Expropriation in Brazil’s Cooperation and Facilitation Investment Agreements

The recent Cooperation and Facilitation Investment agreements signed by Brazil display some innovative features, such as the exclusion of investor-state dispute settlement and the inclusion of corporate social responsibility issues. However, the expropriation provisions have not been improved to the same extent. The lack of precise definitions for expropriation, the omission of any reference to indirect expropriation, and the recurring reference to national legal systems represent some of the main problems. The strategy of revising the provision for expropriation as the agreements were negotiated and signed has resulted in a questionable decision to intentionally exclude indirect expropriation from the scope of the agreements and has created inconsistencies among the different texts. The success of the agreements is still unknown, but sidestepping expropriation is not a good beginning.