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Press Release with the Ministry of Foreign AffairsSigning of the Japan-Sultanate of Oman Investment Agreement

On June 19, 2015, the Government of Japan signed the Agreement with the Sultanate of Oman for the Mutual Promotion and Protection of Investment (Japan- Oman Investment Agreement).

1. Purpose and effects of the Japan- Oman Investment Agreement

1) Investment protection and development of an investment environment

The Agreement stipulates rules for investment protection and the development of an investment environment. Improving the legal stability of the investment environment in Oman is expected to facilitate investment activities by Japanese enterprises in the country.

2) Strengthening the Japan- Oman economic relationship

Because Oman has abundant crude oil and natural gas and large-scale development of infrastructure is progressing, Japanese companies are becoming more interested in developing business in the country. The conclusion of the Agreement is expected to further develop the Japan Oman economic relationship.

2. Key points of the Agreement

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

1) National Treatment

The Agreement stipulates an obligation under which a contracting country should treat an investor of the other contracting country and such investor’s investments no less favorably than the contracting country’s own investors and their investments.

2) Most-favored-nation treatment

The Agreement stipulates an obligation under which a contracting country should treat an investor of the other contracting country and such investor’s investments no less favorably than investors of a third country and their investments. (This provision is not applied to treatment under certain international agreements.)

3) An obligation to observe any commitments made by the contracting countries with investors (known as the “Umbrella Clause”)

The Agreement stipulates the obligation to fulfill commitments when contracts such as those for resource development and infrastructure projects are made between the contracting countries and investors. When such an investment contract is cancelled without reasonable cause, investors may lodge a complaint due to violation of the Agreement against the counterparties in an international arbitration institution conditional upon the consent of the Government of Oman.

4) Investment protection provisions, including compensation for expropriation, protection from strife, and free transfers of funds

5) Settlement of investment disputes between the contracting countries and investors (Investor-State Dispute Settlement)

When an investor suffers damage from the contracting country that the investor has invested in due to a breach of obligations under the Agreement by said country, the investor may submit a dispute with the country to an international arbitration procedure for settlement.

Reference

  • 1. Background of the negotiations

    In February 2013, negotiations on an investment agreement began. After having held four meetings for negotiations, the parties concluded a substantial agreement in December 2013.

  • 2. The text of the Agreement is scheduled to be posted on the METI and MOFA websites:

    METI website for Economic Partnership Agreements (EPAs) / Free Trade Agreements (FTAs) / Investment Agreements:
    http://www.meti.go.jp/policy/trade_policy/epa/english.html

Release date

June 19, 2015

Division in Charge

  • Middle East and Africa Division, Trade Policy Bureau (Oman and the region)
  • Economic Partnership Division, Trade Policy Bureau (the Japan- Oman Investment Agreement)

Related Information

IIA

Regional Affairs / Oman

Ministry of Economy, Trade and Industry
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