Objective Scope of Application: Irrelevance of the Distinction Between Physical and Nonphysical Harm
Academic debate on the scope of FPS has chiefly focused on whether the standard refers only to physical protection, or whether it also encompasses the notion of legal security. The physical security approach is inconsistent with the definition of ‘investment’ in numerous treaties, which typically covers both physical and non-physical assets. The extension of FPS to legal security rests on shaky ground too, as it relies on mere arguments of authority and has no basis in customary international law. A better understanding of FPS is that it pertains to physical and non-physical risks, provided the source of risk is external to the host state. It is the source of risk, and not its physical or non-physical character, what determines the applicability of the FPS standard.