The U.S. bilateral investment treaty (BIT) program helps protect private investment, develop market-oriented policies in partner countries, and promote U.S. exports.
BIT program's basic aims are to:
investment abroad in countries where investor rights are not already protected
through existing agreements (such as modern treaties of friendship, commerce,
and navigation, or free trade agreements);
the adoption of market-oriented domestic policies that treat private investment
in an open, transparent, and non-discriminatory way; and
the development of international law standards consistent with these objectives.
BITs provide investments with six core benefits:
U.S. BITs require that investors and their “covered investments” (that is,
investments of a national or company of one BIT party in the territory of the
other party) be treated as favorably as the host party treats its own investors
and their investments or investors and investments from any third country. The
BIT generally affords the better of national treatment or most-favored-nation
treatment for the full life-cycle of investment – from establishment or
acquisition, through management, operation, and expansion, to
BITs establish clear limits on the expropriation of investments and provide for
payment of prompt, adequate, and effective compensation when expropriation takes
BITs provide for the transferability of investment-related funds into and out of
a host country without delay and using a market rate of exchange.
BITs restrict the imposition of performance requirements, such as local content
targets or export quotas, as a condition for the establishment, acquisition,
expansion, management, conduct, or operation of an investment.
BITs give covered investments the right to engage the top managerial personnel
of their choice, regardless of nationality.
BITs give investors from each party 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.
negotiates BITs on the basis of a model text. For further information on the BIT
program, contact the bilateral investment treaty coordinators at 202-736-4906
(Department of State) or 202-395-9679 (Office of the U.S. Trade