Managing the Risk of Self-Judging Security Exceptions Through Insurance: How Recent Mergers and Acquisitions Practice Copes with Investment Screening

Teoman M. Hagemeyer*, Jens Hillebrand Pohl

*Corresponding author for this work

Research output: Contribution to journalArticleAcademicpeer-review

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Abstract

In light of the limited possibility to seek legal recourse against screening of foreign investments on grounds of national security, can insurance provide an alternative avenue to compensate affected investors? The answer is: Yes, but with caveats. For investors, even if insurance does not provide an equivalent to full reparation, it can serve as a useful mitigant of the risk that contemplated investment transactions cannot be consummated as anticipated due to screening measures. For host States, insurance provides a useful mechanism by which they can facilitate compensation of investors without having to disclose information contrary to their essential security interests and thus a means by which host States can remain attractive to foreign direct investment in spite of investment screening.
Original languageEnglish
Pages (from-to)596-625
Number of pages30
JournalJournal of World Investment & Trade
Volume22
Issue number4
DOIs
Publication statusPublished - 16 Aug 2021

Keywords

  • diplomatic protection
  • essential security interests
  • foreign direct investment
  • geoeconomics
  • investment screening
  • screening risk insurance
  • screening risk

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