The Applicable Study Of The Principle Of Proportionality In Indirect Expropriation

In accordance with the UN 1974 Document: Charter of Economic Rights and Duties of States,Article 2 says that: “Every state has the right to:(a)To regulate and exercise authority over foreign investment within its national jurisdiction in accordance with its laws……” This is the original statement about the right to expropriate in international documents.As a part of sovereignty,the right to expropriate is legitimate right of a state,which is worldwide recognized.The host country perform the power with the public purpose without any discrimination and compensate for this act,which is general proceeding.At the 50 s and the 60 s in last century,in order to get rid of exploitation and colonization,many new-independent states have to take actions to expropriate.After the 80 s,with the development of international economy,the tendency of liberalization of investment has become visible.As a result,largely extent expropriation has decreased.However,the alien investors started to put forward challenge for the host countries with the measures to regulate and require compensation.Therefore,the research on the issues of indirect expropriation become popularized.In the international investment arbitration,the tribunal also take cases related to the issues of indirect expropriation.When it comes across the issues of recognition of indirect expropriation,the standard changed from the primary “purely-effect” standard to the current doctrine of “effect and purpose standards”.During this proceeding,the introduction of the principle of proportionality is very valuable for legal persons to answer the question how to distinguish the “indirect expropriation” and “the measure to regulate”.This article would start with the conception and standards,illustrating the conception and the contents of the principle of proportionality as well as the source of the principle in the perspective of national law and international law.And the paper also demonstrates the application of the principle in the specific cases heard by the ICSID tribunal.At last,based on the current situation of China,on the two aspects of attracting investment and overseas investment,the article would bring forward the countermeasures to remind Chinese government and Chinese investors how to avoid the risks of indirect expropriation.