Bashar H. Malkawi and Joel Slawotsky--Essay: "National Security Review of Chinese FDI into the GCC: Challenges and Opportunities"

(Bashar H. Malkawi)

(Joel Slawotsky)

Joel Slawotsky, of the Radzyner School of Law, Interdisciplinary Center, Herzliya, Israel, and the Law and Business Schools of the College of Management, Rishon LeZion, Israel. has written He has also guest blogged for "Law at the End of the Day"  on issues relating to corporate liability under international law  (e.g., "Rethinking Financial Crimes and Violations of International Law", Jan. 9, 2013; "Corporate Liability Under The Alien Tort Statute: The Latest Twist"April 26, 2014) and on issues of multilateral trade and finance (Joel Slawotsky Reports From Chinese University of Hong Kong: Asia FDI Forum II--China's Three-Prong Investment Strategy: Bilateral, Regional, and Global Tracks) He has also recently also served as Guest Editor of the Sovereign Wealth Fund special issue of Qatar University International Review of Law (IRL) (2015); Joel Slawotsky Reports From Chinese University of Hong Kong: Asia FDI Forum II--China's Three-Prong Investment Strategy: Bilateral, Regional, and Global Tracks (December 2016), and"On the potential shift from the present-day architects to new architects on the definition of international law" (Match 2017).

Bashar H. Malkawi is Professor of Commercial Law at University of Sharjah, where he teaches courses in international trade law, intellectual property and business transactions. He received his S.J.D from American University, Washington College of Law in 2005, and LLM in International Trade Law from University of Arizona in 2001. He has also taught at the Hashemite University-Jordan (2005-2010) and the International University College of Turin, Italy (summer 2009-2010).

They have very kindly produced a marvelously insightful essay: National Security Review of Chinese FDI into the GCC: Challenges and Opportunities. The essay  considers the ramifications of one of the most potent an dynamic elements of global trade--the entry of a very muscular China into global trade flows.  China's One Belt, One Road Initiative has the potential to reshape the contours of global trade. The challenges are to some extent different from those the region faced with U.S. and Rueopean trade a generaiotn agop, and is in its own way as potent. This essay provides an excellent examination of key aspects of these transformations.

About the essay, this from the authors:

I want to thank my friend and colleague Larry Backer for inviting me to write a guest post in his magnificent legal blog regarding paper selected for publication in the Transnational Dispute Management Journal as an article for inclusion in an upcoming special issue on OBOR. See HERE.

I had the privilege of co-authoring this paper with a global expert on trade and finance, Bashar Malkawi, Dean of the University of Sharjah College of Law. Bashar and I hope readers of Law at the end of the day, will enjoy this summary. Obviously we can only provide a general overview as the article itself and in particular the specifics of our proposal are available only to TDM subscribers. The advanced publication is now available by clicking THIS LINK.  

The essay follows.

 

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National Security Review of Chinese FDI into the GCC: Challenges and Opportunities

Bashar H. Malkawi,[1] Joel Slawotsky[2]

Abstract: OBOR forms an integral part of China’s aspirational ascendancy in becoming an architect of the global financial and legal architecture. The core component of OBOR is massive Chinese outbound investment in infrastructure implicating the critical transport and energy sectors of participating nations thus triggering issues of state sovereignty and national security. Nations within OBOR’s domain will increasingly focus on national security review of Chinese FDI. While reviewing FDI generally involves a careful cost-benefit evaluation and a rational balancing of interests, additional dimensions of complexity arise in terms of outbound Chinese investment into the UAE which impacts on this traditional balancing of interests: (1) the incipient U.S.-China rivalry is underway which may force both the U.S. and China to utilize auxiliary power in a global game for hegemonic leadership and (2) China’s unique one-party political system which plays a prominent role in the governance of private companies. Most OBOR investment will be through Chinese State Owned Enterprises - thus raising the potential of non-financially motivated FDI (as it does with other nations’ state-owned companies). In sum, China’s outbound FDI into OBOR projects into the UAE will be more complicated given both the special relationship between the UAE and the U.S. as well as the unique nature of China’s political system. This paper addresses the national security review challenges of China’s OBOR investment in the GCC (with emphasis on the UAE), namely, balancing the potential immense economic advantages - which positively align with the UAE Vision 2021 – and potential national security concerns. The question of national security review of Chinese FDI will become increasingly important not just for the UAE but also for the GCC and dozens of other nations which fall within OBOR’s realm.

China’s One Belt One Road (“OBOR”), is a trillion dollar grand strategy  envisioning a massive new network of inter-connected railways, roads, sea and airports throughout Asia, the Gulf Cooperation Council (“GCC”), Africa and into Europe, substantially influencing the global economy. OBOR forms an integral part of China’s aspirational ascendancy both in Asia and in the global context (here) and "will be a catalyst for shifting power alliances and the changing fortunes of nation states." https://www.forbes.com/sites/alexcapri/2017/06/21/china-obor-qatar-middle-east-america/#469a0d4a70e8

The core component of OBOR is massive Chinese outbound investment in infrastructure inherently implicating the critical transport and energy sectors of participating nations and thereby triggering issues of state sovereignty and national security.

In terms of scale or scope, OBOR has no parallel in modern history. It is more than 12 times the size of the Marshall Plan, America’s post-World War II initiative to aid the reconstruction of Western Europe’s devastated economies. Even if China cannot implement its entire plan, OBOR will have a significant and lasting impact. (HERE)

Over the long-term, OBOR will necessitate staggering FDI from China (HERE) and  OBOR-driven Chinese FDI is already increasing sharply. Located in the oil and gas rich Middle-East, the GCC is a natural strategic partner in China’s OBOR plans and China has sharply increased its economic investment and collaboration in the GCC. Investing in the region makes sense for China as the nations of the oil and gas rich Middle-East rank among the wealthiest: the United Arab Emirates, Israel, Saudi Arabia and Qatar rank among the wealthiest nations (HERE).  In parallel, China, the second largest economy, is expected to continue growing sharply perhaps rivalling the United States in a couple of decades thus providing extensive mutually advantageous economic opportunities for both the GCC and China.

A vital question will arise as Chinese FDI into the UAE intensifies; namely, whether China’s FDI is “good” for the GCC and UAE. This question, framed in the context of “Chinese colonization”, will be increasingly asked in other nations within OBOR’s ambit grappling with the same concerns over Chinese FDI. How should the UAE consider the large wave of Chinese FDI that can be expected in the coming years?

Reviewing FDI generally involves a careful cost-benefit evaluation and a rational balancing of interests rather than a resort to blanket protectionism or curbs to discourage investment. The economic benefits of FDI are well-documented and protectionism and barriers to cross-border movement of capital are universally recognized as potentially disastrous economic policy. However, two additional dimensions of complexity arises in terms of outbound Chinese investment into the UAE which impact on this traditional balancing of interests.

One, an incipient U.S.-China rivalry is underway which may force both the U.S. and China to utilize auxiliary power in a global game for hegemonic leadership. Inherently, a successful OBOR will further empower China and propel its rising influence much as the U.S.-led order has enabled U.S. exceptionality over the prior 70 years.  This is potentially problematic inasmuch as the UAE enjoys close defense ties with the United States and hosts significant U.S. military assets (HERE). The UAE will need to take into account the possible deleterious effects on the relationship with the U.S. if for example the Chinese military (or alternatively Chinese soft-power) becomes intertwined with the UAE. U.S. defense ties and bases serve as a deterrent to potential enemies and the UAE will need to take this factor into account. Of course, it is entirely plausible that over time China will replace the United States as a close military ally of the UAE thus obviating concerns about damaging the long-term relationship with the U.S.

Second, and both related and independent of the first factor, while OBOR has been compared to the U.S. Marshall Plan without the explicit political linkage  to a particular governance order, OBOR is inextricably linked with China’s foreign policy and is the lynchpin of “the great rejuvenation of the Chinese nation.” (HERE)  Strategic undertones exist and “[a]lthough China tends to impose fewer conditions for development assistance, it still has a clear political agenda in its lending, though perhaps not as transparent as its Western counterparts.” (See Simon Chesterman, 'Asia’s Ambivalence about International Law and Institutions: Past, Present and Futures', [2017] 27 EJIL 945, 976 (emphasis added)). While these concerns would naturally exist over any nation’s titanic infrastructure plan, anxieties over OBOR are enhanced due to China’s unique one-party political system which plays a prominent role in the governance of private companies. Most OBOR investment will be through Chinese State Owned Enterprises - thus raising the potential of non-financially motivated FDI (as it does with other nations’ state-owned companies). Since Chinese SOEs exist at least in part to serve the interests of advancing the political aims of the state, the potential for non-economically-driven investment decisions further complicates the review of Chinese investment as government-controlled entities will be the primary conduits of capital.

In the United States (and other Western nations) concerns have increased (HERE) and are amplified because most Chinese companies are controlled or dominated by arms of the Chinese state. (HERE). Indeed, China’s unique one party political control and domination of private companies present exceptional challenges to the issue of balancing FDI and protecting national interests and has led some in the United States to call for a total ban on Chinese SOEs purchases of U.S. businesses. Aside from potential long-term negative economic consequences, embarking on a blanket protectionist agenda will also extract a current economic cost as rejecting more generous Chinese SOE offers may cause a loss to shareholders. (HERE).

EU nations are also re-assessing national security review in light of recent expansion of Chinese acquisitions in the EU.

The economy ministers of France and Germany and Italy's industry minister voiced concern that a growing number of non-EU investors were buying up European technologies for the strategic objectives of their home country….At the same time, EU investors often face barriers when they try to invest in other countries. (HERE).

In sum, China’s outbound FDI into OBOR projects into the UAE will be more complicated given both the special relationship between the UAE and the U.S. as well as the unique nature of China’s political system. This paper addresses the national security review challenges of China’s OBOR investment into the UAE, namely, balancing the potential immense economic advantages - which positively align with the UAE Vision 2021 – and potential national security concerns. The issue of national security review of Chinese FDI will become increasingly important not just for the UAE but for the GCC and dozens of other nations which fall within OBOR’s realm.
The Economic Rise of China and OBOR

China’s rising economic preeminence has been stunning, firmly ensconcing China as the second most powerful world economy, dethroning previously second-ranked Japan. In a remarkably short span, less than 15 years, the US economy has experienced a relatively huge decline vis a vis China on a nominal GDP basis: In 2001, the US economy was eight times bigger but by 2015 it was only 1.6 times bigger than China’s. To put the decline into context, in 2001 the total GDP of the United States was nearly equal to the combined GDP of the next six top nations. Moreover, China is on-track to surpass the United States within thirty years to become the largest and most important economy. On a PPP basis, the astounding fact is China’s GDP has already surpassed the United States.

OBOR is a planned strategic framework further propelling China’s economic hegemony. Dozens of countries will be included within OBOR’s “territorial jurisdiction” covering nearly half the world’s economy and over 4 Billion people.[WU4] Out of dozens of announced transactions, the following five serve as exemplars of the enormity of the outbound infrastructure investments.

· Tanzania (Bagamoyo—$10 billion);
· Sri Lanka (Colombo and Habamtota—$3 billion);
· Burma [Myanmar] (Maday Island—$2.5 billion);
· Australia (Darwin, Newcastle, and Melbourne—$2.2 billion); and
· Israel (Ashdod and Haifa—$2.9 billion). (HERE)

OBOR – The Strategic and Political Context

OBOR is not simply a large-scale economic endeavor but “leverage[s] commercial actors to drive economic and military modernization, advance foreign policy objectives, and enhance Beijing’s power projection abroad.” (HERE). Moreover, success breeds success and OBOR’s success would mean China will naturally “win friends and influence nations” by the exercise of massive soft-power and therefore has far-reaching strategic significance with a global impact. Indeed it would be naïve to expect that a large powerful nation wielding titanic economic soft power will not gravitate towards exercising legitimate self-advantage in the geo-political context.

One likely advantage will arise from the likely increased use of the Chinese dominated AIIB as well as the NDB; a parallel to United States advantage stemming from post WW2 United States influence over the IMF and World Bank. See Jose E. Alvarez, The Internationalization of U.S. Law, [2009] 47 Columbia Journal of Transnational Law 538 The likely increasing importance of the AIIB and NDB in OBOR will significantly raise these international financial institutions’ profile and strategic influence. Larry C. Backer , 'International Financial Institutions (IFIs) and Sovereign Wealth Funds (SWFs) as instruments to combat corruption and enhance fiscal discipline in Developing States, ‘ (HERE; discussing the IMF and World Bank as international financial institutions and discussing their influence in shaping SWF conduct and policy).

In addition, as an important global economic actor, China will likely benefit as did the United States with respect to sway over allied nations – since enlightened financial self-interest is a proximate shaper of foreign policy.

Most strikingly, following the Permanent Court of Arbitration’s finding against China’s position on the South China Sea, the European Union failed to adopt a common position toward the ruling, as two of the EU members, Hungary and Greece, both OBOR partners, were cited in media reports as wary of upsetting their economic relations with Beijing. (HERE)

This is not a critique of OBOR or of China – the United States has also exploited to full advantage the U.S. led post WW2 global governance architecture such as the IMF and World Bank and the reserve status of the U.S. Dollar: dozens of U.S. military bases are embedded in strategic locations throughout Europe, the Persian Gulf and Asia.

Another dimension to the strategic issue is that a successful OBOR will enable China to establish itself as a dynamic global leader and possible equal to the United States.

OBOR matters because it is a challenge to the United States and its traditional way of thinking about world trade. In that view, there are two main trading blocs, the trans-Atlantic one and the trans-Pacific one, with Europe in the first, Asia in the second and America the focal point of each. Two proposed regional trade deals, the Trans-Pacific Partnership and the Transatlantic Trade and Investment Partnership, embody this approach. But OBOR treats Asia and Europe as a single space, and China, not the United States, is its focal point. (HERE).

This rivalry and the potential ramifications of an ascendant China impinges on the self-interest the UAE and is a calculus the UAE should take into account.

Evaluating Chinese SOE Investment

In China, many large companies are SOEs, and are the most common form of entity that will be involved in OBOR investment. Chinese SOEs receive preferential treatment in terms of access to capital and obtaining regulatory approvals and are employed in the advancement of Chinese governmental aims “serv[ing] political goals, including fostering indigenous innovation, supporting social stability and crisis response in China, and advancing economic initiatives abroad such as ‘One Belt, One Road.’” (HERE).

By definition, all SOEs raise national security concerns because of their connection to their home states. Investments made by states trigger different regulatory sensitivities compared to considerations raised by private companies because of the possibility that in conducting business government owned or controlled entities may utilize non-profit motivations and substitute political ambitions instead of (or in addition to) profit-making. (Joel Slawotsky, ' Sovereign Wealth Funds as Emerging Financial Superstars: How U.S. Regulators Should Respond ', [2009] 40 Geo. J. Int'l L. 1239).

These anxieties over state-owned businesses are not unique to China and relate to all SOEs in general.

[H]ost countries cannot summarily assume that [SOE] investments will never be guided by political objectives or that the management of [SOEs] will never be motivated by ‘nationalistic considerations’ deviating from conventional wealth maximization….Russia and China are regularly singled out as countries with major strategic and political interests shown in their SWF usage. These countries also have strategies to control critical assets, such as infrastructure, and this raises issues of market integrity as well as concerns over national security. (Julien Chaisse, Demystifying Public Security Exception and Limitations on Capital Movement: Hard Law, Soft Law and Sovereign Investments in the EU Internal Market, [2015] 37 U. Pa. J. Int’l L. 594-95 ).

Thus, these concerns are associated with any government-owned business which potentially subjugates private market interests (or at a minimum injects non-profit maximizing motivations) to the political interests of the state. Indeed, such concerns are not entirely new. As an illustration of prior concerns with respect to government-owned businesses and their investment decisions was the opposition over Dubai Ports’ attempt to invest in the United States. In 2007, the Dubai government-owned Dubai Ports World sought to acquire port terminals located in the United States. Members of the U.S. Congress, concerned about a foreign government controlling the flow of goods and people into the United States voiced strenuous opposition on national security grounds. (Bashar H. Malkawi, 'The Dubai Ports World Deal and U.S. Trade and Investment Policy in an Era of National Security', [2006] 7 The Journal of World Investment & Trade 443). In this respect, Chinese SOEs are no different than other state-owned businesses.

However, there are additional factors with respect to China’s SOEs which increase national security concerns of FDI recipient nations; China’s political structure and unique state dominance/control of SOEs presents a “different” type of investor. China is a communist economic order and the state is purposely directly involved in all critical economic sectors. “The way that the Chinese government exercises ‘state capitalism’ is that it directly or indirectly controls a large number of powerful SOEs, especially in the strategic and key sectors.” (Julien Chaisse, 'Demystifying Public Security Exception and Limitations on Capital Movement: Hard Law, Soft Law and Sovereign Investments in the EU Internal Market', [2015] 37 U. Pa. J. Int’l L. 583).

[W]hen governments undertake commercial activities, they remain answerable to a wide range of societal pressures that their governance structures are designed to take into account. For this reason, governments may encounter difficulties in making credible commitments to pursue only “commercial” objectives, since their raison d'être involves being sensitive to political pressures and to pursuing non-commercial objectives. (HERE).

The raison d'être of the Chinese SOE is the advancement of the CCP’s objectives thus amplifying the customary “state-ownership” concerns. China is ruled by one political party, the CCP, and its domination of Chinese SOEs is of critical importance. The CCP views Western democracy as flawed, proclaiming the “ultimate defeat of capitalism would enable Communism to emerge victorious.” (HERE). Clearly the freedom and ability to freely create wealth and retain it for private purposes is a UAE national interest which would be incompatible in a “victorious” Communist global order. These facts are not meant as a criticism of China which has expressed no intent (nor is there any present evidence) of aggressively advancing such goals through SOE investment. Nevertheless, Chinese SOEs may have motivations that align with ultimate CCP goals and those aims may not necessarily correlate with UAE national security interests. At a minimum, the question is whether Chinese governmental aims – expressed potentially via Chinese SOE investments into the UAE – raise national security concerns with a Western looking UAE.

While the United States government also wishes to advance its geo-political goals, the key distinction is that the United States government’s pursuit of policies is not part of private U.S. company investment decision making. In evaluating FDI from United States companies, the presumption is the decision to invest is 100 percent profit motivated; but the same cannot innately be inherently said of Chinese SOE investment.

Furthermore, these concerns can be expected to grow. The CCP is apparently strengthening its control over SOEs.

In October 2016, Xi effectively defined the corporate missions of China’s SOEs, declaring that they should “become important forces to implement” the decisions of the Party to “enhance overall national power, economic and social development, and people’s wellbeing.” Xi’s pronouncement is having an immediate effect as the CPC moves to consolidate power over SOEs corporate operations. For example, a number of state-owned firms, including FAW Car Co. and Sinoma Science & Technology Co., are amending their articles of association to provide internal Party Committees a “central role” in corporate management. This includes requiring the board of directors to seek direction from the Party Committee before making “major decisions.” Many SOEs are also combining the role of company chairman and Party secretary, a policy reversal dashing any notion of separation between CPC and SOE corporate affairs. These policies and the elevation of Party Committees within SOEs reflect a coordinated and gradual reorientation of SOE reforms consolidating CPC control over core industries deemed vital to future prosperity and power. (HERE)

The potential motivation to further the strategic and political goals of an alternative vision of global governance by a private entity investing and buying companies presents a very different context for review than traditional corporate acquirers.

In addition, investments and joint ventures from SOEs may not be an efficient allocation of resources or be a profit-generator. If investments are not based upon pure economic motivations, the investments may prove to be less than stellar performers or at a minimum, fail to achieve the potential return. Crucially, such motivations bring potential economic risk/loss of potential profit-maximization into the calculus for a recipient nation.

China has acknowledged the crucial need to reform its inefficient SOEs and doing so would lend confidence to recipient nations and lower national security concerns. (HERE). In terms of enacting reforms to China’s SOEs, economic performance is surely a factor but not the controlling factor as it would be in a private sector business. This demonstrates that SOE investment into the UAE may potentially be made based at least in part upon non-economic factors. The fact that some OBOR investments into the UAE may not have pure economic profit as the driving motivation may constitute an inefficient allocation of financial resources and loss of economic potential in addition to raising national security concerns.

The China - GCC Context

The GCC nations have substantial economic and geopolitical interests in a successful OBOR.

[T]he GCC has much to gain from OBOR as the initiative aims to enhance Beijing’s diplomatic and economic relations with countries that maintain a positive view of China’s global economic and political ascendancy, and can provide China (the world’s top oil importer) with the energy resources it needs to fuel its economy. (Here) 

The GCC is an important OBOR partner and features as a prominent actor in the OBOR plan: China perceives the GCC nations as a conduit to EU and African markets and as a region with great demand for Chinese-led infrastructure projects. In return, the GCC views China both as a stable market for oil and gas exports and as a partner in diversifying from carbon based wealth into other economic areas. The development of GCC economies is important as the GCC is looking to diversify from over-reliance on crude oil and natural gas.

Thus, for both China and GCC nations, OBOR is perceived as a “win-win” and has been enthusiastically embraced.

Yet the GCC also is cognizant of the geo-political stakes particularly in the context of regional rivalries. This concern is further complicated by a perception that the rivalries may serve as a manifestation of the greater U.S.-China rivalry.

[T]here are concerns in the Council about the initiative’s geopolitical implications because Iran will likely achieve major gains from it. Iran plays a key role in OBOR as an integral country in China’s Eurasian overland route. Given Iran’s geographical role linking Central Asia and the Middle East (and by extension Europe), and the fact that Tehran and Beijing maintain positive bilateral relations, it is difficult to imagine Sino-Iranian relations not improving in the future….Also, China’s determination to counteract the United States’ pursuit of its geo economic interests in the Gulf will increase Iran’s value to Beijing, particularly if tensions heat up in Washington-Tehran relations thanks to the Donald Trump administration’s increasingly anti-Iranian foreign policy. (HERE; 24 May 2017 (emphasis added).

Therefore, the GCC will need to balance the benefits of OBOR investment with the prospect that OBOR’s success will enhance regional rivals.

FDI: Advantages and Promotion of Economic Growth Versus National Security Concerns

Although FDI is acknowledged as beneficial and an important enabler of economic vitality, many governments are concerned about national security implications of FDI. Chinese FDI has come under more stringent scrutiny in recent years “sparked [by] political concerns about foreign ownership in Europe and the U.S.” (HERE). Some in the U.S. have urged a complete ban on Chinese SOE investment (HERE). 

Concerns have recently been voiced about foreign investors, notably state-owned enterprises, taking over European companies with key technologies for strategic reasons”…Among the ideas under discussion, the Commission is pondering whether to set up a European mechanism to veto foreign investment in strategic sectors. (HERE) 

While until recently most transactions have been approved by Western governments, many nations are increasingly considering instituting such measures and a reasonable expectation is that more intensive scrutiny will become standard practice.

How Should the UAE Review Chinese OBOR Investment?

There are many unique characteristics of the system employed by the UAE to regulate foreign investment. In many ways this system is different from the U.S. process under CFIUS. The UAE does not have a formal review system. Rather, UAE review considers economic factors and cultural policy objectives. Foreign investors are informally notified of sensitivities associated with attempted investments. If a foreigner attempts to invest in an area deemed to be unacceptable, the investor will be privately redirected.

While the existing set of laws and informal rules has served the UAE well, times are changing. Given the increasing cross-border investment and economic integration, the enormity of OBOR and the unique nature of Chinese SOEs, these factors militate strongly in favor of establishing a review process to screen foreign investment.

The UAE government should establish a similar vetting architecture to the U.S. CFIUS mechanism vesting authority to review and act upon foreign takeovers, mergers, and acquisitions which threaten national security. The UAE should create a separate federal governmental entity to oversee inward foreign investment. This federal body could consist of several ministries such as foreign affairs, trade, economy, treasury, and defense. The term "national security" should not be restricted providing flexibility since what once may have been considered non-strategic may very well become strategic over the long-term financial, defense and technological strategic context. (See Jose E. Alvarez, Karl P. Sauvant, The Evolving International Investment Regime: Expectations, Realities, Options [2011] pages 116-119).

[There are specific proposals with respect to what is recommended contained in the TDM article.]

The overriding context of the UAE’s approach should thus be to welcome FDI while simultaneously strengthening national security review. Blanket protectionism must be avoided as it incentivizes retaliatory measures and poses threats of undermining relations and economic benefits arising from vigorous FDI and the trans-national movement of capital. Overzealous review will also negate the promotion of openness and free markets and cross-border investment. Doing so risks reversing prior economic gains and future development. Reviews should be on a transaction-specific basis.

Yet the UAE should be legitimately concerned about FDI from companies that may have deep and non-transparent connections to a foreign government particularly if the investor is an SOE. The UAE should demand more transparency and carefully investigate each potentially problematic transactions. Another important consideration is the ability of UAE investors to access markets and takeover companies in the nation that is seeking to invest in the UAE - reciprocity. Moreover, it may be worthwhile for GCC nations to share investigative results with other GCC members. This could help identify a broader pattern in foreign acquisitions of GCC businesses. Moreover, a collaborative approach will deter a foreign government from “jurisdiction shopping” by which strategic objectives could be achieved by buying in “low-risk of review” jurisdictions.


NOTES:

[1] [Bashar Malkawi is Dean and Professor of Law at University of Sharjah, UAE. He holds an LLM in International Trade Law from the University of Arizona and SJD from American Univesity, Washington College of Law. He has taught at several law and business schools in Jordan and Italy. He can be reached at bmalkawi@gmail.com ]


[2] [Joel Slawotsky was a law clerk to the Hon. Charles H. Tenney (U.S.D.J., S.D.N.Y.) and AV peer-review rated attorney at Sonnenschein Nath & Rosenthal (now Dentons). He has taught at Radzyner Law School, Interdisciplinary Center (IDC) Herzliya, Israel and other law and business schools. He can be reached at jslawotsky@idc.ac.il]