Author
Mr Braxton Gunawan
Organisation/Institution
Universitas Pelita Harapan, Faculty of Law
Country
INDONESIA
Panel
International Investment Law
Title
Conditional Freedom: How Indonesia's BIT Reform Refines the Free Transfer Guarantee
Abstract
The cornerstone of Bilateral Investment Treaties (“BIT”) regulating the relationship between foreign investors and host States is the Free Transfer Principle (“FTP”). While this principle boosts investor confidence, its rigid application often collides with a State’s sovereign right to adopt emergency economic measures during crises. This becomes particularly concerning in developing economies, where rapid capital outflows can undermine financial stability. Employing a qualitative and comparative approach, this study examines Indonesia’s terminated and renewed BITs, specifically those with Switzerland, Singapore, Finland, and Denmark to evaluate the revisions introduced upon renewal. Through doctrinal and policy-oriented analysis, supported by relevant academic literature, this research inspects how Indonesia reframes the balance between investor protection and the State’s right to regulate capital flows. The comparison between Indonesia’s earlier and reformed BITs demonstrates a consistent doctrinal adjustment of the FTP. In the Indonesia-Singapore BIT, the 2005 treaty granted an unconditional right to transfer capital, but the 2018 version keeps this guarantee whilst adding explicit exceptions for balance-of-payment crises, financial safeguard provisions, and compliance with domestic law. Similarly, the Indonesia-Switzerland BIT evolved from its 1974 form which guarantees unrestricted transfer, to the 2022 treaty which allows temporary restrictions to ensure financial stability. The Indonesia-Finland and Indonesia-Denmark BITs also reflect similar adjustments. Collectively, these revisions transform the FTP from a near-absolute entitlement, into a principle of conditional freedom. Through examining Indonesia’s evolving BIT framework, this research contributes to the discourse on balancing investment protection with State sovereignty. It provides a model for how developing economies can preserve investor confidence while safeguarding economic stability during crises, offering valuable insights for other developing States seeking to design treaty frameworks that are both investment-friendly and safe for State practice, supporting the pursuit of sustainable and equitable economic growth for Asia’s rise.
Biography
I am a second-year Law student at UPH and previously served as a merits researcher for my university’s FDI Moot 2025 team. During the FDI Moot, I became particularly engaged with the complexities of the free transfer principle, exploring its doctrinal foundations, its diverse variations across BIT provisions, the exceptional conditions under which transfers may be restricted, and its common practice for foreign investors. I also hold a strong interest in cyber law, which I further developed through a three-month cybersecurity negotiation case competition as part of the International Negotiation Competition by UGM. I believe that this combined experience strengthened my interest in the sector of international investment law and cybersecurity.
