Jurisdiction of the European Union for Foreign Direct Investments according to the Lisbon Agreement

Abstract

According to the Lisbon Treaty, the European Union now has the power not only to adopt secondary legislation in the area of foreign direct investment made by Member States, but also the competence and the right to negotiate and conclude international investment agreements. The new EU investment policy implemented through the conclusion of investment agreements guarantees the protection of investors and investments in a comprehensive and unique way. The competence of the EU is not limited to the issue of receiving investments, but it covers both the pre-establishment and post-establishment phase by incorporating the FDI, so that it can conclude agreements that contain both substantive and procedural guarantees to investors and investments. As already mentioned, it starts from a broader interpretation of its exclusive jurisdiction regarding FDI, which means that it also includes the implied competence related to other types of investments, such as portfolio investments. With the new approach to regulating foreign direct investments as well as the introduction of a new model of investment agreements, the EU aims to create a common investment policy that implies the integration of the issue of liberalization and investment protection. Future international investment agreements should provide a comprehensive regulation of foreign investment by filling the gaps that existed in the old model of the agreement. The reforms that came into effect with the entry of the Lisbon Treaty aim to strengthen the role and importance of the European Union as a supranational organization, which will comprehensively deal with trade relations with third countries, while at the same time influencing the modernization of international investment law by introducing new standards in that field.