Chapter

Restrictions on Foreign Investment in the Energy Sector for National Security Reasons: The Case of Japan

Kazuhiro Nakatani

in Property and the Law in Energy and Natural Resources

Published in print February 2010 | ISBN: 9780199579853
Published online May 2010 | e-ISBN: 9780191722745 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780199579853.003.0016
 							Restrictions on Foreign Investment in the Energy Sector for National Security Reasons: The Case of Japan

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Article 3 of the OECD Code of Liberalization of Capital Movements provides that a state can restrict foreign investment when it considers it necessary for the maintenance of public order or for the protection of its essential security interests. However, the concepts of public order and essential security interests are vague and the interpretation of these concepts is open to each state. States often impose restrictions on foreign investment in the energy sector and Japan is no exception. In May 2008, the government of Japan, in an unprecedented move, ordered The Children's Investment Master Fund (TCI), a British hedge fund, to drop a bid to raise its stake in J-Power, the biggest wholesale electric company in Japan. This chapter begins by surveying international rules and Japanese laws on foreign investment. It then considers the nature and content of the order by the government of Japan in the J-Power/TCI case.

Keywords: foreign investment; property law; property rights; national security; Japan; foreign ownership

Chapter.  5875 words. 

Subjects: Public International Law

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