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Screening of Foreign Investment in the Context of Turkmenistan’s FDI (Foreign Direct Investment) Regime

Year 2020, Volume: 40 Issue: 1, 417 - 435, 30.06.2020

Abstract

Since the fall of the USSR, Turkmenistan has made some progress in the development of its national economy and its ability to attract foreign investment. Although Turkmenistan is considered an attractive destination due to its rich natural resources, the country’s FDI regime, including its admission procedures, lacks transparency and predictability. From the perspective of foreign investors, the host state’s FDI regime plays a crucial role. Without considering a host state’s FDI regime, foreign investors may be at risk of losing their investment due to lack of transparency or an unpredictable legal environment. Requirements related to the admission of foreign investment may differ between countries. Unlike most countries, which usually limit the scope of admission requirements (national security concerns), Turkmenistan’s FDI regime imposes stricter requirements on foreign investors during the entry process. It is understandable that Turkmenistan may expect to maximize the benefit of foreign investment while minimizing its negative effects on the national economy. However, a lack of clear and transparent admission requirements leaves a large amount of discretion with various administrative bodies. This makes admission requirements unpredictable and dissuades foreign investors from investing in the host country. This article scrutinizes the admission requirements related to foreign investment in the entry stage in the Turkmenistan FDI regime.

Supporting Institution

The author declared that this study has received no financial support.

References

  • Bassan F, ‘Host States and Sovereign Wealth Funds’ (2010) 5 EBLR.
  • Chudnovsky D, ‘Rethinking foreign investment for sustainable development: Lesson from Latin America’, (Anthem Press 2010).
  • Crawford JA and Kotschwar B, ‘Investment Provisions in Preferential Trade Agreements: Evolution and current Trends, WTO: Economic Research and Statistics Division, ERSD 2018-14.
  • Elshihabi S, ‘The difficulty behind securing sector-specific investment establishment rights: The case of the Energy Charter Treaty’ (2001), 35 The International Lawyer 1.
  • Fraedrich L, Kaniecki C and Rafferty S, ‘Foreign Investment Control Heats Up: A Global Survey of Existing Regimes and Potential Significant Changes on the Horizon’ (2018) 13 Global Trade and Customs Journal.
  • Gundoğar, ‘Turkmenistan: Investment for Thrill Seekers< http://www.gundogar.org/?0220049040 000000000000013000000> accessed 13 March 2019.
  • Gomez-Palacio I and Muchlinski P, ‘Admission and Establishment’ in Peter Muchlinski, Federico Ortino and Christopher Shreuer (eds), The Oxford Handbook of International Investment Law (1th edn, OUP 2008).
  • Hepburn J, ‘In Accordance with Which Host State Laws? Restoring the “Defense” of Investor Illegality in Investment Arbitration (2014) 5 Journal of International Dispute Settlement 531.
  • Investment Policy <https://investmentpolicyhub.unctad.org/ISDS/CountryCases/215?partyRole=2> accessed 10 May 2019.
  • Jansen P, ‘Industrial Policy and in the Context of Merger and Foreign Investment Control’ (2018) 24 Columbia Journal of European Law.
  • Jeswald S, “BIT by BIT: the Growth of Bilateral Investment Treaties and Their Impact on Foreign Investment in Developing Countries” (1990) 24 The International Lawyer 3.
  • Kawharu A, ‘The Admission of Foreign Investment under TPP and RCEP’, (2015) 16(2) The Journal of World Investment and Trade.
  • Kong HL and Wroth LK, ‘NAFTA and Sustainable Development: History, Experience and Prospects for Reform’(Cambridge University Press 2015).
  • Lundan SM,’Definitions, Motivations and Locational Determinants of Foreign Direct Investment, Rethinking Investment Incentives: Trends and Policy Options’ 56 (Ana Teresa Tavares-Lehmann, Perrine Toledano, Lise Johnson, and Lisa Sachs ed., 2016).
  • Luttrell S, ‘Fall of the Phoenix: New Approach İllegality Objections in Investment Treaty Arbitration’ (2018) 44 University of Western Australia Law Review 2.
  • Moloo R and Khachaturian A, ‘the Compliance with the Law Requirement in International Investment Law’ (2011) 34 Fordham International Law Journal 6.
  • Muchlinski P, Ortino F and Schreuer C, the Oxford Handbook of International Investment Law (1th edn, Oxford University Press 2008).
  • Muthucumaraswamy S, the International Law on Foreign Investment (3th edn, Cambridge University Press 2010).
  • Narula R and Lall S, ‘Understanding FDI-Assisted Economic Development’ (1th edn, Routledge 2006).
  • O’Brien J, ‘Barriers to Enter: Foreign Direct Investment and the Regulation of Sovereign Wealth Funds’ (2008) 42 The International Lawyer.
  • OECD, ‘FDI Regulatory Restrictiveness Index’(2018)<https://stats.oecd.org/Index.aspx? datasetcode=FDIINDEX&_ga=2.175271777.298301915.1549266976-167128608. 1541492600#> accessed 4 February 2019.
  • OECD, ‘Foreign Direct Investment and Economic Developments: Lesson from Six Emerging Economies’ (1998) 38.
  • OECD, ‘Foreign Direct Investment and Environment: An Overview of Literature (1998) 3.
  • OECD, ‘Foreign Direct Investment Restriction in OECD Countries’ (2015) <https://www.oecd.org/ eco/reform/2956455.pdf> accessed 4 February 2019.
  • OECD, ‘Foreign Investment Restriction in OECD Countries’ (2004) 2 <https://www.oecd-ilibrary.org/ economics/oecd-economic-outlook-volume-2003-issue-1/foreign-direct-investment-restrictionsinoecd-countries_eco_outlook-v2003-1-38-en> accessed 26 February 2019.
  • OECD, ‘Freedom of Investment, National Security and Strategic Industries’< https://www.oecd.org/ investment/investment-policy/40473798.pdf>
  • OECD, ‘Guidelines for Recipient Country Investment Policies Relating to National Security’ <https:// www.oecd.org/daf/inv/investment-policy/43384486> accessed 25 February 2019.
  • OECD, ‘Investment Climate and Regulation of International Investment in MENA Countries: Assessment of Available Information and General Recommendations’ (2005).
  • OECD, ‘Regulatory investment incentives’ < https://pdfs.semanticscholar.org/767d/afb28173 d00395740bf7b9910b09ec7214ba.pdf > accessed 10 May 2019.
  • OECD, ‘Transparency and Predictability for Investment Policies Addressing National Security Concerns: A Survey of Practices’ (2008) 3 < https://www.oecd.org/daf/inv/ investmentpolicy/40700254.pdf > accessed 2 November 2019.
  • OECD, Financing climate action in Turkmenistan, <https://www.oecd.org/environment/outreach/ Turkmenistan_Financing_Climate_Action.Nov2016.pdf> accessed 15 November 2019.
  • PWC, ‘Doing business guide: Turkmenistan’ (2010) <https://www.pwc.com/uz/en/assets/pdf/ doingbusiness-guide-in-turkmenistan-2012-2013.pdf> accessed 20 March 2019.
  • Poulsen S, The Importance of BITs for Foreign Direct Investment and Political Risk Insurance: Revisiting Evidence, Yearbook on International Investment Law and Policy 2009/2010 (Oxford University Press 2010).
  • Reinisch A, ‘How to Distinguish ‘In Accordance with Host State Law’ Clauses From Similar International Investment Agreement Provisions? (2018) 7 Indian Journal of Arbitration Law 1.
  • Reinisch A, Standards of Investment Protection (Oxford University Press 2008).
  • Sacerdoti G, ‘Admission and Treatment of Foreign Investment Recent Bilateral and Regional Treaties’ (2000) 1The Journal of World Investment and Trade 1.
  • Stephen G, ‘Measuring of Restrictions on Inward Foreign Direct Investment for OECD countries’ OECD Economic Department Working Papers <https://www.oecd.org/eco/reform/2956455.pdf> accessed 25 February 2019.
  • Steyt JY, ‘Comparative Foreign Direct Investment Law: Determinants of the Legal Framework and the Level of Openness and Attractiveness of Host Economy’, LLM Graduate Research Paper, 76(2006).
  • Tench R, Sun W and Jones B, ‘Communicating Corporate Social Responsibility: Perspective and Practice’ (Emerald 2014).
  • The Economist, Turkmenistan: Strugling to attract non- oil investment, http://country.eiu.com/article. aspx?articleid=261131210&Country=Turkmenistan&topic=Economy&subtop_7> accessed 13 March 2019.
  • The OECD Central Asia Initiative, Promoting Investments and Job Creation in Central Asia through Business Linkage Programs, 14 (2013) <https://www.oecd.org/global-relations/ BusinessLinkageProgrammes.pdf> accessed October 20, 2018.
  • UNCTAD, ‘Investment Laws: A Widespread Tool for the Promotion and Regulation of Foreign Investment, Investment Policy Monitor’ (2016) <https://unctad.org/en/PublicationsLibrary/ webdiaepcb2016d5_en.pdf> accessed 10 February 2019.
  • UNCTAD, ’World Investment Report’ (2018) 177 < https://unctad.org/en/PublicationsLibrary/ wir2018_en.pdf> accessed 26 February 2019.
  • UNCTAD, Investment Policy Review, 6 (2016) (Oct.25, 2018) <https://unctad.org/en/ PublicationsLibrary/diaepcb2016d1_en.pdf> accessed 20 March 2019.
  • UNCTAD, Measuring Restrictions on FDI in Services in Developing Countries and Transition Economies <https://unctad.org/en/Docs/iteiia20061_en.pdf> accessed 25 February 2019.
  • United Nations Economic Commissions for Europe, ‘Turkmenistan: Environmental Performance Reviews’ (2012) 22<http://www.unece.org/fileadmin/DAM/env/epr/epr_studies/Turkmenistan. pdf > accessed 20 October 2019.
  • Van Der Meulen J and Trebilcock MJ, ‘Canada’s Response to Foreign Sovereign Investment: Operationalizing National Security Exceptions’ (2009) 47 Canadian Business Law Review.
  • Verhoose G, ‘Foreign Direct Investment and Legal Constrains on Domestic Environmental Policies: Striking Reasonable Balance Stability and Change’ (1998) 29 Law and Policy in International Business.
  • Waelde T and Kolo A, ‘Environmental Regulation, Investment Protection and “Regulatory Taking” in International Law’ (2001) 50(4) The International and Comparative Law Quarterly.
  • Wenhua S, ‘The Legal Protection of Foreign Investment: A Comparative Study’ (Hart Publishing 2012).
  • WTO, ‘Concept paper on modalities of pre-establishment, Working Group on Relationship Trade and Investment’ (2002).

Türkmenistan Doğrudan Yabancı Yatırım Rejimi Kapsamında Yabancı Yatırımların Taranması

Year 2020, Volume: 40 Issue: 1, 417 - 435, 30.06.2020

Abstract

Sovyetler Birliği’nin parçalanmasından sonra Türkmenistan’ın ulusal ekonomisinin kalkınması ve yabancı yatırım çekme konusunda belirli bir ilerleme kaydettiği söylenebilir. Her ne kadar Türkmenistan; doğal zenginlikler bakımından zengin ülke konumunda olsa da ülkenin doğrudan yabancı yatırıma ilişkin yasal rejimi özellikle yabancı yatırımların kabulüne ilişkin şartlar şeffaf ve öngörülebilir değildir. Günümüzde birçok ev sahibi ülke yabancı yatırımların kabulünde ancak ulusal güvenlik endişelerinden dolayı kısıtlarken Türkmenistan yabancı yatırımların kabulü aşmasında daha sıkı koşullar getirmektedir. Türkmenistan’ın; yabancı yatırımlardan beklenen yararı maksimize ederken, yatırımların ulusal ekonomi üzerindeki olumsuz etkilerini en aza indirmek istemesi anlaşılabilir bir durumdur. Ancak ev sahibi ülkenin yabancı yatırımların kabulüne ilişkin şartların açık olmaması ve şeffaflıktan yoksun olması yabancı yatırımların kabulünü idari makamların takdir yetkisine bırakmaktadır. Bu durum ev sahibi ülkenin yabancı yatırım kabulüne ilişkin şartlarını öngörülemez hâle getirmekte ve yabancı yatırımcıları ev sahibi ülkeye yatırım yapmaktan caydırabilmektedir. Bu makale Türkmenistan DYY rejimi bağlamında yabancı yatırımların kabulüne ilişkin koşullar incelenmektedir.

References

  • Bassan F, ‘Host States and Sovereign Wealth Funds’ (2010) 5 EBLR.
  • Chudnovsky D, ‘Rethinking foreign investment for sustainable development: Lesson from Latin America’, (Anthem Press 2010).
  • Crawford JA and Kotschwar B, ‘Investment Provisions in Preferential Trade Agreements: Evolution and current Trends, WTO: Economic Research and Statistics Division, ERSD 2018-14.
  • Elshihabi S, ‘The difficulty behind securing sector-specific investment establishment rights: The case of the Energy Charter Treaty’ (2001), 35 The International Lawyer 1.
  • Fraedrich L, Kaniecki C and Rafferty S, ‘Foreign Investment Control Heats Up: A Global Survey of Existing Regimes and Potential Significant Changes on the Horizon’ (2018) 13 Global Trade and Customs Journal.
  • Gundoğar, ‘Turkmenistan: Investment for Thrill Seekers< http://www.gundogar.org/?0220049040 000000000000013000000> accessed 13 March 2019.
  • Gomez-Palacio I and Muchlinski P, ‘Admission and Establishment’ in Peter Muchlinski, Federico Ortino and Christopher Shreuer (eds), The Oxford Handbook of International Investment Law (1th edn, OUP 2008).
  • Hepburn J, ‘In Accordance with Which Host State Laws? Restoring the “Defense” of Investor Illegality in Investment Arbitration (2014) 5 Journal of International Dispute Settlement 531.
  • Investment Policy <https://investmentpolicyhub.unctad.org/ISDS/CountryCases/215?partyRole=2> accessed 10 May 2019.
  • Jansen P, ‘Industrial Policy and in the Context of Merger and Foreign Investment Control’ (2018) 24 Columbia Journal of European Law.
  • Jeswald S, “BIT by BIT: the Growth of Bilateral Investment Treaties and Their Impact on Foreign Investment in Developing Countries” (1990) 24 The International Lawyer 3.
  • Kawharu A, ‘The Admission of Foreign Investment under TPP and RCEP’, (2015) 16(2) The Journal of World Investment and Trade.
  • Kong HL and Wroth LK, ‘NAFTA and Sustainable Development: History, Experience and Prospects for Reform’(Cambridge University Press 2015).
  • Lundan SM,’Definitions, Motivations and Locational Determinants of Foreign Direct Investment, Rethinking Investment Incentives: Trends and Policy Options’ 56 (Ana Teresa Tavares-Lehmann, Perrine Toledano, Lise Johnson, and Lisa Sachs ed., 2016).
  • Luttrell S, ‘Fall of the Phoenix: New Approach İllegality Objections in Investment Treaty Arbitration’ (2018) 44 University of Western Australia Law Review 2.
  • Moloo R and Khachaturian A, ‘the Compliance with the Law Requirement in International Investment Law’ (2011) 34 Fordham International Law Journal 6.
  • Muchlinski P, Ortino F and Schreuer C, the Oxford Handbook of International Investment Law (1th edn, Oxford University Press 2008).
  • Muthucumaraswamy S, the International Law on Foreign Investment (3th edn, Cambridge University Press 2010).
  • Narula R and Lall S, ‘Understanding FDI-Assisted Economic Development’ (1th edn, Routledge 2006).
  • O’Brien J, ‘Barriers to Enter: Foreign Direct Investment and the Regulation of Sovereign Wealth Funds’ (2008) 42 The International Lawyer.
  • OECD, ‘FDI Regulatory Restrictiveness Index’(2018)<https://stats.oecd.org/Index.aspx? datasetcode=FDIINDEX&_ga=2.175271777.298301915.1549266976-167128608. 1541492600#> accessed 4 February 2019.
  • OECD, ‘Foreign Direct Investment and Economic Developments: Lesson from Six Emerging Economies’ (1998) 38.
  • OECD, ‘Foreign Direct Investment and Environment: An Overview of Literature (1998) 3.
  • OECD, ‘Foreign Direct Investment Restriction in OECD Countries’ (2015) <https://www.oecd.org/ eco/reform/2956455.pdf> accessed 4 February 2019.
  • OECD, ‘Foreign Investment Restriction in OECD Countries’ (2004) 2 <https://www.oecd-ilibrary.org/ economics/oecd-economic-outlook-volume-2003-issue-1/foreign-direct-investment-restrictionsinoecd-countries_eco_outlook-v2003-1-38-en> accessed 26 February 2019.
  • OECD, ‘Freedom of Investment, National Security and Strategic Industries’< https://www.oecd.org/ investment/investment-policy/40473798.pdf>
  • OECD, ‘Guidelines for Recipient Country Investment Policies Relating to National Security’ <https:// www.oecd.org/daf/inv/investment-policy/43384486> accessed 25 February 2019.
  • OECD, ‘Investment Climate and Regulation of International Investment in MENA Countries: Assessment of Available Information and General Recommendations’ (2005).
  • OECD, ‘Regulatory investment incentives’ < https://pdfs.semanticscholar.org/767d/afb28173 d00395740bf7b9910b09ec7214ba.pdf > accessed 10 May 2019.
  • OECD, ‘Transparency and Predictability for Investment Policies Addressing National Security Concerns: A Survey of Practices’ (2008) 3 < https://www.oecd.org/daf/inv/ investmentpolicy/40700254.pdf > accessed 2 November 2019.
  • OECD, Financing climate action in Turkmenistan, <https://www.oecd.org/environment/outreach/ Turkmenistan_Financing_Climate_Action.Nov2016.pdf> accessed 15 November 2019.
  • PWC, ‘Doing business guide: Turkmenistan’ (2010) <https://www.pwc.com/uz/en/assets/pdf/ doingbusiness-guide-in-turkmenistan-2012-2013.pdf> accessed 20 March 2019.
  • Poulsen S, The Importance of BITs for Foreign Direct Investment and Political Risk Insurance: Revisiting Evidence, Yearbook on International Investment Law and Policy 2009/2010 (Oxford University Press 2010).
  • Reinisch A, ‘How to Distinguish ‘In Accordance with Host State Law’ Clauses From Similar International Investment Agreement Provisions? (2018) 7 Indian Journal of Arbitration Law 1.
  • Reinisch A, Standards of Investment Protection (Oxford University Press 2008).
  • Sacerdoti G, ‘Admission and Treatment of Foreign Investment Recent Bilateral and Regional Treaties’ (2000) 1The Journal of World Investment and Trade 1.
  • Stephen G, ‘Measuring of Restrictions on Inward Foreign Direct Investment for OECD countries’ OECD Economic Department Working Papers <https://www.oecd.org/eco/reform/2956455.pdf> accessed 25 February 2019.
  • Steyt JY, ‘Comparative Foreign Direct Investment Law: Determinants of the Legal Framework and the Level of Openness and Attractiveness of Host Economy’, LLM Graduate Research Paper, 76(2006).
  • Tench R, Sun W and Jones B, ‘Communicating Corporate Social Responsibility: Perspective and Practice’ (Emerald 2014).
  • The Economist, Turkmenistan: Strugling to attract non- oil investment, http://country.eiu.com/article. aspx?articleid=261131210&Country=Turkmenistan&topic=Economy&subtop_7> accessed 13 March 2019.
  • The OECD Central Asia Initiative, Promoting Investments and Job Creation in Central Asia through Business Linkage Programs, 14 (2013) <https://www.oecd.org/global-relations/ BusinessLinkageProgrammes.pdf> accessed October 20, 2018.
  • UNCTAD, ‘Investment Laws: A Widespread Tool for the Promotion and Regulation of Foreign Investment, Investment Policy Monitor’ (2016) <https://unctad.org/en/PublicationsLibrary/ webdiaepcb2016d5_en.pdf> accessed 10 February 2019.
  • UNCTAD, ’World Investment Report’ (2018) 177 < https://unctad.org/en/PublicationsLibrary/ wir2018_en.pdf> accessed 26 February 2019.
  • UNCTAD, Investment Policy Review, 6 (2016) (Oct.25, 2018) <https://unctad.org/en/ PublicationsLibrary/diaepcb2016d1_en.pdf> accessed 20 March 2019.
  • UNCTAD, Measuring Restrictions on FDI in Services in Developing Countries and Transition Economies <https://unctad.org/en/Docs/iteiia20061_en.pdf> accessed 25 February 2019.
  • United Nations Economic Commissions for Europe, ‘Turkmenistan: Environmental Performance Reviews’ (2012) 22<http://www.unece.org/fileadmin/DAM/env/epr/epr_studies/Turkmenistan. pdf > accessed 20 October 2019.
  • Van Der Meulen J and Trebilcock MJ, ‘Canada’s Response to Foreign Sovereign Investment: Operationalizing National Security Exceptions’ (2009) 47 Canadian Business Law Review.
  • Verhoose G, ‘Foreign Direct Investment and Legal Constrains on Domestic Environmental Policies: Striking Reasonable Balance Stability and Change’ (1998) 29 Law and Policy in International Business.
  • Waelde T and Kolo A, ‘Environmental Regulation, Investment Protection and “Regulatory Taking” in International Law’ (2001) 50(4) The International and Comparative Law Quarterly.
  • Wenhua S, ‘The Legal Protection of Foreign Investment: A Comparative Study’ (Hart Publishing 2012).
  • WTO, ‘Concept paper on modalities of pre-establishment, Working Group on Relationship Trade and Investment’ (2002).
There are 51 citations in total.

Details

Primary Language English
Subjects Law in Context
Journal Section Articles
Authors

Farruhbek Mumınov This is me 0000-0002-1559-3879

Alp Emre Varol This is me 0000-0002-4306-0607

Publication Date June 30, 2020
Submission Date September 16, 2020
Published in Issue Year 2020 Volume: 40 Issue: 1

Cite

APA Mumınov, F., & Varol, A. E. (2020). Screening of Foreign Investment in the Context of Turkmenistan’s FDI (Foreign Direct Investment) Regime. Public and Private International Law Bulletin, 40(1), 417-435.
AMA Mumınov F, Varol AE. Screening of Foreign Investment in the Context of Turkmenistan’s FDI (Foreign Direct Investment) Regime. PPIL. June 2020;40(1):417-435.
Chicago Mumınov, Farruhbek, and Alp Emre Varol. “Screening of Foreign Investment in the Context of Turkmenistan’s FDI (Foreign Direct Investment) Regime”. Public and Private International Law Bulletin 40, no. 1 (June 2020): 417-35.
EndNote Mumınov F, Varol AE (June 1, 2020) Screening of Foreign Investment in the Context of Turkmenistan’s FDI (Foreign Direct Investment) Regime. Public and Private International Law Bulletin 40 1 417–435.
IEEE F. Mumınov and A. E. Varol, “Screening of Foreign Investment in the Context of Turkmenistan’s FDI (Foreign Direct Investment) Regime”, PPIL, vol. 40, no. 1, pp. 417–435, 2020.
ISNAD Mumınov, Farruhbek - Varol, Alp Emre. “Screening of Foreign Investment in the Context of Turkmenistan’s FDI (Foreign Direct Investment) Regime”. Public and Private International Law Bulletin 40/1 (June 2020), 417-435.
JAMA Mumınov F, Varol AE. Screening of Foreign Investment in the Context of Turkmenistan’s FDI (Foreign Direct Investment) Regime. PPIL. 2020;40:417–435.
MLA Mumınov, Farruhbek and Alp Emre Varol. “Screening of Foreign Investment in the Context of Turkmenistan’s FDI (Foreign Direct Investment) Regime”. Public and Private International Law Bulletin, vol. 40, no. 1, 2020, pp. 417-35.
Vancouver Mumınov F, Varol AE. Screening of Foreign Investment in the Context of Turkmenistan’s FDI (Foreign Direct Investment) Regime. PPIL. 2020;40(1):417-35.