Ref. Ares(2021)3902058 - 15/06/2021
Investor workshop on Investment Protection in the EU, Brussels, 17.12.2018
Flash report
Summary
The workshop was organized by DG FISMA with the aim of presenting the Communication on
intra-EU investment to investors and collecting practical feedback on their experiences with
application of EU law. Overall, a very well-attended event, providing a forum for exchange on
intra-EU investment protection with 100 participants from 18 MS, including key EU umbrella
associations (e.g. BusinessEurope, Eurocommerce, SMEUnited, EFAMA, EBF) and FDI and
portfolio investors from various sectors. Constructive discussion with many questions focusing on
pending arbitration cases, the level playing field for EU investors compared to 3rd countries,
enforcement of EU rights by national administration and courts (including judicial independence,
preliminary ruling procedure, efficiency and administrative practices). Multiple calls for EU action
to codify and complement investors’ rights and introduce a neutral dispute settlement mechanism
ensuring a level playing field for EU investors.
In detail:
In his keynote speech, Sean Berrigan (DDG FISMA) sent three messages: 1) investments are
important to address key priorities in the EU; 2) investments are already effectively protected under
EU law; 3) the Commission is open to developing its dialogue with EU investors. He also highlighted
that investors consider legal protection of investments as an important factor in their investment
decisions. Sean also touched upon the
Achmea judgment and its consequences for intra-EU bilateral
investment treaties (BITs) and the intra-application of the Energy Charter Treaty (ECT).
Panel I: Substantive protection EU law:
(FISMA ) presented substantive protection under EU law, already addressing
issues raised by investors during the registration process.
demonstrated that EU law ensures
investment protection throughout the investment life-cycle, noting the
SEGRO case, which covers the
post-establishment phase.
explained rights investors have under EU law comparing them to standards
under intra-EU BITs.
from BusinessEurope called for a comprehensive investment
policy of the EU (both intra-EU and external) and said that EU law is currently not enough for
investment protection (e.g. in terms of legal certainty and enforcement) and stressed the lack of a level
playing field between investment protection for EU investors compared to investors from third
countries, the latter being better placed.
(University of Liege) outlined
different practical avenues for invoking investment rights under EU law, noting the growing relevance
of the procedure for damages for breaches of EU law by the state.
from EFAMA
pointed out the cross-border nature of investments by asset managers and highlighted remaining
barriers, notably in the taxation field. indicated that EU secondary legislation could solves them,
but recently focused on the final consumer/investor rather than on the investment/assets.
In the discussion, investors asked about the fate of pending cases before arbitral tribunals and whether
investors could still rely on the substantive rights provided by intra-EU BITs before national courts.
LS stated that the BITs were illegal from the moment both parties became EU Member States.
WindEurope made a statement stressing the legal uncertainty for the renewables energy sector in
recent years, and the loss of level playing field under the ECT compared to 3rd country investors
following Achmea. noted that the EU expected a huge increase in future investment in the sector,
but the premium on the cost of capital differed substantially among EU countries. In some MS the
price of investments in renewables could become prohibitive. Several participants echoed the
concerns about the loss of a level playing field compared to 3rd country investors also in other sectors.
Many questions referred to enforcement, which was discussed in panel II.
Panel II: Enforcement of rights under EU law
(COM LS) spoke about remedies for investors, including conflict prevention, out of
court dispute resolution and judicial redress.
(JUST) presented the Commission policy on
effective justice, including the EU Justice Scoreboard, European Semester and European funds.
presented the survey of businesses making cross-border investments made by
German Federation of Industry and Trade (DIHK). The issues identified included discrimination,
expropriation, lack of legal certainty due to legislative changes with negative retroactive effects on
investments, lengthy administrative proceedings and problems in national courts (independence,
reluctance to make preliminary reference and set aside national rules incompatible with EU law).
welcomed out-of-court settlement, but also called for a dispute resolution mechanism replacing BITs,
noting concerns about the loss of level playing field internationally and potential diversion of EU
investments via 3rd countries.
(CCBE) presented the legal practitioners’ view on
the enforcement of investors’ rights.
(Network of EU Supreme Court Presidents)
emphasized that the national courts were the natural forum for investment litigation and explained that
the courts had the necessary tools ensuring appropriate specialization to deal with investment cases.
(ACA-Europe) explained the role of administrative courts in the investment
protection in the EU, including administrative review and touched upon the areas of public
procurement and the role of independent administrative authorities. Both
and
mentioned about EU level work of EU judicial networks.
In the discussion, investors raised again the issues of pending arbitrations, the difficulties of enforcing
EU rights before national administrations and courts.
On administration, investors mentioned
concerns about administrative practices targeting foreign investors (discriminatory or more frequent
inspections, higher fines, retaliatory administrative actions when a case is brought to court, as well as
lengthy administrative proceedings).
On courts, the issues focused in particular on concerns about
independence and rule of law, functioning of preliminary ruling procedure, as well as lengthy
proceedings and lack of effective remedies. Several interventions noted the benefits of
out-of-court
dispute resolution and favoured its further development, as investors wished to avoid conflicts and
maintain a good relationship with national authorities (AT business representatives). There was also
the idea of giving arbitral tribunals a right to refer to the CJEU.
Both participants and panelists repeatedly called on the Commission to propose a
replacement of
intra-EU BITs: e.g. via codification of investment protection rights in a “Charter” (as some crucial
aspects, covered by general law principles were not very clear and were difficult to enforce) and/or
the introduction of an alternative dispute settlement body detached from national governments.
Mario Nava (Dir FISMA B) concluded that at this stage, the Commission was here more to listen and
offer a forum for exchange in order to gather evidence for issues investors are still facing in the EU.
This would help collect practical feedback and evidence which would be very timely for developing
ideas on investment protection in the EU for the next Commission .
Many thanks to
for the possibility to include a cocktail for the participants, which gave an
opportunity for fruitful informal exchanges after the workshop.