In order to clarifies that EU law protects EU investors' rights, and investors can enforce these rights before national administrations and courts, the European Commission has issued a guidance on protection of intra-EU investments. The Commission acknowledged that a stable regulatory environment is crucial for encouraging more investment within the European Union, however, in line with the judgment of the Court of Justice of the EU Achmea v. Slovakia, the Commission reiterated that there is no place for bilateral investment treaties. Following this judgment, the Commission has intensified its dialogue with all member states, calling on them to take action to terminate the intra-EU BITs.
Valdis Dombrovskis, Vice-President in charge of Financial Stability, Financial Services and Capital Markets Union said: "Boosting investment is a key priority of the Capital Markets Union. EU law strikes the right balance between protecting the rights of EU investors and enabling governments to regulate in the public interest. 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.”
The Commission reiterates that EU law recognises fundamental rights, such as the right to conduct a business, the right to property and the right to effective judicial protection. In particular, EU companies and citizens have the right to establish a business, invest in a company and provide services and goods across European borders. In addition, they are also protected by general principles of non-discrimination, proportionality, legal certainty and protection of legitimate expectations. In other words, EU rules enshrined in the EU Treaties, in the Charter of Fundamental Rights of the European Union, in the general principles of EU law, and in extensive sector-specific legislation, offers a comprehensive and effective legal framework, including remedies, to intra-EU investors when they invest in another member state.
EU investors can no longer rely on intra-EU bilateral investment treaties. Investor-state arbitration (ISDS) between a member state and an investor from another member state is incompatible with EU law as the Court of Justice of the EU recently held in the Achmea case. ISDS is outside the mechanisms of dispute resolution which is laid down in the Treaty, ISDS would jeopardise correct and uniform application of EU law. In the same line, the European Commission is of the opinion that part III – investment promotion and protection of the Energy Charter Treaty does not apply between EU member states either. However, it does not mean that EU investors are not protected. In order to encourage investments within the European Union, the Commission’s Communication clarifies that EU investors' rights are guaranteed by national courts and the European Court of Justice as well as by the Commission, in particular through the infringement proceedings.
Moreover, EU law does recognize regulatory powers of the EU and its member states. EU markets can be regulated to pursue legitimate public interests such as public security, public health, social rights, consumer protection or the preservation of the environment.