enactment. Meanwhile, individuals and businesses that are facing insolvency can continue to use the Code on Civil and Mercantile Legal Proceedings, which contains a specific chapter on bankruptcy proceedings. Under the code, creditors can request to be included in the list of creditors; request an insolvency proceeding when a debtor has suspended payments of liabilities to creditors; and constitute a general board of creditors to be informed of the proceedings against the debtor. Bankruptcy is not criminalized, but it can become a crime if a court determines there was intent to defraud. According to the World Bank’s 2020 Doing Business Report, Guatemala ranked 157 out of 190 countries in resolving insolvency.

Under former President Alpha Conde, Guinea made its laws and regulations more transparent, though draft bills were not always made available for public comment.  Ministries did not develop forward-looking regulatory plans and publish neither summaries nor proposed legislation.  Once ratified, laws were not enforceable until published in the government’s official gazette.  Since January 2022, the National Transition Council (CNT) has served as Guinea’s legislative body, tasked by the CNRD to draft a new constitution and recommend an electoral timeline to return to democratic and civilian rule.  All laws relevant to international investors are posted (in French) on invest.gov.gn. When investing, it is important to engage with all levels of government to ensure each authority is aware of expectations and responsibilities on both sides.

Guinea has had an independent Supreme Audit Institution since 2016. The institution is charged with making available information on public finances.  The institution presented its first 2016 activities report in January 2018. The institution presented the 2017, 2018, 2019 and 2020 activities report to the President of CNT in February 2022

Guinea’s 2013 amended Mining Code commits the country to increasing transparency in the mining sector. In the code, the government commits to awarding mining contracts by competitive tender and to publish all past, current, and future mining contracts for public scrutiny.  Members of mining sector governing bodies and employees of the Ministry of Mines are prohibited from owning shares in mining companies active in Guinea or their subcontractors.  Each mining company must sign a code of good conduct and develop and implement a corruption-monitoring plan.  There is a public database of mining contracts designed by the Natural Resource Governance Institute (http://www.contratsminiersguinee.org/).

The Extractive Industries Transparency Initiative (EITI) ensures greater transparency in the governance of Guinea’s natural resources and full disclosure of government revenues from its extractives sector. The EITI standard aims to provide a global set of conditions that ensures greater transparency of the management of a country’s oil, gas, and mineral resources. EITI reiterates the need to augment support for countries and governments that are making genuine efforts to address corruption but lack the capacity and systems necessary to manage effectively the businesses, revenues, and royalties derived from extractive industries.  Guinea requires mining companies to file environmental, social, and governance (ESG) disclosures.

Guinea was accepted as EITI compliant for the first time by the international EITI Board at its meeting in Mexico City on July 2, 2014.  As an EITI country, Guinea must disclose the government’s revenues from natural resources.  Guinea completed its most recent report in December 2020 for the 2018 reporting period.  The report is located at: https://www.itie-guinee.org/rapport-itie-guinee-2018/.

While Guinea’s laws promote free enterprise and competition, there is often a lack of transparency in the law’s application.  Business owners openly assert that application procedures are sufficiently opaque to allow for corruption, and regulatory activity is often instigated due to personal interests.

Every year Guinea publishes budget documents and debt obligations.  The yearly enacted budgets are published online LOIS DE FINANCES | Ministère du Budget Guinée (mbudget.gov.gn) https://mbudget.gov.gn/.

Guinea has historically been a member of ECOWAS, but not a member of the West African Economic and Monetary Union (UEMOA) and as such has its own currency.  At the beginning of 2017, Guinea adopted ECOWAS’s Common Exterior Tariff (TEC), which harmonizes Guinea’s import taxes with other West African states and eliminates the need for assessing import duties at Guinea’s land border crossings, though, sometimes it is difficult to get the required certificates to export under these ECOWAS exemptions.  Guinea is a member of the WTO and is not party to any trade disputes.  Since the September 2021 coup, the African Union and ECOWAS have suspended Guinea’s memberships.

Guinea’s legal system is codified and largely based upon French civil law.  Under former President Conde, the judicial system was reported to be generally understaffed, corrupt, and opaque.  Accounting practices and bookkeeping in Guinean courts are frequently unreliable.  U.S. businesspersons should exercise extreme caution when negotiating contract arrangements and do so with proper local legal representation.  Although the current transition charter, former constitution, and laws provide for an independent judiciary; in practice the judicial system lacks independence, is underfunded, inefficient, and is portrayed in the press as corrupt.  Budget shortfalls, a shortage of qualified lawyers and magistrates, nepotism, and ethnic bias contribute to the judiciary’s challenges.  Former President Conde’s administration successfully implemented some judicial reforms and increased the salaries of judges by 400 percent to discourage corruption.

After the September 2021 coup, Guinea’s penal and civil code remains in force. The transition government maintained the existing legal structure and stated that “justice will be the compass guiding every Guinean citizen.”  Transition President COL Doumbouya created the Court to Repress Economic and Financial Crimes (CRIEF) to handle cases involving embezzlement, corruption, and misuse of public funds over one billion GNF (approximately $110,000) in December 2021.  As of April 2022, the court has focused on collecting evidence for corruption cases against businesses tied to and officials that served in former President Conde’s government.

There are few international investment lawyers accredited in Guinea and it is a best practice to include international arbitration clauses in all major contracts.  U.S. companies have identified the absence of a dependable legal system as a major barrier to investment.  Despite dispute settlement procedures set forth in Guinean law, business executives complain of the glacial pace of the adjudication of business disputes.  Most legal cases take years and significant legal fees to resolve.  In speaking with local business leaders, the general sentiment is that any resolution occurring within three to five years might be considered quick.

In many cases, the government does not meet payment obligations to private suppliers of goods and services, either foreign or Guinean, in a timely fashion.  Arrears to the private sector are a major issue that is often ignored.  There is no independent enforcement mechanism for collecting debts from the government, although some contracts have international arbitration clauses. The government, while bound by law to honor judgments made by the arbitration court, often actively influences the decision itself.

Although the situation has improved recently, Guinean and foreign business executives have publicly expressed concern over the rule of law in the country. In 2014, high-ranking members of the military harassed foreign managers of a telecommunications company because they did not renew a contract.  American businesses experience long delays in getting required signatures and approvals from government ministries, and in some cases the presidency, under both former President Conde’s government and the transition government.  Some businesses have been subject to sporadic harassment from tax authorities and demands for donations from military and police personnel.

The National Assembly ratified an Investment Code regulating FDI in May 2015. Developed in cooperation with the Work Bank and IMF, the code harmonizes Guinea’s FDI regulations with other countries in the region and broadens the definition of FDI. The code also allows for direct agreements between investors and the State. Other important legislation related to FDI includes the Procurement Code, the BOT (Build Operate Transfer, now Public Private Partnership or PPP) Law and the Customs Code.  An October 2017 Public-Private Partnerships (PPP) law replaced the earlier BOT law, providing a clearer, updated, and more secure legal, regulatory, and institutional framework for PPP projects, including through partnership agreements, BOT schemes, concessions, public leasing, and delegated public service.  PPP procurement tender processes also have been clarified and updated.  The PPP law seeks to increase infrastructure development in Guinea.  Under the new law, Parliament no longer needs to approve Guinean government contracts with private companies, as was required under BOT, apart from mining contracts.  Obligations to conduct feasibility studies and to precisely define public needs also have been increased in this new law.  Guinea’s investment promotion agency has a website (www.invest.gov.gn) to increase transparency and streamline investment procedures.

The legal system handles domestic cases involving foreign investors.  However, the legal system continues to be weak, is in need of reform, and continues to be subject to interference.  Although the transition charter provides for an independent judiciary, in practice the judicial system lacks independence and is underfunded, inefficient, and is perceived by many to be corrupt.

APIP launched a website in 2016 that lists information related to laws, rules, procedures, and registration requirements for foreign investors, as well as strategy documents for specific sectors http://invest.gov.gn.  Further information on APIP’s services is available at https://apip.gov.gn/.   APIP has a largely bilingual (English and French) staff and is designed to be a clearinghouse of information for investors.

The National Assembly ratified an Investment Code regulating FDI in May 2015. Developed in cooperation with the Work Bank and IMF, the code harmonizes Guinea’s FDI regulations with other countries in the region and broadens the definition of FDI. The code also allows for direct agreements between investors and the State. Other important legislation related to FDI includes the Procurement Code, the BOT (Build Operate Transfer, now Public Private Partnership or PPP) Law and the Customs Code.  An October 2017 Public-Private Partnerships (PPP) law replaced the earlier BOT law, providing a clearer, updated, and more secure legal, regulatory, and institutional framework for PPP projects, including through partnership agreements, BOT schemes, concessions, public leasing, and delegated public service.  PPP procurement tender processes also have been clarified and updated.  The PPP law seeks to increase infrastructure development in Guinea.  Under the new law, Parliament no longer needs to approve Guinean government contracts with private companies, as was required under BOT, apart from mining contracts.  Obligations to conduct feasibility studies and to precisely define public needs also have been increased in this new law.  Guinea’s investment promotion agency has a website (www.invest.gov.gn) to increase transparency and streamline investment procedures.

The legal system handles domestic cases involving foreign investors.  However, the legal system continues to be weak, is in need of reform, and continues to be subject to interference.  Although the transition charter provides for an independent judiciary, in practice the judicial system lacks independence and is underfunded, inefficient, and is perceived by many to be corrupt.

APIP launched a website in 2016 that lists information related to laws, rules, procedures, and registration requirements for foreign investors, as well as strategy documents for specific sectors http://invest.gov.gn.  Further information on APIP’s services is available at https://apip.gov.gn/.   APIP has a largely bilingual (English and French) staff and is designed to be a clearinghouse of information for investors.

There are no agencies that review transactions for competition-related concerns.

Guinea’s Investment Code states that the government will not take any steps to expropriate or nationalize investments made by individuals and companies, except for reasons of public interest.  It also promises fair compensation for expropriated property.

In 2011, the former President Conde’s government claimed full ownership of several languishing industrial facilities in which it had previously held partial shares as part of several joint ventures—including a canned food factory and processing plants for peanuts, tea, mangoes, and tobacco—with no compensation to the private sector partner.  Each of these facilities was privatized under opaque circumstances in the late 1980s and early 1990s.  By expropriating these businesses, which the Conde government deemed to be corrupt and/or ineffective, and putting them to public auction, Guinea hoped to correct past mistakes and put the assets in more productive hands.  During the 1990s, a U.S. investor acquired a 67 percent stake in an explosives and munitions factory from a Canadian entity.  The Guinean government owned the remaining 33 percent.  From 2000 to 2008, the government halted manufacturing at the factory, nationalizing the factory in 2010.

While there had not been recent large-scale expropriation cases by the end of former President Conde’s administration, some mining concession contracts have had their initial award revoked and were sold to another bidder.  In 2008, the previous regime of Lansana Conde stripped Rio Tinto of 50 percent of its concession of the Simandou iron ore mine and sold it to another company.  In March 2022, the transition government began seizing property they believed belonged to the state and was inappropriately sold under former President Conde’s government, in some cases demolishing houses and buildings on the disputed land before legal challenges were exhausted.

Guinea, as a member of OHADA, has the same bankruptcy laws as most West African francophone countries.  OHADA’s Uniform Act on the Organization of Securities enforces collective proceedings for writing off debts and defines bankruptcy in articles 227 to 233.  The Uniform Act also distinguishes fraudulent from non-fraudulent bankruptcies.  There is no distinction between foreign and domestic investors.  The only distinction made is a privilege ranking that defines which claims must be paid first from the bankrupt company’s assets.  Articles 180 to 190 of OHADA’s Uniform Act define which creditors are entitled to priority compensation.  Bankruptcy is only criminalized when it occurs due to fraudulent actions and leaves criminal penalties to national authorities.  Non-fraudulent bankruptcy is adjudicated though the Uniform Act.

Legal, regulatory, and accounting systems are consistent with international norms. Guyana is a commonwealth nation and embraces the International Financial Reporting Standard (IFRS), under which all publicly traded companies are legally required to publish their annual reports. Guyana is a democratic country, whose constitution mandates the separation of the executive, legislative, and judicial branches of government.  In practice, however, many GoG processes are opaque and consistently cause confusion for investors and exporters. Regulations are developed through stakeholder consultations followed by parliamentary debate and eventual passage in Guyana’s National Assembly (parliament). While the GoG does not require companies to disclose environmental, social and governance (ESG) standards, it actively encourages ESG through investment policies and the LCDS. Guyana’s laws are publicly available on the Ministry of Legal Affairs website. Publicly listed companies’ finances and debt obligations are relatively transparent, but Guyana’s accounting and auditing firms are severely limited in their capacity to conduct thorough audits that comply with international best practices. Oversight mechanisms for public finances include the national assembly and the Auditor General Office.

As captured in the World Bank’s Doing Business Report, the GoG’s bureaucratic procedures are cumbersome, often involve multiple ministries that often have overlapping regulatory responsibilities. Investors report having received conflicting messages from various officials, and difficulty determining where the authority for decision-making lies.  In the absence of adequate legislation, most decision-making remains centralized. An extraordinary number of issues continue to be resolved in the presidential cabinet, a process that is perceived by many – especially new investors or bidders – as opaque and slow.

Resources

Ministry of Legal Affairs: https://mola.gov.gy/laws-of-guyana

Guyana has been a World Trade Organization (WTO) member since 1995 and adheres to Trade-Related Investment Measures (TRIMs) guidelines. Guyana is also a member of the Caribbean Community (CARICOM) and is working to harmonize its regulatory systems with the rest of the CARICOM member states. Guyana is a member of the United Nations Framework Convention on Climate Change (UNFCCC) and the reducing emissions from deforestation and forest degradation (REDD+) initiative.

Guyana has laws on intellectual property rights and patents. However, a lack of enforcement offers few protections in practice and allows for the relatively uninhibited distribution and sale of illegally obtained content.

Guyana’s legal system combines civil and common laws. Guyana’s judicial system operates independently from the executive branch. The Caribbean Court of Justice, located in Trinidad and Tobago, is Guyana’s highest court. Registered companies are governed by the Companies Act and contracts are enforced by Guyanese courts or through a mediator. Guyana has a commercial court in its High Court, which has both original and appellate jurisdiction.

Legislation exists in Guyana to support foreign direct investment, but the enforcement of these regulations continues to be inadequate. The objective of the Investment Act of 2004 and Industries and Aid and Encouragement Act of 1951 is to stimulate socio-economic development by attracting and facilitating foreign investment. Other relevant laws include: the Income Tax Act, the Customs Act, the Procurement Act of 2003, the Companies Act of 1991, the Securities Act of 1998, and the Small Business Act. Regulatory actions are still required for much of this legislation to be effectively implemented. The Companies Act provides special provisions for companies incorporated outside of Guyana called “external companies.” Most recently the 2021 Local Content Act mandates certain levels of Guyanese participation (in the form of workforce, company ownership, and sourcing of materials) in the oil and gas sector. Companies should direct their inquiries about regulations on FDI to GOINVEST.

Guyana has no known examples of executive interference in the court system that have adversely affected foreign investors. The judicial system is generally perceived to be slow and ineffective in enforcing legal contracts. The 2020 World Bank’s Doing Business Report states that it takes 581 days to enforce a contract in Guyana. Guyana’s local content legislation was passed on December 30, 2022. The legislation ringfences 40 business lines for Guyanese businesses within the oil and gas industry.

The Competition Commission of Guyana was established under the 2006 Competition and Fair-Trading Act. The Competition and Fair-Trading act seek to promote, maintain, and encourage competition; to prohibit the prevention, restriction, or distortion of competition, the abuse of dominant trade positions; and to promote the welfare and interests of consumers. The Competition Commission and Consumer Affairs Commission (CCAC) is responsible for investigating complaints by agencies and consumers, eliminating anti-competitive agreements, and may institute or participate in proceedings before a Court of Law. For mergers and acquisitions within of the banking sector, the Bank of Guyana has ultimate oversight and approval.

The government can expropriate property in the public interest under the 2001 Acquisition of Land for Public Purposes Act, although there are no recent cases of expropriation. Adequate legislation exists to promote and protect foreign investment. However, enforcement is often ineffective. Many reports view Guyana’s judicial system as being slow and ineffective in enforcing legal contracts. All companies are encouraged to conduct due diligence and seek appropriate legal counsel for any potential questions prior to doing business in Guyana.

Guyana is a party to the International Centre for Settlement of Investment Disputes (ICSID Convention). Additionally, Guyana has ratified the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention), which entered into force in December 2014.

Guyana does not have a bilateral investment treaty with the United States. Negotiations began in 1993 but broke down in 1995. Since then, the two countries have not conducted subsequent negotiations.

Double taxation treaties are in force with Canada (1987), the United Kingdom (1992), and CARICOM (1995). Other double taxation agreements remain under negotiation with India, Kuwait, and the Seychelles. The CARICOM-Dominican Republic Free Trade Agreement provides for the negotiation of a double taxation agreement, but no significant developments have occurred since March 2009.

There is one ongoing investment dispute involving a U.S. telecommunications company, which previously held a legal monopoly in Guyana.

International arbitration decisions are enforceable under the 1931 Arbitration Act of British Guiana, as amended in 1998. The Act is based on the Geneva Convention for the Execution of Foreign Arbitral Awards of 1927. The GoG enforces foreign awards by way of judicial decisions or action, and such awards must be in line with the policies and laws of Guyana.

According to the 2020 World Bank’s Doing Business Report, resolving disputes in Guyana takes 581 days, and on average costs 27 percent of the value of the claim. According to many businesses, suspected corrupt practices and long delays make the courts an unattractive option for settling investment or contractual disputes, particularly for foreign investors unfamiliar with Guyana.

The GoG has set up a Commercial Court to expedite commercial disputes, but this court only has one judge presiding, and companies have reported that it is overwhelmed by a backlog of cases.  The Caribbean Court of Justice, based in Trinidad and Tobago, is Guyana’s court of final instance. In practice, most business disputes are settled by mediation which avoids a lengthy court battle and keeps costs low to both parties. Guyanese state-owned enterprises are not widely involved in investor disputes. To date, there are no complaints on the court process relating to judgments involving state owned enterprises.

The 1998 Guyana Insolvency Act provides for the facilitation of insolvency proceedings.  The 2004 Financial Institutions Act gives the Central Bank power to take temporary control of financial institutions in trouble.  This Act provides legal authority for the Central Bank to take a more proactive role in helping insolvent local banks.

According to data collected by the World Bank Doing Business Report, resolving insolvency in Guyana takes three years on average and costs 28.5% of the debtor’s estate, with the most likely outcome being that the company will be sold piecemeal.  The average recovery rate is 18 cents on the dollar.

Haitian laws are written to allow for transparency and to be applied universally. However, Haitian officials do not uniformly enforce these laws and the bureaucratic “red tape” in the Haitian legal system is often excessive.

Tax, labor, health, and safety laws and policies are also loosely enforced. The private sector often provides services, such as healthcare, to employees that are not entitled to coverage under Haitian government agencies or institutions. All regulatory processes are managed exclusively by the government and do not involve the private sector and non-governmental organizations.

Draft bills or regulations are available to the public through “Le Moniteur,” the official journal of the Haitian government, and information is sometimes made available online. Le Moniteur contains public agency rules, decrees, and public notices that Les Presses Nationales d’Haiti publishes.

According to the World Bank, Haitian ministries and regulatory agencies do not develop forward regulatory plans, nor do they publish proposed regulations prior to their adoption. Haitian law does not require a timeframe for public comment or review of proposed regulations.

Haiti is a member of the Caribbean Community (CARICOM), an organization of 15 states and dependencies established to promote regional economic integration. The CARICOM Single Market and Economy (CSME), created in 1989, aims to advance the region’s integration into the global economy by facilitating free trade in goods and services, and the free movement of labor and capital. CSME became operational in January 2006 in 12 of the 15 member states. Haiti, as a member of CARICOM, has expressed an interest in participating fully in CSME. However, to become eligible, Haiti must amend its customs code to align with CARICOM and WTO standards.

Haiti also adheres to the compulsory jurisdiction of the International Court of Justice on issues of international law, and of the Caribbean Court of Justice for the settlement of trade disputes within CARICOM.

Haiti is an original member of the WTO. As such, it has made several commitments to the WTO with regard to the financial services sector. These commitments include allowing foreign investment in financial services, such as retail, commercial, investment banking, and consulting. One foreign bank, Citibank, operates in Haiti. Haiti has committed to notifying the WTO Committee on Technical Barriers to Trade of all draft technical regulations. However, Haiti is not party to the Trade Facilitation Agreement.

As a former French colony, Haiti adopted the French civil law system. Judicial power is exercised by the Superior Magistrate Council, the courts of appeal, the courts of first instance, the courts of justice of the peace, and the courts of exception. Their operations, organization and competence are set by law. The Supreme Court, also known as the Superior Magistrate Council, is the highest court of the nation, followed in descending order by the Court of Appeals and the Court of First Instance. Haiti’s commercial code dates back to 1826 and underwent significant revisions in 1944. There are few commercial laws in place and there are no commercial courts. Injunctive relief is based upon penal sanctions rather than securing desirable civil action. Similarly, contracts to comply with certain obligations, such as commodities futures contracts, are not enforced. Haitian judges do not have specializations, and their knowledge of commercial law is limited. Utilizing Haitian courts to settle disputes is a lengthy process and cases can remain unresolved for years. Bonds to release assets frozen through litigation are unavailable. Business litigants often pursue out-of-court settlements.

Haiti’s legal system often presents challenges for U.S. citizens seeking to resolve legal disputes. In Haiti, judges are appointed for a set number of years. Public prosecutors are direct employees of the Ministry of Justice and can be transferred or suspended by the executive branch at any time. There are numerous allegations of undue political interference. Additionally, there are persistent claims that some Haitian officials use their public office to influence commercial dispute outcomes for personal gain. The Haitian government receives international assistance to increase the capacity of its oversight institutions and the capacity of the national police.

The Investment Code prohibits fiscal and legal discrimination against foreign investors. The code explicitly recognizes the crucial role of foreign direct investment in promoting economic growth. It also aims to facilitate, liberalize, and stimulate private investment, and contains exemptions to promote investments that enhance competitiveness in sectors deemed priorities, especially export-oriented sectors. Tax incentives, such as reductions on taxable income and tax exemptions, are designed to promote private investment. Additionally, the code grants Haitian and foreign investors the same rights, privileges, and equal protection. Foreign investors must be legally registered and pay appropriate local taxes and fees.

The code also established an Inter-Ministerial Investment Commission (CII) to examine investor eligibility for license exemptions as well as customs and tariff advantages. The Center for Facilitation of Investments (CFI) is the Technical Secretariat of the CII. The Prime Minister, or his delegate, chairs the CII, which is composed of representatives of the Ministries of Economy and Finance, Commerce, and Tourism, as well as those ministries that oversee specific areas of investment. The CII must authorize all business sales, transfers, mergers, partnerships, and fiscal exemptions within the scope of the code. The CII also manages the process of fining and sanctioning enterprises that disregard the code.

The following areas are often noted by businesses as challenging aspects of Haitian law: operation of the judicial system; publication of laws, regulations, and official notices; establishment of companies; land tenure and real property law and procedures; bank and credit operations; insurance and pension regulation; accounting standards; civil status documentation; customs law and administration; international trade and investment promotion; foreign investment regulations; and regulation of market concentration and competition. Although these deficiencies hinder business activities, they are not specifically aimed at foreign firms; rather, they appear to affect both foreign and local companies.

There is currently no law to regulate competition. Haiti is one of the most open economies in the region. The investment code provides the same rights, privileges, and equal protection to local and foreign investors. Anti-corruption legislation also criminalizes nepotism and the dissemination of inside information on public procurement processes. Haiti does not, however, have anti-trust legislation.

The 1987 Constitution allows expropriation or dispossession only for reasons of public interest or land reform and is subject to prior payment of fair compensation as determined by an expert. If the initial project for which the expropriation occurred is abandoned, the Constitution stipulates that the expropriation will be annulled, and the property returned to the original owner. The Constitution prohibits nationalization and confiscation of real and personal property for political purposes or reasons.

Title deeds are vague and often insecure. The Haitian government established the National Institute of Agrarian Reform to implement expropriations of private agricultural properties with appropriate compensation. The agrarian reform project, initiated under the Preval administration (1996-2001), was controversial among both Haitian and U.S. property owners. There have been complaints of non-compensation for the expropriation of property. Moreover, a revision of the land tenure code, intended to address issues related to the lack of access to land records, surveys, and property titles in Haiti, has been pending in parliament since 2014. A partnership between the private sector, Haitian government, and international organizations resulted in a guide on security land rights in Haiti, which was translated in 2016 and can be found here: https://www.land-links.org/wp-content/uploads/2019/09/Haiti-Land-Manual-2.pdf .

Haiti’s bankruptcy law was enacted in 1826 and modified in 1944. There are three phases of bankruptcy under Haitian law. In the first stage, payments cease to be made and bankruptcy is declared. In the second stage, a judgment of bankruptcy is rendered, which transfers the rights to administer assets from the debtor to the Director of the Haitian Tax Authority (Direction Generale des Impots). In this phase, assets are sealed, and the debtor is confined to debtor’s prison. In the last stage, the debtor’s assets are liquidated, and the debtor’s verified debts are paid prorated according to their right. The debtor is released from prison once the debtor’s verified debts are paid. In practice, the above measures are seldom applied. Since 1955, most bankruptcy cases have been settled between the parties.

The practice of mob looting remains a means for some to express their frustration with the country’s social inequities. Many companies went bankrupt after being attacked by violent protesters. Lack of insurance coverage and the complexity of compensation proceedings make it difficult for many to restart their businesses. The state does not have a court assessing the losses of businesses for state financial compensation for bodily or patrimonial damages. While the provisions of Article 356 of the Haitian Penal Code states perpetrators should be punished in hard labor in perpetuity, many of these crimes remained unsolved.

Although the concepts of real property mortgages and chattel mortgages – based on collateral of movable property, such as machinery, furniture, automobiles, or livestock to secure a mortgage – exist, real estate mortgages involve antiquated procedures and may fail to be recorded against the debtor or other creditors. Property is seldom purchased through a mortgage and secured debt is difficult to arrange or collect. Liens are virtually impossible to impose and using the judicial process for foreclosure is time consuming and often futile. Banks frequently require that loans be secured in U.S. dollars.

The GOH publishes approved regulations in the official government Gazette. Honduras lacks an indexed legal code so lawyers and judges must maintain their own libraries of law publications.  The government does not have a process to solicit comments on proposed regulations from the general public.

CAFTA-DR requires host governments publish proposed regulations that could affect businesses or investments. Honduras made significant progress in 2019 and 2020 in relation to the publication and availability of information under CAFTA-DR. Honduras notified Article 1 technical provisions, per CAFTA-DR requirements, and the Customs Administration (ADUANAS) and Sanitary Regulatory Agency (ARSA) have improved publication of regulations through their official online portals.

Some U.S. investors experience long waiting periods for environmental permits and other regulatory and legislative approvals. Sectors in which U.S. companies frequently encounter problems include infrastructure, telecoms, mining, and energy. Generally, regulatory requirements are complex and lengthy and vulnerable to rent-seeking and corruption. Regulatory approvals require congressional intervention if the time exceeds a presidential term of four years. Current regulations are available at the Honduran government’s eRegulations website (  http://honduras.eregulations.org/  ). While the majority of regulations are at the national level, municipal level regulations also exist and can be very discouraging to investment. No significant regulatory changes of relevance to foreign investors were announced since the last report. Public comments received by regulators are not published. The government does not promote or require companies’ environmental, social, and governance (ESG) disclosure to facilitate transparency and/or help investors and consumers distinguish between high- and low-quality investments.

As a member of the WTO, Honduras notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).

Honduras has a civil law system. The Honduran Commercial Code, enacted in 1950, regulates business operations and falls under the jurisdiction of the Honduran civil court system. The Civil Procedures Code, which entered into force in 2010, introduced the use of open, oral arguments for adversarial procedures. The Civil Procedures Code provides for protection of commercial transactions, property rights, and land tenure. It also established a process for the enforcement of rulings issued by foreign courts. Despite these codes, U.S. claimants have noted the lack of transparency and the slow administration of justice in the courts. U.S. firms report favoritism, external pressure, and bribes within the judicial system. They also mention the poor quality of legal representation from Honduran attorneys.

Resolving an investment or commercial dispute in the local Honduran courts is often a lengthy process. Foreign investors report dispute resolution typically involves multiple appeals and decisions at different levels of the Honduran judicial system. Each decision can take months or years, and it is usually not possible for the parties to predict the time required to obtain a decision. An electronic case management system has recently been introduced with US Government support to increase transparency and reduce corruption. This system is gradually being rolled out to the different courts. Final decisions from Honduran courts or from arbitration panels often require subsequent enforcement from lower courts to take effect, requiring additional time. Foreign investors sometimes prefer to resolve disputes with suppliers, customers, or partners out of court when possible. Honduras has a very high-quality mechanism for alternate dispute resolution.

Honduras’ Investment Law requires all local and foreign direct investment be registered with the Investment Office in the Ministry of Economic Development. Upon registration, the Investment Office issues certificates to guarantee international arbitration rights under CAFTA-DR. An investor who believes the government has not honored a substantive obligation under CAFTA-DR may pursue CAFTA-DR’s dispute settlement mechanism, as detailed in the Investment Chapter. The claim’s proceedings and documents are generally open to the public.

The Government of Honduras requires authorization for both foreign and domestic investments in the following areas:

• Basic health services
• Telecommunications
• Generation, transmission, and distribution of electricity
• Air transport
• Fishing, hunting, and aquaculture
• Exploitation of forestry resources
• Agricultural and agro-industrial activities exceeding land tenancy limits established by the Agricultural Modernization Law of 1992 and the Land Reform Law of 1974
• Insurance and financial services
• Investigation, exploration, and exploitation of mines, quarries, petroleum, and related substances.

The Government of Honduras offers one-stop business set-up at its My Business Online website, which helps domestic and international investors submit initial business registry information and provides step-by-step instructions. ( https://www.miempresaenlinea.org/  ) However, formalizing a business still requires visiting a municipal chamber of commerce window for registration and permits, a process vulnerable to rent-seeking and corruption.

The Commission for the Defense and Promotion of Competition (CDPC) is the Honduran government agency that reviews proposed transactions for competition-related concerns. Honduras’ Competition Law established the CDPC in 2005 as part of the effort to implement CAFTA-DR. The Honduran Congress appoints the members of the CDPC, which functions as an independent regulatory commission.

Laws that grant sole companies exclusive distribution rights for imported goods have created artificial monopolies in Honduras, hindering the availability and raising the price of imported goods in the Honduran market.

The Honduran government has the authority to expropriate property for purposes of land reform or public use. The National Agrarian Reform Law provides that idle land fit for farming can be expropriated and awarded to indigent and landless persons via the Honduran National Agrarian Institute. In 2013, the Honduran government passed legislation regarding recovery and reassignment of concessions on underutilized assets. Both local and foreign firms have expressed concerns that the law does not specify what the government considers “underutilized.” The government has not published implementing regulations for the law nor indicated plans to use the law against any private sector firm. The May 2022 energy law threatens energy producers with expropriation if they do not renegotiate their power-purchasing agreements to the government’s satisfaction.

Government expropriation of land owned by U.S. companies is rare. CAFTA-DR’s Investment Chapter Section 10.7 states no party may expropriate or nationalize a covered investment either directly or indirectly, with limited public purpose exceptions that require prompt and adequate compensation. Under the Agrarian Reform Law, the Honduran government must compensate expropriated land partly in cash and partly in 15-, 20-, or 25-year government bonds. The portion to be paid in cash cannot exceed $1,000 if the expropriated land has at least one building and it cannot exceed $500 if the land is in use but has no buildings. If the land is not in use, the government will compensate entirely in 25-year government bonds.

Land invasions by squatters on both Honduran and foreign-owned land are increasingly common, especially in agricultural areas. These invasions have grown more frequent in 2022, sometimes leading to violent confrontations. Owners of disputed land have found pursuing legal avenues costly, time consuming, and ineffective at enforcing property rights.

Companies that default in payment of their obligations in Honduras can declare bankruptcy. A Honduran court must ratify a bankruptcy for it to take effect. These cases are regulated by the country’s Commercial Code.

The judicial ruling that declares the bankruptcy of the company establishes the value of the assets, the recognition and classification of the credits, the procedure for the sale of assets and the schedule for the payment of the obligations, in the case that it is not possible for the company to continue its operations. The ruling must be published in the Gazette. The liquidation of companies is always a judicial matter, except in the case of banking institutions which are liquidated by the National Banking and Insurance Commission.

Any creditor or a company itself may initiate the liquidation procedure, which is generally a civil matter. The judge appoints a liquidator to execute the procedure. A mechanism that a company may exercise to prevent bankruptcy is to request a suspension of payments from the judge. If approved by the judge and the creditors, the company may be able to reach an agreement with its creditors that allows the same administrative board to maintain control of the company.

A company may be prosecuted for fraudulently declaring bankruptcy in the case that the administrative board or shareholders withdraw their assets before the declaration, alter accounting books making it impossible to determine the real situation of the company, or favor certain creditors granting them benefits that they would not be entitled to otherwise.

Hong Kong’s regulations and policies typically strive to avoid distortions or impediments to the efficient mobilization and allocation of capital and to encourage competition. Bureaucratic procedures and “red tape” are usually transparent and held to a minimum. To make or amend any legislation, including investment laws, the HKG conducts a three-month public consultation on the issue concerned, which then informs the drafting of the bill. Lawmakers then discuss draft bills and vote. Hong Kong’s regulatory and accounting systems are transparent and consistent with international norms. Rule of law risks that were formerly limited to mainland China are now increasingly a concern in Hong Kong.

Gazette is the official publication of the HKG. This website https://www.gld.gov.hk/egazette/english/whatsnew/whatsnew.html is the centralized online location where laws, regulations, draft bills, notices, and tenders are published.

All public comments received by the HKG are published at the websites of relevant policy bureaus. The Office of the Ombudsman, established in 1989 by the Ombudsman Ordinance, is Hong Kong’s independent watchdog of public governance.

Public finances are regulated by clear laws and regulations. The Basic Law prescribes that authorities strive to achieve a fiscal balance and avoid deficits. There is a clear commitment by the HKG to publish fiscal information under the Audit Ordinance and the Public Finance Ordinance, which prescribe deadlines for the publication of annual accounts and require the submission of annual spending estimates to the Legislative Council (LegCo), Hong Kong’s legislature. There are few contingent liabilities of the HKG, with details of these items published about seven months after the release of the fiscal budget. In addition, LegCo members have a responsibility to enhance budgetary transparency by urging government officials to explain the government’s rationale for the allocation of resources. All LegCo meetings are open to the public, so the government’s responses are available to the general public. However, the HKG maintains a special fund for “national security expenditures” that is not subject to public scrutiny. In February 2021, the HKG’s annual budget allocated HKD 8 billion (approximately USD 1 billion) to this fund, and the HKG refused to provide information on how this money would be spent.

On June 18, 2021, a subsidiary legislation was gazetted to implement the changes authorized under the Companies Ordinance. The new changes will gradually restrict the public from accessing certain information about executives in the Company Registry (CR) over three phases. Phase one starts on August 23, 2021 and allows new companies to have the option to withhold the usual residential addresses (URA) of directors and the full identification numbers (IDN) of directors and company secretaries from public inspection in hardcopy. Phase two starts on October 24, 2022 and will automatically swap out the URA and IDN of directors and company secretaries in the online CR with correspondence addresses and partial IDNs for public inspection. Phase three starts December 27, 2023 and allows all registered companies to retroactively apply to the CR to replace the URA and IDN of directors and company secretaries with their correspondence addresses and partial IDNs in hardcopy. “Specified persons” could apply to the CR for access to the protected information of directors and other persons.

Hong Kong’s Securities and Futures Commission issued a revised guideline in June 2021 requiring asset managers to disclose more information regarding their methodology for environment, sustainability, governance (ESG) funds, including the ESG focus, ESG investment strategy, expected proportion of ESG investment, any reference benchmark, and related risks. It also requires an ESG fund to conduct periodic assessment, at least annually, to assess how the fund has attained its ESG focus. To enhance transparency of ESG funds in Hong Kong, a central database of all SFC-authorized ESG funds is accessible through the SFC’s website.

Hong Kong is an independent member of the WTO and Asia-Pacific Economic Co-operation (APEC). It notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade and was the first WTO member to ratify the Trade Facilitation Agreement (TFA). Hong Kong has achieved a 100 percent rate of implementation commitments.

While Hong Kong is not a member of the Organization of Economic Cooperation and Development (OECD), it is a participant of the OECD’s Trade Committee and the Committee on Financial Markets. The HKG is in the process of implementing the OECD’s new minimum global corporate tax initiative, Base Erosion and Profit Shifting (BEPS 2.0).

Hong Kong’s common law system is based on the United Kingdom’s, and judges are appointed by the Chief Executive on the recommendation of the Judicial Officers Recommendation Commission. Regulations or enforcement actions are appealable, and they are adjudicated in the court system. In March 2020 two sitting UK judges resigned from the Hong Kong Court of Final Appeal, with the UK government citing a systematic erosion of liberty and democracy that made it untenable for those judges to sit on Hong Kong’s leading court.

Hong Kong’s commercial law covers a wide range of issues related to doing business. Most of Hong Kong’s contract law is found in the reported decisions of the courts in Hong Kong and other common law jurisdictions.

The imposition of the NSL and pressure from mainland China authorities raised serious concerns about the state of Hong Kong’s judicial independence. The NSL authorizes the mainland China judicial system, which lacks judicial independence and has a 99 percent conviction rate, to take over any national security-related case at the request of the HKG or the Office of Safeguarding National Security. Under the NSL, the Chief Executive is required to establish a list of judges to handle all cases concerning national security-related offenses. Legal scholars argued that this unprecedented involvement of the Chief Executive weakens Hong Kong’s judicial independence.

Media outlets controlled by the PRC central government in both Hong Kong and mainland China repeatedly accused Hong Kong judges of bias following the acquittals of protesters accused of rioting and other crimes. Some Hong Kong and PRC central government officials questioned the existence of the “separation of powers” in Hong Kong, including some statements that judicial independence is not enshrined in Hong Kong law and that judges should follow “guidance” from the government.

Hong Kong’s extensive body of commercial and company law generally follows that of the United Kingdom, including the common law and rules of equity. Most statutory law is made locally. The local court system provides for effective enforcement of contracts, dispute settlement, and protection of rights. Foreign and domestic companies register under the same rules and are subject to the same set of business regulations.

The Hong Kong Code on Takeovers and Mergers (1981) sets out general principles for acceptable standards of commercial behavior. The Companies Ordinance (Chapter 622) applies to Hong Kong-incorporated companies and contains the statutory provisions governing compulsory acquisitions. For companies incorporated in jurisdictions other than Hong Kong, relevant local company laws apply. The Companies Ordinance requires companies to retain accurate and up to date information about significant controllers.

The Securities and Futures Ordinance (Chapter 571) contains provisions requiring shareholders to disclose interests in securities in listed companies and provides listed companies with the power to investigate ownership of interests in its shares. It regulates the disclosure of inside information by listed companies and restricts insider dealing and other market misconduct.

The independent Competition Commission (CC) investigates anti-competitive conduct that prevents, restricts, or distorts competition in Hong Kong. In November 2021, the CC filed a case in the Competition Tribunal against three undertakings for participating in cartel conduct regarding the sale of inserters in Hong Kong.

The U.S. Consulate General is not aware of any expropriations in the recent past. Expropriation of private property in Hong Kong may occur if it is clearly in the public interest and only for well-defined purposes such as implementation of public works projects. Expropriations are to be conducted through negotiations, and in a non-discriminatory manner in accordance with established principles of international law. Investors in and lenders to expropriated entities are to receive prompt, adequate, and effective compensation. If agreement cannot be reached on the amount payable, either party can refer the claim to the Land Tribunal.

Hong Kong’s Bankruptcy Ordinance provides the legal framework to enable: i) a creditor to file a bankruptcy petition with the court against an individual, firm, or partner of a firm who owes him/her money; and ii) a debtor who is unable to repay his/her debts to file a bankruptcy petition against himself/herself with the court. Bankruptcy offenses are subject to criminal liability.

The Companies (Winding Up and Miscellaneous Provisions) Ordinance aims to improve and modernize the corporate winding-up regime by increasing creditor protection and further enhancing the integrity of the winding-up process.

The Commercial Credit Reference Agency collates information about the indebtedness and credit history of SMEs and makes such information available to members of the Hong Kong Association of Banks and the Hong Kong Association of Deposit Taking Companies. Hong Kong’s average duration of bankruptcy proceedings is just under ten months.

Generally, legal, regulatory, and accounting systems are consistent with international and EU standards.  However, some executives in Hungarian subsidiaries of U.S. companies express concerns about a lack of transparency in the GOH’s policy-making process and an uneven playing field in public tendering.  In recent years, there has been an uptick in the number of companies, including major U.S. multinational franchises and foreign owners of major infrastructure, reporting pressure to sell their businesses to government-affiliated investors.  Those that refuse to sell report an increase in tax audits, fines, and spurious regulatory challenges and court cases. SMEs increasingly report a desire to either remain small (and therefore “under the radar” of these government-affiliated investors) or relocate their businesses outside of Hungary.

For foreign investors, the most relevant regulations stem from EU directives and the laws passed by Parliament to implement them.  Laws in Parliament can be found on Parliament’s website (https://www.parlament.hu/en/web/house-of-the-national-assembly).  Legislation, once passed, is published in a legal gazette and available online at  www.magyarkozlony.hu  .  The GOH can issue decrees, which also have national scope, but they cannot be contrary to laws enacted by Parliament.  Local municipalities can create local decrees, limited to the local jurisdiction.

As a result of the COVID-19 crisis, in March 2020, the Parliament passed a bill that established a state of emergency (SOE) in Hungary, allowing the GOH to govern by decree without parliamentary approval. The GOH used this decree to levy new sector-specific taxes, to take control of a Hungarian company that had been in an ownership dispute with the GOH, and to reallocate competencies and tax collection duties from an opposition-led municipality to a county-level body led by the ruling Fidesz party.

Hungarian financial reporting standards are in line with the International Accounting Standards and the EU Fourth and Seventh Directives.  The accounting law requires all businesses to prepare consolidated financial statements on an annual basis in accordance with international financial standards. The government does not promote or require environmental, social, and governance (ESG) disclosure for companies operating in Hungary.

The GOH rarely invites interested parties to comment on draft legislation.  Civil society organizations have complained about a loophole in the current law that allows individual Members of Parliament to submit legislation and amendments without public consultation.  The average deadline for submitting public comment is often very short, usually less than one week. The Act on Legislation and the Law Soliciting Public Opinion, both passed by Parliament in 2010, govern the public consultation process.  The laws require the GOH to publish draft laws on its webpage and to give adequate time for all interested parties to give an opinion on the draft. However, implementation is not uniform, and the GOH often fails to solicit public comments on proposed legislation.

The legislation process – including key regulatory actions related to laws – are published on the Parliament’s webpage.  Explanations attached to draft bills include a short summary on the aim of the legislation, but regulators only occasionally release public comments.

Regulatory enforcement mechanisms include the county and district level government offices, whose decisions can be challenged at county-level courts.  The court system generally provides efficient oversight of the GOH’s administrative processes.

Hungary’s budget was widely accessible to the general public, including online through the Parliament and Finance Ministry websites and the Legal Gazette.  The government made budget documents, including the executive budget proposal, the enacted budget, and the end-of-year report publicly available within a reasonable period of time.  Modifications to a current budget, which in 2021 were quite substantial because of the pandemic, are not consolidated with the initial budget law and do not include economic analysis of the effects of those modifications. Information on debt obligations was publicly available, including online through the Hungarian Central Bank (  https://www.mnb.hu/en  ) and Hungarian State Debt Manager’s ( https://akk.hu/  ) websites.

All EU regulations are directly applicable in Hungary, even without further domestic measures.  If a Hungarian law is contrary to EU legislation, the EU rule takes precedence. As a whole, labor, environment, health, and safety laws are consistent with EU regulations.  Hungary follows EU foreign trade and investment policy, and all trade regulations follow EU legislation. Hungary participates in the WTO as an EU Member State.

The Hungarian legal system is based on continental European (German-French and Roman law) traditions.  Contracts are enforced by ordinary courts or – if stipulated by contract – arbitration centers. Investors in Hungary can agree with their partners to turn to Hungarian or foreign arbitration courts.

Apart from these arbitration centers, there are no specialized courts for commercial cases; ordinary courts are entitled to judge any kind of civil case.  The Civil Code of 2013 applies to civil contracts.

The Hungarian judicial system includes four tiers: district courts (formerly referred to as local courts); courts of justice (formerly referred to as county courts); courts of appeal; and the Curia (the Hungarian Supreme Court).  Hungary also has a Constitutional Court that reviews cases involving the constitutionality of laws and court rulings. There are no special commercial courts, but first level public administration and labor cases are judged only by the county level courts of justices.

Although the GOH has criticized court decisions on several occasions, ordinary courts are considered to generally operate independently under largely fair and reliable judicial procedures.  Recently, an increasing number of current and former judges have raised concerns about growing GOH influence over the court system and intimidation of judges by court administration. The European Commission’s 2021 Rule of Law Report, issued in July 2021, cited judicial independence in Hungary as a source of concern. Most business complaints about the court system pertain to the lengthy proceedings rather than the fairness of the verdicts.  The GOH has said it hopes to improve the speed and efficiency of court proceedings with an updated Civil Procedure Code that entered into force in January 2018.

Regulations and law enforcement actions pertaining to investors may be appealed at ordinary courts or at the Constitutional Court.

Hungarian law protects property and investment.  The Hungarian state may expropriate property only in exceptional cases where there is a public interest; any such expropriations must be carried out in a lawful way, and the GOH is obliged to make immediate and full restitution for any expropriated property, without additional stipulations or conditions.

The GOH passed a national security law on investment screening in 2018 that requires foreign investors seeking to acquire more than a 25 percent stake in a Hungarian company in certain “sensitive sectors” (defense, intelligence services, certain financial services, electric energy, gas, water utility, and electronic information systems for governments) to seek approval from the Interior Ministry.  (Please see above section on limits on foreign control for more details). Based on this law, in April 2021 the Interior Ministry blocked Austria’s Vienna Insurance Group from buying Dutch insurer Aegon’s Hungarian subsidiary. In February 2022 the European Commission decided the blocked sale violated EU rules, but by that time the GOH and VIG agreed that the state would acquire a 45 percent stake in Aegon. Additionally, in 2020, as part of the measures to mitigate the economic effects of the COVID-19 pandemic, the GOH passed another regulation requiring foreign investors to seek approval from the Ministry of Innovation and Technology (MIT) for greenfield or expansion of existing investments.

There is no primary website or “one-stop shop” which compiles all relevant laws, rules, procedures, and reporting requirements for investors.  The Hungarian Investment Promotion Agency (HIPA), however, facilitates establishment of businesses and provides guidance on relevant legislation.

The Hungarian Competition Authority, tasked with safeguarding the public interest, enforces the provisions of the Hungarian Competition Act, and EU competition law also binds Hungary. The Competition Authority is empowered to investigate suspected violations of competition law, order changes to practices, and levy fines and penalties.  According to the Authority, since 2010 the number of competition cases has decreased, but they have become more complex. Out of more than 60 cases in 2021, only a few minor cases pertained to U.S.-owned companies.  Hungarian law does not consider conflict of interest to be a criminal offense. Citing evidence of conflict of interest and irregularities, in December 2017 the European Anti-Fraud Office (OLAF) recommended opening a criminal investigation into a high-profile $50 million EU-funded public procurement project, but Hungarian authorities declined to prosecute the case.

Hungary’s Constitution provides protection against uncompensated expropriation, nationalization, and any other arbitrary action by the GOH except in cases of threat to national security.  In such cases, immediate and full compensation is to be provided to the owner. There are no known expropriation cases where the GOH has discriminated against U.S. investments, companies, or representatives.  There have been some complaints from other foreign investors within the past several years that expropriations have been improperly executed and without proper remuneration. Parties involved in these cases turned to the domestic legal system for dispute settlement.

There is no recent history of official GOH expropriations.

ICSID Convention and New York Convention

Hungary is a signatory to the International Centre for the Settlement of Investment Disputes (ICSID Convention), proclaimed in Hungary by Law 27 of 1978.  Hungary also is a signatory to the UN Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention), proclaimed in Hungary by Law 25 of 1962. There is not specific legislation providing for enforcement other than the two domestic laws proclaiming the New York and ICSID Conventions.  According to Law 71 of 1994, an arbitration court decision is equally binding to that of a court ruling.

Investor-State Dispute Settlement

Settlement of Investment Disputes (ICSID) and to UN’s 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.  Under the New York Convention, Hungary recognizes and enforces rulings of the International Chamber of Commerce’s International Court of Arbitration.

Hungary shares no Bilateral Investment Treaty or Free Trade Agreement with the United States.  Since 2000 Hungary has been the respondent in 16 known investor-State arbitration claims, although none of these involve U.S. investors.

Local courts recognize and enforce foreign arbitral awards against the GOH.

International Commercial Arbitration and Foreign Courts

In the last few years, parties have increasingly turned to mediation to settle disputes without engaging in lengthy court procedures.  Law 60 of 2017 on domestic arbitration procedures is based on the UNCITRAL Model Law.

Investment dispute settlement clauses are frequently included in investment contract between the foreign enterprise and GOH.  Hungarian law allows the parties to set the jurisdiction of any courts or arbitration centers. The parties can also agree to set up an ad hoc arbitration court.  The law also allows investors to agree on settling investment disputes by turning to foreign arbitration centers, such as the International Centre for Settlement of Investment Disputes (ICSID), UNCITRAL’s Permanent Court of Arbitration (PCA), or the Vienna International Arbitral Centre.  In Hungary, foreign parties can turn to the Hungarian Chamber of Commerce and Industry arbitration court, which has its own rules of proceedings (HYPERLINK “https://mkik.hu/en/court-of-arbitration” HYPERLINK “https://mkik.hu/en/court-of-arbitration”  https://mkik.hu/en/court-of-arbitration ) and in financial issues to the Financial and Capital Market’s arbitration court. Local courts recognize and enforce foreign or domestic arbitral awards.  An arbitral ruling may only be annulled in limited cases, and under special conditions.

Domestic courts do not favor State-owned enterprises (SOEs) disproportionately.  Investors can expect a fair trial even if SOEs are involved and in case of an unfavorable ruling, may elevate the case to the European Court of Justice (ECJ).  Investors do not generally complain about non-transparent or discriminatory court procedures.

The Act on Bankruptcy Procedures, Liquidation Procedures, and Final Settlement of 1991, covers all commercial entities except banks (which have their own regulatory statutes), trusts, and State-owned enterprises, and brought Hungarian legislation in line with EU regulations.  Debtors can initiate bankruptcy proceedings only if they have not sought bankruptcy protection within the previous three years. Within 90 days of seeking bankruptcy protection, the debtor must call a settlement conference to which all creditors are invited. Majority consent of the creditors present is required for all settlements.  If agreement is not reached, the court can order liquidation. The Bankruptcy Act establishes the following priorities of claims to be paid: 1) liquidation costs; 2) secured debts; 3) claims of the individuals; 4) social security and tax obligations; 5) all other debts. Creditors may request the court to appoint a trustee to perform an independent financial examination.  The trustee has the right to challenge, based on conflict of interest, any contract concluded within 12 months preceding the bankruptcy.

The debtor, the creditors, the administrator, or the Criminal Court may file liquidation procedures with the court.  Once a petition is filed, regardless of who filed it, the Court notifies the debtor by sending a copy of the petition.  The debtor has eight days to acknowledge insolvency. If the insolvency is acknowledged, the company declares if any respite for the settlement of debts is requested.  Failure to respond results in the presumption of insolvency. The Court may allow up to of 30 days for the debtor to settle the debt upon request. If the Court finds the debtor insolvent, it appoints a liquidator.

Bankruptcy itself is not criminalized unless it is made in a fraudulent way, deliberately, and in bad faith to prevent the payment of debts.

Law 122 of 2011 obliges banks and credit institutions to establish and maintain the Central Credit Information System to assess creditworthiness of businesses and individuals to facilitate prudent lending (HYPERLINK “http://www.bisz.hu ” HYPERLINK “http://www.bisz.hu” http://www.bisz.hu ).

The regulatory system is transparent, although bureaucratic delays can occur. All proposed laws and regulations are published in draft form for the public record and are open for comment. Icelandic laws regulating business practices are consistent with those of most OECD member states. Iceland’s laws are generally based on European Union directives as a result of Iceland’s membership in the European Economic Area (EEA), which legally obligates it to adopt EU directives and law concerning the four freedoms of the EU: free movement of goods, services, persons, and capital.

The Competition Authority is responsible for enforcing anti-monopoly regulations and promoting effective competition in business activities. This includes eliminating unreasonable barriers and restrictions on freedom in business operations, preventing monopolies and limitations on competition, and facilitating new competitors’ access to the market. The Consumer Agency holds primary responsibility for market surveillance of business operators, transparency of the markets with respect to safety and consumers’ legal rights, and enforcement of legislation concerning protection of consumers’ health, legal, and economic rights. For more information see the Competition Authority’s website ( https://en.samkeppni.is/ ) and the Consumer Agency website ( https://www.neytendastofa.is/English ).

The Icelandic Parliament (Althingi) consists of a single chamber of 63 members; a simple majority is required for ordinary bills to become law. All bills are introduced in the parliament in draft form. Draft laws and regulations are open to public comment and are published in full on the parliament’s web page ( http://www.stjornartidindi.is ) and on the websites of the relevant ministries (often in English). Invest in Iceland also maintains an information portal website that includes information on industry sectors, the business climate, and incentives that foreign investors may find useful ( http://www.invest.is ).

Ministries or regulatory agencies develop bills, which are available to the general public. Ministries or regulatory agencies publish the text of the proposed regulations before their enactment on a unified website ( https://www.stjornartidindi.is/ ). Ministries or regulatory agencies solicit comments on proposed regulation form the general public. Laws and regulations are published on both the parliament’s website ( https://www.althingi.is/ ) and separate website managed by the Ministry of Justice ( https://www.stjornartidindi.is/ ).

The OECD published a report on Iceland in September 2019. One of the findings of the report was that regulatory barriers were high in Iceland. “Regulation should be more commensurate with the needs of a small open economy. Product market regulation is stringent and the administrative burden for start-ups is high, holding back investment and innovation. Restrictions to foreign direct investment are among the highest of the OECD, dampening employment and productivity gains through international knowledge transfer. The government should set up a comprehensive action plan for regulatory reform, prioritizing reforms that foster competition, level the playing field between domestic and foreign firms and attract international investment” ( http://www.oecd.org/economy/iceland-economic-snapshot/ ). The Government of Iceland has worked to reduce the regulatory burden since the report was published. OECD conducted an economic survey of Iceland in 2021. The key findings are as follows: “the pandemic-related collapse of foreign tourism and international travel, which account for almost a fifth of GDP, highlighted the need to diversify the economy. Iceland needs to improve resilience and find new drivers of productivity and employment growth, in particular given the objective of emission reductions. Boosting skills across the population is hence the top priority, along with reforms to strengthen competitive forces.”

The Iceland Chamber of Commerce operates an independent arbitration institute, the Nordic Arbitration Centre (NAC). The NAC provides for a dispute resolution mechanism, allowing parties to solve their dispute efficiently and safely. Both the arbitration process and the Arbitral Tribunals final awards are strictly confidential. There have been no known cases of discrimination against U.S. investors. For more information visit the Iceland Chamber of Commerce’s website ( https://www.chamber.is/arbitration ).

Iceland scores 4.75 out of 5 (best possible) on The World Bank’s Global Indicators of Regulatory Governance index ( https://rulemaking.worldbank.org/en/data/explorecountries/iceland# ).

Icelandic laws regulating business practices are generally consistent with other OECD members. Iceland’s laws are generally based on EU directives as a result of Iceland’s membership in the EEA, which legally obligates it to adopt EU directives and law concerning four freedoms of the EU: free movement, goods, services, persons, and capital.

Iceland has been a member of the World Trade Organization (WTO) since January 1, 1995. Iceland and the United States signed a Trade and Investment Framework Agreement (TIFA) in January 2009.

The Icelandic civil law system enforces property rights, contractual rights, and the means to protect these rights. The Icelandic court system is independent from the parliament and government. Foreign parties must abide by the same rules as Icelandic parties, and they enjoy the same privileges in court; there is no discrimination against foreign parties in the Icelandic court system. When trade or investment disputes are settled, the settlement is usually remitted in the local currency.

Iceland has a three-tier judicial system; eight District Courts (Héraðsdómstólar), the Court of Appeal (Landsréttur), and the Supreme Court (Hæstiréttur Íslands). All court actions commence at the District Courts, and conclusions can then be appealed to the Court of Appeal. In special cases the conclusions of the Court of Appeal can be referred to the Supreme Court. A new public agency, the Judicial Administration (Dómstólasýsla), along with the Court of Appeal (Landsréttur) began operating on January 1, 2018.

The Landsdómur is a special high court or impeachment court to handle cases where members of the Cabinet of Iceland are suspected of criminal behavior. The Landsdómur has 15 members — five supreme court justices, a district court president, a constitutional law professor, and eight people chosen by parliament every six years. The court assembled for the first time in 2011 to prosecute a former Prime Minister for alleged gross misconduct in the events leading up to the 2008 financial crisis. He was found guilty of failing to hold regular cabinet meetings during the crisis but was not convicted of gross misconduct.

Icelandic laws regulating and protecting foreign investments are consistent with OECD and EU standards. As Iceland is a member of the EEA, most EU commercial legislation and directives are in effect in Iceland. The major law governing foreign investment is the 1996 Act on Investment by Non-residents in Business Enterprises, which grants national treatment to non-residents of the EEA. The law dictates that foreign ownership of businesses is generally unrestricted, except for limits in the fishing, energy, and aviation sectors. Icelandic law also restricts the ability of non-EEA citizens to own land, but the Minister of Culture and Business Affairs may waive this. The managers and the majority of the board of directors in an Icelandic enterprise must be domiciled in Iceland or another EEA member state, although exemptions from this provision can be granted by the Minister of Culture and Business Affairs.

Iceland has no automatic screening process for investments that trigger national security concerns (similar to the Committee on Foreign Investment in the United States), although bidders in privatization sales may have to go through a pre-qualification process to verify that the bidder has the financial strength to participate. Investors that intend to hold more than 10 percent of shares (“active” shareholders) in financial institutions are subject to approval from the Central Bank of Iceland ( http://en.fme.is/ ).

For information on incentives and doing business in Iceland see Invest in Iceland’s website: ( https://www.invest.is/doing-business/incentives-and-support ).

Competition Law no. 44/2005 is currently in place to promote competition and to prevent unreasonable barriers on economic operations. Depending on the turnover of the companies in question, the Icelandic Competition Authority is notified of mergers and acquisitions. The Authority may annul mergers or set conditions to prevent monopolies and limitations on competition. For more information see the Competition Authority’s website: ( https://en.samkeppni.is/ ).

The Constitution of Iceland stipulates that no one may be obliged to surrender their property unless required by the government to serve a public interest, and that such a measure shall be provided for by law and full compensation be paid. A special committee is appointed every five years to review and proclaim the legality of expropriation cases. If the committee proclaims a case to be legal, it will negotiate an amount of compensation with the appropriate parties. If an amount cannot be agreed upon, the committee determines a fair value after hearing the case of all parties.

The Icelandic government has never expropriated a foreign investment. However, some private investors described actions by the Icelandic government before and during the October 2008 financial crisis (related to the takeover of three major banks and offshore krona assets) as a type of indirect expropriation ( www.cb.is ).

The 1991 Act on Bankruptcy states that “the provisions of this Act on the right to obtain a license of financial reorganization or for composition with creditors, and on bankruptcy, shall only apply to a debtor who is a natural person if the debtor’s legal domicile is in Iceland and the debtor is not exempted from the jurisdiction of the courts of Iceland. The provisions of this Act shall however be applied to Icelandic nationals not having their legal domicile in Iceland if they are exempted from the jurisdiction of the courts of other states. Where the debtor is a company or an institution the provisions of this Act on his right to obtain a license of financial reorganization or for composition with creditors, or on bankruptcy, shall only apply if the following conditions are fulfilled: in the case of a registered company, if its registered venue is in Iceland, and in the case of an unregistered company, if its venue is on Iceland according to its articles or as provided for by law, or in the nature of the matter. The same shall apply, as applicable, to institutions.” For more information, refer to the Act on Bankruptcy ( https://www.government.is/publications/legislation/lex/2018/01/15/Act-on-Bankruptcy-etc.-No.-21-1991/ ).

Policies pertaining to foreign investments are framed by the DPIIT, and implementation is undertaken by lead federal ministries and sub-national counterparts. Some government policies are written in a way that can be discriminatory to foreign investors or favor domestic industry. For example, India bars foreign investors from engaging in multi-brand retail, which also limits foreign e-Commerce investors to a “market-place model.” On most occasions major rules are framed after thorough discussions by government authorities and require the approval of the cabinet and, in some cases, the Parliament as well. However, in some instances the rules have been enacted without any consultative process.

The Indian Accounting Standards were issued under the supervision and control of the Accounting Standards Board, a committee under the Institute of Chartered Accountants of India (ICAI), and has government, academic, and professional representatives. The Indian Accounting Standards are named and numbered in the same way as the corresponding International Financial Reporting Standards. The National Advisory Committee on Accounting Standards recommends these standards to the MCA, which all listed companies must then adopt. These can be accessed at: https://www.mca.gov.in/content/mca/global/en/acts-rules/ebooks/accounting-standards.html 

India is a member of the South Asia Association for Regional Cooperation (SAARC), an eight- member regional block in South Asia. India’s regulatory systems are aligned with SAARC’s economic agreements, visa regimes, and investment rules. Dispute resolution in India has been through tribunals, which are quasi-judicial bodies. India has been a member of the WTO since 1995, and generally notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade; however, at times there are delays in publishing the notifications. The Governments of India and the United States cooperate in areas such as standards, trade facilitation, competition, and antidumping practices.

India adopted its legal system from English law and the basic principles of the Common Law as applied in the UK are largely prevalent in India. However, foreign companies need to adjust for Indian law when negotiating and drafting contracts in India to ensure adequate protection in case of breach of contract. The Indian judiciary provides for an integrated system of courts to administer both central and state laws. The judicial system includes the Supreme Court as the highest national court, as well as a High Court in each state or a group of states which covers a hierarchy of subordinate courts. Article 141 of the Constitution of India provides that a decision declared by the Supreme Court shall be binding on all courts within the territory of India. Apart from courts, tribunals are also vested with judicial or quasi-judicial powers by special statutes to decide controversies or disputes relating to specified areas.

Courts have maintained that the independence of the judiciary is a basic feature of the Constitution, which provides the judiciary institutional independence from the executive and legislative branches.

The government has a policy framework on FDI, which is updated every year and formally notified as the Consolidated FDI Policy ( https://dpiit.gov.in/foreign-direct-investment/foreign-direct-investment-policy ). The DPIIT issues policy pronouncements on FDI through the Consolidated FDI Policy Circular, Press Notes, and press releases that are also notified by the Ministry of Finance as amendments to the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 under the Foreign Exchange Management Act (FEMA), 1999. These notifications take effect from the date of issuance of the Press Notes/Press Releases, unless specified otherwise therein. In case of any conflict, the relevant Notification under the Foreign Exchange Management (Non-Debt Instruments) Rules, 2019 will prevail. The payment of inward remittance and reporting requirements are stipulated under the Foreign Exchange Management (Mode of Payment and Reporting of Non-Debt Instruments) Regulations, 2019 issued by the RBI.

The government has introduced “Make in India” and “Self-Reliant India” programs that include investment policies designed to promote domestic manufacturing and attract foreign investment. The “Digital India” program aims to open new avenues for the growth of the information technology sector. The “Start-up India” program creates incentives to enable start-ups to become commercially viable and grow. The “Smart Cities” program creates new avenues for industrial technological investment opportunities in select urban areas.

The central government has successfully established independent and effective regulators in telecommunications, banking, securities, insurance, and pensions. India’s antitrust body, the Competition Commission of India (CCI) reviews cases against cartelization and abuse of dominance and is a well-regarded regulator. The CCI’s investigations wing is required to seek the approval of the local chief metropolitan magistrate for any search and seizure operations. The CCI conducts capacity-building programs for government officials and businesses.

Tax experts confirm that India does not have domestic expropriation laws in place. The Indian Parliament on August 6, 2021, repealed a 2012 law that authorized retroactive taxation. In first proposing the repeal on August 5, Finance Minister Nirmala Sitharaman committed the government to refund the disputed amounts from outstanding cases under the old law. The Indian government has been divesting from state owned enterprises (SOEs) since 1991. In February 2021, the Finance Minister detailed an ambitious program to privatize roughly $24 billion in state owned enterprises as part of the FY 2021-22 (March 31-April 1) budget.

India made resolving contract disputes and insolvency easier with the enactment of the Insolvency and Bankruptcy Code (IBC) in 2016. The World Bank noted that the IBC introduced the option of insolvency resolution for commercial entities as an alternative to liquidation or other mechanisms of debt enforcement, reshaping the way insolvent companies can restore their financial well-being or are liquidated. The IBC created effective tools for creditors to successfully negotiate and receive payments. As a result, the overall recovery rate for creditors jumped from 26.5 to 71.6 cents on the dollar, and the time required for resolving insolvency also was reduced from 4.3 years to 1.6 years. India is now, by far, one of the best performers in South Asia in resolving insolvency and does better than the average for OECD high-income economies in terms of the recovery rate, time taken, and cost of proceedings.

India enacted the Arbitration and Conciliation Act in 1996, based on the United Nations Commission on International Trade Law (UNCITRAL) model to align its adjudication of commercial contract dispute resolution mechanisms with global standards. The government established the International Center for Alternative Dispute Resolution (ICADR) as an autonomous organization under the Ministry of Law and Justice to promote the settlement of domestic and international disputes through alternate dispute resolution. The World Bank has also funded ICADR to conduct training for mediators in commercial dispute settlement.

Judgments of foreign courts have been enforced under multilateral conventions, including the Geneva Convention. India is a signatory to the convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention). However, Indian firms are known to file lawsuits in domestic courts to delay paying an arbitral award. Several cases are currently pending, the oldest of which dates to 1983. In 2021, Amazon received an interim award against Future Retail from the Singapore International Arbitration Centre. However, Future Retail has refused to accept the findings and initiated litigation in Indian courts. India is not a member state to the International Centre for the Settlement of Investment Disputes (ICSID).

The Permanent Court of Arbitration (PCA) at The Hague and the Indian Law Ministry agreed in 2007 to establish a regional PCA office in New Delhi, although this remains pending. The office would provide an arbitration forum to match the facilities offered at The Hague but at a lower cost.

In November 2009, the Department of Revenue’s Central Board of Direct Taxes established eight dispute resolution panels across the country to settle the transfer-pricing tax disputes of domestic and foreign companies. In 2016 the government approved amendments that would allow Commercial Courts, Commercial Divisions, and Commercial Appellate Divisions of the High Courts Act to establish specialized commercial divisions within domestic courts to settle long-pending commercial disputes.

Since formal dispute resolution is expensive and time consuming, many businesses choose methods, including ADR, for resolving disputes. The most used ADRs are arbitration and mediation. India has enacted the Arbitration and Conciliation Act based on the UNCITRAL Model Law. In cases that involve constitutional or criminal law, traditional litigation remains necessary.

The introduction and implementation of the IBC in 2016 overhauled of the previous framework for insolvency with much-needed reforms. The IBC created a uniform and comprehensive creditor-driven insolvency resolution process that encompasses all companies, partnerships, and individuals (other than financial firms). According to the World Bank, the time required for resolving insolvency was reduced significantly from 4.3 years to 1.6 years after implementation of the IBC. The law, however, does not provide for U.S. style Chapter 11 bankruptcy provisions.

In August 2016, the Indian Parliament passed amendments to the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, and the Debt Recovery Tribunals Act. These amendments targeted helping banks and financial institutions recover loans more effectively, encouraging the establishment of more asset reconstruction companies (ARCs), and revamping debt recovery tribunals. The Finance Minister announced in her February 2021 budget speech to Parliament plans to establish the National Asset Reconstruction Company Limited (NARCL), or “bad bank” to resolve large cases of corporate stress. In October 2021, the RBI approved the license to set up the NARCL.

On May 10, 2021, the Securities and Exchange Board of India (SEBI) issued a circular to introduce new environment, social, and governance (ESG) reporting requirements for the top 1,000 listed companies by market capitalization. According to this circular, new disclosure will be made in the format of the Business Responsibility and Sustainability Report (BRSR), which is a notable departure from SEBI’s existing Business Responsibility Report and a significant step toward bringing sustainability reporting up to existing financial reporting standards. BRSR reporting will be voluntary for FY 2021-22 and mandatory from FY 2022-23 for the top 1,000 listed companies by market capitalization. This is to provide companies subject to these requirements with sufficient time to adapt to the new requirements.

Indonesia continues to bring its legal, regulatory, and accounting systems into compliance with international norms and agreements, but foreign investors have indicated they still encounter challenges in comparison to domestic investors and have criticized the current regulatory system for its failure to establish clear and transparent rules for all actors. Certain laws and policies establish sectors that are either fully off-limits to foreign investors or are subject to substantive conditions. To improve the investment climate and create jobs, Indonesia overhauled more than 70 laws and thousands of regulations through the enactment of the Omnibus Law on Job Creation. In November 2021, Indonesia’s Constitutional Court ruled the Omnibus Law on Job Creation was conditionally unconstitutional due to its non-alignment with the standard formulation of laws and regulations, specifically that the law did not have the appropriate public participation during its formulation and deliberation process. The court ordered government officials to amend the procedural flaws in the law within two years and that no new implementing regulations for the Omnibus Law should be issued, although implementing regulations that had already been issued up to the date of the court ruling remain in force.

U.S. businesses cite regulatory uncertainty and a lack of transparency as two significant factors hindering operations. U.S. companies note that regulatory consultation in Indonesia is inconsistent, despite the existence of Law No. 12/2011 on the Development of Laws and Regulations and implementation of Government Regulation No. 87/204, which states that the community is entitled to provide oral or written input into draft laws and regulations. The law also sets out procedures for revoking regulations and introduces requirements for academic studies as a basis for formulating laws and regulations. Nevertheless, the absence of a formal consultation mechanism has been reported to lead to different interpretations among policy makers of what is required. Laws and regulations are often vague and require substantial interpretation by the implementers, leading to business uncertainty and rent-seeking opportunities.

Decentralization has introduced another layer of bureaucracy and red tape for firms to navigate. In 2016, the Jokowi administration repealed 3,143 regional bylaws that overlapped with other regulations and impeded the ease of doing business. However, a 2017 Constitutional Court ruling limited the Ministry of Home Affairs’ authority to revoke local regulations and allowed local governments to appeal the central government’s decision. The Ministry continues to play a consultative function in the regulation drafting stage, providing input to standardize regional bylaws with national laws. The Omnibus Law on Job Creation provided a legal framework to streamline regulations. It establishes the norms, standards, procedures, criteria (NSPK) and performance requirements in administering government affairs for both the central and local governments. Law No. 11/2020 aims to harmonize licensing requirements at the central and regional levels. Under that law and its implementing regulations, the central government has the authority to take over regional business licensing if local governments do not meet performance requirements. Local governments must also obtain recommendations from the Ministries of Home Affairs and Finance prior to implementing local tax regulations.

In 2017, Presidential Instruction No. 7/2017 was enacted to improve coordination among ministries in the policy-making process. The regulation requires lead ministries to coordinate with their respective coordinating ministry before issuing a regulation. The regulation also requires ministries to conduct a regulatory impact analysis and provide an opportunity for public consultation. The presidential instruction did not address the frequent lack of coordination between the central and local governments. The Omnibus Law on Job Creation enhanced the predictability of trade policy by moving the authority to issue trade regulations from the ministry-level (Ministry of Trade regulation) to the cabinet-level (government regulation).

Indonesia ratified the Kyoto Protocol in 2014 and the 2015 Paring Agreement in 2019 and issued Presidential Regulation 59/2017 on the implementation of the SDGs to support reforms in tackling issued related environment, social, and governance, and climate changes. The government made reforms to attract green investment, among others, through the issuance of the Omnibus Law on Job Creation. The Indonesian Financial Services Authority (OJK) has been actively promoting sustainable financing by developing a sustainable finance roadmap, establishing a task force for sustainable finance in financial sectors, and developing green bonds regulations. The Minister of Finance issued the first green sukuk (Islamic bonds) in February 2018.

As an ASEAN member, Indonesia has successfully implemented regional initiatives, including the real-time movement of electronic import documents through the ASEAN Single Window, which reduces shipping costs, speeds customs clearance, and limits corruption opportunities. Indonesia has also ratified the ASEAN Comprehensive Investment Agreement (ACIA), ASEAN Framework Agreement on Services (AFAS), and the ASEAN Mutual Recognition Arrangement and committed to ratify the Regional Comprehensive Economic Partnership.

Notwithstanding the progress made in certain areas, the often-lengthy process of aligning national legislation has caused delays in implementation. The complexity of interagency coordination and/or a shortage of technical capacity are among the challenges being reported.

Indonesia joined the WTO in 1995. Indonesia’s National Standards Body (BSN) is the primary government agency to notify draft regulations to the WTO concerning technical barriers to trade (TBT) and sanitary and phytosanitary standards (SPS); however, in practice, notification is inconsistent. In December 2017, Indonesia ratified the WTO Trade Facilitation Agreement (TFA). Indonesia has met 88.7 percent of its commitments to the TFA provisions to date, including publication of information, consultations, advance rulings, detention and test procedures, goods clearance, import/export formalities, and goods transit.

Indonesia is a Contracting Party to the Aircraft Protocol to the Convention of International Interests in Mobile Equipment (Cape Town Convention). However, foreign investors bringing aircraft to Indonesia to serve the general aviation sector have faced difficulty utilizing Cape Town Convention provisions to recover aircraft leased to Indonesian companies. Foreign owners of leased aircraft that have become the subject of contractual lease disputes with Indonesian lessees have been unable to recover their aircraft in certain circumstances.

Indonesia’s legal system is based on civil law. The court system consists of District Courts (primary courts of original jurisdiction), High Courts (courts of appeal), and the Supreme Court (the court of last resort). Indonesia also has a Constitutional Court. The Constitutional Court has the same legal standing as the Supreme Court, and its role is to review the constitutionality of legislation. Both the Supreme and Constitutional Courts have authority to conduct judicial review.

Corruption continues to plague Indonesia’s judiciary, with graft investigations involving senior judges and court staff. Many businesses note that the judiciary is susceptible to influence from outside parties. Certain companies have claimed that the court system often does not provide the necessary recourse for resolving property and contractual disputes and that cases that would be adjudicated in civil courts in other jurisdictions sometimes result in criminal charges in Indonesia.

Judges are not bound by precedent and many laws are open to various interpretations. A lack of clear land titles has plagued Indonesia for decades, although land acquisition law No. 2/2012 includes legal mechanisms designed to resolve some past land ownership issues. The Omnibus Law on Job Creation also created a land bank to facilitate land acquisition for priority investment projects. In January 2022, President Jokowi established a task force to formulate land use policy and conduct mapping of land use on mining, plantation, and forestry activities, and provide recommendations to the Ministry of Investment on revocation of land permits that are not being utilized. Government Regulation No. 27/2017 provided incentives for upstream energy development and regulates recoverable costs from production sharing contracts. Indonesia has also required mining companies to renegotiate their contracts of work to include higher royalties, more divestment to local partners, more local content, and domestic processing of mineral ore.

Indonesia’s commercial code, grounded in colonial Dutch law, has been updated to include provisions on bankruptcy, intellectual property rights, incorporation and dissolution of businesses, banking, and capital markets. Application of the commercial code, including the bankruptcy provisions, remains uneven, in large part due to corruption and training deficits for judges and lawyers.

FDI in Indonesia is regulated by Law No. 25/2007 (the Investment Law) which was amended by the Omnibus Law of Job Creation. Under the law, any form of FDI in Indonesia must be in the form of a limited liability company with minimum capital of IDR 10 billion (USD 700,000), excluding land and building and with the foreign investor holding shares in the company. The Omnibus Law on Job Creation allows foreign investors to invest below IDR 10 billion in technology-based startups in special economic zones. The Law also introduces several provisions to simplify business licensing requirements, reforms rigid labor laws, introduces tax reforms to support ease of doing business, and establishes the Indonesian Investment Authority (INA) to facilitate direct investment. In addition, the government repealed the 2016 Negative Investment List through the issuance of Presidential Regulation No. 10/2021, introducing major reforms that removed restrictions on foreign ownership in hundreds of sectors that were previously closed or subject to foreign ownership caps. Several sectors remain closed to investment or are otherwise restricted. Presidential Regulation No. 10/2021 contains a grandfather clause that clarifies that existing investments will not be affected unless treatment under the new regulation is more favorable or the investment has special rights under a bilateral agreement. The Indonesian government also expanded business activities in special economic zones to include education and health. (See section on limits on foreign control regarding the new list of investments.)  The website of the Indonesia Investment Coordinating Board (BKPM) provides information on investment requirements and procedures:   https://nswi.bkpm.go.id/guide.   Indonesia mandates reporting obligations for all foreign investors through the OSS system as stipulated in BKPM Regulation No. 6/2020. (See section two for Indonesia’s procedures for licensing foreign investment.)

The Indonesian Competition Authority (KPPU) implements and enforces the 1999 Indonesia Competition Law. The KPPU reviews agreements, business practices and mergers that may be deemed anti-competitive, advises the government on policies that may affect competition, and issues guidelines relating to the Competition Law. Strategic sectors such as food, finance, banking, energy, infrastructure, health, and education are the KPPU’s priorities. The Omnibus Law on Job Creation and its implementing regulation, Government Regulation No. 44/2021, removes criminal sanctions and the cap on administrative fines, which was set at a maximum of IDR 25 billion (USD 1.7 million) under the previous regulation. Appeals of KPPU decisions must be processed through the commercial court.

Indonesia’s political leadership has long championed economic nationalism, particularly concerning mineral and oil and gas reserves. According to Law No. 25/2007 (the Investment Law), the Indonesian government is barred from nationalizing or expropriating an investor’s property rights, unless provided by law. If the Indonesian government nationalizes or expropriates an investors’ property rights, it must provide market value compensation.

Presidential Regulation No. 77/2020 on Government Use of Patent and the Ministry of Law and Human Rights (MLHR) Regulation No. 30/2019 on Compulsory Licenses (CL) enables patent right expropriation in cases deemed in the interest of national security or due to a national emergency. Presidential Regulation No. 77/2020 allows a GOI agency or Ministry to request expropriation, while MLHR Regulation No. 30/2019 allows an individual or private party to request a CL. GOI issued Presidential decrees number 100 and number 101 in November 2021 announcing government use of the Remdesivir and Favipiravir Patents to secure needed COVID-19 drugs supply. This decree will remain in effect for three years, extendable until the end of the global Covid-19 pandemic and requires the assigned company to compensate Remdesivir and Favirapir patent holders one percent of its net annual sales.

Iraq’s overall regulatory environment remains opaque, and the Investment Law does not establish a full legal framework governing investment.  Corruption, unclear regulations, and bureaucratic bottlenecks are major challenges for companies that bid on public procurement contracts or seek to invest in major infrastructure projects.  The KRG procurement reform measures, beginning in 2016, sought to address these problems, but with little result.  Iraq’s commercial and civil laws generally fall short of international norms.

The GOI’s rulemaking process, especially regarding commercial activity and investments, can be opaque and lends itself to arbitrary application.  To illustrate, while ministries must publish regulations imposing duties on citizens or private businesses in the official government gazette, internal ministerial regulations have no corresponding requirement.  This loophole allows officials to create internal requirements or procedures with little or no oversight, which can result in additional burdens for investors and businesses.  Furthermore, the lack of regulatory coordination between GOI ministries and national and provincial authorities can result in conflicting regulations, which makes it difficult to accurately interpret the regulatory environment.  In addition, accounting and legal procedures are opaque, inconsistent, and generally do not meet international standards.  Draft bills, including investment laws, are not available for public comment.  The promulgation of new regulations with little advance notice and requirements related to investment guarantees have also slowed projects.

The GOI encourages private sector associations, but these associations are generally not influential, given Iraqi SOEs’ dominant role in the Iraqi economy.  In the IKR, private sector associations have some influence and many, such as the contractors’ union, are very active in advocacy with the KRG.  However, unions (or “syndicates”) often act as barriers to foreign entry into markets.

Publicly available budgets do not include expenditures by ministry or revenues by source and type.  The budget provided limited details regarding allocations to, and earnings from, SOEs.  Financial statements for most SOEs were generally not publicly available.  Limited information on debt obligations is available on the Central Bank and MOF websites.

Iraq is not a signatory to the Trade Facilitation Agreement and is not a member of the WTO.  Iraqi officials have, however, expressed some interest in WTO accession.

Iraq has a civil law system, although Iraqi commercial jurisprudence is relatively underdeveloped.  Over decades of war and sanctions, Iraqi courts did not keep up with developments in international commercial transactions.  Corruption remains a significant problem because illegitimate gains are not consistently or successfully prosecuted.  As trade with foreign parties increases, Iraqi courts have had to deal with rising numbers of complex commercial cases.

Iraq is a signatory to the League of Arab States Convention on Commercial Arbitration (1987) and the Riyadh Convention on Judicial Cooperation (1983).  Iraq formally joined the ICSID Convention on December 17, 2015, and on February 18, 2017, Iraq joined the Investor-State Dispute Settlement (ISDS) process agreement between investors and states.

Additional information can be found in “A Legal Guide to Investment in Iraq:” http://cldp.doc.gov/programs/cldp-in-action/details/1551.

The COR passed a Competition Law and a Consumer Protection Law in 2010.  However, the Iraqi government has yet to form the Competition and Consumer Protection Commissions authorized by these laws.  The COR has also amended Iraqi law several times to promote fair competition and “competitive capacities” in the local market (2010, 2015).

The COR has also issued many recommendations regarding the amendments of investment licenses and improvements to the investment and businesses environment in Iraq.  Resolution 245 issued in August 2019 announced investment opportunities provided through the NIC.

Public and private corruption and the inordinately large role SOEs play in Iraq’s economy undermine the competitive landscape.

The Iraqi constitution prohibits expropriation, unless done for the purpose of public benefit and in return for just compensation.  The Constitution stipulates that expropriation may be regulated by law, but the COR has not drafted specific legislation regarding expropriation.  Article 9 of the Investment Law guarantees non-seizure or nationalization of any investment project that the provisions of this law cover, except in cases with a final judicial judgment.  The law prohibits expropriation of an investment project, except in cases of public benefit and with fair compensation.  Iraq’s Commercial Court is charged with resolving expropriation cases.  In recent years, there have not been any government actions or shifts in government policy that would indicate possible expropriations in the foreseeable future.

In the IKR, the KBOI can impose fines and potentially confiscate land if it determines that investors are using land awarded under investment licenses for purposes other than those outlined in the license or if the projected was not started during the specified time limits.  The IKR investment law (Article 17) outlines an investor’s arbitration rights, which fall under the civil court system, as the IKR lacks a commercial court system.  Arbitration clauses should be written into local contracts in order to facilitate enforcement in the event of a dispute.

Under Iraqi law, an Iraqi debtor may file for bankruptcy, and an Iraqi creditor may file for liquidation of the debtor.  Bankruptcy is not criminalized.  The Iraqi Companies Law regulates the process for the liquidation of legal entities.  Nevertheless, the mechanism for resolving insolvency remains opaque.  In the IKR, there are no independent laws for resolving companies’ bankruptcies.  Courts use the Iraqi commercial law 49 of 1970 (article 715-729) to settle bankruptcy claims, which can be cumbersome and costly.

Iraq ranks 168 out of 190 countries in the category of Resolving Insolvency, according to the World Bank’s 2020 Doing Business Report.

Ireland’s judicial system is transparent and upholds the sanctity of contracts, as well as laws affecting foreign investment. These laws include:

The Companies Act 2014 which contains the basic requirements for incorporation in Ireland;

The 2004 Finance Act which introduced tax incentives to encourage firms to set up headquarters in Ireland and to conduct R&D;

The Mergers, Takeovers and Monopolies Control Act of 1978 which sets out rules governing mergers and takeovers by foreign, and domestic firms;

The Competition (Amendment) Act of 1996 which amends and extends the Competition Act of 1991 and the Mergers and Takeovers (Control) Acts of 1978 and 1987, and sets out the rules governing competitive behavior; and,

The Industrial Development Act (1993) which outlines the functions of IDA Ireland.

The Companies Act (2014), with more than 1,400 sections and 17 Schedules, is the largest-ever Irish statute. The Act consolidated and reformed all Irish company law for the first time in over 50 years.

In addition, numerous laws and regulations pertain to employment, social security, environment protection and taxation, with many of these keyed to EU regulations and directives.

Ireland has been a member of the EU since 1973. As a member, it incorporates all EU legislation into national legislation and applies all EU regulatory standards and rules. Ireland is a member of the World Trade Organization (WTO) and follows all WTO procedures

Ireland’s legal system is common law. Courts are presided over by judges appointed by the President of Ireland (on the advice of the government). The Commercial Court is a designated court of the High Court which deals with commercial disagreements between businesses where the value of the claim is at least €1 ($1.2) million. The Commercial Court also oversees cases on intellectual property rights, including trademarks and trade secrets.

Ireland treats all firms incorporated in Ireland on an equal basis. With only a few exceptions, no constraints prevent foreign individuals or entities from ownership or participation in private firms/corporations. The most significant of these exceptions is that, in common with other EU countries, Irish airlines must be at least 50 percent owned by EU residents to have full access to the single European aviation market. Citizens of countries other than Ireland and EU member states can acquire land for private residential or industrial purposes.

In the past, one of Ireland’s many attractive features as an FDI destination was its low corporate tax rate. Since 2003, the headline corporate tax rate was 12.5 percent, one of the lowest in the EU. In 2014, the government announced firms would no longer be able to incorporate in Ireland without also being tax resident. Prior to this, firms could incorporate in Ireland and be tax resident elsewhere, making use of a tax avoidance arrangement colloquially known as the “Double Irish” to reduce tax liabilities. The Irish government is party to the OECD’s Base Erosion and Profit Sharing (BEPS) negotiations and ratified the BEPS Multilateral Instrument in January 2019. The government implemented a Knowledge Development Box (KDB), effective 2016, which is consistent with OECD guidelines. The KDB allows for the application of a tax rate of 6.25 percent on profits arising to certain intellectual property assets that are the result of qualifying research and development activities carried out in Ireland.

In October 2021, Ireland signed up to the OECD Inclusive Framework Agreement and will raise its corporate tax rate to 15 percent when implemented.

The Competition and Consumer Protection Commission (CCPC) is an independent statutory body with a dual mandate to enforce competition and consumer protection law in Ireland. The CPCC was established in 2014, following the amalgamation of the National Consumer Agency and the Competition Authority. The CPCC enforces Irish and EU competition law in Ireland. It has the power to conduct investigations and can take civil or criminal enforcement action if it finds evidence of breaches of competition law.

The CPCC is given enforcement powers by the Competition Act of 2002, subsequently amended and extended by the Competition Act 2006. The Act introduced criminal liability for anti-competitive practices, increased corporate liability for violations, and outlined available defenses. Most tax, labor, environment, health and safety, and other laws are compatible with EU regulations, and they do not adversely affect investment. The government publishes proposed drafts of laws and regulations to solicit public comment, including those by foreign firms and their representative trade associations. Bureaucratic procedures are transparent and reasonably efficient, in line with the general pro-business approach of the government.

The Irish Takeover Panel Act of 1997 gives the ‘Irish Takeover Panel’ responsibility for monitoring and supervising takeovers and other relevant corporate transactions. The minority squeeze-out provisions in the legislation, allows a bidder who holds 80 percent of the shares of the target firm (or 90 percent for firms with securities on a regulated market) to compel the remaining minority shareholders to sell their shares. There are no reports that the Irish Takeover Panel Act has prevented foreign takeovers, and, in fact, there have been several high-profile foreign takeovers of Irish companies in the banking and telecommunications sectors in the past. Although not recent, Babcock & Brown (an Australian investment firm) acquired the former national telephone company, Eircom in 2006 which it subsequently sold to Singapore Technologies Telemedia in 2009.

The EU Directive on Takeovers provides a framework of common principles for cross-border takeover bids, creates a level playing field for shareholders, and establishes disclosure obligations throughout the EU. Irish legislation fully implemented the directive in 2006, though the Irish Takeover Panel Act 1997 had already incorporated many of its principles.

Companies must notify the CCPC of mergers over a certain financial threshold for review as required by the Competition Act 2002, as amended (Competition Act).

The government normally expropriates private property only for public purposes in a non-discriminatory manner and in accordance with established principles of international law. The government condemns private property in accordance with recognized principles of due process.

The Irish courts provide a system of judicial review and appeal where there are disputes brought by owners of private property subject to a government action.

There is no specific domestic body for handling investment disputes apart from the judicial system. The Irish Constitution, legislation, and common law form the basis for the Irish legal system. DETE has primary responsibility for drafting and enforcing company law. The judiciary is independent, and litigants are entitled to trial by jury in commercial disputes.

ICSID Convention and New York Convention

Ireland is a member of the International Center for the Settlement of Investment Disputes (ICSID) and a party to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, meaning local courts must enforce international arbitration awards under appropriate circumstances.

Some U.S. business representatives have occasionally called into question the transparency of Irish government tenders. According to some U.S. firms, lengthy procedural decisions often delay the procurement tender process. Unsuccessful bidders have expressed concerns over difficulties receiving information on the rationale behind the tender outcome. In addition, some successful bidders have experienced delays in finalizing contracts, commencing work on major projects, obtaining accurate project data, and receiving compensation for work completed, including through conciliation and arbitration processes. Some successful bidders have also subsequently found that the original tenders may not have accurately described conditions on the ground.

Investor-State Dispute Settlement

Ireland treats all firms incorporated in Ireland on an equal basis. Ireland’s legal system is common law and Ireland’s courts apply Irish and EU legislation. All disputes are dealt with judicially. In the past ten years, we are not aware of any investment disputes involving U.S. investors nor of any extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

Ireland’s judicial court system is used to settle all investor disputes. Investment disputes involving U.S. or other foreign investors in Ireland are extremely rare. There were no known instances of SOE investment disputes in the past five years.

The Companies Act 2014 is the most important body of law dealing with commercial and bankruptcy law, which Irish courts consistently apply. Irish company bankruptcy legislation gives creditors a strong degree of protection.

Israel promotes open governance and has joined the International Open Government Partnership. The government’s policy is to pursue the goals of transparency and active reporting to the public, public participation, and accountability.

Israel’s regulatory system is transparent. Ministries and regulatory agencies give notice of proposed regulations to the public on a government web site: http://www.knesset.gov.il . The texts of proposed regulations are also published (in Hebrew) on this web site. The government requests comments from the public about proposed regulations. However, the government occasionally issues new or revised regulations without prior comment periods.

Israel is a signatory to the WTO Agreement on Government Procurement (GPA), which covers most Israeli government entities and government-owned corporations. Most of the country’s open international public tenders are published in the local press. U.S. companies have won government tenders, notably in the energy and communications sectors. However, government-owned corporations make extensive use of selective tendering procedures. In addition, the lack of transparency in the public procurement process discourages U.S. companies from participating in major projects and disadvantages those that choose to compete. Enforcement of the public procurement laws and regulations is not consistent.

Israel is a member of UNCTAD’s international network of transparent investment procedures. ( http://unctad.org/en/pages/home.aspx  ). Foreign and national investors can find detailed information on administrative procedures applicable to investment and income generating operations including the number of steps, name and contact details of the entities and persons in charge of procedures, required documents and conditions, costs, processing time, and legal basis justifying the procedures.

The Israeli Securities Authority released a recommendation in April 2021 calling for all public companies to publish annual environmental, social, and governance (ESG) reports based on international standards. In May 2021, the Bank of Israel required banks to note in the annual reports the material environmental, social and governance aspects integrated into their targets, and to note concisely the main principles established by the banking corporation for promoting these issues. The Israeli Capital, Insurance, and Savings Authority, which regulates financial services in the insurance and pension funds industries, also required institutional investors to publish ESG reports.

Israel is not a member of any major economic bloc but maintains strong economic relations with several such blocs.

Israeli regulatory bodies in the Ministry of Economy (Standards Institute of Israel), Ministry of Health (Food Control Services), and the Ministry of Agriculture (Veterinary Services and the Plant Protection Service) often adopt standards developed by European standards organizations. Israel’s adoption of European standards rather than international may add costs for some U.S. exports to Israel.

Israel became a member of the WTO in 1995. The Ministry of Economy and Industry’s Standardization Administration is responsible for notifying the WTO Committee on Technical Barriers to Trade, and regularly does so.

Israel has a written and consistently applied commercial law based on the British Companies Act of 1948, as amended. The judiciary is independent, but businesses complain about the length of time required to obtain judgments. The Supreme Court is an appellate court that also functions as the High Court of Justice. Israel does not employ a jury system.

There are few restrictions on foreign investors, except in defense and other national security industries. Foreign investors are welcome to participate in Israel’s privatization program.

Israeli courts exercise authority in cases within the jurisdiction of Israel. However, if an agreement between involved parties contains an exclusively foreign jurisdiction, the Israeli courts will generally decline to exercise their authority.

Israel’s Ministry of Economy sponsors the web site “Invest in Israel” at www.investinisrael.gov.il 

The Investment Promotion Center of the Ministry of Economy seeks to encourage investment in Israel. The center stresses Israel’s high marks in innovation, entrepreneurship, and Israel’s creative, skilled, and ambitious workforce. The center also promotes Israel’s strong ties to the United States and Europe.

Israel adopted its comprehensive competition law in 1988. Israel created the Israel Competition Authority (originally called the Israel Antitrust Authority) in 1994 to enforce the competition law.

There have been no known expropriations of U.S.-owned businesses in Israel. Israeli law requires adequate payment, with interest from the day of expropriation until final payment, in cases of expropriation.

Israel has established and well-regarded bankruptcy measures in place. Israeli Bankruptcy Law has several layers, some rooted in Common Law, when Palestine was under the British mandate in 1917-1948. Bankruptcy Law in Israel is based on the 1980 Bankruptcy Ordinance, the 1985 Bankruptcy Regulations, and the 2018 Law for Insolvency and Economic Recovery.

Regulatory authority exists at the national, regional, and municipal level. All applicable regulations could be relevant for foreign investors. The GOI and individual ministries, as well as independent regulatory authorities, develop regulations at the national level.  Regional and municipal authorities issue regulations at the sub-national level.  Draft regulations may be posted for public comment, but there is generally no requirement to do so. Final national-level regulations generally are published in the Gazzetta Ufficiale (and only become effective upon publication).  Regulatory agencies may publish summaries of received comments.  In Italy private companies are not required to obtain an Environmental Product Declaration (EPD) – an internationally-recognized certificate on the environmental impact of their products or services – but an increasing number of companies apply and disclose it voluntarily. Eco-label licenses were first introduced to Italy in 1998. Since their inception, there has been a positive growth trend in both the number of labeled products and services and EU Eco-label licenses. According to a report issued by the European Commission, Italy ranked second in Europe for number of Eco-labeling licenses. Currently in Italy there are 351 EU Eco-label licenses involving 8,552 products. The product group with the largest number of licenses is “Tourist services” with 199 licenses followed by “Paper Fabric” with 36 licenses.

No major regulatory reform affecting foreign investors was undertaken in 2021.

Aggrieved parties may challenge regulations in court.  Public finances and debt obligations are transparent and are publicly available through banking channels such as the Bank of Italy (BOI).

Italy is a member of the EU. EU directives are brought into force in Italy through implementing national legislation. In some areas, EU procedures require Member States to notify the European Commission (EC) before implementing national-level regulations. Italy on occasion has failed to notify the EC and/or the World Trade Organization (WTO) of draft regulations in a timely way. For example, in 2017 Italy adopted Country of Origin Labelling (COOL) measures for milk and milk products, rice, durum wheat, and tomato-based products. Italy’s Ministers of Agriculture and Economic Development publicly stated these measures would support the “Made in Italy” brand and make Italian products more competitive. Though the requirements were widely regarded as a Technical Barrier to Trade (TBT), Italy failed to notify the WTO in advance of implementing these regulations. Moreover, in March 2020, the Italian Ministers of Agriculture and Economic Development extended the validity of such COOL measures until December 31, 2021. Italy is a signatory to the WTO’s Trade Facilitation Agreement (TFA) and has implemented all developed-country obligations.

Italian law is based on Roman law and on the French Napoleonic Code law. The Italian judicial system consists of a series of courts and a body of judges employed as civil servants. The system is unified; every court is part of the national network. Though notoriously slow, the Italian civil legal system meets the generally recognized principles of international law, with provisions for enforcing property and contractual rights. Italy has a written and consistently applied commercial and bankruptcy law. Foreign investors in Italy can choose among different means of alternate dispute resolution (ADR), including legally binding arbitration, though use of ADR remains rare. The GOI in recent years has introduced justice reforms to reduce the backlog of civil cases and speed new cases to conclusion. These reforms also included a digitization of procedures, and a new emphasis on ADR. Judicial sector reform is a significant pillar of Italy’s National Recovery and Resilience Program.

Regulations can be appealed in the court system.

Italy is bound by EU laws on FDI.

In 2020, Italy began implementing a digital services tax (DST), applicable to companies that meet the following two conditions:

1.  €750 million in annual global revenues from any source, not just digital services; and,

2.  €5.5 million in annual revenues from digital services delivered in Italy.

Some U.S. technology companies fall under Italy’s DST, as do some Italian media firms.  Taxes incurred for the calendar year are due in May of the following year. The government collected €233 million in digital services taxes incurred in 2020, well below the €702 billion estimate. The DST will expire with the full implementation of Pillar 1 of the corporate tax deal reached as part of the OECD/G20 Inclusive Framework. In October 2021, the United States and Italy (along with France, Spain, Austria, and the UK) agreed that DST liabilities accrued by U.S. companies prior to implementation of the global tax deal will be creditable against future Pillar 1 taxes.

The Italian Competition Authority (AGCM) is responsible for reviewing transactions for competition-related concerns.  AGCM may examine transactions that restrict competition in Italy as well as in the broader EU market.  As a member of the EU, Italy is also subject to interventions by the European Commission Competition Directorate (DG COMP).  Companies can challenge AGCM decisions before the Lazio Regional Administrative Court.  Regional Administrative Court decisions can be appealed to the Council of State.

In August 2021, Italy’s antitrust authority opened an investigation into McDonald’s franchise agreements which require franchisees purchase supplies at fixed prices from the corporation.  While the pending probe could result in considerable fines, it has not hampered the company’s planned expansion; at the end of 2021, McDonald’s announced its intent to open 200 new outlets in Italy over the next five years, a move that would create another 12,000

In November 2021, AGCM fined Amazon and Apple $225 million for alleged anti-competitive cooperation in the resale of Apple and Beats products.

In December 2021 AGCM fined Amazon $1.3 billion for abuse of market dominance, in one of the biggest penalties imposed on a U.S. technology company in Europe.  AGCM alleges Amazon grants benefits and higher site visibility to users (sellers) of Amazon’s warehouse and delivery service, thereby harming competitor delivery services.  In addition to the fine, AGCM ordered Amazon “to grant sales benefits and visibility on Amazon.it to all third-party sellers which are able to comply with fair and non-discriminatory standards for the fulfillment of their orders.”  AGCM alleges Amazon unfairly imposes stringent performance metrics on sellers not using Amazon delivery services, which can lead to account suspension.  An Amazon spokesperson said, “The proposed fine and remedies are unjustified and disproportionate,” and added, “More than half of all annual sales on Amazon in Italy come from [small and medium businesses], and their success is at the heart of our business model.”

The Italian Constitution permits expropriation of private property for “public purposes,” defined as essential services (including during national health emergencies) or measures indispensable for the national economy, with fair and timely compensation. Expropriations have been minimal in 2020.

Italy’s bankruptcy regulations are somewhat analogous to U.S. Chapter 11 restructuring and allow firms and their creditors to reach a solution without declaring bankruptcy. In recent years, the judiciary’s role in bankruptcy proceedings has been reduced to simplify and expedite proceedings. In 2015, the Italian parliament passed a package of changes to the bankruptcy law, including measures to ease access to interim credit for bankrupt companies and to restructure debts. Additional changes were approved in 2017 (juridical liquidation, early warning, simplified process, arrangement with creditors, insolvency of affiliated companies as a group, and reorganization of indebtedness rules). The measures aim to reduce the number of bankruptcies, limit the impact on the local economy, and facilitate the settlement of corporate disputes outside of the court system. The reform follows on the 2015 reform of insolvency procedures. Finally, the conversion law of the NRRP includes elements aimed at resolving potential bankruptcies through preliminary agreements among creditors facilitated by exchanges of information and data with the use of telematic tools. In the World Bank’s Doing Business Index 2020, Italy ranks 21 out of 190 economies in the category of “Ease of Resolving Insolvency.”

Jamaica’s regulatory systems are transparent and consistent with international norms.  Proposed legislation is available for public review at japarliament.gov.jm, and submissions are generally invited from members of the public when there is a distinct policy shift or for sensitive changes.  There is no law that requires the rulemaking body to solicit comments on proposed regulation and no timeframe for the length of a consultation period when it happens.  Furthermore, the law does not require reporting on public consultations, but the government presents the consultations directly to interested stakeholders in one unified report.  Laws in effect are available at japarliament.gov.jm or moj.gov.jm.  Companies interested in doing business in a particular sector should seek guidance from the relevant regulator(s), including the Office of Utilities Regulation (OUR) for utilities, the Bank of Jamaica (BOJ) for deposit taking institutions (DTIs) and the Financial Services Commission (FSC) for non-DTIs.

Jamaica is compliant with established benchmarks for public disclosure of its budget, the establishment and functioning of an independent and supreme audit body, and the award of contracts for natural resource extraction.  Additionally, Jamaica’s Public Debt Management Act (PDMA) of 2012 has codified a gradual reduction in its contingent liability or Government Guaranteed Loans (GGL).  The PDMA targets a three percent GGL-to-GDP ratio by 2027. 

Jamaica has adopted IFRS Standards including the IFRS for SMEs Standard for all companies. Jamaica adopted IFRS Standards in 2000 by Resolution of the members of the ICAJ.

The Jamaica Corporate Governance Code 2021 was officially launched on Friday, February 25, 2022. The Code remains the only tool of its kind to date in the Caribbean aimed at helping entities – public and private – to implement Corporate Governance best practices in keeping with international standards.  The Code, which was prepared by the PSOJ Corporate Governance Committee through funding by IDB Invest is available for viewing and download here: https://www.psoj.org/corporate-governance-2/.

The GOJ tends to adopt Commonwealth standards for its regulatory system, especially from Canada and the United Kingdom.  In 2001, CARICOM member states established the Regional Organization for Standards and Quality (CROSQ) under Article 67 of the Revised Treaty of Chaguaramas.  CROSQ is intended to harmonize regional standards to facilitate the smooth movement of goods in the common market.  Jamaica is also a full member of the WTO and is required to notify all draft technical regulations to the WTO Committee of Technical Barriers to Trade (TBT).

Jamaica has a common law legal system and court decisions are generally based on past judicial declarations.  The Jamaican Constitution provides for an independent judiciary with a three-tier court structure.  A party seeking to enforce ownership or contractual rights can file a claim in the Resident Magistrate or Supreme Court.  Appeals on decisions made in these courts can be taken before the Court of Appeal and then to the Judicial Committee of the Privy Council in the United Kingdom.  The Caribbean Court of Justice (CCJ), in its original jurisdiction, is the court of the 15-member Caribbean Community (CARICOM), but Jamaica has not signed on to its appellate jurisdiction.

Jamaica does not have a single written commercial or contractual law and case law is therefore supplemented by the following pieces of legislation: (1) Arbitration (Recognition and Enforcement of Foreign Awards) Act; (2) Companies Act; (3) Consumer Protection Act; (4) Fair Competition Act; (5) Investment Disputes Awards (Enforcement) Act; (6) Judgment (Foreign) (Reciprocal Enforcement) Act; (7) Law Reform (Frustrated Contracts) Act; (8) Loans (Equity Investment Bonds) Act; (9) Partnership (Limited) Act; (10) Registration of Business Names Act; (11) Sale of Goods Act; (12) Standards Act; and, (13) Trade Act.  The commercial and civil divisions of the Supreme Court have jurisdiction to hear intellectual property claims. 

Jamaica enforces the judgments of foreign courts through: (1) The Judgment and Awards (Reciprocal Enforcement) Act; (2) The Judgment (Foreign) (Reciprocal Enforcement) Act; and (3) The Maintenance Orders (Facilities for Enforcement) Act.  Under these acts, judgments of foreign courts are accepted where there is a reciprocal enforcement of judgment treaty with the relevant foreign state.  International arbitration is also accepted as a means for settling investment disputes between private parties.  

The Jamaican judicial system has a long tradition of being fair, but court cases can take years or even decades to resolve.  A new Chief Justice appointed in 2018 has set aggressive benchmarks to streamline the delivery of judgments, bring greater levels of efficiency to court administration, and target throughput rates in line with international best practice.  Efforts are currently underway to provide hearing date certainty and disposition of cases within 24 months, barring exceptional circumstances.  The deployment of new courtrooms and the appointment of additional Appeal Court Judges are indicators of Jamaica’s commitment to justice reform.  

Challenges with dispute resolution usually reflect broader problems within the court system, including long delays and resource constraints.  Subsequent enforcement of court decisions or arbitration awards is usually adequate, and the local court will recognize the enforcement of an international arbitration award. 

A specialized Commercial Court was established in 2001 to expedite the resolution of commercial cases.  The rules do not make it mandatory for commercial cases to be filed in the Commercial Court and the Court is largely underutilized by litigants. 

Jamaica ranked 119 in the 2019 World Bank Doing Business Report on the metric of enforcement of contracts, scoring 64.8 in the length of time taken for enforcement, 43.6 for costs associated with litigation and 52.8 on the quality of judicial processes.

There are no specific laws or regulations specifically related to foreign investment.  Since foreign companies are treated similar to Jamaican companies when investing, the relevant sections of the applicable laws are applied equally. 

The Fair-Trading Commission (FTC), an agency of the Ministry of Industry, Investment and Commerce, administers the Fair Competition Act (FCA).  The major objective of the FCA is to foster competitive behavior and provide consumer protection.  The Act proscribes the following anti-competitive practices: resale price maintenance; tied selling; price fixing; collusion and cartels; and bid rigging.  The Act does not specifically prohibit mergers or acquisitions that could lead to the creation of a monopoly.  The FTC is empowered to investigate breaches of the Act and businesses or individuals in breach can be taken to court if they fail to implement corrective measures outlined by the FTC.

Expropriation is generally not an issue in Jamaica, although land may be expropriated for national development under the Land Acquisition Act, which provides for compensation on the basis of market value.  The U.S. government is not aware of any current expropriation-related litigation between the Jamaican government and any private individual or company.  However, the U.S. government assisted investors who had property expropriated during the 1970’s socialist regime, with a payment in one such case received in 2010.

Jamaica enacted new insolvency legislation in 2014 that replaced the Bankruptcy Act of 1880 and seeks to make the insolvency process more efficient.  The Act prescribes the circumstances under which bankruptcy is committed; the procedure for filing a bankruptcy petition; and the procedures to be followed in the administration of the estates of bankrupts.  The reform addresses bankruptcy; insolvency, receiverships; provisional supervision; and winding up proceedings.  The law addresses corporate and individual insolvency and facilitates the rehabilitation of insolvent debtors, while removing the stigma formerly associated with either form of insolvency.  Both insolvents and “looming insolvents” (persons who will become insolvent within twelve months of the filing of the proposal if corrective or preventative action is not taken) are addressed in the reforms.

The Act contains a provision for debtors to make a proposal to their creditors for the restructuring of debts, subject to acceptance by the creditor.  Creditors can also invoke bankruptcy proceedings against the debtor if the amount owed is not less than the prescribed threshold or if the debtor has committed an act of bankruptcy.  The filing of a proposal or notice of intention to file a proposal creates a temporary stay of proceedings.  During this period, the creditor is precluded from enforcing claims against the debtor.  The stay does not apply to secured creditors who take possession of secured assets before the proposal is filed; gives notice of intention to enforce against a security at least 10 days before the notice of intention or actual proposal is filed; or rejects the proposal.  The 2014 legislation makes it a criminal offence if a bankrupt entity defaults on certain obligations set out in the legislation.

Jamaica ranked 34 on Resolving Insolvency in the 2020 World Bank’s Doing Business Report.  Bankruptcy proceedings take about a year to resolve, costing 18 percent of the estate value with an average recovery rate of 65 percent.

The text of the Bankruptcy and Insolvency Act can be found at: http://www.japarliament.gov.jm/attachments/341_The%20Insolvency%20Act%202014%20No.14%20rotated.pdf  

Japan operates a highly centralized regulatory system in which national-level ministries and government organs play a dominant role. Regulators are generally sophisticated and there is little evidence of explicit discrimination against foreign firms. Most draft regulations and impact assessments are released for public comment before implementation and are accessible through a unified portal ( http://www.e-gov.go.jp/ ). Law, regulations, and administrative procedures are generally available online in Japanese along with regular publication in an official gazette. The Japanese government also actively maintains a body of unofficial English translations of some Japanese laws ( http://www.japaneselawtranslation.go.jp/ ).

Some members of the foreign business community in Japan continue to express concern that Japanese regulators do not seek sufficient formal input from industry stakeholders with adequate time for them to prepare, relying instead on formal and informal connections between regulators and domestic firms to arrive at regulatory decisions. This practice may have the effect of disadvantaging foreign firms that lack the benefit of deep relationships with local regulators. The United States has encouraged the Japanese government to improve public notice and comment procedures to ensure consistency and transparency in rule-making and to give fair consideration to comments received. The National Trade Estimate Report on Foreign Trade Barriers (NTE), issued by the Office of the U.S. Trade Representative (USTR), contains a description of Japan’s regulatory regime as it affects foreign exporters and investors.

The Japanese government encourages environmental, social, and governance disclosure (ESG) to assist investors. The Financial Services Agency is coordinating closely with the international community on harmonizing these standards in the G20 and the Financial Stability Board, among other multilateral groups, and is working to implement these best practices domestically. It is working with the Tokyo Stock Exchange to catalogue ESG bonds issued within the exchange.  The Tokyo Metropolitan Government provides subsidies that aim to partially cover certification and consulting costs incurred by entities issuing green bonds.  Combined with subsidies funded by the Ministry of the Environment, the additional burden incurred by issuing entities can be reduced by as much as 90 percent.

The Japanese Industrial Standards Committee (JISC), administered by the Ministry of Economy, Trade, and Industry, plays a central role in maintaining Japan Industrial Standards (JIS). JISC aims to align JIS with international standards. According to JISC, as of March 31, 2021, 59 percent of Japan’s standards were harmonized with their international counterparts. Nonetheless, Japan maintains a large number of Japan-specific standards that can complicate efforts to introduce new products to the country. Japan is a member of the WTO and notifies the WTO Committee on Technical Barriers to Trade (TBT) of proposed regulations.

Japan is primarily a civil law country based on codified law. The Constitution and the five major legal codes (Civil, Civil Procedure, Commercial, Criminal, and Criminal Procedure) form the legal basis of the system. Japan has a fully independent judiciary and a consistently applied body of commercial law. An Intellectual Property High Court was established in 2005 to expedite trial proceedings in IP cases. Foreign judgments are recognized and enforced by Japanese courts under certain conditions.

Major laws affecting foreign direct investment into Japan include the 1949 Foreign Exchange and Foreign Trade Act, the 2005 Companies Act, and the 1948 Financial Instruments and Exchange Act. The Japanese government actively encourages FDI into Japan and has sought over the past decades to ease legal and administrative burdens on foreign investors, including with major reforms to the Companies Act in 2005 and the Financial Instruments and Exchange Act in 2008. The Japanese government amended the Foreign Exchange and Foreign Trade Act in 2019.

The Japan Fair Trade Commission (JFTC) holds sole responsibility for enforcing Japanese competition and anti-trust law, although public prosecutors may file criminal charges related to a JFTC finding. In fiscal year 2020, the JFTC investigated 101 suspected Antimonopoly Act (AMA) violations and completed 91 investigations. During this same time period, the JFTC issued 15 cease and desist orders and issued a total of JPY 4.3 billion (USD 42 million) surcharge payment orders to four companies. In 2019, the Diet amended the AMA and granted the JFTC discretion to incentivize cooperation with investigations and adjust surcharges according to the nature and extent of the violation.

The JFTC also reviews proposed “business combinations” (i.e., mergers, acquisitions, increased shareholdings, etc.) to ensure that transactions do not “substantially … restrain competition in any particular field of trade.” In December 2019, amended merger guidelines and policies entered into force to “deal with business combinations in the digital market.” Data enjoys consideration as a competitive asset under these new guidelines along with the network effects characteristic of digital businesses. The JFTC has expanded authority (but under no legal obligation) to review merger cases, including “Non-Notifiable Cases,” when the transaction value is more than JPY 40 billion (USD 370 million) and the merger is expected to affect domestic consumers. Further, the amended policies suggest that parties consult with the JFTC voluntarily when the transaction value exceeds JPY40 billion and when one or more of the following factors is met:

(i) When an acquired company has an office in Japan and/or conducts research and development in Japan;
(ii) When an acquired company conducts sales activities targeting domestic consumers, such as developing marketing materials (website, brochures, etc.) in the Japanese language; or
(iii) When the total domestic sales of an acquired company exceed JPY100 million (USD 920,000)

Since 1945, the Japanese government has not expropriated any enterprise, and the expropriation or nationalization of foreign investments in Japan is highly unlikely.

The World Bank 2020 “Doing Business” Report ranked Japan third worldwide for resolving insolvency. An insolvent company in Japan can face liquidation under the Bankruptcy Act or take one of four roads to reorganization: the Civil Rehabilitation Law; the Corporate Reorganization Law; corporate reorganization under the Commercial Code; or an out-of-court creditor agreement. The Civil Rehabilitation Law focuses on corporate restructuring in contrast to liquidation, provides stronger protection of debtor assets prior to the start of restructuring procedures, eases requirements for initiating restructuring procedures, simplifies and rationalizes procedures for the examination and determination of liabilities, and improves procedures for approval of rehabilitation plans.

Out-of-court settlements in Japan tend to save time and expense but can lack transparency. In practice, because 100 percent creditor consensus is required for out-of-court settlements and courts can sanction a reorganization plan with only a majority of creditors’ approval, the last stage of an out-of-court settlement is often a request for a judicial seal of approval.

There are three domestic credit reporting/credit monitoring agencies in Japan. They are not government-run.  They are: Japan Credit Information Reference Center Corp. (JICC, https://www.jicc.co.jp/english/index.html ‘, member companies deal in consumer loans, finance, and credit); Credit Information Center (CIC, https://www.cic.co.jp/en/index.html , member companies deal in credit cards and credit); and Japan Bankers Association (JBA, https://www.zenginkyo.or.jp/pcic/ , member companies deal in banking and bank-issued credit cards). Credit card companies, such as Japan Credit Bureau (JCB), and large banks, such as Mitsubishi UFJ Financial Group (MUFG), also maintain independent databases to monitor and assess credit.

Per Japan’s Banking Act, data and scores from credit reports and credit monitoring databases must be used solely by financial institutions for financial lending purposes.  This information is provided to credit card holders themselves through services provided by credit reporting/credit monitoring agencies.   Increasingly, however, to get around the law, real estate companies partner with a “credit guarantee association” and encourage or effectively require tenants to use its services. According to a 2017 report from the Japan Property Management Association (JPMA), roughly 80 percent of renters in Japan used such a service. While financial institutions can share data to the databases and receive credit reports by joining the membership of a credit monitoring agency, the agencies themselves, as well as credit card companies and large banks, do not necessarily share data with each other.  As such, consumer credit information is generally underutilized and vertically siloed.

A government-operated database, the Juminhyo or the “citizen documentation database,” is used for voter registration; confirmation of eligibility for national health insurance, national social security, and child allowances; and checks and registrations related to scholarships, welfare protection, stamp seals (signatures), and immunizations. The database is strictly confidential, government-controlled, and not shared with third parties or private companies.

For the credit rating of businesses, there are at least seven credit rating agencies (CRAs) in Japan, including Moody’s Japan, Standard & Poor’s Ratings Japan, Tokyo Shoko Research, and Teikoku Databank. See Section 9 for more information on business vetting in Japan.

Legal, regulatory, and accounting policies, applicable to both domestic and foreign investors, are transparent.

The Jordanian Companies Law stipulates that all registered companies should maintain sound accounting records and present annual audited financial statements in accordance with internationally recognized accounting and auditing principles. According to the Jordanian Securities Commission (JSC) Law and Directives of disclosures, auditing, and accounting standards (1/1998), all entities subject to JSC’s supervision are required to apply International Financial Reporting Standards (IFRS).

In 2018, the government issued the “Code of Governance Practices of Policies and Legislative Instruments in Government Departments” to increase legislative predictability and the stability of legislative environment. Currently, the government is updating its Regulatory Impact Assessment (RIA) guidelines. Furthermore, it is working to establish a unified public consultation portal to ensure all government entities conduct consultations on all their regulations.

In 2020, the Council of Ministers issued a “Legislation Data Memorandum,” which all government entities submitting new regulations are required to fill out. The memorandum provides information on the type and details of consultations conducted with the public and private sector. Laws and regulations are also published on the website of the Legislative and Opinion Bureau for public comment, in addition to executive branch consultations with the legislative branch and key stakeholders.

The government is gradually implementing policies to improve competition and foster transparency in implementation.  These reforms aim to change an existing system influenced inthe past by family affiliations, business ties, and other entrenched interests.

The draft comprehensive business law, currently with the Legislative and Opinion Bureau undergoing an RIA, includes updates that will touch on anti-competitive practices, Investors’ rights, contract enforcement, insolvency, etc.

All investments, including public sector projects, are required to conduct an environmental and social impact studies, before receiving final approval. Jordan is committed to its fiscal transparency policy; the Ministry of Finance publishes a monthly “General Government Finance Bulletin” and that includes detailed information on government’s debt obligations. ( arbic_pdf_december2-2021.pdf (mof.gov.jo) )

Jordan recognizes and accepts most U.S. standards and specifications.  However, Jordan has occasionally required additional product standards for imports.  Some of these measures have been viewed as barriers to trade, such as a 2014 restriction imposed on packaging sizes for poultry available for retail resale.

As a member country of the WTO, Jordan is obliged to notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).

Jordan is a signatory of the WTO Trade Facilitation Agreement.  Jordan had implemented 88.7 percent of its commitments.  Jordan submitted its notifications for Category A before the agreement came into force, is currently in the final review for categories B and C and must report completion by December 2022.

Jordan has a mixed legal system based on civil law, sharia law (Islamic law), and customary law.  The Constitution establishes the judiciary as one of three separate and independent branches of government.  Jordanian commercial laws do not make a distinction between Jordanian and non-Jordanian investors.  However, plaintiffs have complained about judicial backlogs and subsequent delays in legal proceedings.

In 2018, Jordan has introduced economic judicial chambers. Jointly the Judicial Council in cooperation with the Ministry of Justice established a unit at the Amman First Instance Court and Amman Magistrate Court that includes judges who are solely dedicated to commercial cases specialized in hearing commercial cases exclusively, in accordance with the provisions of the Law of Formation of the amended Courts No. 30 of 2017.  These chambers specialize in the adjudication of certain commercial and investment disputes mentioned in Article 4 of the Courts Formation Law.

Jordan’s Investment Law governs local and foreign investment.  The law consolidated three entities – the Jordan Investment Board, the Jordanian Development Zones Commission, and the Free Zones Corporation – into the Jordan Investment Commission, which was absorbed by the Ministry of Investment in 2021. The law incorporates a statement of investors’ rights and a legal framework for a single Investment Window.

The Ministry published services and licensing guides outlining processes and fees, in addition to other guides on its website ( Publications – Moin ).  In 2019, it passed amendments to the Foreign Investors bylaw which allowed larger foreign ownership in previously restricted sectors.

In 2018, Jordan passed the Insolvency Law, Movable Assets and Secured Lending Law and Bylaw, the Venture Capital Bylaw, and the Income Tax Law, along with bylaws to ensure proper implementation.  The government has worked to train and certify insolvency practitioners. To date, no company has successfully used the insolvency law to re-structure operations and obligations.

In October 2019, Jordan published an amended Social Security Law stipulating temporary changes to the social security contributions of newly registered entities that meet specific conditions, with an aim to support new companies and startups.  The government also issued the Investor Grievance Bylaw and established a special unit to follow up on investors’ cases. As of 2019, new investors are offered 10-year “incentive stability guarantees.”

Since 2020, the Government of Jordan has a Public Private Partnership (PPP) Unit to identify and study investment opportunities. The PPP Unit falls under the Ministry of Investment and has received technical assistance from the International Finance Corporation (IFC) and other donors.

In 2021, the Parliament approved further amendments to the Companies Law, to allow virtual General Assembly and Board of Directors meetings. The amendments also stipulated companies must keep a record that includes information about the beneficial owner of shares and further obliged companies to disclose to the Companies Control Department the actual beneficiary, in support on Anti-Money Laundering and Counter Terrorism Financing Law.

There is no systematic or legal discrimination against foreign participation with respect to ownership and participation in Jordan’s major economic sectors other than the restrictions outlined in the governing regulations.  In fact, many Jordanian businesses actively seek engagement with foreign partners to increase their competitiveness and access to international markets.  The government’s efforts have made Jordan’s official investment climate welcoming; however, U.S. investors have reported hidden costs, bureaucratic red tape, vague regulations, and unclear or conflicting jurisdictions.

Most economic regulations are available on the Ministry of Industry and Trade and Supply website ( https://www.mit.gov.jo/Default/AR ).  All regulations are published in the Legislative and Opinion Bureau ( http://www.lob.jo/ ).

Parliament passed amendments to Competition Law No. 33/2004 in 2011 to strengthen the local economic environment and attract foreign investment by providing incentives to improve market competitiveness, protect small and medium enterprises from restrictive anticompetitive practices, and give consumers access to high quality products at competitive prices.  The Competition Directorate at the Ministry of Industry, Trade, and Supply conducts market research, examines complaints, and reports violators to the judicial system.

The investor grievance unit established in 2019 at the Ministry of Investment can also investigate unfair competition cases filed by investors.

Article 11 of the Jordanian Constitution stipulates those expropriations are prohibited unless specifically deemed to be in the public interest.  In cases of expropriation, the law mandates provision of fair compensation to the investor in convertible currency.

The Commercial Code, Civil Code, and Companies Law collectively govern bankruptcy and insolvency proceedings.  In December 2017, the cabinet endorsed a bankruptcy bylaw which stipulates procedures for optional and compulsory liquidation, along with the mechanism, liquidation plan, and required documentation and reporting.  In 2018, Parliament passed the Insolvency Law, which allows individuals and companies to offset their financial position through a debt management plan.  The law was designed to help the insolvent entity continue its economic activity, rather than directly resorting to bankruptcy. The law regulates insolvency proceedings for foreign organizations according to international conventions ratified by Jordan.  As of 2022, judges had dismissed almost all petitions for insolvency on technical grounds and no company has yet used the insolvency law successfully.

Defaulting on loans or issuing checks without adequate available balances is a crime in Jordan and may subject the offender to imprisonment under Jordan’s penal system.  While Jordan is reexamining these laws, prison terms for debtors remains a legal practice in Jordan.  Investors should conduct thorough due diligence on potential partners and avail themselves of local legal counsel to understand best business practices in Jordan and conform with local laws.  The U.S. Commercial Service Office of the Embassy of the United States in Amman can assist American businesses in these endeavors.

National legislation is enacted by the Parliament and President. The government, ministries, and local executive administrations issue regulations and executive acts in compliance with national laws. Publicly listed companies adhere to international financial reporting standards, but accounting and valuation practices are not always consistent with international best practices.

The government does not require companies to disclose environmental, social, and governance (ESG) data. Companies listed on the Kazakhstan Stock Exchange (KASE) and Astana International Exchange (AIX), must, however, disclose information on ESG.

All laws and decrees of the President and the government are available in Kazakh and Russian on the websites of the Ministry of Justice: https://adilet.zan.kz/rus  and http://zan.gov.kz/en/ . The government consults on some draft legislation with experts and the business community; draft bills are available for public comment at https://legalacts.egov.kz  under the Open Government section. The process of public comments seems overregulated. Publication occurs without broad notifications, some bills are excluded from public comment, and those who want to participate must register in advance. The legal and regulatory process is opaque.

Implementation and interpretation of commercial legislation sometimes creates confusion. In 2016, the Ministry of Health and Social Development introduced new rules on attracting foreign labor, some of which created significant barriers for foreign investors. After active intervention through the Prime Minister’s Council, the government canceled the most onerous requirements.

Decrees and legislative changes frequently do not “grandfather in” existing investments. Penalties are often assessed for periods prior to the change in policy.

The new OECD-compliant Environmental Code (Eco Code) mandates that local authorities spend 100 percent of environmental payments on environmental remediation.

Public financial reporting, including debt obligations, are published by the National Bank of Kazakhstan at https://nationalbank.kz/en/news/vneshniy-dolg  and, in a very limited scope, by the Ministry of Finance on its site: https://www.gov.kz/memleket/entities/minfin/press/article/details/17399?directionId=261&lang=ru .

The Civil Code establishes commercial and contract law principles. The judicial system is officially independent of the executive branch, although the government interferes in judiciary matters. Freedom House’s 2021 Nations in Transit report gave Kazakhstan a very low score (1.25 out of seven) in the Judicial Framework and Independence category, implying that the executive branch effectively dominates the judicial branch. Allegations of pervasive corruption of the courts and the influence of the ruling elite results in low public expectations and trust in the justice system.

Parties to commercial contracts, including foreign investors, can seek dispute settlement in Kazakhstan’s courts or international arbitration, and courts nominally enforce arbitration clauses in contracts. However, the Post is aware of at least one case when the government is alleged to have refused to honor a fully litigated international arbitral decision.

The AIFC has its own arbitration center and court based on British Common Law and is independent of the judiciary. The government advises foreign investors to use the capacities of the AIFC arbitration center and the AIFC court more actively.

Laws provide for non-expropriation, currency convertibility, guarantees of legal stability, transparent government procurement, and incentives for priority sectors. The Entrepreneurial Code outlines basic principles of doing business, the government’s relations with entrepreneurs, and codifies non-discrimination for foreign investors. The code contains incentives and preferences for government-determined priority sectors.

A law on Currency Regulation and Currency Control expands the statistical monitoring of transactions in foreign currency and facilitated the process of de-dollarization. The law treats branches of foreign companies in Kazakhstan as residents and enables the National Bank of Kazakhstan (NBK) to enhance control over cross-border transactions.

The Entrepreneurial Code regulates competition-related issues such as cartel agreements and unfair competition. The Agency for Protection and Development of Competition is responsible for reviewing transactions for competition-related concerns. Regulation of natural monopolies remains with the Ministry of National Economy.

The bilateral investment treaty between the United States and Kazakhstan requires the government to provide compensation in the event of expropriation. The Entrepreneurial Code allows the state to nationalize property in emergency cases but fails to provide clear criteria for expropriation or to require prompt and adequate compensation at fair market value.

The Mission is aware of cases where owners of flourishing and developed businesses have been forced to sell their businesses to companies affiliated with high-ranking and powerful individuals. In 2021, the government amended the Criminal Code and enhanced punishment for raiding by increasing the possible sentence to a range of five to eight years.

One hydrocarbons company claims expropriation. The case went to international arbitration and the legal process continues without resolution.

Bankruptcy Law protects the rights of creditors during insolvency proceedings. Bankruptcy is not criminalized, unless the court determines the bankruptcy was premeditated, or rehabilitation measures are wrongful. The law eases bureaucratic requirements for bankruptcy filings, gives creditors a greater say in continuing operations, introduces a time limit for adopting rehabilitation or reorganization plans, and adds court supervision requirements.

Kenya’s regulatory system is relatively transparent and continues to improve.  Proposed laws and regulations pertaining to business and investment are published in draft form for public input and stakeholder deliberation before their passage into law (http://www.kenyalaw.org/; http://www.parliament.go.ke/the-national-assembly/house-business/bills-tracker).  Kenya’s business registration and licensing systems are fully digitized and transparent while computerization of other government processes, aimed at increasing transparency and efficiency, and reducing corruption, is ongoing.

The 2010 Kenyan Constitution requires government to incorporate public participation before officials and agencies make certain decisions.  The draft Public Participation Bill (2019) aims to provide the general framework for such public participation.  The Ministry of Devolution has produced a guide for counties on how to carry out public participation; many counties have enacted their own laws on public participation.  The Environmental Management and Coordination Act (1999) incorporates the principles of sustainable development, including public participation in environmental management.  The Public Finance Management Act mandates public participation in the budget cycle.  The Land Act, Water Act, and Fair Administrative Action Act (2015) also include provisions providing for public participation in agency actions.

Kenya also has regulations to promote inclusion and fair competition when applying for tenders. Executive Order No. 2 of 2018 emphasizes publication of all procurement information including tender notices, contracts awarded, name of suppliers and their directors.  The Public Procurement Regulatory Authority publishes this information on the Public Procurement Information Portal, enhancing transparency and accountability (https://www.tenders.go.ke/website).  However, the directive is yet to be fully implemented as not all state agencies provide their tender details to the portal.

Many GOK laws grant significant discretionary and approval powers to government agency administrators, which can create uncertainty among investors.  While some government agencies have amended laws or published clear guidelines for decision-making criteria, others have lagged in making their transactions transparent.  Work permit processing remains a problem, with overlapping and sometimes contradictory regulations.  American companies have complained about delays and non-issuance of permits that appear compliant with known regulations.

Kenya is a member of the EAC, and generally applies EAC policies to trade and investment.  Kenya operates under the EAC Custom Union Act (2004) and decisions regarding tariffs on imports from non-EAC countries are made by the EAC Secretariat.  The U.S. government engages with Kenya on trade and investment issues bilaterally and through the U.S.-EAC Trade and Investment Partnership.  Kenya also is a member of COMESA and the Inter-Governmental Authority on Development (IGAD).

According to the Africa Regional Integration Index Report 2019, Kenya is the second most integrated country in Africa and a leader in regional integration policies within the EAC and COMESA regional blocs, with strong performance on regional infrastructure, productive integration, free movement of people, and financial and macro-economic integration.  The GOK maintains a Department of EAC Integration under the Ministry of East Africa and Regional Development.  Kenya generally adheres to international regulatory standards.  It is a member of the WTO and provides notification of draft technical regulations to the Committee on Technical Barriers to Trade (TBT).  Kenya maintains a TBT National Enquiry Point at http://notifyke.kebs.org.  Additional information on Kenya’s WTO participation can be found at https://www.wto.org/english/thewto_e/countries_e/kenya_e.htm.

Accounting, legal, and regulatory procedures are transparent and consistent with international norms.  Publicly listed companies adhere to International Financial Reporting Standards (IFRS) that have been developed and issued in the public interest by the International Accounting Standards Board.  The board is an independent, non-profit organization that is the standard-setting body of the IFRS Foundation.  Kenya is a member of UNCTAD’s international network of transparent investment procedures.

Kenya’s legal system is based on English Common Law, and its constitution establishes an independent judiciary with a Supreme Court, Court of Appeal, Constitutional Court, High Court, and Environment and Land Court.  Subordinate courts include:  Magistrates, Kadhis (Muslim succession and inheritance), Courts Martial, the Employment and Labor Relations Court, and the Milimani Commercial Courts – the latter two have jurisdiction over economic and commercial matters.  In 2016, Kenya’s judiciary instituted the Anti-Corruption and Economic Crimes Courts, focused on corruption and economic crimes.  There is no systematic executive or other interference in the court system that affects foreign investors, however, the courts often face allegations of corruption, as well as political manipulation, in the form of insufficient budget allocations by the executive branch, which significantly impact the judiciary’s ability to fulfill its mandate.  Delayed confirmation of judges nominated by the Judicial Service Commission has in the past resulted in an understaffed judiciary and prolonged delays in cases coming to trial and receiving judgments.  The COVID-19 pandemic has also increased case backlogs, as courts reduced operations and turned to virtual hearings, particularly for non-urgent cases.

The Foreign Judgments (Reciprocal Enforcement) Act (2012) provides for the enforcement of judgments given in other countries that accord reciprocal treatment to judgments given in Kenya.  Kenya has entered into reciprocal enforcement agreements with Australia, the United Kingdom, Malawi, Tanzania, Uganda, Zambia, and Seychelles.  Outside of such an agreement, a foreign judgment is not enforceable in Kenyan courts except by filing a suit on the judgment.  Foreign advocates may practice as an advocate in Kenya for the purposes of a specified suit or matter if appointed to do so by the Attorney General.  However, foreign advocates are not permitted to practice in Kenya unless they have paid to the Registrar of the High Court of Kenya the prescribed admission fee.  Additionally, they are not permitted to practice unless a Kenyan advocate instructs and accompanies them to court. The regulations or enforcement actions are appealable and are adjudicated in the national court system.

The 2018 amendment to the Anti-Counterfeit Authority (ACA) Act expanded its scope to include protection of intellectual property rights, including those not registered in Kenya.  The amended law empowered ACA inspectors to investigate and seize monetary gains from counterfeit goods.  The 2019 amendment to the 2001 Copyright Act (established when the country had less than one percent internet penetration), formed the independent Copyright Tribunal, ratified the Marrakesh Treaty, recognized artificial intelligence generated works, established protections for internet service providers related to digital advertising, developed a register of copyrighted works by Kenya Copyright Board (KECOBO), and protected digital rights through procedures for take down notices.

The Competition Act of 2010 created the Competition Authority of Kenya (CAK).  The law was amended in 2019 to clarify the law with regard to abuse of buyer power and empower the CAK to investigate alleged abuses of buyer power. The competition law prohibits restrictive trade practices, abuse of dominant position, and abuse of buyer power, and it grants the CAK the authority to review mergers and acquisitions and investigate and take action against unwarranted concentrations of economic power.  All mergers and acquisitions require the CAK’s authorization before they are finalized.  The CAK also investigates and enforces consumer-protection related issues.  In 2014, the CAK established a KES one million (approximately USD 10,000) filing fee for mergers and acquisitions valued between one and KES 50 billion (up to approximately USD 500 million).  The CAK charges KES two million (approximately USD 20,000) for larger transactions.  Company acquisitions are possible if the share buy-out is more than 90 percent, although such transactions seldom occur in practice.

The constitution guarantees protection from expropriation, except in cases of eminent domain or security concerns, and all cases are subject to the payment of prompt and fair compensation.  The Land Acquisition Act (2010) governs due process and compensation related to eminent domain land acquisitions; however, land rights remain contentious and resolving land disputes is often a lengthy process.  However, there are cases where government measures could be deemed indirect expropriation that may impact foreign investment.  Some companies reported instances whereby foreign investors faced uncertainty regarding lease renewals because county governments were attempting to confiscate some or all of the project property.

The Insolvency Act (2015) modernized the legal framework for bankruptcies.  Its provisions generally correspond to those of the United Nations’ Model Law on Cross Border Insolvency.  The act promotes fair and efficient administration of cross-border insolvencies to protect the interests of all creditors and other interested persons, including the debtor.  The act repeals the Bankruptcy Act (2012) and updates the legal structure relating to insolvency of natural persons, incorporated, and unincorporated bodies.  Section 720 of the Insolvency Act (2015) grants the force of law in Kenya to the United Nations Commission on International Trade Law model law on cross border insolvency.

Creditors’ rights are comparable to those in other common law countries, and monetary judgments are typically made in KES.  The Insolvency Act (2015) increased the rights of borrowers and prioritizes the revival of distressed firms.  The law states that a debtor will automatically be discharged from debt after three years.  Bankruptcy is not criminalized in Kenya.

The Law on Public Procurement delegates procurement authority to budgetary units (i.e., ministries, municipalities, and independent agencies) except when the government specifically authorizes the Ministry of Finance, Labor and Transfers’ Central Procurement Agency to procure goods and/or services on its behalf. All tenders are advertised in Albanian and Serbian, and for most important projects, also in English.

The Public Procurement Regulatory Commission (PPRC) oversees and supervises all public procurement and ensures that the Law on Public Procurement is fully implemented. As of March 2022, an e-procurement platform is fully operational; all procurements are handled through it, which has greatly enhanced transparency. The PPRC publishes contract award information on its website ( https://e-prokurimi.rks-gov.net/Home/ClanakItemNew.aspx?id=327 ). The National Audit Office conducts annual procurement audits of all Kosovo ministries, municipal authorities, and agencies that receive funds from the Kosovo consolidated budget. The Procurement Review Body (PRB), an independent administrative body, is responsible for handling appeals related to government procurement. The PRB’s Board, its highest decision-making body, has been unable to process appeals at the highest level, due to board vacancies that have gone unfilled by the Government of Kosovo (GoK) for more than a year.

The Kosovo Assembly is responsible for rule-making and regulatory actions, while government ministries and agencies draft and authorize secondary legislation (i.e., implementing regulations). Municipal assemblies and mayors have regulatory authority at the local level, which rarely extends to the broader issues of investment climate. The Government of Kosovo is working to align all legal, regulatory, and accounting systems in Kosovo with EU standards and international best practices. Publicly listed companies are required to comply with international accounting standards. The government requires Environmental and Social Impact Assessment studies for many projects, especially those with a large environmental or social footprint, such as in the energy and mining sectors.

The Assembly publishes draft laws on its website ( http://www.kuvendikosoves.org/shq/projektligjet-dhe-ligjet/ ). The relevant committees also hold public hearings on proposed laws, including investment laws. The 2016 regulation on the Minimum Standards for Public Consultation Process clarifies the standards, principles, and procedures for consultations during the drafting of legislation. Kosovo has developed an online platform for public comments ( http://konsultimet.rks-gov.net/ ) and publishes all laws and most rules and regulations in the Official Kosovo Gazette ( https://gzk.rks-gov.net/ ) and on the Kosovo Assembly’s website. The Government of Kosovo is currently working to annul, amend, and update all secondary legislation that is outdated or that might otherwise contradict primary legislation. The Government of Kosovo is also working on publishing all secondary legislation in the Official Gazette and relevant ministerial websites. The Law on Public Financial Management and Accountability requires a detailed impact assessment of any budgetary implications before new regulations can be implemented. The Ministry of Finance, Labor and Transfers regularly publishes detailed reports on Kosovo’s public finances and debt obligations. Despite the regulatory requirements, some businesses and business associations complain that regulations are still passed with little substantive discussion or stakeholder input.

Kosovo is represented in CEFTA by the United Nations Mission in Kosovo (UNMIK) and is pursuing EU integration. Through its Stabilization and Association Agreement (SAA) with the EU, Kosovo is working to harmonize its laws and regulations with EU standards. Kosovo is not a member of the WTO.

Kosovo is a signatory to the July 2017 Multi-Annual Action Plan for a Regional Economic Area in the Western Balkans Six  and its subsequent Common Regional Market Action Plan . This action plan aims to increase regional integration in the fields of trade, investment policy, labor force mobility, and digitalization.

In 2016, the Kosovo Assembly amended the constitution to enhance the independence of the judiciary in line with EU requirements. Despite significant reforms and improvements in court efficiency, backlog, and sentencing procedures, the judiciary lacks sufficient subject-matter expertise to effectively handle complex economic issues. While complainants have the right to challenge court decisions, regulations, and enforcement actions in the regular court system, as well as the constitutional court, many analysts view Kosovo’s courts as politically influenced by the executive branch, with special treatment or “selective justice” for high-profile, well-connected individuals. While Kosovo court conviction rates generally match regional averages, the rate falls considerably when filtered for high-profile corruption cases.

In January 2022, the Kosovo Assembly unanimously adopted the Law on the Commercial Court, which establishes a special court for handling business disputes fairly, efficiently, and predictably. The Commercial Court aims to improve the business enabling environment by reducing opportunities for corruption and building investor and private sector trust in the judiciary. USAID supported the Kosovo Ministry of Justice in developing the law through an inclusive and participatory process with the judiciary, commercial law experts, practitioners, academics, businesses, and civil society representatives. The Kosovo Judicial Council, with the help of USAID, developed and is implementing an Action Plan for operationalizing the Commercial Court, including by developing regulations on internal organization, case transfer, and recruitment of key personnel.

Significant legislation overhauling the 2004 Criminal Code and the Criminal Procedure Code, amended in 2018, brought Kosovo’s Criminal Law in compliance with the EU Convention on Human Rights, updating definitions and best practices. The Criminal Code contains penalties for tax evasion, bankruptcy, fraud, intellectual property rights offenses, antitrust, securities fraud, money laundering, and corruption. The Special Department of the Special Prosecutor of the Republic of Kosovo handles high-level cases of corruption, organized crime, terrorism, etc.

Kosovo’s civil legal system provides for property and contract enforcement. The Department for Economic Affairs within the Basic Court of Pristina has jurisdiction over economic disputes between both legal and natural persons, including reorganization, bankruptcy, and liquidation of economic persons; disputes regarding impingement of competition; and protection of property rights and intellectual property rights across the entire territory of Kosovo. A similar department within the Court of Appeals holds jurisdiction over “disputes between domestic and foreign economic persons in their commercial affairs” and addresses all appeals coming from the Pristina Basic Court’s Department for Economic Affairs. Commercial cases can take anywhere from six months to several years to resolve. The upcoming Commercial Court, expected to open in 2022, will supplant the responsibilities of the Economic Departments of the Pristina Basic Court and the Court of Appeals in handling commercial cases and the Administrative Department of the Pristina Basic Court in handling commercial-related administrative cases.

The Law on Enforcement Procedures permits claimants to utilize bailiffs licensed by the Ministry of Justice to execute court-ordered judgments. In addition, the Laws on Arbitration and Mediation have helped to address impediments to alternative dispute resolution and to enforcing arbitral awards.

Foreign firms operating in Kosovo are entitled to the same privileges and treatment as local businesses. Kosovo’s commercial laws are available to the public in English, as well as Kosovo’s official languages (Albanian and Serbian) on the Kosovo Assembly’s website ( http://www.kuvendikosoves.org/shq/projektligjet-dhe-ligjet/ ) and on the Official Gazette website ( http://gzk.rks-gov.net/default.aspx ).

Laws of particular relevance include:

The Law on Foreign Investment: provides a set of fundamental rights and guarantees to ensure protection and fair treatment in strict accordance with accepted international standards and practices.

The Law on Business Organizations: regulates the registration and closure of a company and the rights and obligations of shareholders, authorized representatives, and others included in the business management structure.

The Law on Late Payments in Commercial Transactions: discourages late payments and regulates the calculation of interest on late payments.

The Law on Bankruptcy: regulates all matters related to the insolvency of business organizations; the provisions for the protection, liquidation, and distribution of the assets of a bankrupt debtor to its creditors; and the reorganization and discharge of debt for qualified business organizations.

The Law on Prevention of Money Laundering and Combating Terrorist Financing: enabled Kosovo to join Egmont Group, an inter-governmental network of 152 Financial Intelligence Units whose members exchange expertise and financial intelligence to combat money laundering and terrorist financing.

The Credit Guarantee Fund Law: increased access to finance for all MSMEss in Kosovo in an effort to increase employment, boost local production, and improve the trade balance.

The Law on Foreign Trade, and the Law on Anti-Dumping and Countervailing Measures: provides a set of principles and rules on trade, as well as provisions for government interventions in cases of dumping and countervailing measures.

There are two main laws that regulate transactions for competition-related concerns: The Law on Protection of Competition and the Law on Antidumping and Countervailing Measures. The Competition Authority is responsible for implementing the Law on Protection of Competition, but generally lacks the human resources to conduct thorough investigations. The Authority has lacked a decision-making body since May 2021. The Trade Department of the Ministry of Industry, Entrepreneurship and Trade is responsible for the implementation of the Law on Antidumping and Countervailing Measures. In September 2018, Kosovo’s Assembly approved the Law on Safeguard Measures on Imports, which allows the trade minister to impose a provisional safeguard measure for up to 200 days.

Articles seven and eight of the Foreign Investment Law limit expropriation to cases with a clear public interest and protect foreign investments from unreasonable expropriation, guaranteeing due process and timely compensation payment based on fair-market prices. The Law on Expropriation of Immovable Property permits government or municipal expropriation of private property when such action is in the public interest; articles five through thirteen of the Law define expropriation procedures. An eminent domain clause limits legal recourse in cases arising from the expropriation and sale of property through the privatization of state-owned enterprises. There is no history of expropriation other than uncontroversial, undisputed expropriations for work in the public interest, such as roadway construction.

Kuwait does not have a centralized online location where key regulatory actions are published akin to the Federal Register in the United States.  The regulatory system does not require that regulations be made available for public comment. The government frequently passes draft regulations to interested parties in the private sector, such as the Kuwait Chamber of Commerce and Industry or the Bankers Association, for comment.

Kuwait does not promote or require companies’ environmental, social, and governance (ESG) disclosure to facilitate transparency and/or help investors and consumers distinguish between high- and low-quality investments. However, ESG concepts are increasingly gaining traction in Kuwait with the Kuwait Investment Authority’s January 2022 announcement that it intended to make its investment portfolio ESG compliant.

The State Audit Bureau reviews government contracts and audits contract performance but does not publicly share the results.

Kuwait does not participate in the Extractive Industries Transparency Initiative (EITI), nor does it incorporate domestic transparency measures requiring the disclosure of payments made to other governments related to the commercial development of oil, natural gas, or mineral deposits.  However, the Kuwait economy is almost wholly dependent upon oil, the extraction of which is deemed a responsibility of the government and is subject to close National Assembly oversight.

Kuwait joined the General Agreement on Tariffs and Trade (GATT) in 1963 and became a founding member of the WTO in 1995.  However, Kuwait is not a signatory to every WTO plurilateral agreement, such as the Agreement on Government Procurement. In April 2018, Kuwait deposited its Trade Facilitation Agreement instrument of ratification with the WTO after Kuwait’s National Assembly approved the agreement the previous month.

Kuwait has been part of the GCC since its formation in 1981.  The GCC launched a common market in 2008 and a customs union in 2015.  The GCC continues to forge agreements on regional standards and coordinate trade and investment policies.  American standards and internationally recognized standards are typically accepted. For more information regarding GCC standards and policies, please refer to the following GCC website:  http://www.gcc-sg.org/en-us/Pages/default.aspx 

Kuwait has a developed civil legal system, based in part on Egyptian and French law and influenced by Islamic law.  Having evolved in a historically active trading nation, the court system in Kuwait is familiar with international commercial law.  Kuwait’s judiciary includes specialized courts, including a commercial court to adjudicate commercial law. Residents that are not Kuwaiti citizens involved in legal disputes with citizens have frequently alleged the courts show bias in favor of Kuwaiti citizens.  Holders of legal residence have been detained and deported without recourse to the courts.

Persons charged with criminal offenses, placed under investigation, or involved in unresolved financial disputes with local business partners have, in some cases, been subjected to travel bans.  Travel bans are meant to prevent an individual from leaving Kuwait until a legal matter is resolved or a debt settled. Travel bans may remain in place for a substantial period while the case is investigated, resolved, and/or prosecuted.  Failure to repay a debt can result in a prison term ranging from months to years, depending upon the amount owed.

U.S. firms are advised to consult with a Kuwaiti law firm or the local office of a foreign law firm before executing contracts with local parties.  Fees for legal representation can be very high. Contracts between local and foreign parties serve as the basis for resolving any future commercial disputes.  The process of resolving disputes in the Kuwaiti legal system can be subject to lengthy delays, sometimes years, depending on the complexity of the issue and the parties involved.  During these delays, U.S. citizens can be deprived of income streams related to their business venture and be forced to surrender assets and ownership rights before being allowed to depart the country.

To diversify the economy by attracting foreign investment and grow private sector employment, Kuwait passed a new foreign direct investment law in 2013 permitting up to 100 percent foreign ownership of a business – if approved by KDIPA. Without KDIPA approval, all businesses incorporated in Kuwait must be 51 percent-owned by Kuwaiti or GCC citizens and seek licensing through the Ministry of Commerce and Industry. In reviewing applications from foreign investors, KDIPA places emphasis on creating jobs and the provision of training and education opportunities for Kuwaiti citizens, technology transfer, diversification of national income sources, increasing exports, support for local small- and medium-sized enterprises, and the utilization of Kuwaiti products and services.  In addition to assistance in navigating the bureaucracy, available investment incentives through KDIPA include tax benefits, customs duties relief, and permission to recruit required foreign labor. Government control of land limits its availability for development.

In 2019, a set of criteria was introduced to assess applications and grant licenses to foreign investors. Decision No. 329 of 2019 enacted five main criteria for assessing licensing and granting incentives. The criteria covered the following: (i) transfer and settlement of technology, including tangible and intangible technological innovation and the enablement of knowledge creation; (ii) human capital, stressing job creation for nationals and employee development programs; (iii) market development; (iv) economic diversification; and (v) sustainable development in the areas of corporate social responsibility and environmental sustainability. Decisions on licenses and the granting of incentives are based on a “Points Scoring Mechanism” (PMS). Other recent legal measures to facilitate foreign direct investment and economic growth include Law No. 116 of 2014 regarding public-private partnerships (PPP) and a new Companies Law No. 1 of 2016.  The PPP law created the Kuwait Authority for Partnership Projects ( www.kapp.gov.kw ).

Kuwait’s open economy has generally promoted a competitive market.  In 2007, the government enacted the Protection of Competition Law No. 10 and by-laws in 2012 that facilitated the establishment of a Competition Protection Authority to safeguard free commerce, ban monopolies, investigate complaints, and supervise mergers and acquisitions.  The Competition Protection Authority presented a restructuring plan with the assistance of the World Bank to the Cabinet in 2018, which is still under review. In some previous years, U.S. investors have alleged instances of discrimination.

The Commercial Agency Law No. 13 of 2016 removed exclusivity, enabling foreign firms to have multiple agents to market their products.

In 2016, the National Assembly passed a new Public Tenders Law No. 49.  All bids on government-funded infrastructure projects (excluding military, security, and some oil sector tenders) in excess of KD 75,000 (USD 250,000) must be submitted to the Central Agency for Public Tenders.  The law requires that foreign contractors bidding on government contracts purchase at least 30 percent of their inputs locally and award at least 30 percent of the work to local contractors, where available.  The law favors local sourcing by mandating a 15 percent price preference for locally- and GCC-produced items, however this provision may be waived on a case-by-case basis.

Kuwait has had no recent cases of expropriation or nationalization involving foreign investments.  The 2013 Foreign Direct Investment (FDI) Law guarantees investors against expropriation or nationalization, except for public benefit as prescribed by law.  In such cases, investors should be compensated for the real value of their holdings at the time of expropriation. The last nationalization occurred in 1974.

Kuwait worked with the World Bank to draft bankruptcy legislation designed to assist businesses to recover from financial difficulties as an alternative to liquidation. The Council of Ministers approved new legislation to support competition and create bankruptcy protections and sent it to the National Assembly. On September 29, 2020, Kuwait’s National Assembly passed the long-awaited law. The new law restructures the legal framework for bankruptcy to focus on rehabilitating troubled companies rather than liquidation. The new law removes these penalties for good faith debtors and creates new mechanisms to allow debtors to avoid liquidation, including a preventive settlement procedure and a restructuring procedure.

The legal and regulatory system of the Kyrgyz Republic remains underdeveloped, and implementation regulations and court orders relating to commercial transactions remain inconsistent with international practices. Heavy bureaucracy, lack of accessibility among decision-makers responsible for investment promotion, and frequent changes in leadership due to political instability all undermine investor confidence. Moreover, there is a significant capacity gap between the capital (Bishkek) and regional municipalities, particularly in remote, rural areas, in terms of institutional legal expertise and local officials and local law enforcement capacity, which hinders the conduct of business especially in the regions of Kyrgyzstan.

There have been no known cases of U.S. investors facing discrimination.

Rule-making authority is vested in the Kyrgyz Parliament – the Jogorku Kenesh – which has established committees that oversee legislation and regulations affecting several areas of the economy, including: the Committee on Budget, Economic, and Fiscal Policy; the Committee for Fuel and Energy Complex, Subsoil Use and Industrial Policy; the Committee for Transport, Communications, Architecture and Construction; and the Committee on Agrarian Policy, Water Resources, Ecology and Regional Development. The Office of the Prosecutor General is the supreme legal and regulatory enforcement body in the Kyrgyz Republic. The State Service on Financial Market Regulation and Supervision (Financial Supervision) and the State Service on Financial Intelligence (Financial Intelligence) have played important regulatory roles.

Accounting procedures tend to adhere to internationally recognized accounting rules, such as the International Financial Reporting Standards (IFRS), and audits are conducted regularly, often in compliance with agreements with international financial institutions (IFIs). Audit results of state organizations tend to be publicly available, unlike those of private organizations.

There have been lapses in the public consultation process, and significant reductions in transparency of Parliamentary committee meetings and failure to circulate draft bills for public review, including the 2022 budget and the new tax code.  Draft bills or regulations must be posted on either Parliament’s website or the site of the Ministry that drafted the bill for public comment for 30 days prior to consideration by Parliament and its committees.  Parliament is required by regulation to hold public hearings on draft legislation and has historically been open to the participation of representatives of civil society organizations and the business community in relevant hearings when held. Still, in 2021 many business associations complained of lack of transparency in the passing of business-related legislation and insufficient consultation with the private sector.

The Kyrgyz Agency of Development and Investment (KADI) assists investors with regulatory compliance.  However, the efficacy of this office in assisting firms with setting up shop is limited since official bureaucratic procedures comprise only some of the hurdles to opening a business. Government investment councils exist to further regulatory improvements for the business climate. Since the creation of the Anticorruption Business Council under the Office of the President in 2021, it is unclear under what authority the preexisting Investment Council will fall (the President’s Office or a ministry). Contradictory government decrees often create bureaucratic paralysis or opportunities for bribe solicitation in order to complete normal bureaucratic functions. As often in the Kyrgyz Republic, the legal and regulatory framework is largely sound, but implementation and enforcement are weak.

Throughout 2021, the government structure underwent “optimization,” which resulted in the significant downsizing of ministries and the dissolution and re-organization of several independent state regulatory bodies. The Ministries of Economy and Finance were merged, only to be unmerged later in the year, and the Department of Geology and Subsoil Use became a part of the Ministry of Natural Resources, Ecology and Technical Supervision (MRNETS), formerly the State Committee for Ecology and Climate. MRNETS now oversees mining licensing. The State Committee of Information and Communications Technology, responsible for implementation of the Digital Transformation Strategy 2019-2023, became the Ministry of Digital Development.  The government also eliminated the State Service of Combating Economic Crimes (Financial Police) and transferred its authority to investigate economic crimes to the Prosecutor General’s Office. The State Inspectorate on Ecological and Technical Safety was dissolved, and transferred to the Ministry of Labor, Social Development, and Migration. This move also shifted labor inspection authority to the labor ministry.

In August 2015, the Kyrgyz Republic acceded to the Eurasian Economic Union (EAEU), which also includes Russia, Kazakhstan, Armenia, and Belarus. The Kyrgyz Republic continues to harmonize its laws to comply with regulations set by the Eurasian Economic Commission, the executive body of the EAEU. And while Kyrgyz exports to the EAEU steadily increased from $410 million to $642 million in 2019, the Kyrgyz Republic has not fully realized increased bilateral trade with EAEU member countries. Traders cite unilaterally imposed trade barriers restricting the flow of Kyrgyz exports and numerous Kyrgyz entrepreneurs have criticized non-tariff measures that emerged after the country’s accession to the Union, preventing local exporters from fully accessing the wider EAEU market.  In addition, Kyrgyz entrepreneurs have experienced issues exporting their goods through Kyrgyz-Kazakh border, which is the only EAEU land export route available. Kyrgyz truck drivers report more onerous technical requirements and inspections for their trucks to cross the border, while Kazakh authorities explain these checks are motivated by a desire to curb the smuggling of Chinese goods through the Kyrgyz Republic  to the EAEU.

The United States and other international partners provided substantial technical assistance to the Kyrgyz Republic in support of its accession to the WTO in 1998, and the country’s regulatory system reflects many international norms and best practices. The Law on the Fundamentals of Technical Regulation in the Kyrgyz Republic, which provides for standardization principles under the WTO Technical Barriers to Trade Agreement, entered into force in 2004. To Post’s knowledge, the Kyrgyz government notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).  In 2016, the Kyrgyz Republic ratified the WTO Trade Facilitation Agreement.

The government’s self-stated principles of the reformed legal system of the Kyrgyz Republic are “ideological and political pluralism, a socially oriented market economy, and the expansion of individual rights and freedoms.” Major barriers to foreign investment stem largely from a lack of adequate implementation rather than gaps in existing laws.

The judicial system is technically independent, but political interference and corruption regularly besmirch its reputation and undermine its effectiveness. Resolution of investment disputes within the Kyrgyz Republic depends on several factors, including who the parties are and the amount of investment.

The weak Kyrgyz judicial system often fails to act as an independent arbiter in the resolution of disputes. Since most disputes are lodged by foreign investors against the Kyrgyz Government, local courts often serve as an executor of the authorities’ political agenda. Regulations and enforcement actions can be appealed and are adjudicated in the national court system. International Court of Arbitration at the Chamber of Commerce and Industry of the Kyrgyz Republic (ICA).and the Central Asian Alternative Dispute Resolution Center provide mediation services for public-private disputes, which remain a protracted and often impartial process in the Kyrgyz Republic. In a move to improve the investment climate, the new tax code created arbitration courts where tax disputes with the government can be resolved, rather than in a trial court. Previously, almost 90 percent of tax cases were decided in favor of the state under the trial court system. The hope of the arbitration court system is that it will be more independent and allow for disputes to be resolved faster.

The Kyrgyz Republic’s main legal framework for FDI remains the “2003 Law on Investments,” which reflects multiple amendments up until September 2021. One notable amendment lowers the investment threshold for direct negotiations between the investor and the Kyrgyz government (now $10 million compared to $50 million previously). This law contains an important article that is often interpreted differently by foreign investors and the Kyrgyz Republic, and the government has sought to amend it to limit direct access of foreign investors to international arbitration. While foreign investors claim Article 18 contains the Kyrgyz Republic’s consent to arbitration under either the ICSID Convention or UNCITRAL rules, the government argues each side must first seek consent of the other to bring the dispute to arbitration (see Penwell Business vs. Kyrgyz Republic). In 2022 Parliament introduced a bill amending the language of Article 18 to require the investor to receive consent of the Kyrgyz Republic for any dispute to go to arbitration, which may negatively impact foreign investor rights. Post continues to monitor the issue.

The justice system in the Kyrgyz Republic is inefficient and lacks independence, and cases can take years to be resolved. The Kyrgyz Republic does not have a business registration website. KADI maintains the country’s main website for investment queries, https://invest.gov.kg/.

The State Agency for Anti-Monopoly Regulation of the Kyrgyz Republic conducts unified state antitrust price regulation in the economy. The main tasks of the State Agency are to develop and protect competition, to control compliance with legislation in the field of anti-trust, price regulation, to protect the legal rights of consumers against manifestations of monopoly and unfair competition, to ensure observance of legislation on advertising. To Post’s knowledge, there have been no developments in any significant competition cases over the past year.

The Kyrgyz Republic has a written law governing bankruptcy procedures of legal persons and insolvent physical persons (Law of the Kyrgyz Republic “On Bankruptcy” September 22, 1997 with multiple amendments in December 30, 1998, July 1999, September 2000, June 2002, March and August 2005, January and July 2006, June 2007, July 2009, April 2015, June, July and December 2016, May 2017, and December 31, 2019), which covers industrial enterprises and banks, irrespective of the type of ownership, commercial companies, private entrepreneurs, or foreign commercial entities.  Bankruptcy proceedings are conducted by the court of arbitration competent for the district in which enterprise is located.  The procedure of liquidation can be carried out without the involvement of the judicial bodies if all creditors agree on out-of-court proceedings. Chapter 10 of the law on bankruptcy provides for the possibility of an amicable or peaceful settlement between the enterprise and its creditors, which can be made at any stage of the liquidation process.

Regulations in Laos can be vague and conflicting, a subject that the private sector raises regularly with the government, including through official fora such as the Lao Business Forum. The 2013 Law on Making Legislation mandated that all laws be available online at the official gazette website, www.laoofficialgazette.gov.la . Draft bills are also available for public comment through the official gazette website, although not all bills are posted for comment or in the official gazette, and the provinces seldom post their local legislation. Although the situation continues to improve, the realities of doing business in Laos can fail to correspond with existing legislation and regulation. Implementation and enforcement often do not strictly follow the letter of the law, and vague or contradictory clauses in laws and regulations provide for widely varying interpretations. Regulations at the national and provincial levels can often diverge, overlap, or contradict one another. Many local firms still complain about informal or gray competition from firms that offer lower costs by flaunting formal registration requirements and operating outside of government regulatory structures.

The nascent legal, regulatory, and accounting systems are not particularly conducive to a transparent, competitive business environment. International accounting norms apply, and major international firms are present in the market, though understanding and adherence to these norms is limited to a small section of the business community. Eleven companies are listed on the Lao stock exchange. Regulations dictate that companies listed on the exchange must be held to accounting standards, but the government’s capacity to enforce those standards is low.

The government now publicly releases the enacted budget, which includes the total amount of domestic and external debt obligations for the whole country.

Laos is a member of the ASEAN Economic Community (AEC) and is seeking to implement all AEC-agreed standards domestically. However, the local capacity to develop regulatory standards is weak, while enforcement of technical regulations is weaker still. The Lao government has been diligent at notifying draft technical regulations – such as its new law on standards – to the WTO committee on Technical Barriers to Trade (TBT).

Laos currently has a poorly developed legal sector. The government adopted the Legal Sector Master Plan with an aim to become a rule of law state by 2020.The plan is now complete however rule of law in Laos is still in its infancy. To improve the country’s legal system, the government will continue to work with many development partners on comprehensive legal sector reform. From 1975 to 1991, Laos did not have a constitution, and government decrees issued by various ministries and officials only exacerbated the country’s poor legal framework. While there have been dramatic improvements in the legal system over the last decade, Laos has relatively few lawyers, many judges lack formal training and experience, and laws often remain vague and subject to broad interpretation.

The existing system incorporates some major elements of the French civil law system, but is also influenced by the legal systems of the former Soviet Union and regional neighbors’ systems. Court decisions are neither widely published, nor do they necessarily affect future decisions. Despite being bureaucratically independent of the government cabinet, the Lao judiciary is still subject to government and political interference.

Contract law in Laos is lacking in many areas important to trade and commerce. The law provides for the sanctity of contracts, but in practice, contracts are subject to political interference and patronage. Businesses report that contracts can be voided if they are found to be disadvantageous to one party, or if they conflict with state or public interests. Foreign businessmen describe contracts in Laos as being “a framework for negotiation” rather than a binding agreement, and even when faced with a judgment, enforcement is weak and subject to the influence of corruption. Although a commercial court system exists, most judges adjudicating commercial disputes have little training in commercial law. Those considering doing business in Laos are strongly urged to contact a reputable law firm for additional advice on contracts.

One positive development from 2019 is that under the leadership of the Ministry of Industry and Commerce (MOIC), Laos became the 92nd State Party to join the United Nations Convention on Contracts for the International Sale of Goods.

As discussed above, the 2009 Law on Investment promotion was amended in November 2016. The new law provides more transparency regarding regulations and procedures and provides greater detail about what specific responsibilities fall under the Ministry of Planning and Investment. The 2016 Law on Investment Promotion introduced uniform business registration requirements and tax incentives that apply equally to foreign and domestic investors. As noted above, foreigners may invest in any sector or business except in cases where the government deems the investment to be detrimental to national security, health, or national traditions, or to have a negative impact on the natural environment. Aside from these sectors, there are no statutory limits on foreign ownership or control of commercial enterprises. For reasons discussed above, despite changes in the law, many companies continue to seek a local partner.

Most laws of interest to investors are featured on the Lao Trade Portal website, http://www.laotradeportal.gov.la , with many laws and regulations translated into English, or the Lao Official Gazette, http://laoofficialgazette.gov.la , or the official website of the Investment Promotion Department (MPI), www.investlaos.gov.la , or the newly created “Lao Law” App.

In sum, neither the government’s investment bureaucracy nor the commercial court system is well developed, although the former is improving and reforming. Investors have experienced government practices that deviate significantly from publicly available laws and regulations. Some investors decry the courts’ limited ability to handle commercial disputes and vulnerability to corruption. The Lao government has repeatedly underscored its commitment to increasing predictability in the investment environment, but in practice, with some exceptions in the creation and operation of SEZs, and investments by larger companies, foreign investors describe inconsistent application of laws and regulations.

There have been no updates since 2017. A new competition law was approved in 2015 that applies to both foreign and domestic individuals and entities. The law was drafted with the assistance of the German government and other donors. The competition law was one of the Lao government’s policy efforts to implement the ASEAN Economic Community, or AEC, before 2016. The law established two new government entities, the Business Competition Control (BCC) Commission and the BCC Secretariat. The BCC Commission is the senior body, and its membership is decided by the Prime Minister with the advice of the Minister of Industry and Commerce (MOIC). According to the legislation, it should include senior officials from multiple ministries as well as businesspeople, economists, and lawyers. The BCC Commission can draft regulations, approve mergers, levy penalties, and provide overall guidance on government competition policy and regulation. The BCC Secretariat, a lower-level institution equivalent to a MOIC department or division, can hear complaints, conduct investigations, and conduct research and reporting at the request of the Commission.

According to law, foreign assets and investments in Laos are protected against seizure, confiscation, or nationalization except when deemed necessary for a public purpose. Public purpose can be broadly defined, however, and land grabs are feared by Lao nationals and expatriates alike. In the event of a government expropriation, the Lao government is supposed to provide fair market compensation. Nevertheless, a business relying on a specific parcel of land may lose its investment license if the land is in dispute. Revocation of an investment license cannot be appealed to an independent body, and companies whose licenses are revoked must quickly liquidate their assets. Small landholdings, land with unclear title, or land on which taxes have not been paid are at particular risk of expropriation.

ICSID Convention and New York Convention

The Decree on the Establishment of Private Economic Dispute Resolution as specified under Article 4 of the Law on Economic Dispute Resolution No.51/NA, (2018) provides for private arbitration bodies in Lao PDR. However, the regulatory framework to enable the private sector to establish an alternative channel for business arbitration is still under development with assistance from international donors such as USAID.

Laos is not a member state to the International Center for the Settlement of Investment Disputes (ICSID Convention). It is, however, a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention).

Investor-State Dispute Settlement

According to the Law on Investment Promotion, resolution of a dispute resolution should proceed through the following process: mediation, administrative dispute resolution, dispute resolution by the Committee for Economic Dispute Resolution, and finally, litigation. However, due to the underdeveloped state of the Lao legal system, foreign investors are generally advised to seek arbitration outside of the country. There are few publicly available records on international investment disputes. According to the 2016 investment promotion law, Article 96 on Dispute Resolution by the Office for Economic Dispute Resolution in the Lao PDR or international organization to which Lao PDR is a party states: “When there is an investment-related dispute, either party thereto shall have the rights to request the Office for Economic Dispute Resolution for resolution within the Lao PDR or abroad as agreed by the parties of the dispute. The Lao PDR recognizes and enforces the award of foreign or international arbitration subject to certification by the people’s court of Lao PDR.” However, in practice, the Embassy is not aware of this new article being successfully exercised by a foreign investor.

International Commercial Arbitration and Foreign Courts

Beyond those listed above, there are no formal Alternative Dispute Resolution mechanisms provided in Lao law but based on the amended Investment Promotion Law and the law on Investment Resolution dated June 22, 2018, both parties can decide if they would like to have arbitration in Laos or abroad as mentioned in the contract. There is no known history of Laos enforcing foreign commercial arbitral decisions.

The 1994 bankruptcy law permits either the business or creditor the right to petition the court for a bankruptcy judgment and allows businesses the right to request mediation. The law also authorizes liquidation of assets based upon the request of a debtor or creditor. However, there is no record of a foreign-owned enterprise, whether as debtor or as creditor, petitioning the courts for a bankruptcy judgment. According to the World Bank’s Ease of Doing Business Report, Laos remains at the very bottom of the global rankings for ease of resolving insolvency.

The Latvian government has amended its laws and regulatory procedures to bring Latvia’s legislation in compliance with the EU and WTO GPA requirements. The Latvian government has developed a good working relationship with the foreign business community (through FICIL) to streamline various bureaucratic procedures and to address legal and regulatory issues as they arise. Additional information on the regulatory system in Latvia is available here: http://rulemaking.worldbank.org/en/data/explorecountries/latvia. 

The public finance and debt obligations process is transparent. Detailed information on the national budget process is available on the Latvian Ministry of Finance’s website: https://www.fm.gov.lv/en/s/budget/ .

As an EU member, Latvia has incorporated European norms and standards into its regulatory system. As an EU member, Latvia is a signatory to the WTO Trade Facilitation Agreement. As a WTO member, Latvia has the duty to notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade.

Latvia has a three-tier court system comprising district (city) courts, regional courts, and the Supreme Court. In addition, the Constitutional Court reviews the compatibility of decrees and acts of the President of the Republic, the government, and local authorities with the constitution and the law. Unless otherwise stipulated by law, district courts are the courts of first instance in all civil, criminal, and administrative cases. Regional courts have appellate jurisdiction over district court cases and original jurisdiction for certain cases specified in the Civil Code, such as cases on the protection of patent rights, trademarks, and geographic indicators, as well as cases on the insolvency and liquidation of credit institutions. The Supreme Court is the highest-level court in Latvia and – depending on the origin of the case – has either de novo review of both factual and legal findings or, in instances where it is the second appellate court reviewing a case, cassation review of only legal findings. In March 2021, Latvia established a specialized Economic Court to handle cases of corruption, economic crimes, and complex commercial disputes.

City and regional courts are administered by the Ministry of Justice (https://www.tm.gov.lv/en  ), while the Supreme Court and Constitutional Court are independent.

Observers have voiced concerns about the length of criminal and civil cases in Latvia, and the nature and opacity of judicial rulings have led some investors to question the fairness and impartiality of some judges. These concerns are not specific to foreign or local investors, however, and the court system is generally viewed as applying the law equally to the interests of foreign and local investors. Although the Ministry of Justice has enacted reforms designed to reduce the backlog of cases in the lower courts, improvements in the judicial system are still needed to accelerate the adjudication of cases, to strengthen the enforcement of court decisions, and to upgrade professional standards. The Economic Court’s creation was part of an effort by the government to accelerate and improve adjudication of commercial cases and financial crimes.

Incoming foreign investment in Latvia is regulated by the Commercial Law. The Latvian Investment and Development Agency’s website is a helpful resource for navigating the rules and procedures governing foreign investment. (http://www.liaa.gov.lv/en/invest-latvia/investor-business-guide/operating-environment ).

Competition-related concerns are supervised by the Competition Council. Council’s decisions can be appealed to a court in Latvia. More information can be accessed at: http://www.kp.gov.lv/en. 

In July 2021, the Competition Council imposed about $18 million in fines on 10 construction companies for entering into long-term prohibited agreements related to participation in public and private procurement in Latvia. This was one of the all-time largest cartel cases in Latvia. More detailed information about the so-called “construction company cartel” case is available here: https://www.kp.gov.lv/en/article/competition-council-fines-10-construction-companies-participating-cartel .

Cases of arbitrary expropriation of private property by the Government of Latvia are extremely rare. Expropriation of foreign investment is possible in a very limited number of cases specified in the Law on the Alienation of Immovable Property Necessary for Public Needs: (https://likumi.lv/ta/en/en/id/220517-law-on-the-alienation-of-immovable-property-necessary-for-public-needs ). If the owner of the property claimed by the government deems the compensation inadequate, he or she may challenge the government’s decision in a Latvian court.

There are two laws governing bankruptcy procedure: the Law on Insolvency and the Law on Credit Institutions (regulating bankruptcy procedures for banks and other financial sector companies).

The business community has expressed concerns over inefficiency and allegations of corruption in Latvia’s insolvency administration system. One way Latvia has addressed the issue was partnering with the European Bank for Reconstruction and Development on the September 2019 launch a project entitled “Support for Debt Restructuring in Latvia.” More information is available here: https://www.ebrd.com/news/2019/support-for-debt-restructuring-in-latvia-project-launched.html. 

Private firms should exercise caution when bidding on public projects.  Lebanese Government agencies often sole-source contracts, undertaking direct contracting processes that operate according to differing standards and without a formal competitive solicitation.  Public institutions evade regulations that promote full and open competition by splitting contract requirements into smaller solicitations whose values do not exceed government agency procurement limits.  Parliament passed a modern public procurement law consistent with international standards in June 2021, updating Lebanon’s public procurement system for the first time since the 1960s.  The Public Procurement Management Administration (PPMA), known as the “Tender Board,” technically has the authority to review terms of reference and evaluate bids for government contracts. The Tender Board is generally transparent, but corruption often arises within the scope of the tenders and the ministries that issue them. The new law would create a new public procurement oversight agency and require public tenders to be published online. The law’s success, however, depends on implementation. The Central Inspection Board (CIB), an oversight body within the Office of the Prime Minister, oversees government administrative processes, and the Court of Audit has oversight over public expenditures. The Social Security Fund and the Council for Development and Reconstruction, public entities that manage large funding flows, remain outside the CIB jurisdiction.

Excessive regulation hampers procedures for business entry, operation, and exit.  However, the process does not discriminate against foreign investors.  International companies face an unpredictable and opaque operating environment and often encounter unanticipated obstacles or costs late in the process.

Trademark registration, economic and trade indicators, and market surveillance reports are available online at:  http://www.economy.gov.lb .  However, some procedures, including those related to branch offices or representative offices of foreign companies, or to protecting intellectual property rights, still require the right-holder to visit the ministry in person to finalize and pay required dues.

All legislation, government decrees, decisions, and official announcements are published in the Official Gazette.  The government does not publish proposed draft laws and regulations for public comment, but a parliamentary commission may invite private sector stakeholders to comment on legislation.  Telecom Law No. 431 requires the Telecommunication Regulatory Authority (TRA) to issue regulations in draft for public consultation to promote transparency and enable the general public to shape future regulations.  The TRA has not introduced new regulations since the term of its executive board expired in February 2012.  Publicly listed companies adhere to international accounting standards.  In general, legal, regulatory, and accounting systems for Lebanese businesses in the formal sector accord with international norms.

Lebanon passed the Access to Information Law in January 2017 to promote transparency in the public sector.  The law permits anyone, including foreigners, to request information from government agencies.  A Whistleblower Protection law also passed in October 2018.  While the Whistleblower law is in force, the establishment of a National Anti-Corruption Commission to oversee the law’s implementation was only approved by Parliament in April 2020 and its members were appointed in January 2022. In January 2017, Lebanon announced its intent to join the Extractive Industries Transparency Initiatives (EITI), a global standard to promote transparency of the extractive sector, though Lebanon has not yet joined. In September 2018, Parliament adopted the Transparency in Oil and Gas Law to facilitate the EITI accession process.  To complete Lebanon’s candidacy, the Minister of Energy and Water announced that Lebanon would form a Multi-Stakeholder Group (MSG), with representatives from government, private firms operating in Lebanon, and civil society.  In March 2019, the Minister of Energy and Water invited civil society to choose independently its representative to the MSG, as per the EITI’s requirements. EITI membership will require annual data disclosures on licenses, contracts, beneficial ownership, payments, revenues, and production.

Lebanon’s public finances are not transparent; budget documents did not present a full picture of Lebanon’s expenditures and revenue streams, and Lebanon has not published an end-of-year report.  Details regarding allocations to and earnings from state-owned enterprises were limited.  The information in the budget was not considered reliable or reasonably accurate and did not correspond to actual revenues and expenditures.  Lebanon’s supreme audit institution did not make its audit reports publicly available.  While Lebanon’s debt obligations are transparent, some analysts have questioned the Central Bank’s reported foreign currency position. The Lebanese government hired three private auditors to audit its Central Bank in September 2020. The audits, including one forensic audit, have reportedly stalled.

Lebanon does not promote or require companies’ environmental, social, and governance disclosure to facilitate transparency and/or help investors and consumers distinguish between high- and low-quality investments.

Lebanon is not part of any regional economic block.  It adopts a variety of standards based on the type of product and product destination.  Lebanon is not a member of the World Trade Organization (WTO) but has held observer status since 1999.  Lebanon does have a WTO/TBT (technical barriers to trade) Enquiry Point that handles enquiries from WTO Member States and other interested parties.

Lebanon has a civil (roman and codified law) legal system inspired by the French civil procedure code (three degrees of jurisdictions: First Instance, Appeal, and Supreme Court).  Ownership of property is enforced by registering the deed in the Property Registry.  Lebanon has a written commercial law and contractual law.  Lebanon has commercial, civil, and penal courts, but no specialized courts to hear intellectual property (IP) claims.  Civil and/or penal courts adjudicate IP claims.  Lebanon has an administrative court, the State Council, which handles all disputes involving the state.  Lebanon has a labor court in seven out of its nine governorates to hear claims of unfair labor practices.

Local courts accept investment agreements subject to foreign jurisdictions if they do not contravene Lebanese law.  Judgments of foreign courts are enforced subject to the Exequatur obtained.  Weak judicial capacity (i.e., shortage of judges, inadequate support structures, administrative delays) results in delays in the handling of cases.  The Lebanese Constitution guarantees the judicial system’s independence.  However, politicians and powerful lobbying groups often interfere in the court system.  Lebanon’s Parliament has discussed a draft law on the independence of the judiciary, but as of March 2022, it remains with Parliament’s Administration and Justice Committee.

A foreigner may establish a business under the same conditions as a Lebanese national and must register the business in the Commercial Registry.  Foreign investors who do not manage their business from Lebanon need not apply for a work permit.  However, foreign investors who own and manage their businesses within Lebanon must apply for an employer work permit and a residency permit.  Employer work permits stipulate that a foreign investor’s capital contribution cannot be less than $67,000.  The investor must also hire three Lebanese employees and register them in the National Social Security Fund (NSSF) within the first six months of employment.

Companies established in Lebanon must abide by the Lebanese Commercial Code and are required to retain the services of a lawyer to serve as a corporate agent.  Local courts are responsible for enforcing contracts.  There are no sector-specific laws on acquisitions, mergers, or takeovers, except for bank mergers.

Lebanese law does not differentiate between local and foreign investors, except in land acquisition (see Real Property section).  Foreign investors can generally establish a Lebanese company, participate in a joint venture, or establish a local branch or subsidiary of their company without difficulty.  Specific requirements apply for holding and offshore companies, real estate, insurance, media (television and newspapers), and banking.

Lebanese law allows the establishment of joint-stock corporations, limited liability, offshore, and holding companies.  However, offshore and holding companies must be joint-stock corporations (Société Anonyme Libanaise – SAL).  The Lebanese Commercial Code governs these entities.

IDAL’s website (http://investinlebanon.gov.lb/ ) provides investors information on investment legislation, regulations, and starting a business.  IDAL’s proposed changes to investment-related laws and regulations, including amending requirements for IT companies to benefit from IDAL incentives, are pending government approval.  IDAL has finalized a detailed Information and Communications Technology (ICT) plan aimed at expanding facilities, developing incentives, and facilitating investments in the ICT sector; it awaits Cabinet’s approval.  IDAL intends to focus its investment promotion strategy on attracting high value-added innovative investments related to all of the sectors under its mandate.

Lebanon’s Parliament passed a new law on competition in February 2022. The law will nullify exclusive licenses granted to local companies in certain sectors and create a National Competition Commission to regulate competition. The law’s success in curtailing Lebanon’s many monopolies and attracting foreign investment depends, however, on its implementation. Local courts review claims on competition-related issues under various laws.

Land expropriation in Lebanon is relatively rare.  The Law on Expropriation (Law No. 58, dated May 29, 1991, Article 1) and Article 15 of the Constitution specify that expropriation must be for a public purpose and calls for fair and adequate compensation.  The government pays compensation at the time of expropriation, but the rate is often perceived as below fair market value.  The government does not discriminate against foreign investors, companies, or their representatives on expropriations.

The government established three real estate companies in the mid-1990s to encourage reconstruction and development in Greater Beirut following the Lebanese Civil War:  1) private corporation Solidere for the development and reconstruction of Beirut’s downtown commercial district, 2) private corporation Linord, for northern Beirut, and 3) public institution Elyssar for the southwest suburbs of Beirut.  Linord has been dormant for years, and Elyssar’s projects have stalled since 2007.  The government granted these three companies the authority to expropriate certain lands for development under the Law on Expropriation.  Landowners and squatters have challenged the land seizures in court.

ICSID Convention and New York Convention

Lebanon is a member of the International Center for the Settlement of Investment Disputes (ICSID Convention).  Lebanon ratified the 1958 Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) in 2007.  Lebanese law conforms to both conventions.

Investor-State Dispute Settlement

The government accepts international arbitration related to investment disputes.  In cases involving concessions or public projects, the government does not accept binding international arbitration unless the contract includes an arbitration clause that was obtained through prior approval by Cabinet decree.  However, there is an exception for investors from countries that have a signed and ratified investment protection agreement with Lebanon that provides for international arbitration in the case of disputes.  In the past, the government has faced challenges related to previously awarded contracts and resorted to international arbitration for resolution.  To post’s knowledge, there are no known new cases.  In 2010, the government settled a dispute with a China-based contracting company working to expand the northern port of Tripoli.

International Commercial Arbitration and Foreign Courts

International arbitration is accepted as a means to settle investment disputes between private parties.  The Lebanese Centre for Arbitration was created in 1995 by local economic organizations, including the Lebanese chambers of commerce, industry, and agriculture.  The Centre resolves domestic and international conflicts related to trade and investment.  Its statutes are similar to those of the International Chamber of Commerce (ICC) in Paris, and its conciliation and arbitration rules are modeled on those of the Paris ICC.  Judgments of foreign courts are enforced subject to the exequatur obtained.

Lebanon does not have a Bankruptcy Law.  However, the Commercial Code (Book No. 5, Articles 459-668) and the Penal Code govern insolvency and bankruptcy. Workers may resort to the Labor Court and the National Social Security Fund to recover pay and benefits from local and foreign firms that go bankrupt.  The law criminalizes fraudulent bankruptcy.

Regulatory enforcement is generally weak and has moderate impact by hindering competition and distorting business and investment practices.  The legal, regulatory, and accounting systems are transparent and consistent with international norms.  The accounting systems for companies are regulated by the Companies Act of 2011 and Financial Institutions of 2012.  International Financial Reporting System (IFRS) is the current financial system used by companies.  Rule-making and regulatory mechanisms exist at the local, national, and supra-national levels although the most relevant for foreign investors is the national level.  There are no informal regulatory processes managed by the private sector or non-governmental organizations.

There are no private sector or government efforts to restrict foreign participation in consortia or organizations that set industry standards.  Lesotho has a centralized online location where key regulatory actions are published.  However, the website is poorly maintained and rarely updated —    https://lesotholii.org/   The government printing office also publishes government gazettes which can be purchased by the public.

Businesses in Lesotho are regulated by the Companies Act of 2011. The issuance of traders’ licenses is governed by the Trading Enterprises Order of 1993, as amended in 1996, and the Trading Enterprises Regulations of 1999, as amended in 2011, as well as the Business Licensing and Registration Act of 2019.  Trading licenses are required for a wide range of services; some enterprises can require up to four licenses for one location.  Manufacturing licenses are covered by the Industrial Licensing Act of 1969 and the Pioneer Industries Encouragement Act of 1969.  For most manufacturing license applications, environmental certificates issued by the National Environmental Secretariat (NES) are sufficient.  Where manufacturing activities are assumed to have actual or potential environmental impacts, however, an Environmental Impact Assessment is required, which must be approved by the NES.  The introduction of the OBFC improved the industrial and trading license system.  The OBFC has also streamlined other bureaucratic procedures, including those for licenses and permits.

The GOKL modernized the regulatory framework for utilities through the establishment of the independent Lesotho Communications Authority (LCA), which regulates the telecommunications sector, and the Lesotho Electricity and Water Authority (LEWA), which regulates the energy and water sectors.  The two authorities set the conditions for entry of new competitive operators.  The LEWA allows both the Lesotho Electricity Company and the Water and Sewerage Company to maintain monopolies in their respective sectors.

The Mines and Minerals Act of 2005, the Precious Stones Order (1970), and the

Mine Safety Act (1981) provide a regulatory framework for the mining industry.  The Commissioner of Mines in the Ministry of Mines, supported by the Mining Board, is authorized to issue mineral rights to both foreigners and local investors.  On approval, it takes about a month for both prospecting and mining licenses to be issued.

Under the Financial Institutions Act of 2012 the Central Bank of Lesotho (CBL) regulates financial services.

Tourism enterprises are required to secure licenses under the Accommodation, Catering and Tourism Enterprise Act of 1997.  The Act provides for a Tourism Licensing Board that issues and renews licenses for camp sites, hotels, lodges, restaurants, self-catering establishments, bed and breakfasts, youth hostels, resorts, motels, catering, and guest houses.  Applicants for any of the above licenses must apply to the Board three months before its next meeting.  Several government departments, specifically the Ministries of Health and Tourism, the police and, when the property is in Maseru, the Maseru City Council, must inspect properties and submit inspection reports to the Board on prescribed forms.  Licenses are granted for one year and can be renewed.

Parliamentary committees may, but are not required to, publish proposed laws and regulations in draft form for public comment.  Parliament may also hold public gatherings to explain the contents of the proposed laws, and these provide opportunities for comment on proposed laws and regulations.  The committees generally hold such consultations for laws that are perceived to be sensitive, such as: The Land Act, the Penal Code, and the Children’s Welfare and Protection Act.

Regulations are developed to enforce the law, to implement objectives of legal frameworks, and to ensure compliance.  The following steps are followed when regulations are developed:

The initiating ministry or agency writes a cabinet memo reflecting objectives and benefits of the regulations.  The cabinet memo is then widely circulated to relevant stakeholders to reflect how the regulations will impact them and to seek concurrence.  The initiating agency then makes a cabinet presentation to seek cabinet approval to draft the regulations.  The initiating agency drafts regulations and holds meetings with relevant stakeholders to obtain their input.  The initiating ministry or agency holds workshops with relevant stakeholders to validate regulations.  Draft regulations are submitted to the Attorney General for certification.  A Parliamentary presentation is held and updates to the draft are made.  A presentation to the Senate is held and updates of the regulations are made.  Parliament tables the regulations, and a provision of royal ascent is made by His Majesty King Letsie III.  The regulations are published, and the public is given a period of 14 days to review the regulations after which their comments are incorporated, and the regulations are finalized and gazetted.  The last step is to sensitize the public on the new regulations.

Information on debt obligations is publicly available, including online.  The government produces an Annual Public Debt Bulletin, which covers debt management operations, debt portfolio, debt service, and loan guarantees.  The government also publishes a Medium-Term Debt Strategy paper.  More information is available at:  www.finance.gov.ls/ 

Lesotho is a member of the Southern African Development Community (SADC) and the Southern African Customs Union (SACU).  SACU strives to promote integration of Member States into the global economy through enhanced trade and investment. SADC aspires to deepen regional integration and sustainable development. Lesotho’s products enjoy duty free access to SADC countries, which has a total population of 277 million.  For more information about SADC, visit:  www.sadc.int  

In January 2021, the GOKL ratified the African Continental Free Trade Area (AfCFTA) agreement. The main objective of the AfCTA is to create a single continental market for goods and services, with free movement of businesspersons and investments.  The agreement has been signed by 54 out 55 countries. To date, 35 countries have ratified the agreement. The agreement would provide a market access of over 1 billion people to Lesotho’s products with a combined Gross Domestic Product (GDP) estimated at $3.4 trillion.

Lesotho is a member of the World Trade Organization (WTO). Lesotho’s regulatory systems are independent and not intertwined with regional regulations.  In cases where there are gaps with national regulations, the country uses regional regulations to close them.  The government does not reference or incorporate U.S. or another country’s regulatory systems.  The government notifies all agreements of Technical Barriers to Trade (TBT).  More information is located at:  https://www.tfadatabase.org/members/lesotho  

The legal system in Lesotho is based on Roman–Dutch Law and English Common Law, combined with precolonial Customary Law.  The judicial system is made up of the High Court, the Court of Appeal, subordinate courts, and the Judicial Service Commission (JSC).

There is no trial by jury, instead, judges make rulings alone. There are magistrates’ courts in each of the 10 districts, and more than 70 central and local courts. With U.S. support, a Commercial Court was established in 2010 to improve the country’s capacity in resolving commercial cases though backlogs continue to delay processing times.  Foreign investors have equal treatment before the courts in disputes with national parties or the government.  The SADC Protocol on Finance and Investment enables investors to refer a dispute with the State to international arbitration if domestic remedies have been exhausted.  Lesotho is a signatory of the International Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID) and also accepts ad hoc arbitration.  Lesotho is a member of the International Center for the Settlement of Investment Disputes, and the Arbitration International Investment Disputes Act of 1974 commits Lesotho to accept binding international arbitration of investment disputes.

Lesotho does not have any investment laws. The overarching FDI policy is the 2015 National Investment Policy of Lesotho, produced with the assistance of UNCTAD.  The Companies Act of 2011 and the Financial Institutions Act of 2012, are the principal laws that regulate incoming foreign investment through acquisitions, mergers, takeovers, purchases of securities and other financial contracts and greenfield investments.  The investment treaties also govern conduct toward the entry of foreign investment.  In 2021 there were no major cases relating to foreign investment and the 2021 judgments are available at:  https://lesotholii.org/courtnames/high-court/202  

The OBFC hosts the Lesotho Trade Information Portal, a single online authoritative source of all laws, regulations, and procedures for importing and exporting.   The OBFC web site is:HYPERLINK hError! Hyperlink reference not valid. http://www.obfc.org.ls/business/default.php. The OBFC portal provides information on company registration and export and import regulations as well as information and links to key laws and 23 ministries.

The government has produced but not yet passed a draft competition bill to improve the regulation of investments.  Its goal is to “provide the legal basis for undistorted competition and thus contribute to transparency and predictability in domestic markets.”  The are no agencies established to review transactions for competition-related concerns.  However, various government sectors deal with competition-related issues through use of available institutional guidelines and procedures. These include the Commercial Court, the Ministry of Trade and Industry and the Ministry of Small Business.  The government is also in the process of drafting a consumer protection bill.

The constitution provides that the acquisition of private property by the state can only occur for specified public purposes. The processes that are followed during expropriation follow the Land Act of 2010. These include consultations between government/authority and claimant, consultation with the chief, demarcation and survey of the area, publishing a gazette for public notification and information and provision of compensation equal to fair market value of the property.  In cases of expropriation where claimants allege a lack of due process, the affected persons may appeal to the High Court as to whether the action is legal and compensation is adequate.  The constitution is silent on whether compensation may be paid abroad in the case of a non-resident; such an additional provision would usually be contained in a foreign investment law.  The government has no history of discriminating against U.S. or other foreign investments, companies, or representatives in expropriation.  The only local ownership law is the Trading Enterprises Act.

ICSID Convention and New York Convention

Lesotho is a member of the ICSID Convention and the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.  There is no specific domestic legislation providing for enforcement of awards under the ICSID Convention.

Investor-State Dispute Settlement

The government is a signatory to a treaty in which binding international arbitration of investment disputes is recognized.  Lesotho has no Bilateral Investment Treaty (BIT) with the United States.  The government has little history of investment disputes involving U.S. or other foreign investors or contractors in Lesotho.

Foreign investors have full and equal recourse to the Lesotho courts for commercial and labor disputes.  Courts are regarded as fair and impartial in cases involving foreign investors. There is no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

Lesotho readily accepts binding international arbitration of investment disputes.  Lesotho has entered into a number of bilateral investment agreements that provide for international arbitration.  However, Lesotho does not have a bilateral investment treaty with the United States.  The government stands ready to accept and enforce foreign arbitral awards and judgements if they meet the requirements of domestic law (there have been no such awards to date).

The Companies Act is the principal commercial and bankruptcy law in Lesotho. According to the law, creditors, equity shareholders, and holders of other financial contracts of a bankrupt company have a right to nominate a person to be a liquidator, however, if there are any disagreements, the person nominated by the creditors shall be the liquidator.  All claims against a bankrupt company shall be proved at a meeting of creditors and equity shareholders.  If the claim is rejected by the liquidator, the claimant may apply to the court by motion to set aside the rejection.  Creditors who will act as witnesses are entitled to witness fees. In a bankruptcy, workers are paid first, then creditors, equity shareholders and holders of other financial contracts are paid. Monetary judgments are usually made in the local currency.

Companies are required to adhere to International Financial Reporting Standards (IFRS) consistent with international norms. In many instances, however, authorities do not consistently enforce or apply national laws and international standards. Furthermore, no systematic oversight or enforcement mechanisms exist to ensure government authorities correctly follow administrative rules. Accounting, legal, and regulatory procedures are often not transparent. The government does not require environmental, social, and governance (ESG) disclosure to facilitate transparency or help investors and consumers distinguish between high-and low-quality investments. Liberia passed a Freedom of Information Law in 2010 requiring government agencies to appoint a public information officer and make records available to the public, but access to government records is often difficult or impossible. Some government ministries and agencies have overlapping responsibilities, resulting in inconsistent application of laws. Government agencies are not legally required to disclose regulations before or after enactment and there is no requirement for public comment, although finalized regulations are often published. No central clearinghouse exists to access proposed regulations. Government finances, including revenues and debt obligations, are partially captured in national budgets, but are not fully transparent. Some budget documents are accessible online. For more information on regulatory transparency, see: https://rulemaking.worldbank.org/en/data/explorecountries/liberia .

Liberia is a member of the Economic Community of West African States (ECOWAS)  and the Mano River Union (MRU) . The Liberia Revenue Authority (LRA)  is standardizing the country’s customs and tariff systems and harmonizing its tax regime with the ECOWAS Common External Tariff . Liberia is a member of the World Trade Organization.

Liberia’s legal system uses common law alongside local customary law.  The common law-based court system operates in parallel with local customary law, which incorporates unwritten, indigenous practices, culture, and traditions. Adjudication under these dual systems often results in conflicting decisions between entities based in Monrovia and communities outside of Monrovia, as well as within communities.

The Commercial Court  hears commercial and contractual issues, including debt disputes of USD 15,000 and above. In theory, the Commercial Court presides over all financial, contractual, and commercial disputes, serving as an additional avenue to expedite commercial and contractual cases. Under the Liberian constitution, the judicial branch is independent from the executive, but reports regularly indicate that the executive branch frequently interferes in both judicial and legislative matters. Cases can be subject to extensive delays and procedural and other errors, and investors have questioned the fairness and reliability of judicial decisions. There are widespread reports that court officials solicit bribes to act on cases. Regulations or enforcement actions are appealable, and appeals are adjudicated in the Supreme Court . The high volume of appeals is a significant burden on the court’s five judges and often results in long delays.

Laws guiding foreign investment include the Investment Act of 2010 , the Revenue Code , the Public Procurement and Concessions Act , and the National Competitive Bidding Regulation . No major laws or judicial decisions pertaining to foreign direct investment have come out in the past year. The government does not maintain a “one-stop-shop” website for investment laws, rules, procedures, or reporting requirements.

The Ministry of Commerce and Industry (MOCI)  reviews domestic and international trade transactions for competition-related concerns. If the MOCI cannot resolve the issue or it requires investigation, it may be referred to the Department of Economic Affairs at the Ministry of Justice  (MOJ). The MOJ refers potential violations of civil or criminal law to the court system, including the Commercial Court. There were no significant competition cases during the review period. Liberia does not have anti-trust laws.

The Liberian Constitution permits the government to expropriate property for “national security issues or where the public health and safety are endangered, or for any other public purposes.” The government must pay just compensation and landowners may challenge the expropriation in court. When property taken for a purpose is no longer used for that purpose, the former owner has the right of first refusal to reacquire the property. The 2010 Investment Act further defines the circumstances under which the government can legally expropriate property and includes protections for foreign enterprises against expropriation or nationalization. Liberia is a signatory to the Multilateral Investment Guarantee Agency (MIGA) Convention.

The Libyan regulatory system lacks transparency, and there is a general lack of clarity regarding the function and responsibilities of Libyan government institutions. Transparency International placed Libya 172 out of 180 countries (“1” indicates least corrupt) in its 2021 Corruption Perceptions Index, and Libya ranked 186 out of 190 on the most recent edition of the World Bank’s ‘Ease of Doing Business’ Index. Libya’s bureaucracy is one of the most opaque and amorphous in the Middle East region; its legal and policy frameworks are similarly difficult to navigate. The issuance of licenses and permits is often delayed for significant periods for unspecified reasons, and the adjudication of these applications is most often done in a subjective and non-transparent fashion. This has created an environment ripe for graft and rent-seeking behavior.

Neither ministries nor regulatory agencies publish the text or summary of proposed regulations before their enactment. Accurate, current information about key commercial regulations is difficult to obtain. These factors serve as a deterrent to foreign investment.

Libya does not promote or require companies to disclose environmental, social, and governance information in order to promote transparency. Libya scores zero out of five (with five being the best) in the World Bank’s Global Indicators of Regulatory Governance.

Libya is not a member of the WTO. The WTO received Libya’s application on June 10, 2004. The General Council established a Working Party on July 27, 2004, but no formal progress on Libya’s application has been made.

The 2011 Constitutional Declaration currently functions as the interim constitution. It states Islam is the state religion and sharia is the principal source of legislation. The Libyan civil code begins with a preliminary title containing general dispositions regarding law, sources of law, application of the law, and general dispositions regarding the legal definition of persons as well as the classification of things and property. Thereafter, the code is divided into two parts and four books. The first part addresses obligations or personal rights and contains similarly named subdivisions: Book I (Obligations in General) and Book II (Specific Contracts).  The second part of both codes is entitled “Real Rights” and contains Books III (Principal Real Rights) and Book IV (Accessory Real Rights). In the absence of a legal provision, the Libyan civil code requires courts to adjudicate matters “in accordance with the principles of Islamic law.”  In the absence of an Islamic rule on a particular matter, the Libyan civil code requires courts to look to “prevailing custom,” and in the absence of any custom, “to the principles of natural law and the rules of equity.”

Article 89 of the Libyan Civil Code states that “a contract is created, subject to any special formalities that may be required by law for its conclusion, from the moment that two persons have exchanged concordant intentions.”  The Libyan court system consists of three levels: the courts of first instance; the courts of appeals; and the Supreme Court, which is the final appellate level. Libya’s justice system has remained weak throughout the post-revolutionary period, and enforcement of laws remains a challenge for the government.

Laws and regulations on investment and property ownership allow domestic and foreign entities to establish business enterprises and engage in remunerative activities. Investment law and commercial law differ in their foreign ownership restrictions for business enterprises. Article 7 of the 2010 Investment Law specifies, in general accordance with standard international practice, conditions a project must fulfill in part or in full in order to qualify as an investment rather than a commercial vehicle. Investment projects that meet the conditions set out in the 2010 Investment Law enjoy a number of benefits, such as relief from income taxes for a set number of years. Further, a foreign investor may wholly own the enterprise if the foreign investment exceeds LYD 5 million. This is reduced to LYD 2 million if a Libyan partner holds at least half of the investment. For investment projects that do not meet the conditions set out in the 2010 Investment Law, these benefits do not apply and Libya’s Commercial Code stipulates no more than 49 percent foreign ownership unless the enterprise is a branch of a foreign company, which the foreign company can then fully own.

Chapter 11 of the Libyan Commercial Code deals with the issue of competition and prohibits market abuse. The Commercial Code provides for the establishment of a Competition Committee to be responsible for reviewing complaints and investigating them and, in cases where the law has been violated, referring the cases to public prosecution. There is not an active Competition Committee at the moment, and since these issues are regulated by law and considered violations, interested/damaged parties can pursue legal action directly.

Article 23 of the 2010 Investment Law provides an express guarantee against the nationalization, expropriation, forcible seizure, confiscation, imposition of receivership, freeze or subjection of procedures of similar effect, except by virtue of a law or court ruling and fair and equitable indemnity, and provides such procedures be applied indiscriminately. Article 43 of executive regulation No. 449 of 2010 implementing the law reinforces those provisions. The Libyan government’s history of state expropriation of private property, including the assets of foreign companies, most prevalent during the 1980s, had already been in decline before the law’s passage. There have been no reports of nationalizations or expropriations under the current investment law.

Libya does not have a separate bankruptcy law, but bankruptcy issues are covered under articles 1012 and 1013 of the 2010 Commercial Code. According to this legislation, bankruptcy proceeds in two phases. The first is preventative reconciliation, during which the debtor attempts to rectify the financial situation of the business through an agreement with creditors under court supervision. The second phase commences in the event of the agreement’s failure, whereby the court intercedes to protect the rights of the creditors through liquidation. Libya is tied for last for ease of resolving insolvency in the World Bank’s most recent ‘Ease of Doing Business’ index.

The regulatory system remains a challenge for some investors. Local business leaders report that bureaucratic procedures often are not user-friendly and that the interpretation of regulations is inconsistent and unclear. Businesses and private individuals complain of low-level, but non-systemic corruption, including in the process of awarding government contracts and the granting of licenses and permits. Businesses also note that they would like to have more opportunity to consult with lawmakers regarding new legislation and that new legislation sometimes appears with little advance notice. Public procurement is overseen by the national procurement supervising authority and has a strong reporting system to monitor its activities, making it largely transparent. Nevertheless, problems persist in practice, as some bids are released with technical irregularities and many winning vendors are selected based primarily on price over the quality of the product.

However, the government continues to improve transparency. A new anti-corruption law came into effect in 2022 which codified the responsibilities of public institutions to enforce stricter standards of openness and transparency and established a network of trained anti-corruption officials. For example, the parliament’s website contains all draft legislation, and public tenders must be published electronically in a central database. Ministries also post draft laws under consideration. In March 2014, Transparency International released a report recommending new laws aimed at protecting whistle-blowers, encouraging lobbying transparency, preventing and controlling conflicts of interest, and increasing transparency in political party funding. Some of the recommendations have already been addressed by introducing a whistleblower protection law and a new law on lobbying in 2017. The World Bank’s Doing Business Report ranked Lithuania 11th out of 190 in 2020. Lithuania scored especially high in the categories of Registering Property (4th), Enforcing contracts (7th) Dealing with Construction Permits (10th) and Starting a Business (34th). It did less well in the categories of Resolving Insolvency (89th) and Getting Credit (48th).

Since May 1, 2004, in accordance with its European Union membership, Lithuania has applied European Union trade policies, such as antidumping or anti-subsidy measures. The European Union import regime applies to Lithuania. The country is a member of the WTO and it notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade.

The Lithuanian legal system stems from the legal traditions of continental Europe and complies with the EU’s acquis communautaire. New laws enter into force upon promulgation by the President (or in some cases the Speaker of the parliament) and publication in the official gazette, Valstybes Zinios (State News). Several possibilities exist for commercial dispute resolution. Parties can settle disputes in local courts or in the increasingly popular independent, i.e., non-governmental, Commercial Court of Arbitration. Lithuania also recognizes arbitration judgments by foreign courts. Domestic courts generally operate independently of government influence. Lithuania’s EU membership has given foreign firms the additional right to appeal adverse court rulings to the European Court of Justice.

The Lithuanian court system consists of courts of general jurisdiction that deal with civil and criminal matters, and includes the Supreme Court, the Court of Appeals, District Courts, and local courts. In 1999, Lithuania established a system of administrative courts to adjudicate administrative cases, which generally involve disputes between government regulatory agencies and individuals or organizations. The administrative court system consists of the High Administrative Court and District Administrative Courts.

The Constitutional Court of Lithuania is a separate, independent judicial body that determines whether laws and legal acts adopted by the parliament, president, and the government violate the Constitution.

Lithuanian law provides that foreign entities may establish branches or representative offices, and there are no limits on foreign ownership or control. A foreigner may hold a majority interest in a local company in Lithuania. However, there are some areas of the economy where investment is limited, such as in sectors related to national security and defense of the State, and licensing is necessary for activities related to human life and health, or which are deemed potentially risky. The national investment promotion agency Invest Lithuania provides a detailed overview of the relevant laws and regulations on foreign investment. http://www.investlithuania.com 

There is a domestic Competition Council, which is responsible for the prevention of competition law violations. For more information: https://kt.gov.lt/en/ 

Lithuanian law permits expropriation on the basis of public need, but requires compensation at fair market value in a convertible currency. The law requires payment of compensation within three months of the date of expropriation in the currency the foreign investor requests. The compensation must include interest calculated from the date of publication of the notice of expropriation until the payment of compensation. The recipient may transfer this compensation abroad without any restrictions. There have been no cases of expropriation of private property by the Lithuanian government since 1991. There is an ongoing process to restitute property expropriated during World War II and the Soviet occupation. While the Lithuanian government passed a law in 2011 providing for the restitution of communal property, it has not passed legislation to address the restitution of private and heirless property seized during the Holocaust.

Lithuania passed the current Enterprise Bankruptcy Law in 2001. This law applies to all enterprises, public establishments, commercial banks, and other credit institutions registered in Lithuania. The law provides a mechanism to override the provisions of other laws regulating enterprise activities, assuring protection of creditors’ rights, recovery of debts, and payment of taxes and other mandatory contributions to the State. This law establishes the following order of creditors’ claims: claims by creditors that are secured by a mortgage/pledge of debtor; claims related to employment; tax, social insurance, and state medical insurance claims; claims arising from loans guaranteed or issued on behalf of the Republic of Lithuania or its government; and other claims. Bankruptcy can be criminalized in cases of intentional bankruptcy. The Law on the Bankruptcy of Natural Persons was introduced in Lithuania in 2013. The World Bank’s Ease of Doing Business survey ranks Lithuania 89th in the category of “resolving insolvency”.

The Government of Luxembourg uses transparent policies and effective laws to foster competition and establish clear ground rules on a non-discriminatory basis. The legal system is quite welcoming with respect to FDI, and legal, regulatory, and accounting systems are transparent and consistent with international norms. With the exception of the mandatory membership in the Luxembourg Chamber of Commerce, there are no informal regulatory processes managed by non-governmental organizations or private sector associations. In addition to the Government, the Luxembourg Institute of Regulation, a public agency, proposes regulatory policies.

As confirmed by the World Bank report on Global Indicators of Regulatory Governance, the Luxembourg Government develops anticipated and publishes forward looking regulatory plans – a public list of anticipated regulatory changes and proposals intended to be adopted and implemented. These plans are available to the public, as the texts of proposed legislation are published before Parliamentary debate and voting. In addition, plans and proposed legislation is subject to review by the State Council and the Grand Duke.

Draft texts are published on a unified website where all proposed regulations are published and directly distributed to interested stakeholders. While the ministries do not have a legal obligation to publish the text of proposed regulations before their enactment, the entire text of the proposed draft law is published. ( www.legilux.lu )

In addition, the Government solicits comments on proposed laws and regulations from the public. The comments are received on the same website (www.legilux.lu), through public meetings, and through targeted outreach to stakeholders, such as business associations.

Publicly listed companies adhere to the International Financial Reporting Standards (IFRS), and their accounts must be audited accordingly by an officially accredited auditor.

The Government does not mandate, but strongly encourages companies to disclose information on their environmental, social and governance (ESG) targets. There are multiple ESG labels, international and domestic that are enjoying a strong uptick. Luxembourg has also created an ESG label for investment products called LuxFlag and is home to the first and largest ESG bond exchange in the world, the Luxembourg Green Exchange (LGX).

The law requires that the rulemaking body solicit comments on proposed regulations. The consultation period is typically three months, and the Government reports on the results of the consultation in the form of a consolidated response on the same website. The official journal Mémorial publishes the final text of laws, both online and in print.

Proposed legislation also includes a factsheet on the impact on public finances. The Luxembourg Government is transparent with its public finances and debt obligations through the annual budget procedure that requires Parliamentary approval. The Government also communicates on issuances of new State borrowing.

Luxembourg is a member state of the EU and routinely transposes EU directives and regulations into domestic law. Luxembourg has been a World Trade Organization (WTO) member since 1995 and notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT). Luxembourg ratified the TFA on October 5, 2015 and has an implementation rate of 100 percent.

Luxembourg is a  parliamentary   representative democracy  headed by a  constitutional monarch . The Constitution of 1868 provides for a flexible separation of powers between the executive and the parliament, with the judiciary watching over proper application of laws.

The Grand Duchy has a written commercial/contractual law. Magistrates’ courts deal with cases of lesser importance in civil and commercial matters and under the urgent procedure in the field of law enforcement.

The  district courts , of which there are three, adjudicate civil and commercial matters for all cases not specifically attributed by law to any other court. The current judicial process is considered procedurally competent, fair, and reliable, albeit notably slow (The judicial sector observes all public-school holiday periods). Regulation and enforcement actions are appealable, and they are adjudicated in the national court system

Luxembourg has assimilated the laws of neighboring countries according to the nature of the laws: German tax law, French civil law, and Belgian commercial law (written and consistently applied). As previously mentioned, the website for doing business is: www.guichet.public.lu, and the new one-stop-shop for setting up a business is the House of Entrepreneurship within the Luxembourg Chamber of Commerce ( www.houseofentrepreneurship.lu  ).

The Competition Inspectorate, a department within the Ministry of the Economy, oversees investigating competition cases.

The laws governing expropriation of property are quite complex, and the process can be arduous and lengthy, depending on the property. The Ministry of the Interior, along with the Ministry of Justice, sets forth the specific regulations according to each type of case.

There have been no known expropriations in the recent past or policy shifts which would indicate such actions soon. There are no tendencies by the Luxembourg Government to discriminate against U.S. investments, companies, or representatives in expropriation.

Instances of indirect expropriation or governmental action tantamount to expropriation, such as confiscatory tax regimes, that might warrant special investigation, are non-existent.

Luxembourg has assimilated the laws of neighboring countries according to the nature of the laws: German tax law, French civil law, and Belgian commercial law (written and consistently applied). Judgments of foreign courts are accepted and enforced by the local courts, and Luxembourg does have a written and consistently applied bankruptcy law, which is based on European Union-wide legislation. Monetary settlements are usually made in local currency (euro). Bankruptcy is not criminalized. The bankruptcy law is currently under review and the updated law is expected to be adopted by the end of 2022.

At the end of 2021, the Luxembourg banking sector comprised 125 credit institutions from 26 different countries. Under Luxembourg law, two types of licenses are possible for the credit institutions: the Universal Banking License, and the Mortgage Bonds Banking License.

The Ministry of Finance grants credit institutions operating out of the Grand Duchy an operating license. Since the entry into force of the Single Supervisory Mechanism on November 4, 2014, credit institutions are subjected to the control of the European Central Bank, either directly or indirectly through Luxembourg’s financial sector supervisory authority, the CSSF. The supervision by the ECB/CSSF extends equally to activities performed by these undertakings in another Member State of the EU, whether by means of the establishment of a branch or by free provision of services.

The GOM typically conducts a two-month public consultation when amending or making legislation, including investment laws, and will prepare a draft bill based on the results of the public consultation. The lawmakers then discuss the draft bill before putting it to a final vote. All of the processes are transparent and consistent with international norms.

Public comments received by the GOM are not made available online to the public. The draft bills are made available at the Legislative Assembly’s website (http://www.al.gov.mo/zh/), while this website http://www.io.gov.mo/ links to the GOM’s Printing Bureau, which publishes laws, rules, and procedures.

Macau’s anti-corruption agency, the Commission Against Corruption (known by its Portuguese acronym CCAC), carries out ombudsman functions to safeguard rights, freedoms, and legitimate interests of individuals and to ensure the impartiality and efficiency of public administration.

Macau’s law on the budgetary framework (Decree 15/2017) aims to reinforce monitoring of public finances and to enhance transparency in the preparation and execution of the fiscal budget.

Macau does not owe debt to any countries. The public can retrieve up-to-date data on public finance from the Financial Services Bureau website https://www.dsf.gov.mo/financialReport/?lang=en  at all times.

Macau is a member of the WTO since 1995 and adopts international norms. The GOM notified all draft technical regulations to the WTO Committee on Technical Barriers to Trade.

Macau, as a signatory to the Trade Facilitation Agreement (TFA), has achieved a 100 percent rate of implementation commitments.

Under “one country, two systems”, Macau maintains Continental European law as the foundation of its legal system, which is based on the rule of law and the independence of the judiciary. The current judicial process is procedurally competent, fair, and reliable. Macau has written commercial law and contract law. The Commercial Code is a comprehensive source of commercial law, while the Civil Code serves as a fundamental source of contractual law. Courts in Macau include the Court of Final Appeal, Intermediate Courts, and Primary Courts. There is also an Administrative Court, which has jurisdiction over administrative and tax cases. These provide an effective means for enforcing property and contractual rights. Currently, the Court of Final Appeal has three judges; the Intermediate Courts have nine judges; and the Primary Courts have 33 judges. The Public Prosecutions Office has 36 prosecutors.

Macau passed a National Security Law in 2009 that prohibits and punishes crimes against national security, including treason, secession, sedition, subversion, theft of state secrets, and collusion with foreign political organizations. Preparatory acts leading to any of these crimes may also constitute a criminal offense.

Macau’s courts still have jurisdiction over all local cases except those related to defense and foreign affairs. The 2009 National Security Law did not affect this jurisdiction.

Macau’s legal system is based on the rule of law and the independence of the judiciary. Foreign and domestic companies register under the same rules and are subject to the same set of commercial and bankruptcy laws (Decree 40/99/M).

Macau has no agency that reviews transactions for competition-related concerns, nor does it have a competition law. The Commercial Code (Law No. 16/2009) contains basic elements of a competition policy for commercial practices that can distort the proper functioning of markets. In response to public outcries of price-fixing schemes in the Macau oil and food retail industries, in March 2019, the GOM commissioned Macau University of Science and Technology to conduct research on how to optimize market institutions to help foster healthy private sector competition. The research results were released to the public in May 2020. Based on this research, the GOM claimed that a legislative solution such as an anti-monopoly or anti-trust law would not necessarily bring about lower prices. Rather, the GOM appointed the Macau Consumer Council to monitor the local market prices and determine when the need for new legislation on market competition is warranted. Speaking at a Legislative Assembly plenary meeting on consumer rights protection law in June 2021, the Secretary for Economy and Finance revealed that the authorities still do not have a specific timetable for enacting competition and antitrust laws, explaining that Macau is a civilized society, and legislation is always the last resort to promote ethical conduct and integrity.

The U.S. Consulate General is not aware of any direct or indirect actions to expropriate. Legal expropriations of private property may occur if it is in the public interest. In such cases, the GOM will exchange the private property with an equivalent public property based on the fair market value and conditions of the former. The exchange of property is in accordance with established principles of international law. There is no remunerative compensation.

ICSID Convention and New York Convention

Both the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention) and the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention) apply to Macau. The Law on International Commercial Arbitration (Decree 55/98/M) provides for enforcement of awards under the 1958 New York Convention.

Investor-State Dispute Settlement

The U.S. Consulate General is aware of one previous investment dispute involving U.S. or other foreign investors or contractors and the GOM. In March 2010, a low-cost airline carrier was reportedly forced to cancel flight services because of a credit dispute with its fuel provider, triggering events which led to the airline’s de-licensing. Macau courts declared the airline bankrupt in September 2010. The airline’s major shareholder, a U.S. private investment company, filed a case in the Macau courts seeking a judgment as to whether a GOM administrative act led to the airline’s demise. The Court of Second Instance held hearings in May and June 2012. In November 2013, the Court of Second Instance rejected the appeal. Private investment disputes are normally handled in the courts or via private negotiation. Alternatively, disputes may be referred to the Hong Kong International Arbitration Center or the World Trade Center Macau Arbitration Center. The Arrangement for Mutual Service of Judicial Documents in Civil and Commercial Cases between the Hong Kong Special Administrative Region and the Macau Special Administrative Region came into effect in August 2020, significantly accelerating the service of such judicial documents between the two regions.

International Commercial Arbitration and Foreign Courts

Macau has an arbitration law (Decree 55/98/M), which adopts the UN Commission on International Trade Law (UNCITRAL) model law for international commercial arbitration. The GOM accepts international arbitration of investment disputes between itself and investors. Local courts recognize and enforce foreign arbitral awards. The GOM in May 2020 enacted the New Arbitration Law, which unifies the laws governing domestic and international arbitration in Macau. This arbitration reform incorporated best international practices with effective dispute resolution techniques for investment disputes, including the introduction of emergency arbitrator mechanism, limitation on rights of appeal, procedure for courts assistance in taking of evidence, recognition and enforcement of interim measures, and publication of arbitral awards.

Macau established the World Trade Center Macau Arbitration Center in June 1998. The objective of the Center is to promote the resolution of disputes through arbitration and conciliation, providing the disputing parties with alternative resolutions other than judicial litigation.

Foreign judgments in civil and commercial matters may be enforced in Macau. The enforcement of foreign judgments is stipulated in Articles 1199 and 1200 of the Civil Procedure Code. A foreign court decision will be recognized and enforced in Macau if it qualifies as a final decision supported by authentic documentation and that its enforcement will not breach Macau’s public policy.

Commercial and bankruptcy laws are written under the Macau Commercial Code, the Civil Procedure Code, and the Penal Code. Bankruptcy proceedings can be invoked by an application from the bankrupt business, by petition of the creditor, or by the Public Prosecutor. There are four methods used to prevent the occurrence of bankruptcy: the creditors meeting, the audit of the company’s assets, the amicable settlement, and the creditor agreement. According to Articles 615-618 of the Civil Code and Article 351-353 of the Civil Procedure Code, a creditor who has a justified fear of losing the guarantee of his credits may request seizure of the assets of the debtor. Bankruptcy offenses are subject to criminal liability.

In October 2020, Macau Post and Telecommunications Bureau announced the establishment of a credit information system, allowing banks to inquire about the credit status of lenders when approving individual customer credit applications, while mandating those who want to borrow money from banks to apply for a personal credit report from the new system for the bank’s assessment. The new system is expected to enter service as soon as the second quarter of 2022.

The government continues to work on policy reforms to support business development and investment. The legal, regulatory, and accounting systems are partially transparent and consistent with international norms. Almost all proposed laws, regulations, and policies (including investment laws) are subject to public consultation before submission to the Cabinet, Parliament, or Ministry of Justice. However, public consultation notices are often posted late, resulting in a situation in which only insiders are aware of and able to participate in the consultation process. Enforcement of laws and regulations varies by location and sector and is limited by government resources and capacity.

All regulations follow the same approximate process. The relevant government MDA develops technical regulations and forward them to Ministry of Justice for review and gazetting. All regulations are set at the national level with input from relevant stakeholders. Regulations and enforcement actions are legally reviewable in the national court system. The Ministry of Justice provides oversight or enforcement mechanisms to ensure MDAs follow administrative processes for developing and implementing regulations. Private individuals may raise issue with the appropriate MDA, Parliament, or Ombudsman if they feel the aforementioned procedures were not followed. There are no specific regulatory guidelines for reviewing regulations or conducting impact assessments, including scientific or data-driven assessments. There are no specific criteria for determining which proposed regulations are subject to an impact assessment nor is there a specialized government body tasked with reviewing and monitoring regulatory impact assessments conducted by other MDAs.

The government uses a mix of fiscal, financial, and regulatory instruments to administer business and economic policies across multiple MDAs. Taxation policy is overseen by the Ministry of Finance and Economic Affairs and the Treasury Department. The Malawi Revenue Authority is responsible for implementation of all tax policies. The Reserve Bank of Malawi administers monetary policy, exchange rate policy, as well as exchange controls to allow free flow of capital and earnings, and repatriation of dividends, profits, and royalties. The Immigration department administers the Employment of Expatriates Policy, Temporary Employment Permits (TEPs), and business residence permit. The Ministry of Lands, Housing and Urban Development is responsible for land policy administration. The Malawi Bureau of Standards is responsible for metrology, standardization, and quality assurance. The Malawi Communications Regulatory Authority administers the communications act. The MITC is responsible for approving business plans and providing investment certificates.

The National Construction Industry Council, Malawi Law Society, Malawi Accountants Board, Medical Council of Malawi, and the Employers Consultative Association of Malawi have sectoral rule-making authority, similar to regulatory power. Among the rules established by these associations is the required use of local labor, local contractors, or other means to achieve localization or skills transfer to Malawians. The sector-specific rule-making process is not transparent and can be confusing for firms that are new to the Malawi market. More information on the rule making process can be found at: https://rulemaking.worldbank.org/en/data/comparedata/consultation .

The Institute of Chartered Accountants in Malawi (ICAM) adopted the International Financial Reporting Standards (IFRS) as a common global language in 2001. The Companies Act stipulates that all companies must use IFRS or IFRS accounting standards for Small and Medium Enterprises (SMEs). All public interest entities are required to use full IFRS standards. The government encourages, but does not require environmental, social, and governance (ESG) disclosure. The Environmental Management Act provides the authority to the relevant ministry to require environmental and social impact assessment of projects prior to implementation which may significantly impact timelines and limit the use of an environment or natural resources.

The government does not maintain a public, central repository for technical regulations. Copies of Acts and Laws are available at the National Library and High Court libraries. Copies of recent laws can be purchased from the government printing office. A limited number of laws are also available online at https://malawilii.org/ . The relevant MDAs manage and publish their respective regulations in the Malawi Government Gazette. MDAs do not generally post their regulations or laws on their websites but have been known to provide them upon request.

Recently implemented policy reforms:

(2020) Commodity exchange guidelines, the Cannabis Act of 2020, Export Processing Zone (EPZ) regulations: 20% allowance for local sales by an export enterprise under EPZ. Electronic Permit System launched by the Immigration Department.

(2021) Control of Goods Act (COGA) Export Mandates: all grains, legume, and oil seed export transactions must take place through licensed commodity exchange. E-Passport System launched by the Immigration Department.

Transparency of public finances and debt is inconsistent. Publicly available draft budget documents detail Malawi’s proposed or estimated revenue, and includes natural resources revenues, off-budget donor support, and detailed expenditure lines. The final, approved government budget only provides ministry level expenditure data, line items are generally not disclosed. Actual revenue and expenditures are included in the end of year financial statements. Information about government debt obligations is available in the financial statement and annual debt report. These documents are available at Ministry of Finance . Financial information and contingent liabilities on State Owned Enterprises (SOEs) are generally unknown to the public. SOE data is not transparent nor made public. The IMF currently considers Malawi’s debt to be unsustainable. Additional information on Malawi’s debt can be found in the IMF’s publicly available reports.

Malawi is a member of the Africa Continental Free Trade Area (AfCFTA), COMESA Customs Union, and the SADC Free Trade Area. The government develops all new regulations roughly in line with the regulatory policy provisions set out by AfCFTA, COMESA, and SADC but national regulations take precedence if there is a conflict. As a member of AfCFTA, SADC, and COMESA, Malawi is bound by their respective norms and standards. Details on the respective standards can be found at each organization’s website: SADC- SADC Standards-quality-infrastructure ; COMESA- http://www.comesacompetition.org/ ; and AfCFTA- https://au.int/en/cfta .

There are no records of Malawi providing notification on draft technical regulations to the WTO Committee on Technical Barriers to Trade. Malawi submitted a statement on implementation and administration of the WTO Agreement on Technical Barriers to Trade in 2007 and signed the WTO Trade Facilitation Agreement (TFA) on July 12, 2017. Malawi has made progress on implementing the TFA provisions through the launch of a trade information portal at https://www.malawitradeportal.gov.mw/ . As of February 2022, Malawi has implemented 63% of the TFA Commitments .

Malawi’s legal system is based on English Common Law. The judiciary consists of local courts and a local appeals court in every district. The higher tiers consist of the Supreme Court of Appeal, the High Court, and the Magistrates’ Courts. Judges of the High Court are appointed by the President and posted to one of five divisions on the high court: civil, commercial, criminal, family and probate, or revenue. The High Court has judicial authority over all civil and criminal cases. The High Court hears appeals from the Magistrates’ Courts and the Supreme Court of Appeal in Blantyre hears appeals arising from the High Court. Magistrates’ Courts are located throughout the country. At the end of 2021, there were 36 seated High Court judges and 11 vacancies, and seven Supreme Court judges and six vacancies. The Commercial Division of the High Court deals exclusively with commercial or business disputes; the Revenue Division deals with any revenue or tax related matter. The Industrial Relations Court handles labor disputes and issues relating to employment. The Child Justice Court handles matters affecting children but falls under the High Court. More information on the judicial system can be found at the Judiciary  website.

The government does not have written commercial or contractual laws but instead relies on legislation that governs commercial transactions. The Sale of Goods Act, Companies Act, Employment Act, Hire Purchase Act, Insolvency Act, Control of Goods Act, Labor Relations Act, Business Licensing Act, Taxation Act, Consumer Protection Act, Copyright Act, and Patents Act, serve as the commercial and contractual framework. Mediation is often used to facilitate agreements prior to court proceedings. Enforcement of judgments can be extremely slow.

Foreign and domestic investors have access to Malawi’s legal system, which is generally unbiased but notoriously slow. The legal process is slowed by heavy caseloads, staffing limitations, and inadequate funding. Court injunctions contribute significantly to backlogs and delays. The judicial system is independent of the executive branch. Regulations and enforcement actions are appealable and adjudicated in the national court system. In the financial sector, regulations and enforcement actions are appealable through the Financial Services Appeals Committee and investors are free to seek judicial review through the High Court’s Commercial Division.

The legal system supports local and foreign investments. The MITC operates a One Stop Center to assist any investor to navigate relevant government regulations and procedures. MITC  and MCCCI  both offer websites with relevant information on doing business in Malawi.

The government established the Competition and Fair-Trading Commission ( CFTC ) in 2005 to promote fair and transparent business procedures. The CFTC is responsible for regulation, monitoring, and prevention of activities likely to negatively impact competition or fair trade in Malawi. CFTC decisions may be appealed at the Commercial Court level. COMESA Competition Commission  is responsible for mergers and acquisitions across the COMESA block. It promotes and encourages competition by identifying and preventing restrictive business practices that may impede efficient market operations in COMESA.

According to Malawi’s constitution, Section 44, expropriation of property is only permitted when done for public utility and with adequate notification and compensation. Land is generally only expropriated for government development projects, such as road construction. Affected individuals may obtain an independent assessment of the land value and have the right to appeal in court. The Land Acquisition Act of 2016 is currently under review and changes are expected. The reforms will likely impact land expropriation costs.

Commercial courts govern all bankruptcies under the provision of the consolidated Insolvency Act of 2016 . The Act encourages the use of receivership or reorganization as an alternative to bankruptcy. Secured creditors are given priority over other creditors. Monetary judgments are usually made in the investor’s currency. Cross-border provisions of the Insolvency Act are modeled after UN Commission on International Trade Law models.

Maldives’ Parliament (the People’s Majlis) formulates legislation, while ministries and agencies, primarily the Ministry of Economic Development, develop regulations pertaining to investment. The Ministry of Tourism develops regulations relevant to the tourism sector. Certain business sectors require sector-level operating licenses from other ministries/agencies, including fisheries and agriculture, banking and finance, health, tourism, transport, construction, and education. The Maldives Monetary Authority (MMA) regulates the financial sector and issues banking licenses.  The Capital Market Development Authority develops regulations for the capital market and pension industry and licenses securities market intermediaries.  The current Parliament, sworn in in April 2019, regularly makes draft bills and regulations available for public comment.

Since its inauguration in November 2018, the Solih administration has taken steps to improve fiscal transparency. For example, beginning in December 2018, the MoF began issuing weekly updates on fiscal operations on its public website. A limited write-up on total annual debt obligations for 2022 and projected annual debt obligations for 2023 and 2024 were included in a “budget book” published on the MoF website, along with the 2022 proposed budget.  It includes the total amount of debt, disaggregated into the totals of domestic and foreign debt; however, it does not include details of contingent or state-owned enterprise (SOE) debt. Statistics on Central Government debt and on debt guaranteed by the government are published on the MoF website on a quarterly basis. Details of government-held debt are published bi-annually. Quarterly debt statistics include details on disbursed outstanding debt (both domestic and guaranteed), active external loans, external grants, and active sovereign guarantees. Quarterly debt can be found at https://www.finance.gov.mv/debt-management/debt-statistics .

Details of SOE debt are published in the quarterly and annual reports on SOEs published by Public Enterprise Management (PEM) of the MoF at https://www.finance.gov.mv/public-finance/public-enterprises/audited-financial-statements-of-soes .

Details of active sovereign guarantees as of September 21 can be accessed at: https://www.finance.gov.mv/public/attachments/mBb3dwgKLN1YZvSJOkAOdNDmzUSq8bn1uwXovIEK.pdf .

The MMA, which functions as Maldives’ Central Bank, includes information on domestic debt obligations on a monthly basis on their website: http://mma.gov.mv/#/research/statisticalPublications/mstat/Monthly percent20Statistics .

The MoF published a mid-year “Fiscal and Debt Strategy Report” on their website in July 2021. This report included details of the position of the debt portfolio at the end of 2020 and the estimated position by the end of 2021: https://www.finance.gov.mv/fiscal-and-debt-strategy-report .

The website of the Attorney General’s Office (AGO) ( www.mvlaw.gov.mv ) publishes the full text of all existing laws and regulations, but most of the documents are in the Dhivehi language.  The AGO is establishing an English language database of laws and regulations while the Judiciary is working on a database of court judgements.

Environmental, social, and governance (ESG) reporting is voluntary. Listed PLCs voluntarily report on sustainability aspects and Corporate Governance reporting is mandatory for all listed companies. Annual Reports of listed companies: https://www.cmda.gov.mv/en/public/listed-companies .

Maldives is a member of the South Asian Association for Regional Cooperation (SAARC) and is a signatory of the South Asian Free Trade Area (SAFTA).

Trade and investment related legislation and regulation are influenced by common law principles from the United Kingdom and other western jurisdictions.  The judiciary has cited foreign case law from jurisdictions from the United Kingdom, the United States, and Australia when interpreting local trade-related statues.

Maldives is a member of the World Trade Organization (WTO) and has submitted some of the notifications under Technical Barriers to Trade. However, the Ministry of Economic Development reports that technical assistance is required for Maldives to fully comply with WTO obligations.

The sources of law in Maldives are its constitution, Islamic Sharia law, regulations, presidential decrees, international law, and English common law, with the latter being most influential in commercial matters.  The Maldives has a Contract Law (Law No. 4/91) that codifies English common law practices on contracts.  The Civil Court is specialized to hear commercial cases.  The Employment Tribunal is mandated to hear claims of unfair labor practices.  A bill proposing the establishment of a Mercantile Court has been pending in Parliament since 2013.  The Judicial Services Commission is responsible for nominating, dismissing, and examining the conduct of all judges.  The Attorney General acts as legal advisor to the government and represents the government in all courts except on criminal proceedings, which are represented by the Prosecutor General.

A Supreme Court was established as the highest judicial authority in Maldives in 2008 under the new Maldives Constitution.  In addition to the Supreme Court, there are six courts: the High Court; Civil Court; Criminal Court; Family Court; Juvenile Court; and a Drug Court.  There are approximately 200 magistrate courts, one in each inhabited island.  The Supreme Court and the High Court serve as courts of appeal. There are no jury trials. In February 2020, President Solih stated his intent to submit a bill introducing a circuit court system in Maldives. As of March 2022, the government was working on legislative amendments to the Judicature Act to establish the circuit court.

Historically, the judicial process has been slow and, often, arbitrary.  In August 2010, the Judicial Services Commission (JSC), the judicial watchdog, reappointed—and confirmed for life—191 of the 200 existing judges.  Many of these judges held only a certificate in Sharia law, not a law degree.  The Maldivian judiciary is a semi-independent institution but has been subjected frequently to executive influence, particularly the Supreme Court.  The United Nations Office of the High Commissioner for Human Rights in 2015 stated the judicial system is perceived as politicized, inadequate, and subject to external influence.  An estimated 25 percent of judges have criminal records.  The media, human rights organizations, and civil society had repeatedly criticized the JSC for appointing judges deemed unqualified.

This history led President Solih’s administration to make judicial reform a top priority.  In 2019, the JSC was overhauled; it removed the former Supreme Court bench and initiated investigations into ethics standards complaints against several judges from the High Court, Criminal Court, Civil Court, Family Court, and several island magistrate courts.  In August 2019, Parliament amended the Judicial Service Commission Act to return control of the Department of Judicial Administration (DJA), which is responsible for the management of courts, to the JSC. This amendment was intended to overcome longstanding issues of the former Supreme Court using its direct supervision of the DJA to punish judges exhibiting judicial independence by transferring them to a lower court or another island as retribution.

Foreign parties can invest in Maldives through the Foreign Investment Law or the Special Economic Zones (SEZ) Act.  Details are available on the Ministry of Economic Development’s Doing Business in the Maldives Guide and in the tax guide:

https://www.maldivesembassy.or.th/media/attachments/2019/08/23/doing-business-maldives-trade-min.pdf 

https://www.mira.gov.mv/forms/m829-tax-guide-for-foreigners-doing-business-in-the-Maldive.pdf 

Invest Maldives ( https://investmaldives.gov.mv ) is the primary website for investments and provides information on areas that are open for investment in Maldives. Sector-wise, broad investment opportunities are presented on the website with links to conceptual project briefs for which Invest Maldives is seeking investment from potential investors.

A Foreign Direct Investment (FDI) policy was published in February 2020 to consolidate existing practices and introduce new guidelines, including two new routes to get government approval for foreign direct investments and new caps on equity ownership for investments in certain sectors. The first and second amendments to the FDI policy were announced on June 13 and 15, 2021 respectively. The policy is available at https://trade.gov.mv/laws-regulations  under Foreign Investment Act.

Foreign investment in Maldives is governed by Law No. 25/79, covering agreements between the government and investors.  The Business Registration Act (18/2014) requires foreign businesses to register as a company or partnership.  The Companies Act (10/96) governs the registration and regulatory and operational requirements for public and private companies.  The Partnership Act of 2011 governs the formation and regulation of partnerships.  Foreign investments are currently approved for an initial period of five years, with the option to renew.

Maldives introduced income taxes through an Income Tax Act in December 2019.  Taxation under the act was set to commence on January 1, 2020 but remuneration was to come within the purview of income effective April 1, 2020.  The Business Profit Tax regime imposed under the Business Profit Tax Act and the Remittance Tax regime imposed under the Remittance Tax Act was repealed with the commencement of the Income Tax Act.  Under the Act, tax rates remain unchanged for banks at 25 percent on profits, while taxes of 15 percent on profits that exceed USD 32,425 (MVR 500,000) would be levied on corporations, partnerships, and other business entities.

In September 2020, President Solih ratified the sixth amendment to the Employment Act, which provides a standalone regulatory framework for overseas employees. It includes guidance on registering with the online x-pat system (work permit processing portal), grant of quotas, collection of quota fees, grant of entry passes and work permits to enter and remain in the country for work, deposits and refunds, accommodation arrangements and standards, regularization and penalties for breaches.

In November 2020, President Solih ratified the second amendment to the Maldives Immigration Act. Under the new amendment, there are two additional visa options for foreigners travelling to Maldives: a corporate resident visa and a meeting visa. The corporate resident visa is a permit issued to foreigners who have invested over $250,000 in Maldives or by maintaining $250,000 in a fixed deposit account in a Maldivian bank for five years. According to the amendment, shareholders and partners of companies registered and operating in Maldives may acquire a corporate resident visa for themselves and their families under the established rules and regulations. The meeting visa is a short-duration permit under which foreigners may visit Maldives for professional reasons. This may include attending a business conference, professional convention or a meeting approved by a government agency. A meeting visa is issued according to the guidelines defined by the Registrar of Businesses.

In 2019, Maldives drafted the Competition and Fair Business Practices Act to ensure a fair market and equitable opportunities for all small and medium enterprises. President Solih ratified the bill on August 31, 2020, and it came into force in February 2021. The Ministry of Economic Development is the principal agency responsible for implementing the Act, including hearing, reviewing, and acting on competition-related complaints. No competition-related cases have been submitted to Ministry of Economic Development as of March 2022.

According to the Law on Foreign Investment (No. 25/79), the government may, with or without notice, suspend an investment when an investor indulges in an act detrimental to the security of the country or where temporary closure is necessary for national security.  If, after due investigation, it cannot be concluded within 60 days of the temporary closure that the foreign investor had indulged in an activity detrimental to the security of Maldives, the government will pay compensation.  Capital belonging to an investment that is closed for these reasons may be taken out of the country in a mutually agreed upon manner.

In December 2012, the Maldivian government took over operation of the Malé International Airport from GMR Infrastructure Limited, an Indian company, after the Maldivian government repudiated the 2012 contract.  In 2016, the Maldivian government paid GMR USD 271 million in damages as ordered by a Singaporean Arbitration Tribunal.

In its 2022 Fiscal Transparency Report Survey, the Department of State determined Mali does not meet the minimum requirements of fiscal transparency nor did it make significant progress toward achieving that goal in the previous year. Mali has adopted laws designed to meet the requirements of fair competition, ease bureaucratic procedures, and facilitate the hiring and firing of employees, but in practice many international firms complain of lack of transparency in the regulatory system and challenges in enforcing regulatory requirements to the detriment of business prospects. There is no public comment period or other opportunity for citizens or businesses to comment upon proposed laws.

Mali is a member of UNCTAD’s international network of transparent investment procedures. Mali is also a member of the African Organization for the Harmonization of Business Law (OHADA) and implements the Accounting System of West African States (SYSCOA), which harmonizes business practices among several African countries consistent with international norms. There are no informal regulatory processes managed by nongovernmental organizations or associations.

Mali’s Public Procurement Regulatory Authority (Autorité de régulation des marchés publics or ARMDS) is tasked with ensuring transparency in public procurement projects and may receive complaints from businesses on public procurement-related issues. ARMDS publishes information about its decisions in disputes as well as key laws relating to public procurement on its website at http://www.armds.ml/ .

The transition government regularly reviews regulations in order to adapt them to the current national context or to international standards or commitments. The new mining code and its implementing decree, adopted respectively in 2019 and in 2020, will apply to future mining projects. In February, the ministry of mines declared it is working on the new mining code to improve it and correct deficiencies. In December 2021, the transition government approved a new customs code in order to simplify the customs procedures and facilitate international trade. The government planned also to reform the investment code. The tax code and the tax procedures book (Livre de procédures fiscales) were substantially amended in September 2020, mainly to introduce a mandatory registration of all taxpayers, to operate changes in the VAT refund, to classify companies in terms of risks for the tax office, to digitize tax return and payment. The tax office had also planned to make e-filing mandatory. More information is available on the tax office’s website here .

The reform initiatives in Mali capitalize on experience, input from stakeholders (citizens, elected officials, and technical and financial partners), and reflect the requirements of the new directives establishing a harmonized, renewed framework for public finance in WAEMU member states. Mali has enacted the following directives: Law N°2013-031 of July 23, 2013, adopting the Code of Transparency in Public Finances; Law N°2013-028 of July 11, 2013, relating to the Finance Laws; Decree 2014-0349 of May 22, 2014, on the General Regulations of Public Accounting; and Decree 2014-0774 of October 14, 2014, on the State Chart of Accounts.

Mali makes public finance documents, including the budgets for all government ministries and offices, available on the Ministry of Economy of Finance’s website (https://www.finances.ml/loidesfinances). Mali’s national budget provides details on the expenditures of government entities (including the presidency and prime minister’s office) and the revenues of tax collection authorities, including customs, the public debt directorate, the land administration directorate, and the treasury and public accounting directorate. The budget also includes information on public debt, as well as government subsidies to petroleum products and to the state-owned utility company (Energie du Mali or EDM). Mali also publishes a simplified version of the budget known as the citizen’s budget.

Mali has multiple audit institutions tasked with monitoring public spending. The Malian supreme court’s accounts section is responsible for reviewing and approving the financial statements of all government departments. The Office of the Auditor General (Bureau du Vérificateur General, or BVG) is authorized to audit the accounts of all government entities as well as private companies or other entities that receive public funds. Its reports are made public and can be accessed at http://www.bvg-mali.org/ . Mali has other auditing institutions, including the Office to Fight against Illicit Enrichment (Office central de Lutte contre l’Enrichissement illicite or OCLEI), the General Comptroller of Public Services (Contrôle Général des Services Publics or CGSP), and the Support Unit for Administrative Auditing Bodies (Cellule d’Appui aux Structures de Contrôle de l’Administration or CASCA). Despite the existence of multiple audit institutions, management of public funds remains opaque and subject to corrupt practices, particularly in public procurements.

Mali remains a suspended member of WAEMU and ECOWAS. Mali is a member of the WTO. Mali has not notified the WTO of any measures concerning investments related to trade in goods that are inconsistent with the requirements of Trade Related Investment Measures. Information on other notifications from Mali to the WTO can be found at https://www.wto.org/english/thewto_e/countries_e/mali_e.htm  under the “Notifications from Mali” section.

Mali’s legal system is based on French civil law. Mali uses its investment code, mining code, commerce code, labor code, and code on competition and price to govern disputes. Disputes occasionally arise between the government or state-owned enterprises and foreign companies. Some investors report certain cases involve wrongdoing on the part of corrupt government officials.

Although Mali’s judicial system is independent, many companies have noted it is subject to political influence. Numerous business complaints are awaiting an outcome in the courts. The Minister of Justice wields influence over the career paths of judges and prosecutors, which may compromise their independence. Corruption in the judicial system is common, leading to what foreign investors have characterized as flawed decisions.

An independent commercial court was established in 1991 with the encouragement of the U.S. government to expedite the handling of business litigation. Commercial courts, located in Bamako, Kayes, and Mopti, can hear intellectual property rights cases. In areas where there is no commercial court, the local courts of first instance have the jurisdiction to hear business disputes. Decisions made by the courts of first instance are appealable in the court of appeals and/or in the supreme court. Since its inception, the commercial court has handled cases involving foreign companies. The court is staffed by magistrates and is assisted by elected Malian Chamber of Commerce and Industry representatives. Teams composed of one magistrate and two Chamber of Commerce and Industry representatives conduct hearings. The magistrate’s role is to ensure the court renders decisions in accordance with applicable commercial laws, including internationally recognized bankruptcy laws, and court decisions are enforced under Malian law.

Mali’s investment code gives the same incentives to both domestic and foreign companies for licensing, procurement, tax and customs duty deferrals, export and import policies, and export zone status if the firm exports at least 80 percent of production. Incentives include exemptions from duties on imported equipment and machinery. Investors may also receive tax exemptions on the use of local raw materials. In addition, foreign companies can negotiate specific incentives on a case-by-case basis. Mali has reduced or eliminated many export taxes and import duties as part of ongoing economic reforms; however, export taxes remain for gold and cotton, Mali’s two primary exports. The government applies price controls to petroleum products and cotton, and occasionally to other commodities (such as rice) on a case-by-case basis.

In most cases, foreign investors may own 100 percent of any business they create, except in the mining and media sectors. Foreign investors may also purchase shares in parastatal companies. Foreign companies may also start joint-venture operations with Malian enterprises. The repatriation of capital and profit is guaranteed.

Despite having a generally favorable investment regime on paper, foreign investors have complained of facing challenges in practice, including limited access to financing, high levels of corruption, poor infrastructure (including inconsistent electricity access), a non-transparent judicial system, and the lack of an educated workforce.

The following websites provide additional information relating to investments in Mali:

Investment Promotion Agency: https://apimali.gov.ml/

Mali Trade Portal: https://tradeportal.ml/ 

National Council of Employers: http://www.cnpmali.org/index.php/lois-et-reglements/codes 

Niger River Authority (Officer du Niger): https://www.on-mali.org/on/ 

Ministry of Economy and Finances: http://www.finances.gouv.ml 

The Ministry of Commerce and Industry is responsible for reviewing free competition in the Malian marketplace. Mali’s national competition law (Law 2016-006 and Decree 2018-0332) and the WAEMU 2002 anti-trust rules are the primary judicial documents that govern competition in Mali. The competition law bans any agreements restricting competition or market access. It also bans control or fixation of prices through agreements. Abuses of dominance are prohibited. The commercial court (Tribunal of Commerce) and ARMDS are the primary judicial bodies that oversee competition-related concerns.

Mali’s Organization of Industrial Entrepreneurs (Organisation Patronal des Industriels or OPI) has criticized corruption and smuggling as significant hurdles to fair competition. Contacts report Mali struggles to limit illegal imports of products such as sodas, juices, tobacco, medicines, and textiles (including fabrics). The General Directorate of Customs, the National Directorate for Commerce and Competition, and the Agency for the Sanitary Security of Foods occasionally intervene to address the import and commercialization of smuggled goods but have limited capacity to effectively address the problem.

Expropriation of private property other than land for public purposes is rare. Mali has not unfairly targeted U.S. firms for expropriation. Under Malian law, the expropriation process must be public and transparent and follow the principles of international law. Compensation based on market value is awarded by court decision.

The government may exercise eminent domain in various situations, including when undertaking large-scale public projects, in cases of bankrupt companies that had a government guarantee for their financing, or when a company has not complied with the requirements of an investment agreement with the government.

In cases of illegal expropriations, Malian law affords claimants due process in principle. However, given reported corruption in the land administration sector, impartial adjudication of court cases involving land disputes is rare.

Mali’s bankruptcy law is found in its commerce code, which does not criminalize bankruptcy. The commercial code makes a distinction between insolvency and the cessation of payment or accidental difficulty. It defines the judiciary process of compulsory liquidation. Generally, a bankrupt company will be sold piecemeal.

Malta has transparent and effective policies and regulations to foster competition. It has revised labor, safety, health, and other laws to conform to EU standards.

All proposed regulations are published on a unified website, on the website of the relevant ministry or regulator, and directly distributed to interested stakeholders. Stakeholder engagement is currently required for all subordinate regulations as part of the Regulatory Impact Assessment (RIA) process as well as for some primary laws in selected policy areas. Each online consultation is accompanied by a feedback report, summarizing the views of participants and providing feedback on the comments received. According to an OECD 2019 report on Indicators of Regulatory Policy and Governance, the transparency of the Maltese regulatory framework could be further strengthened by making RIAs available for consultations with stakeholders by systematically engaging with stakeholders during the development of primary laws, specifically at an early stage, before a preferred regulatory decision has been identified.

In April 2021, the European Commission (EC) presented its proposal for a Corporate Sustainability Reporting Directive (CSRD). The Commission plans to introduce extensive mandatory reporting requirements for large companies and separate, proportionate standards for listed SMEs, a requirement that would extend to Malta. Companies will have to report on how sustainability issues affect their business, society, the environment and vice versa.  As a result, nearly 50,000 companies in the EU – Maltese companies included – will have to report on sustainability matters.  External audits will be required to verify the reported information. Companies will have to digitally report/tag the information, so it is machine readable. Once an agreement is reached in the negotiations on EU level (estimated Q2 2022) and the directive enters into force, the reporting requirements would be applicable from the 2023 financial year onwards for large companies.   Listed SMEs would have to comply as of the 2026 financial year.

In December 2021, Malta launched its first Environmental, Social, and Governance (ESG) portal, allowing the general public and investors to evaluate the environmental, social and governance credentials of the largest quoted companies in Malta. The ESG portal, facilitates local and foreign investors’ access to data measuring the level of importance companies are giving to ESG. This platform will serve to further encourage sustainable investment, as investors are increasingly looking into ESG credentials before investing. These companies are quoted on Malta’s Stock Exchange, and their ESG credentials can now be accessed via:   https://sustainabledevelopment.gov.mt/esg/ .

Malta’s regulatory system is derived from the acquis communautaire, the body of laws, rights, and obligations that are binding on all EU member states. Consequently, trade and investment relations with third countries are an EU responsibility under the Common Commercial Policy. However, with respect to investment, Malta does have some national competences in certain investment areas. In particular, where the EU does not have or is not negotiating an investment protection agreement, Malta can hold or negotiate one unilaterally. Malta also maintains competence in the areas of transport and portfolio investment, as well as corporate taxation. NFDIS implements the EU-wide mechanism for cooperation on investment as required by the new EU framework for investment screening which entered into force on April 10, 2019.

Malta became a WTO member on January 1, 1995. However, all draft technical regulations to the WTO Committee on Technical Barriers to Trade are now made at the EU level.

Malta ratified the Trade Facilitation Agreement on October 5, 2015 and is in full compliance with its implementation commitments.

Malta’s Commercial Code regulates commercial activities and related legislation, such as the Banking Act, the Central Bank of Malta Act, and bankruptcy. In cases of bankruptcy, the court appoints a curator to liquidate the assets of the bankrupt company, organization, or individual, and distributes the proceeds among the creditors.

The Maltese judiciary is independent, and courts are divided into superior courts, presided over by judges, and inferior courts, presided over by magistrates. Inferior courts have jurisdiction over minor offenses of a criminal nature and small civil matters. The judiciary traditionally functions through the Criminal, Civil, and Constitutional courts. The First Hall of the Civil Court hears commercial cases. Malta has a Criminal Court of Appeal and a second Court of Appeal for all other matters. The Constitutional Court has jurisdiction to hear and determine questions and appeals on constitutional issues. There are also a number of administrative tribunals, such as the Industrial Tribunal, the Rent Regulation Board, the Sanction Monitoring Board, and the Board of Special Commissioners (for income tax purposes). Malta adopted the European Convention of Human Rights as part of its domestic law in 1987.

The Maltese judiciary has a long tradition of independence. Once appointed to the bench, judges and magistrates have fixed salaries that do not require annual approval. Judges cannot be dismissed, except by a two-thirds vote in the House of Representatives for proven misbehavior or the inability to exercise properly their function. The Maltese Constitution guarantees the separation of powers between the executive and the judiciary and a fair trial. In December 2018, the European Commission for Democracy through Law, known as the Venice Commission, issued an opinion on the constitutional arrangements, separation of powers, and independence of the judiciary and law enforcement bodies of Malta. The Commission recommended setting up an office of an independent Director of Public Prosecutions with security of tenure, being responsible for all public prosecutions, subject to judicial review. The opinion also recommended abolishing the possibility that judges can be dismissed by Parliament and suggested modifications to the system of the judicial appointments. Malta is currently in the process of implementing changes in accordance with the Venice Commission recommendation. Thus far various laws have been enacted to address reforms which include constitutional arrangements that divest powers from the Prime Minister to appoint the judiciary and law enforcement, and separation of powers between the judiciary and law enforcement.

In the latest 2021 Rule of Law Report Country Chapter on Malta the European Commission noted that Maltese reforms enacted during 2020, in particular the reform of the system of judicial appointments and of judicial discipline, have contributed to strengthening the independence of the Maltese justice system. Additional reforms have been carried out to enhance checks and balances. Reforms of the appointment of persons exercising top executive functions and appointments to certain independent commissions, proposed in 2020, have been adopted. Remaining concerns regarding the appointment process for certain other public bodies will be addressed under the Constitutional Convention. However, due to the COVID-19 pandemic, the timing and organization of this Convention are still to be set.

Several laws govern foreign investment in Malta. The Income Tax Act of 1948 (as amended in 1994) establishes a single rate of taxation of 35 percent on income for limited liability companies in Malta. In certain qualifying cases, this rate can fall to five percent through a system of tax refunds on dividends paid. The Business Promotion Act authorizes the Government of Malta to allocate fiscal and other incentives to companies engaged in manufacturing (including software development), repair, or maintenance activities. The Malta Enterprise Act of 2003 enables Malta Enterprise to develop and administer incentives and other forms of support to liberalize and update legislation relevant to FDI. The Companies Act of 1995 regulates the creation of limited liability companies. The Companies Act also provides for the establishment of investment companies with variable share capital (SICAVS) and companies with share capital denominated in a foreign currency. The Malta Financial Services Authority Act of 1989 established the Malta Financial Services Authority (MFSA), which is responsible for the regulation of banking and investment services in Malta. The Investment Services Act of 1994 regulates investment services in the banking and insurance sectors. In 2018, Malta enacted three new acts related to blockchain. The Malta Digital Innovation Authority Act (MDIA) establishes the Authority that oversees and regulates innovative technologies, along with the Innovative Technology Arrangement and Services Act (ITAS) that regulates Innovative Technology Arrangements and Services, such as the software and coding used in digital ledger technology (DLT), smart contract, and related applications, together with the technical administration and review services. In 2018, the MFSA was entrusted with the Virtual Financial Assets Act (VFA) that regulates Initial Virtual Financial Assets Offerings and delineates their licensing requirements. The National Foreign Direct Investment Screening Office Act of 2020 was set up in order to implement the provisions of Regulation (EU) 2019/452 establishing a framework for the screening of foreign direct investments into the Union. The purpose of the screening process is to protect European Union intelligence, knowledge and technology, as well as the security interests of the Union.

Malta is a free-trade, open-economy country. The government does not approve or restrict any FDI, so long as it complies with EU and national regulations. Malta Enterprise reviews FDI before granting any incentives to a private entity or business. A due diligence process is carried out prior to approving greenfield investments. The MFSA undertakes the filings and regulatory screenings on financial investments.

The Office for Competition, currently housed within the Malta Competition and Consumer Affairs Authority (MCCAA), is the office tasked with protecting competition in Malta. The Maltese Competition Act is modelled on EU competition law. The latest amendments to the Competition Act in 2011 strengthened its deterrent effect by widening the decision-making powers of the Office for Competition and further aligned both the substantive and procedural rules with those existing under EU law.

The Government of Malta, in exceptional instances, expropriates private property for public purposes. In such cases, the government must take action in a non-discriminatory manner and in accordance with established principles of international law. Investors and lenders of expropriated property receive prompt, adequate, and effective compensation. In 1993, the government’s Property Division started accepting expropriation requests by public bodies only if the requests were accompanied by the compensation due to the landowners. In 2002, this practice was made law. As a result, the government may only expropriate private property if the presidential decree also includes a deposit for the compensation due. In recent years, the government has appropriated land mainly for the widening of roads; however, no particular sectors are at risk for expropriation or similar actions, and no laws force local ownership.

The Companies Act and the Commercial Code Bankruptcy in Malta and the Set-off and Netting on Insolvency Act of 2003 regulate bankruptcy. The latter provides for the set-off and netting due to each party with respect to mutual credits, mutual debts, or other mutual dealings that are enforceable whether before or after bankruptcy or insolvency.

The Maltese insolvency law regime distinguishes between bankruptcies of a person and bankruptcies of a commercial partnership other than a company. When a company cannot pay its debts, it may initiate insolvency proceedings. In such a case, the court examines carefully whether the financial situation of the company justifies its insolvency or whether it could remain operational and continue to pay its debts.

Any officer of a company who, in the twelve months prior to the deemed date of dissolution, concealed assets or documents, disposed of assets, or otherwise acted in a fraudulent manner may be criminally liable. Separately, courts may find any such officers civilly liable for such acts and require them to pay back to the company any moneys due. The law also provides for proceedings in cases of wrongful trading by directors and fraudulent trading by any officer of the company.

The Malta Association of Credit Management, known as MACM, is a members-owned, not-for-profit organization, providing a central national organization for the promotion and protection of all credit interests pertaining to Maltese businesses. More information at: https://www.macm.org.mt/ .

The government continues to adopt laws and regulations to improve transparency. During the review period, the government passed the 2022 budget through the parliament, accessible to the public via the Ministry of Finance portal ( https://www.finances.gov.mr/ ). The expansionary budget aims to boost the economic recovery and longer-term inclusive growth. The accounting documents provided a complete picture of the government’s planned expenditures and revenue streams, including natural resource revenues. Budget documents were generally prepared according to internationally accepted principles. The government holds full authority in allocating the licenses for all natural resources and controls their finances. The criteria and procedures by which the government awards natural resource extraction contracts or licenses are specified in Mauritania’s investment code, mining code, and a new hydrocarbon law. Basic information on tenders is publicly available on government websites, through the relevant ministry portal, or via the private job search platform ( https://beta.mr/beta/liste_offres/3 ) .

There is no law or policy impeding foreign investment in Mauritania. However, there is a complex and often overlapping system of permits and licenses required to establish and run a business. There continues to be a lack of transparency in implementation of the legal and regulatory policies.

The government does not require companies environmental, social and governance (ESG) disclosure to facilitate transparency and/or help investors and consumers distinguish between high- and low-quality investments

Post is not aware of any informal regulatory processes managed by nongovernmental organizations or private sector associations, and laws and regulations do not discriminate against foreign investment.

Please see Section 2- Bilateral Investment and Taxation Treaties

The Mauritanian judicial system combines French and Islamic (Malikite school) judicial systems. The constitution guarantees the independence of the judiciary (Article 89), and an organic law also protects judges from undue influence. Civil and Commercial Codes exist and are designed to protect contracts, although dispute settlement can be difficult and court enforcement is slow and often inconsistent. The judicial system remains weak and unpredictable in its application of the law, due in part to the training judges receive in two separate and distinct legal systems: Shari’a law and laws modeled after the French legal system. Judges remain undercompensated and susceptible to tribal pressures and bribery. Specialized commercial law courts exist, but judges sometimes lack training and experience in commercial and financial law. Some judges may only have formal training in the Shari’a legal system, while others are only familiar with the French civil law system. A lack of standardization of applicable legal knowledge in the judiciary leads to inefficiency in the execution of judgments in a timely and efficient manner. Laws and decrees related to commercial and financial sectors exist, but they are not always publicly available.

Most judgments are not issued within prescribed time limits and records are not always well maintained. Judgments of foreign courts are recognized by national courts, but enforcement is limited. During the last few years, the government has taken steps to provide training to judges and lawyers as an attempt to professionalize the system to reduce the backlog and work through cases in a more efficient manner. In 2017, the GIRM passed a small new claims law that covers cases valued at less than USD 11,000. In January 2020, the government opened a new international center for mediation and arbitration. The center provides an alternative legal office for settlement of investment disputes and allows arbitration and mediation from international courts.

There were no new major investment laws or judicial decisions ratified last year. However, the government launched the Investment Promotion Agency (APIM in French) under the Ministry of Economy to develop and facilitate procedures and processes related to investment. The investment code, which was last updated in June 2012, was designed to encourage direct investment by enhancing the security of investments and facilitating administrative procedures. The code provides for free repatriation of foreign capital and wages for foreign employees. The code also created free points of importation and export incentives. Small and medium enterprises (SME), which register through OPPS, do not pay corporate taxes or customs duties.

The Ministry of Economy’s Office of Procurement Commission of the Economic and Finance Sectors is the government agency that reviews tenders and bids in accordance with the law and regulations. Suppliers for large government contracts are selected through a tender process initiated at the ministry level. Invitations for some tenders are publicly announced in local newspapers and on government websites. After issuing an invitation for tenders, the Ministry of Economy’s commission in charge of reviewing tenders selects the offer that best fulfills government requirements. If two offers, i.e., one from a foreign company and one from a Mauritanian company, are otherwise considered equal, statutes require that the government award the tender to the Mauritanian company. In practice, this has resulted in contracts awarded to companies that have strong ties to government officials and tribal leaders, regardless of the merits of an individual offer. Preferential treatment remains common in government procurement, despite the government’s recent efforts to promote transparency in the public sector.

In an effort to make tenders more transparent, the National Assembly adopted a bill on December 21, 2021, the Public Procurement Code on December 21, 2021, No. 21-025 repealing and replacing the law No. 044-2010 that was enacted On July 2010. This new code will help the government become more transparent in handling tenders. The current code is structured around:

• Reducing the measures of the preliminary control of the public procurement control body;
• Clarifying the circumstances in which the awarding of contracts by mutual agreement becomes possible;
• Excluding from the provisions of this law, public contracts related to defense and national security needs and procurement operations in emergency situations;
• Promoting small and medium-sized enterprises by facilitating their access to public contracts; and
• Making procedures more flexible to speed up the process of concluding public contracts and handling complaints.

The revised Investment Code provides more property guarantees and protection to business owners. The Code protects private companies against nationalization, expropriation, and requisition. However, if a foreign enterprise is facing difficulties, the government can propose an expropriation plan to avoid bankruptcy and to protect jobs of local employees, with fair and equitable compensation.

The only known case of expropriation since Mauritania’s independence was the nationalization of the French mining MIFERMA in November 1974. In that case, the two parties agreed on a compensation plan.

The country has bankruptcy laws which carry the potential for criminal penalties. Mauritania’s bankruptcy laws were last updated in 2001. The bankruptcy law allows for the reorganization or restructuring of a business. There are very few reported cases of these laws being applied

Since 2006, the GoM has reformed trade, investment, tariffs, and income tax regulations to simplify the framework for doing business. Trade licenses and many other bureaucratic hurdles have been reduced or abolished. With a well-developed legal and commercial infrastructure and a tradition that combines entrepreneurship and representative democracy, Mauritius is one of Africa’s most successful economies. Business Mauritius, the coordinating body of the Mauritian private sector, participates in discussions with and presents papers to government authorities on laws and regulations affecting the private sector.

Regulatory agencies do not request comments on proposed bills from the general public. Both the notice of the introduction of a government bill and a copy of the bill are distributed to every member of the Legislative Assembly and published in the Government Gazette before enactment. Bills with a “certificate of urgency” can be enacted with summary process. All proposed regulations are published on the Legislative Assembly’s website and are publicly available. At the time of writing of this report, the government was drafting a bill that would require regulatory bodies to submit an impact of upcoming regulations on the business environment.

Companies in Mauritius are regulated by the Companies Act of 2001, which incorporates international best practices and promotes accountability, openness, and fairness. To combat corruption, money laundering and terrorist financing, the government also enacted the Prevention of Corruption Act, the Prevention of Terrorism Act, and the Financial Intelligence and Anti-Money Laundering Act. The National Code on Corporate Governance encourages companies to present a balanced assessment of the organization’s financial, environmental, social, and governance performance and outlook in its annual report and on its website. While Mauritius does not have a freedom of information act, members of the public may request information by contacting the permanent secretary of the relevant ministry.

Budget documents, including the executive budget proposal, enacted budget, and end-of-year report, are publicly available and provide a substantial picture of Mauritius’ planned expenditures and revenue streams.

Mauritius is a member of the Southern African Development Community (SADC) and the Common Market for Eastern and Southern Africa (COMESA). The GoM implements its commitments to these regional economic institutions with domestic legal and regulatory adjustments, as appropriate). Mauritius is a signatory to the Tripartite Free Trade Area and the African Continental Free Trade Area (AfCFTA). AfCFTA took effect in January 2021. Negotiations are still ongoing regarding the Tripartite FTA.

Mauritius has been a member of the World Trade Organization (WTO) since 1995. The GoM notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade to the extent possible. In July 2014, Mauritius notified its category A commitments to the WTO, and was among the first African countries to do so. Mauritius was also the fourth country to submit its instrument of acceptance for the Trade Facilitation Agreement (TFA). Mauritius notified its category B & C commitments and its corresponding indicative dates of implementation in 2015. It also indicated its requirements to implement category C measures. With the coming into force of the WTO Trade Facilitation Agreement (TFA) in February 2017, Mauritius is implementing all its category A commitments.

Of TFA’s 36 measures, Mauritius has classified 27 as category A, five as B, and four as C. Discussions with donors to obtain technical assistance to finance trade facilitation projects listed under category C are ongoing. Mauritius has already secured assistance from the World Bank and the World Customs Organization.

To coordinate efforts to implement the TFA, in 2015 Mauritius set up a National Committee on Trade Facilitation co-chaired by representatives from government and the private sector. Members include MRA Customs, the Ministry of Agro-Industry and Food Security, the Ministry of Finance and Economic Development, the Mauritius Chamber of Commerce and Industry and the Economic Developments Board, among others. The committee meets twice a year and discussion topics include identification of the TFA, policy recommendations of trade facilitation, dissemination of information on trade facilitation, and addressing the bottlenecks to trade due to the COVID-19 pandemic.

Mauritius is also part of the Cotonou Agreement, a 2000 treaty between the EU and the African, Caribbean and Pacific Group of States. On December 3, 2020, the EU and the Organization of African, Caribbean and Pacific States (OACPS) reached a new agreement that succeeded the Cotonou Partnership Agreement and is expected to be signed in June 2022. The agreement will focus on human rights, democracy, and governance; security; human and social development; environmental sustainability and climate change; sustainable growth; and migration and mobility.

The Mauritian legal system is based on a unique mixture of traditions. Mauritius draws legal principles from both French civil law and British common law traditions; its procedures are largely derived from the English system, while its substance is based in the Napoleonic Code of 1804. Commercial and contractual law is also based on the civil code. However, some specialized areas of law are comparable to other jurisdictions. For example, its company law is practically identical to that of New Zealand. Mauritian courts often resolve legal disputes by drawing on current legislation, the local legal tradition, and by means of a comparative approach utilizing various legal systems. The highest court of appeal is the judicial committee of the Privy Council of England. Mauritius is a member of the International Court of Justice. Mauritius established a Commercial Court in 2009 to expedite the settlement of commercial disputes.

In 2020, the Courts Act was amended to provide for the creation of a Financial Crimes Division within the Supreme Court and the Intermediate Court. An amendment to the Courts Act provided for the establishment of a Land Division court at the Supreme Court to expedite land dispute resolutions.

The GoM and judiciary are supportive of arbitration. Mauritius has two arbitration centers and is a party to the New York Convention 1958 and the United Nations Convention on Transparency in Treaty-based Investor State Arbitration.

Contracts are legally enforceable and binding. Ownership of property is enforced with the registration of the title deed with the Registrar-General and payment of the registration duty. Mauritian courts have jurisdiction to hear intellectual property claims, both civil and criminal. The judiciary is independent, and the domestic legal system is generally non-discriminatory and transparent.

U.S. Embassy Port Louis is not aware of any recent cases of government or other interference in the court system affecting foreign investors.

The Economic Development Board Act of 2017 governs investment in Mauritius, while the Companies Act of 2001 contains the regulations governing incorporation of businesses. The Corporate and Business Registration Department (CBRD) of the Ministry of Finance and Economic Development administers the Companies Act of 2001, the Business Registration Act of 2002, the Insolvency Act of 2009, the Limited Partnerships Act of 2011, and the Foundations Act of 2012. The Economic Development Board website provides information on investment incentives, procedures to establish a company in Mauritius, and occupation/work permits: https://www.edbmauritius.org/.

The Competition Commission of Mauritius (CCM) is an independent statutory body established in 2009 to enforce Competition Act 2007. It is mandated to safeguard competition by preventing and remedying anticompetitive business practices in Mauritius. Anticompetitive business practices, also called restrictive business practices, may be in the form of cartels, abuse of monopoly situations, and mergers that lessen competition.

The institutional design of the Competition Commission houses both an adjudicative and an investigative organ under one body. While the Executive Director has power to investigate restrictive business practices (the Investigative Arm), the commissioners determine the cases (the Adjudicative Arm) on the basis of reports from the Executive Director. Any party dissatisfied with an order or direction of the commission may appeal to the Supreme Court within 21 days.

Since it began operations, the Competition Commission has undertaken 62 investigations, of which 50 have been completed and 12 are ongoing as of March 2022. To date, the commission has also conducted 312 enquiries, which are preliminary research exercises prior to proceeding to investigations. The Competition Commission conducts market studies and five of the eight market studies have been completed. It has also issued six papers to the government on policy matters affecting competition.

Regionally, the Competition Commission has assessed 166 mergers across the Common Market for Southern and Eastern Africa Free Trade Area (COMESA) member states that affected Mauritius. It has also assisted the African Competition Forum (ACF) on two cross-country market studies.

The Competition Commission has also initiated a process to review and amend the Competition Act of 2007 to enable more effective enforcement. The process is expected to be completed in 2022.

The Constitution includes a guarantee against nationalization. However, in 2015, the government passed the Insurance (Amendment) Act to enable the Financial Services Commission (FSC) to appoint special administrators in cases where there is evidence that the liabilities of an insurer and its related companies exceed assets by 1 billion rupees (approximately $25 million) and that such a situation “is likely to jeopardize the stability and soundness of the financial system of Mauritius.” The special administrators are empowered to seize and sell assets. The government enacted this law in the immediate aftermath of the financial scandal explained below.

In April 2015, the Bank of Mauritius, the central bank, revoked the banking license of Bramer Bank, the banking arm of Mauritian conglomerate British American Investment (BAI) Group, citing an inadequate capital reserve ratio. As a result, Bramer Bank entered receivership and, by May 2015, the receiver had transferred the assets and liabilities of Bramer Bank to a newly created state-owned bank, the National Commercial Bank Ltd., thus effectively nationalizing Bramer Bank. In January 2016, the GoM merged the National Commercial Bank with another government-owned bank, resulting in Maubank, a new bank dedicated mainly to servicing small- and medium-sized enterprises. The GoM owns over 99 percent of Maubank shares. Efforts to privatize the bank in 2018 did not produce any results.

The government likewise took over much of Bramer’s parent, the BAI Group. The FSC placed the BAI Group in conservatorship, alleging fraud and corporate mismanagement in BAI’s insurance business. Following passage of the Insurance (Amendment) Act in 2015, the FSC created the National Insurance Company, which took over the BAI Group’s core insurance business, and the National Property Fund, which took over other BAI Group assets, including a hospital and several retail outlets. CIEL Healthcare, a local private company, bought the hospital in 2017.

In 2015, BAI’s former chairman filed a dispute against the GoM with the United Nations Commission on International Trade Law (UNCITRAL), alleging that the government illegally appropriated BAI’s assets. The former chairman, who is a Mauritian-French dual national, claimed that Mauritius had breached the Mauritius-France bilateral investment treaty and requested the restitution of his assets and payment of compensation by way of arbitration administered by the Permanent Court of Arbitration. The court concluded that it lacked jurisdiction over the dispute and ruled in favor of the GoM. The former chairman had appealed this decision to the French-speaking Court of First Instance in Brussels, which ruled in favor of the GoM in June 2021. In May 2019, the former chairman filed two cases in the Mauritian Supreme Court to challenge the appointment of the special administrator for the Bramer Banking Corporation and BAI Co Ltd, the holding company of the BAI group. Both cases are ongoing.

Bankruptcy is not criminalized in Mauritius. The Insolvency Act of 2009 amended and consolidated the law relating to insolvency of individuals and companies and the distribution of assets in the case of insolvency and related matters. Most notably, the Act introduced administration procedures, providing creditors the option of a more orderly reorganization or restructuring of a business than in liquidation. A bankrupt individual is automatically discharged from bankruptcy three years after adjudication but may apply to be discharged earlier. The Act draws on the Model Law on Cross-Border Insolvency adopted by the United Nations Commission on International Trade Law in 1997.

There were no special procedures that foreign creditors must comply with when submitting claims in insolvency proceedings. The law provides that foreign creditors have the same rights regarding the commencement of, and participation in, an insolvency proceeding as Mauritian creditors. The Second Schedule to the Insolvency Act applies to foreign creditors with respect to the procedures for proving their debts.

The creditor must send to the liquidator of the company an affidavit, sworn by the creditor or an authorized person, that verifies the debt and contains a statement of account showing the particulars of the debt. The affidavit must also state whether the creditor is a secured creditor. Section 132 of the Act outlines the conditions under which a liquidator may be appointed for a foreign company and related procedures.

In 2020, the Insolvency Act was amended to give the Bankruptcy Division of the Supreme Court power to order that a deed of company arrangement be binding on the company and all classes of creditors where there are at least two classes of creditors and one of the classes resolves that the company executes the deed.

The National Commission on Regulatory Improvement (CONAMER), within the Secretariat of Economy, is the agency responsible for streamlining federal and sub-national regulation and reducing the regulatory burden on business.  Mexican law requires secretariats and regulatory agencies to conduct impact assessments of proposed regulations and engage in notice and comment rule making, which CONAMER carries out.  Impact assessments are made available for public comment via CONAMER’s website:  https://www.gob.mx/conamer.  The official gazette of state and federal laws currently in force in Mexico is publicly available via:  http://www.ordenjuridico.gob.mx/.  Mexican law provides for a 20-day public consultation period for most proposed regulations.  Any interested stakeholder can comment on draft regulations and the supporting justification, including regulatory impact assessments.  Certain measures are not subject to a mandatory public consultation period.  These include measures concerning taxation, responsibilities of public servants, the public prosecutor’s office executing its constitutional functions, and the Secretariats of National Defense (SEDENA) and the Navy (SEMAR).  In 2021, there was a rise in rule making with waiver of full notice and public comment processes as President Lopez Obrador rushed regulations through “in the national interest.”

Given SAT’s mandate to collect taxes and revenue from international trade, many of its regulations circumvent the notice and public comment process.  In 2021, SAT proposed a new requirement for a “digital waybill complement” or “complemento de carta porte” for nearly all goods shipments within Mexican territory effective January 1, 2022.  Mexican and U.S. private sector representatives called the digital document “onerous” as it requires 180 data points for shipments across all modalities—rail, truck, air, and maritime shipping—many of which are unknown at the onset of a shipment.  Despite the domestic nature of the new requirement, U.S. companies raised concerns about the “carta porte” as a technical barrier to trade given the potential delays it could cause for shipments to and from ports of entry.  The U.S. government has pushed for better SAT coordination with the private sector to address compliance challenges with the new requirement.  This advocacy led to the postponement of “carta porte’s” entry into force to October 1, 2022 and public-private working groups to discuss implementation in the interim.

The National Quality Infrastructure Program (PNIC) is the official document used to plan, inform, and coordinate standardization activities, both public and private.  The PNIC is published annually by the Secretariat of Economy in Mexico’s Official Gazette.  The PNIC describes Mexico’s plans for new voluntary standards (Normas Mexicanas; NMXs) and mandatory technical regulations (Normas Oficiales Mexicanas; NOMs) as well as proposed changes to existing standards and technical regulations.  Interested stakeholders can request the creation, modification, or cancelation of NMXs and NOMs as well as participate in the working groups that develop and modify these standards and technical regulations.  Mexico’s antitrust agency, the Federal Commission for Economic Competition (COFECE), plays a key role in protecting, promoting, and ensuring a competitive free market in Mexico as well as protecting consumers.  COFECE is responsible for eliminating barriers both to competition and free market entry across the economy (except for the telecommunications sector, which is governed by its own competition authority) and for identifying and regulating access to essential production inputs.  In September 2021, COFECE Commissioner President Alejandra Palacios stepped down following several months of public disagreements with President Lopez Obrador’s statist energy policy.  Lopez Obrador has not named substitutions for COFECE’s Commissioners since November 2020, leaving the institution without a quorum for resolutions related to barriers to competition or the issuance of regulatory provisions.

In addition to COFECE, the Energy Regulatory Commission (CRE) and National Hydrocarbon Commission (CNH) are both technical-oriented independent agencies that play important roles in regulating the energy and hydrocarbons sectors.  CRE regulates national electricity generation, coverage, distribution, and commercialization, as well as the transportation, distribution, and storage of oil, gas, and biofuels.  CNH supervises and regulates oil and gas exploration and production and issues oil and gas upstream (exploration/production) concessions.  In addition, the National Center for Energy Control (CENACE) is the independent electricity grid operator.  Energy experts assert that these agencies, particularly CRE, are no longer fully independent as they have favored Pemex and CFE with regulations and permits over private participants.

Mexico has seen a shift in the public procurement process since the onset of the COVID-19 pandemic.  Government entities are increasingly awarding contracts either as direct awards or by invitation-only procurements.  In addition, there have been recent tenders that favor European standards over North American standards.

Generally speaking, the Mexican government has established legal, regulatory, and accounting systems that are transparent and consistent with international norms.  Still, Mexico’s current executive administration has eroded the autonomy and publicly questioned the value of specific antitrust and energy regulators and has proposed dissolving some of them to cut costs.  Furthermore, corruption continues to affect equal enforcement of some regulations.  The administration rolled out an ambitious plan to centralize government procurement in an effort to root out corruption and generate efficiencies.  The administration estimated it could save up to USD 25 billion annually by consolidating government purchases in the Secretariat of Finance.  Still, the expedited rollout and lack of planning for supply chain contingencies led to several sole-source purchases.  The Mexican government’s budget is published online and readily available.  The Bank of Mexico also publishes and maintains data about the country’s finances and debt obligations.

Investors are increasingly concerned the administration is undermining confidence in the “rules of the game,” particularly in the energy sector, by weakening the political autonomy of COFECE, CNH, CENACE, and CRE.  Still, COFECE has successfully challenged regulatory changes in the electricity sector that favor state-owned enterprises over private companies.  The administration has appointed five of seven CRE commissioners over the Senate’s objections, which voted twice to reject the nominees in part due to concerns their appointments would erode the CRE’s autonomy.  The administration’s budget cuts resulted in significant government layoffs, which has reportedly hampered agencies’ ability to carry out their work, a key factor in investment decisions.  The independence of the CRE and CNH was further undermined by a memo from the government to both bodies instructing them to use their regulatory powers to favor state-owned Pemex and CFE.  Investors expressed concern over the current executive administration setting a fee ceiling for AFORES, or private pensions management firms, starting in 2022 using a fast-tracked regulatory process with little industry consultation.

Beginning with the Spanish conquest in the 1500s, Mexico had an inquisitorial criminal justice system adopted from Europe in which proceedings were largely carried out in writing and sealed from public view.  Mexico amended its Constitution in 2008 to facilitate change to an oral accusatorial criminal justice system to better combat corruption, encourage transparency and efficiency, and ensure respect for the fundamental rights of both the victim and the accused.  An ensuing National Code of Criminal Procedure passed in 2014 and is applicable to all 32 states.  The national procedural code is coupled with each state’s criminal code to provide the legal framework for the new accusatorial system, which allows for oral, public trials with the right of the defendant to face his/her accuser and challenge evidence presented against him/her, right to counsel, due process, and other guarantees.  Mexico fully adopted the new accusatorial criminal justice system at the state and federal levels in June 2016.

Mexico’s Commercial Code, which dates to 1889, was most recently updated in 2014.  All commercial activities must abide by this code and other applicable mercantile laws, including commercial contracts and commercial dispute settlement measures.  Mexico has multiple specialized courts regarding fiscal, labor, economic competition, broadcasting, telecommunications, and agrarian law.

The judicial branch and Prosecutor General’s office (FGR) are constitutionally independent from each other and the executive.  The Prosecutor General is nominated by the president and approved by a two-thirds majority in the Senate for a nine-year term, effectively de-coupling the Prosecutor General from the political cycle of elections every six years.  With the historic 2019 labor reform, Mexico also created an independent labor court system run by the judicial branch (formerly this was an executive branch function).  The labor courts are being brought online in a phased process by state with the final phase completed on May 1, 2022.

Mexico’s Foreign Investment Law sets the rules governing foreign investment into the country.  The National Commission for Foreign Investments, formed by several cabinet-level ministries including Interior (SEGOB), Foreign Relations (SRE), Finance (Hacienda), and Economy (SE) establishes the criteria for administering investment rules.

Mexico has two constitutionally autonomous regulators to govern matters of competition – the Federal Telecommunications Institute (IFT) and the Federal Commission for Economic Competition (COFECE).  IFT governs broadcasting and telecommunications, while COFECE regulates all other sectors.  For more information on competition issues in Mexico, please visit COFECE’s bilingual website at: www.cofece.mx.  As mentioned above, Lopez Obrador has publicly questioned the value of COFECE and his party unsuccessfully introduced a proposal last year which would have dramatically reduced its resources and merged COFECE and other regulators into a less-independent structure.  COFECE currently has the minimum quorum required of at least four commissioners in order to operate, out of a seven-members full board.  However, COFECE lacks the required quorum of five commissioners in order to issue final resolutions determining competition barriers as well as anti-competitive practices.  President Lopez Obrador has not appointed the remaining commissioners as required by law.

USMCA (and NAFTA) contain clauses stating Mexico may neither directly nor indirectly expropriate property, except for public purpose and on a non-discriminatory basis.  Expropriations are governed by international law and require rapid fair market value compensation, including accrued interest.  Investors have the right to international arbitration. The USMCA contains an annex regarding U.S.-Mexico investment disputes and those related to covered government contracts.

Mexico’s Reorganization and Bankruptcy Law (Ley de Concursos Mercantiles) governs bankruptcy and insolvency.  Congress approved modifications in 2014 to shorten procedural filing times and convey greater juridical certainty to all parties, including creditors.  Declaring bankruptcy is legal in Mexico and it may be granted to a private citizen, a business, or an individual business partner.  Debtors, creditors, or the Attorney General can file a bankruptcy claim.  Mexico ranked 33 out of 190 countries for resolving insolvency in the World Bank’s 2020 Doing Business report (that last it produced).  The average bankruptcy filing takes 1.8 years to be resolved and recovers 63.9 cents per USD, which compares favorably to average recovery in Latin America and the Caribbean of just 31.2 cents per USD.  The “Buró de Crédito” is Mexico’s main credit bureau.  More information on credit reports and ratings can be found at:  http://www.burodecredito.com.mx/.

The FSM is not a signatory to any convention on transparency in international investment. Transparency of government actions is typically based more on personalities than on the law. Regulatory bodies sometimes involve themselves in issues beyond their jurisdiction. Conversely, other regulations are not uniformly enforced.  It is often difficult to obtain public records, although some states and government organizations do require open meetings.  While basic laws are accessible on the internet, text or summaries of proposed regulations are published before enactment but are not printed in an official journal or publication, and there is no appeal or administrative review process. In addition, government audits and statistical reports are not prepared promptly, and timely data are often unavailable (the most recent publications Using three or four year old data).

The websites that provide the most relevant economic data on FSM are:

National Public Auditor http://www.fsmopa.fm 

Department of Resources & Development http://www.fsmrd.fm  

FSM Statistics http://www.fsmstatistics.fm 

The FSM signed on to the Pacific Island Countries Trade Agreement (PICTA) in 2001 but did not ratify the agreement.  PICTA is a free trade agreement on trade in goods among 14 members of the Pacific Islands Forum (excluding Australia and New Zealand).  Eleven countries – Cook Islands, Fiji, Kiribati, Nauru, Niue, Papua New Guinea, Samoa, Solomon Islands, Tonga, Tuvalu, and Vanuatu — have ratified PICTA.  The FSM is not a member of any regional economic block, nor is it a member of the WTO.

The FSM follows the U.S. common law system and uses U.S. case law as precedent.  There are no specialized courts except for Land Courts in Pohnpei and Kosrae.  All four states have State Courts and State Supreme Courts.  The judicial system remains independent of the executive branch, but is reported to be slow, weak, and lacking the ability to enforce judgments properly.  Regulations or enforcement actions are appealable. Appeals may be adjudicated in either the State or National courts.

In September 2018, the Pohnpei State Legislature overrode the Governor’s veto of a bill on foreign investment regulations.  The bill became state law over the objection of several local business leaders.  The new law placed all decision-making power into the hands of one person, the Registrar of Corporations.

FSM national and state governments use a “traffic light” system to regulate businesses, with red for prohibited, amber for restricted, and green for unrestricted.  Industry classifications in this system vary from state to state. The individual states directly regulate all foreign investment, except in the areas of deep ocean fishing, banking, insurance, air travel, and international shipping, which are regulated at the federal level.  Thus, a prospective investor who plans to operate in more than one state must obtain separate permits in each state, and often follow different regulations as well.

The following are the regulations pertaining to restrictions by sector in each of the states:

FSM National

Red: Arms manufacture, minting of currency, nuclear power, radioactive goods.
Amber: Increased scrutiny before approval for non-traditional banking services and insurance.
Green: Banking, fishing, air transport, international shipping.

Kosrae State

Red: manufacture of toxic or biohazard materials, gambling, casinos, fishing using sodium/cyanide or compressed air.  (Note: There is also currently a ban on all business transactions on Sundays in the capital town. End Note.)
Amber: Real estate brokerage, non-ecology-based tourism, trade in reef fish, coral harvesting.
Green: Eco-tourism, export of local goods, professional services.

Pohnpei State

Red: None presently defined, determined by board from among amber candidates.
Amber: Everything not classified as green.
Green: Businesses with greater than 60 percent FSM ownership, initial capitalization of $250,000 or more, professional services with capitalization of $50,000 or more, and Special Investment Sector businesses with 51 percent FSM ownership in retail, trade, exploration, development, and extraction of land or marine based mineral resources or timber.

Chuuk State

Red:  Determined by the Director, none codified in law.
Amber:  Casinos, lotteries, and industries that pollute the environment, destroy local culture and tradition, or deplete natural resources.
Green:  Eco-tourism, professional services, intra-state airline services, exports of local goods.

Yap State

Red:  Manufacture of toxic materials, weapons, ammunition, commercial export of reef fish, activities injurious to the health and welfare of the citizens of Yap.
Amber:  None at present.
Green:  All others.

There is no law or agency governing competition in the FSM nor does the government require environmental, social, or governance disclosure to help investors and consumers distinguish between high-and-low quality investments.

The FSM Foreign Investment Act of 1997 guarantees no compulsory acquisition or expropriation of property of any foreign investment for which a Foreign Investment Permit is issued, except for violation of laws and regulations and in certain extraordinary circumstances.  Those extraordinary circumstances include cases in which such action would be consistent with existing FSM eminent domain law, when such action is necessary to serve overriding national interests, or when either the FSM Congress or the FSM Secretary of Resources and Development has initiated expropriation.  There has been no history of expropriation involving foreign investors or U.S. companies.

A bankruptcy law has been in existence since 2005, but was used only three times, generally to avoid taxes.

Laws and regulations are published in the official gazette called Monitorul Oficial, while a database of laws and regulations is available online at http://www.legis.md . The Moldovan government generally publishes significant laws in draft form for public comment. Draft laws are also available online, on the website of the Moldovan Parliament. Consultations with business and trade associations provide other opportunities for comment. A significant exception to these consultations is a mechanism that allows Parliament to also propose draft laws.

The Prime Minister chairs an Economic Council, which liaises with the Moldovan business community to discuss government proposals and gather ideas to improve Moldova’s economy, especially in response to the COVID-19 crisis.

The Foreign Investors Association (FIA) was established in 2004 with the support of the OECD. FIA engages in a dialogue with the government on topics related to the investment climate and produces an annual publication of concerns and recommendations to improve the investment climate. In 2006, the American Chamber of Commerce (AmCham) registered in Moldova, presenting another voice for the business community. In 2011, a group of ten large EU investors founded the European Business Association (EBA). These are the three largest foreign business associations, and they regularly engage in policy discussions with the government.

All regulations and governmental decisions related to business activity have been published in a special business registry, “Register of Regulations on Business Activity,” to raise the awareness of businesspeople about their rights, increase the transparency of business regulations, and help fight corruption. The government has an approved list of business permits and authorizations. Government agencies and inspectors cannot issue any form of documents not included in the list.

The working group of the State Commission for Regulation of Entrepreneurial Activity, which was established as a filter to eliminate excessive business regulations, meets to vet draft governmental regulations dealing with entrepreneurship.

Nevertheless, bureaucratic procedures are not always transparent, and red tape often makes processing registrations, ownership, and other procedures unnecessarily long, costly, and burdensome. Discretionary decisions by government officials provide room for abuse and corruption. While the government adopted laws to improve the business climate and reduce excessive state controls and regulation, effective implementation is insufficient.  This inconsistent application of laws and regulations undermines fair competition and adds uncertainty particularly for small- and medium-sized businesses as well as new entrants.

Moldova committed to implementing International Financial Reporting Standards (IFRS) in 2008. Use of IFRS is required by law for all public interest entities (financial entities, investment funds, insurance companies, private pension funds, and publicly listed entities) and national accounting standards (which approximate IFRS in many ways) are used by other firms, although many use IFRS as well due to foreign ownership.

Moldova has a “one stop window” which provides clear and uniform rules for the release of information and standardized documents for business registration.

Moldova launched a Trade Information Portal for the domestic and international traders. The new portal is available at www.trade.gov.md . It is the main source of official specialized information on related procedures and documents required for the import, export, and transit of goods. The Customs Service of Moldova also operates a call center to provide online support and guide economic agents through Moldova’s import/export procedures.

A law simplifying the system of inspectorates and various inspection bodies was adopted in 2017 to increase efficiency and reduce regulatory burden. Through the reformation of inspection bodies, the government reorganized the state inspection agencies for better planning and monitoring of inspectors’ activity. By reducing the number of inspection agencies and introducing risk-based criteria for inspections, the government sought to improve the business climate by reducing the opportunity for inspections to be used for political purposes.

The government does not have specific policies promoting companies’ environmental, social, and governance disclosure.

The EU Association Agreement (AA), including a Deep Comprehensive Free Trade Area (DCFTA), has binding regulatory provisions committing Moldova to a reform agenda and to approximating domestic legislation to EU standards in a range of areas, including corporate law, labor, consumer protection, competition and market surveillance, general product safety, tax, energy, customs duties, public procurement, intellectual property rights, and others. Under the DCFTA, Moldova will gradually abolish duties and quotas in mutual trade in goods and services. It will also eliminate non-tariff barriers by adopting EU rules on health and safety standards, intellectual property rights, and other fields. The agreement contains a timeframe for implementation, with phase-ins up to ten years.

Moldova has been a member of the World Trade Organization (WTO) since 2001 and, as such, is a signatory to the General Agreement on Trade in Services (GATS), the Agreement on Trade Related Investment Measures (TRIMs) and the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). These agreements contain major investment-related commitments, such as opening to the establishment of foreign service providers, prohibiting local content, trade-balancing, domestic sales requirements (TRIMs), and protection of intellectual property (TRIPS). No major WTO TRIMs inconsistencies have been reported.

As a WTO member, Moldova must notify draft technical regulations to the WTO Committee on Technical Barriers to Trade. In 2016, Moldova ratified the WTO Trade Facilitation Agreement and adopted several measures to conform to WTO requirements.

The government has undertaken incremental steps since 2017 to draft a new Customs Code, which merges existing separate laws on customs procedures and goods crossing national borders and approximate national customs rules to the EU Customs Code. In 2017, the government changed customs rules to align with the EU Authorized Economic Operator requirements and Approved Exporter conditions.

Moldova’s commercial litigation rules comply with WTO requirements. The main challenges to the business climate remain the lack of effective and equitable implementation of laws and regulations, and arbitrary, non-transparent decisions by government officials to give domestic producers an edge over foreign competitors in certain areas. For example, an environmental tax is applied on bottles and other packaging of imported goods, but not levied on bottles and packaging produced in Moldova. There are reports of problems with customs valuation of goods, specifically that the Customs Service has been applying the maximum possible values to imported goods, even if their actual purchase value was far lower. This has increased customs revenues but disadvantaged importers.

Moldova has a civil law legal system with codified laws that govern different aspects of life, including business, trade, and economy. The country’s legal framework consists of its constitution, organic and ordinary laws passed by the Parliament, and administrative acts issued by the government and other public authorities. Although Moldovan courts are constitutionally independent, their structures have facilitated government and political interference; the courts suffer from inefficiency and low public trust.

The court system consists of lower courts (i.e., trial courts), four courts of appeal, the Supreme Court of Justice, and a separate Constitutional Court.

Moldova has a new justice reform strategy for 2022-2025. The new strategy continues the 2016 parliamentary initiative to “optimize” the country’s court system as part of broader justice sector reforms intended to reduce the number of trial courts in Moldova from 40 to 15. Specialized courts such as the Commercial Circumscription Court and Military Court were eliminated. Five trial courts from Chisinau were conceptually merged into one – the Chisinau trial court – although in 2018 the merged Chisinau trial court was further reorganized to specialize across five districts (investigative and contravention; criminal; administrative; bankruptcy; and civil, which includes adjudication of commercial disputes). The government will review court jurisdictions to ensure that the courts are structured in a way that provides access to justice for all citizens, and will begin to review the jurisdiction of the prosecutor’s offices for the same reason.

The 2016 reforms created two specialized quasi-independent prosecution offices. The Anticorruption Prosecution Office is responsible for investigating and prosecuting corruption, bribery, abuse of power by public officials, and money laundering. The Prosecution Office on Combating Organized Crime and Special Cases investigates and prosecutes organized, transnational and particular complex crimes, including tax evasion, smuggling, intellectual property offenses, trafficking in persons, and narcotics. In 2017-2019, the Moldovan Prosecution Service continued the implementation of reforms under a law on the prosecution service passed in 2016. The Prosecutor General’s Office (PGO) led the drafting of new regulations for the specialized prosecution offices, regional, district and municipal offices. As of January 1, 2021, the State Tax Service is authorized to investigate economic crimes. The government further plans to restructure the anticorruption agencies to focus on high-level corruption.

In addition to its international agreements, Moldovan laws affecting FDI include the Civil Code, the Law on Property, the Law on Investment in Entrepreneurship, the Law on Entrepreneurship and Enterprises, the Law on Joint Stock Companies, the Law on Small Business Support, the Law on Financial Institutions, the Law on Franchising, the Tax Code, the Customs Code, the Law on Licensing Certain Activities, and the Law on Insolvency.

The current Law on Investment in Entrepreneurship came into effect in 2004. It was designed to be compatible with European standards in its definitions of types of local and foreign investment. It provides guarantees of investors’ rights, prohibitions against expropriation or similar actions, and for payment of damages if investors’ rights are violated. The law permits FDI in all sectors of the economy, while certain activities require a business license. Parliament adopted a new law setting up an investment screening mechanism in 2021 (see chapter 1 above).

In 2012, Parliament passed a law on competition in line with EU practice and legislation. The National Competition Agency was subsequently renamed the Competition Council. The Competition Council oversees compliance with competition and state-aid provisions and initiates examination of alleged violation of competition laws. The Competition Council may request cessation of action, prescribe behavioral or structural remedies, and apply fines.

The Law on Investment in Entrepreneurship states that investments cannot be subject to expropriation or to measures with a similar effect. However, an investment may be expropriated for purposes of public utility if it is not discriminatory and just compensation is provided. If a public authority violates an investor’s rights, the investor is entitled to compensation equivalent to the actual damages at the time of occurrence, including any lost profits.

The government has given no indication of intent to discriminate against U.S. investments, companies, or representatives by expropriation, or of intent to expropriate property owned by citizens of other countries. No particular sectors are at greater risk of expropriation or similar actions in Moldova.

The previous governments have had a history of depriving investors, both national and foreign, of their businesses in various forms. Many of them have sued the government at the European Court for Human Rights for violation of the right to fair trial and of the respect for property, or in international arbitral tribunals.

Moldova has a law on insolvency that provides for expedited insolvency proceedings, including by granting priority to secured creditors, restructuring mechanisms, reduced opportunities for appeals, moratorium provisions, strict statutory periods in the proceedings, and enhanced role of insolvency administrators.

The Law on Legislation sets out who may draft and submit legislation; the format of these bills; the respective roles of the Mongolian parliament, government, and president; and the procedures for obtaining and employing public comment on pending legislation.  The Law on Legislation states that law initiators – members of parliament, the president of Mongolia, or cabinet ministers – must fulfill these criteria:  (1) provide a clear process for developing and justifying the need for draft legislation; (2) set out methodologies for estimating costs to the government related to a bill’s implementation; (3) evaluate the impact of the legislation on the public; and (4) conduct public outreach before submitting bills to parliament.

Initiators must post draft legislation for public comment and publish reports evaluating costs and impacts on parliament’s official website ( Parliament of Mongolia/Projects ) at least 30 days prior to submitting bills to parliament.  Posts must explicitly state the time for public comment and review.  Initiators must solicit comments in writing, organize public meetings, seek comments through social media, and carry out public surveys.  No more than 30 days after the public comment period ends, initiators must prepare a matrix of all comments, including those used to revise the bill as well as those not used, which must be posted on parliament’s official web site.  After a law’s passage, parliament must monitor and evaluate its implementation and impacts.  Investors report that while legislators have not implemented all these requirements, most relevant legislation is posted on parliament’s website before passage.  Ministries and agencies have not fulfilled these statutory requirements, according to businesses.

While General Administrative Law Article 6 aligns Mongolia’s regulatory drafting process with Transparency Agreement obligations, investors report the government is not generally enforcing it.  Under the Transparency Agreement, originators of regulations must seek public comment by posting draft regulations in a single journal of national circulation, designated as LegalInfo.mn ( HYPERLINK “https://www.legalinfo.mn/%22%20/t%20%22_blank” t “_blank” LegalInfo).  Drafters must record, report, and respond to significant public comments.  The Ministry of Justice and Home Affairs must certify each regulatory drafting process complies with the General Administrative Law before a regulation enters force.  After approval, the statutorily responsible government agency monitors implementation and impacts.

Businesses also note unpredictable, nontransparent regulatory burdens at the local—province and county—levels.  They note inconsistent application of regulations and statutes among central, provincial, and municipal jurisdictions and a lack of expertise among local inspectors.  Regional tax, health, and safety inspectors are cited as particularly problematic.  The Economic Policy and Competitiveness Research Center of Mongolia annually ranks local regulatory burdens: http://en.aimagindex.mn/competitiveness .

Mongolia’s so-called Glass Budget Law requires all levels of government to publicly post proposed and actual budget expenditures, and the law, according to businesses and transparency experts, has generally been followed.  However, parliament can waive these transparency requirements for emergencies and for budgetary bills and has on several occasions in 2020 and 2021 during the COVID-19 pandemic.

The government neither promotes nor requires companies’ environmental, social, and governance (ESG) disclosures to facilitate transparency and/or help investors and consumers distinguish between high- and low-quality investments.  The government does, however, limit the right to invest in such high-risk securities as digital tokens and cryptocurrencies to professional investors and other high net-worth individuals.

Mongolia, which has generally eschewed regional economic blocs, acceded to the Asia-Pacific Trade Agreement (APTA) in 2021.  Also, Mongolia often seeks to adapt European standards and norms in such areas as construction materials, food, and environmental regulations; looks to U.S. standards in the hydrocarbon sector; and adopts a combination of Australian and Canadian standards and norms in the mining sector.  Mongolia also tends to employ World Organization for Animal Health standards for its animal health regulations.  Mongolia, a member of the WTO, asserts it will notify the WTO Committee on Technical Barriers to Trade (TBT) of all draft technical regulations.

Investors state that judges frequently avoid controversial decisions in business disputes, preferring to delay judgment for as long as possible—sometimes years.  If a decision is made, businesses face similarly long delays enforcing court orders.  In some instances, cases have taken so long that by the time an enforcement is executed, the counterparty has liquidated assets and vanished.  Investors note similarly long delays with respect to inspection agencies, such as the Tax Dispute Settlement Resolution Council, as well as with other inspection agency panels, especially those related to mineral licenses and health matters.

In 2021, parliament revised the Law of the Judiciary to bring it into line with the amended constitution.  This law limits the powers of the government, parliament, and the president to influence the selection and removal of judges; and vests the Judicial Disciplinary Council with responsibility for disciplining jurists, except in matters involving criminal acts.  Investors have praised these reforms, saying are helping to restore judicial independence severely.

Under Mongolia’s hybrid civil law-common law system, trial judges may use prior rulings to adjudicate similar cases but have no obligation to follow legal precedent as such.  Mongolian laws, and even their implementing regulations, often lack the specificity needed for consistent judicial and prosecutorial interpretation and application.  All courts may rule on matters of fact as well as matters of law at any point in the judicial process.

Mongolia has specialized laws for contracts but no dedicated courts for commercial activities. Contractual disputes are usually adjudicated through the Civil Court division of the district court system.  Criminal Courts adjudicate crime cases brought by the General Prosecutors Office. Disputants may appeal to the City Court of Ulaanbaatar and ultimately to the Supreme Court of Mongolia.  Mongolia has several specialized administrative courts adjudicating cases brought by citizens, foreign residents, and businesses against official administrative acts.  Mongolia’s Constitutional Court, the Tsets, rules on constitutional issues.  The General Executive Agency for Court Decisions enforces judgments and orders.

Investors and legal sector experts say that the Administrative Court is procedurally competent, fair, and consistent but that the Civil Courts deliver highly inconsistent judgments.

The 2013 Investment Law sets the general statutory and regulatory frame for all investors in Mongolia.  Under the law, foreign investors may access the same investment opportunities as Mongolian citizens and receive the same protections as domestic investors.  Investment domicile, not investor nationality, determines if an investment is foreign or domestic.  The law provides for a more stable tax environment and offers tax and other incentives for investors; and authorizes a single point of registration, the State Registration Office ( www.burtgel.gov.mn ), for all investors.  The law offers qualifying companies transferable tax-stabilization certificates valid for up to 27 years. Affected taxes may include the corporate-income tax, excise taxes, customs duties, value-added tax, and royalties.

Investors cite two primary national-treatment issues with respect to investment rules.  First, foreign nationals and companies may not own real estate; only Mongolian adult citizens may own real estate.  While foreign investors may obtain use rights for the underlying land, these rights expire after a set number of years with limited rights of renewal.  Government officials have said that in some cases municipal, provincial, and central government officials may waive land-use rights limits and recommend that investors contact the relevant agency or ministry for more information on how to apply for these waivers.  Foreign investors also object to the regulatory requirement that each foreign investor in any given venture must invest a minimum of $100,000.  Although the Investment Law has no such requirement, Mongolian regulators impose it on all foreign investors without requiring the same minimum from Mongolian investors.

The Ministry of Economy and Development manages the “One-Stop-Shop for Investors,” which provides investor services on visas, taxation, social insurance, notarization, and business registration ( https://investmongolia.gov.mn/ ).  The Ministry of Economy and Development has publicly stated that it will establish in 2022 a new foreign investment and foreign trade support entity to assume the duties of the One-Stop-Shop, although no date has been provided.

Mongolia’s Agency for Fair Competition and Consumer Protection reviews domestic transactions for competition-related concerns.  For a description of the Agency go to  AFCCP .  The Agency for Fair Competition and Consumer Protection launched no 2021 competition cases affecting U.S. FDI.  U.S. investors generally find the AFCCP applies its norms and procedures transparently, although they remain concerned the agency favors local economic interests over foreign interests.  AFCCP decisions may be appealed to the courts.

State entities at all levels may confiscate or modify land-use rights for purposes of economic development, national security, historical preservation, or environmental protection.  Mongolia’s constitution recognizes private real-property rights and derivative rights, and Mongolian law specifically bars the government from expropriating assets without payment of adequate, market-based compensation.  Investors express little disagreement with such takings in principle but state that a lack of clear lines of authority among the central, provincial, and municipal governments has led to loss of property and use rights in practice.  For example, the Minerals Law provides no clear division of local, regional, and national jurisdictions for issuances of land-use permits and special-use rights.  Faced with unclear lines of authority and frequent differences in practices and interpretation of rules and regulations by different levels of government, investors may find themselves unable to fully exercise legally conferred rights.

Some expropriation cases involve court expropriations after third-party criminal trials at which investors are compelled to appear as “civil defendants” – but are not allowed to fully participate in the proceedings.  In these cases, government officials are convicted of corruption, and the court then orders the civil defendant to surrender a license or property, or pay a tax penalty or fine, for having received an alleged favor from the criminal defendant with no judicial proceedings to determine if property or licenses were obtained illegally.

Businesses claim the tax dispute settlement processes has become a form of indirect expropriation.  2020 amendments to the Tax Law allow tax officials to require disputants to place the entire disputed tax assessment in escrow as a precondition for disputing the tax assessments, which encourages officials to issue punitive tax assessments that make using settlement processes prohibitively expensive and confiscatory.

Bankruptcy law treats bankruptcy as a civil matter requiring judicial adjudication.  Mongolia allows registration of mortgages and other debt instruments backed by real estate, structures, and other immovable collateral (mining and exploration licenses, intellectual property rights, and other use rights); and movable property (cars, equipment, livestock, receivables, and other items of value).  Although investors may securitize movable and immovable assets, local law firms hold that the bankruptcy process remains too vague, onerous, and time-consuming for practical use.  Reporting that foreclosure and bankruptcy proceedings usually require no less than 18 months, with 36 months not uncommon, legal advisors state that a lengthy appeals process, perceived corruption, and government interference may create years of delay.   Moreover, while in court, creditors face suspended interest payments and limited access to the asset.

The main law governing foreign investment, the Montenegrin Law on Foreign Investment, is based on the national treatment principle, which is a basic principle of GATT/WTO that prohibits discrimination between imported and domestically produced goods with respect to internal taxation or other government regulation. All proposed laws and regulations put forth by the government are published in draft form and open for public comment, generally for a 30-day period.Regulations are often applied inconsistently, particularly at the municipal level. Many regulations are in conflict with other regulations, or are ambiguous, creating confusion for investors. As noted in the American Chamber of Commerce’s (AmCham) biannual Business Climate Survey conducted in 2020, many municipalities lack adequate detailed urban plans, complicating investment plans. Some municipalities have made efforts to speed up procedures in order to improve the business environment for investors. While at the national level there are fewer obstacles for investments and other activities, many larger-scale projects involve both local and national authorities, and it is often necessary to work with both administrations to complete a project. AmCham members surveyed are dissatisfied with the duration of the court proceedings (79.5 percent) and unequal implementation of the law (63.6 percent). At the same time, over 70 percent of AmCham member companies surveyed believe that conditions for doing business when it comes to the duration of the court proceedings, and unequal implementation of the laws have not changed in the past two years.

Foreign investors are subject to the same conditions as domestic investors when it comes to establishing a company and making an investment. There are no other regulations in place which might deprive a foreign investor of any rights or limit the investor’s ability to do business in Montenegro. The Law of Foreign Investments is currently fully harmonized with World Trade Organization (WTO) rules.In 2004, the Parliament established an Energy Regulatory Agency, which maintains authority over the electricity, gas, oil, and heating energy sectors. Its main tasks include approving pricing, developing a model for determining allowable business costs for energy sector entities, issuing operating licenses for energy companies and for construction in the energy sector, and monitoring public tenders. The energy law mandates that in the energy sectors, when prices are affected by monopoly positions of some participants, business costs will be set at levels approved by the Agency. In those areas deemed to function competitively, the market will determine prices. The price of gasoline is set nationally every two weeks and is uniform across all petrol stations.The Agency for Electronic Communication and Postal Services (known by its Montenegrin acronym EKIP) was established by the government in 2001. It is an independent regulatory body whose primary purpose is to design and implement a regulatory framework and to encourage private investment in the sector. In March 2021, EKIP prepared a “Study on the Strategy for the Introduction of 5G Mobile Communication Networks in Montenegro”.  In December 2021, the Government adopted the “Roadmap for the Introduction of 5G Mobile Communication Networks” and is planning an auction to allocate radio frequencies for the 5G network (700 MHz, 3.5 GHz and 26 GHz) at the end of 2022.  A “5G Strategy” is also expected to be adopted by mid-2022.

While there is a full legal and regulatory infrastructure in place to conduct public procurement, U.S. companies have complained in numerous cases about irregularities in the procurement process at the national level and maintain there is an inability to meaningfully challenge decisions they believe were erroneously taken through the procurement apparatus. In other cases, the system delivers appropriate outcomes, though in a complex and time-consuming way. Public procurement is conducted jointly by the Public Procurement Directorate, the Ministry of Finance (as the main line ministry for the procurement area), and the State Commission for Control of Public Procurement Procedures in the protection of rights area. The Public Procurement Directorate began operations in 2007 while the State Commission for the Control of Public Procurement Procedures was established in 2011. The State Commission takes decisions in the form of written orders and conclusions made at its meetings. The decisions are made by a majority of present members. The State Commission’s Rules of Procedure specify the method for this work. The revised Law of Public Procurement entered into force in December 2019. The Administrative Court oversees cases involving public procurement procedures.

The Montenegro State Audit Institution (SAI) is an independent supreme audit institution for verification of the entire government’s financial statements, including state-owned enterprises.  The audits are made publicly available on the SAI’s website (http://www.dri.co.me/).  Accounting standards implemented in Montenegro are transparent and consistent with international norms. In addition, various international companies that conduct accounting and auditing procedures are present in the country.

More information on whether Montenegrin Government publish or consult with the public about proposed regulations is available at https://rulemaking.worldbank.org/en/data/explorecountries/montenegro 

Montenegro is a candidate country for membership to the EU, with accession negotiations launched on June 29, 2012. All 33 negotiating chapters have been opened, while three are provisionally closed, the last one in 2017. Montenegro is currently taking steps to harmonize its regulations and accepted best practices with those of the EU, as part of the negotiation process.

The government has not notified the WTO of any measures that are inconsistent with the WTO’s Trade Related Investment Measures (TRIMs), nor have there been any independent allegations that the government maintains any such measures.

Montenegro’s legal system is of a civil, continental type based on Roman law.  It includes the legal heritage of the former Yugoslavia, and the State Union of Serbia and Montenegro.  As of 2006, when the country regained its independence, Montenegrin codes and criminal justice institutions were applicable and operational.  Montenegro’s Law on Courts defines a judicial system consisting of three levels of courts: Basic, High, and the Supreme Court.  Montenegro established the Appellate Court and the Administrative Court in 2005 for the appellate jurisdiction in criminal and commercial matters, and specialized jurisdiction in administrative matters.  The specialized Commercial Court has first instance jurisdiction in commercial matters. Apart from those, there are also specialized Misdemeanors Courts.

The Basic Courts have first instance jurisdiction in civil cases and criminal cases in which a prison sentence of up to 10 years is possible.  There are 15 Basic Courts for Montenegro’s 23 municipalities.  Two High Courts in Podgorica and Bijelo Polje have appellate review of basic court decisions.  The High Courts also decide on jurisdictional conflicts between the basic courts.  They are also first instance courts for serious crimes where prison sentence of more than 10 years is specified.  The Podgorica High Court has specialized judges and department who deal with organized crime, corruption, war crimes, money laundering, and terrorism cases.According to the Law on Courts, there is just one Commercial Court based in Podgorica.  The Commercial Court has jurisdiction in the following matters: all civil disputes between legal entities, shipping, navigation, aircraft (except passenger transport), and disputes related to registration of commercial entities, competition law, intellectual property rights (IPR), bankruptcy, and unfair trade practices.  The High Court hears appeals of Basic Court decisions, and High Courts’ first instance decision may be appealed to the Appellate Court which is also a second instance court for decisions of the Commercial Court. The Supreme Court is the third (and final) instance court for all decisions.  The Supreme Court is the court of final judgment for all civil, criminal, commercial, and administrative cases, and it acts only upon irregular (i.e., extraordinary legal remedies).  There is also the Constitutional Court of Montenegro, which checks constitutionality and legality of legal acts and acts upon constitutional complaints in relation to human rights violations.  The Commercial Court system faces challenges, including weak implementation of legislation and confusion over numerous changes to existing laws; development of a new system of operations, including electronic communication with clients; and limited capacity and expertise among the judges as well as a general backlog in cases. Over the last several years, the adoption of 20 new business laws has significantly changed and clarified the legislative environment.  Recently adopted legislative reforms improved the efficiency and effectiveness of court proceedings, a trend which is already visible through the introduction of Public Enforcement Agents.

In order to attract foreign investment and to lead interested investors through the process, the government established the Montenegrin Investment Agency (MIA) ( www.mia.gov.me ) and the Privatization and Capital Investment Council https://www.gov.me/cyr/vlada-crne-gore/savjet-za-privatizaciju-i-kapitalne-projekte ). These organizations aim to promote Montenegro’s investment climate and opportunities in the local economy, with a focus on the tourism, energy, infrastructure, and agriculture sectors.

In 2013, the Agency for Protection of Competition was established as a functionally independent entity after the Law on Protection of Competition entered into force and the Central Register of Economic Entities registered the law. The area of free market competition, regulated by the law, represents the area that has direct and significant impact on economic development and investment activity, by raising the level of the quality of goods and services, thus creating the conditions for lower prices and creation of a modern, open market economy. This, in turn, provides Montenegro with the possibility to participate in the single market of the EU and in other international markets. More information available on the Agency’s website: http://www.azzk.me/jml/index.php/en/ 

Montenegro provides legal safeguards against expropriation with protections codified in several laws adopted by the government. There have been no cases of expropriation of foreign investments in Montenegro. However, Montenegro has outstanding claims related to property nationalized under the Socialist Federal Republic of Yugoslavia. A number of unresolved restitution cases involve U.S. citizens. The cases are in various stages of adjudication and have languished for over a decade.

At the end of 2007, Parliament passed the new Law on Restitution, which supersedes the 2004 Act. In line with the law, three review commissions have been formed: one in Bar (covering the coastal region); one in Podgorica (for the central region of Montenegro); and one in Bijelo Polje (for the northern region of Montenegro). The basic restitution policy in Montenegro is restitution in kind, when possible, and cash compensation or substitution of other state land when physical return is not possible. In addition, Montenegro provides safeguards from expropriation actions through its Foreign Investment Law. The law states that the government cannot expropriate property from a foreign investor unless there is a “compelling public purpose” established by law or based on the law. If an expropriation is executed, compensation must be provided at fair market value plus one basis point above the London Interbank Offered Rate (LIBOR) rate for the period between the expropriation and the date of payment of compensation.

The Bankruptcy Law, adopted in 2011, mandates that debtors are designated insolvent if they cannot meet financial obligations within 45 days of the date of maturity of any debt obligation. However, the law still offers some latitude for restrictive measures and discretionary government interference. Bankruptcy is criminalized in Montenegro and a responsible officer in a business entity who caused bankruptcy and damage to another person by irrational spending of assets or their bargain selling, by excessive borrowing, undertaking disproportional obligations, recklessly concluding contracts with insolvent entities, omitting to collect claims in time, by destroying or concealing property or by other acts which are not in compliance with  prudent business practices shall be punished by a prison term from six months to five years.

Morocco is a constitutional monarchy with an elected parliament and a mixed legal system of civil law based primarily on French law, with some influences from Islamic law. Legislative acts are subject to judicial review by the Constitutional Court excluding royal decrees (Dahirs) issued by the King, which have the force of law. Legislative power in Morocco is vested in both the government and the two chambers of Parliament, the Chamber of Representatives (Majlis Al-Nuwab) and the Chamber of Councilors (Majlis Al Mustashareen). The principal sources of commercial legislation in Morocco are the Code of Obligations and Contracts of 1913 and Law No. 15-95 establishing the Commercial Code. The Competition Council and the National Authority for Detecting, Preventing, and Fighting Corruption (INPPLC) have responsibility for improving public governance and advocating for further market liberalization. All levels of regulations exist (local, state, national, and supra-national). The most relevant regulations for foreign businesses depend on the sector in question. Ministries develop their own regulations and draft laws, including those related to investment, through their administrative departments, with approval by the respective minister. Each regulation and draft law is made available for public comment. Key regulatory actions are published in their entirety in Arabic and usually French in the official bulletin on the  website   of the General Secretariat of the Government. Once published, the law is final. Public enterprises and establishments can adopt their own specific regulations provided they comply with regulations regarding competition and transparency.

Morocco’s regulatory enforcement mechanisms depend on the sector in question; enforcement is legally reviewable, and made publicly available via the different agencies’ websites. The National Telecommunications Regulatory Agency (ANRT), for example, is the public body responsible for the control and regulation of the telecommunications sector. The agency regulates telecommunications by participating in the development of the legislative and regulatory framework. Morocco does not have specific regulatory impact assessment guidelines, nor are impact assessments required by law. Morocco does not have a specialized government body tasked with reviewing and monitoring regulatory impact assessments conducted by other individual agencies or government bodies.

The U.S. Mission is not aware of any informal regulatory processes managed by nongovernmental organizations or private sector associations. The Moroccan Ministry of Finance  posts quarterly statistics    (compiled in accordance with IMF recommendations) on public finance and debt on their website. A  report on public debt  is published on the Ministry of Economy and Finance’s website and is used as part of the budget bill formulation and voting processes. The fiscal year 2022 debt report was published on December 20, 2021.

Morocco joined the WTO in 1995 and reports technical regulations that could affect trade with other member countries to the WTO. Morocco is a signatory to the  Trade Facilitation Agreement   and has a 91.2 percent implementation rate of TFA requirements. European standards are widely referenced in Morocco’s regulatory system. In some cases, U.S. or international standards, guidelines, and recommendations are also accepted.

The Moroccan legal system is a hybrid of civil law (French system) and some Islamic law, regulated by the Decree of Obligations and Contracts of 1913 as amended, the 1996 Code of Commerce, and Law No. 53-95 on Commercial Courts. These courts also have sole competence to entertain industrial property disputes, as provided for in Law No. 17-97 on the Protection of Industrial Property, irrespective of the legal status of the parties. According to the European Bank for Reconstruction and Development’s 2015 Morocco Commercial Law Assessment Report , Royal Decree No. 1-97-65 (1997) established commercial court jurisdiction over commercial cases including insolvency. Although this led to some improvement in the handling of commercial disputes, the lack of training for judges on general commercial matters remains a key challenge to effective commercial dispute resolution in the country. In general, litigation procedures are time consuming and resource-intensive, and there is no legal requirement with respect to case publishing. Disputes may be brought before one of eight Commercial Courts located in Morocco’s main cities and one of three Commercial Courts of Appeal located in Casablanca, Fes, and Marrakech. There are other special courts such as the Military and Administrative Courts. Title VII of the Constitution provides that the judiciary shall be independent from the legislative and executive branches of government. The 2011 Constitution also authorized the creation of the Supreme Judicial Council, headed by the King, which has the authority to hire, dismiss, and promote judges. Enforcement actions are appealable at the Courts of Appeal, which hear appeals against decisions from the court of first instance.

The principal source of investment legislation in Morocco is Law No. 18-95 that established the 1995 Investment Charter. An updated Investment charter is under development and is expected to go into effect in 2022 Morocco’s CRIs and AMDIE provide users with investment-related information on laws and regulations, both general and specific to various industry sectors and geographic jurisdictions along with procedural information, calls for tenders, and additional resources for business creation. Each CRI hosts a website that is meant to act as an entry point to their “one-stop-shop” services that guide investors through the investment process. These websites have improved significantly and are regularly updated.

Morocco’s Competition Law No. 06-99 on Free Pricing and Competition outlines the authority of the  Competition Council   as an independent executive body with investigatory powers. Together with the INPPLC, the Competition Council is one of the main actors charged with improving public governance and advocating for further market liberalization. Law No. 20-13, adopted on August 7, 2014, amended the powers of the Competition Council to bring them in line with the 2011 Constitution. The Competition Council’s responsibilities include making decisions on anti-competition practices and controlling concentrations, with powers of investigation and sanction; providing opinions in official consultations by government authorities; and publishing reviews and studies on the state of competition. In January 2022, the Competition Council published a legal compliance guide , in partnership with the Moroccan Employers Association, to provide additional guidance for companies and professional organizations in establishing a competition law compliance program. In February 2022, Tangier-based Moroccan Association of Transport and Logistics (AMTL), a labor union, called on transport professionals to raise transport fees by 20 percent, citing the rise in diesel prices. Soon after, Morocco’s Competition Council announced an investigation. Under Morocco’s liberal market laws, prices are determined according to offer and demand principles, and no single entity holds the right to fix market prices. At the same time that the AMTL issued the memo, Morocco’s government stepped into open dialogue with labor unions, causing the AMTL to retract their memo.

Following reported mishandling of an investigation into the alleged collusion by oil distribution companies in 2020, King Mohammed VI convened an ad hoc committee to investigate the Competition Council’s dysfunctions. In March 2021, the king appointed a new council president, and parliament adopted a new bill strengthening the Competition Council by improving its legal framework and increasing transparency.

Expropriation may only occur in the public interest for public use by a state entity, although in the past, private entities that are public service “concessionaires,” mixed economy companies, or general interest companies have also been granted expropriation rights. Article 3 of Law No. 7-81 (May 1982) on expropriation, the associated Royal Decree of May 6, 1982, and Decree No. 2-82-328 of April 16, 1983, regulate government authority to expropriate property. The process of expropriation has two phases: in the administrative phase, the State declares public interest in expropriating specific land and verifies ownership, titles, and appraised value of the land. If the State and owner can come to agreement on the value, the expropriation is complete. If the owner appeals, the judicial phase begins, whereby the property is taken, a judge oversees the transfer of the property, and payment compensation is made to the owner based on the judgment. The U.S. Mission is not aware of any recent, confirmed instances of private property being expropriated for other than public purposes (eminent domain), or in a manner that is discriminatory or not in accordance with established principles of international law.

ICSID Convention and New York Convention

Morocco is a member of the International Center for Settlement of Investment Disputes (ICSID) and signed its convention in June 1967. Morocco is a party to the New York Convention of 1958 on the Recognition and Enforcement of Foreign Arbitral Awards. Law No. 08-05 provides for enforcement of awards made under these conventions.

Investor-State Dispute Settlement

Morocco is signatory to over 70 bilateral treaties recognizing binding international arbitration of trade disputes, including one with the United States. Law No. 08-05 established a system of conventional arbitration and mediation, while allowing parties to apply the Code of Civil Procedure in their dispute resolution. Foreign investors commonly rely on international arbitration to resolve contractual disputes. Commercial courts recognize and enforce foreign arbitration awards. Generally, investor rights are backed by a transparent, impartial procedure for dispute settlement. There have been no claims brought by foreign investors under the investment chapter of the U.S.-Morocco Free Trade Agreement since it came into effect in 2006. The U.S. Mission is not aware of any investment disputes over the last year involving U.S. investors.

Morocco officially recognizes foreign arbitration awards issued against the government. Domestic arbitration awards are also enforceable subject to an enforcement order issued by the President of the Commercial Court, who verifies that no elements of the award violate public order or the defense rights of the parties. As Morocco is a member of the New York Convention, international awards are also enforceable in accordance with the provisions of the convention. Morocco is also a member of the Washington Convention for the International Centre for Settlement of Investment Disputes (ICSID), and as such agrees to enforce and uphold ICSID arbitral awards. The U.S. Mission is not aware of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

Morocco has a national commission on Alternative Dispute Resolution with a mandate to regulate mediation training centers and develop mediator certification systems. Morocco seeks to position itself as a regional center for arbitration in Africa, but the capacity of local courts remains a limiting factor. To remedy this shortcoming, the Moroccan government established the Center of Arbitration and Mediation in Rabat, and the Casablanca Finance City Authority established the Casablanca International Mediation and Arbitration Center, which now see a majority of investment disputes. The U.S. Mission is aware of several investment and commercial disputes and has advocated on behalf of U.S. companies to resolve the disputes.

Morocco’s bankruptcy law is based on French law. Commercial courts have jurisdiction over all cases related to insolvency, as set forth in Royal Decree No. 1-97-65 (1997). The Commercial Court in the debtor’s place of business holds jurisdiction in insolvency cases. The law gives secured debtors priority claim on assets and proceeds over unsecured debtors, who in turn have priority over equity shareholders. Bankruptcy is not criminalized. The World Bank’s 2020 Doing Business report ranked Morocco 73 out of 190 economies in “Resolving Insolvency”. The GOM revised the national insolvency code in March of 2018, but further reform is needed.

Investors face numerous requirements for permits, approvals, and clearances, which often take substantial time and effort to obtain.  The difficulty of navigating the system creates vulnerabilities to corruption, a risk that is aggravated by relatively low wages earned by administrative clerks.  Labor, health, safety, and environmental regulations may go unenforced or are selectively enforced.  In some cases, civil servants have reportedly threatened to enforce antiquated regulations that remain on the books in order to obtain favors or bribes.

The private sector, through CTA, maintains an ongoing dialogue with the GRM, holding quarterly meetings with the Prime Minister and an annual meeting with the President. On behalf of its members and other business associations, CTA provides feedback to the GRM on laws and regulations that impact the business environment. However, because of its exclusive role in communicating with the GRM on behalf of the private sector, some businesses have expressed concerns that not all voices are heard. In addition, some businesses have argued that CTA is not an effective advocate given its political affiliation with long-time ruling party Frelimo. Numerous other business associations exist, including a newly accredited American Chamber of Commerce (AmCham), formed in 2019 to represent the interests of the U.S. business community in Mozambique.

The GRM requires businesses in certain sectors to apply for an Environmental License, via the Environmental Impact Evaluation Process, regulated under the Environmental Impact Assessment Regulation (no. 54/2015). The Ministry of Land and Environment and its subordinate institutions and directorates issue licenses following the Environmental Impact Evaluation Process, which entails creation of an Environmental and Social Management Plan (ESMP).

Draft bills are made available for public comment through business associations or in public meetings.  The GRM publishes changes to laws and regulations in the National Gazette, which is available electronically.  Public comments are usually limited to input from a few private sector organizations, such as CTA.  There have been complaints of short comment periods and that comments are not properly reflected in the National Gazette.

Overall fiscal transparency in Mozambique is improving in the wake of the “hidden debts” scandal, which broke in 2016. GRM reporting on public debts has improved, with SOE debt now included in the national budget. However, publicly available budget documents still do not provide a complete picture of the GRM’s revenue streams, particularly with regard to SOE earnings, which generally do not have publicly available audited financial statements. The GRM also maintains off-budget accounts not subject to adequate audit or oversight.  For published portions of the budget that were relatively complete, the information provided was generally reliable. The March 2022 IMF agreement contains reform measures designed to improve the GRM’s public financial management.

Mozambique is a member of the Southern African Development Community (SADC).  In 2016, Mozambique, Botswana, Lesotho, Namibia, South Africa, and Eswatini (then-Swaziland), signed an Economic Partnership Agreement (EPA) with the European Union.  Mozambique exports aluminum under this EPA agreement. The GRM ratified the World Trade Organization (WTO) Trade Facilitation Agreement (TFA) in July 2016 and notified the WTO in January 2017.  The GRM established a National Trade Facilitation Committee to coordinate the implementation of the TFA.

Mozambique is a member of the WTO and generally notifies the WTO Committee on Technical Barriers to Trade (TBT) of all draft technical regulations. The National Institute of Norms and Quality (Instituto Nacional de Normalização e Qualidade, INNOQ) falls under the supervision of the Ministry of Industry and Commerce and is the WTO enquiry point for TBT-related issues. INNOQ is a member of the International Standards Organization (ISO) and carries the mandate to issue ISO 9001 certificates. According to the WTO’s 2017 Trade Policy Review of Mozambique , no specific trade concerns have been raised about Mozambique’s TBT measures in the WTO TBT Committee.

Like most countries in Africa, Mozambique generally uses standards based on existing ISO and International Electrotechnical Commission (IEC) standards for most products.

Mozambique’s legal system is based on Portuguese civil law and customary law.  The GRM updated its Commercial Code in 2005 and 2018.

In recent years, Mozambique’s legal system has shown a degree of independence. In August 2021, the Maputo City Judicial Court began proceedings for 19 defendants in the “hidden debts” trial, who were accused of illicitly acquiring over $2 billion in state-backed loans under the guise of developing a tuna fishing fleet and coastal protection system. The court completed hearings in March 2022, and anticipated verdicts to be announced on August 1, 2022. It is unclear whether Mozambique’s General Prosecutor will pursue further indictments. The former Finance Minister responsible for signing the illicit state-backed loan guarantees in the scandal remains under custody in South Africa, pending possible extradition to the United States. The General Prosecutor’s office has also pursued suspects in separate corruption-related cases.

The 2009 Code of Fiscal Benefits (no. 4/2009) and 2009 Decree (no. 56/2009) form the legal basis for foreign direct investment in Mozambique. Operating within these regulations, APIEX analyzes the fiscal and customs incentives available for a particular investment.  Investors must establish foreign business representation and acquire a commercial representation license. During project development, investors must document their community consultation efforts related to the project.  If the investment requires the use of land, the investor must present, among other documents, a topographic plan or an outline of the site where the project will be developed.

If the investment involves an area under 1,000 hectares and the investment is under approximately $25 million, the governor of the province where it will be located can approve the investment.  While APIEX has the authority to approve any project up to $40 million, the Minister of Economy and Finance (MEF) must approve national or foreign investments between $40 million and $225 million.  If the investment occupies an area of 10,000 hectares, or an area greater than 100,000 hectares for a forestry concession, or it amounts to more than $225 million, the Council of Ministers must approve it. APIEX  provides additional information regarding Mozambique’s investment requirements.

The 2013 “Competition Law” (no. 10/2013), established a modern legal framework for competition and created the Competition Regulatory Authority, inspired by the Portuguese competition enforcement system.  Violating the prohibitions contained in the Competition Law (either by entering into an illegal agreement or practice or by implementing a concentration subject to mandatory filing) could result in a fine of up to five percent of the turnover of the company in the previous year.  Competition Regulatory Authority decisions may be appealed in the Judicial Court in Maputo for cases leading to fines or other sanctions, or to the Administrative Court for merger control procedures.

There have been no significant cases of nationalization since the adoption of the 1990 Constitution. Mozambican law holds that “when deemed absolutely necessary for weighty reasons of national interest or public health and order, the nationalization or expropriation of goods and rights shall result in the owner being entitled to just and equitable compensation.”

The GRM adopted a comprehensive legal regime for bankruptcy in 2013 known as the “Insolvency Law” (no. 1/2013). This law streamlines the bankruptcy process, sets the rules for business recovery, facilitates potential recovery for struggling businesses, and establishes legal methods to declare bankruptcy. Under the law, creditors can approve a proposed rescue plan, request that a debtor be declared insolvent, and challenge suspicious transactions.

Namibia’s legal, regulatory, and accounting systems are relatively transparent and consistent with international norms. Post is not aware of any government requirements for companies’ environmental, social, and governance (ESG) disclosure to facilitate investments.

Draft bills, proposed legislation, and draft regulations are normally not available for public comment and are not required to be, although there are consultations on such documents throughout the government. Depending on the topic, bills are customarily drafted within the relevant ministry with stakeholder or public consultation and then presented to the parliament for debate. Comments on draft legislation and regulations may also be solicited through public meetings or targeted outreach to stakeholder groups. Such comments are also not required to be made public and generally are not. There is no formal process of appeal or reconsideration of published regulations. Approved legislation and regulations are publicly available and published in the Government Gazette, the official journal of the government of Namibia. The Government Gazette  is digitalized and public.

Public finances are generally transparent, with the annual budget and mid-term budget reviews published on the Ministry of Finance’s website and in the Government Gazette. The Ministry of Finance has begun in the past few years holding consultations with interest groups during the budget preparation process. The Bank of Namibia publishes the Government of Namibia’s debt position – including explicit and contingent liabilities – in its annual reports and quarterly bulletins.

The national coordinating bureau for standards is the Namibian Standards Institution. Namibia is also a member of the International Organization for Standardization. As a member of SACU and SADC, Namibia’s national regulations conform to both regional agreements. Namibia is a member of the World Trade Organization (WTO) and notifies the Committee on Technical Barriers to Trade on draft technical regulations.

The Namibian court system is independent and is widely perceived to be free from government interference. Namibia’s legal system, based on Roman Dutch law, is similar to that of South Africa. The system provides effective means to enforce property and contractual rights, but the speed of justice is generally very slow due to a backlog of cases across the judicial spectrum. Regulation and enforcement actions are appealable. The Minister of Justice may introduce legislation in Parliament in 2022 that would permit plea bargains to expedite cases and reduce backlog to advance rule of law in Namibia.

The Foreign Investment Act (FIA) provides for liberal foreign investment conditions and equal treatment of foreign and local investors. With limited exceptions, all sectors of the economy are open to foreign investment. There is no local participation requirement in the FIA, but the Namibian government is increasingly emphasizing the need for investors to partner with Namibian-owned companies and/or to have a majority of local employees in order to operate in the country.

The FIA reiterates the protection of investment and property provided for in the Namibian Constitution. It also provides for equal treatment of foreign investors and Namibian firms, including the possibility of fair compensation in the event of expropriation, international arbitration of disputes between investors and the government, the right to remit profits, and access to foreign exchange.

The Business and Intellectual Property Agency (BIPA) acts as a one-stop-shop for business registrations and provides information on relevant laws, rules, procedures, and reporting requirement for investors. More information is available online at: http://www.bipa.na/ .

In August 2016, Namibia promulgated and gazetted the Namibia Investment Promotion Act (NIPA). However, the Minister of Industrialization and Trade pulled back the legislation in November 2021 due to substantive legal concerns raised by the private sector and the NIPBD. The revised Namibia Investment Promotion Act (NIPA) will replace the FIA once revisions are complete and approved by Parliament. The NIPA provides for transparent admission procedures for investors, the reservation of certain categories of business and sectors, and the establishment of an integrated client service facility or one-stop-shop for investors within the NIPDB.

Established in 2009, the Namibia Competition Commission (NaCC) is the principal institution that promotes and safeguards fair competition in Namibia. The Commission is tasked with: providing consumers with competitive prices and product choices; promoting employment and advancing the social economic welfare of Namibians; expanding opportunities for Namibian participation in world markets while recognizing the role of foreign competition in Namibia; ensuring that small businesses have an equitable opportunity to participate in the Namibian economy; and promoting a greater spread of ownership, particularly increasing ownership stakes of historically disadvantaged persons. The NaCC has the mandate to review any potential mergers and acquisitions that might limit the competitive landscape or adversely impact the Namibian economy. For example, in August 2020, the NaCC blocked the sale of Schwenk Namibia’s stake in Ohorongo Cement to West China Cement Ltd. over fears the deal could lead to anti-competitive behavior in the local cement market.  In the ruling, the competition watchdog said that, if the USD 870 million deal was allowed to proceed, it would stifle competition and lead to possible collusion and price-fixing.  The Minister of Industrialization and Trade is the final arbiter on merger decisions and may accept or reject a NaCC decision. Any investor can file an appeal with the ministry, though no formal process for doing so has been established.

The Namibian Constitution enshrines the right to private property but allows the state to expropriate property in the public interest subject to the payment of just compensation. The Agricultural (Commercial) Land Reform Act 6 of 1995 (ACLRA) is the primary legal mechanism allowing for expropriation, but the government has adhered to a “willing seller/willing buyer” policy as part of land reform programs. In 2004, the government announced it would proceed with land expropriations after much criticism about the slow pace of land reform. To date, the government has only expropriated farms from a small number of owners, and in each instance ultimately either compensated the owner or returned the land. In March 2008, Namibia’s High Court ruled against the government in Gunter Kessl v. Ministry of Lands and Resettlement – the sole instance in which expropriation was legally challenged – and in doing so established a strong legal precedent protecting individual land rights. Non-binding resolutions adopted at the Second National Land Conference in 2018 resolved to abolish the “willing seller/willing buyer” policy and bar foreign ownership of agricultural land; however, no legislation formalizing these resolutions has been proposed. The Namibian Constitution makes pragmatic provision for different types of economic activity and a “mixed economy” (Article 98), accepts the importance of foreign investment (Article 99), and enshrines the principle that the ownership of natural resources is vested in the Namibian state (Article 100) and the right to property (Article 16). Section 11 of the FIA reiterates the commitment to market compensation in the case of expropriation, which is also codified in Article 16 of the Constitution. Holders of a Certificate of Status Investment must be compensated in foreign currency and can opt for international arbitration if any disputes arise.

The Companies Act of 1973, amended in 2004, governs company and corporate liquidations while the Insolvency Act 12 of 1936, as amended by the Insolvency Amendment Act of 2005, governs insolvent individuals and their estates. The Insolvency Act details sequestration procedures and the rights of creditors. Through the law, all debtors (whether foreign or domestic) may file for both liquidation and reorganization, and a creditor may file for both liquidation and reorganization. However, as reorganization (judicial management) is rarely successful in Namibia, the most likely insolvency procedure is liquidation. International credit monitoring agency TransUnion is a licensed credit bureau in Namibia.

The GoN has many laws, policies, and regulations that look good on paper, but are often not fully and consistently enforced.  Frequent government changes and staff rotations within the civil service result in officials who are often unclear on applicable laws and policies or interpret them differently than their predecessors.  Many foreign investors note that Nepal’s regulatory system is based largely on personal relationships with government officials, rather than systematic and routine processes.  Legal, regulatory, and accounting systems are not transparent and are not consistent with international norms.  The World Bank gives Nepal a score of 1.75 (on a scale of one to five) on its “Global Indicators of Regulatory Governance” index https://rulemaking.worldbank.org/en/data/explorecountries/nepal, and notes that ministries in Nepal do not routinely create lists of “anticipated regulatory changes or proposals” and do not have the “legal obligation to publish the text of proposed regulations before their enactment.”

Historically, rule-making and regulatory authority resided almost exclusively with the central government in Kathmandu.  Nepal’s 2015 Constitution outlines a three-tiered federalist model.  Following elections in 2017, seven provincial governments and 753 local government units were established.  Foreign businesses can expect to continue to interact with bureaucrats at the central government level in the near term, as national regulations remain the most relevant for foreign businesses.  However, this could change over time as provincial governments become more established.

Traditionally, once acts are drafted and passed by Parliament, it has been incumbent upon the related government agencies and ministries to draft regulations to enforce the acts.  Regulations are passed by the cabinet and do not need parliamentary approval.  Nepal still lacks an established mechanism or system for the review of regulations based on scientific or data-driven assessments, or for conducting quantitative analyses for such purposes.  The World Bank notes that the GoN is not required by law to solicit comments on proposed regulations, nor do ministries or regulatory agencies report on the results of the consultation on proposed regulations.  Post is not aware of any informal regulatory processes that are managed by nongovernmental organizations or private sector associations.

Legal, regulatory, and accounting systems are neither fully transparent nor consistent with international norms.  Though auditing is mandatory, professional accounting standards are low, and practitioners may be poorly trained.  As a result, published financial reports can be unreliable, and investors often rely instead on businesses reputations unless companies voluntarily use international accounting standards.

Publicly listed companies in Nepal follow the 2013 Nepal Financial Reporting Standards (NFRSs), which were prepared on the basis of the International Financial Reporting Standards (IFRSs) 2012, developed by the IFRS Foundation and their standard-setting body, the International Accounting Standards Board.  Audited reports of publicly listed companies are usually made available.

Draft bills or regulations are sometimes made available for public comment, although there is no legal obligation to do so.  The government agency that drafts the bill is responsible for undertaking a public consultation process with key stakeholders by issuing federal notices for comments and recommendations, although it is unclear in practice how many government agencies actually do so.  Additionally, all parliamentarians are given copies of the draft bills to share with their constituencies.  This applies to all draft laws, regulations, and policies.  Parliamentary rules, however, require that draft amendments to bills be proposed only within 72 hours of a bill’s introduction, giving minimal time for lawmakers, constituents, or stakeholders to submit considered feedback.  In practice, post’s observation has been that there is no clear timeline for the process of creating and passing bills, including the time period provided for public or stakeholder consultation.

Generally, the government agency that drafted the bill, legislation, policy, or regulation posts the actual draft (in Nepali language) online.  Once approved, the Department of Printing, an office that is part of the Ministry of Communications and Information Technology, posts all acts online.  Regulatory actions and summaries of these actions are available at the Office of the Auditor General and the Ministry of Finance.  Both of these government agencies post periodic reports on the regulatory actions taken against agencies violating laws, rules, and regulations.  Such summaries and reports are available online in Nepali.

Individual ministries are responsible for enforcement of regulations under their purview.  The enforcement process is legally reviewable, making the agencies publicly accountable.  There are several government entities, including the Parliamentary Accounts Committee, the Office of the Auditor General, and the Commission for the Investigation of Abuse of Authority (CIAA) that oversee the government’s administrative and regulatory processes.  Post is not aware of any regulatory reform efforts.

Nepal’s budget and information on debt obligations are widely and easily accessible to the general public.  The annual budget is substantially complete and considered generally reliable.  Nepal’s supreme audit institution reviews the government’s accounts, and its reports are publicly available.

Nepal is one of eight members of the South Asian Association for Regional Cooperation (SAARC), an intergovernmental organization and geopolitical union of nations in South Asia including:  Afghanistan, Bangladesh, Bhutan, India, Maldives, Nepal, Pakistan, and Sri Lanka.  Under SAARC, Nepal is also a member of the South Asian Free Trade Area (SAFTA) which came into force on January 1, 2006 with the goal of creating a duty-free trade regime among SAARC member countries.  According to SAFTA rules, member countries were supposed to reduce formal tariff rates to zero by 2016.  However, tariff barriers remain in place for hundreds of “sensitive” goods produced by various SAARC member countries that do not qualify for duty-free status.

Nepal is also a member of the Bay of Bengal Initiative for Multi-Sectoral Technical and Economic Cooperation (BIMSTEC), an international organization of seven South Asian and Southeast Asian nations:  Bangladesh, India, Myanmar, Sri Lanka, Thailand, Bhutan, and Nepal.

Bangladesh, Bhutan, India, and Nepal – known collectively as BBIN – are working together to develop a platform for sub-regional cooperation in such areas as water resources management, power connectivity, transportation, and infrastructure development.  The four BBIN nations agreed on a motor vehicle agreement (MVA – both cargo and passengers) in 2015.  In early 2018, Bangladesh, India, and Nepal also agreed on operating procedures for the movement of passenger vehicles, and in early 2020, the same three countries met to draft a memorandum of understanding to implement the MVA, without obligation to Bhutan.

Nepal’s regulatory system generally relies on international norms and standards developed by the United Nations, World Bank, World Trade Organization (WTO), and other international organizations and regulatory agencies.

Nepal joined the WTO in March 2004.  According to its WTO accession commitments, the GoN agreed to provide notice of all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).  However, GoN officials are unable to confirm whether this procedure is followed consistently.

Nepal ratified the WTO’s Trade Facilitation Agreement (TFA) in January 2017.  As a least developed country (LDC), Nepal could benefit from additional technical assistance from WTO members through the TFA Facility.  A 2017 Asia Development Bank report noted, “Nepal has been making progress in undertaking trade facilitation reforms over the years, particularly those related to the customs.”  The WTO’s December 2018 policy review (https://www.wto.org/english/tratop_e/tpr_e/tp481_crc_e.htm) noted Nepal’s efforts to diversify its narrow production and export base and encouraged Nepal to pursue further economic reform, including through its National Trade Integration Strategy (https://www.oecd.org/aidfortrade/countryprofiles/dtis/Napal-DTIS-2016.pdf) as well as address its supply side constraints, most notably high transit and transportation costs.  According to the TFA Facility’s website (http://www.tfafacility.org), Nepal has submitted provisions for all three categories, a key step for implementing TFA Category A, B, and C requisites.

Nepal’s court system is based on common law and its legal system is generally categorized under civil and criminal offences and laws.  Contract law is codified.  In theory, contracts are automatically enforced, and a breach of contract can be challenged in a court of law.  In practice, enforcement of contracts is weak. Nepal’s contracts are guided by the Contract Act of 2000.  Nepal does not have a commercial code.  All civil courts are authorized to hear commercial complaints.  A ‘commercial bench’ has been established at the High Court, but judges who preside on this bench are the same judges dealing with civil and criminal cases as well.

The judicial system is independent of the executive branch.  Regulations or enforcement actions are appealable, and they are adjudicated in the national court system.  In general, the judicial process is procedurally competent, fair, and reliable.  In some isolated or high-profile cases, however, court judgments have come under criticism for alleged political interference favoring particular individuals and groups.  There remains widespread public perception that bribery and judicial conflicts of interest affect some judicial outcomes.

In March 2019, three laws directly affecting foreign investment (FITTA, PPP, and SEZ) were hurriedly revised and passed by Parliament ahead of the 2019 Investment Summit.  This left little time for effective stakeholder consultations and transparency.  While welcome provisions were included in the FITTA (a promised single window service center and a streamlined approval process, for example), the regulations to implement the reforms were only completed in January 2021 and observers remain skeptical given the GoN’s record of making lofty announcements without delivering on them in practice.  As drafted, even these pieces of reform legislation retain various institutional and procedural impediments to smooth businesses practices which will dissuade all but the most risk-tolerant investors.

The Competition Promotion and Market Protection Board, comprised of GoN officials from various ministries and chaired by the Minister of Industry, Commerce, and Supplies, is responsible for reviewing competition-related concerns.  Post is not aware of any competition cases that have involved foreign investors.  MOICS’ Department of Supplies Management has a mandate to crack down on cartels and protect consumers.  In the previous two years, it has played a more active role in cracking down on businesses—ranging from retailers to healthcare facilities to private schools—for alleged price-gouging.  However, private sector representatives have said that this department is interfering with the free market and is being used by businesses with political connections to target competitors, rather than as a mechanism to protect consumers.

Nepal’s private sector is dominated by cartels and syndicates—often under the banner of business associations – which are often successful in limiting competition from new market entrants in multiple sectors.  In 2018, the GoN issued new permits for transportation companies, and the Minister of Physical Infrastructure and Transport called the cartels “a curse to the nation.”  Subsequently, however, the GoN has taken few additional steps to crack down on cartels.

The Industrial Enterprise Act of 2016 states that “no industry shall be nationalized.”  To date, there have been no cases of nationalization in Nepal, nor are there any official policies that suggest expropriation should be a concern for prospective investors.  However, companies can be sealed or confiscated if they do not pay taxes in accordance with Nepali law, and bank accounts can be frozen if authorities have suspicions of money laundering or other financial crimes.  Nepal does not have a history of expropriations.  There have been no government actions or shifts in government policy that indicate expropriations will become more likely in the foreseeable future.

There is no single specific act in Nepal that exclusively covers bankruptcy.  The 2006 Insolvency Act provides guidelines for insolvency proceedings in Nepal and specifies the conditions under which such proceedings can occur.  Additionally, the General Code of 1963 covers bankruptcy-related issues.  Creditors, shareholders, or debenture holders can initiate insolvency proceedings against a company by filing a petition at the court.

If a company is solvent, its liquidation is covered by the Company Act of 2006.  If the company is insolvent and unable to pay its liabilities, or if its liabilities exceed its assets, then liquidation is covered by the Insolvency Act of 2006.  Under the Company Act, the order of claimant priority is as follows:  1) government revenue; 2) creditors; and 3) shareholders.  Under the Insolvency Act, the government is equal to all other unsecured creditors.  Monetary judgments are made in local currency.  Firms and entrepreneurs who have declared bankruptcy are blacklisted from receiving loans for 10 years.

New Zealand laws governing competition are transparent, non-discriminatory, and consistent with international norms. The country ranks high on the World Bank’s Global Indicators of Regulatory Governance, scoring 4.25 out of a possible 5.0, but is marked down for lack of transparency at some government departments responsible for communicating regulatory plans that are in the pipeline. Draft bills and regulations, including those related to FTAs and investment law, are generally made available for public comment through a consultation process. The Treaty of Waitangi – New Zealand’s founding document that commits to protect the indigenous Māori culture and to enable Māori to live in New Zealand as Māori – is foundational to public policy in the country. Governing the Crown’s relationship with Māori, the Treaty’s impact on regulation and investment has resulted in a focus on equitable outcomes for Māori in relevant sectors. For more information on Treaty principles, please visit:

https://www.mbie.govt.nz/business-and-employment/employment-and-skills/employment-strategy/maori-employment-action-plan/te-tiriti-principles/ 

More information about regulations, including The Overseas Investment Regulatory System and a regulatory timeline can be found here: https://www.treasury.govt.nz/information-and-services/regulation 

Most standards are developed through Standards New Zealand, a business unit within MBIE. And most standards in New Zealand are set in coordination with Australia. Regulations are developed by “Order in Council,” or law made by someone other than Parliament, that give effect to the government’s decisions. Orders in Council are the main method the Government uses to put into action the decisions that need legal force, such as new or amended regulations.

MBIE is responsible for the stewardship of 16 regulatory systems covering about 140 statutes. In June 2019, MBIE released a discussion paper on the proposed IP Laws Amendment Bill, an omnibus bill that is intended to make technical amendments to the Patents Act 2013, the Trademarks Act 2002, and the Designs Act 1953 to ensure that they remain workable. In November 2019, the Regulatory Systems (Economic Development) Amendment Act 2019 passed and amended about 14 Acts including laws regarding business insolvency, takeovers, trademarks, and limited partnerships. More information about these proposed amendments can be found here: https://www.mbie.govt.nz/have-your-say/proposed-intellectual-property-laws-amendment-bill/ 

Accounting, legal, and regulatory procedures are transparent and widely available online. New Zealand accounting standards are issued by the New Zealand Accounting Standards Board. International Financial Reporting Standards (IFRS) are adopted via New Zealand equivalents, which fully adhere to IFRS. These Standards are developed by the International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB). Foreign companies whose securities are publicly traded in New Zealand are required to apply NZ IFRS, although the Registrar of Companies and the Financial Markets Authority can give exceptions in certain circumstances. For more information, please visit: https://www.ifrs.org/use-around-the-world/use-of-ifrs-standards-by-jurisdiction/view-jurisdiction/new-zealand/ 

New Zealand does not have a government-mandated Environmental, Social, and Governance (ESG) sustainability reporting framework or standard. In October 2021, the government approved legislation for a mandatory climate disclosure law that will require financial entities with assets greater than NZD 1 billion (USD 700 million) to report the expected impact of climate change on businesses, such as how they will manage climate risks.

Draft bills and regulations including those relating to FTAs and investment law, are generally made available for public comment, through a public consultation process. In a few instances there has been criticism of New Zealand governments choosing to follow a “truncated” or shortened public consultation process or adding a substantive legislative change after public consultation through the process of adding a Supplementary Order Paper to the Bill.

While regulations are not in a centralized location in a form similar to the United States Federal Register, the New Zealand government requires the major regulatory departments to publish an annual regulatory stewardship strategy.

The Regulatory Quality Team within the New Zealand Treasury is responsible for the strategic coordination of the Government’s regulatory management system. Treasury exercises stewardship over the regulatory management system to maintain and enhance the quality of government-initiated regulation. The Treasury’s responsibilities include the oversight of the performance of the regulatory management system as a whole and making recommendations on changes to government and Parliamentary systems and processes. These functions complement the Treasury’s role as the government’s primary economic and fiscal advisor. New Zealand’s major regulatory departments are the Department of Internal Affairs, IRD, MBIE, Ministry for the Environment, Ministry of Justice, the Ministry for Primary Industries, the Ministry of Transport, and the Financial Markets Authority.

In recent years, there has been a revision to the Regulatory Impact Assessment (RIA) requirements in order to help New Zealand’s regulatory framework keep up with global standards. To improve transparency in the regulatory process, RIAs are published on the Treasury’s website at the time the relevant bill is introduced to Parliament, or the regulation is published in the newspaper, or at the time of Ministerial release. An RIA provides a high-level summary of the problem being addressed, the options and their associated costs and benefits, the consultation undertaken, and the proposed arrangements for implementation and review.

In 2018, the government introduced three omnibus bills that contain amendments to legislation including economic development, employment relations, and housing: https://www.mbie.govt.nz/cross-government-functions/regulatory-stewardship/regulatory-systems-amendment-bills/ . The government’s objective with this package of legislation is to ensure that they are effective, efficient, and accord with best regulatory practice by providing a process for making continuous improvements to regulatory systems that do not warrant standalone bills. In November 2019, the Regulatory Systems (Economic Development) Amendment Act 2019 passed and amended about 14 Acts including laws regarding business insolvency, takeovers, trademarks, and limited partnerships. In June 2019, MBIE released a discussion paper on the proposed IP Laws Amendment Bill, an omnibus bill that is intended to make technical amendments to the Patents Act 2013, the Trademarks Act 2002, and the Designs Act 1953 to ensure that they remain workable.

The Resource Management Act 1991 (RMA) has drawn criticism from foreign and domestic investors as a barrier to investment in New Zealand. The RMA regulates access to natural and physical resources such as land and water. Critics contend that the resource management process mandated by the law is unpredictable, protracted, and subject to undue influence from competitors and lobby groups. In some cases, companies have been found to exploit the RMA’s objections submission process to stifle competition. Investors have raised concerns that the law is unequally applied between jurisdictions because of the lack of implementing guidelines. The Resource Management Amendment Act 2013 and the Resource Management (Simplifying and Streamlining) Amendment Act 2009 were passed to help address these concerns. In 2020, the Resource Management Act was amended under the RMA Act 2020. The objectives of the amendment were to reduce the complexity of the RMA, increase certainty, restore public participation opportunities, and improve RMA processes. For more information: https://environment.govt.nz/acts-and-regulations/acts/resource-management-amendment-act-2020/#overview-of-the-changes 

The Covid pandemic has encouraged New Zealand’s efforts to boost the digitization of government services. In 2022, the Digital Identity Program was introduced, which aims to incorporate the country’s long-term strategy for a digital public service. The Program offers a regulatory framework that sets out rules for the delivery of digital identity services. It modernizes the digital identity system by innovating how people access and share their information. And under the concept of mutual recognition, it aligns with other likeminded countries such as Australia and Canada in its provision of digital identity services. The Program also touches on free trade agreements by considering a digital trust framework that promotes privacy and security, and allows for easier electronic transacting, thereby reducing barriers in digital trade. For more information, please visit: https://www.digital.govt.nz/digital-government/programmes-and-projects/digital-identity-programme/about-the-digital-identity-programme/ 

The Government of New Zealand is generally transparent about its public finances and debt obligations. The annual budget for the government and its departments publish assumptions, and implications of explicit and contingent liabilities on estimated government revenue and spending.

In recent years, the Government of New Zealand has introduced laws to enhance regulatory coordination with Australia as part of their Single Economic Market agenda. In February 2017, the Patents (Trans-Tasman Patent Attorneys and Other Matters) Amendment Act took effect creating a single body to regulate patent attorneys in both countries. Other areas of regulatory coordination include insolvency law, financial reporting, food safety, competition policy, consumer policy and the 2013 Trans-Tasman Court Proceedings and Regulatory Enforcement Treaty, which allows the enforcement of civil judgements between both countries.

On December 1, 2020, the Privacy Act 2020 came into force, replacing the Privacy Act 1993. The Privacy Act 2020 provides the rules in New Zealand for protecting personal information and puts responsibilities on agencies and organizations about how they must go about fulfilling this statutory requirement. The Act has 13 Information Privacy Principles and requires agencies to report to the Privacy Commissioner if they have a “notifiable privacy breach.”

New Zealand is a Party to the WTO Agreement on Technical Barriers to Trade (TBT). Standards New Zealand is responsible for operating the TBT Enquiry Point on behalf of MFAT. From 2016, Standards New Zealand became a business unit within MBIE administered under the Standards and Accreditation Act 2015. Standards New Zealand establishes techniques and processes built from requirements under the Act and from the International Organization for Standardization.

New Zealand ratified the WTO Trade Facilitation Agreement (TFA) in 2015 and it entered into force in February 2017. New Zealand was already largely in compliance with the TFA which is expected to benefit New Zealand agricultural exporters and importers of perishable items to enhanced procedures for border clearances.

New Zealand’s legal system is derived from the English system and comes from a mix of common law and statute law. The judicial system is independent of the executive branch and is generally transparent and effective in enforcing property and contractual rights. The highest appeals court is a domestic Supreme Court, which replaced the Privy Council in London and began hearing cases July 1, 2004. New Zealand courts can recognize and enforce a judgment of a foreign court if the foreign court is considered to have exercised proper jurisdiction over the defendant according to private international law rules. New Zealand has well-defined and consistently applied commercial and bankruptcy laws. Arbitration is a widely used dispute resolution mechanism and is governed by the Arbitration Act of 1996, Arbitration (Foreign Agreements and Awards) Act of 1982, and the Arbitration (International Investment Disputes) Act 1979.

Legislation to modernize and consolidate laws underpinning contracts and commercial transactions came into effect in September 2017. The Contract and Commercial Law Act 2017 consolidates and repeals 12 acts that date between 1908 and 2002. The Private International Law (Choice of Law in Tort) Act, passed in December 2017, clarifies which jurisdiction’s law is applicable in actions of tort and abolishes certain common law rules, and establishes the general rule that the applicable law will be the law of the country in which the events constituting the tort in question occur.

Overseas investments in New Zealand assets are screened only if they are defined as sensitive by the Overseas Investment Office (OIO). The OIO, a dedicated unit located within Land Information New Zealand (LINZ), administers the Overseas Investment Act, which sets out the criteria for assessing applications for foreign investment. The government ministers for finance, land information, and primary industries are responsible for assessing OIO recommendations and can choose to override OIO recommendations on approved applications. Ministers’ decisions on OIO applications can be appealed by the applicant in the New Zealand High Court. Ministers have the power to confer a discretionary exemption from the requirement for a prospective investor to seek OIO consent under certain circumstances. For more see: http://www.linz.govt.nz/regulatory/overseas-investment .

The OIO monitors foreign investments after approval. All consents are granted with reporting conditions, which are generally standard in nature. Investors must report regularly on their compliance with the terms of the consent. Offenses include: defeating, evading, or circumventing the OIO Act; failure to comply with notices, requirements, or conditions; and making false or misleading statements or omissions. If an offense has been committed under the Act, the High Court has the power to impose penalties, including monetary fines, ordering compliance, and ordering the disposal of the investor’s New Zealand holdings.

In 2017 the Government announced a reform of the Overseas Investment Act shortly after being elected and has already implemented Phase One reforms with strengthened requirements for screening foreign investment in residential houses, building residential housing developments, and farmland acreage. Screening for investments in forestry were eased slightly to help meet the Government’s One Billion Tree policy. Phase Two began in 2019 when the Government consulted on and released details for the introduction of a National Interest test to the screening process to protect New Zealand assets deemed sensitive and “high-risk.” In 2020, in response to the economic impact of COVID-19, the Government agreed to further changes to the OIA. Measures were introduced to reduce the regulatory burden of the screening process for inward foreign investment and implementations from Phase Two reforms were delayed. In February 2022, the private sector called on the OIO to remove its “Forestry Pathway” exemption due to over-investment in the sector by foreign investors who are reportedly sidelining farmland for forestry, a situation that is also impacting New Zealand’s access to domestic carbon credits.

In February 2020 New Zealand reported its first conviction under the Overseas Investment Act. The offender was charged for obstructing an OIO investigation that was initiated because he had not obtained OIO consent for his property purchase and for later submitting a fraudulent application. A second criminal conviction was reported in June 2020 after the offender was found to have submitted a fraudulent loan agreement.

The Land Information New Zealand (LINZ) website reports on enforcement actions taken against foreign investors, including the number of compliance letters issued, the number of warnings and their circumstances, referrals to professional conduct body in relation to an OIO breach, and disposal of investments. For more see: https://www.linz.govt.nz/overseas-investment/enforcement/enforcement-action-taken .

The Commerce Act 1986 prohibits contracts, arrangements, or understandings that have the purpose, or effect, of substantially lessening competition in a market, unless authorized by the Commerce Commission, an independent Crown entity. Before granting such authorization, the Commerce Commission must be satisfied that the public benefit would outweigh the reduction of competition. The Commerce Commission has legislative power to deny an application for a merger or takeover if it would result in the new company gaining a dominant position in the New Zealand market. The Commerce Commission also enforces certain pieces of legislation that, through regulation, aim to provide the benefits of competition in markets with certain natural monopolies, such as the dairy, electricity, gas, airports, and telecommunications industries.

The Dairy Industry Restructuring Act of 2001 (DIR) established dairy co-operative Fonterra Co-operative Group Limited (Fonterra).  The DIR is designed to manage Fonterra’s dominant position in the domestic dairy market, until sufficient competition has emerged. A review by the Commerce Commission in 2016 found competition insufficient, but the findings from a subsequent review in 2018 resulted in the introduction of the DIR Amendment Bill (No 3) which passed its first reading in August 2019 and was finalized and passed on August 6, 2020.

This amendment aims to ease the requirement that Fonterra accept all milk from new suppliers, allowing the cooperative the option to refuse milk if it does not meet environmental standards or if it comes from newly converted dairy farms.  The bill will also limit Fonterra’s discretion in calculating the base milk price. It also requires Fonterra’s dairy companies to enable supplying shareholders to transfer their shares to share milkers by agreement.

The Commerce Commission is also charged with monitoring competition in the telecommunications sector and motor fuel market. It has a regulatory role to promote competition within the electricity industry, which has natural monopolies in the transmission and distribution businesses. In March 2020, the Commission completed a project that set a default to determine price caps that will apply to the 17 electricity distributors in New Zealand from April 2020 to March 2025.

The Commerce (Criminalization of Cartels) Amendment Act was passed in April 2019 to align New Zealand law with other jurisdictions – particularly Australia – by criminalizing cartel behavior. The Commerce Commission has international cooperation arrangements with Australia since 2013 and Canada since 2016, to allow the sharing of compulsorily acquired information, and provide investigative assistance. The arrangements help effective enforcement of both competition and consumer law. In May 2020, the Commerce Commission issued guidance easing restrictions on businesses to collaborate in order to ensure the provision of essential goods and services to New Zealand consumers during the COVID-19 pandemic.

In January 2019, the Government announced proposed amendments to section 36 of the Commerce Act, which relates to the misuse of market power. The government is seeking consultation on repealing sections of the Commerce Act that shield some intellectual property arrangements from competition law, to prevent dominant firms misusing market power by enforcing their patent rights in a way they would not do if there were a more competitive market. It also seeks to strengthen laws and enforcement powers against the misuse of market power by aligning it with Australia and other developed economies, particularly because New Zealand competition law currently does not prohibit dominant firms from engaging in conduct with an anti-competitive effect. Section 36 of the Act only prohibits conduct with certain anti-competitive purposes.

Expropriation is generally not an issue in New Zealand, and there are no outstanding cases.

The government’s KiwiBuild program aims to build 100,000 affordable homes by 2028, with half being in Auckland. The NZD 3.8 billion (USD 2.7 billion) Housing Acceleration Fund also targets the national housing shortage with an infrastructure fund of public and private developments. Recent and legacy legislation has made it easier for the government and developers to acquire and develop land, particularly in high-density urban areas.

Under the Public Works Act 1981, the New Zealand government has the ability to force landowners to sell in order to facilitate public works projects. There is little public dissent over the issue; New Zealanders are generally satisfied with the Act’s provisions for fair market value compensation, although there have been high-profile disputes over sacred Māori land that have been litigated in court. In August 2020, the Urban Development Act (UDA) was passed into law. The Act established powers for Kainga Ora, a newly created Crown Agency that provides rental housing for families in need and facilitates urban development through residential building projects. Under the UDA, compulsory acquisition powers were created for Kainga Ora, who can theoretically make a forced acquisition of residential land after meeting critical thresholds, such as the establishment of a Special Development Project process that has government oversight. In December 2021, the Resource Management Act was amended, weakening the consent process required in order to build residential developments in medium- to high-density urban areas. While the aim of the Act was to urgently address the housing shortage, for which there is bipartisan agreement, there was some concern that the consultation process was overly swift. Overall, the thrust of all three pieces of legislation is to support needed development. The most recent legislation makes this process easier for residential development. To date, there have been no cases involving compulsory acquisition of residential property, nor has the issue been of great concern.

The lack of precedent for due process in the treatment of residents affected by liquefaction of residential land caused by the Canterbury earthquake in 2011 resulted in prolonged court cases against the Government based largely on the amount of compensation offered to insured home and/or landowners and the lack of any compensation for uninsured owners. One offer made by the government to uninsured Christchurch landowners for 50 percent of the rated value of their property was deemed unlawful in the Court of Appeal in 2013. A later offer was made by the government to uninsured residents, but only for the value of their land and not their house.

In 2018, the government opted to settle with a group of uninsured home and landowners, but some objected to the compensation because it was based on 2007/08 rating valuations. There were also reports some insurance companies paid out less to policy holders than the full value of some houses if they found based on the structural characteristics of the house that it was repairable, even though the repairs would be legally prohibited if in the RRZ. LINZ currently manages Crown-owned land in the Christchurch Residential Red Zone (RRZ) and can temporarily agree short-term leases of this land under the Greater Christchurch Regeneration Act 2016. For more see: https://www.linz.govt.nz/crown-property/types-crown-property/christchurch-residential-red-zone .

Bankruptcy is addressed in the Insolvency Act 2006, the Receiverships Act 1993, and the Companies Act 1993. New Zealand bankrupts are subject to conditions on borrowing and international travel, and violations are considered offences and punishable by law. The registration system operated by the Companies Office within MBIE, is designed to enable New Zealand creditors to sue an overseas company in New Zealand, rather than forcing them to sue in the country’s home jurisdiction. An overseas company’s assets in New Zealand can be liquidated for the benefit of creditors. All registered ‘large’ overseas companies are required to file financial statements under the Companies Act of 1993. See: https://www.companiesoffice.govt.nz/companies/learn-about/overseas-companies/managing-an-overseas-company-in-new-zealand 

The government has recognized the need for more insolvency law reform beyond the 2006 Act which repealed the Insolvency Act 1967. The Regulatory Systems (Economic Development) Amendment Act which passed in November 2019 included amendments to the Insolvency Act that strengthened some regulations and assigned more powers to the Official Assignee. After the previous government established an Insolvency Working Group in 2015, MBIE published a proposed set of reforms in November 2019, based on the group’s recommendations from 2017. The current government plans to introduce an insolvency law reform bill in early 2020. The omnibus COVID-19 Response (Further Management Measures) Legislation Bill passed on May 15 included provisions to provide temporary relief for businesses facing insolvency, and exemptions for compliance, due to the COVID-19 pandemic.

The Nicaraguan government does not use transparent policies to establish clear “rules of the game.” Legal, regulatory, and accounting systems exist but implementation is opaque. The government does not foster competition on a non-discriminatory basis. The Ortega-Murillo regime maintains direct control over various sectors of the economy to enrich loyalists. Investors regularly complain that regulatory authorities are arbitrary, negligent, or slow to apply existing laws, at times in an apparent effort to favor one competitor over another.

The executive branch retains ultimate rule-making and regulatory authority. In practice, the relevant government agency is empowered to levy fines directly. In some instances, the prosecutor’s office may also enforce regulations. These actions are widely perceived to be controlled by the executive branch and are neither objective nor transparent. There have not been recent regulatory or enforcement reforms.

Prior to 2018, leading business chambers managed some informal regulatory processes. Leading business chambers filled policy voids left by inadequate government institutions and procedures, meeting with influential government officials to resolve common business issues. This model largely collapsed, however, as business chambers wanted to avoid the reputational risks of making ad hoc deals with the increasingly authoritarian Ortega-Murillo regime. There are currently few options to resolve commercial issues with the government.

There is no accountancy law in Nicaragua. International accounting standards are not a focus for most of the economy, but major businesses typically use IFRS standards or U.S. GAAP standards. The national banking authority officially requires loans to be submitted using IFRS standards.

There is no legal requirement to disclose environmental, social, or governance indicators.

Draft legislation is ostensibly made available for public comment through meetings with associations that will be affected by the proposed regulations. In practice, drafts are typically not published on official websites or made available to the public. The legislature is not required by law to give notice. The executive branch proposes most investment legislation, and the regime-controlled National Assembly rarely makes modifications. Nicaragua publishes regulatory actions in La Gaceta, the official journal of government actions, including official summaries and the full text of all legislation. La Gaceta is available online.

There are no effective oversight or enforcement mechanisms to ensure the government follows administrative processes.

Public finances and debt obligations are not transparent, with little accountability or oversight. The Central Bank has increasingly refused to publish key economic data starting in 2018, including public finances and debt obligations. The Central Bank published limited data in 2020 as a condition of funding from the International Monetary Fund.

All CAFTA-DR provisions are fully incorporated into Nicaragua’s national regulatory system. However, authorities regularly flout national regulations, and investors claim that customs practices regularly violate CAFTA-DR provisions.

Nicaragua is a signatory to the Trade Facilitation Agreement and reported in July 2018 that it had implemented 81 percent of its commitments to date; however, Nicaragua’s trade facilitation is challenged by bureaucratic inefficiency, corruption, and lack of transparency. Nicaragua is a member of the WTO and generally notifies draft technical regulations to the WTO Committee on Technical Barriers to Trade.

Nicaragua is a civil law country in which legislation is the primary source of law. The legislative process is found in Articles 140 to 143 of the Constitution. However, implementation and enforcement of these laws is neither objective nor transparent. Contracts are ostensibly legally enforced through the judicial system, but extrajudicial factors are more likely to influence rulings than the facts at issue. The legal system is weak and cumbersome. Nicaragua has a Commercial Code, but it is outdated and rarely used. There are no specialized courts.

Members of the judiciary, including those at senior levels, are widely believed to be corrupt and subject to significant political pressure and direction from the executive branch, specifically the President and Vice President. The judicial process is neither competent, fair, nor reliable. Regulations and enforcement actions are technically subject to judicial review, but appeals procedures are neither transparent nor objective.

Nicaragua has laws that relate to foreign investment, but implementation, enforcement, and interpretation are subject to corruption and political pressure. The CAFTA-DR Investment Chapter establishes a secure, predictable legal framework for U.S. investors in Central America and the Dominican Republic. The agreement provides six basic protections: 1) nondiscriminatory treatment relative to domestic investors and investors from third countries; 2) limits on performance requirements; 3) the free transfer of funds related to an investment; 4) protection from expropriation other than in conformity with customary international law; 5) a minimum standard of treatment in conformity with customary international law; and 6) the ability to hire key managerial personnel without regard to nationality. The full text of CAFTA-DR  contains additional details.

Nicaragua’s Foreign Investment Law (2000/344) defines the legal framework for foreign investment. It permits 100 percent foreign ownership in most industries. (See Limits on Foreign Control and Right to Private Ownership and Establishment for exceptions.) It also establishes national treatment for investors, guarantees foreign exchange conversion and profit repatriation, clarifies foreigners’ access to local financing, and reaffirms respect for private property.

The Ministry of Growth, Industry, and Trade’s (MIFIC) information portal  details applicable laws and regulations for trade and investment. It contains administrative procedures for investment and income generating operations such as the number of steps, contact information for relevant entities, required documents costs, processing time, and applicable laws. The site is available only in Spanish.

The mission of the Institute for the Promotion of Competition (Procompetencia) includes investigating and disciplining businesses engaged in anticompetitive practices. In practice, it has no effective power, and the Ortega-Murillo regime controls decisions regarding competition.

Nicaragua has a long history of government expropriation without due process. Considerable uncertainty remains in securing property rights (see Protection of Property Rights). Conflicting land title claims are abundant and judicial appeals are very challenging.

Since 2018, the government has cancelled the legal status of 118 NGOs, including 14 universities. The government seized six universities’ assets and is turning them into publicly administered and controlled institutions. In December 2021, the government broke diplomatic ties with Taiwan and officially recognized the People Republic of China (PRC). Subsequently, the government blocked Taiwan’s donation of its former Embassy, confiscated the property, and gave it to the PRC.

Multiple landowners have reported land invasions by government-affiliated actors since the political crisis began in 2018. Landowners were sometimes able to end these invasions through government connections or bribes. In instances where the government claimed legal right to the land, offers of compensation – if any – were calculated on cadastral value, a vast underestimate of market value. The Ortega-Murillo regime has stated on numerous occasions that it would not act to evict those who had illegally taken possession of private property.

In late 2020 and early 2021, the Government of Nicaragua disposed of real property seized from independent news outlets. The Government did not follow due process and transferred the facilities to the Ministry of Health to install health clinics.

Bankruptcy provisions are included in the Civil and Commercial Codes, but there is no tradition of bankruptcy in Nicaragua. Nicaragua’s rules on bankruptcy focus on the liquidation of business entities rather than the reorganization of debts and do not provide equitable treatment of creditors. Insolvent companies usually close without going through formal bankruptcy proceedings and set up a new entity. Creditors are effectively unprotected. Creditors typically attempt to collect as much as possible directly from the debtor to avoid an uncertain judicial process or abandon any potential claims.

The GoN possesses transparent policies and requisite laws to foster competition on a non-discriminatory basis, but does not enforce them equally, in large part due to corruption and weak governmental systems. Legal, regulatory, and accounting systems are generally transparent and consistent with international norms. The Legal Regime – related to the Investment Code, Labor Code and Commercial Acts – applies the provisions of the Organization for the Harmonization of Business Law in Africa (OHADA). It also offers free access to public procurement and with a moderate transparency in the procedures for awarding contract.

Niger does not have any regulatory processes managed by nongovernmental organizations or private sector associations. A company in Niger must be entered in the Register of Companies, must obtain a Tax Identification Number (TIN), be registered with the National Social Security Fund (CNSS), and with the National Employment Promotion Agency (ANPE). There, however, is a large informal sector that does not submit to any of the legal provisions and is not formally regulated.

Rule-making regulatory, and anti-corruption authorities exist in telecommunication, public procurement, and energy, all of which are relevant for foreign businesses, and are exercised at the national level. Law No 2015-58 established the Energy Sector Regulatory Agency, an independent administrative authority, to regulate the energy sector at the national level, but effectively only in major cities. The December 2012 law No 2012-70 created the Telecommunications and Post Office Regulatory Authority (ARTP). ARTP regulates all aspects of telecommunications operators. Legal, regulatory, and accounting systems are generally transparent and consistent with international norms. The Legal Regime – related to the Tax Code, Customs Code, Investment Code, Mining Code, Petroleum Code, Labor Code and Commercial Acts – applies the provisions of the Organization for the Harmonization of Business Law in Africa OHADA. It also offers free access to public procurement and transparency in the procedures for awarding contracts.

GoN officials have confirmed their intent to comply with international norms in its legal, regulatory, and accounting systems, but frequently fall short. Clear procedures are frequently not available. Draft bills are not always available for public comment, although some organizations, such as the Chamber of Commerce, are invited to offer suggestions during the drafting process.

The GoN encourages but does not require companies to disclose environmental, social, and governance (ESG) policies.

Niger does not have a centralized online location where key regulatory actions are published but does have a Directorate of National Archives where key regulatory actions are kept in print; this direction is under the Ministry Secretary of Government. Foreign and national investors, however, can find detailed information on administrative procedures applicable to investment at the following site: http://niger.eregulations.org/ . The site includes information on income generating operations including the number of steps, name and contact details of the entities and persons in charge of procedures, required documents and conditions, costs, processing time, and legal basis justifying the procedures.

The General Inspectorate of Administrative Governance and the Regional Directorates of Archives are in place to oversee administrative processes. Their efforts are reinforced by incentives for state employees, unannounced inspections in public administrations, and an introduction of a sign-in system and exchange meetings. No major regulatory system and/or enforcement reforms were announced in 2021.

Regulations are developed via a system of ministerial collaborations and discussions, consultation with the State Council and the Council of Ministers. This is followed by discussions in the National Assembly, approval by the Constitutional Council and finally approved by the President for publication and distribution to interested stakeholders. Based on the Constitution of 2011, the regulatory power belongs to the President and the Prime Minister to issue regulations for the national territory. Other administrative authorities also have regulatory power, such as ministers, governors, or prefects and mayors, who have the power of enforcement at the local level.

Ministries or regulatory agencies do not conduct impact assessments of proposed regulations. However, ministries or regulatory agencies solicit comments on proposed regulations from the general public through public meetings and targeted outreach to stakeholders, such as business associations or other groups. Public comments are generally not published.

Public finances and debt obligations are not sufficiently transparent. The International Monetary Fund and the European Union, however, are currently funding projects to improve financial oversight and debt transparency. The 2021 assessment indicated some progress for public information on debt obligations and the release of a bi-annual national debt report.

Niger is a part of the Economic Community of West African States (ECOWAS), a 15-member West African trade block. National policy generally adheres to ECOWAS guidelines concerning business regulations. Niger is a member of the U.N. Conference on Trade and Development’s international network of transparent investment procedures:  http://niger.eregulations.org/  (French language only).

Niger is a member of the WTO, but as a lower income member, is exempt from Trade-Related Investment Measures (TRIMs) obligations. The GoN does not notify all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT). Niger ratified a Trade Facilitation Agreement (TFA) in August 2015. The country has reported some progress on implementing the TFA requirements.

Niger’s legal system is a legacy of the French colonial system. The legal infrastructure is insufficient, making it difficult to use the courts to enforce ownership of property or contracts. While Niger’s laws protect property and commercial rights, the administration of justice can be slow and unequal.

Niger has a written commercial law that is heavily based on the Organization for the Harmonization of Business Law in Africa (OHADA). Niger has been a member of OHADA since 1995. OHADA aims to harmonize business laws in 16 African countries by adopting common rules adapted to their economies, setting up appropriate judicial procedures, and encouraging arbitration for the settlement of contractual disputes. OHADA regulations on business and commercial law include definition and classification of legal persons engaged in trade, procedures for credit and recovery of debts, means of enforcement, bankruptcy, receivership, and arbitration.

In 2015, Niger set up a Commercial Court in Niamey. In 2020, 453 cases, including 24 inherited from 2019, were in summary proceedings, of which 351 were the subject of a judgment and whose minutes are available, 38 conciliation, 68 cases canceled and two remaining and postponed to 2021. The average processing time is 37 days.

Article 116 of the constitution clearly states that the judicial system is independent of the executive and legislative branches. However, the personnel management process for assignments and promotions is through politically appointed personnel in the Ministry of Justice, seriously weakening the independence of the judiciary and raising questions about the fairness and reliability of the judicial process. Regulations or enforcement actions are appealable and adjudicated in the court system. However, it is extremely rare for individuals or corporations to challenge government regulations or enforcement actions in court due to costs and administrative obstacles. For example, the GoN may require companies to submit up to 75 percent of a claimed tax discrepancy prior to legal appeal.

Niger offers guarantees to foreign direct investors pertaining to security of capital and investment, compensation for expropriation, and equality of treatment. Foreign investors may be permitted to transfer income derived from invested capital and from liquidated investments, provided the original investment is made in convertible currencies.

Law 2015-08 from 2015 established a specialized Commercial Court in Niamey. This is a mixed court with professional magistrates, who are lawyers by training, who work in tandem with lay-judges, and who generally come from the commercial sector. The concept was to have commercial disputes resolved by a panel of judges with legal training, combined with judges who have experience in the commercial sector. The Commercial Court has 26 judges, who make up five chambers. Unlike U.S. trial courts, where cases are handled by a single judge, in Niger, cases are adjudicated by a panel of judges. Judicial decisions that have come out in the past years can be found on the Commerce Tribunal of Niamey’s website: http://www.tribunalcommerceniamey.org/index.php .

The Chamber of Commerce and Industry houses a specialized institution, known as the Investment Promotion Center (CPI) which supports domestic and foreign investors in terms of business creation, extension and rehabilitation. The GoN also established the The Single Window for Foreign Trade (Guichet Unique du Commerce Exterieur), an information and facilitation system for foreign trade, electronic and dematerialized, intended to simplify and modernize procedures to facilitate the passage of goods entering and leaving the national territory of Niger. Its main missions are to: facilitate foreign trade operations by improving procedures and information flows among stakeholders; facilitate, simplify and rationalize the procedures relating to the application, issue and collection of authorizations prior to import, export and transit operations; facilitate, simplify and rationalize, for all the modes of transport concerned, the procedures relating to the processing, entry and exit of goods from the territory of the Republic of Niger; and facilitate and simplify the completion of administrative and logistical formalities while respecting the prerogatives of all stakeholders.

In 2015, the Ministry of Trade validated a new Competition and Consumer Protection Law, replacing a 1992 law that was never fully operational. Niger also adheres to the Community Competition Law of the West African Economic and Monetary Union (WAEMU).

The Investment Code guarantees that no business will be subject to nationalization or expropriation except when deemed “in the public interest” as prescribed by the law. The code requires that the government compensate any expropriated business with just and equitable payment. There have been a number of expropriations of commercial and personal property, most of which were not conducted in a manner consistent with Nigerien law requiring “just and prior compensation.” It is in fact rare for property owners to be compensated by the government after expropriations of property.

In cases of expropriation carried out by the GoN, claimants and community leaders have alleged a lack of due process. These complaints are currently limited to community forums and press coverage. Many of the families impacted lack the knowledge and ability to exercise their rights under the law. High rates of illiteracy, complexity of the legal system, and lack of resources to retain competent legal counsel present insurmountable barriers to legal remedies for people whose property has been expropriated. Even in situations where educated and wealthy business owners have had their property expropriated, legal challenges to expropriation are not lodged.

ICSID Convention and New York Convention

Niger is a contracting state of both the ICSID Convention and the New York Convention of 1958. There is no domestic legislation providing for enforcement of awards under the 1958 New York Convention and/or under the ICSID Convention.

Investor-State Dispute Settlement

The Investment Code offers the possibility for foreign nationals to seek remedy through the International Center for the Settlement of Investment Disputes. Niger does not have a BIT or FTA with the United States that would provide dispute settlement processes. Over the past 10 years, there were no investment disputes that involved a U.S. person. Local courts are generally reluctant to recognize foreign arbitral awards issued against the GoN. Niger does not have a record of extrajudicial actions against foreign investors.

International Commercial Arbitration and Foreign Courts

Niger has an operational center for mediation and arbitration of business disputes. The center’s stated aim is to maintain investor confidence by eliminating long and expensive procedures traditionally involved in the resolution of business disputes. The Investment Code provides for settlement of disputes by arbitration or by recourse to the World Bank’s International Center for Settlement of Disputes on Investment. However, investment dispute mechanisms in contracts are not always respected and exercising due diligence is extremely important. There was no publicly available information in 2021on foreign arbitral award enforcement in Niger.

Procedures are in place but are often not adhered to because of a lack of resources and corruption in the judicial system. The Investment Code offers the possibility for foreign nationals to seek remedy through the International Center for the Settlement of Investment Disputes.

Niger has laws related to insolvency and/or bankruptcy. Creditors have the right to object to decisions accepting or rejecting a creditor’s claims and may vote on debtors’ bankruptcy reorganization plans. However, the creditors’ rights are limited: creditors do not have the right to receive from a reorganized firm as much as they may have received from one that had been liquidated. Likewise, the law does not require that creditors be consulted on matters pertaining to an insolvency framework following the declaration of bankruptcy. Bankruptcy is not criminalized.

According to data collected by the World Bank’s Doing Business survey, resolving insolvency takes five years on average and costs 18 percent of the debtor’s total assets. Globally, Niger stands at 114 in the 2020 ranking of 190 economies on the ease of resolving insolvency. Niger strength of insolvency framework index (0–16) is 9.

Nigeria’s legal, accounting, and regulatory systems comply with international norms, but application and enforcement remain uneven.  Opportunities for public comment and input into proposed regulations rarely occur.  Professional organizations set standards for the provision of professional services, such as accounting, law, medicine, engineering, and advertising.  These standards usually comply with international norms.  No legal barriers prevent entry into these sectors. 

Ministries and regulatory agencies are meant to develop and make public anticipated regulatory changes or proposals and publish proposed regulations before their application.  The general public should have the opportunity to comment through targeted outreach, including business groups and stakeholders, and during the public hearing process before a bill becomes law, but this is not always the case.  There is no specialized agency tasked with publicizing proposed changes and the time period for comment may vary.  Ministries and agencies do conduct impact assessments, including environmental, but assessment methodologies may vary.  The National Bureau of Statistics reviews regulatory impact assessments conducted by other agencies.  Laws and regulations are publicly available.  

Fiscal management occurs at all three tiers of government:  federal, 36 state governments and Federal Capital Territory (FCT) Abuja, and 774 local government areas (LGAs).  Revenues from oil and non-oil sources are collected into the federation account and then shared among the different tiers of government by the Federal Account Allocation Committee (FAAC) in line with a statutory sharing formula.  All state governments can collect internally generated revenues, which vary from state to state.  The fiscal federalism structure does not compel states to be accountable to the federal government or transparent about revenues generated or received from the federation account.  However, the federal government can demand states meet predefined minimum fiscal transparency requirements as prerequisites for obtaining federal loans.  For instance, compliance with the 22-point Fiscal Sustainability Plan, which focused on ensuring better state financial performance, more sustainable debt management, and improved accountability and transparency, was a prerequisite for obtaining a federal government bailout in 2016.  The federal government’s finances are more transparent as budgets are made public and the financial data are published by the Central Bank of Nigeria (CBN), Debt Management Office (DMO), the Budget Office of the Federation, and the National Bureau of Statistics.  The state-owned oil company (Nigerian National Petroleum Corporation (NNPC)) began publishing audited financial data in 2020.   

Foreign companies operate successfully in Nigeria’s service sectors, including telecommunications, accounting, insurance, banking, and advertising.  The Investment and Securities Act of 2007 forbids monopolies, insider trading, and unfair practices in securities dealings.  Nigeria is not a party to the WTO’s Government Procurement Agreement (GPA).  Nigeria generally regulates investment in line with the WTO’s Trade-Related Investment Measures (TRIMS) Agreement, but the government’s local content requirements in the oil and gas sector and the Information and Communication Technology (ICT) sector may conflict with Nigeria’s commitments under TRIMS.  

ECOWAS implemented a Common External Tariff (CET) beginning in 2015 with a five-year phase in period.  An internal CET implementation committee headed by the Fiscal Policy/Budget Monitoring and Evaluation Department of the Nigerian Customs Service (NCS) was set up to develop the implementation work plans that were consistent with national and ECOWAS regulations.  The CET was slated to be fully harmonized by 2020, but in practice some ECOWAS Member States have maintained deviations from the CET beyond the January 1, 2020, deadline.  The country has put in place a CET monitoring committee domiciled at the Ministry of Finance, consisting of several ministries, departments, and agencies related to the CET.  The country applies five tariff bands under the CET:  zero duty on capital goods, machinery, and essential drugs not produced locally; 5% duty on imported raw materials; 10% duty on intermediate goods; 20% duty on finished goods; and 35% duty on goods in certain sectors that the Nigerian government seeks to protect including palm oil, meat products, dairy, and poultry.  The CET permits ECOWAS member governments to calculate import duties higher than the maximum allowed in the tariff bands (but not to exceed a total effective duty of 70%) for up to 3% of the 5,899 tariff lines included in the ECOWAS CET.  

Nigeria has a complex, three-tiered legal system comprised of English common law, Islamic law, and Nigerian customary law.  Most business transactions are governed by common law modified by statutes to meet local demands and conditions.  The Supreme Court is the pinnacle of the judicial system and has original and appellate jurisdiction in specific constitutional, civil, and criminal matters as prescribed by Nigeria’s constitution.  The Federal High Court has jurisdiction over revenue matters, admiralty law, banking, foreign exchange, other currency and monetary or fiscal matters, and lawsuits to which the federal government or any of its agencies are party.  The Nigerian court system is generally slow and inefficient, lacks adequate court facilities and computerized document-processing systems, and poorly remunerates judges and other court officials, all of which encourages corruption and undermines enforcement.  Judges frequently fail to appear for trials and court officials lack proper equipment and training.

The constitution and law provide for an independent judiciary; however, the judicial branch remains susceptible to pressure from the executive and legislative branches.  Political leaders have influenced the judiciary, particularly at the state and local levels.  

The Doing Business report credited business reforms for improving contract enforcement by issuing new rules of civil procedure for small claims courts, which limit adjournments to unforeseen and exceptional circumstances but noted that there can be variation in performance indicators between cities in Nigeria (as in other developing countries).  For example, resolving a commercial dispute takes 476 days in Kano but 376 days in Lagos.  In the case of Lagos, the 376 days includes 40 days for filing and service, 194 days for trial and judgment, and 142 days for enforcement of the judgment with total costs averaging 42% of the claim.  In Kano, however, filing and service only takes 21 days with enforcement of judgement only taking 90 days, but trial and judgment accounts for 365 days with total costs averaging lower at 28% of the claim.  In comparison, in OECD countries the corresponding figures are an average of 589.6 days and averaging 21.5% of the claim and in sub-Saharan countries an average of 654.9 days and averaging 41.6% of the claim.

The Nigerian Investment Promotion Commission (NIPC) Act allows 100 percent foreign ownership of firms.  Foreign investors must register with the NIPC after incorporation under the Companies and Allied Matters Act of 2020.  The NIPC Act prohibits the nationalization or expropriation of foreign enterprises except in case of national interest, but the Embassy is unaware of specific instances of such interference by the government.  The NIPC website (nipc.gov.ng) provides information on investing in Nigeria, and its One-Stop Investment Center co-locates 27 government agencies with equities in the foreign company registration process.  

The Nigerian government enacted the Federal Competition and Consumer Protection (FCCPC) Act in 2019.  The Act repealed the Consumer Protection Act of 2004 and replaced the previous Consumer Protection Council with a Federal Competition and Consumer Protection Commission while also creating a Competition and Consumer Protection Tribunal to handle issues and disputes arising from the operations of the Act.  Under the terms of the Act, businesses will be able to lodge anti-competitive practices complaints against other firms in the Tribunal.  The Act prohibits agreements made to restrain competition, such as price fixing, price rigging, collusive tendering, etc. (with specific exemptions for collective bargaining agreements and employment, among other items).  The Act empowers the President of Nigeria to regulate prices of certain goods and services on the recommendation of the Commission. 

The law prescribes stringent fines for non-compliance.  The law mandates a fine of up to 10% of the company’s annual turnover in the preceding business year for offences.  The law harmonizes oversight for consumer protection, consolidating it under the FCCPC. 

An entity may seek redress from a court of law if it is not satisfied with the ruling of the FCCPC.

The federal government has not expropriated or nationalized foreign assets recently, and the NIPC Act forbids nationalization of a business or assets unless the acquisition is in the national interest or for a public purpose.  In such cases, investors are entitled to fair compensation and legal redress. 

The federal government’s drive to domesticate foreign investments has led to a number of seemingly discriminatory actions against a prominent South African firm.  Nigeria’s attorney general demanded the payment of $2 billion which he alleged the company owed in taxes over ten years, a suit which was later dropped in 2020 in favor of negotiations with the FIRS.  In 2018, the company paid $53 million to settle a CBN case in which it was accused of illegally repatriating $8.1 billion.  Another South African company is involved in a $4.7 billion tax dispute with the FIRS.

Reflecting Nigeria’s business culture, entrepreneurs generally do not seek bankruptcy protection.  Claims often go unpaid, even in cases where creditors obtain judgments against defendants.  Under Nigerian law, the term bankruptcy generally refers to individuals whereas corporate bankruptcy is referred to as insolvency.  The former is regulated by the Bankruptcy Act of 1990, as amended by Bankruptcy Decree 109 of 1992.  The latter is regulated by the Companies and Allied Matters Act (CAMA) revised in 2020.  Insolvency solutions in CAMA 2020 focus on rescuing insolvent corporates, where debt recovery options are feasible, instead of the former objective which focused largely on the wind-up process.  Once determined insolvent, company shareholders are allowed to enter into a binding agreement with creditors or apply to a court to appoint an administrator thereby obviating the need for claims by creditors.  The debt threshold required for triggering compulsory liquidation is 200,000 naira ($480).  The Act also ranks the claims of secured creditors above all other claims and forbids shareholders or administrators from favoring a creditor above another within the same creditor class.  The Embassy is not aware of U.S. companies that have had to avail themselves of the insolvency provisions under Nigerian law.

The government has made progress adopting reform priorities called for by the EU, NATO, and other bodies, leading to well-defined laws, institutional structures, and regulatory legal frameworks. However, laws are not regularly drafted based on data-driven evidence or assessments and, at times, move through parliament using shortened legislative procedures. While laws are in place, enforcement and universal implementation of laws and regulations are generally lacking and can be a problem for businesses and citizens.

North Macedonia has simplified regulations and procedures for large foreign investors operating in the Technological Industrial Development Zones (TIDZ). While the country’s overall regulatory environment is complex and not fully transparent, the government is making efforts to improve transparency. The government is implementing reforms designed to avoid frequent regulatory and legislative changes, coupled with inconsistent interpretations of the rules, which create an unpredictable business environment that enables corruption. The current government has published all incentives for businesses operating in North Macedonia, which are standardized and available to domestic and international companies. However, companies worth more than $1 billion that want to invest in North Macedonia can negotiate terms different from the standard incentives. The government can offer customized incentive packages if the investment is of strategic importance.

Rule-making and regulatory authorities reside within government ministries, regulatory agencies, and parliament. Almost all regulations most relevant to foreign businesses are on the national level. Regulations are generally developed in a four-step process. First, the regulatory agency or ministry drafts the proposed regulation. The proposal is then published in the Unique National Electronic Register of Regulations (ENER: https://ener.gov.mk/ ) for public review and comment. After public comments are considered and properly incorporated into the draft, it is sent to the central government to be reviewed and adopted in an official government session. Once the government has approved the draft law, it is sent to parliament for full debate and adoption. The public consultation process has improved, with businesses, the public, and NGOs having an increasing role in commenting on draft regulations and proposing changes through ENER.

There is no single centralized location which maintains a copy of all regulatory actions. All newly adopted regulations, rules, and government decisions are published in the Official Gazette of the Republic of North Macedonia after they are adopted by the government or parliament or signed by the corresponding minister or director. Public comments are neither published nor made public as part of the regulation, and limited information is available in English.

North Macedonia accepts International Accounting Standards, and the legal, regulatory, and accounting systems used by the government are consistent with international norms. North Macedonia has aligned its national law with EU directives on corporate accounting and auditing.

The government has systems in place to regularly communicate and consult with the business community and other stakeholders before amending and adopting legislation, through ENER and through dialogues with businesses, the civil sector, and academia. Interested parties, including chambers of commerce, can review the legislation published on ENER. The online platform is intended to facilitate public participation in policymaking, increase public comment, and provide a phase-in period for legal changes to allow enterprises to adapt. Key institutions influencing the business climate publish official and legally-binding instructions for the implementation of laws. These institutions are obliged to publish all relevant laws, by-laws, and internal procedures on their websites; however, some do not make regular updates. The government makes significant efforts to ensure respect for the principles of transparency, merit, and equitable representation.

The government continued to implement the Strategy for Public Administration Reform and Action Plan (2018-2022), and the National Plan for Quality Management of Public Administration, which focus on policy creation and coordination, strengthening public service capacities, and increasing accountability and transparency, in close coordination with the EU. The Open Data Strategy (2018-2020) and Transparency Strategy (2019-2021) put forth measures to encourage the release and use of public data as an effective tool for innovation, growth, and transparent governance and contributed to greater transparency of government bodies, both at the central and local levels. In 2022, Prime Minister Dimitar Kovachevski introduced a new Deputy Prime Minister for Good Governance Policies, who is responsible for good governance, anticorruption policies, and the digitalization of government services. The DPM’s office will replace the previous Cabinet for the Fight Against Corruption and Crime, Sustainable Development and Human Resources.  The new DPM is expected to oversee the implementation of the Public Administration Reform Strategy under development by the Ministry of Information Society and Administration during 2022.

Public finances and debt obligations are fairly transparent. The Ministry of Finance publishes budget execution data monthly; public debt figures, including contingent liability, quarterly; and the fiscal strategy is updated annually.

As a candidate country for accession to the EU, North Macedonia is gradually harmonizing its legal and regulatory systems with EU standards. As a member of the WTO, North Macedonia regularly notifies the WTO Committee on Technical Barriers to Trade of proposed amendments to technical regulations concerning trade. North Macedonia ratified the Trade Facilitation Agreement (TFA) in July 2015, the 50th out of 134 members of the WTO to do so. In October 2017, the government formed a National Trade Facilitation Committee, chaired by the Minister of Economy, which includes 22 member institutions. The Committee identified areas which need harmonization with the TFA and is working toward implementation.

North Macedonia’s legal system is based on the civil law tradition, with increasing adversarial-style elements, and includes an established legal framework for both commercial and contract law. The Constitution established independent courts to rule on commercial and contractual disputes between business entities, and court rulings are legally executed by private enforcement agents. Enforcement actions may be appealed before the court. The enforcement procedure fees were lowered and simplified in 2019. Commercial disputes up to €15,000 require mediation as a precondition to initiating legal action within the courts. Cases involving international elements may be decided using international arbiters. Ratified international instruments are considered an integral part of national legislation and cannot be altered by a national law, per the Constitution.

Throughout 2021, businesses complained that lengthy and costly commercial disputes adjudicated through the court system created legal uncertainty. Businesses, however, have not been inclined to use mediation, despite it being a swifter and often less costly way to resolve disputes. In December 2021, Parliament adopted a new and improved Mediation Law providing for broader use of mediation as a voluntary, contract-based, or legally-mandated alternative prior to addressing a matter in court. Numerous international reports note rule of law remains a key challenge in North Macedonia, pointing to undue executive, business, and political interference in the judiciary, and poor funding for and management of administrative courts. These obstacles often result in lengthy and costly trials. The government continued major reforms throughout 2021 to improve judicial independence and impartiality, but contract enforcement and a perceived lack of transparent public procurement practices remain challenges for businesses.

There is no single law regulating foreign investments, nor a “one-stop-shop” website which provides all relevant laws, rules, procedures, and reporting requirements for investors. Rather, the legal framework is comprised of several laws including the Trade Companies Law, the Securities Law, the Profit Tax Law, the Customs Law, the Value Added Tax (VAT) Law, the Law on Trade, the Law on Acquiring Shareholding Companies, the Foreign Exchange Operations Law, the Payment Operations Law, the Law on Foreign Loan Relations, the Law on Privatization of State-owned Capital, the Law on Investment Funds, the Banking Law, the Labor Law, the Law on Financial Discipline, the Law on Financial Support of Investments, and the Law on Technological Industrial Development Zones (free economic zones). An English language version of the consolidated Law on Technological Industrial Development Zones is available at https://fez.gov.mk/wp-content/uploads/2018/01/law-in-tidz-eng.pdf , and additional information at https://www.worldfzo.org/Portals/0/OpenContent/Files/487/Macedonia_FreeZones.pdf . No new major laws, regulations, or judicial decisions related to foreign investments were passed during the past year; however, some existing laws were amended slightly.

The Commission for the Protection of Competition (CPC) is responsible for enforcing the Law on Protection of Competition. The CPC issues opinions on draft legislation which may impact competition. The CPC reviews the impact on competition of proposed mergers and can prohibit a merger or approve it with or without conditions. The CPC also reviews proposed state aid to private businesses, including foreign investors, under the Law on Control of State Aid and the Law on State Aid . The CPC determines whether the state aid in question gives economic advantage to the recipient, is selective, or adversely influences competition and trade. More information on the CPC’s activities is available at http://kzk.gov.mk/en  . There were no significant competition cases in 2021.

The Law on Expropriation ( http://www.mioa.gov.mk/sites/default/files/pbl_files/documents/legislation/zakon_za_eksproprijacija_konsolidiran_032018.pdf ) states the government can seize or limit ownership and real estate property rights to protect the public interest and to build facilities and carry out other activities of public interest. According to the Constitution and the Law on Expropriation, property under foreign ownership is exempt from expropriation except during instances of war or natural disaster, or for reasons of public interest. Under the Law on Expropriation, the state is obliged to pay market value for any expropriated property. If the payment is not made within 15 days of the expropriation, interest will accrue. The government has conducted a number of expropriations, primarily to enable capital projects of public interest, such as highway and railway construction, for which the government offered market value compensation. Expropriation procedures have followed strict legal regulations and due process. The government has not undertaken any measures that have been alleged to be, or could be argued to be, indirect expropriation, such as confiscatory tax regimes or regulatory actions that deprive investors of substantial economic benefits from their investments.

North Macedonia’s bankruptcy law governs the settlement of creditors’ claims against insolvent debtors. Bankruptcy proceedings may be initiated over the property of a debtor, be it a legal entity, an individual, a deceased person, joint property of spouses, or a business. However, bankruptcy proceedings may not be implemented over a public legal entity or property owned by the Republic of North Macedonia. The Government of North Macedonia’s suspension of bankruptcy proceedings for the duration of the COVID-19 crisis continued throughout 2021. The 2020 World Bank Doing Business Report ranked North Macedonia 30th out of 190 countries for resolving insolvency.

The Macedonian Credit Bureau ( https://mkb.mk/en/ ), commercial banks, and the National Bank of the Republic of North Macedonia serve as credit monitoring authorities.

The transparency of Norway’s regulatory system is generally on par with that of the EU. Norway is obliged to adopt EU directives under the terms of the EEA accord in the areas of social policy, consumer protection, environment, company law, and statistics.

The Norwegian Accounting Act requires, in line with EU Directive 2014/95/EU, Norwegian public companies and other large companies to publish annual reports on environmental, social, and governance (ESG) factors. In addition, ESG implementation is receiving increasing public attention and support, and companies with strong ESG profiles may experience a competitive advantage.

All draft bills are made available for comment through a public consultation process. The Norwegian parliament, the Storting, exercises legislative power in Norway and must approve all formal laws (acts, directives, and regulations). Draft bills are available at: https://www.regjeringen.no/en/find-document/consultations/id1763/  Norwegian laws and regulations are available at: https://lovdata.no/info/information_in_english 

Norway’s public finances and debt obligations are transparent. The Government publishes the National Budget and revised budget on the website http://www.statsbudsjettet.no  and an annual White Paper to Parliament on the State’s account: https://www.regjeringen.no/no/tema/okonomi-og-budsjett/statlig-okonomistyring/statsregnskapet/id438868 .

The Ministry of Finance has a webpage on Government debt: https://www.regjeringen.no/en/topics/the-economy/economic-policy/the-central-governments-outstanding-debt/id443404/ 

Norway is a member of the European Economic Area (EEA) and as such implements applicable EU directives under the terms of the agreement.

Norway is a member of the World Trade Organization (WTO) and notifies draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).

The Norwegian legal system is similar to that of other Nordic countries but does not consist of a single comprehensive civil code. Norwegian law is based on the principle of freedom of contract, subject only to limited restrictions. Contracts, whether oral or written, are generally binding on the parties.

Norway welcomes foreign investment as a matter of policy and generally grants national treatment to foreign investors. Ownership restrictions exist on some natural resources and on some activities (fishing/maritime road transport).

A new National Security Act entered into force January 1, 2019, and provides the legal foundation for enhanced government screening of foreign investments based on national security concerns. Norway’s legal system is robust and trusted.

Current legislation governing competition went into effect in 2004 and is enforced by the Norwegian Competition Authority (NCA). Under the authority of the Ministry of Trade, Industry and Fisheries the NCA is authorized to conduct non-criminal proceedings and impose fines, or “infringement fees,” for anti-competitive behavior. The size of the fees may vary according to a number of factors, including company turnover and severity of the offense. The 2004 legislation also empowers the NCA to halt mergers or acquisitions that threaten to significantly weaken competition. Companies planning such transactions are generally obliged by law to report their plans to the NCA, which may conduct a review. However, if the combined annual turnover in Norway does not exceed NOK 1 billion (USD 113 million) or the annual turnover of one of the companies is less than NOK 100 million (USD 11.3. million), notification is not required.

There have been no cases of questionable expropriation in recent memory. Government takings of property are generally limited to non-discriminatory land and property condemnation for public purposes (road construction, etc.). The Embassy is not aware of any cases in which compensation has not been prompt, adequate, and effective.

Norway has strong bankruptcy laws and is ranked 5 out of 190 for ease of “resolving insolvency” on the World Bank’s 2020 Doing Business report. According to the World Bank, the average duration for bankruptcy proceedings in Norway is half that of the OECD, at just under a year. A new temporary Restructuring Act entered into force on May 11, 2020, making the judicial restructuring process applicable to companies in financial difficulties. The Act, which was adopted in response to the economic consequences of the global Covid-19 pandemic, replaces the National Bankruptcy Act until 1 July 2023. The Storting hopes to enact permanent legislation based on the experience gained from this interim period.

Pakistan generally lacks transparency and effective policies and laws that foster market-based competition in a non-discriminatory manner. The Competition Commission of Pakistan has a mandate to ensure market-based competition, but laws and regulations are opaque, vary among provinces, and are sometimes applied to benefit domestic businesses.

All businesses in Pakistan are required to adhere to certain regulatory processes managed by the chambers of commerce and industry. Rules, for example on the requirement for importers or exporters to register with a chamber, are equally applicable to domestic and foreign firms. To date, Post is not aware of incidents where such rules have been used to discriminate against foreign investors in general or U.S. investors specifically.

The Pakistani government is responsible for establishing and implementing legal rules and regulations, but sub-national governments have a role as well depending on the sector. Prior to implementation, non-government actors and private sector associations can provide feedback to the government on regulations and policies, but governmental authorities are not bound to follow their input. Regulatory authorities are required to conduct in-house post-implementation reviews of regulations in consultation with relevant stakeholders. However, these assessments are not made publicly available. Since the 2010 introduction of the 18th amendment to Pakistan’s constitution, which delegated significant authorities to provincial governments, foreign companies must comply with provincial, and sometimes local, laws in addition to federal law. Foreign businesses complain about the inconsistencies in the application of laws and policies from different regulatory authorities. There are no rules or regulations in place that discriminate specifically against U.S. firms or investors, however.

The SECP is the main regulatory body for foreign companies operating in Pakistan, but it is not the sole regulator. Company financial transactions are regulated by the State Bank of Pakistan (SBP), labor by Social Welfare or the Employee Old-Age Benefits Institution (EOBI), and specialized functions in the energy sector are administered by bodies such as the National Electric Power Regulatory Authority (NEPRA), the Oil and Gas Regulatory Authority (OGRA), and Alternate Energy Development Board (AEDB). Each body has independent management, but all must submit draft regulatory or policy changes through the Ministry of Law and Justice before any proposed rules or regulations may be submitted to parliament or, in some cases, the executive branch.

The SECP is authorized to establish accounting standards for companies in Pakistan, however, execution and implementation of those standards is poor. Pakistan has adopted most, though not all, International Financial Reporting Standards. Though most of Pakistan’s legal, regulatory, and accounting systems are transparent and consistent with international norms, execution and implementation is inefficient and opaque.

The Pakistani government requires companies to provide environmental, social, and governance (ESG) disclosures on their projects in country, but there is no single regulatory mechanism or central regulation for such requirements. For instance, companies must work with the Ministry of Climate Change on environmental disclosures; the EOBI on social disclosures, such as those that concern pensions; and SECP on governance disclosures. However, implementation and monitoring and enforcement mechanisms for such requirements are weak and opaque.

Most draft legislation is made available for public comment but there is no centralized body to collect public responses. The relevant authorities, usually the responsible ministry for proposed legislation, gathers public comments as it deems necessary; otherwise, the government submits legislation directly to the legislative branch. For business and investment laws and regulations, the Ministry of Commerce relies on stakeholder feedback obtained from chambers and associations – such as the American Business Council (ABC) and Overseas Investors Chamber of Commerce and Industry (OICCI) – rather than publishing regulations online for public review.

There is no centralized online location where key regulatory actions are published. Different regulators publish their regulations and implementing actions on their respective websites. In most cases, regulatory implementing actions are not published online.

Businesses impacted by non-compliance with government regulations may seek relief from the judiciary, Ombudsman’s offices, and the Parliamentary Public Account Committee. These forums are designed to ensure the government follows required administrative processes.

Pakistan did not announce any enforcement reforms during the last year. Pakistan is in the process of updating its IPR laws to make them consistent and to improve IPR enforcement through draft amendments on trademark, patent, and copyright legislation. If drafted according to international IP treaties, and fully implemented, updated laws can improve IPR enforcement in Pakistan and boost foreign investor willingness to bring innovations to Pakistan.

Enforcement processes are legally reviewable – initially by specialized IP Tribunals, but also through the High and Supreme Courts of Pakistan. Few of these processes are digitalized.

The government publishes limited debt obligations in the budget document in two broad categories: capital receipts and public debt, which are published in the “Explanatory Memorandum on Federal Receipts.” These documents are available at http://www.finance.gov.pk/, https://www.fbr.gov.pk/, and http://www.sbp.org.pk/ecodata/index2.asp . The government does not publicly disclose the terms of bilateral debt obligations.

Pakistan is a member of the South Asian Association for Regional Cooperation (SAARC), the Central Asia Regional Economic Cooperation (CAREC), and Economic Cooperation Organization (ECO). However, there is no regional cooperation between Pakistan and other member nations on regulatory development or implementation.

Pakistan’s judicial system incorporates British standards. As such, most of Pakistan’s regulatory systems use British norms to meet international standards.

Pakistan has been a World Trade Organization (WTO) member since January 1, 1995, and provides most favored nation (MFN) treatment to all member states, except India and Israel. In October 2015, Pakistan ratified the WTO’s Trade Facilitation Agreement (TFA). Pakistan is one of 23 WTO countries negotiating the Trade in Services Agreement. Pakistan notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade, albeit at times with significant delays.

Most international norms and standards incorporated in Pakistan’s regulatory system, including commercial matters, are influenced by UK law. Laws governing domestic or personal matters are strongly influenced by Islamic Sharia law. Regulations and enforcement actions may be appealed through the court system. The Supreme Court is Pakistan’s highest court and has jurisdiction over the provincial courts, referrals from the federal government, and cases involving disputes among provinces or between a province and the federal government. Decisions by the courts of the superior judiciary (the Supreme Court, the Federal Sharia Court, and five High Courts – Lahore High Court, Sindh High Court, Balochistan High Court, Islamabad High Court, and Peshawar High Court) have national standing. The lower courts are composed of civil and criminal district courts, as well as various specialized courts, including courts devoted to banking, intellectual property, customs and excise, tax law, environmental law, consumer protection, insurance, and cases of corruption. Pakistan’s judiciary is influenced by the government and other stakeholders. The lower judiciary is influenced by the executive branch and seen as lacking competence and fairness. It currently faces a significant backlog of unresolved cases.

Pakistan’s Contract Act of 1872 is the main law that regulates contracts with Pakistan. British legal decisions, under some circumstances, are also cited in court rulings. While Pakistan’s legal code and economic policy do not discriminate against foreign investments, enforcement of contracts remains problematic due to a weak and inefficient judiciary.

Theoretically, Pakistan’s judicial system operates independently of the executive branch. Although higher courts are widely viewed as credible, lower courts are often considered corrupt, inefficient, and subject to pressure from outside influences including the executive branch, the military, and other prominent figures. As a result, there are doubts concerning the competence, fairness, and reliability of Pakistan’s judicial system. In addition, concern over potential contempt of court proceedings inhibits businesses and the public from reporting on perceived weaknesses of the judicial system.

Regulations and enforcement actions are appealable. Specialized tribunals and departmental adjudication authorities are the primary forum for such appeals. Decisions made by a tribunal or adjudication authority may be appealed to a high court and then to the Supreme Court.

Pakistan’s investment and corporate laws permit wholly owned subsidiaries with 100 percent foreign equity in most sectors of the economy. In the education, health, and infrastructure sectors, 100 percent foreign ownership is allowed. In the agricultural sector, the threshold is 60 percent, with an exception for corporate agriculture farming, where 100 percent ownership is allowed.

Most foreign companies operating in Pakistan are “private limited companies,” which are incorporated with a minimum of two shareholders and two directors registered with the SECP. While there are no regulatory requirements on the residency status of company directors, the chief executive must reside in Pakistan to conduct day-to-day operations. If the chief executive is not a Pakistani national, she or he is required to obtain a multiple-entry work visa. Corporations operating in Pakistan are statutorily required to retain full-time audit services and legal representation. Corporations must also register any changes to the name, address, directors, shareholders, CEO, auditors/lawyers, and other pertinent details to the SECP within 15 days of the change. To address long process delays, in 2013, the SECP introduced the issuance of a provisional “Certificate of Incorporation” prior to the final issuance of a “No Objection Certificate” (NOC). The certificate of incorporation includes a provision noting that company shares will be transferred to another shareholder if the foreign shareholder(s) and/or director(s) fails to obtain a NOC.

No new law, regulation, or judicial decision was announced or went into effect during the last year which would be significant to foreign investors.

There is no “single window” website for investment in Pakistan which provides direct access to all relevant laws, rules, and reporting requirements for investors.

Established in 2007, the Competition Commission of Pakistan (CCP) is designed to ensure private and public sector organizations are not involved in any anti-competitive or monopolistic practices. Complaints regarding anti-competitive practices can be lodged with CCP, which conducts the investigation and is legally empowered to impose penalties; complaints are reviewable by the CCP appellate tribunal in Islamabad and the Supreme Court of Pakistan. The CCP appellate tribunal is required to issue decisions on any anti-competitive practice within six months from the date in which it becomes aware of the practice.

As of early 2022, the CCP was investigating a cement sector cartel; it found that cement manufacturers in Pakistan established a cartel and kept prices at an artificially high level, raising excess revenues worth $250 million, but its review was not yet final. In 2021, the CCP also conducted an inquiry into sugar prices and submitted a report to the Prime Minister’s office, with the Federal Investigation Agency tasked to follow up on the inquiry. However, to date no action has been taken on the report’s findings.

The CCP has also conducted an inquiry regarding the banking sector on the charges of forming a cartel to bid up interest rates for public sector debt.

The CCP generally adheres to transparent norms and procedures.

Agency decisions are reviewable by the CCP appellate tribunal and the Supreme Court of Pakistan.

Two Acts, the Protection of Economic Reforms Act 1992 and the Foreign Private Investment Promotion and Protection Act 1976, protect foreign investment in Pakistan from expropriation, while the 2013 Investment Policy reinforced the government’s commitment to protect foreign investor interests. Pakistan does not have a strong history of expropriation.

Pakistan does not have a single, comprehensive bankruptcy law. Foreclosures are governed under the Companies Act 2017 and administered by the SECP, while the Banking Companies Ordinance of 1962 governs liquidations of banks and financial institutions. Court-appointed liquidators auction bankrupt companies’ property and organize the actual bankruptcy process, which can take years to complete. On average, Pakistan requires 2.6 years to resolve insolvency issues and has a recovery rate of 42.8 percent. Pakistan was ranked 58 of 190 for ease of “resolving insolvency” rankings in the World Bank’s Doing Business 2020 report.

The Companies Act 2017 regulates mergers and acquisitions. Mergers are allowed between international companies, as well as between international and local companies. In 2012, the government enacted legislation for friendly and hostile takeovers. The law requires companies to disclose any concentration of share ownership over 25 percent.

Pakistan has no dedicated credit monitoring authority. However, SBP has authority to monitor and investigate the quality of the credit commercial banks extend.

Regulatory and accounting systems are largely consistent with international norms. Bureaucratic procedures (e.g. permitting processes, approvals, etc.) may lack transparency and be influenced by cronyism, partly due to the country’s small size and extensive family networks. Proposed laws and regulations are available in draft form for public comment pursuant to the Administration Procedures Act, Title 6 of the Palau National Code. Generally, tax, labor, environment, health and safety, and other laws and policies do not impede investment. There are no informal regulatory processes managed by nongovernmental organizations or private sector associations. The Government of Palau, through the Financial Investment Act and the Environmental Protection Act, requires companies’ ESG disclosure to facilitate transparency and inform the application process in distinguishing between low- and high-end investment.

The Pacific Island Forum, of which Palau is a member, has a model regulatory and policy framework focused on competition, fair trading, and consumer protections. Palau is not a WTO member.

The legal system in Palau is composed of a mix of civil, common, and customary law. Palau also has a specialized Land Court for disputes arising from conflicting claims of land ownership, which is a complex issue in the country. The legal system is patterned on common law proceedings as they exist in the United States. The judiciary comprises a four-member Supreme Court, a Court of Common Pleas, and a Land Court. The Supreme Court has a trial division and an appellate division. Court rulings, legal codes, and public law can be found on their website: http://www.palausupremecourt.net/ .

All non-citizens wishing to invest in the Republic of Palau must obtain a Foreign Investment Business License (FIBL). The FIBL is obtained from the Registrar of Foreign Investment in the office of the Attorney General. In coordination with the Investment Promotion Unit at the Ministry of Natural Resources and Commerce, the Ministry of Finance reviews the application and ensures that the business does not fall under the categories of the National Reserved List listed above. The application process usually takes 7-10 working days.

Palau does not currently have any anti-trust legislation, although the Foreign Investment Board considers competition-related concerns in its review process.

Although the Palauan constitution provides for the right of the government to condemn land for national interest (“eminent domain”), there are no reported property-expropriation cases. Most of the land is privately owned by Palauan citizens through complex family lineages.

There is no legal provision for bankruptcy in the Republic of Palau. It ranks 166 out of 190 for resolving insolvency in World Bank’s 2020 Doing Business Report.

The Panamanian legal, accounting, and regulatory systems are generally transparent and consistent with international norms.

Panama has five regulatory agencies, four that supervise the activities of financial entities (banking, securities, insurance, and “designated non-financial businesses and professions (DNFBPs)” and a fifth that oversees credit unions. Each of the regulators regularly publishes on their websites detailed policies, laws, and sector reports, as well as information regarding fines and sanctions. Panama’s banking regulator began publishing fines and sanctions in late 2016, which tend to be significantly lower than neighboring countries. The securities and insurance regulators have published fines and sanctions since 2010. Law 23 of 2015 created the regulator for DNFBPs, which began publishing fines and sanctions in 2018. In January 2020, the regulator for DNFBPs was granted independence and superintendency status like that of the banking regulator. The Superintendency of the Securities Market is generally considered a transparent, competent, and effective regulator. Panama is a full signatory to the International Organization of Securities Commissions (IOSCO).

Post is not aware of any informal regulatory processes managed by non-governmental organizations or private sector associations.

Relevant ministries or regulators oversee and enforce administrative and regulatory processes. Any administrative errors or omissions committed by public servants can be challenged and taken to the Supreme Court for a final ruling, a process that often involves a long and arduous dispute resolution. Regulatory bodies can impose sanctions and fines which are made public and can be appealed.

Panama does not promote or require companies to disclose environmental, social, and governance (ESG) data to facilitate transparency and/or help investors and consumers distinguish between high- and low-quality investments.

Laws are developed in the National Assembly. A proposed bill is discussed in three rounds, edited as needed, and approved or rejected. The President then has 30 days to approve or veto a bill the Assembly has passed. If the President vetoes the bill, it can be returned to the National Assembly for changes or sent to the Supreme Court to rule on its constitutionality. If the bill was vetoed for reasons of unconstitutionality, and the Supreme Court finds it constitutional, the President must sign the bill. Regulations are created by agencies and other governmental bodies but they can be modified or overridden by higher authorities.

In general, draft bills, including those for laws and regulations on investment, are made available on the National Assembly’s website and can be introduced for discussion at the bill’s first hearing. All bills and approved legislation are published in the Official Gazette in full and summary form and can also be found on the National Assembly’s website: https://www.asamblea.gob.pa/buscador-de-gacetas .

Accounting, legal, and regulatory procedures in Panama are based on standards set by the International Financial Reporting Standards (IFRS) Foundation, including financial reporting standards for small and medium-sized enterprises (SMEs). Panama is a member of UNCTAD’s international network of transparent investment procedures. Foreign and national investors can find detailed information on administrative procedures applicable to investment and income generating operations, including the number of steps, the names and contact details of the entities and persons in charge of procedures, required documents and conditions, costs, processing times, and legal bases justifying the procedures.

Information on public finances and debt obligations (includes explicit and contingent liabilities) is transparent. It is published on the Ministry of Economy and Finance’s website under the directorate of public finance, but not consistently updated: https://fpublico.mef.gob.pa/en .

Mining regulations are changing. In 2018, the Supreme Court declared unconstitutional the law on which the country largest mining investment contract was based. According to some industry experts, the ruling was a deliberate move to force contract renegotiations and achieve more favorable terms for the government. In 2022, the same company’s concession was renegotiated for renewal, with its royalties to the government increasing significantly as a result. Panama’s enormous potential for generating mining income is undercut by long delays in the government’s concession and permit approval process, according to foreign investor contacts.

Panama is part of the Central American Customs Union (CACU), the regional economic block for Central American countries. Panama has adopted many of the Central American Technical Regulations (RTCA) for intra-regional trade in goods. Panama applies the RTCA to goods imported from any CACU member and updates Panama’s regulations to be consistent with RTCA. However, Panama has not yet adopted some important RTCA regulations, such as for processed food labeling, and dietary supplements/vitamins.

The United States and Panama signed an agreement regarding “Sanitary and Phytosanitary Measures and Technical Standards Affecting Trade in Agricultural Products,” which entered into force on December 20, 2006. The application of this agreement supersedes the RTCA for U.S. food and feed products imported into Panama.

A 2006 law established the Panamanian Food Safety Authority (AUPSA) to issue science-based sanitary and phytosanitary (SPS) import policies for food and feed products entering Panama. Since 2019, AUPSA and other government entities have implemented or proposed measures that restrict market access. These measures have also increased AUPSA’s ability to limit the import of certain agricultural goods. The Panamanian government, for example, has issued regulations on onions and withheld approval of genetically-modified foods, limiting market access and resulting in the loss of millions in potential investment. In March 2021, Panama passed a bill to eliminate the AUPSA. In its place, the bill created the Panamanian Food Agency (APA).  APA began operations on October 1, 2021, and has responsibility for both imports and exports.  The APA intends to improve efficiency for agro-exports and industrial food processes, as well as increase market access.

Historically, Panama has referenced or incorporated international norms and standards into its regulatory system, including the Agreements of the World Trade Organization (WTO), Codex Alimentarius, the World Organization for Animal Health (OIE), the International Plant Protection Convention, the World Intellectual Property Organization, the World Customs Organization, and others. Also, Panama has incorporated into its national regulations many U.S. Food and Drug Administration regulations, such as the Pasteurized Milk Ordinance.

Panama, as a member of the WTO, notifies all draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT). However, in the last five years it has ignored comments on its regulations offered by other WTO members, including but not limited to the United States.

When ruling on cases, judges rely on the Constitution and direct sources of law such as codes, regulations, and statutes. In 2016, Panama transitioned from an inquisitorial to an accusatory justice system, with the goal of simplifying and expediting criminal cases. Fundamental procedural rights in civil cases are broadly similar to those available in U.S. civil courts, although some notice and discovery rights, particularly in administrative matters, may be less extensive than in the United States. Judicial pleadings are not always a matter of public record, nor are processes always transparent.

Panama has a legal framework governing commercial and contractual issues and has specialized commercial courts. Contractual disputes are normally handled in civil court or through arbitration, unless criminal activity is involved. Some U.S. firms have reported inconsistent, unfair, and/or biased treatment from Panamanian courts. The judicial system’s capacity to resolve contractual and property disputes is often weak, hampered by a lack of technological tools and susceptibility to corruption. The World Economic Forum’s 2019 Global Competitiveness Report rated Panama’s judicial independence at 129 of 141 countries.

The Panamanian judicial system suffers from significant budget shortfalls that continue to affect all areas of the system. The transition to the accusatory system faces challenges in funding for personnel, infrastructure, and operational requirements, while addressing a significant backlog of cases initiated under the previous inquisitorial system. The judiciary still struggles with lack of independence, a legacy of an often-politicized system for appointing judges, prosecutors, and other officials. On January 11, 2022, President Cortizo committed $15 million to the Judicial Branch to implement Law 53 of August 27, 2015, which mandates that judges be selected by a merit-based process instead of by appointment, but implementation still faces serious challenges. Under Panamanian law, only the National Assembly may initiate corruption investigations against Supreme Court judges, and only the Supreme Court may initiate investigations against members of the National Assembly, which has led to charges of a de facto “non-aggression pact” between the two branches.

Regulations and enforcement actions can be appealed through the legal system from Municipal Judges, to Circuit Judges, to Superior Judges, and ultimately to the Supreme Court.

Panama has different laws governing investment incentives, depending on the activity, including its newest law intended to draw manufacturing investment, the 2020 Multinational Manufacturing Services Law (EMMA). In addition, it has a Multinational Headquarters Law (SEM), a Tourism Law, an Investment Stability Law, and miscellaneous laws associated with particular sectors, including the film industry, call centers, certain industrial activities, and agricultural exports. In addition, laws may differ in special economic zones, including the Colon Free Zone, the Panama Pacifico Special Economic Area, and the City of Knowledge.

Government policy and law treat Panamanian and foreign investors equally with respect to access to credit. Panamanian interest rates closely follow international rates (i.e., the U.S. federal funds rate, the London Interbank Offered Rate, etc.), plus a country-risk premium.

The Ministries of Tourism, Public Works, and Commerce and Industry, as well as the Minister Counselor for Investment, promote foreign investment. However, some U.S. companies have reported difficulty navigating the Panamanian business environment, especially in the tourism, branding, imports, and infrastructure development sectors. Although individual ministers have been responsive to U.S. companies, fundamental problems such as judicial uncertainty are more difficult to address. U.S. companies have complained about several ministries’ failure to make timely payments for services rendered, without official explanation for the delays. U.S. Embassy Panama is aware of tens of millions of dollars in overdue payments that the Panamanian government owes to U.S. companies.

Some private companies, including multinational corporations, have issued bonds in the local securities market. Companies rarely issue stock on the local market and, when they do, often issue shares without voting rights. Investor demand is generally limited because of the small pool of qualified investors. While some Panamanians may hold overlapping interests in various businesses, there is no established practice of cross-shareholding or stable shareholder arrangements designed to restrict foreign investment through mergers and acquisitions.

The Ministry of Commerce and Industry’s website lists information about laws, transparency, legal frameworks, and regulatory bodies.

https://www.mici.gob.pa/direccion-general-de-servicios-al-inversionista/informacion-para-el-inversionista-direccion-general-de-servicios-al-inversionista 

Panama’s Consumer Protection and Anti-Trust Agency, established by Law 45 on October 31, 2007, and modified by Law 29 of June 2008, reviews transactions for competition-related concerns and serves as a consumer protection agency.

Panamanian law recognizes the concept of eminent domain, but it is exercised only occasionally, for example, to build infrastructure projects such as highways and the metro commuter train. In general, compensation for affected parties is fair. However, in at least one instance a U.S. company has expressed concern about not being compensated at fair market value after the government revoked a concession. There have been no cases of claimants citing a lack of due process regarding eminent domain.

The World Bank 2020 Doing Business Indicator, the most recent report available, ranked Panama 113 out of 190 jurisdictions for resolving insolvency because of a slow court system and the complexity of the bankruptcy process. Panama adopted a new insolvency law (similar to a bankruptcy law) in 2016, but the Doing Business Indicator ranking has not identified material improvement for this metric.

The Independent Consumer and Competition Commission (ICCC) is charged with fostering competition. While there are transparent policies in place, the competition regime is oriented towards regulating existing monopolies and does little to foster competition. Tax, labor, environment, health, and safety and other laws do not distort or impede investment. There are long bureaucratic delays in the processing of work permits and frequent complaints about corruption and bribery in government departments.

The IPA and the Government are moving, with the assistance of the International Finance Corporation, towards a more streamlined regulatory framework to encourage foreign investment. One example of this trend is the IPA’s move to an online registration process for businesses. There are informal regulatory processes managed by nongovernmental organizations and private sector associations. There are impediments to the licensing of skilled foreign labor that are imposed by local professional associations, such as the Papua New Guinea Institute of Engineers and the Law Society (both of which have their own regulatory processes), that foreigners must go through before they can work/practice in the country.

There are no private sector or government efforts to restrict foreign participation in industry standards-setting consortia or organizations. Proposed laws and regulations are made available for public comment, but comments are not always taken into consideration or acted on by lawmakers or regulators. Legal, regulatory, and accounting systems are transparent and consistent with international norms, but there are delays in the dispute resolution system due to a lack of human resources in the judiciary.

The Companies Act requires all banks and financial institutions, insurance companies, listed companies on the stock exchange, securities companies, superannuation funds, and private companies (including exempt companies) to utilize the International Financial Reporting Standards (IFRS) when preparing their financial statements. Foreign companies and their subsidiaries are required to follow similar financial reporting and audit requirements as domestic companies, regardless of size. Although the Listing Rules of the Port Moresby Stock Exchange do not set out additional financial reporting requirements for listed companies, the rules do require listed companies to publicly disclose their audited financial statements.

The government, through the Environmental Act 2000, encourages businesses to prevent and minimize environmental harm. The Conservation Environmental and Protection Authority (CEPA) ensures businesses comply with environmental regulations imposed under the Environmental Act 2000. Companies seeking to invest in businesses that pose a threat to the environment are required to conduct an environmental impact assessment report. However, these reports are rarely made available to the public.

When possible, proposed laws are made available for public comment, but comments are not always taken into consideration or acted on by lawmakers. Frequently, important Parliamentary decisions, such as the annual budget, are taken with no hearings and little or no debate before voting.

Regulatory decisions can sometimes be capricious and opaque, but they do not specifically target foreign-owned businesses. Most regulatory decisions can be appealed to courts with jurisdiction. Many PNG government functions and documents are available online, but not all, and they are not centralized. Government agencies have acts and regulations that encourage transparency in the administrative process, which are rarely enforced.

The Treasurer, Ian Ling-Stuckey commissioned the review and amendment of the Central Bank Act 2000 by an appointed independent advisory group. The findings were made public and proposed amendments to the act were passed in parliament which included governance reforms. The reserve bank’s objectives were also expanded from primarily controlling inflation and unemployment to now include economic growth, the general development of PNG economy, and managing national economic crises. Following these changes, the government appointed a monetary policy board and replaced the head of the reserve bank. The Marape government also amended the Kumul Consolidated Holdings Act to promote good governance, increase transparency, and improve the performance of the country’s state-owned enterprises (SOEs).

There is strong political will in PNG to restore public confidence and engagement in the government’s fiscal reporting systems. However, greater action by reporting agencies is critical to realize full and timely reporting practices in PNG’s public finance management systems.

Overall, the government needs greater coordination among reporting agencies to deliver their mandated functions and responsibilities effectively. This includes all government agencies consistently and fully reporting all required financial activities, with proper financial statements to the supreme audit institution. The lack of full and timely reporting practices continues to undermine public finance management systems, and publicly available budget information.

At the same time, most budget documents remain incomprehensible to many ordinary citizens due to low financial literacy levels and the lack of proper public and civic awareness programs.

PNG is a party to the Melanesian Free Trade Agreement. The agreement came into effect in 2017 and does address the need for competent regulatory authorities in each country (PNG, Solomon Islands, Vanuatu, and Fiji). However, the regulatory chapter is small and is designed to be strengthened and improved going forward.

When international standards are used in PNG, they are most often Australian models due to PNG’s history under Australian colonial governance and their continuing close economic ties.

The government has notified the WTO Committee on Technical Barriers to Trade only once. That notification covered food safety issues and was issued in 2006.

The legal system is based on English common law. Contract law in Papua New Guinea is very similar to and applies in much the same way as in other common law countries such as Great Britain, Australia, Canada, and New Zealand. There is, however, considerably less statutory regulation of the application and operation of contracts in Papua New Guinea than in those other countries.

The Supreme Court is the nation’s highest judicial authority and final court of appeal. Other courts are the National Court; district courts, which deal with summary and non-indictable offenses; and local courts, established to deal with minor offenses, including matters regulated by local customs.

While often painstakingly slow, the judiciary system is widely viewed as independent from government interference. The Supreme Court has original jurisdiction in matters of constitutional interpretation and enforcement and has appellate jurisdiction in appeals from the National Court, certain decisions of the Land Titles Commission, and those of other regulatory entities as prescribed in their own Acts. The National Court also has original jurisdiction for certain constitutional matters and has unlimited original jurisdiction for criminal and civil matters. The National Court has jurisdiction under the Land Act in proceedings involving land in Papua New Guinea other than customary land.

Foreign investors can either be incorporated in PNG as a subsidiary of an overseas company or incorporated under the laws of another country and therefore registered as an overseas company under the Companies Act 1997. The 1997 Companies Act and 1998 Companies Regulation oversee matters regarding private and public companies, both foreign and domestic. All foreign business entities must have IPA approval and must be certified and registered with the government before commencing operations in PNG. While government departments have their own procedures for approving foreign investment in their respective economic sectors, the IPA provides investors with the relevant information and contacts. In 2013, the government amended the Takeovers Code to include a test for foreign companies wishing to buy into the ownership of local companies. The new regulation states that the Securities Commission of Papua New Guinea (SCPNG) shall issue an order preventing a party from acquiring any shares, whether partial or otherwise, if the commission views that such acquisition or takeover is not in the national interest of PNG. This applies to any company, domestic or foreign, registered under the PNG Companies Act, publicly traded, with more than 5 million US$ 1.53 million in assets, with a minimum of 25 shareholders, and more than 100 employees.

In recent years, this law was not used to prevent ExxonMobil’s acquisition of InterOil or Chinese company Zijin Mining’s purchase of 50 percent of the Porgera Joint Venture gold mine. The IPA website (https://www.ipa.gov.pg/ ) is the official online information platform to engage with the public on matters relating to the IPA’s mandated roles and function.

The 2002 Independent Consumer and Competition Commission Act is the law that governs competition. It also established the Independent Consumer & Competition Commission (ICCC), the country’s premier economic regulatory body and consumer watchdog; introduced a new regime for the regulation of utilities, in relation to prices and service standards; and allowed the ICCC to take over the price control tasks previously undertaken by the Prices Controller as well as the consumer protection tasks previously undertaken by the Consumer Affairs Council. The ICCC’s website is http://www.iccc.gov.pg .

The ICCC reviewed the merger and acquisition of Oil Search Limited by Santos Australia, Digicel Pacific by Telstra Australia, and the proposal by Kina Bank to acquire Westpac. ICCC conducted stakeholder consultations for each of the mergers and acquisitions to determine the effect on consumers and market competition. It approved the Santos/Oil Search and Digicel/Telstra deals while denying the acquisition of Westpac by Kina.

The judicial system upholds the sanctity of contracts, and the Investment Promotion Act of 1992 expressly prohibits expropriation of foreign assets. The 2013 nationalization of the Ok Tedi copper-gold-silver mine was an Act of Parliament, considered and voted on in the regular order of business. There was no recourse or due process beyond the Parliament.

ICSID Convention and New York Convention

PNG signed the instrument of Accession to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (the New York Convention) on June 22, 2019. The Instrument of Accession was deposited with the UN Treaties Depository in New York on July 17, 2019, and PNG became the 160th country to accede to the New York Convention. As a signatory to the New York Convention, PNG’s National Executive Council endorsed reform to the country’s outdated Arbitration Act 1951 (Chapter 46 of the Revised Laws of PNG) through the adoption of new legislation based on international model laws to implement the New York Convention and to provide enhanced support for modern arbitration in PNG.

PNG has been a member of the International Centre for Settlement of Investment Disputes (ICSID Convention) since 1978. In agreements with foreign investors, GPNG traditionally adopts the Arbitration Rules of the United Nations Commission on International Trade Law (UNCITRAL model law). While no specific domestic legislation exists for enforcement of awards under the 1958 New York Convention or ICSID Convents, in early 2018, an Arbitration Technical Working Committee (ATWC) was formed to advance arbitration reform in PNG. Consisting of members of the PNG Judiciary and representatives of the First Legislative Counsel and other relevant inter-governmental departments and agencies, the ATWC produced a draft Arbitration Bill 2019 in consultation with the United Nations Commission on International Trade Law (UNCITRAL), Asian Development Bank and internationally recognized arbitration experts. The draft Arbitration Bill 2019 aims to conform with best modern international arbitration law practice. The draft bill is subject to further vetting before its enactment.

Investor-State Dispute Settlement

Investment disputes may be settled through diplomatic channels or through the use of local remedies before having such matters adjudicated at the International Centre for the Settlement of Investment Disputes or through another appropriate tribunal of which Papua New Guinea is a member. The Investment Promotion Act 1992, which is administered by the IPA, also protects against expropriation, cancellation of contracts, and discrimination through the granting of most favored nation treatment to investors. PNG does not have a Bilateral Investment Treaty (BIT) with the United States, and no claims have been made under such an agreement. There is not a recent history of international judgments against GoPNG nor is there a recent history of extrajudicial action against foreign investors. PNG does not have a Bilateral Investment Treaty (BIT) or Free Trade Agreement (FTA) with an investment chapter with the United States.

Over the last 10 years, there here have been no known disputes involving a U.S. person or other foreign investors, nor have the local courts heard cases to recognize or enforce foreign arbitral awards issued against the governments. There is no history of extrajudicial action against foreign investors.

International Commercial Arbitration and Foreign Courts

According to the Port Moresby Chamber of Commerce & Industry, local and foreign parties settle disputes in Papua New Guinea through the courts. Litigation in PNG is perceived to be an expensive and drawn-out process, sometimes taking years for a decision to be handed down.

There is no domestic arbitration body outside of the courts and contract enforcement. A 2015 international arbitration decision in favor of Interoil (which has since been acquired by ExxonMobil) and against Oil Search was reportedly respected in PNG. To date, there have been no cases in which SOEs were involved in investment disputes.

Papua New Guinea’s bankruptcy laws are included in chapter 253 of the Insolvency Act of 1951 and sections 254 through 362 of the Companies Act of 1997, which covers receivership and liquidation. Bankruptcy and litigation searches can only be conducted in person at the National Court in Port Moresby.

According to the World Bank’s Doing Business Report, resolving insolvency in Papua New Guinea takes an average of three years, and typically costs 23 percent of the debtor’s estate. The average recovery rate is 25.2 cents on the dollar. Globally, Papua New Guinea stands at 141 out of 189 economies for the Ease of Resolving Insolvency on the World Bank Ease of Doing Business Survey.

Proposed Paraguayan laws and regulations, including those pertaining to investment, are usually available in draft form for public comment after introduction into senate and lower house committees. In most instances, there are public hearings where members of the general public or interested parties can provide comments.

Regulatory agencies’ supervisory functions over telecommunications, energy, potable water, and the environment are inefficient and opaque. Politically motivated changes in the leadership of regulating agencies negatively impact firms and investors. Although investors may appeal to the Comptroller General’s Office in the event of administrative irregularities, corruption has historically been common in Paraguayan institutions, as time-consuming processes provide opportunities for front-line civil servants to seek bribes to accelerate the paperwork.

While regulatory processes are managed by governmental organizations, the Investment Incentive Law (60/90) establishes an Investment Council that includes the participation of two private sector representatives.

Public finances and debt obligations of government institutions, agencies, and state-owned enterprises (SOEs) are available online and mostly centralized by the Ministry of Finance.

As Mercosur’s purpose is to promote free trade and fluid movement of goods, people, and currency, each country member is expected to adjust their regulations based on multilateral treaties, protocols, and agreements.

Paraguay is a member of the WTO and notifies the WTO Committee on Technical Barriers to Trade of all draft technical regulations.

Paraguay has a Civil Law legal system based on the Napoleonic Code. A new Criminal Code went into effect in 1998, with a corresponding Code of Criminal Procedure following in 2000. A defendant has the right to a public and oral trial. A three-judge panel acts as a jury. Judges render decisions on the basis of (in order of precedence) the Constitution, international agreements, the codes, laws

Private entities may file appeals to government regulations they assess to be contrary to the constitution or Paraguayan law. The Supreme Court is responsible for answering these appeals.

The judiciary is a separate and independent branch of government, however there are frequent media reports of political interference with judicial decision making. Judicial corruption also remains a concern, including reports of judges investing in plaintiffs’ claims in return for a percentage of monetary payouts.

Paraguay has a specialized court for civil and commercial judicial matters.

The Investment Incentive Law (60/90) passed in 1990 permits full repatriation of capital and profits. No restrictions exist in Paraguay on the conversion or transfer of foreign currency, apart from bank reporting requirements for transactions in excess of USD 10,000. This law also grants investors a number of tax breaks, including exemptions from corporate income tax and value-added tax.

The 1991 Investment Law (117/91) guarantees equal treatment of foreign investors and the right to real property. It also regulates joint ventures (JVs), recognizing JVs established through formal legal contracts between interested parties. This law allows international arbitration for the resolution of disputes between foreign investors and the Government of Paraguay.

In December 2015, the president signed an Investment Guarantee Law (5542/15) to promote investment in capital-intensive industries. Implementing regulations were published in 2016. The law protects the remittance of capital and profits, provides assurances against administrative and judicial practices that might be considered discriminatory, and permits tax incentives for up to 20 years. There is no minimum investment amount, but projects must be authorized by a joint resolution by the Ministry of Finance and Ministry of Industry and Commerce.

In 2013 the Paraguayan Congress passed a law to promote public-private partnerships (PPP) in public infrastructure and allow for private sector entities to participate in the provision of basic services such as water and sanitation. The government signed implementing regulations for the PPP law in 2014. As a result, the Executive Branch can now enter into agreements directly with the private sector without the need for congressional approval. In 2015, the Government of Paraguay implemented its first contract under the new law. In 2016, it awarded its second PPP to a consortium of Spanish, Portuguese, and local companies to expand and maintain two of the country’s federal highways. Paraguay’s bid for an airport expansion PPP in Asuncion in 2016, was officially cancelled in October 2018 due to concerns over the contracting process. No other PPPs have been awarded since, although some are under consideration by the Ministry of Public Works. Large infrastructure projects are usually open to foreign investors.

Paraguay took steps in 2019 to demonstrate increased transparency in its financial system with the aim of attracting additional foreign investment. In December 2019, President Abdo Benitez signed into law the last of a series of twelve anti-money laundering laws at the recommendation of the Financial Action Task Force against Money Laundering in Latin America (GAFILAT). The laws comply with international standards and facilitate the fight against money laundering, terrorist financing, and the proliferation of weapons of mass destruction. More information on the anti-money laundering laws and regulations can be found here: http://www.seprelad.gov.py/disposiciones-legales-i68 

Paraguay’s budget and information on debt obligations were widely and easily accessible to the general public, including online.  The published budget was adequately detailed and considered generally reliable.  Revised estimates were made public in end-of-year and in-year execution reports. Paraguay’s Comptroller’s Office selected sections of the government’s accounts for audit according to a risk assessment because it lacks sufficient resources to audit the entire executed budget annually.

REDIEX provides a website to facilitate access to relevant legislation, laws, and regulations for investors, also available in English: www.bit.do/REDIEX20 

Paraguay passed a Competition Law in 2013, which entered into force in April 2014. Law 4956/13 explicitly prohibits anti-competitive acts and created the National Competition Commission (CONACOM) as the government’s enforcement arm.

Private property has historically been respected in Paraguay as a fundamental right. Expropriations must be sanctioned by a law authorizing the specific expropriation. There have been reports of expropriations of land without prompt and fair compensation.

Paraguay has a bankruptcy law (154/63) under which a debtor may suspend payments to creditors during the evaluation period of the debtors’ restructuring proposal. If no agreement is reached, a trustee may liquidate the company’s assets. According to the World Bank’s 2020 Doing Business Report, Paraguay stands at 105 in the ranking of 190 economies on the ease of resolving insolvency. The report states resolving insolvency takes 3.9 years on average and costs nine percent of the debtor’s estate, with the most likely outcome being that the company will be sold as piecemeal sale. The average recovery rate is 23 cents on the dollar. Bankruptcy is not criminalized in Paraguay.

Laws and regulations most relevant to foreign investors are enacted and implemented at the national level. Most ministries and agencies make draft regulations available for public comment. El Peruano, the state’s official gazette, publishes regulations at the national, regional, and municipal level. Ministries generally maintain current regulations on their websites. Rule-making and regulatory authority also exists through executive agencies specific to different sectors. The Supervisory Agency for Forest Resources and Wildlife (OSINFOR), the Supervisory Agency for Energy and Mining (OSINERGMIN), and the Supervisory Agency for Telecommunications (OSIPTEL), all of which report directly to the President of the Council of Ministers, can enact new regulations that affect investments in the economic sectors they manage. These agencies also have the right to enforce regulations with fines. Regulation is generally reviewed on the basis of scientific and data-driven assessments, but public comments are not always received or made public. The government does not promote or require companies’ environmental, social, and governance (ESG) disclosure.

Accounting, legal, and regulatory standards are consistent with international norms. Peru’s Accounting Standards Council endorses the use of IFRS standards by private entities. Public finances and debt obligations, including explicit and contingent liabilities, are transparent and publicly available at the Ministry of Economy and Finance website: https://www.mef.gob.pe/es/estadisticas-sp-18642/deuda-del-sector-publico .

Peru is a member of regional economic blocs. Under the Pacific Alliance, Peru looks to harmonize regulations and reduce barriers to trade with other members: Chile, Colombia, and Mexico. Peru is a member of the Andean Community (CAN), which issues supranational regulations (based on consensus of its members) that supersede domestic provisions.

Peru follows international food standard bodies, including: CODEX Alimentarius, World Organization for Animal Health (OIE), and International Plant Protection Convention (IPPC) guidelines for Sanitary and Phytosanitary (SPS) standards. When CODEX does not have limits or standards established for a product, Peru defaults to the U.S. maximum residue level or standard. Peru’s system is generally more aligned with the U.S. regulatory system and standards than with its other trading partners. Peru notifies all agricultural-related technical regulations to the WTO Technical Barriers to Trade (TBT) committee.

Peru uses a civil law system. Companies are generally regulated through Peru’s civil code, which includes sections governing contracts and general corporate law. Peru’s civil court system resolves conflicts between companies. Companies can also access conflict resolution services in civil courts. Litigation processes in Peruvian courts are slow.

Peru has an independent judiciary. The executive branch does not interfere with the judiciary as a matter of policy. Regulations and enforcement actions are appealable through administrative process and the court system. Peru is in the process of reforming its justice system. The National Justice Board (Junta Nacional de Justicia), which began operating in January 2020, supervises the selection processes, appointments, evaluations, and disciplinary actions for judges.

Peru has a stable and attractive legal framework used to promote private investment. The 1993 Peruvian Constitution includes provisions that establish principles to ensure a favorable legal framework for private investment, particularly for foreign investment. A key constitutional and regulatory principle is equal treatment of domestic and foreign investment. Some of the main private investment regulations include:

• Legislative Decree 662, which establishes foreign investment legal stability regulations;
• Legislative Decree 757, which establishes Peru’s private investment growth framework law; and
• Supreme Decree 162-92-EF, which establishes private investment guarantee mechanism regulations.

Peru’s legal system is available to investors. All laws relevant to foreign investment along with pertinent explanations and forms can be found on the ProInversion website: https://www.investinperu.pe/en/climate/legal-framework-for-investments .

INDECOPI is the GOP agency responsible for reviewing domestic competition-related concerns. Congress published a mergers and acquisitions (M&A) control law in January 2021. The law currently requires INDECOPI to review and approve M&As involving companies, including multinationals, that have combined annual sales or gross earnings over $146 million in Peru and if the value of the sales or annual gross earnings in Peru of two or more of the companies involved in the proposed M&A operation exceed $22 million each.

A legislative decree issued in September 2018 (DL 1444) modified the public procurement law to allow government agencies to use government-to-government (G2G) agreements to facilitate procurement processes.  The GOP considers the G2G procurement model as a suitable method for expediting priority infrastructure projects in a manner that is more transparent and less susceptible to corruption. However, the USG, outside of the US Army Corps of Engineers, does not have a mechanism to support Peru’s G2G contracts. Peru expanded the use of G2G agreements in 2021 to include large infrastructure projects including a $1.6 billion general reconstruction initiative (related to damages caused by the El Nino event of 2017) and a $3.0 billion Central Highway project.

The Peruvian Constitution states that Peru can only expropriate private property based on public interest, such as public works projects or for national security. Article 70 of the Constitution establishes that the State can only expropriate through a judicial process or prior mandate of the law, and only after payment of compensation, including for damages. Peruvian law bases compensation for expropriation on fair market value. Article 70 also guarantees the inviolability of private property.

Public dialogue has at times touched the theme of expropriation or nationalization of the extractives sectors, including during political campaigns, but the GOP has not to date moved forward with any direct expropriation of sectors or businesses. Landowners have alleged indirect expropriation due to government inaction and corruption in “land-grab” cases that have, at times, been linked to projects endorsed by subnational governments.

Peru has a creditor rights hierarchy similar to that established under U.S. bankruptcy law, and monetary judgments are usually made in the currency stipulated in the contract. However, administrative bankruptcy procedures are slow and subject to judicial intervention. Compounding this difficulty are occasional laws passed to protect specific debtors from action by creditors that would force them into bankruptcy or liquidation. In August 2016, the GOP extended the period for bankruptcy from one year to two years. Peru does not criminalize bankruptcy.

The Polish Constitution contains a number of provisions related to administrative law and procedures.  It states administrative bodies have a duty to observe and comply with the law of Poland.  The Code of Administrative Procedures (CAP) states rules and principles concerning participation and involvement of citizens in processes affecting them, the giving of reasons for decisions, and forms of appeal and review.

As a member of the EU, Poland complies with EU directives by harmonizing rules or translating them into national legislation.  Rule-making and regulatory authority exist at the central, regional, and municipal levels.  Various ministries are engaged in rule-making that affects foreign business, such as pharmaceutical reimbursement at the Ministry of Health or incentives for R&D at the Ministry of Economic Development and Technology.  Regional and municipal level governments can levy certain taxes and affect foreign investors through permitting and zoning.

Polish accounting standards do not differ significantly from international standards.  Major international accounting firms provide services in Poland.  In cases where there is no national accounting standard, the appropriate International Accounting Standard may be applied.  However, investors have complained of regulatory unpredictability and high levels of administrative red tape.  Foreign and domestic investors must comply with a variety of laws concerning taxation, labor practices, health and safety, and the environment.  Complaints about these laws, especially the tax system, center on frequent changes, lack of clarity, and strict penalties for minor errors.

Poland has improved its regulatory policy system over the last several years.  The government introduced a central online system to provide access for the general public to regulatory impact assessments (RIA) and other documents sent for consultation to selected groups such as trade unions and business.  Proposed laws and regulations are published in draft form for public comment, and ministries must conduct public consultations.  Poland follows OECD recognized good regulatory practices, but investors say the lack of regulations governing the role of stakeholders in the legislative process is a problem.  Participation in public consultations and the window for comments are often limited.

New guidelines for RIA, consultation and ex post evaluation were adopted under the Better Regulation Program in 2015, providing more detailed guidance and stronger emphasis on public consultation.  Like many countries, Poland faces challenges to fully implement its regulatory policy requirements and to ensure that RIA and consultation comments are used to improve decision making.  The OECD suggests Poland extend its online public consultation system and consider using instruments such as green papers more systematically for early-stage consultation to identify options for addressing a policy problem.  OECD considers steps taken to introduce ex post evaluation of regulations encouraging.

Bills can be submitted to Parliament for debate as “citizens’ bills” if authors collect 100,000 signatures in support for the draft legislation.  NGOs and private sector associations most often take advantage of this avenue.  Parliamentary bills can also be submitted by a group of parliamentarians, a mechanism that bypasses public consultation and which both domestic and foreign investors have criticized.  Changes to the government’s rules of procedure introduced in June 2016 reduced the requirements for RIA for preparations of new legislation.

Administrative authorities are subject to oversight by courts and other bodies (e.g., the Supreme Audit Chamber – NIK), the Office of the Human Rights Ombudsperson, special commissions and agencies, inspectorates, the Prosecutor and parliamentary committees.  Polish parliamentary committees utilize a distinct system to examine and instruct ministries and administrative agency heads.  Committees’ oversight of administrative matters consists of: reports on state budget implementation and preparation of new budgets, citizens’ complaints, and reports from NIK.  In addition, courts and prosecutors’ offices sometimes bring cases to Parliament’s attention.

The Ombudsperson’s institution works relatively well in Poland.  Polish citizens have a right to complain and to put forward grievances before administrative bodies.  Proposed legislation can be tracked on the Prime Minister’s webpage, RPL Strona Główna (rcl.gov.pl)  and the Parliament’s webpage:  https://www.sejm.gov.pl/sejm9.nsf/proces.xsp 

The government promotes and encourages companies’ environmental, social, and governance (ESG) disclosure. For example, the Strategic Investments Program launched by Bank Gospodarstwa Krajowego (BGK) offers co-financing, up to 95 percent of the value, for investments by local governments. As part of the assessment of applications, implementation of innovative technologies and compliance with sustainable development goals are taken into account. Tax relief for corporate social responsibility (CSR), intended for all entrepreneurs, will come into force in 2022. Companies will be able to deduct an additional 50 percent from the tax base for costs incurred on activities such as sports, culture, higher education, and science. CSR relief may be deducted up to the amount of income obtained in the tax year. The government also organizes or supports conferences and campaigns such as “Our Climate” and “TOGETAIR 2022,” with the aim of raising awareness of ways to transition to a climate-neutral, green, competitive, and inclusive economy.

Poland has consistently met the Department of State’s minimum requirements for fiscal transparency: 2021 Fiscal Transparency Report – United States Department of State

Poland’s budget and information on debt obligations were widely and easily accessible to the general public, including online. The budget was substantially complete and considered generally reliable. NIK audited the government’s accounts and made its reports publicly available, including online. The budget structure and classifications are complex, and the Polish authorities agree more work is needed to address deficiencies in the process of budgetary planning and procedures. State budgets encompass only part of the public finances sector.

The European Commission regularly assesses the public finance sustainability of Member States based on fiscal gap ratios. In 2022, Poland’s public finances will be exposed to a higher general government deficit, uncertainty in financial markets resulting from the Russian invasion of Ukraine, the macroeconomic environment with elevated inflation, and the monetary policy of the National Bank of Poland (NBP) and major central banks, including the European Central Bank and the U.S. Federal Reserve.

Since its EU accession in May 2004, Poland has been transposing European legislation and reforming its own regulations in compliance with the EU system. Poland sometimes disagrees with EU regulations related to renewable energy and emissions due to its important domestic coal industry. Poland participates in the process of creation of European norms. There is strong encouragement for non-governmental organizations, such as environmental and consumer groups, to actively participate in European standardization. In areas not covered by European normalization, the Polish Committee for Standardization (PKN) introduces norms identical with international norms, i.e., PN-ISO and PN-IEC. PKN actively cooperates with international and European standards organizations and with standards bodies from other countries. PKN has been a founding member of the International Organization for Standardization (ISO) and a member of the International Electro-technical Commission (IEC) since 1923.PKN also cooperates with the American Society for Testing and Materials (ASTM) International and the World Trade Organization’s (WTO) Agreement on Technical Barriers to Trade (TBT). Poland has been a member of the WTO since July 1, 1995 and was a member of GATT from October 18, 1967. All EU member states are WTO members, as is the EU in its own right. While the member states coordinate their positions in Brussels and Geneva, the European Commission alone speaks for the EU and its members in almost all WTO affairs. PKN runs the WTO/TBT National Information Point in order to apply the provisions of the TBT with respect to information exchange concerning national standardization.Useful Links:

http://ec.europa.eu/growth/single-market/european-standards/harmonised-standards/ 

http://eur-lex.europa.eu/oj/direct-access.html?locale=en )

The Polish legal system is code-based and prosecutorial.  The main source of the country’s law is the Constitution of 1997.  The legal system is a mix of Continental civil law (Napoleonic) and remnants of communist legal theory.  Poland accepts the obligatory jurisdiction of the European Court of Justice (ECJ), but with reservations.  In civil and commercial matters, first instance courts sit in single-judge panels, while courts handling appeals sit in three-judge panels. District Courts (Sad Rejonowy) handle the majority of disputes in the first instance.  When the value of a dispute exceeds a certain amount or the subject matter requires more expertise (such as those regarding intellectual property rights), Circuit Courts (Sad Okregowy) serve as first instance courts.  Circuit Courts also handle appeals from District Court verdicts.  Courts of Appeal (Sad Apelacyjny) handle appeals from verdicts of Circuit Courts as well as generally supervise the courts in their region.  The Polish judicial system generally upholds the sanctity of contracts.  Foreign court judgements, under the Polish Civil Procedure Code and European Community regulation, can be recognized.  There are many foreign court judgments, however, which Polish courts do not accept or accept partially.  There can also be delays in the recognition of judgments of foreign courts due to an insufficient number of judges with specialized expertise.  Generally, foreign firms are wary of the slow and over-burdened Polish court system, preferring other means to defend their rights.  Contracts involving foreign parties often include a clause specifying that disputes will be resolved in a third-country court or through offshore arbitration.  (More detail in Section 4, Dispute Settlement.)

Since coming to power in 2015, the PiS-led government has pursued far-reaching reforms to Poland’s judicial system. The reforms have led to legal disputes with the European Commission over threats to judicial independence. The reforms have also drawn criticism from legal experts, NGOs, and international organizations. Poland’s government contends the reforms are needed to purge the old Communist guard and increase efficiency and democratic oversight in the judiciary.

Observers have noted, in particular, the introduction of an extraordinary appeal mechanism in the 2017 Supreme Court Law.  The extraordinary appeal mechanism states that final judgments issued since 1997 can be challenged and overturned in whole or in part during a three-year period starting from the day the legislation entered into force, April 3, 2018.  On February 25, 2021, the lower house of Parliament (Sejm) passed an amendment to the law further extending the deadline for submitting extraordinary complaints by three years (until April 3, 2024).  The President signed the bill into law on March 31, 2021. During 2021, the Extraordinary Appeals Chamber received 744 new complaints of which 280 were recognized and accepted for examination. During 2021, the Chamber reviewed 103 complaints.

On April 8, 2020, the European Court of Justice (ECJ) issued interim measures ordering the government to suspend the work of the Supreme Court Disciplinary Chamber with regard to disciplinary cases against judges. The ECJ is evaluating an infringement proceeding launched by the European Commission in April 2019 and referred to the ECJ in October 2019. The Commission has argued that the country’s disciplinary regime for judges “undermines the judicial independence of…judges and does not ensure the necessary guarantees to protect judges from political control, as required by the Court of Justice of the EU.” The Commission stated the disciplinary regime did not provide for the independence and impartiality of the Disciplinary Chamber, which is composed solely of judges selected by the restructured National Council of the Judiciary, which is appointed by the Sejm. The ECJ has yet to make a final ruling. The European Commission and judicial experts have complained the government has ignored the ECJ’s interim measures.

On April 29, 2020, the European Commission launched another infringement procedure regarding a law that came into effect on February 14, 2020. The law allows judges to be disciplined for impeding the functioning of the legal system or for questioning another judge’s professional state or the effectiveness of his or her appointment. It also requires judges to disclose memberships in associations. The Commission stated the law “undermines the judicial independence of Polish judges and is incompatible with the primacy of EU law.” It also stated the law “prevents Polish courts from directly applying certain provisions of EU law protecting judicial independence and from putting references for preliminary rulings on such questions to the [European] Court of Justice.” On December 3, 2020, the Commission expanded its April 29 complaint to include the continued functioning of the Disciplinary Chamber in apparent disregard of the ECJ’s interim measures in the prior infringement procedure.  On January 27, 2021, the European Commission sent a reasoned opinion to the Polish government for response.

On July 14 and 15, 2021, the ECJ issued two rulings against Polish government changes to Poland’s judicial disciplinary system. These rulings directly conflicted with a July 14, 2021, Polish Constitutional Tribunal ruling that said the ECJ had exceeded its authority. On July 20, 2021, the European Commission threatened financial sanctions and gave the Polish government until August 16, 2021, to confirm compliance with the ECJ rulings. On August 16, the Polish government sent a letter to the Commission in response to the ultimatum, promising new legislation in “the coming months” to fix Poland’s judicial disciplinary regime and liquidate the controversial Disciplinary Chamber of the Supreme Court. On September 7, 2021, the Commission announced it had requested the ECJ impose financial penalties against Poland for not complying with ECJ rulings. The Commission also initiated a new infringement procedure against Poland to ascertain details about the Polish government’s planned legislation. On October 27, 2021, the ECJ imposed a €1 million daily fine against Poland for the government’s failure to suspend the Disciplinary Chamber of the Supreme Court, as ordered by the ECJ in July. As of April 2022, the Polish Parliament has not completed the legislative process to consider legislation that responds to the European Commission’s concerns.

Foreign nationals can expect to obtain impartial proceedings in legal matters. Polish is the official language and must be used in all legal proceedings. It is possible to obtain an interpreter. The basic legal framework for establishing and operating companies in Poland, including companies with foreign investors, is found in the Commercial Companies Code. The Code provides for establishment of joint-stock companies, limited liability companies, or partnerships (e.g., limited joint-stock partnerships and professional partnerships). These corporate forms are available to foreign investors who come from an EU or European Free Trade Association (EFTA) member state or from a country that offers reciprocity to Polish enterprises, including the United States.With few exceptions, foreign investors are guaranteed national treatment. Companies that establish an EU subsidiary after May 1, 2004 and conduct or plan to commence business operations in Poland must observe all EU regulations. However, in some cases they may not be able to benefit from all privileges afforded to EU companies. Foreign investors without permanent residence and the right to work in Poland may be restricted from participating in day-to-day operations of a company. Parties can freely determine the content of contracts within the limits of European contract law. All parties must agree on essential terms, including the price and the subject matter of the contract. Written agreements, although not always mandatory, may enable an investor to avoid future disputes. The Civil Code is the law applicable to contracts.

Useful websites (in English) to help navigate laws, rules, procedures, and reporting requirements for foreign investors:

Polish Investment and Trade Agency: https://www.paih.gov.pl/en 

Polish Financial Supervision Authority (KNF):  https://www.knf.gov.pl/en/ 

Office of Competition and Consumer Protection (UOKIK):  https://uokik.gov.pl/legal_regulations.php 

Biznes.gov.pl is intended for people who plan to start a new business in Poland. The portal is designed to simplify the formalities of setting up and running a business. It provides up-to-date regulations and procedures for running a business in Poland and the EU; it supports electronic application submission to state institutions; and it answers questions regarding running a business. Information is available in Polish and English. https://www.biznes.gov.pl/en/przedsiebiorcy/ 

In 2022, the Polish Government introduced a new measure – an investment agreement – for strategic investors who would like to obtain clarity and certainty regarding the tax consequences of a given investment. The agreement (commonly referred to as “Interpretation 590”) is concluded with the Ministry of Finance and will be binding on the tax administration.

An Interpretation 590 includes the following features:

• Its objective is to provide flexibility, completeness, and comprehensiveness in determining the tax consequences of an investment project.
• It is available to investors planning an investment in Poland worth at least PLN 100 million (approximately $22 million) and, from 2025 onward, PLN 50 million (approximately $11 million).
• The agreement will be valid for the stated period, limited to five tax years (with the possibility to extend).
• Separate applications to various tax authorities (e.g., individual tax rulings, advance pricing arrangements (APA), anti-GAAR clearance, etc.) are not required as all of these matters would be covered with one investment agreement.
• The scope of information provided in the agreement should not be limited by the provisions of the Tax Code governing individual tax rulings. One agreement could cover all potential tax consequences of an investment.
• The agreement will be subject to a fee of PLN 50,000 (approximately $11,200) for the initial application and PLN 100,000 to 500,000 (approximately $22,400 to $112,000) after concluding the agreement, with the exact fee depending on the volume of the investment and scope of the investment agreement).

The above changes reflect an increasing focus of the Polish Government to attract significant investments into Poland.

A special tax unit, the “Investor Desk” has been established, at the Finance Ministry, to handle tax matters of strategic investor. This unit, along with other agencies focused on foreign investments in Poland, will support significant investors passing through administrative requirements.

The tax authorities are often open to discussing strategic investments and providing support in applying formal measures which, with new measures in place, should be even more common and accessible to investors.

Poland has a high level of nominal convergence with the EU on competition policy in accordance with Articles 101 and 102 of the Lisbon Treaty. Poland’s Office of Competition and Consumer Protection (UOKiK) is well within EU norms for structure and functioning, with the exception that the Prime Minister both appoints and dismisses the head of UOKiK. This is supposed to change to be in line with EU norms, however, as of April 2022, the Prime Minister was still exercising his right to remove and nominate UOKiK’s presidents.

The Act on Competition and Consumer Protection  was amended in mid-2019. The most important changes, which concern geo-blocking and access to fiscal and banking secrets, came into force on September 17, 2019. Other minor changes took effect in January 2020. The amendments result from the need to align national law with new EU laws.

Starting in January 2020, UOKiK may intervene in cases when delays in payment are excessive. UOKiK can take action when the sum of outstanding payments due to an entrepreneur for three subsequent months amounts to at least PLN 5 million ($1.1 million). In 2022, the minimum amount decreases to PLN 2 million ($450,000).

The President of UOKiK issues approximately 100 decisions per year regarding practices restricting competition and infringing on collective interests of consumers. Enterprises have the right to appeal against those decisions to the court. In the first instance, the case is examined by the Court of Competition and Consumer Protection, and in the second instance, by the Appellate Court. The decision of the Appellate Court may be challenged by way of a cassation appeal filed to the Supreme Court. In major cases, the General Counsel to the Republic of Poland will act as the legal representative in proceedings concerning an appeal against a decision of the President of UOKiK.

As part of COVID-related measures, the Polish Parliament adopted legislation amending the Act of July 24, 2015, on the Control of Certain Investments, introducing full-fledged foreign direct investment control in Poland and giving new responsibilities to UOKiK. Entities from outside the EEA and/or the OECD have to notify the Polish Competition Authority of the intention to make an investment resulting in acquisition, achievement or obtaining directly or indirectly “significant participation” or the status of a dominant entity within the meaning of the Act of July 24, 2015, on the Control of Certain Investments in an entity subject to protection. The law entered into force on July 24, 2020 and is valid for 24 months. In view of the war taking place across Poland’s eastern border and in the absence of significant amendments to the original Act on the Control of Certain Investments, there is a high likelihood that the temporary amendment adopted in 2020 will be extended, with possible modifications.

In late 2020, the government proposed legislation concerning UOKiK’s investigative powers, cooperation between anti-monopoly authorities, and changes to fine imposition and leniency programs. One of the amendments also stipulates that the President of UOKiK will be elected to a 5-year term and the dismissal of the anti-monopoly authority will only be possible in precisely defined situations, such as a legally valid conviction for a criminal offense caused by intentional conduct and the deprivation of public rights or of Polish citizenship. Adoption of these solutions is linked to the implementation of the EU’s ECN+ directive.

All multinational companies must notify UOKiK of a proposed merger if any party to it has subsidiaries, distribution networks, or permanent sales in Poland.

Examples of competition reviews can be found at:

https://uokik.gov.pl/aktualnosci.php?news_id=17406  (PKN Orlen/Polska Press)

https://www.uokik.gov.pl/news.php?news_id=17198  (Agora/Eurozet)

https://www.uokik.gov.pl/news.php?news_id=17202  (Orlen/Polska Press)

https://www.uokik.gov.pl/news.php?news_id=17198  (BPH Bank spread clauses)

Decisions made by the President of UOKiK can be searched here: https://decyzje.uokik.gov.pl/bp/dec_prez.nsf 

In December 2021, UOKiK launched its first competition probe into a major online platform, beginning an investigation into whether Apple’s latest privacy update unlawfully favors its own personalized advertising service. UOKiK has also initiated two proceedings concerning the application of competition law to employment-related arrangements. This follows a growing global trend of competition authorities combating no-poach or wage-fixing arrangements.

The President of UOKiK has the power to impose significant fines on individuals in management positions at companies that violate the prohibition of anticompetitive agreements and in the case of violations of consumer rights. The maximum fine that can be imposed on a manager is PLN 2 million ($450,000) and, in the case of managers in the financial sector, up to PLN 5 million ($1.12 million).

UOKiK imposed such fines on individuals for the first time in 2021 and as of March 2022, they have been imposed in three cases. Two cases concerned horizontal agreements regarding price fixing and market sharing, and one case concerned vertical restraints on resale prices. More decisions imposing fines on individuals can be expected as there are additional pending cases.

In October 2020, UOKiK issued a €6.48 billion ($6.8 billion) fine on Gazprom for failing to notify the agency about a joint financing agreement.

Article 21 of the Polish Constitution states that “expropriation is admissible only for public purposes and upon equitable compensation.”  The Law on Land Management and Expropriation of Real Estate states that property may be expropriated only in accordance with statutory provisions such as construction of public works, national security considerations, or other specified cases of public interest.  The government must pay full compensation at market value for expropriated property.  Acquiring land for road construction investment, and recently also for the Central Communication Port and the Vistula Spit projects, has been liberalized and simplified to accelerate property acquisition, particularly through a special legislative act. Most acquisitions for road construction are resolved without problems.  There have been a few cases, however, in which the inability to reach agreement on remuneration has resulted in disputes.  Post is not aware of any recent expropriation actions against U.S. investors, companies, or representatives.

Poland’s bankruptcy law has undergone significant change and modernization in recent years. There is now a bankruptcy law and a separate, distinct restructuring law. Bankruptcy in Poland is criminalized if a company’s management does not file a petition to declare bankruptcy when a company becomes illiquid for an extended period of time or if a company ceases to pay its liabilities. https://www.paih.gov.pl/polish_law/bankruptcy_law_and_restructuring_proceedings

In order to reduce the risk of overwhelming the bankruptcy courts with an excess of cases resulting from the COVID-19 pandemic, changes were introduced in the bankruptcy process for consumers, shifting part of the duties to a trustee. A second significant change was the introduction of simplified restructuring proceedings. During restructuring proceedings, a company appoints an interim supervisor and is guaranteed protection against debt collection while seeking approval for specific restructuring plans from creditors. The simplified proceedings enjoy great support among entities at risk of insolvency. These changes were originally intended to remain in force only until June 30, 2021, later extended until November 30, 2021. The popularity of simplified restructurings among distressed entrepreneurs led the Polish Parliament to retain them for an indefinite period of time.

The latest implementation of the amendments to the bankruptcy law brought about other amendments to the proceedings, as follows:

• The announcement on the opening of the proceedings to approve the arrangement will be made by the arrangement supervisor, not by the debtor himself or herself;
• The announcement may be made only after the debtor has submitted the list of receivables and the list of disputed receivables;
• The arrangement supervisor will list the agreements that are essential for the functioning of the debtor’s enterprise so as to prevent its termination;
• The court’s decision on the cancellation of the effects of making the announcement may be appealed; and
• The case files will be kept by the arrangement supervisor.

These amendments entered into force on December 1, 2021.

On December 1, 2021, the National Debtors Register (NDR or Krajowy Rejestr Zadluzonych) began operations. Its purpose is to increase the safety of business transactions through easier verification of contractors, as well as to contribute to the acceleration of bankruptcy and restructuring proceedings. This registry makes proceedings more transparent and easier to follow because all important information regarding the proceedings is available online in one place. In addition to its informational function, the National Debtors Register also serves as a platform for bankruptcy and restructuring proceedings. Applications and letters in proceedings are filed exclusively via the NDR system. Voting on the arrangement and collecting creditors’ votes also takes place via this system, as does the preparation and delivery of court judgments. Certain statutorily defined groups of entities will be exempt from the obligation to file letters in bankruptcy and restructuring proceedings through the NDR.

The government of Portugal employs transparent policies and effective laws to foster competition, and the legal system welcomes FDI on a non-discriminatory basis, establishing clear rules of the game. Legal, regulatory, and accounting systems are consistent with international norms. Public finances and debt obligations are transparent, with data regularly published by the Bank of Portugal, the IGCP debt management agency, and the Ministry of Finance. Regulations drafted by ministries or agencies must be approved by Parliament and, in some cases, by European authorities. All proposed regulations are subject to a 20-to-30-day public consultation period during which the proposed measure is published on the relevant ministry or regulator’s website. Only after ministries or regulatory agencies have conducted an impact assessment of the proposed regulation can the text be enacted and published. The process can be monitored and consulted at the official websites of Parliament  and the Official Portuguese Republic Journal. Ministries or regulatory agencies report the results of the consultations through a consolidated response published on the website of the relevant ministry or regulator.

Rule-making and regulatory authorities exist across sectors including energy, telecommunications, securities markets, financial, and health. Regulations are enforced at the local level through district courts, on the national level through the Court of Auditors, and at the supra-national level through EU mechanisms including the European Court of Justice, the European Commission, and the European Central Bank. The OECD, the European Commission, and the IMF also publish key regulatory actions and analysis. UTAO , the Parliamentary Technical Budget Support Unit, is a nonpartisan body composed of economic and legal experts that support parliamentary budget deliberations by providing the Budget Committee with quality analytical reports on the executive’s budget proposals. In addition, the Portuguese Public Finance Council  conducts an independent assessment of the consistency, compliance with stated objectives, and sustainability of public finances, while promoting fiscal transparency.

The legal, regulatory, and accounting systems are transparent and consistent with international norms. Since 2005, all listed companies must comply with International Financial Reporting Standards as adopted by the European Union (“IFRS”), which closely parallels the U.S. GAAP-Generally Accepted Accounting Principles. Portugal’s Competition Authority enforces adherence to domestic competition and public procurement rules. The European Commission further ensures adhesion to EU administrative processes among its member states.

Public finances are generally deemed transparent, closely scrutinized by Eurostat and monitored by an independent technical budget support unit, UTAO, and the Supreme Audit Institution ‘Tribunal de Contas.’ Over the last decades, Portugal has also consolidated within the State accounts many state-owned enterprises, making budget analysis more accurate.

Portugal has been a member of the EU since 1986, a member of the Schengen area since 1995, and joined the Eurozone in 1999. With the Treaty of Lisbon’s entry into force in 2009, trade policy and rules on foreign direct investment became mostly EU competencies, as part of the bloc’s common commercial policy. The European Central Bank is the central bank for the euro and determines monetary policy for the 19 Eurozone member states, including Portugal. Portugal complies with EU directives regarding equal treatment of foreign and domestic investors. Portugal has been a member of the World Trade Organization since 1995.

The Portuguese legal system is a civil law system, based on Roman law. The hierarchy among various sources of law is as follows: (i) Constitutional laws and amendments; (ii) the rules and principles of general or common international law and international agreements; (iii) ordinary laws enacted by Parliament; (iv) instruments having an effective equivalent to that of laws, including approved international conventions or decisions of the Constitutional Court; and (v) regulations used to supplement and implement laws. The country’s Commercial Company Law and Civil Code define Portugal’s legal treatment of corporations and contracts. Portugal has a Supreme Court and specialized family courts, labor courts, commercial courts, maritime courts, intellectual property courts, and competition courts. Regulations or enforcement actions are appealable, and are adjudicated in national Appellate Courts, with the possibility to appeal to the European Court of Justice. The judicial system is independent of the executive branch and the judicial process procedurally competent, fair, and reliable. Regulations and enforcement actions are appealable.

The Bank of Portugal defines FDI as “an act or contract that obtains or increases enduring economic links with an existing Portuguese institution or one to be formed.” A non-resident who invests in at least 10 percent of a resident company’s equity and participates in the company’s decision-making is considered a foreign direct investor. Current information on laws, procedures, registration requirements, and investment incentives for foreign investors in Portugal is available at AICEP’s website .

The domestic agency that reviews transactions for competition-related concerns is the Portuguese Competition Authority and the international agency is the European Commission’s Directorate General for Competition. Portuguese law specifically prohibits collusion between companies to fix prices, limit supplies, share markets or sources of supply, discriminate in transactions, or force unrelated obligations on other parties. Similar prohibitions apply to any company or group with a dominant market position. The law also requires prior government notification of mergers or acquisitions that would give a company more than 30 percent market share in a sector, or mergers or acquisitions among entities whose total sales exceeded €150 million during the preceding financial year. The Competition Authority has 60 days to determine if the merger or acquisition can proceed. The European Commission may claim authority on cross-border competition issues or those involving entities large enough to have a significant EU market share.

Under Portugal’s Expropriation Code, the government may expropriate property and its associated rights if it is deemed to support the public interest, and upon payment of prompt, adequate, and effective compensation. The code outlines criteria for calculating fair compensation based on market values. The decision to expropriate as well as the fairness of compensation can be challenged in national courts.

Portugal’s Insolvency and Corporate Recovery Code defines insolvency as a debtor’s inability to meet commitments as they fall due. Corporations are also considered insolvent when their liabilities clearly exceed their assets. A debtor, creditor or any person responsible for the debtor’s liabilities can initiate insolvency proceedings in a commercial court. The court assumes the key role of ensuring compliance with legal rules governing insolvency proceedings, with particular responsibility for ruling on the legality of insolvency and payment plans approved by creditors. After declaration of insolvency, creditors may submit their claims to the court-appointed insolvency administrator for a specific term set for this purpose, typically up to 30 days. Creditors must submit details regarding the amount, maturity, guarantees, and nature of their claims. Claims are ranked as follows: (i) claims over the insolvent’s estate, i.e. court fees related to insolvency proceedings; (ii) secured claims; (iii) privileged claims; (iv) common, unsecured claims; and (v) subordinated claims, including those of shareholders.

Qatar has taken measures to protect competition and ensure a free and efficient economy. The World Trade Organization recognizes Qatar’s legal framework to be conducive to private investment and entrepreneurship and enabling the development of an independent judiciary system. In addition to the National Competition Protection and Anti-Monopoly Committee, regulatory authorities exist for most economic sectors and are mandated to monitor economic activity and ensure fair practices.

According to the World Bank’s Global Indicators of Regulatory Governance, Qatar lacks a transparent rulemaking mechanism. Government ministries and regulatory agencies do not share regulatory plans or publish draft laws for public consideration. An official public consultation process does not exist in Qatar. Relevant ministries develop Laws and regulations. The 45-member Shura Council (30 of which are publicly elected officials) must reach a consensus to pass draft legislation, which is then returned to the Cabinet for further review and to the Amir for final approval. The text of all legislation is published online and in local newspapers upon approval by the Amir. All Qatari laws are issued in Arabic and eventually translated to English. Qatar-based legal firms provide translations of Qatari legislation to their clients. Each approved law explicitly tasks one or more government entities with implementing and enforcing legislation. These entities are clearly defined in the text of each law. In some cases, the law also sets up regulatory and oversight committees consisting of representatives of concerned government entities to safeguard enforcement. Qatar’s official legal portal is http://www.almeezan.qa .

Qatar’s primary commercial regulator is the Ministry of Commerce and Industry. Commercial Companies’ Law 11/2015 requires that publicly traded companies submit financial statements to the Ministry in compliance with the International Financial Reporting Standards (IFRS) and the International Accounting Standards (IAS). Publicly listed companies must also publish financial statements at least 15 days before annual general meetings in two local newspapers (in Arabic and English) and on their websites. All companies must prepare accounting records according to standards promulgated by the IAS Board.

Since joining the United Nations’ initiative on sustainable development (SSEI) in 2016, the Qatar Stock Exchange (QSE) has encouraged, but not required, publicly traded companies to report on environmental, social, and governance issues (ESG). In November 2021, the QSE launched an ESG Index listing the top 20 securities with the best ESG profile, indicating that ESG disclosures may soon become a requirement of all listed companies.

The Qatar Central Bank (QCB) is the primary financial regulator that oversees all financial institutions in Qatar, per Law 13/2012, which established a Financial Stability and Risk Control Committee to promote financial stability and enhance regulatory coordination, headed by the QCB Governor. According to Law 7/2005, the Qatar Financial Centre (QFC) Regulatory Authority is the independent regulator of the QFC firms and individuals conducting financial services in or from the QFC. Still, the QCB also oversees financial markets housed within QFC. QFC regulations are available at http://www.qfcra.com/en-us/legislation/ .

The government of Qatar is transparent about its public finances and debt obligations. QCB publishes quarterly banking data, including external government debt, government bonds, treasury bills, and Sukuk (Islamic bonds) at http://qcb.gov.qa/English/Publications/Pages/Publications.aspx 

Qatar is a member of the Gulf Cooperation Council (GCC) – a political and economic regional bloc. Laws based on GCC regulations must be approved through Qatar’s domestic legislative process and are reviewed by the Qatari Cabinet and the Shura Council before implementation. Qatar has been a member of the World Trade Organization (WTO) since 1996 and usually notifies its draft technical regulations to the WTO Committee on Technical Barriers to Trade (TBT).

Qatar’s legal system is based on civil and Islamic Sharia laws. The Constitution takes precedence over all laws, followed by legislation, decrees, and ministerial resolutions. The Supreme Judicial Council appoints all judges under Law 10/2003, oversees Qatari courts, and functions independently from the executive branch of the government, per the Constitution. Qatari courts adjudicate civil and commercial disputes per civil and Sharia laws. International agreements have equal status with Qatari laws; the Constitution ensures that international pacts, treaties, and agreements to which Qatar is party are respected. Contract enforcement is governed by the Civil Code Law 22/2004.

Law 21/2021 promogulated the establishment of an Investment and Commerce Court to oversee all commercial lawsuits and disputes. Pending the establishment of the new court, domestic and commercial disputes continue to be settled in civil courts. Decisions made in civil courts and the new Investment and Commerce Court can be appealed before the Court of Appeals or later the Court of Cassation. Law 20/2021 on Mediation in the Settlement of Civil and Commercial Disputes is applied when parties agree to mediate and settle commercial disputes.

Companies registered with the Ministry of Commerce and Industry are subject to Qatari courts and laws, primarily the Commercial Companies Law 11/2015. Meanwhile, companies set up through Qatar Financial Center (QFC) are regulated by commercial laws based on English Common Law and the courts of the QFC Regulatory Authority. The QFC legal regime is separate from the Qatari legal system—except for criminal law—and is only applicable to companies licensed by the QFC. Similarly, companies registered within the Qatar Free Zones Authority are governed by specialized regulations.

Law 1/2019 on Regulating the Investment of Non-Qatari Capital in Economic Activity and Law 16/2018 on Regulating Non-Qatari Ownership and Use of Properties aim to encourage greater foreign investment in the economy by authorizing, incentivizing, and protecting foreign ownership. The MOCI’s Invest in Qatar Center is Qatar’s main investment registration body. It gives preference to investments that add value to the local economy and align with the country’s national development plans. It has a physical “one-stop-shop” and an online portal. For more information on investment opportunities, commercial registration application, and required documentation, visit https://invest.gov.qa .

Different laws and regulations govern foreign direct investment at the Qatar Financial Centre ( http://www.qfc.qa/ ), the Qatar Free Zones Authority (https://qfz.gov.qa/), the Qatar Science and Technology Park ( https://qstp.org.qa/ ), and Manateq ( https://www.manateq.qa/ ).

Specific sectors are not open for domestic or foreign competition, such as public transportation and fuel distribution and marketing. In such sectors, semi-public companies maintain a predominant role. Law 19/2006 for the Protection of Competition and Prevention of Monopolistic Practice established the Competition Protection and Anti-Monopoly Committee to receive complaints about anti-competition violations. The law protects against monopolistic behavior by entities outside the state if deemed to impact the Qatari market. The law also allows state institutions and government-owned companies absolute or predominant roles in some sectors.

Qatari laws permit international law firms with at least 15 years of continuous experience in their countries of origin to operate in Qatar; however, they can only be licensed if Qatari authorities deem their fields of specialization useful to Qatar. Cabinet Decision Number 57/2010 stipulates that the Doha office of an international law firm can practice in Qatar only if its main office in the country of origin remains open.

Under current legislation (Law 1/2019 and Law 16/2018), the government protects foreign investment and property from direct or indirect expropriation, unless for public benefit, in a non-discriminatory manner, and after providing adequate compensation. Law 13/1988 covers the rules of expropriation for public benefit. The same procedures are applied to the expropriated property of Qatari citizens. Expropriation is unlikely to occur in the investment zones where foreigners may purchase or obtain rights to property. However, the law does not restrict the expropriation power in these areas. There were two Cabinet-approved expropriation decisions in 2021 and one decision in 2020.

Two concurrent bankruptcy regimes exist in Qatar. The first is the local regime, set out in Commercial Law 27/2006 (Articles 606-846). The bankruptcy of a Qatari citizen or a Qatari-owned company is rarely announced. The law aims to protect creditors from a bankrupted debtor whose assets are insufficient to meet the amount of the debts. The government sometimes plays the role of the guarantor to prop up domestic businesses and safeguard creditors’ rights. Bankruptcy is punishable by imprisonment, but the length of the prison sentence depends on violations of other penal codes, such as concealment or destruction of company records, embezzlement, or knowingly contributing to insolvency. The second bankruptcy regime is encoded in QFC’s Insolvency Regulations of 2005 and applies to corporate bodies and branches registered within the QFC. Some firms offer full dissolution bankruptcy services to QFC-registered companies.

The Qatar Central Bank (QCB) established the Qatar Credit Bureau in 2010 to promote credit growth in Qatar. The Credit Bureau provides QCB and the banking sector with a centralized credit database to inform economic and financial policies and support the implementation of risk management techniques as outlined in the Basel II Accord.

Lack of transparency poses one of the greatest hurdles to FDI, as investors must navigate an opaque regulatory bureaucracy. Companies routinely find themselves embroiled in tax, customs, and labor disputes arbitrated by court officials who make decisions that do not conform with Congolese law and ROC Ministry of Justice regulations.

ROC has no known informal regulatory processes managed by nongovernmental organizations or private sector associations.

The government develops new regulations internally and rarely requests formal input from industry representatives. Various ministries have regulatory authority over the individual industries in their area of responsibility, with overall authority coordinated by the Ministry of Economy. The government does not usually offer a formal, public-comment period.

ROC’s accounting, legal, and regulatory frameworks are transparent in their structure, though the application often lacks transparency and fairness. ROC uses Francophone Africa’s Organization for Business and Customs Harmonization (French acronym OHADA) system of accounting, legal, and regulatory procedures.

The government does legally require extractive industries to conduct environmental impact surveys ahead of activities. Mining and timber sector companies are required to do ongoing environmental and social offset activities. Oversight on these required activities is self-reported from businesses. The GROC lacks the capacity to enforce and assure disclosures.

The government does not make draft bills or regulations available for public comment. The government publishes new laws and regulations in ROC’s Official Journal.

The Official Journal is available for download at the website of the Secretary General of the Government who maintains the Official Journal online at http://www.sgg.cg .

Most government ministries have an inspector general that conduct oversight to ensure that government agencies follow administrative processes. The Office of the President has an inspector general who oversees the entire government.

In 2021, the government passed the new Anti-Corruption Law, aiming to target corruption among public officials across all sectors of government. The new legislation is a complement to the 2017 Public Transparency and Financial Management law that focused on transparency of public funds and the officials managing them. The new law increases fines and potential jail time for corruption and is meant to mitigate loss of funds to corruption. No new reforms were made in the reporting period.

The inspector general process is not legally reviewable, digitalized, nor accountable to the public.

The government publishes some public finances and debt obligations, including explicit and contingent liabilities. The Ministry of Finance publishes the arrangements on its website, https://www.finances.gouv.cg/ .

ROC participates as a member in the Economic Community of Central African States (French acronym CEEAC), a regional economic cooperation community, and in the Economic and Monetary Community of Central Africa (French acronym CEMAC), a monetary union of six Central African states. CEMAC forms the base of local regulatory systems, including the stock exchange, the central bank, and the language for rules and regulations on investment and the economy. CEMAC sets the regional debt threshold for member countries and limits external cash transfers for companies based in member countries, and institutes banking regulations shared by member countries.

ROC’s regulatory system for business disputes and regulations governing company registration structure and incorporation incorporates Francophone African regulatory norms promulgated by Organization for the Harmonization of African Business Rights (OHADA).

ROC participates as a member country of the World Trade Organization (WTO). The government did not provide information as to whether it notifies the WTO Committee of all draft regulations relating to Technical Barriers to Trade. ROC signed the WTO Trade Facilitation Agreement but has not begun implementing the agreement.

The French civil law legal system serves as the basis of the Congolese legal system. Contracts are enforced by referring to the commercial court system.

OHADA provides the basis for ROC’s national commercial law, supplemented by ROC-specific provisions, such as requiring companies to register with the commercial courts. A commercial court exists in ROC but has not convened since 2016.

The judicial system remains independent in principle. In practice, however, the executive branch intervenes in the judicial system on an ad hoc basis. The judicial process is procedurally competent, but its fairness and the reliability of judgments and applications of the legal code are questionable.

Appellate courts exist and receive appeals of enforcement actions. Public Law 6-2003, which established the country’s Investment Charter, states that Congolese law will resolve investment disputes. Judgments of foreign courts are difficult to enforce in ROC. Though the government does not usually deny foreign court judgments outright, it may propose process or procedural delays that prolong matters indefinitely without resolution.

ROC’s commercial court has authority over any legal disputes involving foreign investors.

Investors may also file legal complaints in the OHADA court – based in Abidjan, Cote d’Ivoire – which has jurisdiction throughout Francophone Africa. ROC’s Hydrocarbons Law and Mining Code of 2016 contain industry-specific regulations for foreign investments.

The government published no substantive changes to laws, regulations, or judicial decisions related to foreign investment during the reporting period.

The ROC Agency for Business Creation ACPCE is the first stop for establishing a business. Its website has limited information about laws, rules, and reporting requirements: https://dgpme.cg/acpce.php . The newly formed American Chamber of Commerce also serves as a resource for American investors.

No agencies review transactions for competition-related concerns, either domestic or international in nature. Ministries in general monitor individual industries and review industry-related transactions.

The ROC government may legally expropriate property if it finds a public need for a given public facility or infrastructure (e.g. roads, hospitals, etc.).

No recent history of expropriation regarding private companies exists. Historically, however, the ROC government has expropriated private property from Congolese citizens to build roads and stadiums. Law entitles the claimants to a fair market value compensation, but the government distributed such compensation inconsistently.

Beginning in 2012, the ROC government expropriated land of Congolese private property owners in the Kintele suburb of Brazzaville to build a sports complex for the 2015 African Games. The government offered minimal compensation to property owners. At the time, citizens publicly complained of a lack of legal recourse against the government.

The government has not taken any measures alleged to be indirect expropriations such as confiscatory tax regimes or regulatory actions that deprive investors of substantial economic benefits from their investments during the reporting period. However, there is an abundance of corrupt employees within the tax authority who charge companies more than they are due, irrespective of the legal tax regime.

ROC has no specific law that governs bankruptcy. As a member of OHADA, ROC applies OHADA bankruptcy provisions in the event of corporate or individual insolvency. No laws criminalize bankruptcy. ROC does not have a credit bureau or other credit monitoring authority serving the country’s market.

Romanian law requires consultations with stakeholders, including the private sector, and a 30-day comment period on legislation or regulation affecting the business environment (the “Sunshine Law”). Some draft pieces of legislation pending with the government are available in Romanian at  http://www.sgg.ro/acte-normative/ . Proposed items for cabinet meetings are not always publicized in advance or in full. Generally, the agenda of cabinet meetings should include links to the draft pieces of legislation (government decisions, ordinances, emergency ordinances, or memoranda) slated for government decision, but this is not always the case. Pending parliament legislation is available at http://www.cdep.ro/pls/proiecte/upl_pck.home  for the Chamber of Deputies and at https://www.senat.ro/legis/lista.aspx   for the Senate. The Chamber of Deputies is the decision-making body for economic legislation.

Foreign investors point to the excessive time required to secure necessary zoning permits, environmental approvals, property titles, licenses, and utility hook-ups.

The Sunshine Law (Law 52/2003 on Transparency in Public Administration) requires public authorities to allow the public to comment on draft legislation and sets the general timeframe for stakeholders to provide input; however, comments received are not published. The Sunshine Law’s public consultation timelines do not have enforceable penalties or sanctions, and thus public authorities can bypass its provisions without harm. In some cases, public authorities have set deadlines much shorter than the standards set forth in the law or passed a piece of legislation before the deadline for public input expired. The regulatory enforcement process is not digitalized and is not made accountable to the public.

As an EU member state since 2007, Romanian legislation is largely driven by the EU Acquis Communautaire, the accumulated body of EU legislation. European Commission (EC) regulations are directly applicable while national legislation implements directives at the national level. Romania’s regulatory system incorporates European standards. Romania has been a WTO member since January 1995 and a member of the General Agreement on Tariffs and Trade (GATT) since November 1971. Technical regulation notifications submitted by the EU are valid for all Member States. The EU signed the Trade Facilitation Agreement (TFA) in October 2015. Romania has implemented all TFA requirements.

Romania recognizes property and contractual rights, but enforcement through the judicial process can be lengthy, costly, and difficult. Foreign companies engaged in trade or investment in Romania often express concern about the Romanian courts’ lack of expertise in commercial issues. Romania has no specialized commercial courts, but it does have specialized civil courts. Judges generally have limited experience in the functioning of a market economy, international business methods, intellectual property rights, or the application of Romanian commercial and competition laws. As stipulated in the Constitution, the judicial system is independent from the executive branch and generally considered procedurally competent, fair, and reliable. Affected parties can challenge regulations and enforcement actions in court. Such challenges are adjudicated in the national court system.

Inconsistency and a lack of predictability in the jurisprudence of the courts or in the interpretation of the laws remains a major concern for foreign and domestic investors and for wider society. Even when court judgments are favorable, enforcement of judgments is inconsistent and can lead to lengthy appeals. Failure to implement court orders or cases where the public administration unjustifiably challenges court decisions constitute obstacles to the binding nature of court decisions.

Mediation as a tool to resolve disputes is gradually becoming more common in Romania, and a certifying body, the Mediation Council, sets standards and practices. The professional association, the Union of Mediation Centers in Romania, is the umbrella organization for mediators throughout the county. Court-sanctioned and private mediation is available at recognized mediation centers in every county seat.

Romania has no legal mechanism for court-ordered mediation, but judges can encourage litigants to use mediation to resolve their cases. If litigants opt for mediation, they must present their proposed resolution to a judge upon completion of the mediation process. The judge must then approve the agreement.

Since Romania joined the EU in 2007, the country has worked assiduously to create an EU-compatible legal framework consistent with a market economy and investment promotion. At the same time, implementation of these laws and regulations frequently lags or is inconsistent, and lack of legislative predictability undermines Romania’s appeal as an investment destination.

Romania’s legal framework for foreign investment is encompassed within a substantial body of law largely enacted in the late 1990s. It is subject to frequent revision. Romania enacted major changes to the Civil Code in October 2011, including replacing the Commercial Code, consolidating provisions applicable to companies and contracts into a single piece of legislation, and harmonizing Romanian legislation with international practices. The Civil Procedure Code, which provides detailed procedural guidance for implementing the new Civil Code, came into force in February 2013. Fiscal legislation is revised frequently, often without scientific or data-driven assessment of the impact the changes may have on the economy.

Given the state of flux of legal developments, investors are strongly encouraged to engage local counsel to navigate the various laws, decrees, and regulations as several pieces of investor-relevant legislation have been challenged in both local courts and the Constitutional Court. Few hostile takeover attempts have been reported in Romania. Romanian law has not focused on limiting potential mergers or acquisitions. No Romanian laws prohibit or restrict private firms’ free association with foreign investors.

Romania has extensively revised its competition legislation, bringing it closer to the EU Acquis Communautaire and corporate best practices. As of 2014, companies with a market share below 40 percent were no longer considered to have a dominant market position. This approach eliminates the need for the Romanian Competition Council (RCC) to conduct full investigations, saving considerable time and money for all parties involved. Resale price maintenance and market and client sharing are still prohibited, regardless of the size of either party’s market share. The authorization fee for mergers or takeovers ranges between EUR 10,000 (USD 11,944) and EUR 50,000 (USD 59,720). The Fiscal Procedure Code requires companies that challenge an RCC ruling to front a deposit while awaiting a court decision on the merits of the complaint.

Romania’s Public Procurement Directives outline general procurements of goods and equipment, utilities procurement (“sectorial procurement”), works and services concessions, and remedies and appeals. An extensive body of secondary and tertiary legislation accompanies the four 2016 laws and has been subject to repeated revisions. Separate legislation governs defense and security procurements. In a positive move, this body of legislation moved away from the previous approach of using lowest price as the only public procurement selection criterion, allowing authorities to use price, cost, quality-price ratio, or quality-cost ratio. The revised laws also allow bidders to provide a simple form (the European Single Procurement Document) to participate in the award procedures. Only the winner must later submit full documentation. As of April 2021, only companies from EU member states or signatory countries of the WTO Public Procurement Agreement have been allowed to bid on public procurements in Romania.

Public procurement laws stipulated that challenges regarding procedure or an award can be filed with the National Complaint Council (NCC) or the courts. Disputes regarding execution, amendment, or termination of public procurement contracts can be subject to arbitration. The revised laws also stipulated that a bidder must notify the contracting authority before challenging either the award or procedure. Not fulfilling this notification requirement can result in the NCC or the courts rejecting the challenge.

The EC’s 2020 European Semester Country Report for Romania noted that despite improved implementation, public procurement remained inefficient. According to the report, 97 percent of businesses thought corruption was widespread in Romania, and 87 percent said it was widespread in public procurements managed by national authorities.

The law on direct investment includes a guarantee against nationalization and expropriation or other equivalent actions. The law allows investors to select the court or arbitration body of their choice to settle disputes. Several cases involving investment property nationalized during the Communist era remain unresolved. In doing due diligence, prospective investors should conduct a thorough title search to ensure land or assets are not subject to any pending restitution claims.

Romania’s bankruptcy law contains provisions for liquidation and reorganization that are generally consistent with Western legal standards. These laws usually emphasize enterprise restructuring and job preservation. To mitigate the time and financial cost of bankruptcies, Romanian legislation provides for administrative liquidation as an alternative to bankruptcy. However, investors and creditors have complained that liquidators sometimes lack the incentive to expedite liquidation proceedings and that, in some cases, their decisions have served vested outside interests. Both state-owned and private companies tend to opt for judicial reorganization to avoid bankruptcy.

In December 2009, the debt settlement mechanism Company Voluntary Agreements (CVAs) was introduced as a means for creditors and debtors to establish partial debt service schedules without resorting to bankruptcy proceedings. However, global economic crisis prompted Romania to shorten insolvency proceedings in 2011.

According to the World Bank 2020 Doing Business Report, resolving insolvency in Romania takes 3.3 years on average compared to 2.3 years in Europe and Central Asia. Such cases cost 10.5 percent of the debtor’s estate with the most likely outcome being a piecemeal sale of the company. The average recovery rate is 34.4 cents on the dollar.

The GOR generally employs transparent policies and effective laws that are largely consistent with international norms. Rwanda is a member of the UN Conference on Trade and Development’s international network of transparent investment procedures. The Rwanda eRegulations system is an online database designed to bring transparency to investment procedures in Rwanda. Investors can find further information on administrative procedures here .

The GOR publishes Rwandan laws and regulations in the Official Gazette, which is available online here . Government institutions generally have clear rules and procedures, but implementation can sometimes be uneven. Investors have cited breaches of contracts and incentive promises and the short time given to comply with changes in government policies as hurdles to complying with regulations. Government institutions generally have clear rules and procedures, but implementation can sometimes be uneven. Investors have cited breaches of contracts and incentive promises and the short time given to comply with changes in government policies as hurdles to complying with regulations.

There is no formal mechanism to publish draft laws for public comment, although civil society sometimes has the opportunity to review them. There is no informal regulatory process managed by nongovernmental organizations. Regulations are usually developed rapidly to achieve policy goals. Some investors have complained this process results in new regulations being adopted without the backing of scientific or data-driven assessments. Regulators do not publicize comments they receive. Public finances and debt obligations are generally made available to the public before budget enactment. Finances for State Owned Enterprises (SOEs) are not publicly available, though in 2021 some limited financial information for a small group of large SOEs was made public. Civil society organizations may request SOEs’ financial information by providing a legitimate reason, but these requests are not routinely granted.

There is no government effort to restrict foreign participation in industry standards-setting consortia or organizations. Legal, regulatory, and accounting systems are generally transparent and consistent with international norms but are not always enforced. Consumer protection associations exist but are largely ineffective. The business community has been able to lobby the government and provide feedback on some draft government policies through the Private Sector Federation (PSF), a business association with strong ties to the government. In some cases, the PSF has welcomed foreign investors’ efforts to positively influence government policies. On the other hand, some investors have criticized the PSF for advocating for the government’s positions more so than conveying business concerns to the government.

Rwanda is a member of the EAC Standards Technical Management Committee. Approved EAC measures are generally incorporated into the Rwandan regulatory system within six months and are published in the Official Gazette like other domestic laws and regulations. Rwanda is also a member of the Standards Technical Committee for the International Standardization Organization, the African Organization for Standardization, and the International Electrotechnical Commission. Rwanda is a member of the International Organization for Legal Metrology and the International Metrology Confederation. The Rwanda Standards Board represents Rwanda at the African Electrotechnical Commission. Rwanda has been a member of the WTO since May 22, 1996, and Rwanda notifies the WTO Committee on Technical Barriers to Trade on draft technical regulations.

The Rwandan legal system was originally based on the Belgian civil law system. Following the revision of the legal framework in 2002, the introduction of a new constitution in 2003, and the country’s entrance to the Commonwealth in 2009, the Rwandan legal system now consists of a mixture of civil law and common law. The judiciary addresses commercial disputes and facilitates enforcement of property and contract rights. Though it suffers from a lack of resources and capacity, it continues to improve. The judiciary is generally independent and impartial in civil matters, with some exceptions involving state interests. Investors state the government occasionally takes a casual approach to contract sanctity and sometimes fails to enforce court judgments in a timely fashion.

National laws governing commercial establishments, investments, privatization and public investments, land, and environmental protection are the primary directives governing investments in Rwanda. Since 2011, the government has reformed tax payment processes and enacted additional laws on insolvency and arbitration. The Investment Code establishes policies on FDI, including dispute settlement (Article 13). The RDB publishes investment-related regulations and procedures here   .

According to a WTO policy review report dated January 2019, Rwanda is not a party to any countertrade and offsetting arrangements or agreements limiting exports to Rwanda.

The most recent laws (passed between 2020-22) on FDI are below:

• Amended Company Act
• Law on Mutual Assistance in Criminal Matters
• Law on Anti-Money Laundering and Terrorism Finance
• Law on Partnerships
• Law on Transfer Pricing Law on Insolvency
• Law on Land Reference Prices 2021
• New Instructions on Modalities of Management, Lease, Auction and Acquisition of Mortgage
• Law on Financial Service Consumer Protection
• New Land Law

The GOR created the Competition and Consumer Protection Unit at MINICOM in 2010 to address competition and consumer protection issues. The government is now setting up the Rwanda Inspectorate, Competition and Consumer Protection Authority (RICA), a new independent body with the mandate to promote fair competition among producers. The body will reportedly aim to ensure consumer protection and enforcement of standards. To learn more on competition laws in Rwanda, please review the law and related policy here .

Market forces determine most prices in Rwanda, but in some cases, the GOR intervenes to fix prices for items considered sensitive. On international tenders, a 10 percent price preference is available for local bidders, including those from regional economic integration bodies in which Rwanda is a member.

Some U.S. companies expressed frustration that while authorities require them to operate as a formal enterprise that meets all Rwandan regulatory requirements, some local competitors are allowed to operate informally without complying fully with all regulatory requirements. Other investors have claimed SOEs, ruling party-aligned, and politically connected business competitors receive preferential treatment in securing public incentives and contracts. Some investors reported it was not always possible to compete aggressively in some sectors in which the existing domestic competition enjoyed strong political ties. Those who attempted to compete aggressively in those sectors risked losing their investment because of political interference, they explained. More information on specific types of agreements, decisions and practices considered to be anti-competitive in Rwanda can be found here .

The Investment Code forbids the expropriation of investors’ property in the public interest unless the investor is fairly compensated. A 2015 expropriation law includes explicit protections for property owners.

A 2017 study by Rwanda Civil Society Platform stated the government conducted expropriations on short notice and did not provide sufficient time or support to help landowners negotiate fair compensation. The report included a survey that found only 27 percent of respondents received information about planned expropriation well in advance of action. While mechanisms exist to challenge the government’s offer, the report noted that landowners are required to pay all expenses for the second valuation, which represents a prohibitive cost for rural farmers or the urban poor. Media have reported that wealthier landowners used their position to challenge valuations and have received higher amounts. Political exiles and other embattled opposition figures have been involved in taxation lawsuits that resulted in their “abandoned properties” being sold at auction, allegedly at below market values.

Rwanda ranked 38 out of 190 economies for resolving insolvency in the World Bank’s 2020 Doing Business Report and is number two in Africa. It takes an average of two and a half years to conclude bankruptcy proceedings in Rwanda. Per the World Bank 2020 Doing Business Report, the recovery rate for creditors on insolvent firms was reported at 19.3 cents on the dollar, with judgments typically made in local currency.

In April 2018, the GOR instituted a new insolvency and bankruptcy law. One major change was the introduction of an article on “pooling of assets” allowing creditors to pursue parent companies and other members of the group (for example, in cases in which a subsidiary is in liquidation). The law can be accessed here . .

On February 8, 2021, Rwanda passed a new Company Act with several bankruptcy and insolvency provisions. The new law can be found here .

On February 17, 2021, Rwanda published a new law on partnerships with several provisions on partnerships’ insolvency. The new law can be accessed here .

The Government of St. Kitts and Nevis provides a legal framework to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety.  The St. Kitts Ministry of Finance and SKIPA and the Nevis Ministry of Finance and NIPA provide oversight of the system’s transparency as it relates to investment. The government does not promote or require environmental, social, and governance disclosures by companies.

The incorporation and registration of companies differs somewhat on the country’s two constituent islands.  In St. Kitts, the Companies Act regulates the process.  In Nevis, the Nevis Island Business Corporation Ordinance regulates the incorporation of companies.  There are no nationality restrictions for directors in a company, and in general, national treatment is applied.  All registered companies must have a registered office in St. Kitts and Nevis.

Rulemaking and regulatory authority lies with the unicameral parliament of St. Kitts and Nevis.  The parliament consists of 11 members elected in single-seat constituencies (eight from St. Kitts and three from Nevis) for a five-year term.

Although St. Kitts and Nevis does not have legislation that guarantees access to information or freedom of expression, access to information is generally available in practice.  The government maintains an information service and a website where it posts information such as directories of officials and a summary of laws and press releases.  The government budget and limited debt obligation information are available on the website:  https://www.gov.kn/ .  Accounting, legal, and regulatory procedures are generally transparent and consistent with international norms.  The International Financial Accounting Standards, which stem from the General Accepted Accounting Principles, govern the accounting profession in St. Kitts and Nevis.

The independent Office of the Ombudsman guards against abuses by government officers in the performance of their duties.  The Ombudsman is responsible for investigating any complaint relating to any decision or act of any government officer or body in any case in which a member of the public claims to be aggrieved or appears to the Ombudsman to be the victim of injustice due to the exercise of the administrative function of that officer or body.

Regulations are developed nationally and regionally.  Nationally, the relevant line ministry reviews regulations.  Ministries then submit the results of their reviews to the Ministry of Justice, Legal Affairs and Communications for the preparation of the draft legislation.  Subsequently, the Ministry of Justice, Legal Affairs and Communications reviews all agreements and legal commitments (national, regional, and international) to be undertaken by St. Kitts and Nevis to ensure consistency prior to finalization.  SKIPA has the main responsibility for project-level supervision, while the Ministry of Finance monitors investments to collect information for national statistics and reporting purposes. Regulatory actions under the purview of the country’s Financial Services Regulatory Commission are posted on its website.

St. Kitts and Nevis’s membership in regional organizations, particularly the OECS and its Economic Union, commits it to implement all appropriate measures to ensure the fulfillment of its various treaty obligations.  For example, the Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the ECCU, although there are some minor differences in implementation from country to country.  The enforcement mechanisms of these regulations include penalties or legal sanctions.

As a member of the OECS and the Eastern Caribbean Customs Union, St. Kitts and Nevis subscribes to a set of principles and policies outlined in the Revised Treaty of Basseterre.  The relationship between national and regional systems is such that each participating member state is expected to coordinate and adopt, where possible, common national policies aimed at the progressive harmonization of relevant policies and systems across the region.  Thus, St. Kitts and Nevis is obligated to implement regionally developed regulations, such as legislation passed under OECS authority, unless specific concessions are sought.

The St. Kitts and Nevis Bureau of Standards develops, establishes, maintains, and promotes standards for improving industrial development, industrial efficiency, the health and safety of consumers, the environment, food and food products, and the facilitation of trade.  It also conducts national training and consultations in international standards practices.  As a signatory to the World Trade Organization (WTO) Agreement on the Technical Barriers to Trade, St. Kitts and Nevis, through the St. Kitts and Nevis Bureau of Standards, is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.

St. Kitts and Nevis ratified the WTO Trade Facilitation Agreement (TFA) in 2016.  Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade.  The TFA aims to improve the speed and efficiency of border procedures, facilitate reductions in trade costs, and enhance participation in the global value chain.  St. Kitts and Nevis has already implemented some TFA requirements.  A full list is available at:  https://tfadatabase.org/members/saint-kitts-and-nevis.

St. Kitts and Nevis bases its legal system on the British common law system.  The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court (ECSC), junior judges, and magistrates administer justice in the country.  The ECSC Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal.  The High Court hears criminal and civil matters and makes determinations on interpretation of the Constitution.  Parties may appeal to the ECSC, an itinerant court that hears appeals from all OECS members.  Final appeal is to the Judicial Committee of the Privy Council of the UK.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas.  In its appellate jurisdiction, the CCJ considers and determines appeals from CARICOM member states, which are parties to the Agreement Establishing the Caribbean Court of Justice.  Currently, St. Kitts and Nevis is subject only to the original jurisdiction of the CCJ.

The United States and St. Kitts and Nevis are both parties to the WTO.  The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.

St. Kitts and Nevis’ policy is to attract foreign direct investment into the priority sectors identified under its National Diversification Strategy.  These include financial services, tourism, real estate, agriculture, information technology, education services, and limited light manufacturing.  However, investment opportunities also exist in renewable energy and other services.  The main laws concerning foreign investment include the Fiscal Incentive Act, the Hotels Aid Act, and the Companies Act.

SKIPA and NIPA offer websites useful for navigating procedures and registration requirements for foreign investors at  https://investstkitts.kn  and  https://investnevis.org .  St. Kitts also offers an online investment handbook at  https://goldenbookskn.com .

Under St. Kitts and Nevis’ citizenship by investment (CBI) program, foreign individuals can obtain citizenship without needing to establish residence (or gaining voting rights).  Applicants are required to undergo a due diligence process before citizenship can be granted.  A minimum investment for a single investor to qualify is $200,000 in real estate or a $150,000 contribution to the Sustainable Growth Fund. Applicants must also provide a full medical certificate and evidence of the source of funds.  Applications for CBI status for real estate projects should be submitted to SKIPA for review and processing.  Further information is available at:  http://www.ciu.gov.kn/ .

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to CARICOM states.  Member states are required to establish and maintain a national competition authority for implementing the rules of competition.  CARICOM established a Caribbean Competition Commission to apply rules of competition regarding anti-competitive cross-border business conduct.  CARICOM competition policy addresses anti-competitive business conduct such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM.  St. Kitts and Nevis does not have domestic legislation regulating competition.

St. Kitts and Nevis employs eminent domain laws which allow the government to expropriate private property.  The government is required to compensate owners.  There are also laws that permit the acquisition of private businesses, and the government claims such laws are constitutional.  The concept of eminent domain and the expropriation of private property is typically governed by laws that require governments to adequately compensate owners of the expropriated property at the time of its expropriation or soon thereafter.  In some cases, the procedure for compensation of owners favors the government valuation.

The U.S. Embassy in Bridgetown is aware of two separate and outstanding cases involving the seizure of private land by the government.

In the first case, the government of St. Kitts and Nevis was ordered in 2013 to pay a judgement to the American claimant in a series of installments. After completing the first two installments to the American claimant in 2013 and 2014, the government subsequently defaulted. Although a local court ordered the government to pay the 2015 and 2016 installments, it has yet to do so. The government alleges that another individual has made a claim on part of the property and that it must wait until a court determines the outcome of the other claim before completing payments to the American claimant. In 2020, a court ruled that the balance of payment due was to be deposited by the government into a court-controlled account to facilitate payment upon resolution of the other property claim. During the reporting period, the government did not deposit the balance into a court-controlled account. By the end of 2021, no further payments had been made to the estate of the American claimant. The court case deciding on the competing claim has not yet been scheduled.

In the second case, in 2015, an American company signed an agreement with the government to provide 2 million gallons of water. According to the American company, the government expropriated the company’s drilling equipment in 2018 without compensation. In 2019, the government agreed to pay a $1 million settlement to the company and to deposit an additional $500,000 into an escrow account. The company subsequently agreed to a settlement of $750,000 in addition to the escrow deposit. Although the government agreed to the payments, it has not released the funds. According to the Ministry of Foreign Affairs, an additional agreement was reached between the parties in December 2020, regarding the delivery of water and the payment of all fees. The U.S. Embassy in Bridgetown continues to recommend caution when conducting business in St. Kitts and Nevis.

St. Kitts and Nevis has a bankruptcy framework that grants certain rights to debtor and creditor, including the ability of creditors to pursue necessary actions to resolve outstanding debts.

The legal framework in Saint Lucia seeks to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety.  The Ministry of Commerce, International Trade, Investment, Enterprise Development, and Consumer Affairs in the Office of the Prime Minister and Invest Saint Lucia provide oversight on the transparency of the system as it relates to investment.  The government offers a range of incentives for foreign investors.  The Invest Saint Lucia Act addresses government policy for attracting investment.  The Trade License Act, Aliens Licensing Act, Special Development Areas Act, Income Tax Act, Free Zones Act, Tourism Incentives Act, Investment and Stimulus Act, and Fiscal Incentives Act also impact foreign investment.  The government announced plans to update these pieces of legislation to ensure that Saint Lucia remains compliant with international tax and exchange of information requirements.

Rulemaking and regulatory authority lie with the bicameral parliament.  The parliament consists of a lower house, which has 17 members elected for five-year terms in single-seat constituencies, and a Senate with 11 appointed members.

Relevant laws govern all regulations relating to foreign investment in Saint Lucia.  These laws are developed in the respective ministries and drafted by the Office of the Attorney General.  FDI is covered by the enacting legislation for Invest Saint Lucia, the citizenship by investment program, and some sector-specific laws such as the Fiscal Incentives Act or tourism-related laws.  Saint Lucia’s laws are available online at  http://www.govt.lc .

Although some draft bills are not subject to public consultation, the government often solicits input from various stakeholder groups and via town hall meetings when formulating new legislation.  The government also uses public awareness efforts such as television and radio call-in programs to inform and shape public opinion.  The government publishes copies of proposed laws and regulations in the Official Gazette before they are presented in the House of Assembly.  Although Saint Lucia does not have legislation guaranteeing access to information or freedom of expression, access to information is generally available in practice.  The government maintains an information service website on which it posts information such as directories of officials and a summary of laws and press releases.  The government budget and an audit of that budget are available on the website.  Accounting, legal, and regulatory procedures are generally transparent and consistent with international norms.  The International Financial Accounting Standards, which stem from the General Accepted Accounting Principles, govern the accounting profession in Saint Lucia.  The most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found Saint Lucia to be largely compliant.  The ECCB is the supervisory authority over financial institutions registered under the Banking Act of 2015.

The Office of the Parliamentary Commissioner or Ombudsman is a constitutional entity created to guard against abuses of power by government officers in the performance of their duties.  The Office of the Parliamentary Commissioner is independent.  The Parliamentary Commissioner investigates complaints relating to actions or omissions by any government official or government body where such actions or omissions cause an injustice or harm a member of the public.

In developing regulations, respective ministries advise the Ministry of Home Affairs, Justice, and National Security regarding necessary elements and parameters of proposed legislation.  The Ministry of Home Affairs, Justice, and National Security subsequently drafts legislation, ensuring compatibility with the nation’s domestic and international legal commitments.  Invest Saint Lucia has the main responsibility for investment supervision, whereas the Ministry of Finance monitors investments to collect information for national statistics and reporting purposes.  Saint Lucia’s membership in regional organizations, particularly the OECS and its Economic Union, commits the state to ensure the fulfillment of its various treaty obligations, although there are some minor differences in implementation from country to country.  The enforcement mechanisms of these regulations include financial penalties and other sanctions.

As a member of the OECS and the ECCU, Saint Lucia subscribes to a set of principles and policies outlined in the Revised Treaty of Basseterre.  Each participating member state is expected to coordinate and adopt, where possible, common national policies, with the objective of progressive harmonization of relevant policies and systems across the region.  Saint Lucia is obligated to implement regionally developed regulations, such as legislation passed under OECS authority, unless it seeks specific concessions not to implement such regulations.

The Saint Lucia Bureau of Standards is a statutory body established under the Standards Act.  It establishes, maintains, and promotes standards for improving industrial development and efficiency, promoting the health and safety of consumers, and protecting the environment, food products, quality of life, and the facilitation of trade.  It also conducts international standards consultations and training.  As a signatory to the WTO Agreement on the Technical Barriers to Trade, Saint Lucia is obligated to harmonize all national standards to international norms to avoid creating technical barriers to trade.  Saint Lucia is working to improve customs efficiency, modernize customs operations, and address inefficiencies in the clearance of goods.

Saint Lucia ratified the WTO Trade Facilitation Agreement (TFA) in December 2015.  Ratification of the Agreement is an important signal to investors of the country’s commitment to improving its business environment for trade.  The TFA aims to improve the speed and efficiency of border procedures, facilitate reductions in trade costs, and enhance participation in the global value chain.  Saint Lucia has already implemented several TFA requirements.

Saint Lucia bases its legal system on the British common law system, but its civil code and property law are influenced by French law.  The Attorney General, the Chief Justice of the Eastern Caribbean Supreme Court, junior judges, and magistrates administer justice.  The Eastern Caribbean Supreme Court Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal.  The High Court hears criminal and civil matters and makes determinations on the interpretation of the constitution. Parties may appeal first to the Eastern Caribbean Supreme Court.  The final court of appeal is the Judicial Committee of the Privy Council of the United Kingdom.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal, established in 2001 by the Agreement Establishing the CARICOM Single Market and Economy.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas.  In its appellate jurisdiction, the CCJ considers and determines appeals from the CARICOM member states that are parties to the Agreement Establishing the CCJ.  Currently, Saint Lucia is subject only to the original jurisdiction of the CCJ.

The United States and Saint Lucia are both parties to the WTO.  The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.

The judicial system remains relatively independent of the executive branch of government and is free of political interference in judicial matters.

Invest Saint Lucia’s FDI policy is to actively pursue FDI in priority sectors and advise the government on the formation and implementation of policies and programs to attract sustainable investment.  Invest Saint Lucia reviews all proposals for investment concessions and incentives to ensure the projects are consistent with the national interest and provide economic benefits to the country.

Invest Saint Lucia provides “one-stop shop” facilitation services to investors to guide them through the various stages of the investment process.  Invest Saint Lucia offers a website that is useful to navigate the laws, rules, procedures, and registration requirements for foreign investors:  http://www.investstlucia.com/ .

Under Saint Lucia’s CBI program, foreign individuals may obtain citizenship in accordance with the Citizenship by Investment Act of 2015, which grants the right to citizenship by investment.  Program applicants are required to submit to a due diligence process before citizenship can be granted.  The minimum investment for a single applicant to qualify is a $100,000 contribution to the National Economic Fund.  A $190,000 contribution covers a family of four made up of the principal applicant, spouse, and up to two dependents.  Alternatively, a real estate purchase valued at $300,000 or more will also qualify.  There are also provisions for enterprise investment in approved projects and a government bond option.  In response to the Covid-19 pandemic, the unit also created a special Covid-19 Relief Bond with a minimum investment of $250,000.  This bond option is available until the end of 2022.  More information on the citizenship by investment program is available at  https://www.cipsaintlucia.com .

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to CARICOM member states.  Member states are required to establish and maintain a national competition authority. CARICOM established a Caribbean Competition Commission to apply rules of competition regarding anti-competitive cross-border business conduct.  CARICOM competition policy addresses anti-competitive business conduct such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM. Saint Lucia does not yet have legislation regulating competition. The OECS agreed to establish a regional competition body to handle competition matters within its single market.

Under the Land Acquisition Act, the government can acquire land for a public purpose.  The government must serve a notice of acquisition to the person from whom the land is acquired.  Saint Lucia employs a system of eminent domain to pay compensation in such cases.  There were no reports that the government discriminated against U.S. investments, companies, or landholdings.  There are no laws forcing local ownership in specified sectors.

There is one case of expropriation involving an American citizen-owned property. An American citizen purchased 32 acres of land in Saint Lucia in 1970. The government expropriated the land in 1985 by an act of law. The claimant has been seeking redress and those efforts have been unsuccessful to date. The government denied the claimant’s request without explanation in 2014. The government has been largely unresponsive to repeated attempts by the claimant to appeal the decision. The government also claims to have lost property records that the claimant says support their ownership claim. The U.S. Embassy in Bridgetown continues to advocate with the government to ensure the claimant is allowed to fully exercise their due process rights.

Saint Lucia has a limited bankruptcy framework that grants certain rights to debtors and creditors. The act was updated in 2020.

St. Vincent and the Grenadines uses transparent policies and laws to foster competition and establish clear rules for foreign and domestic investors in the areas of tax, labor, environment, health, and safety.  Accounting, legal, and regulatory practices are generally transparent and consistent with international norms.  The International Financial Accounting Standards, which stem from the General Accepted Accounting Principles, govern the profession in St. Vincent and the Grenadines.

Rulemaking and regulatory authority rests in the unicameral House of Assembly, which has fifteen elected members and six appointed senators who sit for a five-year term.  The Public Accounts Committee and Director of Audits ensure the government follows administrative processes.

National laws govern all regulations relating to foreign investment.  Ministries develop these laws, and the Ministry of Legal Affairs drafts them.  Laws pertaining to Invest SVG also govern FDI.  Invest SVG has the main responsibility for investment supervision, while the Ministry of Economic Planning, Sustainable Development, Industry, Information, and Labor tracks investments to collect information for national statistics and reporting purposes.

The government publishes most draft bills in local newspapers for public comment.  In addition, the government circulates bills at stakeholder meetings.  Some bills and laws are published on the government website at  www.gov.vc .  The government sometimes establishes a select committee to suggest amendments to specific draft bills.  In some instances, these mechanisms may also apply to investment laws and regulations.  There is no obligation for the government to consider proposed amendments prior to implementation.  The government discloses information on public finances and debt obligations.  The annual budget address can be found online.

The country’s membership in regional organizations, particularly the OECS and its Economic Union, commits the state to implement all appropriate measures to fulfill its various treaty obligations.  For example, the Banking Act, which establishes a single banking space and the harmonization of banking regulations in the Economic Union, is uniformly in force in the eight member territories of the ECCU, although there are some minor differences in implementation from country to country.  The most recent Caribbean Financial Action Task Force (CFATF) Mutual Evaluation assessment found St. Vincent and the Grenadines to be largely compliant.  The ECCB is the supervisory authority over financial institutions registered under the Banking Act of 2015.

Local laws dictate that an external company must be registered with the Commercial Registry in St. Vincent and the Grenadines if it wishes to operate in the country.  Companies using or manufacturing chemicals must first obtain approval of their environmental and health practices from the St. Vincent and the Grenadines National Standards Institution and the Environmental Division of the Ministry of Health.

As a member of the OECS and the ECCU, St. Vincent and the Grenadines subscribes to a set of principles and policies outlined in the Revised Treaty of Basseterre.  The relationship between national and regional systems is such that each participating member state is expected to coordinate and adopt, where possible, common national policies aimed at the progressive harmonization of relevant policies and systems across the region.  Thus, the country must implement regionally developed regulations, such as legislation passed under the OECS Authority, unless it seeks specific concessions not to do so.

The country’s Bureau of Standards is a statutory body which prepares and promulgates standards in relation to goods, services, processes, and practices.  As a signatory to the WTO Agreement on the Technical Barriers to Trade, St. Vincent and the Grenadines must harmonize all national standards to international norms to avoid creating technical barriers to trade.

St. Vincent and the Grenadines ratified the WTO Trade Facilitation Agreement (TFA) in 2017 and subsequently notified its Category A measures.  Included in the Trade Facilitation Agreement are measures to improve risk management techniques and a post-clearance audit system to eliminate delays and congestion at the port.  While St. Vincent and the Grenadines has implemented some TFA requirements, it has missed two implementation deadlines.  A full list of measures undertaken pursuant to the TFA is available at  https://tfadatabase.org/members/saint-vincent-and-the-grenadines .

The country’s legal system is based on the British common law system.  The constitution guarantees the independence of the judiciary.  The judicial system consists of lower courts, called magistrates’ courts, and a family court.  The Eastern Caribbean Supreme Court Act establishes the Supreme Court of Judicature, which consists of the High Court and the Eastern Caribbean Court of Appeal.  The High Court hears criminal and civil (commercial) matters and makes determinations on constitutional matters.  Parties may appeal first to the Eastern Caribbean Supreme Court, a court that hears appeals from all OECS members.  The final court of appeal is the Judicial Committee of the UK Privy Council.

The country has a strong judicial system that upholds the sanctity of contracts and prevents unwarranted discrimination towards foreign investors.  The government treats foreign investors and local investors equally with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.  The police and court systems are generally unbiased in commercial matters.

The Caribbean Court of Justice (CCJ) is the regional judicial tribunal.  The CCJ has original jurisdiction to interpret and apply the Revised Treaty of Chaguaramas.  St. Vincent and the Grenadines is only subject to the original jurisdiction of the CCJ.

The United States and St. Vincent and the Grenadines are both parties to the WTO.  The WTO Dispute Settlement Panel and Appellate Body resolve disputes over WTO agreements, while courts of appropriate jurisdiction in both countries resolve private disputes.

Invest SVG provides guidance on the relevant laws, rules, procedures, and reporting requirements for investors.  Invest SVG has the authority to screen and review FDI projects.  The review process is transparent and contingent on the size of capital investment and the project’s projected economic impact.  The investor must complete a series of steps to obtain a business license.  These steps are listed at  http://www.investsvg.com .  All potential investors seeking an incentive package must submit their proposals for review by Invest SVG to ensure the project is consistent with the nation’s laws and interests and would provide economic benefits to the country.

Local enterprises generally welcome joint ventures with foreign investors to access technology, expertise, markets, and capital.

Chapter 8 of the Revised Treaty of Chaguaramas outlines the competition policy applicable to CARICOM states.  Member states are required to establish and maintain a national competition authority for implementing the rules of competition.  CARICOM established a Caribbean Competition Commission to apply rules of competition regarding anti-competitive cross-border business conduct.  CARICOM competition policy addresses anti-competitive business conduct such as agreements between enterprises, decisions by associations of enterprises, and concerted practices by enterprises that have as their object or effect the prevention, restriction, or distortion of competition within CARICOM, and actions by which an enterprise abuses its dominant position within CARICOM.  There is no legislation to regulate competition in St. Vincent and the Grenadines.

Under the Land Acquisition Act, the government may acquire land for a public purpose.  The government must serve a notice of acquisition to the person from whom the land is acquired.  A Board of Assessment determines compensation and files its award in the High Court.  The value of the land is based on the amount for which the land would be sold on the open market by a willing seller.  Under the Alien’s (Land-Holding Regulation) Act, the government can hold properties forfeit without compensation if the terms of investment are not met.  The U.S. Embassy is not aware of any outstanding expropriation claims or nationalization of foreign enterprises in St. Vincent and the Grenadines.

The Bankruptcy and Insolvency Act governs the country’s bankruptcy framework and grants certain rights to debtors and creditors.

The Government uses transparent policies and effective laws to establish “clear rules of the game.” Accounting, legal and regulatory procedures are all consistent with international norms. According to the Samoa Institute of Accountants, businesses adhere to International Financial Reporting Standards (IFRS) and International Standards on Auditing and Quality Assurance.

Draft bills are made available through the parliamentary website, https://www.palemene.ws/parliament-business/bills/ , but are not made available for formal public comment. Those who wish to make a comment on the bill are given the opportunity to do so before a Parliamentary Committee. Public notices are televised and printed on local newspaper for the awareness of the public that there is an avenue to voice their opinions on drafted Government policies.

The Office of the Regulator (OOTR) was established in 2006 under the Telecommunications Act 2005 to provide regulatory services for the telecommunications sector in Samoa. However, the Broadcasting and Postal Services Acts 2010 were recently approved by Parliament, which also provide regulatory framework for broadcasting and postal sectors in Samoa. These Acts require the Regulator to establish a fair, unbiased and ethical regime for implementing the objects of these Acts including licensing of telecommunications, broadcasting and postal services, promotion of new services and investment, consumer protection, prevention of anti-competitive activities by service providers, and management of the radio spectrum and national number plans. OOTR also approves the Electric Power Corporation’s Power Purchase Agreements with Independent Power Providers and reviews EPC’s Power Extension Plan.

Finances and expenditures of the government are published twice on an annual basis, and available through the parliament website. Debt obligations are published on a quarterly basis by the Samoa Bureau of Statistics through its quarterly reports.

Samoa is a member of the Pacific Islands Forum, which is an 18-member inter-governmental organization that aims to enhance cooperation between the independent countries of the Pacific Ocean.

Samoa’s system of government is based on the Westminster Parliamentary system. Samoa’s Companies Act 2001 contains a modern regulatory regime based on New Zealand company law.

The Samoan legal system has its foundations in English and Commonwealth statutory and common law. Various business structures utilized in common law are recognized: sole traders, partnerships, limited liability companies, joint ventures and trusts (including unit trusts). These structures are regulated by legislation including the Companies Act 2001, Partnership Act 1975, Trustee Act 1975 and Unit Trusts Act 2008. Samoa’s Companies Act 2001 contains a modern regulatory regime based on New Zealand company law. It allows the incorporation of a sole person company (i.e., one person being both shareholder and director) and directors need not be resident in Samoa.

A Samoa incorporated private company is a separate legal entity and a corporation under Samoan law. It must file an annual return with the Registrar of Companies specifying details of directors, shareholders, registered office etc. There is no requirement for private companies to file annual financial reports with the Companies Registry nor are there any minimum capital requirements.

The judicial system is largely independent from the executive branch. In December 2020, the National Parliament passed into law three controversial bills that fundamentally changed country’s constitution and judicial system. The three bills, the Constitution Amendment Bill, Lands and Titles Bill, and Judicature Bill, were passed by Parliament with a vote of 41-4. The bills were opposed by the judiciary and the Samoa Law Society for lack of consultation and the impact on human rights and rule of law. The Australian and New Zealand Law Societies, and other international organizations issued statements in support of the judiciary and the law society. The new laws have in effect divided the judicial system into parallel courts of equal standing: one to deal with criminal and civil matters, and the other with customary land and titles. There are outstanding questions about the constitutionality of the new laws.

The Ministry of Commerce, Industry and Labor administers Samoa’s foreign investment policy and regulations under the Foreign Investment Amendment Act 2011. All businesses with any foreign ownership require foreign investment approval by MCIL. ( https://www.mcil.gov.ws/ ).

The Ministry of Commerce, Industry, and Labor’s Fair Trading and Codex Alimentarius Division (FTCD) handles competition related concerns. The main pieces of legislation regarding competition are the Fair Trading Act 1998, the Consumer Information Act 1989, and the Measures Ordinance 1960.

Samoa’s constitution prohibits expropriation without compensation, and expropriation cases in Samoa are rare. There was one significant case that occurred in 2009 over land designated for a new six-story government building. A business signed a 20-year lease with the government in 2005 but was then asked to move in 2008 to make way for the new building. The business moved but won a settlement in the Court of Appeals against the government for a much larger sum than the government initially offered the business for vacating the land.

The Alternative Dispute Resolution Act of 2007 (amended 2013) outlines ADR procedures for both criminal and civil proceedings. Samoa has an Accredited Mediators of Samoa Association that was put in place to help resolve (largely commercial) disputes.

Bankruptcies are governed by the Samoa Bankruptcy Act of 1908, which gives broad rights to the judiciary to issue orders related the property of any debtor or bankrupt who becomes subject to the Act. The judiciary has the authority to decide all questions of priorities.

The laws and regulations that affect direct investment, including environmental, health, and safety rules and regulations, apply equally to foreign and domestic firms. Before approval, investment proposals are evaluated for their environmental and social impacts. STP tax laws reward citizens who return to STP to invest, while also containing provisions for attracting foreigners to invest in STP. The STP legal code is based on Portuguese law, and laws and regulations are applied at the national level. Rule-making and regulatory authority exist at the national level and regulations are developed at the ministerial level, approved by the National Assembly, and promulgated by the President. The ministry concerned is responsible for any regulatory enforcement mechanisms. Rarely, drafted bills or regulations are made available for public comment. Copies of most regulations can be purchased online at https://www.legis-palop.org/  or directly at the Ministry of Justice, Public Administration, and Human Rights in the format of the Official Gazette. The public finances and debt obligations are relatively transparent and are periodically available on the finance ministry website: https://financas.gov.st/ 

STP is a member of the Economic Community of Central African States (ECCAS), whose fundamental goals are to promote exchange and collaboration among the member countries and provide an institutional and legal framework to their cooperative efforts. ECCAS is the largest economic community in Central Africa, including Central African Economic and Monetary Community (CEMAC) member states (Gabon, Cameroon, the Central African Republic, Chad, Republic of Congo, and Equatorial Guinea), as well as Burundi, the Democratic Republic of Congo, Angola, Rwanda, and STP. The archipelago is a member of the Community of Portuguese Language Countries (CPLP) and its economic confederation (CE). STP is not a member of the WTO, but it does have observer status. STP is among the 44 African Nations to have signed the agreement on African Continental Free Trade Area (AfCFTA) in March 2018 in Kigali, Rwanda, and became the 25th African country to ratify the AfCFTA in June 2019.

Disputes are generally solved through dialogue or negotiations between parties without litigation. However, there was a dispute in May 2018 between a local businessman and an Angolan investor that led to the unconstitutional dismissal of Supreme Court Judges by the parliament. Relatedly, there have been a few instances of disagreements involving foreign investors reaching international courts. The country has a written commercial law but does not have specialized courts.

Overall, the legal system is perceived as acting independently. The judicial process is fair but is subject to manipulation on occasion. All regulations or enforcement actions are appealable to the Supreme Court.

The VAT Law was approved in 2019, but it has yet to be legally implemented. A modern Labor Code (6/2019) enacted in April 2019, is designed to make labor standards easier for investors to understand and implement. In June 2019, STP ratified the African Continental Free Trade Area agreement (AfCFTA). The Public Private Partnership (PPP) Law, the new Notary Code, and the Commercial Register Code all entered into force in 2018; the Regulation of Investment Code was adopted in 2017; and the Investment Code and Code of Fiscal Benefits and Incentives were adopted in 2016. The Trade and Investment Promotion Agency (APCI) is a one-stop shop for all investment information.

Due to the establishment of APCI, the cost and waiting period to start a new business have been substantially reduced. A new business can obtain expedited registration within 24 hours for approximately STN10,190 ($456) and between three to five days for approximately STN 5,190 ($232). Despite this improvement, STP was downgraded to 150 out of 190 countries in terms of starting a new business according to the 2020 World Bank Ease of Doing Business Report. In comparison, the country ranked 35 out of 190 economies in the 2017 survey.

Although no online business registration process exists, companies can easily register their businesses at the counter. The following is a general description of how a foreign company can establish a local office:

1. Provide full company documentation, translated into Portuguese.
2. Check the uniqueness of the proposed company name and reserve a name.
3. Notarize the company statutes with the registration office at the Ministry of Justice.
4. File a company declaration with the Tax Administration Office at the Ministry of Finance, Commerce, and Blue Economy.
5. Register with the Social Security Office at the Ministry of Labor and Social Affairs.
6. Publish the incorporation notice in the official government gazette (Diário da República).
7. Publish the incorporation notice in a national newspaper.
8. Register the company with the Commercial Registry Office at the Ministry of Finance, Commerce, and Blue Economy.
9. Apply for a commercial operations permit (also known as an “alvara”).
10. Apply for a taxpayer identification number with the Office of Tax Administration at the Ministry of Finance, Commerce, and Blue Economy.
11. Register employees with the Social Security Office.

Other required documents include: 1) copies of the by-laws of the parent company and of the minutes of the meeting of the board of directors in which the opening of the STP branch is approved; 2) a certificate of appointment of the general manager for the STP office; 3) a copy of any agreement signed with a São Toméan company or with the STP government; 4) two copies of permits from the Court authorization to operate; and 5) two photographs and a copy of the passport of the General Manager.

In addition, the Single Window website  ( http://www.gue-stp.net/spip.php?article24 ; in Portuguese only) provides information on creating and registering companies in STP.

Beyond the APCI’s “one-stop shop,”, there are no agencies or brokers that provide services to further simplify the procedures for establishing an office in STP. Some companies consult with a legal office for assistance.

DRCAE (Directorate of Regulation and Control of Economic Activities) has the mandate to inspect all economic activities and impose penalties, but it lacks the resources necessary to fully perform its duties. DRCAE is housed under the Secretary of State for Commerce and Industry.

AGER (General Regulatory Authority of the Democratic Republic of São Tomé and Príncipe) was created to promote competition and prevent operator abuses in the water, electricity, and telecommunications sectors, as well as in the postal service. The AGER was established in 2005 and is housed under the Ministry of Public Works, Infrastructures, Natural Resources, and Environment.

The STP Constitution and the Expropriation Code allows only the central government to expropriate private property. The law permits expropriation of private property only if it is deemed to be in the national public interest and only with adequate compensation. There is no evidence to suggest that the government would undertake expropriation in a discriminatory manner or in violation of established principles of international law and standards.

Aside from a massive land expropriation from colonial farmers in 1976 – later recognized by the government as detrimental to STP’s economy – there have not been any documented cases of expropriation of foreign-owned properties. The government has reportedly considered expropriating land to expand the runway at the international airport, but thus far has reportedly been reluctant to do so out of concern that any expropriation will deter new investment.

STP has a bankruptcy law, but it is not well developed. In the World Bank’s 2020 Doing Business Report, STP ranked 168 out of 190 economies on the ease of resolving insolvency, the same rank it has in 2019. In January 2022, the STP-based commercial bank Energy Bank, founded in 2011 by a Nigeria investor, declared bankruptcy. This led to the Central Bank cancelling all of the bank’s financial operations in STP.

Saudi Arabia received the lowest score possible (zero out of five) in the World Bank’s 2017-2018 Global Indicators of Regulatory Governance project, which places the Kingdom in the bottom 13 countries among 186 countries surveyed ( http://rulemaking.worldbank.org/ ). Few aspects of the SAG’s regulatory system are entirely transparent, although Saudi investment policy is less opaque than other areas. Bureaucratic procedures are cumbersome, but red tape can generally be overcome with persistence. Foreign portfolio investment in the Saudi stock exchange is well-regulated by the Capital Markets Authority (CMA), with clear standards for interested foreign investors to qualify to trade on the local market. The CMA has progressively liberalized requirements for “qualified foreign investors” to trade in Saudi securities. Insurance companies and banks whose shares are listed on the Saudi stock exchange are required to publish financial statements according to International Financial Reporting Standards (IFRS) accounting standards. All other companies are required to follow accounting standards issued by the Saudi Organization for Certified Public Accountants.

Stakeholder consultation on regulatory issues is inconsistent. Some Saudi organizations are diligent in consulting businesses affected by the regulatory process, while others tend to issue regulations with no consultation at all. Proposed laws and regulations are not always published in draft form for public comment. An increasing number of government agencies, however, solicit public comments through their websites. In addition, in March 2021, Saudi Arabia’s National Competitiveness Center launched a public consultation platform called “Istitlaa” to solicit feedback on proposed laws and regulations before they are approved. That said, the processes and procedures for stakeholder consultation remain generally opaque and are not codified in law or regulations. There are no private sector or government efforts to restrict foreign participation in the industry standards-setting consortia or organizations that are available. There are no informal regulatory processes managed by NGOs or private sector associations.

Saudi Arabia uses technical regulations developed both by the Saudi Arabian Standards Organization (SASO) and by the Gulf Standards Organization (GSO). Although the GCC member states continue to work towards common requirements and standards, each individual member state, and Saudi Arabia through SASO, continues to maintain significant autonomy in developing, implementing, and enforcing technical regulations and conformity assessment procedures in its territory. More recently, Saudi Arabia has moved towards adoption of a single standard for technical regulations. This standard is often based on International Organization for Standardization (ISO) or International Electrotechnical Commission (IEC) standards, to the exclusion of other international standards, such as those developed by U.S.-domiciled standards development organizations (SDOs).

Saudi Arabia’s exclusion of these other international standards, which are often used by U.S. manufacturers, can create significant market access barriers for industrial and consumer products exported from the United States. The United States government has engaged Saudi authorities on the principles for international standards per the WTO Technical Barriers to Trade Committee Decision and encouraged Saudi Arabia to adopt standards developed according to such principles in their technical regulations, allowing all products that meet those standards to enter the Saudi market. Several U.S.-based standards organizations, including SDOs and individual companies, have also engaged SASO, with mixed success, in an effort to preserve market access for U.S. products, ranging from electrical equipment to footwear.

A member of the WTO, Saudi Arabia must notify the WTO Committee on Technical Barriers to Trade of all draft technical regulations.

The Saudi legal system is derived from Islamic law, known as sharia. Saudi commercial law, meanwhile, is still developing. In 2016, Saudi Arabia took a significant step in improving its dispute settlement regime with the establishment of the Saudi Center for Commercial Arbitration (see “Dispute Settlement” section below). Through its Commercial Law Development Program, the U.S. Department of Commerce has provided capacity-building programs for Saudi stakeholders in the areas of contract enforcement, public procurement, and insolvency.

The Saudi Ministry of Justice oversees the sharia-based judicial system, but most ministries have committees to rule on matters under their jurisdictions. Judicial and regulatory decisions can be appealed. Many disputes that would be handled in a court of law in the United States are handled through intra-ministerial administrative bodies and processes in Saudi Arabia. Generally, the Saudi Board of Grievances has jurisdiction over commercial disputes between the government and private contractors. The Board also reviews all foreign arbitral awards and foreign court decisions to ensure that they comply with sharia. This review process can be lengthy, and outcomes are unpredictable.

The Kingdom’s record of enforcing judgments issued by courts of other GCC states under the GCC Common Economic Agreement, and of other Arab League states under the Arab League Treaty, is somewhat better than enforcement of judgments from other foreign courts. Monetary judgments are based on the terms of the contract – e.g., if the contract is calculated in U.S. dollars, a judgment may be obtained in U.S. dollars. If unspecified, the judgment is denominated in Saudi riyals. Non-material damages and interest are not included in monetary judgments, based on the sharia prohibitions against interest and against indirect, consequential, and speculative damages.

As with any investment abroad, it is important that U.S. investors take steps to protect themselves by thoroughly researching the business record of a proposed Saudi partner, retaining legal counsel, complying scrupulously with all legal steps in the investment process, and securing a well-drafted agreement. Even after a decision is reached in a dispute, enforcement of a judgment can still take years. The U.S. government recommends consulting with local counsel in advance of investing to review legal options and appropriate contractual provisions for dispute resolution.

In 2021, the Crown Prince announced draft legal reforms including a new personal status law, civil transactions law, evidence law, and discretionary sentencing law that aim to increase predictability and transparency in the legal system, facilitating commerce and expanding protections for women. To date, Saudi Arabia has published the new evidence law and the new personal status law. The two new laws have not yet come into force, but if implemented effectively, these reforms could be a major step towards modernizing the Saudi legal system.

In January 2019, the Saudi government established the General Authority for Foreign Trade (GAFT), which aims to strengthen Saudi Arabia’s non-oil exports and investment, increase the private sector’s contribution to foreign trade, and resolve obstacles encountered by Saudi exporters and investors. The authority monitors the Kingdom’s obligations under international trade agreements and treaties, negotiates and enters into new international commercial and investment agreements, and represents the Kingdom before the WTO. The Governor of GAFT reports to the Minister of Commerce.

Despite the list of activities excluded from foreign investment (see “Limits on Foreign Control and Right to Private Ownership and Establishment” section), foreign minority ownership in joint ventures with Saudi partners may be allowed in some of these sectors. Foreign investors are no longer required to take local partners in many sectors and may own real estate for company activities. They are allowed to transfer money from their enterprises out of the country and can sponsor foreign employees, provided that “Saudization” quotas are met (see “Labor Policies” section). Minimum capital requirements to establish business entities range from zero to $8 million, depending on the sector and the type of investment.

MISA offers detailed information on the investment process, provides licenses and support services to foreign investors, and coordinates with government ministries to facilitate investment. According to MISA, it must grant or refuse a license within five days of receiving an application and supporting documentation from a prospective investor. MISA has established and posted online its licensing guidelines, but many companies looking to invest in Saudi Arabia continue to work with local representation to navigate the bureaucratic licensing process.

MISA licenses foreign investments by sector, each with its own regulations and requirements: (i) services, which comprise a wide range of activities including IT, healthcare, and tourism; (ii) industrial, (iii) real estate, (iv) public transportation, (v) entrepreneurial, (vi) contracting, (vii) audiovisual media, (viii) science and technical office, (ix) education (colleges and universities), and (x) domestic services employment recruitment. MISA also offers several special-purpose licenses for bidding on and performance of government contracts. Foreign firms must describe their planned commercial activities in some detail and will receive a license in one of these sectors at MISA’s discretion. Depending on the type of license issued, foreign firms may also require the approval of relevant competent authorities, such as the Ministry of Health or the Ministry of Tourism.

An important MISA objective is to ensure that investors do not just acquire and hold licenses without investing, and MISA sometimes cancels licenses of foreign investors that it deems do not contribute sufficiently to the local economy. MISA’s periodic license reviews, with the possibility of cancellation, add uncertainty for investors and can provide a disincentive to longer-term investment commitments.

MISA has agreements with various SAG agencies and ministries to facilitate and streamline foreign investment. These agreements permit MISA to facilitate the granting of visas, establish MISA branch offices at Saudi embassies in different countries, prolong tariff exemptions on imported raw materials to three years and on production and manufacturing equipment to two years, and establish commercial courts. To make it easier for businesspeople to visit the Kingdom, MISA can sponsor visa requests without involving a local company. Saudi Arabia has implemented a decree providing that sponsorship is no longer required for certain business visas. While MISA has set up the infrastructure to support foreign investment, many companies report that despite some improvements, the process remains cumbersome and time-consuming.

The General Authority for Competition (GAC) reviews merger transactions for competition-related concerns, investigates business conduct, including allegations of price fixing, can issue fines, and can approve applications for exemptions for certain business conduct.

The competition law, as amended in 2019, applies to all entities operating in Saudi Arabia, and covers all activities related to the production, distribution, purchase, and sale of commodities inside the Kingdom, as well as practices that occur outside of Saudi Arabia and that have an impact on domestic competition. The competition law prohibits anti-competitive practices and agreements. This may include certain aspects of vertically integrated business combinations. Consequently, companies doing business in Saudi Arabia may find it difficult to register exclusivity clauses in distribution agreements but are not necessarily precluded from enforcing such clauses in Saudi courts.

Certain merger transactions must be notified to the GAC, and each entity involved in the merger is obligated to notify the GAC. GAC may approve, conditionally approve, or reject a merger transaction.

The Embassy is not aware of any cases in Saudi Arabia of expropriation from foreign investors without adequate compensation. Some small- to medium-sized foreign investors, however, have complained that their investment licenses have been cancelled without justification, causing them to forfeit their investments.

In August 2018, the SAG implemented new bankruptcy legislation that seeks to “further facilitate a healthy business environment that encourages participation by foreign and domestic investors, as well as local small and medium enterprises.” The law clarifies procedural processes and recognizes distinct creditor classes (e.g., secured creditors). It also includes procedures for continued operation of a distressed company via financial restructuring. Alternatively, the parties may pursue an orderly liquidation of company assets, which would be managed by a court-appointed licensed bankruptcy trustee. Saudi courts have begun to accept and hear cases under this new legislation.

Senegal has made some progress towards establishing independent regulatory institutions, having set up regulators for energy, telecommunications, and finance. While Senegal lacks established procedures for a public comment process for proposed laws and regulations, the GOS sometimes holds public hearings and workshops to discuss drafts. Suggested regulations are not always made available to the public in a timely manner, however. Although Senegalese law requires proposed legislation to be published in advance in the government’s official gazette, the GOS does not consistently update its website. The government does not promote or require companies’ environmental, social, and governance disclosure to facilitate transparency or help investors and consumers distinguish between high- and low-quality investments.

Authority to make and enforce rules rests with the relevant government ministry unless there is a separate regulatory authority. Local government bodies do not have a decisive role in regulatory decisions.

The Commission de Régulation du Secteur de l’Electricité (Electricity Sector Regulatory Commission, CRSE) was established in 1998 to regulate the electricity sector and set electricity tariffs. Although the CRSE is by law an independent agency, observers note that the government frequently exercises influence over its decisions. Under the Millennium Challenge Corporation Senegal Power Compact, the GOS has committed to reforms, including adopting a new electricity code in 2021 and strengthening the CRSE’s capacity and independence.

The Autorité de Régulation des Télécommunications et des Postes (Telecommunications and Postal Regulatory Authority, ARTP) is responsible for licensing and regulating telecommunications and postal services in Senegal. The Dakar-based Central Bank of West African States (known by its French acronym, BCEAO) regulates banking.

There is no legal requirement to conduct impact assessments of proposed regulations, and regulatory agencies rarely do so. There is no specialized government body tasked with reviewing and monitoring regulatory impacts. Legal, regulatory, and accounting systems closely follow French models. Financial statements must be prepared in accordance with the SYSCOHADA system, based on generally accepted accounting principles in France.

As a member of ECOWAS, Senegal generally adheres to regional requirements concerning the movement of people and goods. Similarly, fiscal policy directives of WAEMU are enforced in Senegal, as are regulations issued by the BCEAO. Senegal is a WTO member and generally notifies draft regulations to the WTO Committee on Technical Barriers to Trade. However, since 2005, Senegal has banned imports of uncooked poultry and poultry products without notifying the WTO. In March 2019, Senegal ratified the AfCFTA, which went into effect in January 2021.

Senegal’s legal system is based on French civil law and has well-developed commercial and investment laws. Although settlement of commercial disputes has historically been cumbersome and slow, Senegal launched a new commercial court system in 2018 with jurisdiction over commercial matters and a mandate to resolve cases within three months.  The business community welcomed the move, and in the past two years, the court has heard 11,054 cases with a combined value of nearly $500 million.

While Senegal’s constitution mandates that the judiciary operate independently of the legislature and executive, the executive frequently exerts influence, particularly in high-profile criminal cases. This type of influence is rare in strictly commercial matters. Some foreign investors, however, report discriminatory treatment by local courts. Investors may consider including binding arbitration in their contracts to avoid prolonged legal entanglements. Companies may seek judicial redress against regulatory decisions. Regulatory appeals are heard in administrative tribunals that specialize in adjudicating claims against the state.

Senegal is a member of the World Intellectual Property Organization and the Berne Copyright Convention, and in 2019 hosted a regional workshop on protecting intellectual property in the pharmaceutical and pesticide industries that gathered prosecutors, customs, and law enforcement officers. Nevertheless, the country has insufficient capacity to reliably protect intellectual property rights.

Senegal’s 2004 Investment Code provides basic guarantees for equal treatment of foreign investors and repatriation of profit and capital. It also specifies tax and customs exemptions according to investment volume and company size and location, with investments outside of Dakar eligible for longer tax exemptions. A law to enhance transparency in public procurement and public tenders entered into force in 2008, establishing a public procurement regulatory body, the Autorité de Régulation des Marchés Publics (Public Procurement Regulatory Authority, ARMP), which publishes annual reviews of public procurement.

In February 2021, Senegal’s National Assembly signed into law the long-awaited update to the law governing public-private partnership (PPP) contracts, followed by the implementing decree in November 2021. The amended law includes several important innovations, including: a unified legal framework for private sector-led, GOS-supported projects; a streamlined institutional framework to simplify procedures and avoid incompatibilities; a strengthened monitoring and control system; and provisions about local content requirements. The GOS has stated that the new law will introduce a more flexible and attractive framework for blended finance projects. Some U.S. companies have raised concerns about the local content requirements included in the law.

BCEAO regulations proscribe the use of offshore accounts in project finance transactions within the WAEMU, except when approved by ministries of finance with the express consent of the BCEAO. According to BCEAO, these restrictions allow visibility over international transactions, deter money laundering, and help it maintain adequate foreign currency reserves. BCEAO emphasizes the importance of these rules in enabling it to fulfill its mandate of maintaining the stability of the CFA franc’s peg to the Euro.

Since 2018, the BCEAO and Senegalese Ministry of Finance and Budget have tightened their approach to the approvals of offshore accounts. Although there is no “maximum” number of accounts permitted, informal guidelines suggest that transactions using one to three accounts have the greatest chance of being approved. According to the BCEAO, the intent is to encourage the minimum number of such accounts necessary to legitimately conduct the transaction. Managers and lenders should raise the subject of offshore accounts with the Ministry of Finance as early in the process as possible and should be prepared to submit a functional justification for each requested account. All offshore accounts must be “reauthorized” annually.

The Investment Code, the Mining Code, the Petroleum Code, and a government services one-stop can be found at the following:

• Investment Code
• Mining Code
• Petroleum Code
• Senegal Services

Senegal’s national competition commission, the Commission Nationale de la Concurrence, is responsible for reviewing transactions for competition-related concerns.

Senegal’s Investment Code includes protection against expropriation or nationalization of private property, with exceptions for “reasons of public utility” provided there is “just compensation” in advance. In general, Senegal has no history of expropriation or creeping expropriation against private companies. The government may sometimes use eminent domain justifications to procure land for public infrastructure projects, with compensation provided to landowners. The U.S.-Senegal BIT specifies that international legal standards are applicable to any cases of expropriation.

Senegal is a member of the International Convention for the Settlement of Investment Disputes (ICSID) and a signatory of the Convention on the Recognition and Enforcement of Arbitral Awards (the “New York Convention”). Senegalese law recognizes the Cour d’Appel (Appeals Court) as the competent authority for the recognition and enforcement of awards rendered pursuant to ICSID. Senegal is also a signatory to the Organization for the Harmonization of Corporate Law in Africa Treaty (OHADA). This agreement supports enforcement of awards under the New York Convention. The Autorité de Régulation des Marchés Publics (Public Procurement Regulatory Authority or ARMP) manages a dispute-resolution mechanism for public tenders.

Senegal has growing experience in using international arbitration for resolution of investment disputes with foreign companies, including some cases involving tax disputes with U.S. firms. The government has also prevailed in some arbitration cases, including a 2013 arbitration decision in a high-profile case with a multinational company over an integrated mining/railway/port project, fostering greater confidence within the government in the arbitration process. Senegal’s BIT with the United States includes provisions to facilitate the referral of investment disputes to binding arbitration.

International firms have pursued a variety of investment disputes during the last decade, including at least two U.S. firms involved in tax and customs disputes. Other foreign companies in mining and telecommunications have pursued commercial disputes over licensing. These disputes have often been resolved through arbitration or an amicable settlement. Senegal has no history of extrajudicial action against foreign investors.

The GOS has commercial courts and uses alternative dispute resolution mechanisms to expedite dispute resolution. Under the OHADA treaty, Senegal recognizes the corporate law and arbitration procedures common to the 16 member states in Western and Central Africa. Senegalese courts routinely recognize arbitration clauses in contracts and agreements. It is not unusual for courts to rule against SOEs in disputes involving private enterprises.

Senegal has commercial and bankruptcy laws that address liquidation of business liabilities. Foreign creditors receive equal treatment under Senegalese bankruptcy law in making claims against liquidated assets. Monetary judgments are normally in local currency. As a member of OHADA, Senegal permits three different types of bankruptcy: liquidation through a negotiated settlement; company restructuring; or complete liquidation of assets.

The harmonization of Serbian with EU law in accordance with the EU’s acquis communautaire has created a more favorable legal environment; however, Serbia still needs to address problems with transparency in the development, adoption, and implementation of regulations.

The website of Serbia’s unicameral legislature, the National Assembly ( www.parlament.gov.rs ), provides a list of both proposed and adopted legislation.

International Financial Reporting Standards (IFRS) are required for publicly listed companies and financial institutions, as well as for the following large legal entities, regardless of whether their securities trade in a public market: insurance companies, financial leasing lessors, voluntary pension funds and their management companies, investment funds and their management companies, stock exchanges, securities brokerages, and factoring companies. Additionally, IFRS standards are required for all foreign companies whose securities trade on any public market.

On January 1, 2021, Serbia introduced environmental, social, and governance disclosure (non-financial reporting) with the new Law on Accounting (Article 37), which obliges all companies with over 500 employees in Serbia to publish non-financial reports.

There are no informal regulatory processes managed by NGOs or the private sector.

The Law on Ultimate Beneficial Owners Central Registry (2018) introduced a single, public, online database maintained by the Serbian Business Registers Agency (www.apr.gov.rs), which contains information on natural persons who are ultimate beneficial owners of the companies.

Nationally, there are 37 different inspectorates operating within 12 different ministries that do not significantly cooperate or coordinate with one another, despite the existence of the Coordination Commission for Inspection Supervision. The administrative court is the legal entity that considers appeals on inspection decisions.

Serbia’s public finances are relatively transparent. The government regularly publishes information related to public debt on the website www.javnidug.gov.rs .

Serbia is not a member of the World Trade Organization or the EU. Serbia became an EU candidate country and opened formal accession negotiations in 2012. Details on EU-Serbia relations and the status of Serbia’s accession process are available through the EU Delegation to Serbia at https://eeas.europa.eu/delegations/serbia_en/ . The WTO accepted Serbia’s application for accession on February 15, 2005, and Serbia currently has observer status.

Serbia has a civil law system. The National Assembly codifies laws. The courts have sole authority to interpret legislation, with the exception of so-called “authentic interpretation” which is reserved for the legislature. According to the Constitution, Serbia’s judicial system is legally independent of the executive branch; but in practice, significant obstacles prevent judicial independence.

Serbia’s judicial system distinguishes between commercial courts and courts of general jurisdiction. Commercial courts adjudicate commercial matters, including disputes involving business organizations, business contracts, foreign investment, foreign trade, maritime law, aeronautical law, bankruptcy, civil economic offenses, intellectual property rights, and misdemeanors committed by commercial legal entities. When only one of the parties is a business and the other is not, the courts of general civil jurisdiction decide the dispute. The Appellate Commercial Court rules on appeals of commercial courts’ decisions. The average waiting time to bring a case to trial in the Commercial Courts is high. Case processing time for commercial litigation is in line with EU averages, but the law is inconsistently applied.

In general, contract enforcement is weak, and the courts responsible for enforcing property rights are overburdened. Under Serbian commercial law, the Law on Obligations regulates contractual relations (also known as the Law on Contracts and Torts). Civil Procedure Law governs contract-related disputes. Serbian law need not be the governing law of a contract entered into in Serbia. The Law on Resolution of Disputes with the Regulations of Other Countries, as well as bilateral agreements, regulates procedures for recognition of foreign court decisions.

Significant laws for investment, business activities, and foreign companies in Serbia include: the Law on Investments, the Law on Foreign Trade, the Law on Foreign Exchange Operations, the Law on Markets of Securities and other Financial Instruments, the Law on Registration of Commercial Entities, the Law on Banks and Other Financial Institutions, the Law on Construction and Planning, the Company Law, the Law on Financial Leasing, the Law on Concessions, and Regulations on Conditions for Establishing and Operation of Foreign Representative Offices in Serbia. Other relevant laws include: the Law on Value Added Tax, the Law on Income Tax, the Law on Corporate Profit Tax, the Law on Real Estate Tax, and the Law on Mandatory Social Contributions. Laws and regulations on portfolio investments are on the Securities Commission’s website at https://www.sec.gov.rs/index.php/en/.  Laws and regulations related to payment operations can be found on the National Bank of Serbia’s website at https://nbs.rs/sr_RS/drugi-nivo-navigacije/propisi/ .

Serbia lacks a primary or “one-stop-shop” website for investment that provides relevant laws, rules, procedures, and reporting requirements for investors. However, numerous Serbian firms that provide legal and other professional services publish comprehensive information for foreign investors, including PricewaterhouseCoopers .

The Commission for the Protection of Competition is responsible for competition-related concerns and in principle implements the law as an independent agency reporting directly to the National Assembly. In some cases, companies have reported perceptions that political factors have influenced the Commission’s decision-making. Annual reports of the Commission’s actions are published online at http://www.kzk.gov.rs/izvestaji . Laws and regulations related to market competition are available at http://www.kzk.gov.rs/en/zakon-2 .

A foreign investor is guaranteed national treatment, which means that any legal entity or natural person investing in Serbia enjoys full legal security and protection equal to those of local entities. A stake held by a foreign investor or a company with a foreign investment cannot be the subject of expropriation. The contribution of a foreign investor may be in the form of convertible foreign currency, contribution in kind, intellectual property rights, and securities.

Serbia’s Law on Expropriation authorizes expropriations that have been determined to be in the public interest and for a compensation in the form of similar property or cash approximating the current market value of the expropriated property. The local municipal court is authorized to intervene and decide the level of compensation if there is no mutually agreed resolution within two months of the expropriation order. The Law on Investment provides safeguards against arbitrary government expropriation of investments. There have been no cases of expropriation of foreign investments in Serbia since the dissolution of the former Federal Republic of Yugoslavia in 2003. There are, however, outstanding claims against Serbia related to property nationalized under the Socialist Federal Republic of Yugoslavia, which was dissolved in 1992.

The 2014 Law on Restitution of Property and Compensation applies to property seized by the government since March 9, 1945, shortly before the end of World War II, and includes special coverage for victims of the Holocaust, who are authorized to reclaim property confiscated by Nazi occupation forces. Heirless property left by victims of the Holocaust is subject to a separate law, which was approved in February 2016. The deadline for filing restitution applications was March 1, 2014. The Agency for Restitution received 75,414 property claims, and the adjudication process is still ongoing. Information about the Agency for Restitution, restitution procedures and the status of cases is available on its website at www.restitucija.gov.rs/eng/index.php .

Serbia’s bankruptcy law is consistent with international standards. According to the Bankruptcy Law, its goal is to provide compensation to creditors via the sale of the assets of a debtor company. The law stipulates automatic bankruptcy for legal entities whose accounts have been blocked for more than three years, and it allows debtors and creditors to initiate bankruptcy proceedings. The law ensures a faster and more equitable settlement of creditors’ claims, lowers costs, and clarifies rules regarding the role of bankruptcy trustees and creditors’ councils.

Foreign creditors have the same rights as Serbian creditors with respect to initiating or participating in bankruptcy proceedings. Claims in foreign currency are calculated in dinars at the dinar exchange rate on the date the bankruptcy proceeding commenced. Serbia’s Criminal Code criminalizes intentionally causing bankruptcy, as well as fraud in relation to a bankruptcy proceeding. The 2020 World Bank Doing Business index ranked Serbia 41 out of 190 economies with regards to resolving insolvency, with an average time of two years needed to resolve insolvency and average cost of 20% of the estate. The recovery rate was estimated at 34.5 cents on the dollar.

Although the Seychellois government has made considerable efforts to liberalize the economy, the country continues to suffer from overregulation. There is a lack of transparency in the privatization and allocation of government-owned land and businesses. To promote transparency in the public procurement system, Seychelles’ National Tender Board publishes all tenders both on its website (http://www.ntb.sc)  and in local newspapers. The board publicizes contracts that have been awarded and includes the names of successful bidders and bid amounts. The government has also set up a Procurement Oversight Unit, which serves as a public procurement policy and monitoring body (http://www.pou.gov.sc/ ).

Following the 2016 election victory of the opposition Seychelles Democratic Union (LDS) in winning a majority in the National Assembly for the first time in 40 years, significant procedural changes were implemented. The government also took several measures to combat corruption and nepotism, including establishing the Anti-Corruption Commission; more frequently publishing special audits by the Auditor General’s Office of questionable government transactions; and appointing opposition supporters to various boards of national organizations and important positions. Since 2017, the government has held budget preparation focus group discussions, including key stakeholders such as the business community and civil society organizations. Additionally, there has been considerably more legislative debate on the annual government budget. Increased budget debate and scrutiny has continued following the October 2020 presidential and legislative elections, in which the LDS won the presidency for the first time in the country’s history, and again won a majority in the National Assembly. Every government agency is called to the National Assembly to answer questions on their proposed budgets, as well as general questions related to their organizations.

Proposed laws and regulations, as well as final laws, are published in the official gazette on a monthly basis and are available online at https://www.gazette.sc/ . Regulatory transparency improved with the balance of power between the opposition-controlled National Assembly and ruling party-controlled presidency following the 2016 elections. This included several new laws, such as the Freedom of Information Act. In 2018, the access to information law came into force. In 2019, the government appointed a chief executive officer for the Seychelles Information Commission, and appointed information officers in all ministries and departments. The law makes provisions for how citizens may access government information that is not classified as sensitive for security and defense reasons. It also makes provisions for how agencies should respond to requests, mandates proactive disclosure and a duty to assist requestors, and defines information that is deemed classified for security and defense. In 2020, the government also published a manual for using the Freedom of Information Act and accessing information. Additionally, ministries are now required to submit white papers and consult with stakeholders before legislation is adopted.

Seychelles’ budget is easily accessible to the general public: http://www.finance.gov.sc/national-budget/47 . Budget documents, including the executive budget proposal and the enacted budget, provide a substantially full picture of Seychelles’ planned expenditures and revenue streams. Publicly available budgets included expenditures broken down by ministry and revenues broken down by source and type. Information on debt obligations is also readily available. In 2019, the government also included a fiscal risk statement, which identified substantial fiscal risks emanating from public enterprises in Seychelles. The statement also contains details on explicit and contingent liabilities, and is available at https://bit.ly/3ivTzDq 

In its 2022 budget, the government announced a bill for the oversight of public enterprises to be presented to the National Assembly in early 2022. This legislation will establish new obligations for public enterprises and will help the Public Enterprise Monitoring Commission (PEMC) be more efficient and rigorous in its supervisory function. The PEMC oversees 32 state-owned enterprises, which have either been established using public financial resources, or of which the government is a significant shareholder.

Other measures to improve transparency and accountability announced by the Seychellois government in 2021 include: (a) a framework for better transparency and justice related to taxes paid by charitable organizations on private sector donations; (b) review of the Income and Non-Monetary Benefits Tax Act to bring more transparency to salaries that are not taxed; (c) implementation of a Results Based Management (RBM) framework to inculcate principles of efficiency, transparency and accountability in public service; and (d) creation of a Public Sector Commission to ensure better transparency and to remove any political agenda in the appointment of senior executives in the public sector.

In November 2021, the Seychellois government also announced the establishment of a high-level domestic regulations (HLDRC) committee to represent the public sector and members of the National Assembly. This committee will discuss ways of improving the transparency and efficiency of licensing administrative procedures, especially with regards to business with foreign investors.

Seychelles has signed trade agreements with regional blocs such as COMESA, SADC, and the EU. Seychelles has also signed the COMESA- East African Community (EAC)-SADC Tripartite Free Trade Agreement (TFTA) and AfCFTA. Seychelles ratified the AfCFTA in June 2021 and announced its withdrawal from the TFTA in September 2021 to focus its resources on the AfCFTA. The AfCFTA started during the TFTA negotiations but moved at a faster pace and covers a larger number of African countries (54), including the 28 countries negotiating the TFTA. In January 2019, four eastern and southern African (ESA) countries, including Seychelles, signed the UK-ESA Economic Partnership Agreement, which safeguards trade preferences currently enjoyed under iEPA post Brexit.

Seychelles joined the WTO in 2015, becoming the 161st member. Seychelles does notify draft technical regulations to the WTO Committee on Technical Barriers to Trade. In 2016, Seychelles ratified the Trade Facilitation Agreement (TFA). Further details on Seychelles’ TFA notifications to the WTO can be found at https://tfadatabase.org/members/seychelles .

Seychelles’ legal system is a blend of English common law, the Napoleonic Code, and customary law. Civil matters, such as contracts and torts, are governed by the Civil Code of Seychelles, which is derived from the French Napoleonic Code. However, the company law and criminal laws are based on British law. In both civil and criminal matters, the procedural rules derive from British law. Seychelles does not maintain a specialized commercial court. Judgments of foreign courts are governed by Section 3 of the Foreign Judgments (Reciprocal Enforcement) Act of 1961. Under the current government, the perception among Seychellois is that the judiciary is no longer influenced by the executive. In its 2022 budget, the government announced that it will start working with the judiciary to introduce a separate court that will deal specifically with commercial cases.

The Seychellois government established the SIB (Seychelles Investment Bureau, https://www.investinseychelles.com/ ) as a one-stop-shop for all matters relating to business and investment in Seychelles. The SIB’s main functions are to promote investment and facilitate investment processes within the country’s administrative and legal framework. The SIB, in cooperation with other government agencies, also assists in screening potential investment projects. It has also implemented a digital customer relations management system to follow up on applications submitted by investors. In 2021, the government announced that it is working on a digital system to integrate functions of all government agencies involved in the administration of online business applications to further improve ease of doing business.

The government is keen to ensure that business activities are not conducted at the expense of Seychelles’ natural environment. For a business to operate, investors must apply for a license from the Seychelles Licensing Authority (http://www.sla.gov.sc/ ).

The government established an Investment Appeal Panel in 2012 to provide an appeal mechanism for investors to challenge the government’s decisions regarding investments or proposed investments in Seychelles.

The SIB only reviews competition cases initiated by other government authorities, private sector entities, or investors. Current legislation does not empower SIB to review on its own accord all transactions for competition-related concerns. The Fair-Trading Commission (http://ftc.sc/ ) is responsible for investigating competition-related concerns. Such investigations may be initiated by the Commission or may be carried out following a complaint.

In November 2021, the government announced new measures to promote competition in the financial services sector: (a) modernization of the National Payments System; (b) a new fintech strategy; and (c) the introduction of financial consumer protection legislation, which will give the central bank and financial services authority more power to protect the interests of financial consumers. This new law will likely be complemented by other actions to enhance competition, such as reducing or eliminating costs for switching providers, eliminating abusive practices aimed at keeping customers tied to one particular service provider, and educating the public on its rights.

The government also announced measures to promote competition in the telecommunication sector. A new bill that will be presented to the National Assembly in 2022 will address competition issues and establish legal provisions to enable consumers to switch operators.

The 1978 Lands Acquisition Act, last amended in 1990, states that when the government takes possession of property, it must pay prompt and full compensation for the property. The government may expropriate property in cases of public interest or for public safety. Following the 1977 socialist takeover, the government engaged in expropriation of land for redistribution or for use by the state. With the return of a multi-party-political system in 1993, the government compensated some of those who had lost land to expropriation/redistribution in the late 1970s. In 2017, Seychelles established the Land Compensation Tribunal to investigate cases where compulsory land acquisition was made by the government without adequate compensation. Seychellois whose land was taken by the government from 1977 to 1993 had until December 2020 to make their claims. The Land Compensation Tribunal completed judgments in all its cases in 2021. The Land Compensation Tribunal also works in close collaboration with the Truth Reconciliation and National Unity Commission (TRNUC), which is investigating cases of human rights abuses prior to and after the 1977 takeover. Due to the COVID-19 pandemic, both the Land Compensation Tribunal and the TRNUC have not been able to function as planned. The TRNUC’s work is further hindered by an insufficient budget. Illegal land acquisition by the government also forms part of the TRNUC’s mandate.

In October 2021, the Seychellois government also introduced a program to return land that was forcibly acquired between 1977 and 1993. This program applies to land acquired through the 1977 Lands Acquisition Act or purchased under a private agreement. The measure is based on the principle that land acquired by the government either compulsorily or through private agreement for a public purpose or in the national interest and which is still undeveloped and not earmarked by the government to be utilized in the public interest or for a public purpose will be considered for return to the original owner or his executor or heir. More information on this is available here: https://bit.ly/3IOIGY3 .

U.S. Embassy Port Louis does not anticipate major expropriations in the near future, nor is it aware of any pattern of discrimination against U.S. persons.

ICSID Convention and New York Convention

In 1978, Seychelles joined the Convention on the Settlement of Investment Disputes between States and Nationals of Other States (ICSID Convention). In February 2020, Seychelles deposited its instrument of accession to the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention), which entered into force in May 2020.

Investor-State Dispute Settlement

Seychelles has been a party to the Convention on the Settlement of Investment Disputes between States and Nationals of Other States since April 1978. Seychelles has signed five bilateral investment treaties (BITs), of which two are currently in force: the 2007 France-Seychelles BIT and the 1998 Cyprus-Seychelles BIT.

U.S. Embassy Port Louis is aware of at least one investor-government dispute in the current reporting period. The dispute involves the operation of a large hotel resort by a company with U.S. shareholders, in which the Seychellois government also owned a small percentage share. In 2008, the Seychellois government sought to close the company on the grounds that it “had disappeared in its ability to operate as a hotel resort,” allowing the hotel to fall into disrepair. The government’s effort was successful and resulted in the cancellation of the hotel’s operating license. The liquidation and subsequent sell-off of the hotel, formerly the country’s second largest hotel, raised suspicions of government corruption among local press outlets and business institutions, including the chamber of commerce. The former majority shareholder of the hotel claimed that he was threatened into selling the hotel by a businessman with ties to the government. The purchasers of the hotel, a newly formed group allegedly led by the same businessman who threatened the previous owner, were the lowest bidder. In October 2019, the Seychellois Supreme Court recommended that the Seychellois president establish a commission of inquiry to investigate the sale of the hotel, and, in June 2020, then-President Danny Faure appointed such a commission. The commission’s report was expected to be published by the end of May 2021 but has not yet been published as of March 2022.

Parties involved in investment disputes are encouraged to resolve their disputes through arbitration and negotiation. The Seychelles Investment Act created the Investment Appeal Panel to which aggrieved investors may appeal a decision made by a public sector agency regarding their investments or proposed investments in Seychelles. In the event investors are not satisfied with the decision of the Investment Appeal Panel, they may appeal to the Court of Appeal. Seychelles has acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which entered into force in May 2020.

International Commercial Arbitration and Foreign Courts

The legal framework for international arbitration exists through the Commercial Code of Seychelles, the Seychelles Code of Civil Procedure, and Seychelles Investment Act. Seychelles has acceded to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, which entered into force in May 2020. Arbitration legislation in the Seychelles is not based on the UNCITRAL Model Law; however, several provisions are compatible with the Model Law. In general, international arbitration is not yet a regular feature of dispute resolution in Seychelles, even though arbitration clauses are used in contracts.

Bankruptcy in Seychelles is governed under the Insolvency Act of 2013 (https://www.seylii.org/sc/legislation/act/2013/4 ). According to his act, an individual may be discharged from bankruptcy three years from the date of its declaration. Bankruptcy is not criminalized in Seychelles.

The Sierra Leone Parliament is the country’s supreme legislative authority. Generally, Parliament enacts bills that the President signs into law. The judiciary interprets and applies the laws to ensure impartial justice and provides a mechanism for dispute resolution. However, the regulatory system is not entirely consistent with international norms. Laws and regulations are developed at the national level, and the Constitution requires publication of proposed laws and regulations in a government journal, the Gazette, for 21 days.

A series of legislative reforms have been carried out since the second trade policy review in 2017 to create a conducive business environment and attract FDI. These include the Anti-Money Laundering Act, the Banking Act, the Bank of Sierra Leone Act, the Extractive Industries Revenue Act, and several Finance Acts, to name a few. To strengthen the legal, regulatory, and institutional frameworks, Sierra Leone established a fast-track commercial court, the Credit Reference Bureau, the Corporate Affairs Commission, revised the legislation of company activities, and developed the Local Content Policy.

Also, Sierra Leone has taken steps to promote and improve regulatory transparency. The Right to Access Information Commission was established in 2014 to make government records available to the public and imposes a penalty for failure to make information available. Sierra Leone joined the Open Government Partnership (OGP) in 2014, an initiative that empowers citizens to fight corruption and promotes transparent and accountable governance. The OGP, now led by the National Council for Civic Education and Development (NaCCED), made significant progress in access to justice, gender, education, and open Parliament, thereby assuring citizens of government’s commitment to provide for the public and to consolidate democracy. In 2020, Parliament passed the Independent Commission for Peace and National Cohesion law and repealed Part 5 of the Public Order Act of 1965 that criminalized libel. In 2021, the government enacted the Cyber Security and Crime Act, signed the abolition of the death penalty, created a fast-track court to try sexual offenders, and a Gender Empowerment Bill 2021 currently before Parliament for enactment.

The Audit Service Act of 1998 established the Audit Service Sierra Leone (ASSL) and further strengthened to carry out audits of all government entities, including statutory corporations and organizations, by the Audit Service Act of 2014.

Sierra Leone became a member of the Extractive Industries Transparency Initiative (EITI) in 2008, established the Sierra Leone Extractive Industries Transparency Initiative (SLEITI), and became compliant with EITI rules in 2014. In 2019, the EITI Board agreed that Sierra Leone had made meaningful progress in implementing the EITI Standard but should undertake corrective actions before the second validation in December 2020. However, in 2020, recognizing the challenges associated with the COVID-19 pandemic, the EITI Board introduced flexible measures in EITI implementation and tasked the multi-stakeholder group (MSG) to focus on ensuring EITII’s commitment to transparency and accountability.

The Public Financial Management Act of 2016 reformed the budget process and improved transparency in the expenditure of public funds. While the Fiscal Management and Control Act of 2017 directed government ministries, departments, and agencies (MDAs) to transfer all revenues into the Treasury Single Account, domestically referred to the Consolidated Revenue Fund (CRF), which was fully complied with in 2018 on the executive order of President Maada Bio.

Sierra Leone joined the General Agreement of Tariff and Trade (GATT) in 1961 and the World Trade Organization (WTO) in 1995. Sierra Leone is committed to the multilateral trading system and has not notified the WTO of any inconsistent measures with the WTO’s Trade-Related Investment Measures (TRIMs) obligations. It acceded to the Kyoto Protocol in 2006 and the International Convention on the Simplification and Harmonization of Customs Procedures, otherwise referred to as the Revised Kyoto Convention in 2015. It became a contracting party to the International Convention on the Harmonized Commodity Description and Coding System (HS Convention) in 2015. It replaced its pre-shipment inspection with a destination inspection in 2009 and notified the WTO of the Agreement on Trade facilitation in May 2017. The Customs Act of 2011 upheld the WTO Customs Valuation Agreement, which prohibits the use of arbitrary or fictitious values. However, it has not notified the WTO of its sanitary and phytosanitary legislation required for the international movement of any plant materials or products or any state-trading activity.

Sierra Leone is not a signatory to any plurilateral agreements concluded under the WTO but established a mission to the WTO in 2011.  It ratified six multilateral investment agreements, including the International Center for Settlement of Investment Disputes (ICSID) and the Multilateral Investment Guarantee Agency (MIGA) Conventions, so that foreign investments in Sierra Leone are covered against non-commercial risks such as currency transfer risks, expropriation risks, risks of war and civil disturbance, and repudiation risk.

The legal system is derived from the English common law system, but local courts apply customary law to many disputes outside of the capital, Freetown. The courts provide a venue to enforce property and contract rights. The country does not have a consolidated written commercial or contractual law, and disparate pieces of legislation sometimes lead to the uneven treatment of commercial disputes.

The Superior Court of Judicature consists of the Supreme Court, the Court of Appeal, and the High Court, while the lower courts consist of the magistrate court and the local courts. In 2010, Sierra Leone created a Fast-Track Commercial Court to reduce the duration of commercial cases to as low as six months. In 2017, Sierra Leone hosted a commercial law summit to address gaps in the justice system, resulting in concrete recommendations in critical areas, including arbitration, anti-corruption and bribery, public-private partnerships, and reform of the court process.  A draft arbitration bill will bring arbitration proceedings in Sierra Leone up to international standards when passed into law.

Foreign investors have equal access to the judicial system, which is slow and often subject to financial and political influence. However, Sierra Leonean courts may acknowledge foreign judgment from specific jurisdictions with reciprocal enforcement arrangements with Ghana, Nigeria, Guinea, and the Gambia. Generally, Sierra Leonean courts do not apply foreign law, but foreign judgment can be enforced when registered with the high court. However, the registration may be refused when enforcement is contrary to public policy.

On depositing its instrument for accession to the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York Convention), Sierra Leone became the 166th state party to the Convention, which came into force in January 2021. Recommended during the inaugural Commercial Law Summit of May 2017, the accession will promote FDI by resolving disputes by arbitration without interference from local courts and will enforce arbitral awards consistently and predictably.

The Companies Act of 2009, the Registration of Business Act of 2007, and their subsequent amendments are the primary laws governing the registration of all businesses before commencing operations. The Corporate Affairs Commission (CAC) deals with the incorporation of companies. In contrast, the Office of the Administrator and Registrar General (OARG) deals with sole proprietorships and partnerships, with the process streamlined into a stop-shop.

Sierra Leonean law ensures that foreign investors may compete on the same terms as domestic firms. The Investment Promotion Act 2004 protects foreign entities from discriminatory treatment. The law creates incentives for customs exemptions, allows investors to repatriate proceeds and remittances freely, and protects against expropriation without prompt and adequate compensation. The law establishes a dispute settlement framework that will enable investors to submit disputes to arbitration under the UN Commission on International Trade Laws (UNCITRAL).

Sierra Leonean authorities do not screen, review, or approve foreign direct investments. Companies must register to do business in Sierra Leone, and there are no reports that the registration process has blocked investments or discriminated against investors. In the case of investment guarantees, the government established specific procedures with the U.S. government in agreements signed on December 28, 1962, and November 13, 1963, whereby Sierra Leone authorities approved external investment guarantees in Sierra Leone. Additional information about the laws and regulations applicable to foreign investments is available on the SLIEPA website: https://www.sliepa.gov.sl/ .

Sierra Leone does not have a competition law. The European Union and the United Nations Conference on Trade and Development (UNCTAD) have supported the Ministry of Trade and Industry’s attempt to develop a competition policy. This ministry oversees the regulation of anti-competitive practices. Whereas consumer protection has been passed, the cabinet has approved a competition policy but awaits parliamentary ratification.

The Constitution authorizes the government to confiscate property only when necessary, in the interest of national defense, public safety, order, morality, town and country planning, or the public benefit or welfare. In such cases, the Constitution guarantees the prompt payment of adequate compensation, with a right of access to a court or other independent authority to consider legality, determine the amount of compensation, and ensure prompt payment.

The Bankruptcy Act 2009 establishes a process of bankruptcy for individuals and companies. Bankruptcy is a civil matter, but it may disqualify an individual from holding certain elected public offices and practicing certain professions. The Bankruptcy Act 2009 also encourages and facilitates reorganization as an alternative to liquidation. The World Bank ranked Sierra Leone 162, with a score of 24.7, in the ease of resolving insolvency in 2020.

After passing a Credit Reference Act in 2011, Sierra Leone established a Credit Reference Bureau within the Bank of Sierra Leone, mandating all financial institutions to give all information regarding loan applications for credit history checks. The credit history checks will detail all outstanding loans, when and where a loan was taken, and the repayment history guiding financial institutions in their loan decision. The Bureau now operates a digital identification system to control credit information and ensure citizens have secure and complete ownership of their data and information, transforming the financial inclusion landscape.

In May 2021, DBS Bank (DBS), SGX, Standard Chartered and Temasek started a joint venture to establish a global exchange and marketplace for high-quality carbon credits, called Climate Impact X (CIX).

In March, SGX and OCBC established a low-carbon index to analyze the top 50 free-float market capitalization companies based on fossil fuel engagement in an effort to improve sustainable financing. This index plans to exclude companies with high involvement in the fossil fuel sector.

The government establishes clear rules that foster competition. The USSFTA enhances transparency by requiring regulatory authorities to consult with interested parties before issuing regulations, and to provide advance notice and comment periods for proposed rules, as well as to publish all regulations. Singapore’s legal, regulatory, and accounting systems are transparent and consistent with international norms.

Rule-making authority is vested in the parliament to pass laws that determine the regulatory scope, purpose, rights, and powers of the regulator and the legal framework for the industry. Regulatory authority is vested in government ministries or in statutory boards, which are organizations that have been given autonomy to perform an operational function by legal statutes passed as acts of parliament, and report to a specific ministry. Local laws give regulatory bodies wide discretion to modify regulations and impose new conditions, but in practice agencies use this positively to adapt incentives or other services on a case-by-case basis to meet the needs of foreign as well as domestic companies. Acts of parliament also confer certain powers on a minister or other similar persons or authorities to make rules or regulations in order to put the act into practice; these rules are known as subsidiary legislation.  National-level regulations are the most relevant for foreign businesses. Singapore has no local or state regulatory layers.

Before a ministry instructs the Attorney-General’s Chambers (AGC) to draft a new bill or make an amendment to a bill, the ministry has to seek in-principle approval from the cabinet for the proposed bill. The AGC legislation division advises and helps vet or draft bills in conjunction with policymakers from relevant ministries.  Public and private consultations are often requested for proposed draft legislative amendments. Thereafter, the cabinet’s approval is required before the bill can be introduced in parliament.  All bills passed by parliament (with some exceptions) must be forwarded to the Presidential Council for Minority Rights for scrutiny, and thereafter presented to the president for assent. Only after the president has assented to the bill does it become law.

While ministries or regulatory agencies do conduct internal impact assessments of proposed regulations, there are no criteria used for determining which proposed regulations are subjected to an impact assessment, and there are no specific regulatory impact assessment guidelines. There is no independent agency tasked with reviewing and monitoring regulatory impact assessments and distributing findings to the public. The Ministry of Finance publishes a biennial Singapore Public Sector Outcomes Review ( http://www.mof.gov.sg/Resources/Singapore-Public-Sector-Outcomes-Review-SPOR ), focusing on broad outcomes and indicators rather than policy evaluation. Results of scientific studies or quantitative analysis conducted in review of policies and regulations are not made publicly available.

Industry self-regulation occurs in several areas, including advertising and corporate governance.  Advertising Standards Authority of Singapore (ASAS) ( https://asas.org.sg/ ), an advisory council under the Consumers Association of Singapore, administers the Singapore Code of Advertising Practice, which focuses on ensuring that advertisements are legal, decent, and truthful. Listed companies are required under the SGX Listing Rules to describe in their annual reports their corporate governance practices with specific reference to the principles and provisions of the Code. Listed companies must comply with the principles of the code, and, if their practices vary from any provisions of the code, they must note the reason for the variation and explain how the practices they have adopted are consistent with the intent of the relevant principle. The SGX plays the role of a self-regulatory organization (SRO) in listings, market surveillance, and member supervision to uphold the integrity of the market and ensure participants’ adherence to trading and clearing rules. There have been no reports of discriminatory practices aimed at foreign investors.

Singapore’s legal and accounting procedures are transparent and consistent with international norms and rank similar to the United States in international comparisons according to the World Justice Project ( http://worldjusticeproject.org/rule-of-law-index ). The prescribed accounting standards for Singapore-incorporated companies applying to be listed in the public market are known as Singapore Financial Reporting Standards (SFRS(I)), which are identical to those of the International Accounting Standards Board (IASB). Non-listed Singapore-incorporated companies can voluntarily apply for SFRS(I). Otherwise, they are required to comply with Singapore Financial Reporting Standards (SFRS), which are also aligned with those of IASB. For the use of foreign accounting standards, the companies are required to seek approval of the Accounting and Corporate Regulatory Authority (ACRA).

For foreign companies with primary listings on the Singapore Exchange, the SGX Listing Rules allow the use of alternative standards such as International Financial Reporting Standards (IFRS) or the U.S. Generally Accepted Accounting Principles (U.S. GAAP).  Accounts prepared in accordance with IFRS or U.S. GAAP need not be reconciled to SFRS(1). Companies with secondary listings on the Singapore Exchange need only reconcile their accounts to SFRS(I), IFRS, or U.S. GAAP.

Notices of proposed legislation to be considered by parliament are published, including the text of the laws, the dates of the readings, and whether or not the laws eventually pass. The government has established a centralized Internet portal ( www.reach.gov.sg ) to solicit feedback on selected draft legislation and regulations, a process that is being used with increasing frequency. There is no stipulated consultative period.  Results of consultations are usually consolidated and published on relevant websites. As noted in the “Openness to Foreign Investment” section, some U.S. companies, in particular in the telecommunications and media sectors, are concerned about the government’s lack of transparency in its regulatory and rule-making process.  However, many U.S. firms report they have opportunities to weigh in on pending legislation that affects their industries.  These mechanisms also apply to investment laws and regulations.

The Parliament of Singapore website ( https://www.parliament.gov.sg/parliamentary-business/bills-introduced ) publishes a database of all bills introduced, read, and passed in parliament in chronological order as of 2006. The contents are the actual draft texts of the proposed legislation/legislative amendments. All statutes are also publicly available in the Singapore Statutes Online website ( https://sso.agc.gov.sg ). However, there is no centralized online location where key regulatory actions are published. Regulatory actions are published separately on websites of Statutory Boards.

Enforcement of regulatory offences is governed by both acts of parliament and subsidiary legislation. Enforcement powers of government statutory bodies are typically enshrined in the act of parliament constituting that statutory body. There is accountability to parliament for enforcement action through question time, where members of parliament may raise questions with the ministers on their respective ministries’ responsibilities.

Singapore’s judicial system and courts serve as the oversight mechanism in respect of executive action (such as the enforcement of regulatory offences) and dispense justice based on law. The Supreme Court, which is made up of the Court of Appeal and the High Court, hears both civil and criminal matters. The chief justice heads the judiciary. The president appoints the chief justice, the judges of appeal and the judges of the High Court if she, acting at her discretion, concurs with the advice of the prime minister.

No systemic regulatory reforms or enforcement reforms relevant to foreign investors were announced in 2021. The Monetary Authority of Singapore focuses enforcement efforts on timely disclosure of corporate information, business conduct of financial advisors, compliance with anti-money laundering/combatting the financing of terrorism requirements, deterring stock market abuse, and insider trading. In March 2019, MAS published its inaugural Enforcement Report detailing enforcement measures and publishes recent enforcement actions on its website ( https://www.mas.gov.sg/regulation/enforcement/enforcement-actions ).

Singapore was the 2018 chair of ASEAN. ASEAN is working towards the 2025 ASEAN Economic Community (AEC) Blueprint aimed at achieving a single market and production base, with a free flow of goods, services, and investment within the region. While ASEAN is working towards regulatory harmonization, there are no regional regulatory systems in place; instead, ASEAN agreements and regulations are enacted through each ASEAN Member State’s domestic regulatory system.

The WTO’s 2016 trade policy review notes that Singapore’s guiding principle for standardization is to align national standards with international standards, and Singapore is an elected member of the International Organization of Standardization (ISO) and International Electrotechnical Commission (IEC) Councils. Singapore encourages the direct use of international standards whenever possible. Singapore standards (SS) are developed when there is no appropriate international standard equivalent, or when there is a need to customize standards to meet domestic requirements. At the end of 2015, Singapore had a stock of 553 SS, about 40 percent of which were references to international standards. Enterprise Singapore, the Singapore Food Agency, and the Ministry of Trade and Industry are the three national enquiry points under the TBT Agreement. There are no known reports of omissions in reporting to TBT.

A non-exhaustive list of major international norms and standards referenced or incorporated into the country’s regulatory systems include Base Erosion and Profit Shifting (BEPS) project, Common Reporting Standards (CRS), Basel III, EU Dual-Use Export Control Regulation, Exchange of Information on Request, 27 International Labor Organization (ILO) conventions on labor rights and governance, UN conventions, and WTO agreements.

Singapore is signatory to the WTO Trade Facilitation Agreement (TFA). The WTO reports that Singapore has fully implemented the TFA ( https://www.tfadatabase.org/members/singapore ).

Singapore’s legal system has its roots in English common law and practice and is enforced by courts of law. The current judicial process is procedurally competent, fair, and reliable. In the 2021 Rule of Law Index  by World Justice Project, it is ranked 17th in the world overall, third on order and security, fourth on regulatory enforcement, third in absence of corruption, eighth on civil justice, seventh on criminal justice, 32nd on constraints on government powers, 34th on open government, and 38th on fundamental rights. The judicial system remains independent of the executive branch and the executive does not interfere in judiciary matters.

Singapore strives to promote an efficient, business-friendly regulatory environment. Tax, labor, banking and finance, industrial health and safety, arbitration, wage, and training rules and regulations are formulated and reviewed with the interests of both foreign investors and local enterprises in mind. Starting in 2005, a Rules Review Panel, comprising senior civil servants, began overseeing a review of all rules and regulations; this process will be repeated every five years. A Pro-Enterprise Panel of high-level public sector and private sector representatives examines feedback from businesses on regulatory issues and provides recommendations to the government. (https://www.mti.gov.sg/PEP/About)

The Cybersecurity Act, which entered into force in August 2018, establishes a comprehensive regulatory framework for cybersecurity. The act provides the Commissioner of Cyber Security with powers to investigate, prevent, and assess the potential impact of cyber security incidents and threats in Singapore.  These can include requiring persons and organizations to provide requested information, requiring the owner of a computer system to take any action to assist with cyber investigations, directing organizations to remediate cyber incidents, authorizing officers to enter premises, installing software, and taking possession of computer systems to prevent serious cyber-attacks in the event of severe threat. The act also establishes a framework for the designation and regulation of critical information infrastructure (CII). Requirements for CII owners include a mandatory incident reporting regime, regular audits and risk assessments, and participation in national cyber security stress tests. In addition, the act will establish a regulatory regime for cyber security service providers and required licensing for penetration testing and managed security operations center (SOC) monitoring services. U.S. business chambers have expressed concern about the effects of licensing and regularly burdens on compliance costs, insufficient checks and balances on the investigatory powers of the authorities, and the absence of a multidirectional cyber threat sharing framework that includes protections from liability. Under the law, additional measures, such as the Cybersecurity Labelling Scheme (October 2021), continue to be introduced.  Authorities stress that, “in view of the need to strike a good balance between industry development and cybersecurity needs, the licensing framework will take a light-touch approach.”

The Competition and Consumer Commission of Singapore (CCCS) is a statutory board under the Ministry of Trade and Industry and is tasked with administering and enforcing the Competition Act. The act contains provisions on anti-competitive agreements, decisions, and practices; abuse of dominance; enforcement and appeals process; and mergers and acquisitions. The Competition Act was enacted in 2004 in accordance with U.S-Singapore USSFTA commitments, which contains specific conduct guarantees to ensure that Singapore’s government linked companies (GLC) will operate on a commercial and non-discriminatory basis towards U.S. firms. GLCs with substantial revenues or assets are also subject to enhanced transparency requirements under the FTA. A 2018 addition to the act gives the CCCS additional administrative power to protect consumers against unfair trade practices.

Singapore has not expropriated foreign-owned property and has no laws that force foreign investors to transfer ownership to local interests. Singapore has signed investment promotion and protection agreements with a wide range of countries. These agreements mutually protect nationals or companies of either country against certain non-commercial risks, such as expropriation and nationalization and remain in effect unless otherwise terminated. The USSFTA contains strong investor protection provisions relating to expropriation of private property and the need to follow due process; provisions are in place for an owner to receive compensation based on fair market value. No disputes are pending.

Singapore has bankruptcy laws allowing both debtors and creditors to file a bankruptcy claim. While Singapore performed well in recovery rate and time of recovery following bankruptcies, the country did not score well on cost of proceedings or insolvency frameworks. In particular, the insolvency framework does not require approval by the creditors for sale of substantial assets of the debtor or approval by the creditors for selection or appointment of the insolvency representative.

Singapore has made several reforms to enhance corporate rescue and restructuring processes, including features from Chapter 11 of the U.S. Bankruptcy Code. Amendments to the Companies Act, which came into force in May 2017, include additional disclosure requirements by debtors, rescue financing provisions, provisions to facilitate the approval of pre-packaged restructurings, increased debtor protections, and cram-down provisions that will allow a scheme to be approved by the court even if a class of creditors oppose the scheme, provided the dissenting class of creditors are not unfairly prejudiced by the scheme.

The Insolvency, Restructuring and Dissolution Act passed in 2018 and entered into force in July 2020. It updates the insolvency legislation and introduces a significant number of new provisions, particularly with respect to corporate insolvency. It mandates licensing, qualifications, standards, and disciplinary measures for insolvency practitioners. It also includes standalone voidable transaction provisions for corporate insolvency and, a new wrongful trading provision. The act allows “out of court” commencement of judicial management, permits judicial managers to assign the proceeds of certain insolvency related claims, restricts the operation of contractual “ipso facto clauses” upon the commencement of certain restructuring and insolvency procedures, and modifies the operation of the scheme of arrangement cross class “cram down” power. Authorities continue to seek public consultations of subsidiary legislation to be drafted under the act.

Two MAS-recognized consumer credit bureaus operate in Singapore: the Credit Bureau (Singapore) Pte Ltd and Experian Credit Bureau Singapore Pte Ltd. U.S. industry advocates enhancements to Singapore’s credit bureau system, in particular, adoption of an open admission system for all lenders, including non-banks. Bankruptcy is not criminalized in Singapore. https://www.acra.gov.sg/CA_2017/ 

Companies in Slovakia frequently complain about the country’s complex and unpredictable legislative and regulatory environment. The current ruling coalition is making significant efforts to address this issue. Starting June 1, 2021, all government ministries as well as 20 non-ministry central government institutions are legally bound to adhere to a “one-in-one-out” principle, meaning every new regulation that will increase administrative burden by €1 must be matched with a proposal to decrease the administrative burden by €1. As of January 2022, the principle has been further expanded to “one-in-two-out.” Failure to comply does not, however, result in the annulment of the regulation or any other material consequences. The Ministry of Economy flags violations through a mandatory interdepartmental consultation procedure on all draft legislation and prepares an annual report on implementation of the rule.

Regulations are drafted on the local and national level with the latter usually having more direct consequences to foreign investors. The Legislative and Information Portal of the Ministry of Justice, Slov-Lex, is a publicly accessible centralized online portal for laws and regulations, including draft texts and information about the interdepartmental and public review processes. Draft bills, including investment laws proposed by ministries through a standard legislative procedure, are available for public comment through the portal, with a comment period of usually between two to three weeks. When fast tracking legislation and regulations comment periods may shrink to one-week, leaving little time for public comment. Affected business associations note that government reactions to comments are often superficial and generic, rather than substantive.

While the process of adopting new laws and regulations follows clearly defined rules, MPs or parliamentary groups have the option of proposing legislation without having to adhere to the same legislative rules as the government and without having to hold any public consultations, thus rendering the legislative process less predictable and less transparent than draft laws introduced by the government. Legislative rules are also frequently circumvented by using the “accelerated legislative procedure.” This procedure is, by law, conditioned on extraordinary circumstances, threat to public safety, or imminent economic damage. However, in practice, the procedure is sometimes used to approve bills that do not appear to meet these criteria. In an effort to reduce abuse of the procedure, the President has repeatedly exercised her suspensive veto right in cases when the accelerated procedure was used to pass legislation without clearly meeting the aforementioned criteria.

Legislation and regulations are, in most cases, not reviewed on the basis of scientific data assessments and critics assert that some mandatory impact assessments are conducted superficially. Analytical institutes at some ministries produce data-driven assessments of proposed policies or large investment projects, but not all ministries have the needed personnel and/or technical capacity to ensure a uniform and high-quality level of data-driven policymaking across the whole of government. Impact assessments for proposed legislation are available online, as are most policy and/or investment assessments prepared by the analytical units at government ministries.

The Commercial Code ( 98/1991  Coll.) and the Act on Protection of Economic Competition (136/2001 Coll.) govern competition policy in Slovakia. As an EU Member State, Slovakia follows relevant EU legislation. The Anti-Monopoly Office, a part of the EU’s European Competition Network (ECN), is an independent state administrative body responsible for ensuring a competitive marketplace.

The Public Procurement Office (PPO) supervises and administers public procurement. Public procurement legislation is frequently amended, and challenges remain in striking an adequate balance between protecting competition and eliminating corruption, while keeping the bureaucratic burden and average tendering time at acceptable levels. The PPO has made efforts to improve transparency and communication with stakeholders, as well as to strengthen supervisory activities. Since March 2021, the PPO accepts self-declarations from U.S. companies that are bidding in public procurements, rather than requiring companies to produce non-standard documentation issued by U.S. state or federal entities – which had been overly burdensome to obtain. In October 2021, parliament approved an amendment to the public procurement act aimed at accelerating and streamlining the public procurement process by increasing the threshold for when public tenders are required from €5,000 to €10,000 and by preventing the abuse of the complaint procedures to stall tenders via repetitive formal complaints. The amendment also introduces changes to increase the transparency of the tendering process by moving all tender-related communication online via a specialized electronic platform, by strengthening the independence of the PPO, and by prohibiting selected public servants from doing business with the state. The amendment to the public procurement act will enter into force on March 31, 2022.

Oversight over the legality of administrative and regulatory processes, and decisions of the central government, as well as municipalities, is carried out by the prosecution service and an administrative court system consisting of first-instance courts, which are part of regional courts, and a Supreme Administrative Court. Complaints related to administrative malpractice can also be raised via the Public Defender of Rights and, in case these include breaches of fundamental rights and freedoms, also via the Constitutional Court.

The government does not proactively promote or require companies’ environmental, social, and governance (ESG) disclosure. As an EU member state, Slovakia is bound by the EU Taxonomy Regulation, which seeks to create a common framework to determine whether certain economic activities can be regarded as environmentally sustainable. All measures implemented through Slovakia’s Recovery and Resilience Plan, including investments and reforms, must be in line with the environmental objectives laid down by the EU Taxonomy and must not breach the ‘do no significant harm’ principle.

As an EU Member State, Slovakia conforms to the European System of National and Regional Accounts (ESA 2010), which is the EU’s most recent internationally compatible accounting framework, as well as the International Financial Reporting Standards (IFRS-EU). Slovakia meets the minimum criteria of the U.S. Fiscal Transparency Report. Budget proposals, enacted budgets, and closing statements are substantially complete and publicly available. Departures from budget goals are common. The current ruling coalition introduced a number of changes to the 2021 and 2022 national budgets that have improved transparency and led to better projections compared to previous years. The Ministry of Finance publishes monthly reviews of budget execution, which provide an overview of public revenues and expenditures broken down by source and type. Annex 6 of the State budget describes the Debt Management Strategy including volume, total cost, debt service, structure, financing, forecast, and risk assessments.

In February 2022, the government adopted sweeping changes to construction and zoning legislation with the aim to significantly accelerate, streamline, and digitize the process of obtaining construction permits and prevent the ex-post legalization of buildings built without requisite permits. While the business community generally welcomed the legislative changes as long overdue, municipalities and some non-governmental organizations argue that the legislation will strengthen the position of large real-estate developers, while reducing public scrutiny over proposed construction projects.

Please consult the following websites for more information:

• Legislative and Information Portal Slov-Lex:    (Note: all legal acts and regulations mentioned throughout this report can be found on this portal.)
• World Bank:
• Anti-Monopoly Office of the Slovak Republic:
• Office for Public Procurement:
• Public Administration Budget, Ministry of Finance:
• The European Commission Country Report – Slovakia 2020:

Slovakia is subject to European Court of Justice (ECJ) jurisdiction and must comply with all EU legislation and standards, including the Trade Facilitation Agreement (TFA). The national regulatory system is enforced in areas not governed by EU regulatory mechanisms. Slovakia is a WTO member, and the government notifies the WTO Committee on Technical Barriers to Trade of technical regulations.

Please consult the following websites for more information:

• WTO:

Slovakia is a civil law country. The Slovak judicial system is comprised of the Constitutional Court and general courts, including the Specialized Criminal Court, the Supreme Court, and the Supreme Administrative Court, functional from August 1, 2021.  General courts decide civil, commercial, and criminal matters, and review the legality of decisions by administrative bodies. However, as of March 2022, a proposal to create a new system of separate first-instance administrative courts in January 2023 is pending Parliament’s approval, as part of the government’s judicial reform plan. The Supreme Administrative Court serves as the second-instance administrative court, including as a disciplinary court for judges, prosecutors, and some other legal professions. The Specialized Criminal Court focuses on cases involving corruption, organized crime, serious crimes like premeditated murder, crimes committed by senior public officials, and crimes related to extremism, such as hate crimes. Enforcement actions are appealable and are adjudicated in the national court system. The right to appeal regulations is limited to some state institutions and selected public officials.

The Slovak Constitution and the European Convention on Human Rights guarantee property rights.  Slovakia has a written Commercial Code including contract law in the civil and commercial sectors.  The basic framework for investment protection and dispute resolution between Slovakia and the U.S. is outlined in the 1992 U.S.-Slovakia Bilateral Investment Treaty.

Court rulings by EU Member States are recognized and enforced in compliance with existing EU regulations.  Third country rulings are governed by bilateral treaties or by the Act on International Private Law.  Contracts are enforced through litigation or arbitration.

Laws guarantee judicial independence; however, public perception of judicial independence is among the lowest in the EU.  According to the 2021 EU Justice Scoreboard, public trust in the judiciary is low, with trust among the general public standing at 28 percent and 30 percent among the business community. The trend has been improving, however, with the trust in the judiciary among businesses doubling since 2020. In 2019 and 2020 numerous investigations into judicial corruption were opened and about 20 judges were arrested on suspicion of corruption, while several additional judges resigned from office. Businesses and NGOs report that the justice system remains relatively slow and inefficient, and characterizing some verdicts as unpredictable and often poorly justified.  Investors generally prefer international arbitration to resolution in the national court system.

The government is pursuing an ambitious set of judicial reforms, aiming to address alleged corruption ties, low public trust, and inefficiency, and is also following the recommendations of the Council of Europe Commission for the Efficiency of Justice (CEPEJ). Judges remain divided on the need for reform though, and a consensus on the reform’s elements within the ruling coalition has not been reached as of March 2022. Accountability mechanisms ensuring judicial impartiality and independence exist and are increasingly utilized. Courts use a digital system for random case assignment to increase transparency. As of 2021, the functional immunity of judges related to their decision-making was significantly reduced, to prevent arbitrary and poorly justified rulings, and a new offence of “abuse of law”, inspired by German law, was introduced to enable prosecution of judges for arbitrary, unlawful decisions.

Please consult the following websites for more information:

1. Constitutional Court:
2. Supreme Court:
3. Supreme Administrative Court:
4. Ministry of Justice, Analytical Centre, judicial map reform plan:
5. EU Justice Scoreboard:
6. European Commission 2021 Rule of Law Report:
7. European Commission for the Efficiency of Justice (CEPEJ) 2017 report on the Slovak judiciary:

Slovakia is a politically and economically safe destination for foreign investment. Investment incentives are available to motivate investors to place new projects in regions with higher unemployment and to attract projects with higher added value.  In February 2021, the government approved a law that allows the Economy Ministry to review and potentially stop ownership transfers larger than 10 percent of companies classified as critical infrastructure (see Section 1 for more detail).

The Slovak Investment and Trade Development Agency (SARIO) is a specialized government agency in charge of attracting foreign investments to Slovakia and serves as a one-stop shop for foreign investors. Their website offers easily accessible information on laws, rules, procedures, and reporting requirements relevant to investors or those wanting to register a business. The Slovak Business Agency (SBA) runs a National Business Center (NBC) in Bratislava and several other cities; it provides information and services for starting and establishing businesses. Startups can use a simplified procedure to register their company in order to facilitate the entry of potential investors. The Interior Ministry operates Client Centers around the country where many formal administrative procedures can be completed under one roof.

In the World Bank’s Doing Business 2020 report, the most recently published edition, Slovakia placed 45 out of 190 countries in the report’s overall ranking.

Please consult the following websites for more information:

1. Ministry of Economy:
2. Startup Visa: https://www.economy.gov.sk/inovacie/podnikatelsky-zamer-na-realizaciu-inovativneho-projektu
3. Slovak Business Agency:
4. Slovak Investment and Trade Development Agency:
5. Information on requirements for investing or registering a business: https://sario.sk/sites/default/files/data/pdf/sario-invest-in-slovakia-ENG.pdf
6. Central Public Administration Portal:
7. Interior Ministry:
8. World Bank Ease of Doing Business Ranking:

The Anti-Monopoly Office of the Slovak Republic is an independent body charged with the protection of economic competition.  This office intervenes in cases of cartels, abuse of a dominant position, vertical agreements, and validates that state aid and mergers comply with antitrust law. Decisions of the Anti-Monopoly Office can be appealed to an independent committee and, in the second instance, to administrative courts. The key antitrust legislation regarding fair competition is the Competition Law (136/2001 Coll.). Slovakia complies with EU competition policy. Certain decisions related to competition policy and enforcing competition rules are directly under the purview of the European Commission.

In January 2022, the Anti-Monopoly Office fined three Slovak companies nearly €9 million, the second highest issued fine in the authority’s history, for allegedly entering an illegal cartel agreement related to a €38 million renovation of an electricity substation for the Slovak transmission system operator. The involved companies appealed the decision to the Committee of the Anti-Monopoly Office and the case is pending.

Please consult the following website for more information:

1. The Anti-Monopoly Office:
2. The European Commission:

The Slovak Constitution guarantees the right to property.  There is an array of legal acts stipulating property rights, including the Constitution.  The Act on Expropriation of Land and Buildings (282/2015 Coll.) mandates that expropriation must only occur to the extent necessary, be in the public interest, provide appropriate compensation based on fair market value, and shall only occur when the goal of expropriation cannot be achieved through agreement or other means. In April 2021, the Slovak Parliament voted to extend by 10 years a sunset clause on expropriations of property for roads, which expired at the end of 2020. Expropriations are used by the government primarily for acquiring land on which planned highways are built, or large industrial parks, and only in the event that direct negotiations with landowners fail.

In February 2022, the government proposed, without prior stakeholder consultation, and adopted a 50 percent tax on “excess profit” from electricity generated in nuclear power plants. Reportedly, this would have cost Slovakia’s nuclear operator, a majority foreign-owned company (with state minority ownership), more than €300 million annually, depending on wholesale electricity prices. The proposed tax was withdrawn just before parliamentary approval, after the government and the utility signed an MOU, under which the electricity generation company will provide a set volume of electricity at below market rates for household consumers through the end of 2024. According to a joint press conference announcing the agreement, the government, in turn, agreed to not alter the business environment for the company through 2025. The company is reportedly set to lose an estimated €850 million on the deal.

ICSID Convention and New York Convention

Slovakia is a contracting state to the International Centre for Settling International Disputes (ICSID) and the World Bank’s Commercial Arbitration Tribunal (established under the 1966 Washington Convention). Slovakia is a member of the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitrage Awards, which obligates Slovakia to accept binding international arbitration. The Finance Ministry leads on bilateral investment treaty matters and manages and represents Slovakia in international arbitration. Investment contracts with foreign investors in Slovakia are covered by respective ministries depending on the sector, in most cases by the Ministry of Economy.

Investor-State Dispute Settlement

The basic framework for investment protection and dispute resolution between Slovakia and the United States is governed by the 1992 U.S.-Slovakia Bilateral Investment Treaty with an additional protocol that came into force in 2004.

To date, twelve known cases of international arbitration have concluded, all of which Slovakia won. In one of the international arbitrations, a U.S. investor made claims under the U.S.-Slovakia Bilateral Investment Treaty, but respected the decision of ICSID, which ruled in Slovakia’s favor. In October 2021, a U.S. firm registered a request to commence arbitration proceedings against Slovakia at the ICSID, with a claim under the U.S.- Slovakia BIT related to oil and gas extraction. As of February 2022, the case remained pending.

The legal system generally enforces property and contractual rights, but decisions may take years, thus limiting the relevance of the courts in dispute resolution. According to the World Bank Doing Business 2020 report, the last one available, Slovakia ranked 46 out of 190 countries in the “enforcing contracts” indicator, with a 775-day average for enforcing contracts. The report notes that Slovakia made enforcing contracts easier by implementing electronic processing services. Slovak courts recognize and enforce foreign judgments, subject to the same delays. Although the commercial code generally appears to be applied consistently, the business community continues to cite a lack of legislation protecting creditor rights, corruption, political influence, lengthy procedures, and weak enforcement of court rulings as persistent problems. U.S. and other investors privately described instances of multi-million-dollar losses that were settled out of court because of doubts about the court system’s ability to offer a credible legal remedy.

International Commercial Arbitration and Foreign Courts

There are two acts applicable to alternative dispute resolution in Slovakia – the Act on Mediation (420/2004 Coll.) and the Act on Arbitration (244/2002 Coll.). The Slovak Act on Arbitration is largely modeled after UNCITRAL model law.  Local courts in Slovakia recognize and enforce foreign arbitral awards.

The alternative dispute resolution mechanisms in Slovakia are relatively fast compared to the court system.  The list of permanent arbitration courts authorized by the Slovak Ministry of Justice is published on the Ministry’s website.  Decisions should be reached within 90 days of the date when the lawsuit was filed.  It is possible to lodge an appeal to a civil court against an arbitration decision within three months of the date of its issuance or lodge a complaint about an arbitration decision to the chairman of the permanent arbitration court or to the Ministry of Justice.

Alternative dispute resolution proceedings for consumer disputes can also be initiated by filing a motion with one of the alternative dispute resolution entities from a list maintained by the Ministry of Economy.  Dispute settlement takes place through written communication and has a 90-day timeframe for completion.  Unless the parties reach an agreement, the alternative dispute resolution entity will prepare a justified opinion. If any attempt to settle the dispute by mutual agreement fails, and the arbitration entity issues an opinion, there is no avenue for appeal.

The other option for extrajudicial dispute settlement is mediation.  Mediation can be used even after a court proceeding has started.  The agreement resulting from mediation is legally enforceable only if it has the form of a notarial record or court settlement.  The list of mediators is published on the website of the Association of Mediators.  In the case of an unsuccessful mediation, parties can still take the case to arbitration or to court.

Please consult the following websites for more information:

1. List of alternative dispute resolution entities:
2. List of permanent arbitration courts:
3. List of Mediators:
4. U.S.- Slovakia Bilateral Investment Treaty:
5. Finance Ministry – International Arbitrations:
6. Slovak Chamber of Commerce:
7. World Bank Ease of Doing Business Ranking:

The Law on Bankruptcy and Restructuring (377/2016 Coll.) governs bankruptcy issues. Companies can undergo court-protected restructuring, and both individuals and companies can discharge their debts through bankruptcy. After its implementation, the International Monetary Fund praised this law for speeding up the bankruptcy process, strengthening creditor rights, limiting the discretion bankruptcy judges may use in adjudicating cases, and randomizing the allocation of cases to judges to reduce potential corruption. The Law on Bankruptcy and Restructuring contains provisions to prevent preferential treatment for creditors over company shareholders, reduce arbitrariness in bankruptcy administrators’ conduct, and impose stricter liability rules for those initiating the bankruptcy proceedings. The Commercial Code also contains provisions on bankruptcy and restructuring preventing speculative mergers during ongoing bankruptcy proceedings.

Slovakia ranked 46 out of 190 in the World Bank’s Doing Business 2020 ranking of the ease of resolving insolvency, with an average of four years for resolving insolvency.

Please consult the following websites for more information:

1. Slovak Banking Credit Bureau:
2. Non-Banking Credit Bureau:
3. Justice Ministry:
4. Insolvency Register:
5. Dlznik.sk:
6. Central Register of Debtors:

Accounting, legal, and regulatory procedures in Slovenia are transparent and consistent with international norms.

Financial statements should be prepared by the Slovenian Institute of Auditors in accordance with the Slovenian Accounting Standards and International Financial Reporting Standards (IFRS), as adopted by the EU. Annual reports of for-profit business entities are publicly available on the website of AJPES, the Slovenian Business Database.

There are three levels of regulatory authority: supra-national (Slovenia is a member of the EU), national, and sub-national (municipalities have limited regulatory power over local affairs, and regulations must comply with state regulations). Laws may be proposed by the government, member(s) of parliament, or through signatures of at least 5,000 voters.

Slovenia adopted a comprehensive regulatory policy in 2013, focusing on measures aimed at raising the quality of the regulatory environment to improve the business environment and increase competitiveness.

Slovenia’s Ministry of Public Administration is required by several legal and policy documents to solicit and include public stakeholder engagement in decision-making processes. Public authorities must solicit stakeholder engagement and inform the public about their work to the greatest extent possible.

Government entities that propose regulations must invite experts and the general public to participate by publishing a general invitation, together with a draft regulation, on their websites. The experts and general public must respond by the deadline, ranging from 30 to 60 days from the day of its publication. In addition to the relevant ministry, the proposals are also published on government websites and on the Ministry of Public Administration’s eDemocracy  portal.

Through the eDemocracy web portal, citizens may actively cooperate in the decision-making process by expressing opinions and submitting proposals and comments on draft regulations. When possible, government entities take into consideration proposals and opinions on proposed regulations submitted by experts and the general public. If such opinions and proposals are not taken into consideration, those proposing the regulation must inform stakeholders in writing and explain the reasons.

The public, however, is not invited to comment on proposed regulations when the nature of the issue precludes such consideration, such as in emergency situations and in matters relating to the national budget, the annual financial statement, the rules of procedure of the government, ordinances, resolutions, development and planning documents, development policies, declarations, acts ratifying international treaties, and official decisions.

A regulatory impact assessment (RIA) is obligatory for all primary legislation; however, the quality of such assessments varies, and analyses are often only qualitative or incomplete due to the lack of an external body to conduct quality control. The quality of such assessments has improved, however, since the Ministry of Public Administration introduced its Small and Medium Enterprise (SME) test in 2012 to measure regulatory impacts on small and medium-sized businesses.

The General Secretariat of the Republic of Slovenia is responsible for administrative oversight to ensure the government follows administrative procedures. There are no informal regulatory processes managed by non-governmental organizations or private sector associations.

Slovenia’s executive branch initiates approximately 92 percent of primary laws, with regulations often developed rapidly. The government’s frequent use of urgent procedures (normally reserved for national emergencies) to pass legislation often limits the stakeholder engagement process.

After the adoption of new legislation, the text is published in the Official Gazette of the Republic of Slovenia and online at https://www.uradni-list.si/glasilo-uradni-list-rs. Slovenia lacks a systematic process to evaluate regulations after their implementation.

To measure regulatory burdens on businesses, Slovenia adopted the Standard Cost Model, which has led to a significant reduction of such burdens. The United Nations awarded its Public Service Award to Slovenia in 2009 for its system of one-stop shops (the so-called “VEM points”) to incorporate and establish businesses. The introduction of e-government processes has simplified administrative procedures. The World Bank assigned Slovenia a score of 4.75 out of 5 on its Global Indicators of Regulatory Governance measure in 2018, while the International Budget Partnership gave Slovenia 68 points out of 100 on its Open Budget Survey 2019, assessing Slovenia’s budget transparency as sufficient with substantial information available.

Slovenia meets the Department of State’s minimum requirements for fiscal transparency. In 2021, Slovenia’s budget and information on debt obligations were widely and easily accessible to the general public, including online. The budget was substantially complete and considered generally reliable. Slovenia’s supreme audit institution reviewed the government’s accounts and made its reports publicly available. The criteria and procedures by which the national government awards contracts or licenses for natural resource extraction were outlined in law and appeared to be followed in practice. Basic information on natural resource extraction awards was public.

Slovenia joined the World Trade Organization (WTO) in 1995, and to date there have been no cases of Slovenia violating WTO rules. The law treats domestic and foreign investors equally. The government does not impose performance requirements or any condition for establishing, maintaining, or expanding an investment. As a WTO member country, Slovenia is required by the Agreement on Technical Barriers to Trade (TBT Agreement) to report to the WTO all proposed technical regulations that could affect trade with other member countries. Slovenia is a signatory to the Trade Facilitation Agreement (TFA) and has implemented all TFA requirements.

As an EU member state, Slovenia applies two principles in its regulatory system: the supremacy of EU laws and the principle of direct effect. In areas subject to EU responsibility, EU laws override any conflicting member state laws. Direct effect enables Slovenians and other EU citizens to use EU laws in national courts against the government or private parties.

Slovenia is a civil law jurisdiction with a codified system of law. It has a well-developed, independent legal system based on a five-tier (district, regional, appeals, supreme, and administrative) court system. These courts deal with a wide array of legal cases, including criminal, probate, domestic relations, land disputes, contracts, and other business-related issues. A separate social and labor court system, comprised of regional, appeals, and supreme courts, deals strictly with labor disputes, pensions, and other social welfare claims. As with most other European countries, Slovenia has a Constitutional Court which hears complaints alleging violations of human rights and personal freedoms. The Constitutional Court also issues opinions on the constitutionality of international agreements and state statutes and deals with other high-profile political issues. In 1997, Slovenia’s National Assembly established an administrative court to handle legal disputes among local authorities, between state and local authorities, and between local authorities and executors of public authority.

In 1999, the National Assembly passed legislation to streamline legal proceedings and speed up administrative judicial processes. The law established a stricter and more efficient procedure for serving court documents and providing evidence. In commercial cases, defendants are required to file their defense within 15 days of receiving a notice of a claim.

In 2018, the National Assembly passed Slovenia’s Investment Promotion Act, defining the types of incentives, criteria, and procedures to promote long-term investment in Slovenia. The act establishes that domestic and foreign investors are equal and mandates priority treatment of strategic investments, defined as investments totaling EUR 40 million or more and creating 400 new jobs in manufacturing and services, while R&D strategic investments are defined as totaling at least EUR 200 million and creating 200 new jobs. Under the law, a working group headed by the Ministry of Economic Development and Technology will assist strategic investors in obtaining necessary permits. The Invest Slovenia website serves as a resource for investors to obtain relevant information on investment regulations and incentives.

Slovenia’s Prevention of Restriction of Competition Act regulates restrictive practices, concentrations, unfair competition, regulatory restrictions of competition, and measures to prevent restrictive practices and concentrations that significantly impede effective competition. The law applies to corporate bodies and natural persons engaged in economic activities regardless of their legal form, organization, or ownership. The law also applies to the actions of public companies and complies with EU legislation. Slovenia’s competition and anti-trust laws prohibit restrictive agreements; direct or indirect price fixing; sharing markets or supply sources; limiting or controlling production, sales, technical progress, or investment; applying dissimilar conditions to different trading parties; or subjecting the conclusion of contracts to acceptance of supplementary obligations that, by their nature or according to commercial usage, have no connection with the subject of their contracts. Companies and entities whose domestic market share exceeds 40 percent for a single undertaking and 60 percent for two or more undertakings (joint dominance) are prohibited from abusing dominant market positions. Slovenian law defines a non-exhaustive list of dominant position abuses describing the most common practices.

The government may, however, prescribe market restrictions by means of regulatory instruments and actions in cases of natural disasters, epidemics, or states of emergency; significant market disturbances due to a shortage of goods or disturbances in other fields that represent a risk to the safety and health of the population; or when necessary to satisfy product requirements, raw materials, and semi-finished goods of special or strategic importance to the defense of the nation.

The fines for restrictive agreements and abuses of dominant positions may total as much as 10 percent of an undertaking’s annual turnover in the preceding business year. Those legally responsible for a legal entity or sole proprietorship may be subject to a fine of EUR 5,000-10,000, or EUR 15,000-30,000 for more serious violations.

Slovenia’s Competition Protection Agency (CPA) supervises the implementation of the Restriction of Competition Act. The agency monitors market conditions to ensure effective competition, conducts procedures and issues decisions, and submits opinions to the National Assembly and the government. The CPA is also responsible for the enforcement of Slovenia’s antitrust and merger control rules. An independent administrative authority, the CPA was established in 2013 through a reorganization of the former Slovenian Competition Protection Office, which was part of the Ministry of the Economy. Some private sector representatives expressed concern about the CPA’s susceptibility to outside influence and ability to reach timely decisions on complex cases, which added an element of unpredictability for some investors and their legal counsel.

According to Article 69 of Slovenia’s Constitution, the government may take real property or limit rights to possess real property for public purposes in the public interest, in exchange for in-kind compensation or financial compensation under conditions determined by law. Article 7 of Slovenia’s Investment Promotion Act stipulates that, if the government deems an investment strategic, it may expropriate private property for construction in exchange for compensation, under conditions determined by law. In such cases, a special government task force monitors the investment and coordinates the acquisition of environmental and building permits.

The current government is not involved in any expropriation-related investment disputes. National law offers adequate protection to all investments. However, legal disputes continue over private property expropriated by the former Yugoslav government for state purposes. Following its secession from Yugoslavia, Slovenia’s 1991 Denationalization Act established a process to “denationalize” these properties, return them to their rightful owners or their heirs, or pay just compensation if returning the property was not feasible. In some of these cases, the rightful owners and heirs are U.S. citizens.

Since the 1993 deadline for filing claims, over 99 percent of denationalization cases have been closed, although only 88 percent of cases involving American owners and heirs have been resolved. Cases involving U.S. citizens have taken longer in part because the claimants generally do not live in Slovenia. In such cases, the Ministry of Justice must determine the nationality of the property’s former owners at the time the property was seized – a generally simple question for Slovenians who never acquired another citizenship, but more complicated in cases involving naturalized American citizens. In addition, some claims may involve property currently controlled by prominent and influential Slovenians, thereby creating additional informal obstacles to restitution.

Competition is lively in Slovenia, and bankruptcies are an established and reliable means of working out firms’ financial difficulties. By law, there are three procedural methods for dealing with bankrupt debtors. The first procedure, compulsory settlement, allows the insolvent debtor to submit a plan to the court for financial reorganization. Creditors whose claims represent more than 60 percent of the total amount owed may vote on the proposed compulsory settlement plan. If the settlement is accepted, the debtor is not obligated to pay the creditor any amount exceeding the payment agreed to in the confirmed settlement. The procedure calls for new terms, extended in accordance with the conditions of forced liquidation settlement (see below). Confirmed compulsory settlement agreements affect creditors who have voted against the compulsory settlement as well as creditors who have not reported their claims in the settlement procedure.

Creditors or debtors may also initiate bankruptcy proceedings. In such instances, the court names a bankruptcy administrator who sells the debtor’s property according to a bankruptcy senate, the senate president’s instructions, and court-sponsored supervision. Generally, the debtor’s property is sold at public auction. Otherwise, the creditors’ committee may prescribe a different mode of sale such as collecting offers or placing conditions on potential buyers. The legal effect of the completed bankruptcy is the termination of the debtor’s legal status to conduct business, and distribution of funds from the sale of assets to creditors according to their share of total debt.

In accordance with the Law on Commercial Companies, the state can impose forced liquidation on a debtor subject to liquidation procedures and legal conditions for ending its existence as a business entity. This would occur, for example, in cases in which an entity’s management has ceased operations for more than 12 months, if the court finds the registration void, or by court order.

In 2013, the National Assembly adopted an amendment to the Financial Operations, Insolvency Procedures, and Compulsory Dissolution Act to simplify and speed up bankruptcy procedures and deleveraging.

Slovenia ranked as 8th out of 168 economies for ease of “resolving insolvency” in the World Bank’s Doing Business Report.

Somalia’s regulatory system is largely nonexistent.  The 2012 provisional constitution has not been finalized, and there is not yet a constitutional court to enforce it.  Many of the current investment laws and regulations predate the 1991 government collapse.  The FGS has revised some of these regulations and has begun to develop modern business and investment legislation to conform to the global business environment, but it has a long way to go.  Somalia has a procurement act that is intended to provide for transparency in public contracts and concessions, but it is not always followed.  In 2020, the FGS passed a petroleum law that provides a regulatory framework for issuing exploration and development licenses.

Somalia is a member of the Intergovernmental Authority on Development, as well as the Arab League and the Organization of Islamic Cooperation.  In 2018, Somalia obtained provisional membership in the Common Market for Eastern and Southern Africa, but it has several conditions to fulfill before achieving full membership. Somalia is an observer, but not yet a member, of the WTO.

Somalia’s legal system derives from Italian and British law, customary dispute resolution (xeer) principles, and Islamic law.  The provisional constitution establishes a judicial system that is theoretically independent of the executive and the legislature, but in practice the legal system depends on the executive.  There are no courts dedicated to commercial disputes.  A November 2020 USAID-funded report found that the courts lack political independence, are marked by “pervasive graft,” and face competition from a parallel al-Shabaab court system.  There are reports that some citizens choose to bring cases to al-Shabaab courts, finding them less corrupt than government courts.

Somalia’s 2015 foreign investment law provides some guidance for foreign investors, but a comprehensive investor and investment bill remains stuck in parliament.  In 2019, the Ministry of Planning opened its investment promotion office,  SOMINVEST , to provide potential investors with guidance on investing in Somalia.

Competition and anti-trust laws do not exist in Somalia.  Local business disputes often are informally settled through the intervention of traditional elders.

Somalia is rebuilding from decades of civil war, and its legal and regulatory environment remains undeveloped.  There are no laws that define how the government can expropriate private property.  However, the provisional constitution provides a right to just compensation from the government if property has been compulsorily acquired in the public interest.  After the 1991 government collapse, many state-owned properties ended up in private hands, and the FGS has indicated interest in repossessing these properties.  There is a draft investor protection bill in parliament that will address expropriation, dispute resolution, and the transfer and repatriation of investments.

Somalia does not have any bankruptcy laws.

South African laws and regulations are generally published in draft form for stakeholder comment at: https://www.gov.za/document?search_query=&field_gcisdoc_doctype=545&field_gcisdoc_subjects=All&start_date=&end_date= . South Africa’s process is similar to the U.S. notice and comment consultation process and full draft texts are available to the public; however, foreign stakeholders have expressed concern over the adequacy of notice and the GoSA’s willingness to address comments. Legal, regulatory, and accounting systems are generally transparent and consistent with international norms. The GoSA’s regulatory regime and laws enacted by Parliament are subject to judicial review to ensure they follow administrative processes.

DTIC is responsible for business-related regulations. It develops and reviews regulatory systems in the areas of competition, standards, consumer protection, company and intellectual property registration and protections, as well as other subjects in the public interest. It also oversees the work of national and provincial regulatory agencies mandated to assist DTIC in creating and managing competitive and socially responsible business and consumer regulations. DTIC publishes a list of bills and acts that govern its work at: http://www.theDTIC.gov.za/legislation/legislation-and-business-regulation/?hilite=%27IDZ%27 

South Africa has a number of public laws that promote transparency of the business regulatory regime to aid the public in understanding their rights. For instance, South Africa’s Consumer Protection Act (2008) reinforces various consumer rights, including right of product choice, right to fair contract terms, and right of product quality. The law’s impact varies by industry, and businesses have adjusted their operations accordingly. A brochure summarizing the Consumer Protection Act can be found at: http://www.theDTIC.gov.za/wp-content/uploads/CP_Brochure.pdf . Similarly, the National Credit Act of 2005 aims to promote a fair and non-discriminatory marketplace for access to consumer credit and for that purpose to provide the general regulation of consumer credit and improves standards of consumer information. A brochure summarizing the National Credit Act can be found at: http://www.theDTIC.gov.za/wp-content/uploads/NCA_Brochure.pdf

The South African National Treasury is developing new legislation that will “seek to enhance the transformation imperatives of the South African financial services sector.” In August 2021, the former Minister of Finance Tito Mboweni said that a new version of the Conduct of Financial Institutions (COFI) bill contains provisions that, if enacted, will require financial institutions to develop transformation plans and commitments around B-BBEE. The bill seeks to enhance market conduct, market development and financial inclusion. National Treasury also published a draft policy document on financial inclusion for public comment, which focuses on general ‘economic inclusiveness’ for South Africa. A summary statement of the draft policy can be found at: http://www.treasury.gov.za/comm_media/press/2020/20201028%20Media%20Statement%20-%20Updated%20Financial%20Inclusion%20Policy.pdf.

Parliament’s National Assembly passed the Employment Equity Amendment Bill in November 2021 and has sent the draft law to the National Council of Provinces for concurrence. The bill will allow the Employment and Labor minister to set employment equity targets for different business sectors and for different designated groups (that is, black people, women, and persons with disabilities).

In South Africa the financial sector has been a leader in integrating environmental, social, and governance issues into its practices. For example, regulation 28 of the Pension Funds Act, 1956 requires a pension fund and its board to “before investing in, and whilst invested in an asset, consider any factor which may materially affect the sustainable long-term performance of the asset including but not limited to those of an environment, social and governance character.” There are no specific ESG disclosure rules for companies, but several ESG related laws include a carbon tax law and energy efficiency legislation.

The Financial Sector and Deposit Insurance Levies (Administration) and Deposit Insurance Premiums Bill was tabled in parliament in January 2022. The National Treasury had published the bill for comment in December 2021. The bill seeks to “facilitate the funding of financial sector regulators, ombuds and other bodies, to ensure that they are able to effectively regulate the financial sector for the benefit of financial customers.” According to the bill’s memorandum, the deposit insurance premiums will be imposed on licensed banks, mutual banks, co-operative banks and branches of foreign banks that conduct business in South Africa. The model imposes huge expenses on the financial sector and results in an increased burden on already over-taxed citizens.

Under the current disclosure regime in South Africa, there is no explicit duty to provide disclosures on ESG matters. However, JSE-listed companies are subject to general continuing disclosure obligations under the JSE Listing Requirements, which apply to financially material ESG issues. Regulatory enforcement processes are legally reviewed and made publicly available for stakeholder comments.

The country’s fiscal transparency is overall very good. National Treasury publishes the executive budget online and the enacted budget is usually published within three months of enactment. End of year reports are published within twelve months of the end of the fiscal year. Information on debt obligations (including explicit and contingent liabilities) is made publicly available and updated at least annually. Public finances and debt obligations are fairly transparent. The year ending March 2021 report is not yet published.

South Africa is a member of the African Continental Free Trade Area, which commenced trading in January 2021. It is a signatory to the SADC-EAC-COMESA Tripartite FTA and a member of the Southern Africa Customs Union (SACU), which has a common external tariff and tariff-free trade between its five members (South Africa, Botswana, Lesotho, Namibia, and Eswatini, formerly known as Swaziland). South Africa has free trade agreements with the Southern African Development Community (SADC); the Trade, Development and Cooperation Agreement (TDCA) between South Africa and the European Union (EU); the EFTA-SACU Free Trade Agreement between SACU and the European Free Trade Association (EFTA) – Iceland, Liechtenstein, Norway, and Switzerland; and the Economic Partnership Agreement (EPA) between the SADC EPA States (South Africa, Botswana, Namibia, Eswatini, Lesotho, and Mozambique) and the EU and its Member States. SACU and Mozambique (SACUM) and the United Kington (UK) signed an Economic Partnership Agreement (EPA) in September 2019.

South Africa is a member of the WTO. While it notifies some draft technical regulations to the Committee on Technical Barriers to Trade (TBT), these notifications may occur after implementation. In November 2017, South Africa ratified the WTO’s Trade Facilitation Agreement, implementing many of its commitments, including some Category B notifications. The GoSA is not party to the WTO’s Government Procurement Agreement (GPA).

South Africa has a strong legal system composed of civil law inherited from the Dutch, common law inherited from the British, and African customary law. Generally, South Africa follows English law in criminal and civil procedure, company law, constitutional law, and the law of evidence, but follows Roman-Dutch common law in contract law, law of delict (torts), law of persons, and family law. South African company law regulates corporations, including external companies, non-profit, and for-profit companies (including state-owned enterprises). Funded by the Department of Justice and Constitutional Development, South Africa has district and magistrate courts across 350 districts and high courts for each of the provinces. Cases from Limpopo and Mpumalanga are heard in Gauteng. The Supreme Court of Appeals hears appeals, and its decisions may only be overruled by the Constitutional Court. South Africa has multiple specialized courts, including the Competition Appeal Court, Electoral Court, Land Claims Court, the Labor and Labor Appeal Courts, and Tax Courts to handle disputes between taxpayers and SARS. Rulings are subject to the same appeals process as other courts.

The major laws affecting foreign investment in South Africa are:

1. The Companies Act, which governs the registration and operation of companies in South Africa.
2. The Protection of Investment Act, which provides for the protection of investors and their investments.
3. The Labor Relations Act, which provides protection for employees against unfair dismissal and unfair labor practices.
4. The Customs and Excise Act, which provides for general incentives to investors in various sectors.
5. The Competition Act, which is responsible for the investigation, control and evaluation of restrictive practices, abuse of dominant position, and mergers.
6. The Special Economic Zones Act which provides national economic growth and exports by using support measures to attract foreign and domestic investments and technology.

In July 2021, the SARS updated the SARS Customs and Excise Client Accreditation rules. Section 64E deals with SARS client accreditation rules and is of interest to importers and exporters who wish to apply for accredited client status in South Africa. An accredited client, or preferred trader, is similar to the authorized economic operator found in many other countries. The new rules set out two levels of accredited client status: Level 1 – Authorized Economic Operator (Compliance) and Level 2 – Authorized Economic Operator (Security). A person that is registered for customs and excise activities in South Africa may apply for Level 1 or 2 accredited client status. According to the new rules, all customs activities for which an applicant is registered or licensed under the provisions of the Act will be considered when assessing applications for either level of accredited client status. The new rules also set out the application process, the validity of the person applying, the renewal process for accredited client status, criteria for levels of accredited client status, and the benefits of the two levels of accredited client status.

The Ease of Doing Business Bill was introduced in Parliament in February 2021 and is currently under consideration by the Portfolio Committee on Public Service and Administration. If passed, the bill will provide for a mechanism to allow the executive, Parliament. and others to assess the socio-economic impact of regulatory measures, including the detection and reduction of measures that increase the cost of doing business. DTIC has a one-stop-shop website for investment that provides relevant laws, rules, procedures, and reporting requirements for investors (refer to section one for details).

South Africa’s Competition Commission is empowered to investigate, control, and evaluate restrictive business practices, abuse of dominant positions, and review mergers to achieve equity and efficiency. Its public website is www.compcom.co.za . The Competition Commission is an investigative body. The Competition Tribunal, an adjudicative body that may review Competition Committee actions, functions very much like a court. It has jurisdiction throughout South Africa and adjudicates competition matters. Tribunal decisions may be appealed through the South African court system. International and domestic investors have raised concern the Commission has taken an increasingly social activist approach by prioritizing the public interest criteria found in the Competition Amendment Bill of 2018 over other more traditional anti-trust and monopoly criteria to push forward social and economic policies such as B-BBEE. Concerns include that the new Commission approach has led to more ambiguous, expensive, and lengthy review processes and often result in requests to alter previously agreed-upon terms of the merger and acquisition at a late stage.

In January 2021, GovChat, South Africa’s official citizen-government engagement platform, asked the Competition Tribunal to prevent its removal from a U.S.-owned platform, which charges a fee to business and GoSA clients for contacting customers or citizens. The tribunal granted GovChat’s application for interim relief, stating: “The respondents are interdicted and restrained from off-boarding the applicants from their WABA pending the conclusion of a hearing into the applicants’ complaint lodged with the [Competition] Commission, or six months of date hereof, whichever is the earlier.” On March 14, 2022, the Competition Commission referred the investigation to the Tribunal for review, alleging that the U.S. party’s actions against GovChat constituted an “abuse of dominance.” The Commission asked the Tribunal to assess the U.S. party with a maximum penalty constituting 10 percent of its annual turnover, and to enjoin the U.S. party from removing GovChat from the WhatsApp platform.

The Competition Commission prohibited the sale of the South African operations of a U.S. fast food chain and Grand Food Meat Plant, its main supplier, by Grand Parade Investments (GPI) to a U.S. private equity firm in June 2021 on the grounds that the sale would reduce the proportion of black ownership from 68 percent to zero percent. The regulator found this to be “a significant reduction in the shareholding of historically disadvantaged persons.” By August 2021, the parties and the Commission had agreed to a revised set of conditions which include the new owner’s commitment to improving its rating for the enterprise and supplier development element under its B-BBEE scorecard, which relates to empowering black-owned and smaller enterprises. In addition, the U.S. private equity firm agreed to establish an employee share ownership program that will entitle workers to a five percent stake in the company.

Racially discriminatory property laws and land allocations during the colonial and apartheid periods resulted in highly distorted patterns of land ownership and property distribution in South Africa. Given land reform’s slow and mixed success, the National Assembly (Parliament) passed a motion in February 2018 to investigate amending the constitution (specifically Section 25, the “property clause”) to allow for land expropriation without compensation (EWC). Some politicians, think-tanks, and academics argue that Section 25 already allows for EWC in certain cases, while others insist that amendments are required to implement EWC more broadly and explicitly. Parliament tasked an ad hoc Constitutional Review Committee composed of parliamentarians from various political parties to report back on whether to amend the constitution to allow EWC, and if so, how it should be done. In December 2018, the National Assembly adopted the committee’s report recommending a constitutional amendment. Following elections in May 2019 the new Parliament created an ad hoc Committee to Initiate and Introduce Legislation to Amend Section 25 of the Constitution. The Committee drafted constitutional amendment language explicitly allowing for EWC and accepted public comments on the draft language through March 2021. After granting a series of extensions to complete its work, Parliament finally voted on the Committee’s draft bill on December 7, 2021. Constitutional amendments require a two-thirds parliamentary majority (267 votes) to pass, as well as the support of six out of the nine provinces in the National Council of Provinces. Because no single political party holds such a majority, a two-third vote can only be achieved with the support of two or more political parties. Because the ruling ANC could not garner enough supporting votes from the left-leaning Economic Freedom Fighters, who sought more drastic “state custodianship” of all property, nor the right-leaning Democratic Alliance, which rejected EWC as an investment-killing measure, the bill failed. However, on December 8, Justice Minister Ronald Lamola told media that the ruling party would use its simple majority to pass EWC legislation, which requires a lower threshold than a constitutional amendment. The ANC’s EWC bill is still making its way through Parliament but will likely see constitutional challenges from opposing parties.

In October 2020, the GoSA published the draft expropriation bill in its Gazette, which would introduce the EWC concept into its legal system. The application of the draft’s provisions could conflict with South Africa’s commitments to international investors under its remaining investment protection treaties as well as its obligations under customary international law. Submissions closed in February 2021 and the Public Works committee is currently finalizing the language.

Existing expropriation law, including The Expropriation Act of 1975 (Act) and the Expropriation Act Amendment of 1992, entitles the GoSA to expropriate private property for reasons of public necessity or utility. The decision is an administrative one. Compensation should be the fair market value of the property as agreed between the buyer and seller or determined by the court per Section 25 of the Constitution.

In 2018, the GoSA operationalized the 2014 Property Valuation Act that creates the office of Valuer-General charged with the valuation of property that has been identified for land reform or acquisition or disposal. The Act gives the GoSA the option to expropriate property based on a formulation in the Constitution termed “just and equitable compensation.”

The Mineral and Petroleum Resources Development Act 28 of 2002 (MPRDA), enacted in 2004, gave the state ownership of South Africa’s mineral and petroleum resources. It replaced private ownership with a system of licenses controlled by the GoSA and issued by the Department of Mineral Resources. Under the MPRDA, investors who held pre-existing rights were granted the opportunity to apply for licenses, provided they met the licensing criteria, including the achievement of certain B-BBEE objectives. Parliament passed an amendment to the MPRDA in 2014 but President Ramaphosa never signed it. In August 2018, Minister for the Department of Mineral Resources Gwede Mantashe called for the recall of the amendments so that oil and gas could be separated out into a new bill. He also announced the B-BBEE provisions in the new Mining Charter would not apply during exploration but would start once commodities were found and mining commenced. In November 2019, the newly merged Department of Mineral Resources and Energy (DMRE) published draft regulations to the MPRDA. In December 2019, the DMRE published the Draft Upstream Petroleum Resources Development Bill for public comment. Parliament continues to review this legislation. Oil and gas exploration and production is currently regulated under MPRDA, but the new Bill will repeal and replace the relevant sections pertaining to upstream petroleum activities in the MPRDA.

On September 27, 2018, the Minister of the DMRE released a new mining charter, stating that the new charter would be operationalized within the next five years to bolster certainty in the sector. The charter establishes requirements for new licenses and investment in the mining sector and includes rules and targets for black ownership and community development in the sector to redress historic economic inequalities from the apartheid era. The new rules recognize existing mining right holders who have a minimum 26 percent B-BBEE ownership as compliant but requires an increase to 30 percent B-BBEE ownership within a five-year transitional period. Recognition of B-BBEE ownership compliance is not transferable to a new owner. New mining right licenses must have 30 percent B-BBEE shareholding, applicable to the duration of the mining right.

In March 2019 the Minerals Council of South Africa applied for a judicial review of the 2018 Mining Charter. The court was asked to review several issues in the Mining Charter including: the legal standing of the Mining Charter in relation to the MPRDA; the levels of black ownership of mines under B-BBEE requirements; the levels of ownership required when B-BBEE partners sell their shares, and if B-BBEE ownership levels must be maintained in perpetuity, especially when levels of ownership preceded the current Mining Charter. In September 2021, the Pretoria high court ruling set aside key aspects of the Mining Charter, notably those related to black ownership targets. The DMRE resolved not to appeal the high court ruling.

The Insolvency Act 24 of 1936 sets out liquidation procedures for the distribution of any remaining asset value among creditors. Financial sector legislation such as the Banks Act or Insurance Act makes further provision for the protection of certain clients (such as depositors and policy holders). South Africa’s bankruptcy regime grants many rights to debtors, including rejection of overly burdensome contracts, avoiding preferential transactions, and the ability to obtain credit during insolvency proceedings.

ROK regulatory transparency has improved, due in part to Korea’s membership in the WTO and negotiated FTAs. However, the foreign business community continues to face numerous rules and regulations unique to the ROK. National Assembly legislation on environmental protection or the promotion of SMEs, while broadly targeting big businesses, has created new trade barriers that disadvantage foreign companies. Also, some laws and regulations lack sufficient detail and are subject to differing interpretations by government regulatory officials. In other cases, ministries issue non-legally binding guidelines on implementation of regulations, yet these become the bases for legal decisions in ROK courts. Regulatory authorities also issue oral or internal guidelines or other legally-enforceable dictates that prove burdensome for foreign firms. Intermittent ROK government deregulation plans to eliminate oral guidelines or impose the same level of regulatory review as written regulations have not led to concrete changes. Despite KORUS FTA provisions designed to address transparency issues, they remain persistent and prominent.

The ROK constitution allows both the legislative and executive branches to introduce bills. Ministries draft subordinate statutes (presidential decrees, ministerial decrees, and administrative rules), which largely govern the procedural matters addressed by the respective laws. Administrative agencies shape policies and draft bills on matters within their respective jurisdictions. Drafting ministries must clearly define policy goals and complete regulatory impact assessments (RIAs). When a ministry drafts a regulation, it must consult with other relevant ministries before it releases the regulation for public comment. The constitution also allows local governments to exercise self-rule legislative authority to draft ordinances and rules within the scope of federal acts and subordinate statutes. The enactment of laws and their subordinate statutes, ranging from the drafting of bills to their promulgation, must follow formal ROK legislative procedures in accordance with the Regulation on Legislative Process enacted by the Ministry of Government Legislation. Since 2011, all publicly listed companies must follow International Financial Reporting Standards (IFRS, or K-IFRS in the ROK). The Korea Accounting Standards Board facilitates ROK government endorsement and adoption of IFRS and sets accounting standards for companies not subject to IFRS. According to the Administrative Procedures Act, authorities proposing laws and regulations (acts, presidential decrees, or ministerial decrees) must seek public comments at least 40 days prior to their promulgation. Regulations are sometimes promulgated after only the minimum required comment period and with minimal consultation with industry.

The Official Gazette and the websites of relevant ministries and the National Assembly simultaneously post the Korean language text of draft acts and regulations, accompanied by executive summaries, for a 40-day comment period. Comments are not made public, and firms may struggle to translate complex documentation, analyze, and respond adequately before the expiration of this period. After the comment period, the Ministry of Government Legislation reviews the laws and regulations to ensure they conform to the constitution and monitors government adherence to the Regulation on Legislative Process. While the Regulatory Reform Committee (RRC), under the executive branch, reviews all laws and regulations to minimize government intervention in the economy and to abolish all economic regulations that fall short of international standards or hamper national competitiveness, the committee has been less active in recent years.

In January 2019, Korea introduced a “regulatory sandbox” program intended to reduce the regulatory burden on companies that seek to test innovative ideas, products, and services. Depending on the business sector in which a particular proposal falls, either MOTIE, the Ministry of Science and ICT, or the Financial Services Commission manages the program. The program is open to Korean companies and foreign companies with Korean branch offices. Websites and applications are only available in Korean. The business community has welcomed this effort by regulators to spur innovation.

The ROK government has taken major steps to promote the environmental, social, and governance (ESG) practices of companies in the past year with the goal to require ESG disclosure for all listed companies with total assets valued at 2 trillion won (about $1.7billion) or more by 2025, and all listed companies by 2030. In December 2021, Korea’s Financial Services Commission and the Korea Exchange launched a an ESG information platform for listed companies ( http://esg.krx.co.kr/ ). Korea’s National Pension Service also plans to invest half of its assets into ESG companies by the end of 2022.

The ROK government enforces regulations through penalties (fines, enforcing corrective measures, or criminal charges) in the case of violations of the law. The government’s enforcement actions can be challenged through an appeal process or administrative litigation. The CEOs of local branches can be held legally responsible for all actions of their company and at times have been arrested, charged for company infractions, and placed under travel bans while awaiting or undergoing court procedures. Foreign CEOs have cited this as a significant burden to their business operations in Korea. For large companies with over 5 trillion won of local assets (about $4.2 billion), the ROK Government may designate a single person or entity (for example, the largest subsidiary) to be subject to additional regulatory scrutiny and potential liability for company actions. Industry contacts have indicated the Korea Fair Trade Commission (KFTC) is considering making such designations for foreigners or entities based outside of the ROK.

The ROK’s public finances and debt obligations are generally transparent, with the exception of state-owned enterprise debt.

The ROK has revised local regulations to implement commitments under international treaties and trade agreements. Treaties duly concluded and promulgated in accordance with the constitution and the generally recognized rules of international law are accorded the same standing as domestic laws. ROK officials consistently express intent to harmonize standards with global norms by benchmarking the United States and the EU. The U.S., U.K., and Australian governments exchange regulatory reform best practices with the ROK government to encourage local regulators to employ more regulatory analytics, increase transparency, and improve compliance with international standards; however, unique local rules and regulations continue to pose difficulties for foreign companies operating in the ROK. The ROK is a member of the WTO and notifies the Committee on Technical Barriers to Trade of all draft technical regulations. The ROK is also a signatory of the Trade Facilitation Agreement (TFA). The ROK amended the ministerial decree of the Customs Act in 2015, creating a committee charged with implementing the TFA. The ROK is a global leader of modernized and streamlined procedures for transportation and customs clearance. Industry sources report the Korea Customs Service enforces rules of origin issues largely in compliance with ROK obligations under its free trade agreements.

The ROK legal system is based on civil law. Subdivisions within the district and high courts govern commercial activities and bankruptcies and enforce property and contractual rights with monetary judgments, usually levied in the domestic currency. The ROK has a written commercial law, and matters regarding contracts are covered by the Civil Act. There are also three specialized courts in the ROK: patent, family, and administrative courts. The ROK court system is independent and not subject to government interference in cases that may affect foreign investors. Foreign court judgments, with the exception of foreign arbitral rulings that meet certain conditions, are not enforceable in the ROK. Rulings by district courts can be appealed to higher courts and to the Supreme Court. There is no principle of stare decisis or precedent. The Constitutional Court rules on constitutional issues and is comprised of nine justices who are appointed by the President.

The ROK has a transparent legal system with a strong rule-of-law tradition and an independent judiciary. FIPA is the principal basic law pertaining to foreign investment in the ROK. The Invest KOREA website ( http://investkorea.org ) provides information on relevant laws, rules, and procedures for foreign investment in the ROK.

Laws and regulations enacted within the past year include:

• On April 6, 2021, an amended Labor Standards Act (LSA) took effect. The amendments modify certain restrictions on allowable work hours for employees and add certain health and safety requirements for overtime labor.
• On January 26, 2021, the Serious Accidents Punishment Act (SAPA) was enacted. The law entered into force for businesses with 50 or more employees on January 27, 2022. The Act holds CEOs personally accountable for workplace accidents and occupational illnesses. It also expands the scope of obligations for worker protections and strengthens penalties for violations.
• In August 2021, the ROK became the first country in the world to pass legislation banning digital platform operators from requiring app developers to use the platforms’ in-app payment systems. The law entered into force on March 15, 2022.

Key pending/proposed laws and regulations as of March 2022 include:

• The 2011 Personal Information Protection Act imposed stringent requirements on service providers seeking to transfer customers’ personal data outside Korea. In September 2021, the Personal Information Protection Commission submitted a proposed amendment to increase the fines to three percent of a company’s total global revenue. The proposed amendment would also grant the Personal Information Protection Committee the authority to suspend a company’s cross border data transfers in the case of a significant violation.
• As of March 2022, there are several proposed bills in the National Assembly seeking to mandate global over-the-top (OTT) providers pay network usage fees to Korean internet service providers.

The Korea Fair Trade Commission (KFTC) reviews and regulates competition and consumer safety matters under the Monopoly Regulation and Fair Trade Act (MRFTA). The amended MRFTA, which came into effect in December 2021, includes strengthened provisions on information exchange between companies, cartel law enforcement, and administrative fine levels.

KFTC has a broad mandate that includes promoting competition, strengthening consumer rights, and creating a suitable environment for SMEs. In addition to investigating corporate and financial restructuring, the KFTC can levy sizeable administrative fines and issue corrective measures for violations of law and for failure to cooperate with investigators. Decisions by KFTC are subject to appeal in Korean courts. As part of KORUS implementation, KFTC instituted a “consent decree” process in 2014, whereby firms can settle disputes with KFTC without resorting to the court system.

Over the last several years, a number of U.S. firms have raised concerns that KFTC targets foreign companies with aggressive enforcement. An amendment to the MRFTA in September 2020 improved the administrative decision-making process by the KFTC, including permitting access to confidential business information, limited to outside legal counsel, in order to protect possible trade secrets.

The ROK follows generally-accepted principles of international law with respect to expropriation. ROK law protects foreign-invested enterprise property from expropriation or requisition. Private property can be expropriated for public purposes such as urban redevelopment, new industrial complexes, or constructing roads, and claimants are afforded due process and compensation. Private property expropriation in the ROK for public use is generally conducted in a non-discriminatory manner, with claimants compensated at or above market value. Embassy Seoul is aware of one case in which a U.S. investor filed an investor-state dispute lawsuit in 2018 against the ROK government, claiming that the government had violated the KORUS FTA in expropriating the investor’s land. The case was dismissed in the ROK judicial system on jurisdictional grounds in September 2019. The ROK government allotted USD 26 billion in its 2022 budget for land expropriation – a 36 percent decrease from the previous year.

The Debtor Rehabilitation and Bankruptcy Act (DRBA) stipulates that bankruptcy is a court-managed liquidation procedure where both domestic and foreign entities are afforded equal treatment. The procedure commences after a filing by a debtor, creditor, or a group of creditors, and determination by the court that a company is bankrupt. The court designates a Custodial Committee to take an accounting of the debtor’s assets, claims, and contracts. The Custodial Committee may grant voting rights among creditors. Shareholders and contract holders may retain their rights and responsibilities based on shareholdings and contract terms. Debtors may be subject to arrest once a bankruptcy petition has been filed, even if the debtor has not been declared bankrupt. Individuals found guilty of negligent or false bankruptcy are subject to criminal penalties. The Seoul Bankruptcy Court (SBC) has nationwide jurisdiction to hear major bankruptcy or rehabilitation cases and to provide effective, specialized, and consistent guidance in bankruptcy proceedings. Any Korean company with debt equal to or above KRW 50 billion (about USD 41.8 million) and/or 300 or more creditors may file for bankruptcy rehabilitation with the SBC. Thirteen local district courts continue to oversee smaller bankruptcy cases in areas outside Seoul.

Opening a business can be especially challenging for foreigners trying to navigate the bureaucratic system without the assistance of a well-connected national.

The private sector is governed by a mix of legacy pre-independence laws from Sudan and post-independence South Sudan laws. South Sudan has no securities exchange or publicly listed companies. Post-independence, the national legislature passed laws to improve the transparency of the regulatory system, including the 2012 Companies Act and the 2012 Banking Act. However, enforcement regulations remain lacking and there is little transparency.

The national legislature historically passed most bills and regulations without public comment or quantitative analysis. It did not adequately disseminate finalized laws publicly. This trend continues with the Transnational Legislative Assembly (TNLA). The TNLA formed several committees in late 2021 and early 2022, a development that may improve capacity and transparency. Most government ministries and agencies do not hold notice and comment periods before finalizing regulations. There is no centralized online platform for publishing regulatory actions similar to the U.S. Federal Register. A notable exception is the Bank of South Sudan , which lists banking regulations on its website.

South Sudan’s 2011 Public Finance and Accountability Act requires budget documents to comply with International Public Sector Accounting Standards; however, published documents often do not comply and therefore are difficult to decipher. There have not been public budget hearings since 2019. The legislature failed to pass a budget for fiscal year 2020/2021, which began in July 2020, and did not table the fiscal year 2021/2022 budget until February 2022, even though the fiscal year began in July 2021.

The oil sector attracts the most FDI, but transparency is absent, despite statutory reporting requirements. The Ministry of Finance and Planning does not share foreign debt data at an institutional level and does not release it to the public.

The government occasionally releases limited debt obligation information about certain infrastructure loans, but to date has not disclosed the amount of oil it has committed to pay for infrastructure projects. This makes it difficult for analysts to determine how much money the government has available to service debt and pay for public services.

The contract process for oil companies that are planning to bid and invest in South Sudan is controlled by the Ministry of Petroleum, but paragraph 11 of the 2012 Petroleum Act says the National Petroleum and Gas Commission is empowered to approve all petroleum agreements on behalf of the government and ensure that they are consistent with the Act. Bidding and tender information is not publicly available.

There are no known informal regulatory processes managed by NGOs or private sector associations that would affect U.S. investors. National and state bodies are the main source of regulation, but county and sub-county level officials also impose regulations. NGOs regularly report discrepancies between tax, labor, and import rules issued by the national government and those enforced by local authorities. Humanitarian service providers moving goods earmarked for humanitarian relief claim state officials have, at times, barred them entry at state borders. Tax collection and enforcement at the state level is limited, uneven, and unpredictable. The Ministry of Labor has not conducted labor inspections since March 2020 due to the COVID-19 pandemic, but when it did NGOs and foreign investors reported employees colluded with labor inspectors to extort fines from business managers.

Nationally non-oil tax revenue increased dramatically in 2021 as South Sudan improved its collection methods for personal income tax and customs revenue. Some months saw a 100 percent year-over-year increase suggesting prior revenue collection efforts were corrupt, inept, or both. Much of this improvement is due to public financial management (PFM) reforms aimed at strengthening the National Revenue Authority.

Despite significant PFM reforms, the government did not announce or implement new enforcement reforms in 2021. The legislative body does not provide effective administrative compliance oversight of government ministers nor do ministries or agencies adequately regulate one another. There were no significant corruption prosecutions in 2021. Media reported in February 2022 that President, Salva Kiir Mayardit, blocked the investigation of former Minister of Petroleum Ezekiel Lol Gatkuoth for allegedly stealing millions of dollars in oil revenues between 2016 and 2017.

South Sudan is not a WTO member but joined the African Union in 2012 and the East African Community (EAC) in April 2016. It is currently behind in membership payments to both and has its voting rights suspended. The Ministry of East African Community Affairs is responsible for integration into the EAC. South Sudan is adapting its national regulatory system to regional standards. It joined the customs union of the EAC but is behind in implementing regulations, prompting the EAC in February 2022 to urge the government to fully implement the EAC’s Single Customs Territory to boost intra-regional trade. The National Revenue Authority assists in implementing EAC customs regulations and procedures.

South Sudan currently has nine members in the EAC parliament.

U.S. companies seeking to invest in South Sudan face a complex commercial environment with weak legal enforcement mechanisms. Large U.S. and multinational companies may have enough leverage to extricate themselves from business disputes, but medium-sized enterprises (the more natural counterparts to South Sudan’s fledgling business community) do not.

South’s Sudan’s legal system is a combination of statutory and customary laws. There are no dedicated commercial courts and no effective arbitration bodies to handle business disputes. The only official means of settling disputes between private parties is civil court. Enforcement of judgements and awards is weak or nonexistent, leading businesses to seek informal mediation, including through private lawyers, tribal elders, law enforcement officials, and business organizations. Corrupt practices are widespread and undermine pending cases. The lack of a unified, formal judicial system encourages “forum shopping” by businesses motivated to find the venue in which they can achieve the most favorable outcome.

As an East African Community (EAC) member, South Sudan is subject to the jurisdiction of the East African Court of Justice (EACJ). The EAC treaty gives the EACJ broad jurisdiction including trade disputes and human rights violations. However, the court only reviews 40 cases annually and results for the South Sudanese legal community have been inconclusive. Hope for Humanity Africa, an advocacy group, sued the government in the EACJ in June 2021 over oil waste mismanagement that allegedly caused health and environmental damage. The EACJ allowed the government to resolve the case through mediation, although there have not been any published results of the mediation.

The executive branch regularly interferes with the work of the judicial branch. State security forces arrest and detain parties to business disputes without charging them with a crime. Security forces continue detaining the person until they agree to make a payment as directed to “resolve” the case. High-level government and military officials are immune from prosecution in practice and frequently interfere with court decisions.

Foreign investors face a lack of transparency and capacity in South Sudan’s legal system as well as inconsistent laws and regulations. Most foreign direct investment rules can be found in the 2009 Land Act, the 2009 Investment Promotion Act, and the 2012 Companies Act. The relevant ministries do not have implementing regulations or they do not publish them for public review. The Ministry of Justice has a business registration website, but a foreign investor may still need local counsel to register the business and obtain an investment certificate.

South Sudan does not review transactions for competition-related concerns. There were no significant developments in 2021.

Investors should be prepared to face a complex commercial environment with a weak civil justice system in which contract disputes are common and often resolved without due process.

The 2009 Investment Promotion Act prohibits nationalization of private enterprises unless the expropriation is in the national interest for a public purpose. The Act does not define the terms “national interest” or “public purpose.” According to the Act, expropriation must be in accordance with due process and provide fair and adequate compensation, which is ultimately determined by local domestic courts.

While some donor agreements call for the government to receive goods at the conclusion of a project, local government officials have seized assets even without a formal agreement and did not offer compensation for the expropriated property.

Although officially denied, credible reports from humanitarian aid agencies indicate both government and opposition forces routinely extort money at checkpoints throughout the country before allowing the delivery of humanitarian aid, amongst several other bureaucratic access impediments.

The 2011 Insolvency Act provides for both personal and corporate bankruptcies. Given the lack of commercial courts, there is little information available about the rights of creditors in practice.

There is transparency throughout the rule making process at all levels of government. The Spanish government launched a transparency website in 2014 that makes more than 500,000 items of public interest freely accessible to all citizens (http://transparencia.gob.es/transparencia/en/transparencia_Home/index.html ). The website offers details about the central government, public institutions such as the Royal House, the Parliament, the Constitutional Court, the Judicial Power, the Ombudsman, the Audit Court, the Central Bank, and the Economic and Social Council, and other organisms such as the European Commission. Regional and local authorities have developed their own transparency portals and related legislation. Spain’s Boletin Oficial de Estado ( https://www.boe.es/ ) publishes key regulatory actions.

Many large established Spanish companies have not yet fully adopted environmental, social, and governance (ESG) criteria, though companies are increasingly committed to making positive impact on society. New companies, especially startups, tend to incorporate ESG values into their operations from the start, acting with transparency and adopting innovative, modern technologies for continuous improvement. Several official Spanish certifications recognized at European and global level accredit companies that meet ESG and CSR criteria, such as Norma SGE21, B Corp Spain, and SDG Certificate (AENOR.) To promote transparency in the disclosure of non-financial information and its impact on corporate governance of companies, the Spanish government published Law 11/2018 on non-financial and diversity matters ( https://www.boe.es/boe/dias/2018/12/29/pdfs/BOE-A-2018-17989.pdf ). The law reinforces requirements that companies disclose relevant information about their management in five areas: environment; social impact and workers’ rights; respect for human rights; fight against corruption and bribery; and impact on society.

Spain is a member of the European Union, and its local regulatory framework compares favorably with other major European countries, although permitting and licensing processes may result in significant delays. The efficacy of regulation at the regional level is uneven. With a license from only one of Spain’s 17 regional governments or two enclaves, companies can operate throughout Spanish territory. The measures are designed to reduce business operating costs, improve competitiveness, and attract foreign investment.

The Spanish judiciary has a well-established tradition of supporting and facilitating the enforcement of both foreign judgments and awards. For a foreign judgment to be enforced in Spain, an order declaring it is enforceable or exequatur is necessary. Once the order is granted, enforcement itself is quite fast, provided that the assets are identified. First instance courts are responsible for the enforcement of foreign rulings.

Local legislation establishes mechanisms to resolve disputes if they arise. Spain’s civil (Roman-based) judicial system is fair and accessible, although sometimes slow-moving. Investigating judges are in charge of the criminal investigation, assuring independence from the executive branch of the government. The Spanish judicial system allows for successive appeals to a higher court.

The number of civil claims has grown significantly over the past decade, due in part to litigation stemming from Spain’s financial 2008 crisis, resulting in an increased openness to alternative dispute resolution mechanisms. Although ordinary proceedings are relatively straightforward, due to the significant number of cases within each court, it can take years for a case to come to trial. Domestic court decisions are subject to appeal, and the average time taken for a final judgment to be issued by the Court of Appeal can be anywhere from months to years. A decision may still be subject to appeal to the Supreme Court (although the grounds for appeal are quite limited), a process that generally takes two to three years to produce a final ruling. Due to the uncertainty surrounding the duration of appeals, disputes involving large companies or significant amounts of money tend to be resolved through arbitration.

The Spanish government issued new regulations on foreign investment in March 2020 (Royal Decrees 8/2020, 11/2020, and 34/2020) that require prior authorization for foreign investors seeking to acquire more than a 10 percent stake in the following critical sectors:

• critical infrastructures, both physical and virtual (energy industries, transportation, water, healthcare, communications, media, data storage and processing, aerospace, defense, financial services, and sensitive installations)
• critical technology and dual-use products;
• essential supplies (energy, hydrocarbons, electricity, raw materials and food and agriculture value chains);
• sectors with sensitive information such as personal data or with capacity to control such information and;
• the media.

Purchases of less than 10 percent are also subject to authorization if they result in participation in the control or management of the company. Under these new Royal Decrees, foreign investments in any industry must also receive prior approval if the foreign investor is controlled directly or indirectly by the government of another country; if the investor has invested or participated in sectors affecting the security, public order, or public health in another EU Member State; or if administrative or judicial proceedings have been initiated against the investor for exercising illegal or criminal activities. Investments less than EUR 1 million are exempted, and investments between EUR 1 and 5 million are subject to a simplified review.

Spanish law conforms to multi-disciplinary EU Directive 88/361, which prohibits all restrictions of capital movements between Member States as well as between Member States and other countries. The Directive also classifies investors according to residence rather than nationality. However, Royal Decree 34/2020 also temporarily requires residents of the European Union and European Free Trade Association to receive prior approval for investments into companies listed in Spain or investments exceeding EUR 500 million. This temporary requirement has been extended several times and is valid until December 31, 2022.

Registration requirements are straightforward and apply equally to foreign and domestic investments. They aim to verify the purpose of the investment, not block any investment. On September 1, 2016, a resolution established new forms for declaration of foreign investments before the Investment Registry, which oblige the investor(s) to declare foreign participation in the company.

In 2015, changes to the Personal Income Tax Law affected the transfer of investments outside of Spain by creating a tax on unrealized gains from investment. Residents who have resided in Spain for at least 10 of the previous 15 years are subject to a tax of 19-23 percent if they relocate their holdings or investments outside of Spain if the market value of the shares held exceeds EUR 4 million or if the individual holds 25 percent or more shares in a venture whose market value exceeds EUR 1 million.

A Protocol to the 1990 Income Tax Convention between the United States and Spain entered into force in November 2019. The Protocol significantly reduces taxes on interest, royalties, certain direct dividends, and capital gains. It also provides for mandatory binding arbitration to streamline dispute resolutions between the two countries’ tax administrations.

Spain’s digital services tax on companies, approved in January 2021, was dropped as of January 2022 in response to the OECD/G20’s multilateral agreement during international tax negotiations. Spain will credit amounts paid in excess of the global minimum tax from January 2022 against future taxes owed.

Useful websites:
Ministry of Industry, Trade, and Tourism page on Foreign Investment: https://comercio.gob.es/InversionesExteriores/Paginas/control-inversiones.aspx
Invest in Spain (investment promotion agency): http://www.investinspain.org/invest/en/index.html
Investment aid and incentives in Spain: https://guidetobusinessinspain.com/en/

The parliament passed Act 3/2013 on June 4, 2013, by which the entities that regulated energy (CNE), telecoms (CMT), and competition (CNC) merged into a new entity: the National Securities Market Commission (CNMC). The law attributes practically all functions entrusted to the National Competition Commission under the Competition Act 15/2007, of July 3, 2007 (LDC), to the CNMC. The CNMC’s website ( https://www.cnmv.es/Portal/home.aspx ) provides information to the public about major cases.

Spanish legislation set up safeguards to prevent the nationalization or expropriation of foreign investments. Since the 2008 economic crisis, Spain has altered its renewables policy several times, creating regulatory uncertainty and resulting in losses to U.S. companies’ earnings and investments. As a result, Spain accumulated more than 32 lawsuits, totaling about EUR 7.6 billion in claims. Spain now faces an array of related international claims for solar photovoltaic and other renewable energy projects. Spain registered one case with ICSID in 2021 related to renewable energy generation.

Spain has a fair and transparent bankruptcy regime. In 2014, the government approved a reform of the bankruptcy law to promote Spain’s economic recovery by establishing mediation mechanisms. These reforms – nicknamed the Second Chance Law – aimed to avoid the bankruptcy of viable companies and preserve jobs by facilitating refinancing agreements through debt write-off, capitalization, and rescheduling. However, declaring bankruptcy remains less prevalent in Spain than in other parts of the world.

Many foreign and domestic investors view the regulatory system as unpredictable with outdated regulations, rigid administrative procedures, and excessive leeway for bureaucratic discretion. BOI is responsible for informing potential investors about laws and regulations affecting operations in Sri Lanka, including new regulations and policies that are frequently developed to protect specific sectors or stakeholders. Effective enforcement mechanisms are sometimes lacking, and investors cite coordination problems between BOI and relevant line agencies. Lack of sufficient technical capacity within the government to review financial proposals for private infrastructure projects also creates problems during the tender process.

Corporate financial reporting requirements in Sri Lanka are covered in a number of laws, and the Institute of Chartered Accountants of Sri Lanka (ICASL) is responsible for setting and updating accounting standards to comply with current accounting and audit standards adopted by the International Accounting Standards Board (IASB) and the International Auditing and Assurance Standards Board (IAASB). Sri Lanka follows International Financial Reporting Standards (IFRS) for financial reporting purposes set by the IASB. Sri Lankan accounting standards are applicable for all banks, companies listed on the stock exchange, and all other large and medium-sized companies in Sri Lanka. Accounts must be audited by professionally qualified auditors holding ICASL membership. ICASL also has published accounting standards for small companies. The Accounting Standards Monitoring Board (ASMB) is responsible for monitoring compliance with Sri Lankan accounting and auditing standards.

Overall legislative authority lies with Parliament. Line ministries draft bills and, together with regulatory authorities, are responsible for crafting draft regulations, which may require approval from the National Economic Council, the Cabinet, and/or Parliament. Bills are published in the government gazette http://documents.gov.lk/en/home.php  at least seven days before being placed on the Order Paper of the Parliament (the first occasion the public is officially informed of proposed laws) with drafts being treated as confidential prior to this. Any member of the public can challenge a bill in the Supreme Court if they do so within one week of its placement on the Order Paper of the Parliament. If the Supreme Court orders amendments to a bill, such amendments must be incorporated before the bill can be debated and passed. Regulations are made by administrative agencies and are published in a government gazette, similar to a U.S. Federal Notice. In addition to regulations, some rules are made through internal circulars, which may be difficult to locate.

The Central Bank and the Finance Ministry published information on Central Government debt including contingent liabilities and government finance. Central Bank publishes information on debt of major SOE’s. Debt obligations are available online in the Central Bank Annual Report; Fiscal Management Report of the Finance Ministry; Annual Report of the Ministry of Finance. Information on contingent liabilities is available in the Annual Report of the Ministry of Finance. Since 2018, the Central Bank published guaranteed debt and central government debt annually. The government does not promote or require companies’ environmental, social, and governance (ESG) disclosures, however most large companies listed on the Colombo Stock Exchange disclose these.

Sri Lanka is a member of the World Trade Organization (WTO) and has made WTO notifications on customs valuation, agriculture, import licensing, sanitary and phytosanitary measures, the Agreement on Technical Barriers to Trade, the Agreement on Trade-Related Investment Measures, and the Agreement on Trade-Related Aspects of Intellectual Property Rights. Sri Lanka ratified the WTO Trade Facilitation Agreement (TFA) in 2016 and a National Trade Facilitation Committee was tasked with undertaking reforms needed to operationalize the TFA. The WTO conducted a review of the TFA in June 2019 in which Sri Lankan officials noted challenges related to accessing technical assistance and capacity building support for implementation of TFA recommendations. In September 2021 Sri Lanka requested for extension of its definitive implementation dates on certain provisions based on Article 17 of the Trade Facilitation Agreement.

Sri Lanka’s legal system reflects diverse cultural influences. Criminal law is fundamentally British-based while civil law is Roman-Dutch. Laws on marriage, divorce, inheritance, and other issues can also vary based on religious affiliation. Sri Lankan commercial law is almost entirely statutory, reflecting British colonial law, although amendments have largely kept pace with subsequent legal changes in the United Kingdom. Several important legislative enactments regulate commercial issues: the BOI Law; the Intellectual Property Act; the Companies Act; the Securities and Exchange Commission Act; the Banking Act; the Inland Revenue Act; the Industrial Promotion Act; and the Consumer Affairs Authority Act.

Sri Lanka’s court system consists of the Supreme Court, the Court of Appeal, provincial High Courts, and the Courts of First Instance (district courts with general civil jurisdiction) and Magistrate Courts (with criminal jurisdiction). Provincial High Courts have original, appellate, and reversionary criminal jurisdiction. The Court of Appeal is an intermediate appellate court with a limited right of appeal to the Supreme Court. The Supreme Court exercises final appellate jurisdiction for all criminal and civil cases. Citizens may apply directly to the Supreme Court for protection if they believe any government or administrative action has violated their fundamental human rights.

The principal law governing foreign investment is Law No. 4 (known as the BOI Act), created in 1978 and amended in 1980, 1983, 1992, 2002, 2009 and 2012.  The BOI Act and implementing regulations provide for two types of investment approvals, one for concessions and one without concessions.  Under Section 17 of the Act, the BOI is empowered to approve companies satisfying minimum investment criteria with such companies eligible for duty-free import concessions.  The BOI acts as the “one-stop-shop” to facilitate all the requirements of the foreign investors to Sri Lanka. Investment approval under Section 16 of the BOI Act permits companies to operate under the “normal” laws and applies to investments that do not satisfy eligibility incentive criteria.  From April 1, 2017, Inland Revenue Act No. 24 of 2017 created an investment incentive regime granting a concessionary tax rate (for specific sectors) and capital allowances (depreciation) based on capital investments.  Commercial Hub Regulation No 1 of 2013 applies to transshipment trade, offshore businesses, and logistic services. The Strategic Development Project Act of 2008 (SDPA) provides tax incentives for large projects that the Cabinet identifies as “strategic development projects.” https://investsrilanka.com/ 

Sri Lanka does not have a specific competition law. Instead, the BOI or respective regulatory authorities may review transactions for competition-related concerns. In March of 2017, Parliament approved the “Anti-Dumping and Countervailing” and “Safeguard Measures” Acts. These laws provide a framework against unfair trade practices and import surges and allow government trade agencies to initiate investigations relating to unfair business practices to impose additional and/or countervailing duties.

Since economic liberalization policies began in 1978, the government has not expropriated a foreign investment, with the last expropriation dispute resolved in 1998. The land acquisition law (Land Acquisition Act of 1950) empowers the government to take private land for public purposes with compensation based on a government valuation.

The Companies Act and the Insolvency Ordinance provide for dissolution of insolvent companies, but there is no mechanism to facilitate the reorganization of financially troubled companies. Other laws make it difficult to keep a struggling company solvent. The Termination of Employment of Workmen Special Provisions Act (TEWA), for example, makes it difficult to fire or lay off workers who have been employed for more than six months for any reason other than serious, well-documented disciplinary problems. In the absence of comprehensive bankruptcy laws, extra-judicial powers granted by law to financial institutions protect the rights of creditors. A creditor may petition the court to dissolve the company if the company cannot make payments on debts in excess of LKR 50,000 ($320.00). Lenders are also empowered to foreclose on collateral without court intervention. However, loans below LKR 5 million ($32,000) are exempt, and lenders cannot foreclose on collateral provided by guarantors to a loan.

Sri Lanka ranked 94 out of 190 countries in the resolving insolvency index in the World Bank’s Doing Business Report 2020. Resolving insolvency takes, on average, 1.7 years at a cost equivalent to 10 percent of the estate’s value.

Some ministries and regulatory agencies distribute the text or summary of proposed regulations before their enactment to interested stakeholders but are under no legal obligation to do so. There is no period of time set by law for the text of proposed regulations to be publicly available. Some agencies make received comments publicly accessible. There is no specialized government body or department tasked with soliciting and receiving these comments. Some ministries and agencies report on the results of the consultation on proposed regulations in the form of one consolidated response in an official gazette, journal, or other publication or directly distributed to interested stakeholders. This reporting on the results of the consultation is not required by law. https://rulemaking.worldbank.org/en/data/explorecountries/sudan# . There is no centralized online location where key regulatory actions are published. https://rulemaking.worldbank.org/en/data/explorecountries/sudan# 

Regulations are developed at the federal (national), state, and local levels. Ministries develop regulations to support federal laws, while state and local jurisdictions can adopt additional regulations to address local concerns. Federal legislation is the most relevant to foreign businesses.

Under the CLTG, legislation was drafted using a consensus approach that included input from affected ministries, consultations with local academics, business leaders, and international experts. The consultation period did not make the draft legislation available for public comment. The legislation was next reviewed by the Ministry of Justice (MoJ) to determine if it conformed to the Sudanese Constitution. After receiving MoJ approval, the legislation was reviewed and endorsed independently by the civilian Council of Ministers and the joint military-civilian Sovereign Council. Following endorsement, the bill would receive final approval by a majority vote during a joint Council of Ministers/Sovereign Council. The approved legislation would become law once it was published in the MoJ’s Official Gazette. [Note: With the ouster of Prime Minister Hamdok and dissolution of the CLTG’s Council of Ministers, military authorities have governed through the Sovereign Council by decree. End Note.]

New regulations are posted on ministry websites and made available in printed pamphlets and booklets. Regulations are legally reviewable in court. Several ministries have committees that review complaints and arbitrate regulatory disputes.

The CLTG committed to strengthen governance and improve fiscal transparency by establishing civilian control over all public finances and assets, including those under the control of the Sudanese security and intelligence services, and to develop a transparent budget that accounts for all public expenditures. The government sought to institutionalize its commitment to accountability and good governance through the development and adoption of a Public Financial Management (PFM) roadmap by September 2021. The roadmap would seek to outline a series of medium-term actions to address identified PFM vulnerabilities. Although finalization of the roadmap was derailed by the military takeover, the draft roadmap would provide a useful reference point for future civilian leadership to adopt.

Sudan’s Ministry of Industry and Trade provides a list of all of Sudan’s bilateral and regional trade agreements:

http://www.tpsudan.gov.sd/index.php/en/pages/details/154/Agreements 

Sudan is a signatory of the Greater Arab Free Trade Area Agreement (GAFTA) and a member of the Common Market for Eastern and Southern Africa (COMSEA). It is not a member of the WTO. Sudan does not currently qualify for the U.S Generalized System of Preferences (GSP).

Sudan’s legal code is a mixture of British common law practices, Islamic law, and customary law. Contracts are enforced through the courts. Sudan has written commercial and contractual laws.  Business regulations or enforcement actions are appealable and are adjudicated in the national court system. The Investment Act of 2013 established courts to handle disputes.

Sudan’s investment authority lists the process by which businesses much register to operate at:  http://www.sudaninvest.org/English/Default.htm .  The website outlines procedures for companies that wish to invest, including forming and ending relationships and license applications.  There is not an online business registration process.

On May 12, 2021, Sudan passed Public Private Partnership Law No. 10 of 2021, which aims to create a business-friendly environment that attracts foreign investors. The law is part of a set of reforms driven by the transitional government to achieve a successful transition to an open, dynamic, and business-friendly economy. The law organizes and promotes public private partnerships (PPPs) to encourage private entities to invest and participate in projects alongside public entities. It also intends to ensure transparency and integrity in procedures and equal and fair treatment for bidders. The law creates a central unit with an independent budget to ensure the development, management, and implementation of PPP projects. It allows both the public and private sectors to suggest PPP projects.

The Investment Encouragement Act, which was issued on 11 April 2021, seeks to improve on the 2013 Investment Act in terms of treatment of investors regardless of their nationality, and to create a more predictable and transparent regime that facilitates investment. Key changes include: (i) provision of new tax exemptions, including as regards the business profits tax; (ii) creation of an investment register for collecting data on investing entities; (iii) introduction of an online investment guide to clarify and facilitate investment procedures; (iv) creation of a specialized insurance company that insures investors against various risks (e.g., risks of nationalization, risks of war, domestic conflict and civil disobedience, risks of recession, etc.) for an annual premium, and (v) publication of a special exclusion list detailing the sectors and activities not available to foreign investors.

The new law also requires foreign investors to deposit at least $250,000 to obtain a license. Furthermore, it clarifies the definitions of the various types of investment projects which were regulated in the 2013 Act, including State Projects, Investment projects, National Projects, and Strategic Projects.

The law was published in the official Sudan Gazette of 12 May 2021 and is available at:  https://moj.gov.sd/files/index/28 .

The Economic Security Department of the General Intelligence Service (GIS) reviews transactions (mergers, acquisitions, etc.) and conduct (cartels, monopolization) for competition-related concerns (whether domestic or international in nature). This system is opaque; however, its decisions can be appealed through the judicial system.

The government has the legal right to expropriate private property for public use under its eminent domain powers. The government has a history of expropriating private property without adequately compensating owners. In certain circumstances the government has incarcerated owners who refused to surrender their property.

The CLTG formed the Empowerment Elimination, Anti-Corruption, and Funds Recovery Committee (commonly called the Dismantling Committee) in November 2019 after the CLTG approved a law to dismantle the institutions established under the Bashir regime. Despite initial steps by the Committee to recover assets stolen during the Bashir dictatorship and remove Bashir allies from leadership positions in government institutions, its efforts lacked a clear strategy and legal framework for recovering assets domestically and abroad associated with the banned National Congress Party, its officials, and its affiliates. Some of the Committee’s actions appeared partisan, capricious, and undertaken unilaterally without coordination with the Ministry of Finance and Economic Planning, the agency that should, in theory, lead on asset recovery efforts. For example, the Committee oversaw the firing of over two hundred Central Bank of Sudan (CBOS) technical experts in March 2021 but provided no recourse for those who contested their supposed affiliation with the National Congress Party. After the military takeover, members of the Committee were explicitly targeted for arrest. Several former members remain in custody on charges of criminal breach of trust, illicit wealth, and dealing in foreign exchange. Meanwhile, hundreds of government officials dismissed by the Committee were reinstated at the CBOS, Ministries, and other government agencies, although it is unclear how many of those reinstated are genuinely affiliated with the Bashir regime and how many are merely long-serving civil servants.

The government controls most of the agricultural land in Sudan and has sold or leased millions of acres to Saudi Arabia and other countries. Land laws have historically been an issue of dispute between local communities and the government. The most recent examples of government expropriations were in 2019 when the Bashir regime bulldozed churches and sold the land to private investors. The government claimed the churches did not have permits. Some churches which had existed for decades lacked permits because the government would not issue them. The government claimed the churches were simply squatting on the land illegally. According to the law, for eminent domain claims the government should have compensated the churches. That did not happen in all cases. Government and Arab militias’ expropriation of land in Darfur, Gedaref, and Kassala states without compensation have been reported. In some cases, displaced persons returned to their land only to be denied access. In most instances, the government did not adequately respond to appeals.

The Bankruptcy Act of 1929, Companies Act of 2003, and Insolvency Act of 2011 are the key bankruptcy laws currently in force in Sudan. The bankruptcy system is based on British legal traditions.

Suriname does not have transparent policies nor effective laws to foster competition. The previous National Assembly (2015-2020) indicated that it would vote on a draft competition law but did not do so. The Competitiveness Unit of Suriname coordinates and monitors national competitiveness and is working towards establishing policies and suggesting legislation to foster competition. Current legislation on topics such as taxes, the environment, health, safety, and other matters are not purposefully used to impede investment but may still form obstacles. Employment protection legislation is among the most stringent in the world. Labor laws, for instance, prohibit employers from firing an employee without the permission of the Ministry of Labor once the employee has fulfilled his or her probationary period, which by law is limited to two months. Tax laws are criticized for overburdening the formal business sector, while a large informal sector goes untaxed. Public sector contracts and concessions are not always awarded in a clear and transparent manner. The current administration has announced its commitment to greater transparency in the public tendering process, and the Ministry of Public Works is publishing procurement notices on its website on a regular basis.

There are no informal regulatory processes managed by non-governmental organizations or private sector associations. Rule-making and regulatory authority exist within relevant ministries at the national level. It is this level of regulation that is most relevant for foreign businesses. The government may consult with relevant stakeholders on regulations, but there is no required public process. The government presents draft laws and regulations to the Council of Minsters for discussion and approval. Once approved, the President’s advisory body, the State Council, considers the draft. If approved, the government presents a draft to the National Assembly for discussion, amendment, and approval, and then to the President for signature. Legislation only goes into effect with the signature of the President and after publication in the National Gazette.

Legal, regulatory, and accounting systems are often outdated and therefore not transparent nor consistent with international norms. The National Assembly passed the Act on Annual Accounts in 2017 to create more fiscal transparency by requiring all companies, including state owned enterprises, to publish annual accounts based on the International Financial Reporting Standards (IFRS). The law went into effect in 2020 for large companies, while it went into effect for small and medium sized companies (SMEs) in 2021. Small companies can use the IFRS for SMEs.

Suriname passed new legislation in October 2018 to professionalize and institute better standards in the accounting profession. The legislation created the Suriname Chartered Accountants Institute (SCAI) and makes membership mandatory for accountants in Suriname. The board of the SCAI has the responsibility to monitor the quality of the profession and apply disciplinary measures.

The intake form used by the division of International Business at the Ministry of Foreign Affairs and International Cooperation does mention that companies can submit an Environmental and Social Impact Assessment (ESIA) if available.

Draft bills or regulations are discussed in view of the public, and relevant stakeholders may be consulted. The National Assembly has established the email address feedbackwetgeving@dna.sr as a place where individuals can give their opinion on draft legislation.

There is no centralized online location where key regulatory actions are published. However, the National Assembly publishes the actual text of adopted laws on its website.

It is unclear what the regulatory enforcement mechanisms that ensure the government follows administrative processes might be, as the processes have not been made public. There is no public administration law. The Auditor General’s office is an independent body in charge of supervising the financial management of government funds. The Supreme Audit Institution reports to the National Assembly. The Central Accountant Service exercises control on administrative processes at the ministries and reports to the Ministry of Finance. There are no centralized online locations where key regulatory actions, or their summaries, are published.

The minimum wage law was revised by State Decree on July 18, 2019.

In January 2021, the government announced its intent to implement a value-added tax (VAT) by January 01, 2022, but it has not yet been implemented. The VAT is now scheduled to be implemented July 1, 2022.

No new business rules were announced in 2021.

It is unclear what the regulatory enforcement mechanisms are, as the process has not been made public. Regulatory reform efforts announced in prior years have not been fully implemented. Regulations are developed by ministries that have jurisdiction over the relevant area, in consultation with stakeholders.

The government’s executive budget proposal and enacted budget are easily accessible to the public. Actual revenues and expenditures regularly deviate from the budget as passed, and the origin and level of accuracy of some information in the budget is unreliable. A full end-of-year report is not publicly available. The Supreme Audit Institution publishes a limited audit based on self-reporting by the ministries. The State Debt Management Office (SDMO) is responsible for the operational management of the public debt of the government. Data regarding public debt is published every three months in the Government Gazette of Suriname and on the SDMO website.

As a member of CARICOM, Suriname has committed to regionally coordinated regulatory systems.

Suriname uses national and international standards. Standards developed by international and regional standardization bodies include ISO, Codex Alimentarius, International Electro Technical Commission, CROSQ, ASTM International, COPANT, SMIIC (Standards and Metrology Institute for Islamic Countries), NEN (Nederland Normalisatie Instituut), ETSI, GLOBAL GAP, etc.

Suriname is a member of the World Trade Organization (WTO). The WTO Committee on Technical Barriers to Trade (TBT) lists only one notification from Suriname in 2015.

Suriname’s legal system is based on the Dutch civil system. Judges uphold the sanctity of contracts and enforce them in accordance with their terms. When an individual or company disputes a signed contract, they have the right to take the case to court. The judiciary consistently upholds local law, applies it, and enforces it for local and international businesses.

Laws are defined in criminal, civil, and commercial codes, and verdicts are based on the judge’s interpretation of those codes. There is no specialized commercial court. The commercial codes contain commercial legislation.

Historically, the judicial system has been considered independent of the executive branch. Most observers consider the judicial system to be procedurally competent, fair, reliable, and free of overt government interference. Due to a shortage of judges and administrative staff, processing of civil cases can be delayed. Last year, the Court of Justice appointed seven new judges to ease the delay in court cases. There are now 30 judges.

Draft regulations may be reviewed by interested stakeholders, and they may be given the opportunity to comment. Since October 2019, individuals have also had the option to comment on draft legislation via email at feedbackwetgeving@dna.sr. There is no formal, required public consultation process. Suriname has no general administrative law, so there are no special administrative tribunals. Judges of the regular courts also hear cases of administrative law.

The overall legal regime, and more particularly the approval of foreign direct investment (FDI), may be discretionary rather than rules based. This can lead to heightened unpredictability and uncertainty and associated risks of favoritism and corruption.

In July 2021 the National Assembly approved ratification of The Law of Accession to the Republic of Suriname to the United Nations Convention Against Corruption (UNCAC)

In April 2020, the previous National Assembly passed the COVID-19 State of Emergency Law, which granted the government broad powers to enforce COVID-19-related precautionary measures. It also created a $53 million fund to assist struggling businesses, and it allowed the government to take loans and advances from local institutions and consolidate them into a single mega-loan. The new National Assembly extended the law in August 2020 and extended it once again in February 2021. The National Assembly extended this law once again in August 2021, for the duration of twelve months.

In August 2021, the National Assembly approved an amendment of the turnover tax law. Turnover tax on goods, and services was increased to twelve percent.

In February 2021, the Foreign Exchange Commission announced three new measures regarding exchange rate policy. First, exporters are now required to repatriate earned export revenues to Suriname, which requires a buyer abroad to pay for purchased goods through a Surinamese commercial bank. Second, exporters and foreign exchange offices must exchange 30% of their foreign currency income into Surinamese Dollars (SRD). Third, importers are required to pay for imports via Surinamese commercial banks.

Several criminal investigations of former government officials began in 2020. In February 2020, former Central Bank Governor Robert van Trikt was arrested on fraud charges. In August 2020, the new National Assembly officially indicted ex-Minister of Finance Gillmore Hoefdraad, which allowed the Attorney General to launch an investigation into alleged financial mismanagement by Hoefdraad in collaboration with the ex-Governor of the Central Bank of Suriname, Robert van Trikt. In December 2020, the National Assembly voted to indict former Vice President (and current National Assembly member) Ashwin Adhin, which allowed the Attorney General to pursue a criminal investigation for embezzlement, fraud, and destruction of government property. In Jan 2022, both Hoefdraad and van Trikt were sentenced to twelve and eight years in prison respectively.

There is no primary one-stop-shop website for investments that provides relevant laws, rules, procedures, and reporting requirements for investors.

There are no domestic agencies currently reviewing transactions for competition-related concerns. The previous National Assembly (2015-2020) considered draft laws on competition and consumer protection but did not ultimately vote on them. According to the authorities, no date for enactment is foreseen. Both draft laws also cover state-owned enterprises. The CARICOM Competition Commission is based in Suriname, and it monitors potential anti-competitive practices for enterprises operating within the CARICOM Single Market and Economy.

According to Article 34 of Suriname’s constitution, expropriation will take place “only for reasons of public utility” and with prior compensation. In practice, the government has no history of expropriations. However, Article 42 of Suriname’s constitution specifically refers to all natural resources as property of the nation, and states that the nation has inalienable rights to take possession of all natural resources to utilize them for the economic, social, and cultural development of Suriname.

There is no history of government measures alleged to be, or that could be argued to be, indirect expropriation, such as confiscatory tax regimes or regulatory actions that deprive investors of substantial economic benefits from their investments.

Suriname has bankruptcy legislation. Creditors, equity shareholders, and holders of other financial contracts, including foreign contract holders, have the right to file for liquidation of debts due to insolvency. In a case where there is a loan from a commercial bank, repayment of the bank loan takes precedence. Bankruptcy, in principle, is not criminalized. However, in cases where a board of directors encouraged a company to pursue bankruptcy to avoid creditors, courts have viewed this behavior as a criminal offense. In the World Bank’s Doing Business Report, Suriname stands at 139 in the ranking of 190 economies on the ease of resolving insolvency.

As an EU member, Sweden has altered its legislation to comply with the EU’s stringent rules on competition. The country has made extensive changes in its laws and regulations to harmonize with EU practices, all to avoid distortions in, or impediments to the efficient mobilization and allocation of investment. The institutions of the European Union are publicly committed to transparent regulatory processes. The European Commission has the sole right of initiative for EU regulations and publishes extensive, descriptive information on many of its activities. More information can be found at: http://ec.europa.eu/atwork/decision-making/index_en.htm ; http://ec.europa.eu/smart-regulation/index_en.htm .

There are no informal regulatory processes managed by nongovernmental organizations or private sector associations. Nongovernmental organizations and private sector associations may submit comments to government draft bills. The submitted comments are made public in the public consultation process.

Rule-making and regulatory authority on a national level exists formally in the legislative branch, the Riksdag. As a member of the EU, a growing proportion of legislation and regulation stem from the EU. These laws apply in some case directly as national law or are put before the Riksdag to be enacted as national law. The executive branch, the Government of Sweden, and its various agencies draft laws and regulations that are put before the Riksdag and are adopted on a national level when they enter into force. Municipalities may draft regulations that are within their spheres of competence. These regulations apply at the respective municipality only and may vary between municipalities.

Sweden is in principle supportive of the creation of an EU-wide environmental, social, and governance (ESG) taxonomy for sustainable activities. The EU taxonomy is a classification system, establishing a list of environmentally sustainable economic activities to help the EU scale up sustainable investment and implement the European green deal. The ambition is that the EU taxonomy would provide companies, investors, and policymakers with appropriate definitions for which economic activities can be considered environmentally sustainable. In this way, the taxonomy is believed to create security for investors, protect private investors from greenwashing, help companies to become more climate-friendly, mitigate market fragmentation, and help shift investments where they are most needed.

Draft bills and regulations, which include investment laws, are made available for public comment through a public consultation process, along the lines of U.S. federal notice and comment procedures. Current and newly adopted legislation can be found at the Swedish Parliament’s homepage and in the various government agencies dealing with the relevant regulation: http://www.riksdagen.se/sv/dokument-lagar/ . Key regulatory actions are published at Lagrummet: https://lagrummet.se/ . Lagrummet serves as the official site for information on Swedish legislation and provides information on legislation in the public domain, all statutes currently in force, and information on impending legislation. “Post och Inrikes Tidningar” serves in certain aspects a similar role as the Federal Register in the U.S., through which public notifications are published. The proclamations of “Post och Inrikes Tidningar” can be found at the Swedish Companies Registration Office (Bolagsverket): https://poit.bolagsverket.se/poit/PublikPoitIn.do .

The judicial branch and various agencies are tasked with regulation oversight and/or regulation enforcement. The Swedish Parliamentary Ombudsmen, known as the Justitieombuds-männen (JO), are tasked to make sure that public authority complies with the law and follows administrative processes. They also investigate complaints from the general public.

Regulations are reviewed on the basis of scientific and/or data-driven assessments. The principle of public access to official documents, offentlighetsprincipen, governs the availability of the results of studies that are conducted by government entities and furthermore to comments made by government entities. The principle provides the Swedish public with the right to study public documents as specified in the Freedom of the Press Act.

The status of Sweden’s public finances is available at Statistics Sweden, Sweden official statistics agency: https://www.scb.se/en/finding-statistics/statistics-by-subject-area/public-finances/ .

The status of Sweden’s national debt is available at the Swedish National Debt Office (Riksgälden): https://www.riksgalden.se/en/statistics/statistics-regarding-swedens-central-government-debt/ .

As an EU-member, Sweden complies with EU-legislation in shaping its national regulations.

If a national law, norm, or standard is found to be in conflict with EU-law, then the national law is altered to be in compliance with EU-law. Sweden adheres to the practices of WTO and coordinates its actions in regard to WTO with other EU-member countries as the EU-countries have a common trade policy.

Sweden’s legal system is based on the civil law tradition, common to Europe, and founded on classical Roman law, but has been further influenced by the German interpretation of this tradition. Swedish legislation and Swedish agencies provide guidance on whether regulations or enforcement actions are appealable and adjudicated in the national court system. Swedish courts are independent and free of influence from other branches of government, including the executive. Sweden has a written commercial law and contractual law and there are specialized courts, such as commercial and civil courts. The Swedish courts are divided into:

• Courts of general jurisdiction (the District Courts, the Courts of Appeal, and the Supreme Court) which have jurisdiction with respect to civil and criminal cases;
• Administrative courts (County Administrative Courts, Administrative Courts of Appeal, and the Supreme Administrative Court) which have jurisdiction with respect to issues of public law, including taxation;
• Specialist courts for disputes within certain legal areas such as labor law, environmental law and market regulation.

Sweden is a signatory to the New York Convention on Recognition and Enforcement of Foreign Arbitral Law; foreign awards may be enforced in Sweden regardless of which foreign country the arbitral proceedings took place. The main source of arbitration law in Sweden is the Swedish Arbitration Act, which contains both procedural and substantive regulations. Sweden is a party to the Lugano and the Brussels Conventions, and, by its membership of the EU, Sweden is also bound by the Brussels Regulation on Jurisdiction and the Recognition and Enforcement of Judgments in Civil and Commercial Matters. An arbitral award is considered final and is not subject to substantive review by Swedish courts. However, arbitral awards may be challenged for reasons set out in the Arbitration Act. An award may, for example, be set aside after a challenge because of procedural errors, which are likely to have influenced the outcome.

During the 1990s, Sweden undertook significant deregulation of its markets. In a number of areas, including the electricity and telecommunication markets, Sweden has been on the leading edge of reform, resulting in more efficient sectors and lower prices. Nevertheless, a number of practical impediments to direct investments remain. These include a fairly extensive, though non-discriminatory, system of permits and authorizations needed to engage in many activities and the dominance of a few very large players in certain sectors, such as construction and food wholesaling. Foreign banks, insurance companies, brokerage firms, and cooperative mortgage institutions are permitted to establish branches in Sweden on equal terms with domestic firms, although a permit is required. Swedes and foreigners alike may acquire shares in any company listed on NASDAQ OMX.

Sweden’s taxation structure is straightforward and corporate tax levels are low. In 2013, Sweden lowered its corporate tax from 26.3 percent to 22 percent in nominal terms and lowered it again to 21.4 percent in 2019. The effective rate can be even lower as companies have the option of making deductible annual appropriations to a tax allocation reserve of up to 25 percent of their pretax profit for the year. Companies can make pre-tax allocations to untaxed reserves, which are subject to tax only when utilized. Certain amounts of untaxed reserves may be used to cover losses. Due to tax exemptions on capital gains and dividends, as well as other competitive tax rules such as low effective corporate tax rates, deductible interest costs for tax purposes, no withholding tax on interest, no stamp duty or capital duties on share capital, and an extensive double tax treaty network, Sweden is among Europe’s most favorable jurisdictions for holding companies. Unlisted shares are always tax-exempt, meaning there is no qualification time or minimum holding of votes or capital. Listed shares are exempt if the holding represents at least 10 percent of the voting rights (or is contingent on the holder’s business) and the shares are held for at least one year. As part of a COVID-19 stimulus package, the government lowered the payroll tax for persons aged 19-23 from 31.42 percent to 19.73 percent. The lower rate is temporary and applies until March 31, 2023.

Personal income taxes are among the highest in the world. Since public finances have improved due to extensive consolidation packages to reduce deficits, the government has been able to reduce tax pressure as a percentage of GDP. Though well below the national average in the EU area, public debt, as a share of GDP, rose to approximately 40 percent as a result of the enactment of several fiscal stimulus packages which aimed to boost the economy in the COVID-19 pandemic. Early 2022 figures indicate public debt will fall below 40 percent by the end of 2022. Significant tax increases in the near future remain unlikely. One particular focus of the Swedish government has been tax reductions to encourage employers to hire the long-term unemployed.

Dividends paid by foreign subsidiaries in Sweden to their parent company are not subject to Swedish taxation. Dividends distributed to other foreign shareholders are subject to a 30 percent withholding tax under domestic law, unless dividends are exempt or taxed at a lower rate under a tax treaty. Tax liability may also be eliminated under the EU Parent Subsidiary Directive. Profits of a Swedish branch of a foreign company may be remitted abroad without being subject to any other tax than the regular corporate income tax. There is no exit taxation and no specific rules regarding taxation of stock options received before a move to Sweden. Instead, cases of double taxation are solved by applying tax treaties and cover not only moves within the EU but all countries, including the United States.

For detailed tax guidance, see the Swedish Tax Administration’s website (in English): http://www.skatteverket.se/servicelankar/otherlanguages/inenglish.4.12815e4f14a62bc048f4edc.html 

There is no primary or “one-stop-shop” website that provides relevant laws, rules, procedures, and reporting requirements for investors. Business Sweden, Sweden’s official trade and investment organization, is the investment promotion agency tasked with developing business in Sweden. The services of the agency are available to all investors.

As an EU member, Sweden has altered its legislation to comply with the EU’s stringent rules on competition. The competition law rules are contained in the Swedish Competition Act (2008:579), which entered into force in November 2008. The fundamental antitrust provisions have been the same since 1993. The Swedish Competition Authority (SCA) is the main enforcement authority of the Swedish Competition Act. The agency adheres to transparent norms and procedures, which are made available on its homepage: Konkurrensverket | Välfärd genom väl fungerande marknaderSwedish Competition Authority | Welfare through well-functioning markets . SCA decisions can be appealed to the administrative courts. This can be done by submitting a written appeal to the Swedish Competition Authority within three weeks from the day the applicant received the SCA’s initial decision.

Private property is only expropriated for public purposes, in a non-discriminatory manner, with fair compensation, and in accordance with established principles of international law.

The Swedish legislation on bankruptcy is found in a number of laws that came into force in different periods of time and to serve different purposes. The main laws on insolvency are the Bankruptcy Act (1987:672) and the Company Reorganization Act (1996:764), but the Preferential Rights of Creditors Act (1970:979), the Salary Guarantee Act (1992:497), and the Companies Act (1975:1385) are equally important. In 2010, Sweden strengthened its secured transactions system through changes to the Rights of Priority Act that give secured creditors’ claims priority in cases of debtor default outside bankruptcy. According to data collected by the World Bank’s 2020 Doing Business Report, resolving insolvency takes two years on average and costs nine percent of the debtor’s estate, with the most likely outcome being that the company will be sold as a going concern. The average recovery rate is 78 cents on the dollar. Globally, Sweden ranked 17 of 190 economies on the ease of resolving insolvency in the Doing Business 2020 report.

The Swiss government uses transparent policies and effective laws to foster a competitive investment climate. Proposed laws and regulations are open for three-month public comment from interested parties, interest groups, cantons, and cities before being discussed within the bicameral parliament or promulgated by the appropriate regulatory authority. Authorities take comments into account carefully, particularly since proposals may be subject to optional or automatic referenda that allow Swiss voters to reject or accept the proposals. Only in rare instances – such as the case of the extension of a moratorium until 2025 on planting GMO crops – are regulations reviewed on the basis of political or customer preferences rather than solely on the basis of scientific analysis.

Switzerland is not a member of the European Union. However, Switzerland adopts many EU standards in line with a series of agreements with the EU.

The WTO concluded in 2017 that Switzerland has regularly notified its draft technical regulations, ordinances, and conformity assessment procedures to the WTO TBT Committee. Switzerland has been a signatory to the Trade Facilitation Agreement (TFA) since 2015.

Swiss civil law is codified in the Swiss Civil Code (which governs the status of individuals, family law, inheritance law, and property law) and in the Swiss Code of Obligations (which governs contracts, torts, commercial law, company law, law of checks and other payment instruments). Switzerland’s civil legal system is divided into public and private law. Public law governs the organization of the state, as well as the relationships between the state and private individuals or other entities, such as companies. Constitutional law, administrative law, tax law, criminal law, criminal procedure, public international law, civil procedure, debt enforcement, and bankruptcy law are sub-divisions of public law. Private law governs relationships among individuals or entities. Intellectual property law (copyright, patents, trademarks, etc.) is an area of private law. Labor is governed by both private and public law.

All cantons have a high court, which includes a specialized commercial court in four cantons (Zurich, Bern, St. Gallen and Aargau). The organization of the judiciary differs by canton; smaller cantons have only one court, while larger cantons have multiple courts. Cantonal high court decisions can be appealed to the Swiss Supreme Court. The court system is independent, competent, and fair.

Switzerland is party to a number of bilateral and multilateral treaties governing the recognition and enforcement of foreign judgments. The Lugano Convention, a multilateral treaty tying Switzerland to European legal conventions, entered into force in 2011 (replacing an older legal framework by the same name). A set of bilateral treaties is also in place to handle judgments of specific foreign courts. While no such agreement is in place between the United States and Switzerland, Switzerland operates under the New York Convention on Recognition and Enforcement of Foreign Arbitral Law, meaning local courts must enforce international arbitration awards under specific circumstances.

The major laws governing foreign investment in Switzerland are the Swiss Code of Obligations, the Lex Friedrich/Koller, Switzerland’s Securities Law, the Cartel Law and the Financial Market Infrastructure Act. There is currently no specific screening of foreign investment beyond a normal anti-trust review. However, Parliament instructed the Federal Council to prepare a foreign investment screening mechanism in March 2020. The Federal Council decided on the basic tenets of Switzerland’s future investment screening mechanism in August 2021, and a draft law is expected to go to Parliament in 2022, with the earliest potential date for entry into force in 2023. There are few sectoral or geographic incentives or restrictions; exceptions are described below in the section on performance requirements and incentives.

There is no pronounced interference in the court system that should affect foreign investors.

Useful websites:

The Swiss Code of Obligations, including an unofficial English translation: https://www.admin.ch/opc/en/classified-compilation/19110009/index.html 

Information on the acquisition of property in Switzerland by persons abroad:  https://www.bj.admin.ch/dam/data/bj/wirtschaft/grundstueckerwerb/lex-e.pdf

The Federal Act on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (Unofficial English translation): https://www.admin.ch/opc/en/classified-compilation/20141779/index.html