International law approaches to state-owned enterprises

The economic impact of state-owned enterprises (SOEs) has been growing for years. Recent developments have served as reminders that SOEs are not only interesting to states for economic reasons. Often active in sectors that include critical infrastructure, SOEs can be used by states to facilitate a (foreign policy) agenda that may have a geopolitical rationale much different from that of (privately owned) commercial enterprises - be it to exert political or economic pressure, or to exploit interdependencies for geopolitical reasons. While investment screening mechanisms (ISMs) have become increasingly sensitive to this reality, other key regimes in international law still adhere to the classic dichotomy between sovereign and private entities. This makes it challenging to account for underlying political dynamics and various forms of state influence on SOE operations - neither of which are adequately captured by existing criteria. As a consequence, SOEs might utilize protection mechanisms intended for commercial enterprises and stifle host states' ability to respond to such influence. This article advocates the development of a »geopolitically informed approach« to SOEs, drawing on some of the criteria applied in investment screening, notably the »targets« of SOE-investment and contrasts this approach with existing criteria developed in international law regimes.