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- Title
Sovereignty and Security: Constraints on Foreign Investment Control Arising from International Law.
- Authors
Geraets, Dylan; Gargne, Leo
- Abstract
Does international law impose constraints on States adopting, implementing or maintaining investment screening measures (ISMs)? Is the sovereignty of States in respect of whose investments and what types of investments to 'permit' into their territories unfettered? Or does that sovereignty only exist insofar as it is compatible with the (national) security exceptions provided for in many instruments of international economic law, as encompassing both international trade law and international investment law? These are the main questions that this contribution seeks to answer. ISMs have increased both in number and in scope in the past decades and the fact that they are included in the regulatory toolbox of many States raises questions as to the compatibility of these mechanisms, and the manner in which they are applied in specific instances, with norms of international law. The relevant norms are found, for example, in the World Trade Organization's (WTO) General Agreement on Trade in Services (GATS) and in international investment (protection) agreements (IIAs). This contribution assesses the international legal norms that ISMs need to be compatible with if they are implemented and applied by host States seeking to exercise control over inward foreign investment on the basis of (national) security considerations. Thereto, after an Introduction (Section 1), the contribution sets out in Section 2, the key considerations in terms of sovereignty and international law, and the relationship between international legal norms and the desire to safeguard the domestic (legal) order from unwanted foreign influence. Thereafter, in Section 3, the contribution discusses the key considerations under the GATS in terms of ISM, and, in particular, the need to grant services and service suppliers of WTO Members treatment no less favourable than that is granted to the like services and like service suppliers from any other country. In addition, Section 3 examines potential considerations in respect of the Market Access and National Treatment obligation of the GATS, as well as the possibilities of relying upon the (security) exceptions in Articles XIV and XIVbis GATS to justify otherwise GATS-inconsistent ISMs. Finally, in Section 4, the contribution considers norms of international investment law that may restrict the ability of host States to implement or apply ISMs.
- Subjects
WORLD Trade Organization; INTERNATIONAL law; FOREIGN investments; SOVEREIGNTY; GENERAL Agreement on Trade in Services (Organization); LEGAL norms; INTERNATIONAL trade; INVESTMENT laws
- Publication
Erasmus Law Review, 2022, Vol 15, Issue 4, p311
- ISSN
2210-2671
- Publication type
Article
- DOI
10.5553/ELR.000241