张皎 ZHANG Jiao 3 March 2015

International investment and international investment law International investment law regime Standards of protection (1) – National Treatment Standards of protection (2) – Most-Favored-Nation Treatment Standards of protection (3) – Fair and Equitable Treatment Standards of protection (4) – others Expropriation Political risk insurance Investment dispute settlement Chinese Foreign Investment Law China’s policy for encouraging overseas investment Prospects in investment law and policy

Reading material user name: password: investment2015 Participation Question Achievements knowledge + methodology

Private foreign investors - government-controlled entities? - non-profit organizations? Individuals & companies Foreignness - nationality Protection from a treaty Jurisdiction of an international tribunal

Certificate of nationality …but, in effective (Case Soufraki v UAE) Dual nationalities …however, has the nationality of the host country? (Case Champion Trading v Egypt) General criteria: - incorporation, the main seat - central administration or effective seat Based on treaties and national laws: - incorporation: Saluka v Czech Republic - seat or principle seat of business: Argentina-Germany BIT - combine incorporation with seat: ASEAN Agreement - a bond of economic substance: effective control over the corporation by nationals of the state; genuine economic activity of the company in the state Individuals Corporations

Treat a local company as a foreign national? - ICSIC Convention: Article 25(2)(b) - an agreement between the host state and the investor - actual foreign control: incorporated in the host state but are controlled by nationals of another state (Vacuum Salt v Ghana) Nationality planning ?? Shareholders as investors ??

Economic debate: - transfer of funds - a longer-term project - the purpose of regular income - the participation of person transferring the funds, at least, to some extent in the management of the project - a business risk The absence of a traditional legal understanding of “investment” - State parties negotiating - tribunals charged with its interpretation

ICSIDArt. 25, Only cover a legal dispute ‘arising directly out of an investment’ – respondent’s jurisdictional objection NAFTAArt “investment means: (a) an enterprise; (b) an equity security of an enterprise; (c) a debt security of an enterprise (i)…; (d)a loan to an enterprise (i)…; (e) an interest in an enterprise that entitles the owner to share in the assets of that enterprise on dissolution, …; (f)…” ECTArt. 1 (6) “Investment” means every kind of asset, owned or controlled directly or indirectly by an Investor and includes: …” US-Argentina BIT ‘investment’ means every kind of investment in the territory of one Party owned or controlled directly or indirectly by nationals or companies of the other Party, … Ukraine- Denmark BIT (economic) The term “investment” shall mean every kind of asset connected with economic activities acquired for the purpose of establishing lasting economic relations. … US-Chile BIT (characteristic) Investment means every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including … commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk.

Foreign Direct Investment Foreign Indirect Investment (Portfolio Investment)