7 - Normative Control in the EU and the Responsibility of Member States: An Analysis of the Responsibility of the EU in International Investment Law

Summary

Introduction

The previous chapter showed how, in the context of the WTO Dispute Settlement System, the EU ended up being responsible in any dispute brought against an EU Member State over an issue of EU law. By participating in those disputes, the EU can raise the issue of its normative control over its Member States when they are implementing EU law, which leads to the attribution to the EU of the challenged Member States’ actions. However, there are other international agreements in which the institutional design may not foster EU participation and/or responsibility: either because the institutional design of the dispute settlement system is not as flexible as the WTO one, or due to the fact that the EU is not a party to the agreement even though its Member States are. For instance, this is the case of most of the international investment agreements, both bilateral and multilateral. Yet, regardless of these problems, recent developments in investment arbitration case law seem to recognize normative control as a rule of attribution of responsibility to the EU.

This gradual acceptance of the responsibility of the EU for the acts of its Member States when implementing EU law in international investment law has emerged in parallel to the new EU competence in this area. With the entry into force of the Lisbon Treaty in 2009, FDI became an EU exclusive competence; accordingly, the EU institutions have been preparing the legal instruments which will develop a new European international investment policy. Among the topics that are drawing special interest are the issues of the responsibility and participation in investment arbitration of the EU.

Although the issue of the EU's responsibility is not new, it has nevertheless just recently come to the forefront of the debate on the future FDI policy of the EU. On one hand, the exclusive nature of the EU's FDI policy has created some uncertainties in relation to the scope of this new exclusive competence. While there seems to be agreement as to the definition of FDI, the specific scope of the EU's FDI competence and the impact that it will have in the EU's treaty-making practice has yet to be clarified.