Columbia International Affairs Online: Policy Briefs

CIAO DATE: 11/2012

Reconciling IMF rules and international investment agreements: An innovative derogation for capital controls

Elizabeth L. Broomfield

September 2012

Columbia Center on Sustainable Investment

Abstract

In the absence of an international framework governing capital controls, a conflict has developed due to the different approaches towards such controls taken by various international organizations and international investment agreements (IIAs). IIAs should incorporate derogations for countries when treaty obligations conflict with IMF recommendations to impose controls in response to severe economic hardship.