[Senate Treaty Document 114-15]
[From the U.S. Government Publishing Office]
114th Congress } { Treaty Doc.
SENATE
2d Session } { 114-15
_______________________________________________________________________
UNITED NATIONS CONVENTION ON TRANSPARENCY IN TREATY-BASED INVESTOR-
STATE ARBITRATION
__________
MESSAGE
from
THE PRESIDENT OF THE UNITED STATES
transmitting
UNITED NATIONS CONVENTION ON TRANSPARENCY IN TREATY-BASED INVESTOR-
STATE ARBITRATION (CONVENTION), DONE AT NEW YORK ON DECEMBER 10, 2014
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December 9, 2016.--Treaty was read the first time, and together with
the accompanying papers, referred to the Committee on Foreign Relations
and ordered to be printed for the use of the Senate
----------
U.S. GOVERNMENT PUBLISHING OFFICE
69-118 WASHINGTON : 2016
LETTER OF TRANSMITTAL
----------
The White House, December 9, 2016.
To the Senate of the United States:
With a view to receiving the advice and consent of the
Senate to ratification, subject to certain reservations, I
transmit herewith the United Nations Convention on Transparency
in Treaty-Based Investor-State Arbitration (Convention), done
at New York on December 10, 2014. The report of the Secretary
of State, which includes an overview of the Convention, is
enclosed for the information of the Senate.
The Convention requires the application of the modern
transparency measures contained in the United Nations
Commission on International Trade Law (UNCITRAL) Transparency
Rules to certain investor-state arbitrations occurring under
international investment agreements concluded before April
2014, including under the investment chapters of U.S. free
trade agreements and U.S. bilateral investment treaties. These
transparency measures include publication of various key
documents from the arbitration proceeding, opening of hearings
to the public, and permitting non-disputing parties and other
interested third persons to make submissions to the tribunal.
As the UNCITRAL Transparency Rules by their terms automatically
apply to arbitrations commenced under international investment
agreements concluded on or after April 1, 2014, and that use
the UNCITRAL Arbitration Rules (unless the parties to such
agreements agree otherwise), there is no need for the
Convention to apply to international investment agreements
concluded after that date.
Transparency in investor-state arbitration is vital, given
that governmental measures of interest to the broader public
can be the subject matter of the proceedings. The United States
has long been a leader in promoting transparency in investor-
state arbitration, and the 11 most recently concluded U.S.
international investment agreements that contain investor-state
arbitration already provide for modern transparency measures
similar to those made applicable by the Convention. However, 41
older U.S. international investment agreements lack all or some
of the transparency measures. Should the United States become a
party, the Convention would require the transparency measures
to apply to arbitrations under U.S. international investment
agreements concluded before April 2014, to the extent that
other parties to those agreements also join the Convention and
to the extent the United States and such other parties do not
take reservations regarding such arbitrations. The Convention
would also require the transparency measures to apply in
investor-state arbitrations under those agreements when the
United States is the respondent and the claimants consent to
their application, even if the claimants are not from a party
to the Convention.
The United States was a central participant in the
negotiation of the Convention in the UNCITRAL. Ratification by
the United States can be expected to encourage other countries
to become parties to the Convention. The Convention would not
require any implementing legislation.
I recommend, therefore, that the Senate give early and
favorable consideration to the Convention and give its advice
and consent to ratification by the United States, subject to
certain reservations.
Barack Obama.
LETTER OF SUBMITTAL
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Department of State,
Washington, DC, April 26, 2016.
The President,
The White House.
The President: I have the honor to submit to you, with a
view to its transmittal to the Senate for advice and consent to
ratification, the United Nations Convention on Transparency in
Treaty-Based Investor-State Arbitration, subject to the
reservations set forth in the enclosed Overview of the
Convention. The Convention was adopted in New York on December
10, 2014.
As a leader in the development of transparency measures in
investor-state arbitration, the United States was a central
participant in the negotiation of this treaty at the United
Nations Commission on International Trade Law (UNCITRAL). The
Convention requires the application of modern transparency
measures, similar to those included in the investment chapters
of recent U.S. free trade agreements (FTAs) and bilateral
investment treaties (BITs), to investor-state arbitrations
occurring under certain international investment agreements
concluded before April 2014, most of which lack some or all
such measures.
Transparency in investor-state arbitration is vital, given
that government measures of interest to the broader public can
be the subject matter of the proceedings. Moreover,
transparency helps both the public and governments monitor how
international investment agreements are being interpreted.
The transparency measures applied by the Convention are
contained in the UNCITRAL Rules on Transparency in Treaty-Based
Investor-State Arbitration (UNCITRAL Transparency Rules)
adopted in 2013, which have three main effects on the
transparency of investor-state arbitrations. First, the
UNCITRAL Transparency Rules require a wide range of key
documents from the arbitration proceeding to be made available
to the public, which lets the public review the arguments that
are being made on both sides of the dispute, as well as the
reasoning of the arbitral tribunal in its award. Second, they
require that hearings for the presentation of evidence or oral
arguments be open to the public, which enables attendance at
the proceedings just as if they had occurred in a domestic
court. Third, they permit non-disputing parties and other third
persons to make submissions to the arbitral tribunal, which
provides an opportunity for those with a significant interest
in the dispute to contribute their voices to the proceedings.
Every U.S. BIT and FTA concluded since 2003 that provides
for investor-state arbitration already includes similar
transparency measures. However, 41 older U.S. international
investment agreements lack all or some of the transparency
measures. Should the United States become a party, the
Convention would require the application of the UNCITRAL
Transparency Rules in arbitrations under U.S. international
investment agreements concluded before April 2014, to the
extent that other parties to those agreements also join the
Convention and if neither the United States nor those other
parties take reservations permitted by the Convention
pertaining to such arbitrations. The Convention would also
require the application of the UNCITRAL Transparency Rules to
investor-state arbitrations under U.S. international investment
agreements where the United States is the respondent in the
dispute and claimants in such arbitrations consent to their
application, even if those claimants are from countries that
are not parties to the Convention. As the 11 U.S. international
investment agreements concluded between 2003 and 2008 already
contain modern transparency standards that are as high as or
higher than those applied by the Convention, it is recommended
that the United States decline to apply the Convention to those
11 agreements by making a permissible reservation to that
effect.
Only international investment agreements concluded before
April 1, 2014, are within the scope of the Convention because
the UNCITRAL Transparency Rules by their terms automatically
apply to arbitrations under international investment agreements
that are concluded on or after April 1, 2014, and that use the
UNCITRAL Arbitration Rules, unless the parties to such
agreements otherwise agree. Therefore, parties to international
investment agreements concluded on or after April 1, 2014, who
wish to apply the UNCITRAL Transparency Rules can easily
incorporate those Rules into their agreements simply by calling
for the application of the UNCITRAL Arbitration Rules or by
otherwise explicitly incorporating the Transparency Rules into
their agreements at the time of negotiation of their
agreements.
In addition to the United States, fifteen other countries
have signed the Convention thus far. Ratification by the United
States can be expected to encourage other countries to sign and
become parties to the Convention. Moreover, even to the extent
that other countries do not ratify, the Convention will still
apply the Transparency Rules to arbitrations in which the
United States is the respondent if investors from those
countries consent to the application of the Transparency Rules.
The Convention would not be self-executing, and no implementing
legislation would be needed.
I recommend, therefore, that you transmit the Convention to
the Senate for advice and consent to ratification, subject to
the reservations set forth in the enclosed Overview of the
Convention.
Respectfully submitted.
John F. Kerry.
Enclosure: As stated.
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