Investment Dispute Resolution

Following the public consultation on investment dispute resolution in the Transatlantic Trade and Investment Partnership (TTIP) launched in March 2014, the Commission issued its report on the consultation in January 2015.

In the Concept Paper published on 12 May 2015, the Commission charted the path for an ambitious reform of investment policy and investment dispute resolution in TTIP and beyond.

Detailed proposals for a new Investment Court System for TTIP and other EU trade and investment negotiations were presented on 16 September 2015.

Investment can take many forms. Foreign direct investment (FDI) consists in making capital available from one country for carrying out an economic activity in another country, with a view to exercising a form of control, such as the ability to influence business decisions. The most common form of FDI is the creation or acquisition of a company, like a plant to produce cars. Other forms of investment are portfolio investment, through which the investor does not seek control, or any other assets including for example intellectual property rights.

The EU supports the movement of capital as it is essential in generating economic growth, jobs and reducing poverty. The EU is the largest source and destination of FDI in the world measured by stocks and flows.

Source: Eurostat, Unctad

International rules on Investment contribute to improving the business climate. They increase legal certainty for investors and reduce the perceived risk to invest. The EU subscribes to various international rules on investment:

The EU also adheres to principles and standards on responsible business conduct such as the OECD Guidelines for Multinational Enterprises, the reference document on corporate social responsibility intended to balance the rights and obligations between investors and host states.

Investment is now part of the EUs common commercial policy. As a consequence, the European Commission may legislate on investment.

The European Commission outlined its approach for the EU's future investment policy in its Communication "Towards a comprehensive European international investment policy" in 2010. This policy contributes to the objectives of smart, sustainable and inclusive growth, set out in the Europe 2020 Strategy.

The EU's investment policy is focused on providing EU investors and investments with market access and with legal certainty and a stable, predictable, fair and properly regulated environment in which to conduct their business.

There are two aspects:

The EU is negotiating investment rules in the context of free trade agreements with third countries and also in stand-alone investment agreements. Whereas the EU is currently negotiating stand-alone agreements with China and Myanmar, investment chapters are being negotiated in the context of FTAs with India, Singapore, Japan, the United States, Egypt, Tunisia, Morocco, Jordan, Malaysia, Vietnam and Thailand. Negotiations with Canada were concluded in 2014.

The EU actively participates in work on international investment conducted in international fora (OECD, UNCTAD, WTO, G8, IMF).

The European comprehensive investment policy will be introduced progressively. This means that almost 1200 Bilateral Investment Agreements of Member States that currently offer investment protection to many European investors will be preserved until they are replaced by EU agreements. Regulation No 1219/2012 grants legal security to the existing BIAs between our Member States and third countries until they are replaced by EU-wide investment deals. It also allows for the Commission to authorise Member States to open formal negotiations with a third country to amend or conclude a BIA under certain conditions.

More on EUs approach to investor-state dispute settlement.

The EU-Canada trade and investment agreement is the first occasion for EU-wide rules on investment as part of a broad trade agreement.

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Investment - Trade - European Commission