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Wrote a draft on investment equity and investors' rights. Comments and suggestions primarily on questions of legality, but content, argumentation and style as well are still welcome. I've included a prospective telegram as well for reference.
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Telegram:
As you may already be aware, my nation Naboompu has drafted a resolution, “On Investment Equity”, which is currently on the proposal floor.
One of the biggest issues in real life today is that of broadening economic growth to emerging markets in order to reduce global economic inequality. While the World Bank plays a pivotal role in providing long-term loans to finance capital projects, it also recognizes its complementary role in facilitating private foreign investment. The most critical obstacle to said investment is not the level of the taxation and subsidisation but rather the heightened exposure for foreign investors to political and regulatory risks abroad. To address this issue in the Nation States universe, my nation has drafted this proposal.
This proposal addresses the issue of investment equity by (i) ensuring a minimum standard of fair and equitable treatment for foreign investors and (ii) tasking an existing committee to resolve disputes. It is my sincerest hope to have your support in bridging the investment gap.
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Resolution:
Category: Free trade
Strength: Significant
The World Assembly:
Noting that previous General Assembly legislation on investment equity has only given the International Securities and Exchange Commission (ISEC) jurisdiction on tradable securities (such as bonds and common stocks);
Also noting that said legislation has not tasked ISEC to establish any guidelines for other asset classes, including but not limited to financials (such as loans and other receivables), other tangibles (such as commodities and real estate) and intangibles (such as patents, trademarks and copyrights);
Also noting that ISEC lacks an enforcement mechanism even in the context of tradable securities;
Also noting that ISEC lacks an arbitration process through which foreign investors may bring forth proceedings, with a timely and impartial settlement, against foreign governments;
Concerned about the lack of provisions for the protection and security of foreign investments;
Also concerned that foreign investors may not be accorded as favourable treatment as domestic or other foreign national investors;
Recognizing the pivotal role of private foreign investment in financing capital projects and the heightened exposure for foreign investors to political and regulatory risks abroad;
Holding that investment equity for foreign and domestic investors alike is important in the interest of expanding access to foreign capital markets and broadening economic growth to emerging markets;
Hereby, subject to extant legislation, enacts:
- The World Assembly, for the purposes of this resolution, defines:
- “investment” as any form of financial and/or intellectual capital allocation by individuals, firms and/or government agencies towards the acquisition, management and/or disposition of tangible and/or intangible assets;
- a “WA national investor” as any individual with citizenship/permanent residency in a member nation, or a firm registered therein, or a government agency therein, that engages in investment activity;
- a “foreign investor” as any individual, firm or government agency engaging in investment activity in a foreign nation.
- WA national investors are accorded no less favourable treatment than domestic or other foreign investors with respect to the original purchase and/or acquisition, the intermediate operating, investing and/or financing activity as well as the final sale and/or disposition of investments.
. - Member nations, notwithstanding the stipulations in Clause 2, are excepted given that an investment concerns foreign ownership, control and/or influence of defence security services.
. - WA national investors are provisioned with a minimum standard of fair and equitable treatment in accordance with international law to fully protect and secure their investments from immoderate political and/or regulatory risks, including but not limited to restrictions on both the transfer and convertibility of currency and/or other forms of capital.
. - Member nations are expressly prohibited from directly and/or indirectly engaging in nationalisation, expropriation and/or any act tantamount to such of the investments of WA national investors, except in the cases where said engagement is neither disproportionate to that of domestic investment nor purposed to dilute foreign investment; and not without commensurate compensation.
. - ISEC, under the authority of the World Assembly, is henceforth tasked to resolve disputes between WA national investors and member nations regarding these four previous enactments as follows:
- Through ISEC, foreign investor(s) may bring forth proceedings against foreign government(s);
- ISEC will first seek resolution to the dispute through non-binding arbitration;
- Should resolution not be forthcoming, ISEC will then timely and bindingly arbitrate on the extent and severity of the alleged violations as well as the proportionate compensation.
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