Investor protection vs host state regulatory autonomy during economic crisis: treatment of capital transfers and restrictions under modern investment treaties

Capital liberalisation was the norm of international economic relations until the Economic Depression of the 1930s, when exchange restrictions became an important instrument of economic policy for many countries. The IMF Articles of Agreement was the outcome of efforts by several countries to provide an acceptable international legal framework that would minimise the negative impact of exchange restrictions while at the same time preserving the right of member states to impose exchange restrictions when faced with balance of payment problems. That position is to a large extent maintained by most modern investment treaties. This article explores the treatment of capital transfer restrictions under these treaties: how they have been or should be interpreted by courts and international tribunals in a manner that protects investor rights while maintaining the regulatory autonomy of host states.