Melbourne Law School - Research Publications

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    CELIS Country Report on Australia, 2023
    Voon, T (CELIS Institute, 2023)
    Australia was one of the first countries to introduce a mechanism for the ‘screening’ or approval of inward foreign investment, in the 1970s. The mechanism has evolved over time, most recently since the COVID-19 pandemic began in 2020. It purports to reflect Australia’s welcoming of inward foreign investment — consistent with a longstanding commitment to an open economy — while retaining controls to restrict investment. Australia has in recent years expanded foreign investment screening to encompass a broader range of security-related matters as well as the potential for ‘retrospective’ review of existing investments on national security grounds. These security-specific developments build on the general ‘national interest’ test that continues to apply in most cases, which incorporates national security as only one of a range of factors considered. Although Australia’s regime is elaborated in detail in legislation and regulations, some important aspects, including the meaning of national security and the national interest, are explained only in policy documents rather than in law. This aspect of the Australian system increases the discretion of the Treasurer in making relevant decisions, as does the limited transparency of decision-making, regarding not only public notices but also non-disclosure of certain information to the investor applicant.
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    Inward foreign investment screening targets China: interdisciplinary perspectives
    Mccalman, P ; Puzzello, L ; Voon, T ; Walter, A (EDWARD ELGAR PUBLISHING LTD, 2023-06)
    Screening of inward foreign investment in numerous countries worldwide has heightened in recent years for a range of reasons, one of which is the volume of Chinese outward investment. Moulding screening policies around concerns about Chinese investment has been a common pattern, particularly among developed countries and allies of the United States. The application of screening measures to Chinese investments in particular is also seen in recent practice in numerous countries. These developments create potential inconsistencies with international investment law, at least for those countries with an international investment agreement with China. The 2020 arbitral award in Global Telecom v Canada shows that even a provision that explicitly excludes investment screening decisions from a bilateral investment treaty may not apply to prevent all related investment treaty claims. The increased use of screening as a policy tool, with respect to China and otherwise, also raises questions about economic rationale and impact. Put simply, blocking a foreign investment proposal may have negative effects on shareholders, jobs and the economy itself, while even the existence of a restrictive screening regime and the threat of the imposition of conditions on a deal may dampen the appeal for foreign investors.
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    Screening of Chinese Investments Intensifies
    McCalman, P ; Puzzello, L ; Voon, T ; Walter, A ( 2022)
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    Is Australia's Foreign Investment Screening Policy Consistent with International Investment Law?
    Voon, T ; Merriman, D (Melbourne Journal of International Law, 2022)
    Significant changes to Australia’s foreign investment screening policy came into effect in 2021, modifying the Foreign Acquisitions and Takeovers Act 1975 (Cth). These changes establish a framework for national security reviews of proposed foreign investments in Australia, including the potential for review of investments that have already been lawfully admitted into the country. These developments increase the risk of conflict with international investment law, as reflected in Australia’s obligations under more than thirty international investment agreements, in the form of bilateral investment treaties and preferential trade agreements with investment chapters or associated investment agreements. Traditionally, these agreements shielded Australia’s foreign investment policy by restricting themselves to investments that had already been established in Australia. In more modern agreements, a range of reforms add explicit and implicit protections to Australia’s foreign investment policy. However, the co-existence of traditional and modern approaches and the inconsistency with which reforms have been adopted across different treaties complicate the assessment of Australia’s compliance with international investment law in its foreign investment screening policy. Potential remains for claims to be brought against Australia in this regard by home states or investors themselves.
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    Incoming: How International Investment Law Constrains Foreign Investment Screening
    Voon, T ; Merriman, D (Brill, 2022-01-01)
    Abstract Domestic screening of foreign investment, often on national security grounds, has intensified in recent years. More countries are introducing such regimes, while others expand their scope or allow retrospective screening. These developments increase the potential for investor–State claims under international investment agreements, even sometimes regarding investments that are not yet established. Host States need to be aware of the potential for adverse screening decisions, the imposition of conditions, or due process shortcomings to conflict with investment obligations, such as fair and equitable treatment or most-favoured nation treatment. Although tools exist in some treaties to exclude or exempt investment screening, these may not prevent a successful investment claim. For example, listing a screening regime as a non-conforming measure may not cover all future amendments, and general and security exceptions are subject to considerable uncertainty. Host States need to ensure compliance with international investment law in creating and developing screening regimes.
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    The Trans-Pacific Partnership as a Development of the Australia–United States Free Trade Agreement: Services Liberalisation and Investment Protection
    Voon, T ; Mitchell, AD ; Huerta-Goldman, JA ; Gantz, DA (Cambridge University Press, 2021-11-11)
    This chapter compares the Trans-Pacific Partnership Agreement (TPP) with the Australia -- United States Free Trade Agreement (AUSFTA), reflecting on relevant developments in the Australia -- United States relationship, including with respect to agriculture and biologic medicines. The chapter focuses on the Chapters on services and investment, addressing areas such as electronic commerce, investor--state dispute settlement (ISDS), and the "carve-out" of tobacco control measures from ISDS in the TPP. The comparison of investment in the two treaties is particularly of interest given the exclusion of ISDS in the AUSFTA and its inclusion (except as between Australia and New Zealand) in the TPP. We conclude that the TPP is a more modern agreement than the AUSFTA with several improvements that provide greater regulatory policy space. However, the inclusion of ISDS as between Australia and the United States in the TPP is questionable.
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    Remarks by Tania Voon
    Voon, T (Cambridge University Press (CUP), 2018)
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    Ending international investment agreements: Russia's withdrawal from participation in the energy charter treaty
    Voon, T ; Mitchell, AD (Cambridge University Press, 2017-01-01)
    When states withdraw from bilateral investment treaties or denounce multilateral treaties related to foreign investment, a range of intersecting questions arise in domestic and international law. Recent developments have demonstrated potential incongruities between domestic and international approaches to investment protection, including as regards the effectiveness of withdrawal and the implications for existing investments. This essay reflects on international and domestic disputes involving the withdrawal of the Russian Federation from participation in the Energy Charter Treaty (ECT) to highlight these interactions. These issues have become particularly pertinent today because more than 1,500 international investment agreements (IIAs) are nearing expiry of their initial term, providing an opportunity for termination. Moreover, some states have begun to terminate or denounce investment treaties, while many more are engaging in a process of renegotiation and reform. The Russian case study also highlights the potentially far-reaching effects of a state simply signing a treaty, even many years after the state has expressed its decision to withdraw from it, and notwithstanding tensions with the domestic legal framework.
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