Cross-Border Investment Committee

Role of International Politics in Cross Border Investments

Session Synopsis:

State intervention in foreign investments can take a multitude of forms, and for a variety of reasons. Milder intervention could take the form of foreign investment notification requirements. On the other hand, more drastic intervention can go from regulatory restrictions over the ownership interest which a foreign investor can beneficially hold in certain entities – to direct or indirect expropriation of the actual foreign investment (whether with or without compensation). Yet, ironically, foreign investors may also be able take advantage of protections and dispute settlement procedures that are often unavailable to domestic investors, such as arbitration commenced under investment treaties. To this extent, foreign investors may sometimes be seen as being in a better position than domestic investors to protect themselves against State intervention.

 

This IPBA panel will be discussing the trends, developments and events in light of recent interventions (or anticipated interventions) by States in foreign investments. Topics which will be covered include the economic sectors which are historically most subject to State intervention, the forms in which a State can intervene, policy reasons commonly put forward for state intervention, how international diplomacy and politics affects cross-border investments, and, importantly, any measures available by a foreign investor in response to actual or anticipated intervention by a State. The panel will also consider the dimension of positive state intervention (i.e. favourable to investors), and how government measures (whether by the host State individually or together with the investor’s home State) can assist in facilitating foreign investments.

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