Ref. Ares(2020)3025851 - 11/06/2020
Ref. Ares(2019)4889105 - 26/07/2019
EUROPEAN COMMISSION
Directorate-General for Financial Stability, Financial Services and Capital Markets Union
Director General
Brussels,
fisma.ddg.
(2019)5283289
European Banking Federation
Avenue des Arts 56,
1000 Brussels
Subject:
Future of EU investment protection mechanism
Dear
,
I refer to your letter dated 3 July 2019, in which you express your concerns about the termination
of the intra-EU BITs and about the future efficiency of intra-EU investment protection in the
absence of the investor to State dispute settlement mechanism through arbitral tribunals
previously foreseen in those investment treaties.
The Commission is very mindful of the need to safeguard a favourable investment climate to
encourage cross-border investments within the EU.
The Commission services are contributing to the follow-up to the commitment expressed by
Member States in the political declarations of 15 and 16 January 2019 to intensify discussions
"with the aim of better ensuring complete, strong and effective protection of investments within
the European Union".
In this regard, we are reaching out to all relevant stakeholders. A first workshop on investment
protection took place in December 2018 and we are planning to organise another workshop
during this year.
As stated in the Commission Communication on the protection of intra-EU investments of July
2018, EU law provides investors with a high level of protection, as well as a number of judicial
remedies available to investors before national courts.
To examine more closely the functioning of national justice systems, the Commission publishes
the annual EU Justice Scoreboard, which looks at a range of indicators to assess their
independence, quality and efficiency. It is part of the EU’s toolbox to strengthen the rule of law
by contributing to ensure that justice reforms respect EU law and European standards on the
rule of law.
The effective functioning of justice systems and the full respect for the rule of law have also
been identified since a number of years as a priority for structural reforms in the context of the
European Semester. The EU Justice Scoreboard feeds the country specific analysis in the
context of the European Semester and helps Member States to improve their national justice
systems. Alone this year, the Commission has proposed country-specific recommendations
concerning the effective functioning of justice systems, including the independence of the
judiciary to seven Member States. On 3 April 2019, the Commission also adopted a
Communication on further strengthening the rule of law within the Union which takes stock of
the state of play and looks at possible next steps.
At the same time, the Communication acknowledges that EU law may not solve all problems
investors may face in their activities. Currently, the expert group on intra-EU investment
environment composed of representatives from Member States is the forum to discuss how the
investment climate and investment protection can be improved.
The discussions with Member States and investors as well as other stakeholder will include
further reflections on whether there is a need for EU action, and namely for new alternative
dispute settlement mechanisms in line with EU law. The result of these reflections will feed into
the work of the next Commission.
In the framework of this ongoing reflexion process, my services remain at your disposal to
discuss your note and the future of EU investor protection with you in more detail.
Yours sincerely,
Olivier GUERSENT
Contact:
Electronically signed on 25/07/2019 16:15 (UTC+02) in accordance with article 4.2 (Validity of electronic documents) of Commission Decision 2004/563