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Commission presents procedural proposals for the Investment Court System in CETA

Canada | Brussels, 11 October 2019

The European Commission today presented to the Council four proposals for specific rules putting in place the Investment Court System (ICS) provisions in the EU-Canada Comprehensive Economic and Trade Agreement (CETA). These will now be discussed in the Council and approved by the Council and Member States. After their approval they can be formally agreed with Canada in the relevant CETA committees. They will enter into force when the ratification of CETA is completed by Member State parliaments.

The fundamentals of the Investment Court System are already established in CETA. While they are not yet applied pending ratification of the agreement by all EU Member States (13 have ratified it so far), the Joint Interpretative Instrument on CETA agreed by the EU and Canada in October 2016 includes a commitment to make the system operational as soon as the agreement enters into force.

Today’s proposals are necessary to deliver on this commitment by the European Union, Member States and Canada. These rules complete the putting in place in CETA of the reformed approach to investment dispute settlement and continue the ground-breaking path already established by the EU’s reforms of investment dispute policy.

In particular, they will ensure an effective appeal function, the first such appeal function to become operational in international investment agreements. They will further bolster the assurances of the highest ethics standards already contained in the agreement. They put in place rules on mediation for investment disputes, an area which traditional investment agreements have largely overlooked. Finally, they flesh out a framework for the adoption of binding interpretations (already foreseen in the agreement), facilitating the Parties maintenance of control of the interpretation of the agreement.

The four proposals concern:

  • Rules setting out the functioning of the Appellate Tribunal (Decision here);
  • a code of conduct for members of the ICS; (Decision here);
  • rules for mediation (Decision here), and;
  • rules for binding interpretations to be adopted by the CETA Joint Committee (Decision here).

The Commission has already discussed the drafts with EU Member States and has also kept the European Parliament fully informed.

Background

The Investment Court System included in the EU-Canada agreement represents a new EU approach to investment-related disputes eliminating the risk of abuse and safeguarding the right to regulate in the public interest. The same approach is taken in the agreements the EU has negotiated with Singapore, Viet Nam and Mexico and is on the table in all on-going investment negotiations.

In parallel to its implementation, the Commission is continuing to work at multilateral level to seek support for a Multilateral Investment Court. This discussion takes place in Working Group III of the United Nations Commission on International Trade (UNCITRAL), where the EU and its Member States have submitted a concept paper setting out how a multilateral investment court could be established. Discussions in the Working Group take place in the week of 14 October, 20 January 2020 and 30 March 2020 and beyond.

 


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