Research On Financial Prudential Exception Clauses In International Investment Agreements

With the expansion and penetration of global value chain and the development of international investment liberalization,international investment agreements have sprung up all over the world,but the global financial crisis of 2008 has brought great impact to international financial markets,and countries are beginning to realize the power of global financial systemic risks.To promote the reflection and reform of international financial law in international financial cooperation and domestic financial regulation rights.Prudential exceptions have gained increasing attention as safety valves and stabilizers for the liberalization of financial services investments From the perspective of international investment,the United States 2004 BIT(bilateral investment agreement)model and Canada 2004 BIT model have taken the lead in incorporating financial prudential exception provisions in the model bilateral investment agreement,and have gradually affected the parties to the international investment agreement,including China,that balance investment liberalization with national financial regulation sovereignty through financial prudential exception provisions.Prudential exceptions ensure that parties have sufficient regulatory sovereignty to guard against the risks posed by an increasingly open financial environment and prevent the rise of new financial services from hitting the domestic financial sector.However,whether it was first stipulated in international trade agreements,the provisions of NAFTA and the Financial Annex of GATS on prudential exceptions,or the gradual incorporation of financial prudential exceptions in bilateral investment agreements,the provisions of the Financial Prudential exception clause are controversial in the specific practice of applying,restricting,preventing misuse,and dispute settlement mechanisms as the level of inter-State contracting becomes more "high standards,high rules "and the in-depth penetration of investment liberalization in the financial industry.As a result of the dynamic development of prudential causes,it is difficult to reach a consensus on the definition of prudential causes in the application process,and some treaties restrict it to"measures relating to financial services",which make it more difficult to invoke financial prudential exceptions,to respond well and in a timely manner to the investment behaviour of the depleted financial system,and to propose changes or deletions of such restrictions,provisions on prevention of abuse,which are too vague,will still lead many countries to use prudential exceptions to form barriers to international investment and make it a" safe haven "system.In addition,for the special dispute settlement procedure established in international investment arbitration under the financial prudential exception clause,its pre-consultation procedure,that is,the application of the invocation of the prudential exception clause must be first negotiated between the home country and the host country,and the report prepared after its consultation is binding on the investor-inter-State arbitral tribunal.On the one hand,it is beneficial to promote the settlement of disputes,improve the efficiency of arbitration and save the resources of arbitration,but on the other hand,the negotiation brought by the pre-arbitration procedure also makes the relevant application of the clause in the aspects of information transparency,interpretation of the clause and so on.Neither the entity nor the procedural provisions of the financial prudence exception clause reflect the balance between the liberalization of investment and the maintenance of the security of the financial system,the improvement of the host country's regulatory sovereignty,and the better promotion of investment in the financial system.In response to the call of the times,China has actively promoted the "Belt and Road" construction,strengthened cooperation in cross-border banking supervision,and actively promoted multilateral regional free trade systems such as the Regional Comprehensive Economic Partnership Agreement(RCEP)negotiations and the China-Japan-ROK FTA.Reasonable,appropriate and practical exceptions to financial prudence should be formulated on the basis of absorbing advanced foreign experience and taking into account the reality of China.create opportunities and platforms for China to participate in the formulation of new international trade rules.enhance the right to speak in the formulation of our rules and strive for the "dividend" of the rules.