Research On National Security Review Standard In BITs And Its Enlightenment To China

In recent years,the total amount of bilateral investment treaties(BITs)signed by all countries has been increasing,which reflects the demands of all countries to further realize the liberalization and facilitation towards international investments.BIT is a means to protect the interests of investors abroad for home countries,and it’s also a way for host countries to attract and utilize foreign investments.Another important force in international investment field in recent years is the protection of national regulatory power.The supervision measures on foreign investments all over the world have been increasing and become stricter than they used to be.The establishment and implementation of national security review system on foreign investments has become an important means for many host countries to protect national security.The national security review system on foreign investments and BITs both belong to the content of international investment law,and bear the function of regulating the international investment order,but also conflict in the value objectives.In this case,to explore the national security review standard in BITs becomes the basis for the rational and coordinated use of national security review and BITs,which are tools to regulate international investment order and realize the maximization of interests for a country.Specifically,the national security review measures may violate BITs’ national treatment clauses and the most-favored-nation treatment clauses,violate the reasonable expectation requirement,transparency principle and due process principle under the fair and just treatment clauses and in some cases constitute indirect expropriation.The basic obligations clause in BITs set requirements for the national security review standard.On the other hand,in recent years,more and more essential security exception clauses have been incorporated into BITs to exclude the illegality of measures related to national security protection under BITs.When the scope of the national security review on foreign investments falls into the scope of essential security exception clauses in BITs,the illegality of the national security review measures can be excluded.However,due to the fuzziness and difference between the content and scope of "essential security" in essential security exception clauses and the scope of national security review on foreign investments,the exclusion of the illegality is often controversial.Then the justiciability and review standard of the treaty dispute settlement agency on this dispute becomes an issue to be concerned.For non-self-judging exception clauses,the current international arbitration practice tends to use the standard of "reasonable available" to judge the necessity of the review measures;whereas for self-judging exception clauses,the good faith principle is valued and adopted.The research on national security review standard in BITs brings enlightenment to China on how to use China’s national security review and BITs coordinately and rationally.When China mainly acts as a host country,China’s goal is to prevent foreign investors from abusing BITs to challenge the legitimacy of China’s national security review while promoting the function of BITs in attracting and utilizing foreign capital.On the one hand,China should improve its national security review system at the domestic law level,and respond to the requirements of basic obligation clauses in BITs and the standards of "reasonable available" standard and good faith principle in ISDS review practice.On the other hand,China should prevent the excessive protection for foreign capital via selecting contracting modes like making clear the obligation elements of the basic obligation clauses in BITs,distinguishing the indirect expropriation and legal supervision behaviors without compensation and reduce the possibility of violating BITs with the national security review on foreign investments.And at the same time,China also needs take measures like improving the clarity of BIT clauses to take into account the goal of attracting foreign capital.When China mainly acts as a home country,China’s goal is to make full use of BITs to prevent the host country from abusing its national security review on foreign investments to harm the interests of China’s investors abroad.Therefore,China should choose reasonable contracting modes for basic obligation clauses in the BIT to restrict the excessive use of national security review,emphasize on expanding the applicability of dispute settlement provisions in the BIT to the disputes related to national security review,and clarify the key areas and industries under the national security review of the other contracting country via making lists in essential security exception clauses,so as to improve the predictability of the national security review results given by the other country.And when there is a dual identity to China facing the same country,it is necessary for China to consider more factors such as the negotiation advantages,bargaining chips and interest differences between the two parties,to promote the coordination between the security review and BITs.In the last chapter,the author puts forward some concrete suggestions on how to coordinate the relationship between the national security review on foreign investments and BITs,and discusses them in combination with the Sino-US economic and trade negotiation and the Sino-US economic and trade treaty concluded in the first phase.