Skip to main content Accessibility help
×
Hostname: page-component-7bb8b95d7b-qxsvm Total loading time: 0 Render date: 2024-09-05T09:46:47.559Z Has data issue: false hasContentIssue false

Part IV - Ex Ante Evaluation on National Security Grounds in Practice

Published online by Cambridge University Press:  13 October 2018

Get access

Summary

Screening systems are so far national. They are systems created by states with the direct goal of evaluating the potential threat to national security, national essential security interests or related terms caused by a foreign investment project or certain categories of FDI. All these concepts are usually not defined, and always difficult to explain and assess. The final outcome of the evaluation will depend on a range different factors to be assessed in relation to the specific operation analysed. The sector where the investment is proposed will be considered, as well as the nationality or nature of the investor. In any case, the real existence of a threat will depend on the conditions of the specific FDI operation. The danger may be prevented or mitigated through contractual agreements with the prospective investor. This evaluation will ultimately determine whether or not the FDI operation affects national security.

However, these national screening systems are affected by the existence of the dense network of IIAs, mainly BITs, that have been entered into by states over the last three decades. These screening systems are outside the scope of the dispute resolution clauses embodied in certain IIAs that refer to both the pre-establishment and post-establishment phases of FDI. That is the case, for instance, in Article 1138(1) NAFTA, which apparently prevents the NAFTA dispute settlement from evaluating the state's decision to invoke the national security exception to prohibit or restrict an investment by another NAFTA state in its territory:

[W]ithout prejudice to the applicability or non-applicability of the dispute settlement provisions of this Section or of Chapter Twenty (Institutional Arrangements and Dispute Settlement Procedures) to other actions taken by a Party pursuant to Article 2102 (National Security), a decision by a Party to prohibit or restrict the acquisition of an investment in its territory by an investor of another Party, or its investment, pursuant to that Article shall not be subject to such provisions.

As previously stated, the debate is intense as regards the rights of each state to assert which threats are to be addressed on national security grounds through the screening system of the host country, to design the ways of evaluating FDI and to ascertain to what extent restrictions on FDI may or not be justified.

Type
Chapter
Information
Publisher: Intersentia
Print publication year: 2018

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×