The prolific rise of neoliberalism in the 1990s, after the end of the Cold War created fertile conditions for the growth of cross-border movement of capital. The ideological opposition to foreign investment started to wane in several parts of the world including in those countries of the global South that had historically opposed foreign capital as a tool of neo-colonialism. This, in turn, fostered the legalization of international investment relations. The most common face of this legalization is the mushrooming of bilateral investment treaties (BITs) in the 1990s, which led to a rapid proliferation of the field of international investment law (IIL). BITs promise the protection of foreign investment by imposing restraints on the State’s regulatory behaviour. A very important facet of a BIT is giving a foreign investor the right to bring claims for alleged treaty breaches against States before an arbitration tribunal. This is known as investor-state dispute settlement (ISDS). The BITs signed in the 1980s, 1990s, and early 2000s came to champion the neoliberal template of maximalist foreign investment protection by ensuring a minimalist State. 

A key provision of these first-generation BITs that captures this neoliberal tenet most remarkably is the transfer of funds (ToF) provisions, which haven’t attracted much scholarly attention. The ToF provisions impose a broad and unqualified obligation on host countries to guarantee the transfer of funds by foreign investors in and out of the country. This guarantee to transfer funds includes both current and capital account transactions of the balance of payments (BoP) account. The ToF provisions do not explicitly recognize that a host State in certain situations such as a balance of payments difficulty or any other situation of economic difficulty would like to impose restrictions or controls on the transfer of funds. Although under general international law, States possess the right over their currency, including the right to regulate and prohibit the entry and exit of funds into their territory. Thus, a broad ToF provision potentially impedes the monetary sovereignty of the host State. 

In the last few years, the discipline of IIL started witnessing a churn due to a high number of ISDS claims brought by foreign investors challenging a wide array of sovereign regulatory measures including monetary measures as breaches of investment treaties. The global financial crisis (GFC) of 2008 exposed countries to the risks of unhinged financial liberalization. The GFC was accompanied by a broader backlash against neoliberal economics and hyper-globalization, which, in turn, has triggered a contestation against BITs as well. This contestation has taken different forms, which include some countries trying to recalibrate their investment treaties. This recalibration can be linked to the de-legalization of IIL – a process where countries redirect the decision-making process from 'international' to 'national' at two levels – rules and adjudication. My research will focus on the recalibration taking place in the redrafting of the ToF provisions in the new generation BITs. I argue that the ToF provisions in the new-generation investment treaties, that give greater control to the host State over transfer of funds represent embedded liberalism, moving away from the neoliberalism of the 1990s.  

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