CYIL 2015

POSTǧLISBON EXERCISE OF EU COMPETENCE IN THE FIELD OF FOREIGN INVESTMENT… for the international responsibility to “follow the division of competences between the Union and the Member States” as the preamble of the Financial Responsibility Regulation suggests, the given international instrument must acknowledge the international effects of the intra-EU division of competences or it must be established that the intra-EU division of competence produces international-law effects per se . This proposition is subject to discussion, international case law divided, and the related work of the International Law Commission (“ILC”), which constitutes to date the most authoritative attempt to pull together the existing practice, inconclusive. 70 Another example of what appears problematic in light of applicable international rules are the provisions (contained in the operative part of the Financial Responsibility Regulation) indicating who shall “act as respondent” in a given ISDS proceedings. 71 For a Member State to be able to appear as a respondent in a given proceedings, it must be in principle party to the applicable investment agreement. Otherwise, the arbitral tribunal will lack personal competence (unless the latter is accepted on an ad hoc basis, which however triggers the issues of the competence ratione materiae and of the applicable law). The same presumed parallel between the intra-EU financial and extra-EU international responsibility transpires also through the possibility given to the Member State to enter into a settlement agreement with the concerned investor. If in these situations the Member States are supposed to act in their own name and not only as a proxy of the Union, they should be able to be the addressees of the underlying international obligations to be settled. 72 Although the Commission’s proposal of the Financial Responsibility Regulation deals with both situations through the prism of empowerment under Art. 2(1) TFEU, 73 this is an appropriate response of EU law that does not, however, bridge a possible international-law gap between the bearer of an international obligation and the actor who presents himself as willing to respond for it. It follows that the effective operation of the Financial Responsibility Regulation cannot be dissociated from the relevant international-law rules including those that the Union is shaping through post-Lisbon negotiation of investment-related agreements, as further analyzed in the following part of this paper. In accord with the focus of this paper, the extra-EU exercise by the Union of its new competence is looked at from the perspective of rules framing the EU’s and Member States’ respective international presence.

70 This paper will come back to this issue in its “extra-EU” part below. 71 See Art. 4 to 11 and Recitals 9 to 13 of the Preamble of the Financial Responsibility Regulation quoted above, fn. No. 56. 72 See also DIMOPOULOS, A., “The involvement of the EU …”, op. cit ., fn. No. 60, p. 1678. 73 See the Commission proposal of the Financial Responsibility Regulation COM(2012) 335 final, 21 Jun. 2012, p. 5.

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