September 23, 2020

Colombia and Spain await the endorsement of the European Commission in an investment agreement

Colombia and Spain await the endorsement of the European Commission in an investment agreement

The Colombian Minister of Commerce, José Manuel Restrepo, and the Secretary of State for Commerce of Spain, Xiana Méndez, met today in Bogotá to advance the procedures of the Agreement for the Protection and Reciprocal Promotion of Investments (Appri) signed by both countries and which is pending the endorsement of the European Commission.

Because the initial agreement ended in September 2017, Spain and Colombia negotiated a new "modern and balanced" instrument to replace it.

The negotiation, the officials said in a joint statement, "culminated in the middle of this year and the text of the agreement was already signed by the parties," so it remains "pending only to be endorsed by the European Commission."

Once this process is concluded, they explained, "it would proceed to be signed by the governments of both countries and then initiate the approval procedures before the respective legislative bodies."

According to the parties, the new agreement, which contributes to improving legal security, has key advances compared to the first, as it complies with the 11 points that the United Nations Conference on Trade and Development (UNCTAD) requires to judge an Appri as "balanced and good".

In the same way, it clarifies that "not any regulation that affects an investor may give rise to demand from the State", has greater demands in terms of evidence and assessment of damages and provides for measures to make third-party financing more transparent.

According to Restrepo and Méndez, the two countries "want to see a balance in their investment protection treaty" to "avoid abuses by investors.

With this, they said, they will prevent "unfortunate episodes such as the one Colombia is currently facing in the face of the investment demand presented by the Brazilian company Odebrecht, claiming protection under the protection of the Appri with Spain."

On August 2, the director of the State Legal Defense Agency, Luis Guillermo Velez, announced that Odebrecht intends to obtain from Colombia a compensation of 3.8 billion pesos (about 1,312 million dollars) for alleged breaches of the State in a treaty protecting investors that affected their interests.

In addition to the meeting with Restrepo, the Spanish Secretary of State will participate in the XV National Congress of Infrastructure of Colombia that is being held from today and until next Friday in Cartagena de Indias.


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