Quick guide: key investment & Investor-State Dispute Settlement (ISDS) outcomes

The Korea-Australia Free Trade Agreement (KAFTA) provides improved access and protection for Australian investors and investments in Korea. It also promotes increased Korean investment in Australia.

KAFTA ISDS is a modern, balanced mechanism with explicit safeguards for legitimate public welfare regulation

  • Investment obligations can be enforced directly by Australian investors (and by Korean investors) through an ISDS mechanism. An ISDS claim can only be made on the basis of a breach of an investment obligation or commitment. It cannot be based on a breach of an obligation in other parts of KAFTA such as the intellectual property or environment chapters.
  • The KAFTA Investment Chapter and ISDS provisions include explicit safeguards to protect legitimate public welfare regulation, including in areas such as public health, and the environment. These include: safeguards built into the Investment Chapter obligations; ‘reservations’ which allow Australia to reserve policy space in sensitive areas; general exceptions; and procedural safeguards built into the ISDS mechanism.
  • ISDS does not apply to decisions made concerning investments which are subject to review under Australia’s Foreign Investment Framework.

KAFTA will promote increased Korean investment in Australia

  • KAFTA raises the screening threshold at which private Korean investments in non‑sensitive sectors are considered by Australia’s Foreign Investment Review Board from $248 million to $1,078 million.
  • Australia retains the ability to screen investments in sensitive sectors, including media, telecommunications, defence and agriculture at lower levels, and all foreign government investments regardless of value.

KAFTA will improve opportunities and protections for Australian investors

  • Under KAFTA, Korea further opens its economy to Australian investors through the progressive reduction of market access barriers in key sectors including: telecommunications; legal services; and accounting and tax agency services.
  • KAFTA provides enhanced protections and certainty for Australian investors in Korea (and for Korean investors in Australia) with measures to ensure non‑discrimination, and protection and security for investments.

Fact sheet last update: September 2017

Last Updated: 26 September 2017