**Introduction** As national security becomes more integrated into economic policymaking, governments are increasingly using asset controls such as investment screening, export restrictions, sanctions, ownership limitations, and, in more extreme cases, asset freezes or seizures to protect strategic industries and critical infrastructure. While these measures can strengthen resilience against security risks, poorly designed or excessively broad controls can weaken investment confidence, disrupt global supply chains, and intensify geopolitical tensions. Preventing destabilization therefore requires a balance between security objectives and the preservation of predictable, rules-based economic relations. **Contextual background** Asset controls are policy measures that restrict, condition, or monitor the ownership, financing, transfer, or operation of assets considered strategically sensitive. These measures increasingly apply to sectors such as semiconductors, critical minerals, telecommunications, energy infrastructure, artificial intelligence, and advanced manufacturing. In recent years, governments have expanded national security-based investment screening and economic restrictions in response to geopolitical tensions, technological competition, and concerns over strategic dependencies. This shift reflects a broader trend toward geoeconomic policymaking, where economic tools are increasingly used to pursue strategic and security objectives[1][2]. The emergence of geopolitical asset seizures as a policy concern shows how economic security tools can move beyond screening and restriction into direct intervention in ownership and control, raising higher risks for investor confidence and legal predictability[3]. **How countries can prevent asset controls from becoming destabilizing** **1.** **Asset controls should remain targeted and proportionate** Broad or poorly defined controls create uncertainty for investors and increase the likelihood of retaliatory measures. Limiting controls to clearly identified strategic sectors and technologies reduces unnecessary disruption to wider economic activity. Proportionate measures also help preserve market confidence. Governments that apply narrowly tailored restrictions, rather than sweeping limitations across entire industries or countries, are less likely to trigger capital flight, supply chain dislocation, or long-term declines in foreign direct investment. Clear regulatory criteria, review procedures, and timelines further reduce uncertainty by allowing firms and investors to better assess compliance risks and investment conditions[4]. **2.** **Greater international coordination can reduce fragmentation** Unilateral asset controls can produce overlapping restrictions, inconsistent regulatory standards, and retaliatory responses that fragment global markets. Coordination among governments helps reduce duplication and lowers the risk of escalating economic confrontation. Common principles for investment screening, export controls, and strategic-sector governance can improve predictability across jurisdictions while preserving national security objectives. Coordination is particularly important in globally integrated sectors such as semiconductors, digital infrastructure, clean energy technologies, and critical minerals, where fragmented controls can disrupt production networks across multiple economies[1]. International cooperation also helps smaller economies avoid becoming caught between competing regulatory systems or geopolitical blocs. **3.** **National security measures should not evolve into generalized protectionism** A major source of instability emerges when national security justifications are used to support broad industrial protectionism or commercial advantage. If governments perceive asset controls as tools for economic containment rather than genuine security protection, trust in international economic rules deteriorates. Preventing this outcome requires clearer distinctions between legitimate security concerns and conventional industrial policy objectives. Security-related controls should be evidence-based, narrowly applied, and subject to periodic review to prevent their expansion into permanent restrictions across large segments of the economy. The growing overlap between industrial policy and economic security has already increased the risk of subsidy competition, retaliatory restrictions, and geoeconomic fragmentation[2][5]. **4.** **Legal predictability and due process remain essential for investment confidence** Investment stability depends heavily on predictable legal and regulatory environments. Sudden asset seizures, retroactive ownership restrictions, or politically motivated interventions increase perceptions of sovereign risk and discourage long-term investment. The increasing discussion of geopolitical asset seizures highlights this risk: once asset controls are seen as instruments of geopolitical retaliation rather than narrowly bounded security tools, investors may price in higher political risk even in sectors not directly targeted[3]. Governments can reduce destabilizing effects by maintaining transparent legal procedures, protecting due process rights, and preserving access to impartial dispute resolution mechanisms. Stable governance frameworks are particularly important in sectors requiring long-term capital commitments, including infrastructure, manufacturing, energy, and advanced technology industries. Maintaining rule-based investment environments also helps prevent financial spillovers that can extend beyond the targeted sectors or countries. **Conclusion** As national security concerns increasingly shape economic policy, asset controls are likely to remain an important feature of global economic governance. However, excessively broad, unpredictable, or politically driven controls risk weakening investment confidence, fragmenting supply chains, and accelerating geoeconomic tensions. Limiting these risks requires targeted and proportionate measures, stronger international coordination, clearer separation between security policy and protectionism, and continued adherence to transparent, rules-based governance principles. Balancing security resilience with economic openness will be critical for maintaining stability in the global economy.
