The concept "host country operational measures" (HCOMs) captures the vast array of measures implemented by host countries concerning the operation of foreign affiliates once inside their jurisdictions. HCOMs usually take the form of either restrictions or performance requirements. They are usually adopted to influence the location and character of FDI and, in particular, to increase its benefits in the light of national objectives. The paper groups HCOMs into three categories and proceeds with discussing them in the context of some of their restrictions at different international levels: (a) HCOMs that are explicitly prohibited at the multilateral level, i.e. by the TRIMs Agreement. To use a traffic light analogy, these are "red light" HCOMs, i.e. measures that the international community as a whole (or, more precisely, as represented in the WTO) has agreed should not be employed. (b) Additional HCOMs that are explicitly prohibited, conditioned or discouraged by interregional, regional or bilateral (but not by multilateral) agreements (or drafts thereof). These are "yellow light" HCOMs in the sense that negotiators of IIAs ought to be aware that some countries (or groups of countries) have indeed prohibited them in some IIAs and perhaps would like to do so also at the multilateral level. (c) All other HCOMs. These are "green light" HCOMs. Such measures are generally not subject to control through IIAs although their use may be subject to other international obligations, e.g. to apply national treatment. [English only]
SUBJECT
Investments
Foreign -- Government policy
Free trade -- Government policy
Investments
Foreign -- Law and legislation
Affiliated corporations -- Government policy
LOCATION
CALL#
STATUS
International Institute for Trade and Developement : UNCTAD Collection
