By: Ana Sarmento
Bilateral investment treaties (BITs) are “international agreements establishing the terms and conditions for private investment by nationals and companies of one state in another state.” BITs usually provide for investor-state arbitration, a mechanism that allows an investor to bring an arbitral claim against a state to enforce the BIT’s protections. Brazil has historically rejected the BIT model, especially because of the investor-state arbitration provision. Besides, Brazil did not need BITs to attract foreign investment (FDI): in 2014 Brazil was already the fifth state worldwide that attracted the most FDI. But in the past twenty years Brazilian multinationals emerged with the capital and will to invest abroad. As a result, Brazil saw the need to protect Brazilian investors’ interests abroad. As an alternative to traditional BITs, Brazil created Agreements on Cooperation and Facilitation of Investments (“ACFIs”).
ACFIs only allow state-state arbitration, meaning investors cannot submit to arbitration claims to enforce treaty rights. This is a significant divergence from traditional BITs but not a complete departure from the international trend. ACFIs require that the Parties comply with a structured negotiation process before submitting a dispute to arbitration and limit the remedies a tribunal can award. Brazil has, to date, entered into ACFIs with Mexico,Chile, Colombia, Ecuador,Guiana, Peru, Suriname, India, Morocco, United Arab Emirates, Ethiopia, Malawi, Angolaand Mozambique. Of those, only the Brazil-Mexico and Brazil-Angola have been ratified by the Brazilian government.
This paper demonstrates how most ACFIs offer investors little protection, especially in the ambit of enforcement. While the procedural and substantive protections of ACFIs are limited, some investors may be able to expand those substantive protections using other BITs. This paper is organized as follows. Part 2 discusses the potential appeal of ACFIs to intellectual property (IP) investors. Part 3 analyzes the scope of the procedural and substantive provisions of ACFIs and their limitations. Finally, Part 4 remarks on the implications of this paper’s findings for investors and states.
Strong intellectual property rights (IPRs) can incentivize FDI. However, the strength of IPRs protection is not the primary consideration for investors. A strong IPR regime by itself is unlikely to attract FDI, especially in least developed countries, because these protections are worth little if the state lacks enforcement capabilities. Investors will instead look at the overall investment climate of the country. Investors value predictable regulatory burdens, a healthy legal system, and transparent government procedures. BITs (and in theory ACFIs) should improve the overall investment climate of the country and encourage IP investors in a manner IP regulation alone cannot.
To date, only three investor-state arbitrations have significantly involved IP: Phillip Morris v. Uruguay, Eli Lilly v. Canada, Bridgestone Licensing Services v. Panama. These cases involved lower-value claims than the average BIT arbitration. However, compensation is not necessarily a priority for IP investors. Rather, these investors often seek prospective relief—a change in the state’s behavior. An investor may want the withdrawal of measures that interferes with its ability to profit from its IPRs, an increased level of IPRs protection that the investor can enforce against third parties, or even a change in the state’s enforcement efforts. The state-state arbitration model espoused by ACFIs offers IP investors the benefits of prospective relief, an uncommon remedy in investor state arbitration. Nevertheless, the procedural and substantive protections of ACFIs may be insufficient to improve the overall investment climate.
ACFIs create new procedural and substantive protections for investors. The first step for any investor seeking to enjoy these protections is establishing that the investor is protected by the ACFI. Having established that, an investor may benefit from an ACFI’s controversy-prevention mechanism and substantive protections. Some investors may even be able to claim additional protections from other treaties.
a. Intellectual Property as an “Investment” under ACFIs
While most ACFIs explicitly include IP in their definitions of investment, the enumeration of IP as a recognized type of investment is not enough to secure an ACFI’s protections. Indeed, an investor must establish that its investment meets the overriding criteria of the applicable ACFI’s definition of “investment.” All ACFIs (except Brazil-Angola ACFI) require that the investment be related to the “production of goods or provision of services.” In consequence, the type of IPRs at issue and the exploitation of those rights will be relevant to determining whether the IP qualifies as an investment. Registration of an IPR—patent, trademark, copyright—will likely be insufficient on its own to qualify as “investment.” Registration of an IPR merely prevents others from using the IP; it does not create an expectation of profit absent further action. Therefore, an investor must use the IP in the production of goods or provision of services for the IP to qualify as an investment.
Some ACFIs require that the investment have the “characteristics of an investment.” This requirement calls for an analysis similar to that conducted by the Bridgestone To determine whether a trademark had the “characteristics of an investment,” the Bridgestone tribunal analyzed whether the trademark owner carried out activities normally involved in the exploitation of the investment, such as the manufacture, promotion or sale of goods bearing the trademark. Meaning, the exploitation of IPRs is likely necessary to show that the IPR had the “characteristics of an investment.” To determine if a specific IPR qualifies as an investment, a tribunal will have to analyze the use and exploitation of the IPR on a case-by-case basis. Hence, an investor is not protected by the treaty simply because the investor has a registered IPR.
b. Procedural Protections
All ACFIs include a controversy prevention mechanism. This mechanism has two key features: the Joint Committee (the “Committee”) and the Ombudsmen. The Ombudsmen are responsible for facilitating dialogue between investors and the host state, preventing and helping resolve disputes. The Ombudsmen are to work with the host state’s authorities to evaluate the suggestions and complaints of the other Party and of the other Party’s investors. This feature is promising: a similar Ombudsmen model has yielded positive results in South Korea.
The Committee is composed of government representatives of both parties and must meet at least once a year. The Committee is responsible for: (1) monitoring the implementation and execution of the ACFI, (2) discussing opportunities for reciprocal investments, (3) consulting with the private sector and civil society, when appropriate, about specific issues relating to the Committee’s work, (4) amicably resolving controversies about investments, and (5) implementing rules of the arbitral tribunals deciding ACFI disputes. In essence, the Committee seeks to improve Parties’ compliance with the treaty and coordinate dialogue between the Parties and between host states and investors.
The Committee and Ombudsman create structured dispute resolution mechanism lacking in most BITs. To illustrate, in Phillip Morris the investor had an obligation to attempt to amicably resolve the dispute before the investor could submit a claim to arbitration. The investor in Phillip Morris sent a letter to the Uruguayan government (to which the government never replied) and the tribunal found this effort sufficient to satisfy the amicable resolution requirement. By contrast, the Ombudsman will (in theory) guarantee that the investor receives a response to a complaint and facilitate a more substantial effort—by investor and the host state—to resolve the dispute amicably. When a dispute escalates, a Party may bring it before the Committee. The Committee and the Parties (and ideally the investor) would then engage in a mediation process to resolve the dispute. The Committee has a short time to resolve the issue: it must begin dispute resolution meetings within thirty days or receiving a request and issue a report within sixty days of the first meeting, unless parties agree to an extension.
Together, the Ombudsman and Committee guarantee that the host state will engage with the investor to resolve a dispute, increasing the likelihood of an amicable resolution. These features—especially given the short resolution period for the Committee—are beneficial to investors. Afterall, “[t]here are very few investors who choose to go to litigation if the dispute can be resolved through negotiations.”
A few caveats must be noted. Only a Party can submit an issue to the Committee. While one may hope that the state will advocate for its investors, the decision to submit an issue to the Committee lies entirely with the state. Once a dispute is before the Committee, the investor may be able to participate in the Committee negotiations; but the investor’s participation is not required by the ACFIs and, thus, not guaranteed.
Most ACFIs allow a state to resort to arbitration if negotiations with the Committee fail but none give the investor that right. On the one hand, investor-state arbitration may impede the development of positive, long-term relations between the investor and the host state. Brazil is not alone in rejecting the investor-state dispute settlement mechanism. Moreover, if the investor’s home state pursues arbitration in the investor’s behalf, the investor could benefit from prospective relief without incurring arbitration expenses. On the other hand, denying investors access to effective and neutral mechanisms to resolve disputes may leave the issue unresolved, deteriorate relations between the investor and the host state, and even lead to the investor’s exit from the host state. Under the ACFI system, the investors will ultimately be at the mercy of their home state’s willingness to bring an arbitral claim on their behalf. While a state could conceivably be persuaded to bring a claim on behalf of an investor—especially an economically powerful and/or politically connected investor—nothing ensures that the state will do so.
What is more, ACFIs do not clarify whether the investor will be required to exhaust local remedies before the state can bring an arbitral claim on that investor’s behalf. Exhaustion of local remedies is a principle of international law that requires a foreign national to seek redress in the host state’s domestic courts before the foreign national’s home state can intervene on that national’s behalf. ACFI’s failure to address exhaustion does not mean the principle will not apply. Meaning, investors could be required to pursue their rights in national courts before their home state can bring an arbitral claim.
Even if the investor’s home state submits an arbitral claim, monetary relief may not be available. Some ACFIs provide that the states may agree to submit issues of compensation to the tribunal. Consent would be the simplest way to ensure a tribunal is competent to award monetary damages. If Parties agree to submit the issue of compensation to the tribunal, the damages (minus the costs of litigating the dispute) would be forwarded to the investors. But little motivation exists for a Party to agree to compensation after the fact. Without such consent, a tribunal may be unable to award damages per the terms of the ACFIs; but the possibility should not be dismissed offhand. The tribunal would have to analyze the language of the specific ACFI at issue. In a dispute between states concerning the interpretation of a treaty, damages may be warranted because “it is a principle of international law that the reparation of a wrong may consist in an indemnity corresponding to the damage which the nationals of the injured State have suffered.” Still, even assuming a legal basis to advocate for damages, the first hurdle to the realization of this scenario is the state’s motivation. Why would a state advocate for damages when its arguments and position could be yielded against its interests in a future dispute where that state is the respondent? Not only do investors have limited power to enforce the substantive protections of ACFIs, but those protections are limited.
c. Substantive Protections
ACFIs offer substantive protections for Brazilian investors abroad and for foreign investors in Brazil. The benefits and limitations of these protections are discussed here.
i. Expropriation Protections in ACFIs
All ACFIs prohibit direct expropriation of investor’s property by the host state unless certain conditions are met. Direct expropriation is a complete taking of an investor’s property by the state, where the investor loses title to the property. To accord with the treaty, the expropriation must (1) be for a public purpose or utility, (2) comport with due process, (3) be non-discriminatory, and (4) result in the payment of just compensation to the investor. But no ACFI protects against indirect expropriation—a state act that “neutralizes the enjoyment of property” while leaving title to the property with the investor. Indeed, some ACFIs explicitly exclude indirect expropriation from coverage.
Indirect expropriation is more common and likely to occur than direct expropriation, especially in the context of IP. For instance, Phillip Morris and Eli Lilly both involved only indirect expropriation. Even compulsory licensing by a state, which authorizes “companies or individuals other than the patent owner to use the rights of the patent…without the permission of the patent owner,” could only amount to indirect expropriation because the patent owner would retain ownership of the patent. Consequently, only a limited number of state actions are covered by ACFIs’ expropriation provisions and most IP investors will not be able to benefit from the protection.
ii. National Treatment & Fair and Equitable Treatment Protections
All ACFIs provide for national treatment, which guarantees investors treatment no less favorable than the treatment accorded to the nationals of the host state with respect to activities relating to the investment (e. management, operation). This provision is meant to ensure that the foreign investor is not disadvantaged by laws, regulations or practices of the host state favoring the host state’s nationals. Most ACFIs exclude from the national treatment obligation provisions pre-dating the ACFI, thus allowing existing advantages granted to the host Party’s nationals to remain in place. The Brazil-Chile ACFI excludes from national treatment protection any laws or regulations in place before the investor made its investment. Most restrictively, the Brazil-Angola ACFI provides for national treatment only “with respect to access to judicial tribunals and administrative agencies, or the defense of these investors’ rights.” National treatment under the Brazil-Angola ACFI thus appears limited to access to justice. Indeed, the Brazil-Angola ACFI authorizes parties to impose “special formalities” on the “investment activities of the investor of the other Party.”
Only two ACFIs provide for fair and equitable treatment (FET) and they do not offer the full range of FET protections. Rather, these ACFI enumerate the protections included, which prohibit actions by the host state that amount to: (1) denial of justice, (2) violation of due process, (3) discrimination based on gender, race or religion, (4) manifestly abusive treatment (e. coercion), and (5) discriminatory application of the host state’s laws. By enumerating these protections, the ACFIs exclude other protections that could otherwise fall under the FET umbrella, such as legitimate expectations and full protection and security.
iii. Most-Favored Nation (MFN) Protection: Expanding FET and Expropriation Protections
Most ACFIs contain an MFN provision. An MFN provision guarantees that an investor and/or investment covered by the treaty shall be treated no less favorably than an investor and/or investment from any third country in like circumstances. In practice, MFN clauses allows investors to import to the treaty at issue more favorable provisions found in the respondent state’s other treaties.
All ACFIs containing an MFN provisions limit the sources of “treatment” available for comparison. Some ACFIs broadly prohibit comparison to any “treatment, preference or privilege” in either Party’s other BITs, multilateral investment agreements or international commercial agreements. These sweeping restrictions reduce the value of the MFN clause to an investor. But a few ACFIs have less restrictive MFN clauses that could expand the investor’s substantive protections.
The Brazil-Peru, Brazil-Morocco and Brazil-Ethiopia ACFIs allow comparison to treatment provided for in BITs post-dating the ACFI. Brazil has other ACFIs that include additional protections that can be made applicable to Peruvian, Moroccan and Ethiopian investors through the MFN clause. For example, the Brazil-India ACFI provides for enumerated FET protections that investors can claim using the MFN clause. As Brazil’s ACFI partners have more traditional BITs, Brazilian investors can gain even greater protections. The Morocco-Japan BIT, for instance, provides for FET, “full protection and security,”  and protection against indirect expropriation. That said, the limitation to the MFN clause is significant; neither Ethiopia nor Peru has any BITs post-dating their respective ACFIs with Brazil.
The most expansive MFN clauses are those of the Brazil-Guyana and Brazil-Suriname ACFIs, which allow comparison to substantive treatment in pre-existing and subsequent BITs of the Parties. Guyana has eight BITs pre-dating the Brazil-Guyana ACFI: the substantive protections of all of those BITs are available to Brazilian investors though the MFN clause of the Brazil-Guyana ACFI. Using the MFN clause, Brazilian investors can claim broad FET protections and protection against indirect expropriation, neither of which are provided for in the Brazil-Guyana ACFI. Similarly, Brazilian investors can claim the additional protections of Suriname’s BITs. As Brazil has not entered into a traditional BIT, Guyanese and Surinamese investors can only rely on other ACFIs for additional protections.
In short, the MFN clauses of the Brazil-Morocco, Brazil-Ethiopia, Brazil-Suriname and Brazil-Guyana ACFIs expand the scope of investment protections. Even so, investors cannot forget that they can only benefit from these extended protections in arbitration (or even Committee mediation) if the investor’s home state chooses to take full advantage of the MFN provision.
ACFIs offer investors new procedural and substantive protections; but these protections are limited. The benefits and limitations of ACFI model discussed in this paper can hopefully serve as a guide for investors evaluating the risks of an investment covered by an ACFI and for states considering the ACFI model as an alternative to traditional BITs.
Table 1 – Comparison of ACFI and United States Model BIT Provisions
|ACFIs||United States Model BIT|
|Investment||• Must have the “characteristics of an investment” (Ecuador ACFI, art. 3; Brazil-India ACFI, art. 2)
• Intellectual property enumerated as a type of investment (Mexico ACFI, art. 3; Brazil-Chile ACFI, art. 1; Brazil-Colombia ACFI, art. 3; Brazil-Ecuador ACFI, art. 3; Brazil-Guiana ACFI, art. 3(1.3); Brazil-India ACFI, art. 2; Brazil-Suriname ACFI, art. 3)
• Must be related to the “production of goods and services” (Brazil-Mexico ACFI, art. 3; Brazil-Chile ACFI, art. 1; Brazil-Colombia ACFI, art. 3; Brazil-Ecuador ACFI, art. 3; Brazil-Guiana ACFI, art. 3; Brazil-Suriname ACFI, art. 3; Brazil-India ACFI, art. 2; Brazil-Morocco ACFI, art. 3; Brazil-UAE ACFI, art. 3)
• Defined by the laws of the Parties (Brazil-Angola ACFI, art. 3)
|• Must have the “characteristics of an investment” (Art. 1)
• Intellectual property enumerated as a type of investment (Art. 1)
|Direct Expropriation||• Taking must (1) be for a public purpose or utility, (2) comport with due process, (3) be non-discriminatory, and (4) result in the payment of just compensation to the investor. (Mexico ACFI, art. 6; Brazil-Chile ACFI, art. 7; Brazil-Colombia ACFI, art. 6; Brazil-Ecuador ACFI, art. 7; Brazil-Guiana ACFI, art. 7; Brazil-Peru ACFI, art. 2.7; Brazil-India ACFI, art. 6; Brazil-Suriname ACFI, art. 7; Brazil-Morocco ACFI, art. 6; Brazil-Ethiopia ACFI, art. 7; Brazil-Malawi, art. 8; Brazil-Angola 9; Brazil-Mozambique, art. 8)||• Taking must (1) be for a public purpose or utility, (2) comport with due process, (3) be non-discriminatory, and (4) result in the payment of just compensation to the investor. (Art. 6)|
|Indirect Expropriation||• Not covered||• Covered with direct expropriation (Art. 6)|
|Fair & Equitable Treatment||• Enumerated protections against (1) denial of justice; (2) violation of due process; (3) discrimination on the basis of gender, race or religion; (4) manifestly abusive treatment such as coercion; and (5) discrimination in the application of laws. (Brazil-UAE ACF, art. 4 (explicitly excludes full protection and security); Brazil-India ACFI, art. 4.)||• Fair and equitable treatment and full protection and security “in accordance with customary international law” (Art. 5)|
|National Treatment||• Unrestricted (Brazil-Mozambique, art. 11; Brazil-Morocco ACFI, art. 5)
• Limited to state actions post-dating the ACFI (Brazil-Colombia ACFI, art. 5; Brazil-Peru ACFI, art. 2.5; Brazil-Mexico ACFI, art. 5; Brazil-Guiana ACFI, art. 5; Brazil-Ethiopia ACFI, art. 5; Brazil-Suriname, art. 5; Brazil-India, art. 5; Brazil-UAE, art. 5; Brazil-Malawi ACFI, art. 10 (see note )
• Limited to state actions post-dating the investment (Brazil-Chile ACFI, art. 5)
|• Unrestricted (Art. 3)|
|MFN||• Comparison to other BITs not allowed (Brazil-Mexico ACFI, art. 5; Brazil-Chile ACFI art. 6; Brazil-Colombia ACFI, art. 5; Brazil-Ecuador ACFI, art. 6;
• Comparison to BITs post-dating the ACFI allowed (Brazil-Peru ACFI, art. 2.6; Brazil-Morocco ACFI, art. 5; Brazil-Ethiopia ACFI, art. 5)
• Comparison to any other BITs allowed (Brazil-Guyana ACFI, art. 6; Brazil-Suriname ACFI, art. 6)
|• Unrestricted (Art. 4)|
|Pre – Arbitration Requirement||• Committee mediation (see arbitration provisions below)||• None (Arts. 23-24)|
|Arbitration||• States may submit a dispute to arbitration if Committee negotiations fail (Brazil-Chile ACFI, art. 25; Brazil-Colombia ACFI, art. 23; Brazil-Ecuador ACFI, art. 25; Brazil-Guiana ACFI, art. 25; Brazil-Peru ACFI, art.2.21; Brazil-Mexico ACFI, art. 19; Brazil-Angola ACFI, art. 15(6); Brazil-Suriname ACFI, art. 25; Brazil-India ACFI, art. 19; Brazil-Morocco AFI, Art. 20; Brazil-UAE ACFI, Art. 15; Brazil-Ethiopia ACFI, art. 24)
• States need a separate agreement to arbitrate (Brazil-Malawi-ACFI; Brazil-Mozambique ACFI)
• Investors cannot submit disputes to arbitration
|• Investors can submit disputes to arbitration (Art. 24-25)|
Bilateral Investment Treaty Definition, Cornell Law School Legal Information Institute, https://www.law.cornell.edu/wex/bilateral_investment_treaty.
 Fabio Morosini & Michelle Ratton Sanchez Badin, ACFI: o que está por trás desta invoação regulatória?, 12 Pontes 9, 9-10 (2016).
 Nitish Monebhurrun, Novelty in International Investment Law: The Brazilian Agreement on Cooperation and Facilitation of Investments as a Different International Investment Agreement Model, 8 J. of Int’l Disp. Settlement 79, 81 (2016); Constanza Negri Biasutti & Fabrizio Sardelli Panzini, O retorno dos acordos de investimento na agenda comercial brasileira, 12 Pontes 4, 4 (2016).
 Monebhurrun, supra note 3, at 81.
 Id. at 81-83; see Biasutti & Panzini, supra note 3, at 4-5.
 Seev. , SADC Model Bilateral Inv. Treaty Template with Comment, South African Dev. Community,. (July 2012), https://www.iisd.org/itn/wp-content/uploads/2012/10/sadc-model-bit-template-final.pdf (“The Drafting Committee was of the view that the preferred option is not to include investor-State dispute settlement. Several States are opting out or looking at opting out of investor-State mechanisms, including Australia, South Africa and others.”); see also Free Trade Agreement between the United States and Australia,art. 11.16 ,May 18, 2004, art. (providing that under certain circumstances, “Parties should considerallowing an investor of a Party to submit to arbitration with the other Party a claim regarding a matter within the scope of this [Investment] Chapter”) (emphasis added); Nathalie Bernasconi-Osterwalder, Repensando a solução de controvérsias relacionadas a investimentos, 12 Pontes 18, 20 (2016).
 The term “Parties” refers to the states party to an ACFI.
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e os Estados Unidos Mexicanos, May 26, 2015 (“Brazil-Mexico ACFI”).
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e a República do Chile, November 23, 2015 (“Brazil-Chile ACFI”).
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e a República da Colombia, October 9, 2015 (“Brazil-Colombia ACFI”).
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e a República do Ecuador, September 25, 2019 (“Brazil-Ecuador ACFI”).
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e a República Cooperativa da Guiana, December 13, 2018 (“Brazil-Guiana ACFI”).
 Acordo de Ampliação Econômico-Comercial Entre a República Federativa do Brasil e a República do Peru, April 29, 2016 (“Brazil-Peru ACFI”). This agreement is broader than the other ACFIs. See Geraldo Vidigal & Beatriz Stevens, Brazil’s New Model of Dispute Settlement for Investment: Return to the Past or Alternative for the Future?, 19 J. of World Inv. & Trade 475, 486 (2018). In this paper, the analysis of this treaty is limited to the investment- related provisions paralleling those in other ACFIs.
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e a República do Suriname, May 2, 2018 (“Brazil-Suriname ACFI”).
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e a República da India, January 25, 2020 (“Brazil-India ACFI”).
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e o Reino de Marrocos, June 13, 2019 (“Brazil-Morocco ACFI”).
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e os Emirados Árabes Unidos, March 15, 2019 (“Brazil-UAE ACFI”).
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e a República Democrática Federal da Etiópia, April 11, 2018 (“Brazil-Ethiopia ACFI”).
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e a República do Maláui, June 6, 2018 (“Brazil-Malawi ACFI”).
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e o Governo da Repúblia de Angola, April 1, 2015 (“Brazil-Angola ACFI”).
 Acordo de Cooperação e Facilitação de Investimentos Entre a República Federativa do Brasil e o Governo da Repúblia de Moçambique, March 30, 2015 (“Brazil-Mozambique ACFI”).
 Decreto No. 9.495 de 6 de setembro de 2018, [D.O.U. 10.09.2018] (Braz.); Decreto No. 9.167 de 11 de outubro de 2017, [D.O.U 13.10.2017] (Braz.).
 Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, ICSID Case No. ARB/10/7, Award ( July 8, 2016).
 Eli Lilly and Co. v. Government of Canada, UNCITRAL, ICSID Case No. UNCT/14/2, Award, 16 Mar., 2017).
 Bridgestone Licensing Services, Inc. and Bridgestone Americas, Inc. v. Republic of Panama, ICSID Case No. ARB/16/34 (Final Award Pending).
 The average amount claimed in investor-state arbitrations is US$ 1.35 billion and the average amount awarded to investors in successful claims is US$ 522 million. See Special Update on Investor–State Dispute Settlement: Facts and Figures, IIA Issues Note, UNCTAD, Nov. 2017, at 5, https://unctad.org/en/PublicationsLibrary/diaepcb2017d7_en.pdf. In contrast, the investors requested US$ 16 million in damages Bridgestone, US$ 22.267 million in damages in Phillip Morris ¶ 12, and CAN US$ 500 million in damages and in Eli Lilly. Bridgestone,Request for Arbitration, ¶ 90 (Oct.7, 2016); Phillip Morris ¶ 12; Eli Lilly ¶ 467.
 See Phillip Morris ¶ 193-95, 284.
 See Europe Cement Investment & Trade S.A. v. Republic of Turkey, ICSID Case No. ARB(AF)/07/2 ,Award,)¶ 148 ( Aug. 13, 2003) (“Declaratory relief is a common form of relief in international tribunals in state-to-state cases, but no cases were cited to us of tribunals established under the ICSID Convention or Additional Facility or under international investment treaties more generally where declarations are granted as a form of relief.”).
 See Brazil-Mexico ACFI, art. 3(1.2)(e); Brazil-Chile ACFI, art. 1(1.4)(f); Brazil-Colombia ACFI, art. 3(2.3)(e); Brazil-Ecuador ACFI, art. 3(1.3)(f); Brazil-Guiana ACFI, art. 3(1.3)(e); Brazil-Suriname ACFI, art. 3(1.3)(e); Brazil-India ACFI, art. 2(2.4)(e); Brazil-Morocco ACFI, art. 3(1.3)(e); Brazil-UAE ACFI, art. 3(1.3)(e). The ACFIs that do not enumerate IP in their definitions of investment are the Brazil-Peru, Brazil-Ethiopia, Brazil-Malawi, Brazil- Angola and Brazil-Mozambique ACFIs.
 See Bridgestone, Decision on Expedited Objections, ¶ 164-165 ( Dec. 12, 2017).
 The Brazil-Angola ACFI provides that the definition of investment will be regulated by the laws of the Parties. Brazil-Angola ACFI, art. 3.
 See Brazil-Mexico ACFI, art. 3(1.2)(e); Brazil-Chile ACFI, art. 1(1.4)(f); Brazil-Colombia ACFI, art. 3(2.3)(e); Brazil-Ecuador ACFI, art. 3(1.3)(f); Brazil-Guiana ACFI, art. 3(1.3)(e); Brazil-Peru ACFI, art. 2.3(1)(f); Brazil-Ethiopia ACFI, art. 1.3; Brazil-Suriname ACFI, art. 3(1.3)(e); Brazil-India ACFI, art. 2(2.4)(e); Brazil-Malawi ACFI, art. 2(1); Brazil-Morocco ACFI, art. 3(1.3)(e); Brazil-Mozambique ACFI, art. 3; Brazil-UAE ACFI, art. 3(1.3)(e); see also ; see Jonathan C. Hamilton & Michelle Grando, O modelo de proteção de investimentos do Brasil: os novos acordos internacionais, 12 Pontes 13, 15 (2016).
 Bridgestone, Decision on Expedited Objections, ¶171 ( Dec. 12, 2017) (“[T]he effect of a trademark is negative. It prevents competitors form using that trademark on their products. It confers no benefit on the country where the registration takes place, nor, of itself, does it create any expectation of profit for the owner of the trademark.”).
 Brazil-Ecuador ACFI, art. 3(1.3); Brazil-India ACFI, art. 2(2.4)
 Bridgestone, Decision on Expedited Objections, ¶172-174 ( Dec. 12, 2017)
 See Brazil-Colombia ACFI, art. 16; Brazil-Chile ACFI, art. 18.
 See Brazil-Colombia ACFI, art. 22; Brazil-Chile ACFI, art. 24.
 Phillip Morris ¶ 94-95.
 Id.; see also . 2012 U.S. Model Bilateral Inv. Treaty, OFFICE OF THE U.S. TRADE REPRESENTATIVE, arts. 23-24, https://ustr.gov/sites/default/files/BIT%20text%20for%20ACIEP%20Meeting.pdf (suggesting but not requiring that investor attempt amicable resolution before submitting a dispute to arbitration).
 See Brazil-Mexico ACFI, art. 18(3); Brazil-Colombia ACFI, art. 22(3); Brazil-Chile ACFI, At. 24(3); Brazil-Angola ACFI, art. 15(3).
 Hamilton & Grando, supra note 36, at 16.
 All ACFIs provide that “a Party may submit a specific question of interest to an investor” to the Committee. See Brazil-Mexico ACFI, art. 18(3); Brazil-Colombia ACFI, art. 22(3); Brazil-Chile ACFI, At. 24(3); Brazil-Angola ACFI, art. 15(3) (emphasis added).
 All ACFIs contain permissive language encouraging the investor’s participation in the Committee discussions. See Brazil-Mexico ACFI, art. 18(3); Brazil-Colombia ACFI, art. 22(3); Brazil-Chile ACFI, At. 24(3); Brazil-Angola ACFI, art. 15(3).
 See Brazil-Colombia ACFI, art. 23(1); Brazil-Ecuador ACFI, art. 25(1). The MFN clause cannot be used to import consent to investor-state arbitration. Venezuela US, S.R.L. (Barbados) v. Bolivarian Republic of Venezuela, PCA Case No. 2013-34,Interim Award on Jurisdiction on the Respondent Objection to Jurisdiction Ratione Voluntatis, ¶ 105( July 26, 2016) (“[T]he MFN clause cannot serve the purpose of importing consent to arbitration where none exists under the BIT”). The ACFIs that do not clearly contain a consent to arbitration are: Brazil-Malawi-ACFI and Brazil-Mozambique ACFI, both of which provide that parties may resort to arbitration “when the parties deem [arbitration] convenient.” Brazil-Malawi ACFI, art. 13(6); Brazil-Mozambique ACFI, art. 15(6); see also Hamilton & Grando, supra note 36, at 16 (stating that the language of the Brazil-Angola ACFI may require parties to separately agree to arbitration).
 See generally supra, note 6.
 Hamilton & Grando, supra note 36, at 16.
 The state-state arbitration mechanism is better developed in ACFIs between Brazil and Latin American countries than those between Brazil and African countries. The state-state arbitration model will likely be an obstacle to forming ACFIs with the United States and European Union, both of which are proponents of investor-state arbitration. Biasutti & Panzini, supra note 3, at 7.
 Representatives of the Brazilian government have already stated that arbitration shall not be the main mechanisms to resolve disputes. Morosini & Badin, supra note 2, at 11-12. Doubts regarding a state’s willingness to bring a claim are especially appropriate for Latin American investors. Because of Latin American governments’ propensity for government takings, investors can hardly rely on their governments to espouse their views, especially in disputes involving expropriation. Carlos G. Garcia, All the other Dirty Little Secrets: Investment Treaties, Latin America, and the Necessary Evil of Investor-State Arbitration, 16 Fla. J. Int’l L. 301, 307 (2004); see also Hamilton & Grando, supra note 36, at 16-17 (suggesting that state involvement may be beneficial or detrimental to an investor’s claim depending on the type of investment).
 ACFIs provide that a party can only submit a dispute to arbitration after the Joint Committee proceedings are exhausted but make no reference to the investors’ obligations regarding local remedies.
 Generally, “[a] state may only exercise diplomatic protection—or ‘present an international claim in respect of an injury to a national or other person’—after the injured person has exhausted all local remedies.” Martin D. Brauch, Exhaustion of Local Remedies in International Investment Law, Int’l Inst. for Sustainable Dev. (IISD), 2-3 (2017). ACFI’s failure to address exhaustion of local remedies by investors does not necessarily mean the principle will not apply.
 See Elettronica Sicula S.p.A. (ELSI) (Italy v. U.S.), Judgment, 1989 I.C.J. Rep. 15, ¶ 50 (July 20) (holding that exhaustion “should not be held to have been tacitly dispensed with, in the absence of any words making clear an intention to do so.”). Whether exhaustion of remedies would be required under ACFIs is beyond the scope of this paper but an important inquiry for investors.
 See Brazil-Mexico ACFI, art. 19(2); Brazil-Suriname ACFI, art. 25(13); Brazil-Ethiopia ACFI, art. 24(11); Brazil-UAE ACFI, art. 25(13); Brazil-Morocco ACFI, art. 20(2); Brazil-Colombia ACFI, art. 23(14); Brazil-Guyana ACFI, art. 25(13).
 Brazil-Mexico ACFI, art. 19(2); Brazil-Suriname ACFI, art. 25(13); Brazil-Ethiopia ACFI, art. 24(11); Brazil-UAE ACFI, art. 25(13); Brazil-Morocco ACFI, art. 20(2); Brazil-Colombia ACFI, art. 23(14); Brazil-Guyana ACFI, art. 25(13).
 See Vidigal & Stevens, supra note 12, at 491-498 (explaining how ACFI language draws heavily on WTO Dispute Settlement Understanding, which has been interpreted as allowing only prospective remedies).
 The potential remedies analysis is beyond the scope of this paper but several arguments for the proposition that damages could be awarded under the terms of ACFIs are set out in Vidigal & Stevens, supra note 12, at 491-499.
 Factory at Chorzów (Germany v Poland), Claim for Indemnity Merits, 1928 P.C.I.J. (ser. A) No. 17, at 66, 125; Draft Articles on Responsibility of States for Internationally Wrongful Acts, in Report of the International Law Commission on the Work of Its Fifty-third Session, UN GAOR, 56th Sess., Supp. No. 10, at 43, UN Doc. A/56/10 (2001), available at https://legal.un.org/ilc/texts/instruments/english/draft_articles/9_6_2001.pdf, art. 31 (“The responsible State is under an obligation to make full reparation for the injury caused by the internationally wrongful act.”).
 Id.; Eli Lilly ¶ 181.
Meaning of Compulsory Licensing, WTO Glossary, https://www.wto.org/english/thewto_e/glossary_e/compulsory_licensing_e.htm.
 Brazil-India ACFI, art. 4; Brazil-UAE ACFI, art. 4.
 All ACFIs grant the investor a right to transparency, which is sometimes considered a component of FET. See Rumeli Telekom A.S. and Telsim Mobil Telekomunikasyon Hizmetleri A.S. v. Republic of Kazakhstan, ICSID Case No. ARB/05/16, Award, ¶ 591-92 ( July 29, 2008); Monebhurrun, supra note 3, at 93. A discussion regarding whether and to what extent a transparency guarantee equates with a FET protection is beyond the scope of this paper; for a brief discussion on this subject see Monebhurrun, supra note 3, at 93-94.
 Legitimate expectations protect the basic, reasonable expectations taken into account by the foreign investor to make the investment. Biwater Gauff (Tanzania) Limited v. United Republic of Tanzania, ICSID Case No. ARB/05/2, Award, ¶ 602( July 24, 2008) . These expectations can be created by specific comments the host state made to the investor, Gavrilovic and Gavrilovic d.o.o. v. Republic of Croatia, ICSID Case No. ARB/12/39 (Award of 26 July 2018) ¶ 956, 984-85, or by legislation in place in the host state at the time of the investment, Murphy Exploration and Production Company International v. Republic of Ecuador II, PCA Case No. 2012-16 (formerly AA 434),Partial Final Award, ¶ 248 (May 6, 2016). Legitimate expectations can also include the expectation of a stable legal framework in the host state. Occidental v. Ecuador, LCIA Case No. UN3467, Award,¶ 183 (July 1, 2004).
 See Brazil-UAE ACFI, art. 4 (explicitly excluding full protection and security from the scope of the FET provision). Full protection and security may also be considered separate from FET.
 Brazil-Mexico ACFI, art. 5; Brazil-Chile ACFI, art. 6; Brazil-Colombia ACFI, art. 5; Brazil-Ecuador ACFI, art. 6.
 ACFIs also grant the investor a right to transparency, which may be viewed as a component of FET. See Rumeli Telekom ¶ 591-92; Monebhurrun, supra note 3, at 93. A discussion regarding whether and to what extent a transparency guarantee equates with a FET protection is beyond the scope of this paper; for a brief discussion on this subject see Monebhurrun, supra note 3, at 93-94.
 Brazil-Peru ACFI, art. 2.6(1)-(2); Brazil-Morocco ACFI, art. 5; Brazil-Ethiopia ACFI, art. 5.
 The Brazil-India ACFI post-dates the Brazil-Peru, Brazil-Morocco and Brazil-Ethiopia ACFIs; Peruvian and Ethiopian investors can also rely on the protections of the Brazil-UAE ACFI, which contains the same FET protections as the Brazil-India ACFI.
 Agreement Between the Kingdom of Morocco and Japan for the Promotion and Protection of Investment dated January 8, 2020 (Morocco-Japan BIT) (post-dates the Brazil-Morocco ACFI).
 Morocco-Japan BIT, art. 4 (“Full protection and security” is a state’s obligation to “ensure the necessary level of police protection required under customary international law.”).
 Morocco-Japan BIT, art. 9; Annex art. 1 (clarifying that the treaty covers direct and indirect expropriation).
 Brazil-Guyana ACFI, art. 6; Brazil-Suriname ACFI, art. 6. Note that both prohibit comparison to dispute resolution provisions in other BITs.
 Guyana, Inv. Policy Hub, UNCTAD, https://investmentpolicy.unctad.org/international-investment-agreements/countries/89/guyana.
 See Agreement between the Government of the United Kingdom of Britain and Northern Ireland and the Government of the Co-operative Republic of Guyana, October 27, 1989, art. 2(1)
 See Agreement between the Swiss Confederation and the Republic of Guyana on the Promotion and Reciprocal Protection of Investments dated December 13, 2005, art. 6.
 Like the Guyana BITs, Suriname’s pre-existing BITs can give Brazilian investors broad FET protections and protection against indirect expropriation. See Agreement on encouragement and reciprocal protection of investments between the Kingdom of the Netherlands and the Republic of Suriname, dated March 31, 2005, arts. 3(1), 6.
 These investors can claim, for example, the FET protections of the Brazil-India ACFI and Brazil-UAE ACFI.