Research On The Legal Issues Of Indirect Expropriation Of Foreign Investment In My Country

With the enforcement of the Belt and Road Initiative and continued opening-up policy,China is attaching more importance on the protection of foreign investment.As a hot topic of investment protection,indirect expropriation causes wide concern.The balance between public interest and investor's right exists throughout the criteria,legitimacy and compensation of indirect expropriation.The paper is divided into three parts.The first part mainly discusses the criteria of decision on indirect expropriation and its legitimacy standards.Comparing between several popular viewpoints on the decision of indirect expropriation,this paper held that the mixed criteria is comparatively persuasive.The standard to decide legitimacy of expropriation is a part of customary international law,while this issue need to be rediscussed in the context of indirect expropriation because of its particularity.The second part separately illustrates the standards of compensation caused by lawful and unlawful expropriations.This paper introduces two ways of reparation for international wrongful acts and standards of compensation for lawful expropriations,comparing among main current methods of valuation of the fair market value.The trade-offs between adequate and fair compensation is also discussed.The third part analyses articles about indirect expropriation in the regulations on the implementation of foreign investment law and the foreign investment law itself.This paper also gives several advice on the bilateral investment treaties.It is suggested that domestic law should clarify the criteria determining whether an indirect expropriation has occurred,and stipulate compensation standards caused by unlawful expropriations.Besides,the standards of compensation caused by lawful expropriation are expected to take the adequate compensation criteria as a principle and the fair compensation criteria as an exception.The bilateral investment treaties are suggested to be modernized in time,clarifying the criteria and compensation standards of indirect expropriation.