Trilateral Investment Treaty

Trilateral Investment Treaty (TIT) means an investment treaty executed among three states. In this article, TIT in capital letters (or KCJ Agreement, 한·중·일 투자협정/韓·中·日 投資協定) refers to the Agreement Among the Government of Japan, the Government of the Republic of Korea and the Government of the People's Republlic of China for the Promotion, Facilitation and Protection of Investment, which was signed on the occasion of the annual trilateral summit meeting held in Beijing on May 13, 2012.

Actually the bilateral investment treaty(BIT) between Korea and China was established in 1992 and amended in 2007, and BIT between China and Japan was executed in 1988 while BIT between Korea and Japan came into force in 2003.

The TIT has not yet been endorsed by the parliament of each Contracting State, and accordingly not effective. It would be a significant milestone to begin negotiations for a trilateral free trade agreement before the end of 2012, taking a step forward to create one of the world’s largest markets in the region.

Key words
BIT, TIT, FTA, investment guarantee, ICSID

Investment
The term “investments” means every kind of asset that an investor owns or controls, directly or indirectly, which has the characteristics of an investment, such as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk. Article 1.1

Forms that investments may take include:
 * (a) an enterprise and a branch of an enterprise;
 * (b) shares, stocks or other forms of equity participation in an enterprise, including rights derived therefrom;
 * (c) bonds, debentures, loans and other forms of debt, including rights derived therefrom;
 * (d) rights under contracts, including turnkey, construction, management, production or revenuesharing contracts;
 * (e) claims to money and claims to any performance under contract having a financial value associated with investment;
 * (f) intellectual property rights, including copyrights and related rights, patent rights and rights relating to utility models, trademarks, industrial designs, layout-designs of integrated circuits, new varieties of plants, trade names, indications of source or geographical indications and undisclosed information;
 * (g) rights conferred pursuant to laws and regulations or contracts such as concessions, licenses, authorizations and permits; and
 * (h) any other tangible and intangible, movable and immovable property, and any related property rights, such as leases, mortgages, liens and pledges;
 * Note: Investments also include the amounts yielded by investments, in particular, profit, interest, capital gains, dividends, royalties and fees. A change in the form in which assets are invested does not affect their character as investments.

Dispute settlement
The investment dispute shall at the request of the disputing investor be submitted to either: Article 15.3
 * (a) a competent court of the disputing Contracting Party;
 * (b) arbitration in accordance with the ICSID Convention, if the ICSID Convention is available;
 * (c) arbitration under the ICSID Additional Facility Rules, if the ICSID Additional Facility Rules are available;
 * (d) arbitration under the UNCITRAL Arbitration Rules; or
 * (e) if agreed with the disputing Contracting Party, any arbitration in accordance with other arbitration rules,
 * provided that, for the purposes of subparagraphs (b) through (e):
 * (i) the investment dispute cannot be settled through the consultation referred to in paragraph 2 within four months from the date of the submission of the written request for consultation to the disputing Contracting Party; and
 * (ii) the requirement concerning the domestic administrative review procedure set out in paragraph 7, where applicable, is met.
 * Note: For the purposes of subparagraph (a), this paragraph shall not be construed to prevent, where applicable, preliminary trial by administrative tribunals or agencies.