CYIL 2011

TOMÁŠ FECÁK CYIL 2 ȍ2011Ȏ the participation of Member States. Of course, the possibility of a different factual development of affairs cannot be excluded. To provide a basic idea about its intentions, in July 2010 the Commission published a communication titled “Towards a comprehensive European international investment policy” (the Communication). 76 It is clear from the document that the Commission plans to craft a policy that should integrate investment liberalization and investment protection in the form of binding commitments under international law. The substantive rules of new agreements should, according to the Commission, follow the practices of the Member States’ BITs and should include standards of non-discrimination, fair and equitable treatment, full security and protection, rules for expropriation and, as a matter of effective enforceability, also the investor-to-state settlement mechanism. However, while revealing ambitious plans, the Communication comes up somewhat short in tackling the problematic issues of division of competences and international responsibility, what may indicate that EU officials are also struggling in their search for a satisfactory in-depth explanation of the new competence. The question still remains what is going to happen to the existing third countries’ BITs. It is clear that these agreements are in no way compatible with the new delimitation of external competences, while their immediate termination, leading to an erosion of investors’ rights, would also not be desirable. Therefore, the Commission presented, together with the above-mentioned Communication, the Proposal for a Regulation establishing transitional arrangements for BITs between Member States and third countries (the Draft Regulation). 77 The Draft Regulation provides for a grandfathering regime under which the Member States are authorised to maintain in force bilateral agreements relating to investment that have been notified to the Commission. However, the Commission has reserved for itself a competence to withdraw the authorization in specified cases, most notably if an agreement conflicts with EU law other than as concerns the incompatibilities arising from the allocation of competence between the Union and its Member States. The Draft Regulation also maintains the possibility of Member States to amend existing BITs or conclude new ones, subject to authorization by the Commission. This procedure should in particular allow Member States to renegotiate the existing agreements in order to bring them into compliance with EU law (meaning, of course, provisions other than those allocating external competences). 78 The existing Member States’ BITs should be gradually replaced by investment agreements concluded at the EU level. The implications of the new regime for the Czech Republic, as well as for other Member States, are significant. Although the Regulation has not yet entered into 76 Communication from the Commission to the council, the European Parliament, the European Economic and Social Committee and the Committee of the Regions: Towards a comprehensive European international investment policy. COM(2010)343 final. 77 Proposal for a Regulation of the European Parliament and of the Council establishing transitional arrangements for bilateral investment agreements between Member States and third countries. COM(2010)344 final. 78 Supra note 77. Explanatory memorandum, p. 2.

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