Investment law system applies the exception of the MFN

Abstract: The MFN treatment is a relative standard, its contents can not be absolute. This not only refers to the relative nature of the object it refers the State party's treaty obligations between the imbalance in the host country and its foreign substantial differences between the treatment. In addition to the above constraints prevailing MFN standard applies to the conditions, the practice in international Investment, as well as countries in the world, including the very liberal foreign Investment policy implemented by the developed countries generally recognition and use of the exceptions.


Keywords: international Investment, MFN status, the State party


First, the MFN exception for the general

It is generally accepted by all States and the accepted exceptions, including those based on public policy, public order, public health and public morality and the needs of national security exception to the implementation of these two cases. Most of the provisions of bilateral Investment agreements are the parties can be based on the need to make reservations. to determine the circumstances in which "need" Based on the above measures taken to retain the discretion of the host left a large space, so this is a very large flexibility in terms of almost any case, the host can be based on the needs of its policy under which an exception, claim exemption from treaty obligations.

Most bilateral Investment agreements have made provisions for this, the multilateral Investment agreement also made similar provisions, including "<General Agreement on Trade in Services>> also provides for protection of public morals and public order in terms of reservations; Economic cooperation and Development organizations in the <<capital flows liberalization, Law "> and <<Multilateral Agreement on Investment>> also allow the State to make reservation of public order when it deems necessary to protect public safety, public health and public morals. Here it must be pointed out that States have the right to use this exception, and not in violation of the spirit of the treaty, otherwise, the terms non-existent, resulting in objectives of the Treaty can not be achieved, but also may lead to the implementation of retaliatory measures between the parties. These short-sighted approach and the Economic world trend is contrary to the long term point of view would affect the Investment environment in these countries, which are bound to hamper their Economic Development.


Second, the state of mutual agreement between the exception specific issues

These exceptions include tariffs, intellectual property, regional Economic integration and mutual recognition between countries, the exceptions. Tariff issues in international Investment treaties entered into by the State party's main aim is to avoid double taxation of investors, if the tariffs of Investment by MFN, then the host will result in substantial loss of revenue, and is not conducive to effective control to investors, so deal with tariffs in almost all investment treaties have provided an exception to the MFN clause to apply.

In the intellectual property rights, the majority of bilateral investment treaties and multilateral agreements on intellectual property provisions are also exceptions to the MFN standard, allowing Dong Daoguo provided the requirements of obtaining intellectual property, but also provides the parties on the basis of the specific reciprocal MFN status, that is intellectual property rights by giving MFN status on the premise that the other investors are also given to the host country investments in its territory of such treatment. but also allows the State party to the copyright provisions of the acquisition and content departure from the MFN standard. World Trade Organization <<Agreement on Trade-Related Intellectual Property Rights>> made sure of this provision: ... ... Member States may exempt based on its obligations following reasons: ... ... According to the 1971 <<Berne Convention> "and" <Rome Convention >> The requirement is justified ... .... At the recent Organization for Economic Cooperation and Development <<multilateral investment agreement> "(draft), also affirmed the national and MFN treatment exceptions in this area. Links to Research Papers Download center of regional economic integration organizations http://www.hi138.com agreements typically contain a so-called "regional economic" integration organization "provisions under the provisions of the Member States have no obligation to give them to other Member States preferential treatment given to the MFN clause has entered into with foreign investors. but the terms are often only applies to market access phase, if the members of a regional economic integration organizations, investors of all countries adopted liberalization measures are applicable, or When an investment has entered the country after the requirements of the investor can usually enjoy the same treatment with member investors.

States recognized each other in such a legal action usually occurs between neighboring countries, its purpose is to facilitate border trade between their respective nationals taken to grant each other the national special treatment, they will be given these treatments is the investor of any nationality impractical and impossible.


Third, in reality, the implementation of country-specific exceptions
The main exception occurs in the multilateral treaty practice, as a multilateral negotiation, the negotiations must take into account the actual situation of the respective parties and interests, through mutual compromises, in some relatively minor issues, but also to allow certain parties parties to make reservations, balance of interests, the parties may agree. but they agreed to make a reservation at the same time the State party to make this restriction, provided reservations are usually allowed to make a reservation period and the period, generally After joining the treaty does not allow parties to take new reservations.


Fourth, the MFN regime applicable restrictions on foreign

MFN standard does not necessarily automatically to other host countries to give preferential treatment to foreign investors and host countries concluded agreements containing the MFN clause party investors, including the conclusion of the treatment given before and after the treaty. Because of MFN to provide protection for foreign investors , but also limits the parties entered into an investment agreement in the future when the mobile space. When the host country of investment agreements in the future to give any other foreign investor interest in a new MFN clause will be the host country may be forced to give equal benefits to make their investors in countries with MFN clauses, thus breaking the original balance of interests. particularly when the MFN clause so that the distance between countries, greater reciprocity, they will have a "white rider" phenomenon, that is less fulfill their obligations, and more entitlements, which international investment Law is a problem in a lot of controversy. Therefore, in international investment practice, the parties generally provide for certain conditions, specifically, that provision must be applicable to a particular stage of the investment for the object must be under the treaty of qualified investors. In addition, some countries also require to be on the basis of reciprocity party investors in their countries to be able to automatically obtain its new foreign investors to other preferential treatment.


References:

[1] Cao Jianming. International Economic Law monographs. Law Press, the year 1999 edition.

[2] Shen Mu Zhu. WTO Legal Principles and Strategies of regional WTO accession. Modern Law .2001 (10).

[3] Liang Ying. The correct understanding and application of the MFN principle. Frontline .2002 (9).

[4] Yu Jinsong, Wu climbing. International Economic Law. University Press, Higher Education Press .2000 edition. Links http://www.hi138.com Research Papers Download