The State Department recently announced that it had affirmed the termination of a bilateral investment treaty (BIT) between Ecuador and the United States, set to take effect a year after the Ecuadorian government issued a notice of its termination. The termination of the BIT, however, also affects the availability of E-2 treaty investor visas for Ecuadorian immigrant workers.
The E-2 investor visa allows certain individuals from countries the United States has a commerce and navigation treaty (such as the BIT) with to enter the country. In particular, only foreign nationals who have invested a “substantial amount of capital” in a U.S. business enterprise may avail of the visa as they are expected to develop and direct the operations of that enterprise throughout their stay in the country.
What happens after the termination of a BIT is unique to every treaty because each agreement follows an embedded set of post-termination guidelines. In the case of the U.S.-Ecuador BIT, Ecuadorian nationals with E-2 visas acquired on or before May 18, 2018 will remain entitled to their E-2 classification until May 18, 2028.
The BIT between the United States and Ecuador was set to continue the availability of E-2 visas to Ecuadorian investors for another 10 years following a cut-off date for investments. During this grace period, the U.S. will continue to accept and process applications and renewals for the visa insofar as an applicant’s investment was established or acquired prior to the termination date.
But in 2017, Ecuador became the fifth country to terminate all of its active BITs, the reason for which continues to elude observes. Experts, however, believe that the South American state found that the treaties had only brought risks and costs to the country instead of any tangible benefit.
According to Cecilia Olivet, president of the Ecuadorian Citizens Commission, “The Bilateral Investment Treaties (BITs) signed by Ecuador failed to deliver promised foreign direct investment.”
In addition, Ecuador’s BITs contract and undermine the country’s development objectives, which are defined in Ecuador’s BITs contradict and undermine the development objectives laid out in the country’s constitution and its National Plan for Living Well (Buen Vivir).
The commission also believes that the treaty has made the country vulnerable to exploitation from foreign investors. Previously, U.S. oil company Occidental earned upward $2.3 billion from the country as a result of deliberation at an investor-State tribunal – an arbitration the Ecuadorian government believes was skewed.
Call the offices of the Lyttle Law Firm today to learn more about the E-2 visa program. Contact us at (512) 215.5225 for a discussion on how we can help you with your immigration goals.