[Senate Treaty Document 114-15] [From the U.S. Government Publishing Office] 114th Congress } { Treaty Doc. SENATE 2d Session } { 114-15 _______________________________________________________________________ UNITED NATIONS CONVENTION ON TRANSPARENCY IN TREATY-BASED INVESTOR- STATE ARBITRATION __________ MESSAGE from THE PRESIDENT OF THE UNITED STATES transmitting UNITED NATIONS CONVENTION ON TRANSPARENCY IN TREATY-BASED INVESTOR- STATE ARBITRATION (CONVENTION), DONE AT NEW YORK ON DECEMBER 10, 2014 [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT] December 9, 2016.--Treaty was read the first time, and together with the accompanying papers, referred to the Committee on Foreign Relations and ordered to be printed for the use of the Senate ---------- U.S. GOVERNMENT PUBLISHING OFFICE 69-118 WASHINGTON : 2016 LETTER OF TRANSMITTAL ---------- The White House, December 9, 2016. To the Senate of the United States: With a view to receiving the advice and consent of the Senate to ratification, subject to certain reservations, I transmit herewith the United Nations Convention on Transparency in Treaty-Based Investor-State Arbitration (Convention), done at New York on December 10, 2014. The report of the Secretary of State, which includes an overview of the Convention, is enclosed for the information of the Senate. The Convention requires the application of the modern transparency measures contained in the United Nations Commission on International Trade Law (UNCITRAL) Transparency Rules to certain investor-state arbitrations occurring under international investment agreements concluded before April 2014, including under the investment chapters of U.S. free trade agreements and U.S. bilateral investment treaties. These transparency measures include publication of various key documents from the arbitration proceeding, opening of hearings to the public, and permitting non-disputing parties and other interested third persons to make submissions to the tribunal. As the UNCITRAL Transparency Rules by their terms automatically apply to arbitrations commenced under international investment agreements concluded on or after April 1, 2014, and that use the UNCITRAL Arbitration Rules (unless the parties to such agreements agree otherwise), there is no need for the Convention to apply to international investment agreements concluded after that date. Transparency in investor-state arbitration is vital, given that governmental measures of interest to the broader public can be the subject matter of the proceedings. The United States has long been a leader in promoting transparency in investor- state arbitration, and the 11 most recently concluded U.S. international investment agreements that contain investor-state arbitration already provide for modern transparency measures similar to those made applicable by the Convention. However, 41 older U.S. international investment agreements lack all or some of the transparency measures. Should the United States become a party, the Convention would require the transparency measures to apply to arbitrations under U.S. international investment agreements concluded before April 2014, to the extent that other parties to those agreements also join the Convention and to the extent the United States and such other parties do not take reservations regarding such arbitrations. The Convention would also require the transparency measures to apply in investor-state arbitrations under those agreements when the United States is the respondent and the claimants consent to their application, even if the claimants are not from a party to the Convention. The United States was a central participant in the negotiation of the Convention in the UNCITRAL. Ratification by the United States can be expected to encourage other countries to become parties to the Convention. The Convention would not require any implementing legislation. I recommend, therefore, that the Senate give early and favorable consideration to the Convention and give its advice and consent to ratification by the United States, subject to certain reservations. Barack Obama. LETTER OF SUBMITTAL ---------- Department of State, Washington, DC, April 26, 2016. The President, The White House. The President: I have the honor to submit to you, with a view to its transmittal to the Senate for advice and consent to ratification, the United Nations Convention on Transparency in Treaty-Based Investor-State Arbitration, subject to the reservations set forth in the enclosed Overview of the Convention. The Convention was adopted in New York on December 10, 2014. As a leader in the development of transparency measures in investor-state arbitration, the United States was a central participant in the negotiation of this treaty at the United Nations Commission on International Trade Law (UNCITRAL). The Convention requires the application of modern transparency measures, similar to those included in the investment chapters of recent U.S. free trade agreements (FTAs) and bilateral investment treaties (BITs), to investor-state arbitrations occurring under certain international investment agreements concluded before April 2014, most of which lack some or all such measures. Transparency in investor-state arbitration is vital, given that government measures of interest to the broader public can be the subject matter of the proceedings. Moreover, transparency helps both the public and governments monitor how international investment agreements are being interpreted. The transparency measures applied by the Convention are contained in the UNCITRAL Rules on Transparency in Treaty-Based Investor-State Arbitration (UNCITRAL Transparency Rules) adopted in 2013, which have three main effects on the transparency of investor-state arbitrations. First, the UNCITRAL Transparency Rules require a wide range of key documents from the arbitration proceeding to be made available to the public, which lets the public review the arguments that are being made on both sides of the dispute, as well as the reasoning of the arbitral tribunal in its award. Second, they require that hearings for the presentation of evidence or oral arguments be open to the public, which enables attendance at the proceedings just as if they had occurred in a domestic court. Third, they permit non-disputing parties and other third persons to make submissions to the arbitral tribunal, which provides an opportunity for those with a significant interest in the dispute to contribute their voices to the proceedings. Every U.S. BIT and FTA concluded since 2003 that provides for investor-state arbitration already includes similar transparency measures. However, 41 older U.S. international investment agreements lack all or some of the transparency measures. Should the United States become a party, the Convention would require the application of the UNCITRAL Transparency Rules in arbitrations under U.S. international investment agreements concluded before April 2014, to the extent that other parties to those agreements also join the Convention and if neither the United States nor those other parties take reservations permitted by the Convention pertaining to such arbitrations. The Convention would also require the application of the UNCITRAL Transparency Rules to investor-state arbitrations under U.S. international investment agreements where the United States is the respondent in the dispute and claimants in such arbitrations consent to their application, even if those claimants are from countries that are not parties to the Convention. As the 11 U.S. international investment agreements concluded between 2003 and 2008 already contain modern transparency standards that are as high as or higher than those applied by the Convention, it is recommended that the United States decline to apply the Convention to those 11 agreements by making a permissible reservation to that effect. Only international investment agreements concluded before April 1, 2014, are within the scope of the Convention because the UNCITRAL Transparency Rules by their terms automatically apply to arbitrations under international investment agreements that are concluded on or after April 1, 2014, and that use the UNCITRAL Arbitration Rules, unless the parties to such agreements otherwise agree. Therefore, parties to international investment agreements concluded on or after April 1, 2014, who wish to apply the UNCITRAL Transparency Rules can easily incorporate those Rules into their agreements simply by calling for the application of the UNCITRAL Arbitration Rules or by otherwise explicitly incorporating the Transparency Rules into their agreements at the time of negotiation of their agreements. In addition to the United States, fifteen other countries have signed the Convention thus far. Ratification by the United States can be expected to encourage other countries to sign and become parties to the Convention. Moreover, even to the extent that other countries do not ratify, the Convention will still apply the Transparency Rules to arbitrations in which the United States is the respondent if investors from those countries consent to the application of the Transparency Rules. The Convention would not be self-executing, and no implementing legislation would be needed. I recommend, therefore, that you transmit the Convention to the Senate for advice and consent to ratification, subject to the reservations set forth in the enclosed Overview of the Convention. Respectfully submitted. John F. Kerry. Enclosure: As stated. [GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]