COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT pursuant to Article 294(6) of the Treaty on the Functioning of the European Union concerning the position of the Council on the adoption of a Regulation of the European Parliament and of the Council establishing transitional arrangements for bilateral investment agreements between Member States and third countries
Date: 2012-10-16
Institutions: European Commission
Subjects: bilateral agreement, common commercial policy, foreign investment, investment policy, third country

EUROPEAN 
COMMISSION 

Brussels, 16.10.2012  
COM(2012) 603 final 

2010/0197 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to Article 294(6) of the Treaty on the Functioning of the European Union 

concerning the 

position of the Council on the adoption of a Regulation of the European Parliament and 
of the Council establishing transitional arrangements for bilateral investment 
agreements between Member States and third countries 

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2010/0197 (COD) 

COMMUNICATION FROM THE COMMISSION 
TO THE EUROPEAN PARLIAMENT 

pursuant to Article 294(6) of the Treaty on the Functioning of the European Union 

concerning the 

position of the Council on the adoption of a Regulation of the European Parliament and 
of the Council establishing transitional arrangements for bilateral investment 
agreements between Member States and third countries 

1. 

BACKGROUND 

Date of transmission of the proposal to the European Parliament and 
to the Council 
(document COM(2010)344final – 2010/0197 COD): 

7/07/2010 

Date of the position of the European Parliament, first reading: 

10/05/2011 

Date of adoption of the position of the Council: 

4/10/2012 

2. 

OBJECTIVE OF THE PROPOSAL FROM THE COMMISSION 

The Lisbon Treaty established the Union's exclusive competence on foreign direct investment, 
as part of the common commercial policy. In accordance with Article 2 of the Treaty on the 
Functioning of the European Union (TFEU), only the Union may legislate and adopt legally 
binding  acts  in  an  area  where  exclusive  competence  is  conferred  upon  the  Union.  In  the 
absence of a specific transitional regime in the TFEU clarifying the status of Member States' 
bilateral  investment  agreements,  the  Commission's  proposal  for  a  Regulation  seeks  to 
establish  legal  certainty  for  investors  benefiting  from  these  agreements,  by  authorising  the 
continued  existence  of  all  investment  agreements  signed  between  Member  States  and  third 
countries, as well as to create a mechanism empowering – under certain conditions – Member 
States to negotiate and conclude such agreements in the future. 

3. 

COMMENTS ON THE POSITION OF THE COUNCIL 

The position of the Council as adopted in the 1st reading fully reflects the agreement reached 
in  the  trilogue  between  the  Council,  the  European  Parliament  and  the  Commission,  as 
concluded on 29th May 2012. The main points of this agreement are as following: 

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to clarify the status under the law of the Union of bilateral investment agreements of 
the  Member  States  signed  before  the  entry  into  force  of  the  Lisbon  Treaty,  by 
confirming  that  those  agreements  may  be  maintained  in  force  (or  enter  into  force) 
until they are replaced by the investment agreement of the Union; 

to  establish  the  conditions  under  which  Member  States  may  be  empowered  to 
conclude  and/or  maintain  in  force  bilateral  investment  agreements  signed  between 
the entry into force of the Lisbon Treaty and the entry into force of this Regulation; 

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– 

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to  streamline  the  conditions  and  procedures  under  which  Member  States  may  be 
empowered  to  amend  or  conclude  bilateral  investment  agreements  with  third 
countries after entry into force of the Regulation; 

to ensure that maintainance in force of investment agreements by Member States, or 
authorisation to open negotiations or conclude bilateral investment agreements with 
third  countries  will  not  prevent  the  negotiation  or  conclusion  of  future  investment 
agreements by the Union; 

to  confer  on  the  Commission  –  with  a  view  to  applying  the  Regulation  – 
implementing  powers  in  accordance  with  Regulation  (EU)  No  182/2011,  and  to 
apply advisory procedure for the adoption of authorisation decisions pursuant to the 
Regulation. 

The Commission fully supported the agreement reached in the trilogue.  

4. 

DECLARATIONS  

The  Commission  accepted  and  subscribed  to  the  joint  declaration  of  the  Council,  the 
Parliament  and  the  Commission  on  the  fact  that  the  use  of  comitology  in  the  Regulation 
should  not  be  considered  as  a  precedent  for  future  acts  on  empowerment  of  Member  States 
under the EU exclusive competences, and that the choice of the advisory procedure should not 
be  considered  as  a  precedent  for  future  implementing  acts  under  the  Common  Commercial 
Policy. 

5. 

CONCLUSION 

The Commission accepts the position taken by the Council. 

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