Abstract
The article’s aim is to analyse the legal issues concerning the compatibility with the EU law of Bilateral Investments Treaties concluded between Member States themselves (intra-EU BITs), on the one hand, and Member State and Third State on the other hand (extra-EU BITs). The questions arise as a consequence of the shift of competence for Foreign Direct Investments from the Member States to the EU, so it is approached as a problem of compatibility between sources of law that belong to different legal systems: international law and European Union law. The author’s conclusion is that the EU has, despite several difficulties, succeeded in preserving the autonomy and the primacy of its legal order.
Highlights
IntroductionPursuant to the article 207 TFEU, entered into force with the Lisbon Treaty in 2009, the European Union has the explicit and exclusive external trade competence on foreign direct investment (FDI, defined as “any foreign investment which serves to establish lasting and direct links with the undertaking to which capital is made available in order to carry out an economic activity”, in: the European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Towards a comprehensive European international investment policy, COM/2010/0343 final, p. 3)
The questions arise as a consequence of the shift of competence for Foreign Direct Investments from the Member States to the EU, so it is approached as a problem of compatibility between sources of law that belong to different legal systems: international law and European Union law
Both as regards the Agreement on extinction of intra-EU Bilateral Investment Treaties (BITs) reached on May 5, 2020 between the Member States themselves, and the Regulation applying on extra-EU BITs issued by the EU itself, problems of coordination have arisen between international arbitration on investments and EU law, and with regard to the international law general rules on the extinction of the treaties
Summary
Pursuant to the article 207 TFEU, entered into force with the Lisbon Treaty in 2009, the European Union has the explicit and exclusive external trade competence on foreign direct investment (FDI, defined as “any foreign investment which serves to establish lasting and direct links with the undertaking to which capital is made available in order to carry out an economic activity”, in: the European Commission, Communication from the Commission to the European Parliament, the Council, the European Economic and Social Committee and the Committee of the Regions - Towards a comprehensive European international investment policy, COM/2010/0343 final, p. 3). By affirming the inapplicability of one of the most essential and emblematic clauses of the BITs, such as the arbitration clause, the Court has stated the general and substantial incompatibility of intra-EU BITs with the EU law 2 of the Vienna Convention) would be an expression of a general principle “applicable to all third party holders” It has been argued that the practice made for an explicit provision concerning the extinction of the sunset clause constitutes a strategy of Member States to avoid any arbitration awards that could state the survival of the sunset clauses of a BITs even after its extinction (this concept has been expressed by Loris Marotti, Aspetti problematici dell’accordo sull’estinzione dei trattati bilaterali di investimento tra Stati membri dell’Unione europea, in Rivista di diritto internazionale privato e processuale, ottobre-dicembre 2020, p. 859)
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