CYIL 2015

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POSTǧLISBON EXERCISE OF EU COMPETENCE IN THE FIELD OF FOREIGN INVESTMENT…

far-reaching argument as traditional investment international instruments, such as

BITs, typically deal with the post-establishment protection standards. To carve post-

establishment standards out from EU FDI competence would amount to leaving the

Member States’ extra-EU BITs almost untouched and the Union with not much to do.

The Commission argues that both market access and post-establishment protection of

investments are covered by the new competence and this view seems to be supported

by scholars arguing that the Union’s CCP competence does not limit itself to market

access and includes post-entry aspects too.

Finally, and once it is admitted that the Union can lay down post-establishment

protection standards, the discussion moves to a more detailed level as to whether the

Union can regulate all such standards and to what extent. In this context, the debate

has focused on the existence and nature of the EU’s competence over expropriation

given that Art. 345 TFEU provides that “[t]he Treaties shall in no way prejudice the

rules in Member States governing the system of property ownership”. In this aspect,

the debate seems to evolve, however, less around the possible exclusivity of the Union’s

competence, and more around the question of whether the expropriation falls

under shared competence or whether it is entirely under the Member States’ control.

Whereas the responses to these interrogations determine in principle the extent

of the EU-law illegality that the extra-EU BITs trigger and set the limits for the

review that the Commission can conduct, the Extra-EU BITs Regulation does not

make any distinction in this respect and qualifies the instruments falling under its

scope simply by the respective dates of their signature. Whether this absence of

further distinguishing can shed light on the intra-EU division of competence is,

however, doubtful given that this regulation states to be “[w]ithout prejudice to the

division of competences established by the TFEU”.

As to the second point, one should also consider the EU-law status of the extra-

EU BITs from the perspective of Art. 351 TFEU that was briefly invoked earlier.

Art. 351 TFEU is an intriguing provision of EU primary law which reflects on

the Union’s international legal context and on the legal “hardship” that EU-law

commitments may bring internationally for the Member States. Its first clause

guarantees that the agreements concluded by the Member States prior to establishing

or joining the Union shall not be affected by EU law. The second clause of the

same provision lays down an obligation of the Member States to eliminate any

incompatibilities between said agreements and EU law.

Unsurprisingly, striking the

See e.g. EECKHOUT, P.,

EU External Relations Law

op. cit.,

fn. No. 37, p. 64.

On this and other aspects of the competence under Art. 207 TFEU see BURGSTALLER, M., “The

Energy Charter Treaty as a Mixed Agreement: a Model for Future European Investment Treaties?”

COOP, G., Energy Dispute Resolution:…,”

op. cit

., fn. No. 37, pp. 125-153, p. 133.

Art. 1 of the Extra-EU BITs Regulation quoted above fn. No. 13.

For more on Art. 351 TFEU see FORTEAU, M., “La place des conventions internationales dans l’ordre

juridique de l’Union européenne”

BENLOLO-CARABOT, M., CANDAŞ, U., CUJO, E. (dir.),