[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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