On 29 January 2021, Japan and Georgia signed a bilateral investment treaty titled the Agreement between Japan and Georgia for the Liberalisation, Promotion and Protection of Investment (Japan-Georgia BIT or BIT). This is the first BIT signed by either Japan or Georgia since the outbreak of the COVID-19 pandemic. It is expected that the BIT will enter into force later this year once it has been through the requisite ratification procedures in Japan and Georgia.
Upon signing the BIT, Georgia's Minister of Economy was reported to have said "We will do our best to bring as many Japanese investors as possible into various fields of the Georgian economy to create new jobs especially in the post-Covid period, when we need active investments". This builds upon a steady increase of Japanese investment into Georgia particularly in the energy sector. For example, last year a major Japanese utility company acquired a significant stake in a Georgian hydropower company.
The Japan-Georgia BIT contains wide-ranging investment protections for investors from Georgia and Japan. This briefing provides further detail on who is covered and how these rights may be used. In summary, consistent with its own aims, and the emerging Japanese 'standard form' for investment treaties, the Japan-Georgia BIT is favourable from an investor's perspective. Importantly, the treaty has "teeth" in the form of an investor-State dispute settlement (ISDS) mechanism.
As well as looking at the provisions of the treaty in more detail in this briefing, we highlight some of its limitations and exclusions, for example, for measures aimed at protecting public health. There are also other exclusions specifically focused on the construction, engineering, electricity, gas and oil sectors.