Incoming : How International Investment Law Constrains Foreign Investment Screening

Domestic screening of inbound foreign investment, often on the grounds of national security, has intensified in recent years. More countries are introducing such regimes, while others are expanding their sectoral scope or creating opportunities for retrospective screening. These developments increase the potential for investor–State claims under international investment agreements, even in some circumstances with respect to investments that have not yet been established. Host States need to be aware of the potential for adverse screening decisions, the imposition of conditions on investment, or due process shortcomings to conflict with investment protections, such as obligations to accord fair and equitable treatment or most-favoured nation treatment. Although a range of tools exist in some IIAs to exclude or exempt investment screening, these will not necessarily prevent a successful investment claim. For example, listing a screening regime as a non-conforming measure will not necessarily cover all future amendments, and general exceptions and security exceptions are subject to considerable uncertainty. Host States need to ensure compliance with international investment law in creating and developing screening regimes