This is the scenario:
You are performing an In-Place upgrade from Microsoft Dynamics AX 2012 CU3+ to AX 2012 R2, and have “Foundation Labels II” installed in the model store. After completing the upgrade you will find that the labels for Tier 2 Countries (the ones that were originally in the Foundation Labels II model), no longer exist.
There is currently a hot-fix in progress for this, however until this is released you can follow the workaround below:
Please note, I will update this post with the hot-fix details once it is released. At the moment I don’t have details of when this will be.