European Commission Launches Inception Impact Assessment and Publishes Roadmap on Interpretative Communication

 

On July 25, 2017, the European Commission, launched an Inception Impact Assessment, which aims to develop a tool that would improve the investment climate in the EU. On the same date, it published a Roadmap that announces the adoption of an Interpretative Communication on the existing EU standards for the treatment of cross-border intra-EU investments..

The Inception Impact Assessment and Roadmap consider a variety of options to create a stable and clear regulatory environment to incentivize investments in the EU, including creating an interpretative Communication, establishing an EU network of “Investment Contact Points” and creating an EU legal framework for mediation.

Inception Impact Assessment

The Inception Impact Assessment considers the following options to create a more predictable, stable and clear regulatory environment to incentivize investments:

  • Baseline scenario: No EU action. The Commission is nevertheless working on an interpretative communication to provide guidance on existing EU rules for the treatment of cross-border EU investments. This would be without prejudice to any other possible future actions by the Commission in the context of the implementation of single-market rules or in the context of the third pillar of the investment plan.
  • Establishing an EU network of “Investment Contact Points” within the national administrations that could assist investors. In particular, such contact points could be used by investors before a formal dispute when a national public authority arises in order to see how to prevent the escalation of any issues and to inform the investors about their rights and existing remedies. In assessing this option, the Commission will ensure complementarity with other ongoing or planned workstreams in the context of the third pillar of the Investment Plan.
  • Creating an EU legal framework for mediation, enabling mediation between investors and the relevant national authorities and ensuring minimum standards of quality and transparency for the mediation process.
  • In addition to an EU legal framework regulating the procedure of mediation, creating permanent agencies in each member state that could administer the mediation services (for example, by establishing a registration system of mediators) or act as mediators.
  • In addition to an EU legal framework, creating one EU-wide mediation agency, which could administer the mediation services or act as a mediator.

Roadmap

The Roadmap document notes that it currently may not always be clear to investors what their rights are when they invest within the EU, and legal practitioners might find it difficult to interpret EU law and the existing jurisprudence of the Court of Justice correctly. Greater clarity on investors’ EU rights (called substantive EU standards of protection) would be useful for EU investors, national administrations and stakeholders, as well as for legal practitioners. This would provide greater transparency on the effective protection of EU investor rights in the single market and create a more positive environment to attract investments.

To meet those objectives, priority action 8 of the CMU Mid-term Review Communication states that the Commission will adopt an interpretative Communication to provide guidance on existing EU rules for the treatment of cross-border EU investments. The Interpretative Communication will bring together and explain the existing substantive EU standards for the lawful treatment of cross-border EU investments. The Communication could also highlight general principles of EU law, often invoked in the case-law of the Court of Justice, such as the principle of proportionality, legal certainty and the protection of legitimate expectations.