On Thursday 19 July, the European Commission published a series of orientations in the form of a communication, to help EU investors to enforce their rights before national administrations and jurisdictions.
In reality, the aim is to clarify the regulatory environment following the 'Achmea' judgment, which fell on 6 March 2018 (see EUROPE 11975), and in which the Court of Justice of the EU ruled that the investor/state arbitration set out by the bilateral investment treaties between member states was incompatible with EU law. This was a victory for the Commission, which has stressed several times that it considers these treaties to be illegal and to impinge on the single market rules.
“There is no place in the single market for bilateral investment treaties between member states. Today's Communication sends a strong signal that EU law already protects investors. They can therefore remain confident when investing within the EU”, said the European Commissioner for Financial Services, Valdis Dombrovskis, in a press release.
Readers may recall that bilateral investment treaties (BITs) are international agreements that generally consist of ensuring the protection of investments made by the nationals and businesses of one state in another. They often provide for compensation in the event of expropriation and an investment dispute settlement system.
Several member states of the EU had entered into BITs with countries of Central and Eastern Europe before these joined the EU. With effect from the date of accession to the EU, the agreements in question therefore became treaties between member states of the EU, hence intra-EU.
In 2016, the Commission started infringement proceedings against Austria, the Netherlands, Romania, Slovakia and Sweden, ordering them to cancel their intra-EU BITs. Officially, there are reported still to be a shade under 200 of these to this day, even though some countries - such as Ireland and Italy - cancelled all of theirs.
In its communication, the Commission stressed the consequences of the 'Achmea' judgment and argues that its conclusions also apply to the treaty on the Energy Charter, as it concerns cross-border investments within the EU.
Essentially, the text sets out the protection to be enjoyed by investors under European law in force, for instance listing the multitude of general principles of non-discrimination, proportionality, legal security and the vast range of protective sectorial legislations.
Although the communication aims to show that the EU does protect investors, it also stresses that it is not unlimited protection and that the public authorities have other legitimate interests to take into account, such as public security, that can have negative consequences investors.
The communication is available here: https://bit.ly/2JAloH3 . (Original version in English by Marion Fontana)