Israel’s foreign investment protection regime in view of developments in its energy sector

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3 Scopus citations

Abstract

This article discusses Israel’s BITs regime and policy and analyzes its central features. It argues that time has come to use BITs as a tool to attract FDI to the country, in particular to the energy sector. It shows that until now, Israel has concluded BITs mainly as a means to protect Israeli investors in developing and transition countries. The article argues that this policy needs to change to keep up with current trends in International Investment Law and on the background of the important developments over the last few years in Israel’s energy sector. It describes the long saga of the regulatory changes in relation to the natural gas sector, ever since the discovery of huge offshore gas fields, including the Supreme Court’s rulings on the changes of the tax regime and on the stabilization clause, and analyses its impact on the investment climate based on original data.

Original languageEnglish
Pages (from-to)41-94
Number of pages54
JournalJournal of World Investment and Trade
Volume19
Issue number1
DOIs
StatePublished - 2018

Bibliographical note

Publisher Copyright:
© Koninklijke Brill NV, Leiden, 2018.

Funding

Therefore, the Government decided to appoint a team, headed by the chairperson of Israel’s National Economic Council, Prof. Eugene Kandel, to look for an alternative solution. The team was composed of representatives from the Ministry of Finance, the Ministry of Energy, the Ministry of Justice, the Antitrust Authority and others. They heard the position of the gas companies and started designing the so-called ‘Gas Framework’ that was to reflect a compromise between the Government and the companies. Without a solution, the companies would not and could not have proceeded to make the huge investments required to develop the Leviathan gas field and to sign gas sales contracts to support the financing of the development. It should be noted that the compromise was reached under the shadow of Noble Energy’s threat to sue the State under the Cyprus-Israel BIT, although it is not clear how credible this threat was.75 However, in May 2015, Prof. David Gilo announced his resignation from his position of Antitrust Commissioner, in view of his opposition to the

Funders
Ministry of Justice
Ministry of Finance

    Keywords

    • Bilateral investment treaties
    • Foreign investment protection
    • Israel
    • Natural gas sector
    • Regulatory instability
    • Stabilization clause
    • Stabilization clause regulatory instability

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