Protection of foreign investments during economic crises.

Abstract

Foreign investments play a crucial role in overcoming the economic crisis in individual States, especially if such a crisis is systemic in nature, and domestic entities lack resources that could be attracted to the economy. In this case, foreign investment is often the only way to restore the normal development of the socio-economic sphere. At the same time, in crisis situations, foreign investors themselves require special protection, which in this case are exposed not only to commercial risk (such risk is "normal", and no one is responsible to the investor for it), but also to "political" risk (which is usually inextricably linked with economic), if, for example, an economic crisis leads to a revolution, a coup, or simply a tightening of economic policy, within the framework of which enterprises are nationalized, including those created at the expense of foreign investment.   The currently existing international legal mechanisms, primarily insurance of "political" risk, do not solve the problem due to the fact that it is difficult for insurance companies to receive compensation from sovereign states by way of subrogation. Thus, the importance of national legislation increases - the norms of which should form the investment attractiveness of the state and give foreign investors confidence in protecting their rights even in a situation of economic crisis, for example, in Russia tax benefits are provided for foreign investors in case of adverse changes in the tax burden (the institute of "tax stability") in accordance with Article 9 of the Federal Law "On foreign investments".