{"id":36831,"date":"2026-09-02T04:20:15","date_gmt":"2026-09-02T04:20:15","guid":{"rendered":"https:\/\/gsrra.com\/?p=36831"},"modified":"2026-09-02T04:20:15","modified_gmt":"2026-09-02T04:20:15","slug":"pakistan-decides-to-renegotiate-investment-treaty-with-sweden","status":"publish","type":"post","link":"https:\/\/gsrra.com\/?p=36831","title":{"rendered":"Pakistan decides to renegotiate investment treaty with Sweden"},"content":{"rendered":"\n

The federal government has decided to revoke Pakistan\u2019s notice of termination of its Bilateral Investment Treaty (BIT) with Sweden before it takes effect later this month and initiate renegotiations of the existing agreement to modernise its provisions in line with Pakistan\u2019s current investment protection framework and policy objectives, well-informed sources in the Board of Investment (BoI) told\u00a0Business Recorder<\/em>.<\/strong><\/p>\n\n\n\n

The decision was taken by the federal Cabinet, which unanimously endorsed revocation of the termination notice served on the Swedish government under the Pakistan BIT Strategy 2021, amid concerns that allowing the agreement to lapse could adversely affect investor confidence and Pakistan\u2019s economic relations with Sweden and other countries.<\/p>\n\n\n\n

The Cabinet also expressed concern over the circumstances in which the termination notice had been issued and directed that the reasons, grounds and approvals behind the decision be ascertained.<\/p>\n\n\n\n

Prime Minister Shehbaz Sharif, agreeing with the views expressed by Cabinet members, directed the constitution of a committee to determine why the notice for termination of the Pakistan-Sweden BIT was issued and to formulate detailed guidelines to be followed before issuing such notices in future.<\/p>\n\n\n\n

According to the BoI, Pakistan, through its Mission in Stockholm, had conveyed a notice of termination of the Pakistan-Sweden BIT of 1981 pursuant to implementation of the approved Pakistan BIT Strategy 2021.<\/p>\n\n\n\n

The notice was issued in accordance with Article 11 of the treaty, which required a one-year notice period before termination. Consequently, the agreement was due to terminate on September 28, 2026.<\/p>\n\n\n\n

The agreement between the Government of Pakistan and the Government of Sweden on the Promotion and Mutual Protection of Investments was signed on March 12, 1981, and entered into force on June 14, 1981.<\/p>\n\n\n\n

The BoI recently apprised the Cabinet that the Pakistan BIT Strategy 2021 had been formulated in consultation with the Office of the Attorney General for Pakistan, Ministry of Foreign Affairs, Ministry of Law and Justice, and National Security Division.<\/p>\n\n\n\n

The strategy was developed following a comprehensive review of Pakistan\u2019s investment treaty network and the country\u2019s exposure to international investment arbitration.<\/p>\n\n\n\n

Pakistan has, so far, concluded 53 BITs with various countries over several decades. According to the BoI, many of the earlier-generation BITs, negotiated primarily during the 1990s and early 2000s, contained broad and ambiguously worded investment protection provisions.<\/p>\n\n\n\n

These agreements included wide-ranging Most Favoured Nation (MFN) clauses, unqualified Fair and Equitable Treatment (FET) standards and expansive Investor-State Dispute Settlement (ISDS) mechanisms.<\/p>\n\n\n\n

The BoI maintained that such provisions had exposed Pakistan to significant risks and costly international investment arbitration.<\/p>\n\n\n\n

According to the information presented to the Cabinet, BITs with 25 countries have so far been terminated, while 29 treaties remain in force. Several renegotiations are either underway or have been proposed.<\/p>\n\n\n\n

A detailed status of Pakistan\u2019s BITs was also placed before the Cabinet.<\/p>\n\n\n\n

The matter of the Pakistan-Sweden BIT was revisited after the Ministry of Foreign Affairs, in a communication dated June 11, 2026, requested the BoI and Ministry of Commerce to review the termination notice before it took effect.<\/p>\n\n\n\n

The Foreign Ministry pointed to the nature of Pakistan\u2019s bilateral relationship with Sweden and the potential implications of the termination for investor confidence.<\/p>\n\n\n\n

It also requested that the matter be examined from the perspective of Pakistan\u2019s trade, investment and broader European Union-related economic interests.<\/p>\n\n\n\n

The BoI informed the Cabinet that the Foreign Ministry had identified two possible policy options.<\/p>\n\n\n\n

Under the first option, Pakistan could allow the termination of the BIT to take effect and negotiate a new treaty with Sweden thereafter.<\/p>\n\n\n\n

However, the existing treaty contains a survival clause under which Swedish investments would continue to enjoy protection for 20 years after termination. The BoI was informed that Sweden could be reluctant to negotiate a new BIT during the period in which the survival clause remained applicable.<\/p>\n\n\n\n

The second option was to revoke the termination notice before September 28, 2026, and simultaneously initiate negotiations for a new or modernised BIT.<\/p>\n\n\n\n

According to the BoI, this option would ensure continuity of the investment protection framework and avoid legal uncertainty for Swedish investors.<\/p>\n\n\n\n

Details regarding the quantum of foreign direct investment between Pakistan and Sweden were also presented to the Cabinet for its consideration.<\/p>\n\n\n\n

The Cabinet was further informed that several internal consultations had already taken place under the chairmanship of the Secretary, Special Investment Facilitation Council (SIFC).<\/p>\n\n\n\n

Representatives of the National Security Division and Ministry of Law and Justice had endorsed the termination notice in accordance with the approved Pakistan BIT Strategy 2021.<\/p>\n\n\n\n

However, they also suggested that if the Ministry of Foreign Affairs considered revocation appropriate, a summary could be initiated for the Prime Minister to seek policy direction on withdrawal of the termination notice.<\/p>\n\n\n\n

Against this background, two alternative proposals were submitted to the Cabinet under Rule 16(1)(h) of the Rules of Business, 1973.<\/p>\n\n\n\n

Under the first proposal, the Cabinet was requested to approve revocation of Pakistan\u2019s notice of termination of the 1981 Agreement between Pakistan and Sweden on the Promotion and Reciprocal Protection of Investments.<\/p>\n\n\n\n

The Cabinet was also asked to direct that formal communication regarding revocation of the notice be conveyed to the competent Swedish authorities through the Ministry of Foreign Affairs at the earliest opportunity.<\/p>\n\n\n\n

At the same time, negotiations on the existing agreement would be initiated with a view to modernising its provisions and bringing them into conformity with Pakistan\u2019s present investment protection framework and policy objectives.<\/p>\n\n\n\n

Under the second proposal, the BoI was to commence and lead negotiations for an entirely new BIT between Pakistan and Sweden on the basis of the Pakistan Model Bilateral Investment Treaty Template 2021.<\/p>\n\n\n\n

During the ensuing discussion, Cabinet members observed that Pakistan enjoyed longstanding diplomatic and economic ties with Sweden and that termination of the BIT could have potential adverse implications for foreign direct investment flows from Sweden as well as other countries.<\/p>\n\n\n\n

The members, therefore, stressed that the termination notice should be revoked before it became effective on September 28, 2026.<\/p>\n\n\n\n

The Cabinet unanimously endorsed the first option, approving revocation of Pakistan\u2019s notice of termination and initiation of renegotiations of the existing agreement.<\/p>\n\n\n\n

The objective of the renegotiations will be to modernise the treaty and align its provisions with Pakistan\u2019s current investment protection framework and policy objectives.<\/p>\n\n\n\n

However, the Cabinet also raised questions over the original decision to issue the termination notice.<\/p>\n\n\n\n

It was observed that it needed to be ascertained on what facts and grounds, and with whose approval, the decision to serve the termination notice on Sweden had been taken.<\/p>\n\n\n\n

Cabinet members further noted that issuance of such notices without proper appraisal and a thorough understanding of the possible detrimental effects of terminating a BIT could potentially jeopardise Pakistan\u2019s economic relations with other countries.<\/p>\n\n\n\n

The Prime Minister, agreeing with these observations, directed the constitution of a committee to ascertain the reasons for issuance of the termination notice to Sweden.<\/p>\n\n\n\n

The committee will also formulate detailed guidelines for relevant government institutions to follow before issuing similar notices in the future.<\/p>\n\n\n\n

The Prime Minister further apprised the Cabinet that he had already directed the SIFC and BoI to prepare a comprehensive plan for revamping the Board of Investment.<\/p>\n\n\n\n

The proposed plan, he said, would, among other measures, provide for recruitment of experts and subject specialists possessing expertise in various dimensions of investment agreements and international investment treaties.<\/p>\n\n\n\n

According to the Prime Minister, the plan would be presented to him for approval and aimed to strengthen the BoI’s institutional capacity and help Pakistan attract greater investment flows into the country.<\/p>\n\n\n\n

Reference Link:- https:\/\/www.brecorder.com\/news\/40437519<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The federal government has decided to revoke Pakistan\u2019s notice of termination of its Bilateral Investment Treaty (BIT) with Sweden before it takes effect later this month and initiate renegotiations of the existing agreement to modernise its provisions in line with Pakistan\u2019s current investment protection framework and policy objectives, well-informed sources in the Board of Investment […]<\/p>\n","protected":false},"author":1,"featured_media":23310,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"aside","meta":{"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2}},"categories":[2],"tags":[23860,12898,3666,3094,2076,11208,34396,483,34397,27769,2906],"class_list":["post-36831","post","type-post","status-publish","format-aside","has-post-thumbnail","hentry","category-sample-category","tag-bilateral-relations-3","tag-business-2","tag-collaboration-2","tag-cooperation-2","tag-economy-2","tag-investment-2","tag-investment-treaty","tag-pakistan-2","tag-re-negociate","tag-sweden-2","tag-trade-2","post_format-post-format-aside"],"jetpack_publicize_connections":[],"_links":{"self":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts\/36831","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=36831"}],"version-history":[{"count":1,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts\/36831\/revisions"}],"predecessor-version":[{"id":36832,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/posts\/36831\/revisions\/36832"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=\/wp\/v2\/media\/23310"}],"wp:attachment":[{"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=36831"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=36831"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/gsrra.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=36831"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}