Qualifying an investment under a treaty

Criteria for qualifying an investment under a bilateral investment treaty

• Identification of the transaction.
• Applicable treaty in force.
• Treaty definition of investment.
• Doctrinal criteria: in particular the Salini test.
• Protected investor: in particular nationality and control.
• Structuring, timing and interaction with Moroccan investment law.
• Finally, a summary and the applicable references.

When to check qualification under a bilateral investment treaty

The grid serves first before an investment abroad or in Morocco is structured. It also serves before the ownership chain is restructured. Furthermore, it informs the preliminary analysis of a dispute with a State.

Investors and legal departments are in particular its intended readers. The document also concerns the finance departments of international groups.

Instructions for use

The grid is first gone through in the order of the conditions: treaty, investment, investor. The grid then records each unmet condition and its consequence. Furthermore, the ownership chain is examined before any restructuring. Finally, the summary indicates whether access to treaty protection appears open, uncertain or closed.

Expected outcome

Once completed, the grid characterises access to treaty protection: open, uncertain or closed. The conditions to be secured are clearly identified. Consequently, the structuring of the investment incorporates these conditions before any irreversible decision.

Key facts

Limitations

The grid does not constitute a consultation on a dispute. Moreover, arbitral case law is not uniform on several criteria.

Further reading: investment project structuring; International Centre for Settlement of Investment Disputes.