A Scrutiny of Foreign Direct Investment Regulation in Light of Evolving National Security Concerns in International Investment Law

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Alemnew Gebeyehu Dessie

Abstract

In the last three decades, international investment has grown fast. It has impacted almost every state and all sectors of the economy. However, nowadays, the increase in the flow of FDI from developing and emerging countries to developed economies resulted in the adoption of FDI screening on national security grounds. For this, among other things, the sudden relevance of Sovereign Wealth Funds, the changing national security environment, the need to protect core or foundational technologies or critical infrastructures, strategic sectors or industries, and the fear of the socioeconomic effects of M&As of domestic firms by foreigners become evolving national security threats and to introduce tight national security review system.


Though national security is a buzzword, still it lacks a definite meaning in international investment law. Thus, there are times when FDI screening systems use it as a disguise protectionist measure, or as a tool to pursue other economic or strategic goals not achievable by domestic investment and other related laws. Due to its evolving, ambiguous, and context-specific nature of national security and security-related grounds, FDI screening systems’ scope of review becomes broader. This problem would be worse when a dedicated policy, legal rules, and institutional structures are absent. For this, this article is aimed at demystifying its meaning, application, and effects of evolving national security in different U.S., China, and EU screening systems.

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How to Cite
Dessie, A. G. (2022). A Scrutiny of Foreign Direct Investment Regulation in Light of Evolving National Security Concerns in International Investment Law. Jimma University Journal of Law, 13, 30. https://doi.org/10.46404/jlaw.v13i0.2784
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