Transfer of funds in China‐US BIT negotiations: comparing the Articles of Agreement of the IMF

Purpose – The purpose of this paper is to explore discrepancies between transfer provisions in the US model BIT, employed as a working text in the ongoing China‐USA BIT negotiations, and relevant Articles of the Agreement of the IMF, to which both China and the USA are signatories, with a view to advising on China's possible strategies for negotiation. Design/methodology/approach – The approach taken is doctrinal and comparative analysis and treaty interpretation of the US model BIT, the Articles of the Agreement of the IMF, the Chinese model BIT and some earlier versions of these instruments. Findings – A detailed analysis of several major discrepancies between these instruments finds that a differentiated treatment of capital transfers and current transfers is desirable and, in respect of current transfers, a properly formulated “temporary derogation” exception should be adopted. Originality/value – The paper conducts a unique substantial comparison of two most influential instruments governing transfer of funds in international investments. It reveals the common rationale shared by the transfer provisions under both instruments.