Investment treaty practice

Model BIT

Does the state have a model BIT?

In April 2012, upon the conclusion of a three-year review of the prior 2004 version, the US government released a revised 2012 model BIT, which negotiators in the Office of the United States Trade Representative and the United States Department of State use as a template in negotiating bilateral investment treaties and the investment chapters of United States FTAs.

Like the 2004 model, the 2012 model BIT attempts to maintain a balance between providing strong investor protections and preserving the government’s ability to regulate in the public interest. Targeted changes, however, have been made to the 2012 text to:

  • enhance transparency and public participation;
  • improve protections for US firms investing in state-led economies; and
  • strengthen protections relating to labour and the environment.

The full text of the 2012 model BIT is available online at:

Preparatory materials

Does the state have a central repository of treaty preparatory materials? Are such materials publicly available?

The Office of the Assistant Legal Adviser for Treaty Affairs, within the United States Department of State, serves as the principal US government repository for US treaties and other international agreements. The treaty office advises other offices under the Legal Adviser, other Department bureaus (including posts overseas), and other government agencies on all aspects of treaty law and procedure, including constitutional questions, and provides guidance and assistance in the authorisation, drafting, negotiation, application, and interpretation of hundreds of agreements annually. It also responds to treaty-related enquiries from Congress, academia, members of the public, and officials of foreign governments and international organisations.

The Legal Adviser office also publishes Treaties in Force, which details more than 10,000 US treaties and international agreements in force from 1 January of each year, and is charged with publication of treaties and international agreements in the Treaties and Other International Acts Series. An electronic edition of Treaties in Force as of January 2018 is available in text-searchable PDF format (see:

Copies of US treaty materials are widely available in many libraries across the country, including state, academic, public, federal depositories, and the Library of Congress and through online services such as Lexis, Westlaw and HeinOnline. See also (including over 200 multilateral treaties and related instruments, divided into subject categories, such as human rights, trade and commercial relations, marine and coastal, and diplomatic relations). The text of treaties, as published as Senate Treaty Documents, may also be accessed through the Library of Congress’ THOMAS website (see:{“source”:”treaties”}) and from the United States Government Printing Office (see:

The Office of the United States Trade Representative also maintains an online repository of US trade-related agreements, organised into the following categories: WTO and multilateral affairs, FTAs, trade and trade investment framework agreements, and bilateral investment treaties (

Although there is no central repository of treaty preparation materials for all US treaties, the Yale University Law Library has collected the available travaux preparatoires for international treaties online and in its collection (see:

Scope and coverage

What is the typical scope of coverage of investment treaties?

US BITs tend to cover a broad range of investments (including, for instance, stocks, bonds, various loan and debt interests, futures, options and other derivatives, contracts, intellectual property rights, licences, permits and similar rights conferred pursuant to domestic law, and movable and immovable property). They typically offer protection to both foreign nationals and enterprises. Recent US BITs also often contain a denial-of-benefits clause that allows a party to deny the benefits of the treaty to an investor of the other party if that investor does not maintain substantial business activities in the territory of the other party, and where investors of a non-party or the denying party own or control the enterprise.


What substantive protections are typically available?

Although there are variations among them, US BITs typically provide investors with the following core benefits, which apply to foreign investments and govern the conduct of both the federal US government and the government of any state within the United States:

  • the better of national treatment or most-favoured nation treatment for the full life cycle of investment - from establishment or acquisition, through to management, operation, expansion and disposition;
  • clear limits on the expropriation of investments and provisions for payment of prompt, adequate and effective compensation when expropriation takes place;
  • treatment that is in accord with customary international law, including fair and equitable treatment and full protection and security;
  • the transferability of investment-related funds into and out of a host country without delay and using a market rate of exchange;
  • protection from the imposition of trade-distorting performance requirements, such as local content targets or export quotas;
  • the right to engage the top managerial personnel of the investor’s choice, regardless of nationality; and
  • the right to submit an investment dispute with the government of the other party to international arbitration. There is no requirement to use that country’s domestic courts.
Dispute resolution

What are the most commonly used dispute resolution options for investment disputes between foreign investors and your state?

To date, most claims against the United States have arisen under the NAFTA treaty, which, under article 1120, provides investors with the option of bringing claims under the ICSID Convention Rules, ICSID Additional Facility Rules or UNCITRAL Rules. Of the 17 former or pending cases, four have used the ICSID Additional Facility Rules, 12 have employed the UNCITRAL Arbitration Rules and one has employed the ICSID Convention Rules.

In addition, in 2012, investors filed official notices of intent to submit claims to arbitration alleging that US government regulators failed to sufficiently protect their investments against suspected frauds at the Texas-based Stanford Financial group of companies. Depending on their countries of nationality, the investors invoked applicable provisions of CAFTA, the US-Chile FTA, the US-Peru Trade Promotion Agreement and the US-Uruguay Bilateral Investment Treaty. To date, no formal claims have been filed.


Does the state have an established practice of requiring confidentiality in investment arbitration?

No. In fact, the United States Department of State links to a large volume of materials concerning investor arbitrations against the United States on its website (see: In addition to pages describing the cases against state parties, the website contains pleadings, awards (where applicable) and certain other documents that are publicly available under the rules and confidentiality agreements applicable in each case.


Does the state have an investment insurance agency or programme?

The Overseas Private Investment Corporation, an agency of the United States, allows US investors, lenders and contractors to purchase political risk insurance for investments in more than 160 developing and post-conflict countries. It is not contingent on the existence of a BIT.

The Export-Import Bank also offers insurance to US entities against the risk of non-payment stemming from war, terrorism, riots, revolution and expropriation. It is also not contingent on the existence of a BIT.

In addition, the United States is a member of the World Bank’s Multilateral Investment Guarantee Agency program (MIGA), which aims to promote FDI in developing nations by providing political risk insurance guarantees to private sector investors and lenders. MIGA offers guarantees to protect investments against non-commercial risks and can help investors obtain access to funding sources with improved financial terms and conditions.