Agreement To Terminate Intra Eu Bits

The signing and entry into force of the Repeal Agreement are important developments in the investor-state dispute settlement landscape in the EU. It is recommended that parties to the existing EU-State arbitration involving States signatories to the Repeal Agreement, as well as those considering initiating such proceedings, be advised on the effects of the Repeal Agreement. Finally, the European Commission has approved a headwind against internal investment arbitration in Achmea, as ECT is also in modernisation negotiations, the EU could redefine investor-state dispute settlement in the European region in one fell swoop. Given that the COVID-19 pandemic is expected to lead to an unknown increase in disputes over investment agreements (as discussed in the archives of this blog on COVID-19), the removal of intra-EU NTBs has the added benefit of avoiding potential liability through traditional intra-EU-ISDS channels. The intra-EU DTS in question were closed when at least one of the parties was not yet an EU Member State. Most of these non-EU states were then candidates for EU membership and had joined several EDPs, precisely because the EU had actively encouraged them to do so. Thus, the pre-accession treaty with Romania aimed “at the Member States and Romania concluding agreements on the promotion and protection of investments”. When these countries subsequently joined the EU, intra-EU IPTs allowed investors from one EU Member State to initiate investment arbitration proceedings against another EU Member State. The proof will however be in the pudding. As has already been said, the agreement puts an end to intra-EU NTBs, including their forfeiture clauses.

A sunset clause extends the duration of a contract beyond the date of its termination. For example, Article 13(3) of the ILO Netherlands-Poland provides that, while Austria and Sweden have undertaken to terminate their ILO bilaterally, the Commission has adopted formal infringement notifications to both Finland and the United Kingdom (for which EU law continues to apply under the Withdrawal Agreement during the transitional period contracting until 31 December 2020) and has asked them: `take all necessary measures to urgently remove the intra-EU ILO from its legal order, taking into account its incompatibility with Union law.` However, it is quite possible that the UK intends to maintain its DT until 2021, when it will become extra-EU DT. However, the movement to end intra-EU DTS began at least a decade before the Achmea decision. Its origins can be attributed to the 2007 Lisbon Treaty, which gave the EU absolute authority over both member states` foreign and domestic trade policies. Since then, the Commission (the EU executive) has pledged to end intra-bilateral trade, most often against the will of the majority of EU member states that refuse to terminate their intra-EU NTBs. An interesting follow-up question is why the Commission is targeting the UK, which after the end of the transitional period on 31 December 2020 will no longer have to comply with EU law. The Withdrawal Agreement (“WA”) does not affect its BKT and does not contain a draft free trade agreement between the EU and the UK ISDS. The denunciation of the EU`s (intra-) UK`s ILO now, the elimination of ISDS in the “old style” and paves the way for EU-UK investment rules on EU terms. However, the UK seems to have an incentive not to end its intra-EU DTS, which will soon become extra-EU NTTs. It would be more advantageous to keep these NTBs in force than to (renegotiate) new investment standards with the EU.

The United Kingdom could therefore try to “turn the clock”. In accordance with Articles 92 to 95 and 87 to 89 AV, the Commission and the ECJ retain jurisdiction for administrative and judicial proceedings initiated before 31 December 2020. Therefore, the Commission could continue to refer the case to the ECJ after the transition period, but the ECJ would then only be empowered to rule on the UK`s conduct in the past, while it is subject to EU law. Nor could it order a particular benefit to end it for the future.. . . .

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