Through diplomatic protection, aliens could invest abroad with the expectation that if they were injured in an unstable country, international law would provide an additional framework of protection. The US practice ensured that the content and scope of international obligations would extend beyond ad hoc diplomacy to international arbitration, where professional lawyers began to articulate general principles of state responsibility. The most important of these principles was the minimum standard of care owed to aliens. If a state failed to meet international standards, its legal responsibility was engaged. Latin American lawyers, however, were unhappy with state responsibility being applied in this way. In response to what they viewed as legal imperialism, Latin Americans expanded the doctrine to apply to the US and Latin Americans alike and to the violation of any international obligation and not just alien protection. In this way, what began as a narrow practice in Latin America, grew into a general framework of international law enforcement.

Each Contracting Party shall accord to investments of investors of the other Contracting Party fair and equitable treatment.

The nationals of each High Contracting Party shall receive, within the territories of the other High Contracting Party, the most constant protection and security for their persons and property, and shall enjoy in this respect the full protection and security required by international law.