Book contents
- Frontmatter
- Dedication
- Acknowledgements
- Contents
- List of Cases
- List of Legislation
- List of Abbreviations
- The Changing Course of FDI: An Introduction
- Part I FDI and National Security: The Playing Field
- Part II The Traditional Approach: Ex Post Control
- Part III Towards Ex Ante Control: The Evolving Position
- Part IV Ex Ante Evaluation on National Security Grounds in Practice
- A Look to the Future
- Bibliography
- Index
- About the Author
Part IV - Ex Ante Evaluation on National Security Grounds in Practice
Published online by Cambridge University Press: 13 October 2018
- Frontmatter
- Dedication
- Acknowledgements
- Contents
- List of Cases
- List of Legislation
- List of Abbreviations
- The Changing Course of FDI: An Introduction
- Part I FDI and National Security: The Playing Field
- Part II The Traditional Approach: Ex Post Control
- Part III Towards Ex Ante Control: The Evolving Position
- Part IV Ex Ante Evaluation on National Security Grounds in Practice
- A Look to the Future
- Bibliography
- Index
- About the Author
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.
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- Foreign Investment, Strategic Assets and National Security , pp. 257 - 262Publisher: IntersentiaPrint publication year: 2018