1. I NTERNATIONAL I NVESTMENT L AW - 6 State Responsibility and Attribution Prof. Dr. Werner Meng - Europa Institut - Saarland University1

2. 2 Direct or indirect expropriations by central, subfederal states, provinces or municipalities? Is the state responsible for violating acts of independent judges? For acts of the parliaments on different levels? For independent government agencies like central banks or cartel authorities? For activities of independent legal persons owned by the state, or where the state is a majority shareholder, the holder of a blocking majority, of a golden share For activities of private persons on behalf of the state, by employment, by legal submission or out of free will? Whose actions are states responsible for?

3. Prof. Dr. Werner Meng - Europa Institut - Saarland University3 Article 4. Conduct of organs of a State 1. The conduct of any State organ shall be con- sidered an act of that State under international law, whether the organ exercises legislative, executive, judicial or any other functions, whatever position it holds in the organization of the State, and whatever its character as an organ of the central Government or of a territorial unit of the State. 2. An organ includes any person or entity which has that status in accordance with the internal law of the State. International law Commission, Draft articles on Responsibility of States for Internationally Wrongful Acts (2001) Organs of a state

4. Prof. Dr. Werner Meng - Europa Institut - Saarland University4 The European central bank, by manipulating the exchange rate with the US dollar is deteriorating the export position of the exporters to the dollar area. – Among them are also foreign investors What if the cartel authority of a state is breaking up the merger of two firms of foreign investors unlawfully, causing their bankruptcy? State agencies

5. Prof. Dr. Werner Meng - Europa Institut - Saarland University5 "empowered by the law of that State to exercise elements of the governmental authority" Formal arguments – Presumptions Direct or indirect state ownership Direct or indirect control by the state Activities are governmental in nature of reserved for the state Functional arguments – Are specific acts or omissions are essentially commercial rather than governmental in nature? State agencies

6. Prof. Dr. Werner Meng - Europa Institut - Saarland University6 Article 5. Conduct of persons or entities exercising elements of governmental authority The conduct of a person or entity which is not an organ of the State under article 5 but which is empowered by the law of that State to exercise elements of the governmental authority shall be considered an act of the State under international law, provided the person or entity is acting in that capacity in the particular instance. International law Commission, Draft articles on Responsibility of States for Internationally Wrongful Acts (2001) Agencies of a state

7. Prof. Dr. Werner Meng - Europa Institut - Saarland University7 Very rarely in reality The customs authority of a foreign state in an exclave of the territory of a state creates an act that amounts to a direct or indirect expropriation Delegated organs

8. Prof. Dr. Werner Meng - Europa Institut - Saarland University8 Article 6. Conduct of organs placed at the disposal of a State by another State The conduct of an organ placed at the disposal of a State by another State shall be considered an act of the former State under international law if the organ is acting in the exercise of elements of the governmental authority of the State at whose disposal it is placed. International law Commission, Draft articles on Responsibility of States for Internationally Wrongful Acts (2001) Delegated organs

9. Prof. Dr. Werner Meng - Europa Institut - Saarland University9 A state organ causes an act of indirect expropriation Later the government contends that this activity was unlawful, in excess of the powers of this organ Excess of powers

10. Prof. Dr. Werner Meng - Europa Institut - Saarland University10 Article 7. Excess of authority or contravention of instructions The conduct of an organ of a State or of a person or entity empowered to exercise elements of the governmental authority shall be considered an act of the State under international law if the organ, person or entity acts in that capacity, even if it exceeds its authority or contravenes instructions. International law Commission, Draft articles on Responsibility of States for Internationally Wrongful Acts (2001) Excess of powers

11. Prof. Dr. Werner Meng - Europa Institut - Saarland University11 The state is using a labor union group in the enterprise to paralyze its activities and monitors and steers this union Controlled conduct

12. Prof. Dr. Werner Meng - Europa Institut - Saarland University12 Article 8. Conduct directed or controlled by a State The conduct of a person or group of persons shall be considered an act of a State under international law if the person or group of persons is in fact acting on the instructions of, or under the direction or control of, that State in carrying out the conduct. International law Commission, Draft articles on Responsibility of States for Internationally Wrongful Acts (2001) Controlled conduct

13. Prof. Dr. Werner Meng - Europa Institut - Saarland University13 In the ELSI case the municipality had secured the persistence of the factory. What if a labor union would have done that securing? Default conduct

14. Prof. Dr. Werner Meng - Europa Institut - Saarland University14 Article 9. Conduct carried out in the absence or default of the official authorities The conduct of a person or group of persons shall be considered an act of a State under international law if the person or group of persons is in fact exercising elements of the governmental authority in the absence or default of the official authorities and in circumstances such as to call for the exercise of those elements of authority. International law Commission, Draft articles on Responsibility of States for Internationally Wrongful Acts (2001) Default conduct

15. Prof. Dr. Werner Meng - Europa Institut - Saarland University15 Article 10. Conduct of an insurrectional or other movement 1. The conduct of an insurrectional movement which becomes the new Government of a State shall be considered an act of that State under international law. 2. The conduct of a movement, insurrectional or other, which succeeds in establishing a new State in part of the territory of a pre-existing State or in a territory under its administration shall be considered an act of the new State under international law. 3. This article is without prejudice to the attribution to a State of any conduct, however related to that of the movement concerned, which is to be considered an act of that State by virtue of articles 4 to 9. International law Commission, Draft articles on Responsibility of States for Internationally Wrongful Acts (2001) Insurrection and civil war

16. Prof. Dr. Werner Meng - Europa Institut - Saarland University16 Hardly happening in reality Not: acknowledgement of economic activities of a state entity Only public power activities of non-State entities But how could that ever happen? Acknowledged conduct

17. Prof. Dr. Werner Meng - Europa Institut - Saarland University17 Article 11. Conduct acknowledged and adopted by a State as its own Conduct which is not attributable to a State under the preceding articles shall nevertheless be considered an act of that State under international law if and to the extent that the State acknowledges and adopts the conduct in question as its own. International law Commission, Draft articles on Responsibility of States for Internationally Wrongful Acts (2001) Acknowledged conduct

18. Prof. Dr. Werner Meng - Europa Institut - Saarland University18 Already minimum standard obligation In BITs: – Full security and protection or – FET Violated by an omission Objective standard – No subjective fault necessary Obligation to protect the investor