Minister Lehtomäki signs agreement on promotion and protection of investments between Finland and Mozambique

Press Release 188/2004
3 September 2004


At an event held in Maputo in connection with her visit to Mozambique, Paula Lehtomäki, Minister of Foreign Trade and Development, today signed an agreement between Finland and Mozambique on the reciprocal promotion and protection of investments. Signing for Mozambique was Luisa Dias Diogo, the country’s Prime Minister and Minister of Planning and Finance. The decision to launch negotiations aiming at an agreement was taken during the visit to Finland made last year by Joaquim Chissano, President of Mozambique. The negotiations were held in Maputo in May 2004.

By means of this agreement, Finland primarily strives to ensure that Finnish companies receive fair and equal treatment in Mozambique. The agreement shields Finnish companies’ investments against political risks and stipulates that investments be treated impartially with regard to investments from both foreign and domestic companies. Further, the agreement guarantees the free transfer of invested funds and their returns to and from the country. The agreement obligates the signatories to pay compensation for losses arising through expropriation, confiscation and damage and requires compliance with the principle of transparency in regulations affecting enterprise.

There are now 48 agreements on promotion and protection of investments in force between Finland and other nations. Of the countries in Sub-Saharan Africa, Finland has previously concluded agreements with South Africa, Namibia and Tanzania.

Mozambique is among Africa’s poorest countries, but in recent years its economic growth has been the fastest of all Southern Africa. Mozambique is Finland’s most important long-term development cooperation partner. By contrast, trade relations based on free competition are still modest between Finland and Mozambique.

A central objective of Finland’s development cooperation is to support economic enterprise in partnership countries by means of trade policy and also to promote Finnish investment in these countries. Efforts are made to find methods that can be applied to combine development policy and trade policy with companies’ own business targets. This agreement on the promotion and protection of investments supports these goals.

Additional information: Jukka Nystén, Head of Unit, Department for External Economic Relations, Ministry for Foreign Affairs, [email protected], tel. +358 9 1605 5071.