BIT by BIT – The Silent Liberalisation of the Capital Account
INTERNATIONAL INVESTMENT LAW FOR THE 21ST CENTURY - ESSAYS IN HONOUR OF CHRISTOPH SCHREUER, pp. 497-518, C. Binder, U. Kriebaum, A. Reinisch and S. Wittich, eds., Oxford, 2009
20 Pages Posted: 8 Mar 2010
Date Written: 2009
The article explores the relationship between free transfer clauses and exchange restrictions. The transfer of funds provision is a common feature of BITs, albeit of limited practical relevance thus far. The free transfer provision is particularly important in difficult economic times, when the host country faces complex policy trade-offs. Financial crises are a good example. No ICSID tribunal seems to have ruled on the merits of a capital transfer provision. This is likely to change over the coming years, in particular following the global financial crisis in 2008.
Keywords: Balance of Payments, ICSID, Bilateral Investment Treaties, Safeguards, Exchange Controls, Capital Controls, IMF
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