Bilateral investment treaties: limiting the Commission’s authority
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European Parliament − 10-05-2011
Bilateral investment treaties: limiting the Commission’s authority
Parliament voted to circumscribe the Commission’s rights regarding Member States’ bilateral investment treaties (BITs). While urging the replacement of these BITs with EU-wide agreements, Members chose to water down the Commission’s proposal that would have allowed it to review national BITs and, if warranted, withdraw its authorization from them.
The Commission has proposed a regulation that would require all Member States to notify the Commission of all of their BITs, in exchange for which they would be authorised to maintain these agreements in force. After reviewing these treaties, the Commission could then withdraw this authorization, if the BIT in question conflicts with EU law, overlaps with an EU investment agreement with the same country, or conflicts with EU investment policy more generally.
Commission’s powers of review and chances to withdraw authorization cut back
The report adopted in the Parliament today (345-246-14) is very close to the version that emerged from the International Trade Committee a few weeks ago. That text, in turn, was based on compromise amendments from the EPP, ECR and ALDE groups, and opposed by the Socialists & Democrats, Greens/EFA, and GUE/NGL groups. Parliament’s amendments generally aim to weaken the power of the Commission in both its power to review BITs and in the reasons it can cite to withdraw authorization from them.
Reviews of BITs would no longer be mandatory, and only happen under stricter circumstances. The deadline by which the Commission needs to inform Parliament of the results of the review process was also extended from five to ten years after the entry into force of the regulation. The report also limits the reasons for which the Commission can withdraw authorisation from BITs. At the same time, MEPs’ amendments would allow for Member States to amend existing BITs or to conclude new ones, provided that they notify the Commission beforehand, and as long as a simple majority of Member States in the Council doesn’t prefer that an EU-level agreement be negotiated, instead.
Rapporteur’s reactions and next steps
"It is deeply disappointing to see that a majority of this House decided not to follow a balanced approach of combining legal certainty for the existing investment treaties of the Member States (BITs) with a way of modernizing the EU investment policy," said rapporteur Carl Schlyter (Greens/EFA, SV) after the vote. "Parliament has tied the hands of the Commission to review and possibly withdraw existing BITs even when it is clearly against the principles and established policies of the EU, and increased transparency in arbitration cases was also not supported."
Parliament’s vote sets the stage for negotiations with Council to begin shortly, since unless the Member States fully accept the Parliament’s version, the regulation will go into a second reading.
