CYIL vol. 11 (2020)

HALIL RAHMAN BASARAN CYIL 11 (2020) rules do not exist at all. 86 Yet, the fact remains that apart from the Santiago Principles, there is no international law initiative that brings order to SWF activity. SWF states, through the Santiago Principles , try to assuage the concerns of the recipient countries that SWFs possess a certain amount of autonomous institutionalization with commercial concerns, rather than political purposes, as their primary (and perhaps sole) motive. 87 For instance, under Santiago Principle No. 17, any and all pertinent financial information about an SWF should be publicly disclosed to demonstrate its economic and financial orientation with the aim of enhancing trust in recipient countries. For example, under Santiago Principle No. 15, SWF operations and activities in host countries should be conducted in compliance with all the applicable regulatory and disclosure requirements of the countries in which they operate. The Santiago Principles adopt a liberal approach to international markets in that they envisage a free flow of capital and investment. As such, the principles convey the message to the international community that SWFs invest on the basis of economic and financial risk and not geopolitical considerations. If there is any political motivation, this is to be disclosed to the recipient country, as outlined in Santiago Principle No. 19.1: If investment decisions are subject to other than economic and financial considerations, these should be clearly set out in the investment policy and be publicly disclosed. Another example of the effort to depoliticize SWF is Santiago Principle No. 20, which discourages/prohibits SWFs from using privileged information and the influence of their home states against private commercial competitors. The principle attempts to establish a level playing field and fair competition between SWFs and private entities 88 yet it is not easy to equate SWFs with private investors. Guaranteeing the autonomy of an SWF from the political organs of its state and cutting it off from privileged information as provided by its home state seems a considerably difficult task. Still, Santiago Principle No.1, through highlighting the significance of the legal framework for SWFs, looks for the clear delineation of responsibility between SWFs on the one side and government and governmental entities on the other. The SWF can be a public legal entity under national public law, it can be a state-owned corporation, 89 or national legislation can provide specific rules governing the asset pool of the SWF. 90 There is a search in the Santiago Principle No.1 for the legal transparency of the SWF. Interestingly, the Santiago Principles leave their implementation to individual SWFs. They are voluntary principles without an enforcement mechanism. The IFSWF, which maintains and promotes these principles, is merely a voluntary group of SWFs. The forum is not a formal supranational authority and its work does not carry any legal force. 91 The 86 The Kuwait Declaration, April 6, 2009. Accessible at https://www.ifswf.org/santiago-principles-landing/kuwait- declaration (accessed on 02/04/2020). 87 CATA BACKER, Larry, The Norwegian Sovereign Wealth Fund: Between Private and Public , Georgetown Journal of International Law, 2009, 40(4), p. 1274. 88 Discussion of the GAPP – Santiago Principles, Part II, p. 22. Accessible at https://www.ifswf.org/sites/default/ files/santiagoprinciples_0_0.pdf (Accessed on 26 February 2020). 89 Discussion of the GAPP – Santiago Principles, Part II, p. 11. Accessible at https://www.ifswf.org/sites/default/ files/santiagoprinciples_0_0.pdf (Accessed on 26 February 2020). 90 Ibid. 91 Kuwait Declaration, International Working Group of Sovereign Wealth Funds, Establishment of the International

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