Fair and Equitable Treatment Standards and Its Challenges for Developing and Least Developed Countries with Special Reference to Afghanistan

Sebghatullah Qazi Zada

Abstract
Much of the regulation of foreign investments are done through the domestic laws of host countries. As foreign investors search for laws and regulations that affect their potential and actual investments, they would also look to the provisions of domestic law of that host state. The backbone of international foreign investment law is to provide complimentary and supplementary protection, outline international standards of protection, and give assurance to foreign investors of accessibility to an independent international tribunal in the event of a dispute arising between the host state and a foreign investor. In this area of international economic law, the special risks involved make predictability and stability as well as the nature and duration of investments become predominantly important. Changes in the position of the host state causes vulnerability to the foreign investor once he has sunk his investment in that state. Meanwhile, protecting the host state’s interest is highly important. It is true that foreign investments are subject to the law and administrative control of the host States. However, legitimate regulation of the states must not be jeopardized by the guarantees afforded to the foreign investors. From time to time, some important interests of the local population are at stake in some areas of investment. However, developing and least developed countries are more vulnerable to this phenomenon as they desperately look for foreign investments to save and boost their volatile economies leading them to compromise their sovereign rights. Foreign investors are penetrating in very far territories and countries with different degrees of development in their laws despite problems caused by expansive and creative interpretations of FET. Therefore, a striking balance between these potentially conflicting interests is needed as one of the tasks of international investment law. Afghanistan’s economy is booming and desperately looks for foreign investment. Therefore the abovementioned challenges are more tangible than ever.
Keywords: Treatment Standards, FET, Afghanistan