The scope of the new Common Commercial Policy covers competence to conclude general obligations on the liberalization of capital transfer with relation to FDI and establishment. It is not limited to the market access phase. However, provisions concerning portfolio investment and minority participations in enterprises are not covered. It remains uncertain whether the new wording enables the EU to include policies to protect against expropriation and dispute-settlement clauses in its agreements. Although the Reform Treaty confers considerable competences to the EU, major parts of common Bilateral Investment Treaties do not fall within the scope of the new CCP. Hence, the Member States may continue to conclude their own specific agreements while the EU obtains more flexibility in negotiations and strengthens its position on the international scene.
Additionally, the Lisbon Treaty slightly strengthens the power of the European Parliament.
Table of Contents
I. The Lisbon Treaty - General Introduction
a) Reform of the Union - a long and tricky road
b) Contractual Basis after the ToL
c) Legal Personality of the European Union
d) The new Foreign Direct Investment Competence
II. Investment
a) Foreign Direct Investment
b) Portfolio Investment
c) Market Access- and Post Market Access Phase
d) Investment Protection Instruments
III. Investment Activities of the Member States
a) Bilateral Investment Agreements
b) Key Common Provisions of BITs
IV. Investment Competences of the EU/EC
a) Foreign Investment Competence in the Treaties and in Case-Law
b) Common Commercial Policy (CCP), Art. 133 EC-T
c) Freedom of Establishment, Art. 47(2) and Art. 48 EC-T
d) Freedom of Capital and Payment
e) Mixed Agreements
f) Investment Provisions in existing Agreements
V. The Reform of the CCP
VI. The Scope of FDI in Art. 207 TFEU
a) Covered Types of Investment
b) Covered Stages of Investment
c) Covered Investment Protection Instruments
d) Protection against Expropriation
e) Dispute Settlement
f) General Limitation by Art. 207 (6) TFEU
VII. Procedures and Voting
a) Framework-Regulations and Negotiation Procedure
b) Voting Rules
VIII. Consequences and Conclusion
Objectives and Topics
This paper examines the impact of the Lisbon Treaty on the European Union's external competences regarding foreign direct investment (FDI). It addresses the transition from a system where investment agreements were largely the responsibility of Member States to a new framework under the Common Commercial Policy (CCP), analyzing the legal implications and potential conflicts.
- The transition of investment competence from Member States to the European Union.
- The definition and scope of Foreign Direct Investment (FDI) within the EU legal framework.
- The role of Bilateral Investment Treaties (BITs) and their standard provisions.
- The interpretation of Article 207 of the Treaty on the Functioning of the European Union (TFEU).
- Challenges regarding mixed agreements and the future of investment dispute settlement.
Excerpt from the book
b) Key Common Provisions of BITs
Each BIT starts with defining the terms "investment" and "investor" which determine its scope of application. As stated above, EU-BITs contain a rather broad definition of investment, encompassing assets that go beyond the classic forms of FDI. Usually, BITs refer to investors as every national or company from the signatory countries. Problems may arise from the different approaches to the definition of corporate nationality.
The majority of investment agreements concluded by the 15 old EU Member States do not provide pre-establishment rights for foreign investors. They only aim at protecting existing investments. Nevertheless, they contain non-binding "admission-clauses" which promise best efforts and sometimes guarantee due process when deciding about the admittance of an investment. As a result the host state retains its right to adopt restrictions on market access.
By contrast, several new Central and Eastern Europe Member States have concluded BITs with the US that grant free establishment and national treatment on market access. However, these rights are able to cause serious incompatibilities with certain EU competences.
Summary of Chapters
I. The Lisbon Treaty - General Introduction: Provides an overview of the treaty's historical context, the contractual modifications, and the EU's evolving external competence.
II. Investment: Defines key concepts such as foreign direct investment, portfolio investment, and investment protection instruments.
III. Investment Activities of the Member States: Analyzes the traditional reliance on Bilateral Investment Treaties (BITs) and their common standard provisions.
IV. Investment Competences of the EU/EC: Discusses the pre-Lisbon legal landscape, including the Common Commercial Policy and freedom of movement provisions.
V. The Reform of the CCP: Details the integration of FDI into the Common Commercial Policy under the new treaty architecture.
VI. The Scope of FDI in Art. 207 TFEU: Examines how the new treaty provisions define and limit the Union's authority over various investment aspects.
VII. Procedures and Voting: Explores the administrative shifts in negotiation and voting, including the roles of the Parliament and Council.
VIII. Consequences and Conclusion: Summarizes the shift toward exclusive EU competence while acknowledging remaining uncertainties and the likely necessity of continued cooperation.
Keywords
Lisbon Treaty, European Union, Foreign Direct Investment, Common Commercial Policy, TFEU, Investment Protection, Bilateral Investment Treaties, BITs, Market Access, Dispute Settlement, Competence, External Relations, European Court of Justice, Expropriation, Mixed Agreements
Frequently Asked Questions
What is the core focus of this research?
This research analyzes how the Lisbon Treaty alters the legal landscape for international investment agreements, specifically focusing on whether the competence for concluding such agreements is now exclusive to the European Union.
What are the primary themes discussed?
The main themes include the definition of FDI, the transition of power from Member States to the EU, the legal structure of the Common Commercial Policy (CCP), and the implications for existing Bilateral Investment Treaties.
What is the central research question?
The work seeks to determine if the competence to conclude international investment agreements has become exclusively vested in the European Union or if it remains, at least partially, with the Member States.
Which scientific method is applied?
The author uses a legal-dogmatic approach, analyzing treaty provisions (TFEU, TEU), secondary legislation, and relevant case law from the European Court of Justice to evaluate the scope of new competencies.
What is the focus of the main section of the paper?
The main section evaluates the specific changes introduced by Article 207 TFEU and assesses how these amendments redefine the stages, types, and protection instruments of foreign investment relative to the EU's external action.
Which keywords best characterize this work?
Key terms include Lisbon Treaty, Foreign Direct Investment (FDI), Common Commercial Policy (CCP), Investment Protection, and TFEU.
How does the author view the role of mixed agreements under the new treaty?
The author suggests that despite the broadening of EU competence, comprehensive investment agreements may still require the continued participation of Member States through mixed agreements and intensive cooperation.
How does the paper address the conflict between BITs and EU law?
It highlights that existing Member State BITs may need to be renegotiated or adjusted to comply with the new exclusive competences of the EU, drawing analogies to Article 351 TFEU.
What impact does the "General Limitation" by Article 207(6) TFEU have?
The author notes that this provision creates significant confusion, as it formally includes FDI under the CCP while simultaneously stating that it should not change the existing delimitation of competences between the Union and Member States.
- Quote paper
- Thomas Obersteiner (Author), 2008, Competence to conclude international investment agreements - Exclusive to the European Union or vested in Member States?, Munich, GRIN Verlag, https://www.grin.com/document/163255
