— concept and types of foreign investments;
— the status of foreign investors;
― guarantees for foreign investments.
― concept and types of foreign investments;
The concept of investment is key in investment law, since any legal proceeding begins with a determination whether a particular investment is an investment or not. Where can we find the concept of investment? In national legislation or in international treaties (bilateral - BIT; multilateral - MIT).
Usually, investments are understood as tangible and intangible values of legal and individuals of one state, which are exported from this state to the territory of another state in order to make a profit.
According to Russian legislation, foreign investment is understood as the investment of foreign capital in an object entrepreneurial activity on the territory of the Russian Federation. Under the 1999 Act, not all investments must receive the same support. Therefore, in addition to the actual term "investment", there is also the term "foreign direct investment" and the term "priority investment project". According to the law, priority investment projects include projects with a total value of 1 billion rubles, where the share of a foreign investor is at least 100 million rubles.
The concept of investment varies everywhere – it can be wider, it can be narrower. The broadest understanding of investment is found, as a rule, in bilateral agreements on the protection and promotion of investment. Russia has concluded more than 50 such agreements. An example from the Agreement between Russia and Japan, concluded in 1998: “investments are understood as investments of investors of one country in the territory of another” (Ie we see that a very broad definition).
The most common way to divide investments into
Direct- investments that give the opportunity to exercise control over the enterprise;
Portfolio– an investor, by acquiring assets in the form of securities (shares, bonds), is not able to exercise managerial control.
― the status of foreign investors;
Who is an Investor? An investor is someone who invests capital. In investment law, the concepts of the investor differ as widely as the concepts of investment. As foreign investors, the legislation of the Russian Federation understands:
1) foreign legal entities, foreign organizations that are not legal entities;
2) foreign citizens, stateless persons permanently residing outside Russia, international organizations and foreign states;
3) organizations under the control of foreign investors, including those established on the territory of the Russian Federation.
Many states seek to use foreign resources. But the factors of the negative impact of foreign participation are known: the establishment of control over domestic production. In Russia, in order to overcome such negative phenomena, the adoption of the Federal Law “On the procedure for making foreign investments in business entities that are of strategic importance for ensuring the defense of the country and the security of the state” was of particular importance. This law includes a list of 42 sectors of the economy where the participation of foreign entities is possible only with the special permission of the Government Commission for Control over Foreign Investments in the Russian Federation (CII).
Along with the question of whether a particular investment is an investment, the question often arises of whether this investor is a foreign one.
The case of Tokyo Tokeles v. Ukraine. The Ukrainian company has created a legal entity in Lithuania under the laws of Lithuania. The new legal entity invested in Ukraine. There was a dispute. Ukraine proved: what kind of foreign investment is this? These are our people. And between Ukraine and Lithuania there is an agreement on foreign investment. The arbitration said that the investor was Lithuanian.
Sufraki case. Sufraki was a Canadian citizen and invested in the UAE. Sufraki filed a lawsuit with ICSID based not on the BIT between Canada and the UAE, but on the agreement between Italy and the UAE. In confirmation of his nationality, he presented 2 passports, 5 certificates of nationality and a letter from the Ministry of Foreign Affairs. The UAE proved that in 1991 the investor changed his Italian citizenship to Canadian, but did not take measures to retain Italian citizenship. The arbitral tribunal said he did not meet the requirements for effective Italian citizenship. Therefore, jurisdiction was rejected.
― guarantees for foreign investment.
What is the specificity of the legislation on foreign investment? This legislation should be comprehensive. It must be stable. Further, there are almost no conflict of laws rules in the investment legislation (states try to regulate foreign investments in their country independently). The investment legislation should establish the legal regime for foreign investors (national regime, MFN, preferential treatment (exemption from taxes, duties, etc.)). In addition, the legislation on foreign investment is associated with the establishment of restrictions (exemptions from the regime provided) - most often this is a ban on investing in certain industries or enterprises. The latter is done, as a rule, to protect domestic producers.
Providing national treatment- foreign investors are given a treatment no less favorable than domestic investors, i.e. foreign investors are actually equated to domestic ones.
Providing most favored nation treatment- i.e. treatment no less favorable than that provided to investors of other foreign state.
It is possible to use both modes simultaneously (Agreement between Japan and Russia, 1998).
According to the Law on Foreign Investments, the legal regime for the activities of foreign investors cannot be less favorable than the legal regime for the activities and use of profits received from investments provided to Russian investors.
In Russia there is a so-called regulatory procedure for investments, according to which prior permission for admission is not required. The exception is investments in strategic areas - a license is required.
The Foreign Investment Law of 1999 provides for a number of guarantees for foreign investors:
Guarantee of legal protection of activities;
Guaranteed use by a foreign investor (FI) of various forms of investment;
Guaranteeing the AI's right to purchase securities;
Guarantee of participation of AI in privatization;
Guaranteeing the transfer of the rights and obligations of the AI to another person;
A guarantee to ensure proper resolution of the dispute arising in connection with the implementation of investments;
Guarantee of AI right to unhindered export of property and information outside Russia;
Guarantee of compensation in case of nationalization and requisition of AI property, etc. (see law).
Guarantee of granting the right to land plots - there are certain restrictions for AI to acquire land plots in the property: they cannot have the right to property memory located in the border areas or special areas (where strategic facilities, military facilities are located). Special regime in relation to the right of ownership of agricultural storage. AIs cannot own such lots6 can only own such lots on a leasehold basis.
Grandfather's clause (grandfather) or stabilization clause clause - clause, according to which the AI is guaranteed against an adverse change in the legislation that was previously in force for it. But there are limitations: the reservation does not apply to changes that are made to the legislation in order to protect the foundations of the constitutional order, morality, health, etc.
Foreign investment activity is an important component of the normal functioning of the economy of any state, and Russia is no exception. In the context of this thesis, the legal regulation of foreign investment in the Russian Federation is of great importance for the country, because their absence negatively affects the economy. Problems with their involvement are caused not only by the crisis, but also by the imperfection of the legal framework and legal institutions operating in the country. Therefore, it is advisable to consider the features of investment regulation in 2019 in more detail.
The concept and legal regime of foreign investment in Russia are defined by the provisions of the Federal Law “On Foreign Investment in Russian Federation” dated 09.07.1999 No. 160-FZ (hereinafter referred to as “On Foreign Investments in the Russian Federation”). As such, according to Art. 2 of the law, are property investments of foreign investors in the object of entrepreneurship in the territory of the Russian Federation.
Investments can be made in the form of investing tangible and intangible assets, money or shares, property and property rights, services and even information, while they must necessarily belong to a foreign investor and not be withdrawn from civil circulation.
Foreign investment activity is influenced not only by legal aspects, but also by political and economic factors. In order to avoid the adverse consequences associated with them for foreign investors, Art. 4 of the law prescribes the national legal regime for foreign investments. In particular, it cannot be less favorable than the "rules of the game" provided to domestic investors. However, legislation may provide for both restrictive and incentive exceptions to this rule.
Foreign investor, according to Art. 2 of the Law "On Foreign Investments in the Russian Federation", a person is recognized who carries out investment activities in the territory of the Russian Federation and is:
Legal basis investment activity, established by the legislation of the Russian Federation, equally guarantee investors - both foreign and Russian - non-discrimination and observance of their rights and interests, in particular: equivalent business conditions, exclusion of adverse changes in legislation, compensation during nationalization and requisition, justice, participation in privatization and others. In addition, the legislation provides for some benefits to attract foreign capital to the Russian Federation.
Russian legislation is designed to comprehensively cover and address the complex and diversity of problems that potentially arise for foreign investors. According to Art. 3 of the Law "On Foreign Investments in the Russian Federation", it is this regulatory legal act, along with other federal laws, codes and laws of the subjects of the Federation, that is the basis of the regulatory framework governing foreign investment.
Since relations in the field of foreign investment are mainly regulated by such regulatory legal acts, it is advisable to consider them in more detail:
At the same time, the state also implements a universal legal support, which regulates the general principles and rules relating to the investment activities of entities. These are, in particular, the Civil and other codes, the Federal Law "On Joint Stock Companies" and many others. In addition, it is impossible not to mention the international treaties concluded by the Russian Federation.
Establishing a national regime for foreign investment, the legislator, in accordance with Art. 6 of the Law "On Foreign Investments in the Russian Federation", allows the investor to make them in any way, unless prohibited by law. Law enforcement practice traditionally distinguishes three legal forms of foreign investment:
Let's consider each of them in more detail.
Commercial organizations with foreign investment are traditionally created in the form of business partnerships and companies. Despite the presence of foreign capital, they are registered by the tax authorities in general order, in accordance with the Law "On State Registration of Legal Entities and individual entrepreneurs» dated 08.08.2001 No. 129-FZ.
At the same time, the legal status of commercial organizations with foreign investments is determined by the norms of the Law “On Foreign Investments in the Russian Federation”. It is worth considering that investors can invest not only in new companies, but also acquire shares in existing companies. From the moment of such a transaction, the company will be recognized as an organization with foreign investments.
When organizing enterprises with foreign investments, not only the rights of foreign investors, but also the rights of domestic participants should be taken into account: in particular, the creation of subsidiaries of foreign legal entities in the Russian Federation should be prevented.
By the way, it is important to distinguish between investment and entrepreneurial activities: the latter is carried out not through investments, but through the creation of Russian branches.
Representative offices and branches are, as indicated in Art. 55 of the Civil Code of the Russian Federation, separate structural units, through which, according to the Law "On Foreign Investments in the Russian Federation", foreign companies have the right to carry out entrepreneurial activities in the Russian Federation.
Sources of regulation of foreign investment require such branches and representative offices to be subject to mandatory state accreditation, which is carried out by tax authorities. From the moment of its implementation, the branch and representative office acquire the right to conduct activities corresponding to their goals. Despite this, due to the need for foreign financial investments, it is not only an organizational form of entrepreneurship, but also a form of investment activity.
By virtue of Art. 55 of the Civil Code of the Russian Federation, branches and representative offices of a foreign legal entity in Russia have differences. So, if branches are able to perform all or part of the economic functions of a legal entity, then representative offices perform only organizational and legal functions. But regardless of these differences, both forms are not independent legal entities.
International private law distinguishes many forms of contractual relations, but only some of them can have the character of investment cooperation.
In particular, they must meet the following criteria:
As a matter of fact, the legislation distinguishes a set of the contracts falling under such signs. In the context of this, contracts of various nature and various activities can be recognized as investment contracts. These, in particular, may be:
Let us note that the freedom of forms of foreign investment that exists in the Russian Federation, enshrined in Art. 6 of the Law "On Foreign Investments in the Russian Federation", allows investors to conclude any agreements that are of an investment nature.
The legal doctrine and analysis of law enforcement practice make it possible to identify three main principles on the basis of which the legal regulation of foreign investment is carried out:
Consider the features of each principle separately. 
Domestic law, of course, is one of the foundations for regulating investment activity in any state, and Russia is no exception.
Investment legislation should be perceived as a set of legal acts regulating not only investment activity, but also currency relations and control, labor relations and other aspects of investment activity.
At the same time, it should be noted that in Russia the national legal regulation of foreign investment is based on special investment laws, which is typical for countries with economies in transition.
These laws define a single regime for foreign and domestic investment, but do not use the conflict method of regulation, directly establishing the order of relations between investors and the state.
It is interesting that in developed countries such investment legislation does not exist at all, which is why the same rules apply to foreign investors as to other civil entities.
Civil law regulation of foreign investments in business law on the territory of the Russian Federation is aimed at ensuring the interests of each investor, regardless of the form of investments they make, nationality, investment volumes, profits received and other subjective aspects of their activities.
Guarantees of such protection are fixed both by domestic legislation and by the obligations of the Russian Federation under international treaties and conventions. Every investor is entitled to such protection from any non-economic factors, and the state is obliged to provide it to him.
In addition to national legislation, the legal regulation of foreign investment in the Russian Federation and other countries is also carried out by international treaties concluded between states and other subjects of international law. According to the circle of participants, they are usually divided into multilateral, regional and bilateral international treaties. The most influential and significant sources of investment law, of course, are multilateral international treaties. The multilateral system of regulation of foreign investments makes it possible to ensure the safety of investments at the interstate level. Let's look at some examples in more detail.
In the historical past, investors who invested in the economy of a foreign state, in the event of a change in the political situation in the recipient state, could lose their invested funds and property, having only two options for protecting violated rights. In this regard, the second half of the 20th century, the international community tried to develop a mechanism that would protect the rights of investors from violations by such states.
One of the most influential international treaties regulating international investment activity is the Washington Convention for the Settlement of Investment Disputes between States and Foreign Persons, signed on March 18, 1965.
Being a universal source of international law, it has become the foundation on which the system of measures to resolve investment disputes is based. The Russian Federation signed the Convention on June 16, 1992, but has not yet ratified it. Currently, more than 150 states are parties to the Washington Convention.
Its main achievement is the creation of an autonomous International Center on settlement of investment disputes. The Center seeks to remove all foreign economic obstacles to private investment and is regarded as one of the most authoritative international arbitration institutions, where all disputes are resolved through conciliation procedures or through arbitration.
As noted above, the recipient country of foreign capital cannot always provide it with adequate protection, but the development of new forms of cooperation has led to the establishment of more effective investment protection mechanisms - insurance. 
The outcome of this process was the Seoul Convention on the Establishment of the Multilateral Investment Guarantee Agency, signed on October 11, 1985. Along with the Washington Convention, the Seoul Convention is the most important document on the issue of investment protection. Guarantees provided to investors by the Agency are designed to protect them from most non-economic risks when investing in the member countries of the convention. The only thing the agency does not insure against is economic risks, including bankruptcy. The Agency acts as a guarantor that the rights of investors will not be violated.
One of the participants of the Seoul Convention is Russia, which ratified it in 1992.
Along with multilateral international treaties, one cannot but pay attention to regional international agreements concluded by Russia within the framework of the CIS. Over the 26 years of the existence of the Commonwealth, its members have signed about 500 of them, many of which related to investment activities, for example:
It should be borne in mind that all these treaties and agreements are valid only within the framework of regional cooperation of the CIS countries, since the provisions presented in them establish certain privileges for representatives of the CIS countries.
By virtue of Art. 4 of the Law "On Foreign Investments in the Russian Federation" and the national legal regime for foreign investments established by it, the activities of foreign investors are under the same protection of legislation as the activities Russian companies. The legal regime applicable to foreign companies could not be less favorable.
Despite the same regulatory measures in the field of foreign investment, the legislator does not exclude the possibility of applying stimulating or restrictive exemptions. True, restrictions are possible only in order to protect the constitutional order, the security of the state, as well as the rights and legitimate interests of others.
At the same time, incentives in the form of benefits for investors can be established by law in the interests of the country's socio-economic development. The law cannot provide for any prohibitive measures in relation to economic investments. In addition, measures of state regulation can be expressed in the form of state guarantees.
The legislation of the Russian Federation, through federal laws, obligations under international treaties and other regulatory legal acts, guarantees full and comprehensive protection of the rights and interests of foreign investors. One of the main legal acts providing for the state guarantee of foreign investments is the Law “On Foreign Investments in the Russian Federation”.
The above law gives investors the following rights:
In accordance with the Law “On the Procedure for Making Foreign Investments” and Decree of the Government of the Russian Federation No. 510 dated July 6, 2008, the Cabinet of Ministers formed Government Commission to control foreign investment. Its composition is determined by the Government of the Russian Federation, the prime minister is considered the head.
Among the main tasks of the Commission is the preliminary approval of transactions that may lead to the establishment of foreign investors' control over business entities of strategic importance, the approval of the possibility of establishing such control, as well as the denial of approval.
When considering investors' petitions and performing other functions, it requests the required information from the executive authorities, hears experts and makes decisions by a majority of votes.
One of the exceptions for foreign investors is the restriction of their participation in the authorized capital of business entities that are of strategic importance for the economy, security, defense of the country and other strategic areas. The exemption is not prohibitive, therefore, the admission of foreign investors to participate in investment activities in relation to strategic industries is not prohibited, but requires compliance with certain conditions. 
Yes, Art. 4 of the Law “On the Procedure for Making Foreign Investments” allows such investment transactions, which may result in the establishment of control by foreigners, only if permission is given by the above-mentioned Government Commission.
The admission of foreign investors to invest in strategic sectors is possible upon their application submitted to the Commission with all necessary documents referred to in Art. 8 of the law. It checks the submitted documents, obtains the necessary conclusions and requests the necessary materials regarding the threat to strategic industries from other authorized bodies, and only after that makes a decision on preliminary approval of the transaction, approval of the establishment of control or refusal to do so.
The decision must be made within three months from the date of filing the application. Art. 6 of the law defines 45 types of activities that are of strategic importance for the defense and security of the country.
Despite a very impressive, detailed and diverse regulatory framework, the legal regulation of foreign investment is often characterized by a number of problematic issues. All of them, for the most part, relate to investment legislation. We managed to identify the most priority problematic issues.
Sargsyan Georgy Robertovich - post-graduate student of the Modern Humanitarian Academy (Moscow).
The formation and development of the legal regulation of foreign investment in modern conditions reflects the specifics of the transition period experienced by Russia. The foreign investment regime is the regulation of business activities carried out in the conditions of a foreign state. This means that the legal status of a foreign investor always remains vulnerable, regardless of the specific socio-political situation at a particular stage of development of a particular state.<1>.
<1>Bogatyrev A.G. Investment law. M., 1992. S. 8 - 13.
Despite the significant experience gained in the field of legal regulation of foreign investment, there is still no proper mechanism for the relevant international legal regulation. This, in our opinion, is explained to some extent by the poor development of the topic. A comprehensive analytical approach to research within the framework of international investment law, located in the system of international economic law, can help here.
Many states set up a range of barriers foreign citizens and companies in the course of their admission to the implementation of investment activities in their territory. States are afraid of the active introduction of foreign capital into those sectors of the economy that are of particular importance for national security and constitute its basic branches. In some cases, governments, at the request of their entrepreneurs, are implementing protectionist policies, wanting to protect them from competition with foreign companies. Therefore, many states establish restrictions or special conditions for the admission of foreign direct investment in the most important sectors of the economy, which is also legally enshrined in Russia.
The obligation of the recipient state to encourage and protect foreign investment is, as a rule, the following legal norms and provisions: to ensure and encourage the admission of foreign investment to its territory; guarantee foreign investors high standards of treatment, including fair and equitable, non-discriminatory treatment, most favored nation treatment or national treatment; provide legal protection for international law and guarantees for investments, especially with regard to the transfer of funds and expropriation, including standards for compensation to be paid, and thereby reduce the possibility of arbitrary nationalization; guarantee access to international means of resolving disputes in case they arise, etc.
It should be especially noted here that international investment law does not contain a uniform definition of the concept of foreign investment. This is explained by the fact that specific rights and obligations are imposed on the subjects of investment relations in the course of this type of entrepreneurial activity, the scope of which is determined by the relevant acts. Therefore, the definition of this concept depends on the content and objectives of the normative act.
Despite the absence in the specialized literature of a generally accepted understanding of the legal content of the concept of foreign investment, we should adhere, in our opinion, to the Seoul Convention of 1985 on the establishment of MIGA, according to which the constituent features of this legal category are three mandatory conditions:
But, in addition, long-term investment relations should be directly established, in our opinion, between the investor and the entrepreneur in the sector of the real economy, and the investor should also be able to manage the enterprise he invests.
The legal nature of foreign investment relations is such that they need special legal regulation. Foreign investment relations, having inherently a private law character, at the same time need international legal public regulation. By the way, this is the main goal of our scientific research. In other words, a multifaceted complex of relations is evident, the participants of which are participants of various ranks in terms of their legal origin. Moreover, in connection with the above controversy, we especially emphasize that the subjects of international investment relations do not always act as owners, that is, owners, users or managers of property benefits in material terms, that is, investments.
For example, the state, as the main subject of international investment law, plays a leading role in ensuring the legal protection of foreign capital on international basis. At the same time, in the field of foreign investment, as a rule, it does not act as a participant in international private law property relations. In this case, the state primarily plays the role of a guarantor of foreign investment activities within its own territorial jurisdiction. In other words, the state provides the organizational and legal basis for the activities of a foreign investor. Yes, a foreign investor enters into property relations, but not the recipient state, which, by virtue of its legal status, is a special subject of international investment relations.
International investment law in the broad sense of the word is a complex branch both in the system of public international law (PIL) and in the system of private international law (PIL) at the same time, coexisting along with the main branches of law and occupying a special place in the legal system. The legal nature of legal relations in the field of foreign investment lies in the creation of appropriate conditions and guarantees for investors, as well as in determining the appropriate organizational and legal forms of investment. First of all, in national law - in special investment legislation, as well as in regulatory legal acts of a general nature (civil, financial, tax, banking, customs legislation, etc.), where the norms defining the legal forms of regulation of foreign investment are fixed. On the other hand, international legal investment norms, enshrined in international universal and bilateral treaties and which are integral part national legal systems, act as a legal standard for domestic investment legislation<2>.
<2>Farkhutdinov I.Z. International investment law: theory and practice of application. M.: Wolters Kluver, 2005. S. 47 - 86.
The legal regime of foreign investment predetermines the set of principles and rules of international and domestic law that determine the regime of foreign investment from the moment of their establishment until the moment of their liquidation.
In principle, the legal regime for foreign investment is primarily determined by domestic law. But domestic law is the law of the State in whose territory the investment is made, and not the law of the State from which the investor originates. However, the instability of national legislation and the general lack of political and economic instability force a foreign investor to seek protection in international legal forms of regulation of international investments. The investment guarantee mechanism is understood as a set of mechanisms that transfer financial consequences arising from certain political risks from an international investor to a special body of domestic or local law.<3>.
<3>Carro D., Zhyuar P. International economic law. Per. from fr. / Nauch. ed. V.M. Shumilov. M.: International relationships, 2002. S. 375.
The provision by the recipient state of the regime of protection and guarantees of investments is ultimately aimed at legally ensuring the security of capital. The concept of the legal regime of investments and the concept of state guarantees are interdependent and interrelated with each other. The legal regime is assumed to be a set of norms of national and international law that determine the legal status of foreign investments from the moment of their establishment until the moment of their liquidation. Forms and methods of protection mean a set of norms of national and international law that warn or punish state bodies that impede normal investment activity.
International law does not oblige a foreign investor to enjoy more favorable treatment than the national one. It does not, in principle, oppose domestic investment being treated more favorably than foreign investment. The state, by virtue of its sovereignty, has the right to stimulate domestic investors or foreign investors by applying a balanced investment policy. That is, we are talking about the fact that the legal regime of foreign investment may differ from the national regime. At the same time, there is a certain relationship between the national regime and international standards. The national treatment accorded to a foreign investor in the host country must be in accordance with international law if the host state respects the standard of fair and equitable treatment of foreign property.
The theory and practice of international investment law divides foreign investment regimes into absolute and relative. The former are based on the principles of full protection and security, non-discrimination, fair and equitable treatment, the obligation to comply with obligations relating to investments, treatment within the framework of international law. The latter are most favored nation treatment and national treatment.<4>.
<4>Evteeva M.S. International bilateral investment agreements. M., 2001. S. 21 - 22.
The principles of the absolute regime of foreign investment are aimed at ensuring the full protection of foreign investment. Fair and equitable treatment is, as noted above, a traditional custom in international law closely related to the classical definition of so-called "due diligence", although its meaning is not precisely defined. The official commentary on article 1 of the draft Convention for the Protection of Foreign Property states that "fair and equitable treatment means the minimum international standard which forms part of customary international law". According to this view, this standard embraces its system of international legal principles, including the principle of non-discrimination, the duty to protect foreign property, and the international minimum standard.
As you know, some developing countries question the special legal status of certain standards of international law and their applicability to foreign investment.
According to this logic, the importance of the principle of fair and equitable treatment is explained by the relative lack of abstract content.
A fundamental place in international bilateral treaties on the promotion and mutual protection of investments, the so-called DND<5>, takes the definition of a common legal regime. This is because a clear indication of the general legal standard for foreign investment has importance to ensure a favorable investment climate in any country. New, in comparison with the provisions of Russian legislation, is the inclusion in bilateral international agreements on the protection of foreign investment of the conditions of the regime, which has received the name "absolute standard regime" in international legal practice. This mode assumes general characteristics treatment granted to foreign investments: "equitable" and "fair treatment", "a regime that provides full and unconditional protection of investments" in accordance with the standards that are accepted in international law. There is no specific interpretation of "favourable and just treatment", although some of its elements are considered more or less generally accepted. In this case, we are talking about non-discrimination, a certain minimum standard, the obligation of the state-capital recipient to protect foreign property.
<5>Russia has entered into agreements with more than 50 states.
The concept that “management, maintenance must not be hindered in any way by unjustified or discriminatory measures” appears to be very similar to a minimum international standard. The concept is believed to refer to such cases that took place shortly after the Iranian Revolution. In this case, in conditions of tolerant attitude, tacit support, and sometimes encouragement from some state structures, significant commercial damage was inflicted, which in many cases was expressed in direct or "creeping" expropriation.
The principles and norms governing the legal regime of foreign investment, being the core of the entire system of international legal regulation of foreign investment, have been formed and developed for a long time, that is, in the course of the evolution of the international legal mechanism for the protection of foreign capital. Historically, gradually making their way for themselves, even today they have not turned into some kind of dogma that deserves universal recognition. On the contrary, the question of the role of the principles and norms of international investment law (IIP) in the regulation of foreign investment is still quite debatable. For example, G.M. Velyaminov argues that "general international law does not contain any clear and universally recognized principles and norms regarding the regime of foreign investment"<6>. In addition, the problem is particularly complicated by the fact that the legal regulation of foreign investment cannot be based only on the national legal framework or only on the principles and norms of international law, albeit in the manner prescribed by the treaty. An absolute axiom: a combination of national and international legal norms and methods of regulation is required. The mechanism of legal regulation of international investments in the broad sense of the word is a set of principles, norms and rules of international and domestic law, which determines the legal status of foreign investments, as already mentioned, from the moment of their establishment until the moment of their liquidation. The principles and rules of international investment law derive either from non-treaty sources, especially from general principles of international law, or from conventional sources; both multilateral and bilateral treaties and agreements. The action of the basic principles of international law in the legal regulation of foreign investment has almost lost its former sharpness today after heated discussions between the countries of the North and the countries of the South in the 70s of the XX century.
<6>Velyaminov G.M. International economic law. Moscow: Wolters Kluver, 2002.
As for the principles and norms of national law, they are developed by the recipient state of capital. Legislative or by-laws in this area reflect the choice of a state-defined policy regarding foreign investment. Each state tries to build its investment policy based on a number of considerations, which are based on the priorities of the general economic policy pursued.
In the course of the evolution of international investment law, there has been a transformation of principles and norms within this law. In the 60s - 70s of the XX century. The IIP relied primarily on the general principles of international law. In conditions when developing countries tried to assert their unconditional right to regulate international investments, and there was no conventional system of legal protection of foreign investments, it was beneficial for developed countries to turn to the basic principles of international law.
In the second half of the XX century. international investment law, designed to provide a favorable regime for foreign investment, developed in a zigzag manner, which was caused by fundamental contradictions between the countries of the North, the exporters of investments, and the countries of the South, their importers. This development has gone through three stages, although their time frames are rather arbitrary.<7>:
<7>Farkhutdinov I.Z. Decree. op. pp. 171 - 172.
The first stage is the stage of approval by the countries of the North of the general principles of international law in the field of foreign investment regulation.
The second stage is the time of non-recognition (withdrawal) by the countries of the South of the general principles of international law in the field of the legal regime of international investment.
The third stage is the stage of restoration by the countries of the North and the South of common principles in regard to the legal regime of foreign investment.
It should be especially noted that the concepts of legal status and investment protection, on the one hand, investment guarantees, on the other, are closely related to each other. The legal status is understood as a set of norms of national and international law that determine the legal regime of foreign investments from the moment of their establishment until the moment of their liquidation. The rules of protection are understood as a set of norms of internal or local law that prevent or punish encroachments of public authorities for violating the norms and rules, means of regulating foreign investment activities.
But the whole problem is that investment guarantees are provided within the framework of domestic legislation. As is known, the interests of the recipient state and the foreign investor often diverge, and therefore these two parties have different points of view on providing legal guarantees for foreign investors.
The state on whose territory foreign investment activity is carried out seeks to use its internal guarantees, which allows it to receive the greatest concessions. The country of origin of the foreign investor is more preferable to the mechanisms of international law, since the use of international guarantees gives him the opportunity to reduce concessions in the field of investment protection<8>.
<8>Carro D., Juard P. Decree. op. pp. 375 - 376.
The constituent, interdependent elements of the general principles of international law in the area under consideration are the following rules. First, the national rules governing the investment regime, if they contradict, should be brought into line with international rules if necessary. Secondly, international law does not prevent international investment from being given or given preferential treatment over national investments mode. Third, international law prohibits some differential treatment that places foreign investment at a disadvantage compared to domestic investment.
Indeed, developing countries find it difficult to admit the existence of general principles of international law in the field under study, which, regardless of any convention, oblige the state on whose territory investments are made to respect international standards. The general principles were established solely under the influence of the developed countries, when the developing states had not yet achieved international recognition of their sovereignty. Although in fact these principles do not reflect the will of all members of the world community, since they are unfavorable for developing countries. Here it is necessary, through mutual compromises, to find a golden mean, that is, a balance of interests of the countries of the North and the countries of the South.<9>.
<9>Farkhutdinov I.Z. International investment legal relations: theory and practice. Abstract dis. doc. legal Sciences. M., 2006. S. 12.
The goals and principles of international investment law are determined by the goals and principles of international law as a whole. The UN Charter, which has formally universal competence in the field of international economic relations, paid special attention to economic cooperation, a very significant part of which is international investment cooperation. In accordance with the UN Charter, the objectives of international economic cooperation are: promotion of economic and social development states<10>.
<10>Velyaminov G.M. Decree. op. pp. 118 - 119.
The system of control over the admission of foreign investments in accordance with national legislation does not contradict the theory and practice of international law. However, not all states require the approval procedure for all foreign investments. Many governments have an "open door" policy, but government-approved investments receive various benefits. A special procedure for approving foreign investments is aimed at attracting mainly those of them that are beneficial for the host state and meet all the conditions imposed by this state. This does not contradict the norms and principles of international investment law<11>.
<11>Farkhutdinov I.Z. International investment law. pp. 74 - 77.
The principle of territoriality of foreign investment regulation means that as soon as a foreign investor is admitted to the territory of a foreign state, his activities automatically fall under the exclusive jurisdiction of the host state. In light of this, all forms and methods state control, established by the state in relation to a foreign investor, are recognized as legal in accordance with existing international legal norms.
Based on the theory and practice of international law, each state is obliged to respect the property of citizens of other states and provide them with protection. The obligations of a fair, favorable attitude towards foreign private property, as well as ensuring its normal functioning, is a mandatory norm of international law.
Depending on the functional orientation, the norms governing the legal regime of foreign investment in Russia can be divided into separate groups:
International legal norms have their own peculiarity that distinguishes them from the norms of national law, although, on the other hand, it is obvious that many common features of their legal nature as legal categories make it possible, to a certain extent, to use separate categories and the concepts of domestic law and the general theory of law in general in the study legal nature norms of international law. This is required due to the fact that the development and universalization of international investment relations required, in turn, the strengthening of activities for international legal and domestic unification of legal norms in various areas of correlation between the norms of international and national law.
The norms and rules governing the procedure for insuring foreign investments are of fundamental importance in the system for ensuring successful foreign investment activity.
International legal norms that establish uniform forms and methods for settling investment disputes are also one of the cornerstones of international investment law. This is explained by the fact that the mechanism of legal protection of the interests of foreign investors in the course of resolving investment disputes must comply with international investment law.
The implementation of international and investment norms generally accepted on a multilateral and bilateral basis requires close and similar legal norms of the same type in the national investment legislation. Such interaction contributes, in turn, to the convergence and unification of domestic investment norms. Incidentally, speaking of international contractual unification of law, it should be noted that this form of interaction between international and national law is one of the important conditions for the implementation of global economic integration.
Which of the well-known forms of harmonization of international and domestic law: transformation (direct and indirect), incorporation (reference to an international treaty), implementation - should be taken as a tool when studying the features of the implementation of international investment norms in national legislation? It is believed that the most successful way to implement international legal norms in domestic law is the implementation<13>.
<13>Farkhutdinov I.Z. Decree. op. pp. 362 - 371.
the main task implementation in the field of foreign investment - the implementation of the goal of international norms by the forms and methods of national law. By virtue of the obligation voluntarily taken by the state to unquestioningly comply with the terms of an international treaty, ensuring the fulfillment of the goals and norms of international investment law must be achieved as a result of changes, additions, cancellations or the adoption of new norms in domestic legislation. Thus, in the course of implementation, domestic legislation is brought into line with the norms of international law.
A fundamental place in bilateral treaties on the promotion and mutual protection of investments is the definition of a general legal regime. This is because a clear indication of a common legal standard for foreign investment is essential to ensure a favorable investment climate in any country. New, in comparison with the provisions of Russian legislation, is the inclusion in bilateral international agreements on the protection of foreign investment of the conditions of the regime, which has received the name "absolute standard regime" in international legal practice. Such a regime assumes a general characteristic of the regime granted to foreign investments: "equitable" and "fair treatment", "a regime that provides full and unconditional protection of investments in accordance with the standards adopted in international law".
There is no specific interpretation of "favourable and just treatment", although some of its elements are considered more or less generally accepted. In this case, we are talking about non-discrimination, a certain minimum standard, the obligation of the state of the capital recipient to protect foreign property.
The vast majority of Russia's bilateral treaties contain the term "just and equal" treatment. "Each of the Contracting Parties will ensure a fair and equitable treatment of investments of investors of the other Contracting Party and will not, by taking unjustified or discriminatory measures, impede the operation, management of investments made by these investors. Each of the Contracting Parties shall ensure such investments with full security and protection," it says , for example, in the Agreement between Russia and the Kingdom of the Netherlands.
Incidentally, the norm "fair and equal treatment" is largely declarative. It fixes the will of the state to encourage foreign investment, to conduct a benevolent policy towards foreign investors. More specific wording of the bilateral treaty is contained in subsequent articles, which refer to the granting of most favored nation treatment or national treatment to foreign investors.
The establishment of the most favored nation regime is mentioned in bilateral agreements with Austria, Belgium, Great Britain, Spain, Italy, Canada, Korea, China, the Netherlands, Turkey, France, Germany, Finland, Switzerland, etc. Consider Article 3, Clause 2 of the Agreement between Russia and France on the Mutual Encouragement and Mutual Protection of Investments, which says: "Each of the contracting Parties in its territory and in its maritime zone will apply to investors of the other Contracting Party in regard to their investments and related activities, treatment no less favorable than that accorded to investors in any third country.”
"The regime is no less favorable than in respect of investments by investors from third countries," establishes Article 3 of a similar Agreement between Russia and Germany. The same article states that "without prejudice to its legislation on joint ventures with the participation of foreign investors, each of the Contracting Parties undertakes not to take discriminatory measures in relation to joint ventures with the participation of investors of the other Contracting Party, the investments of such investors, as well as the activities of investors related to with capital investment.
Russia's bilateral treaties also provide for exemptions that are allowed when granting most favored nation treatment. The principle of most favored nation is understood as the inclusion in international treaties of the provision that each of the contracting states undertakes to grant to the other contracting state in one or another sphere of their relations specified in the contract the rights, advantages, privileges and benefits as favorable as those that it provides or will provide in the future to any third state. The formula "which it grants or will grant in the future to any third State" covers the treatment enjoyed by any third State, whether based on an international treaty, national law or practice<14>.
<14>Usenko E.T. Most favored nation treatment in Soviet-American trade relations // SGiP. 1987. N 9. S. 85; Voitovich S.A. Most favored nation treatment in trade and economic relations // SEMP, 1987. M., 1988. S. 172 - 184; Ustor E. The most favored nation clause the customs unions // Asta jurid. 1977. T. 19. P. 155 - 173; Nazay P. Application of the most favored nation treatment in East-West trade. 1979. T. 21. P. 145 - 158.
It should be especially noted that the most favored nation treatment cannot be confused with or identified with the non-discrimination regime. The principles underlying these regimes have different content. The essence of the principle of non-discrimination lies in the right to demand such conditions as are used by all, that is, general conditions, the same for all.
The essence of the principle of most favored nation is the right to demand preferential, privileged conditions. Therefore, the most favored nation treatment implies a non-discriminatory treatment, but is not limited to it. The principle of non-discrimination is a general consequence of the sovereign equality of States. It has the character of a universally binding customary legal norm and therefore does not need treaty recognition. As for the principle of most favored nation, it, as an international legal norm, has a contractual character.<15>.
<15>Hyder K. Equality of treatment and trade discrimination in international Law. The Haque, 1968. P. 33-127; Domke M., Hazard J. State trading the most favored nation clause // Amer J. International Law. 1958. Ns. 1. P. 55 - 68; Sukijasowic M. The most favored nation treatment in the contemporary world // Jugost rew medunar pravo. 1977. Na 1/2. S. 56-64; Velyaminov G.M. Legal regulation international trade. M., 1972. S. 219 - 234; Shumilov V. The Principle of the Most Favorable Nation in International Law (Problems of Theory and Practice) // Foreign Trade. 1985. N 7. S. 42 - 48.
It is noteworthy that the UN International Law Commission on Non-Discrimination stated quite clearly that this is a "general rule arising from the equality of states"<16>, "the general rule arising from the sovereign equality of states"<17>.
<16>Gearbook of International law commission. 1958.V.II. P. 105.
<17>Ibid, 196. Vol. 11. P. 128.
It should be especially noted that in addition to the provision on granting the most favored nation treatment, our country has undertaken to provide foreign investors with national treatment.
The principle of national treatment in advanced economies is fundamental to investment activity. When granting a national regime to foreign investments, national and foreign entrepreneurs act on the market, with some exceptions, as equal subjects.
Consequently, national treatment is a regime in which the rights of investors in the territory of the host state are determined mainly by local (national) laws, and not by the laws of the country of origin of capital. At the same time, the national treatment of foreign investments cannot be less favorable than the treatment provided to national legal entities (national capital) of Russian investors. For example, in the Agreement with Spain Art. Article 5 states that "Each Party, in accordance with national law, will accord to investments made by investors of the other Party treatment no less favorable than that accorded to its own investors."
A similar addition is contained in Art. 3, paragraph 4 of the Agreement with Canada: "... to the extent possible and in accordance with its laws, it grants to the investment or income of investors of the other contracting party treatment no less favorable than that which it accords to the investment or income of its own investors."
The fact that "this Agreement cannot prevent investors from taking advantage of more favorable provisions" is stated in the Treaty with the Governments of the Kingdom of Belgium and the Grand Duchy of Luxembourg on the mutual encouragement and mutual protection of investments.
The above additions to the most favored nation treatment granted to foreign investors testify to the desire to create more favorable conditions that are in line with national treatment as a principle of subjecting foreign investors to business rules established for Russian businessmen. In paragraph 1 of Art. of this Agreement stipulates the provision of the most favored nation treatment: each of the parties is granted "a treatment no less favorable than that which you provide" to the investments and incomes of investors of any third state. "The next paragraph of the same article stipulates the conditions for granting "a treatment no less favorable than , which is provided to investors of any third country".
Paragraph 3 of Art. 3 directly speaks of the application of national treatment to foreign investors. That is, "equal treatment given to the investment and income of its own investors." But it should be noted that this kind of optimal favorable treatment, by agreement of the Parties, is provided "to the extent possible and in accordance with their legislation."
Analyzing the relevant articles of agreements on the encouragement and mutual protection of investments, one can come to the conclusion that the wording in the Treaty with the United States is interesting. Paragraph "p" Art. 1 states that "national treatment means treatment which is at least as favorable as that accorded by a Party to companies or nationals of third countries in similar circumstances".
The "mixed" regime is referred to in the Agreement between Russia and the Republic of Korea on the encouragement and mutual protection of investments. In it, the parties reciprocally grant investors the right between most-favoured-nation treatment and national treatment: "Each of the Contracting Parties shall accord in its territory to the investment or investment income of the investors of the other Contracting Party treatment no less favorable than that which it accords to the investment or investment income of its own investors or investors. any third state" (art. 3).
International agreements on the protection of investments may provide for the possibility of exemptions from national treatment in relations between investors of contracting states and the contracting state receiving the investment. So, for example, in the Agreement between Russia and Korea, paragraph 3 of Art. 3, it is provided that "each of the Contracting Parties reserves the right to establish or maintain, in accordance with its existing legislation, limited exemptions from national treatment granted in accordance with paragraphs 1 and 2 of this article."
It is noteworthy that in the Agreements with Canada and France, when determining the investment regime, a direct reference is made to the general principles of international law. For example, "each of the parties undertakes to ensure in its territory ... the investment of investors of the other Contracting Party, in accordance with the principles of international law, a fair and equitable treatment, excluding any injustice or discriminatory measure that could interfere with the management, maintenance, use or liquidation of these investments" (Clause 1, Article 3 of the Agreement with France).
The inclusion of the condition on granting the regime of an absolute standard, in the opinion of experts, means that when resolving certain issues in the course of investment activities, reference to the norms of international law is not excluded. If the condition of an international agreement contains a direct reference to the norms and principles of international law, then the interpretation of such categories as "fair" and "equitable" treatment should be given in accordance with the understanding of these categories adopted in international law. The absence of reference to international law allows the contracting parties to interpret these categories in accordance with national law<18>.
<18>Doronina N.G., Semilyutina N.G. Legal regulation of foreign investments in Russia and abroad. M., 1993. S. 96.
In the past, most favored nation treatment (MFN) was a feature of interstate trade agreements. The states connected with each other by a system of trade relations were interested in it. The advantage provided to the MFN states is as follows: each new agreement of one of the counterparties of the MFN agreement with any third state on changing the terms of international trade in a preferential direction also changes the terms of trade in relation to its counterparty under the agreement, and also in a preferential one. side. In order to avoid the loss of benefits in international trade obtained by mutual concessions, each state tries to ensure the right to any other and greater benefits that can be granted to its rival in international trade, some other state. In the modern economic struggle for the development of new foreign markets no state can rely on its own strength so much as not to be afraid of especially preferential treatment of other states.
Having concluded an agreement with a condition on the MFN, the state can be sure that the conclusion by its counterparty of a preferential agreement with a third state will entail the application of the same benefits in relation to itself. To create the most favorable international trade regime, it may not be enough to conclude a bilateral MFN agreement; a multilateral agreement or a system of bilateral MFN agreements that would bind a whole group of countries may be required. Thus, a single trade regime would operate for the whole region (for example, a trade regime between EU member states or a regime established under the General Agreement on Tariffs and Trade).
In fact, in this case, a kind of community of states arises, trading among themselves according to the same rules. In this regard, it should be noted that reciprocity is one of the basic principles of international trade and investment cooperation. However, many acts of an international legal nature provide for a violation this principle especially for developing countries. Similar provisions are contained, for example, in Art. 19 Charters economic rights and obligations of States, which establishes preferential, non-reciprocal and non-discriminatory treatment for developing countries. In the past, this regime was granted to trade between colonial countries and their mother countries, the USSR and other socialist countries provided special preferences to maintain national economy developing countries. Thus, the activities of foreign investors can be provided with a special type of treatment - preferential.
Consequently, the most favored nation treatment can be granted both on the condition of reciprocity and without it. In the case when the most favored nation treatment is granted without the condition of reciprocity, we are talking about the absolute most favored nation.
Under national treatment, foreign individuals and legal entities have the same rights, privileges, benefits and restrictions regarding their entrepreneurial activities as national companies and entrepreneurs. Unlike the MFN, national treatment can be provided both by international treaties (for example, treaties on legal assistance, on the mutual encouragement and protection of foreign investment, trade treaties, shipping treaties), and the norms of national legislation (laws on entrepreneurial activity, foreign investment, legal status of foreigners, etc.).
When studying each type of activity provided by states to foreign investors, it must be borne in mind that any type of regime is rarely applied in a "pure" form - for each of them, various exceptions and exemptions are possible, the list of which is either contained in international treaties or established by the state in unilaterally domestic law rules. At the same time, depending on the nature of the exemptions from the regime, preferential or restrictive regimes for investors' activities are distinguished. What types of activity regimes are typical for the modern legal regulation of the investment activity of foreign investors? The terms of operation contain a variety of international agreements - multilateral and bilateral treaties, and above all various trade agreements, partnership and cooperation agreements, as well as bilateral agreements on the encouragement and mutual protection of foreign investment.
At present, more than 50 agreements on the encouragement and mutual protection of foreign investments are in force for the Russian Federation. Some of them were signed on behalf of the USSR. In relation to them, the Russian Federation continues to exercise rights and fulfill obligations on the basis of the note of the Ministry of Foreign Affairs of the Russian Federation dated January 13, 1991, in which Russia confirmed its succession in relation to treaties concluded on behalf of the USSR. When studying these agreements, it must be borne in mind that some of them have not entered into force and have no practical application yet.
In 1994, Russia applied for admission to the World Trade Organization (WTO/GATT-1994). Russia's entry into this organization will entail the spread of a special regime for Russian goods and investments in the world market. The Partnership and Cooperation Agreement signed by Russia and the European Union on June 24, 1994 is of particular importance for determining the mode of activity of Russian investors in the Western market. Special modes of activity for investors within the CIS are provided for by the Agreement on Cooperation in the Framework of Investment Activities dated December 24, 1993. In addition, provisions on the regime of investment activities within the CIS are contained in the act of the Inter-Parliamentary Assembly of the States - Members of the CIS "On general principles regulation of foreign investment in the states - participants of the Inter-Parliamentary Assembly" 1994.
An analysis of Russia's bilateral investment agreements allows us to conclude that the following types of regimes can be provided to foreign investors. The most favored nation treatment is provided for, for example, in agreements on the encouragement and mutual protection of investments: with the Republic of Austria (Article 3), in Art. 2 of the Agreement between the USSR and the Kingdom of Belgium and the Grand Duchy of Luxembourg, Art. 4 of the Agreement with the Netherlands, Art. 3 of the Agreement with Germany, Art. 3 Agreements with the Republic of Finland. These Agreements provide that the regime for the activities of investors in the territory of the contracting parties will be no worse than the regime granted to investors of third countries.
Certain difficulties are caused by the definition of the specific type of the national NB treatment provided - is it a partial or full most favored nation? Agreements with Austria, Belgium and Luxembourg, the Netherlands, and China provide for the establishment of a regime that should be “no less favorable than the regime granted to capital investments and activities in connection with capital investments of any third state. Agreements with Germany and Finland provide for a regime “no less favorable, than with regard to investments of investors from third countries". If we do not take into account the inaccuracies in the translation of the wording of the articles of the Agreements when they pass authentication, we can draw the following conclusion. In the first case, the countries committed themselves to treat each other no worse than with any third states .
Thus, the parties to the treaty can only claim those preferential terms activities of investors that are provided for all third countries (any of them), thereby the parties limit the right to claim special benefits intended for investors of any other state, and only for them. At the same time, this obligation provides for the need not to impose special restrictions on the activities of investors of the parties to the agreement, if they do not apply equally to all other states. The absence of the right to special, special benefits provided to other individual states is emphasized by the provision according to which this regime does not apply to the benefits that the parties will provide to investors of a third state on the basis of special international treaties (clause 3, article 3 of the Agreement with Austria, article 2 Agreement with Belgium, paragraph 3 of article 3 of the Agreement with the Netherlands, paragraph 3 of article 3 of the Agreement with China). Such agreements may relate to a free trade zone, a customs union, an organization for mutual economic assistance; tax issues, cross-border trade. That is, in this case we can only talk about the partial most favored nation treatment.
The conditions for the regime of investors' activity are formulated somewhat differently in the Agreements of Russia with the participation of the Federal Republic of Germany and Finland (clauses 1, 2, article 3). It is envisaged that each of the contracting parties shall ensure on its territory "a regime no less favorable than with regard to investments by investors from third countries". Apparently, here we are talking about specific third states, which are provided under special agreements with special benefits compared to general conditions activities of foreign investors. At the same time, the Agreements provide for a condition traditional for the MFN not to apply discriminatory measures to investors of the counterparty that would put them in a worse position than investors of other states. In this case, we are talking about granting the most favored nation. Based on the foregoing, it can be concluded that investment protection agreements provide for different types MFN for foreign investors, thus putting their investors in different legal positions. However, it should be noted that in the practice of implementing these agreements, such a discrepancy will most likely not be taken into account, since this discrepancy is literally in one word, and the regimes themselves - partial and full MFN - are formulated and described in the same way, and additional differences between them content cannot be identified by analyzing the relevant articles. Moreover, the Agreements with Germany and Finland (full MFN) and the Agreements with Austria, Belgium and the Netherlands (partial MFN) provide for the same list of exceptions from the MFN (border trade, customs union, taxation issues, etc.). Therefore, although it is doctrinally possible to identify discrepancies in the content of the MFN in these agreements, the full MF regime, in which the parties are most interested and which was probably implied when these agreements were concluded, will actually operate. Therefore, we can conclude that if the agreements refer to the MFN, then it means, first of all, complete absolute favored nation.
Moreover, the condition for granting a non-discriminatory regime of activity, which, as already mentioned, is one of two types of conditions of the most favored nation, is contained in certain agreements on the encouragement and mutual protection of foreign investment in special articles, not coinciding with the second condition - the condition of the full most favored nation. favored. An example is the provisions of the Agreement between the Russian Federation and Kuwait. Paragraph 2 of Article 2 of the Agreement establishes: "The investment of investors of one of the Contracting Parties shall be given a fair and equitable treatment, as well as full protection and security in the territory of the other Contracting Party. None of the Contracting Parties shall inflict damage on its territory to investors of the other Contracting Party by adopting unreasonable, mandatory or discriminatory measures in relation to the management, maintenance, use, possession or disposal of capital investments. In turn, paragraph 1 of Article 3 directly provides for the most favored nation condition itself, the right to a particularly preferential treatment in comparison with a simply non-discriminatory regime: each of the contracting Parties provides capital investments made in its territory by investors of the other Contracting Party with a treatment no less favorable than one that it provides for investment ... of any third state."
A similar distinction between these two types of conditions is contained in other agreements, for example, in the Agreement between Russia and Canada. The most favorable condition for investors is established in international agreements on the mutual encouragement of investments. Undoubtedly, such a regime meets the interests of states, placing them in an equal position in relation to the activities of their investors. According to the MFN, the state can always expect that any privilege or advantage regarding the issues of importation of goods, customs duties, tariffs or excises, import quotas and all other issues within the scope of the MFN, provided to investors of a third state, will automatically apply to its investors.
Thus, states find themselves in an equal position and their investors enjoy equal rights and benefits relative to each other, which facilitates competition between them and puts them on an equal footing when conquering a new market. A foreign firm seeking to establish itself abroad may not be afraid of the special advantages and benefits that a company in another state may enjoy. In fact, by concluding a number of agreements with the condition of providing the MFN, a kind of unified regime of activity is introduced for all foreign investors on the territory of one state.
However, the same starting conditions when penetrating the domestic market of the state do not provide a favorable climate for economic investments of foreign investors in the future - they have a new competitor, who is very actively protected by the state itself, which accepts investments - the national investor.
Upon penetration into national market a foreign company may face special regulation of its activities, which may put this company in an unequal position compared to local firms. The state, as a support for its own investors, can quite severely restrict the rights of foreign firms by establishing a special procedure for access to entrepreneurial activity, prohibiting foreign presence in certain industries, etc. Therefore, any company operating in the foreign market prefers to be equalized in rights with national entrepreneurs, to act according to the same rules as national investors, that is, to receive a national regime for doing business.
To achieve this goal, states, when concluding agreements on mutual encouragement and mutual protection of foreign investments, seek to achieve the inclusion in these agreements of the condition for granting their investors a national regime of activity. At the same time, the state does not want to lose for its investors those benefits that are provided to them by the MFN. Therefore, at present, the most common type of regime for foreign investors is a combination of MFN and national regime.
The provision of MFN and national treatment is simultaneously provided for in agreements on the promotion and mutual protection of foreign investment concluded by Russia with the following states: Korea, Greece, Denmark, Poland, Romania, Kuwait. Agreements with these states imply simultaneous action in relation to their investors and national treatment, and most favored nation treatment. The agreement between the Russian Federation and the Hellenic Republic provides for special treatment activities of investors, involving a combination of the MFN regime and the national regime, and which one will be applied, depends on which of them is currently more favorable. Therefore, if the state provides in the future in its national legislation or international agreement any special benefits for foreign firms, placing them in a more favorable position than their own investors, MFN will apply to counterparty investors. When changing the investment policy of the state and providing national investors with more benefits and privileges, national treatment will apply to counterparty investors. A similar type of regime is provided for in Russia's agreements with Denmark and Kuwait.
Agreements with Korea, Poland, Romania, and Slovakia provide, in principle, the same regime for investors, but formulate the definition of the regime in a slightly different way: the choice of the MFN or national regime is not determined by the condition of the most profitable regime for the investor at the moment. "Each of the Contracting Parties shall accord in its territory to the investments or incomes of the other Contracting Party treatment no less favorable than it grants to the investments or incomes from investments of its own investors or investors of any third state" (Clause 1, Article 3 of the Agreement with Korea, para. 2 article 4 of the Agreement with Poland, paragraph 1 of article 3 of the Agreement with Romania, paragraph 1 of article 3 of the Agreement with Slovakia). This formulation can hardly be called successful. In applying these provisions, difficulties will inevitably arise in determining the specific type of treatment that investors in these states can apply for. It seems that the regime of their activity can be determined in one of the following ways: 1) use the principle applied in the agreements with Denmark and Greece - the regime will be provided based on its current profitability; 2) investors can choose the type of regime for their activity themselves - in this case, the problem of applying the regime by the investor in relation to various state bodies will arise; 3) the type of regime will be determined by the state receiving the investment.
Such wording of the articles of agreements that provide for alternative regimes for the activities of foreign investors creates a special problem of determining a specific type of regime in relation to investors of each state, the scope of the regime (legal relations to which this regime applies), the method of its consolidation and implementation in the practical implementation of investment activities. Probably the easiest way to secure the type of regime and the benefits it provides is to conclude a special investment agreement between the investor and the state hosting the investment.
The Declaration on International Investment and Multinational Enterprises, prepared by the Organization for Economic Co-operation and Development (OECD), recommends that the member states of this international organization treat each other's investors and investments on an equal footing with their own investors. The provision of such a regime is an undoubted advantage for foreign companies operating in the territory of a particular state: they get free access to local sources of financing, enjoy all local benefits, can operate in any industry using any organizational and legal form, etc. d.
National treatment is usually granted to foreigners by countries with a developed, stable economy that are not afraid of economic intervention from other states, and the principle of national treatment extends developed countries for each other's investors, but for investors in developing countries, special types of regimes may apply.
When granting national treatment, national legislation does not provide for special conditions for the activities of foreigners, extending to them the same rules as for national investors. Therefore, in some states there is no special legislation designed exclusively to regulate the activities of foreign companies and entrepreneurs. If some aspects of the activities of foreign investors require special regulation (for example, in matters of the procedure for establishing and registering companies, the licensing procedure for allowing investors to use natural resources etc.), then such special rules will be contained in general regulations intended primarily for national investors, in the form of exceptions to general rule. It is this approach in regulating the activities of foreigners that the United States adheres to.
Other states, while giving investors national treatment, nonetheless develop special legislation to regulate their activities in the form of special laws or codes on investment activity, as well as in the form of special administrative regulation of foreign investment. It is this approach that the Russian Federation, as well as other countries of the Commonwealth of Independent States, currently adheres to.
It is generally accepted that the granting of national treatment allows the adoption by the state of certain exemptions from it for foreign persons. It should be noted that none of the agreements on the mutual protection of investments considers the rules for the admission of foreign investment as a restriction on the activities of foreign investors or an exemption from the national regime. Some bilateral treaties of Russia specifically stipulate the right of each contracting party "to create on its territory favorable conditions for investments by investors of the other Contracting Party and to allow such investments in accordance with its legislation" (Agreement with Switzerland - clause 1, article 3). The articles are entitled respectively "Acceptance and protection of investment" and "Promotion of investment".
SEI HPE "RUSSIAN LEGAL ACADEMY OF THE MINISTRY OF JUSTICE OF THE RUSSIAN FEDERATION"
POVOLZHSKIY (Saratov) LEGAL INSTITUTE (branch)
DEPARTMENT OF CIVIL LEGAL DISCIPLINES
LEGAL REGIME FOR FOREIGN INVESTMENTS
Course work
Rozhko Svetlana Alexandrovna
5th year student
SARATOV 2010
WORK PLAN
Introduction
The essence of foreign investment in the global economy
The concept of foreign investment
1.2 Importance of foreign investment
2. Conditions for the implementation of foreign investment
3. The main forms of foreign investment in the modern world economy
4. The role and specifics of foreign investment in the development of the world economy and in particular Russia
Conclusion
Bibliography
INTRODUCTION
There are many definitions of investment in the scientific literature. The following definition is generally recognized in the scientific literature: investments are investments in any economic objects and processes: means of production, stocks, reserves, information resources, securities(target bank deposits, shares, shares), cash, movable and immovable property, property rights, experience arising from copyright know-how, the right to use land and other natural resources, technologies, machines, equipment, licenses, including trademarks, loans, intellectual values invested in business and other types of activities , "human capital".
Most authors, defining foreign investments, agree that they are the property of foreign investors, acting in various forms and types, exported from one state and invested in any business on the territory of another state, and investments are considered in the broadest sense. These are not only funds invested in capital construction, in the securities of enterprises and governments, but also loans in various forms and even gratuitous transfers of funds aimed at achieving a positive social effect.
The subjects of foreign investment can be: investors, customers, contractors, users of investment activities, suppliers, foreign countries, international organizations, foreign legal entities (banking, insurance and intermediary organizations, investment exchanges) and individuals; citizens of host countries with permanent residence abroad.
As objects of foreign investment, the Investment Code in Article 4 names: real estate, including an enterprise as a property complex; securities; intellectual property.
Legislative acts of the state usually define objects that are only in state ownership, which does not exclude investment activities in relation to these objects: shares, bonds, bank deposits, insurance policies and other securities; enterprises and organizations of the host country; buildings, structures, property of local legal entities and individuals; scientific and technical products; rights to intellectual property; rights to use the land, natural resources and the land itself; other property, as well as property and non-property rights.
Investment (from the Latin investire - area) - all types of property and intellectual values invested in objects of entrepreneurial and other activities, as a result of which profit (income) is formed or a social effect is achieved.
The issues of foreign investment in the economic literature are presented ambiguously. Thus, in most Soviet economic literature, foreign investment was presented as the export of capital by the monopoly of one country to other countries with the aim of its most profitable application. Now such ideas have changed significantly, since any entrepreneurial activity is associated with obtaining a certain profit.
The problem of investments in our country is so urgent that talk about them does not subside. This problem is relevant, first of all, because investments in Russia can make a huge fortune, but at the same time, the fear of losing the invested funds stops investors. The Russian market is one of the most attractive for foreign investors, however, it is also one of the most unpredictable, and foreign investors are rushing from side to side, trying not to miss their piece Russian market and, at the same time, not to lose your money. At the same time, foreign investors are guided, first of all, by the investment climate in Russia, which is determined by independent experts and serves to indicate the effectiveness of investments in a particular country and which is very unfavorable in our country. Russian potential investors do not trust the government for a long time, this mistrust is due, first of all, to the prevailing stereotype of attitude towards power among Russians - “the government works only for itself”. However, the state investment policy is now aimed precisely at providing investors with all the necessary conditions for working on the Russian market, and therefore in the future we can count on a change in the situation in the Russian economy for the better.
Therefore, our state faces a complex and rather delicate task: to attract foreign capital to the country, and, without depriving it of its own incentives, direct it through economic regulation measures to achieve social goals.
The relevance of the issue under study follows from the fact that the modern world economy cannot develop successfully without foreign investment. Many countries of the world are actively investing their funds in the economy of other countries, receiving a certain income and developing certain industries National economy these countries. The role of foreign investment is very important for many countries: they are intended to raise and develop production, increase its capacity, technological level, and create favorable conditions, on the basis of loans received, to renew and develop all the necessary sectors of the national economy, increase production efficiency and produce competitive goods. . And that's not all.
My goal term paper consists in determining the significance of foreign investments and in disclosing their legal regime.
The objectives of this work are: 1. Disclosure of the essence of foreign investment, namely: ● to give the concept of foreign investment; and
● determine their importance in the global economy.
2. Identify the conditions for the implementation of foreign investment.
3. Describe the main forms of foreign investment.
4. Approve the role of foreign capital in shaping the global market economy and the Russian economy.
The practical significance of the work lies in the possibility of its use in the educational process when studying this topic.
Research methods for course work. In the process of doing the work, I used systematic, logical and dogmatic methods.
1. The essence of foreign investment in the global economy
1.1 The concept of foreign investment
Foreign economic relations include the import and export of not only goods, but also capital. The export of capital is a purposeful movement Money from one country to another to invest them in a profitable business. Foreign investment is mainly carried out by the largest, primarily transnational companies. The export is carried out in the form of entrepreneurial and loan capital. The export of entrepreneurial capital is a long-term foreign investment in industrial, commercial and other enterprises.
Foreign investments serve as a source of monetary and sometimes property investments in the development or development of new production of goods and services, the improvement of technology, the extraction of minerals, the use of natural resources.
Foreign investments are long-term investments of capital by foreign investors (- subjects of investment activity that invest their own, borrowed or borrowed funds in the form of investments and ensure their intended use), as well as foreign owners in objects of entrepreneurial and other types of activity (industry, agriculture, transport and other sectors of the economy). The export of entrepreneurial capital is carried out mainly through the creation by monopolies of branches or subsidiaries abroad, including in the form of joint ventures with the participation of national capital. That is, foreign investment is the export of domestic capital to other countries.
The most famous classification identifies two main forms of foreign private investment: direct and portfolio. Direct investments (both in hard currency and in national currency) are:
Investments in the authorized capital of an economic entity in order to generate income and obtain rights to participate in the management of this economic entity.
Loans received from foreign co-owners of enterprises.
- the acquisition of a long-term interest by a resident of one country (direct investor) in an enterprise - a resident of another country (an enterprise with direct investment).
They also represent a way to increase the productivity and technical level of Russian enterprises.
Direct investments most often include investments of such a volume, in which a foreign investor controls at least 20-25% of the capital of the company in which he invested. This value is different in different countries.
Portfolio investment means:
Portfolio formation by purchasing securities and other assets. Portfolio - a set of various investment values brought together, serving as a tool for achieving a specific investment goal of the investor. The portfolio may include securities of the same type (stocks) or different investment values (stocks, bonds, savings and deposit certificates, pledge certificates, insurance policies and etc.). one
Investments in shares of foreign enterprises, in bonds and other securities of a foreign state and international monetary and financial organizations, carried out with the expectation of obtaining high profits and do not give the right to control the investment object, that is, in which the investor does not have a goal (as opposed to direct investor) - direct participation in the management of the enterprise or the impact on the country's economy (in most cases, such investments are made in the market of freely traded securities).
It should be noted that portfolio investments are made, as a rule, in cash, while direct investments are also made in the form of the supply of goods, raw materials, equipment, technologies, in the form of managerial experience, etc.
There are also real investments. These are capital investments in land, real estate, machinery and equipment, spare parts, etc. Real investments include the costs of working capital. one
The legal regime of foreign investment in our country is defined federal law"On Foreign Investments in the Russian Federation". The subjects of the Russian Federation also have the right to adopt laws and other regulations on the regulation of foreign investment in the relevant part.
The legal regime for the activities of foreign investors and the use of profits received from investments cannot be less favorable than the legal regime for the activities and use of profits received from investments provided to Russian investors. Restrictions for foreign investors may be established by federal laws to the extent necessary to protect the foundations of the constitutional order, morality, health, rights and legitimate interests of others, to ensure the defense of the country and the security of the state.
A foreign investor has the right: to make investments in the territory of the Russian Federation in any form not prohibited by law; transfer your rights and obligations to another person; freely use income and profits on the territory of the Russian Federation for reinvestment and freely transfer income, profits and other legally received amounts of money outside Russia in foreign currency; freely export property and information previously imported as foreign investment; to acquire shares and other securities of Russian commercial organizations and government securities; participate in the privatization of objects of state and municipal property by acquiring ownership rights to state and municipal property.
A foreign investor has the right to compensation for losses caused to him as a result of illegal actions government agencies, local self-government bodies or officials of these bodies. The investor must comply antitrust law RF, prevent unfair competition and restrictive business practices.
The property of a foreign investor is not subject to compulsory seizure, including nationalization, requisition (with the exceptions provided by law). Regulations adopted during the implementation of an investment project that worsen the legal regime for foreign investment in Russia are not applied to a foreign investor during the payback period of the investment project, but not more than seven years from the date the project was launched.
Disputes of a foreign investor arising in connection with the implementation of investments and entrepreneurial activities in Russia are resolved in accordance with international treaties and federal laws in court or arbitration court or in international arbitration (arbitral tribunal).
In the implementation of priority investment projects foreign investor and commercial organization with foreign investment, benefits can be provided for the payment of customs duties. Subjects of the Russian Federation, local governments, within their competence, may provide a foreign investor with additional benefits and guarantees.
With regard to investment in form of capital investment the Federal Law "On investment activity in the Russian Federation carried out in the form of capital investments" is in force. The subjects of these legal relations are investors, customers, contractors, users of capital investment objects and other persons. Relations between them are regulated on the basis of an agreement and (or) government contract. All investment projects, regardless of sources of financing and forms of ownership of capital investment objects, are subject to examination in accordance with the legislation of the Russian Federation.
The direct participation of the state in investment activities carried out in the form of capital investments is provided for in the following forms: development and financing of investment projects; formation of a list of objects for state needs; examination of investment projects; development of rules; issue of bonded loans, guaranteed targeted loans; granting concessions to investors based on the results of bidding.
The sphere of circulation of securities is regulated in Russia by the Federal Law "On the Securities Market". The organizers of trade in this market are stock exchanges in the form non-profit partnership or joint-stock company. The procedure for admission to participation in the auction and exclusion from the number of participants are determined by the rules established by stock exchange th. The stock exchange exercises constant control over transactions made on the stock exchange. Trading participants are obliged to provide the stock exchange, at its request, with the information necessary for the implementation of such control. State registration issuance of emissive securities is carried out by the federal executive body for the securities market at the request of the issuer.
Russian issuers are entitled to place securities outside of Russia only with permission federal body executive branch for the securities market.
