OECD work on preventing investment protectionism

| Meetings | Documents and links |

Bookmark this page: www.oecd.org/daf/investment/foi

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 10 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 confirms that the OECD’s established principles for investment policy apply equally well to investments by SWFs. 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, will contribute to building a policy framework that will reinforce mutual confidence and trust between recipient countries and SWFs.

Meetings

• OECD Forum 2008 - Session on Sovereign Wealth Funds, 3-4 June 2008
• Conference on Sovereign Wealth Funds in the Global Investment Landscape: Building Trust, London, United Kingdom, 31 March 2008
• 7th Roundtable on Freedom of Investment, National Security and ‘Strategic’ Industries [ English / French ], 26 March 2008
• 6th Roundtable on Freedom of Investment, National Security and ‘Strategic’ Industries, 13 December 2007
• 4th Roundtable on Freedom of Investment, National Security and "Strategic Industries", 30 March 2007
• 3rd Roundtable on Freedom of Investment, National Security and ‘Strategic’ Industries, 6 December 2006
• 1st Roundtable on Freedom of Investment, National Security and ‘Strategic’ Industries, 21 June 2006

Documents and links

• OECD Declaration on sovereign wealth funds and recipient country policies, 5 June 2008

Reports by the Investment Committee

• Sovereign Wealth Funds (SWFs) and Recipient Country Policies [ English / français ], 4 April 2008 
• Progress report on the Freedom of Investment, National Security and ‘Strategic’ Industries project [ English / français ], 26 March 2008
• Freedom of Investment, National Security and “Strategic” Industries: An Interim Report, October 2007

Statements and news releases

• Communiqué of the International Monetary and Financial Committee of the Board of Governors of the International Monetary Fund, Press Release No. 08/78 [ English / français / español ], Washington, 12 April 2008
• Statement of G-7 Finance Ministers and Central Bank Governors, Washington, 11 April 2008
• News release: OECD countries stay open to commercial investments by sovereign wealth funds [ English / français ], 9 April 2008 
• Statement by OECD Secretary-General Angel Gurría to the International Monetary and Financial Committee, Singapore, 17 September 2006

Background documents by the OECD Secretariat

• Protection of 'critical infrastructure' and role of investment policies relating to national security, May 2008
• Transparency and predictability for investment policies addressing essential security interests: a survey of practices, May 2008
• Proportionality of security-related investment instruments: A survey of practices, May 2008
• Governance and investment of public pension reserve funds in selected OECD countries, May 2008
• Competition, international investment and energy security, March 2008
• Sovereign wealth and pension fund issues, March 2008
• International investment of sovereign wealth funds, October 2007
• Economic and other impacts of foreign corporate takeovers in OECD countries, October 2007
• Essential security interests under international investment law, October 2007
• OECD’s FDI Regulatory Restrictiveness Index: Revision and extension to more economies and sectors, October 2007

OECD investment instruments

• OECD Declaration and Decisions on International Investment and Multinational Enterprises
• National Treatment Instrument
• OECD Codes of Liberalisation of Capital Movements and of Current Invisible Operations