Treaty Shopping and Denial of Benefits Clauses - What Investors Should Know

9 Pages Posted: 18 Apr 2018

See all articles by Alan Franklin

Alan Franklin

Global Business Risk Management

Date Written: April 12, 2018


This Article examines the concept of treaty shopping by international investors to find a preferred jurisdiction in which to incorporate for best protections under bilateral investment treaties or free trade agreements.

It examines case law that sets out the tests for when treaty shopping is allowable and when it runs afoul of the rules.

The article also examines the concept of denial of benefits under bilateral investment treaties and the Energy Charter Treaty to determine when and how a host state can deny benefits of treaty protection of investments to an investor. It examines the meaning of the term “substantial business activities” in connection with denial of benefits clauses.

Keywords: Treaty Shopping, Denial of Benefits, Bilateral Investment Treaties, Energy Charter Treaty

JEL Classification: K33, K4, K2, M16, M38, M48, F01, F02, F2, F21, F23, F33, F34, F38

Suggested Citation

Franklin, Alan, Treaty Shopping and Denial of Benefits Clauses - What Investors Should Know (April 12, 2018). Available at SSRN: or

Alan Franklin (Contact Author)

Global Business Risk Management ( email )

635 Blenkin Avenue
Parksville, British Columbia V9P 2K7
416 454 6133 (Phone)


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