Part V The International Law of Foreign Investment, XXXII Customary International Law

Subject(s):

Corporations — International investment law — International monetary law — Standards of treatment — Customary international law

This chapter looks at how foreign investment enjoys some rudimentary protection under the customary standard of international investment law—especially in case of expropriation. The concept of ‘expropriation’ covers any deprivation of property rights. The taking of property by a State, like any other exercise of regulatory powers, requires a territorial or personal nexus with the expropriating State. In principle, every State may expropriate any property situated within its own borders. Under customary law, the ‘international minimum standard’ conditions the expropriation of foreigners. The reason for the special protection of non-nationals by international law lies in the fact that—in contrast to nationals—foreigners are usually excluded from the political process and from the political community which benefits from expropriations in the public interest; the payment of a due compensation thus re-establishes the proper balance of the private foreign interest and the interest of the public.