Garcia Olmedo: Claims by Dual Nationals Under Investment Treaties

Javier Garcia Olmedo (Max Planck Institute Luxembourg for International, European and Regulatory Procedural Law) has posted Claims by Dual Nationals Under Investment Treaties: Are Investors Entitled to Sue Their Own States? (Journal of International Dispute Settlement, forthcoming). Here's the abstract:

Nationality plays a vital role in the field of investor-state arbitration. Most investment treaties require that, to benefit from treaty protection, an investor must be a national of the home state. Yet, the determination of nationality for investment treaty purposes can be particularly complex, raising a number of unresolved questions of considerable practical importance. One of these questions is whether investors who hold the nationality of both state parties to an investment treaty (i.e., dual nationals) are entitled to sue their own home state where the treaty is silent on the issue of dual nationality. This contribution contends that, when faced with a claim of this nature, arbitral tribunals should apply the well-established customary rule of dominant and effective nationality, and uphold jurisdiction only if the investor maintains a stronger connection with its home state.

Spiro: Citizenship Overreach

Peter J. Spiro (Temple Univ. - Law) has posted Citizenship Overreach (Michigan Journal of International Law, forthcoming). Here's the abstract:

This Article examines international law limitations on the ascription of citizenship in the context of U.S. taxation of non-resident citizens. U.S. citizenship practice is exceptionally generous, extending citizenship to almost all persons in its territory at the moment of birth. At the same time that it is generous at the front end, U.S. citizenship is sticky at the back. Termination of citizenship on the individual’s part involves substantial fees and tax compliance. It is difficult to shed a citizenship one may never have wanted in the first place.

This stickiness would be inconsequential if few costs were associated with the status. But the United States taxes its citizens on a worldwide basis. The 2010 enactment of the Foreign Account Tax Compliance Act has ramped up historically lax enforcement and imposes substantial administrative burdens on even middle-earner citizens abroad.

In this frame, U.S. birthright citizenship and expatriation regimes may violate international norms, especially with respect to those "accidental Americans" who departed the United States as children. Even in the context of extremely relaxed historical constraints on state nationality practice, there were acknowledged nineteenth century limitations on the extension of citizenship to individuals with insufficient connection to a state -- citizenship over-claiming, as it were. The article also describes the historical requirement that naturalization be volitional, a norm now appropriately applied in some cases in the context of birthright citizenship.

To the extent the ascription of U.S. citizenship compromises individual rights, there are tax fixes and there are citizenship fixes. Citizenship fixes include opt-in and opt-out mechanisms for birthright citizenship. The better solution may lie in frictionless exit for those with nominal ties to the national community. Though reform is more likely to be accomplished through the tax regime, the moment highlights the over-inclusiveness of U.S. citizenship and the growing salience of international law to citizenship practices.

Baumgartner: Treaty Shopping in International Investment Law

Jorun Baumgartner (UNCTAD) has published Treaty Shopping in International Investment Law (Oxford Univ. Press 2017). Here's the abstract:

Treaty shopping, also known under the terms of nationality planning, corporate (re-)structuring or corporate maneuvering, implies a strategic change of nationality or strategic invocation of another nationality with the aim of accessing another (usually more favourable) investment treaty for purposes of investment arbitration. When deciding on whether an investment claim based on treaty shopping should be upheld or dismissed, investment arbitral tribunals have been increasingly faced with significant questions, such as: What is treaty shopping and how may legitimate nationality planning be distinguished from treaty abuse in international investment law? Should a claimant that is controlled by a host-State national be considered a protected investor, or should tribunals pierce its corporate veil? Does an investor have to make the investment in good faith, and does it have to make a contribution of its own to the investment it is claiming protection for? When does a corporate restructuring constitute an abuse of process, and which is the role of the notion of dispute in this respect? How efficient are denial of benefits clauses to counter treaty shopping?

Treaty Shopping in International Investment Law examines in a systematic manner the practice of treaty shopping in international investment law and arbitral decisions that have undertaken to draw this line. While some legal approaches taken by arbitral tribunals have started to consolidate, others remain unsettled, painting a picture of an overall inconsistent jurisprudence. This is hardly surprising, given the thousands of international investment agreements that provide for the investor´s right to sue the host State on grounds of alleged breaches of investment obligations. This book analyses and discusses the different ways by which arbitral tribunals have dealt with the value judgment at the core of the distinction between objectionable and unobjectionable treaty shopping, and makes proposals de lege ferenda on how States could reform their international investment agreements (in particular with respect to treaty drafting) in order to make them less susceptible to the practice of treaty shopping.

Forlati & Annoni: The Changing Role of Nationality in International Law

Serena Forlati (Univ. of Catanzaro - Law) & Alessandra Annoni (Univ. of Ferrara - Law) have published The Changing Role of Nationality in International Law (Routledge 2013). The table of contents is here. Here's the abstract:

The book explores the current role of nationality from the point of view of international law, reassessing the validity of the ‘classical’, state-centered, approach to nationality in light of the ‘new’ role the human being is gradually acquiring within the international legal order. In this framework, the collection assesses the impact of international human rights rules on the international discourse on nationality and explores the significance international (including private international) law attaches to the links individuals may establish with states other than that of nationality. The book weighs the significance of the bond of nationality in the context of regional integration systems, and explores the fields of international law in which nationality still plays a pivotal role, such as diplomatic protection and dispute settlement in international investment law. The collection includes contributions from legal scholars of different nationalities and academic backgrounds, and offers an excellent resource for academics, practitioners and students undertaking advanced studies in international law.

Addison-Agyei: Nationality Planning und Treaty Shopping im Internationalen Investitionsrecht

Sange Addison-Agyei (Hessischen Ministerium der Justiz, für Integration und Europa) has published Nationality Planning und Treaty Shopping im Internationalen Investitionsrecht (Peter Lang 2012). Here's the abstract:

Können sich Briefkastengesellschaften auf den Schutz von Investitionsabkommen berufen und vor internationalen Schiedsgerichten klagen? Die Arbeit untersucht den Schutz von Briefkastenfirmen nach der ICSID Convention, dem North American Free Trade Agreement (NAFTA) und dem Energiecharta-Vertrag (ECV). Das Ergebnis fällt differenziert aus: Das NAFTA und der ECV erfassen zunächst einmal alle Briefkastenfirmen; in Analogie zu den Vertragsbestimmungen können Vertragsstaaten jedoch Briefkastenfirmen, die im Eigentum oder unter der Kontrolle von Angehörigen des Gaststaates stehen, den Schutz des Vertrags verweigern. Gemäß der ICSID Convention sind Briefkastengesellschaften unter «gaststaatlicher Kontrolle» hingegen von vornherein keine tauglichen Investoren.

SFDI: Droit international et nationalité

The Société française pour le droit international has published Droit international et nationalité: Colloque de Poitiers de la Société française pour le droit international (Pedone 2012). The table of contents is here.

Spiro: A New International Law of Citizenship

Peter J. Spiro (Temple Univ. - Law) has posted A New International Law of Citizenship (American Journal of International Law, forthcoming). Here's the abstract:

Will international law colonize the last bastion of sovereign discretion? As a matter of traditional doctrine, international law has had little to say about the citizenship practices of states and the terms on which states determine the boundaries of their memberships. Through much of the Westphalian era, states have been essentially unconstrained with respect to who gets citizenship and on what terms.

That is now changing. Recent developments point to the emergence of norms that require the extension of territorial birthright citizenship in some cases and that limit discretion concerning naturalization thresholds. International law may come to protect an individual’s right to maintain multiple nationality. These and other elements of a new regime relating to citizenship practice are emerging through multiple channels of decentralized international lawmaking. The shift is also reflected in recent work of prominent political theorists, who are increasingly articulating a right to citizenship.

The new international law of citizenship has broad implications for the nature of the state. To the extent that an international right to citizenship status helps decouple citizenship from organic forms of community, it could be subversive of the communal solidarities on which state capacities may depend. This magnifies the importance of building capacity at the international level. The article charts the history of and suggests a future for the international law of citizenship.