Brussels, 28/08/2014 (Agence Europe) - With the publication in the Official Journal on Thursday 28 August of the regulation setting out a new framework for managing disputes under investment agreements with its trading partners, the EU has taken an important step towards implementing a comprehensive global EU investment policy, the European Commission announced the same day.
The new rules - which will enter into force on 17 September - aim to strengthen transparency in investor-state dispute settlement (ISDS) in future trade and/or investment agreements concluded between the EU and third countries by providing for close consultation and information-sharing between the Commission, EU member states and the European Parliament.
The regulation sets out the arrangements for cooperation between the Commission and member states in precise cases for ISDS procedures. It defines who is best placed to defend the EU and member state interests in the event of any challenge, and sets out the principles for allocating any eventual costs or compensation. The member states will defend any challenges to their own measures and the EU will defend measures taken at EU level.
“This regulation represents another building block in our efforts to develop a transparent, accountable and balanced investor-state dispute settlement mechanism as part of the EU trade and investment policy”, said European Commissioner for Trade Karel De Gucht.
Following the entry into force of the Lisbon Treaty on 1 December 2009, foreign direct investment (FDI) is now part of EU common commercial policy - with exclusive competence for the EU in this area. As a result, the Commission now negotiates investment agreements or the inclusion of an investment chapter as part of trade agreements.
The new EU policy on investment aims, on the one hand, to negotiate new rules on this with important trading partners and, on the other hand, to ensure application of the 1,400 bilateral treaties that already exist between the member states and third countries. Until now, the EU has been party to just one agreement providing for an ISDS mechanism - the Energy Charter Treaty.
In this context, the EU is seeking to introduce substantial improvements to ISDS mechanisms, by requiring transparency, accountability and predictability to be strengthened. In its agreements, the EU includes firm transparency obligations for companies, making all documents and hearings public, and it includes provisions against abuse of the system and measures ensuring the independence and impartiality of arbitrators, the Commission states.
Negotiations for investment agreements have been under way since the end of 2013 with China, and since last spring with Burma/Myanmar. The free-trade negotiations with Canada, the USA, India, Japan, Morocco, Singapore, Thailand and Vietnam also provide for the inclusion of an investment chapter in future agreements. (EH)