Joint Press Release with the Ministry of Foreign AffairsSigning of the Japan-Saudi Arabia Investment Agreement

1) Investment protection and developing an investment environment

The Agreement stipulates rules for investment protection and development of an investment environment. Improving legal stability of the investment environment in Saudi Arabia is expected to encourage investment activities of Japan's enterprises in the country.

2) Strengthening the Japan-Saudi Arabia relationship

Saudi Arabia has the world's largest crude oil production and is the largest supplier of crude oil to Japan. In recent years, the relationship between Japan and Saudi Arabia has been deepening broadly in various areas including medical care, and fashion, as well as energy, infrastructure development, other trade and investment.

3) Strengthening the relationships between the member states of the Gulf Cooperation Council (GCC)

Following Kuwait, this agreement with Saudi Arabia is the second investment agreement that Japan concluded with a member state of the Gulf Cooperation Council (GCC). The Agreement is expected to contribute to strengthened relationships between Japan and the regions in the GCC. The Agreement also marks the 21st investment agreement (the 31st agreement if the bilateral EPA investment chapter is included) for Japan.

The Agreement includes the following provisions in order to improve the legal stability of the investment environment:

1) National treatment and most-favored-nation treatment in the post-investment process

* Concerning the post-investment process, the Agreement stipulates an obligation under which a contracting country should treat an investor of another contracting country and such investor's investments no less favorably than the contracting country's own investors or a third contracting country and its investments.

2) Investment protection, including compensation in expropriation, protection from disputes, and free transfers

3) Development of an investment environment, including transparency of laws and regulations

4) Settlement of investment disputes between the contracting countries and investors

* When an investor suffers damage from the partner contracting country that the investor has invested in due to such country's breaching of its obligation under the Agreement, the investor may submit a dispute with the country to the international arbitration organization for settlement.

In April 2006, then-Prime Minister Junichiro Koizumi and then-Crown Prince Sultan Bin Abdulaziz Al-Saud held a talk and they agreed to launch negotiations on an investment agreement between Japan and Saudi Arabia. In October 2006, the first round of the negotiations was held, and since then, six rounds of the negotiations were held before the agreement was substantially concluded in May 2008.

METI website on Economic Partnership Agreements (EPA)/Free Trade Agreements (FTA) (investment agreements):
http://www.meti.go.jp/policy/trade_policy/epa/investment.html (in Japanese)

May 1, 2013

Information on the country and regions:

Middle East and Africa Division, Trade Policy Bureau

Information on the details of the Agreement:

Economic Partnership Division, Trade Policy Bureau