International financial law: concept, sources, principles

2024 Author: Henry Conors | [email protected]. Last modified: 2024-02-12 02:45

In the course of the development of international economic relations, the corresponding developed types of economic relations are being established. The financial, currency and credit principles of interaction are especially actively expanding. They have a number of specific features. To regulate relations arising in this area, the rules of international financial law are applied. They will be discussed further.

General concept

In the middle of the 20th century, the development of international exchange led to differentiation, as well as the expansion of cooperation between different countries. This manifested itself not only in the economic, but also in the cultural, political and other fields. Which led, in turn, to the need to expand the boundaries of financial international relations.

As a result, special organizations began to appear. Their participants, who were representatives of sovereign states, assumed obligations in the field of finance, currency and loans. They receive andprovide loans at the macro level. These are, for example, the International Monetary Fund (IMF), the International Bank for Reconstruction and Development (IBRD) and others.

Relations that arise between participants in the international financial system can be of the following types:

• Between international partners that arise in the process of transferring money from one state to another to replenish official currency-type reserves. This is the provision of foreign currency loans.
• Credit relations that develop when a certain value moves at the macroeconomic level on the terms of its further return. In most cases, interest is also expected.
• Relations that arise between states in the process of implementing actions aimed at maintaining the exchange rate ratio of their own currency at the desired level. A system of monetary relations between individual states is also being organized.
• Cooperation in the field of taxes. Such relationships arise when carrying out activities in the field of tax settlement.

Considering the concept, sources and principles of international financial law, it is worth noting that it is part of economic international law.

Signs, subject and object of currency law

In the course of international monetary cooperation, the relevant norms of international financial law are applied. This makes it possible to establish a framework for an effective correlation of forces at the macro level, for the efficient use of available world resources.

The subject of international financial law are currency, credit relations arising between partners from different countries. Such interaction is characterized by certain features:

• The nature of the relationship is necessarily monetary.
• Only sovereign states or organizations created by them enter into interaction.
• Relationships arise in the external activities of states.

The object of such interaction is always money. It can also be financial obligations. Such connections arise only in the process of external activities of the organization in the performance of global tasks and functions.

Relations in the field of finance that arise between states and their representatives (international banks, organizations and funds, other participants) are based on the principles of respect for state sovereignty. They are necessarily interstate, which is expressed in the conclusion of interstate treaties and agreements. But their implementation falls within the competence of domestic financial and credit institutions.

Obligations to the international community are reflected in national state budgets, balance sheets and other financial acts within the country.

Sources of law

International financial relations and their legal regulation is based on certain sources of law. In a special sense, from a legal point of view, they include the external form of legal expression, which, in particular, is legalAct. Also, the source can be an expression of law in an external form, which is used to regulate international activities in the field of finance. At the same time, its specific features are taken into account.

A significant number of sources are of contractual origin. It should be understood that there are no uniform rules for the implementation of international financial law. The only exceptions are unified treaties and agreements that are at the source of such interaction.

Also sources are any form of external right, as well as public cooperation, which is governed by global financial regulations.

Legal regulation is carried out through the following sources:

• Agreements between foreign partners.
• Acts of internal legislation.
• Customs, generally accepted norms of interaction at the global level.
• Judicial and arbitration practice.
• Other doctrines.

They form a complex system of sources of law that guides the organization of foreign cooperation. Each of its elements is in interaction.

The sources of international law are ambivalent. These can be agreements concluded between different countries, special customs when interacting with foreign partners. But it is also the normative acts issued within the state, as well as its judicial practice, the customs of financial turnover, etc.e. At the internal level, the main principles of interaction with other countries and partners are determined.

System Features

The organization of international financial relations is carried out in accordance with some generally accepted norms. The structure of this system includes institutions, sub-institutions. Some of them combine their functions with other structural units of international economic law. At the same time, cooperation in the field of finance is constantly developing. The normative array of this area of interaction is growing.

However, it is in this branch of law that there are significant gaps, which are a sign of some immaturity, softness in the regulation of relations between foreign partners. This is due to the presence of external debt problems, lack of regulatory principles, ineffectiveness of multilateral mechanisms, etc.

This system is in close interaction with other regulatory blocks. There are certain patterns in the development of relations between foreign partners. Formerly soft rules of law are gradually becoming tougher. Cooperation takes place on the basis of international agreements. Unilateral regulation is gradually being replaced by bilateral or even multilateral regulation. This makes it possible to unify procedures in the area of currency law. The method of supranational regulation is being used more and more.

The main operators of international relations in the field of finance are banks. They serve agreements and treaties of different countries. The most reliable in thisSwiss banks are considered. These are financial intermediaries that work with both domestic and foreign currencies.

It is worth noting that legal regulation does not support the interests of all countries equally. The activities of financial organizations, including international and Swiss banks, serve the interests of the Western world to a greater extent. The situation was somewhat changed by the financial crisis that occurred in 2008-2010. After it, there was a shift towards taking into account the interests of countries of a different civilized type. First of all, the situation has improved for developing countries. But in general, financial law at the global level is still far from achieving the status of moral and fair.

System

Existing institutions of international financial law form a certain system. They can be procedural or material, simple or complex. Some institutions are entirely related to financial law at the level of international relations, but there are also mixed forms.

International Monetary Law has its core in the International Monetary Fund. Its law is inherently imperative and universal to a large extent. In accordance with the basic principles of the IMF, existing norms are drawn up, institutions and sub-institutions function. They may cover a different number of states.

Together with the right of the IMF, the financial norms of the EU also function. They have many points of contact. The order of establishing relations between different states is provided mainlybilateral agreements.

The structure of international financial law includes many financial institutions. They differ in their area of influence, features of activity. One of them is also the International Bank for Reconstruction and Development (IBRD). This is a credit organization created by the UN. It promotes the development of the economies of countries that are participants in international trade. The purpose of the functioning of the IBRD is to stabilize the world economy, to prevent deep, protracted crises. This organization was established simultaneously with the IMF.

IBRD provides long-term loans to developing countries. They definitely provide a money back guarantee. Credit is provided only to countries that are members of the IMF.

It is worth noting that all institutions included in the structure of legal financial regulation operate in accordance with general or special rules. These parts of the law cover either all financial relations at the global level, or some of its aspects.

Principles

The development of international economic cooperation is based on special principles. These are general rules that have a high legal competence.

Their functions are systematic, allowing them to play an organizing role. This allows you to maintain law and order. In the field of currency interaction, principles are applied that do not contradict international law. Each of them is a separate institution that contains normscooperation in the field of currency relations between countries.

There are two categories of principles:

1. Having material content.
2. Condition equations and matching that perform the function of the method.

The first category includes principles that are of a customary legal or conventional nature:

• State sovereignty over national finances and systems, with some exceptions.
• Freedom of payments, settlements on foreign trade.
• Balance of payments balance.
• Freedom of participation of private representatives in the foreign exchange market of the international level, which is carried out in accordance with the legislation in force within the state.
• Choose the exchange rate, which is carried out with the norms of the International Monetary Fund.
• Prohibition on the use of devaluation (change in the exchange rate), which is used in the conduct of competition.
• Freedom to choose systems for payments and settlements in bilateral relations that should not harm the global financial system.
• Repayment (repayment) of the state's external debts.
• Concessional lending to developing countries.
• Joint action to prevent financial crises.
• Guarantees for high financial risks.
• Financial assistance to states in the event of a financial crisis.
• The list of listed principles can be expanded or adjusted. There are exceptions to each of these items.

Second category of principles

To the secondthe categories of principles of international financial law include specific methods.

Such principles allow foreigners to infiltrate the legal environment of another country. They are used to ensure equality in the implementation of external financial relations. The main principles of this group are:

• Non-discrimination. It is impossible to exempt representatives of one state and impose double taxation on representatives of another state. The principle of non-discrimination is also applied when issuing credit funds.
• Granting the appropriate treatment to the nation that is currently most favored.
• Granting national treatment.
• Preference.
• Reciprocity.

The above principles may apply by custom or by contract. They are combined in different combinations. The presented principles can be applied to the spheres of legal relations in a broad or narrow sense. They are actively used in the course of building interaction in international financial relations.

Factors influencing the development of MFP

In the course of the performance by the relevant organizations, international banks of their functions, there is a gradual development of private law. This process is influenced by certain factors. There are only three types of them in the modern world:

1. In the process of globalization, increasing the information support of economic relations, the turnover of certain types has a significant impactgoods, services or works. Previously, they did not play a priority role in the global economy. Today, the IFP is heavily influenced by information technology, telecommunications, and products that are driven by mass demand.
2. Increasing the importance of international labor migration in the field of trade, which is due to social, political, national reasons. Also, this category of factors includes the lack of an employment market in the country, the possibility of improving education.
3. The manifestation of new directions in the field of scientific and technological progress needs to intensify the need for regulation by methods of private law. In this area, it is becoming increasingly necessary. This avoids clashes between domestic and foreign legislation. In this case, it is possible to form a single legal basis for fruitful cooperation. At the same time, it is possible to strengthen the rights and interests of the parties in the process of civil exchange.

Interaction in the field of taxation

International financial law is applied in various areas of interaction. One of the most interesting is the issue of taxation. The norms in this area of finance are stipulated mainly in the relevant agreements. They can also be found in other sources. These, for example, can be acts worked out by the relevant departments of international organizations.

In the field of taxation, cooperation between countries takes place in the following areas:

• Definition of the main principles in the field of taxationtaxes.
• Bringing to a single standard of legislation in this direction.
• Contributing to the prevention of double taxation, as well as the prevention of evasion from making appropriate payments to the budget.
• The procedure for regulating certain rules that relate to offshore and "tax havens" in the relevant parts of the world.
• Cooperation, exchange of information and other assistance in the fight against tax offenses.

Prevention of double taxation

Many countries conclude agreements to prevent tax evasion, as well as their double payment to the budget. This document provides a list of territories to which such a decree applies. A list of taxes that will not be paid twice by the manufacturer is also determined. So, if a resident of Russia owns capital or receives income that is taxed in another country, this amount is deducted from the total amount of deductions to the domestic budget. But such a difference cannot be higher than the amount of such tax in our country.