Comparison Between Philippines-Finland and Philippines-

Romania on the Promotion and Protection of Investment

The investment agreement between the Government of the Republic of the

Philippines and the Government of the Republic of Finland was signed by the
representatives of each country on March 25, 1998 and took effect on April 16, 1999.
While the investment agreement between the Government of the Republic of the
Philippines and the Government of Romania was signed on May 18, 1994 and took
effect on June 14, 1998.

I. Preamble

In its preamble, both investment agreements of Philippines-Finland and

Philippines-Romania desires to create and maintain favourable conditions for
investments between Contracting Parties. It recognizes that the encouragement
and protection of investments on the basis of an Agreement enhance the
economic prosperity of both Contracting Parties.

II. Standard Protection of Treatment

The Philippines-Finland investment agreement contains both National

Treatment clause and Most Favoured Nation Treatment clause wherein it
provides that each Contracting Party shall accord admitted investments and
investors of the other Contracting Party “treatment which is no less favourable
than that accorded to investments or returns of investments by its own investors
or by investors of any third State, whichever is more favourable to the investor.”
While the Philippines-Romania investment agreement contains only a Most
Favoured Nation Treatment clause, which provides that each Contracting Party
shall accord to the investments and investors of the other Contracting Party a
treatment not less favourable than that which it accords to investments and
investors of any third State, whichever is more favourable to the investor.

However, both investment agreements exempt any agreement or

arrangement relating to taxation and current or future economic integration
agreements from Most Favoured Nation Treatment obligations.

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 The Philippines-Finland investment agreement provides for full protection
and security to investments by investors of the Contracting Party in the territory
of the other Contracting Party, while the Philippines-Romania only provides for
fair and equitable treatment. However, both investment agreements prohibit
arbitrary, unreasonable or discriminatory measures in the management,
maintenance or use of investments as well as the right to the disposal thereof.

III. Expropriation

Both investment agreements do not allow investments by investors of one

Contracting Party in the territory of the other Contracting Party to be
expropriated, nationalized or subjected to other measures having similar effect
unless the measures are taken in the public interest, against prompt, effective
and adequate compensation, and in accordance with due process of law.

In Philippines-Finland investment agreement, it specifically provides that

the compensation for the expropriation shall be the amount of the fair market
value of the investment expropriated. And in the event that payment of
compensation is unduly delayed, compensation shall also include interest at the
London Interbank Offered Rate (LIBOR) for three months deposits until the date
of actual payment. Whereas in Philippines-Romania investment agreement, the
determination of the compensation in only in accordance with the recognized
principles of valuation. Investors shall also receive interest in the event that
payment of compensation is unduly delayed.

In both investment agreements, compensation shall be effectively

realisable and freely transferrable and in convertible currencies.

IV. Transfer

Both investment agreements ensure the transfer of funds in connection

with the investments of investors of each Contracting Party as well as the
earnings of individuals derived from work and services in connection with the
investment. Such transfers shall be made in freely convertible currency at the
official rate of exchange prevailing at the time of remittance. However, in the
case of Philippines-Finland investment agreement, it provides for unrestricted
transfer of funds whereas, the Philippines-Romania investment agreement
subject such transfers to the laws and regulations of each Contracting Party.

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V. Application of the Agreement

Both investment agreements shall apply to all investment before or after

its entry into force. However, both investment agreements shall not apply to
investment disputes arising prior to its entry into force.

VI. Settlement of Disputes Between an Investor and the Contracting Party

Both investment agreements require that disputes between an investor of

one Contracting Party and the other Contracting Party shall be settled amicably.

In Philippines-Finland investment agreement, if such disputes cannot be

settled within three months from the date of request for settlement, the investor
concerned may submit the dispute either to: (1) the International Center for the
Settlement of Investment Disputes (ICSID), or (2) an ad hoc arbitration tribunal
established under the Arbitration Rules of the UNCITRAL.

The Philippines-Romania investment agreement provides for a longer

period of six months before the dispute may be submitted to: (1) the competent
court of the Contracting Party in all instances, or (2) the ICSID.

VII. Settlement of Disputes Between Contracting Parties

Both investment agreements provide for similar provisions on the

settlement of disputes between contracting parties except that in Philippines-
Finland, it allows the Arbitral Tribunal to direct the large portion of the costs of
arbitration to be borne by one of the Contracting Parties.

VIII. Duration and Termination

The Philippines-Finland investment agreement shall remain in force for

fifteen years. Thereafter, it shall remain in force until one of the Contracting
Parties gives one year’s prior written notice of the termination through diplomatic
channel. While Philippines-Romania investment agreement shall remain in force
for ten years and shall continue in force thereafter for another five years and so
forth unless denounced in writing by either Contracting Party one year before its
expiration.

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 Both investment agreements provide for a survival clause of five years. In
respect to investments made prior to the date of the notice of termination of the
investment agreement, its provisions shall continue to be effective for a further
period of five years from the date of the termination of the agreement.

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