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"Indirect Expropriation" and the "Right to Regulate" in International Investment Law


  • OECD


It is a well recognised rule in international law that the property of aliens cannot be taken, whether for public purposes or not, without adequate compensation. Two decades ago, the disputes before the courts and the discussions in academic literature focused mainly on the standard of compensation and measuring of expropriated value. The divergent views of the developed and developing countries raised issues regarding the formation and evolution of customary law. Today, the more positive attitude of countries around the world toward foreign investment and the proliferation of bilateral treaties and other investment agreements requiring prompt, adequate and effective compensation for expropriation of foreign investments have largely deprived that debate of practical significance for foreign investors. Disputes on direct expropriation – mainly related to nationalisation that marked the 70s and 80s -- have been replaced by disputes related to foreign investment regulation ...

Suggested Citation

  • Oecd, 2004. ""Indirect Expropriation" and the "Right to Regulate" in International Investment Law," OECD Working Papers on International Investment 2004/4, OECD Publishing.
  • Handle: RePEc:oec:dafaaa:2004/4-en
    DOI: 10.1787/780155872321

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    Cited by:

    1. Nathan M Jensen, 2005. "Measuring Risk: Political Risk Insurance Premiums and Domestic Political Institutions," International Finance 0512002, University Library of Munich, Germany.
    2. Marina Azzimonti-Renzo & Pierre-Daniel G. Sarte, 2007. "Barriers to foreign direct investment under political instability," Economic Quarterly, Federal Reserve Bank of Richmond, issue sum, pages 287-315.

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