International and foreign Investment Law Part II Scope of protection Azar Aliyev LL.M. (University of Heidelberg) Overview I. Investment II. Market Access III. Investor I. Investment Investment – an economical term Transfer of funds Risk Duration Profit Participation in the management I. Investment Investment as a legal term Investment - a legal term? Process based definition (Encyclopedia of Public international Law (1985)) Asset-based definition (used in almost all Treaties and Laws) I. Investment Definition of Investment (UNCTAD classification) Broad asset-based definition with a non-exhaustive list (Germany - Azerbaijan BIT) Broad asset-based definition specifying characteristics and forms (US Model BIT, ) Broad asset based definition with an exhaustive list (BIT Canada Peru) I. Investment Limitations of Definition In accordance with the law (EurAsEC IIA) Kardassopoulos v. Georgia Fraport v. Philippines Territorial requirement (German Model BIT 2008) Fedax v. Venezuela SGS v. Philippines Temporal requirement (ECT) Veteran Petroleum v. Russian Federation Sector requirement Approved project Pre-investment expenditures I. Investment Investment under the ICSID No definition Subjective test Objective test Salini test – contribution to the development Controversial discussions II. Market access Treaties are dealing mostly with ‘pos-entry’ treatment (ECT) Investment promotion agencies (Germany Trade and Invest) ‘In accordance with national legislation’ and protectionism Russian Law on Foreign Investment in strategic Sectors AWG Germany III. Investor Definition of Investor Nationality of private persons Private persons State owned companies Sovereign wealth funds States International organizations Non-profit organizations III. Investor Nationality of private persons Dual nationality No claims against own State (ICSID) Champion trading v. Egypt Effective nationality (US Model BIT) Olguin v. Paraguay Nationality of companies Incorporation (German Model BIT) Tokios Tokéles v. Ukraine Control or seat as additional criteria (MIGA) ICSID Art. 25.2 (b) Vacuum Salt v. Ghana III. Investor Denial of Benefits (ECT, US Model BIT) Shareholder as Investor ICSID Art.25(2) (b) Minority shareholders CMS v. Argentina Thank you very much!