The principle of full protection and security of foreign investments, or FP&S, is a fundamental principle of international investment law. This standard requires states to protect the foreign investment rights of investors, which means establishing a system of legal remedies in case of violations. In addition, the principle imposes a dual duty on states: to prevent violations of FP&S and to punish perpetrators of such violations.
Under FP&S, the host state has a duty to protect foreign investments from undue interference in the host state. Unlike the Fair and Equitable Treatment standard, which only applies to third parties, the full protection and security standard covers actions by state organs that could harm an investment, including cyber attacks. Such actions, which may result in undue harm to a foreign investment, are also governed by the principle of contextual proportionality.
The full protection and security standard has gained importance in international investment law. It is a fundamental element of almost all investment agreements. Although it is a fundamental principle of investment law, it has received less scholarly attention than many other obligations. This study examines the evolution of the FPS concept and its scope in customary international law.
FPSS is often expressed under different formulations in the promotion and protection of investment section of BITs. Although different BITs use different wording to express the concept, all express the same principle. For example, the Argentine Republic – Japan BIT expresses the concept as “full protection and security.” In addition, the Abs-Shawcross Draft Convention and the Energy Charter Treaty use the term “continuous protection and security” to convey the same concept.