Guidelines on the Treatment of Foreign Direct Investment
- Type: Convention
- Date of signature: 21/09/1992
- Place of signature: Washington D.C., USA
- Depositary: International Bank for Reconstruction and Development (IBRD)
- Date of entry into force: N/A
What is it about?
The World Bank Guidelines form a practical guide for States wishing to attract foreign capital. Directed against discriminatory and quantitative restrictions, the guidelines encourage and protect foreign investments and establish standards related to their admission and treatment on the territory of a State as well as their transfer towards a third party. They promote the notion of fair and efficient treatment, the most favoured nation status and national treatment. They also impose strict limits on nationalization. The guidelines are not mandatory. States are encouraged to take them into account when acquiring international investments and to incorporate them into their national legislation and regulations.
Why is it relevant?
The Guidelines, primarily directed towards receiving states, assist in the implementation of legal frameworks that encourage international investment.
The negotiations, which began in 1995 under the OECD to conclude a multilateral agreement for investment, ended in 1998 without the final adoption of a treaty. The Multilateral Agreements on Trade Goods under the WTO was inspired by the guidelines of 1992, but only applies to investments related to investments involving trade of goods, excluding investments purely of a financial character.