Legal Analysis of Supporting Methods of Foreign Investors in Nationalization and Property Confiscation

Abstract

Nationalization of foreign investor assets does not serve the interests of countries because it disrupts the economic security of states and ultimately leads to a reduction in foreign investment. Governments have sought to minimize investor nationalization and property confiscation in order to attract foreign investment. In the event of expropriation of a foreign investor, governments are required to compensate the investor. The position of customary international law on how to pay compensation and methods of assessing damages includes procedures based on national law, treaties and judicial decisions or arbitration. In order to support investors, it is necessary that the right to nationalize property and expropriation of investors should be very limited. Further, in case of nationalization, the damage must be compensated in a desirable and effective manner. The foreign investor must enjoy the same rights as domestic investors and at the same time have the right to transfer their capital and profits abroad. Appropriate measures should also be taken to amend national laws in order to consolidate and guarantee the ownership of foreign investors.