EUROPEAN UNION: Commission Asks Member States to Terminate Their Intra-EU Bilateral Investment Treaties

Friday June 19 2015

The European Commission has initiated infringement proceedings against five Member States requesting them to terminate intra-EU bilateral investment treaties between them (“intra-EU BITs”). BITs are agreements establishing the terms and conditions for private investment by nationals and companies of one state in another one. Intra-EU BITs are agreements that exist between EU Member States.

Many of these intra-EU BITs were agreed in the 1990s, before the EU enlargements of 2004, 2007 and 2013. They were mainly struck between existing members of the EU and those who would become the “EU 13”. They were aimed at reassuring investors who wanted to invest in the future “EU 13” at a time when private investors – sometimes for historical political reasons – might have felt wary about investing in those countries. The BITs were thus aimed at strengthening investor protection, for example by means of compensation for expropriation and arbitration procedures for the settlement of investment disputes.

The Commission has decided to request five Member States (Austria, the Netherlands, Romania, Slovakia and Sweden) to bring the intra-EU BITs between them to an end.

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