Substantive Protection Clause Samples

Substantive Protection. The elucidation of the concepts of ‘investment’ and ‘investor’ is found in footnotes of the TPP investment chapter, which limits its scope of application. With respect to the definition of investment, certain exclusions are considered in the definitions of ‘branch’,35 ‘loan’,36 and ‘investment authorization’.37 Regarding the definition of investor, of particular significance is a footnote that could limit pre-establishment protection,38 through the clarification of what the parties understand when an investor ‘attempts to make’ an investment, meaning that when that investor ‘has taken concrete action or actions to make an investment, such as channelling resources or capital in order to set up a business, or applying for permits or licenses’.39 But this is not novel for the Latin American countries that are signatories of the TPP (Chile, Mexico and Peru) as these limitations on pre-establishment were already considered with almost the same wording (although in Spanish) on the investment chapters of FTAs concluded between them, like in Chile–Peru FTA (2006), Mexico–Peru FTA (2012), and the Additional Protocol to the Framework Agreement of the Pacific Alliance (2014).40 Another novel addition is the clarification of the notion of ‘like circumstances’ in national treatment and most favoured nation (‘MFN’), according to which the analysis of these relative standards depends ‘on the totality of the circumstances, including whether the relevant treatment distinguishes between investors or investments on the basis of legitimate public 35 ‘For greater certainty, the inclusion of a ‘branch’ in the definitions of ‘enterprise’ and ‘enterprise of a Party’ is without prejudice to a Party’s ability to treat a branch under its laws as an entity that has no independent legal existence and is not separately organised’: Trans Pacific Partnership Agreement, signed 4 February 2016, [2016] ATNIF 2 (not yet in force) ch 9 n 1 (‘TPP’).