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Sovereign wealth funds and national security - three purposes of regulations and beyond
Author(s)
Date Issued
2022
Journal
ISSN
2632 – 8186
Citation
King's Student Law Review, 2022, Vol. XII(I), pp. 58-76.
Type
Peer Reviewed Journal Article
Abstract
In light of the fact that the international investments made by state investors have tremendously
expanded since the 19th century, there is a heated debate concerning the regulatory issues and
challenges raised by sovereign wealth funds (‘SWFs’). This paper seeks to identify the obscure purposes
regulating SWFs. It provides an alternative perspective of national security through its impact of
autonomy, disclosure requirement, and continuous development of International Law from the
investor-state made to the host-state. It is illustrated through comparative studies of the SWF related
rules of the United Kingdom, the United States and the European Union, where most of these SWFs
from around the world are established. This paper hopes to raise these three questions for further
research and provide a new angle to understand national security beyond the ordinary sense of physical
harm but on top of its how its citizen's property is being protected and could not be deprived. This
deprivation is different in the sense that the control is taken over through the operation of contracts and
treaties, which are totally legitimate but could not be regarded as an integrity channel because of the
potential political influence behind, its ability to be used for political purposes and interfere investment
decisions if it contradicts with government interest. Even if these are not the intention to invest through
SWFs, it could impose an invisible hand that creates fear of SWFs as there is a channel for economic
retaliation or other forms of support that endanger national security. We believe the international legal
community should expand existing rules and regulations to protect country autonomy, the confined
scope for disclosure and reduce public worries over national security through promoting financial and
economic national security.
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