Component 6: Investment

Key objective:

To facilitate the flow of investment across the participants, by deepening and broadening linkages and assisting them to address impediments to expanding investment in response to the opportunities created by the Agreement.


  • In increased awareness by potential investors of new opportunities arising from the Agreement
  • Identification and resolution of impediments to investment between parties
  • Improvements in the investment climate in participating countries directly and indirectly attributable to the Agreement.


The Investment Chapter of the PACER Plus Agreement is intended to encourage a stable and predictable environment to attract and promote the flow of investment between the Parties with due respect to national policy objectives and to the right of each Party to regulate.

The Agreement contains obligations that are imposed on host countries (i.e. those countries receiving investment) which are designed to further this objective in order to increase the level of sustainable investment in line with national development objectives. The Agreement contains several obligations for countries focused on Investment Protection. Many of these are usually found in international investment agreements, whether bilateral investment treaties or free trade agreements. The PACER Plus Agreement requires all countries to be accustomed international standards, especially in respect to basic norms regarding protection of investments.

Obligation to Comply with Domestic Law and Corporate Social Responsibility
  • A key element of the Agreement is acknowledging that investors of a Party and their investments are subject to the laws, regulations and standards of the host state Party.
National Treatment
  • The national treatment obligation only applies to investors and investments in the sectors that a country has listed in its Schedule of Commitments on Investment. National treatment is a type of non-discrimination rule. It requires that in sectors listed in a country’s Schedule of Commitments, a country must treat investors and covered investments from another PACER Plus country no less favourably than it treats, in like circumstances, its own investors and investments.
Obligations that apply in respect of all investors and investments

Most of the obligations in the Investment Chapter apply in respect of all investors and investments, regardless of whether the relevant sectors have been listed by a country in its Schedule of Commitments. The following obligations are described in this summary:

  • Corporate Social Responsibility - While the PACER Plus obligations usually fall on governments and their officials, in the case of the Investment Chapter, investors and investments also have to uphold their end of the bargain. The Investment Chapter says that investors and their investments are expected to comply with the domestic law of the host state Party. Domestic law includes all laws, regulations and standards.
  • Most favoured nation (MFN) - Each country has agreed to treat investors and covered investments from all PACER Plus countries in accordance with the most favoured nation obligation (MFN).
  • International minimum standard of treatment - Each country has agreed to provide investors from PACER Plus countries with a minimum standard of treatment, in accordance with customary international law.
  • No expropriation without compensation - A government can only expropriate or nationalise a covered investment if the following conditions are all met:
    • for a public purpose
    • in a non-discriminatory manner
    • in accordance with the due process of the law, and
    • on payment of prompt, adequate and effective compensation.

If a covered investment is expropriated, the investor has a right under PACER Plus to seek a review of the decision to expropriate and of the valuation of its investment.

  • Guarantee of free transfer of funds - PACER Plus countries must allow transfers of monies relating to a covered investment to be made freely and without delay into and out of its territory (noting there are exceptions to this and grounds for preventing or delaying a transfer detailed in the Agreement). Investors are able to utilise a freely usable currency at the market exchange rate at the time of transfer.
  • Senior management and boards of directors - Under PACER Plus, a host country must not:
    • require members of a PACER Plus investor’s senior management team to be of any particular nationality, or
    • require that the majority of the Board of Directors of a PACER Plus investor be of a particular nationality or resident in any particular country.
  • Performance requirements - Performance requirements are requirements that a host country imposes on an investor either as a condition of being allowed to invest, or as a condition of being able to receive certain incentives (such as tax exemptions).
PACER Plus requires that:
  • WTO Members act consistently with the WTO’s Agreement on Trade-Related Investment Measures (known as TRIMS), and
  • non-WTO Members, to the extent of their capacity, act consistently with TRIMS

Non-WTO Members must also provide a list of any of their measures (such as laws and regulations) that do not comply with TRIMS. They must do this within two years of the date on which PACER Plus enters into force. After two years, these countries must not introduce any new measures that are inconsistent with TRIMS.

  • Compensation in times of civil strife, armed conflict, state of emergency - Host countries owe foreign investors a certain standard of treatment in times of armed conflict, civil strife or state of emergency in their country. If these circumstances result in losses suffered by covered investments, officials must treat foreign investors from PACER Plus countries:
    • no less favourably than domestic investors and investments, and
    • no less favourably than investors and investments from any other country.

If a country’s forces or authorities have requisitioned (taken use of) or destroyed a covered investment during any of these extreme circumstances, a government is required to provide the investor with restitution or compensation, or both as appropriate.


Transparency is about making measures known to those who want to find out about them. It is important for predictability in investment. It is easier for investors if they know as much as possible about the rules and requirements they will face when entering a market. PACER Plus Countries have committed to providing:

  • Laws, regulations and other rules
  • Names of relevant officials
  • Keeping information up to date
Contact Points

Each PACER Plus country must identify a Contact Point who will work with other countries’ Contact Points and assist with the distribution of requests and notifications about investment.


A PACER Plus country may require an investor of another PACER Plus country to provide information concerning an investment solely for the purposes of collecting information or statistics. If a PACER Plus country requires an investor to share information, then the PACER Plus country should protect any information that is confidential and which would prejudice the legitimate commercial interests of the investor or the covered investment.

Settlement of Disputes

The PACER Plus Agreement does not include a conventional investor-state dispute settlement mechanism, rather encourages resolution of disputes through domestic courts.  Foreign companies do not have the right to take FIC governments to binding international arbitration tribunals and seek monetary compensation for alleged violations of the Investment Chapter. Government to Government disputes can be resolved within the framework of the Dispute Settlement Chapter​ (Chapter 14).

Exceptions to the investment obligations

PACER Plus has a number of exceptions that allow countries to justify actions that would otherwise be a breach of the obligations in the Investment Chapter. The exceptions are set out in Chapter 11 (General Provisions and Exceptions). Advice should be sought on the application of the exceptions in any given situation.


By creating a conducive investment environment, Participants will attract foreign direct investment in sectors of development priority to promote competition, expand productive capacity, boost growth, create employment, and take advantage of trade opportunities.​