Running their business via a letterbox company in the Netherlands, transnational corporations profit from the corporate-friendly Dutch tax regime and bilateral investment treaties the Netherlands has with third countries. Euro Telecom Italia (ETI), a subsidiary of Italian telecoms giant ENTEL, is one such letterbox company. ETI recently lodged a complaint with the World Bank tribunal ICSID against Bolivia for compensation, after the Bolivian government had launched a review the company’s much-criticised performance and attempted to negotiate a buy back of what used to be a public telecommunications company.
Italy has strongly supported Pakistan’s case for Free Trade Agreement (FTA) with the European Union and given assurance to encourage Italian investment in Pakistan.
The recent free trade agreement between Korea and the US could help uncork one of the hottest markets in an expanding Asian frontier: quality foodstuffs and wine.
Finstone Ltd SA, a foreign mining company based in Luxembourg, is suing the South African government for an alleged expropriation of its mineral rights. Finstone is a holding company in control of three South African granite producing operations i.e. Marlin, Red Graniti and Kelgran. The real challenge posed by this legal action is that the abovementioned investors find the black economic empowerment programme is in violation of the bilateral treaties signed with South Africa by both Luxembourg and Italy.
Government has finished Bilateral Investment Promotion and Protection Agreements (Bippas) negotiations with France, Italy and Indonesia, a move analysts say gives a glimmer of hope to other countries whose nationals lost their agro-ventures during the land reform programme.
The minerals and energy department is engaged in talks with Italian companies operating in SA over possible breaches of the SA-Italy bilateral investment treaty in the implementation of the Mineral and Petroleum Resources Development Act.