The international legal framework for 'performance requirements'

States may impose operational requirements on foreign investments in the interests of their own economic, political or social interests, which do not coincide with-or may even regularly conflict with-the interests of foreign investors. Whilst such policies are indisputable under the domestic law of each State, the only recourse lies in international law. However, the scope of international law in this area is rather limited. Whilst there are general principles regarding investment protection, there is no custom or general principle requiring the removal of operational constraints, an area that reflects the sovereignty of states. Nevertheless, states may accept restrictions on their sovereignty by entering into international agreements. The aim of this book is to examine the extent to which, given the advantages and disadvantages it may entail, the imposition of operating restrictions is compatible with treaty law.