Chapter 4: Host States’ Laws and SWFs
We saw in Chapter 3 the current regulation governing SWFs activity. We will deal now with the rules applicable to recipient states, hosting SWFs investments. We will assess which obligations they have, according to international multilateral investment rules, and which exceptions they can invoke to waive such obligations in particular circumstances. We will also verify whether and to what extent states can self apply safeguard clauses to the case at issue. We will start the analysis keeping in mind the conclusions we arrived at in the previous chapters: the SWFs definition we propose; the two SWFs qualifying elements (sovereignty and purposes); a regulation of SWFs activity that should aim not at neutralising the sovereign element but at guaranteeing a correct use of sovereignty. With these assumptions, host states should apply all the relevant international investment rules, and adopt restrictive measures in domestic strategic sectors only towards SWFs that do not endorse GAPPs regulations suitably. 1. THE GOVERNING LAW: OBLIGATIONS OF HOST STATES The review of the discipline applicable to host state obligations should start from the multilateral regulations in force, analysing both the relevant GATT (for trade) and GATS (for services) rules, and the OECD regulations. It would have been logical to start with a review of the multilateral rules of TRIMs agreements concerning trade-affecting investments that might, in theory, apply to the case. However, investments are still regulated by bilateral or, at most, regional agreements governing their access, treatment and protection, while TRIMs only deal with trade issues and...
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