A/HRC/31/50 90. For one panellist, the existence of legal responsibility presupposes the existence of wrongful conduct in contravention of an obligation. Likewise, harmful conduct could happen inside or outside national territory, and it was therefore not necessary to define whether a company was transnational or not. The panellist argued that sanctions could be criminal, civil or administrative, and recalled that human rights violations should be tackled under public, not private, law. The panellist also highlighted that the instrument should incorporate the obligation of States to clearly define and incorporate in national criminal law those forms of harmful conduct against human rights, including those already recognized under international law. In addition, the instrument should include sanctions for human rights abuses that were not defined as criminal acts, as well as standards of complicity or conspiracy and the explicit recognition of the legal responsibility of a company as a legal person, not excluding the individual legal responsibility of directors and managers. 91. The final panellist analysed the implications of international trade and investment agreements on State policies to comply with human rights obligations. It was noted that, in several cases, transnational corporations had effectively used investment treaties or investment chapters of trade agreements to bring claims against host States for actions taken to protect human rights or comply with national legislation. These cases had resulted in Governments having to pay large compensation to such corporations. Likewise, the disadvantage of States in investor-State dispute settlement procedures was also evident with respect to the payment of legal fees. If companies win a case, their legal fees should be covered by the State, but typically the latter is not compensated if the award is in its favour. Often, foreign investors do not have to pay legal fees at all. The panellist also highlighted the hurdles that victims face to effectively sue transnational corporations. 92. One delegation noted that a list of harmful conducts and violations recognized in international law could be included in a treaty and should be linked to the domestic law of States. The delegation furthermore noted that the working group needed to look at how an effective instrument could (a) correspond to instruments that protect the rights of investors, (b) address the legal loopholes that corporations exploit in order to escape liability from harmful conduct and (c) ensure victims’ access to remedy. One delegation asked whether the legally binding instrument fully covered corporate social responsibility and human rights, and how to limit impunity, for example, by withdrawing contracts. 93. Another delegation enquired about measures to protect the host country, because of the imbalance of protections offered to investors under treaties, often allowing them to avoid sanctions. Several States noted that the instrument should cover the responsibility of the enterprise, including the acts of its subsidiaries and suppliers, its licenses and others levels of the corporate structure, and should clearly determine certain types of conduct. 94. One delegation noted that the footnote in resolution 26/9 was legitimate and justifiable. Local businesses must be registered and must comply with national legislation. In addition, the delegation remarked that the purpose of the working group was to regulate the activities of transnational corporations under international human rights law. Likewise, it stressed the need for uniform human rights standards in the global operations of transnational corporations in order to ensure effective remedies for victims, including mechanisms for proper litigation and remediation. The State also recalled that the footnote did not exclude the fact that States were encouraged to enhance human rights standards in their national legislation. 95. One NGO asked whether a treaty should be extended to financial institutions. Another NGO noted the need to establish a new list of standards to fill the gap that allows transnational corporations to avoid their responsibilities to prevent human right abuses. Several NGOs recognized the need to clarify the criminal liability of legal entities and to include mechanisms for coordination among different jurisdictions. Finally, a group of 18