Bilateral Investment Treaties

The necessity of Bilateral Investment Treaties came up with the technological improvements allowing the commercial goods to be transported easily around the world. Developing countries that are aiming to attract other countries to invest in their lands, sign or negotiate BITs to secure investors from potential economical risks. It can be said that the purpose of the Bilateral Investment Treaties according to developed countries is to obtain a legal protection for the investment and preclude non-commercial risks facing foreign investors in host countries. All of the BITs are signed reciprocal, thus they don't explain which contracting party is the source of the investment or which one is the recipient.