The Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Economic Development

¶ 01 Hon. Speaker, on behalf of the Minister of Foreign Affairs, Foreign Employment and Tourism, I move:

¶ 02 “That this Parliament resolve, in terms of Article 157 of the Constitution of the Democratic Socialist Republic of Sri Lanka, to approve the Agreement between the Democratic Socialist Republic of Sri Lanka and the United Arab Emirates on the Promotion and Reciprocal Protection of Investments signed on 12 February 2025 and presented on 21 August 2025, as it is necessary for the growth of the national economy.”

¶ 03 (Cabinet approval has been granted.)

¶ 04 This agreement on promotion and reciprocal protection of investments follows discussions with the UAE and consideration of the bilateral trade and investment relationship. It was signed on 12 February 2025 during H.E. the President’s visit to the UAE by the Hon. Minister of Foreign Affairs, Foreign Employment and Tourism and the UAE Minister of State for Financial Affairs. Implementation requires a two-thirds special majority under Article 157.

¶ 05 The agreement has 29 articles in four parts. Definitions are key, including what constitutes “investment” and “investor,” and the scope of covered investments, which must meet materiality thresholds and be subject to host-state laws and approvals. It excludes non-commercial governmental authority functions and matters like intellectual property beyond the defined scope.

¶ 06 The agreement balances promotion/protection with constitutional necessities such as national security, public morals and culture, environmental protection and sustainability, national heritage and natural resources, all under applicable laws.

¶ 07 State obligations include promoting investments, providing information, and mobilizing agencies, including incentives via BOI Act Section 17 where appropriate, consistent with domestic laws such as the Income Tax Act. Reciprocally, Sri Lankan investments in the UAE would be governed under UAE federal law.

¶ 08 Protections include: - Fair and equitable treatment (FET) and non-discrimination. - National treatment and most-favoured-nation considerations consistent with domestic regimes. - Expropriation: permitted for a public purpose, under due process, on a non-discriminatory basis, with prompt, adequate, and effective compensation. - Transfers: investors may repatriate capital and returns, subject to temporary safeguards in cases such as serious balance-of-payments difficulties to avoid undermining macroeconomic stability.

¶ 09 Investor obligations are also recognized, including compliance with host state laws and corporate social responsibility. Dispute settlement provides for domestic courts first and, with party agreement, recourse to UNCITRAL or ICSID arbitration.

¶ 10 This agreement creates opportunities to deepen trade and reduce the persistent deficit with the UAE, improve FDI inflows—where Sri Lanka currently captures a very small share of the UAE’s annual outward investment (~US$20 billion)—and diversify export markets, notably in manufacturing, ICT, tourism, and agri-industries. It aims to rebuild investor confidence by ensuring clarity, predictability, and balanced dispute resolution, avoiding unilateral actions that previously undermined trust.

¶ 11 Therefore, I commend this Resolution to the House.