Document Type

Article

Disciplines

International Law

Abstract

When an investment is made in a foreign country it often is necessary to comply with certain prerequisites, such as prior governmental approval or registration, imposed by municipal law. If the investment is made pursuant to a concession, construction, or supply contract with the local government, other requirements, such as compliance with procurement regulations, may also arise.

This article analyzes the principle requirements facing a foreign investor and the legal consequences in the event of non-compliance. The focus is on the type of problems that arise rather than on the specific procedures that must be followed to make an investment or execute a contract with the Argentine government.

The analysis is based on the law and experience of Argentina as a host country for foreign investments.1 To the extent that other Latin American countries impose analogous requirements' and apply similar concepts of administrative law,' the comments made herein may have relevance in a broader context.

In this article, the term "foreign investments" comprises not only the traditional situations of direct investments made as capital contributions, but also those contracts or associations between a state and a foreign company or its local subsidiary for the production or supply of goods or services.

The body of this article is divided into three parts. Part I prefaces the analysis with a short exposition of the applicable legal rules and a consideration of several specific disputes that arose between the government and private parties. Part II deals with those legal issues which may arise with regard to foreign investments generally, whether made pursuant to a contract with the government or not. Part III treats those problems which arise only in connection with governmental contracts.

This article does not discuss whether municipal law should apply, as a matter of principle, to these issues5 or whether the rules of Argentine law comply with international law or with "the general principles of law recognized by civilized nations." Likewise, this article does not discuss the Calvo Doctrine, which states that no remedies other than those provided by the courts of the host country should be available to the foreign investor.

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