This article examines whether the characterization of a regulatory measure as expropriatory depends upon the objective intent of the state in enacting that measure. The issue of regulatory expropriation is of particular importance, given the fact that a number of recent multilateral investment treaties, including the North American Free Trade Agreement, grant investors a right of direct action against a foreign state for losses arising out of measures that are “tantamount” to expropriation.
This article will first consider the respective approaches of the Iran-United States Claims Tribunal and the United States to regulatory expropriation. These approaches will be then briefly contrasted with the unique jurisprudence of the European Court of Justice and the European Court of Human Rights. Next, the role of intent in municipal law as a means of categorization will be addressed and a case made as to why this approach is equally viable on the international plane. In conclusion, reasons will be given as to why a test based on intent is to be preferred over other theories.