UAE and Philippines deal
The UAE and Philippines enter a far-reaching deal on investment protection in cases involving natioanlisation. Image Credit: Supplied

Dubai: In a significant push for capital flows, the UAE Ministry of Finance has entered a deal with the Philippines to protect mutual investments.

The Protection and Promotion of Investments Agreements will future-proof investments from all non-commercial risks like nationalisation, expropriation, and sequestration unless it is in the public interest and in accordance with the law. These will also provide investors just compensation for their investments, provided this is in accordance with the market value of the investment prior to its nationalisation or expropriation. This will not apply to ventures involving natural resources. Investors are also protected if their investments are destroyed because of conflict, civil disobedience, or demonstration.

Mohamed Al Hussaini, Minister of State for Financial Affairs said the deals create an investment climate to attract capital-intensive foreign investments and provide incentives. “we are keen to strengthen international relations and sign agreements that enhance the investment climate and elevate the business-incubator environment,” said Al Hussaini. “These serve as a key international policy tool to encourage foreign direct investment and provide legal protection for both parties’ investments.”

The investor is ‘deprived of the provisions of the agreement if the goal is to benefit from it without having an investment activity in the country’. Additionally, investors from a third country are also deprived of benefiting from the provisions of the agreement, as the investor’s country must have diplomatic relations with the UAE.

The agreement also aims to set the dispute settlement procedures between the investor and the State, including finding an amicable solution through local courts or the International Centre for Settlement of Investment Disputes.

The conditions for replacing the creditor must be revealed after prior approval of the state in which the investments are located. It is mandatory to ensure that investments and government sovereign assets are not nationalised, expropriated, or seized directly or at the request of a third State.