VII. INVESTMENT CLIMATE HOST COUNTRIES POLICIES AND PRACTICES Italy encourages foreign investment. In general, 100 percent ownership of Italian corporations is permitted, although in some sectors there is resistance to foreign entry and a preference for an "Italian solution". Significant bureaucratic obstacles exist to investing in Italy, but these apply to Italian and foreign investors alike. There are no screening or blocking procedures directed solely at foreign investment except in the restricted sectors listed below. However, the 1990 anti-trust law requires notification and possible screening (of anti-competitive actions or effects) of all acquisitions in which the takeover target has total sales of over 50 billion lire (31 million dollars) or where the merged entity would have combined sales of over 500 billion lire (300 million dollars). These thresholds are adjusted for inflation over time. The law also gives the government authority to block an acquisition if the home government of the acquiring company does not grant Italian firms treatment as liberal as that granted by Italy. Italy provides national treatment to foreign investors except in a few instances. These include limits to access to government subsidies for the film industry and some limits on access to domestic capital market, especially for non-EU countries. The Italian government operates several monopolies, including petroleum, railroads, electrical generation and transmission, and the production of cigars and cigarettes. However, the privatization program is going to reduce the State role in these sectors. Italy maintained restrictions and/or limits on foreign investment in banking, insurance, domestic air transportation, shipping aircraft registration. A further restriction on investment concerns local labor content. Companies can bring in foreigners only after certifying that no unemployed Italian is available to carry out the expected duties. Some restrictions applying to banking and financial services, radio and television and air and sea navigation have been removed or relaxed. The Amato law of July 1990 allowed banking and savings institutions established in accordance with italian "public law" to transform themselves into "private law" joint stock companies and sell up to 49 percent of their assets to private investors. Shares in the joint stock companies can be transferred to foreign and Italian investors provided that Italian state controlled entities retain direct and indirect ownership of the majority of shares of common stock. The law provides that in exceptional cases, subject to the approval of the treasury ministry, a majority stake can be transferred to private investors. Furthermore, acquisition of more that five percent of a credit institution's capital (or gaining effective control) requires prior authorization by the Bank of Italy. In addition, industries (either Italian or foreign) are barred, directly or indirectly, from acquiring more the 15 percent of a bank's capital. The privatization program launched in 1992 covers a large number of industrial and service sectors. Privatization of the financial sector is in fact an essential move not only to allow foreign direct investment in that sector but also to support the development of Italy's financial market in general, and hence the funding of foreign investment. The introduction of concessions to replace monopolies for oil and gas extraction in the Po Valley and energy production was the first step in the de-monopolization program. The 1992 privatization program proposed the sale of the majority of the capital of public companies, public services and financial institutions, and encouraged the management of these enterprise to sell assets by curtailing government assistance. The main sale techniques indicated by the privatization decree law are sale by mutual agreement or private placement, plans for worker shareholdings and management by-outs, public offer for sale, and public auction. Apart for allowing greater transparency, public auction should impose greater discipline and make it possible to extent share ownership (to italian households in particular). The latest version (May 1994) of the privatization decree law provides some limits to the establishment of "hard-core" shareholdings for the companies operating in the defense, communications, energy, public utilities, but also for companies operating in the credit and insurance sectors. The privatization decree law anticipates that the treasury is intent to present a further decree to regulate the privatization of the foundations controlling by 77 saving banks and six large public banks. The overall value of these foundation is estimated at 63 trillion lire at end-1992 (42 billion USD). The securities intermediation (SIM) law passed in January 1991 required that as that of January 5 1992, all securities firms wishing to do business in Italy or with Italian clients must create a securities intermediation company (SIM) in Italy. A SIM is a joint stock company with prescribed capital, staff and structural requirements. Due to the high cost of establishing a SIM, the law has adversely affected the operations of U.S. Financial institution in Italian capital markets. The SIM law violates basic tenets of the OECD code of liberalization of capital movements. In addition, the EU commission has threatened to take Italy to the European Court of Justice unless changes are made in the SIM law which violate the freedom of establishment and freedom to provide services principles of the Treaty or Rome. The Italian tax system does not discriminate between foreign and domestic firms. Direct taxation, which is governed by the single statute (testo unico), includes the national corporate income tax (IRPEG), which is currently 36 percent, The local income tax (ILOR), which is currently 16.2 percent, and the personal income tax (IRPEF), which is progressive, varying from 10 to 51 percent. From January 1, 1993 , ILOR was replaced by a new local property tax (ICI). The tax rate for the ICI is set by each municipality. Foreign citizens who reside in Italy for more than 180 days per year are subject to the personal income tax (IRPEF). Italian residents are required to pay taxes on their world wide income. Non-residents are taxed on income accruing from an Italian source. Italy's civil code stipulates that an investor's losses generally cannot exceed the value of the initial investment. Capital investments, sales of companies and plants, exchange transactions, loans sales of securities and transfers of properties relating to company mergers and reorganizations are exempt from the value added tax (IVA). There is a double taxation treaty in effect between the U.S. And Italy. The Italian-U.S. tax treaty provides that profits in a company located in one of the contracting states are not taxable in that state unless the company carries on business in the other state through a permanent establishment may be taxed in the other state. Royalties from patents and like properties are exempt from tax withholding under the treaty. They are freely remittable, subject to documentation requirements. TRANSFER POLICIES Presidential decree no. 454 of September 1987 liberalized Italian exchange control laws and provided that all cross-border transactions would be permitted unless specifically prohibited by law. This and subsequent decrees and regulations concerning exchange controls were consolidated under presidential decree no. 148 of March 1988, which establishes the "testo unico" (single statute). In May 1990, Italy eliminated its remaining foreign exchange controls in order to implement the EU directive on liberalization of short term capital movement. There is a double taxation treaty in effect between the U.S. And Italy. The Italian-U.S. Tax treaty provides that profits in a company located in one of the contracting states are not taxable in that state unless the company carries on business in the other state through a permanent establishment may be taxed in the other state. Royalties from patents and like properties are exempt from tax withholding under the treaty. They are freely remittable, subject to documentation requirements. Residents are free to undertake financial transactions, including direct investments and purchases and sales of any foreign securities, real estate investments, and loans. Residents may also freely hold foreign exchange and lire in any form in Italy and abroad. Residents cannot enter or leave the country with bearer securities worth more than 20 million lire (12,500 USD). They are allowed to import or export nonbearer securities worth more than 20 million lire, provided that they submit a declaration to customs. Banks and authorized intermediaries must, for statistical purposes, submit data on their foreign exchange transactions exceeding 20 million lire to the foreign exchange office of the Bank of Italy. During the September 1992 foreign exchange crisis, there were rumors that foreign exchange controls would be reimposed to stop capital flight, but the government has denied any intention of doing so. Except as noted above, foreign investments in Italy, including both direct and portfolio investment and purchase of real estate, are not restricted and no restrictions apply to repatriation of capital. EXPROPRIATION AND COMPENSATION Under article 42 of the Italian constitution, private property may be expropriated for "public purposes." Compensation is guaranteed. According to the constitutional court, such compensation may not be "merely symbolic", but must adequately compensate the legitimate proprietor for losses. Lenders are not covered by the same constitutional guarantee as proprietors in the event of expropriation. The constitution also authorizes the nationalization of enterprises handling essential public services, energy and monopolies that are indispensable to the national economy. DISPUTE SETTLEMENTS In the past, internal and external economic difficulties have forced a few U.S. companies to reduce operations in Italy or to close down altogether. A recent dispute involved a U.S. manufacturer of plastic film with a plant in Southern Italy whose authorization to install a coating machine had been held up by the local fire chief. The company became so exasperated that it threatened to relocate its operations to the Netherlands, with the consequent loss of 200 jobs in an area which has a 21 percent unemployment rate. USG intervention unblocked the impasse, and construction of a new production line is underway. Another recent investment dispute concerned the Italian subsidiary of an American company which had been subjected to allegedly unfair tax audits. A series of highly publicized raids had caused hundreds of the firm's sales agents to tender their resignation. Embassy intervention allowed the company to plead its case through regular channels and present a formal appeal. The case is still pending and the company is still operating. On the other hand, U.S. firms continue to invest in Italy: 23 mergers and acquisitions were reported in 1991 and the first nine months of 1992, some involving large companies: Kellogg, United Technologies and Browning Ferris. Total U.S. direct investment in Italy was 5.9 billion USD in 1993. PERFORMANCE REQUIREMENTS/INCENTIVES The government makes a variety of investment incentives available to both foreign and Italian investors. These include: subsidized loans, cash grants, labor cost incentives, other non-tax incentives (rebates on rail freight, reduction of electric utility coasts, etc.) and tax incentives. The incentives are targeted at the economically depressed area of the Mezzogiorno (Southern Italy, Sardinia and Sicily). Incentives for the Mezzogiorno are regulated by Law No. 64 of March 1, 1986, which provides for: 1) a ten-year exemption from the Corporate Income Tax (IRPEG) for new industrial activities; 2) a ten-year exemption from the Local Income Tax (ILOR) on profits from investment in new plants and expansion of existing ones; 3) an exemption from Local Income Tax (ILOR) on profits earned anywhere in Italy which are reinvested in the South. Rebates of indirect taxes (including VAT) are available for all exports regardless of where they originate in Italy. The EU Commission has challenged several of these incentives, which it claims do not conform with EU directives on competition policy. Their future is uncertain. Similar incentives exist for a few strategic industries such as telecommunications. None of these incentives is tied by law to export or local content commitments. Although companies must provide substantial information to obtain incentives, and some businessmen have complained about delays in receiving them, they are freely available and widely used. RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT There is no specific limitation to the right to private ownership and establishment in either the Italian Constitution or Italian Civil Law. PROTECTION OF PROPERTY RIGHTS Italy since 1989 has been on the intellectual property rights "watch list" under the Special 301 provision of the 1988 trade law, reflecting widespread problems with protection of copyrights for computer software and film videos. Over the past year, Italian authorities have shown a much greater sensitivity to the need for action in these areas, and considerable progress has been made. Enactment in December 1992 of the EU software directive making software copyright violations a criminal offense was a major step forward. Simultaneously, the GOI has substantially increased enforcement actions agains both video and software pirates. A May 1993 decree by Prime Minister Ciampi established a permanent anti-piracy committee to coordinate and mobilize government activity in this area. Other related activity has included a series of specialized training courses organized by the Ministry of Interior for Italy's three law enforcement agencies, and a two-day symposium to sensitize judges throughout Italy to the need for stricter application of the law. Italy is a member of the Paris Union International Convention for the Protection of Industrial Property (patents and trademarks) to which the United States and about 85 other countries adhere. U.S. citizens are entitled to the same treatment (national treatment) in acquiring and maintaining patent and trademark protection in Italy as an Italian citizen would be. In addition, after filing a patent application in the United States, a U.S. citizen is entitled to a 12-month period within which to file a corresponding application in Italy and receive in Italy the benefit of his or her first U.S. filing date (rights of priority). The priority right filing period for trademarks is 6 months. Italy is also a member of the Berne Copyright Union and adheres to the Universal Copyright Convention to which the United States and 50 other countries are signatories. U.S. authors can thereby obtain copyright protection in Italy for their work first copyrighted in the United States merely by placing on the work, their name, date of first publication, and the symbol . In turn, Italian authors have the same rights in the United States for works first copyrighted in Italy. Patent and trademark applications and inquiries should be addressed to: Ministero dell'Industria e Commercio Ufficio Centrale Brevetti per Invenzioni Modelli e Marchi Via Molise, 19 00187 Rome, Italy Applications and inquires concerning copyrights should be addressed to: Presidenza del Consiglio dei Ministri Ufficio del Propriet Letteraria, Artistica e Scientifica Via Boncompagni, 15 00187 Rome, Italy Laws Governing Intellectual Property Rights Patents and Licensing--The principal laws governing patent protection are Royal Decrees No. 3731 of October 30, 1859, No. 1127 of June 29, 1939, Law No. 633 of April 22, 1941, and Presidential Decree No. 338 of June 19, 1979. Decree 338 amends the former Italian legislation and implements the European Patent Convention. To be patentable, an invention must be novel, that is it cannot have been available to the public anywhere else before the date of the filing or of the priority claimed. Patents are granted for 15 years from the effective filing date of application. They are assignable and transferable. A patent can be subject to compulsory licensing if not worked within 3 years from date of grant or 4 years from the filing date of application, whichever is later. Licensing and technical assistance agreements with foreign firms are encouraged by the government. The foreign exchange necessary to effect payment abroad (including the United States) of bona fide royalties and/or technical assistance fees can be obtained simply upon application to the Italian Exchange Office through a bank. Applicants are required to produce the original contract with the foreign concern and to submit a certified copy of such a contract. A certificate confirming the validity of the patent should also be submitted in the event that the contract provides for the use of patents. Annual taxes must be paid each year during the period an Italian patent is in force. These taxes are progressive and range from lire 1,000 for the first year to lire 35,000 for the 15th year. Trademarks--The principal trademark registration laws are Royal Decree No. 929 of June 21, 1942, and Presidential Decree No. 795 of May 8, 1948. Some types of terms are not registrable as trademarks, such as those deemed to be generic, those containing false indications of quality or origin of goods, and those similar terms already registered by others in Italy or for which applica- tions are pending. For some goods, geographic names may not be used in trademarks nor can the portraits of persons be registered without their consent. Trademark applications are examined for acceptability of their format and consistency with the laws. If an application is in order, the mark will be registered. There is no opportunity for opposition and the first applicant is entitled to registration. However, any other person who claims to be the first user of the mark in Italy can have the prior registration cancelled, provided one can prove the claim. No claim of prior use claim can be made after the registered mark is 5 years old. Trademarks are registered for 20 years from the effective application filing date and are renewable for similar periods. Failure to use a mark within 3 years after its registration can result in cancellation. Trademarks may be assigned to other users provided such action does not involves deceptive trade practices. For administrative purposes, trademark products are classified under 42 groups (1-34 for products and 35-42 for services). Applications must indicate the appropriate classification. Copyrights--Both Italy and the United States are signatories of the Universal Copyright Convention, which provides for mutual copyright protection. In Italy, copyrights are protected by Law No. 633 of April 22, 1941 and Decree Law No. 82 of August 23, 1946. Executive recognition in the form of copyright protection to the author is accorded intellectual creations pertaining to science, literature, music, decorative arts, architecture, the theater, and motion pictures. Copyright protection for an author's work exists for the life of the author, plus 50 years after his or her death. In the case of motion pictures, protection is limited to 50 years from the date of the first public screening. Anonymous works are protected for 50 years after publication. Further detailed information on procedures regarding patent, trademark, and copyright protection in Italy should be obtained from competent legal counsel. The following additional legislation relating to the protection of copyright was subsequently issued: Illegal duplication of phonographic material (No. 406 7/29/81); Illegal duplication and transmission of film works (No. 400 7/20/85); Illegal duplication of software (No. 518 12/20/92 - enacting EU Directive 91/250). Copyright protection for motion pictures, originally 30 years under the 1941 law, was extended to 50 years by a decree law of 1979. Under the 1945 law, a further 6 years of protection is granted to compensate the time period between the commencement and the end of World War II for films produced by "allied and associated countries" (which include the United States). EU Initiatives on IPR Italy is also a signatory to the European Patent Convention, which provides for a centralized European-wide patent protection system (Italy has not yet ratified the convention). The European Patents Act of 1977 provides increased legal protection, a patents court, and guidelines for compensation of an inventor. The European Patent Convention has simplified the process for obtaining patent protection in the EU member states. Under the European Convention, an applicant for a patent is granted a preexamined 15-year, non-renewable European patent that has the effect of a national patent in all 16 countries that are signatories of the convention, based on a single application to the European Patent Office. This procedure should expedite the granting of patents. However, infringement proceedings remain within the jurisdiction of the national courts, which could result in some divergent interpretations. Further information may be obtained from the European Patent Office, Motorama-Haus, Rosenheimer Strasse 30, Munich, Germany. The EU commission is attempting to harmonize copyright protection in several areas and views continued progress as a key part of its programs for the internal market. The software directive, approved by the European Council in 1991, entered into force on January 1, 1993. Seven member states including Italy have transposed the directive into national legislation. The directive on rental and lending rights, approved by the Council in 1992, is due to be implemented by the member states by July 1, 1994. In September 1993, the Council adopted a directive on the harmonization of copyright laws in satellite broadcasting and cable retransmission, which member states must implement by January 1, 1995. This measure allows satellite broadcasters to clear in their country of origin full copyright responsibility for their entire footprint throughout Europe. In an attempt to overcome the significant divergences among the member states in this area of IPR protection, in October 1993, the Council adopted the directive on the harmonization of the duration of copyright and of certain related rights. It provides for the term of copyright to be harmonized for a period of 70 years after the author's death. For related rights, it harmonizes the term of protection at 50 years from the date of production. REGULATORY SYSTEM: LAWS AND PROCEDURES Italy is in the process of implementing the EU mandated, single market directives which are intended to harmonize many of the most significant regulatory structures. While the thrust of these directives is towards creating a non-discriminatory, less restrictive trade regime amongst the twelve EU members, the resulting market consolidation is expected to yield significant benefits to non-EU trading partners as well. Harmonization of standards relating to labeling, content, production, safety, etc. should reduce development costs and contribute to economies of scale for companies which wish to operate in Italy. Several EU directives deal with the issue of transparency, public sector contracts, and subcontracting. The process of incorporating these directives into Italian law has focused public attention on governmental and party practices in a sector widely thought to be poorly regulated and corrupt. Legislation required to bring Italy into compliance with EU standards in this area would have the effect of subjecting such transactions and relationships to public scrutiny. Final enactment has yet to occur and the topic remains politically volatile. In the areas of standards and standards setting, Italy has been slow in accepting test data from foreign sources, but is expected to adopt EU standards in this area. However, it is generally accepted that the implementation process may be slower than with some other leading EU members. It appears that in sectors such as pollution control, the uniformity in application of standards may vary according o region, thus creating a complicated system of certification requirements for U.S. exporters. BILATERAL INVESTMENT AGREEMENT Italy has bilateral investment agreements with the following countries: Chad Ivory Coast China Kuwait Egypt Malta Gabon Rumania Guinea Sri Lanka Hungary Tunisia Italy has also exchanged letters with UNIDO (United Nations Industrial Development Organization) to develop an institution in Milan to promote industrial investment in developing countries. The 1948 U.S.-Italy Friendship, Commerce and Navigation Treaty contains provisions which may protect U.S. investment in Italy. Generally, existing bilateral investment accords create favorable conditions and guarantees for capital investment. They include reciprocal guarantees of equal treatment vis-a-vis domestic firms and most-favored-nation status vis-a-vis third countries, assurances against appropriation without fair market compensation and indemnities against losses suffered during war or revolution. Agreements also include statements allowing for the free transfer of returns, royalties and funds to maintain investments. They usually detail the procedures under which disputes would be arbitrated. OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS There is no OPIC program in Italy. Italy is a member of the multilateral investment guarantee agency (MIGA). LABOR Unemployment continues to be an intransigent problem in Italy. While the national rate hovers above 11 percent, it ranges from 6.9 percent in the Northern areas to 16.0 In the Central-Southern regions. However these figures are inflated according to U.S. methods of counting unemployment. There is a skilled labor pool in the North, where industry and services are more developed. Labor shortages exit in the fields of engineering, nursing, and computers. There is also a lack of electricians trained to deal with current technology in the automotive industry. High level human resources and marketing skills are also lacking. The South, where agriculture and the underground economy are more widespread, has an overabundance of unskilled labor. Nonetheless, immigrant workers are employed in the south for seasonal harvesting. Job placement is a function of the labor and social security ministry, through its local offices. The hiring system had been very rigid until the law 223/1991 was enacted. Under this law, employers have the option to select their employees directly, by passing but informing the public placement office. The same law requires that companies employing more than 10 employees must reserve 12 percent of total new hires for disadvantaged workers, including the long-term unemployed. There also is some tolerance for part-time hiring, fixed term contacts, and work week and pay reductions to maintain employment levels. Social security contributions are high, accounting for up to 45 percent of total labor cost. Some reimbursement is possible, however, through government tax relief granted to companies "exposed to international competition." Italian workers enjoy elaborate legal protection from dismissal, often with complex and costly consequences. Labor relations in Italy have improved since the chaotic period of the 1970s. The 1980s saw less confrontational labor unions, partly as a result of declining union membership and the decreased importance of the heavy industry. Wage indexation was ended through agreements reached in late 1991 and July 1992. Another important labor cost agreement was signed in July 1993. The number of days lost due to strikes has declined considerably over the past decade. The new government recently implemented tax measures aimed at promoting employment, new investment and new businesses. The new government also plans to improve employment through a partial reform of labor market, increasing companies' freedom to hire and changing the regulations of term contracts, part-time employment, temporary employment. FOREIGN TRADE ZONE/FREE PORTS There are two free trade zones in Italy located in Trieste and Venice. Goods of foreign origin may be brought in without payment of taxes or duties, as long as the material is to be used in the production or assembly of a product that will be exported. While there are no free ports in Italy, there are ten free depots where goods may be stored; however, no processing may take place. CAPITAL OUTFLOWS POLICIES Italy has maintained a relatively open attitude toward foreign direct investment abroad for some years. The final controls on portfolio investment abroad were dropped in early 1990 and the prohibition on opening current accounts abroad was eliminated in May 1990. A reporting requirement on capital outflows has been established for statistical and tax revenue purposes, but there are no quantitative controls. Certain incentive grants and low- cost loans are available to encourage Italian investment in Malta. FOREIGN DIRECT INVESTMENT STATISTICS In 1993, Italian direct investment abroad (net) exceeded foreign direct investment (net) in Italy by 3.4 billion USD. Italian direct investment abroad totalled 7.0 billion USD up from 5.6 billion USD in 1992. Direct investment inflows totalled 3.6 billion USD, compared to 3.2 billion USD in 1992. Italian direct investment abroad in 1992 exceeded foreign direct investment in Italy for the fourth year in a row. The Bank of Italy (BOI) estimates that at end-1993, the stock of total foreign direct investment in Italy was 52.5 billion, of which U.S. Direct investment in Italy amounted to 5.8 billion USD (11.1 percent of total). The stock of total Italian direct investment abroad was 73.8 billion USD. Italian investment in the U.S. was valued by the Bank of Italy at 4.8 billion USD (6.5 percent of total Italian direct investment overseas) at end-1993. According to BOI data, the stock of Italian direct investment abroad exceeded foreign direct investment in Italy by 21.3 billion USD at end-1993 (see appendix A, tables 3 and 7). Switzerland, the United States, Sweden, Liechtenstein, Japan are net investors in Italy. Switzerland has the largest stock of foreign direct investment in Italy (9.4 billion USD, or 17.6 percent of total), followed by the U.S. (5.8 billion USD, or 11.1 percent of total). Among EU countries (22.7 billion USD, or 43.2 percent of total), France is the largest investor in Italy (5.8 billion USD), followed by Netherlands (4.8 billion USD), the U.K. (4.1 billion USD), Luxembourg (3.5 billion USD) and Germany (3.1 billion USD). Although Japan is a net investor in Italy, both Italian investment in Japan and Japanese investment in Italy (mostly in the banking and insurance sectors) are modest. All the EU countries are net recipient of Italian investment. Among non-European countries, the largest recipients of Italian investment are Brazil and Argentina. Unfortunately, the Bank of Italy does not publish statistics on Italian direct investment in the former Soviet Union, Eastern Europe and NIC's. The countries are included in the "other" category, which receives almost two times the amount of Italian foreign investment than it has invested in Italy. According to BOI data, the stock of U.S. direct investment in Italy in 1993 (5.8 billion USD) exceeded Italy's direct investment in the U.S. (4.8 billion USD) (see Appendix A, tables 5 and 6). (Note: BOI statistics on foreign direct investment stocks differ considerably from those of USDOC.) Of Italy's 4.8 billion USD of direct investment in the U.S. at end-1993 (See Appendix A, table 6), 2.7 billion USD was in the services sector (56.9 percent of the total) and 1.5 billion USD was in the industrial sector (31.6 percent of the total stock). The energy sector at 545 million USD accounted for most of the balance (11.4 percent of the total). In the service sector, the value of direct investment in the banking and insurance sector totalled almost 1.1 billion USD, up slightly from 1992. In the industrial sector, the value of Italy's investment in the mechanical sector decreased from 1.1 billion USD at end 1992 to 900 million USD at end 1993. Of the 5.8 billion USD of U.S investment in Italy at the end of 1993 (see Appendix A, table 5), the largest portion was in the industrial sector at 3.8 billion USD (65.6 percent of total investment). The largest portion of industrial investment was in the chemical industry -- 878 million USD (15.1 percent of total). Investment in the service sector totalled 1.7 billion USD, or 23.6 percent of total. The largest portion of service sector investment was in banking and insurance -- 956 million USD, or 16.4 percent of total.