Freedom of Investment Process INVENTORY OF INVESTMENT MEASURES TAKEN BETWEEN 15 NOVEMBER 2008 AND 31 AUGUST 2009 7 October 2009 The ―Freedom of Investment" (FOI) process hosted by the OECD Investment Committee has stepped up monitoring of investment policy developments and will be issuing reports on investment measures throughout 2010. This report was prepared for the 11th Freedom of Investment Roundtable held in October 2009. Earlier findings were presented at the OECD Ministerial Meeting in June 2009 and fed into a joint WTO-OECD-UNCTAD report to the G20 Summit in Pittsburgh in September 2009. More information about the FOI process is available at www.oecd.org/daf/investment/foi. Investment Division, Directorate for Financial and Enterprise Affairs Organisation for Economic Co-operation and Development 2 rue André-Pascal, Paris 75116, France www.oecd.org/daf/investment/ TABLE OF CONTENTS Introduction 4 Inventory of Investment measures taken between 15 November 2008 and 31 August 2009 5 Summary of Findings 5 Reports on individual economies: Recent investment policy measures 10 Argentina 10 Australia 11 Austria 13 Belgium 15 Brazil 16 Canada 17 Chile 20 People‘s Republic of China 21 Czech Republic 23 Denmark 24 Egypt 25 Estonia 26 Finland 27 France 28 Germany 31 Greece 35 Hungary 36 Iceland 38 India 39 Indonesia 41 Ireland 42 Israel 44 Italy 46 Japan 47 Korea 49 Latvia 51 Lithuania 52 Luxembourg 53 Mexico 54 Netherlands 55 New Zealand 57 Norway 58 Peru 59 Poland 60 Portugal 61 Romania 63 Russian Federation 64 Saudi Arabia 67 Slovak Republic 68 Slovenia 69 South Africa 71 Spain 72 2 Sweden 73 Switzerland 74 Turkey 75 United Kingdom 76 United States 79 European Union 82 Methodology—Coverage, definitions and sources 84 3 INTRODUCTION 1. The Tour d’horizon is a permanent feature of Freedom of Investment (FOI) Roundtables. It provides an opportunity for Roundtable participants to monitor, share information, express views and make recommendations on recent investment policy developments. 2. These discussions are based on a variety of information sources: The participating countries themselves provide information in the form of written submissions or during presentations to the Roundtables. The Secretariat of the OECD Investment Committee has been mandated to track investment policy changes in order to inform discussions at the FOI Roundtables. The present inventory of investment measures provides descriptions of recent investment or investment-related actions by 47 countries and the European Union. These actions are of three types: ‗investment measures‘; ‗investment measures relating to national security‘ and ‗emergency and related measures with potential impacts on international investment‘. The Inventory also provides a brief summary of the findings. The inventory uses the same methodology as the report sent by the Roundtable to the 2009 Meeting of the OECD Council at Ministerial Level and the joint WTO-OECD- UNCTAD report to the G20 Leaders‘ Meeting in Pittsburgh in September 2009. 4 INVENTORY OF INVESTMENT MEASURES TAKEN BETWEEN 15 NOVEMBER 2008 AND 31 AUGUST 2009 3. By adhering to the OECD investment instruments, governments have committed themselves to open, non-discriminatory investment policies. At the London summit on 2 April 2009, G20 leaders reaffirmed their ―commitment made in Washington: to refrain from raising new barriers to investment or to trade in goods and services,‖ and pledged to ―minimise any negative impact on trade and investment of [their] domestic policy actions including fiscal policy and action in support of the financial sector.‖ They also committed to ―not retreat into financial protectionism, particularly measures that constrain worldwide capital flows, especially to developing countries‖ and asked for quarterly reporting on their ―adherence to these undertakings.‖ 4. Under its mandate to track investment policy developments, the Secretariat of the OECD Investment Committee prepared a status report for consideration by Ministers at the June Council Meeting at Ministerial Level (MCM).1 Building on this work, the OECD developed, jointly with WTO and UNCTAD, a report to the G20 Summit in Pittsburgh on 24-25 September 2009.2 5. The present inventory of investment measures draws on the information gathered in these exercises and covers the period from 15 November 2008 to 31 August 2009. It comprises all economies that participate in the Freedom of Investment process of the OECD Investment Committee. The report uses broad definitions of international investment and of investment measures and includes: investment policy measures (involving removal or imposition of discrimination against foreign or non-resident investors); investment measures relating to national security; and emergency and related measures with potential impacts on international investment. More detailed information on the methodology is available in the section ―Methodology—Coverage, definitions and sources‖ on p. 84 in this document. Summary of Findings The thrust of investment policy changes is, for the most part, toward greater openness and clarity. 6. During the reporting period, 44 of the 48 economies—47 countries and the European Union— included in the present survey took some sort of policy action that will or may affect international investment (investment measures, investment measures related to national security, emergency and related measures). Table 1 summarises the information on the individual measures that are described in detail in part II of the present report. Many of the governments taking these measures indicated that the purpose was to reduce barriers to investment and improve the clarity of existing policies. 1 ―Status Report: Inventory of Investment Measures taken between 15 November 2008 and 15 June 2009‖, C/MIN(2009)12. 2 ―Report on G20 Trade and Investment Measures‖, WTO, OECD, UNCTAD, September 2009. 5 Table 1: Investment Measures taken between 15 November 2008 and 31 August 2009 Investment policy Investment Emergency and related measures with potential measures measures related impacts on international investment to national security Financial sector Automotive Cross-sectoral sector measures Argentina • • Australia • • Austria • • Belgium • • Brazil • Canada • • • • • Chile • P.R. China • • Czech Republic • • Denmark • Egypt Estonia • Finland • • France • • • • Germany • • • • Greece • • Hungary • • Iceland • • India • • • Indonesia • Ireland • • Israel • • Italy • Japan • • • Korea • • • Latvia • • Lithuania • Luxembourg • • Mexico • • Netherlands • • New Zealand • • Norway • • Peru Poland • • Portugal • • Romania • • Russian Federation • • • • Saudi Arabia Slovak Republic • Slovenia • • South Africa Spain • • Sweden • • 6 Investment policy Investment Emergency and related measures with potential measures measures related impacts on international investment to national security Financial sector Automotive Cross-sectoral sector measures Switzerland • Turkey • United Kingdom • • • • United States • • • European Union • • • Investment policy measures 7. During the reporting period, 14 economies—13 countries and the European Union—changed policies governing inward and/or outward investment, not including policy changes related to national security (treated below). Measures include the following: Argentina relaxed capital controls it had introduced in 2005. Australia relaxed restrictions on residential real estate investment. Also, Australia liberalised screening requirements for the Foreign Investment Review Board to lower compliance costs on foreign investors. An annual indexing of investment screening thresholds seeks to ensure that the thresholds do not capture lower value foreign investment proposals over time. Canada changed its investment review procedure in ways that, by its own assessment, will lower the number of investments it reviews. Canada also released for public comment draft regulations amending the existing Investment Canada Act Regulations. These follow amendments to the Investment Canada Act, which changed the monetary threshold for reviews of investments to determine whether they are of net benefit to Canada. The draft regulations: define the "enterprise value" which is the basis for determining whether the monetary threshold for review has been met; eliminate lower monetary review thresholds for investments in the uranium production, financial services, and transportation sectors; and modify the information requirements for investors. Canada also concluded a series of open skies agreements. The People‘s Republic of China: streamlined its foreign investment review process; eased restrictions on provision of financial information services by foreign institutions; and authorised two foreign banks to issue Yuan bonds in China. In the area of outward investment, it simplified approval processes for such investment and allowed Chinese companies to lend up to 30% of their equity to their overseas subsidiaries. France established a state-controlled Strategic Investment Fund to aid national businesses and to invest in companies that are considered of strategic value for the French or European economies. India relaxed restrictions in some sectors (including by changing the way it calculates the amount of foreign investment in Indian companies), but replaced automatic approval of investments in several ―capped‖ sectors with a requirement for prior approval. India has also taken steps to facilitate investment in Indian depository receipts by foreign institutional investors and mutual funds.