Capital-Flow Management Measures and International Investment Law – Never the Twain Shall Meet?

Abstract

The focus of this chapter is on monetary transfer provision (MTP). MTPs in BITs regulate the transfer of funds related to investment in and out of the host country. The chapter starts by introducing Capital Flow Management (CFMs) and the different ways by which international law regulates the freedom of States to impose them (section II). It then analyses the relationship between the different approaches adopted under the IMF Articles on the one hand, and BITs on the other; this involves an inquiry into questions of norm conflict as well as systemic treaty interpretation (section III). Having discussed rules specifically addressing CFM measures, the chapter moves on to discuss alternative options for host countries to respond on the basis of generally available defences (section IV). The chapter finally concludes by observing that the method to resolve the conflict is through the legislative route where countries enter into Type II MTPs that recognise the right of countries to impose CFM measures (section V).