The institute of investment operations guarantees is designed to ensure, through legal measures, a relative stability of reproduction and freedom of capital movement in the world economic system amid the backdrop of social, economic and political crisis. The notion of investment guarantee stands for the investment insurance mechanism both on the state and the state-by-state basis, aimed at compensation for damages caused to a foreign investor upon occurrence of events economically affecting the investment. The article discusses the activity of the Multilateral Investment Guarantee Agency (MIGA) established under the Seoul Convention. MIGA's guarantee opportunities, conditions for granting investment guarantees and risks which could be covered by the Agency's guarantees are specified.
In international investment law the compensation for foreign investors is a precondition for the expropriation of his property. However, the sources of international law have different opinion as to the definition of the principle of compensation, and the procedure for calculating the specific quantity. This article examines two competing approaches to international legal standards of compensation: the principle of full compensation and sufficient compensation principle. Describes the basic methods of determining the value of compensation: the method of book value, liquidation value, replacement cost and discounted cash flow. It proved the dominant role of the last of them. Separate consideration is noncash foreign investor protection, which, although not widespread, sometimes used by international arbitration.
Foreign direct investment provides receiving companies with not only capital necessary for their development but with modern manufacturing technologies and management experience. The article covers investment made into Russian before the financial crisis had begun and after that. Their volume and dynamics are analyzed in comparison with the other BRIC countries i.e. Brazil, Russia, India, China. The article studies their structure as a whole as well as regional and industrial distribution. The instrument for non-resident owners influence on strategic and operational management of a company is analyzed. It is also underlined that companies with foreign participation have higher productivity in comparison with Russian competitors due to their educational programs for their loyal employees, international accreditation, use of different innovations and modern organization of export.
As the borders to foreign investment opened, European countries in transition have faced new opportunities for the development. Rich human capital assets, sprawling infrastructure and institutional ties with the European Union contributed to their investment attractiveness. Foreign direct investment made to the Central and Eastern Europe 2005 through 2009 is discussed based on international statistics and companies survey. Cross-country analysis identifying leaders in inducement and effective use of foreign capital is shown. The article also describes behavior of foreign and domestic organizations in various regions.
Under the Russia legislation, foreign investment implies all types of property and intellectual assets invested in objects of entrepreneurial and other activities by foreign businessmen for purposes of profit. Greenfield and renovated capital funds and circulating assets in all economic areas, securities, property rights and etc. are regarded as investment objects. This part of the article covers issues of commercial and lending institutions with foreign investment, procedure of their registration, and lists relevant documents. The article also analyses the importance of the adequate legal regulation under Federal law no. 160-FZ of 9 July, 1999 on foreign investment in the Russian Federation and other federal laws, legal enactments and international agreements of the Russian Federation.
The necessity of minimizing impact of world economic crisis contributed to establishing strong commercial and economic relations between Russia and Great Britain. England is traditionally one of the main foreign economic partners of Russia. Moreover it is likely to be represented on the Russian market as an exporter rather than a supplier, which is in character with British companies taking part in international division of labour. The article covers different lines of cooperation between British and Russian businessmen. The degree of oil companies’ dominance is underlined. Investment attractiveness of strategic industries of Russian economy for British investors is studied in more detail. The article calls attention to the possible development prospects of Russian and British financial relations.
Favourable tax climate is one of the factors of a country's investment attractiveness. Any changes in fiscal policy can result in decrease (or increase) in inflow of capital investments - both private domestic and foreign direct ones. The article dwells on the expedience of profit tax, which is characterized by low budget's earnings generation and high costs of legislation observance. It is underscored that the major emerging disadvantage of this investment regulation instrument is the transfer of tax burden to individuals through growth of prices, reduction in employee pay and return on capital. The author points to the fact that government interventionism may significantly decrease the volumes of direct investments. Consideration is given to the influence of taxation on private investments via labor market channels, savings sector and household consumption.
Current Russian criminal legislation does not provide specifications of liability for illegal corporate hostile takeovers (corporate raid). It provides only for sanctions for the infringements, such as arbitrariness, fraud, organization of criminal groups, giving bribes, abuse of authority, blackmail, forgery, etc. The article analyzes illicit potential of raider attacks; the most typical methods of their commitment are discussed, namely corporate blackmail, corporate hostile takeover in the course of bankruptcy, and strongarm takeover. The author underscores the negative impact of corporate raid on a countrys investment climate. Attention is paid to such a peculiarity of the national mentality, as the perception by managers of the organizations property complex as their own belonging, which stimulates hostile takeovers.
Instrument for settling disputes in international investment law is fixed in the Washington Convention of 1965 on settlement of investment disputes between governments, individuals and legal entities of other countries. International Centre for Settlement of Investment Disputes, established under the convention, provides conditions for conciliation and arbitration due to different conflicts between negotiating parties. The article covers the process of forming conciliation commission and arbitration court. The litigious procedure is described in detail. The article also stresses obligation of enforcing arbitral awards except for cases provided by the convention.