The Swiss government has called South Africa’s decision to terminate a bilateral investor protection agreement signed in 1997 a regrettable «unilateral step».
The South African authorities informed the Swiss on Thursday that they were ending the accord, having indicated over 12 months ago that investment treaties would be replaced by legislation. The agreement will still run for a year, the legal period of notice, and investments made before that time will be protected for another 20 years.
In a statement, the Swiss embassy in Pretoria said that «Switzerland regrets this unilateral step taken by South Africa and would have preferred the continuation of this agreement.»
«Bilateral investment agreements remain an important pillar for the development of Swiss foreign investments in a large range of countries.»
The announcement came less than two months after Swiss Economics Minister Johann Schneider-Ammann met the South African Trade and Industry Minister Rob Davies. Davies said then in Cape Town that «this is the right time for us to strengthen our partnership.»
Switzerland is currently is the seventh biggest foreign direct investor in South Africa, with investments worth around CHF2.4 billion ($2.6 billion).
The embassy statement added that the Swiss authorities expect South Africa to «swiftly introduce a reliable and equivalent national legal framework for the promotion and protection of investments in order to restore solid guarantees and predictability for Swiss companies investing in South Africa in the future.»
«Switzerland remains committed to continuing discussions with South Africa on the future framework for the protection of foreign investments,» it said.
South Africa has cancelled this type of agreement with Luxembourg, Spain, Belgium and Germany. Its government approved last week a bill aimed at promoting and protecting investments, intended to replace the earlier treaties that it considers outdated.