March 21 (LBO) – An investment protection agreement between Sri Lanka and Australia has come into effect from March this year with Australia, which can increase investment flows to the island, the foreign ministry said. Sri Lanka had completed its internal legal requirements in February 2006.
“The Agreement sets out the State to State guarantees with regard to, inter-alia, promotion and protection of investments, standard of treatment of investments, compensation for losses, including in the event of expropriation or nationalization and provision relating to settlement of investment disputes,” the Ministry of Foreign Affairs said in a statement.
The foreign ministry says Australia is the second largest investor in Sri Lanka and the Bilateral Investment Promotion and Protection Agreement would spur Australian investments into Sri Lanka through the creation of better legal environment for Australian investments.
The agreement came into effect on March 14 after Australia completed domestic procedures needed bring the agreement into legal effect.