ASSIGNMENT 1

Assignment 1



Assignment 1

Introduction

Bilateral investment treaties (BITs) are agreements between the two countries to promote, protect, and in some cases, liberalize investment. Most BITs are solely focused on the promotion and protection of investment. It allows countries by assuring investors of the other country gets a certain investment protection. The overall purpose of these guarantees is to create a stable, predictable and legally secure environment for investment. Some BITs also include conditions for the establishment and the banning of certain trade-related investment measures (Trade-Related Investment Measures - TRIMS). Therefore, investors can claim damages from states which do not meet the requirements of the contract through international arbitration. The number of BITs increased dramatically during the 1990s, and today there are about 2,700 BITs, of which the US is a party to more than half of the contracts.

US Model BIT 2012

In view of the fact that US law are in addition to international and national law a separate legal system is due to the membership in the US to be paid to the issue of protection of foreign investment in the US very special attention. Protection of foreign investments by US law is being complicated issue on which solution among legal experts, there are many different opinions. US Model BIT model states the right to control the entry of foreign investors and their investments on its territory. This general rule may be modified by the commitments assumed in multilateral or bilateral international agreements, respectively. This may result from customary international law. The international community has not yet entered into any general multilateral international treaty that would regulate the establishment of foreign investment and its protection, and it is questionable whether it will ever negotiated.

Lack of contractual arrangements on a universal level led to the creation of various international documents, but these have only a recommendation and that can be described as a so-called soft law. At this point it is necessary to state the Charter of economic rights and obligations of States, according to which the regulation of foreign investment governed exclusively by national law, or guiding principles for the handling of foreign direct investment, adopted by the International Bank for Reconstruction and Development in 1992, which confirmed the right of the host state to regulate the admission of foreign investment, but also asked him to facilitate the establishment of these investments by removing administrative obstacles and too complicated formalities.

Given that the differences between countries regarding the scope of protection of foreign investments and permissible state intervention in such investments (in particular regarding the possibilities and conditions for expropriation) so far prevented the adoption of multilateral international agreements, national efforts were concentrated in the bilateral (bilateral) international agreements.

Previous model and US Bit model 2012

The practice is also known that complications do not occur in a conflict between national law and US laws, when the law is found to be applicable and therefore having precedence over national law. According to the US Commission should be based on US law, even ...