EXPLANATORY MEMORANDUM

1.CONTEXT OF THE PROPOSAL

On 19 December 2019, the Council adopted its decision amending the negotiating directives for the negotiation of Economic Partnership Agreements (EPAs) with the African, Caribbean and Pacific (ACP) countries and regions, to the extent that they fall within the competence of the Union (“the 2019 negotiating directives”). Those new negotiating directives updated the wide-ranging mandate and negotiating directives issued by the Council on 12 June 2002 (9930/02).

Under section 6.2, first paragraph of the amended negotiated directives, it is stated: “Investment. In accordance with the objective of "reducing and eventually eradicating poverty consistent with the objective of sustainable development" (and with regard to articles 1, 29, 75 to 78, and to Annex II to the Cotonou Agreement and the relevant provisions of its successor agreement, once applicable) the parties agree to establish a framework which shall facilitate, enhance and stimulate mutually beneficial sustainable investment between them, taking into account multilateral initiatives on investment facilitation. This framework will be based on principles of non-discrimination, openness, transparency and stability. The parties will foster the development of attractive and stable investment environments by supporting stable and transparent rules for investors, and seek to improve financial inclusion and access to finance.”

Angola is not yet a party to the EPA between the EU and the SADC EPA group, and that agreement does not contain provisions on investment facilitation.

In a joint statement dated 8 September 2020, Executive Vice-President of the European Commission, Mr. Valdis Dombrovskis and Minister of Trade and Industry of Angola, Mr. Victor Fernandes, issued a joint statement confirming “their intention to start exploratory discussions on an EU-Angola investment agreement, on top of the EPA, focusing on investment facilitation.”

Under the existing negotiating directives as updated in 2019, the Commission is authorised by the Council to negotiate, with ACP countries and regions, Economic Partnership Agreements covering a wide range of topics, including provisions related to investment facilitation. In light of this, and of the willingness by Angola to negotiate an agreement with the EU on this matter, the Commission recommends opening negotiations with Angola for an agreement on investment facilitation. In order to ensure coherence and consistency with negotiations on investment facilitation with other ACP countries, the negotiations with Angola should be conducted on the basis of the provisions of the 2019 negotiating directives, relating to investment facilitation (section 6.2, first paragraph).

The overall objective of this Agreement would be to improve the investment climate and facilitate the mobilisation and retention of investment between the Parties on the basis of modern and simplified rules, measures and procedures relating to foreign direct investment. In doing so, the agreement would promote sustainable development, economic growth and job creation, and strengthen the bilateral investment relationship between the EU and Angola. It would also provide a solid platform for contributing to the diversification of Angola’s economy and its integration into the global economy.

•Consistency with existing policy provisions in the policy area

The above objectives are consistent with the Treaty on the European Union (TEU) that provides that the EU should ‘encourage the integration of all countries into the world economy, including through the progressive abolition of restrictions on international trade’.

The objectives are also fully in line with the objectives of the Cotonou Agreement and its successor agreement, and the general principles promoted therein.

It is also in line with the EU’s comprehensive strategy with Africa which “proposed that the EU develops more ambitious arrangements to facilitate, attract and support investment in Africa.”

This proposal would also complement the ongoing negotiations on “Investment Facilitation for Development” currently taking place in the World Trade Organisation.

•Consistency with other Union policies

The objectives are consistent with other EU policies, notably the EU’s development policy.

2.LEGAL BASIS, SUBSIDIARITY AND PROPORTIONALITY

•Legal basis

The procedural legal basis for this act is Article 218(3) and (4) of the TFEU. When the Commission recommends the negotiation of an international agreement, it does not indicate the substantial legal basis.

•Subsidiarity (for non-exclusive competence)