Press Releases 2003
Understanding on U.S. Bilateral Investment Treaties with EU Accession States
4 September 2003
We are pleased that on September 2 the European Commission endorsed
a political Understanding preserving U.S. bilateral investment treaties
(BITs) with eight countries that are acceding, or are candidates for
accession, to the European Union (the Czech Republic, Estonia, Latvia,
Lithuania, Poland, the Slovak Republic, Bulgaria and Romania).
The
United States supports EU enlargement and is pleased that we have
reached an Understanding that both maintains a positive investment
environment in the accession states and furthers the objective of
assuring compatibility between the obligations of U.S. BITs and the
obligations of membership in the EU.
U.S. investment contributes
positively to these countries’ economic development. Their membership
in the EU, together with the continuation of their agreements with the
United States, will only serve to reinforce the message that Europe in
general, and these countries in particular, welcome foreign investment.
The
Understanding expresses the intentions of the parties to amend the BITs
in relation to a few areas where accession states’ BIT obligations
might otherwise be found to conflict with their obligations of
membership in the EU.
We hope to sign this political
Understanding and the amendments to our BITs later this month, after
they have been approved by the accession states.
The
amendments would accommodate EU measures in areas such as the
audio–visual, agriculture, financial services, transportation, and
fishery sectors.
In general, U.S. investors have not encountered
major difficulties with the transition to EU law in areas covered by
U.S. BITs. U.S. investors have urged us to preserve these agreements.
Although
we do not expect these changes to create significant practical problems
for U.S. firms, the amendments will provide that existing U.S.
investors will be grand-fathered with respect to the BITs’
non-discrimination protections for a minimum of 10 years following the
application of EU measures.
Preserving these agreements will
ensure that U.S. investors continue to benefit from valuable
protections, including the ability to take investment disputes to
international arbitration.
The Understanding also provides for
continuing consultations regarding the possibility that EU measures
that may be adopted in the future could raise issues of compatibility
with U.S. BITs.
In particular, it recognizes that the parties
will need to discuss further the issue of the relationship between the
BITs’ obligations concerning investment-related transfers and the EU’s
authority to restrict capital movements in extraordinary circumstances.
Although the EU, like the United States, has a strong policy
favoring the free movement of capital and, thus, conflict with the BITs
in this area is largely theoretical, we look forward to consulting with
the Commission and the other participants on how best to carry this
discussion forward.
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