Signing of modernised investment protection agreement with Chile
Bern, 03.06.2025 — Federal Councillor Guy Parmelin and Chilean Under-Secretary for International Economic Relations Claudia Sanhueza Riveros signed a modernised investment protection agreement between Switzerland and Chile on 3 June on the margins of the OECD Ministerial Conference in Paris.
Negotiations on the modernisation of the investment protection agreement were concluded in January. The agreement affords Swiss investments in Chile and Chilean investments in Switzerland protection against political risks. Specifically, it protects against state discrimination and unlawful expropriation and ensures the free transfer of payments in connection with investments. Dispute settlement procedures enable the states and investors to enforce compliance with the agreement before an international arbitration tribunal if necessary.
The modernised investment protection agreement between Switzerland and Chile replaces the agreement that has been in force between the two countries since 2002. Negotiations to modernise the agreement were launched in 2023 and took place in parallel with the revision of the free trade agreement between the EFTA states and Chile. The Federal Council adopted the dispatch on the modernisation of the free trade agreement on 26 February.
New negotiating approach
The investment protection agreement with Chile is Switzerland's second agreement based on a new negotiating approach, following that with Indonesia. Compared with agreements concluded in the past, it contains more detailed provisions to limit the discretion of arbitral tribunals in interpreting and applying the agreement. In addition, specific provisions on the regulatory rights of states, corporate social responsibility and the fight against corruption help to reconcile the objectives of investment protection with those of sustainable development.
Important partner in Latin America
With over CHF 1,287 billion in direct investments abroad, Switzerland is one of the ten largest capital exporters in the world. It has a network of over 110 investment protection agreements. Chile is one of the most important destinations for Swiss direct investment in Latin America. Swiss direct investment in Chile amounted to around CHF 192 million in 2023, with around 180 Swiss companies based in Chile.
The modernised agreement was signed by Federal Councillor Guy Parmelin and the Chilean Under-Secretary for International Economic Relations, subject to the internal approval procedures of both countries. The next step will be to draft the dispatch on the agreement and submit it to Parliament for approval. The new agreement will come into force as soon as both countries have completed their internal approval procedures.