LGST 219 - Class 11 Notes

LGST 219 - Class 11 Notes - Lecture 11, Oct 17 Thailand...

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Lecture 11, Oct 17 Thailand Case (form; substance) - Shift in Thai law: how could acquire real estate - Could only acquire if Thai or Thai company - Impact: companies that were in essence foreign companies, but superficially looked like Thai companies (formally) - In 2007, decided to look away from form , and towards substance - Not only political sensitivities to corporate nationalities, but they can also shift over time Remington Case (form; substance) - Company being set up in France - Being told that it was not French - Whole purpose of the law that covers it as a French company was to give it advantageous French rental terms - This company was in substance an American company - BUT, could be seen as French in terms of tax law (changing nationality depending on legal question) NAFTA system in defining corporate nationality - Very simplistic - Special benefits and protections if one company from a NAFTA country is investing in another NAFTA country - How do we know if a company is a NAFTA company ? o Where it is incorporated? o Where it operates? - Odd that NAFTA has not developed a more sophisticated system to determine nationality o NAFTA only looks at form (does not look at the background as in Noe case, Thai real estate law etc) - A lot of leeway in NAFTA system for companies to manipulate their nationality to give them special benefits o Against expropriation (taking of property by the government for its continued used) – NAFTA is very stringent against this. Can go to arbitration. o Protected by Chapter 11 of NAFTA o Against indirect expropriation/ creeping expropriation (indirect taking – usually through burdensome standards – that deprives foreign owner of benefits of investment e.g. environmental regulations ) If country B imposes strict environmental regulations on you, you can sue country B in the NAFTA arbitral tribunal with a very good chance of success Even if you do not win, country B may hesitate to enforce environmental standards on you because they do not want to waste money on arbitration (so does not impose environmental regulations on country A’s company in country B, but only on country B companies) Pull back and not enforce regulations!
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Impact : Chinese company can be incorporated in a NAFTA country, and when in another NAFTA country, would enjoy a host of special benefits (but essentially, NOT a NAFTA company!) Glamis Gold Case (corporate nationality: form) - Canadian company is in USA, CA (sets up subsidiary in the mining business) - Could only mine in CA if it were an American company - CA wants to protect the environment - Glamis Gold says it has lost a lot of money in profits - Says it is an example of creeping expropriation as the American subsidiary is essentially a Canadian company, and so under NAFTA regulation Chapter 11, they were going to sue the US - Conclusion: failed in arbitration as tribunal said what CA did was not creeping expropriation Tokio Tokeles Case (corporate nationality: form) - Bilateral investment treaty
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This note was uploaded on 01/11/2012 for the course LGST 219 taught by Professor Anne.mayer during the Fall '11 term at UPenn.

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LGST 219 - Class 11 Notes - Lecture 11, Oct 17 Thailand...

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