Protecting freedom of investment at the OECD

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Permanent url: www.oecd.org/daf/investment/foi

Governments resist investment protectionism

>> 03/06/2009 - The crisis and its impact on cross border investment
Remarks by Angel Gurría, OECD Secretary-General, during a lunch organised by the United States Council for International Business.
>> 27/03/2009 - Building trust and confidence in international investment
At the 10th roundtable on Freedom of Investment on 26 March, OECD and non-OECD governments reviewed recent policy measures and found no trend to date towards protectionism This report calls for renewed vigilance in resisting protectionist pressures and continued peer monitoring at the OECD.

>> News release 30/03/2009 - Resist investment protectionism, countries meeting at OECD agree

Keeping investment markets open and protecting national security

The OECD Investment Committee’s project on “Freedom of Investment, National Security and ‘Strategic Industries’” has, since early 2006, provided a forum for intergovernmental dialogue on how governments can reconcile the need to preserve and expand an open international investment environment with their duty to safeguard the essential security interests of their people.

Dialogue has taken place in a series of discussions involving the 30 OECD members, the 11 non-member adherents to the Declaration and other major non-member countries. The “Freedom of Investment” (FOI) project carries on a tradition of OECD dialogue on investment issues that has been framed by the two OECD investment instruments: the Code of Liberalisation of Capital Movements and the Declaration on International Investment and Multinational Enterprises.

Reaffirming basic OECD principles: transparency, liberalisation and non discrimination

The FOI discussions have confirmed the continuing relevance of the basic principles underpinning these instruments: transparency, liberalisation and non-discrimination. They have focused on clarifying, in the current security context, the one exception to open investment policies provided for in these instruments: that governments may take measures they “consider necessary to protect essential security interests”.

The FOI discussions include peer monitoring sessions through tours d’horizon of national developments, in-depth policy discussions of selected national security topics, and identification of good investment policy practices. The Investment Committee has issued a report summarising these discussions. A key finding of these discussions is that any restrictions designed to protect national security should be transparent, subject to accountability and proportional to the objective pursued. To the extent possible, other policy remedies to the problem should be used before considering new restrictions.

Recipient government policies and SWFs

The Investment Committee is treating the issue of recipient country policies toward Sovereign Wealth Funds (SWFs) and other government-controlled investment entities as an integral part of the FOI project. A report by the Investment Committee issued in April 2008 confirms that the OECD’s established principles for investment policy apply equally well to investments by SWFs. OECD guidance on recipient country policies towards SWFs was published in October 2008 following the 8th Roundtable on Freedom of Investment. This work responds to a 2007 mandate from G7 Finance Ministers and from other OECD countries and was presented to the 2008 meeting of G7 Finance Ministers. It complements work by SWFs, assisted by the IMF, on developing guidance for their own transparency and governance practices. The two projects, taken together, contribute to a policy framework that reinforces mutual confidence and trust between recipient countries and SWFs.

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Reports and declarations