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Emerging International Law of Foreign Investments

Emerging International Law of Foreign Investments. Omar E. Garcia-Bolivar. Issues of Foreign Investment (FI). Flow of capital -from one country to other -in search of economic objective Right of property Sovereignty -of Host State regulating -of Home State extraterritorial rule

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Emerging International Law of Foreign Investments

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  1. Emerging International Law of Foreign Investments Omar E. Garcia-Bolivar

  2. Issues of Foreign Investment (FI) • Flow of capital -from one country to other -in search of economic objective • Right of property • Sovereignty -of Host State regulating -of Home State extraterritorial rule • Diplomatic protection • International Law • Development/Dominance

  3. Parties to F I • Investor: individual or corporation, Transnational Corporations (TNCs) • Host State • Home State • International Organizations

  4. TNCs TNC Country B Country C Country A Country D Sub A Sub C Sub B What is the nationality of TNC?

  5. Kind of FI • Foreign Direct Investment (FDI) - “Greenfield” - Mergers and Acquisitions • Portfolio Investment (PI) • New forms of FI - BOO - Non incorporating forms.

  6. Traditional Law of FI • State Sovereignty • Diplomatic Protection • State Responsibility for injury to aliens • UN Declaration on Permanent Sovereignty on Natural Resources • Calvo Doctrine • Charter Economic Rights and Duties of States • TNCs: a matter of domestic law

  7. New Reality of FI Source: UNCTAD World Investment Report 2001

  8. New Reality of FI (II) Source: UNCTAD World Investment Report 2001

  9. Regulatory changes on FI Source: UNCTAD World Investment Report 2001

  10. Bilateral Investment Treaties (BITs) • Bilateral “lex speciali” • Protects and promotes FI • Not only FDI • Based on idea of economic liberalization • More than 1300 signed as of 1996

  11. Non Binding • UN draft Code of Conduct on TNCs • OECD Guidelines to TNCs • World Bank Guidelines

  12. Multilateral • ICSID Convention • MIGA Convention • WTO agreements: GATS, TRIMs • NAFTA Chapter 11 • Energy Charter Treaty • Others (ASEAN, CARICOM, MERCOSUR, SADC, ANZCERTA) • Failed OECD MAI • Draft FTAA

  13. International Law of FI Multilateral BITs Regional Specialized Int’ law FI FI Investor Admission Treatment Property Dispute

  14. Conclusions • International law of FI enhances investment climate. • Emerging law protects FI, not only FDI. • TNCs’ nationality is determined. • Admission. • Treatment. • Expropriation upon conditions. • Investment dispute settlement mechanisms.

  15. Omar E. Garcia-Bolivar omargarcia@bg-consulting.com (703) 212-0300

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