Over the years, Morocco has been a favorite destination for foreign direct investment across various sectors of its economy and France remained the top Investors in the region. However, in recent times, the United States has emerged as the top foreign direct investor in Morocco, with its investments across diverse sectors of the Moroccan economy reflecting the close economic ties between the two countries. With the Bilateral Investment Treaty (BIT) between the United States and Morocco, investors have been granted access to an investor-state dispute resolution mechanism that seeks to ensure the protection of investors’ rights in both countries. In this blog post, we will explore the US-Morocco BIT, the implications of the agreement for investors, and how it can impact the future of investments in the region. See US Overtakes France As Top Foreign Investor in Morocco in 2022 (moroccoworldnews.com)
United States and Morrocco Bilateral Investment Treaty
The Bilateral Investment Treaty (BIT) between the United States and Morocco was signed in 1985, with the aim of promoting economic cooperation and increasing investment flows between the two countries. The BIT provides investors in both countries with access to a fair and predictable investment climate that is supported by an investor-state dispute resolution mechanism. The BIT also provides for the settlement of disputes between investors and the host state, which primarily aims to ensure the protection of investors’ rights.
Under the terms of the BIT, investors are granted protection for their investments, which includes protection from expropriation and other discriminatory measures. The BIT provides investors with the right to initiate arbitration proceedings in case of a dispute with the host state. The BIT, however, only consents to ICSID (International Centre for Settlement of Investment Dispute) rules and does not allow dual nationality claims against Morocco. Claimants will have a hard time to establish Jurisdiction if there is an issue of dual nationality. However, this will vary on a case-by-case basis. See Morocco – United States of America BIT (1985) | International Investment Agreements Navigator | UNCTAD Investment Policy Hub
Goal of the BIT
It is worth noting that the BIT is in line with Morocco’s broader strategy to attract foreign direct investment to its economy. With the rise of technological advancements and innovations in various economic sectors, Morocco has been at the forefront of attracting foreign companies that are seeking to invest in the country’s growth and development. In recent years, Morocco has been proactively involved in creating an enabling environment for foreign investors, with the signing of BITs with various countries serving as a testament to its commitment to growth and development.
One of the key sectors that have seen significant foreign direct investment in Morocco is the automotive industry. With its strategic location, low-cost operating environment, and the presence of a skilled workforce, Morocco has become an ideal destination for automakers seeking to expand their operations in Africa. Global automotive brands such as PSA Peugeot, Renault, Ford, and BMW have all set up plants in Morocco in recent years, contributing to the rise in foreign direct investment in the country.
In conclusion, the Bilateral Investment Treaty (BIT) between the United States and Morocco provides investors in both countries with a reliable investment climate that is supported by a fair and predictable dispute resolution mechanism. With the United States emerging as the top foreign direct investor in Morocco, it is evident that the economic ties between the two countries are growing strong. While the BIT only consents to ICSID rules, it is in line with Morocco’s broader strategy to attract foreign direct investment to its economy and create an enabling environment for investors to operate in. Going forward, it will be interesting to see how the bilateral relationship between the United States and Morocco evolves and how it impacts further investments in the region. Our team of attorneys can help you protect your investments. Contact Our Office – Transnational Matters